The Ramsey Show - App - Stop Letting Excuses Steal Your Wealth

Episode Date: March 3, 2025

This is the Ramsey Show, where America hangs out to get coached up on their life, specifically their money life, their professional life, and their relational life. 888-825-5225 is the phone number to jump in, America. It's your show, 888-825-5225. Alongside the fabulously fly, I feel like today, Jane Warshaw. I got to say, I think you got a 90s vibe, and I don't have a problem with it. I'm in it. I'm all the way in it. Number 23. Yeah. I'm not got a 90s vibe and I don't have a problem with it. I'm in it. I'm all the way in it. Number 23.

I'm not ashamed of my age. I graduated in 1992 from high school. We've got a big group of fantastic looking young scholars, high schoolers from a local school here today looking at us and they're all like, yeah, he's pretty much

my dad's age. And I am. We're not the same age though, Ken you're younger than me just look at you all ashamed are you shaming me I'm not trying to be where you're at yet I know well you look great though you're pulling off the 90s vibe uh making me look cooler than I'll ever look just to be next to you she's fabulous she'll help you out with how to save the money, how to budget the money. I'm going to help you out with how to make more money. That's our combo today. You ready to go? Let's do it. All right. Kayla's up first in Jackson, Michigan. Kayla, how can we help today? Hi, thank you for having me. You bet. What's going on?

So my fiance and I combined are about $56,000 in debt, and I'm wondering if we should use his retirement. I'm not exactly sure how much is in it, but it's somewhere around $50,000 to pay that off. Oh man. So these are retirement funds. It's not just money that's invested in a brokerage, correct? I believe so. Okay. When's the big day? March 29th. So right around the corner. Yeah. Okay. So split up the debt for us. Whose is whose? So we both have 16 and some change in student loans. I have $3,500 on a car and he has close to 20 on his truck, which we're probably planning on selling. There we go. Okay.

That's a good move. All right. I love the fact that you guys are looking at this debt and you see that it's an issue. I think that's a green light. That's a plus. I would not use the retirement to pay this off. The retirement is there as retirement. If you pull it out now, you will be penalized for it. You'll pay taxes on it and you'll have to pay a fee because you're pulling it out before 59 and a half. So for that reason, I would not do that. At this point, even though the wedding is just around the corner, I would focus on you two paying down your individual debts with your individual income. And then when you do get married, you can come together and tackle this.

Right now, yeah, if I'm your fiancé, I would look into selling that truck. Do you know the numbers around it? Do you know what he could sell it for, a private sale? We're looking into it. And I think he'd probably be just a little bit upside down on it. Maybe like a thousand or 2000, something like that. Yeah. And if I were him,

I, if I could save up that one or 2000 really quick, plus another two or three just to get a junker. Um, I would do either of you have money saved. That's not retirement, even if it's just a couple of thousand or a couple hundred? Yes, but I'm going back to school soon.

So we're trying to pay for that without taking out more debt. What are you going back to school for? Well, I'm not in yet, but I have an interview for x-ray and sonography soon. So hopefully one of those two. Nice. What's that going to cost you? Total program? Somewhere around $20,000. And what are you doing for a living right now? I'm painting. I just have done it throughout college. So I'm just doing that. And then he works on interiors. Like abstract art or painting people's houses?

Like commercial painting. Oh. The reason I'm asking this question is I'm going to challenge you that starting off this marriage debt-free or with very little debt is going to be so much more relaxing. It's funny. You posted an Instagram reel today of you and I together on this show. And I was talking about the young man, I was telling him, you need to learn how to get out of your parents' house and learn how to live on your own. Because when you get married, what's going to happen is you have these two individuals that

have grown up in two different households and there's a lot of culture shock. Yes. Yes. And I'm just going to bring that back up because it's fresh. Yes. I want to get Jade back here involved, Kayla, but I'd like to see you use that money to knock the debt off and let's hold off on paying your way through the school. I just think life, do you agree with me on that? I couldn't agree more.

Take the reins from me on this. I couldn't agree more. And instead of surrounding yourself with financial problems, I'll put that in quotes because going to school is a good thing, but the $20,000 that it will cost is a problem right now. Instead of surrounding yourself with more problems, it's really focusing on one thing at a time and saying, okay, out of the two issues, paying for school and the current debt, what's the biggest,

most burning priority? And the truth is it's the current debt that you have is the biggest priority. Cause how old are you? I'm about to turn 24 and he's 23, which is why I thought about the retirement. You don't want to do that. You're robbing yourself. You're just going backwards. Yeah, you've got time. And if that's the one thing I want you and you to take away from what Ken and I are telling you, you have time. Yes, the debt is something that needs to be taken care of, but it's not to the point of doing something extreme and making a further mistake like taking out your retirement. And that's the thing, Ken, I think that people have to be careful of. And Dave would say it like this, you know, when you get desperate, you know, you start getting stupid, right? And so you've got to be careful.

Right now you feel desperate. You're like, oh my gosh, look at all this debt. Don't turn around and do something stupid trying to solve for the desperate, okay? Can we ask you, Kayla, how much cash you have set aside for school? Together right now, we have $12,000. Okay, so doing the numbers here, you said you guys have collectively $54,000. I'm going to keep it at that because you're going to be married. By the time you split this out and try to take it on your own, you're basically going to be married.

So let's say you got $54,000. $20,000 of it is your fiancé's truck. That takes say you got $54,000. 20 of it is your fiance's truck. That takes it down to $34,000. If you put $12,000 on it, that takes you down to $22,000. Boy, that's really doable. I mean, I'm looking at this. Yeah, Ken is right. The truck gets out of the way. Your husband does that. He starts working on that today, right? Why not? You can take the $12,000. You pay off your car. How much is your car payment? Mine is like $135,000 you pay off your car how much is your car payment mine is like 135 okay now you've got another 135 back in your you know month-to-month what's his truck payment uh 300 oh look at that that's a big big raise yeah you're creeping up on 500 extra dollars

every month then you take the rest uh the other uh 8 000 that's left you put it on your student loan and that's how this works and before you know it you're going to be out of debt this 56 000 debt problem is going to be gone i predict in one year oh 100 and then come this time next year you're going to be paying for school and you're going to be so much more peaceful. Imagine studying without debt, Kayla. Imagine taking your exams without thinking about making your car payments. Right. That's what I'm talking about. So I want you to get there and make sure no matter what you do, you keep a thousand dollars set aside as your baby step one baby emergency fund. You need that there in case something happens.

But everything else needs to go to the debt. Yeah, I agree. It's not what you expected, but I think it's the best plan, especially being a young married couple. I mean, it's just going to make marriage a whole lot easier as you experience that first year of just learning how to live with somebody else. And it's a lot harder than anybody tells you, by the way. So don't add money complications to it. Great first call, Kayla. All right, quick break. Jade's going to tell me more about 90s fashion and then we'll be back. This is The Ramsey Show. Hey guys, I'm Jade Warshaw and I want to talk to you for a quick second about student loan

refinancing. If your payment and your interest rate are burying you and you feel like you can't dig out, refinancing your student loan debt might make sense. That's because a lower rate could free up more money in your budget and a shorter term could help you pay down your debt faster. So reach out to the student loan refinancing experts today at laurelroad.com slash Ramsey. There, you'll find helpful resources

like a student loan rate table, a refinancing calculator, and other tools. Plus, you can get an initial rate in just a few minutes. Laurel Road offers low competitive rates starting under 5%. And you can get your interest rate even lower if, sign up for a free 30-minute consultation with one of their student loan refinancing experts to get your tough questions answered. Listen, not everybody should refinance their student loan, so make sure you run the numbers. But for some people, it is the right move. Learn more at laurelroad.com slash Ramsey to find out more about their student loan refinancing. That's laurelroad.com slash Ramsey to find out more about their student loan refinancing. That's laurelroad.com

slash Ramsey. Laurel Road is a brand of Key Bank National Association. All credit products are subject to credit approval. Welcome back, America. You're joining the conversation about your life here on the Ramsey Show. Ken Coleman alongside Jade Warshaw. So happy you're with us, 888-825-5225. Investing can be overwhelming and certainly confusing. And it's not something that a TikTok or a Instagram reel is going to give you some depth on. So if you're feeling that,

we want you to know about our Investing Essentials virtual event. It's happening tomorrow. Dave Ramsey and George Campbell together will be doing the event here from our headquarters. Night one tomorrow, March 4th. It's a two-night event. So tomorrow and Wednesday, you're going to get two hours of teaching about maximizing your 401k and picking mutual funds. Also, you're going to get Dave's personal playbook on real estate investing. And he'll tell you how he's made hundreds of millions of dollars in property investments. Tickets are $199. Get

yours right now, ramsaysolutions.com slash events, ramsaysolutions.com slash events, or click on the link in the show notes if you're tuning in on podcast or YouTube. So this is a great event, two-night event starting tomorrow. And you're going to learn a lot YouTube. So this is a great event, two-night event, starting tomorrow. And you're going to learn a lot. And I'm going to tell you something. If you're out there and you're going, I need more Munyon in my life. Come on, Ken. Then this event is for you.

Trying to get that Munyon. That's what I'm talking about, Ken. More Munyon. I want a bag of Munyon. You know? So that's the event. You don't want to miss that munion is money for anybody who is not in the know i know this i'm hip i know these things i just use words like

that i forget that people aren't as up with it yeah yeah yeah we got to keep up with you ken i know i'm trying to stand on business as you tell me are you am i are you trying to stand on business i'm not sure if i know how to use that one. I'm still working on it. You hold that thought. What? Where is she going? Oh, no. James, I'm not sure what's happening right now.

Shut up. Are you for real right now? You just pull out a hat that says standing on business? I got that just for you, Kim. You stashed these? Yeah. I knew the time would come when you would be ready. To say, listen, this was not planned. I knew the time would come. you would be ready. To say, listen, this was not planned.

I knew the time would come. And now- See what kind of lid. I'm telling you, I'm rocking that lid right now. And now whenever you're ready to go on one of your rants, I want you to put that hat on. All right. Well, I'm going to keep it on the entire segment. It's not, I'm not a fan of black and red, but-

Listen to- I'm going to go with it. I like it. All right. Very good. Let's see how I do with this, James. This is all very exciting. I love so much of this.

Let's go to Caleb in Salem, Oregon. Caleb, how can we help? Hi there. Thanks for taking my call. You bet. What's going on? So my wife and I are 26. We have two kids, two and under.

And my instinct is to have no life and pay off our house as fast as possible. And she wants to live reasonably. And so I was wondering how you balance the gazelle intensity as you step into four, five, six. All right, I'll tell you what. I think the best thing to do here, Jade, is to go right to Caleb's wife and what she thinks is reasonable. In other words, she wants to live some life. You don't want to have a life. So what is her definition of have a life?

What does that include from a budget standpoint, and where does that challenge you? Let's get real about this. Sure. I guess she's working full-time now as a paramedic, making about 90, and I'm salary and supply chain at about 60. Great. 150 joint income. That's good. We're pretty comfortable, but I've considered moving to a different job that might pay more, but it would not allow me to be as home as much. How much more?

