The Ramsey Show - App - Should I Be a Long-Distance Landlord? (Hour 3)

Episode Date: March 14, 2022

Dave Ramsey & George Kamel discuss: Should you hire a property manager to help with rentals? The best way to invest, Why reverse mortgages suck, What's wrong with cash value life insurance. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where dad is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW. Has the status symbol choice. I'm Dave Ramsey, your host. George Campbell, Ramsey personality, is my co-host today as we answer your questions about your life and your money. It's a free call at 888-825-5225. We'll talk about relationships, mental health.

We'll talk about jobs and careers. We'll talk about money. We'll talk about wealth. We'll talk about whatever you want to talk about. It's your life, and it's right here on The Ramsey Show. Elizabeth is going to start off this hour. She's in Washington, D.C. Hi, Elizabeth. How are you? Hi, Dave. I'm doing well. How are you? Better than I deserve. What's

up? Awesome. So my husband and I, we're on baby steps four and six. We live in D.C., but we're currently renting and we own a property in Atlanta. So the current tenants that I have, their lease ends actually on April 1st. And so I'm trying to decide whether we should spend $2,500 for a property manager to bring in a new tenant, or if we should just go ahead and sell the house. Sell it. Sell it? Okay. I love rental property. I hate long-distance rental property. Right. And you did not buy this house as a rental property. You used to live there and you moved to D.C. and kept it. Yes.

So you're a landlord by default, not by strategy. Right. Yeah. What would you get if you sold it? So the realtor is actually going to list it for $285,000, and there's about $158,000 left on it. Okay. $1,000,000, sorry. Yeah.

What would you do with the profits? So we would just buy a new house, probably in DC, or just kind of hold off for maybe two years and decide where we want to be, whether it's like closer to family, but we have agreed that we don't want to go back to Balena. Okay, yeah, there's no reason to keep this house. A lot of reasons to stay. Okay. And I have one more question. So when it comes to long-distance rental properties, when we get to that point, what would you consider too far to be a landlord? Can I drive to it?

Easy. I mean, like, I don't have any rental properties that are more than an hour apart. Okay, gotcha. They're all within 30 minutes of where I sit right here, but from one of them the furthest away to the other one, it might take an hour, but that would be with traffic. But, yeah, I mean, I don't – I mean, I personally will drive by them once or twice a year, but our management team – I've got my own in-house property management because i own a lot

of property but uh they you know do quarterly inspections um they uh are constantly checking the property and you just don't you can't keep your hands around it property requires a level of effort in order to keep it up in order to keep it from getting destroyed in order to you know suddenly there's something happening over there with a tenant you went what i got 17 cats what you know and so um you know they're cat hoarders who knew but yeah so people do stuff and so um and that'll destroy a house yeah so it's just you get the the actual practical fact of landlording and just being in proximity to it you will do a much better job even if you in proximity to it, you will do a much better job. Even if you're using a property manager,

you'll do a much better job if it's in the vicinity because, you know, you and your husband out to eat and you just say, no, I'm going to drive down that street and just wonder what's over there. Oh, that's the house we own, yeah. And, yeah, we're going to look at it and just get a feel for what's going on. I drove by one of ours the other day and the bushes, they really need to be done. And I'm just like, come on. Do you have your trimmers have your trimmers out there just i didn't jump out of the car with my pocket knife but no but the uh but yeah i did i did place an order for that to be fixed when i

got back to oh good got it back on the email but i mean that's you know you just gotta it's like a long distance relationship i wouldn't choose one if i could and so don't do that with your rental property oh it's not fun it It's not fun. Good analogy. All right, Diane's in Oklahoma City. Hi, Diane. How are you? Hi, Dave. Thank you for taking my call.

Sure. What's up? Well, my question is how to best put approximately $183,000 that I have in a bank account to work for my retirement. I've never owned my own home, and I thought about investing in a bank account to work for my retirement i've never owned my own home and i thought about investing in a small condo i currently rent a condo for nine hundred dollars a month a little less than a thousand with bills included okay now that oklahoma accent's coming through where are you from? Oh, overseas. No.

