The Ramsey Show - App - Should You Buy a Car in This Crazy Market? (Hour 3)

Episode Date: March 25, 2022

George Kamel discusses: A wedding with a $500k budget! (no that's not a typo), Buying a car now or waiting till the market cools down, Renovating a house. 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

I'm out. Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Ramsey personality George Campbell, and I am your host today, flying solo, They All Ditched Me. So this is what you got, America, and I'm excited to take your call. Whether you need some confirmation, affirmation, motivation, education, if it ends ination, I'm here for you. 888-825-5225 is the number to call. Megan kicks us off in Chicago, Illinois. Megan, welcome to the show.

Hey, George, can you hear me okay? Are you in a wind tunnel? What's happening over there? I am. I'm outside. If you can't hear me, I'm coming out. Oh, George, can you hear me okay? Are you in a wind tunnel? What's happening over there? I am. I'm outside. If you can't hear me, I'm coming out the other way. Oh, no, you sound great. You sound great.

How can I help? Okay. Okay. Three years ago, I bought an existing business, took out an SBA loan for it. Everything was going great until COVID smashed it. We were down 90%. For most of COVID, we're starting to pick back up um but we found lately it's really hard to hire people to do what we need them to do

our busy they're independent contractors so it's more of a side gig a little minute our busiest time of the day is monday through friday from about 10 to 3 so my husband and i are ending up doing a lot of this work. However, we haven't been able to pay ourselves through this business for about two years. Okay, so then when COVID took that business out, we bought another one in cash. That business now cash flows about $6,000 to $8,000 a month.

Great. And I'm wondering if we should consider selling that business, putting that money into the SBA loan, and just putting all of our efforts into the first business to try to get it back up and running like it was before. I mean, I like this plan so far. So you're saying should we sell the business that's bringing in $0

that we took out a loan on? No. Should we sell the business that's bringing in about $7,000 a month? Put that money that we make off that business into the business

that's making $0. Oof. I wouldn't want to sell the business that's actually profitable to put it into the one that's making nothing. You would do that? No, I mean, I don't, how is that a good plan if it's making zero dollars for you guys right now,

net profit? Well, we have a, on the profitable business, zero debt on the, I mean, the profitable, the first business, it's making money, but it's all going to our debt service, the SBA loan. So if you didn't have that loan in your life, what would a cash flow for you guys net? Right now, about $5,000 a month. So that's how much you're putting on the debt. Yeah. Before COVID, it was making about $10,000. So we're still at about 50% of what we were at before COVID.

The first one sounds like it's a grind. I mean, do you even want to continue that business? So when it's up and running, it's minimal effort for myself. It's a great business. It's just right now we've been having a really hard time finding people to work in it. Will that change in the future? What's that? Will that change in the future or will's that? Will that change in the future, or will it always be hard to find people? I hope so, yeah. It requires a lot of driving from our people,

and so I think gas pressures right now are throwing people off, but maybe even in the summer we'll get some college students that can get excited about doing what we do. And they're paying for their own gas? Yes. Yeah, that could be a tough sell right now. Yeah. So, you know, we've really started to pick up with this business in the past three weeks,

which is great, but it's made us do four to five hours a day of work and topples, you know, working at other business and other job. And so we just feel a little bit stuck because that loan is there and we have to pay it no matter what. How much is left on the loan? $270,000. Whoa. About seven years left. I mean, how much could you sell the business for?

Well, I mean, probably like two and a half of what we make so about 150 000 which would just cut the debt down but it wouldn't actually free up any payment or cash flow right no we'd still be liable for the rest of it and that's what worries me is it just feels like we're not going to create any more cash flow and we're going to lose the $6,000 to $8,000 a month that we currently have. So my worry is it actually puts you guys in a worse position. Yes. So my thought, although I love being at the business of cash flowing, it is very hands-on for me also right now. So if we sold it, we can make $160,000 off of it, put that into the other business, reduce that loan, and just put 100% of my time into bringing that business back up to where it was before COVID,

then we could start making a little bit of money. And even if it's a little bit for a while, it's better than nothing. Well, the problem is there's a lot of ifs in this situation. There's a lot of if this happens, and if this happens, then this could happen. And that's the part that I don't like. I want you guys to be in control of that piece of the future. And so right now it spooks me a little bit to just sell off the only business that's bringing in money for your life. Yeah. Because we just don't know, even if you pay down the loan, that you're going to find workers and that you're going to get this business back up to 10K a month. So I would try to get that business back up and running before you sell it.

