The Ramsey Show - App - This Might Be a $100K Stupid Tax (Hour 1)

Episode Date: April 24, 2024

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz hosting this hour with my good friend and co-host of Smart Money Happy Hour, George Camel. And we will be taking your questions. So give us a call at 888-825-5225. We're talking about your life, your money, your relationships, your career, anything and everything here to help you out. So first up, we have Ian out of Portland, Oregon. Hey, Ian. Welcome to the show.

Hi. Hi. Good afternoon. This is Ian. Thanks for taking my call. Absolutely. How can we help? I'm in a bit of a juncture in my life where I'm purchasing my third house, which will be my primary house since I'm moving. I have two existing mortgages, and I was wondering what to do with them. The two options have come up in my mind is one, I can have the paid both these mortgages off

because I have enough savings to pay them off. And subsequently have renters pay my primary slash third mortgage. That way I lose, you know, I kind of get rid of two mortgages and I just have one primary mortgage. That's sort of the foreseeable advantage I have. The option B is I leave the two long-term renters in my two existing mortgages properties, and then I pay myself for the third mortgage. And three mortgages is what the caveat here is that I have to handle versus one mortgage in option A. I need some help with deciphering which would be a better option for me. Okay. Well, if I'm in your shoes, I would want my primary mortgage paid off,

but I also don't like the risk of having two mortgages sitting out there with renters. And so if I'm in your shoes and you can pay off both mortgages today, I'd rather you leave with one mortgage than multiple. So what is the balances of the two existing mortgages? Yeah, the first balance is about $25,000. The other one is $150,000, so $175,000 total. And how much do you have in savings? I've got about half a million.

Wonderful. Okay, great. And how much are those properties worth? The first property is probably worth about $210,000 with a $2,500 mortgage. The other one is worth $350,000. I'm sorry, the other one is about $800,000 with the $145,000 mortgage. Okay, that's great. And then your primary, how much do you owe on it?

Good question. This is what I'm in the process of buying in my primary. Oh, you haven't bought it yet. My budget is about $800,000. Okay. Okay, I gotcha. Are you single? No, married.

Okay. But primary owner, primary, yeah, breadwinner. Okay. How quickly could you pay off all of this? Let's say you depleted your cash down to just an emergency fund. You knocked out the two existing mortgages. How much could you put down on the next mortgage on the next property? That's a great question. And that's where I'm running into some trouble is because I'm deciding whether I should, you know,

pay this $170,000 off and pay off these two mortgages or use that for my down payment. Right. Do you enjoy being a landlord? Like, do you enjoy the real estate part of life? That's a good question. I, yeah, it's been uneventful for the last, you know, five, 10 years that I've been doing so. I mean, they're great. I mean, you're so close, Ian, of having two paid for properties, which, and then they're going to be, you know, cash flowing. And we always say on the show, obviously it's not, when we say passive income, it's not really passive income because there's, you have work, you have to do upkeep, right? You're flipping renters maybe once a year. So, I mean, there is work in there.

But I do like the idea of, yeah, your diversification of having some rental properties and you're so close to having them paid off, which I think is exceptional. And it frees up those payments. What would those payments add up to just the principal and interest on both of those properties if you freed them up? Good question. If I feed them up and I'm getting rental income from both those properties, I could probably get $1,500 from one and maybe $3,000 from another, so $4,500. That's great. And if you then threw all of that onto your new mortgage that you'd be taking on for your primary and knock that out within a few years, I think that's a great plan. There's not really a baby step for this because of the way you did it. We would say, hey, get your

primary paid off, then pay cash for any investment properties. So we're sort of reverse engineering a lot of this. And the ultimate goal is to get you debt free as quickly as possible. Okay. How much do you make a year, Ian? About $300,000. Okay. And the two other properties are near you, driving distance-wise? You're not, it's not like a, it's not cross-country or anything. Okay. Yeah, three hours. Yeah, and I think that, I mean, I think that's great, Ian. And then if you get two years down the road and you hate your primary mortgage so much because you're like, oh my gosh, I just that's great, Ian. And then if you get two years down the road and you hate your primary mortgage so much

because you're like, oh my gosh, I just want to pay it off, then sell one of the rentals and pay it off. Yeah. Or you can just, you know, leave it in that baby step six. So the, you know, with the caveat, another caveat with this foreseeing is that if I, you know, use my savings to pay off the first two rents, pay off the first two mortgages, I am going to now have very little money for down payment for my third mortgage slash primary mortgage. And given the

