The Ramsey Show - App - What’s the Fastest Way I Pay Off My Debt? (Hour 1)

Episode Date: March 18, 2024

Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where we help you win in your life. We want you to win with your money. We want you to win in your work. We want you to win in your relationships. And so we take your questions. I'm Ken Coleman. George Campbell joins me this hour. The phone number to jump in is 8. And so we take your questions. I'm Ken Coleman. George Campbell joins me this hour.

The phone number to jump in is 888-825-5225. That's 888-825-5225. George and I always have fun together. There's a, I don't know what you call this, the comment, Hinterlands, or they call us the root beer float. Yeah. And you have self-designated as the root beer and so that leaves the vanilla ice cream for me we'll see how it goes today but

we do enjoy being with you we enjoy having fun while giving you advice so you're ready to go i'm excited all right jonathan starts us off in pensacola florida jonathan how can we help hey gentlemen thanks for having me on you bet what. What's going on? I had a quick question. I'm trying to consolidate my snowball for paying off my debt. And I wanted to know how to properly break it up. So I have a student loan, a credit card loan, and then I have a medical debt. But the medical debt is going to the same collection group. It's just they have it in two different accounts. And I wanted to know on my snowball,

do I separate that debt into two different accounts? Because one is $3,000, one's a little over $10,000. And obviously the $3,000 would be at the bottom. Like it would be the first one I'm trying to pay off. Yes. And they have different payments? They're to the same people. They're two different accounts. Okay. With different payments. So one has a $200 payment, one has a $500 payment? Yeah, basically. Okay. Then I would keep them separate because the key with the debt snowball

is that you keep them separate on purpose. You said the word consolidate, which is meaning to bring together. I want you to keep them separate so that when you free up a payment, you roll that next payment into the next debt and you feel the momentum faster. That's the psychological win of the debt snowball. So if you just laid out the balances, smallest to largest, regardless of the payment, which one would come first? What's the smallest balance? The $3,000 one.

Perfect. Followed by one of the credit cards, I assume? Are these multiple cards? No, it's just one. It's a little over $6,000. Okay. Followed by your $10,000 medical, followed by a student loan? Yes.

Nailed it. Okay, so that's the order you want to attack these. Make minimum payments on all of the debts except for that smallest medical debt and throw as much as you can extra to that debt until it's knocked out. How quickly can you knock out that first debt? Oof. Man, I mean, I could have it done by the end of the year for sure. End of the year?

$3,000 is going to take you all year long? What are you making? Maybe not. Annually, I bring in a little over $48,000 a year after taxes. Okay. What are you doing for work? I'm a pastor. All right. Well, can you do things on the side, like officiate weddings or funerals and get some honorariums for that? I do some things on the side already. There's another. What I bring from pastoring is a little over $38,000. There's another $5,000 I do in cleaning work that I do.

Okay. And I do hospitality events as well. Right. That brings in a little bit. All those side hustles are going to help you create more margin. That's what you need right now. Because if you don't have an extra 500 bucks or a thousand bucks to throw at this debt, then something is wrong with your expenses and your income. Right. So that's your next goal is to free up as much as you can to throw at those debts.

And we'll help you out. I'm going to give you one year of every dollar premium so that you can lay out your debt snowball, track every expense, track the transaction, connect your bank account, and feel the momentum of this snowball. Oh, thanks. I appreciate it. Thank you. Absolutely. Thanks for calling in. Yeah, there you go. You know, you were starting to get a little agitated there, but you pulled it back. I thought maybe you're going to challenge the pastor with some type of parable, maybe, you know, a little biblical challenge. Oh, I should have done that.

Because I think he can get there. But he can out-pastor me. He knows a lot more verses than I do off the top of his head. I know. I thought you were going there. You didn't. But that's okay. It's risky.

It's the first call. We're getting, we're stretching still. That's true. You know, we're only one call in. You don't want to break out Proverbs 22, 7 too early. No, you don't. All right, let's go to Palmer next in Raleigh, North Carolina. Palmer, how can we help?

Hey, my question is basically, should my wife and I take money out of our retirement account to pay off our house? Are you of age, good sir? Yeah, I'm 62 and my wife is 61. Okay, and what's in the nest egg? We've got about 650 in the nest egg and there's about 82 left on the house. Are you working now?

