The Ramsey Show - App - What Should I Do With My 10-Year-Old's Income? (Hour 1)

Episode Date: July 5, 2021

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. Dr. John Deloney, best-selling author and Ramsey personality, host of the Dr. John Deloney podcast, which is exploding across America in a good way, is my co-host today.

So you can talk to him here on the air as a part of the show. The phone number is 888-825-5225. We'll talk about your life, your money, and your life. Dr. John is known for helping people with any kind of mental health type things, relational type things. And so answering questions about boundaries and in-laws and, you know, life when it happens. And it does happen to all of us. So if you want to call in on his show, you can always do so at 844-693-3291 or email askjohn at ramsaysolutions.com. The phone number here for today, and there are a couple of lines available, 888-825-5225. Greg is in Tulsa, Oklahoma. Hi, Greg. Welcome

to the Ramsey Show. Hi, how are you doing? Good to talk to you. You too, sir. What's up? Got a question. I'm 47. My wife is 56, and we started very late in life in trying to save. We just paid off all of our debt except for our house.

Good. So my question is, combined, we bring home about $130,000 a year. Phenomenal. Should I take everything and slam our mortgage, or because of our age and we're starting late, should I put more of that into ETFs or mutual funds? Well, I would load up your retirement accounts, 401ks, Roth IRAs, and anything where there's a match or anything where you can get a Roth first. I've got a Roth 401k at work. They match 3% up to 6%, so I'm maxing that out.

Good. And then this year we just started a Roth IRA for me and a Roth for her. Good. And we're maxing that as well. What I want you to do is to stop that when it gets to 15% of your household income. Okay? Okay. And everything above that then goes to what we call Baby Step 5, Kids College, if that applies.

If it doesn't apply, then we move right on to Baby Step 6 and dump anything above 15% going into retirement that we can scrape out of the budget as extra payments on the house. What typically happens in these situations, and we can run the math out on your situation if you want, but what normally happens is the home's paid for in about seven years. That's where I had figured six and a half. Okay. And that's with putting 15% of your income into retirement? Yes. See, there we go. Okay. And that's why, because here's the thing, we want to get to retirement age with both of these things done, the house paid for and a pile of money in the 401ks and the IRAs. One or the other is okay.

Neither one done becomes a retirement crisis, right? No money saved in big debt on the house, and you hit 65 or 69 or whatever, then you're screwed. You're really in a mess. But you've got 10 years for your wife, 20 years for you to build wealth and to clear this debt. And so you should be in very, very good shape when you get to retirement just by following the baby steps.

So, Dave, help me with this because I feel burdened by a mortgage. It kills me to the point that it is hard for me at my age to put money in retirement while this thing's hanging out there. And is that a point when the psychology needs to – I need to dial that back and it becomes a math problem? It just kills me, man. Well, I would just take a percentage of that kills me and just put it into I'm going to be very intentional with these dollars. Yeah. Every dollar that comes into the house. And so everything above 15% goes on the house.

Yeah. And the kills you keeps you from buying a $150,000 car or a $50,000 car or something instead of putting it on the house. Now, that doesn't mean you have to drive a $2,000 car, on the other hand, but I'm saying what that does is that sense of weight or that sense of fear of not having enough, there's a healthy result in that if you don't let it build up and it just becomes toxic. In other words, it's a motivator. It pushes you to do the right things because the weight is real. I said, am I crazy? No, you're not crazy.

The weight's real. I mean, it's real, but don't let it make you crazy i've never been able to to demonize like if i owe somebody something i've really feel like i owe them something right and i know credit card's different than student loans different than house but for me it's all the same yeah i mean it's all it's all a debt that's right and the borrower is still slaving to the lender and what you're experiencing is the emotional relational spiritual part of slavery. Right. And you feel it.

Somebody else is going to participate in me deciding what I'm going to do with my life. Yeah. Don't want any bankers bellying up to my kitchen table. That's what it comes down to. But I invited them to, right? John is in Indianapolis. Hey, John, how are you? I'm doing fine, Dave. How are you today?

