The Ramsey Show - App - Think It Out, Plan It Out and Save for It! (Hour 2)

Episode Date: April 2, 2019

The show about you

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thanks for joining us. Open phones at 888-825-5225. That's 888-825-5225. Greg starts off this hour in Boston. Hi, Greg. Welcome to the Dave Ramsey Show. Dave, how are you? Pleasure to talk to you. You too, sir. How can I help? So I have an investment property with a partner of mine and we are going to be

selling it in May. And I would just want some background as to capital gains and if I have to pay capital gains or capital gains tax on the first sale of a house.

What will the house sell for? $761,000. Okay. And so your net on it would be around $700,000. And what is your basis? You've been depreciating it. How long have you owned it? I have owned this for about five years.

And I assume you've depreciated it every year on your taxes, correct? That is correct, yeah. Do you know what your adjusted basis is? I do not. Okay. What did you pay for it? $465,000. Okay. I'll give you a guess and say you probably have depreciated it down to about 300 adjusted basis. We'll use that as our example.

Okay. If your adjusted basis after depreciation is 300 and your net sale after expenses is 700, you have a gain of 400. You following me? I'm following you. And I'm assuming you are splitting this 50-50 with your partner? That is correct. So you would have a gain of $200,000. And do you make over $400,000 a year household income?

No. Then your capital gains rate is 15% of your capital gain. So your capital gains bill is going to be around $30,000. $30,000? Yep. Okay. Out of $200,000. Now, okay.

Give or take. I mean, I'm not going to be exactly right right but that's going to be fairly close yep now the next question is this who owns the property an llc a sub s or you two as individuals us two individuals okay if you wanted to do a 1031 you can talk to your tax advisor and see if that's possible. I think, I'm not sure, but I think you can take your portion without him, without the partner, and roll it into another property of greater or equal value. And then that would take your $200,000 and move it into another property. And you can not pay any capital gains

because a 1031 is basically a trade. You're trading one property for another. You're rolling your gain into the next property. Someday, if you sell that property while you live, you will pay capital gains on it, no matter how many times you roll it. You can roll it and roll it and roll it in a 1031, but it costs about usually $1, it roll it in a 1031 but um it costs about usually 1500 extra to do a 1031 closing because it has to be closed into an irs approved escrow account

and then that escrow account money is used to purchase the next property and um it's somewhat like a direct transfer rollover for an ira that regard. But you have to have a certified title company that the IRS certifies for 1031s, and then you can get all that set up ahead of time, check with your tax advisor, see if you can break this partnership up and do that. Do you want to keep owning rental property? Yes, I do. I mean, it was something that my wife and I are discussing just because we're in a good spot on our mortgage.

We don't have any debt currently. And if I could avoid the capital gains tax, and, you know, we are interested in investing in real estate. If it saves you $30,000 and you're going to keep the money in investment real estate anyway, that's the income-producing real estate. Income-producing, income-producing, like kind. You can't go buy a piece of raw ground. You can't go buy a lake house for you to play in. It has to be an income-producing property.

A question on the same value. Now, if I sell this property in the mid-sevens, do I have to go buy? Well, I guess I assume if we can split it off it would be half okay you're half i assume but that's where it gets tricky a i don't know if you can split this partnership up and move it that way but since it's two individuals in a general partnership i think it's possible that's the part i'm not a% on. And logic would say, which when you apply logic to tax law, that's laughable, but logic would say that you would take half of the $700 or $350 because it's the number net of expenses.

So when you pay your commissions and whatever negotiating you do, whatever else you do around the thing, that's your net. But your worst-case scenario is only $30,000, and you're going to put $170,000 in your pocket. It's still been a really good day. Kathleen is with us in Dallas, Texas. Hi, Kathleen. How are you?

Good. How are you? Better than I deserve. What's up? Hi. So my husband, he's feeling pulled toward missions through our church. At this point, it's just short-term because he's in his working years. But my question for you is that we are debt free

except for our house. But we have our next two quarterly taxes payments. Those are saved up. So we do have some money in the bank, but they're kind of spoken for. But we do not have our six to 12 months of expenses saved up. So my dilemma here is these trips. I mean, they're a couple thousand dollars. First, he kind of wanted all five of us to go, which would be $10,000. Now he's thinking just himself and our daughter, which would be $4,000. But I'm kind of feeling if he's willing to be taking these higher-risk type trips, one he did already with Central America, he's willing to go now to Kenya. Your household income is what?

