The Ramsey Show - App - What Are the Best Mutual Funds To Invest In? (Hour 2)

Episode Date: July 1, 2022

George Kamel & Dr. John Delony discuss: The different types of mutual funds, Figuring out your next financial goal, How to pay off your car.

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where America hangs out to have a conversation about your life, your money, your relationships, your mental health, right in front of you. That's what we're here for. I'm George Campbell, joined today by Dr. John Deloney. Open phones this hour, 888-825-5225. That's 888-825-5225. Ryan's kicking off this hour. He's in Cleveland, Ohio. Ryan, welcome to The Ramsey Show. Thank you. How are you? Great. How can we help? So this is a pretty open-ended question,

but I'm trying to figure out how I decide my next financial goal. And I guess more specifically, how do I change or maybe pause my investing to achieve whatever goal that might be? Wow. Okay, so you're pretty familiar with the baby steps, I assume. Yes. I've read through the book, and i'm vaguely familiar with them but it's been a little while honestly so what are your goals man what are you trying to accomplish so that's that's the hard part because i'm very very fortunate right now to have no debt i have a pretty good income for i mean i'm 23 fresh out of college uh and right now i've just been focusing on investing for retirement.

So I've maxed out my Roth already this year. And now I just have income to put towards something. And it feels wrong to not just invest all of it. But at the same time, like I might be considering getting a home at some point. So there's a down payment to consider. I'm not really sure. Okay. What's your income? It's most likely going to be somewhere between about 60 and 80 this next year for 2022.

Okay. Pre-tax. Do you have an emergency fund in place of three to six months of expenses? Yeah, I've got 7,500 saved up for my emergency funds. Great. And how much are you investing percentage-wise right now? You said you're maxing out the Roth, so I assume not quite 15%. Yeah, I've looked at the last few months and it's come to more close to about 30 to 33%. Of your income is what you're investing? Yeah, I believe so. Unless my numbers are wrong, but yeah, I believe so. Okay. Well, once you max out that Roth, that puts you at $6,000?

Yes. Yep. So I hit $6,000 last month with my Roth. Which is about 10% of your income, but it sounds like you're kind of front-loading. You're putting a lot of money from each paycheck right now, but once you max that out, what are your other retirement investment options? Do you have one through your employer? I don't have any 401k options. I work with a small business, so I don't really have many other retirement options unless I open up like a traditional Roth or something like that, as far as I'm aware of. Well, there's no traditional Roth. Is it a traditional IRA or a Roth IRA?

Traditional IRA, correct. Okay. Well, if you max out the Roth, that's going to be it for the year on the IRA side. But there are other options, taxable brokerage accounts, things like that, where they won't be tax-advantaged, but you can invest and pay taxes on it when you take it out. So as far as financial goals, you told me you want to get a house. And so my next goal, if I'm in your shoes, debt-free with an emergency fund, is getting a big house down payment saved. Yeah. Now, I guess I'm struggling with how do I save up a down payment

and adjust my investment strategy for that? Because I guess I kind of view it as I could always just throw a bunch of money into a brokerage fund and choose a safe-ish investment, and then when I buy a house, I buy a house with that money. But, of course, there's always risk with investments. So it's much less down. Well, when it comes to that kind of risk, I like a longer time horizon. So if you're saying, hey, I don't need a house in the next year or two, I'm looking at three, five years from now, then I'm okay with you putting some money into those types of accounts to invest because you

can ride that out. And if you have patience and you don't have a level of urgency, then you're going to be okay. And your investments will grow, who knows with this market, but you can grow 8%, 9%, 10%, 11% if the market gets back up to where it was. Right, right. Okay. So that's what I'd be doing in your shoes. Just start investing 15% of every paycheck into whatever options you have. Right now, it sounds like the Roth IRA is your best option. Beyond that, you're not going to have a ton because you don't have an employer retirement plan, but you can invest in a taxable brokerage account, maybe in some index funds and park the money there as you save up

for the house. And Ryan, can I give you one more little nugget to put in your back pocket? Please do. You can do three things with money you can save it you can spend it or you can give it make sure you're planning for the future you're doing a great you're you are so far ahead of 95 people we talk to me included okay you're way down the road um it took me about 15 or 20 years to get to the financial position you're in okay but make sure you enjoy your life you're 23 okay go have fun go to a concert hang out with people go somewhere right you know see i'm saying enjoy some of that money and start a start a habit start a an identity of generosity.