Better than I deserve. What's up? Good. I just have one question. In 2007, my wife and I took one of your Financial Peace University class through our library, and it served us very well down through the years. I'm about two years away from retirement, and I've been investing in the 40% C, 40% S, and 20% I,

like you recommended, and it's done very well. And my question is, I'm about two years out from retirement. At what point do I possibly slide that over into a more safe, less risky fund, or do I keep my foot on the gas pedal until I walk out the door? How old are you? I'm 58. 5'8? Yes. Okay, well, I'm 60, and I have not moved anything to conservative investing. Now, what you may do when you do retire, I probably would come out of the Thrift Savings Plan and do a rollover into an IRA

and sit down with SmartVestor Pro and develop a portfolio for your retirement of mutual funds, okay? Okay. But I'll tell you what my portfolio looks like. It's growth, growth and income, and sit down with a smart investor pro and develop a portfolio for your retirement of mutual funds. Okay? Okay. But I'll tell you what my portfolio looks like. It's growth, growth and income, aggressive growth and international, what we've taught for 30 years. Now, here's the thing. The idea that as you hit 60 or hit retirement that you're supposed to move money into conservative things is called asset allocation.

And it is a widely believed theory of investing among the financial planning community. I personally think it's wrong. I think it's a theory, and I think the theory breaks down. Here's why. At 60 years old, if you move stuff into bonds and money markets, and you start producing about half the rate of return that you're producing now, in other words, you start making four or five or six instead of 10 or 12 on your money. All in the idea that now we're coasting into the harbor of retirement and we need to be super conservative and we don't want to put anything at risk. The problem with that theory is, is that if you're 60 years old and you're healthy, statistically, you're going to live into your 90s the average death age of a male in america is 76 or a female 76 a male is 74 but that includes infant mortality teenage death and so on when you hit 60 years old healthy you have a very high probability of living 30 more years so this is like talking to a 30 year

old and saying you need to invest conservative because you're going to be 60 someday. You've got 30 years. You've still got to outpace inflation. And so I think this theory is asinine. And so especially if you've got a lump of money, if you're sitting there with a half million or a million dollars in these investments, and it sounds like you probably are, then you're not going to be using the money anyway. You're just going to be living off the income it creates. The money's going to be invested for your kids. You're just going to live off the income. You're not going to be using the money anyway. You're just going to be living off the income it creates. The money's going to be invested for your kids.

You're just going to live off the income. You're not going to touch the goose. You're only living off the golden eggs. And so that's my theory. I don't think I'll ever move mine to conservative investments because I've got millions of dollars in it. We'll be right back. over the country are discovering a faith-based and budget-friendly way of meeting health care costs through Christian Health Care Ministries. Christian Health Care Ministries, or CHM, is a non-profit organization that helps members carry one another's burdens with health care expenses, and they have successfully shared each other's medical bills for nearly 40 years.

See if CHM is right for you by visiting chministries.org. CHM is a proud sponsor of Dave Ramsey Live Events. Getting a cup of coffee before the show, and I ran into one of our new team members who asked him how he was doing. He said, well, better today, but over the weekend, his new house that he was trying to buy here got sideways because this market is so white hot that he got leapfrogged, and somebody pushed him out of a deal, and so he had to start again. You know, if you've been paying attention to the real estate market this year, you've known the competition for a property is high.

There's low inventory right now, and prices are going up in a lot of markets really fast. It's hard to find a property. When inventory is low, it means there's more buyers buying than sellers selling. And that turns the pressure up. Buyers want to snag the right house. And sometimes when you're doing that, if you're not careful, you get stupid. Because you go, it's like a beagle chasing a rabbit. You know, I got to get. stupid because you go it's like a beagle chasing a rabbit you know i gotta get and you like keep

upping the offer to the point that you're in the stupid zone to win in this market you really need a pro walking with you going nick calm down calm down our agents in our elp program our endorsed local provider program have years of industry success in any market, and they can walk you through and help you navigate the weirdness of this post-COVID market. Text the word HOUSE to connect with an Endorsed Local Provider. Text the word HOUSE to 33789. That's 33789.

Stephen's with us. Stephen is in Columbus, Ohio. Hi, Stephen. How are you? Hi, Dave. How are you, sir? Better than I deserve. That's for sure.

