The Ramsey Show - App - What's the Best Way To Get Into Real Estate Investing? (Hour 2)

Episode Date: August 18, 2023

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studio, this is The Ramsey Show. It's where we help you win in your life, specifically your money, your work, and your relationships. I'm Ken Coleman with the extreme privilege to be sitting alongside the one, the only, the fabulous Rachel Cruz, my colleague, friend of years.

Thank you, Ken. Good to see you, Rachel. Kenneth Coleman. She's the only person in the building that calls me Kenneth. Kenneth. That I will allow, by the way. Just feels right. From you, it does.

Great to be with you here on a Friday. Good to be with you as well. We already had a fantastic first hour. Here we go, here we go, here we go. Amarillo, Texas. Alan is waiting for us there. Alan, how can we help? Hey, guys.

It's a pleasure to talk to you. You bet. So I hear all the time, don't finance a rental property. So I have been diligently saving and I'm about ready to, I think, pull the trigger on getting a rental. The problem is I would like to hear you guys' opinion on how to like structure, setting out myself for success when it comes to, you know, doing this as a business. How much money have you got saved?

Um, about 170,000. And what are you looking at buying? That's, that's why I'm calling actually. All right. So I was going to see sort of deal,'all recommend something like multifamily or single family? Something that, you know, multifamilies are cheaper but harder to sell from what I have noticed online.

You know, how do you recommend taking next steps as opposed to, you know, for the structuring of the deal as opposed to just the financing side? Yeah, I mean, I think it's a great question. And real estate is something that, you know, we talk about a lot on this show is just another avenue to building wealth. And I know the, you know, one of the best ways that you're going to just make money in general, Alan, because we look at real estate specifically, I should say we, within the Ramsey family, the way that I've seen it always kind of, the viewpoint on it is that it is a long-term play,

that you're not going to be getting rich off of the rentals that you're getting every month. It really is a, it's an equity play. It's even a play to say, hey, we're going to keep this for decades and even pass it on you know maybe to my kids you know so like there's it's a long-term play is that what you're kind of is that your mindset or is this is it more hey i want to get into something flip it maybe make some money on it but i'm gonna do it with cash because there's two ways to do it not

you know neither one's right or wrong i'm just curious what your mindset is. Well, my mindset is I want to buy something that I can get into and I plan on holding for a long time. Now, whether that's turnkey, whether for somebody to move in or I need to fix it up because I personally like doing that kind of work myself. Yeah. That would be the play. But things like, should I set up an LLC for a property? Should I just do this under my name? Like, what do you guys recommend on that front? Well, before we get into that piece, do you have any debt? I do not.

Okay. No. Do you have three to six months? I've been a lengthy listener for 20 years. What baby step are you on? I got through college without death. I guess I'd be four, five, and six. Good.

I'm kind of a mix, I guess. Is your primary home paid off, Alan? Yeah. I bought it as a really cheap house and fixed it myself. So what does $170 get you in Amarillo, assuming that you're paying cash, right? You're starting to get into a market that is good 3-2 property, not in the best neighborhoods, but some that are decent, respectable, you could get a duplex in a fine area. They're going to be smaller and usually need work. You're starting to really

break into the market at that point. Okay. Now, here's what I'm curious about. Where do we go? What's the next level? When does it get you into a much better investment, meaning it's not a sketchy area, it's not entry level? Is it $250? Is it $275? Yeah, I'd say it's around $250. All right, so you're not that far away from that. How much do you make a year? My wife and I make about $130 combined. Okay.