interest rate right now for mortgages, I feel like I might not have much sort of leverage to kind of decrease the interest rate, you know, because my down payment will be low. Right. So that's the downside. Is that an acceptable risk? Yes. So you could look at it then in that case as you're running out all your numbers that you sell one of these properties and take all the money from there

and throw it at your primary and just have one rental. Because either way, you're going to have a mortgage on this new property. Yeah, it just depends on how big you want it. But if you're paying it off aggressively... So I can have my cake and eat it too. Exactly, yeah. And the interest on this, if you do it our way and you can eat it too exactly yeah and the interest on this if you do it our way and you pay this thing off within a few years the interest is not going to

be the deal breaker here we're not telling you to keep this primary mortgage for 30 years you're going to knock it out probably knowing your income and what you have probably four years five years yeah my plan was to take a 15-year mortgage and then, yeah, depending. Let's say you took a half million mortgage and you can throw $100,000 at it a year, making $300,000. It's gone in five years. Right. And so that's the kind of math I'd be running.

And obviously talk to your spouse about this and get the game plan. But if you're that close to freeing up the rental mortgage properties, I like that plan. And so there's kind of debt snowballing in the sense of you're freeing up a payment faster is the goal here. Awesome. Hey, thanks for that clarity. Yeah, way to go. Absolutely.

Thanks, Ian. Thanks for the call. Yeah, and I always feel like, yeah, because it's always, you know, it's kind of one of those things, especially if you want to get into the rental game, that if you already have them and you already have equity built in and you have as much margin as he does, he's so close to paying them off and he has the cash to pay them off, right? So there's a part of you that's like, my gosh, instead of selling them and then having to go back, that's right. If you pay these things off tomorrow. That's right. Yeah. And the power of being able to throw that at the primary mortgage. But again, all you listening and watching,

I think that that's the motivation, right? We're trying to get debt-free as quickly as possible while also looking and saying, okay, how can we diversify our wealth-building strategy here by not just retirements, but also with him getting in the real estate game, which I think is great, but doing it with cash, which is key. Yes. And you could tell there's some calm in his voice. He's not freaked out. He's not desperate. He's making this decision out of a place of strength. That's right.

Exactly. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Rachel Cruz hosting today with George Camel. And George, I'm hitting the road this week. I'm going back out. I know. For my new kids book, I'm glad the road this week. I'm going back out. I know, for my new kids book, I'm glad for where I am.

I'll be in Atlanta, you guys, on Friday from 1 to 2 o'clock at the Barnes & Noble in, I think it's called... Mansell Crossing. Mansell Crossing. How did you know that? I just... Alpharetta, are you from Georgia?

No, I've just... We've been pitching this all week. Go see Rachel. Go see Rachel. Go see Rachel. Will you memorize it? Memorize your tour stops. That's amazing. Okay. So I'll be there Friday. And remember you have a manicure tomorrow at three. That would be next level. He's like my assistant. Knows my schedule. I'd be great. But yeah, if you're in Atlanta, come say hi from one to two on Friday. We'll be there. All right. Next up we have Haley in Ontario, Canada. Hey, Haley,

welcome to the show. Hi, thank you for having me. Yes, absolutely. How can we help? So my spouse and I, back in July of 2021, we purchased an investment property and we put $100,000 deposit down. And that was when the covid interest rates had gone right down and in canada they're right back up i don't know how it is in the states but um they're looking at our we're looking at our closing date coming up in two months and we don't know if we can afford this was the financing already approved no so did sit down with our bank and essentially I think if we sold our current home, we would be able to get the mortgage. But my predicament is that even if we do get approved for a mortgage, we're looking at a $5,000 plus mortgage per month.

And we've been looking at different avenues potentially renting but in that area um the likelihood of someone renting over 3500 is very slim and so we would still be having money coming out of our pocket and now the reason we're thinking about doing a mutual release at this point is because we put that hundred thousand down but we did really well with our first home through COVID. We bought it really low, and then when we sold, we had actually gotten a lot of equity and paid off that line of credit that we used to put the deposit down on that home.