It's about $350,000. How much? About $350,000. And much? About $350,000. And why don't you have your three to six months done? We just last year finished paying off our medical school debt and a personal loan. Last year? To make it debt-free. Yes.

But you make $250,000 a year. We do. And so how much do you have in your emergency fund? We have about $100,000. But that being said, we have high quarterly tax payments. No, no, no. I said your emergency fund. Oh, our emergency fund.

We kind of have it. It's just all lumped together. Yeah, it shouldn't be. We've got $100,000. How much is your quarterly taxes? How much of that is allocated to quarterly taxes? We have about $35,000 each quarter that we have to pay. Okay, so $35 of the $100 is set aside for quarterly taxes, right?

Correct. Does that leave $65 for your emergency fund then? Well, so I kind of like to have the next two quarterly tax payments reserved, so I'm counting $70 of that. Well, you haven't made the income yet. As you make the income, you don't get to do that. Okay. As you make the income, you should set aside your quarterly estimates.

Every time you pull money out of the practice and bring it home, you ought to be setting aside your quarterly estimates in a separate savings account, which means that you have $65,000 clear and you make $250,000 a year and he wants to spend $4,000. Yeah, spend $4,000. Yeah. Spend $4,000. Okay. Yeah, you're okay.

You're not dying here. No, we're not. If he wanted to spend $40,000, he'd be different because you don't have that. But $4,000 you've got. You make $250,000 a year. Yeah. Go on a missions trip. Take your kid on a missions trip.

It's wonderful. And he's feeling called to do that. Yeah. I think you can afford it. Now, what you need to do is start budgeting for it and saying, what's the rhythm on this that we're going to agree to so that we don't have to have this strained discussion every time? Because right now, it's a strained discussion because it wasn't a plan. And you can't play the God card and say, oh, God said,

because God believes in planning too. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable affordable biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry, a Better Business Bureau-accredited organization CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other.

It's what Christian Healthcare Ministries has done for over 35 years. And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Al's with us in Detroit. Hey, Al, welcome to the Dave Ramsey Show. Hey, Dave, how are you? Better than I deserve. What's up?

So, I'm a recently retired engineer, 61 years old. I have about a quarter million dollar house paid off. I have about a year old truck paid off, a car a few years older than that, no debt. I recently retired and I am right now I'm moving my money out of my 401K and rolling over into an IRA. And I've got a pension, and I'm eligible for Social Security starting next year. Just trying to figure out what's my next move, how should I invest. Did you say 61 or 51? Six-one. Six-one. Okay. What's my next move? How should I invest? Did you say 61 or 51? Six one. Six one.

Okay. All right. And so are you doing anything to earn income? No, I don't really need to. Obviously, but you're still not, though. No. Okay. All right.

So what are you doing with your time? Well, I have a mom that's 92 years old, and I visit her every day and pretty much just do whatever I want. Yeah. Well, you're in a position to do that. Congratulations. You've done a great job. I was just curious because I'm 58, and I just can't imagine doing nothing. It bothers me, so I wanted to know what it felt like.

Yeah. Yeah. Well, I'm trying to figure out what's my next move as far as that part of it goes. But right now, I want to figure out. Because that kind of enters into the question a little bit, okay? Number one, you've saved your nest egg is how big, not counting your pension? About 970. So you're a millionaire plus.

You've got a net worth of about a million and a half, give or take, depending on the value of this house. And way to go, man. Congratulations. Thank you. Did you inherit any of this money? No, none of it. Okay. So just for the sake of our listeners and the Everyday Millionaire Project, how did you do this?

What do you attribute it to? I think frugality was a big part of it. I mean, I'm just being honest. Yeah, okay. You're just not a big spender. I invested as much as I could. Yeah, you're the number two category in career of the millionaires that we studied. Engineers are number two, likely, most likely.