How can I help? Happy to hear that. I've got a question for you. I have a young entrepreneur daughter. We actually just recently put in a new commercial kitchen basically in our house. She started up a bakery doing ice sugar cookies, and it's just kind of taken off, kind of blown up actually. And I was curious what to do with kind of setting her up for the future, what your recommendation is for a 10-year-old to do with her money besides throw it in the savings account so how much is she made with her

sugar cookies um it's kind of you know it goes month to month depending on holidays you know it started yeah i mean just roughly i mean um i'm gonna say roughly she's right at a month last month was like 550 this month pushing This month, pushing $1,000. Oh, that's awesome. Wow, that's great, man. Okay. Well, here's what I'm going to do. When I get done, I'm going to put you on hold.

Kelly's going to pick up. I'm going to send you a copy of Anthony O'Neill's Teen Entrepreneur Toolbox, which is a toolbox that helps parents work with their teenagers on setting up and running a small business appropriately. Here's the main thing I want parents to remember about money and about entrepreneurship when you're 10, 12, 14, even 16 years old. The investing in some big investment that's going to be worth $8 bazillion when you're 65 years old is some fun math to run out, and it's not a bad teaching tool. But 99% of what your 10 year old needs to

take away from this experience is the entrepreneurial skills and confidence it's not the money the money and the scope of her life is irrelevant because you have a young rock star on your hands and so you know like when rachel was growing up rachel cruz well you know sharon i kept looking at each going, we have to point this one at something because it's going to go off. You know, and that's what you're doing here, right? You know, your children, the Bible says there's an arrow in your quiver. And so what you want is you want them to fly straight when you release the bow. And that's what this is all about.

It's not about $1,000 a month because it's not $15,000 a month. It's $1,000, okay? And in the scope of this kid's life, she's going to make $100,000 a month if you keep teaching her these skills. And so I think what you need to do is make sure you lean in on the lessons. And then I always take money with adults and children, and I divide it into three categories. We enjoy some, called spending. We give some, called generosity. And we save some.

And you always, all of us, including 10-year-olds, need to be building those three muscles at all times. The problem is often with children, we only teach them one or two of the muscles. And it's not optional either. It's freaking mandatory. Like brushing your teeth or taking your test and getting a grade and going to bed when I tell you to because I'm an old school Papa Dave. So, you know, that kind of stuff. So this is, you're going to save some.

And here's why. I'm going to show you why. You're going to give some. And here's why. And I'm going to show you why. And we're going to talk about it. And you're going to save some, and here's why, and I'm going to show you why. You're going to give some, and here's why, and I'm going to show you why, and we're going to talk about it. And you're going to enjoy some. Because sometimes you have a kid that's a little tightwad, doesn't want to give or doesn't want to enjoy. Sometimes you have a little spender, and they want to spend it all. And so they got a natural bent, but also helped them develop those other skills and these entrepreneurial skills. And that's what i want to concentrate on

here and so under the heading of savings if you want to sit down and continue a deeper education with a smart investor pro you can open up a little mutual fund if you want to and put some of the money in there that's okay but the the moral of the story is this kid is the magic sauce not the money right and dave tell me what you think about this. While he was talking, I was thinking about myself as a parent of a 10-year-old. And my 10-year-old gets really zoned in on something for sometimes months at a time. And it takes a couple of months, and then suddenly I start reading about it. I get on board, and then I think, all right, I'll learn about dinosaurs.

And then right when I start thinking about it, I get on board and then I think, alright, I'll learn about dinosaurs and then right when I start thinking about it, he's off to the next thing. It can be really easy for the parents, as you were talking about, to lose the importance of the lessons here and suddenly it becomes about keeping this business running, right?

And not forgetting, hey, she's 10. In two months, it might be soccer that she's this passionate about. Shut it down. Shut it down. It's sugar cookies. Don't make your 10-year-old have an ROI on a professional kitchen you may not need to have bought. And see, this is what happens.

