The Ramsey Show - App - Should I Sell Individual Stocks? (Hour 1)

Episode Date: August 12, 2021

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Live Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host, Rachel Cruz, Ramsey personality, number one New York Times bestselling author multiple times, and my daughter is my co-host today. We'll be answering your questions about your life and your money. Open phones at 888-825-5225. The advice is free, and some say it's worth every penny.

888-825-5225 arnell is going to start us off in california hey arnell what's up in your world hello it's a pleasure speaking with you you have shed some light on my life i'm very excited about. Basically paying off our mortgage. That's where we are and building them up. Nice. So my question is, we are about ready to sell a piece of real estate, which we've owned for 30 something years, and it will go for 1.5 million approximately. We've just got our first offer. And we split that with my brother-in-law since we co-own it. With that money, let's just say $700,000, we're going to pay off another rental

property and our primary residence and then we'll have about $500,000 left. I hate it when that happens. I know. We are 65 and 68, so we're in that stage of our life, and we're not quite sure what to do with that money, what you suggest. So that means you're at baby step seven, you're millionaires, and you've done it, you're good shape, you're completely debt-free, and you've got an extra half million dollars that you just have to figure out what to do. Well, you address it to Dave's Cabo Fund, and you send it. No, I'm kidding. Okay.

Wire the money to the Caymans. I started writing that down. I'm so proud of you guys. Well done, Arnelle. Do you feel accomplished? Because you should. I do. I came from nothing, you know, inner city projects of New York,

and we've really done well, so I'm very excited. What were your careers? Currently, we both own our own business. My husband and I are both prosthetists so we make artificial limbs for amputees wow and then i have been a special ed teacher i've been a homeschooling mom a prosthetist and now i own my own gluten-free organic baking mix company, which I am about to sell. Wow. Yeah, nothing's stopping you. That's amazing.

Very cool. All right. Well, there's only three things you can do with money. That's give it, enjoy it, and invest it so that you can give it and enjoy it. Right. And so we always recommend with money that's laying around that you are intentional with it, that you give it an assignment before it gets there. Because if it gets there and you don't give it an assignment, it can slip away. And so you say, we're going to enjoy by going on a trip or buying some item or some lifestyle decision some of this money.

And it's X number of dollars, and we're going to buy this thingy with it or whatever it is you write it down and we're going to uh we're going to be generous with it we're going to find some people that uh need some help uh like where you came from and you say we're going to help them get started we're going to help them with their life whoever that is and that's outrageous generosity and then we're going to help them get started. We're going to help them with their life, whoever that is. And that's outrageous generosity. And then we're going to obviously invest some of it. And you can buy a piece of paid-for real estate, which is what I do, and or you could invest in good mutual funds, which is what I do. But what a great story.

No, it's amazing. Arnelle, do you guys have kids? Yes, we have two daughters. And grandkids, maybe two. 31 and 29. Okay, any grandkids? Not amazing. Arnelle, do you guys have kids? Yes, we have two daughters and grandkids. Maybe two. Okay. Any grandkids? Not yet. Not yet. Okay. No grandkids yet. But for your two daughters. Yeah, that's wonderful. Well, I mean, I mean, I feel like that this is always just, oh, go ahead. I have a question about index annuities. Somebody was telling me that one called like American National. It's like a fixed index annuity. It's a flexible premium that has this range,

but you can never lose the money if the market crashes. Any thoughts about that? Yeah, I wouldn't do fixed annuities, but a variable annuity might be a play, and it does give you a protection of principle, and it'll even give you a floor on a minimum it will make however their fees are higher and so um you're going to pay more fees there than if you buy a mutual fund and basically they're going to require in most cases that you uh leave the money in there long uh for a long period of time or otherwise you're

going to have surrender charges and if you have have the surrender charges, then, you know, if you had left it alone five years in a mutual fund, it wouldn't have gone down anyway on average. That's why they're able to make that guarantee. So I'm 60. I don't have any variable annuities, but I'm not worried about the stock market. I'm not worried that I'm going to lose money. I'm going to ride out any downturns from there. Is there ever a time frame to do a variable annuity? This would be it if you were going to do it. It's the only time. Only after your home's paid for and all your other retirement stuff's maxed out. And it grows tax deferred. It sits in there and grows. But