Less, yeah. Probably 80, maybe 85. And then how much less would you be home? So right now I work hybrid. I'm home, working from home two to three days a week. But my work lets me pick my hours, and I can be flexible around my wife's schedule. So it would cause us to have to do childcare, which we don't, and just make things more complicated. All right. And so, and the only debt you have is the home?

Correct. Oh, bro, this is easy for me. I mean, you got to find a way to make some more money somewhere else because if it throws the family dynamic off as much as it sounds like, and they incur more expenses for child care. You could easily end up spending that $20,000 a year taking care of these kids. Yeah, so I would be patient, and this is happy wife, happy life. But this is also, to Jade's point, she got to it faster than i did but this is a net net it's not like a whole bunch of uh of win for you a financial windfall so i would just be patient man uh you got a good joint income how soon will you pay the house off if you just stay at the current rate we're

projecting around six years i wasn't sure if that was too long. That's amazing. How long were you in baby step to? I'm just curious. How long did it take you to pay off whatever consumer debt you had? We've never had debt. We've been married. We both cash flowed our two-year degrees

from the fire department and me through a charter school in high school. We've been debt-free and my work paid for us to go through FPU. So we've just been. What do you owe on your house? About 280. You know, it does bring up an interesting conversation. So obviously the way we teach the baby steps is baby steps one, two, three.

Those are you move intensely, right? That's gazelle intense. You're going fast. You're sacrificing. You're doing whatever it takes to get this debt paid off. But then when you move into baby steps four, five and six, particularly when it's time to pay the house off, that's the time where we say, hey, you don't have to be intense anymore.

It's really about being intentional and you're moving methodically with intent toward paying off the house right it's not you sacrificing everything right um but in cases where where i kind of am willing to play the game a little bit is in cases like yours where it's like listen we never had debt we never went through a season where we were really sacrificing to win we never needed to and i say kudos to you for that but in those situations that's the time where I'm like listen if you want to get a little bit more intense to do it I'm not mad at it I don't think the means that you stated earlier was the way to do that but um it would have been one thing to me if your wife was like listen man we just spent three years you know in the trenches

I want to take a break but in this case you didn't. And if you wanted to get more intense along with your intentionality, I don't think that's necessarily a bad thing when you haven't gone through that baby step two situation. I agree, but not at this particular option. Not in this way. Because now you're increasing your expenses to take this opportunity. And when you, and just by the way, challenge us on the numbers off this call, right? So take the $20,000 gross that you're going to make. So we know you're going to take taxes on that. So run your taxes on that.

You have a pretty good idea what that is, okay? And then you look at the increase in child care, and you start playing that out. And so that's how you just walk through these decisions. If you had said to us, Caleb, I'm going to make an additional $20,000, keep the same schedule, get to work at home, then I think it's a very different conversation. But man, you're in good shape, and listen to your wife on this one. Yeah, yeah. If you don't listen to us, listen to her. Perfect, hold you. Yeah, you the man. I appreciate that. You the man. You know, fascinating. I love to hear a young man who's going, I really want to pay this off.

And he's like, hold me back, Jade. Right, right. Hold me back. Like, am I doing? And boy, as opposed to the opposite effect, you know, where people are just like, oh, they're not even thinking about it at all. They aren't willing to sacrifice. Really interesting way of coming at this.

It is. It is. And I think it's worth that conversation because, yeah, when Sam and I, after we spent seven and a half years paying off our debt, we're weary, right, at that point. If he'd have come at you with more intensity, you'd have been like, hey, man. Listen, I tried to do it. You tried. I've tried a couple of times to go really hard on something, and Sam's like, I need you to calm down. He's out there. He's like, yes.

I see him. I see him, too. He's like, I need you to calm down, Jade. And it's true. Even if you've done an intense two-year battle, right? And I think that's why the baby steps are the way they are because we need a break. We need a breather to live and enjoy life. I can't believe you just pulled the standing on business hat

out of the, for those of you that are watching on YouTube, you have to check it out. You made these hats? Yeah. Yeah. All for that moment. Yeah. How funny is that? This originated with Sam Warshaw. He was like, we need to get Sam a standing on business hat. We need to get Ken a standing on business hat. Well, there's two of them. So I think he and I will sign them to each other and they'll just, they'll be bros. That's right. But you got to pull that out when it's time. Yeah. Sam, you and I, a stick with these hats. We'll smoke a stick soon on that. All right, quick break.

We'll be right back. This is The Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story, and it's a lie. In our self-obsessed society,

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The Ramsey Show continues. I'm Ken Coma, Jade Warshaw is alongside, 888-825-5225 is the phone number. Laura is joining us now in Los Angeles. Laura, how can we help? Hi. My husband and I are in a lot of debt from a small business we started, and I need you to guide me how to get out of it, I guess. All right. Give us some numbers. Okay. So we're talking, if we're combining personal and business, it's about like $150,000. Okay. How much is from the business, though? I'm just curious. Well, I would say all of it because we put in from personal into the business, but just

the credit cards would be like $90,000. Ooh-wee. Okay. And what's the rest of the debt? They're all credit cards. All of it's all 150s on credit cards? Yes. Oh, my word.

We even opened up personal loans to pay for the credit cards so we can have more space for the credit cards. It's a mess. So how many credit cards total? I would say there's about seven. Seven. And then you said you have personal loans open too. Is that included in the 150 or is that, what is that? Yes. That's included in the 150. Okay. So your thought is like, hey, we use these personal loans to pay down the credit card to clear up more space so we can borrow more on the credit card. Exactly. What's your income situation? Are you guys still working in the business? No, no. It took us a while, but we brightened up to close that business. Well, it's still open, but it's not running. Okay, gotcha. So what's your income? My husband makes about, I would say, $120,000 and I make $80,000. Where does that money come from? We each have jobs. Got it.

Okay. So we got $200,000 combined income. Correct. Okay. Do you have any other debt outside the $150,000? I know she asked you that, but I'm just totally clarifying. This is all of your debt. Well, yeah, we have a mortgage, a car, if that's what you're asking. Yeah, we want to know. Total debt. Tell us about your cars, your student loans, anything that you owe money towards, that you make a monthly payment towards, we want to know about it.

So go ahead and tell me your mortgage. I'm just curious, what do you owe money towards that you make a monthly payment towards, we want to know about it. So go ahead and tell me your mortgage. I'm just curious. What do you owe on it? I would say we owe like $400,000. So monthly, I paid $3,300 for mortgage. Okay. The car, I paid $700 a month.

I think there's like $19,000 left on it. Okay. We have a leased car that's $400 a month. My son's school is $850 a month. Is that private school or is that daycare? Private school. Okay. How old is he? Four.

Okay. Okay. Keep going. private school okay how old is he four okay okay keep going um my school one is 400 so our personal loans his is 1600 a month mine is 850 a month okay and how much but that personal loan is included in the 150 you told me earlier yes okay tell me um when you guys get your paychecks like after everything's taken out what do you take home every month what's your check look like between both of you combined uh yeah mine is about 2 000 and his is about oh no that's every other week so $4,000 and about $9,000 for him. Okay that's the

good news. So $13,000 net and just a real quick question I don't want to get bogged down on this but why is the four year old in a private school? Because of I don't want him to learn anything. Right, but is it pre-K? Yes.

Okay. So he doesn't have to be in pre-K. I'm just wondering, right out of the gate, there's some money to be saved on some home care maybe versus, but there's bigger issues going on. But y'all got to cut back big time. Big, big time. There's the bumper stickers that Jade's about ready to walk you through.

Well, I think that's, I mean, jumping off with Ken's point could be a good place to start. The only way to get out of debt is there's two methods you could invoke here. You could work more, right, to have more margin. You could also cut back on your budget to find more margin, or you can do a combination of both. And to Ken's point, that school might be a great place to start because I don't know what you were going to say as far as like, I don't want them to learn certain things. It might be some of the same feelings that I have. And my kid is in private school, but for right now, it's okay.

Or they're in daycare, and but for right now it's okay or in there in daycare and for right now it's okay so it might be worth it for you to invoke that when they get a little bit older could be that it's your kid yeah I was gonna say yeah and I might step on toes here but since we're here I'm gonna go ahead and say it because I know a lot of Americans are thinking this so I'm gonna go ahead and say it get in. You might have to put your hat on. I don't remember anything from my 12th grade year. Your four-year-old, no matter what they're trying to teach the kid. I mean, I get it. I'm not in LA. I get it.

But I don't know. I would be looking to save $800 a month tonight. Yeah. I mean, at the end of the day, what matters most is what you teach them at home. Yeah. But again, I know we're really getting into your personal life. I know. And I got to be careful.

I'm not judging you. I'm just saying, you know, the four-year-old, we could cut that. That's 800 bucks a month. That's $9,600 a year. It's a lot. For where you're at right now, it is a lot. We just want to highlight that it is a lot. Next thing is I'm looking at possibly both of these cars.

I want to know about how you can get out of this lease. When is this lease over? Very soon. I would say like four months. Okay. And then your option, you just turn the car in and you're out? Yeah. Okay.

So I would do that. Don't try to buy back the car or nothing like that. Just get out of the lease. And in the meantime, do you have any money saved? No, everything is gone. Okay, then what I'd be doing, knowing that this lease is about to come up, I'd be like, we got to in your notebook as when we turn in this lease in three months, in three months we'll also be buying a $3,000 to $4,000 car. I know you have the margin in your budget to do that.

Okay, so that deals with one car. Let's talk about the $19,000 car. Do you know what that car is worth? The payment was kind of high, didn't you say it was like $700? Yes, I think we bought it at $50 it at fifty thousand okay do you know what it's worth now I don't okay that's your second piece of car homework I want you to go on kellybluebook.com look at private sale because it sounds like if you bought it at 50 and judging by the height of your payment I feel like you've been paying this off kind of fast.

Am I wrong? No, you're right. Okay, so you might not be upside down. And if you're not, I would still get out of this and get into something cheaper because a $700 payment, you need that money. And so now we've just found $1,100 in your budget with these cars, and you need every dime of that to go towards paying off this credit card debt. The good news is, I mean, you guys have a good income. It's not wonderful for LA, but it's wonderful for the rest of the country. Yeah, and it's doable. And again, not telling you what to do with your kid in school,

but if we take the $800 on top of that, now we're right at the doorstep of $2,000 that we found in your monthly budget. That goes a long way to paying off $150,000 in debt. Okay, because now you're looking at if we just take $2,000 a month that you found and you put it towards debt, that's $24,000 a year. Now, it's a long haul, right? And this is a drastic change of your lifestyle. You're not going on vacation. You know, you aren't going out to eat. You guys are going to have to really hustle.

But again, my co-host today, this is a woman who her and her husband paid off half a million dollars. She needs a little pep talk as we go into the break here because mindset wise, what does she got to be thinking right now? You've got to be thinking, the hard part is you're making a good income and to not be living in that income feels like, oh man, I've been working hard. But the time will come when you do get to do that. So just hold on. If you clean up this mess, you're going to enjoy your income like you never have before. Right now, you've kind of faux enjoyed it with all these things on payments, and it's not all it's cracked up to be. But if you walk through this journey, you're going to get to enjoy the fruit of $220,000 plus a year with no

debt and payments. You can send your kid to the school that you want to, and you don't have the stress associated with it because you'll actually be able to afford it. You can do it. You can. Appreciate the call. All right, quick break. Jade Warshaw, Ken Coleman. This is The Ramsey Show. We'll be right back.