And so if you can get this plate spinning over here where you have workers, it's generating $5,000, $6,000, $7,000, $8,000 a month, then I think we can go, okay, we know that this is working. If we went all in on this, we can get this even higher, and we can sell this business and pay down the debt. So I wouldn't go ahead and do that today, but I don't think it's a bad plan once you get this other business back up and running. Okay.

I agree. I'm glad we're in agreement. I hope your husband agrees. Have you talked this over with him? What's he want to do? He is under the impression right now that he just has to grind. It's just a, just a rough season right now. And we just have to kind of grit our teeth and get through it.

Well, here's how good of a business this other, you know, the one with the loan can't be. How easy it is to run once it's all running smoothly. Well, as we say, business is easy until people get involved. And you can't even get people involved right now. That's the sad part. So I would try to bring the boat a little closer to the dock before we go ahead and jump ship here. And what I'm going to do is have Kelly send you a copy of Dave's best-selling book on business and leadership

called Entree Leadership. And this is his playbook of how he built this business from a card table in his living room to now multi hundreds of millions of dollars, over a thousand people on the team. And he did it all debt-free. And like you mentioned, this would be a whole different situation

if you didn't take out a quarter of a million dollars in debt on this business. Yeah, there'd be no worries on it. And so that is why we tell people to start and run their businesses debt-free completely from now until eternity. So I'm rooting for you, Megan, but you've got a hole to clean up here with $270,000 in business debt, and I would not sell my only profitable business right now to try to get the other one off the ground. That's just too much risk for me. Folks, I host the Entree Leadership Podcast, and if you want some business and leadership inspiration, go check that out. You can check

it out wherever you listen to podcasts. We have some amazing thought leaders, guests on there, a lot of our Ramsey leaders, and really unpacking what the right way to lead looks like, what the right way to run a business looks like, how to lead a team in a time such as this. So go check that out wherever you listen to podcasts. I salute all of the small business owners out there. You guys are the backbone of the economy, the backbone of America, and we are big, big fans of small business. We'll be back with you before you know it. 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. One of the most crucial and affordable first steps

to take is to protect your family and get term life insurance. I know it's not glamorous, but all the other steps mean a lot less if something happens to you and your family has no financial protection. Getting term life insurance needs to be a top priority. I recommend 10 to 12 times your income and lock in rates for 15 to 20 years. This gives you plenty of time to get out of debt and build wealth. I've been recommending Zander Insurance for over 20 years and they understand and live this strategy and will take the time to help you find the most affordable term life rates. Go to Zander.com or call 800-356-4282.

It's not that expensive, it's not complicated, and you need to do it now. welcome back to the ramsey show i'm george camel ramsey personality and host of the fine print if you want to keep up with me you can find find me on Instagram at George Camel. Always love hearing from you guys, answering your questions over there as well. Neil joins us in New Brunswick, New Jersey. Neil, welcome to the Ramsey Show. Hey, George. How's it going? Great. How can I help? Yeah, so right now I'm 22 years old. I'm making around 90 take home and been listening to you guys for, I think, three or four

years now since I was like 18. Awesome. So a big fan and kind of have a small problem going on in my life. So I do live with my parents right now and pay rent, um, technically, but I do end up paying, you know, one to two K, you know, putting money into the house, uh, like groceries and miscellaneous expenses. Um, and just want to ask you, um, I don't, you know, like staying at home and, um, I want to, uh, finance, you know, a big wedding coming up,, hopefully, when I'm like 25, 26. Do you think I should kind of move out or kind of save money and continue staying at home? I think you should move out based on the information you just gave me. And let me just be clear.

You said finance a wedding. That worried me. Do you mean pay cash? No, no, no. I just want to kind of save up for a wedding, like a bigger wedding. So you're not going into debt for this wedding? No, no. Okay, you worried me.

Never used the word finance. It scares me. You spooked me there. Because you've been following us for a few years now. So have you followed the baby steps? Do you have any debt? No. So luckily my parents did pay for my college tuition.