Once a week, once a month, tip somebody out of their mind. Give to your local church if you go to one. Find ways that you can invest and give back to your local community. Make that a part of who you are. That's one of those legacy shifting. You'll change your family tree with

the spirit behind which you deal with your money. Thank you so much. I appreciate the spirit behind which you deal with your money. Okay? Yeah. Thank you so much. I appreciate the advice. You got it, my brother. Yeah. Thanks for the call. Great reminder there, John. A lot of young people out there, they're very focused on investing, and I love that young people are even excited about this. It's so cool. But to your point,

we can get so far down the rabbit hole of what the next big investment is and the get-rich- and crypto and nfts and we forget to just live our lives what i love about our plan is we say invest 15 and you'll be a millionaire yeah if you do that over consistently over a long period of time pay your house off not invest every single dime you can and not spend a dime and don't do anything else you got to live your life yeah there's other things along the journey that you've got to be thinking about and when it comes to to investing, I invest, you know, I love I love talking about money. I love financial topics. But we also need to loop on the story that this is all going away and this is finite and so i'm having to work hard in a season like you know we're in a season of blessing right now hey yes we're trying to crush the the house mortgage we're trying to do this take your wife on a 20th anniversary good god dude what do you do right buy a car that runs

right and so i have to talk to myself and let myself know, hey, we're following the principles. We're okay. How do you balance that mentality? Because there's one side that says, YOLO, we're going to live forever. We'll figure it out later. Let's just do what we want right now. And there's another side that is the, like, this is all going to come crumbling down tomorrow. I think there's two.

You have to be. It depends on what side of the coin you're on. If you owe somebody else money, that's an emergency. It's a danger. Will Robinson, you is not time for YOLO. It is time to stop everything and get that done. When you get to zero, you owe nobody anything. You have an emergency fund. So not if, but when the things go wrong, you, you are able to deal with it. That's when you have to exhale and say, tell yourself, and you have to practice this, not in danger anymore. Now it's about giving.

It's about living. It's about saving. It's about planning. It's about looking at that beautiful wife and saying, hey, let's go do something fun. It's about looking at that guy who looks like he's rubbing two pennies together to eat that meal. I got this for you, my brother, right? You're able to live a different kind of life because you're not running for your life anymore.

Ooh, mic drop moment there. Good stuff. More of The Ramsey Show coming up. Give us a call, 888-825-5225. People all over the country are discovering a faith-based and budget-friendly way of meeting health care costs through Christian Christian Healthcare Ministries. Christian Healthcare Ministries, or CHM, is a nonprofit organization that helps members carry one another's burdens

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All right, John, occasionally we get a question from social media, and occasionally we take that question. And today we have one from Olivia in Texas, and she writes in on YouTube, I just finished funding my six-month emergency fund, and I'm ready to start investing. What are the best retirement plans to invest in? I love this, Olivia. Way to go, first of all, for getting debt-free, building that emergency fund of six months, and now you're at baby step four. You're ready to begin investing that 15% of your household income into retirement. I have a feeling I know what you're going to say.