Australia or England? Which is it? I'm having trouble picking it up. England. Okay. All right, good. Well, welcome to Oklahoma City. It's a wonderful place.

I'll be over there in a couple of weeks hanging out with my friend Craig Groeschel. All right. Are you going to be there a while? I plan to be, yes. Okay. If you're going to be there three years or more, I would take that money and buy a condo for cash. Okay.

That you're going to live in. You could pay cash for a condo for that, couldn't you? Absolutely. I was hoping to just spend a little over $100,000 for one and then possibly put the other somewhere else. And I need your suggestions on that. I know you really like mutual funds. So what's your recommendation? I have a small business and I'm going to begin a SEP this year. I also started my first scruff IRA last year and I plan to do another one soon. But I know you're big on mutual funds.

What would you recommend I do with the remainder? Yeah, I mean, you can definitely, I'd max out your retirement accounts first, and then if you've maxed those out and there's nowhere else to go, you can put those in taxable accounts, and you can do index funds and mutual funds in there to let that money grow for you. Yeah, just keep it simple. It doesn't have to be complicated. An S&P 500 index fund is where I park a lot of mine after I've maxed out everything else. And you've got a paid-for property.

You're sitting on what we call Baby Step 7. So everything's 100% debt-free. You've got some money left over to invest. You're going to max out your SEP, max out your Roth in mutual funds. And then in addition to that, I would just use an S&P 500 index fund what George is saying so George is exactly and make sure you've got your emergency fund in tax and keep that separate from all this money yep Talia is with us in Portland Oregon is it Talia did I pronounce that correctly yes you did hi how are you better than I deserve how can we help

okay so I have a question. I feel like your advice would usually be to don't do it, so I need to confirm with you to either do it or not do it. So a little background. I have $47,000 in student loans and $20,000 in retirement. It's $15,000 in a 403B, 5K, and a Roth IRA, and I make $90,000 a year as a nurse. I have no other student debt. So I would never cash out this retirement, but I've had people suggest it,

and they're like, just call Dave and see what he would say. $20,000 isn't a lot, but then I know there's like the penalty and all of that. So I just kind of want to know, like, yes, the advice still stands, don't do it. You know, I wish I could say you're special today, but you're not. Don't do it. You're going to rob from your future, and you don't need to do that. You have a great income, and this is a shortcut, and it's not going to lead you to somewhere worth going when you have to pay this thing back and you rob from all the growth.

When you cash it out, you're going to have a 10% penalty plus your tax rate, and you're sitting at about a 25% bracket. And so you're borrowing money at 35% interest to pay off student loan debt. See, that's what I thought you might say. Yeah, I'm fairly predictable because I say the same thing over and over again, and people still listen. It's just bizarre. Shock us one day. It's just bizarre.

But now, I don't know who told you to call me because they obviously don't listen enough to know I say the same thing over and over again. I hope it's the same. I say it over and over again so much, George says it. Yeah. There you go. They call me a parrot for that reason. Whoa. There we go.

There you go. Well, you're my favorite parrot. Aw. That's so sweet. You're mine too, Dave. This is the Ramsey Show. No matter what time of year it is, focusing on your family's financial plan is always a smart move. I get questions all the time about where to start and what to do first.

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Today's question comes from Mark in Missouri. He said, I know you hate reverse mortgages, but my question is this. I'm 57 and my wife is 32. We have no kids. I was thinking of getting a reverse mortgage to enjoy my money while I can. Let's say I live another 20 years, then my wife inherits the house and lives there the rest of her life. Why shouldn't I get a reverse mortgage?

Man. Well, because markets are not going to work like you think it's going to work. You just picked up the high points that the sales job gave you and you didn't get the reality. The reality is the interest rates that the reverse mortgages are calculated on

are almost double what traditional interest rates are on a mortgage. The fees are more than double when you go to close on the reverse mortgage. They get you coming. They get you going. And the foreclosure rate on reverse mortgages is tenfold the national average for traditional mortgages. Wait, wait, wait, wait, wait. They're paying me. How could I get foreclosed on?