again, you don't really have good access to it and the guarantee that it makes you know if you look at the historical data on what the stock market actual does actually does you don't really need that guarantee if you're gonna leave it alone five years or seven years so you're gonna get you're gonna make a floor of five percent or more if you didn't it'd be the first time in the history of the market you're gonna get your you're gonna at least make your principle but if you want to sleep a little bit better and you don't you know you want that guarantee i'm not mad about it i i'm okay if people buy these i don't want you buying them for your iras and stuff like that because that stuff's already got stuff got you know it's already built in and so um we don't need to do principal protection on that stuff. But if you want to with some of this money, that's fine.

But I think the thing I want you to leave with, Arnell, is you should do all three things with the money. I don't care what the amounts are, but you need to spend some on you. And sometimes people like you don't do that enough. You've done a great job. We hear that a lot lot especially people that have sacrificed and have worked decades literally and i mean she's in southern california right ventura i mean it's so her i mean if her house is paid for there you know it's been a long time

that you know they've put money towards you've been diligent and then to be able to look up and actually have the freedom to spend it's like it's a it's a muscle you have to learn to grow if you haven't already yeah and sometimes the generosity muscle outrageous generosity you know sometimes people think generosity is five bucks no not not when you're sitting on that kind of money that's not generosity that's cheap so no i mean you need to find about about five or six single moms and buy them a car you know, or something like that, that kind of thing. You need to have some fun with the generosity piece of this and get all down in somebody's business and really help them.

And, you know, we've all had people help us over the years in different ways. Sometimes it was encouragement. Sometimes it was an actual dollar amount. But that's why you do this. And so make sure you're doing all three things with this but you've done such a good job so proud of you this is the ramsey show You know, I heard a sad and touching story recently. Zander Insurance has set up a scholarship for children whose parents died without life insurance. Last year, they gave away over $165,000 to help kids avoid debt and go to college to pursue their dreams.

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way you do and what to do about it the know Know Yourself Money Assessment is $20 for individuals, $30 for couples. Great for couples that want to get on the same page. You get your money profile and beliefs, your money classrooms, how you grew up, your money tendencies and fears and motivations and attitudes and actions. It all prints out, and you will look at your spouse and go, Oh, that's why you do that. So be sure and check all that out. No parent ever wants their child to experience the panic of being unprepared for an emergency.

Well, we've got your back. With our digital self-study courses for teenagers, you can rest assured that your teen will know the right way to handle money, no matter what curveballs life can throw them. Best part is no instructor is needed. If your teen has a tablet or a computer, they're all set text self-study to 33 789 self-study to 33 789 and you can learn more about the different courses we have for middle school and for high school you'll see rachel cruz featured on most all of those jimmy is with us jimmy in St. Louis. Hi, Jimmy. Welcome to the Ramsey Show.

Hey, Dave. Hey, Rachel. Thanks for taking my call. Sure. What's up? I am basically just to lay it out there. I'm 27 years old. I have no debt other than a mortgage.

Good. I bought this house back in March, and I have about $49,000 left on it. Wow. I have a home repair that sent me back from step six to step three. I'm currently sitting on about $30,000 in individual stocks outside of 401k, and I'm trying to figure out what to do with it. Do I replenish my emergency fund and reinvest the rest of it? Just pour the rest of it back into my mortgage.

Do I reinvest all of the stocks with mutual funds? I'm just wanting to get your take on it. Yeah, our general rule of thumb is always not to own individual stock as majority of your net worth. And so, I mean, we always say, you know, if all your eggs are in one basket, right? I mean, just the idea of diversification is so much better when it comes to investing. So like you said, mutual funds is the best way to go in that case. So if I were you, I would, yes, cash out those individual stocks, replenish baby step 3, and then go right back down to the Baby Steps, which would mean a lot of that probably will be in Baby Step 6 for you,

especially if you've maxed out Baby Step 4 already all of your retirement. What's this house worth? I bought it at about $70,000. It ended up having to have a few repairs. The appraisal came in at like $80. Good for you. Okay. And so what do you make?