Yes. Yeah. We bring in probably about $130,000 between the two of us a year. And how long would it take you to pay off the house from today to what would be the payoff if you just kept paying it or got aggressive towards it? What's the quickest you could pay it off, the 82? Well, the normal payments right now would be another 10 years. Yeah, but that's not. But if you put extra, because I'm guessing you guys have some extra margin.

To be honest with you i have no idea i don't i we i think your next homework assignment is to make a budget with your wife and go how much money do we have if we follow this plan to put towards the mortgage principle on top of our normal payment yeah could you like let's just throw some numbers out just for the heck of it, not holding you to it. Okay. Could you throw $1,500, excuse me, could you throw $1,500 a month towards that? Extra. Rob, that might stretch it a little bit. Yeah, we probably could. And what's your normal mortgage payment? $970. So think about that. If you could double or triple that payment, it's going to fly. It's not going to take 10 years.

I'm trying to get him to the two to three year. Yeah, if you can pay this off in two to three years while you're still working, I would rather you do that than rob the nest egg too soon. Because $650 is a wonderful start, but that will deplete it by almost $100,000. And what's your house worth? Probably about $250,000. Yeah. And do you guys see yourself staying there long-term? Well, we'll see.

We'll see what God has for us in the future. Exactly. We're not too sure. So the reason I'm asking that is based on your responses to that, we don't know that this is your long-term play. I hate to say only. I know $82,000 is real money, but you make good money. And I think I would rather leave that money in retirement and let that keep building. I would not pull a big chunk out of it.

I'd let that keep building, pay off the house. You might end up selling it down the road anyway. I just would leave that retirement account completely alone. George, you agree? Yeah. I mean, if you could throw $2,500 at this mortgage, it's gone in under three years while you're still working. Okay. Without robbing the nest egg, because I want this nest egg to continue growing for you, and history shows us if you just leave it alone, it will double about every seven years. Right. And so I want you guys to have a great retirement instead of just scrimping by. I agree. If you had 5 million in there, I'd say go for it. But it's just not enough. The juice may not be

worth the squeeze, as my friend Ken would say. I love it, George. I love when you borrow some of my phrases that aren't really mine. I try to give you credit. I'll take it. I'll take it as much as I can get. Juice-related quotes. That's your sweet spot. Thank you. Thank you very much. All right. I'll tell you what. We've got to step away for just a couple of minutes, but we're not going anywhere and you shouldn't either. He's George Campbell. I'm Ken Coleman, and this is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Ken Coleman George Campbell joins me the phone number for you because it is your show we're here to talk with you about your life that phone number is 888-825-5225 888-825-5225 so I'm looking at my hands here we've got a new event

we love Ramsey's Investing Essentials. Are you a part of that? I am. You are? I thought you were. I don't see your name on here. Well, you know, Dave gets all the love these days. Well, yeah. So from what I understand, this is Dave sharing his personal playbook on investing. Something people have been asking for for a long time. The nuts and bolts we talk a lot about on the show, but this is a deep dive. Yeah. So of course, we'll cover the basics. We'll talk about 401ks and mutual funds, but we're also going to be talking about the way Dave has personally invested to build his wealth,

including real estate investing. That's been a hot topic on the show. Dave's going to unpack the right way to do it, even in this economy. And I'll be joining him to talk about some of the investing trends and traps out there, how to maximize some of your retirement options, especially for those who are self-employed. We talk about this on the show. You have options too. So we just want to lay it all out there and I hope it gives people some confidence that they're building wealth the right way. And you don't even have to put on your church clothes. You don't have to. Your work clothes, you can watch it in the sweatpants at home. It's a two-night virtual event, May 21 and 22 are the dates. May 21, May 22. And you're going to learn a lot that George just shared with you.

Tickets start at just $199. And you can sign up, get your ticket today at ramsaysolutions.com slash events, ramsaysolutions.com slash events. And you want to click on Dave Ramsey's Investing Essentials. You can watch it right from the comfort of your home. That's always fun. So check that. Looking forward to it. All right, let's go to Los Angeles, California, where Charles joins us. Charles, how can we help? Hey, how are you guys? We're having a blast. What's going on? Great. So my wife and I are on Baby Step 3B and our question is, should we use some of our money that we have saved up for a down payment to start a business? What kind of business?

