The Ramsey Show - App - Setting a Strong Foundation To Build Wealth (Hour 3)

Episode Date: March 10, 2023

George Kamel & Rachel Cruze answer your questions and discuss: Setting a foundation to build wealth, "My husband's boss is a pig... should he leave?" "Should I cash out my investments to buy a house?" from the blog: How to Save for a House, Investing while paying off debt. from the blog: When You Should Stop Investing, "When should I invest in my side hustle?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Take our FREE 3 minute assessment: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pod's moving and storage studio, it's The Ramsey Show, where we help people build wealth, do work they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined this hour by the Rachel Cruz. That's right. The official Rachel Cruz is here with us today, taking your calls about life and money at 888-825-5225. Anthony kicks us off this hour in Philly. Anthony, welcome to The Ramsey Show. Hi, George and Rachel. Thank you so much for taking my call today. We're happy to take it. What's going on with you? So as an 18-year-old, how can I start building wealth early to ensure that I'll be able to

save for a house not too late in my life? That's a fantastic question. Can I just say the fact that you are thinking about this, calling in with this question tells me that you are going to build wealth. So I want to encourage you with that. That is going to happen because of your mindset, which is the most important part. So I love the question. Let's get into your financial picture. So you're 18. Are you going to college? Are you going to work? I'm going to college starting in september i'm going to a community college love it and i i do work i am a utility worker at a retirement community cool what do you make there i make 1470 an hour and do you have any debt um no not yet but I will probably have to take out some student loans.

No. Anthony, we had a good thing going. You said not yet. Yeah. How do we avoid this? How much is the community college? Each year, it's about $5,500. Okay.

So per semester. Yeah. Okay. And how many hours do you work? Oh, I work during school. I'm still in high school right now. During school, I work about 30 hours a week. Oh, wow.

Awesome. And is this a two-year community college? Yes. So we're talking 11 grand for the two years? Yes. Okay. So that to me now becomes our goal. How do we come up with 11 grand over the two years? Yes. Okay. So that to me now becomes our goal. How do we come up with 11 grand over the two years to cashflow this so that we can get out of this

thing completely debt-free? Well, I do have some problems with saving and spending, but I am trying, I do try and then take problems pop up. What do you mean by problems? Like stuff with my car and I do like spending money and I really try to stop that, especially, you know, my friends, they ask to go out and it's really hard to refuse sometimes. Are y'all, yeah, just to be a little specific, like where are you guys going? Like does it cost a lot of money what you guys are doing as seniors in high school? We go out to eat and stuff like that.

Sure. And we go to movies and stuff, things that we like to do. We have fun, but sometimes it does wind up costing a little more than I'd expect, especially with driving and gas. And are you on the hook for all of that personally or are your parents helping you at all? Where are you at with that? Well, I usually don't like asking my parents for anything,

especially if it's something not important. I really don't like asking anybody for money unless it's something absolutely like I need it. Okay, so if you don't like asking, have money unless it's something absolutely like I need it. Okay. So if you don't like asking, have you guys had a conversation about college at all with your parents? Yes. Okay. And you're on the hook for it all?

They're going to help me out. Perfect. They can't afford to pay for the whole thing. Sure. How much are they going to pay? Approximately like $3,000, $4,000. For the entire thing? Yeah.

Okay. So that's, I mean, that's great. That leaves you with seven or eight. Yep. So that's going to, yeah. And I'm looking at this per semester, Anthony, because I think our big, so your number one goal is to go to college debt-free. Okay. So a couple of things you have going for you that's really great is you're working, you have a job, so your work ethic is there. You're going to a community college, which is even less expensive than a state school or I'm for sure out of state. So your school choice is really, really great. And so if your parents, you know, if you, you know, maybe they say, yeah, $4,000, which would be $2,000 a year that you could use that money and $1,000 a semester, which means you only have to figure out really $1,500, $1,700 a semester to get through it debt