What am I going to say? Open a Dogecoin account. No crypto. We're not doing that today, John. I meant get on the internets and find a bunch of artwork, digital artwork. No NFTs either, John. Okay. Let's stick to the basics here. Here are my two favorite retirement plans to invest in. Number one is the 401k. That is going to be through your employer. And it's just a type of account. It's not an actual investment in and of itself. You want

to actually put investments inside of that 401k, like good growth stock mutual funds that we talk about all the time. The other type of retirement plan that I recommend is an IRA. That stands for Individual Retirement Arrangement. Did you know that, John? I was going to say Individual Retirement Account. They're interchangeable, but the official terminology is arrangement. And this is basically another retirement account that's outside of your employer. So anyone with earned income can go open an IRA and start investing. So I can't go open, if I had a great lawn business, I couldn't just go open a 401k on my own? I need to start opening an IRA? Yes. Now there are employment options. If you're self-employed, there's other options. We'll get into it another time. But it sounds like she's got a normal employer here. So let's talk about this. Traditional. So a traditional 401k, traditional IRA, that doesn't mean it's old-timey. It just means that the money that

you put in there is pre-tax. And that means that it's tax-deferred growth, meaning you will pay taxes on that when you pull the money out in retirement after 59 and a half. So let's say I put $100,000 in. It grows to be $1 million. When I start pulling it out, I'm going to pay tax on the $900,000 that it's grown, right? You'll pay taxes on all of the income. What I withdraw. Yes.

And here's the beautiful part about traditional is that there are tax advantages. So you can deduct that amount from your taxable income when it comes to tax time. So that's a nice part about traditional. But let me tell you about another friend named Roth. So on the other side is Roth. And what I love about Roth is that it grows tax-free. Meaning if I have a million dollars in my Roth 401k, I have a million dollars I can go spend and Uncle Sam can't touch his hands on it. But I put it in there after taxes. Exactly. So you're already paying taxes on that money before it ever goes into the account.

So either way, you're paying taxes. Let's make that clear. This isn't like a tax hack. We're getting around the IRS. We're going to pay taxes on this money. It's just a question of am I going to do it now or am I going to do it later in retirement? So I'm a big fan, especially for younger people out there to open up a Roth 401k or Roth IRA if you have that option. Here at Ramsey, we have a Roth 401k. It's a fantastic

option. And I do my entire 15% in our Roth 401k. And the beautiful part is here at Ramsey and many employers, they have a match. And so the match is free money. It's 100% return on that investment. So Ramsey puts 4% in when I put 4% in. That is already right there. So we say that match beats Roth beats traditional, meaning we want to take the match first, then we want to move into a Roth option. So if you don't have a Roth option at work, let's go to the Roth IRA, let's fully fund that, then let's move back to the 401k the traditional side and finish out that 15 very cool now if you have a roth 401k and you've got good investment options in there that's great but the ira will give you way more options i mean the sky's the limit with an ira the 401k is limited

in the investment so you want to make sure you've got good growth stock mutual funds in there that have a good proven track record and many people do combinations depending on their situation. But reminder, a Roth 401k, a 401k, an IRA, these are not actual investments. They're just a bucket. It's a jar that you can then put investments in and they are tax advantaged, which I love. And remember, we want to diversify here, John. We don't want to put all of our eggs in one basket. I remember this. Yeah. Yeah, one time. It was one time I had a basket of eggs, and I said, hey, John, hold this one basket for me, and then I slapped it out of his hand,

and it was wild. I know. I've talked to my therapist about it. Oh, you have a therapist? No, actually, I talked to James about it. It's just James. Yeah, that's right. Well, I mean, that sums it up for investment accounts.

When it comes down to it, it's so simple. But you didn't mention crypto once, dude. No, and that's the thing. People overcomplicate investments, and that's when things get out of hand. That's when they make bad financial decisions because they think, well, my buddy told me about this investment over here I should be doing. Man, the millionaires that we talk to, the stats are incredible. Seventy-nine percent became millionaires, they say, due to their employer-sponsored retirement plan.