I make about $58 after taxes. Okay. So how much does it take to replenish the emergency fund? Probably another $8,000. So I would put $8,000 in that and $22,000 on the house. Okay. And then you're going to be done with your house in under three years. Exactly what Rachel said.

Okay. Yeah, just walking right down the baby steps, replenish that emergency fund, and then just lean in on that house. Dude, you're so close. And as young as you are, you're in great shape. You have done a fabulous job touchdown baby good job jeremy's with us in oklahoma city hi jeremy welcome to the ramsey show hey david rachel how are y'all great how can we help yeah i'm a second lieutenant in the air force uh and i'll be promoting to first lieutenant here in september my wife and i have been loosely following the baby steps.

We just moved from Pensacola, Florida to Oklahoma, so we had some moving expenses. We had to save up a little bit more than $1,000 to start with. In the apartment we got here in Oklahoma, it was kind of inadequate, and we were ready for a house, so we sort of jumped the gun a bit and bought a house when we still had about $5,500 left to pay on my truck, but that's our only debt. So I guess my question is, now that we have a house and more can go wrong, would you suggest throwing everything available at the truck to go ahead and get it paid off or increasing the initial emergency fund before we pay off that truck loan? Jeremy, I'm just curious, what about the situation for you guys? Were you guys in a house in Florida

and then you moved to an apartment and you just kind of got restless? I'm just curious kind of the why behind that decision to jump the gun. You guys were just kind of discontent? Sure thing. So we just got married in December. We were in an apartment in Florida, which we actually really liked. And then the apartment we got

that was available when we got to Oklahoma, you know, Air Force moves us when they decide to move us. The only thing we could find was not the best. Just as an example, our apartments smelled like weed all the time. Neither of us smoked. It was just seeping in from the walls of our neighbors, basically. And then there were some issues where we were having trouble getting maintenance done in the apartment.

Because the maintenance guy lives next door and he was high all the time. Could have been. And as part of our military pay, we do get a housing allowance. And we were able to find a house that was within that housing allowance. We're in a 30-year fixed VA loan. And as I said, I'm going to promote here in September. So my take-home pay after taxes will increase by about $1,000 a month. And how much will that be a year?

So right now, before the promotion, it's about $50,000 a year after tax. So it'll be up to about $60,000 a year after tax, and that's just my income. Another reason we decided to jump the gun is my wife just got a job on base. Right now she's making $12.33 an hour, but it fluctuates from 20 to 40 hours a week. So we didn't factor that into a budget. My income pays for all of our expenses. Okay. Okay, so the rule of thumb

when it comes to buying a house, the reason why we always say to wait is because probably what you're learning pretty quickly is that owning a home is expensive, right? It's not just the purchase of the home, it's everything else that kind of goes into play. But whether you're a homeowner or not, still focusing on the debt and getting that truck paid off as soon as possible is going to be your main focus. everything else that kind of goes into play. But whether you're a homeowner or not, still

focusing on the debt and getting that truck paid off as soon as possible is going to be your main focus. So I would not up the emergency funds, keep it at a thousand. And if something comes up and you have to pause paying off the truck to save up to fix something in the house, then that's what you're gonna have to do. But besides that, still attacking that 5,500 and then building up that emergency fund. So again, the reason for everyone listening is that when you still have debt and you don't have a lot of savings and you buy a home and something does break, it just makes the whole situation stressful. It's more of a curse than a blessing of what a house should be.