So no debt. Just that's why I'm trying to make the correct moves so I can save up for this wedding. Do you have an emergency fund? Yes, I do. How much is in there? How many months of expenses? It's six months. But you don't have many expenses. Right. So how much do you have in there? How many months of expenses? It's six months. But you don't have many expenses.

Right. So how much do you have in there? $30,000. I've kind of put in a big chunk of my first year salary into that. Very cool. And you're investing 15% of your income into retirement? Yep. And maxed out my 401k that my employer sponsors. So I think I get like a 7% match. Wow. So are you investing more than 15%? I haven't looked into that too specific. I'm just trying to put in as much into investing. I don't know the exact percentages. Okay.

Well, I would keep it at 15% right now only because you're 22 and you've got a lot of other financial goals to hit, including paying for this wedding. Are you dating someone right now or is this just future thinking? Dating someone for like six years now. Oh, wow.

So this is like a high school relationship that has gone well. Yeah, a high school relationship that has gone well, but not too well to where you're like, I'm not quite ready. Right. But I just want to be financially set as well. That's why I want to wait. Well, I just want to make sure, you know, you have a 90,000 take home pay. You have no debt in an emergency fund. I mean, half the women listening right now are like, man, I wish I could find a Neil out there. Yeah, but this wedding that I'm kind of thinking of, kind of in like the 500K kind of range. I'm sorry, hold the phones.

You said $500,000 for a wedding? George, have you ever been to an Indian wedding? I've seen it on TV. I've seen Love is Blind, if that counts. Oh my goodness, man. They're very expensive. Is that just normal? Yeah.

Hold on, who's paying for this? Yeah, so I don't want to get my parents involved. That's why I'm trying to do my due diligence to make these steps proper so I can pay for this. Can you break the mold and do like a $50,000 wedding, which is still like really expensive for most people? Yeah, I mean, maybe I can. You'll be shunned by all the people who attend.

Yeah, true. I get it. Man, I mean, that feels just exorbitant for you to be paying on your own. I feel like if it's like, hey, mom and dad, if this is your reputation on the line, then you can fund it. Right. But I've got goals, and the wedding is one day, and I want to set myself up for the rest of my life with my wife, not throw a party that makes the parents look good. True. I mean, right? Isn't that, that's a piece of the cultural aspect. Yeah, that is true, but usually these, like, weddings, like, last, like, maybe, like, a

week long. So it's not just one day. But, yeah, your logic definitely does make sense. Man, that just took my breath away. I think it took America's breath away, too. I mean, you could buy a house for that much money. Yeah, the reputation really matters. Well, I can't stop you from doing that, but I would say let's make a plan to where you're not having to pay for that, because that's overwhelming for a 22-year-old, even though you're crushing it, to go, hey, it's on you to pay for a half-million-dollar wedding.

Yeah, they did pay for my college. That's why I'm not kind of resorting to asking my parents. But, yeah, that does make sense. Now, have you talked to your girlfriend about her parents and what they would pitch in? No, so I'm kind of like an early bird on this. Since this is a plan three, four years out, I kind of don't want to freak her out by mentioning marriage and stuff. Hold on.

You've been dating for six years, and you think you're going to freak her out by mentioning marriage? But we're still 22 at the end of the day, you know. We just got out of the college lifestyle, working corporate jobs now, so it's not, you know, fully into the picture yet. Now, does she come from the same cultural background as you? Yes. Okay, so you're both on board to just throw half a million at this wedding.

Pretty much, yeah. Now, culturally, is it usually a split amount that families pay? How does this normally go down? Yeah, so normally it is split among the bride's parents and the groom's parents. So the bride and groom don't usually pay for the expenses for the wedding. And that's where my head is at. I mean, if the parents want to do that, that's great. But if you say, hey, they're not going to foot the bill and it's on me,

then sorry, we're not doing a half-million-dollar wedding. Yeah, that doesn't make sense, yeah. Because here's the problem. If you're going to do a half-million-dollar wedding and pay for it, you're going to have to live with your parents until the day you get married. And that's not a good plan. So I think you need to move out. You need to start your life on your own. You need to have some more serious conversations with your girlfriend as you head towards marriage. And we've got to figure out a game plan for what this future looks like. And I mean,

it just hurts my heart that there's half million dollar weddings out there. I mean, they look amazing. Don't get me wrong. I would love to be invited to one one day. So throw me an invite, Neil, if you're going to throw the party. Yeah, of course. And you're footing the bill. Exactly.