And I just don't know if it's worth it to jeopardize and try and push this mortgage through. Also, my spouse is military, so he's currently posted to where we are, and I don't even know how the moving procurement would work. So have you guys been building for that long? Yeah, the builder was very delayed. Through COVID, they stopped a lot of the building, and it's been ongoing for a long time. Okay. Was it a custom build, or was it one that was within a development, and you pick a floor plan kind of thing?

Yeah, it was in a development. Okay. What does the contract say? Because you signed the purchase agreement. Have you talked to the builder about what it would look like to back out? So we did ask them about a mutual release. Essentially, if we did back out, we would be forfeiting our $100,000 deposit. Yeah. So that would be sort of the our $100,000 deposit. Yeah.

So that would be sort of the stupid tax, I guess, of using that on that. How much would the full mortgage be? If you did go forward, I'm just curious how much the house is. We originally purchased for about $1.1, and with $100,000, it would be about a million-dollar mortgage. Okay. So you're going to put nothing down? Well, if we were looking at the option of renting, if we sold our current house,

we have enough equity that we could probably get the mortgage down to about $700,000. Why wouldn't you sell your current house? My husband's military and he's posted here. So it would be so many loopholes and jump throughs. Like he might not even be able to move. So we might have to send our family. But then why were you getting this new house?

Because we didn't realize that he would be posted out at that time. We were posted to that base. And so this was back in 21. This is about three years later now. And also, too, we thought with the interest rates, honestly, we weren't thinking ahead with the interest rates at that point, it was affordable. Right, right.

Haley, how are you guys financially overall? Do you have savings? Do you guys have debt? Our debt is paid. Like we don't really have any debt. We have some equity in our home. My husband's like military serving right now. He makes about 80K a year.

I've retired from the military. I got injured. I'm getting an income replacement benefit of about $50,000 a year. So total income is about $130,000. Okay. Do you guys have money saved? Other than whatever we have in equity, no. Okay.

I'm just trying to figure out how big this $100,000... I don't see a world where you guys could have afforded a million dollar home, regardless of what interest rates were doing. I think you guys weren't thinking through this and got a little starry-eyed at what a new build would be and life happened. I agree. And you cannot keep both. There's no world where you keep both of these properties. Absolutely. So if you're going to make this move and not lose your $100,000, you need to sell the property, save up as much as you can until this build is done, and minimize the mortgage as much as possible.

And you might not even be able to stay in it that long. Because it sounds like it's unsustainable. You guys barely make $5,000 a month. Yeah, it's not sustainable. Yeah, I don't think you guys can do it. What's your mortgage now? My mortgage, well, they just increased it because we had a variable rate. It's about

$3,000. You're barely covering the mortgage now. What's the take-home pay? What's your take-home pay every month between you and your husband? Gosh. I don't even know.

Like, my husband does the finances. My guess is it's about $6,000, and half of it is taken up by your mortgage. Yeah, yeah, it would probably be around there. And I'm more on the side of mutually releasing. It doesn't immediately affect us. With regard to losing $100,000, it sucks. But I just wanted, I guess, your advice and kind of clarification on that before I move ahead. I mean, it is a lot of money and it is a big deal. Yeah. I mean, almost, I would...

I don't think you have an option. I think you have to release it and lose $100,000. Yeah. I mean, I think that's a better option than going into a million dollar house that you guys can't afford the mortgage, that the mortgage payment is basically what you're bringing in every month. I mean, that's... You'd foreclose on it within months. Yeah. That's not ideal. I know. And we have children. I don't want to jeopardize that. His parents have offered, they have multiple properties, offered to sell one of their properties but at the same time we don't want to um we don't want to be indebted to them that's right no no no key i would keep this clean i think this is a decision was a hundred thousand dollars was it cash hayley or did you guys take

out a loan for that so we did it originally on our first residence that we had purchased it was our first home and we had purchased it for about $500,000. And then when we sold, we sold for $9,000. But we had taken out a home equity line of credit, but that is paid off. There's no debt owing towards that. Okay. So the $100,000, it'll just be gone. It's not debt that you have to repay. No. So my husband just told me, he said our income is $8,907 per month. Okay, that's better. Yes. For your $3,000 mortgage. So that's net?