It just doesn't bring that peace. So for you guys, I would just say, Jeremy, to make that be extra motivation to be like all right we can get this truck paid off fast we're gonna get some cash in the bank to save up more so that we're not kind of because you you feel it you said we're jumping we jumped the gun a little so you're feeling a little bit of that stress i know so thank you for your service um rachel's right but listen listen dude here's the thing okay you're screwing around with this stuff you're running around making up your own rules and in your head what you did was smart and it wasn't smart you did it out of order yes you jumped the gun but you're not concerned about

jumping the gun and you should be you screwed up and so don't screw up again. Decide you're going to work these baby steps exactly and with military-like discipline. $1,000 is baby step one. Beans and rice, rice and beans. I don't want to see your butt in a restaurant until you get this truck paid off, unless you're working there as your extra job. And the fact that you're making more money is not an excuse to be stupid, and it's not an excuse to be stupid and it's not an excuse to get things out of order so you got to tighten up man and uh it's time to do that now

you can do that or you can not do that you're a grown guy you get to decide what you're going to do but you called here and asked us what to do and so what you're going to get is a proven plan that millions of people have done you don't need to fix this it's not broken you need to just execute on it exactly and with discipline and so the fact you know all the people most of people working baby steps one through three have a house and they all start with baby step one being a thousand dollars yeah but what you're feeling in your gut is the fear of something breaking in that house. And to Rachel's point, that's exactly why you shouldn't have bought the stupid house. Because you're broke.

And when broke people buy houses, stuff in their house breaks. That's how this works. That's why they call them mortgage brokers and real estate brokers. It gets you broker and broker. And it's not a blessing. So, you know, you need to roll up your sleeves and tear into this thing, man. Tear into it and get that car gone. Get that emergency fund built by Christmas.

Get it done. This is the Ramsey personality is my co-host today. Open phones at 888-825-5225. Right here in the lobby of Ramsey Solutions on the debt-free stage, James and Megan are with us. Hey, guys, how are you? Hey. We're good. How are you? Better than we deserve.

Welcome, and all the way from where do you live? Charlotte. Charlotte, North Carolina, to do a debt-free scream. How much did you pay off? $249,756.57. Ding, ding, ding. Way to go. How long did this take?

Three years, three months, and 20 days. Wow. That's a lot in a fast time period. Yeah. What's your household income during that time, the range? It started at about $120,000, and we're on track to probably clear a little over $165,000 now. Excellent. Way to go.

What do you all do for a living? I'm a project manager. And a real estate agent. And a real estate agent. On the side. I'm a project manager. And a real estate agent. And a real estate agent. On the side. I'm a deployment engineer. Okay. Excellent, guys.

I play software. So what kind of debt was the $250,000? Everything. We had medical bills. We had credit cards, car. Student loans. Student loans was most of it. My fault.

Okay. Wow. How long y'all been married uh almost five years almost in october it'll be so not long after marriage you look up and go oh my god there's a lot of that we gotta do what happened tell us the story our daughter was born oh that'll do it a baby does. That's a wake-up call. Yeah. Yeah. No pun intended. Some of us were dragging our feet a little more than others.

Guilty. But I came home one day, and she said I paid off the medical debt from our daughter. And I said, how did you do that? We didn't have that money. And she said, that credit card that the bank gave me that's connected to the house equity, I paid it with that. And I said, you did what? This medical debt had no interest, and you just put it on something that's got interest. And I ran in the office, grabbed the paper shredder, put it down the middle of the floor.

We had a shred party right there in the middle of the floor. A debit card got shredded in the process, too. Anything that was plastic. Basically, the whole lot. The whole driver's license, everything. Oh, my gosh. Yeah, I was done. Okay.

Oh, man. Sounds like a big fight. Oh, yeah. There was more than that. A water bill got paid on it, too. For you, it was just, hey, I'm going to try to help. That's right. The process.

You didn't know. It was a little bit of an ignorance. Absolutely. Yeah. Okay, so the meltdown and the famous shred night, and then what happens? And then my dad actually had purchased Financial Peace for me years ago, and it was on the shelf. So that came out, and we started the journey on our own. Oh, wow.