free. Because for a lot of this, the tuition is going to be due per semester. You can even get put on a payment plan, a cash flow payment plan with a community college. So all you need to come up with, Anthony, if everything's as I'm seeing is correct. Yeah, you're you're only having to to come up with like seventeen hundred bucks per semester. And you can do that working. And based on the numbers you just told me, 1470 an hour, 30 hours a week. That's 1764 a month before taxes, right? Yeah. So per year week that's 1764 a month before taxes right yeah so per year that's that's 21 grand you're making before taxes and that's anthony working you know with a high school schedule so once you start community college you may have classes just from like 9 to 1 p.m

and then pick up another job so yeah i would not anthony i would not take out student loans i would really make it a goal make it a challenge for you to say, I am not an option. Yeah, it's not an option. So what do I have to do? How do I figure this out to pay for it? And honestly, the numbers here are so reasonable and doable, Anthony, and you're doing it a really smart way. Like hear us say that because college today, we are all for higher education, but people have lost their freaking minds when it comes to college. And it's insane what people are paying for to get a degree that may not even be marketable out in the world. I mean, it's just, it's a mess. And so what you're doing is really wise and you're getting a two-year degree and that's really great at a community

college. And so all of that is so great. So I would really put my efforts and instead of thinking about a house long-term, think about, hey, how can I get through these next two years each semester? How do I have four semesters I need to cashflow? And how do I do that? And it may be possible. I mean, no, it is possible because yeah, these numbers are so doable. I'm very encouraged. So here's the deal. You asked us, how can I build wealth early? And the truth is, I'm not going to tell you to invest in the next two years. The best way to build wealth is to graduate completely debt-free so that when you start a career, a full-time job, you get every single one of those dollars. You keep them instead of sending it to lenders every month. And that allows you to have the margin to begin investing and to put 15% in your 401k. And you're going to have an emergency

fund by then of three to six months of expenses. So you never need to turn to debt, which is only going to delay your wealth building journey. So I wouldn't invest until you have that full-time job. Then you can begin investing that 15% as long as you're debt-free with the emergency fund. And that's going to be your best course to build wealth if you do that from 22 to 52 you're going to be a multi-millionaire wow thank you i appreciate the advice and i am really definitely gonna try my absolute best not to take out a single loan and because that's what i always wanted to do yeah and you can anthony like it's not like you're trying to go pay for thirty thousand dollars right of per semester or something. This is doable.

This is so, so doable. And go watch the Borrowed Future documentary, too. That'll be really encouraging. And get on a budget, Anthony. Austin will pick up. We'll give you a free trial of Every Dollar Plus because that's going to help you spend with your friends and enjoy it where you're not feeling guilty about it. And to be able to say, hey, where can I cut some stuff to make this tuition goal?

Love it. We're cheering you on, man. We love seeing students graduate completely debt free. That is a major key to building wealth and you are on the path. This is The Ramsey Show. This is The Ramsey Show. I'm George Campbell, joined by Rachel Cruz. Hey, if you're a fan of the show, which I assume you are, if you're taking the time to listen to us right now, we would love for you to subscribe to the show, to follow wherever you're listening, leave a review, be kind,

and share it with a friend who might enjoy this show if they're looking for some hope in their life and their money. We so appreciate that. That is how we spread the word and create more impact. All right, let's take some more calls here. 888-825-5225 is the number. Emma is in San Bernardino. Emma, welcome to The Ramsey Show. Hi, guys. Thanks for having me on. Sure. What's your question? So my husband is a real estate agent, and he's been with a company for about three years now. But his boss is very inappropriate. He's had about three lawsuits against him for sexual harassment.