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alongside jade warshaw i'm ken coleman you're listening to the ramsey show so excited that you are with us today as we help you win with your money winning your profession and win with your relationships 888-825-5225 is the phone number. We'd love to hear from you. We go to Paul, who's right here in our backyard, Nashville, Tennessee. Paul, how can we help today? Hi. How are you guys?

Doing well, sir. What's going on? So I am 22 years old, about to turn 23. And so is my wife. We recently just got married about six months ago. And I knew before we got married that she wants to be a stay-at-home mom. But I have no idea how to have a career or a job or whatever to support that kind of thing. I'm a college dropout. And so I'm trying to figure out

like, how, how does one have a career? Good. Well, I'm a college dropout as well. And so I want you to stop saying it that way the rest of your life. I want you to stop saying it the way that you said it. And I'm not criticizing you. I'm actually going, Hey man, everybody's got their story. Everybody's got their reasons for it. That does not limit you. And so I want to make sure we get our shoulders back on that, okay? So I'm a college dropout, all right? And so I'm not going to let you talk about me the way you talk about you that way, all right? You got this, Paul. All right, so let's talk about real numbers, all right? So she wants to be a stay-at-home mom. Love that. It's the greatest job in the world.

Mad respect for it. My wife, Stacey, was a professional, made really good money, and then she's been at home for a while. I got mad props for that. How much money? I think you've got a number in your mind, or let's come up with a number. If you earned X amount of dollars, that would replace her income at the minimum. So what's the number?

We don't have any kids right now, but to just stick her at the house, I would have to be making 85, but to have the amount of kids that we want, I'd probably have to be making 150 to 200. How many kids do you want, maybe? She wants five. Oh, Lordy. Hello. Well, so are we trying right now or is this just something we're talking about? Cause we've been married six months. Okay. Thank the Lord. Yeah. Y'all need to slow your roll and learn how to be married for heaven's sake. Cause you've been married six months. We're waiting like five years to have kids. Oh, well, let me also say, you know what, Paul, let me just tell you, all those plans are great. You have no idea what's in store for you. No idea. You have zero

idea. So let's do what we, let's focus on what we know. She's in a job right now, correct? Yes, sir. And she's not coming home anytime soon because there's no reason to come home, correct? Yeah. What's she earn? Take home is $33,000. Okay, great. And what do you take home right now? Oh, $33,000. I take home, yeah, $33,000 a year. Okay, so you guys are fine.

You're 66, take home. That's not bad at all. You guys can stack cash. Do you have any debt? No debt. I made sure to pay all my college debts off. All right. So I'm going to bring Jade back in in just a minute to pick you up right where I just left you. But I want to talk about what you want to do. I think this is what I've been doing for years is coaching people to find work they're wired to do. I'm going to give you at the end of this phone call my best-selling book, Find the Work You're

Wired to Do. It has the Get Clear Career Assessment in it, okay? And I want you to take it, and then I want you to read the book because the book is me coaching you along with your assessment results. But let's just see if we can get a couple ideas because I just believe, Paul, that you know what it is or you have a couple ideas of something that you would like to do. And if I could wave my pencil and go poof, and you were doing it and making the money you'd like to make, what is it that you would like to do? Any ideas? I would want to probably own a real estate and or logistics company. Great. And why logistics? What about logistics intrigues you?

I've just been kind of good at it and it's fun. Maybe that's weird to say, but it's fun. It's perfect. My assessment measures three things, Paul. What you are good at doing, you just said you've always been good at it, and what you love to do. That's amazing. I love to do what I'm doing right now. It's fun. It's really fun. So that's not weird. So logistics has got a lot of application to it. That's very versatile in the world of work because if you're good at logistics, there's some operational roles, a lot of ways you can go with that. And then real estate, if you're smart, you transition to that over time, that's great. So what's keeping you from moving into logistics over the next year or two or three? What do you think is missing? Do you have to have a degree to work in logistics? I mean, I work for a logistics company right now. We supply apartments, but

I don't really know what to do to get into the logistics space. Okay, let me ask you a question. Since you're in logistics right now, who at your current company would be able to answer that question about what would it look like to climb the ladder into logistics? I could probably find some people on our company portal that I could probably email. Yeah, I think.

Oh, Paul. Paul, I'm going to give you the magical key that most young people never discover. You ready? You find out who are the logistics veterans in the company portal. You send them an email or a chat or a voicemail, and it sounds kind of like this. Hey, so-and-so, my name's Paul. I'm a young guy who would love to get into logistics. I've always been good at it. I really love it, but I need someone with experience to just give me their wisdom on the multiple ways that I can grow and climb the ladder in logistics. Would you be willing to spend time with me if I bought your coffee or lunch, and you just rinse and repeat until you get somebody to do that. And then you actually pay attention to what they tell you. And then go find some other things. Go down message boards in logistics. Read, listen to podcasts. Find everything it is about logistics that are

out there. Believe me, it's out there. And you figure out how to get there. Now, once you know that that's a good move for you, and my assessment, the Get Clear Career Assessment will help you with that, and it's going to validate all the stuff we're talking about. Start moving forward with that. By the way, Christian, let's also give him a copy of my book, number one bestseller, The Proximity Principle. I'm just piling it on the young man, because I want to hand you over to Jade. We've got a couple minutes, and I want her to walk you through how you will get ahead financially now that we're going to have a path and we're going to make more money, how we plan for little ones and mama to

come home down the road. Yeah, I want you to have a clear picture in your mind by the time you leave this call. Ken gave you the career piece. So let's talk about what it could look like. So you've got kind of a five-year play here, right? There's five years where both of you guys are in the workforce during that time you're getting your income up it's 66 now you know by the time she takes the baton or you take the baton from her hopefully you're carrying that on your own and more um so the key here is the house like that is the key that's the foundation of all of this if you can set yourself up you don't have any debt right now, right? If you can get into a house and you're already projecting saying, okay, this house, it can't be more than 25% of our take-home pay, my take-home pay, because you're going to be the only one working.

So at this point, let's say you're making 66,000, right? You're carrying that on your own. Okay. Payment can't be any more than $1,200, right? That's the max. So now is the time to start saving towards that and making that happen, right? That you've got five years to make that happen. And then once you're in baby step four, you're saving, you're putting aside 15% of your income. That's 825 bucks a month from now until the cows come home. I mean, if you just did that on one salary with your kids, like you could retire with $5 million. So there, this is, this is the picture that I want to paint. You're creating stability by your home. And by the way, when you get that home, it's got to be based on your income, not both of you together, just what yours is. That's going to be the key to this.

And then from then on, it's you guys making, Ken, how can I say this delicately? A lot of times folks call in and the childbirth has kind of taken over all other thought process. And it's like, you just have to understand that kids are expensive and they're not getting any cheaper. So you guys might get to three babies and go, oh, okay. Well, it's really hard to make current decisions on hypothetical future decisions. And what I mean is what you're saying. Sure, I understand we want five kids is what she's saying, but we don't know how that's going to happen. Yeah. You may look at the situation and go, okay, I haven't gotten quite to $66,000.

I'm at $50,000. Yeah. How does that play into this? And that's okay. A lot of life happens between now and five years from now. And everything we lay out, it's awesome. But life has a real weird way of never turning out exactly the way we plan it to. So that's why you want to make these great money decisions now and then deal with what happens when life throws it at you. Great hour.

Jade Warshaw, always fun. This is your show. It's the Ramsey Show. This is the Ramsey Show, where America hangs out to have a conversation about their life, specifically their money, their profession, and their relationships. Alongside Jade Warshaw, I'm Ken Coleman, 888-825-5225 is the phone number to jump in. She'll coach you up on saving money, budgeting money, investing money. I'm going to coach you up on how to make more of it,

as the young people call it, munion. This is a new term I learned today from some high schoolers. I can't wait to drop that on my kids. Oh, they're going to love it and hate it. And see how fast and hard they roll their eyes. As my daughter likes to say all the time, you're so cringe, Dad. Oh, man. You know? Make a meme out of it. Yeah.

It's what I'm supposed to do. It's part of the role of a dad. But we're here for you, America. You ready to go? I'm ready. Come on, partner. All right, she's ready, folks. Sarah is up in Miami floor.

Oh, near your old stomping grounds. You like that. Sarah, how can we help? Hi, guys. Thank you so much for having on. So my parents opened up a credit card for me when I was younger in my name. So right now, the card has about $18,000 in debt, and i want to know what's the best way to go about paying it off um they've already agreed to help me pay off since it's the three of us uh our charges are on it um but i want to know what's the best way to go about it so the 18 000 isn't just your spending it's it's your parents spending as well yeah the three of us oh wow okay do you know who spent what is there any do you know who's on the hook for how much is there a spreadsheet um

uh in november we had a trip um where they put about five thousand dollars in charges and then it's been open since I think I was 16. So I can't exactly point out who has what. But I pay off every month what I put on. Obviously I've stopped now just because we're trying to pay it off.

So there's no more charges going on to it. But I want to know what's the best. They've agreed to pay it off so they've put money on it. But it's just 18, it just seems so huge to me. Who's the primary on it? Are you the primary and they're the cosigner? Or who's in charge of it?

My mom is the primary. Okay. My first order of business would be for me to be taken off of it just from a credit perspective just from a responsibility perspective um this is you doing damage control saying hey the truth is and i'm not saying you say this to her but i'm saying this to you the truth is they pulled this debt out in your name before you were of age to even be able to make the decision to say yes or no. That's the truth. 16 is not the time for you to be deciding if you should have credit card debt

with your parents. The answer would be no, but you didn't know that. Okay. So first order of business is mom and dad. I need you to take my name off of this and I want my name off of this. So that's numero uno. You do that tonight. Because the truth is, how old are you? Right now I'm 26. Yeah, you're 26. And the truth is, one day you're going to want to do something that requires your credit score to be zero. And as long as this is around, your credit score can't go to zero, right? Which is what we're trying to get to. So that needs to happen. And then after that, you can say, okay, let's look at what the charges are now. And let's go through and let's kind of itemize this thing.

And I'm fine with you going, this was me. I will pay that. And this was not me. I will not pay that. Right? Now, if we're trying to play a chess game here, it's really important that you get your name off of this thing first. Yeah, I was going to ask.

I love the advice. Do you think that's going to go down okay, Sarah? I'm curious. Yeah, they're pretty reasonable. Okay. Because if you start talking about what you're not going to pay, they may not want to take your name off it. I think Jade's exactly right. Is there any way, and you have to forgive me, I really don't know this. I just don't know. Yeah, what? How far back can they track? Can they track the expenses over the lifetime of this card?

