The Ramsey Show - App - Warren Buffett on Building Wealth & Avoiding Charlatans (Hour 2)

Episode Date: November 16, 2022

George Kamel & Kristina Ellis discuss: Restructuring your life to get out of debt, Paying for a debit card that has rewards, Pausing investing to build a house, Warren Buffet's crypto prediction and wealth building advice, Pulling from an IRA to pay off debt. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm George Campbell, host of The Fine Friend, the Entree Leadership Podcast, and co-host of Smart Money Happy Hour, joined by Christina Ellis. And we are taking your calls at the number 888-825-5225. We're kicking it off with Jan in Chicago. Jan, how is it going over there? Well, I have some school debt and some credit card debt and just looking for some advice on how to restructure our lives so we can get out of this debt. Wow. Well, the fact that you're willing to talk like that means you guys are ready for a change. Absolutely.

Sounds like you've had your I've had it moment. Yes, we've definitely had it. I came to the realization with the school debt, I'm actually going to the expense to leave school and look for a job just so that we can get out of debt. How far are you in your schooling? So I have been about a year, close to a year and a half into schooling. I was going to go to law school and then realized I don't think I want to practice. And so it doesn't really make sense for me to continue with a degree. So that costs a pretty penny, of course. So this is you're a year and a half into law school.

Of course. Yeah. Okay. So how much student loan debt and how much credit card debt? So total, we have about $108,000 in student loan debt and then credit card debt. We have about $6,000. Okay. And when you say we, is that your spouse? Me and my spouse, correct.

Okay. And what's your income, household? Right now, we just have one income, and it's about $115,000. And then you're going to leave school soon. What are you going to do after that? I'm not sure. I'm just looking for something, maybe administrative work. I'm just trying to find something because I'm realizing that this debt has turned into kind of a snowball and we're definitely not looking to take on more debt. What is your undergrad?

What's your undergrad degree in? Political science. Okay. And do you feel like you want to stay completely away from law in any capacity right now, or are you still kind of open to maybe paralegal work or something in the field? I'm open to work in the

field just, you know, because I don't really have too much of a choice at this point. But it would be nice to kind of pivot if that's possible. But I mean, I've worked in the field for some time. I was a legal assistant prior to school, so I could always go back to that. I just, I don't want you to wait until you're debt-free to do something you love. And so that's what we're trying to get you plugged into while you become debt-free. And if you can do that and get paid well and actually enjoy doing it, it's going to make this whole experience a whole lot better. Well, you'll probably make more money doing something that you're passionate about. Like, I think right now it feels really overwhelming and you feel kind of, you know, a lot of guilt around leaving this degree and, you know, maybe some shame, debt because it's a lot.

And school loans are pretty tough. Yeah, it's overwhelming. Right now, it feels like you are staring at a mountain and it's easy to just want to start running as fast as possible, which we do want you to run as fast as possible and be gazelle intense, but we want you to do it with the best strategy, with a career that you love, that you're going to want to be fired up to get up every morning and go to work and take on an overtime job. And, you know, anytime the boss says we need somebody to work late tonight, they're going to go, hey me, hey me, you know, and get a bonus for doing that. Like the more you're feeling passionate about what you're doing, the more you're going to show up, you know, and want to go above and beyond, which often translates into more income. Yeah. And that's a really good point that you make. There's nothing worse than being miserable at a job and then also

trying to pay off debt. And another issue too, is like we have really high rent because we live here in the city and so it's close to $3,500 a month so when I'm thinking about restructuring we're wondering if it would be better to just like move to the suburbs or that's that's a tough one there too it makes it harder for us to pay down that well is he is he working in the city? Yes. Okay. So it would be a little bit more of a commute. So there's a trade-off there. We don't want him driving two hours each way to work. So is there a trade-off where you could lower your rent to $2,000 a month, live a little further outside of the city, and still have him have a reasonable commute? Yes, I think that would be possible. That's something that we're looking into,, I think that would be possible. That's something that