But, man, you're crushing it. I mean, 22 years old with a $90,000 take-home pay, no debt, emergency fund, you're investing. You're doing great. And you can afford to move out and get your own place if you want to. And I wouldn't be sticking around with mom and dad too much longer. Gotcha. Makes sense. All right. Well, my work here is done. Keep me posted on this wedding. Send me photos and videos on Instagram. All right, Neil? Of course. Thank you, George. Appreciate it. Oh, I just had to deflate after that call. I literally can't breathe trying to fathom spending

$500,000. So fun fact, me and my wife, we won a free wedding that was a $28,000 wedding package. And I mean, I thought we won the lottery, but it turns out that was like a poor person's wedding compared to these wild Indian weddings that are a week long. That's incredible. And on top of that, it still cost us money to throw another reception because the wedding had limits on how many people could attend and all that. So you were down to like four guests can attend. And so we threw another reception that we helped pay for with our families. And it was great and it was worth it. But man, let me tell you, I don't remember much from the wedding except the photos. I can't tell you. I can count on one finger how many times I've went back and watched the wedding footage and reminisced. Because the truth is, the focus

is now on our marriage together. Just us two. Couldn't tell you who was there and all the faces and invitations we sent out. Kelly was there. She's pointing at me now, reminding me that she was there. Appreciate you, Kelly. Thanks for the gift, whatever it was. But man, weddings, the whole thing is a scam. And I get that we love to celebrate and it's a big day for people. But remember, it's about you too. It's about your marriage. It's about your future. It's not about impressing people. It's not about keeping up a reputation. This is The Ramsey Show. You probably knew that, but I'm going to remind you anyways. I'm George Campbell, your host today, Ramsey personality and host of the Fine Print and Entree Leadership Podcasts. Our question of the day comes from Blinds.com.

Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos they run every single month, you'll save even more, and you guys know I love to save. You can use the promo code RAMSEY to get the best deal. Today's question comes from Darren in Nevada. He says, how do I get out of a hole that just keeps getting deeper? I worked two jobs and made $72,000 last year. Between child support, a school loan, and rent that just keeps going up, I'm barely keeping my head above water. I've been following you for over three years. I even became a financial coach to have as a side gig, but that didn't work out.

I'm frustrated and tired. It's hard doing this alone, and I've created a social bubble around myself, which is also wearing me down. What can I do to move forward? Darren, I feel so much weight in your question. You're in a really, really tough spot right now. And I don't want to belittle that or make light of it. This stuff is hard. But here's the thing about things that are hard. Being in debt is hard. Being financially disciplined, getting out of debt

is hard. And so we've got to choose which hard we want. And a lot of people, unfortunately, choose the type of hard that leaves them in debt for 10, 20, 30 years, and they're broke in retirement, and they lived a house of cards, and it comes tumbling down eventually. And so the hard that you're describing is the hard that's worth it, where you see the light at the end of the tunnel. And right now, it's hard to see that. You can you see the light at the end of the tunnel. And right now, it's hard to see that. You can't see the forest from the trees. But that child support one day will be gone. The school loan, soon enough, if you follow the baby steps and use the dead snowball, will be gone. That rent that just keeps going up is going to be gone because eventually you're

going to get into a house with a fixed payment, which you're going to pay off. And so your mortgage payment will be gone. So what you need to do right now is try to have a vision beyond Friday. Have a vision for the next two, three, five, 10 years of your life where you remind yourself why you're sacrificing right now. And you mentioned that you've created a social bubble around yourself. I assume you're talking about the fact that you're working so hard, you don't have any relationships, you feel disconnected.

And on that front, I would encourage you to get plugged in to a Financial Peace University class. If you get in a group of people who are on the same journey you are, it changes everything. Because you have people who get it, who are speaking the same language, who can encourage you when you feel like giving up, who can cheer you on with every

little piece of progress you make. It changes everything. So try to join a class in person. If you can, you can go to ramseysolutions.com and get plugged in to a class there. And you also said, how do I get out of a hole that just keeps getting deeper? So my hope is that you're not continuing to go into debt because of your situation. That's kind of a baby step zero where we decide we're done borrowing. No matter what, we're going to get creative. We're going to work extra. We're going to cut the expenses down so that we can stop going into debt and start paying it off. So we're cheering you on, man.