Or is that like going to some credit card database? I think that would be hard to do. I'd probably go back $18,000 worth of charges. Because the thing is they've been using it, paying it off, using it, paying it off. So as it stands now. Okay the eight that's what i'm asking yeah so of the 18 that's on there now yeah it's like a fresh start that's i'm can they track that they being sarah and her parents the credit card oh yeah i mean does the credit card have a obviously it's a website but does it have the capability that she and her parents could go in and they could get an itemized list of of the current 18k this is what it's made up of so that they can divvy it up i mean yeah you know that's a dumb question my guess is probably three

months of expenses is probably 18 000 because they spent 5 000 just in november right so you could probably just pull up the past three or four month statements. And the reason I'm so hung up on that, Sarah, Jade's advice is absolutely stellar. And to the extent that you can find out what is yours and you and mom and dad are all mature and we go, okay, this is our chunk and this is your chunk. And let's say you come back and I'm making this up, but let's say your chunk is half of it at 9K. Now, because you're off the card and what you're going to do is you're going to pay 9K to mom and dad to put on the card. Hopefully they'll do that. Hopefully they will. But that ain't your problem. And you will come to an agreement, mom and dad, I owe you $9,000 and I'm going to make that right. So whatever the

number is, that's what we want you to do. And that's going to make this clean from a boundary standpoint for you, which is really important. Really, really important. And the hard part is, you know, I would tell you, hey, like if for some reason you ask them to take you off and they give you a problem, you could contest it like with the credit bureaus and say, hey, I got this when I was a minor. The hard part now is you have been spending on it and it's kind of been, you've okayed it from a certain perspective. So I really would, it's all going to melt down to how you have this conversation to get them to take you off.

That's right. But yeah, that's a good idea. I'll definitely do that. I just had one more question. I am worrying about my credit. So when they take me off the card will my credit be impacted um it probably wanted to go down that's the part where i'm not

exactly sure because you're not disputing it you're not saying hey this never happened it'd be one thing that's why i said if you went to credit bureaus and said hey they did this when i was 16 i didn't give them consent yeah then it'd almost be a fraudulent and they'd take you off and for you it'd be like it never happened But I want you to coach her up on something. She just said, she didn't catch what you said earlier. She said, I don't want my credit score to go down. You want it to go to zero. Give her the quick pep talk on why. I don't think she caught that. Am I right, Sarah? That's very good. You need to hear this. It's important. So the key is for your credit score to go to zero, not necessarily to go up.

So the truth is, if you've had any sort of debt that you were using and you paid off and you close it out, or in this case, you get it off of your credit report, it could impact your credit report. But over time, when you stop borrowing money and there's no open accounts on your credit, your credit score is going to go to zero. And so if that credit is the only debt you have, once your name is removed off of that over time, in a very short period of time, six months to a year, your credit score is going to roll to zero. And a zero credit score is just as good as a high credit score. Okay. That's the one thing they don't teach you in school. They don't teach you on the internet. They don't teach that because nobody benefits from that, but you. No company is making a bunch of money on that, but you. Okay. That's why they don't teach it, but it's absolutely true. So that's what we're working towards. Get this in the motion,

get it happening, get your name off of it and don't borrow any more money and you'll be good. Yep. You got this. I think a lot of people don't realize you can buy a house with zero credit score. Yes. You can live life without a credit card. Yes. It's all very doable. If you want to know more about that, just go to ramseysolutions.com, you know, and search. We've got articles on that. People think we make it up, Ken. No, it's a real thing. It is doable. So Sarah, you got this, kiddo. Thanks for the call. We're rooting for you. All right, quick break. We'll be right back. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down.

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as low as $98 a month. So learn more today and join at chministries.org slash budget at chministries.org slash budget. Welcome back to the Ramsey Show alongside Jade Warshaw. I'm Ken Coleman. 888-825-5225 is the phone number to jump in. We'd love to have you. Palm Springs, California is where Jenny joins us. Jenny, how can we help you today? Hi. Hello.

I'm a 90s kid, by the way. Nice. Come on, Jenny. My parents are getting old. Love it. My parents are getting older, so now they're in their late 70s. They've done well for themselves, but now i'm helping them because i noticed they were paying quite a bit of money into a flexible premium adjustable universal life insurance that they've had since 1986 oh man that thing's got

mold on it my well my dad worked in law enforcement and his initial hourly rate was only four dollars and eighty cents wow so it made sense to them back then to have this hundred thousand dollar Well, my dad worked in law enforcement and his initial hourly rate was only $4.80. Wow. So it made sense to them back then to have this $100,000 policy for him because, you know, you don't know what's going to happen. But after doing some research, I've gone back and forth. The policy has been sold from company to company. They don't even have the records for this policy because it's 39 years old. And their cash value has basically depleted. My mom's very smart.

What is it? Do you know what it is, the cash value has basically depleted. My mom's very smart. What is it? Do you know what it is, the cash value? Oh, yes. So the first, well, the cash value now is, I think, down to $1,000. Oh, my gosh. And they've been paying into it since the 80s, basically? Yes. Oh, Lord.

Basically, they've totally paid $48,000 of their money into this policy. Okay. And so they have three different, well, one policy is $25,000, two riders, one for 50 and one for 75. So basically 150 for both my parents. Okay. Right now what happened was they said, oh, you stopped paying your payments. But my mom said, no way I've paid my pay. She's paid over the amount over all these years. And basically what happens, and I've been researching, so it's imploding on itself. So now their cash value is gone. And my question is, right now we're at a level playing field.

Do they stop paying this? I'm trying to get the answers from somebody. They won't give them to me. Well, let's find out. What's the rest. Tell me more about their financial setting, because the hope is that you can get to the point where you're self-insured. That's the hope, is to get to that point. So tell me more about their finances aside from this universal life. Do they have a nest egg? And if so, how much is that? They've owned four homes.

They currently own three homes, but my parents being the great people they are, are leaving those homes to their children. Okay, what are they worth? So they won't sell those. I would say they're probably worth a million and a half. Okay, so 1.5 million. Do they have debt on them or are they cash, paid for cash?

No, they only owe a little bit left on one home. I think $25,000 left on one home. Okay. So essentially paid for. So three homes worth $1.5 million. Do you know what their nest egg is that's in the stock market? Savings. They don't have stock market. My mom didn't come from that era. She didn't want that. So I think in savings, they have liquid about 250,000 okay 250,000 cash okay so they're millionaires they're doing fine um these i mean is the assumption that these homes are going to continue to go up in value they've been taken care of oh yes okay so there's worse things that could be going on here um the chances of them you know going out and getting a term life insurance policy for anything reasonable at this point,

you said they're in their late 70s, it is not happening, right? So the best you can think through is, okay, if one of them were to have an event that was not paid for, if any of one of them were to go into assisted living, is there money to pay for it? And the other spouse, the remaining spouse is there money to pay for it and the other spouse the

remaining spouse still have money to live off of that's kind of the equation that you're doing in your head right yes okay so a couple of things that i would do for that to be more of the case of this 250 000 in cash um i would want to invest some of that because I'd want it working for me. That's a big chunk of money that should be making. I mean, over the last three years, if that had been invested, the rate of return would have been unbelievable on that. But just even in a normal market, in a normal market, you're looking for at least a 10% annualized rate of return. That means if we look back on the track record over the course of five or six or 10 years, we're looking at 10% is that annualized percentages

of return there. So that 250, if you can talk with them and say, here's the truth, and I didn't ask you this, I guess I should, are you sure that this is their only life insurance that they have? Or is there another policy or something else laying around i i'm pretty sure so i'm not very smart on life insurance policies but once you stop paying they're gone right yeah if you let it lapse yeah how old are

they my dad's 78 my mom is 75 i just don't think they need insurance at this point. I think they're okay. Now, well, I mean, here's my thing. With all those houses, and then what's beyond the house? They've got 250 cash, but I'm always looking at what if one of them becomes very ill and they need assisted living or they need somebody living. Well, that's why I'm with you. I'd invest that, and I would use that as like that. That's that fund. That's the fund for that.

Here's the thing. I don't know. What are they paying a month on this coverage? It's $100,000. What are they paying on it? So she's been paying $185 and their premium was only 50. Yeah, it's peanuts.

54. Yeah, it's. But that's what I'm. Now that their cash value is gone, where do all these fees come from after they make their own? Because it's just, it's but that's what I'm now that their their cash value is gone. Where do all these fees come from after they make their own? Because it's just it's a terrible product. Now you get it. Now, you know why we hate it. It's a horrible product. They got nickel and dime to death on their own cash value. They're not they're horrible products. And that's what we try to tell people. You pay into this thing for life. And at the the end of the day you have nothing to show for it all they have is their hundred thousand when they pass away which i you know

if they keep it around much yeah if they keep it around and they're like i'm happy to pay the 185 a quarter or whatever it is you know they're not getting rich off of this thing which is what we've learned and when they pass away you're not getting rich off of it either is what it amounts to. And so and here's the thing. If they had passed away, they wouldn't have gotten to keep the cash value anyway. That's the most ridiculous thing about this whole thing. So they're in it. It's not it's a horrible product.

If they want to get out, they can get out. If they stay in, it's not the end of the world. They've got the money to pay for it. And it's in many ways, I guess at this point, it's better than nothing because it's not overly expensive monthly. But that cash... Would there be a penalty for them to get out of it now? I don't... Did they say, okay, we don't want it anymore?

Yeah. Ask about that. Ask and find out. At this point, I feel like they could probably surrender it with no issue, but just find out about that. And push for that. Push for that. But this 250... I'm trying and I can't get anybody to help me or help him while we're both here, but nobody will help. Nobody will answer my questions. It's all, well, we don't know. We have to look it up and nobody has answers for me. Well, that's because they don't want you to get out of it. They've gotten $48,000. They got answers. They just don't like the answers. I would really just put the pressure on somebody and become their worst nightmare,

and you'd be surprised if somebody wants to get rid of you. You can be nice, but you're just like a bulldog. Yeah, I mean, I'm a 90s kid. I'm good at getting somebody's worst nightmare to come out. Come on, there's a 90s reference. There you go. Come on, you know? You get into it.

I mean. Like new kids on the block hanging tough, you know what I mean? That's what I'm dropping. That's our theme song. Yes, okay. You know? Hanging tough. I into it. I mean, like new kids on the block hanging tough. You know what I mean? That's what I'm dropping. That's our theme song. Okay. You know, hanging tough. I like it. Yeah.

I mean, there's no cash value. I can't imagine what they might charge to surrender this at this point. But check into it. And if you want to lapse it, let it lapse. They're not going to get into anything else, though, at this point is what I'm saying. And the good news is that they have the money to self-insure. But pushing on that $250 to get that invested, I at this point is what i'm saying and the good news is they have the money to self-insure but pushing on that 250 to get that invested i would do that if i were you and do you know will the premium keep going up and up and up so they get their fees say that again will the premiums on the whole life keep going up uh they might yeah i'm telling you

they might you can cancel this thing get out of it get out of it it's and if there is a penalty at this point it's like who cares get out of the thing yeah yeah they paid forty eight thousand dollars into this and they have a hundred thousand dollars of coverage that's terrible i'm unfortunately i'm unfortunately at the the time of my life where insurance is such a fraud and i'm I know I'm saying that blanketly, but after looking at all of this for them, I'm thinking, what a fraud. You could have put that money

into something else. And I don't want to make my parents feel bad about it because they said we were doing what we thought was right at the time. It happens all the time. That's why we teach term life insurance is the best way to get it.