Yeah, so I mean, I can tell you, Alan. Yeah. So, like the LLC, I think is a smart play, especially if you're going to have multiple properties in the next few years. If you guys, you know, look at it and say, hey, we want this to become part of our wealth building strategy, then at that point, you know, that's, yeah, I think that's a great option. Very easy to do. Low lift. But I would say the two best things to remember, Alan, is when you're buying property, you make the most money when you buy. Meaning if there's any way, which I know the market right now is just crazy. But sometimes with those types of properties that, you know, I mean, if there is foreclosure, short sale,

any way that you can get a deal, which I know is very hard right now in the market that we're in. But that's going to be your most, that's going to fast forward your jumpstart in this equity process to get as much equity as you can at the buy. And I know Dave's rule of thumb with investment was always, I think it's around like trying to get it at 70% of value. And you having cash is going to be a really, that you're going to, that's a great negotiating tactic that you're going to have to be able just to pay for it that you're not to go through financing and everything and that's going to look really appealing so again any any possible way you can get the deal and then you know I mean my husband and I when we our very first one we got at as a short sale back 10 years ago and it was a little yeah uh condo and it was nasty and we went in and got new light fixtures cleaned it up we rented it for a few years and then we ended up selling it

to help cash flow the build of our primary home um and what it went up you know in just a few years was was great it was awesome and so we we sold so just it's kind of that moving at the speed of cash but the best the best thing that you can do is get a deal on the front end, Alan. And then, yeah, if you can see, hey, I can get a better deal just to make it as less of a headache. But also know, Alan, that you're starting a side business in a sense. I mean, the myth that real estate is just passive income is anything but. And so you do wanna make sure

that it's gonna be worth your time and effort of what the average rent's gonna bring in versus how much hassle is gonna go in. I mean, you wanna really kind of play out these scenarios because it's real life. They're going to be calling you at 11 o'clock on a Friday night because something broke or whatever it is, right? So taking all of that into consideration, I just want you to go in with not a Pollyanna view, which I feel like some people do sometimes when it comes to real estate. Yeah. And I think he's very disciplined. So Alan, I'm not hanging this on you, but I don't want you to get so excited to get there. You've saved $170,000 and I know you can

get something. I'd rather you save a little bit more and get something that's a much better bet. And to look at your ROI, what are you going to get for rent and all of that? So there's that math play as well to look at, Alan. But I think it's great. And I think real estate is another great avenue. Ten seconds or less. Of building wealth. Five seconds. Duplex, yes or no?

You like duplexes? Yeah, it's fine. For a starter rental. There it is. I'm not mad at it. There it is. She's not mad at it. I don't know.

I got judgment problems. I need to get right with duplexes. I don't know what my problem is. I'll work on it on the commercial break. We'll be right back. This is The Ramsey Show. Cruz, and we are here for you this hour, America. What are your money questions? Maybe get some work-related questions that could have some money ties to it, relationship issues around money, any of those questions. We're here for you, 888-825-5225. Let's go to St. Louis, Missouri. Timothy is there. Timothy, how can we help? How's it going?

Good. How are you, sir? Not too bad. My question was career related. Right now I make $50,000 a year and my wife is pregnant. She's in March. Congratulations. Oh, thank you. We've been married since last March, so it was a pretty quick turnaround. Uh-oh. First baby on the way. Some changes happening in your life, Timothy. Oh, yeah.

So my current job gives me a three-month paid paternity leave. However, I know the vice president of another company, and it's a totally different type of company than what I'm doing right now but it has the potential to pay ten to fifteen thousand dollars more a year than when I make now but there's no eternity leave I would just have to take my vacation days as my paternity leave so I kind of, my wife and I are kind of debating the pros and cons. We're on baby step number two. Let me ask, if you were to take this new job and you're going to make 10 to 15 more, is that right out of the gate? Is that down the line? I think if I play my cards right, I would be able to make 10,000 more out of the gate.

It's a sales job, and that would just be my salary and then commission on top of that. But my commission rate wouldn't be as good as it could be right off the bat. Sure, of course. But what's the long-term play? Let's say that they had all of the uh paternity leave that your current job has would you be jumping at this new opportunity for the long term right yeah probably i mean my current boss has kind of outlined a career path as well it would just take probably a couple years to get to like 70 000 a year. If you took the new job and you used vacation, how much paternity time would you take off?

I would probably take a month off. I think I could get that. How are you going to get a month's vacation in a brand new job they would just um i think i i mean i may only be able to get two weeks but i think i could all right just how much just because i have an in with the vice president and i know a few people who work there and they they seem really interested so what if you came home and told your wife hey uh i'm only going to take a week off. How would she handle that? Probably not well. The three months is nice.