He only hires employees who are under the age of 25 and blonde and skinny. Is his boss Leonardo DiCaprio? This is wild. Yeah, and he makes really inappropriate comments about women

and he recently had an affair with an employee and the employee got mad at him for whatever reason and sent out a huge email to tons of different lenders and other agents and just basically saying, don't hire these people, don't work with them. And I don't really want my husband to be with this company anymore because of his boss. Emma, how does your husband feel? What's your husband say about all of this? He kind of, I mean, we haven't really talked too much,

I think, right now because my husband's making good money. I don't know if he will really be open to that, but I'm worried something major is going to happen soon. Oh, my gosh it feels like like you want to stay in the band on the titanic because of the money but we can see it sinking yeah that's that's the perfect way to put it so i think he needs to see the writing on the wall going this guy's got multiple lawsuits against him. People are trying to actively take him down. The money may be good now, but number one, at what cost of your soul and sticking around with a guy of this level of integrity.

And then number two, going, this money may not be around a year from now as word gets around in the real estate world. Yeah, is he on a certain commission system? Because if it's like with a company or a brokerage, can he just change brokerages? Yeah, I mean, he's had other agencies reach out to him because he is a really good real estate agent. He sells a lot. And that's usually most of the time.

That's where you're going to find that you make the money as a real estate agent is you, not necessarily the company. Now, granted, there are some more companies that will put marketing dollars behind you and all of that but uh but he's the secret sauce your husband so regardless of where he got to where he goes he'll be able to perform and yeah continue to make great money so my big thing emma is i would talk i mean i would be talking to him about it. Just make your feelings clear. I'm not comfortable with you working around this guy. Yeah, because of his integrity. Like the guy is a creep.

And it's like, if he's a creep with other people, like I'm like, oh, I don't know. You just don't want to be around that. And is he doing weird business? Like usually when you have a lack of integrity in one area of your life, sometimes it spills into other areas. So I would just be worried from a-

And this guy's not even trying to hide it. From a cultural standpoint, it's really toxic, but then also who knows what he's doing behind the scenes with business and all that. Yeah, this is just the tip of the iceberg to keep the Leo and Titanic references going. Yeah, yeah. I mean, they've had their place vandalized

because he slept with a married woman who was an employee and her husband found out. So like three guys he hired and came and just broke windows so yeah so so we yeah so the boss is one thing right but it's you and your husband that need to make this decision and so that's what I want to focus on and so the fact that you haven't brought it up to him yet or that it hasn't been a conversation um yeah I mean I that that's more of a like a, okay, here's what's in my control is, hey, I can actually, whatever the boss decides to do with his life, that's his issue. But my issue here is that my husband is part of a company that is obviously just a complete,

they're not jumping on the lifeboat at all anytime soon is what it sounds like. Thank you for keeping the references going. You're welcome. So Emma, I would put your life vest on. Put the life vest on and let's find him another job. He's a fantastic real estate agent. And that is the common denominator here. Not this magical agency that's about to go under. And talk to your husband about it. And the fact that you haven't yet, I'm like, hmm, I mean, I don't know. That's interesting. If it bothered me enough to call a national radio show, it's going to bother me enough to have a conversation with my spouse. Yeah. So have that conversation, Emma, for sure. All right. Let's interesting. If it bothered me enough to call a national radio show, it's going to bother me enough to have a conversation with my spouse.

Yeah. So have that conversation, Emma, for sure. All right. Let's move on to Minneapolis, Minnesota. Jeremy joins us there. Jeremy, welcome to the show. Hey, George and Rachel. How are you?

Doing great. You sound defeated, Jeremy. Have you just been waiting on the line too long? Oh, my gosh. Let's see. When did I start? Well, I'm in central time. So I started around two. So I've been in here about an hour and a half, but not bad. So sorry, Jeremy. We really appreciate the marathon. You really stuck it out there. Thanks. My admin will be sending you a bill, so it's okay. So I have more of a money etiquette question.

So my wife and I, when we go out to eat, we usually pay cash. And so let's say, like, this was a couple nights ago. We were at Olive Garden, and our bill was $45.30. I leave $3.20 on the table. Server comes over. And to me, I just kind of assume like, you know what? It's kind of high. They'll probably just assume to bring change.