With term life insurance, you're only paying for insurance. With all these other universal life and all these other, you're giving them extra for them to invest it for you at a horrible rate of return. It's loaded with fees. And at the end of the day, you end up with nothing. What these people have ended up with is so typical. And so your best bet, term life insurance, check out our friends at Zander Insurance.

They will hook you up. Yeah, yeah. And it's peace of mind and it's for the term. That's right. And that's why it's so beautiful. Once you get past that, you don't need it. Guess what? You don't need it. You're not paying for it. All right, quick break. More of your calls coming up. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is joining me. 888-825-5225 is the phone number to jump in. We'd love to hear from you. Javen is joining us now in Hattiesburg, Mississippi.

Javen, how can we help? Hey, how are you? Good. How are you today? Doing pretty good. Okay, so a little bit of background for my question. Me and my fiance, we recently got engaged back in September, and we are set to get married in November of this year.

That being said, I am very excited, and there's nothing that I want more than to marry her, but I am also very nervous because I've never had to financially lead anybody in my life. And so I guess my question is, what are some of the best steps that I can take in order to ensure that we'll be financially successful and we'll keep the money fights to a minimum? Oh, really thoughtful question. How old are you? 22. Do you have any debt? No, sir.

Does she? So she doesn't have any debt right now, but she's going to school to be a PA, and she wants to go to PA school, but obviously her parents didn't save any money for her to go to PA school, so she's going to have to take out loans, I'm guessing. And when will she start? Right now that's kind of unknown. She has been applying to different schools.

She did have an interview, and she got waitlisted. So right now it's just kind of unknown. Okay. Well, I want Jade to weigh in obviously on this but from a i really thought it was in a really mature way of asking the question you've never had to lead anybody and uh and when it comes to husband and wife and the word leading can get tricky for some people and i think what i'm going to say hopefully helps everybody. I wouldn't look at it as telling her what to do if that's what we think leading is.

I think modeling the way is what I would define as leading when it comes to a marital relationship. And so modeling the way is you being disciplined with money, you being transparent about money, you being thoughtful about money, you know, just coming at it from a, it's a we. And so first, give you a classic example. Leading her right now would be sitting down with her and going, hey, here's my view on student loan debt and just debt in general. Here's what it does to me. Here's why it does that to me. And when I say the why, I don't mean like Ramsey bullet point language. I mean like you personalizing going, I grew up this way or whatever, whatever. So that

she goes, she feels very safe because you're not talking at her about this. You're going, here's how I feel about money in general. And I feel as your future husband, that I have a responsibility to lead us, is how I would say that. And say, can we talk about what it might look like to save up and cashflow PA school? Or I'm going to bring you in here because I I wanted to try to take the I wanted to give you some wisdom from my you know as a man in the marriage Stacy very strong we've always been on the same page about money when we didn't start that way in other words we may start a conversation we ain't on the same page yeah yeah when we finish the conversation Jade we got to get on the same page.

And so I'm bringing you in here. I'm tagging. This is like a wrestling match. And I'm tagging you in the corner over there. You're jumping off the ring. I'm getting out of the ring. And I need you to come in because I do want the female perspective as well. Okay. I'm jumping off the ropes into the ring.

Be gentle now. Don't elbow drop me right in the head. No, I think Ken is exactly right. And I think as much as you can when you have this conversation ken is right tell her the way that you're feeling but as much as you can reiterate over and over and over again that you agree she should go to school yes yes i agree i agree you should go to school i agree i do want you to be become a pa i agree your career is very important i think whenever you're having

a discussion like this uh the person who's uh I'll say their thing the thing they want to do when their thing that they want to do is on the line it can get defensive easily even if they're you know a person who doesn't want to argue it's just easy to think like what does this mean does this mean I can't go to PA school then does this mean mean I can't do my dream? Right? So reiterating that over and over is going to be so important. And then saying, having ideas of here's what we can do. I was thinking, how can we make you go to school? Because I really want you to be able to go to school because it's important for you to become a PA. Here's how we could do it. Cash and funded in cash. Right? And so being able to talk about it like that, I think is going to be really

important. And yeah, that's how you lay out that i think is going to be really important and yeah you're gonna be fine but you're gonna be fine young man you really will if it's a if it's a conversation not you're not dictating you know it's not like uh the old school i'm trying to think of mad men where you know a guy barks at his secretary and says yeah as long as the posture is i want what's best for our marriage and this is about peace and us not being like you know millions of couples that fight over money and then that turns into marriage issues that i think i'm just trying to take the pressure off jayven does that make sense to you like you don't have to be a know-it-all you don't have to be this wise you know sage yeah

you just got to be smart with money and we're going to walk along with you. And by the way, as a wedding gift, by the way, I want to give you Total Money Makeover, Dave Ramsey's classic book, close to 10 million copies I think sold or whatever it is. That's just kind of the basics. And if you were to just follow that,

because you guys aren't in any kind of trouble, but if you were to just follow that, that guys aren't in any kind of trouble but if you were to just follow that that would be great what else can we give them yeah make sure they have uh financial peace university let's do that that'll be good and along with that you'll have every dollar we're just going to set you guys up you're getting married this is our newlywed gift to you so you get total money makeover you get financial peace university we'll give you every dollar premium for several months you can hang out with that for a while. And yeah, I think if you can start having these conversations, maybe you start by not talking about PA school. Maybe you just start by saying, hey, what do we believe about debt?

And you just have those conversations. How do we want to handle our money? And then this happens. The conversation about school comes up as a result of you guys talking about the other, the other thing. So, yeah,

I agree with that. Really good question though. I love your heart, Javon. I think it's great that a young man is thinking about that. And, you know, it's,

you got to make the big decisions early in marriage. Yeah. And then you spend the rest of your marriage managing those decisions. And money is one of them. Man, it really is. Do you ever, Ken, do you ever listen to Jefferson Fisher? Oh, sure. I had him on the front row seats. It's coming out soon. Oh, that's right. You did. Oh, man. All I could think of was him when I was thinking about this conversation because it's all about finding what you agree on and restating what you agree on so

that it doesn't escalate. That's right. And I would also liken it, I'm glad you bring that up, I would also liken it to, this is going to give some people some heartburn, so hang with me. Okay. I would liken it to the family member that you're going to see on a regular basis, so you can't be a jerk when that uncomfortable political conversation happens. Oh, yeah. In other words, like if it's Uncle Larry who you see once a year, you might come at Uncle Larry if he says something. You know what I mean? But like if it's your grandmother or somebody where it's like you choose relationship over being right or the zinger where you're like, you just feel like I need to zing you and just kind of let you know what I think of people.

We can do that on tough topics. And politics is one. Money is another. Faith and religion, things like that. When there is some respect to say, I'm going to understand you. That's right. Because here's what I've learned about politics. You're never going to convince somebody else because of your five points that you're going to make in a debate.

Well, what's the key point of that? But seek to understand them. Just to understand them. You can't understand if you're talking too much in a debate. Well, what's the key point of that? But seek to understand them. And how can you? You can't understand if you're talking too much. 100%. Ask questions. Yeah. Common ground.

Where can we find common ground? And so this is a lot easier when it's your spouse, when it's, okay, I'm just going to seek to understand how she thinks and feels about money. Yeah. Let's start there. Seek to understand. That's so good. Then I know what's going on.

Yeah. You're not trying to convince them. You're not trying to bring them over to your side. What do you think about debt? And then she tells you. And you go, what formed that? What do you think? See, all of a sudden, this isn't a game. It's not manipulation.

It's a legitimate, respectful question asking that allows you to get on her page. That does not mean that you agree with everything on her page. But you got there. You're just listening. Now you hope it's reciprocated. And in a healthy relationship, it will be reciprocated. I think that's the lesson. That's a very good kid.

At least that's the best you can do and hope it works out from there. And without all else fails, go get a great therapist for your marriage. You know what I mean? I know what you mean, Ken. Come on. All right. Quick break. We'll be right back.

This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman, joined by Jade Warshaw. Thrilled to have you with us. 888-825-5225 is the phone number. Let's go to Lafayette, Indiana. And Steve is there. Steve, how can we help?

Yeah, hi. Appreciate you taking my call. So my wife and I are discussing whether we should be paying off the house. It's pretty much our last debt that we have. And current mortgage, I owe about $175,000, and the rate is at 2.79%. We have $420,000 roughly in a 401k and about another $400,000 in money market CDs. And so I would like to keep it in the 401k, I'm sorry, in the money market, in the CDs, and get about four and a half percent off of that and just apply the overage towards the mortgage payment. And my wife is looking to take it out of there and just pay it off, be done with it. Let's not worry about the house. So try to figure out, you know, financially what the best direction is to go.

Okay. So let me just run that back real quick. So you're saying she's like, hey, we've got $400,000 in a money market. Let's just pull out the $175,000 and pay off the house. That's what she wants to do, correct? Yep. And you're saying you just want to use the interest as it accrues to pay off the house? Yeah. Yeah. So keep the $175,000, the full $400,000 in there, because I'll be earning at a little bit higher rate than the $2.79 it's costing us for the mortgage. I mean, I'm with your wife.

You're not going to pay it off that fast. Have you run those numbers? I'm with Jade. Have you run the numbers on the interest and what that's going to actually be? So, for instance, let's put you on the spot. Over the next 12 months, what are you anticipating that the interest of the $400,000 is going to throw off? Yeah, I guess I didn't really do the math close enough to be able to throw a number on the spot. Well, let's do it. Let's do it. So what's the return? What do you think you're going to get over the next 12 months on that money market? So $400,000, $4,500, so would that be $12,000?

Am I doing that right? I think that's right. Let me get my calculator. You're breaking up a little bit. While Ken does that, my thought is just, it's kind of like ripping off the Band-Aid in a way. You take the money out, the $175,000, you pay off this mortgage, it frees up your payment right now, How much is your payment right now? About $1,700, but that's with insurance and taxes.

I think principal and interest is maybe $900, I want to say, of that. Okay, so immediately you free up $900. If you wanted to, you could invest that. Or I mean, if you want to put it in a money market, I don't know why you have so much money in this money market, but I would invest that money. And then you're completely debt-free. And I love Dave Ramsey's take on this because he would say, hey, if you hate the feeling of being debt-free and you're kicking yourself because you could have made some interest on the 4.5% on your money market, you could always go back into debt and go back and do that plan. But I don't think you would. Yeah, probably not. Yeah. So I got to jump in, Steve, really quick because I'm 100% with your wife on this.

Here's why. I just pulled the numbers. You're at 4.5% on the $400,000. That's $18,000 a year. However, if you pay the house off, you have massive, massive jump forward in your long-term play. And then the second thing is I would take all that money and I would be investing most of that. Outside of your emergency fund, a six-month emergency fund, Jade, I would be investing the rest of that after we pay the house off because I would rather get 8% to 10% versus your 4.5%. Absolutely.