And I think it's because of the way your mind works. Number one, you're good with math, obviously. But number two, you're systems and you're steady. Systems and steady. And so you got in that 401K and you got in that Roth IRA and you just did it every stinking month, didn't you? Yes. And I found through life that material things don't do it.

Oh, I agree. I just assume, you know, if I'm outside doing something, you know, I really don't need to spend a lot of money. Maybe I'll get a bicycle. Amen. Something like that. Amen. Good. Okay.

Cool. Thanks for letting me interview you for a second. Okay. You do not need to do investing. You don't need to. You may want to. Yeah, I don't need to you may want to to be i don't want to be risky i want to be low risk yeah no i'm not talking about that i'm not talking about i'm just saying if you never saved another dollar right you're okay oh good that's my point you you you said earlier if you never earn another dollar you're okay the money you have invested in your pension, you should be just fine.

I take it you're single. Yes. Yeah, okay. And so you're going to be able to – That's probably another reason why I've got more money. Well, maybe, maybe not. Yeah. But the – so you don't have to work and you don't have to invest.

So there's not a need to do either thing. Now, you don't have to work and you don't have to invest. So there's not a need to do either thing. There may be a want. There may be a career that gives you great fulfillment in your encore, where you come back out for the second act and take a bow, right, your encore career. And there might be some investing that is fun. Now, I long ago reached where you are and don't need to invest um not even close but i enjoy it for me it's just kind of a game in the sense that i like seeing the real estate go up in value i like making sure that it's maximizing and then i'm doing a good job of

managing that asset that god gave me to manage for him. And I like the generosity that it allows me to do. By having money, I'm able to be more and more and more generous. And I noticed when I was broke, I couldn't do that. So, you know, I work now for legacy and for generosity. The percentage of the money that I create now off of investments or I create now off of my income that goes to my personal lifestyle would be probably less than 2%. And I got a really good life. I'm not that frugal, comparatively speaking. So all of that to say, that's the guy who's answering your question. And I would say you might find real fulfillment in the generosity that you're able to create by doing some additional investing and by creating a second encore career that's not high pressure or that doesn't require you to not see your 92-year-old mother or something like that.

But, you know, you have a unique ability to earn and create money there's only 12 million millionaires in north america and you're one of them that makes you a fairly rare bird um and so you have a gift uh and how can you use that gift in a way that that gives you fulfillment and it usually has to do with service when you serve get fulfillment. And generosity is a type of service. Helping other people do something is a type of service. And that's unbelievably fulfilling. And so I'm going to lead you in that direction with your investing. And, yeah, you can afford to take some risk.

You don't need to. You don't like to take much risk. I don't blame you. I don't like to take much risk. I don't blame you. I don't take a lot of risk. But I put money in real estate. There's no guarantee on it. I put money in mutual funds. There's no guarantee.

They got great long-term history, so they're relatively low risk if I'm willing to leave it alone long-term. So that's what I would suggest. You're what we call baby step seven. You're completely out of debt, and it's build wealth and give. Build wealth and give. And that's baby step seven. And decide as a single guy, you know, what you're going to do with this, and you need to have your will in place and your estate plan in place.

And how's this money going to be handed out? And if it is nieces and nephews or relatives, you might want to spend some of your time teaching them how to be like you when they grow up. And you could have a real impact on your whole family if you chose to then. I'm not saying it's not an obligation to, but I would not leave some kid $300,000 who's a doofus. I would want to train them and make sure that they were going to be blessed by the money

rather than cursed by it. But you may have all that planned out, too. You're kind of a planner, so I wouldn't doubt it. Those are some things to think about. Good talking to you. Congratulations. Very, very, very well done. Margaret's in Sacramento.

Hi, Margaret. Welcome to the Dave Ramsey Show. Thank you, Dave. I appreciate it. And first and foremost, thank you so much. With the six kids that we have, you have really helped us change our large family tree. So thank you very much. Lots of branches.