Yeah, so the business consists in creating an app. We have been working with some developers and it will cost us $20,000 in which we have the option to pay monthly for 12 months, which is $1,667 a month. So we can't cash flow these payments without touching our savings, but we know that eventually we would have to pay for marketing, lawyers, et cetera. So is it okay to use some of our down payment for our business? Well, I don't think you've given us enough facts for me to say. I'd want to know, okay, I get the $20,000 is for the actual development of the app.

Does that include testing as well, or is it just they're going to give you an app and then you start messing with it from there? No, they will do all the testing and make sure everything is on point. Okay, and then what are your expenses? Let's fast forward $20,000 later out of your house savings fund, and let's say we got an app. It's been tested, debugged, it's actually working, but now we actually have to get people to use it.

What's that going to cost you? Yeah, I couldn't tell you yeah you know obviously not at that point but well but so there's my answer even money you're not ready i'm going to save well the biggest question is will this even roi would you be okay if you lit 20 grand on fire and it delayed your house dreams by a year or two he doesn't know i don't know if we play it out if you play out a worst case scenario if this is a total failure you build an app now i'm i'm just playing it out to get you to a decision here and so if this did not roi you just blew 20 grand now you're behind on a on your house dream

is that okay with you i feel like that would be okay. We have, currently we have $60,000 for a down payment. Okay. I'm going to be a little... These $20,000, we put cash flow. We don't even have to touch those $60,000 at the moment. Yeah, but I appreciate George's question. I'm going to be a little bit more strict on this. The fact that

you can't tell me what the next stage of the business looks like, I'm not knocking on you. I'm not trying to be unkind. That's horrible. I wouldn't burn $20,000 and be okay with it under any circumstance. So I appreciate what George is asking. I get it. But I'm telling you, no, you don't even know what the next stage of the business looks like. You shouldn't spend $20,000 on any business idea until you have gotten a whole lot of answers. And you can sit there and say with intelligence in less than 30 seconds or less, here's what my risk factor is. and it's well worth the risk. But you don't have enough information to even answer George's question.

So for that reason, George, what am I? You're out. I'm out. You just got shark tanked. You're not ready. You're not ready. Well, think about it this way, Charles. The safer bet's the house, George.

You put $20,000 into the house, that's a guaranteed return in the form of guaranteed equity. Ding, ding, ding. You put $20,000 into an app, and we've seen it happen too many times. People get excited about this business idea, they pay this company to produce it, and all of a sudden it just sits there because they didn't think about what's next. How are we going to market it? How are we going to monetize it? Are we going to charge 20 bucks? Okay, well, Apple's going to take 30% off the top. Are we going to do it free with a freemium model where you can buy things within the app? These are the steps you got to think about when it comes to this business.

What is the app? I'm just curious. Okay. So it's a, it's a app is for a dog and daycare boarding. So it would be, it wouldn't be for the US. It would be for the country.

My wife and I were born and raised that. And we're just doing some Google research, would be for the country my wife and I were born and raised at. And we're just doing some Google research. Roughly 50% of the population have at least one dog in the household. Okay, so this would be you live in the U.S. You're going to try to create an international app where that's just for one country? Yeah, so we have dual citizenship. So it would be easy for us to just go there and start developing there. And so the app would allow dog owners to use your app and get daycare services when they're looking for some.

Right, yeah. We've done some research. There's no app like that in that country. Well, there might be a reason. Right? There might be a good reason. There might be a good reason. There might be a bad reason. And so we just want you to be super careful with this cash because you've worked so hard. So I'll just reiterate, I would tell you to stay in the house savings business and put a really good down payment on for all the reasons George gave. He's absolutely right. And I would tell you that you also need to do way more research.

And in the time it takes you to do that research and really figure out, is this a good business idea in this location? You could be saving up the additional 20 grand. But even then, I wouldn't invest it unless I felt like the probability of success was much higher than just, well, let's give it a rip. That's never a good idea. It needs to be. We've done market research. We know there's a need for this. We have a wait list of 20,000 people who want access to it. That's where I get excited and go, all right, this has some legs on it.

Yeah, yeah. So maybe start small. Maybe build a website where it's very archaic and primal and you go there and you click a few links, but that's going to cost you $100 versus $20,000. Oh, I like that, George.