Well, they go to just take it. And they said, okay, have a good night. And they take it. And I'm like, wait, I'm like, you're bringing change, right? And then she got very kind of visually upset at us. And this has happened more than you would think when we go out to eat like just constantly servers kind of just assume whatever money's on the table i guess they just keep so all you gotta do jeremy yeah all you gotta do is say hey uh here's 60 bucks um can i have some change please like do you just be proactive so that they're not that they're not wondering right

or just tell them exactly how much change you want back oh you could do that too like hey we bring you yeah that's fair so one time we were at a different uh place and so our bill was like let's just say it's 35 and we had two 220s and or maybe 320s so we can't give them a 40 and just say keep because it's five bucks kind of lame. Um, and so then we gave him 60 and we're like, okay, can you break up this 20 for us so we can leave a tip for you?

He's like, okay. So then he came back with change. So let's just say it was 35. We give him 60. I would expect to get 25 back, but then they came back with like a 10 and two ones. And it sounds like they're just not good at

math well they're just factoring but you're saying they're manipulating the the cash system to bring you back a certain bill so that you leave the ten dollar bill you can't you know yeah i mean it's yeah either in the situation you just ask specifically what you need um and i know you said yeah change but say like can i have two fives like you gotta ask specifically what you need. And I know you said, yeah, change, but say like, can I have two fives? Like you got to just be really, you could just be really specific or just leave them an extra $5. Well, that's what we did with the other kids. We're like, you know what?

We don't care about this. This is a really silly solution, but you could just get smaller bills and just have those on you when you're out to eat. Not just have twenties. That's fair. That's an option. I do do that for my haircut so this is a great example i pay cash for my haircuts to get to get a discount i just went today and i go to the bank next door and i'll break the 20 i'll get 10 5 and 5 ones so that i can give him exact the exact amount with tip included but see the heart thing it's all okay

you don't know how much you're gonna you're gonna pay for the meal of course but the idea here is you've got you've got a five you've got some options you've got some options yeah when we started doing this i was like carrying hundreds with us and then i was like okay this is jeremy's balling out at olive garden i love it yeah but um but so like what the problem is i just i feel very uh, I don't want to say bad. Don't. Don't be shamed. Yeah, don't be shamed into it. I'll just say we feel very shamed.

That's a good way to put it. Yeah. Because you're asking for change back, they look at it like, oh, he's so cheap. He doesn't want to leave us the 15 bucks. Well, right. And it's like, I absolutely hate being manipulated. So it's more of that case. Yeah, I would be proactive and say exactly what you need back.

Communicate up front. Yep. And then that's their issue, Jeremy. As long as you're tipping well, you know, 15%, 20%, 25% if it's great, there's nothing to be ashamed about. And that's their, I mean, at that point, that's their problem. And servers love cash tips, so they should be grateful that they're not having to wait to get that,

you know, at the end of the month in a check. So you're doing the right thing, man. Don't be ashamed. You're doing great, Jeremy. You're doing great. Release the shame. Yes. This is The Ramsey Show. I'm George Campbell, joined by Rachel Cruz this hour. This is The Ramsey Show. Listen, paying off debt is smart. We know that. Saving and investing, very smart. But there's one key to winning with money that people overlook all the time, and that is protecting your finances from emergencies. That's where insurance comes into play. Now, there are 10 kinds of insurance coverage you might need based on what your life looks like today. And our team has built a tool called the coverage checkup to show you exactly which types you need to add, drop, or adjust. We'll even rank your coverage list by importance. We'll email it to you and we'll connect you with Ramsey trusted

insurance providers so you can get your plan in place fast. Seriously, this could be the most important five minutes you spend today. Donald wrote in, I like how he puts it, for anyone who has not completed this checkup, do it now. You never know when something will happen and you never want to leave your family in a bad situation. Visit ramsaysolutions.com slash checkup to use that coverage checkup tool. That's ramsaysolutions.com slash checkup. Don't let an emergency sneak up on you. Protect your family now. This is one of those areas, Rachel, where people go, well, I'm good. I don't need insurance. Everything's good right now. Oh, gosh. Yeah.

