The Ramsey Show - App - Should I Use My 401k To Pay Off Debt? (Hour 2)

Episode Date: February 3, 2022

Debt, Home Selling, Home Buying, Career, Investing, Retirement As heard on this episode: Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

I'm out. Live from the headquarters of Ramsey Solutions in Nashville, Tennessee, this is The Ramsey Show, where we talk about your money and your life and your mental health, your relationships, anything and everything. Give us a shout, 888-825-5225. I'm John Deloney, joined here by George Campbell. We're taking your calls on money, on life, relationships. We're here to walk alongside you to get through the

messiness and the madness that's going on out there. We're here with you. Give us a shout. 888-825-5225. Let's go to Jay in Phoenix. Hey, Jay, what's going on? Hey, guys. I just had a quick question for you. My wife and I, we make about $120,000 a year. We currently have two auto loans. My wife's working at home indefinite. So my question is, should I trade two auto loans

in for one new auto loan just to kind of consolidate and reduce the payments per month? Well, I don't like the idea of just moving the debt around. Is there any chance that she might need a vehicle in some kind of emergency situation? Possibly just getting her a new vehicle just to have and then just buying myself one cash. Or can you go a season with only one car and sell one and pay off your debt for for now possibly the only reason that i'm even thinking about this is because we've been trying to work on buying a home our first home um you know uh and we're just basically waiting for that we know the markets for the used value of your for the used vehicles way up in the of

course the home values are way up as well so we're just trying to see what's best right now. Yeah. You're wanting to do a few things at once here. What are these cars worth and what do you owe on them? So I owe about $40,000, $43,000. And I have a Nissan that I only owe $17,000 on and it's worth $23,000, $24,000 right now. The word only is always a little trigger for me. I only owe $17,000.

Dude, $17,000 you owe. How much do you make? What's your annual salary? Sorry, you're breaking up on us, Jay. Speak directly to the phone. That was a very strategic breakup there on the phone. I come alone to $16,000. Combined, $120,000. income alone is $80,000. Combined, $120,000.

Combined, $120,000. And these cars are worth close to $60,000? Correct. Altogether, yes. Dude, that's a lot. I mean, that's our parameter is 50%. No more than 50% of your income tied up in things with motors in it, and you guys are broke.

What's your other debt portfolio? How much do you owe? Currently, not too much. We've been paying down a lot of other credit and things like that. We only owe about $4,000 in overall debt. Outside of those cars.

Well, let me tell you. Here's what I would do if I was in your shoes and if I was talking to my friend. I would tell you to sell both vehicles and buy two very reasonable cars, if you even need two reasonable cars. Worst case, you sell both vehicles and buy two very reasonable cars, if you even need two reasonable cars. Worst case, you sell both vehicles and get one decent one until you can cash flow, get out of debt, and get your wife a car as well.

And we're going to be the fun ruiners here, but brother, you're not in a position to buy a house yet in Phoenix. No, I 100% agree. All right, good. I want you to get out of debt. I want you to have an emergency fund so you can breathe if, I mean when, not if,

something happens on your new house and then you're going to save up 10 to 20% of a down payment before you get about buying anything, okay? So we're talking a couple of years here and it's going to be frustrating and annoying and all that stuff, but hang in there, okay?

You're playing a long, long game on this one. If you sell these cars and you said they're worth about $60K, and let's say you buy a $10,000 car, right? That still leaves you with a nice chunk of change, doesn't it? You've got to pay this thing off? Yeah. Once you pay off the loans, what's left if you sold them? Really, just a few credit cards, and that's about it.

Man, that feels good. I'd be done. left if you sold them? Really, just a few credit cards, and that's about it. Man, that feels good. I'd be done. I'd set them up today, Jay, to sell them. I would be going all over town seeing who'd give me what, going on Vroom and Carvana and all those different websites and see who's going to give me the most bang for my buck, private, on Facebook Marketplace or Craigslist. Man, I want these things out of my life. This is just too much car for you right now.