So I think there's better ways to go about this before you go drop that kind of money. So I don't want to squash your dreams. This could be a brilliant idea. Yeah. But I want you to do it

in a way that doesn't derail your other financial goals. That's right. I appreciate it. Can I ask a real quick follow-up question? Yeah, go. Yeah, so since my wife and I are self-employed, should we both open a Roth IRA and max them out during this process? Well, if you're in Baby Step 3B, many choose to invest 15%. And so 15% gets you two maxed out Roth IRAs, that's great. But because you have

multiple goals happening right now with the home down payment savings, some people choose to invest less than 15%. Some choose to go zero or up to a match. So for you guys, don't go above 15%. Okay. And we're also putting $200 in S&P 500. So should we stop doing that? In a brokerage account outside of retirement? Yeah. I would pause on that and stick to your tax-advantaged accounts first in retirement. Later on down the road, then we can start looking at those brokerage and bridge accounts. Gotcha, gotcha.

Good question, Charles. And hey, man, we're for you. We really are. We just want you to be really, really smart, really, really slow. Slow and smart don't get a lot of clicks on TikTok and Instagram when it comes to advice for businesses. They just don't because you know why? Nobody gets excited about slow and smart. Well, let me tell you what slow and smart leads to, George.

Wealth. Rich people like slow and smart. They're not impulsive. Because they've done it over and over again. People that are impatient, wannabes, oh, they like the fast. Fast and dumb leads to broke. Fast and dumb. Woo-hoo!

I love it. But this TikTok guy said, and he's got 9 million views. Yeah, well, he's broke. Living in his parents' basement. This is The Ramsey Show, where we help you win with your money, in your work, and in your relationships. I'm Ken Coleman. George Campbell joins me. We're so excited that you're with us. On the debt-free stage out there are Lucas and Alexis. Welcome. Thank you.

How are you guys doing? We're doing great. Happy to be here. Good, okay. Good, good, good. And that tells me you're here to do We're doing great. You're doing good? Okay, good, good, good. And that tells me you're here to do a debt-free scream. Is this true? This is true. This is true. Okay, great.

Where are you guys from? We're from Clarksville, Tennessee. Okay, not far away. It's right up the road. Okay, very nice. Traffic was good this morning, I hope? It wasn't too bad. Okay, nice, nice, nice.

All right, let's get the details. How much debt did you pay off? We paid off $81,188. $81,188? $88? Is that what I heard? $81,188, correct. Oh, $188. Excuse me. George, I don't know what's going on with my voice here. We'll get you there. Yeah, I took a week off for spring break. It's like my vocal cords are gone. I don't know what's going on. And how long did that take? It took 14 months. 14 months. Okay. And what was your range of income during that time? Range of income was $72,000 all the way up to about $86,000.

Okay, great. What do you guys do for a living? I'm military. Okay. I stay home with the children. Yay. Love that. That's awesome.

And what branch of military are you in? Army. Okay, great. Thank you for your service. Thank you for your support. Yeah, absolutely. All right. So take us to 14 months ago.

What happened that made you guys decide to get on this journey? Well, it was about nine months before we started that our firstborn, Layla, over there, she was born and she just turned two the other day. Well, we transitioned to one income and, you know, we were doing okay, but we weren't really just saving enough that we wanted to. We weren't investing as much as we wanted to. We knew that we wanted to optimize things in one way or another. And so we found the Ramsey Show and I started listening to it on my commute to work. And I brought it to Alexis here and I said, hey, I think we can maybe pay our debt off in a year,

maybe a little bit more. That's how it worked out. But she took it and she did a budget for us. And she said, wow, I think we could do this. And so that's exactly what we did. And we just kind of stepped it in gear from there. And then just recently we had Claire here. She's three months old. So fun. So what I understand here, there wasn't a lot of pushback at all, if any, from Alexis. In fact, she probably made the idea a reality, sounds like. That's correct. Wow.

What kind of debt was it? It was student loans. It was a personal loan. It was a car loan, a little bit of credit card, and some medical debt, a little bit of everything. Pretty normal. Yeah, you had a nice little buffet. A little potpourri, if you will. Cornucopia. That's even better. Yeah, you had a nice little buffet. A little potpourri, if you will. Cornucopia. That's even better.