Yeah, that's right. You know, I have about 280K in my former 401K, former employees 401K. And I know you've always said to roll that over with the SmartVestor Pro so that we have more investment options. But it's currently making about 12% year over year. And is it worth it to spend that 4% fee that I would have to pay in order to roll it over out of the former employer? Does that make sense? If you make more over the long haul, it would be. Okay.

If you break even, it wouldn't be. Right. The purpose of having more options would be to create a better portfolio that outperforms it sounds like your 401k is outstanding you may want there's nothing wrong with leaving it uh but most of the time if you're given 12 options and i'm given 8 000 i can find something that outperforms your 12 okay most of the time i mean it's logical you know not everyone chooses to but um and it's okay you're not doing anything like there's nothing here under the stupid column

that we're checking a box okay this is all brilliant i mean you got a you have a quarter of a million dollars way to go touchdown okay b you've got it invested very well and so the only thing is could you do and let me just you, you're not going to do double. If you could make 1% more than you're making now, you would have had a great day. So, you know what you might do? You might just sit with a smart investor pro and say, you know, show me a reason that I should believe that a logical, educated person that you can teach me why I would want to move it. And they may say, leave it.

That's okay. This is the Dave Ramsey Show. The last thing I want you to feel is buyer's remorse, especially when you offered thousands more on a new home to win a bidding war. If I've taught you anything, it's that blindly throwing money at a problem is a stupid plan and something you'll regret for years. The key to avoiding this rookie mistake is to call Churchill Mortgage and get certified. This easy program puts you miles ahead of your competition because you are pre-underwritten. Your interest rate is secured, and yes, you can close within 14 days.

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In the lobby of Ramsey Solutions, Jamel and Aletha are with us. You guys win the t-shirt contest. That's the best t-shirts I have seen. Thank you. Black t-shirt, white t-shirt. One says beans and rice. The other one says rice and beans. Well done, you guys.

Touchdown. I love it. Where do you guys live? We live in Brandywine, Maryland, and it's about 20 minutes outside of Washington, D.C. D.C. folk. Welcome. Good to have you. And here to do a debt-free scream. Yes. I love it. Welcome. And how much have you paid off? $222,222. No way. That's a lot. How long did this take? 22 months.

Oh, no. Are you making that up? Nope. 22 months and 22 hours. Yeah, and 22 days. Oh, my gosh. And what's your household income? Don't tell me $222,000.

No, currently the household income is $200,000. $200,000. Okay. And what was the range? What was the low point? The high point was $234,000, and we went from $234,000 to $180,000. Whoa. Okay.

All right. And now making $200,000. So what kind of debt was the $222,000? We had a rental property, medical bill, credit cards, vacations. Vehicles. Vehicles. We had it all. You paid off everything but your house?

Everything but our home. Wow. Did you sell the rental? Yes, we sold the rental. And what did it bring? What did it sell for? $138. Okay.

Of the $222? Of the $222. All right. Good. And the rest of it, what was the other big ones? Cars or student loans? Cars. We didn't have student loans, but it was cars, and we had bought a brand-new home.

So, of course, with a brand-new home, we was brand-new furniture. Oh, yeah. It's federal law. Yes. So did you keep the cars? Yes, we did keep the cars. So you sold the rental property and just plowed through the rest of it? Plowed through the rest of it.

Beans and rice, rice and beans. Rice and beans, yes. I love it. So how long have you two been married? Be close to 14 years, coming this August. Okay. So what happened two years ago that lit the fuse? Because you guys blew up, man.

Oh, it's all her. Boy, he gives me the van of white. I got pregnant, and I went in for my 22-week follow-up, and they put me on high risk. And they indicated that I will have to stay in the hospital until I delivered her, and the goal was to get her to 28. And so since I was in the hospital, they wouldn't allow me to go home to pack or bring anything. My husband went to a bookstore and he just so happened to pick up your financial peace book. So I read it within one or two days and that's what kicked everything off.

So you're stuck in bed, but you are chomping at the bit now. Yes. We're ready to go. And so Jamel's like, okay, I got two problems. One is I got her in bed, and now she's gone crazy. Well, actually, it was three problems, because the third one was, being that she was on bed rest, I was unaware of everything, all the bills that we had. Oh.