So that's a third of your take-home pay, which is a lot, but it's not going to crush you financially. So I would just stay put where you are and mutually release this, lose the $100K, and learn from it. Yeah, it's a tough learning lesson, but I definitely need to hear that. So I appreciate your help. Yeah, absolutely. Sorry, going through it. That's not a fun thing to deal with. And for anyone watching out there who's military or they move around a lot, this is why we tell people it's okay to rent. It's okay to stay put. Don't feel like you have to go get a

house because people are telling you, you got to get a house, you got to get a house. And obviously their situation is different, but it's one of the risks you take. For sure. With new builds, with mortgages of you don't know where you're going to end up and what life is going to be like. And that's one reason, you know, our house purchasing formula at Ramsey is pretty conservative and people, they don't like it very often. But this is one of the reasons why too, is like, we just know life happens. And if so much of your income is being taken up by your mortgage or what you think life will be like when you're doing a build that's two three four years long like i mean you just have to be realistic about it and so um and also too i think when you have information and you have facts you're able to make wiser decisions and so that's one thing

too and this isn't to you know harp on hayley by any means but you know she was like i'm not sure my husband takes care of the finances which is happens a lot too in families but if you're married you guys you're you together need to be making these decisions meaning both of you need to know the facts both of you because you both bring a perspective to the table right hayley could have if she you know maybe had more information you know she could have said something that maybe would have directed a different decision. I mean, I don't know, but that's why it's important that that's the beautiful thing about being married

is that you have two people and these big decision-making processes, but you both have to have the facts and understand what's going on. And then sometimes you make a decision and you pay the stupid tax, which is what we say, but we'd rather do that, honestly, than go into a million dollar home

that the mortgage is eating up close to 75% of their income. So I'm glad you guys called, Haley. Good luck. And again, I'm so sorry. So sorry this is the situation. This is The Ramsey Show. Welcome back to The Ramsey Show. So, George, some fun things that we do here at Ramsey is we put on some pretty incredible

events. That's true. I've been to other events. Ours stand out among the rest. And actually, there's a group of them right now in Dallas for the Entree Leadership Summit. That's right. Thousands of business owners and leaders out there learning from the best. In real time right now, they're there in Dallas. But what we're going to talk about is the Total Money Makeover weekend. So this is May 10th and 11th. And this is a place, this is an event to help you create healthy money habits when it comes to your finances. And the idea that your habits are so key because it's just your knee-jerk reaction on how you handle money and how do you start implementing those. So we're going to cover everything though from how to get out of debt, how to create a budget with every dollar, how to communicate with your spouse more effectively, how to ease your anxiety around money,

how to invest, how to build wealth. I mean, we're covering all the bases. So again, this is the ultimate motivator and it's going to be really fun. And George and I, we're actually going to do a live taping of Smart Money Happy Hour. I think it's the third time we'll be doing this? You just read my mind. That's exactly what I was about to say. I think it's the third time. And it's always so fun.

They say that's the charm. Third time's the charm. It's going to be the best Smart Money Happy Hour. We have a good time with the live crowds. That's right. So all the Ramsey personalities will be there that weekend. Dave Ramsey, myself, Dr. John Deloney, George Campbell, Jade Warshaw, and Ken Coleman. So get

your tickets right now at ramseysolutions.com slash events. Our Platinum Plus tickets are already sold out, but you can still get VIP and general admission. So again, May 10th and 11th, the Total Money Makeover Live. This is not just for like, if you're new to the Ramsey plan, if you've been doing it for a while, some people need the motivation because they have been doing it for a long time and they kind of fall off the wagon, got a little lazy, a little sloppy. Some people, it's, hey, I have a friend that I'd love to come or a spouse that needs to get on board. This is the perfect event for them too. And so whether you're ish off the wagon, you're new to the plan, this is a great way to just kind of get dunked. That's right. And it's right here

on our campus and right outside of Nashville. So, yep, come hang out. All right, up next, we have Nicole in Indianapolis. Hey, Nicole, welcome to the show. Hi, guys. I'm so excited to talk to you today. Oh, we're so glad you called in. How can we help? So, my husband and I are on baby step two, and we were kind of just wondering what you guys suggested as far as my job situation. About three years ago, I landed my dream job. I am a provider in a private practice, and so I've been working there, and I've been very happy.