And then when they run out of equity, by the way, it's only 65% of the equity that you can take out, up to 65% loan to value. And when you run out of the equity, then you still have to maintain the property even though you have no money. You have to keep the property taxes paid, the insurance paid, and the maintenance done. If you don't do any one of the three, the clauses in the document allow them to foreclose because the collateral is falling apart or getting foreclosed on for lack of insurance or lack of taxes paid.

And so we're finding poor little widows, like you're going to leave behind, who entered into these things, are now losing their homes at four and five and six times the rate that you lose a home in a traditional mortgage. Dude, you're trying to skin a cat the wrong way. This is not how you become wealthy. The way you become wealthy and make sure she's secure is you get the house paid off, and then you save up some money, and you live like no one else, so later you can live like no one else. Beautifully said. So the simple answer is, if paying off your house is the best option,

then going into the reverse side and borrowing against your house is the worst option. And it's going to leave his wife in a lurch here, because she's going to have to pay the full thing off if he dies before it's sold, with all the interest, or she surrenders it to the bank. Well, now, if it's in both their names, she'll be able to sit there in it until something happens. But a lot of these have call provisions in them. I've got to tell you, it's a filthy business, and I would stay away from it. And it's bad products.

The product design is not good for you. And they go after older folk. I mean, that's their target demo with these. You see the commercials late at night. Exactly. Exactly. That's another thing you can think about is this, okay? If your investment product or financial product is advertised on a cable channel

right next to Snuggies and walk-in bathtubs, you probably don't want to do it. Now, Snuggie is a good investment. Let's be clear. Oh, I'm just saying, if that's where your financials, so you can just line up, what, gold coins. You can line up reverse mortgages with washed-up actors. You can, you know, we got the Fonz, and we got Magnum PI. Tom Selleck, yeah. And so, you know, it's old-time stuff.

And so these guys are, I'm sure they're great guys. They're just bought and paid for, but I'm not mad at Tom or Henry, but love to meet either one of them. But I'm not buying the crap. And the little company that Tom endorses, they had an $800 million fine. Wow. That's scary. Yeah. That's some shady business right there.

Yeah, that's some shady business, so let's not do that. Scott's with us in New York City. Hey, Scott, how are you? Well, Dave, and yourself? Better than I deserve. How can I help? Good. I'll start with my question and then give a little background, if I can.

My wife and I are 42 years old. We own a vacation property, which is actually only four miles away from our main house. It's a waterfront property that we rent a little bit just to cover its overall cost. I own this property outright, and I'm curious if I should sell it to pay my main house off. So the house we live in right now, I have a $870,000 mortgage on it. It's worth about a million for, uh, the house that we're looking to sell is actually got a value of about 3 million right now. Um, but I have, uh, I would have substantial capital gains because of the real estate market

in the last two or three years here. Wow. So your lake house is worth more than your house well considerably it is it is that's fun i like that uh that's a style that's styling right there it really is a blessing so why don't you just move in the lake house uh it's it is a seasonal it's a seasonal house waterfront house it is seasonal uh and i also have my parents my elderly parents that live with us so we we need a little more room to uh to be able to accommodate them as well okay um we've got substantial wealth which gives you a lot of options what other money do you have whatever the money do you have that we could just get your mortgage paid off and keep it yeah so i make about 170 000 a year uh i am self-employed it fluctuates do you have any money saved that is not retirement money other than these properties i don't i have no debt no car payments no nothing, but no cash on hand, very, very little, $5,000, $6,000.

So you've got a seven-year, eight-year journey to pay this house off if you keep the lake house. Absolutely, absolutely. And I've got a kid that's just heading off to college this year. I've got a 14- and 13-year-old behind that one that's going to be heading off to college. But I typically set up the cash flow of those colleges. Are you pretty tight financially with that $870,000 mortgage? I am. Since COVID, I am.