Just get a sandwich board and stand out in front of a Walmart and say, no, don't do that. Don't do that. But right now these cars own you. You don't own them. And so you'll get to that spot. I want you to. But once you get that emergency fund, you start saving up for that house.

Man, you're in that house. You got a reasonable payment on it. Now we can talk about upgrading the cars. There you go. Let's go to Max in Orlando. What's up, brother Max? How we doing? Hey, man.

How you doing? Good. What's up? How can we help? Hey, so at 27 years old, I'm officially debt-free. Congrats, man. Appreciate it. I just got medically discharged from the Army after 10 years.

Thanks for your service, brother. Appreciate it. So they gave me a service check of $75,000. Okay. Thanks for your service, brother. I appreciate it. So they gave me a service check of $75,000. Okay. I paid off all our debt. I got $55,000 left in the bank. The VA gives me $4,000 monthly for my disability, which I can still work.

They also paid off my student loans for being total and permanent. So I basically got my bachelor's paid for for free. Very cool. And we already own a home. We're renting it out. We get about $5,000 cash flow from it monthly in North Carolina. I was just wondering, what's...

Oh, so we moved from North Carolina down to Florida. So the only bills I have is probably like $1,000 a month, car payment, car insurance, and phone bills. Okay. And we're living rent-free right now. My mother, she helps out with a lot of us. She has no issue with it. I was wondering, what's the next step?

What do I do with this $55,000? I never really had a lump sum of money before. What's the nature of your disability, brother? I had like four or five surgeries from jumps. I did. Okay. Man, thanks for leaving it out there for us, man. Grateful for you.

I appreciate it. I was just wondering, so money's not an issue for me right now. I can still work and everything. So I was just wondering, we want to buy a second home in Florida, so we're just trying to figure out what's the next move. I know the first move is to get a job, obviously, but what do I do with this $55,000 that's in the bank? Yeah, that's a great question.

You flew by something earlier. You said you've got a car payment? Yeah, it's a lease. It's a three-year lease. Well, you told me you were debt-free, and I was really excited for you. And now I've got to backtrack and go, bro, what do you think a lease is? I really don't consider it. I have kids, so I think of a car as a reliable transportation.

I always have a new car. Okay, here's a good way to look at debt. If I stop paying, what happens? If someone comes after me, it's called debt. You owe anyone anything for any reason. It is debt. And, brother, I got two little kids, and I got an 06 and a 10. And we're

gonna ride them to the wheels fall off man and i love my kids more than life itself and they are just fine in those cars i don't look cool thankfully i'm already married and my wife is a wears like really dark sunglasses and so she doesn't but i i'm good i'm not i'm not gonna no one's gonna come after me and tell me how cool i am but dude that's it, it's a debt and it's a chain on you. We're about solving for freedom here. That's what me and George are doing. Tell me real quick about this house. Why are y'all keeping a house that you don't live in?

It's a good cash flow. We pay monthly $1,300 on it. We rent it out for $2,000 in North Carolina. You cash flow $500 a month? Yes. $6,000 a month is some game-changing investment for you?

Mm-hmm. Dude, you can do better than that. You can do better than that just investing in retirement, IRAs. This is not great to be a long-distance landlord. If I'm you and you want to set yourself up for freedom,

I would sell that thing. I'd stop being a long-distance landlord. I'd pack all the money I could, and I'd set myself and my family up for freedom in our next house. That's what I would do personally. Yeah, I'm going to pay off the call. I'm going to get out of this lease. I'm going to buy the lease out or turn the car back in.