we're looking into. And I think that would probably make the most sense for us. Because, yeah, like, we're obviously exceeding our income in bed. What size, like, what size apartment are you renting right now? Right now, we're in a two bedroom. I mean, I know it would be a little bit of a squeeze. There's also just weighing that, you know, do you want to live further out or do you want to go down to a one bedroom or maybe even a studio for a season? Like if living close to the city is a big priority, there's also kind of going a little bit smaller. Do you guys have kids? Right now we don't and we're thinking about it, but yeah. Okay. Yeah. I think either way you go, whether you live a little bit further, you know, get a little bit of a smaller spot or maybe even rent out the other room,

getting that $3,500. There's going to be compromise either way. So it's you deciding on, but is he on board? Is he on fire like you are to make some changes? Absolutely. I'm the one that's kind of driving it, but he's on board with it. So. Awesome. Hey, for a lot of people, that's half the battle, getting their spouse on board. So that's great. Well, I want to leave you with some resources, Jan, so that you feel equipped. And one of those is Ken Coleman, our Ramsey personality and colleague. He's got an assessment called the Get Clear Career Assessment, because I think right now you're kind of at this crossroads. You've lost a little bit of hope that your dreams are shattered. And we want to tell you

that there is hope for you, that you can do work that you love. And this assessment is going to take you about 15 or 20 minutes, and it's going to spit out some amazing results that very clearly show you where your passions, your talents, your mission lie, and give you career options of things you can look into. That sounds great. And I also want to get you a copy of Paycheck to Purpose. That's Ken's book. And it's going to help you a copy of Paycheck to Purpose. That's Ken's book. And it's going to help you go from just looking for a job that's going to pay off these student loans to finding a job that gives you purpose that you're excited about, like we talked about earlier, that gets you fired up.

So it's kind of the best of both worlds. Absolutely. And let's pile on Financial Peace University. Have you guys been through that as a couple? We have not been through it as a couple. Oh, you're going to love it. You're going to love that. So it's nine lessons. I want you to watch all of them together. You can also join a local class. That is the best way to do it because getting around other people who are on the same

journey as you, there's nothing like it. With that, we're going to throw in every dollar premium to help you guys get a plan for your money every single month, make decisions, and you're the boss of the budget until you make the budget, and the budget becomes the boss of you. And that is going to give you such freedom because now it's not a fight. It's no, no, we decided we're going to spend this much on food, and that's why we're not eating out. And so you guys got this. You have a great income. It's going to go up. You're going to come back and do a debt-free scream, and I cannot wait for that day. So hang on the line. Austin is going to pick up and give you from Paycheck to Purpose, the Get Clear Career Assessment, Financial Peace University,

and Every Dollar Premium. Austin, you've got some work to do, man. Good luck with that. But we love doing it. Congrats. We are cheering you guys on. This is The Ramsey Show. We'll be right back. you are listening to the ramsey show i'm george camel joined by christina ellis this hour and we're taking your calls at 888-825-5225. Our question of the day comes from Blinds.com. Find out for yourself about their 100% satisfaction guarantee. It means even if you mismeasure or pick the wrong color, they will remake your blinds for free. You get free samples, free shipping, and with the new promos they run every month,

you will save even more. Use the promo code RAMSEY to get the best deal. Today's question comes from Bill in Arkansas. I bank with Truist Bank and they offer a Delta SkyMiles reward debit card. It has a $99 or less depending on spending annual fee, but you get one mile for every $2 spent on all purchases except ATM withdrawals. The rewards do not expire. My wife's family lives a few states over and we are currently inheriting a family business. So we do travel quite a bit. Is this worth it in your opinion?