A 401k. That's it. If you want to become a millionaire, you don't need to get rich quick. You don't need to hit it big at the slots. You just need to do something simple and boring consistently over a long period of time. That is how the majority of millionaires got there. And by the way, that same advice works for you want to become a better husband, a better wife, better girlfriend, better boyfriend, do little things

consistently over time. You want to get in shape, be consistent with the workout, do it on a regular schedule. There's no hack for me to get a six pack by tomorrow, John? There's a few

and you'll pay for them later. Right, yes. Same with like changing your nutrition. I mean, everything is be consistent, do it over and over, over a period of time and the results take care of themselves. That's right.

Well, thank you so much for the question, Olivia. Call us back when you're a millionaire. All right, let's go to the phones. Adam joins us in New York City. Adam, welcome to The Ramsey Show. Are you with us, Adam? We lost Adam. It was so close.

We were so close to helping Adam, and then we lost him. Well, we can move on. Right, Kelly? Do you feel good about this? Oh, he's back. What's up, Adam? He was on mute. All right.

Hey. What's up, dude? How can we help, man? That was a close one. I almost lost you guys. No, we almost lost you. You would have been our first. What's up, man? So I am $26,000 in debt. 23 of that is in a car and three is in a credit

card. And the car is just way too much. The payments are just a big hassle every week, every month. I was just trying to see if I can relinquish the car or maybe find someone to transfer the payments to so I don't have to pay for it anymore. Is it a lease or is it a traditional loan? It's a loan. Okay. What's the car worth? It's worth $1,700, I believe. $1,700. Okay. Well, one option is you keep the car and you keep making payments, but it sounds like that is not an option you can afford.

Yeah, it's killing me. So in that case, you're going to be in the hole by about $6,000, right? Yeah. How much money do you have saved right now? I about have like $1,000 altogether. Okay, so you have that baby step $1,000. When you say this thing's worth $17,000, did you go call somebody and have them appraise1,000. When you say this thing's worth $17,000, is that, did you go

call somebody and have them appraise it, or is that you looking on Kelly Blue Book? Yeah, I went on a couple websites and they all said about the same. Okay, that's private sale, is $6,000 underwater? Yeah. Okay. Well, that's going to be your best bet.

I mean, you could get a personal loan from your credit union. It's the only time we would ever tell you to go get a loan is when you're underwater on a car. But I still don't love that option for you. What's your household income? It's about $30,000 a year. Okay. Well, we have got to get this income up. What are you doing for work? I deliver for Amazon. I am getting a second job. I'm a bartender during the peak season,

basically throughout the summer. So I'll be making, I usually make like $800 to $900 a week there. All right. And that's going to bump up my money. Well, in New York City, people drink year-round, I found. So I'm going to be doing that every weekend.

Yeah. Is that possible? Any weekday, if possible. Yeah, definitely. I just had an interview yesterday for another place, so I start next week. Okay. Are you doing a monthly budget? Yes. Okay. We need to tighten that thing down. I'm going to go ahead and gift you one year of Ramsey Plus. If you'll watch all the videos in Financial Peace University, you can get every dollar plus. Hang on the line. Kelly will get that for you. But man, we've got to create margin here and we have to get rid of this car. So if you can save up that six grand and be done

with this car and the difference, that's what I'd be doing. Or you go get a quick loan, get a thousand dollars on top of it, buy a thousand dollar beater, get rid of this thing. And now you owe $8,000 instead of seven. And get the worst car you have ever seen in your life. The more you hate it, the more I know it's the right car for you right now. You are broke, dude. You're living in New York City making $30,000 and you're 26 in debt. This is a problem. But we're rooting for you.

Call us back when you're debt-free. Call us back if we can help in any way. This is The Ramsey Show. so so And on the debt-free stage, we've got Danielle and Samantha. Good to see you. So I'm assuming you're here to do your debt-free scream. Yes, sir. Where are you all in here from?

Hastings, Minnesota. Minnesota. Fantastic. And how much have you paid off? $85,000. $85,000. $85,000. How long did it take? Two years.