Yeah, and that's part of – so you had asked or said like why is there so much in the money market. So we had a pretty good chunk of money that we came into about two and a half years ago, I want to say it was at this point, and put it in the market. And then the market continued to decline. I did probably the worst thing ever, which is, you know, put it in and take it back out. And so we had some other like personal things going on in our life that said,

okay, we need to minimize the risk of any further loss on this. So we pulled it out and threw it in like a CD ladder for about the last year and a half is where I pulled it out. So basically I put it in right when it started going down and then, and then I took it out right as it started coming back up. So worst possible timing for me. So did you learn from that though? Well, I did. I did. Okay. So. Yeah, he's too excited about 4.5%. I wouldn't be excited about 4.5%. That's not, yeah, I agree. I'm trying to formulate a clear thought here, which is as long as you're moving this money

around, it's never going to work for you as well as it is if you park it in the stock market. I don't care if you park it in an index fund, but just putting it somewhere where it's having a better rate of return, especially if we're using interest as a basis for this argument. You know what I'm saying? If you took the 200,000 that will be left

after you pay off the house and you moved that and got a 10 or 12% rate of return, I mean, then this whole thing is kind of like a moot point. That's exactly what I would do, Steve. Pay off the house, get with a smart investor pro in your area, RamseySolutions.com, make the connection.

The smart investor pros are people you need to sit with if you don't have one and sit with them and interview them, get the right fit, right feel, the connection, the chemistry deal, and then have them invest that money for you. You're going to be so much happier. Yeah, because what did we say? We said that you were trying to keep the interest. I'm just thinking about the math. You were trying to keep the interest, throw the interest off of this $400,000. What was that? $18,000 a year? Yeah, I was thinking I'm going to pay the house off at $18,000 a year. But I'm like, if you paid off today,

the difference is really, I mean, with the payment back, that's $11,000 a year. But I'm like, if you get the, if you paid off today, the difference is really, I mean, you would, with the payment back, that's $11,000 a year. So really we're saying keep the house around for six more years for $7,000 is really the argument. And I'd say no to that. No, it's not a good move. Hey, I want to mention something. Then we got to get to our question of the day. If you're a business owner, I know we have a lot of people who are starting out, you just could be in the side hustle stage, or you've got the business up and running. You need to know about Dave's new book, Build a Business You Love. It's where he's unpacking how he took this business, where he started on a card table in his living room, to now an over $250 million business. It's a proven

system. Think of it as the baby steps for250 million business. It's a proven system. Think of it as the baby steps for running a business. And you can pre-order it right now. It's called Build a Business You Love. Look at that. I like the cover. He looks sharp, doesn't he? And so that book is now available to pre-order for only $29.99. You'll get over $350 in free bonus items, including the Entree Leadership Hiring Playbook, the e-book, and the Enhanced Audio book. So you can get it at ramsaysolutions.com. Or if you're watching on YouTube or podcast, we've got the link for the book, Build a Business You Love by Dave Ramsey, his latest book.

You can get it in the show notes. So go get that. All right, let's get to our question of the day, which is brought to you by Y Refi. Do you have a defaulted private student loan and the payments are dragging you down? Y Refi can help you save thousands of dollars. Visit yrefi.com slash Ramsey to see how they can help. That's the letter Y, R-E-F-Y dot com slash Ramsey. It may not be available in all states. All right. Today's question comes from Shelby in Idaho. She says, my husband and I have been married for 15 years and have two children. We're on baby steps four,

five, and six. Last year, he was diagnosed with leukemia and underwent chemotherapy and a bone marrow transplant. My husband's estranged sister was a perfect match which probably saved his life wow now she has gotten herself in deep debt trying to flip houses and rent out airbnbs and has started asking us for money we've already given her several thousand dollars last month and we have heard from other relatives that she has started asking them for large amounts as well my husband feels obligated to give her money because she saved his life. And we know she'll be asking for more money again soon. How should we respond? Well, number one, guilt should never be a reason that we give.

We should never give out of guilt. You give out of a cheerful heart. And that's the number one principle right there. Number two is if you have the abundance to give out of, you still have boundaries around it. It's not an unending well that's like, yes, more and more and more and more, right? You get to decide, okay,

if we have the money to help a strange sister, what are our boundaries around that? And it's okay for you to let her know, okay, we're willing to give you X amount of dollars, but this is the last time we're going to be able to do it because that's where our boundary is. And after that, you just hold up the boundary. Yeah. Let the silence. I'm going to give you six words. We can't give more. I'm sorry. That's it. And just let it ride. And you say we can't, you have to tell them why. Just we can't. Oh, I'm so sorry. We can't. I think that's all you

can do here. This thing's going to be an ugly, can't. Oh, I'm so sorry. We can't. I think that's all you can do here. This thing's going to be an ugly, ugly mess. This is The Ramsey Show. This is The Ramsey Show, where America comes to hang out and have a conversation about life, specifically money, your profession, and your relationships. 888-825-5225 is the phone number. Alongside the fabulous Jade Warshaw, I'm Ken Coleman, and we're excited to be here for you. We're going to start it off in Manchester, New Hampshire, where Matt joins us.

Matt, how can we help? Hey, guys. Yeah, thanks. So I pay child support for my two daughters, and my child support went up to like $1,000. At least that's what the letter said. And then I make $2,600, so I'm just not sure what to do. Why did the child support go up? Well, I'm not exactly sure. I quit my job and I found another job,

so I'm just waiting for that to kick in. I don't know why it's a thousand but that's what it is is your new job less than your old job was no it's more well but again I let me let me we got to press pause here because trying to help you out but it sounds like it sounds like you just got a letter out of nowhere from the judge I mean what do you mean you just you got a letter yeah so I got a letter from, you know, child services, and they said that my, that it was going up to a thousand dollars, and I called, and I talked to them, but, you know, it's still going up to that. Was there no hearing? I'm sorry,

I am so clueless. I have a friend who's been walking through some of this stuff but but it sounds like there's got to be i thought there had to be lawyers or doesn't have to be but i thought if that decision is made it's made by a judge and you would know something about that not just get a letter in the mail well well i have um i have wage garnishment so the wage garnishment was going up to a thousand dollars i'm sorry i should have been oh you buried the lead. Yeah. Okay, this is a whole different deal. This is a big deal because I was going to say, the judge is not going to require you to pay more than you can afford.

There's a formula that they use to establish child support. So you got a garnishment from a past judgment because you couldn't pay it or you didn't pay it. Right. All right, let's talk about what you need to do. So it sounds like you need more money or what did you call us for we want to answer your question sure so i just wasn't sure you know what to do i guess i'm going to wait until i get my first check and see what no sir

no you don't wait no you don't wait for your next check you ought to be working tonight yeah i mean like you ought to be a walmart tonight like you know stocking shelves at 3 a.m like you need money brother we don't wait for life to happen to us we happen to it well i'm not trying to be unkind i'm just saying there's too much waiting going on and you're already in a hole that got you into the garnishment situation you need more income first and foremost, and that means you got a new job, and hopefully that's got some prospects of a ladder forward for you. But if it's not enough, then you're working a second job. You're working weekends to dig out of this hole. Then the other thing you need is you need my friend here to help walk you through

your budget and go, based on the money I do have am I managing well do I have debt listen that's the solve before I walk you through a budget I gotta walk you through changing your perspective on this uh I want you to view child support as something that you get to do you get to take care of your kids woohoo yeah that's wonderful I don't want you to view this as like some sentence that's being put on you or like, man, they raised my child support. No, it is a wonderful thing to be able to take care of the human beings that you created. So I want you to change that. I know that it feels tight right now because of, you know, your income situation and because of, you know, what's going on there. But I think if

you approach this as something that is a privilege to do, it can motivate you in a new way. Fair enough? Yes. Yes. Okay. So although Ken said we're going to talk about a budget, I do think that the number one thing is the career.

I think that that's… How much of a bumper you're getting right now with this new job? It's $3 more an hour how much three dollars more an hour okay okay so that's not a whole lot in the grand scheme of things what are you going to be doing uh it's retail okay retail means sales Retail? Means sales? Yes. Okay. What do you... And what... Okay. Well, that's not going to cut it.

Because, I mean, what are you doing? What are you selling? Paint. Okay. Okay. So there's not a commission structure in that? It's just hourly? Yeah.

Okay. So do you have any kind of trade skills or the ability to be trained to do a trade yes i'd have the ability to be trained bingo so i'm gonna stay with the paint job because that's what we got right now okay and we got a three dollar an hour bumps not a lot but it's still a bump. And you are getting your budget under control. You're spending under control. You're getting a second job, maybe a third job, Matt, so that you can stack money away to get trained as a trade. Let's say that I could put you in any trade school near you today, what would you want to be doing?

You get to pick. Probably electrical. Boom. Oh, Matt, there's so much money to be made in electrical. There we go. So the question, the homework assignment for you is, what are the trade schools in your area? How many are there? Are there more than one? If they are, how much do they cost? How long will they take? Those are your two questions. How much is it going to cost me to take the training? How long will the training take? And what's the placement situation look like?

That is number one priority for you before you go to sleep tonight. To Jade's point. Okay. Because that gets a fire burning underneath of us to go, I got to go make more money. And you know what you're going towards, which is motivation. Okay, good. Now that you have a target that you're going towards, then it's like, okay, I need to learn to budget. I'm going to start learning to budget my money now when I have less money so that when I have more money, I know what to do with it. And I've been practicing what to do

with it. So before you get off the phone, we'll make sure that you have every dollar, which is a budgeting app. It's the best budget out there, really, because it's completely intuitive and it just makes handling your money easier, Matt. What you'll do is you'll plug in your incomes, anything that you think you'll make, you'll type it in there, and then you'll put everything that you're spending money on. And that'll help you see if you have margin. And here's the thing, if it's in the red, which it probably will be, you'll be able to see, okay, here's my deficit. Like if it's $500 in the red, 400, whatever, you'll be able to have a clear picture again of-wise and I want to get clear about what's going on with my money. And even though the answers to those things aren't happening right now, you're going to feel a lot better that you can at least see it for exactly what it is and you know the path forward. All right, I got to give you an update, Jade. Are we ready? Matt, I've been over here on my

laptop while Jade's been teaching you. Okay, it looks like it's going to take you a minimum of four years of field experience in an apprenticeship program or equivalent which you'll get paid for that and uh you got to have 600 hours of classroom-based instruction so already in in two seconds i found that you're going to have 600 hours of classroom instruction, and that'll get you into the apprenticeship. And then, look at this. The average hourly pay for an electrician in New Hampshire is $28.70 an hour. All right? That's a nice bump for you.

Oh, yeah. I know it is. So this is doable. What we've told you today is doable. But, man, listen. You're a dad who's had his wages garnished. Let's go, man. Happen to life. Don't let life happen to you. You can do this. This is not a big deal for you. So go after it, man. Shoulders back, eyes up, and let's get after it. As Jade said, this is a privilege to be a father. I'll step up and be the father those kiddos need.

This is The Ramsey Show. Welcome back to The Ramsey Show. Thrilled to take your calls today on your money, your profession, your relationships. 888-825-5225 is the number to join the conversation. I'm Ken Coleman. Jade Warshaw is alongside. Let's go to New Orleans, Louisiana, where Rob joins us. Rob, how can we help today?

Hey, what's up, y'all? I'm 26, no debt, just got six months of expenses saved up. Nice. Currently contribute. Yeah, thanks. Currently contribute at a 6% rate at my company. They match an additional 6% on a 401k. And my question is, I want to save up capital to put into a business venture, an e-commerce business.

