The Ramsey Show - App - When Do I Combine Finances With My Girlfriend? (Hour 1)

Episode Date: June 2, 2021

Debt, Home Buying, Savings, Investing, Business Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

🎵 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. Anthony O'Neill, Ramsey personality, number one best-selling author and host of the popular online series, The Table, is my co-host today. You can join him on podcast or on YouTube to watch The Table, listen to The Table anytime.

In the meantime, he's here to help you and I am too. The phone number is 888-825-5225. That's 888-825-5225. Amon is with us in Houston. Hey, Amon, how are you? Hey, Dave, how are you? Better than I deserve. What's up?

So I wanted to ask you about the situation I'm in. So I'm deciding between a 15-year fixed-rate mortgage or to save up and buy a home in cash. So the thing is, in my religion, we have a 20% required charity. So basically, at the end of the year, any money we didn't spend from our income, 20% of whatever's left over, we have to donate to charity. So if I were to save for a house, I'd have to pay a lot more in charity, which means it would take away from my house savings. But if I got a mortgage, that money would be an expense, so I'd have to pay less charity and put more towards the house. So with that 20% number, what would you recommend? Would I get a mortgage or save up for a house and pay in cash?

How old are you? I'm 22. And what's your income? $160,000. Wow. What in the world do you do at 22 years old making $160,000? I'm a software engineer. Of course you are, yeah.

Okay. You're smart. Good for you. Way to go. Okay, so what are you going to pay for this house in cash, or what are you going to pay for this house, and how long is it going to take us to get there? I'm thinking around $300,000 and probably trying to save up over the next four to five years.

To pay for it cash? Yes. How much do you have cash right now in your savings account? I have not started work yet, but right now I have about $10,000. Oh, so you're not working. You're just coming out of school. Yeah. Now I have about $10,000. Oh, so you're not working. You're just coming out of school. Yeah. Okay.

So what would happen if you lived like a college student and did this in like three years? Yeah, I could do that, and my expenses would be pretty low. Yeah. And so does the 20% apply? I don't know the technicalities on your process, does that apply to whatever you have in savings every year or what you added to savings this year? What I added to savings this year. Okay.

And so if you put in $100,000, it'd be $80,000. The next year, if you put in $100,000, it'd be $80,000. And the next year, if you put in $100,000, it'd be $80,000, and you'd have $240,000. Exactly. Okay. And buy a $240,000 it'd be $80,000 and you'd have $240,000. Exactly. Okay. And buy a $240,000 house at 25 years old. Cash. Yeah.

But would it make more sense to get a mortgage which would be cheap like $60,000 to protect charity versus $60,000 in interest or less than $60,000 in interest which would be... So what is your religion? I'm a sect of islam called the shia muslim okay and um i've got some friends that are muslims that

are doing some teaching on what the quran says about uh money and uh they're kind of building out you know we're christians we kind of do it from a Christian perspective, they're doing it from a Muslim perspective, which is very cool, by the way. And they were teaching me that the Quran is harder on debt than the Bible is. Yeah, it is pretty tough on debt. A lot of people don't take any interest at all, actually. Yeah, not only the usurious issue, but the whole debt thing in general. So I don't know.

I mean, what I'm suggesting is maybe you're choosing which part of the Koran you're going to be worried about here. And if you're worried about the debt part, you would gladly give up the other 20%. I kind of like the saving um you know it mathematically doesn't work but technically charity doesn't work mathematically in general because when you give money away you don't have it anymore right uh and but yeah every religion of quality suggests generosity of some in some methodology christians you know, Orthodox Jews, 10% tithe. You've got a 20% on savings there that you're teaching me about that I wasn't aware of. And so it's not unusual at all for some methodology for generosity to be built in,

meaning that in general, most religions believe that God says we're better off if we're generous. Right? Right. And so I don't think there's a downside to you being generous me neither instead of looking at it as a duty look at it as a an instruction from your religion that is to your benefit not even just a duty it's a bit yeah i'm about to say a benefit i like that dave i mean you benefit from being a generous person, that is why you are getting this instruction to be generous. And that's true.

I mean, we can say that, you know, as Christians, we certainly believe that. God is not telling us to give money away because he needs our money. He's having to give money away because it changes your heart into a generous person. And generous people are highly attractive. But if you're doing it as an act of duty, then you're not getting that benefit. Instead, if you're doing it as an act of instruction, where I'm seeing the benefit of my character being changed to that of a generous person, which I suppose is what the, you know, is this version of Islam, that's what the goal is.