You need it for the what ifs in life to protect the wealth that you're building. That's exactly right. Yep. Very, very important part of your financial picture. Huge. I love talking about insurance, not only because I'm a nerd, but because it's so important and it can tank you financially if you don't have the right ones in place. All right, let's go to the phones. Sarah joins us in Ireland. Oh my goodness. This might be my first call from Ireland. Sarah, welcome. Hello. I'm sorry to be the point, but I'm Italian, just living in Ireland. I could listen to you all day, Sarah, but unfortunately we don't have all day, but we're excited to take your call. So my problem for me is that I've been working abroad my whole life, so I could never get into a 401k or a European version of a 401k. So right now I'm

just investing in basically an S&P fund that has been treated as my basically retirement fund. But now that I'm stable in Ireland, I'm thinking about starting the Irish 401k. And I was wondering if it's wise to take out the investment in the S&P fund that I've been making to use as a down payment for a home. How much is in there? It's around $25,000. Right now, the market is not doing super hot, so not that much. Okay.

I would have liked to keep it there for retirement, but since I can't start on a 401k, now I'm rethinking that. How old are you? I'm 34. Okay. And what other money do you have? Do you have any money in savings and cash?

I have around like 30,000 euros. So let's say like $35,000 more or less. And then this 20,000, so around like 60,000, but I want to keep a very healthy emergency fund. And then I'm getting married soon, so that's kind of fun. Exciting. Congratulations.

Thank you. That's awesome. And there's zero debt in the picture at all. Okay. And it's never going to change. So you have no debt and a giant emergency fund, and you have this investment. Yes.

And when you get married, when is that, Sarah? When's the wedding? It's going to be in July. In July, okay. And then are you guys going to buy a house then together? Is that what the plan is? We're thinking about renting because he's Japanese and I'm Italian. So we need to like scope out the town a little bit.

So we think about renting for a year. Good. Yeah. And then buying there. Okay. But you were asking to cash out the investments for a down payment. If that is wise or should I just use the cash? But then the wedding is going to have some cost,

and then in college, full-time while working full-time, so I'm not very comfortable using more than $10,000 of that money because you never know what's going to happen. Well, it's great that you're being conservative with this. That will serve you well in the future. So I'm wondering, can you just cash out all of the money in those investments and use it towards your future and maybe put it in like a high-yield savings account or some version of that to protect it?

Because the problem is, what if you rent for a year and all of a sudden the market is down when you need that money for the down payment? That's what worries me. Yeah's that's exactly what's happening now because i was thinking like it used to be much higher and now of course with the downturn yeah it's it should be around 30 000 it's 25 so i was thinking i don't want to time the market because it's definitely like not exactly well and since you ever do don't need the cash right now i almost george would just leave it in the s&p and just let it because i mean it's getting better like we're seeing upticks so just leaving it in because also sarah i would say you have a lot of life change happening in the next year like you said you're gonna be in school you're getting married i mean there's just a lot happening and you guys may look up in two years and be transferred somewhere else.

And this may not even be a discussion. So in my mind, because there are so many life changes that are going to be happening, I would, George, just leave it in the S&P and just let it ride out. And then when you're really serious, OK, we know we're going to be here. We want to look to buy a house in the next six months, that's probably then when I would remove the money and put it in a high-yield savings when you're actually ready to buy, right? It's still a little bit of a theory right now, and you just never know what life is going to throw at you guys,

because there's a lot of change happening. Yeah, that could be a year and a half away, and so let's see what the market does, but you don't need the money right now, which is a great problem to have, where you can just let it sit there. Yeah. All right. So I guess I would just let it sit there and then let it ride. And then when the house conversation becomes actually like a reality that you're looking out and say, okay, great, we've been renting for a year, we found the house we want, all of that, then that's when I would look to pull the money out. And hopefully you've broke even by then or even made a little bit. Yeah, for sure. On those investments. So thank you for the call all the way from Ireland. How cool is that? And next up, let's go to my old hometown, Boston, Massachusetts. Marianne joins us there.