And I want that first initial capital to be around $10,000. The e-commerce business is like a physical product. And the question is, where I'm currently at, is that good? And if I'm to start saving money for this business, am I missing out on other avenues to put this money other than the business? For example, like the 401k, do I need to raise that amount should i focus on a house instead of a business that kind of thing yeah and i think those are really great questions to ask um very good questions anytime you're choosing one thing to do with your money there's always an opportunity cost right there's always well what else could i have done and how how else would i could i've used

this to earn right so right now you're investing 6%. You're getting a 6% match. Yeah, technically in baby step four, which is what you're in, we would say to invest 15%. So in this case, the opportunity cost is you're saying, well, instead of investing the amount of money per month to go towards that, I'm putting it towards saving up for this business. So yeah, there's the dollar amount there plus the interest that's accruing that you're missing out on. Then, yeah, you can talk about the house situation. If you were going to do a down payment for a house, yeah, that's another opportunity that you're giving up on for the moment. So what you've got to ask yourself is, what's the priority? Is the priority the business

or is the priority a down payment for a house? Because if you do them both at the same time, you might make some progress, but it'll be slow going. And then you have to ask yourself, am I willing to go slowly to do both at the same time? Or do I want to do go move more quickly and accomplish one thing at a time? Okay, cool. Yeah, I didn't know if maybe y'all had a kind of a conviction on that or if it really just comes down to priorities. It does. It does up to a point.

So let's talk through it like through the lens of the baby steps. So let's say you're on baby step 3B right now, right? Because you're considering saving for a down payment. I would say, hey, if you said to me, Jade, I don't want to invest 15% until I've saved this down payment. I'm fine with 6% right now. I'd say, okay, but if this is going to go beyond like a two-year deal, then I'd say at some point you do need to start investing the 15% because I don't want you to miss out on too much time in the market. You see what I'm saying? So if you're telling me, hey, I'm going to save up for two years to do this

business, and then I'm going to save up another two years to do my down payment. And then after that, I'll invest 15%. I would say, ah, let's run that back and come up with a better plan to where you can be investing 15% sooner. That's just what I would say. Gotcha. On an e-commerce business with a physical product, would y'all have any insight on kind of where to focus in on deploying that capital with starting out with $10,000 and going from there? Yeah. I mean, without knowing the specifics of your business, it's hard for me to answer that super, super clear. I would say low, low, low inventory. You know, this is not your primary income, correct? No, not at all. Yeah. So when I hear physical product, I had a lump in my throat because I'm going. Me too. What's the

nature of the product? Can you just tell us? Yeah, I don't know what you're comfortable telling us. What can we know about the business that'll help us answer that? Yeah, it's in the women's beauty space. It's a perishable item that would need to be on a monthly subscription, which appeals to me. The biggest challenge is going to be manufacturing and design and fulfillment. So that's kind of where I'm thinking to put the money, is on the fulfillment part and the design part. So you haven't launched yet, correct? No, no. I just... Literally, because of the EveryDollar app, I just got to a point where I have six months of expenses saved. Okay. All right, here's what I want you to do. I know you've

probably watched Shark Tank, but I'd like you to talk to real people who have been in some type of similar business. I'll tell you why. Years ago, I had the privilege of interviewing Sarah Blakely. She's the billionaire founder of Spanx. Cool. And her story is pretty amazing. And you talk about somebody who just really just grew at the speed of cash in the sense of like, she didn't go overly all out investing. She just went store by store, sold it, manufactured it. And again, I don't know the minutia of everything she did, but what i'm telling you is in your case you whenever you've got a physical product that involves obviously the manufacturing the shipping um you do not you don't know if this thing's gonna work brother and i want the best for

you right but but the reality is is we don't want to get stuck with a bunch of inventory so we that we can't move so if i'm'm you, I'm immediately going, what if? Let's go worst case scenario. So what do I need to launch? What's the absolute bare minimum I need to launch? And what would be considered a decent launch? What would be a good launch? What would be a crazy, amazing launch? Well, forget crazy, amazing. We'll get there. That's a problem we solve if we have to solve it. And so I would be really being smart with my cash and not overspend on fulfillment. I mean, excuse me, on inventory. Right.

And then just kind of see how this thing goes. How are you getting customers? Is this like you're putting it on social media? Like, how do you see yourself doing that? Right now I'm running like testing demand ads on Meta and on Google. And so like I've done that. That's it. I mean, this is like in its infancy. How is that returned on those tests? Are you getting any kind of good test data? Yeah, there's demand there. I mean, I'm hesitant to even say what the product is.

Yeah, don't. I'm interested. A perishable women's beauty product. I'm thinking through it. I'm like, is it for my hair? Is it for my skin? We know this call is going to go great if you end up buying it, and we're talking advertisements on the Ramsey show one day.

You know what I'm saying? Listen, hit me up. Slide in my DMs and let me test it out. She can be bought. She can be bought. I guess one question, if we still have time, would just be do you guys have a general strategy around, hey, let me get demand for it first and then backfill the orders.

Do I do a, hey, if you order now, it may come in one month, it may come in two, but we're going to give you this $15 discount or 50% off discount for being one of our first customers. I wouldn't do that. Something like that. Nobody wants to buy something because they buy it impulsively because they go, Ooh, I love this perishable beauty item, whatever it's called. I don't want to wait two months for it. Yeah, I agree. I agree. agree. It's a horrible idea. I'd be spending a lot of time right now asking questions and finding out about my customer.

That would be the biggest thing. If you haven't read the book, The Mom Test, I would do that. I don't know. Are we allowed to send copies of Dave's new book or does he need to buy that Joker? I'll buy it. We can give it away once it's in pre- pre-order so we'll figure it out we'll

give you that we need you to get that i want to add this here's the deal uh rob listen you need to be really talking to your manufacturers i know this is in the infancy but that is where you're going to make it or break it how willing are they to work with you what kind of terms will they give you they got to know your story and they go look look, you know, so you got to really get your do your homework on the manufacturing and fulfillment side of this. You're doing all the homework on the on the marketing and testing. That's that's a big part of it. But you just don't want to get caught.

You don't want to get stuck. So I would go start small, grow slow would be my four words. Yeah. And I'd start maybe a good place to test this i don't know but i'm just thinking if i could get more like on the streets like go to some trade shows or something like that and test it there before this is good before i try to go online with a bunch of where would you go locally you don't have to tell us the product but to her point where would you go locally if you had a bunch of samples of this today? Where would you go?

What kind of places? My target demographic would be like women out of college and professional. Where would you go? Where are they hanging out? Would you go to the hair salon? Would you go to a college campus? Where would you go sell it? I think college campuses, hair salons, and probably like conventions around those areas.

Forget conventions. You've got to go where these women are, and you've got to walk in off the street and go, hey, talk to the owner. Can I give these out for fun? And all I require is real, honest feedback. That's what Jade's talking about. Numero uno. People are afraid to do what she just suggested, but that's really good.

Send me one. I'll tell you. I'll tell you what it is. Send it to me. Send some to Jade. Oh, but that's really good. Send me one. I'll tell you. I'll tell you what it is. Send it to me. Send some to Jade. Oh, that's a great idea. Welcome back to The Ramsey Show. Thrilled to have you with us alongside Jade Warshaw.

I'm Ken Coleman. The phone number to jump in is 888-825-5225. Hey, have you heard we've got a fun tour coming out to you very soon. It's Dave Ramsey and Dr. John Deloney. They're going to be live. They're calling it the Money and Relationships Tour. And boy, money and relationships go together, and sometimes they don't go together well.

And it can cause a lot of heartache. They're going to be live in six cities. Louisville, Kentucky, April 21. Durham, North Carolina, April 23. Atlanta, Georgia, April 25. Phoenix, Arizona, May 5. Fort Worth, Texas, May 7. And Kansas City on May 9. You don't want to wait. Tickets are going fast. Go to ramseysolutions.com slash tour. If you're tuning in on YouTube or podcast, click the link in the show notes to get the link for the ticket. So that's the Money and Relationships Tour, maybe coming to a city near you.

Let's go to Birmingham, Alabama, where Rod joins us. Rod, how can we help? Hey, guys. Hey. Hey, I got a question for you. So I'm in the market for a boat, and I'd like to pull out about $100,000 of my 401k and purchase a boat. Interesting. I want to walk through it with you guys and see what you think. Okay. How old are you? Wow. I am, I'm going to be 59 and a half

here in just a couple months. Okay. What kind of boat? I don't know. I'm looking at a Tri-Tune, something about 27 foot with a 250 or 300 horsepower engine on it. What's that set of guy back these days? Well, they get more expensive each and every day, but I'm thinking somewhere between 100 and 125. Okay. And how much is in your 401k? So right now I've got about 2.3 million. Are you retired? That's all in the 401k so right now i've got about 2.3 million are you retired and i'm sorry that's all in the 401k yes okay well ira's got about 215 or so in it but um i've got my wife's got about 150 and hers and then the rest is in mind about 2.3 between 2.3 and 2.4. The market's not doing good today. No, it's not. Have you retired?

No, I'm not retired. I got about another five and a half years to go and then I'm mandatory have to retire at 65. So I've got a little bit going. So on a below average market, if I look at below average returns, I'm probably looking at somewhere between 3.6 and 4. And if it does well, I could be up around maybe 4.5 million to 5 million in retirement. Okay. Why are your returns so low? Did you say 3.4 percent? No, no. 3.4 million. Oh, okay. Okay. Yeah. So if on average returns, if I keep the 2.3 in there right now, uh, in the next say five and a half, six years based on just kind of a below average return at 65, I'd have somewhere between 3.6 million and 4 million. Yeah. I mean, we, the, the simple

way we stayed around here is a lump sum doubles every seven years. So that's a, that's a quick way to kind of look at it. What else do you have as far as assets? What about home, your home? So the home is completely paid for. What's it worth? It's paid off, 600. Nice, okay.

That's paid for, all the cars are paid for. And what's your income? All the college tuition, I'm sorry. What's your income? 450. Ooh. All right, listen. We can sorry? What's your income? $450,000. Ooh. All right, listen. Let me go raw.

Why are we even talking about this? Yeah, why? Excellent job. So I'll be putting in about another $108,000 per year. I can do about $70,000 between employer, employee, and then another $11 250 with a catch-up at, you know, because I'll be turning 60 in December. So that puts me at 81. Yeah, you've got the money.

My only question is, why would you take the tax hit on the 401k? Yeah, why not just save it up and pay cash? Just save it up and buy the boat. But you're taking a tax hit. Well, the tax hit, yeah, well, at 59 and a half, I can take a qualified distribution. Okay. Okay. All right.

So that changes the game. Is that what you're planning to do? Yeah, so I can take a qualified distribution. There's no 10% penalty for, you know, dipping into it at 59 and a half. And are these traditional funds? Are these Roth funds? Well, you know, I wasn't eligible for the Roth. I was not eligible for a long time. Because of your income.

Everything else went into the... I'm sorry? Because of your income, yeah. So there's going to be taxes. Right. So, yeah, well, the taxes will be ordinary taxes. It'd be taxes, ordinary income. So for the most part, it's not going to be, I'm not going to tack it on right now at 59 and a half. I'm not working go from 450 to 550 and pay the taxes at an increased rate at, you know, the rate over $400,000. So I would actually just, instead of working more to make more money, I would just work less, but take the money out of 401k. I hear what you're saying. How much over the required minimum distribution is the $100,000. Well, I don't have a required distribution.