The three months is nice. And I've been door dashing quite a bit. Timothy, how much debt do you guys have left? So I just read Total Money Makeover last month and Complete Paradigm Shift. We paid off $1,500 since last month. Wow. Great job. Yeah. Baby Step One was already pretty much taken care of just for my savings. So we owe $2,000 left on credit cards. I plan on having that taken care of pretty quickly. We do have a car, $20,000 on the car. I have $23,000 in student loans, and then the home is $121,000. Okay. Okay, so what I would suggest, Timothy, I would take the new job because you're going to be getting a massive pay increase, which is phenomenal.

I mean, 10,000 more off the bat is going to help. With better long-term, too. Yep, better long-term. We teach people that when you are actually, when you're expecting a baby or a big life change coming up, and this would be for somebody that's about to move for a job or, know there's a big shift happening a medical some of the medicals coming up and that you can foresee we will say pause the baby steps so i actually still want you working the same intensity that you're working but i want you guys just piling cash stay current on all of your debt but i want you to pile up cash until after march when your wife comes home, baby comes home, everyone is good.

You're going to press play. And I would hope by that time, you're going to be able to pay off that you'll pay off the credit card immediately. Hopefully majority of the car loan you'll pay off immediately. And yeah, you'll start working back down the debt snowball. But Timothy, I mean, I'll be honest. I think, you know, and as a mom with three, you guys are not in a financial situation. You haven't set yourselves up in a financial situation where you can just, you know, take off a significant time of work. I think spending

some time home is a gift, right? Especially as a new parent parent there's a lot to do so maybe yeah a week week and a half at that point but timothy i would i would i would still be plugging into that sales job and be making these calls um because i'm telling you when you are able to get this debt paid off as quickly as possible you're actually gonna you're gonna be a much you're gonna have more margin i think yeah to be able to spend time with family, take off when you want. I mean, like,

and I'm being very compassionate towards your wife, because I know that feeling, but I mean, again, it's a big debate, this whole thing. And I think, and I know you are Ken,

and I'm probably a little bit more on the moderate side of that debate than you are. So we can have that because here's the deal. This is ridiculous. No, I think, And I know you are, Ken, and I'm probably a little bit more on the moderate side of that debate than you are. So we can have that. Because here's the deal. This is ridiculous. No, I think there is something about the family unit that is really important in having- Wait a second. I got three kids. I love my family.

I know you do. I didn't take three days off when my kids were born. You didn't take three days? Maybe three. Maybe. Oh. It's called, listen, he doesn't have were born. You didn't take three days? Maybe three, maybe. It's called, listen, he doesn't have the margin. He doesn't. That's what I'm saying. Timothy doesn't.

Did I mention that it's paid at my current work? It's not just time off. It is paid. I know, but we've told you to take the new gig. I know. I agree with Rachel. But I will tell you this. I'm going to shock Rachel right now.

If your wife thinks that I'm a raving lunatic with my position, which is possible, then you've got to choose marriage and your wife, and maybe you stay in the current job where you get your paid three months, happy wife, happy life. I'm not in any way capitulating here. I'm just saying this may be a real thing here, and I don't want to sound like I have some fun with my position on this. I'll get back to that in a moment. But I want to be practical to say to my, if you're my friend, and I want you to be my friend, Timothy, and we're hanging out on my back porch, I'm going, where's your wife at on this? And you can always get another sales job.

That's right. That's right. Make the decision together. And maybe talk to that VP. If he's your friend i go hey i want this job with you are you willing to wait until i've taken my three months and then that's another option i know so i'm trying to be fair but but i will tell you rachel's right she's so much nicer than me but she's absolutely right that you shouldn't be taking a month off right now you need to be working man to get this debt and everything under control it i'm i'm having fun with the fact that this this is a paternity thing that didn't exist when my kids were born and i just think dudes go out freaking kill something drag back take the feedings at night help your wife serve your

wife like i did i mean i took 2 am. feedings while starting a radio show. Okay, I did it. I'm putting my money where my mouth is. And everybody who knows me at Ramsey knows I'm a family guy. I go home, but I think it's ridiculous that we would choose to stay home for months at a time over furthering our career, furthering our ability to provide for the very family that you want to be with. And I'm not saying that towards my friend Timothy. I'm saying in general, I think it's a bit much. The wife, a working mom, yeah.