Typically, no. I've been very, you know, been fine, a lot of cash flowing. But since COVID, I'm in the construction construction business and we're busy as all heck uh but the contracts we were lucky to be very flush but we've had contracts that you know are six seven months old and then it takes a year to build these custom homes uh and with cost increases really really got out of hand yeah really got out of hand so yeah, yeah, it is a little tight right now. There's not a wrong answer. If it gives you more joy and more peace to dump the lake house and be 100% debt-free

and have a pile of cash during this tight time, that's fine. If you just would, you know, if you would feel stupid for doing that, then don't do it. I mean, you can you can probably hang on without any trouble and get your house paid off over a period of years and hang on to the house it is it is you know it's weird that your lake house a few miles from you is worth three times what your house is that's just a little strange in your portfolio but it's not the end of the world um i love my lake house. I'm not selling it. So you can do whatever you want to do.

But in your case, you're asking the question, which makes me kind of think you may want to do it. But it's up to you. You don't have a financial reason driving this one way or the other. It's a personal call. We'll be right back. George Campbell Ramsey personality is my co-host today. Open phones as we talk about your life and your money. 888-825-5225. Ruben is with us in Green Bay, Wisconsin. Hi, Ruben.

Welcome to the Ramsey Show. Hi, Mr. Ramsey. How are you doing today? Better than I deserve, sir. How can I help? Fantastic. So, yeah, first my question, and then I'll fill in a couple of blanks. I am getting ready to go into a new field.

It's life insurance. I'm getting ready to take my state exam. I've been studying for the last month. And this is final expense insurance. And I'd recently heard on one of your shows, you kind of had spoken against whole life insurance. This is really a brand new landscape for me. So I really don't have a lot of frame of reference. I guess I just want to make sure I'm, um, getting into something that's, you know, noteworthy and, you know, going to, uh, to be something I can stand behind. Um, the insurance company I'm getting ready to pair with is called Lincoln Heritage. So, um, that is, uh, that's kind of what's going on currently.

Just a little background, like on a personal, I'm 44, just turned 44. I am on my just over two years clean from a 20 year heroin addiction. Wow. here. I had a dependency issue with chemicals for a long time, jailed institution, and then finally death. I was revived. I ended up going into a faith-based recovery program and totally got healed, set free. And Jesus is my Lord and Savior. Thank you, Lord. Second chance in life, I really feel. And I just want to, you know, I'm trying to, it's more than just about money to me. It's about breaking generational things. I've got children. I just have so much to be thankful for, so much writing on all of this. I have a great church I've been plugged into, and they were the ones that first exposed me to your podcast and to Baby Steps.

Actually, I lost my job right before Christmas. What were you doing? And I was actually selling for budget blinds. So you're a people person. I love, yeah, I love it. You love people. Yeah, going into people's house and just kind of connecting with them.

Sometimes I really felt like the secondary reason I was there is to help them with window treatments or whatever, but yeah, it was definitely fulfilling. Well, you're a hero, Ruben, man. I'm proud of you. Way to go. So let's do a couple of things. This is a decision you have to make.

You don't make it because I said to. You've got to gather facts. But you're calling me and saying it bothered you that I tell people not to buy whole life, and you're signed up to become a salesman for it, so that's throwing you off. Well, I guess it's industrial life, right, because it's final expense insurance. So I don't know if it's one and the same. I have no idea. I mean, I do have an idea in that I'm studying.

I understand that whole life is different than industrial and final expense insurance. Does the insurance that you're selling have a cash value? It does. Okay. Then it's a type of whole life or cash value product. There are various types. I mean, there's universal life, there's variable life, there's whole life, there's industrial. But anything that has a cash value in it is where I'm going to have a problem, okay?