Then we found a church group that was doing one, and we went and did it with the church group. Wow. And then we became coordinators and started teaching our own classes to kind of keep ourselves accountable. That'll do it. And we're still doing classes today. Nothing like teaching something to make sure you learn it oh yeah wow way to go you guys yeah now we're uh we're doing three and we're on two uh four five and six

wow amazing so well done how does it feel great it's like a giant weight lifted off my shoulders i when i graduated college with all that debt, I honestly thought I would never. I was hesitant to get married, have kids, because I saw this massive amount of debt. And I was like, I don't want to put this on anybody else. And I'll never pay this off. And then when I met her, I was like, well, I can't let her go. And so I got married. And I figured we're going to figure out how to get through this.

So it was like $200,000 in student loan debt. Oh, yeah. He went private school, cross-country. Oh, yeah. A whole enchilada, baby. Megan actually called your show. I did. Oh, what did I say?

Was I nice? You were very nice. You were surprising on some of the stuff you said. But we got a call from – I didn't warn her about my student debt. And they called her because I was delinquent on a lot of it. And they said, we're willing to settle $120,000 of it for $8,000. And yeah. On student loans?

Yeah, student loans. Did they do it? They did. They did? I called you. Oh, it was all private? It was all private. Oh, okay. Okay. Okay. Yeah. Yeah, student loans. Did they do it? They did. They did? I called you. Oh, it was all private? It was all private. Oh, okay.

Oh, my God. But what they did is they took the principal balance, and they took 10% of the principal balance and settled for the 10% of the principal balance. Wow. And we did it. We got it all in writing. She called you. You told her, yeah, do this deal before they change their mind. We didn't have a credit card at the time. We didn't have a grand at the mind. We didn't have a credit card at the time.

We didn't have a grand at the time. We didn't have a grand at the time. So she said, should we get a credit card to do this? And you explained like, yes, today you have $120,000 on debt. Tomorrow you have eight grand and an IRS issue. Right. And it's totally worth it. I mean, I can't tell anybody enough.

If you're hesitant about this or you think you're doing Dave-ish or any of that stuff, stop doing all that. Just go all in and submit yourself to the process. Do it. So you guys were newly parents though, new parents when you kind of started this.

Our two oldest are from a previous marriage. Okay, okay. I'm sorry. I'm sorry. But you had had your daughter, though, which was kind of the wake-up call. Yes. So what was the hardest part? Because I'm like, I know it's hard, right, when you have a new baby and you're trying

to figure out life. It's expensive. All of it. So what would you say to people that had their first baby and they're realizing, wow, we got to get our money in order? Yeah. I mean, we really don't. We would go on a family vacation a year, and we usually went with, like, a parent, and they kind of helped us along the way.

We would budget to save for what we needed to save. Budget everything. But we didn't really go out to eat. We just ate in in and we had beans and rice some nights with the kids. Like, I mean, our children, you know, they would only get to play, like, one extracurricular activity a year. Like, we couldn't do everything. So they've sacrificed, you know, right there with us. But it's totally been worth the sacrifice i mean it sucks seeing your friends and other family members do all these extravagant wonderful things but now like we can go do those

things um and only they're in debt and you're not that's right we don't have when we come home from vacation we don't have to keep it with us yeah it doesn't follow you home that's right it's awesome well come on guys you know the key that i tell people is contentment teamwork and focus oh that's good and uh if you can just do those things then you can get through it i know it seems like a lot but you can i promise you can get through it yeah it's kind of it's a it's a contentment that goes hey it's two years three years you can do any you can hold your breath for three years i went to college for three years so why not two years, three years. You can do anything. You can hold your breath for three years. I went to college for three years, so why not do this for three years? Why not clean up college for three years?

Wow. Amazing, guys. You guys are so – I'm so proud of you. Great job. Well done. Thank you. Who were your biggest cheerleaders outside the two of you? My dad was a big one.

Yeah. Yeah. Got the FPU kit off the shelf and blew the dust off of it. Our children were big cheerleaders because they knew at the end of it, you know, they get their own room. And we're going to, you know, work on getting that for them and going on vacations. And Disney, we've promised Disney at some point. We did promise Disney. We're going to do that.