Oh boy. I'm fired up about this one, Christina. No, Bill, it is not worth it. Even though it's a debit card, I am not paying to have a debit card. And you just laid out, here's the deal. You pay $99, but here's the blessing, Christina. You get one mile for every $2 spent. Here's the thing. Yeah, let's tell them. When it comes to miles, there is no indication of what one mile even means. And so Bill's in Arkansas. And so I did a little pre-show math here. To go from Little Rock to Nashville round trip in December is 31,000 points. So if you're doing the math at home, one mile for every $2 spent, that means 30,000 miles is $60,000 worth of spending for one person to go round trip from Little Rock to Nashville and back.

Ouch. So you're going to pay $100 for the annual fee, then spend $60,000 of your net income on God knows what to go from Little Rock to Nashville and back. That same flight, if you just paid for it on the same airline, Delta, would cost $282. Wow. Enjoy your miles, Bill. So no, never let rewards drive decisions. Right. Well, and like, what does that do to the psyche to make you, one, want to make sure you spent enough to make your $99 fee worth it, but then thinking, man, I really want to get enough points to get this flight. So $60,000 is the bar I have to reach. I feel like that encourages spending. Oh, absolutely.

And then you feel like you won. We go, hey, we got a free flight. So Christina, I don't understand what the issue is. Yeah, but you spent $60,000 to get it. And so your math is broken here. So no, never do that. And it's one of the reasons, Christina, we launched our very own debit card called Gazelle the other day.

And one of the reasons is we're sick of banks screwing people over. And so we don't fee you to death. There's no annual fee. We don't even do overdraft because we're like, we don't want you to spend money you don't have. It will just decline. And so it's a great way to spend and save the Ramsey way if you want to check that out. But Bill, I'm not falling for this SkyMiles Rewards debit card, man. Just do a budget, save up for your vacations, pay for the flights. I like to use Google Flights and Skyscanner and all kinds of online tools to just find the best deal on a flight instead of being beholden to one airline. Right. That's what I was going to say is this is just through Delta.

Like if you look around at some of the cheaper airlines, there's a good chance you could find a flight for a hundred bucks anyways. You know, Little Rock to Nashville is not far. We've driven that several times. So one, you could drive if you really want to go. But at the same time, like just shop around. We both love travel. We both love travel deals. We're kind of obsessed with Skyscanner and finding the best flight. And it's like, you can do this in a much smarter way. Yes. So don't fall for this, folks. If you're seeing these rewards and you see, oh, it's a debit card. So that's helpful.

But oh, wait, there's an annual fee. And so now I have to spend enough to at least cover the annual fee, which is going to cause me to spend enough to cover the annual fee. And so it's a self-fulfilling prophecy here that will cause you to be broke. So Bill, I hope you say no to this debit card and just stick to a no fee debit card and don't spend because of the rewards. Thanks for the question though.

It's a good discussion. It's a good discussion because it's very tempting. Like when you see that and you see miles and you see the potential of a free flight, like that's exciting and it can kind of get you stirred up to where you don't really want to look at the math. You're just excited to go somewhere.

You're excited to get on an airplane. That seems very cool. And it's like, wait a minute. When you break this down, it's not really as cool as it seems. It's never worth it. And Christina, we did an entire episode on the fine print about this very topic. It's about credit card rewards. But now that debit cards are starting to try to compete in this weird space,

we have to watch out for this as well. So you can go listen to it. It's episode two of the Fine Print podcast, wherever you listen to podcasts, called The True Cost of Credit Card Rewards. And I talked to an ex-employee of Capital One who dishes. And she explains how they do tens of thousands of experiments every year on consumers to get them to spend more. And instead of cash back, they went, hey, what if we did like points and miles? Because that's confusing. And you could cash back, they went, hey, what if we did like points and miles? Because that's confusing. And you could be 100,000 points

and you feel like you're winning, but really you're a loser. So don't fall for this. Don't fall. You're just a rat in the maze and you get to the cheese and you think you won until you realize, oh my gosh, I'm in a maze. I'm in a tiny prison.