Okay. And I'm not going to end this call. I think you're an amazing man, and I don't want to in this call trash your dreams of what you're going for for your career but I'm going to give you a whole bunch of stuff to work on and decide for yourself number one I'm going to give you a copy

of Ken Coleman's new book From Paycheck to Purpose because that's the move you're trying to make you're trying to get into something that has meaning and purpose because your life has a whole fresh start. You're seeing things with cleaner eyes than you have ever seen because of your journey, and it's a wonderful place in your journey that you are, and we want to assist you in that.

And so that book is in case I talk you into quitting before you start. Okay? Okay. So the product, the reason I don't like the product is this the way it works mathematically is not a good deal for the person that buys it and i'll explain it to you okay whole life traditional cash value insurance is 20 times more expensive for the same amount of coverage of life insurance. And so let's say you were going to buy a $200,000 policy. If it was $100 a month for whole life, it would be $5 a month for term insurance.

Right. Okay. Now, where does the other 95 dollars go well it goes to build up this cash value inside the policy it's a savings account inside the policy in and of itself that's not a bad problem except that the fees are ridiculous in the whole life world now i don't know the particular product you're selling, but the typical whole life policy, the first three years, your cash value buildup is zero,

which means they kept your $95 a month that you put in the savings account because it was zero, upfront fees. Okay? The second thing is the rate at which the money accrues is somewhere around 1.2% according to Federal Trade Commission studies. The rate of return on your savings account sucks as a long-term investment, and this is a long-term play. And the third problem is this. paying $95 extra per month, $5 bought the insurance, and you're paying $95 extra for savings, they pay the face value of the policy, in this case $200,000.

So if you've built up, after you got through the three zero years, and you got a horrible rate of return, and you keep putting $95 in there, and you built up $20,000 in cash value, and you die, they send your beneficiary, your spouse probably, $200,000. What happens to your $20,000 savings account that sucked? They keep it. And so this is like going down to the bank and opening a savings account that the first three years you put money in it, they keep your money.

After that, they give you a lousy rate of return. And when you die, they keep your money. It's a horrible way to save money. And so, consequently, the people that you're talking about going to work for hate me with a vengeance because I tell people not to buy what they sell every day and have for 30 years. The worst, the particular product that you're in or that company I'm not even familiar with, but I'll guarantee you their face is going to turn inside out and explode when you just mention the name Dave Ramsey. So don't mention it because it won't do any good.

We don't want anybody's head exploding. I'm not going to make friends like that. If you're going to quit, just quit. Do it with class. You don't have to go in there and try to change them. You're not going to change them. They're going to keep doing it. They've been doing it for 100 years. So lastly, what I'll do so that you can review this material in detail

is I want to sign you up for Ramsey Plus, which is the Financial Peace University class and EveryDollar app. In that class, there is an insurance lesson that goes into detail on the life insurance portion so you can learn in detail what we teach about life insurance. And you can't dispute it because it's just math. It's a fact. And so, consequently, no financial planning people, unless they're in the insurance business and call themselves financial planners, no one in the financial world pushes cash value life insurance anywhere unless they sell it.

There's no independent financial people that push this stuff. They all say buy the term insurance for $5 instead of the cash value for $100. Do your investing with your $95 difference anywhere else but inside of a cash value policy. You're better off putting it in a fruit jar in the backyard. At least the family can find it and it's there when you die. They don't keep it. Yeah, it's trying to be investing in the family can find it and it's there when you die. They don't keep it. Yeah, it's trying to be investing in insurance at the same time, and it's terrible at both at the end of the day. So if I'm selling this thing, I'm going to have a moral problem knowing how much I know.

So ignorance was bliss until now. Ruben just learned a little too much about whole life. I think he can find a better job out there if he loves sales, if he even loves insurance. That's a noble thing to sell, but not whole life. I would stay away. And these companies are like a Northwestern. You know, it's your buddies from college that want to make a big commission off you. Stay away.

And again, I tell you never to buy it. And so I know I'm kind of bursting your bubble in the middle of you having this whole recovery journey and everything. And I don't want to do that. I want to say you're a hero. I'm proud of you. You and I are going to be friends even if you decide to do that. I want to say you're a hero. I'm proud of you. You and I are going to be friends even if you decide to work there. So I'm just, you stay with it, buddy. But hang on.