We'll sell this house. I'm going to take all that money, plus the $55,000. I'm going to have an emergency fund of three to six weeks, and then I'm going to buy me my own place for me and my family there in Florida. That simplicity is making me breathe easier, John. Already. Hey, thanks for your service, Brother Max brother max absolutely we'll be right back most people know me as the guy who did stupid with a lot of zeros on the end i made my first million dollars in my 20s the wrong way and then went bankrupt. That's when I set out to learn God's ways of managing money and developed the Ramsey baby

steps. By following these steps, I became a millionaire again, and this time the right way. After three decades of guiding millions of others through the plan, the evidence is undeniable. If you follow the baby steps, you will become a millionaire and get to live and give like no one else. My new book, Baby Steps Millionaires, is now available for purchase. When you order my new book, you'll learn how ordinary people built extraordinary wealth and how you can do it too. I'll walk you through how to invest, build wealth, and bust through the barriers preventing you from becoming a millionaire. Baby step your way to becoming a millionaire. Get your copy today at RamseySolutions.com. That's RamseySolutions.com. 888-825-5225.

This is the Ramsey Show. Let's go out to Kara in H-Town, Houston, Texas. What's up, Kara? Hi. Thanks for taking my call, guys. Thank Houston, Texas. What's up, Kara? Hi. Thanks for taking my call, guys. Thank you for calling. What's up? Well, I feel like my family's in a position that maybe some other Americans are in.

My husband is a nurse. And I was really hoping that his exemption for the vaccine would be approved. And we just found out last night that it was denied. And kind of the CMS vaccine mandate is everywhere. And so at the end of the month, you know, his income will be no more in our house at this point. And I'm just thinking, are we looking at a career change? Do you guys have any advice?

I mean, we are debt-free, but our house, we have an emergency fund. We've got three kids who aren't even school age yet. So, like, there's a lot of emotion and thoughts that are going on through our house right now. So we've got a lot to think about. Yeah, so, number one, you're right. I know lots of people are going through all sorts of job transitions and are staring this in the face. And so thanks for being brave and calling and putting it out there for us to walk through. So here's how I make these decisions. This is just the matrix that I use, right, wrong, or indifferent. And I just want to, there is no way to talk about COVID and vaccine mandates and job loss that people lose in their minds. So that's fine.

Here's how I make these type of decisions. I always want to back out of these things and take the air or the emotion and set it to the side for a second. Those feelings are real. The emotion is real. But what are the facts in front of me? The facts are this. I have a principle or a value. It could be about mandates. It could be about

being asked to steal at work. It could be about anything. I have a set of core principles, and my employer is violating those principles so much so that I am opting to have no job. That's my stance. That's my platform. That's where I'm sitting. And come what may, I will have to work 50 part-time jobs. I'm going to have to go to another hospital. I'm going to have to move.

I'm going to have to do other things, but my values are that important. And almost always, unless there's just something way out, I've got high respect for anybody who says, I've got a set of values that I simply, I can't, I can't move forward on this. Right? So I want to take the emotion aside and look at the reality. The reality is you guys have 30 days or a little less than 30 days before you're going to have no income. So let's take out the mandates. Let's take out the frustration, the anger. What are y'all going to do for food and rent and transportation? What are you going to do? And that's when you, I think career change is a time to go. I think you put all that stuff after you take care of your four walls, right? You're going to be able to keep your house. You can be able to keep your little kids fed. You're going to be able to keep your house? Are you going to be able to keep your little kids fed?

Are you going to be able to keep the lights and electricity running? Are you going to be able to get to and from the grocery store? That becomes where my initial, how am I going to solve for this? So what's your plan there? Well, we have taken a look at the budget. I work, you know, I make about twice as much as my husband. And so we are extremely, extremely thankful for that. So when it comes to our four walls, you know, maybe we're only taking between,

we're kind of slimming everything down, and maybe we're only taking between $500 and $1,000 out every month from our emergency fund. And that covers everything. So our four walls were good. Nobody's going to go hungry. We can put gas in the car. Our health will be paid. We had big goals.