Oh my gosh, that's so sad. I know. Studying us like rats. We made Christina sad. Thanks, credit card companies. All right, let's go to the phones this hour. To Kansas City we go. Jackie joins us there. Jackie, welcome to the Ramsey Show. Hi there. Thanks for taking my call. Absolutely. What's going on? Okay, so my husband is going to retire from the Marine Corps in two and a half years.

And we have a small acreage that we bought. It's back in Iowa. And we hope to build a home on that in roughly two and a half years. We have some money saved up, but we're butting heads. So you guys are going to settle this score. Oh, this is fun. Don't put me in between a Marine. I will not win.

So we're discussing taking a pause from saving and putting money into our Roth account and our children's education account. So we can have less of a mortgage on our home. And then, you know, once the home is built, that's not where the finances end. Well, we're going to start like a little bit of a hobby farm for our two younger kids and we homeschool. And so that is going to be, you know, our new life and our new education for our kids as they're growing up. So that's the question. Do we kind of put a hold on saving and getting that money when we're older? Because we need more money now. Do you need more money as in like you need more money for the down payment? Or do you already have a down payment for the house?

We have a down, yeah, we have money saved up. Okay, how much do you have saved up? We have $350,000 in our savings account. Just in liquid cash? Yeah. Oh, my gosh. You guys are amazing. Get it. And we have $110,000 in the stock market.

Okay. What is that in? Is it in mutual funds or single stocks or what? I think it's mutual funds. I think it's pretty safe. But that's non-retirement? Yeah, that's non-retirement. Okay. And we have, yeah, we've got, and then we have money in our Roth retirements as well. And about how much do you anticipate the home build's going to cost? With the new higher prices? I mean,

we were always, we've been saving for 20 years and we've always had in our mind about $500,000. But that's kind of creeping up. Maybe it'll go down. We're not sure. And I know interest rates are going up. So, I mean, our goal was just to build a house. Well, it sounds like you're going to be able to pay cash for it. Yeah, we're just wanting to save a little bit more, yes, and get to that point. Well, that's kind of the debate, right? So the debate is do we pause all of our investing in order to stockpile the cash to cover the home build in full? I mean, if you guys even took on a mortgage, you're talking about like a $40,000 loan. Well, it might be upwards.

You know, with the home building cost, it might be more like $600, $700. But then the costs don't end after that because it's a cornfield right now. And so we're wanting to build that up. And so we need equipment, we need tractors. And this is all just for the kids to have a hobby? Well, it's like our passion is what we want to do with our lives after the Marine Corps.

Well, I would take your time with that. Cashflow it as you go. You can pause investing for a short while, but I wouldn't do it for very long, not more than six months or a year as you save up. With that much saved up, I'm still doing four and five, steps four and five. I'm still investing for retirement and saving for my kids' college at the same time because you guys have a lot saved up. You're beyond what you need for a 20% down. And if it takes longer for the home build by six months because of that, that's okay. You will live to tell the tale. You can rent for a little while, but I want this thing to be a blessing and not a curse. So take your time, move slowly, and you'll get to that dream. This is The Ramsey Show. It's a show about you and your life and your money.

And you can call us at 888-825-5225. Some say the advice is worth what you pay for it. I'm George Campbell, joined by Christina Ellis this hour. And, Christina, there's a clip I want to play from a 2018 shareholder meeting with our friends. I wish they were my friends. Warren Buffett and Charlie Munger, very, very wealthy old men. And it's talking about cryptocurrency. And I'll tell you why I played it afterwards.