That's why I asked what real money was. She said she's making a lot of money. And that is a lot of money if you're 10. But I've also had the call here where you've got the child star. That's right. You know, and they made $100,000. Did a commercial and made $100,000. Right. Freaking diaper commercial and the three you know, they made $100,000. They did a commercial and made $100,000. Right.

Freaking diaper commercial, and the three-year-old got $100,000. You know, that's happened. I've talked to those people. And if you're not careful, then the parents get all invested, and that's how their childhood gets stolen. Because they become a product. They become a professional. Right. And they become about their achievement and how much money you're going to make.

And that's why we all gripe about parents who overdo sports or gripe about parents who overdo pageants right or gripe about parents that overdo dot dot dot because they're trying to live some kind of very vicarious crap right through their kiddo and he's not doing that there's no sign of that in his call at all none whatsoever but that's the warning is encourage nourish the positive things guide them give them some boundaries guardrails, so that this can be a healthy thing, not a toxic thing. And hold it really loosely. Yeah. Hold it loosely.

They don't need to be up at 2 o'clock in the morning making cookies. Don't send your 10-year-old to salt mines. And he wasn't doing that. No. And most people don't, but sometimes people go, well, the kid needs to go where the kid's gonna go no no they're a kid they're 10 you need to you need to go no you're going to bed you're going to bed it's a sugar cookie shut the crap up go to bed you know i mean that's it's it you know and so you got to draw the line there and and back it in because uh you know adults because if you don't then you've got a 30 year old with an expanded version

of that and that's then they end up on your show. Yes. Calling in going, I'm crazy. So they've lost their ever-loving mind. And that's not how they call your show. I mean, it is the actual diagnosis. Sort of. Well, but yeah, it's so easy to take what your kid's passionate about and it becomes your passion and suddenly you're driving them towards

an outcome so just let them be a kid. Yeah, and then you get, you know, you can name all these stars that were stars too young. Right. The teenage.

Or that didn't have parents who had good boundaries. No, parents were just crazier than a loon and then the kid just blew up, made a bunch of money and as a country star

or a pop star or whatever, 14 years old and then all you've got is expanded dysfunction later on because they never had the ability to emotionally relationally develop and have good solid boundaries and process now again he's not got any of that there was no smell of that sounds like he's a dad who loves his daughter yeah he sounded like he's proud he's very proud of her and he should be she's a cool kid that's a cool kid i mean that's

neat but the moral there is don't overthink it yeah yeah and don't make it in i put in a savings account in local but i mean you don't have to when you when you look down and you go five i mean a 10 year old doing a thousand dollars that's incredible you go and it's easy to go i gotta be responsible with this you know it's like yeah the be responsible with the gift that the kid has that's the most that kid's has. That's the most important thing. That's the most important thing. Love it. Because that kid's going to be a big deal. That's a big deal kid right there.

Should be working here someday. I love it. Running a whole area. This is The Ramsey Show. We'll be right back. Dr. John Deloney, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Annette is with us in Sacramento. Hi, Annette. How are you? I'm great. Thank you.

So my question today is, I'm a teacher and I'm due to retire in four more school years. My husband is already retired, but we've not had to touch his through savings plan or his social security at all. I have a required retirement that I put into through my school district, but about seven years ago, after reading, starting to realize that, you know, we want to have more money when we retire. Well, I didn't realize about annuities. So I invested into a teacher annuity. And then after reading your book a few years ago, realized that was a mistake. And so I've stopped putting into the teacher annuity, but there's about $125,000 into that. And we fully funded a Roth IRA for last year and for this year already. We're completely debt free, including

our rental property. Um, and our house should be paid off. The goal is that it'll be paid off before I retire or I'm not retiring because I don't want to have a house payment afterwards. So I don't know what to do with that teacher annuity. I asked our financial advisor if I should try to roll that into a Roth IRA, but he said that I would be taxed on that full amount. And with what I make in my husband's retirement, we're like at $130,000, $140,000 a year. And he goes, you would be paying a lot in taxes. Yeah, but he didn't offer to pay you. He's right.

I agree with him. But he didn't offer for you to roll it to a variable annuity with him taking care of it? No, he didn't. And I'm not, because this was something that was optional um through my school district i had gotten a settlement and i didn't want to get taxed on it so i was trying to figure out where to put it this was seven years ago but you could roll it to a traditional ira not a roth ira and not have any taxes and then i would be able to control the amount of interest.