What's going on, Marianne? Hello. Thanks for taking my call. Absolutely. What's going on? So I had a question. So I found out about the Dave Ramsey plan in around like 2020, you know, during the pandemic and everything. So obviously, you know, in the beginning I was all gung-ho, went hard, and then I became Dave-ish. And so I did stop contributing to my 401k at that point, like, you know, when I found out about everything. And so I kind of spent the last year and a half not really working hard towards the debt and also was not contributing. So now I just started a new job and I was kind of, you know, I started contributing again because I feel like, oh, no, I lost like the last two years. But I still do have this pile of debt that I'm still working on. And so I was kind of wondering your opinion on,

you know, should I still hold off on all the contributions or if I should just, you know, or if I can contribute basically. So why are you doing this plan? Because I want to pay off my debt. And what's been holding you back when you said, I kind of went day-vig, I kind of got a little, you know, lackadaisical with it? Well, you know, it's, I don't know, like it's just a lot of things come up and I just don't, you know, I'm not like the best planner, I guess. And, um, I don't know. It's a very, it's a very big struggle. Like I want so badly to like get rid of my debt, but then at the same time, like I want to buy stuff. And that, that therein lies the key. You have to want to pay off the debt more than you want the stuff. How much do you have left, Marianne, to pay off?

I have about like $80,000 with student loans to pay off. I've already paid off like $30,000 or maybe more. Awesome, great job. What's your income? Yeah, so now I make $150,000 a year. Heck yeah. Yeah, my new job really gave me a good bump. So that's also what motivated me to go back to it, you know, and say like, okay, I really have to, like I have no excuses, you know? Right, right. And how old are you?

I'm 35 and I'm single but have a child. And how much are you investing? What percent? So it's pretty low. I think I'd put it at like 4%. And then we also have like the profit sharing. And I already have about 75K in retirement from previous jobs. I think you're going to be fine for retirement. I would pause it. Pause it, yes. 4% of $150,000 is a heck of a lot of money that could be going towards the debt and get you free faster. And you're young, you still have time, You will catch up by funding 15% of your income

after you pay off this debt and you have some savings. So I would spend a year and a half of just like gung-ho throwing everything at this debt. And you could be out. You could be out in a year and a half. So do that. And then you can press play on retirement. That all will be behind you.

You're closer than you think, Marianne. Doing great. We're cheering you on think, Marianne. Doing great. We're cheering you on. This is The Ramsey Show. This is The Ramsey Show. I'm George Campbell, joined by Rachel Cruz. Our scripture of the day comes from Matthew 5, 16. In the same way, let your light shine before others so that they may see your good works

and give glory to your Father who is in heaven. Mark Twain once said, let us endeavor to live so that when we die, even the undertaker will be sorry. Love that. The wittiest guy of the 19th century. I got to tell you, I love Mark Twain. He was speaking in tweets before Twitter was a thing. That's right. Love it. All right, let's get back to the phones. That's where we can serve you best. Stephen joins us in Canada. Stephen, welcome to The Ramsey Show.

Hey, guys. Thank you for taking my call. Sure. What's going on? I just wanted to get your guys' opinion on whether or not I should invest in a tool for my side hustle. Oh, okay. Tell us about it. Yeah, so I started a wood shop,

like a woodworking business, and I make tabletop accessories for RPG games like Dungeons & Dragons, Pathfinder, and you can use these tools for Monopoly and other games as well. Cool. And my side hustle just started making a profit recently, so we are averaging $50 to $75

a month in profit. This is net. And I wanted to get a tool to take it to the next level. And this tool is approximately $4,000. And I wanted to know if now would be an appropriate time to invest in this, considering I'm paying off a little bit of debt right now. Okay, that was my question. What is the purpose of the side hustle?