But let's get your take on this clip from the 2018 shareholder meeting. There's nothing being produced in the way of value from the asset that you also have the problem that it draws in a lot of charlatans and that sort of thing who are trying to create various sorts of exchanges or whatever it may be. It's something where people who are of less than stellar character see an opportunity to clip people who are trying to get rich because their neighbor is getting rich buying this stuff and neither one of them understands. It will come to a bad ending. Charlie? Well, I like cryptocurrencies a lot less than you do. And so, to me, it's just dementia. And I think the people who are professional traders that go into trading cryptocurrencies,

it's just disgusting it's like somebody else is trading turds and you decide i can't be left out gosh i love this so much i feel like you would fit in well on that stage talking about your disdain for yes and that i've always thought I was an old soul. And I'm like, these are the guys I want to hang out with. These are my people. Warren and Charlene in a podcast. Okay, so let me recap in case you didn't hear what they said. Warren Buffett said, cryptocurrency draws in a lot of charlatans who are trying to create

various sorts of exchanges, whatever it may be. It's something where people who are of less than stellar character see an opportunity to clip people who are trying to get rich because their neighbor is getting rich, buying the stuff that neither one of them understands it will come to a bad ending. His friend Charlie, vice chairman of Berkshire Hathaway, which is Warren's investment firm holding company, said crypto is like somebody else trading turds and you decide I can't be left out. And that is the definition of FOMO and what this kind of get-rich-quick crypto greed culture has turned into. And there's a reason I played this clip from four years ago.

Who knew it was foreshadowing, Christina? Because the news came out this week that one of the largest cryptocurrency exchanges, FTX, just filed for Chapter 11 bankruptcy, and the collapse is being compared to Enron and Bernie Madoff, and it is a wild, wild story. So the company's founder, Sam Bankman-Fried, faces allegations that he secretly transferred $10 billion from FTX to Alameda Research, which is his hedge fund that also filed for bankruptcy, and he's facing a criminal probe in the Bahamas for this, and it's not going to end well. And he went from a $16 billion net worth to a $0 net worth because of this collapse.

And all of the users that have accounts may never see the money again. Their accounts went down to zero, and now they're going, where did it happen here? And a lot of people have compared this to Lehman. I would compare it to Emron, one said. And this is crazy, just a crazy story, and it really goes back to what those old guys were talking about, which are some of the wealthiest, smartest guys in the financial world, which is that there is so much fraud and delusion in the cryptocurrency world,

and it's a sad thing to see. I think so many people just want it to work because they want that get rich quick feeling. They want to have success instantly. It's been interesting talking to people who are obsessed with crypto, being somebody in the money space. It's like, tell me more, tell me more.

I wanna understand why you're so passionate about this. You're so much nicer than I am, Christina. Well, it's hard, because a lot of them don't have answers for how it works. It's like, wait, how is your money safe? You don't understand the blockchain, Christina. It's like, this is the future, man. You're so out of touch. Oh my gosh. And here we are. At its peak, it was the third largest crypto exchange and it's just gone kaput and millions of dollars worth of assets just unaccounted for. Y'all, that's scary. Very scary. And so I'm a big fan of Warren Buffett.

So much wisdom. One of the wealthiest people on planet Earth. $97 billion net worth. And I just wanted to share some of the ways that he lives that I think we can all take away and live a little bit smarter, a little less frivolous, if you will. So here's an article that covers some of that. One, buy a modest home, he says. He still lives in the same home in Omaha, Nebraska that he

had since the 50s. And the dude has as much, I mean, he could buy islands for days. Right. I love this one that says, don't be afraid to use coupons in front of friends. My man. And he talks about, or I guess Bill Gates talks about a story where they were at a McDonald's in Hong Kong and Buffett offered to pay and he dug into his pocket and pulled out coupons to pay for Bill Gates meal. I love that so much. That's a mental image.