Two years. That's a lot of money. What was your range of income during this time? We started at $80,000 and then we went to $125,000. And since we paid off debt, we're at $130,000. Whoa. What do y'all do for a living? I am a mental health therapist.

Hey-o. Yep. Awesome. And I'm an accountant. Oh, I bet y'all's dinnertime conversations are a blast. It's great. That's fantastic. I'm just kidding.

It's wonderful. So what accounts for this? You see what I did there? What accounts for this big jump in income? I recently just got a promotion at work for the clinical director position at my community mental clinic. Thank you very much. Very cool. And then I changed jobs. That gave us a little boost as well. That's outstanding. Good for you guys. So what type of debt was this $85,000? The majority of it was student loan debt. And then we had two car loans.

Two car loans. Was it the graduate school? Yeah. Yeah. It's expensive. Oh, man. All right, so what happened? Take us back 24 months ago, two years ago, that spurred you on this journey.

So actually three years ago, Sam and I went to a conference with Dave Ramsey and Rachel Cruz, and Chris Hogan was there as well. And that kind of got us interested in doing something about the debt we knew we were going to have when we got married. And we get married, get some cash gifts. We have this income. That's great. So we decided to do something about it.

Took financial peace and then just powered through it. That's the most accounting answer I've ever heard. Well, we went to this thing, and then the next thing we did was play. They gave us seven steps. We said, okay, let's do it. I think that he's skipping over some pieces. I assume so. He's been talking to me about Dave Ramsey.

So we've been together for roughly nine years now. Wow, okay. Married for about two and a half. Okay. He's been talking to me about Dave Ramsey for the past five years. Okay. And he's like, when we get married, we're going Ramsey for the past like five years. And he's like, when we get married, we're going to do this, this and this. And I'm like, I don't really want

to do that. But whatever, if it makes you happy, we can do it. And then we got Financial Peace University from this conference that we went to with Dave Ramsey. We got it as a gift to ourselves as like a pre-wedding thing. And then we took Financial Peace University. I think our first class started those Sunday we got back from our honeymoon. And then we kind of just went from there. So how did you ultimately buy in? He told, so I'm a spender. Let's just throw that out there right now. He had told me that it was a way for me to spend as much money as I wanted to and then also keep him happy.

That may be the greatest line. It was wonderful. What a sales pitch. It worked because here we are. And I do spend as much money as I want to. In the budget. In the budget. Everything is budgeted.

It gives you the freedom to spend without the guilt. 100%. Oh, that's incredible. See, I mean, would you consider yourselves kind of opposites in a lot of ways? Absolutely. Yeah. He's an accountant. I'm a therapist.

Facts and feelings. You got a little bit of everything in there. Yep. Oh, that's awesome. Which you went on the same plan. So this has been something that's been in your heart and mind. Who introduced you to the plan? My parents went, took a financial piece with a family friend of theirs.

Dave Ramsey is just a name I've heard through the years. Wow. Oh, go ahead. I'm just wondering, this $85,000, two years, I mean, you guys were busting it for a while. What were the sacrifices you made along the way? Some of the hard things, you were like, gosh, I don't want to do this. I don't want to sell this. I don't want to work extra.

What were those things for you? Definitely it was really looking at our budget where we were, like, spending extra money. So, like, going out to eat was huge. I mean, there was one month, I think, that we had dropped over $1,000 on going out to eat. And so we had just stopped that completely. And we would do, like, a few date nights here and there where we would go to, like,'s and we would get um like their trio of appetizers and just split that and then we would just go home and have like popcorn and watch a movie or whatever um but it was kind of just like really combing through the budget and just making sure that we were actually spending our money on what

we wanted to spend it on in accounting terms you did an audit of the budget you started paying attention to what was going on. Yes. Yep. And then I picked up a few side jobs at a restaurant, Applebee's actually.