Yeah, control what it's invested in, yeah. Okay, and do you know if you're able, if you put into a teacher annuity, do you know if you're able to roll that over? Well, if it was a pre-tax annuity, it's up to the school board. It's up to your particular employer. I don't know what teacher annuity can mean, a whole myriad of different things. So you'll have to find out. But it sounds like your investment advisor didn't want to fool with us.

So get in touch with one of our SmartVestor pros and ask them to tell you in your area in the city of Sacramento, what can you do? And if you are able to roll this, just because it's in an annuity, if you roll it to a Roth, it does become taxable. That piece of information was correct. But if you can roll it to a Roth and it becomes taxable, then I know you can roll it to a traditional and there's no taxes. And that's what I would do. I'd move it to a traditional and put it in good mutual funds and get it away from there if you're able to. But I do not know what the guidelines and regulations are with each individual county across the nation and what their deal with their teacher annuity is.

It tells me something that the financial advisor didn't immediately try to grab that into another product maybe yeah um should have if they're able to but he told her not to do it because of taxes he didn't tell her to do it not do it because she couldn't do it that's fair that's what's bothering me so um i'm thinking that uh yeah get click smart investor pro at at uh ramSolutions.com and get one of our SmartVestors and ask them, and they maybe can do it for you. That's a possibility. So something to check on for sure.

Thank you for calling. Kareem is with us in Toronto. Hi, Kareem. How are you? I'm good. How are you, Mr. Ramsey? Better than I deserve, sir. How can we help?

So I just wanted your opinion on something. So I from toronto i just uh i'm graduating university right now i actually just broke my last exam a few hours ago congratulations what's your degree in uh business good for you did you pass this last exam i hope so i just got one exam back but I didn't do too hard on. So hopefully it's not bad. But yeah, so I'm moving to New York in a few months for a job. And I wanted your opinion on if I should potentially buy an apartment instead of

renting in New York. It would be somewhere in Midtown, around $300,000 or $400,000. And I have a fair amount saved already. And my job specifically doesn't allow me to invest in a lot of stuff that I would normally invest in, so I was thinking of that as an alternative that I could also live in.

So I was hoping to get your opinion on that. So you said a fair amount. What is a fair amount? I have like 50 or 60,000 saved. Okay. What will you be making at your new financial job? Bates would be around 100, and then bonuses variable can be between 20 and 50 for first year. So I'm guessing you're moving into an analyst role,

which is why they're not allowing you to invest in things that you might be actually analyzing. Yeah. Okay. I like, Dave, you can, of course, counter in. I like folks to work at their first job out of college for a year or two before they just plant their roots so deep or get real close to their financial ceiling there,

the $400,000 apartment. Yeah. I'm really good with you getting settled in and all the other changes in your life without also becoming a real estate owner for year one, particularly. After year one, yeah, you know, you start to talk about it. And you can use that year to pile up even more cash, by the way. And there's a possibility, by the way, that Manhattan midtown real estate is going to be cheaper in a year. Yeah, there's the possibility.

Yeah, because the freaking place is a ghost town. Yeah, for now. Yeah, I know. I don't know. I'm a little more bullish on it than most. I know, but, I mean, people are leaving there by droves, and supply-demand curve is going to affect real estate prices. I don't know what they're going to do.

But I don't think they're going to shoot straight up. I'm pretty sure of that. I don't know whether they're going to stay flat or turn down. But, you know, you've just got the, you know, the midtown economy has just been damaged by the continued shutdown, the prolonged shutdown. So, anyway, no, I would not buy the first year. I agree with John and all of those other reasons. I think you move down there, get you an apartment, pile prolonged shutdown. So anyway, no, I would not buy the first year. I agree with John and all of those other reasons. I think you move down there, get you an apartment, pile up cash.