Another one, look for sales and deals. This one I'm personally passionate about. I call myself bougie frugal. I like the finer things in life, but I'm still going to get a deal on it. I'm going to be very intentional. And this is something that he's very passionate about, is doing the research. Can I get a better deal on this? Negotiate, all that stuff. That's good. I like that he also says, don't gamble, that gambling is a tax on ignorance. I think that's really important, especially now with all the online gambling. And it's like

gambling is getting so mainstream. It's you watch a football game and there's all these different commercials encouraging you to gamble. Well, and you can do sports betting and you can bet on the tiniest little pieces of the game. Yeah. And you think, well, I'm just having some fun. And all of a sudden you're like, I just blew 500 bucks this month. Yeah. Or I'm hooked on it. And I feel like I can't stop. I mean, it's becoming an addiction, an actual legitimate addiction. Or you think I'm going to be the next Powerball winner and win $2 billion. There's a much higher chance you get struck by lightning a thousand times in the same spot than winning that Powerball. And we've called the lottery attacks on the poor and very similar to

what Buffett says here. Yeah. And then he also says, forget fancy food, which I feel like we can all get on board with that. You know, he said he literally could afford lobster, you know, for every single meal, but he's really cautious with what he eats and is mindful of that. So, I mean, for all y'all on beans and rice, maybe you stick with that a little longer. You're just living like Warren Buffett, that's all. There you go.

Yeah, well, Dave's always said, you eat enough lobster, it tastes like soap eventually. And so even the finer things in life, at some point, it loses its specialness, if you will. Another one, don't upgrade possessions unless you have to. Buffett famously used a Nokia flip phone for years, although he's moved on to an iPhone. My man. You know he has standards, Christine.

He's like, I'm not getting an Android. All right. I still want to enjoy life. Oh, that's a good one. That's awesome. I like that he also said, pick inexpensive hobbies. His favorite hobby is playing bridge, and that if he ever went to jail, he would hope that his friends in jail would play bridge with him.

Wow. Please don't go to jail, Warren. We need you. You're a voice of truth in a world gone mad. The last one here that I think is fun is forget fancy clothing. Yes. You know, just go the Steve Jobs route. Just wear a turtleneck every day.

You think I should do that, Christina? I'm on board with that. I like simplifying. I'd get too claustrophobic. There's too much fabric for me, guys. Let's stop it at the neck. You don't need any more than that. Oh, good stuff there.

A lot of timeless wisdom, though, in a lot of what they said. And I've said on the show now for months and months, if you follow the trends, you will fall for the traps. And anytime something comes on the horizon that everyone gets a little starry-eyed about, I go, oh, I want to step back. Does this have a proven track record? What's behind this thing? And Warren Buffett said he wouldn't buy all the crypto in the world for $25, all the Bitcoin, because it produces nothing. And you can see what happens when nothing is produced. It's a house of cards and the whole thing can just collapse. And so only invest in things with long-term track record, even when it's boring. And that's what we found in our millionaire study

is that it's 401ks and paid for real estate and IRAs and mutual funds. That's what causes long-term wealth. It's what causes you to keep it. Yeah, and it may not look as fun and flashy in the moment. You may not have instant success, but it's what is going to stand the test of time. Yeah, and I've made the analogy that it's like popcorn in the microwave. And you've been there, Christina,

when it goes one second too long in the microwave and it's burnt. You're like, how did this? It was in there one second too long. I had $16 billion in the bank the other day and now it's zero. That's exactly it. And you're going to get burnt, Christina, if you live the microwave lifestyle. And so I need everyone listening to be a crockpot in a world full of microwaves. It tastes better.

You don't have to worry about it. No one's freaking out about what's on the crockpot. It's going to be fine. It's going to be fine. And so be patient. The Bible says, Proverbs 13, 11, wealth gained hastily will dwindle, but whoever gathers little by little will increase it. So good. Timeless wisdom right there. More of The Ramsey Show coming your way. ស្រូវានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលា� You know that feeling you get when you finally remember to leave your keys by the front door, so the next morning when you're running late, they're right where they're supposed to be? Yeah, you want to go and high-five your past self for being so smart and planning ahead. Well, here is one of those opportunities. We are heading into the holiday season where our brains are focused on buying presents,

thawing turkeys, and making sure we still have that one ugly Christmas sweater for the party in a couple weeks. And then all of a sudden, you just blink and it's January and we feel behind on everything. That doesn't have to be the way you start off the new year. Make plans now to start the new year strong by joining us for Building Wealth Live right here in Nashville, Tennessee on January the 12th. We're also headed to Indianapolis, Austin, Salt Lake City, and Anaheim with dates into the spring. And this is a one-night event that will help you kick off 2023 feeling confident about your finances, even in this crazy economy. So join Dave Ramsey, myself, Rachel Cruz, Ken Coleman, Dr. John Deloney, as we walk you through a simple but proven plan to pay off debt and build wealth. It is possible.