It would make sense to me that that's how that works. But Dave, let's take away religion from this if i'm 22 years old and i'm making 160 thousand dollars a year i'm staying at home and just going to just save up and just buy a house cash by 25 and even if you take away the religion have to stay home yeah i mean you live on 60 grand exactly that's no slouch no slouch at all A lot of people coming out of college wish they made 60 grand. Absolutely. So, you know, that's an okay version. I still think, I mean, it's an interesting discussion, and I like talking about it through

this lens because I think it's instructive, but, you know, so the point is that even though you're down by 20%, I think your character is up by more than 20%. Your generosity makes you more attractive. You are a better person. You, on the long haul, are going to prosper. I don't know that you're going to prosper in this calendar year by the equivalent of your giving. That probably seldom does happen. But I will tell you that generous people, over the scope of their life, tend towards prosperity because they're more attractive.

People want to do things with them. They're the ones that smile. They're the ones that hold the door for you. They're the ones you want to promote. Now, this is not someone who's acting out of religious duty, though. That's not generous. That's just following the rules, being a religious Boy Scout. And that doesn't give you that benefit.

But the idea that generosity should be key in your financial plan if you are doing it out of a compassionate, loving, giving heart, not a dutiful heart, I think it's a very important part of the discussion. I agree. I do. So even all that aside, if I can save up and pay cash for three years,

regardless of what rules I'm doing it under, I'm doing that. Yes, I agree, Dave. Yeah, you're going to be 25 years old and own a home that's a quarter of a million dollars, and you'll be making $200,000 a year. You're going to be in good shape, sir. Oh, yeah. You're going to be all right. Oh, yeah.

Oh, yeah. When I was that age, I, yeah. Oh, my gosh. That's why I say something else. Walking up, you know, walking up, you the hill both ways to school in the snow. I just wanted no shoes. If he's single, you know. Yeah, well, the ladies are lining up.

They're all looking for a software engineer right now. The ladies out there are already laughing like, is he? The software engineer in Dead Gum Houston right there. I'm just saying. Oh, my gosh. Way to go, dude. I'm so proud of you. Really cool.

Thank you for the call, and thank you for the question. So you don't think you need ID theft protection? Check out these numbers. Every seven seconds, an identity is stolen, and the average time to completely resolve an ID theft event is 44 months. 44 months, people. But you won't just spend time on it. You'll also spend money. 26% of victims end up borrowing money and using payday loans,

while another 15% sell personal belongings to deal with this nightmare. Pretty quick way to screw up your debt snowball and your baby steps. But not if you're a member of Zander's ID Theft Protection Plan. Zander's plan covers all types of ID theft, takes over the work if you become a victim, and protects against stolen funds and expenses you incur. They also cover your children for free on their family plan. It's just the smarter, more affordable way to protect yourself.

Go to Zander.com or call 800-356-4282. Save yourself the trouble before it's too late. Thank you for joining us, America. This is The Ramsey Show. Anthony O'Neill, Ramsey personality, number one bestselling author, host of The Table on YouTube and podcast, is my co-host today. If you're tired of feeling stuck with your money like you'll never get out of debt, you'll never save enough for the future, it doesn't have to be that way. You can make progress with your money and you can do it really faster than you think. The only way to make it happen

is with a budget, with a plan, following the baby steps with the instruction, the support. That's why you need a Ramsey Plus membership. You'll get access to Financial Peace University, the premium version of our every dollar budgeting app you'll plan out every dollar thus the name and save before the month spend a save before the month begins when you budget and you get intentional with your money you make progress really fast and you can start budgeting for free today to start your free trial at ramsey plus text trial to 33 789 that's trial 233 789 open phones here at 888-825-5225 boaz is with us in wichita kansas hey boaz what's up hey dave how are you great man how can we help? Hey, I'm currently a college student here in

Wichita, and I am kind of wondering, I have about $22,000 in savings and about $2,000 on my debit card. I'm kind of afraid because right now I hear with all the new money being printed that inflation is going to hit it. So I'm wondering, since I'm currently a college student, should I take out some? What did you hear? Oh, I was hearing that there was going to be a lot of inflation maybe here coming since they printed off a lot of money. Who told you that? Who told you that oh man uh that's that's what i've been hearing from a couple people so i know you're drinking buddy in college

uh no just a little bit on uh youtube and things like that you went down a rabbit hole of conspiracy theory crap that's what i. You've been playing on the internet getting financial advice. Oh, Dave. What year are you in, Boaz? Right now I will be becoming a sophomore over at