Kelly will get you the book for Ken Coleman, and we'll get you signed up for Ramsey Plus. I'm not charging you a thing for any of this. And I'm not going to keep your money when you die. No commission. This is The Ramsey Show. Our scripture of the day, Psalm 9419, When anxiety was great within me, your consolation brought me joy. Mark Twain said, A man cannot be comfortable without his own

approval. That's pretty strong. That'll do. George Campbell, Ramsey Personality is my co-host today. TJ is with us in Lima, Ohio. Hi TJ, how are you? Good, thanks Dave and George. Thanks for taking my call. Sure, what's up? Yeah. So I got a question about whether or not I should pay off the remainder of my car this month or wait until next month. So I'll give you the situation in brief. First, I want to thank you guys. When I started this process about 14 months ago, I was making $45,000 a year. Within two months, I started making $60,000 a year.

And just today, I just got an offer to make $100,000 starting next month. Wow! Good for you. Yeah. Good for you, man. That's killer. Yeah, I'm really excited. I'm a little shaky, to be honest with you. I paid off $28,000 in the last 12 months. And this week, I'll be able to

have the funds to pay the remainder of the car off, which is $2,638. Now, the question that I have is, if I pay off the car this month, I'll be making next month a little tight financially until I get my first paycheck at my new job. So the question boils down to, do I go ahead and pay the car off, or is it okay to dip into the emergency fund as a gap bill? Now, I'm kind of conservative, so I think I should pay off the majority of it and then pay the remainder after I've secured that first paycheck. And my wife thinks it's okay to dip into that emergency fund, so I'd like to hear your thoughts. What's your car payment?

It is $408.24 a month. How much are you having in your emergency fund? $1,000. Okay, just making sure you're doing this right because you're acting like there's a lot of money and on top of that you'll be able to pay off the car but you'll have a thousand dollars to your name for a short period of time correct so i don't understand why you're gonna i don't understand why you're going to miss a paycheck changing jobs. Well, I don't anticipate that I will, but, you know, there might be, like, this job right now pays weekly, and I don't know if the next job will pay biweekly or, you know, semi-monthly, whatever. But I didn't know if I should pause just as a security blanket or just go forth and assume my best, I guess. Does your wife work outside the home?

No, my wife is a stay-at-home mom with our two little girls, and she actually watches two kids to help with income as well. What does she make doing that? Right at $2,000 a month. Mostly she uses her income to pay for food, household supplies, things of that nature. And we're really using my income to tackle large bills like the mortgage, the car payment, the debts, and then also attack the debt pretty heavily. Gotcha. So your conservative nature is what's making you assume

that you're going to dip into the emergency fund. We don't really know that you're going to have to because you really don't know how the new place is structured yet. Correct. So let's find that information before we make the decision. Okay. So let's pretend there's no change, that you go from one paycheck to another.

Then you would have just paid off the car now, right? Right. But let's pretend there's a $2,000 gap between the time you get paid and the changeover. And you only have $1,000. Well, then having paid off the car would have been silly because your kid's going to be hungry. Right. So we need to work from facts on this as to what's really going on. But I think that's what's going to happen.

I mean, a normal transition would be we pay in America, generally speaking, for the work that is completed. In other words, you work and you get paid at the end of the work time. You work, and you get paid at the end of the work time. You work, and then you get paid at the end of the work time. And so if you work, and you get your final paycheck, and the next week you go to work at the other place, and it's two weeks, and you get a paycheck, you're not going to miss a check. You're going to miss a weekly hit, but you're going to have two weeks of pay.

If you can sit down and look at that and go, well, with my wife, with keeping the kids with that income, we're easy. It's no problem. I think that's probably what's going to happen unless there's a start date that's pushed out on the new place after you leave the old place. Now, you could leave a gap in the middle there, right? Right. But, I mean, I think we need to figure out exactly where you are. Just ask the employer, hey, when is that first check going to come in for planning purposes?