Yes. I was officiated. Free appetizers, right? Right, yeah. And then I officiated youth awards too. Very cool. Yeah, you sat down

in between shifts and had an appetizer and you got back up and went and served to the tables. Oh, that's awesome. That was a bunch. So what was, take us back to your best firework show,

the best argument you two got in during this 24-month journey. I would say that it was, I had overspent. This was like in the beginning of like budgeting and I had overspent in a category. And we were like four months in and this was the first time that I had gone over. And Daniel was just like, we have to stick to our budget. I can't believe that we didn't stick to our budget. I'm like, this is the first time in four months that I've gone over. Like,

you should be proud of me that I've made it this far. And he was like, holy crap, you're right. I am proud of you for making it this far. But that was kind of like the biggest moment of, wow, this actually works and we can work together as a team when it comes to money and we can both have what we want. And Daniel, just for the record, that was some mental health gymnastics she did all over you just then. Like, let's reframe this. Look how great I've done. And you were like, yeah, you're right. Yeah, she does that every once in a while. So did you guys have any cheerleaders along the way? Definitely our parents. They were like,

finally, about time, man. Parents, a couple friends, a couple co-workers. Tell me what it felt like. The reality is y'all were making six figures. Your wife's got a great job, you've got a great job, and you're working as a server at Applebee's.

There's got to be some moments that you're just banging your head up you're working as a server at applebee's like there's got to be some moments that you're just banging your head up against the dashboard as you pull into the pull into your third job right tell people what's going through your mind how do you feel i just weigh you know this is what i'm doing right now this shift will be over in two or three hours but it's getting us that much closer to building our life together wow and um you know in other words that free we just had a baby, and Sam can take the full 12 weeks off, and we don't need to worry about extra payments.

Wow. That's amazing. It's just not a big deal. Wow. So you were willing to have the temporary sacrifice, and you said, hey, this is for a short time so that we can have long-term freedom. Yes.

It's powerful. So if you're talking, not so if, you are, you're talking to a couple, you're talking to millions of couples right now who are thinking, I can't do this. If you were to say, here's the key to getting out of debt, for you couples who are just getting married, here's the key, what would it be? I think it's just getting up and doing it. A lot of people think, well, do I want to do this or do I want to do this? I don't want to cut out restaurants that much Dave Ramsey's not for me but if you

just get up and do it that's the only way you'll ever get debt-free and I think that communication is honestly the key here you know just saying like you know this is really hard and Daniel being like yeah it is hard and just having someone there to like kind of suffer with you yeah as you're going through and then like really looking at the goal of like I'm going to be here this is temporary eventually we'll be done and we'll be able to do whatever the heck we want to do communicate and just get up and do it I absolutely love that well Daniel and Samantha y'all are officially weirdos, and we're so

glad you're in the gang, and you have changed your family tree. You got two little ones, Sierra and Penelope. Are they with you today? They are. They are? Do you want to bring them up on stage? Here they come. Oh, they are little, little. And we have some things for them, John. What do we have? Yes. What do we have,

Bob? We've got a copy of Everyday Millionaires, because that's your next step in your journey we also have a copy of total money maker of the young give to some friends as y'all bounce these two beautiful little babies we're gonna do the debt-free scream daniel and samantha paid off 85 000 making 80 to making $80,000 to $130,000 in two years, changing their lives in Minnesota forever. Count them down.

Let's do hear a debt-free scream. Three, two, one. We're debt-free! Yeah! And the crowd goes wild. And the kids stop. The babies stop crying. Yeah, they do. They found out they're debt-free stopped crying. Yeah, they do. They found out they're dead free, John.

Oh, my goodness. Every once in a while, a baby hears applause and says, You mean? And their life direction is forever changed. I love it. That's incredible. Daniel and Samantha pay $85,000. Communicating and just deciding.