So I brought that to her attention. I said, well, you know, future reference, if something happens, how am I going to pay the bills? What bills do you have? What bills do I have? And so from that point, I went and looked for a financial book because she's always reading from Barnes & Noble. Okay.

And I purchased your book and brought it to her. Oh, wow. Okay. So what'd you guys do? Just dump everything out on the hospital bed and go through it and figure it out? Well, not at first. When I was in there, it was more of, hey, we need to do this. And he was, no, no, I just need to know what bills to pay,

so I'll bring the bills whenever they come in the mail. But it took a while. It wasn't always easy. I recall having the budget envelopes, and I'm in one grocery line with my budget envelopes, and he's in another line with his debit card. Uh-oh. So it took us a while. It wasn't an instant, let's pick up the book and just do it, but he eventually came on

board. Gotcha. Okay. All right. But in 22 months, you decided to sell the rental and pay off everything else. So, Jamel, what made you decide to go all in going from sort of being in? Well, she drew a good picture for me in terms of a stress-free household. Because we like to travel.

We like to do things. But at the same time, we was also going in debt. So she painted a like to travel we like to do things but at the same time we was also going in debt so she painted a picture to where if we just plan accordingly that we'll live a better life and more stressful life if we just pay save and pay out of pocket versus putting everything on the credit card so it was a bigger picture for me and now here we are yeah so way to go was it it worth it? It was. Sky's the limit. Yeah.

I love it. Well done. Good job. Very, very cool. So what do you guys tell, now that you're on the other side of this, what do you tell people the secret to getting out of debt is? I would tell someone, especially a married couple, that if you have a strong household and one person is strong in one aspect in terms of finances,

let that person take the lead and you follow. Just get on board. And that's with anything. Whoever's a strong person in a particular category, follow the lead from that person and just go all in. And the overall outcome will succeed. That's logical. And who's the nerd at your house then?

I'm guessing I know. I am. You kind of enjoy it. I mean, that's what it amounts to. And that makes sense. Well done. Good job, you guys. What about you, Aletha? What do you tell people the key is? I would say there's three major things. Know your why, have a vision of where you want to go, and then start creating goals to get there. That's very good. Very good. All very good ways and reasons to get out of debt. That's it.

So what's your why? Our why was we just wanted to live like nobody else down the road. My vision is at the age of 50, I want to retire from the government service and be a third-grade math teacher and travel in the summertime. I love it. Very good. Very good. And what do you do, Jamil? I'm in law enforcement.

Okay. Very good. Good. Okay. Very cool, you guys. I'm proud of you. Who are your biggest cheerleaders? We good. Good. Okay. Very cool, you guys. I'm proud of you. Who are your biggest cheerleaders? We are.

Yeah. We are each other's biggest cheerleaders. We cheered each other on. We actually created a vision wall in our basement because we was in the process of redoing the basement. Since it was a new home, we needed to get the basement done. But we stopped in the middle of construction and painted the wall like a chalkboard paint and we put our vision and everything up there so anytime we went down there that was our cheerleader that was our visual to see that we got to keep going i love it that'll be one in every house i may go home and make one tonight that's good i

like that well done well done so uh what was your biggest sacrifice for me i'm the spender in the family so my my biggest sacrifice was not purchasing quickly think it out plan it out save for it and also decide whether or not if it's a need or if it's a want so i made determinations in terms of things that I want, necessarily things that I need. So need always came first. And wants, I put in the back. Yeah. You know, I used to do that, too, because I'm a spender at our house, just like you.

And, you know, I actually wrote it out one time, and I figured out I didn't really have any needs. Almost everything on my list was wants, and so I was just whining. It just convicted me to no end. It was unbelievable. Most of us in America, really, I mean, most of us don't have many needs, if any at all. We have transportation, clothing, food, shelter. I mean, we really have many needs if any at all we we have transportation clothing food shelter i mean we really have our needs covered uh and and so and even a better version of any of those things is a want you know once you got a car a better car is not a bad thing but it's a one it's not a need

you know and yet we all say i need and i do it too i still do it i have to fight against it that's why god makes me teach this every day. Well done, you guys. So proud of you. We've got a copy of Chris Hogan's book for you. They almost said retire inspired. Every Day Millionaires, because you're going to be one very soon, at your right. And that way you can travel in the summers. That'll be perfect.