Yeah. I'm for more time. Sure. Totally. I know. I know. So I don't want to put you in a – you know what I'm saying? Oh, totally, totally.

Working women deserve more benefits. But dudes, you're the dad. It's going to be okay. Right. I hear you. I just know when you look back, though, and you look back hundreds of years, though, no, just the way the family was run. It was an agricultural type setting.

The family worked together. They did everything together. There's something about the family unit that is so separate now. And while the mom was nursing the baby, dad was out picking the pumpkins. Well, mom's got her strapped on her back and she's still working back then. I mean. Yeah, she had the baby on her back. I know.

But I'm just saying that family unit is so crucial. Oh, my God. Jeez. It's nice to have the help. Toughen up, America. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman.

I'm joined by my colleague, Rachel Cruz. The phone number to jump in is 888-825-5225. That's 888-825-5225. All right, let's go to Carol, who's joining us in what sounds like a lovely place. Mountain Home, Arkansas. That sounds like a great place to be. Carol, you're on The Ramsey Show. Hi, thanks for taking my call.

You bet. So what do you do when life keeps getting in the way of you getting to baby step one? Oh, no. Tell us what's been happening. What kind of life, Carol? Well, my 14-year-old car with 300,000 miles up and gave up the ghost in February. Yeah. That's hysterical.

Yeah. Traitorous vehicle anyway i i spent all my money on getting uh just a car to get me around and got that done got my credit card paid off in june now the car i'm going to have eighteen hundred dollars worth of work done on it next week, and I have $500 in my emergency fund. Do I take my $500 and put it towards the $1,800 work and put $1,300 on the dreaded credit card? Or do I continue to save up until I get to $1,000, make the minimum payment on the credit card,

and start paying it off that way. I don't know what to do. Yeah. How much do you make a year, Carol? $15,300. I'm retired on Social Security. Okay. How old are you?

65. 65, 55, what did you say? 65. 65. Okay okay 65 years old um and you have no uh no money to your name no retirement of course not it was always going to happen next year yeah yeah i hear that next year i yeah when i finally woke up i was was 55, and, you know, what's the point? Well, Carol, before we keep going on the numbers here, just real quick, are you able to work? No. I've got congestive heart failure. I broke a crushed vertebrae in my back, so I can stand up about 20 minutes at a time.

Oh, my gosh. Yeah. No, I'm an old lady. No, can I tell you something? You don't sound 65. No, you don't. And for all the stuff going on with you, you've got some spunk, and I think that needs to be called out.

You don't sound like you're, you know, wasting away. I never smoked. That's why I can sound like this. That's fantastic. No cigs for Carol, rachel no never have all right good for you um okay so carol i mean i'm going to be honest the numbers are tough when you're just living off social security to be able to kind of gain some traction here well let me but it's 1 275 a month i did took your advice and i mean i have the strictest i maybe put away if i don't buy a pop at mcdonald's once a month i can probably put by

three hundred and fifty dollars into an emergency fund i don't have a car. I don't have a car payment and I don't have a house payment. Okay. And I have about $1,500 in debt. $1,500 and that's on what? I have two medical bills and a medical bill in collections. Okay. And I pay $100 a month on those three. Okay.

So we got a car issue, we got $1,500 in debt and that month on those three. Okay. So we got a car issue. We got $1,500 in debt and that's it? Yeah. Okay. Here's what I would envision, Carol. This may be a little bit of a challenge for you. But the truth is with you just collecting Social Security and living off of that, there's not going to be big swings in your budget

because the income side is just really not there. So I'm wondering, Carol, for one year, for one year, is there something you can do during the day to make money from home? I don't know if that's a virtual assistant. I don't know. There's many different options,

but I just wonder, Carol. Maybe a customer service job? Yep. Are you on the phone? Again, and I know you're 65, but I want you to be able to be bringing in more than $15,000 a year. Well, I would have to buy a computer or a laptop.