And passes for this start at just $39, but seats are limited for this event. So head to ramseysolutions.com slash events to reserve your seat for our Building Wealth Live in Nashville today. It will sell out. Don't miss it. Your future self will thank you for it. That's ramseysolutions.com slash events. I'm George Campbell, joined by Christina Ellis this hour. This is The Ramsey Show. It's a free call at 888-825-5225. Jessica joins us up next in Miami. Jessica, welcome to the show. Hi, George. Hi, Christina. Thank you for having me. Absolutely. How can we help today?

Okay, so I'm going to try to make this brief. So in 2020, I got furloughed and eventually I left my job in January of 2021. And my 401k just kind of sat in my retirement account that, that whole time, um, up until about last month, actually, I had that transferred over into a traditional IRA account with my bank, with my bank that I use. And so my husband and I, um, recently got very serious about paying off our debt and we are on baby step number two. We've paid everything off with the exception of one credit card that we will pay off by the end of this month. And that will leave us with just our student loan debt. So I have about 29,000 in student loan debt and my husband has about 8,000.

Now going back to that retirement account, I have about $32,000 just sitting, like I said, in that traditional IRA account. It hasn't been any transactions. Initially, I wanted to use that as my retirement investment account. But before I do that, I just wanted to see if it would make sense to use that to go ahead and pay off my balance and just leave my husband's $8,000 student loan debt. I am so glad you called, Jessica, to talk you off of the ledge of robbing your retirement and your future with all kinds of penalties and interest. I'm glad. I'm so glad I called you then. No, we never recommend robbing your retirement unless you're facing a bankruptcy or some kind of insane situation. But you guys got this. You can use your future income to pay this down.

How long is it going to take to pay off the rest? So we pay about $2,000 a month. So there's about, what is that, $2929,800 $38,000 in there so about $18,000-$19,000 maybe if we can do that $2,000 every month

yeah and that'll put you a total timeline of what for your whole debt free journey about a year and a half oh you mean total

so we've been doing it about six months right now so it'll be about two years probably that's spot on that's exactly the average amount of time it takes. If you're gazelle intense,

you're following this stuff, 18 to 24 months is the sweet spot to pay off your debt. And so you guys have got this. I know you're just now really excited and you're like, what else can accelerate this? Oh, there's a pile of money over here. You're right. Keep that excitement though. Keep that excitement. I love the intensity. I mean, that's where we want you. We want you to have that gazelle intensity. But you know, just if there's anything you're going to do to throw more fuel on the fire, you know, think of things that are, you know, going to be extra income. Maybe there's somewhere else you can cut back, but

definitely don't rob your retirement. Okay, that makes total sense. Thank you guys so much. Yeah. And if you need more encouragement, go pop those numbers in, whatever's in your IRA, put it into our investing calculator at ramseysolutions.com and then look 20 years out, look what that money turned into. And so robbing that down to zero, instead of letting compound growth do its work, on top of the fact that if you withdrew that money, you're going to have penalties, it's going to be taxed. It is never, never worth it to take that kind of hit. Well, because the ultimate goal where we want to true you see truly see you in 10 years we want you to be baby step millionaires you know in 10 to 15 years so it's like that that IRA it's a huge part