Wichita State. Okay, cool. What's your question, man? How can we help? I'm wondering if I should go and either use that money towards my college. Currently, I'll be working, so I'm wondering, should I just use my money in my savings? Should I just invest that? And you're saying you want to invest because you're scared that you may have some inflation issues coming up down the road, right? Yeah, like my interest won't,

and my savings account won't keep up with the inflation rate, which it's not currently. So I'm wondering if that's a smart idea to stick it into investments pretty much. So let me ask you this question. Let's say if you did do that. Let's just say I say, yep, do that.

How are you going to pay for college? Student loans? I was only going to stick about five or seven grand in there, and then the rest I was just going to work while I was in college. So here's my thing. No, don't invest nothing. Um, you have the $22,000 in 2k in your savings account.

The best investment you can make into yourself is right now. It's not into, you know, investing it so you can save on inflation. No, you want to make sure that you graduate debt free. Now, once you graduate debt free, and if there is some level of inflation, then let's worry about it then. But the key thing is I want you to graduate 100% debt free. And so keep that money in your savings,

use it to pay for all of your cash, get off of YouTube or only get on YouTube to listen to the Dave Ramsey show. The way Dave is looking at me right now, you may want to come watch my show first, then come and look at Dave. Because Dave really wants to talk to you right now. I'm stepping in for Uncle Dave and I'm your nephew. So what are you studying? I'm studying aerospace engineering. Good for you. Good for you.

Good for you. So here's the point. A guy like you that even has enough good common sense to even ask this question is so far ahead of the game studying aerospace engineer that you investing in you, what Anthony's telling you, to get that degree debt-free is worth a lot more than any investment that you could possibly make. No mutual fund will keep up with what you're going to be worth because you are getting an aerospace degree. Follow me? Mathematically.

Yes, sir. Mathematically, you are more valuable. That's not some kind of existential thing of we think Boaz is awesome, although we do. But this is more like, dude, the money that you can make with that degree is greater than the money you will make on a mutual fund. Get that degree. Get it debt-free. Anthony's advice is exactly correct. Okay.

Now, let's step back for a second, though, just for the fun of it and have that inflation discussion, okay? Just to soothe your fears. Yes, there's going to be some inflation we're already seeing it and what inflation is is an increase in costs the cost you have to worry about increasing is college you don't have to worry about the cost of milk over the next three years ruining your life you do have to worry about the cost of milk or gasoline or whatever other components of inflation that there are, ruining your life over 50 years, but not over four years or three years or two years while you're in college.

It's the long-term drip that where inflation kills you. The only way that inflation would kill you in two years is if we had hyperinflation which we have never had in the united states and hyperinflation is where all goods and services triple in one year or quadruple in one year so a two hundred thousand dollar house becomes an eight hundred thousand dollar house a gallon of gas is going for fourteen dollars and a loaf of bread is ten dollars and if you saw, then your fears would have come true. But that would be the first time in the history of the United States. By the way, there's only two instances that we can find in the modern world economy

that that has actually occurred. One was in pre-Nazi Germany, and the other is good old South America, Argentina. And so we saw collapses of the entire economy. As a result, new governments rose up, and all currency was disbanded, and they started over. This is how Hitler came to power, by the way. It was not on his charisma. It was an economic collapse, and he stepped into the vacuum

and made himself the hero of resetting it. And it was from hyperinflation. So you can go back and study that, by the way. But it's an interesting discussion. The point being is it's not going, you know, if we have a 5 or a 10, if we normally have a 4% inflation rate, if it's 7%, which it's probably going to be because we're seeing cars go up in value, houses go up in value, two-by-fours are going up, plywood's going up. You know, resin, you name it.

Copper, steel, everything's going up because of the shortage, because there's, you know, factories are shut down. Now they're coming back after COVID trying to catch up on the supply-demand curve, and we've got an artificial inflation rate kicking up. But it is a short-term thing, dude, and it's not going to kill you with your aerospace degree. You're going to be just fine. Calm down. Quit watching cat lasers on youtube i'm gonna get you jason's with us in dallas hi jason welcome to the ramsey show hey guys thanks for taking my call sure what's up hey man so i am on baby step five and you give great advice on four and three as far as kind of how much to save.