The problem is if I were to go to like a more, um, like a hospital or something of that nature, even work in urgent care clinic, um, I could work half the time and make the same amount of money, um, and would be able to pick up more shifts. Wow. So you'd essentially double your income. Basically. But it's hard because this is what I thought I wanted to do since I was a little girl. This is the place that I thought I wanted to work. And that's where I've said I've always, I was always going to work and then I landed it. And now I'm sitting here with a little bit of resentment because I'm like, I can't be home with my son. If I did move, I could,

you know, pick up extra shifts if we needed it, have a little more flexibility. So I just don't know. I'm kind of in this weird place where I had this dream, I achieved it, and now I have a kid. And so it looks a little different. And I just kind of wanted to hear your thoughts. We do have, together, we have $85,000 in student loan debt. Okay. I bet you guys are working. How much are you making now? Total together we're making $195,000. How much is yours out of that?

So I make about $95,000. Okay, and you could be making $95,000 working half the amount of time that you're working. With more flexibility. Yeah, it would be two 12-hour shifts. I work four days a week now and one of those is a 12-hour shift. Okay, wow. I mean, do you think you would enjoy it? Is there a part of you that is still, you know, you're working with people and helping them in that way?

Or do you think, are you like, oh, my God, I'm going to be miserable if I take this? I mean, I think that it's definitely going to be harder work, for sure. You know, but we're still kind of essentially doing the same thing. I do enjoy sick volume, which is what I would be doing. Yeah. I mean, honestly, Nicole, I would take it. I understand the idea of a dream. I mean, if it was your dream job that you're in now, and what you're going to be doing is so vastly different than your dream job, you're doing something completely, you know, that is not anywhere near what you were doing, then I would say, okay, let's hold on, let's back up because we want to make sure Nicole's enjoying her work.

But it's in the same realm. Do you know what I mean? Like, you'll still be able to be with people. And and I think the flexibility aspect is huge. And especially if you're a mom with a little one and that part of your heart is being tugged in that way too, and you're making the same amount of money with the upside of even maybe once a month taking on two shifts or something. There's a lot of upside in my opinion.

And I think too, we hold onto a dream sometimes and you get to the reality of it you're like well I may have to make a different decision I don't want you to be miserable in your new job but sometimes I don't know I feel like some people they go into a job they're like oh my gosh my dream job is to be in marketing or whatever it is and then they get there and they're like okay then maybe this isn't exactly maybe what I what I yeah it's okay for that to shift and change as you're as you you know got married and had kids and it's okay for that to shift and change as you got married and had kids. And it's okay for your dream job is one part of your dream life. And I think your dream life now looks

different because that looks like being home more with your kid and having a little more flexibility. So I think that you kind of have to grieve and celebrate the fact that you accomplished your dream. You did it. And now life has changed and you have a different dream. And guess what? You'll probably have a different dream five years from now. So this decision is not fatal. There's maybe another job down the line. And so life is never linear as we want it to be. It's got some twists and turns, and this is a twist. And I think it's a blessing in, you know, 90% of the way and 10% you're going to miss this and you'll have to move on from it in a way. But I think it's the right move for your family right now. Okay. Yeah, and there's not a lot of upward trajectory

at the job either. We haven't got raises in a few years. So, you know, there's ups and downs. Yeah, for sure. And who knows, Maybe one day you stay home for a season. And so I don't want you to base everything off of this one decision, but I think for the next step, as we're looking at it on paper and what you've told us, it's the right next step for you to take this position. It's still in the type of work that you love. You have to work half as much for the same amount of money.

I don't know. In my head, it sounds – That's hard to pass up. Yep, it sounds right. That sounds like a dream to me in a lot of ways. And it's changed you, Nicole, and that may be some of your fear. It's just when you just do something different

where you thought I'd be in this forever, it is scary to take that step, but it's a really solid, secure step. So I don't want you to question that. Thanks for the call. Up next, we have Shane in Indianapolis. Hey, Shane, welcome to the show. Hi, how are you?

Doing well. How can we help? Okay, so I want a car. I can't afford it. It's fine. I don't have any debt. I have some money in the bank. I have three kids. This might be a fast phone call. So I've had issues buying things that I want. When I need something, I can pull the trigger. When I want something, I hold off. So I'm looking at buying a more interactive manual car for myself. I've been working for 20 years. I got three kids. They really take care of me. They live at home with me. And the cars I'm looking at are between 40 and 80 grand. So I don't know whether information you guys need. What's your household income?