So were you guys just normal? Like how long have you been married now? Almost three years. And you'd never been debt-free? You got married, had some debt, kept some debt, accrued some debt, and then there was this wake-up call when you go down to one income. We were like, all right, things are tight. This is not as fun as I thought it would be,

even with the blessing of children. And so you got your butts in gear, and just 14 months into this thing, it's gone now. And you got your income back in your life. What's next for you guys? Well, I'm just really excited to start building that emergency fund up, eventually start investing,

and then saving for our girls' college. Wow. And then, yeah, taking it from there. And you guys, I mean, you look very young. Can you tell us? Wow. I'm 25. 25 and 27, and you got this stuff out of your life.

And I love that there was no excuses made. You didn't sit and wallow in pity and go, well, this is life. This is the American way. Collect our payments. Someone will forgive the student loans at some point. These credit card companies, at least I'm getting my 2%. You guys actually woke up to this. Was there a tool, a resource, something that gave you that new knowledge? Well, the podcast gave us a lot of inspiration and specifically the debt-free screams. We always

listened to it when we traveled and when we just took simple trips through the city and everything. And we drew a lot of inspiration from other people. And that's exactly why we wanted to come here today and do our debt-free scream. Talk about the community of people that you had with you. Oh yeah, so my parents are here with us. They were some of our biggest cheerleaders and then I've got to shout out my grandparents. They were doing the Ramsey plan

before the Ramsey plan was cool. Yeah, that's amazing. We drew a lot of inspiration from them as well. Just common sense, debt-free living. That's correct. Oh, that's incredible. So you got some some other young couples you got middle-aged couples maybe maybe got some older couples that are listening right now yes what would you tell them we have we have some good friends uh adam and emily fisher they're actually going through the plan right now all good yeah so they kept us in it and we're keeping it you know with them and we're you know

staying the path together yeah make the budget and stick to it. So for you, it's budget, budget, budget. That's the key. All right. Anything else, Lucas? What's the key? Budget's big. I think consistency is also a big thing.

You know, life happens, and you've got to replace the tires, and the car breaks down. But you can't let it take you too far off the path. You've got to get right back on and get back into it. Well, I know you've inspired a whole new set of people out there. So you're paying this forward, especially for those service members out there. I mean, the difference that it makes when you're debt-free and you're making the sacrifice,

but you're not worried about the finances at home, that makes all the difference. It really does. That's huge. I love it. All right, so are we ready? Are we going to get the littles in there? Can we get the kiddos up here?

I think we can. It looks like, is it Claire the youngest? Yeah. She looks like she's out cold. She's about to wake up from the scream anyways, so we'll see. And the two-year-old's meandering somewhere around the lobby. There she goes with the parents. Okay, good.

We got the kiddos. All the support. So we got Layla who's two and Claire is a newborn I hope you're watching on YouTube America because this might be the cutest family you'll see today super cute okay all right here we go let's run it down we got Lucas and Alexis along with Claire and Layla they're from Clarksville Tennessee and they paid off $81,188 over 14 months, making $72,000 up to $86,000. Lucas and Alexis, take it away. Let's hear your debt-free scream.

Three, two, one. We're debt-free! There it is. And the babies aren't crying. The babies survived it. I like that. And we've got a special gift for you guys as well. We forgot to mention two every dollar gift cards.

Good for a one year membership. So you guys can use those every dollar memberships or you can pay them forward to someone else to get them on the journey. But you said the key is budgeting. And so you will enjoy that for sure as you continue your financial journey. Yeah, that every dollar premium comes with a lot of bells and whistles and makes life a lot easier. 100%. That is your gift and you get to give one away to somebody. I like that idea. I like the two. Maybe you give both away if they already have it, but you know. That is true.

Or use it for yourself. There's no judgment here. No judgment at all. It's free. It's Dave's stuff. You and I love to give away Dave's stuff for free. It costs us nothing and it makes Ken look good. That's right. We love it. It's like a bumper sticker. I like that. You know, it's interesting, George, when we, because this is really cool, we've got a 27 and a 25 year old. And I think it's important to kind of, we got new people that are joining the show all the time. So maybe this is the first debt-free screen that some people have ever heard or seen. Yeah. I mean, just set the table right now. Okay. So let's say they're making the 86 or maybe somewhere between the 72 and 86. Now they're debt-free. And so now they begin the process of whether it's baby step three,

then 3B, and then they start that 15%. I want you to paint a picture to what wealth looks like for this young couple at their age. Yeah. He's 25. Let's say they get through three in the next year and they begin investing it. Let's say he's 26. Well, from 26 to let's say 62, that's fair, right? And in military, he'll probably retire early with some beautiful benefits there. But let's just take 86,000 and take 15% of that. Well, that's 12,900. And so every month they could invest $1,075. And let's say they start from zero. That 1,075 every single month with an average return of about 10%, which is what we've seen, is $4.5 million at 62 years old. Drop it down to 8%.