But our advice on five is not so good. Oh man, Jason, I feel so hurt. I feel so hurt by that. We have a number one national bestselling book and you're saying it's not so good. Oh my Lord. No, I just, how much, how much should How much should I be putting away per child or... The reason it's so vague and we just say college savings or baby step five, because we don't know if you got a 17-year-old or 17-month-old. Got it.

But Jason, studies are showing from our research, and I wrote about this in my book, that for an in-state school, you need to have about $100,000 for your child to graduate in four years. Today. Today. Yeah. And you can add inflation, tuition inflation, to that depending on how old your kid is. So where you want to send them to school, how much of the money do you want to provide, all of it or not, and then you can back into that.

How old are your babies? One is two and one is due in seven days. You are a great dad. Phenomenal. You are a great dad. You're ahead of the curve. So what I would tell you to do, you need a financial calculator, and you need to have a target that you're aiming at.

And your SmartVestor Pro can help you with that. Click SmartVestor at ramsaysolutions.com and sit down with them. They'll be able to calculate exactly how much you need to save once you identify this is how much we want to have 18 years from today for the brand new baby. Anthony O'Neill, Ramsey personality, host of The Table. Lots of interesting people come to The Table for a conversation.

You can join them on anywhere good podcasts are played, and certainly his YouTube channel as well. There's some fun stuff there, and I will promise you this. If you watch or you listen to The Table, your level of cool will increase. Yeah, it definitely will. That's why I say come to me first, get cool, then come get me. The Ramsey Show does not make that guarantee. Nah. But The Table can make that guarantee.

Absolutely. But you know what this is? I'm a walking dad joke. Grandpa joke. No, but we are at a table. So, I mean, there is a level of coolness on The Ramsey Show when I'm on here. When you're on here. And humility, too. Yeah, I mean, there is a level of coolness on the Ramsey Show when I'm on here. When you're on here. And humility, too.

Yeah, that's it. Morganson, Jacksonville, Florida. Hey, Morgan, what's up? Hey, Dave, how we doing? Better than I deserve. How can I help? Awesome, Dave. First of all, let me just say thanks for taking the call. A long-time listener. I grew up, my dad listened to you

ever before I could even understand what finances were. So I got to finally get in. Thanks. A financial peace baby. Yes, sir. Yes, sir. And I'm about 24 years old, Dave. I'm debt-free, never had a credit card or a car payment.

I bought my own used car a couple years back, and I'm currently renting a one-bedroom apartment with my girlfriend. My girlfriend and I are pretty serious and I've actually fully funded a savings fund for an engagement ring that I plan on purchasing in the next few months and popping the question probably later this year. My dad's very traditional, similar to you in the sense of he doesn't even like that her and I live together right now before being married and certainly doesn't think that merging finances before marriage is a good idea. But I'm curious because she's in the process of pursuing a master's degree, and with that is taking out some student loans to do so. And so I'm wondering if it would be

beneficial for me to, once we do get engaged, start paying off her student loans as a fiancé and not a husband prior to, you know, actually combining our finances when we get married, because then I'd be able to save money on the loans. Oh, man, Dave. Man, you know, here's the thing, Morgan. I agree with your dad. I'm traditional like your father, you know, and I don't have any kids. So but I think you already know that. So we don't have to go there here. Here's my suggestion, because, again, I feel Dave eyes looking at me. He's ready to say something.

I'm just watching you. I'm watching you do your thing. You get so nervous. I'm just saying here's the thing, man. I would not combine. Here's what I would do, because I hear it in your heart that you really that you love your young lady and that you really want to help her out. And I'll put my business out there right when I joined the team here. Dave knows is I was engaged to an amazing woman and we had some goals.

But what I did not do, I did not combine our finances. I actually had a savings account that I was parking all the money on. So when we did get married, I would just cut the check and say, here, babe, let's go take care of this, of something that she had. So I would recommend that same thing for you because Morgan, I'm single today. And unfortunately, that engagement didn't work out.

And I pray that your engagement works out. I pray that you all do get married, but I would not combine the finances of you and your girlfriend today. If you have a heart for that, because you are saved, you are single, I would just go ahead and put the money in a separate savings account. And then when y'all get married, then go ahead and combine the check. That's my suggestion for you.