We've got a budget for that. Okay. Very good. So fun. Well, we've got that. We got a budget for that. Okay, very good. So fun. Well, we got a copy of the Legacy Journey for you. That's the next chapter in your story for sure.

On to being Baby Steps millionaires before you know it. You guys are right on track. Well done, well done, well done. You make great money. You got no payments. You got control, teamwork, contentment, focus.

Game on, man. Game on. A copy of the Total Money Makeover 2 for you to give away to somebody. I'm sure you know somebody. We give that away a lot. Thank you, thank you. We'll let one of the Total Money Makeover, too, for you to give away to somebody. I'm sure you know somebody. Oh, we give that away a lot. Thank you.

Thank you. We'll let one of them be free from you. No, appreciate it. Thank you very much. Well done. James and Megan from Charlotte, North Carolina. $250,000 paid off in three years and three months, making $120,000 to $165,000. Count it down.

Let's hear a debt-free scream. Before we do this, I want to thank you and your team personally as well. Thank you. Three, two, one. We're debt-free! I love it! Rachel, somebody out there is looking on their bookshelf

and they see a dusty Financial Peace University kit. And you need to pull it off right now. This is The Ramsey Show. We'll be right back. Rachel Cruz, Ramsey personality, is my co-host today. Number one best-selling author, New York Times best-selling author of the latest book, Know Yourself, Know Your Money. Discover why you handle money the way you do and what to do about it. Dan is in Modesto, California. Hi, Dan. Welcome to the Ramsey Show.

Thanks, Dave. How are you doing? Better than I deserve. How can I help? So I'm just having a little bit of a qualm right now with trying to decide where to go. Okay. I am a plumber right now, a service plumber. I work on commission because I've found that really the best places to work around here

and make decent money is to be on commission-based. Now, that means 100% of my income is commission. I have no base salary, so my income varies very wildly. What's your worst month? My worst month was about 3,000 take-homes. What will it be in the next year? What will be your worst month in the next year? Probably about 2,000 to 2,500. Why? Why would you have a worse month than your worst month so far, and you've been doing it a while? It should be better. Well, this is true okay so what's been your best month

my best month has been uh 8 000 take home okay so three to eight thousand is your range that we're working with right and so that's wildly okay how much is your rent yes 15 50 a month okay and your question is what So I've been trying to work extra to try to, to make sure that my worst months stay as minimal as possible. Meaning, you know, I, I don't have those bad months. Uh, the only problem with that is I, the way we do it is I work on call. So I would be on call over and overnight or, and then on the weekends, but if the calls don't come in, I don't really, I don't get paid anything for just being on call. So I'm wondering, should I continue to work these extra shifts and, you know, hope that the calls come in

or should I maybe look somewhere else where I would be making much less per call? Because I average, you know, if I'm actually working on the weekends, I average about $45 an hour to $65, somewhere in there, depending on the job. Or should I take a job making way less an hour, but it's guaranteed? Dan, where are you, like, when it comes to debt savings, like, what, you're just your financial picture, what does that look like? Yeah, so we've got about $54,000 total debt we're renting right now, so we don't have the mortgage.

And we have $1,000 for Baby Step 1 in the savings, and then I've got $1,000 in the checking right now that I keep there because I don't know what my next paycheck is going to be. So I want to keep that just in case utilities are a little high or something like that. Yeah, yeah. Well, when it comes to understanding just the budgeting process with a commission-based, I don't want to say salary because it's not salary, your own commission, is mapping out priorities. And so those first four things being that rent, your utilities, transportation, and food. And so these are the things that absolutely have to be paid every single month. We have to have money for these things to survive. And then everything else under that I would list in priority.

This is the next thing we need, next, next, next, all the way down. And the goal would be to get to a place, because there is such a swing for you, that you can live off of that budget. If we could do everything we needed to, we could live off this budget. And then on the months that we make more than that, we put it away. It could be in your checking account. I don't care what it is. For the down months, you can pull from that. It's kind of that slush funds that you're keeping month to month.