All right, let's go down to 8%. Just for the cynics. More conservative, 2.7 million. I'd still take that. And that's outside of any other investing they do. That's saying he never gets a raise. That doesn't include his military retirement. So this is just the process as we teach it. And you look at doing it that young, it's really huge. And this is great, too, because this is a young couple that had, again, normal situations, all different types of debt, $81,000, and they knocked it out really quick.

That's really doable. I mean, $81,000, if you just look at that and you go, that's a lot of money to pay off for a young couple. They did it in 14 months. While cash flowing some things, we didn't get into that. Yeah. And with a stay-at-home spouse, that's huge. So they went from two incomes to one. So we're not pitching get-rich-stuff here, quick stuff. We're not pitching this unbelievably impossible thing that only a few fortunate souls accomplish. Yeah, there was no trust funds, no lottery winners here, just hard work and sacrifice. It's doable, and that's why I love the story.

So, good stuff. All right, we're going to go out and celebrate with Lucas, Alexis, Layla, and Claire. And, George, don't kiss the babies. I stay away. Okay, that's a little creepy these days. Don't do that. But we'll be back right after that with more of your calls. This is The Ramsey Show.

Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me. The phone number for you is 888-825-5225. Let's go to Kalamazoo, Michigan, and that's where we join David. David, how can we help? Hey, guys. Thanks for taking my call. I'm looking for your advice and guidance on something that feels like a no-win scenario. I'm unfortunately in the business transaction of a divorce with my wife and determining an equitable division of the marital assets. And one of the bigger items in this

division is my retirement account. I have about 140,000 more in my account than she does. And I'm looking at what seemed like two options that are available in the process. One is that she gets around 50% of that difference, which might be something like $70,000. And another option that she's proposed is I take on some amount of her debt to close the gap. She has about $35,000 in student loan and another $6,800 on a car that she's taking from the marriage. So she wants me to assume about $42,000 of her debt and then potentially either not touch the rest of my retirement account or she would only get whatever that remaining difference is, about $28,000.

So I'm not sure if there are other options, but I guess I'm wondering what your thoughts are on the two options and which is the lesser of two evils. Well, I'm sorry to hear what you're going through. That is not fun, even at a transactional level. And are you guys working with mediation? Is this, you know, court ordered? What's been the judge's side? We're just starting in the process. So we both have attorneys. We're hoping to work things out on our own to minimize any mediation that might be needed and not go to the court to have it decided. Okay. Well, I mean, financially speaking, it makes more sense for you

not to touch the retirement as much as possible. Right. When you look at the future growth of that. And so taking that money away, unplugging that growth would have a lot of zeros on the end as you fast forward. And so out of the two scenarios you offered up, I would rather you take on, do you have the money to pay off the debt? No, I will not have enough money to pay that off. What are the other assets here? Did you guys have a home together? We do have a home. That's not likely to cover the difference that's there either.

So you would sell the home and split it 50-50, the proceeds? Okay, what would that amount to? I don't have a number on that yet. We just had our appraisal done, so we're waiting for those numbers to come back. Okay. And do you have any other money in the bank or any other assets? Just the savings that we will split. It'll come out to probably around $7,000 each for that money. Okay. And do you have any debt? I will have one small loan, but beyond that, I have no other debt. Okay.

Hmm. I still like, if those are the only two options, I still like the second option, where you take on a portion of her debt and maybe leftover from the retirement. Okay. What do you think, Ken? I agree with you. Like you said, this is kind of a no-win. It's a rock and a hard place.

Yeah. How old are you? I'm curious. What's your age? I'm 50. Okay. What's your income? I gross about $104,000 and bring home roughly $63,000.