Let's just stop. Let's do it. Don't overcomplicate it. It's simple. Let's just do it. How do you lose weight? Diet and exercise. Do it. How do you get a debt? Do it. Don't overcomplicate it. It's simple. Let's just do it. How do you lose weight? Diet and exercise. Do it.

How do you get a debt? Do it. Get on a budget. Pay it off. Congratulations. Welcome back to The Ramsey Show. I'm Ramsey personality George Campbell, joined today by my friend Dr. John Deloney, and we are taking your calls, 888-825-5225.

Rafael joins us in Tucson, Arizona. Rafael, welcome to the show. Hi. Hey, welcome to the show. Hi. Hey, how can we help today? How are you, brother? Good, thank you. Thank you for taking my call. I am

going through a divorce. I'm sorry. Yeah, thank you. How long have y'all been married? 25 years. Oh, gosh. all been married? 25 years. Oh, gosh. I'm so sorry, man. Yeah, it's hard.

Yeah, man. That's heartbreaking. How far are you guys into the process? Just started it. Just started? Like five months ago. So no paper signed or anything like that yet? No, nothing. Um, actually we are in a good terms.

Okay. And, uh, but the thing is we have a small child, uh, and we want to, um, I want to be still close to her. And we were thinking to refinance our house and buy a land in order to build a house with a casita on it. And I was wondering if that's a good idea. So you want to buy land and build property to where you both live on that property? Yeah, but my wife and my daughter, they're going to live in the main house, and I'm going to live in a small casino, so I can be close to her. Yeah, so what's the impetus for this divorce? You sound like y'all are working awfully close together and on the same page for two people who say after a quarter of a century, we need to separate.

Can you repeat the question? What's the nature of the divorce? Why do you feel it necessary to split up? I think communication is the main thing. We have a lot of problems for years and we try to stay together and stay together, and I think that it's not possible anymore. I mean, we tried everything. So when you make the decision to get a divorce, you are taking a romantic relationship,

a friendship, a co-parenting relationship, and you are choosing to intentionally turn it into a transactional relationship. This is now a business deal. And I would tell you, if you are unable to communicate in a way that keeps you safe, that keeps your relationship whole, and you find it necessary to divorce after 25 years, that sharing property and living in a back house is a disastrous idea. What I think you're wrestling with right now is you can't imagine your life without seeing that baby girl every day. Is that true?

Yes. I have a little baby girl, man. I can't even wrap my head around it. I was just telling this last segment, I went and got my daughter up last night at 8 o'clock so I could spend five minutes with her. I can't wrap my head around that. That is a consequence of you and your wife's divorce. What you're not thinking through down the road is if your soon-to-be ex-wife brings somebody else home or when you meet somebody and start dating again

or when she has a big party and fill in the blank. It's just a recipe for disaster. Please don't do this. Okay? Get yourself an apartment in the neighborhood where you're close. Make sure every agreement and disagreement is written down. This is a transaction now. And you're going to need to protect yourself in writing so that you have legal standing to see your daughter at regular intervals

and all that stuff that will happen in the courts. But if you're going to make this hard decision to say, we are done, we cannot be in the same place anymore, it's worth dividing this house up, then you have to go through and divide the house up. And I know that is, I'm talking to you, forget the radio, I'm talking to dad to dad here. I can't think of a more gut-wrenching decision than what you've made, okay?

So I'm not making light of it. I've just been the other side of this thing with too many couples over the years. This is a two-year and three-year and five-year and ten-year decision here, okay? So do not sell your house and buy a piece of land and live in the pool house. Don't do that, okay? Okay. buy a piece of land, and live in the pool house. Don't do that, okay? Okay, so then just live in an apartment, and that's it, and move on, I guess. Yeah, I mean, that's really the choice.