I wish I could talk to you and hear more about your story. But until you call in, I hope that encourages you in the meantime. Let's go to the phones this hour. It's a free call, 888-825-5225. Hugo joins us in Dallas, Texas. Hugo, welcome to The Ramsey Show. Hi, George. Hey.

What's going on? Thanks for taking my call. So I had a question in regards to the car market right now. I've been looking for a car for about six, seven months now, and I haven't had much luck for it. I am a firm believer in not taking any loans for a car payment at the dealership. I have cash saved up for a car. I just don't know if I should wait until the car market goes down a little bit or if it's the right time to buy a car.

How much do you have saved for the car? I have about $8,000 or $9,000. Okay. And are you out of debt with a fully funded emergency fund? Yes, I have no debt, and I have $1,000 for an emergency fund. Okay, so we're in baby step three right now. Correct. You've got to save up three to six months of expenses.

What's going on with your car that's causing this urgency to get a new one? So the car I had before, the transmission one now, it's an 04 Acura. So if I fix the transmission, it's probably like another 2K. So 2K is pretty much what the car is kind of worth. It does have a high mileage right now, so I don't want to really fix the car right now in regards to the transmission. So I'm really just looking for a new car right now. Okay. So could you sell this thing right now?

How much would you get for it? About $2,000 with the transmission being busted? I would say, if anything, maybe like $1,K. I can try. In this market, you could probably sell for parts more than that. Things are crazy out there right now. I would do some research. I mean, you're not in a terrible place because you don't have debt. And so there's not a lot of desperation here. But you can't drive right now, right? No, I can't. I borrowed my dad's car for school and work right now. So it's kind of, I am kind of in a tight spot, but I don't want to lose my head and get a car payment loan because I've been watching the Ramsey show for three years now. So I know

everything we teach about. Cool. Well, do you know what kind of car you're looking to get for eight or nine K? Yeah. So I'm looking either a Toyota or Honda, and then just the luxury versions of those, which would be the Lexus and the Acura. Okay. Yeah. I mean, with eight or nine, I'm probably going to go with the Honda or Toyota, because if you're going Lexus or Acura, you're going to end up where you were when – where you have a luxury car that is more expensive to maintain. And I'm a big fan. Those are the only four brands I love in that space because of the reliability. But I still would be looking at something cheaper right now, especially as you try to build this emergency fund because right now, if you had an emergency, you'd be screwed, even though you're out of debt. And I don't know if this is a factor, too. All the cars I've looked at have rebuilt and salvaged titles,

so I don't know if that's also smart. I wouldn't do that. Okay. Unless you're a mechanic, I wouldn't be buying a car that has a rebuilt or salvaged title. There's too much that we don't know about what happened and frame damage and if it's safe to drive and what could go wrong with it. So if I'm you, I'm not going to a dealership because you're not going to get a deal at a dealership right now. They're all going to charge you over MSRP. When they find out you're paying cash, they're going to charge you even more because they're not making money off the deal versus financing.

So if I'm you, I'm going to Facebook Marketplace. I'm going going to Craigslist and I'm going to someone saying, hey, you have it listed for 10, I'll give you 8,500 cash today. And you commit and you show up and you get it, make sure you, whatever you look at, you get it inspected by a mechanic before you purchase it. Pre-purchase inspection is what you want to do. It'll cost you, you know, a hundred bucks, but man, it's going to give you some peace of mind before you turn around and call me and say, I bought a $10,000 car that's a lemon. What do I do? So if I was in your shoes, that's what I'd be doing. I don't think you're going to find an $8,000 or $9,000 car at a reputable dealership. You may be able to get one through an auto broker or wholesaler that can find you a good deal on something reliable. But I would get us something as cheap as possible to get you from A to B, get your emergency

funds saved up, try to sell your car for as much as you can get for it. And then eventually we upgrade once we're in baby step four through six. Okay. No, it sounds good. I can definitely go ahead and do that. Yeah. The key here is doing your research and being patient. And it may take another month or two before you find the right car, but don't do things