Yeah, and here's the thing. Not by your hand, but in your lap. You didn't cause it, but you had a values-based decision, and somebody dropped something in your lap, and they called your bluff. And you said, cool, I'm sticking by our values, whatever they happen to be. And so I don't want you to make a practice of living off the emergency fund, but here we are. And so I think now is when your husband— No, it's not our intention. That's right, that's right.

Of course it's not but now your husband's able to say do i love nursing do i want to find a place whether it's on a college campus or at an elementary school or a travel like do i love this is what i want to be doing and i just got caught up in a in a mess that will go away at some point or will reduce at some point or may never change it right right? Do I love nursing? Do I love helping people? Do I want to go back to school and get some different credentials? I think you're in a position and it's a fortunate position to ask that question and then say what comes next. And I'm going to hold my head up high. Anytime I make decisions and I'm angry or I am raged out, I never make good choices. I'm out of this profession. I quit. This is the way. Actually, I love nursing. I hate that this thing is happening

here. Where can I find nursing? Where can I find human care? Where can I find connection in other places? And I'll get on that road. And maybe there's none. Maybe there's none. I don't know enough. I haven't kept close enough tabs on it. There may not be any places left to go. And it may be that this is, I've got to go do something else. But I think you can enter a season of one month, two months and figure it out. I'll give you a copy. Hang on the line. We'll give you a copy of our friend Ken Coleman's book, From Paycheck to Purpose. And it's just got some good exercises to walk through it and say, what do I actually want to be doing and what do I actually love?

Is your family united in this decision? My husband and I, we are 100% on board. I can't say the same for some extended families cutting kind of a mixed bag. They don't get a vote. Yeah, they don't get a vote. But my husband and I, we made this decision a long time ago when we were like, what do we need to put on this exemption that sits with our family and what we believe and what we have already set forth is how we believe and feel and all that. You know, natural immunity is like not a thing in the CMS

world. They don't really care that we have that. But yes, we are fully united, supportive of, you know, that decision and whatever it means for us in the coming days. I just feel like it's, I know my husband's an extremely hard worker, and he has never been in the situation where his job is being taken from him, you know, from, you know, and this is a decision that we made. Just like if you were a poor performer, that's a decision you make. Right, right. Well, it's, there's something about, there's something about knowing something's coming and then it shows up. Right?

And we are often caught off guard by how much it hurts, how scary it is. We knew it was coming. We knew this was coming down the road, and then it's here. I hear this a lot when I used to sit with folks who had long-term illnesses. We know that granddad's going to pass away, but when he actually passes away,

it's something else, right? And people are caught off guard by that. So don't be caught off guard by how off guard you're going to feel, right? I want you and your husband to have a regular practice. If I were you, I'd make this a daily practice. Three minutes, go. I'm scared. I'm kind of freaked out. I'm pissed off. I'm angry about all this or taking a job away that I love. And then you go and then you get your three minutes and then, all right, what are we going to be about solving this today? I'm going to make sure that we've got purpose, we've got a paycheck.

What do you want to actually do with your life? How are you going to get back on the horse? And let's go down that road. I'm just not going to let anger and emotion and rage take me over because I know I'm going to make less wise decisions when that happens. Yeah, and the only thing I'll add to that, John, is he's got to be about the business of getting to work. Clearly, he's a hard worker, and he might have to swallow his pride, have some humility, and go do jobs that he would never

otherwise do right now. But planning on using the emergency fund, like we talked about earlier, is a bad plan. I want you to use it because you absolutely need it. So if you can avoid touching that, that would be my goal personally, is to go, well, he can work. He can make an extra $500 to $1,000 a month to help us avoid dipping into the emergency fund while he looks for something new, while he figures out what he really wants to do. So that would be my personal goal, just adding on top of that the financial part. Yeah, and again, I feel like I'm a broken record sometimes. Nobody, whether we're talking about work, we're talking about relationship issues, we're talking about investing. Nobody, it's a neurological thing. Nobody makes good decisions when they're in fight or flight.