So that way you're protected on both sides. If something doesn't go well, cool, you still have the money. If something does go well and everything goes down the way you want it, I think that's a great impression on your wife. Key word there was wife. Awesome. Thank you very much. And that's aside from traditional, that's more just practical and legal than it is spiritual or moral. We can go spiritual or moral, but we still answer the question

through the lens that you're asking it, which is, you know, it just sets you up. Now, let me give you another one that is relational, and that is that when you start handing money to people, I don't care who the people is that you aren't married to, it changes the quality and the texture of the relationship. So I have children older than you, okay? So if I hand them $10,000, if I don't do that in a very, very distinct and clean way, it taints, it colors the relationship. Does that make sense? Yes, it colors the relationship. Does that make sense? Yes, it does. Like they could feel like they had to answer to me about where they went on vacation then,

even though I didn't say that. That's in the air, right? And so it could negatively impact the quality of your engagement if you go ahead and transfer funds from a relational standpoint. And that's apart from the moral or the traditional or the spiritual element that your dad and I would be concerned about, which is another different discussion. It's the same issue but different discussions around it. So the practical aspect, and I've seen things worse than what happened with Anthony.

Here's a really weird one. Like people go buy houses together and they're not married, and one of them dies in a car wreck. Now your shacked-up girlfriend owns a house with your parents because you didn't have a will leaving it to her, and your assets go to your heirs, which would be your mom and dad.

Now your mom and dad are half owners with your former shacked up girlfriend you talk about awkward as crap that gets weird very weird and i've been in these coaching sessions with either the parents and they're going what do we do with her do we kick her out or or you're with her and you're going the future in-laws that never really became the in-laws are now being the people from hell. And, you know, oh, my gosh, it just creates all kinds of problems. Yes. So just keep everything separate until you're married.

Yeah. When you come back from the honeymoon, combine everything. And talk a lot about it. Talk about it. You can say, I got $10,000 over here waiting for when we get home from the honeymoon. I got, you know, and we're going to pay that off. That's what we're going to do. And, you know, how's your pay that off that's what we're gonna do and you know how's your budget going here's my budget and show each other what's going on but don't combine them yeah don't combine them and

it's going to be a little difficult because you are you are you guys are living together and so there there will be a little temptation on both sides because you're already living whose mustard is that in the refrigerator yeah i mean it's just a problem but yeah hunter is in tampa florida hey hunter what's up hey dave uh thank you guys so much for taking my call a long time listener um i am currently on baby step number one just finished paying off my credit card um and now i'm working on student loans um very similar situation as your previous caller so i'm glad he called in before me. But my question for you guys today is I work in sales and I travel all around, and I use my personal credit card to expense a lot of my traveling

and get reimbursed for my company. My question is should I continue using that card specifically just for work to, you know, to build credit and to be reimbursed that and not, you know, anything personal on that card just strictly for business? Or should I just put it on my debit card and pay it off when I get paid? No credit cards. On average, how much are you spending a month, Hunter? For the expenses, probably around in between $1,400 to $1,700 a month. Cool. So what I would do is I would go ahead and just put $2,000 extra into your savings account that you can just cycle through every single month. So that way you're not touching your emergency account. And then while you're paying off the debt, you have the $2,000 there that's specifically for work and you're replacing it every time you get your reimbursement. But I would not go ahead and get a credit card because

that credit card will eventually be spent on something else. Yeah. Here's the thing. I would add a further clarification. I would do it in a separate checking account. I agree, yeah. Open a work, an account for your work travel. Put $2,000 in there before you go any further, before you pay any extra on your other debts right now. Let's get that $2,000 in there. Once you put it in there, obviously you're going to spend it down,

and then the next month they're going to give you the money back to put it back. So you only have to prime the pump one time. Does that make sense? Yes, sir. And then you run a debit card on that. Let me tell you what this will to put it back. So you only have to prime the pump one time. Does that make sense? Yes, sir. And then you run a debit card on that. Let me tell you what this will cause you to do. It's already kind of, you kind of went, just a little bit. It's going to cause you to never use this card for anything that's not reimbursable. Where with a credit card, you go, well, you know, it's not that big a deal, and it's not

reimbursable. And so you'll get balance creep on a credit card that you're using for business expense reimbursement. And you'll look up, and you've got $2,000 owed on it, the crap you bought when you were on the road. Because when you're traveling, you get tired, you buy stupid butt stuff. Can you tell I've done that? It's just you eat too much, you eat poorly, you spend poorly. The road is hard. The road is hard. The road is hard.