My inkling is that you're not going to ROI on that $4,000 purchase enough to warrant it while you're in debt. So I did a little bit of calculations, and this is kind of where I want to get your guys' opinion on, because I know in the past show Dave said that the only exception is if you can show that your ROI is going to be sufficient enough to pay it off in a reasonable amount of time. So you'd be paying cash for this, right? Yes. Okay. So I currently make $7,000 a month after tax, and my total expenses are $3,000 a month. So this month, if I don't make any payments towards my debt,

I would have enough cash to pay for this total cash. How much debt do you have? I have $56,000 in a line of credit. A line of credit. And how much with this new tool will you be able to bring in? Yeah, so on the low end, I wrote a little budget analysis, and on the low end, this tool should increase my profits by $350 or $400 a month, and that's on the minimum.

The more expected amount that I expect it to bring in is $450 to $700 a month. Even at $400 a month, let's say $400 a month, that's still 10 months just to break even on it. And is this going to become a full-time thing, Stephen, for you, or is it just a side hustle to get out of debt? Honestly, if everything goes well, I would love for it to be a full-time job, I guess. Yeah. I would love to take it on full-time.

That's my goal. I just have reservations with the idea that it's guaranteed that you're going to make $400 extra a month in profit. That's the part that worries me. Because what happens if it only increases your profit by $50 to $100 a month? Yeah. worries me because what happens if it only increases your profit by 50 to 100 bucks a month yeah so i was i was thinking about that and um what i what i saw is let's say you know the business makes no more money and i just shut it down right like a side hustle this would um this would increase my line of credit by one more month because i would have to take one month's worth of uh uh difference to pay up for the tool cash.

And I was wondering, is that... Are you saying you'd use the line of credit to do this? No, no, no, no. I moved houses stupidly, and I took a line of credit for the difference, and I'm trying to pay it off as soon as possible. Okay. So with my current salary,

the difference between my expenses and my income is $4,000. And so if I take the difference for one month, I can pay this tool cash. I just wonder if you're better off using that four grand to throw at the debt instead of throwing at the tool for the side hustle, if that would get you debt free faster. To me, that's a more guaranteed rate of return than the hopes that this picks up,

which I want this thing to pick up. I just wonder if we invest in it once we're debt free, if you want to continue it and use this as a full-time gig one day. For sure. No, that makes sense. The only reason why I thought about purchasing this tool is right now with one product where we just got our profits at 75 and we're this month and next month we're projected to make over 200. And then this would kind of... So this is just an increase in... Who is we when you say we? Is it a partner or is it a spouse? No, no, no.

It's just me. I just use we when I talk to customers and I just kind of have the habit now. Okay, Stephen, are you saying $200 a month? Is that what you were saying? Okay. Yeah, right now we're making $75 to $200 a month. It depends on the month.

I just think you can do better with side hustles. I know, Stephen. That's not a lot. You could go work at a retailer and make more than that. Right. So I just don't want you to conflate the side hustle with this is my ticket to become debt-free. And this is my passion, right? Like, obviously, you love this and you want it to be your full-time gig, which is great.

But, I mean, honestly, Stephen, my number one goal is to get completely debt-free as fast as possible. And this doesn't feel like the fastest pathway versus driving Uber and waiting tables or whatever. You're going to be making more money doing something else. And then you could look up in two years, press play on this passion project, save up, then buy this, invest in this tool. And then if it kind of actually starts picking up steam, then maybe you jump careers even into this, you know, into this new thing. But I wouldn't use this side hustle for getting out of debt because it doesn't feel lucrative right now for the sole purpose of just getting out of debt. I understand you love it and it's your passion, but that's more of,

I would put it more in the bucket of a hobby. It's still such a small part of your overall income. Yeah, it doesn't. I mean, if it was two grand a month, that's one thing, but just 200. Four grand is a big investment as well. Yeah, and not bringing in as much. I mean, not bringing in a lot. Sorry, Stephen. I didn't want to burst a bubble there. It sounds really cool. I hope one day it'll be like, that guy's a billionaire now with his RPG tabletop accessory business. And we want you to.