And people that are on commission, there's a level of that that you need to be able to, for that to be your safety net. So I would map out, I mean, on average, how much are you making when you're working overtime with that plumbing company where you're making extra and then run the numbers that if you're in a lower paying job how many hours would you be working to make that type and kind of just kind of like a cost analysis yeah that's what i would do here's what i'm hearing you didn't grow up in a commission-based or self-employed family you grew up in a family that was salaried and so this is scaring your mom and dad and it's scaring you because no because you don't know how to emotionally process these swings much less to how to handle the math. The math, Rachel, just told you how to do it with prioritization. And so the way to back off and look at it is this.

Everyone is on straight commission. If you're on salary and you don't go to work, they quit paying you. They fire your butt. And so everybody ultimately is on straight commission. And so the way you've got to look at it is overall. So what I would do, I heard a couple of concerns. One is I heard the unpredictability is driving you nuts. You can't tell how much of the overtime and how much of the on-call to take

and how much not to take. And you feel desperate because of the volatility to take all of it, and it's keeping you working all the time, only you don't work all the time because on-call, sometimes you're just sitting there and you don't get the $45 an hour. And so what I would do is say, all right, I'm going to make a couple of assumptions in my business model here. Assumption is, number one is, i don't want to work all the time

okay so how much do i want to work and so you would take some overtime some on-call shifts but not as many as you're taking now or not as many as you're taking when you get good and scared okay and just say over the scope of a year, I want to work this many hours. Okay, now you're working 40 plus these on-calls, right? Correct. Okay, and so if you're on-call, you're on-call as much as 80, right? Right. So I would back that down and say, all right, I got a wife, a kid, I got a life,

and so I'm going to work some on-call plus my 40, and so I'm going to work 50 or I'm going to work 60 for the next three years. And I'm just going to dial it up and back until I get to that. I'm going to take the premium extra 20 hours of on-call, but not the 40-hour of on-call. You don't have to do that today. If I'm going to do that as my assumption, what's my income probably going to be? And you can estimate that very close.

You've got a lot of details based on what you told me. And that is your household income, or that's your income for this career. And it sounds to me like that that's about a 70 or an 80 000 a year job what that i just described you have the ability to make 120 but you're working an unreasonable number of hours to get there so you're probably in an 80 000 with some ot some on call is that a fair guess yes yeah so no you don't take a forty thousand dollar a year job when you're making 80 to get quote unquote stability because what i just outlined really was stability dan that's a very predictable environment that i just outlined and you can

go do that so um that's what i would do i think but i think you got to lay it out like that and then you say all right what's the minimum we've got to have every month to eat? And what Rachel said, you lay out your priorities. We call it the four walls, food, shelter, clothing, transportation, and utilities before you do anything else. You lay that down exactly in that order. And then everything else is listed on a to-do list based on priority. Number one is where all the money goes until extra money past the four walls until it's done then number two when number two buckets full spills over to number three when

number three is full spills over to number four and that's how you're going to work off your debt is doing that now having done all of that you may choose to crank it back up to 80 hours for a period of time as gazelle intensity to attack that debt. But at that point, you're doing it not out of desperation due to the emotional insecurity of the variable income or the unpredictability of it. You're doing it because we're attacking debt with a system then. That's it. I mean, that's exactly it.

The feeling, which is very real, of holding your breath every month thinking, oh, God, we're going to be able to pay the bills and we're going to be able to exactly it. The feeling, which is very real, of holding your breath every month, thinking, oh, God, we're going to be able to pay the bills, we're going to be able to do it. Once you have that plan in place and you're in that formula, that settles down. There you go. That puts this hour of The Ramsey Show in the books. Our thanks to James Childs, our producer, Kelly Daniel,

our associate producer and phone screener. I'm Dave Ramsey, your host, and we'll be back. Hey, it's Kelly, associate producer for The Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes section or head to theramseyshow.com. Thanks for listening.