You've obviously got a wonderful job. Congratulations. Making serious bucks straight out of school. Pretty freaking amazing. And you've done a great job saving money so far. Be debt-free, have your emergency fund in place, and save as big a down payment as you can save in the next 12 to 18 months and then talk about buying that's what i would and dave i think again i've got my experience and just my students who graduated but if if he were moving to kansas make a hundred thousand dollars and was going to buy a two hundred

thousand dollar house i would say hey just sit for a second you don't know where you're going to want to live in this new town. You think you want to do here. You think you want to – this is going to be your forever job like every new college graduate does and ends up shifting and changing. I just want someone to get all that stuff settled in. Now, maybe that's not a rule of thumb, but – No, I think it is. It's a time of high transition.

And adding one more thing to the bowl of transition is is as equals stress and aptitude to make a mistake right um so yeah i don't disagree i think you know it's kind of like we talk about a young couple getting married don't buy a house first year same kind of a thing you know it takes a year of being married to know how close your mother-in-law to buy the old joke we use over and over and over and over You know, that kind of stuff. So that's the thing. And so, you know, and that's true. You're in one of the more transitional phases of your entire life. Right.

Another way of saying it, the least stable. Right. And real estate's a freaking anchor. Few people think they know more about how the world works than a new business grad. What are you saying? Maybe a new psychology grad. What are you talking about here? They're dumb, too, but I'm telling you, a 21-year-old business grad is like, I think I've got this figured out.

What I need to do is this. And everyone's saying, hey, just be wise. Slow down. Ah, but I got it. Right. He may have it. I'll be guilty as charged when I graduated. I definitely knew everything about the economy.

Oh, as a captain. Only to discover I know nothing about the economy. This is The Ramsey Show. Thank you. Thanks for joining us, America. This is The Ramsey Show. Dr. John Deloney is my co-host. Open phones at 888-825-5225. Rachel's in Green Bay, Wisconsin. Hi, Rachel.

How are you? Good. How are you guys doing? Better than I deserve. How can I help? So my husband and I recently bought our first home, and we're trying to figure out how much is too much to spend on some updates and purchases for the house.

Updates and, oh, you want to do some renovation after you bought it. Yes. So we're looking to do some new paint, some carpet. We need a few appliances because the sellers are taking some of them with them and just kind of looking at some big price tags and not wanting to spend too much money. Okay. Number one, do you have the cash to do whatever it is we're talking about, no debt? Yes.

Okay. And do you have that above your emergency fund yes and you are debt free except the house uh we actually don't have a mortgage either oh well that's nice so you pay cash for this house yes wow so what's the house what'd you pay for it uh we paid 290 for it. Good for you. How'd you do that? Our parents helped us out with about half, and then we were just the big, big savers

who never liked debt. Okay, cool. So you have a $300,000 house that you paid cash for. How old are you? 24. Good God almighty. You are a freak i love you you're amazing that's so cool so what are you thinking about spending on these renovations um in total probably about 25 000 and you have the 25 000 yes000. Yes, do it. Yes. Yesterday. Do it. You are not, listen, the two of you, the way your brain and your relationship is put together, the chances of you overspending or being impulsive on something is almost zero.

It's almost zero. Okay, so. Okay. I would probably tell you to add to it just because, but I won't. Just to have the enjoyment. Just, yes. Yeah, spend $30,000, okay? Yeah, you guys are

incredible. Very well done. What's your household income? Combined, about $150,000. Wow. What do you all do for a living? I'm an analytics, and my husband's an engineer. So how did you learn that these principles were important?

Where did you learn all this, from your mom and dad or what? Yeah, I remember my mom listening to you in the car when I was in elementary school when she was picking me up from school. It's genetic for you at this point, right? Right, exactly. It's a financial piece, baby. And then met a really great guy who was just right on board right at the start so so that sounds like a joke like a an analytics person engineer walk into a bar right what do

y'all do for fun like you get a bottle of wine and some spreadsheets and you're like this is like like what do y'all do for fun? Like, I'm being serious. Yeah, we were recently married, and, you know, we like to go take trips, but haven't been able to do that too much. But I know we're just kind of homebodies, so. Yeah, good for you. Let me ask you something. What is the thing you're thinking about buying for this house that you really don't want to do it