He will be for sure. He's a smart guy. All right, let's try to sneak in one more here from Jalen in Dayton. Jalen, get right to the question. We're up against the clock. Hi. Hey.

Hi, thank you for taking my call. Absolutely. Hi, so my name is Jalen. I make about $900 a month. My college is free and I'm getting a car from my grandpa, so I don't have to worry about that either. So I guess I'm just wondering what should I do with my money since I don't really have any debt and I don't have anything important to put towards it in the next couple of years. That's great. How old are you? I'm 18. I just turned 18 a few months ago. Good for you, Jalen. How exciting. So what an amazing gift you've been given. I mean, no college is paid for. Do you have any

expenses that you're going to have to be in charge of? Unless my parents decide to charge me $200 a month while I'm living with them doing college, I don't think so. Okay. Yeah. What about like gas and your car insurance and all that maintenance? Um, gas. Yeah, probably gas and stuff, but I don't have any, like, I'm not planning on buying a house immediately. I'm going to be living with my parents while I'm going through college for a couple of years. That's great. So really, I mean, at your stage of life, Jalen, the best thing you can do is just, I would open up a high yield savings account and put your money there as you're saving.

Have a checking account, know what your expenses are per month. So know how much you're paying in gas. If you're going out with friends, create a budget to know, okay, every month, here's my expenses and here's how much I need out of that 900 to live off of. Anything else I would put in a high yield savings account

and just let it grow. I mean, it's not gonna grow a lot right now. It's like three, 4%, but you have that money that you can get to it. And then throughout college, that's all I would do because your number one goal is to get through school debt-free. And if you can graduate with a surplus,

with actually- No debt and a pile of money? With, yes, having cash. I mean, that's what's incredible. And then when you graduate, you can use that money as an emergency fund. You can use that money maybe for a down payment on a home. If you're looking to buy a home, you could use that money to start investing.

But I wouldn't do any of those steps, Jalen, until I was out of college. So are you doing a four-year degree or a two-year? I'm going to be doing a two-year degree. I'm planning on going into travel nursing, and then that's going to take a year of experience. And once I get through that, I should be able to bank about $3,000 a week. Congratulations, Jalyn. Well done. Well done. Yep. So I would just open up a high-yield savings account and put your money there that you're saving for. Let's say 500 bucks out of the 900 after expenses. That's six grand a year. So even after two years, you got 12 grand in the bank yeah plus interest and then from there you wouldn't worry about like saving

for retirement and all that yet until afterwards exactly yes you're working full-time the sooner you do it the better i just don't want to waste too much time or and you're right the sooner you do it the better but you're doing it so early you're going to catch up and be totally fine if you start retirement at 22 23 years old you're going to be way and be totally fine. If you start retirement at 22, 23 years old, you're going to be way ahead of the game. So right now it's about having liquid cash because you have transitions coming up in your life after you graduate and you move, you start a new job. You want cash on hand versus it being an investment.

And then Jalen, you're going to start investing around 22, 23. Let's go. And that's where it gets fun. So well done. Thank you. All right. That puts this hour of the Ramsey Show in the books. My thanks to my co-host, Rachel Cruz, all the folks in the booth, and you, America.

Until next time, spend wisely, save intentionally, and give generously. Hey, it's Rachel Cruz. If you like what you heard in this episode and want to know more about getting started on the Ramsey Baby Steps, go to RamseySolutions.com and click the Get Started button. We'll help you figure out the best next step for you based on your specific situation. That's ramseysolutions.com and click Get Started.