Or y'all, as part of your divorce decree, y'all can sell the house and split the place, split the whatever, however y'all decide sell the house and split the place, split the whatever. However y'all decide to do that, to break up your estate, and she can buy a small house, you can buy a small house. I mean, it can be whatever. That stuff's all negotiable, and y'all figure that out with your lawyers or figure it out together and then go down to the courthouse together and sign a piece of paper. But y'all can choose to be civil and be grownups about the separation, which would be wonderful if you could do that, both for y'all could y'all could choose to be civil and be grown-ups about the separation

which would be fun which would be wonderful if you could do that for both for y'all and for your kid but yeah that's that's that's my recommendation man um don't don't live in the pool house yeah uh to what john said rafael you don't want to be splitting property taxes and your names on the same stuff as her i mean this is now a business transaction and that means we got to go our separate ways and that's hard. Or her name is only on the deed, and she evicts you at some point out of the pool. The whole thing's a mess. Yeah.

So avoid that. Live as close as you can to your daughter, but you've got to cut ties here. Thanks for the call, man. Man, that breaks my heart, brother. We're thinking about you, man. Yeah. Allison joins us next in Columbus, Ohio. Allison, welcome to the show.

Hi. Hey, how can we help today? Hey, I was just calling with a question about small business ownership. My husband has a small business and his is a sole proprietorship, so he doesn't have any employees. And anytime we have sat down and tried to do budgets together to work through the debts that we do have, we've always found it kind of difficult because with a business, you don't always have a set amount of income if you have a piece of equipment down or an unexpected emergency. So when we go to do that, we've always wondered specifically, my first part of the question is, do I separate the business side from the personal side since it is really all within our family when

we go to set up a budget and have two different parts or do I keep it in one part? And also, as far as emergency funds go, do we keep that $1,000 emergency fund, or do we maybe make it a little bigger to account for his business needs? How much debt do you guys have? Well, we have different kinds. He owns two large pieces of equipment, and we have debt on one of them, probably about in the amount of $16,000 or $17,000, I would say. Okay.

We also have a personal car loan, and that's about $13,500, $13,500, I would say. And then we have some consumer debt. So we have some on credit cards, both the business and some personal ones, and that's probably between $18,000 to $20,000. All right. So if I'm you guys, here's how this works. All of that business debt, he signed for. Therefore, it's your personal debt. So in that regard, you're going to put all of this in the debt snowball together and attack it smallest to largest regardless of the interest rate. Now, on the bank account side, we need to have separate finances for what's going on in the business.

Please get separate accounts. We do have separate accounts. Now I'm not saying... We do have separate accounts. Okay. Now his income, that's going to be part of the budget. But the business expenses, transactions, we need to keep that separate so it doesn't get too muddy. Okay. He needs to pay himself a salary out of the business.

Not just dump it all into the checking account. You know what I mean? Okay. Yeah. How long has he had this business for? We moved money. He's had it for maybe going on two and a half years now. He has semi-trucks. He drives trucks.

Do you all move money back and forth? Yeah. He gets paid by the company he has a lease agreement with in his business account, and then we move money each week according to our needs to our personal account. Yeah. See, that's a recipe for disaster. Make sure you've got a budget that says this is how much we're going to take out. It's too easy to look at that as some kind of credit card, basically, is what that's going to look like.

You're going to end up bankrupting your business doing that. Okay. And once this debt is paid off, I want him to run this business completely debt-free, which means if he's going to get a piece of equipment, we're going to cash flow, we're going to save up for it. Hang on, I'm going to have Austin pick up. He's going to send you a copy of Entree Leadership. This is Dave's book, 20, 30 years in the trenches of building a business

from a card table in his living room to now multi-hundreds of millions of dollars. And he did it all, that's right, debt-free with cash. And he can too. This puts this hour of The Ramsey Show in the books. Our thanks to James Child, Ben Hill, Austin Selby, the whole crew in there keeping the show afloat. And you, America, we appreciate you tuning in. We'll be back with you before you know it. This is The Ramsey Show. Did you know over 18 million people listen to The Ramsey Show every week? A lot of those people listen on one of our 600-plus radio stations across the country.

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