When they are consciously stewing, they are living in this rage and they're angry. I get it's real. I get it's visceral. I get it hurts. And then you got to set that down and say, okay, what do I got to do right now? Focus on the future next steps. That's right. I'm going to choose optimism in a mess.

I'm going to choose it because why not, right? Because why not? We'll be right back on The Ramsey Show. Thank you. This is the Ramsey Show. Half of Americans over 65 will need long-term care. And the average cost of that care is $138,000. You've got to plan for the long-term care needs now. But I talk to people all the time whose quote-unquote plan is to let Medicare pay for it. I got news for you people.

Medicare won't pay for everything. That's why I recommend long-term care insurance for people age 60 and over. It helps pay for nursing home care, assisted living, and in-home care costs like medical equipment, help getting dressed and eating, and home modifications so you can get around safely in your house. That way you get to keep your independence and your savings. Long-term care insurance protects your family too. Your spouse and kids won't have to bear the financial and emotional burden of caring for you. And since you're not using all your savings on long-term care, you'll be able to enjoy your retirement years with your family

and leave a legacy that provides for them after you're gone. Our network of endorsed local providers will help you understand your long-term care insurance options and find the right policy for you. That's why they're Ramsey Trusted, because they'll put you first no matter what. So if you're over 60, it's time to connect with a trusted ELP and get your free long-term care insurance quotes. Visit ramsaysolutions.com slash longtermcare to get started. That's ramsaysolutions.com slash long-term care.

Let's go out to Ian in Amarillo, Texas, the 806. What's up, Ian? Hey, what's going on, guys? How are y'all doing today? Excellent. How are you? I am doing awesome. Great. What's up? So right now, I'm 31 years old. I'm married. My wife is pregnant, so she's not currently working. Congratulations. My income, thank you.

My income is about $110,000 a year, and we are about $112,000 in debt. What do you do? I work in the nuclear industry. Oh, yeah, I know that over there. Is the Pantac over there? Yes, it is. Very cool, man. And what's the debt?

Well, it's like $3,500 in credit card debt. We only have one credit card. I took like an $8,000 loan out on a ring. I owe $12,000 on a motorcycle. I owe $65,000 on a truck, which is majority of our debt. And her student loans were about $22,000. Okay. What's your question? So I have about $45,000 from my former employer in a 401k. I'm wondering if I should just pull that out, take the hit on it, take the taxes and all that and pay off a chunk of that debt. Or if I should just roll it into a current 401k or like another retirement plan. I don't really know what to do with that money.

I feel like pulling it out and paying off some debt would work, but I just don't know what the taxes would be. Ian, you want me to talk to you like I talk to my friend or do you want to make you feel good? You get to choose today. I want to know the honest truth, what I should do. Ian, you are living the West Texas dream. You got a great job. You got the big truck, the big ring.

You are West Texas through and through. Let him have it, George. Okay, man. And you know me, John. I'm just not a car guy. But here's the thing, man. You are making a terrible decision by pulling this money out of this 401k. Don't do it. You're going to be taxed at your tax rate plus the 10% penalty. You know all this. And you're saying I'd rather lose 35% of this money that could make me a millionaire

so I can keep my big truck. That's what I heard. Keep my big truck. Ian. Dude. Sell the truck today. Sell the motorcycle. Today, sell the motorcycle. You're going to be a dad, dude. You don't want to be riding on that death trap right now. Oh, man. I know.

It hurts. Sell the truck. Say, listen, I drove out to Snyder a few years ago and bought a F-150 that was made before the American Revolution. Not really, but it was old. Can I hit you with another fact, my man? And it wasn't cool, and it got me where I needed to go, man. Dude, 70% of your income is tied up in things with motors in it

that are going down in value every day you wake up. Does that not make you angry? I'm angry. You riled me up. It does. It does. Here's a little spot I'm angry. You riled me up. It does. Here's a little spot that I'm stuck in, though. Okay.