because you think it's over the top and crazy? We'd like to get some really nice patio set up outside. Yeah, I think you need to build a full-on outdoor kitchen, okay? Absolutely. And let him engineer design it. Here's what I'm doing, okay? There's three things that you can do with money. You can give it, you can live it,

spend it, in other words, and enjoy it, or you can invest it. You have no trouble saving and investing. But it is a good exercise for you to also learn to enjoy money. I very seldom have to have that conversation on this show. Most of the time I'm like, quit spending like you're in Congress. But you need to loosen up and enjoy it because you're very disciplined,

you're very intentional. I'm so thankful your mama made you listen when you were in elementary school, so your financial peace baby, I'm glad that we're part of your story of incredible success. But part of your success is generosity. And part of your success is enjoying the money. As well as continuing to be very careful, very wise, and very intentional. And it's hard to get off the rails with a paid-for house at 24. Paid for $300,000.

Yeah, making $100,500. Making $150,000. And those career fields are both going up. A highly transferable field. And they're going up from there. I mean, in two years, it'll be at $200,000, easy, between the two of them. So you guys are going to be multimillionaires, and your outdoor kitchen isn't going to mess that up.

It's going to help your homebody-ness to have a cool outdoor kitchen, right? I love this. Wow, what a cool story. Zev's in San Francisco. Hi, Zev. Hi, Dave. Long-time listener, first-time caller. Really, it's an honor to speak with you. You too, sir. Thank you. The reason I'm calling was because, unfortunately, my father died about five months ago, leaving me a house in San Francisco. Yeah. I'm sorry.

Left me a house in San Francisco. Thank you. Thank you. I appreciate that. But the silver lining, I guess, as it were, is that he did leave me a house in San Francisco and a pretty sizable estate. He left me a house worth about $2 million and an estate worth about $4 million on top of that. How old are you? I'm 32.

Okay. Are you married? I'm not married. Okay. Nope. All right. Go ahead. And I came into this, I was already worth about $300,000 when this all happened.

My annual income is around the $40,000 mark. I actually am a law school dropout. I dropped out of law school about five years ago to caretake for my father and never went back. So that's kind of the situation from a career standpoint. I've been teaching in the meantime. What's your question? My question is, the house is falling apart, but I'm very sentimentally attached to it, but I hate San Francisco and California and I'm facing like a lot of repair costs. And, but I do have a very low tax rates because of this thing called prop 13 in California. I pay about a thousand dollars a year. Um, my question is, do I take money from

this estate and just dump it into the house and fix it up? Or do I try to get over the sentimental piece of this and look at it more from a financial perspective and just say, you know what, this house is a money pit and sell it and go live out of state, uh state where I can live the kind of life that I want for a much lower cost of living? That's basically my question. I like the emotional simplicity of selling it now and moving. Okay. The downside of that is that that's going to hurt because of the freshness of the story.

If your dad had passed two years ago, it would feel you will feel more released than you do with him passing five months ago. Does that make sense? Yes. Yeah, your sentimental value for that house is going to go down every day that you own it from today forward. And so it's going to be emotionally easier to let it go a year from today than it is today. But aside from your grieving and your attachment to the house and your memories and all of those things, you also have this other side that sees a fresh start, a clean whiteboard, and there's a lot of health in you moving on. John, from a grief perspective, if he sells it now and truncates some

of that those feelings does that is that a problem no because every day you stay there is going to be a penalty paid against the memory of your father and you already have part of your heart as much as you love your dad that says i gave up this dream I gave up this world to love and honor and take care of him. And continuing that way of living is going to end up compressing this memory of your dad. And so I'm going to tell you to sell the house. Go be free. Selling this house is in your future anyway. Sell your house.

Go start over clean. That's the best way to honor your father moving forward. And rehabbing that house is going to be more emotional than sitting in it for six months.'re going to sell it anyway so i just i just sell it and move on yeah i really would and that's has nothing to do with financial that's just being free just opening the next chapter in the book of your life this is Kelly, associate producer for The Ramsey Show. Did you know that over 16 million people listen to The Ramsey Show every week? And a lot of those people listen on one of our 600 plus radio stations across the country. To find a station near you, head to DaveRamsey.com slash show.