I don't have either one uh do you have you have your what are you calling us on a cell phone or homeland a cell phone okay well i think you can find an old used macbook a facebook marketplace or something you know finding something so i think having don't assume that carol a level of technology you may be surprised i don't want her to assume that she's going to have to buy a computer they may depending on if you get a customer service role or something like that they may provide something yeah just be open-minded is what we're saying here but you've got to bring in some income yeah i mean that's kind of the bottom line carol is i think you know it would be amazing what you could do working even 30 hours a week, making $20, $22 an hour, how significantly these numbers start to drop.

Because the other great thing is $1,500 and a car issue can be fixed rather quickly by just bringing in some income. And so I think that would be the biggest thing for you. But as far as your car, how much could you sell it for? Could I sell it for? Yeah, how much is it worth? I don't know. I just got it in February. It's a 99 Jeep Grand Cherokee with 80,000 miles.

It had 80,000 miles on it when I bought it. Okay. Yeah, I would be curious. And obviously it's broken, so you'd have to like factor in the medical but I or I'm sorry the the repairs but I wonder if you would be able to to somehow yeah if it's worth you know how much did you how much did you buy it for back in 3500 3500 okay yeah I mean I'm wondering Carol honestly if you could so I mean I just wonder putting 1800 into

a 3500 car feels like you're just kind of spinning your wheels at that point yeah um so i mean i you could look to see you know yeah is there is there another option out there could you could you sell it i mean i i i i can't in faith, tell you to go and fix your car on a credit card. You know, we're never going to tell you to go into debt. No, no, I know. And that's, I guess the, the main question is, do I continue to take money out of my emergency fund, empty my, my emergency fund when something comes up? Or do I put everything on a credit card till I get my thousand and then start whittling away the credit card? No, no, no. You're taking it out of your emergency fund. You're cash flowing as much as possible.

That's why it's there in case of an emergency. So instead of continuing to go deeper in credit card debt, use the cash that's there. And I wonder too, if there's something, Carol, even with the current card to go get a second opinion. And I wonder if you can, you know, find something that it's not going to be a long-term fix but something to at least get you to and from you know the store or what you need around town uh for 500 bucks and then hopefully you're possibly getting a getting a job here in the next month and you're gonna be bringing in some more to to buff up that emergency fund back at a thousand dollars but staying current you know on that medical on those medical bills is key. But I would cut up the credit card.

I wouldn't even let that be an option. And then when that's not even an option, that's when other options start to come into play where you have to realize, okay, if I can't charge it on a credit card, what do I do? I'm going to have to get a second opinion. I'm going to have to look to see, is there a cheaper way to fix this car? Carol, I just want to know what kind of community you have in Mountain Home, Arkansas. Are you a part of a church community or do you have friends and people around you? Because you're an awesome lady, I can just tell.

And this is what community is for. Someone might have a car that they're not using, an extra car that you could use for a while. I mean, I want you to have the courage to say, I need help. And I know that's not easy. What's your situation there as it relates to community? Actually, I'm pretty much a loner, and I don't have any friends here. My best friend and my only friend is in Tampa, Florida. And I just pretty much hang by myself.

I don't go to church. I don't have any community groups. I just retired here. I really think the time is now for you to get some community and get out and meet some people. Quality of life is big. And look for good people that will help you right now. You can't do this on your own, and you've got some tough situations here. So I really want to challenge you in that area.

But Rachel gave you great advice. Please don't go into more debt. That's only going to make the situation worse. So hang on the line. I want to get you a free session with one of our financial coaches. That's our gift to you. They can walk through the details with you. Hang on the line. I want to get you a free session with one of our financial coaches. That's our gift to you. They can walk through the details with you. Hang on the line.