The truck is I had a series of stupid decisions that led me to being about $20,000 upside down in this truck. So the truck is only worth about $40,000. Okay. But I owe like $65,000. So let's take a $65,000 mistake, okay? And let's say you go sell it and you get $40,000. How much do you still owe? Oh, $20,000.

Okay. $25,000. $25,000. There you go. Math. I'm glad you're working in the nuclear industry. It's not my strong suit, man. So you got $25,000 and then you go take a loan out for a $2,000 Corolla to get you to and from.

And I know that car exists because I sold it right before I moved to Nashville in your area, so it's out there somewhere. And it's going to get you to and from. Now you don't owe $65,000. You owe $26,000. Okay. And you've more than you've cut your debt load in half just there. And then you sell that

your big boy bicycle you sell that and now you got another chunk of money to knock that thing off. Do you see what we're doing here? Yeah, yeah. I see what we're doing. And I, dude I there is not but anybody else in this building that knows how bad this hurts than me i get it

what i'm asking you to do but here's what i'm asking you to think about the legacy of this little kid that's about to be born think about the insecurity your wife feels knowing that that 70 of your household debt is depreciating every day. It's becoming less and less value. What if you told your wife, hey, I've had a, you married a guy that was like, do you have boots that have square toes on them probably? Yeah, I do. Of course you do. So I married a guy with cool jeans and square toed boots and the big truck and I'm going to change. I'm going to be the husband that's going to make sure we are financially secure and safe. I'm going to drive goofy cars, but you watch what happens to our net worth,

to our bank account. Man, if she looks at you and says, you will not sell that truck. I married a man with a big... Then you probably got yourself a problem. She's not going to do that. She's not like that, no. So what would she do if you came at her with that?

Hey, I've set us up in a hole, and it's time for me to change. What would she say? What would she do? She's awesome. She really does support me in any decision that we have to make. We had really, really big conversations about money and stuff like that before we even got married. But it was just, like I said, a series of stupid decisions that I made

that led me to a $65,000 truck that's worth $40,000. So I'm pretty sure she would support it. As long as it's something that we're safe in. Like right now, it's ice and snow on the ground, and it's been snowing all day. Hey, dude, the Corolla can rock some snow. When's that baby due uh august all right so me and george our gift to you is we're going to give you a year subscription to ramsey plus

as a baby warming gift but baby warming gift that's not a thing that sounded weird i don't know that you need your baby needs to be any warmer but hey it's it's our gift but listen you gotta promise two things, that you will go through every one of the FPU lessons, the Financial Peace University lessons, in that series with your wife. You'll watch them together, and you'll talk to her and say, how does this make us feel? How do you feel about this? What would this be like for our family? And then the second thing is, by the end of tomorrow, you've got to put one of those things up for sale. You've got to have it posted

somewhere. Is that cool? Yeah, yeah. Let's do it. Are you in? I'm in. We turned him around. My man, dude. My man. Hey, you're going to be the only dude rolling up to a nuclear factory on a bicycle or

driving a Camry, right? And you're going to be the only dude rolling up to a nuclear factory on a bicycle or driving a Camry, right? And you're going to be absolutely – you make too good of a salary to be as broke as you are, my brother. You just do. I know. I know. You know what I mean? You make six figures in a part of the country that the cost of living is pretty low. I want you to – you work so hard, man. You're a smart, smart, smart guy.

Hey, and by the way, quit beating yourself up. We've all done stupid stuff with money. Yeah, we love you, man. Every single one of us. You sound like a cool guy. I want to get a drink with you sometime. This guy's awesome, man. Come to Nashville when you're debt-free.

Let's hear about it. But remember, there's no shortcuts when it comes to getting out of debt. And robbing your 401K, that's a shortcut. Do the hard work. You're not scared of it. You got this. And sell the motorcycle. Sell the big bike.