My income is over 120 a year. And what cars do you have now and what are they worth? I have an old Suburban, probably only worth $3,500 and a couple of work vans. I own a small company with a few employees. Okay. But your personal car, is that Suburban? Yeah, yeah. And it gets the kids around all their sports and everything. Yeah. And just, you know, I've been working for a long time, kind of want something for myself.

So our kind of rule of thumb, Shane, is anything with wheels and motors, we don't want to be more than half of your annual income. And so... Okay, so that's about $60,000 is the top, if you add everything up. Yep. So I would look at, yeah, but if you have, you have the cash, you have, you know, 50 grand if you wanted to do this.

All right. Yeah. Like I said, it might be a quick phone call. Yeah. But do you have the cash? You have 50 grand today to spend on it and you're okay losing that money because it's a toy. It's going to go down in value and you got to be okay with that. Yeah. You see, that's my, my personal problem. So, um, I just didn't know if you guys would tell me, no, that's stupid or, uh, no, I mean, if you have the cash and you have an emergency fund and no debts at that point, I mean, I think that's when you get to still investing. I think you get to enjoy it. Living out the baby steps. You can get that car. Maybe go on the, on the cheaper end of it, the $40,000 mark, and have it. And then maybe you upgrade in three to four years to something nicer. But yeah, if you have the cash, we're all for it.

You have our permission. Yep. Great job, Shane. Congratulations. Have fun. This is The Ramsey Show. Welcome back to The Ramsey Show. One of the best ways to spread the word we have found is not just in marketing, George. It is word of mouth.

It's you guys sharing the show on your social media, sending clips to your friends and your family, and just really getting the word out that way. So we really, really do appreciate it. So make sure you do that. Leave a review. Subscribe to our channels, podcasts, YouTube. And yeah, we really appreciate it. The show, it's grown so much, which we're so thankful for. And it's a lot because of you guys. And we want to help give content into the world that is positive and instructional and inspirational.

So that is what- It's your way to give back. This show is all about about and it's your show so give us a call at 888-825-5225 up next we have elise in little rock hey elise welcome to the show hello um we bought a property um three years ago and the property owners committed fraud they withheld the fact that the well runs dry about half of the year. Oh, gosh. Feels like a problem. It will cost $24,000 to drill a new well or $30,000 to bring in city water.

My husband wants to spend our emergency fund on the well, but I don't think it's an emergency because we've lived with it for three years. We spend about $80 a month on laundry, and we're debt-free besides the mortgage. My husband works full-time and makes $60,000 a year. The other option is we could buy an old well-drilling rig for $4,800, but we don't know if there's any major issues with it. And then we could buy a brand new well drilling rig for $22,000. We have $11,000 in our emergency fund, but once it's fully funded, it will be $18,000.

So you don't have the money to cover this anyways, even with the emergency fund, if you did the $24,000 or $30,000 option? That's right. And nothing in the, was there lawsuits because of the fraud, anything legally that they had to pay you guys because they didn't disclose it? We are still in the process, but we do not believe that. We will probably win the case. We don't believe we will get the money to cover it. Why? Because we believe that she doesn't have the money to pay us back for it. Okay. Okay. So how long, Elise, would it take you guys to save up

the extra $13,000 to make this a possibility for a $24,000 fix? We have saved about $11,000 in the last four or five months. Okay. So it'll take us another six months probably. Okay, to do that. And you don't want to do that. That's not because you're good with how you guys are functioning now. Because, I mean, I guess if the well runs dry, do you guys have water? I mean, what does life look like on the...

Is this a little house on the prairie? How does this work? Well, I do laundry at the laundromat. I can only do one load of dishes a day. At least it kind of sounds miserable. Is it? It is. It's very miserable.

Okay, yeah. I would probably save up and get this. I would categorize this as an emergency. Yeah, this is kind of a necessity. You know, your four walls, food, shelter, utilities, transformation. It's not life or death, but it's pretty close. Well, I'm worried that if we spend our emergency fund on this, another emergency will pop up, and then we have no money. Well, I mean, that's always a risk.