This is The Ramsey Show. Talking with you about your life, specifically your money, your work, and your relationships. This is The Ramsey Show. The phone number to jump in on that conversation is 888-825-5225. I'm Ken Coleman, joined by the incomparable, fabulously looking fall today. Got our fall style rocking today, if you're watching the Ramsey Show. The audience is loving it. You're getting comments. You're going with the sleeveless sweater. Once the kids go back to school, it's like fall. You just go ahead and break out the fall clothes. Yeah, summer's over.

I'm with you. We're here in fall. That's what it feels like. I can't get to sweater weather fast enough. That's a personal conviction. Sweater weather. Sweater weather. Hey, if you're enjoying the show, we would love for you to help us by sharing the show.

However you're watching, wherever you're watching, subscribing and sharing helps us get this message of financial peace, taking control of your life out to a lot of people. And this is fun, Rachel. Our fearless leader, James Childs, saw us in the hallway here during our last break, and this is really fun. Just three of the many, many reviews we get that we're asking you to do for us. We've got one from New Zealand. I listen to the show every single day while farming here in New Zealand. This is exciting.

So good. I got to call my mom and tell her that I'm a huge deal. Finally, I've made it. I am now global. You know, I'm not. Who's that guy? Who's the bald global? He calls himself the global.

Who is that? Pitbull. I'm no Pitbull global superstar but uh i am i am on in new zealand right now somewhere a guy is herding sheep and listening to my voice is very exciting and then we got one from the uk which is my personal favorite if i was going to to leave america you go to i would i would become brit chap. I do say old chap. Give me your best British. Yeah, yeah, yeah. I love the Brits.

They're very nice. I love riding the tube. You're such a local. I am. I rode the tube everywhere. And then we've got one from Paris. And so that's nice, too. So we are all around the world.

That's what's so fun about this YouTube and podcast stuff. It's crazy. The world is truly flat so choose paris london which one uh i've never been to paris oh you haven't no i'm very surprised by this i know nope maybe winston's saving it for a big anniversary yeah how many years you guys at uh 14 oh maybe maybe the old 15 maybe the old 15 maybe the 25 we'll see okay i think you would like Paris. You know why? Everybody sits on the sidewalk at these cafes with the chairs facing the street.

Which is fantastic. It's a very European thing. It's a people-watching extravaganza. Wonderful. I love it. Wonderful. Because I'm a people-watcher. Oh, we...

It's fun for me, you know. A lot of fun people-watching in Paris. So there you go. You got to save up your money. Got to go debt-free, folks, to remember that. So, all right, let's get to the phones. Boise, Idaho is where Eric joins us. Eric, how can we help?

Rachel, Ken, happy Friday to you. Yes, sir, it is. How's your Friday? It's doing wonderful. Good. So late last year I moved to Baby Step 6, and I've been paying extra on my mortgage debt. And I've been able to knock five years off the back end so far, got about 225 to go.

I think it's pretty aggressive, but possible I can pay it off in the next five years. But it's a new stage for me in the financial journey. So I was hoping you could help me learn how to frame my thinking about other big expenses while trying to pay off the house. Now, fortunately, I don't have any immediate needs, but I'd say there's a pretty high probability my car is going to die before the mortgage is gone. And my thinking is like, you know, if I set aside money for a car, the mortgage hangs around longer, but if I don't do that, then I'm going to

have to dip into my emergency fund. Wait, what did you say is going to... Wait, sorry. His car's going to die. Your car. Oh my gosh. Oh dear. I don't even want to know what you thought he said. I thought it was a... I thought you said, like, it was a... Someone in your family. I don't even want to know what you thought he said. I thought you said someone in your family. I don't even want to say it because it's just...

Don't say it. When Ken said, and then Ken said, oh, no. And I was like... Gee, Ken, you're a little insensitive. Yeah. No, he's talking about his car. This is going to be a happy call. Okay.

What's the car? I'm so sorry. We've got to give Rachel a chance to breathe. What's the car? Oh, it's a 2011. It's an old chrysler 200 oh yeah i don't know it's got so many miles on it the odometer stopped like six months ago dude would you have any money to buy a car right now buy a new car eric i do um and that's what i'm trying to figure out in balancing, right? Because to me, like I have an emergency fund. Right.