And the big truck. We'll be right back. This is the Ramsey Show, taking your calls about life and money. 888-825-5225. I'm John Deloney, joined by George Camel, and we are here for you. 888-825-5225. Let's go out to Ross in Springfield, Missouri. Hey, Ross, what's going on? Hey, Dr. John and George.

Thank you all for taking my call. You got it, my brother. What's up? Me and my wife are currently on baby steps four, five, and six, and we'll hopefully have our house paid off by the end of next year. Let's go, Ross. Oh, thank you all. Appreciate it.

Very cool. I know you all say to buy a house with payments less than 25% of your income, but once you have your house paid off, what value of house should I have past that? Should I base it on a certain times our income or a certain percentage of our net worth? Is there a rule of thumb?

You're saying if you're going to purchase a new home after that? Yes. Okay. Would this be... My house should... Are you looking for like an investment property or are you saying you want to upgrade the house and sell your primary? Just for primary house. Okay. I mean, I would stick to those parameters. My goal for you would be to pay cash for any upgrade in-house, and no, there's no parameter if you're paying cash.

You can buy a $2 million house if you pay cash. That's great. It's a great part of your net worth, your retirement plan, because that home will appreciate, and you own every single cent of it. Now, I won't be mad at you if you go get another mortgage and do the same thing and roll that into the next one, but I think it's a cool goal to have personally to be able to pay cash for that next one. Can I ask you, Ross? It sounds like y'all have worked. Y'all have just busted it to get this thing paid off.

What would motivate you to go get a mortgage again? Well, I wouldn't want to get a mortgage again. I just wanted to know if i should have a more expensive house for our income or you know if our net worth gets higher if i should have a house be a certain percentage of my net worth is there a house you have a in your mind that you want to go get that you think might be too expensive what's the root of this call not in not in particular just out of um i say people with, you know, spending a lot of money on houses. And I hear people, you know, that call in to spend a lot on houses, you know,

what I would consider comparative income. And I just want to know, you know, if you all had a certain ratio that you went by. I'll tell you this. In our millionaire study that we did, what we found is that most of the millionaires, their net worth looked like this. About two-thirds of that was in investments. It was their 401k. It was their IRA over a lot of time and consistency. And about a third was their home value. So that's a parameter. That's not to say that if yours is different, that you're doing anything wrong. My goal is for you to be a baby steps millionaire and whatever

that looks like is awesome. And let me, I'm, I'm not poking at you. I'm just, we're friends now, right, Ross? You bet. We're friends. Our friend Rachel Cruz says, comparison is the thief of joy. And I know this is folklore at this point,

but I just lost his name. Berkshire Hathaway. Warren? Yeah, Warren, good grief, Deloney Our friend Warren Buffett Still lives in the same house And so what I want you to do When considering where you're going to live

Say, do we love our house And do we like it, and it's paid off It can be enough I am good, yeah, it's that magic word My friend Dr. Mark Phillips taught me about The magic word of enough. When's enough enough? And, man, just because somebody makes the same amount of money, or really, it's the other way around.

You make as much as they do, and you think, well, I guess I should get that car, and I guess I should, you know. Me and George, neither of us are car guys, and people hassle us around here for the cars that we drive. It gets me where I want to go. I'm not a car guy. I like it, right? And would it be cool to have something else? Yeah, it'd be awesome, man. I like driving fancy things.

But right now, I'm good. He's good. Contentment. I want you to be content with where you're at. Don't feel like you need to get another house just because you make X dollars. What's this house going to be worth once you pay it off, Ross? Just your guess. I'd say probably one and a quarter.

Wow. $125,000. No, $125,000. Sorry. Okay. I was like, one and a quarter wow 125 000 no 125 000 sorry okay it's like one and a quarter million dude that up boy ross okay so 125 000 house what are you having in investments um right now probably uh 75 75 000 investments how old are you uh 34 34 okay dude you got your whole life ahead of you. Yeah, man. You're just a youngster. How much do you make? Me and my wife combined, it's probably 75 a year. Awesome. Brother, you have a paid-off house. Do you like the house? Does it meet your needs?