of you getting to that real next level like we want you to be ultimately successful in the long term and so we don't want you to take any short term you know kind of get out of jail free cards that could actually hurt that long-term trajectory so you're going to get there we don't want you to take any short-term, you know, kind of get out of jail free cards that could actually hurt that long-term trajectory. So you're going to get there. We're excited for you. And I hope that whenever, you know, you're done in a year and a half, we see you right there on that stage

screaming out that you're debt-free. Yes. And if anyone out there is thinking about cashing out of their 401k, their IRAs, number one, because they're scared of the market. Number two, because they want to pay off some debt. Please, let me talk you off the ledge right now. Do not do that. And if you're not working with an investment professional, like a smart investor pro that we have at RamseySolutions.com, you need to work with

one because they're so good at talking you off the ledge, showing you long-term track records, being the voice of truth in a world that's kind of gone mad. And we feel like all the anxiety, I'm seeing my account go down. I need to cash out, cash out. And inflation and all the different things. I think people are feeling a lot of fear and a lot of anxiety. So just keeping that level headedness is key, especially in the season, going into the holidays, seeing the market down, all these things added up together. Stay the course. Yeah. It can produce some not great decisions. So yeah. Glad you talked people off the ledge, George. That's what I'm here for. Jake joins us up next in Madison, Wisconsin. Jake, welcome to the show. Hey guys, how are you today? Doing great. What's going on with you? Good. So I am a CPA

out of Madison, Wisconsin. And I have a girlfriend who also works in Madison, Wisconsin area. And we're both 25, and she currently rents, and I currently live at home with my parents. I've accumulated quite a bit of money, a little over 100 grand, I would say. And she has about 35,000 in debt total. Um, and that might play into the conversation later. But my main question is she has a, we're looking to move in together, right? And she has

a lease that's up in about a month. And I'm, I guess I'm on the fence, whether I want to take the leap and start paying rent and make that split decision in the next month to move in and have those expenses or hold off and then potentially buy a house or something like that in the next year. How serious is this girlfriend? We've been dating for about a year. We've known each other for a couple years now. What's holding you from asking her to marry you? I guess nothing much. I guess we're almost at that level.

I think when we're starting to talk big decisions like moving in together and finances and combining finances, I mean, that's such an important conversation to have because those are really huge commitments. And money fights and money problems are one of the number one reasons relationships don't work out. And when you move in together, you were just, it's a recipe for disaster when it comes to finances because we haven't combined finances and now she's contributing towards you paying down the mortgage, but she has no real buy-in into this. And so I've only seen it gone poorly. And so I would recommend you to not have her move in, whether you rent or buy, until you guys are married. And if you're ready to buy a house, regardless of the relationship status, that's okay if you want to do that, as long as you're debt-free with an emergency fund

and the payment's going to be no more than 25% of your take-home pay on a 15-year fixed. Are you at that point? I would say, are you just talking about buying a house in general? Yes. And at that level of, I could definitely buy a house right now if I wanted to. Yes. Okay. Well, I would still tread slowly because as Dave likes to say, as soon as you're married, she wants a different house. And so, you know, if this is a serious relationship, I might put pause in the home buying process and say, Hey, is this going

to be something I really pursue towards engagement, towards marriage? And then we're going to make that decision together. And if you keep stacking cash in the meantime, there's nothing wrong with that. So I appreciate the call, man. That's it. You're at a crossroads of some really big decisions, and I hope you do it with a lot of patience and not a lot of impulse. Yeah. And maybe, I mean, the lease is up in a month. Maybe figure out a solution. Maybe she can rent month to month for a while, because whenever we have those time pressures, it can lead us to make hasty decisions that often aren't the best choice. Or here's a wild solution.

Just sign a new lease. Life goes on. It's amazing how that works. Appreciate the call. More of The Ramsey Show. We'll be back with you real soon. Have you been inspired to make a change with your money? Want to know where to start?

Take our three-minute money quiz to get a plan you can follow. Go to RamseySolutions.com and search for Get Started to get a plan for your money.