out of desperation. Here's how I like to look at it. The person with the most patience, the most information always wins and the most options. And so when you only have two options, that sucks. We need more options. When it's really urgent and you're really desperate, that sucks. When you have no patience, that sucks. So take your time, do a lot of research online, always get it inspected. Don't do anything out of desperation. Always pay cash, try to negotiate, and you'll be just fine, man. Thanks for the call. This is The Ramsey Show. Thank you. Our scripture of the day comes from Ecclesiastes 4.9. Two are better than one because they have a good return for their labor. Helen Keller once said, Walking with a friend in the dark is better than walking alone in the light.

Folks, if you're out there listening, we get it. There's a lot of people struggling with money right now, and it can be all-consuming. You're wondering if that check's going to clear, if you can even afford to fill up at the gas station. It's always on your mind. But you shouldn't have to live with that kind of stress, and you don't have to. When you follow a proven plan, you'll discover peace with your mind. But you shouldn't have to live with that kind of stress. And you don't have to. When you follow a proven plan, you'll discover peace with your money. In Financial Peace University, you'll learn the same plan that's helped almost 10 million people budget, save and spend wisely, pay off debt, and build wealth. You can start watching the course online right now or

join a class with others for community and support. Decide today that you're done letting money stress rule your life. You can do this. Start Financial Peace University for free by visiting ramsaysolutions.com slash FPU. That's ramsaysolutions.com slash FPU. Douglas joins us up next in Los Angeles. Douglas, welcome to the show. Hi, thanks, George. I appreciate you guys' advice so much and live by it, even though I'm not part of the program. Oh, that means a lot. Yeah, that's so good. My mom is 93 and in good shape. She has a living trust. I stand to be the one-third that inherits the house. Needs a lot of work. I do plan on living there. I'd like to fix it up and even put a pool in it because we're in Southern California hot.

Should I wait until I inherit the house to start putting some money into that myself, or should she quit deed it to me now, or what do you think is the best plan? Hmm. That is quite the predicament here. or what do you think is the best plan? That is quite the predicament here. So are you going to own the house solely? Yes. My brothers both have agreed to give me the house if I want it, and they'll take the other – there's like $800,000, $900,000 that's divided between them. Okay.

I would get that piece in writing just so that when it comes down to it, I don't want them to go, well, hold on, hold on. The house prices have increased and man, I want in on this house now. So if you guys are going to have that kind of arrangement, I would have it in writing, not because you don't trust each other, but because you actually love each other and you want to avoid that kind of conflict. Thank you. Okay, great advice. So where are you at financially? Are you out of debt? Do you have a fully funded emergency fund? Yeah, I have an emergency fund.

My home's paid off. My cars are paid off. I don't have too much of any payments anymore. I have a condo that I own too that gives me some rental income. But I don't have a ton of money in the bank, but I have a good living condition. So you have a paid-for house and a paid-for condo? Yes. Douglas, my man, you are crushing it. So beyond that, you only have your emergency fund as far as cash goes. That's about it. Yeah. Yeah. Well, with where you're at financially,

how much of your income could you sock away for a renovation fund? Probably about $4,000 to $5,000 a month, somewhere in there. Okay. What we could do is just start socking that money away, and when that time comes and when that house is yours, you have a big pile of renovation money that you've used intentionally for that. Right. So I don't know that I would start it right now. It feels a little bit weird because she's still living there. And obviously she's crushing it at 93. I hope I'm in that shape. I hope I'm alive at 93. But I would hold off and wait because we just don't know what life looks like. We don't know if she's going to live another seven years. And so to be putting a pool in the backyard

of a place that isn't really yours, it just feels a little bit premature. I see. And it wouldn't be in my best interest for her to quit eat it to me if my brothers agreed now or anything like that. I mean, you have a paid for property, and so you've got a place to live. You know, when she passes, you've got time to make those renovations. You know, in three months time, you could have all of that done while you hang out at your place. You know, there's just a lot of life ahead of you guys. And I wouldn't quit deed it immediately. There's no need for that. I mean, you could if you wanted to, but you still won't be living there. And so there still leaves that kind of issue.