Yeah, we bought it when we got married. It was a new house, and I guess if she's content with it, I am. I just want to make sure I don't need to upgrade, you know, as investments grow, since I'm going to start putting more into investments now. If you find a place to live and you owe nobody anything on it, and you've got joy, you have won. You've got people in your life you love, which you clearly do. You have won.

You've won. Good for you, my brother. You start to enjoy those stains and a little crack in the dry you love, which you clearly do. You have won. You've won. Good for you, my bro. You start to enjoy those stains and a little crack in the drywall. Because it's my crack. It's my stains, right? Can't come at me. I own it. Exactly.

Good stuff. Let's go to Corey out in Salt Lake City. What's up, Corey? Hi. How are you guys? Thanks for having me on. Thank you. What's up?

So I have a question about, it has to do with a job offer and my side business. So about a year ago, I started a side business where I manufacture cable assemblies in my garage. And over the past year, it has grown quite a bit and we ended up making quite a bit of money last year. I didn't hear what you were making. What were you making? You say cable assembly? Yeah, cable assemblies. Yeah, custom cable assemblies. Okay.

For the electronics industry. And then I have a day job as well. And I made altogether about 120,000 last year between my day job and, and my side business. Um, but I, uh, just recently got a job offer, um, from a company here in Utah that, uh, is in the same field for me to work, work there is to, um, either sell my side business or transfer it into somebody else's name so that there isn't a conflict of interest between the companies. And so I just wanted to talk that through with somebody and find out. So we have a very similar thing here. So if I didn't, but if I had written books before I joined this team, part of me joining this team was transferring ownership

of my intellectual property to this team. That's just part of it. Because all of a sudden I can try to sell books out of my intellectual property to this team. That's just part of it. Okay. Because all of a sudden, I can try to sell books out of my car. If Dave says, hey, this is a great book, and he gets behind it, it's going to sell way more copies, right? So there's a give and take there. This sounds like a very similar situation.

And what I would say is don't over, like we talked about this on an earlier call, don't over-emotionalize it. This is just a set of facts. Do you want this job for this amount of money? And here's the stipulation. You've got to wear pants. You've got to tuck your shirt in. And you've got to sell your side business, right?

And if you think of it that way, then you can say, okay, am I vested in this side business? What can I sell it for? Is it worth the money I'm going to be making? Is it more stable long-term, right? Or do I want to be an entrepreneur and start this up? I think those are all simple questions. I wouldn't over-dramatize the job stipulations. What's the job offer?

How much are they offering? So they're offering $75,000 a year, but they're within the company. There's a, there's kind of a ladder to move up. It's within a new department that could be, that could become a bit bigger. And then I could move up within that department. Okay. Do you like your side hustle? I do. I like it. And when you spoke earlier about emotions, when I think about it, it actually makes me quite emotional.

Yeah. Hey, let that speak to you then, okay? If I say, hey, don't get emotional about this, and you go, all right, cool, you're right. I just need to sell this. That's a big signal. If I say, hey, don't get emotional about this, and you say, all right, cool. You're right. I just need to sell this. That's a big signal. If I say, Hey, don't get emotional about this. And you say, no, this is my baby, right? Now we're back to the old Solomon proverb, right? Now we're back to, I'm not cutting that baby in half, right? Then I just want it to live. So that may be a big signal. If you're not going to see a big financial increase, you're going to give up a dream, something you've

been building. Hang on to it, man. Hang on to it. You're clearly good at what you do. Somebody else will have a job offer for you if that's what you want to do. I'd like to thank the guys in the booth, especially James Childs, a good friend, George Camel. We will be phone screener for The Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit theramseyshow.com and register. We would love for you to come to Nashville and tell Dave your story.