Yeah. Which way were you leaning? I'm sorry, go ahead. Well, I'm just curious. I agree with George and the way he broke it down. It's not really two exciting options at all, but I think his is the best. But I'm just curious, were you leaning that way or another way? I'm trying to stay away from debt as much as I possibly can. And when I run my own numbers, it'll take me about three years at my current investment to make up that $70,000. Um, but I could also divert all of that investment money into paying off the debt that I may take on from

her to get through it quicker and still maintain, um at some level. So yeah, I kind of want to protect my retirement, but it's also not that far of a time frame for me to get back to where it was. Right. But I think if you weigh that though, versus, okay, let's just say we take on the 70s at the number to make sure I'm remembering? Approximately, yeah. That's how much would come out of my retirement if we split it. I know, but I would rather you consider, okay, what would I have to do? What would need to be true in my life to knock the 70 out a lot faster than I think and not touch the retirement?

I think it's more doable than you think. Do I think you're going to have to hustle maybe? Do you maybe take on a second job, sell some stuff, some other stuff, do whatever it takes? I just, I don't know. That's where my head's at. And with some quick calculations, David, just to help you grapple with this, that 70,000, if you just left it there, just that portion alone, just growing at 9% from 50 to 62, that's over 200 grand. There's an opportunity cost. So that's the opportunity cost is you're really, by giving her 70 out of her retirement account, you're giving her 200 grand. Yeah. And that's why I want you to minimize how much you take out of retirement.

And if at all possible, you avoid it. Yep. Okay. I mean, David, I love what George just did there, David. To me, that would put a nasty taste in my mouth in what is an already nasty situation. Yes? Right. Exactly. Well, I wouldn't give her 200 grand. Is there any other, like, is there alimony here, any child support, or is this it? This is probably going to be it. We only have one minor child and we're splitting custody equally. And she makes about the same that I do. So there's really not that difference in income. So not, I mean, we're, again, we're still in the beginning, so we haven't worked through that process, but from what we're being told, there probably won't be anything or it will be extremely minimal.

Okay. I just think, David, that George's advice, I agree. I just think this minimizes the damage from an already damaging situation. And there's just no sense in hurting your retirement potential. I'd leave the 70 in the retirement. And I'd gut it out. Gut it out. There'll be something good that comes out of it.

Yeah, absolutely. I mean, it's a tough call, George. Yeah. Because on one hand, I get where he's coming from. He's going, I just want to be done with this. You know, just... Well, and it feels weird to now take on debt that he didn't technically have, even though he did because they were married.

So that's a whole other situation. That's right. So that's why I see it differently, just to go, all right, I'll take on this debt. Even if it was $70K in debt, I'm going to pay that off aggressively and not have to unplug my retirement at all. I agree. Just the compound interest is the game. And I love the way you set that up. That is the real question to answer.

And especially at 50, and he's heading into retirement in the next decade. I'd rather see him have that nest egg intact. Yeah. That's where the spirit of it comes from. All right, let's see if we can answer Chloe's question really quick. Chloe, how can we help? We've got about a minute and a half. What's your question?

Hello. So I recently received a large amount, $300,000, as a gift from a relative. After paying off our debt, we'll be left with about $200,000, and that does not include our mortgage. So my question was, you know, basically the best way to maximize the rest of that money. Well, maximize is that's a loaded word. What's left on the mortgage? So we have about $260,000 left on our mortgage. The reason we are hesitant to put that towards it is because the house that we are currently living in is in a bad area, and it needs about $30,000 worth of improvements. So if we were to take the money to complete those improvements and then sell the house we live in,

I don't believe we would get that money back. You're not going to get the money back if you make the improvements? Yes, correct. So basically when we bought this house, it was a flip. It was supposed to be renovated. We paid up front for extra inspections, the whole nine yards, and the quality of the work that was completed ended up being quite subpar. So we would basically be redoing the renovations that we basically paid for up front when we bought the house.

This is a flip gone wrong. Correct. Yeah. I mean, I would minimize what you put into this, put in what you need to, to sell it and get out of there. And whatever money is remaining, add into the new down payment for the new house. And that's what I would use that money toward. Okay.

So then you wouldn't necessarily put anything in like investments or accounts or anything like that. I mean, you can give save spend as long as you're investing 15% of your income. If you want to consider that income, if you want to consider part of it, giving money and the rest, enjoy some of it and put the rest towards that next goal. But I would, I would definitely not sink it all into this house and then be underwater on it. That's not a good plan either. Yeah. Love that. Well, you've got some good options, Chloe, and I agree with George. So run that out. I think you're going to be in a much better situation. All right, that does it for the first hour. Thank you to George Campbell, my co-host, and to James Childs, our fearless leader

in the booth. This is The Ranch Show. Take care.