I'm loving it. Well done. Very good stuff. Jamel and Aletha. And you brought your baby with you? Yes. And how old is she? She is 15 months and 12 months corrected.

She was a 26-weeker. All right. Look at her. Very good. Good stuff. All right. Jamel and Aletha and little Kennedy, $222,000 paid off in 22 months. Let's hear your debt-free scream.

Three, two, one. We're debt-free! Anthony's with us in Chicago. Hi, Anthony. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure.

What's up? I spoke with one of your endorsed local providers about opening up a Roth IRA. He told me I made too much money to do that, and I need to open up a traditional IRA and then do a backdoor and a Roth IRA. It just didn't seem right to me. Why doesn't it seem right? Well, first of all, it's called a backdoor IRA, and if they know a legal loophole that I don't, it just seems a little sketchy to me. I do one every year. Okay.

It's perfectly legal um it is a loophole uh meaning that it was not the intent of the law but uh it's perfectly legal and there's not anything wrong with it the congress is well aware of it they have just chosen not to stop up the uh the leak so to speak but um sharon and i do uh do one every every january sounds good And then should I expect additional fees with that? No, it's the same exact fee because there's no charge on a rollover like that. Okay. Easy enough. Sounds good. Thanks for taking my call, Dave.

Thank you, Anthony. Appreciate you calling in. So the backdoor Roth is if you make over a couple hundred thousand dollars a year as a married filing jointly couple, you don't qualify for a Roth. I don't qualify for a Roth I don't qualify for a Roth the backdoor IRA the backdoor Roth is simply you open an after-tax traditional IRA which there's no income limits on doing that meaning you don't take the tax deduction you put the money in after tax, and then 30 seconds after you open that, you roll it to a Roth IRA. And Roth IRAs are after tax, too. So there's no tax implications at all, no fees extra, and it is a tax loophole, literally. It really is.

And it's a widely known one, so it's not like it's a big secret or something. And there's certainly nothing ethically wrong with it. Paying as little in taxes as possible under the law is really a commandment. I mean, if you want to pay extra in taxes, you can. But actually, this doesn't save you taxes in the year you do it. It only saves taxes on the growth of that account. A question of the day comes from Blinds.com. They have a 100% satisfaction guarantee.

That means even if you mismeasure, you pick the wrong color, they will remake your window blinds for free. You get free samples, free shipping, and with the new promos every month, you will save even more. Use the promo code RAMSY. Jason's in Oklahoma. We have $78,000 in debt. We the promo code RAMSY. Jason's in Oklahoma. We have $78,000 in debt. We started the debt snowball last month.

Have our emergency fund in place. Should I drop my 401k contribution until we're debt-free? Yes. Keeping it in place, I figure four to five years to pay off all debt. If I stop the 401k, I believe I can get to zero debt in three years or less. You always stop your 401k when you're in baby step two. You stop all saving. You stop all investing.

You stop all eating out, and you stop all vacations, and you stop having a life. And you completely attack your debts, listing them smallest to largest, pay minimum payments on everything but the little one, and attack the little one with a vengeance. Every dollar you can squeeze out of your life. You work extra, you sell stuff, and you do not do investing. It is a temporary measure, and the typical family, Jason, that does it with the kind of intensity and focus that I'm outlining there,

not ish, but wide open. Game on. We're in the Super Bowl. Complete focus. Game on. We're in the Super Bowl. Complete focus. Complete energy. When you do it that way, the typical family is out of debt, everything but their home in two years or less. That's the deal. So I suspect your three years or less will turn into two years or less if you do everything I just outlined.

You don't need to see the inside of a restaurant while you're doing this unless you work there as your extra job or your main job plus your extra job and don't talk to me about a vacation you're trying to get out of debt when you completely focus wholesale like that on getting out of debt is when you get out of debt you can wander into debt but you cannot wander out and And it is a temporary thing. As soon as you finish that, you're going to go and put your emergency fund back. Any money you've got in savings, except that's not retirement accounts, that has no penalty to it, you take all of that and throw it at the debt, down to $1,000.