And we plan from that. But you're not going to have a car payment either, so you're going to need less money once the car is paid off. Well, it's only a $400 swing, so it's not a $2,600 swing. It's a $2,200 swing. And we've got $2,000 coming in from her, $1,000 sitting in the account. I think you're going to be okay, but I don't want your kid to be hungry. But I also don't want you making decisions that are just based on the fact that oh i'm kind of conservative no we'll get the car paid off you know okay if you're conservative or not but um but let's but but let your conservative

cautious turn into wisdom and say we're going to gather this information from the new employer match it with the old employer pay and and here's the gap or there is no gap, and then you can make your decision. And we're going to live like we did not get a raise because we have an emergency fund to build up as soon as this debt's paid off. Yeah, just keep plowing on through. Keep working your baby steps for sure. So well done. Jenna's with us in Wisconsin.

Hi, Jenna, how are you? Hey, good, how are you? Better than I deserve. How can we help? Hey, I was just curious. Is it wise for my husband to quit his public work job in order to continue an already in-business working cabinet-making company, especially with concern for the future and market and the current economy costs? Yes.

He should go be self-employed. I should preface this by saying we are on BBS at number two. So far, we have paid off $210,000 with $55,000 left to go. Way to go. That's awesome. I'm assuming he's going to make more, though. You're assuming he's going to make less. Which one of us is right?

Well, I think there's security in with the public works job as far as it's salary. No, there's not. No, there's not. Some goob over there has to make payroll. Security in the workplace is mythology. What's he make at his current job? So his current job in the public works job, he makes $47,000 a year. What did he make last year on the cabinets?

And then last year his net profit was $40,000. On cabinets? But that wasn't full-time. Yeah, that was just part-time. That was part-time. So he's going to do better if he just increases his time spent on the cabinet business. Correct. It sounds like he's not scared of work either.

So I feel pretty good about security of him being self-employed. Sure, yeah. And the other thing is I was trying to, you know, for the future, like this fall, if all of the interest rates go up, I guess I was just kind of nervous that way. He's going to double his income. Yeah. He's going to double his income. He can make $100,000 next year. Sure. income you can make a hundred thousand dollars next year sure i mean we do have forty thousand dollars of face frames in wilbur city in our garage because of orders so yes i don't doubt

that um i guess yeah i think you can clear six figures with this new business and get you guys out of debt even faster sure yeah so jenna we're big believers in self-employment when you've got a real gig going. This guy's got a real gig going. He does. And what I don't want you to do is I don't want you to confuse. I don't want you to say, I'm willing for my husband to make half as much working for the city as he can make working on his own and call that security. That's not security. Now, the city's probably not going to go broke.

They're probably going to keep paying him. They may not lay everybody off, but they might, too. They have before. It wouldn't be the first time that the city had a layoff. And so, you know, but don't make half as much as you can make in the marketplace and call that security just because somebody else is writing your paycheck. His ability to get up, leave the cave, and kill something and drag it home has been proven. That's true.

He's a smart guy, and he's a hard worker. Now, I do want you guys to, I want to coach you up. I'm going to send you a copy of the book Entree Leadership because I think this guy's really good at making cabinets. His next step is to learn how to run a business. It's a different skill than making cabinets. And if you're going to be bringing in that profit of $100,000 a year, you've got to run a business. And so he needs to get into that. I'll send you a copy of our book, How We Run Hours.

It's called Entree Leadership. Thank you for calling in. George, good show. Good stuff. Thanks, Dave. That puts us out of the Ramsey Show in the books. 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. Hey, it's Rachel Cruz, co-host on The Ramsey Show. If you want to do your debt-free scream live on the show, visit RamseySolutions. do your debt-free scream live on the show, visit ramsaysolutions.com slash debtfreescream. We'd love for you to come to Nashville and tell Dave your story. That's ramsaysolutions.com slash debtfreescream.