I qualify to remove some money out of the 401k if I want without a 10% penalty, but then I would be taxed at ordinary income. That's right. Listen, you can do that. I feel like it's simpler and cleaner with your income to just let that stay where it's at. Let it stay earning interest. And then you can cash flow this thing. I feel like that's what I would do if I were in your shoes. I think that I'd say, OK, I've got four hundred fifty thousand. I have a paid for a house. I don't, I have paid for cars. How quickly can I save this money?

That's probably what I would do. How quickly do you think you could? Well, it just depends. I just finished paying off, well, not paying off, I paid cash for my daughter's college, both of them. And then I've got a wedding I'm paying for. So cash is, you know, that's, it's already spoken for. It's like what cash on hand that i have and i always keep about you know thirty to forty thousand dollars just for emergencies i don't really want to like deplete my cash position yeah i get that i wouldn't i wouldn't take that emergency fund and do that i would not do that but i feel like you could do it pretty quickly yeah it'd be another year or so, I guess. You know, just putting money away. Okay.

A year sounds like a lot, but yeah, okay. I mean, yeah, I'm with you, Jade. With that income and where I'm at in life, if I'm putting myself in your shoes, man, I'm going to save up. I just want that to keep stacking because you're taking that money out of the 401k instead of letting that build for five, seven more years. But hey, man, I mean.

There's worse things you could do, obviously. Yeah, because he's not taking the hit for early withdrawal. That's right. You're not taking that hit. So because of that, I don't have a problem with it. I mean, he's earned. I mean, he's gotten himself there. Unless I'm missing something.

No, he can take it. He's not going to take a 10%. It'd be one thing if you were getting itchy for a boat and you took a big hit for withdrawing, but you've reached the 59 and a half. You've got plenty of money in there. It's going to continue to grow. You're going to continue to work. I mean, don't hate it.

I don't hate it i don't hate it am i right well i think well yeah you know i mean i you know you walk into a place and they want you to finance it and of course i have a wreck my credit score is completely in the toilet because i don't have any debt or credit card yeah you're a responsible guy i don't have anything yeah and so they just kind of laughed me out there so you know my unless i'm paying full cash for it, you know, even if I put, say, $50,000 down and said I wanted to finance the next 50 and pay it off quickly, they're going to sell me. There's no financing that needs to be done in the picture. You don't need to finance it. The question is, are you going to pull it out of your retirement or are you going to cash flow it?

You said in a couple of months you turned 59 and a half. You're done paying for kids' college. The only thing coming up is the wedding. So at the very least, what I'd say is, OK, but he's got money set aside. How much can I stack up until I hit 59 and a half? Because at the end of the day, maybe you only pull out 50,000 instead of 100,000. Do you see what I'm saying? Anything I could do to kind of offset pulling from that nest egg if I don't need to.

I would do that. OK. Yeah. You know, and that way you're kind of splitting the difference and you're getting what you want, but you're also not taking more than you need. Yeah, it's good. But man, can we just say, yay, this is a fun

conversation to have on this deal. Wonderful. You're not irresponsible. You're not going to do anything stupid. You're not going to go into debt for it. So, you know, we gave you our take on it. Yeah, way to go. Yeah, you're a good dude. Man, I'll tell you what.

Rodney, you need to bring that thing on up to Cumberland, and I'll meet you down there. The Cumberland? The river. Bring that up here. We'll jump on that boat. I'm disappointed. I just said to come pick us up.

And then we go to the ocean. Yeah, nobody wants to. Where the real water is. Yeah, we're not cruising to Cumberland. I get where you're at. So snooty. This is the Ramseyland. I get where you're at. So snooty. This is The Ramsey Show. I can't do the lake.

Welcome back to The Ramsey Show. Alongside Jade Warshaw, I'm Ken Coleman. Our scripture of the day comes from Proverbs 15, 16. Better is a little with the fear of the Lord than great treasure and trouble with it. Our quote from Peter Marshall. When we long for life without difficulties, remind us that oaks grow strong in contrary winds and diamonds are made under pressure.

Wow. How about that? We go from Peter Marshall to me thinking, shine bright like a diamond. There you go. What's that? Who is that? That's R Peter Marshall to me thinking, shine bright like a diamond. There you go. What's that? Who is that? That's Rihanna.

Rihanna. I was really here for the vocal stylings. Well, I'll be honest, it was out of my range, as we all just heard. And so I only could go to a silly falsetto as opposed to actually trying to sing it. I said, I didn't want anybody to think I was actually attempting to get anywhere near that note. You did it, Ken. It worked, right? Yeah, it worked.

And it gave you a good chuckle because I'm a fan of making my co-host chuckle. And James Childs also got a nice chuckle out of that, our fearless producer. It was a little creepy the way it sounded when you sang it. Well, that's disappointing because that's the last thing I wanted to do was be creepy. It's just out of my range yeah okay i should have just said it shine bright like a diamond and you would have done your thing so there you go by the way took the whole family to barbados this summer her homeland yes that's right on his homeland yes that's right yeah there you go information that nobody asked for nor did they me to sing, so we'll get right to the phones. Greg is on the line in Portland, Maine.

Greg, how can we help? Oh, let me actually get the line. There we go, Greg. How can we help? Yeah, thanks very much. Sure. So back in 2008, I got sort of soured by the market and made a decision to build a, like a vacation cottage. And so I took a,

I cashed in my 401k did that. I've since, I've since sold it and it made out fairly well. But since then I've put most, well, put most, all of my money, all of my extra money my um retirement savings into precious metals physical gold and silver primarily wow how much and well right now it's at about just under half a million so about 450 000 worth of physical gold and silver. What made you choose gold and silver? What made you choose that as opposed to kind of... Just because I...

Watching too much TV. Just sort of protect my money. Yeah, but you got scared, right? I got scared. Yeah, man. Yeah, and so over the past... Well, primarily, I really started elevating that over the past 10 years, and I'm 60 years old. What's your return been?

Do you mind us asking what your return on that has been? Well, over the past five years, it's like 85%. Yeah, the big spike. Over the past year, it's really just skyrocketed. You know, it's like about 40%. So what's your question today? I'm starting to wonder, I'm starting to think about, you know, retirements probably within 10 years and try to make, it might be time to

diversify. And I know, um, you guys talk a lot about mutual funds. Um, I did, uh, I have a neighbor who's a financial advisor and I started a, a, a money market now that's got about $100K in it. It sounds like you're very skittish of the stock market. I am. It sounds like that all originated back in 2008. Yeah. What happened? Did you lose a bunch tell me tell me what happened that that scared you off i lost a bunch of money when i was young

in the stock market but basically i watched my 401k go down and i was like right but i don't want to right but i want to highlight something really key with that there are people who you were in 2008 and a lot of people were there with you in 2008. There's two types of people. The people who saw their investments go down and they left it and said, okay, this is just a down market. It will recover and then it will go back up again after it recovers. And those people left their money in and they continued to gain interest and interest and interest beyond 2008. Then there's the people who said they locked in their loss by cashing out.

And so truly what locked in your loss was the action of you cashing out, not there being a down market. Does that make sense? And I think once you really internalize that, you realize, oh, the market didn't lose my money. I lost it when I cashed out if I just left it there. Because back then in 2008, you weren't ready to retire. You were still a young gun, you know, going along, working. And if you had left that in, have you ever done the calculation of where it would be if you had left it in? Yeah, no, it, I certainly see that.

So if you look at that, and I'm not saying that to harp on a mistake, that's not my purpose. My purpose is for you to see what it would have been if you had left it in. And then you can go, oh, you know what? I guess I can trust the stock market because it does dip and then it recovers. That's just the nature of what it does. You've probably seen the same thing happen with your silver and gold. And if you haven't yet,'t yet you will right every investment has ups and downs and ups and downs the only difference is the stock market has a longer track record of us being able to track it and know what it's going to do so we can kind of depend on the fact okay even with the ups and downs if i leave it in there five to 10 years, I should see a 10% rate of return. Like we can, we can rest on that and know that that's going on. So I think that it's

important for you before I could tell you, Hey, take this, take this gold and put it in mutual funds. I could just tell you to do that, but I don't think you'd feel right about it. Right. Because of what you've experienced. I have, I have money to invest. And so I'm wondering, is it, you know, because my horizon is about 10 years now with my age and I'm wondering. It is, but it's not. It's beyond 10 years. You might say at 10 years, I might start to pull from it, but it's going to continue to compound beyond that. So even with that way of thinking i would i would adjust that yeah and and i just want to remind you i don't want to be so you know dark on this greg but just meeting with our own stacy and i meet with our uh the smart investor pro in the area that takes care of us and uh you know we were talking this this this last time about how expensive it is when you get into your late 70s and 80s and like

healthcare and like, you don't know if you live to be 90. That's right. The most expensive time is those later years. So stacking is the name of the game because it gets more expensive. Investing. Yeah. Yeah. It's necessary. And Ken makes a really good point. So I want you to sit down with a smart investor pro because I can tell you on this call, hey, stock market's it. You don't have anything to be afraid of, you know, have a diversified mix. You know, I can tell you all of that. But even the fact that you're like, OK, like I've been talking to my neighbor now, I've got some money in a money market. You know, if I could encourage you today, I'd be like, listen, jump both feet into mutual funds. I would tell you that today. But I think for you, it's going to take a little bit more time. And I, you know, I respect that. So I would sit down with

the Smartfester Pro. We'll put the information up there for you. And you might sit down with somebody and go, this is not the guy. And that's fine. You move on to the next person. Then you sit down with them and go, okay, I like this person a little bit better. But it's up to you to interview that person. We already vet them, right? We already know they're going to do things the Ramsey way, but it's up to you to sit down and say, I like this person's personality. I like the way they talk to me. I feel like we vibe. You need that because you've been burned and you've burned yourself. And you want to make sure that it's safe to enter again, and I get that, and they're going to be able to help you do that. Yeah, absolutely. By the way, for anybody listening and watching,

ramsaysolutions.com and click on SmartVestor Pro, and those are financial pros on their own. We've vetted them as far as philosophy and all that kind of stuff, but you need to meet with them. By the way, we say this a lot. It bears repeating. Make sure that you meet with multiple people. That's right. It's kind of like choosing a dentist or a doctor or you kind of like get some recommendations maybe,

but I want to go sit with them. Let's make sure I understand what they're teaching because you were making the decisions, not the financial part. Yeah. I mean, have you ever had a teacher, a math teacher, and one math teacher, it's like you get it.

Like, the way they explain it, you got it. Then you have another teacher who's still a great teacher, but something about the way they explain it, it just doesn't hit right. Might as well be speaking

a foreign language. Exactly. You got to find the right one. And I didn't do well in math class in general. Me either, Ken. Shout out to all the math teachers that ever had to deal with me.

I apologize. Not my lane. I'm in it now. All right, Jade Warshaw, always fun, my friend, to be on the show with you. Thanks to James Childs and our crew. Thank you, America. This is The Ramsey Show.