Maybe step one's $1,000. Two is debt snowball, out of debt as fast as you can. Well, that scares me. I know it scares you. Being broke ought to scare you. Being in debt ought to as you can. Well, that scares me. I know it scares you. Being broke ought to scare you. Being in debt ought to scare you, too. But having a plan that you execute and 18 months, a year, two years from now, you have a fully funded emergency fund and zero debt except a house payment, that would put you in the top 5% of Americans right there.

Long before we start talking about building wealth. But now you're in a position to actually build wealth. And that's what you want to do. That's how we do it. Brendan is with us in Utah. Hi, Brendan. How are you? Hey, doing as best as I can here.

I appreciate your time. Sure. I've had some health issues that make it pretty difficult to work outside the home. My wife has some health issues as well, and she can't work at all. Despite my health issues, I've made just over $100,000 a year for the past 12 years, with the exception of a year and a half where I couldn't work at all because of my health. Wow. What kind of health issues have you got?

Well, my liver doesn't detox the way it should. So when I get around fumes, paint fumes, exhaust fumes, you name it, my body can't get rid of it. And so it's a pretty bad deal. So knowing that my health issues weren't going to get better, I was trying to find a way to replace my income. I invested six years into learning how to day trade as a side hustle. And last November, I was making way more than I was at my day job. So I quit today trade full-time so I could focus on mine and my wife's health. But unbeknownst to me, the very same week that I quit my job, the government revoked my broker's license and froze all their client assets. So I actually start a job this next Monday, but if my health

allows me to make it past the first two weeks, it'd be a miracle. And so I'm trying to figure out, you know, I don't have any money to invest right now because it's all tied up with the accounts being frozen. I'm trying to figure out how to replace my income and maybe even work from home so I can not have to worry about the toxic office environments that I have to go to and dealing with my health there. Okay. Well, you're obviously good with math, and you're good at studying trend lines.

So I wonder how we could apply that to a business idea that hadn't got anything to do with the stock market? My career right now is systems engineering. Oh, that doesn't shock me. Okay. And why can you not do systems engineering remotely as a contractor for five different companies from home? Well, the nature of my systems engineering is supporting software as a service type environment. Which blends itself beautifully to remote.

It should. You really should. But I struggle to find work doing that remote. There's a lot of development jobs that are remote, but systems engineering, especially if they've got a data center that you need to be in and be there physically, it's a little bit more of a challenge. Yeah, it would be. Because it's more of a team thing. That makes sense. So you'd be Skyping your brains out or Zooming your brains out probably.

But yeah, I think that's your answer. What in the world happened that they shut you down and froze your accounts? What are they accusing you of? Well, no, it's not me that they're accusing of. The broker, it's out in Australia. I went to Australia to circumvent some of the dog frank stuff here in the U.S., and the broker wasn't filing all of their reports to ASIC, which is like our CFTC, and then they started not fulfilling people's withdrawal requests, and so they

just basically... So they shut the whole brokerage down, and you were just one of them? Yep, I'm just one of many. And you got caught in the crossfire? Yep. Okay. And so they should go through the accounts, though, and determine each account that doesn't have fraud and release it.

What's the timeline on that? They're not going to confiscate the money. Well, it's relative to how much money they broke. There's claims that perhaps the executives of the brokerage firm was using money that they shouldn't, that wasn't theirs. And so if there is money to get back, they had a court date this month, and they have another court date in May. So you have your money in there. How much of your money? $300,000. In Australia?

Yep. Good gracious. Well, yeah, that's a bad deal. Yeah, I think you'd take the same talent and find a way to do it as a remote thing, do it as a way to push, and you have an amazing amount of energy and an amazing amount of vision that I think you can apply and turn into some money. I think you'll find it. Keep poking around on it. You're right there on the edge of it. This is the Dave Ramsey Show.

This is James Childs, producer of the Dave Ramsey Show. Did you know you can now listen to the Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.