Most emergencies, for the most part, you're able to get by with a couple of thousand dollars. So maybe you guys save $28,000, have $4,000 left over just for a little bit of cushion, and that'll be a few extra months, right? So maybe you give yourself a deadline and say, okay, in eight months, we're going to fix this well issue. Do it and still have some cash left over and then keep saving because sometimes when stuff comes up, I mean, just like this, this is a great example you know yes we would consider this emergency or people have you know a tire you know goes flat or you can fix that for more than less than less than four thousand dollars but yeah but like a roof or heating and things that are like really really really expensive usually you can buy some time and be able to save month to month that's what i'm wondering is there a temporary fix let's say you

bought the used rig. Do you guys know how to do this yourselves or will you still pay someone to actually do the work? We could do it ourselves. Wow. If you feel capable. Are you guys, like, do you know how to, like, is that something that's like,

oh yeah, that's a totally possibility and your husband's like, yep, for sure. That just seems complicated. Yes, we could for sure do it. And we have a friend that has actually built a well drilling system in the past. Okay. Then I feel like you'd go this route for now. Yeah, why wouldn't you do that route?

It just makes me nervous to buy something that we're not positive would work. And why wouldn't it work? Just because it's a used old, I mean, it's a 1980 truck that has an old well drilling rig that hasn't worked. Can you test it somehow? Yes. Or have someone inspect it? Are there other ones out there that you guys can rent for a month? We cannot. I've looked everywhere. There's no well drilling rigs for rent. You'd have to buy either a new or you'd have to find a used one somewhere. And most of them aren't big enough because we are drilling through rock. And most of them, most of the ones that you would buy

for $20,000 would drill through sand or gravel, not solid rock. Okay. I feel like George and I are probably not the right people. Beyond our pay grade to talk about drilling wells. I know. But if I was in your shoes and I felt comfortable and capable, I would inspect it, make sure it's mechanically sound, and buy the used one because that's what you can afford right now.

And later on, if that buys you time even to save up $24,000 to do it officially or get the city water, I would do that down the line. But for now, I'm willing to drop $5,000 to see if we can fix this problem and remedy it, even for a year or two. And it's only $2,400, right? You said $4,800 for the used one? There's a used one for $4,800. Talk them down to $4,000.

Negotiate them down and see if you can get this thing going. Because there ain't, I mean, there's not a lot of buyers because apparently there's not a lot of ones out there. And maybe you can sell it once you're done with it and make some money back out of it, right? Yeah. We've also thought about using it around here locally because there's only one

well drilling company. Hey, you got a new business on your hands. Yeah, there you go. well i hope that helps elise so yeah maybe maybe do that if you feel capable i don't know why i didn't have that as an option it's impressive yeah elise and her husband well my first thought was if i i would just go drill myself i mean i mean george with his with his i'm sure there's a youtube video out there with his tools george could figure it out. Honestly, I think your husband Winston could figure it out. I'd drill him well.

I'd call Winston. Yeah, you two together. I just feel like it would work. That would be a TV show. I hope it would work. I know. So great. Okay, up next we have Andy in Miami.

Hey, Andy, welcome to the show. Hi, Rachel. Hi, George. Huge fan here. Thanks. How can we help? So I currently work for a bank, and you guys may not like it, but I underwrite commercial real estate loans.

We can still be friends, Andy. Thank you. Thank you. At least not personal loans or residential mortgages. There you go. I see. So work-from-home setup, base salary is around 113 plus some other little perks, 20K bonus. They'll give me 2,000 for my 401k just because every year and about a thousand towards my HSA, fully remote, love my bosses. They love me about four years in. Um, and then I got a message from a recruiter on LinkedIn about, uh, a trade finance type job. Sounded interesting, but very, very far away, uh,

geographically about an hour to 80 minutes each way per day, Miami road rage capital of the world. So I was like, eh, all right, I'll tell this guy I'm open. He's going to say $120. I'm going to say thanks, bye. He says $150 to $180 plus 20% bonus. So my interest was peaked there, and I'm just kind of weighing the pros and cons of flexibility. Where are you guys financially? Do you guys have a lot of debt? We are recently on Baby Step 3. I just finished FPU at church,

co-leading it two weeks ago. And you've got a spouse? Have a spouse, two kids. This is a move. May not be done with the children. Mother-in-law, who's been a huge help, is about two miles away. Oh, man, that's tough.

That's a big life change. Unless you plan on moving, I wouldn't do the hour commute. It's not worth the money. That's two hours in the car. I try to make more doing what you're doing now and stay put. Have the peace. You've set your life up to have peace. I don't know if I would do it for the money.

That would be tough. Thanks for the call, Andy. Thanks to you, America, for listening. Thanks to everyone in the booth. My co-host, George Campbell. This is The Ramsey Show.