So I think where you're at financially, there's no need to start this right now. But I would say start putting the money away in a savings account. $5,000 a month, that's $60,000 a year. And in two years, that's $120,000. And now we can have some fun with some renovations because of your financial spot. Awesome. Okay, that's awesome. Yeah, man, thanks for the call. I expected great advice, and I got it.

Oh, that means a lot. I appreciate the call, man. Robert is up next. He's in Sacramento, California. Robert, welcome to The Ramsey Show. Thank you for taking my call, George. Absolutely. I hope you're having a wonderful day.

I am. How are you? I'm doing well. It's a nice a wonderful day. I am. How are you? I'm doing well. It's a nice warm day. Um, I've got, first I want to, um,

encourage the, the, the, uh, email the day guy. Uh, I've been there, man.

Uh, keep chipping away. You know, as you dig yourself out, that hole fills up and just keep at it. You'll get, you'll get out. Um,

my question is, I've, I've paid off all my debt. I've made it through baby step three, my fully funded emergency fund. And I'm at the point where I need to, I want to either go and start my 3d or initiate my investment. And I'm not quite sure how much to put into 3B or just to split halfway between 3B and 4. Yeah, that's a great question. And there are a few ways you can go. And this is a very personal thing for a lot of people. Either you pause investing entirely and you just go all in on 3B for, you know, maybe a year or two. I don't like going much further than that. Or you split the difference and go, hey, I'm going to invest up to the match, or I'm going to invest 5%, 6%, and then the rest

is going to go to 3B. Or we begin investing 15%, and whatever's left goes towards 3B. So it depends on the urgency of you getting into a house. How urgent is this? Not very urgent. Where I'm renting is a very below market value for rent. That's amazing. Yeah. So thanks to that, I was able to get out of debt and do my snowfall stuff faster. Yeah. So if you pause investing, how fast could you save up? At least $3,000 a month.

Okay, so that's $36,000 a year. So in two years, you'd have $72,000? About, yeah. Would that be a reasonable down payment of 10% to 20% for a place in your area that is reasonable? Well, in some places in the area, it's kind of like on the stop on the way to Tahoe, so we've had a lot of Bay Area transplants kind of drive prices up quite a bit.

Do you have to live close to that area? No, I've just been in the area because it's where I got the cheaper, so I was hoping for a cheaper house. Is your work nearby? Yes, I'm about 15 minutes driving distance from work. Okay, that's good. I like to stay close to work.

That's just a personal preference. Don't love a commute. So if you can find something that's close to where you work, that's reasonable, and I would start doing your research to know what you're aiming at. All right, my goal is to have $80,000 saved up in two years. I'm going to pause investing, and then I'm going to get into that house and begin investing 15%.

So how old are you? Okay. I am 38. Okay. Have you invested at all so far? No. I have a 401k available to work, but due to some changes in the contract, it's no longer matched, and I'd be putting my first dollars in in six years. So you have $0 in retirement right now?

Correct. Okay. Well, I mean, that changes my feelings about it. If I'm in your shoes and I'm 38 and I don't want to work until 72, I want you to begin investing. And so if that's the case, I would be investing 15% and it's going to slow down your progress towards the down payment. But that's the trade-off we have to make because we haven't invested in 38 years of life. And so I think we just put a pause here and we go, all right, it's going to be more like four years before I can get into that house instead of two. And I'm okay with that. I'm renting below market. Hopefully it stays that way.

I can afford it. My income should go up. I can work extra to make this thing happen. But right now I would be focused on getting that 15% so that in 20, 25 years from now, when you retire, you can be a millionaire. Sounds great. Awesome. Appreciate the call, Robert. That puts this hour of The Ramsey Show in the books. My thanks to all of the nice people in the booth that made this show happen today. Kelly, Ben, James, Zach, Nathan, the whole gang.

And you, America. We appreciate you listening. We can't do this show without you. Remember, spend wisely, save intentionally, and give generously. This is The Ramsey Show. 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 ramsesolutions.com slash debt-free scream.

We'd love for you to come to Nashville and tell Dave your story. That's ramsesolutions.com slash debtfreescreen. We'd love for you to come to Nashville and tell Dave your story. That's ramsaysolutions.com slash debtfreescreen.