That's all in the steps. Like baby steps six, I'm throwing everything I can at the house, which has been really fun to see like all the time coming off the back end of it. But I also, I know I'm probably going to need a car, and I'll get something conservative like, you know, for my income. But I guess it doesn't seem like buying a car is a reason to go into your emergency fund. It's not. It's not.

It's not. It's not. Like, your car's going to die. You know that the day you buy it. You know what I mean? Do you have no cash outside of your emergency fund? Well, I mean, like, retirement accounts. No, I say cash.

So if you look at your monthly budget, do you have any kind of margin over the next two or three months where you could change your budget up, cash flow, buying another car? Because you said it's going to be conservative anyway. So what's that number? You're going to buy $10,000 on the car, $12,000? What is it? So I've looked, and I think it's under $20,000.

Okay. All right. So do you have any other cash outside of your emergency fund that you could put towards that? If you just paid the mortgage of what's owed, not extra on it, just the mortgage. Oh, yeah. Oh, yeah. I've been throwing right just the mortgage oh yeah oh yeah i've been throwing thousands at the mortgage every month so what's the margin that you could save up each month towards a new car 2,500 bucks all right so five six months from now you know you're getting closer

and closer to that what 12 15,000 how much did you sell yours for, you think? Not much. The odometer doesn't even work. Yeah, that's fair. Okay, that's fair. That sounds a little sketchy. Who's going to buy that car? That's fair. Actually, I'd like to see the Facebook listing for that one. I don't know how many miles it has on it.

Yeah, and I guess it's a mental thing for me. I know if I set that money aside, because it's a mental thing for me i know like it's just if i set that money aside because it's not an imminent need like i want to be responsible and be prepared when the time does come that the car is no longer functional and i've put enough money in it to make it last this long like i'm at that point where no more money makes sense you know it's just the blue so so eric the way we look at baby steps one through three is that you are intense. This is like the game on scorched earth. Like we're just we're doing everything.

Any extra penny we can get in the budget, it's going to pay off debt. It's going to an emergency fund. And that's really where we're focused. And then once you're on baby steps four through seven, which is where you are four through six, then at that point it's intentional, which means you can kind of step off the gas a little bit, breathe, have some margin in your budget to enjoy a vacation, save up for a new car, all of it. So again, yeah, saving up to buy a new car

will, yeah, delay you months on paying off the house. But again, we're not trying to be intense at the house it's just anything extra that we have we're going to start putting towards that so i understand your excitement but i do want to give you permission to enjoy your life like you can you can pause and save up do you are do you have a family eric i've never been blessed with children but i have the world's greatest wife. Oh, wonderful. What does she say about all this? What's her take?

Well, I think we're on board. We have these conversations together. Yeah. And this is a great place to be for us financially compared to five, ten years ago. Sure. But it's just new, so it's kind of like, well, we're not sure. Eric, Eric, I got you. While Rachel was giving you fabulous advice,

I was researching used cars for sale under $20,000 in Boise, Idaho. You ready? I got a 2009 Honda Accord EXL, 127,000 miles, $9,800. All right, you don't like that? It's white? Yeah, okay, all right, I'll get you. How about a gunmetal color? 2016 Nissan Altima, 79,000 miles, 13,500.

Got a 2014 Mazda, 116,000 miles, 12,900. I'm telling you, I'm all over it, Eric. Dude, you got the money. I like white and metal gray. It is okay. So I basically need to stop a little bit of my insanity. Eric, you're not insane. You're disciplined,

but it's time to buy a car. Yes. Slow down a little bit. Get yourself a good car. Go on a nice trip with your wife. It's okay. Enjoy some of this life while you're still intentional about paying off the house. We love you, Eric. You're going to be okay, buddy. Good job, Eric.

Doing great. Get you a car. Rachel Cruz, good hour. Thank you, America. This is The Ramsey Show. Hey, it's Rachel Cruz. If you like what you heard in this episode and want to know more about getting started on the Ramsey baby steps, go to RamseySolutions.com and click the Get Started button. We'll help you figure out the best next step for you based on your specific situation. That's RamseySolutions.com and click Get Started.