This is the Ramsey personality is my co-host. Open phones at 888-825-5225. Brian's in Atlanta, Georgia. Hey, Brian. Welcome to the Ramsey Show. Thank you, Dave. It's good to talk to you. You too.

How can we help? I'm wondering how much money should I have set aside for business savings before opening a new business? Hmm. business savings before opening a new business. Well, most people are not able to do a lot of that. What are we talking about? What kind of a business and what are you changing from and to and so forth? I'm looking to open a law practice. I currently work in a government legal position, so the ability to take on clients before leaving this job is very limited just based on ethics rules.

Yeah, I would say. So I'm looking to open a private practice. My wife and I were on Baby Steps 456, so I'm just looking to see so uh what what field of uh law or what area of law would the private practice be aimed at looking to um rules estate planning a little bit of litigation that sort of thing business formation how do you uh so for a fairly general family practice type situation not counting divorce okay um correct the uh so i'm trying the reason i'm asking this question i'm trying to visualize in my head how long before you start get some cash coming in the door what do you think my question as well yeah what do you i mean what do you think i mean do you have you are there some models that are some best practices that when you launch or are you going to be able to have anything in the pipeline ready to go,

even though you haven't actually done the work yet? Not much in the pipeline ready to go, but I've spoken with some former law school colleagues that are in a similar kind of field and got some feelers for how to start things to do, advertising and doing classes in local neighborhoods and things like that. How to get the revenue model going. Yeah. Okay.

So how long, I mean, are they giving you any indication of how long it'll take you to get some revenue coming in? Revenue, a couple of months. Sustainability, probably nine to 12. Okay. So that kind of gives us a clue how much money we need, right? Okay. Yeah.

So probably six months. Okay. Because you're going to have nothing for three, the first three of the next 12. The back three of the next 12 you need very little, hopefully, because you'll be reaching stability. And the middle six in there is going to be kind of middle which totals up in my mind to a total of about six okay are you married i am does she work outside the home she does can you eat on her income um we can eat but i don't know how well we

keep the lights on okay it might get a little dark in there. Okay. Yeah. What do you make now? I make about $69,000. Okay. And sustainability is? She makes about $82,000. She makes $82,000? Yes. Okay. Yeah, I'm thinking, you know, $3,000 to $6,000 is what it sounds like.

$6,000 would be preferable. And so that sounds like what 30 grand or something right okay yeah so three to six of my current income well because that's what you got to replace correct while you get the other revenue going we're going to offset that zero for the first three we're going to offset it almost totally in the last three and kind of medium in the middle six is my that's my projection based on our discussion but i don't know what i'm talking about i'm listening to you okay i mean you this we're working this through together you follow me i'm not i don't have like i've done this a hundred

times for law firms and this is what it's going to be i haven't i'm making this up while i'm talking to you so but it's logical and what you're saying does sound like it makes sense you've got to get enough wills coming in estate plans plans coming in, and some incorporations, some LLCs. You've got maybe some lightweight litigation that will pay early and take a good retainer on the front end, some small stuff, $3,000 to $5,000 retainer type things. I can visualize you doing that with your friends, relatives, and getting this thing going with guys that I know that are lawyers. That makes sense. But in an eight-mile radius of here, there's probably a bazillion of them, right?

Mm-hmm. Okay. But you're going to have to do the work, the marketing work. Right. That's the big thing. The business development, we would call it, I guess, in that world. But it's still marketing. Like you said, hold the classes on wheels, have a thing, a free night at the clubhouse, and people can come by and ask questions about estate planning.

And whatever it is you want to build up, whatever the client is, you want to get in the top of the funnel and start to have them create cash. I guess the other thing you could do is just go to work for a private law firm, work there for a little while. You can make that transition more ethically and still have your own clients with you. Yeah, especially in Atlanta, Georgia, Dave. You could do that. Yeah, there'd be a lot of ways to do that, but that's another direction. But the way you're choosing, you're kind of just taking the leap. It's a little scary, but I think you'll be fine. I think you'll be fine.

But just commit to the marketing disciplines. That's very, very important in this. Andrew's in Washington, D.C. Andrew, welcome to The Ramsey Show. How can Anthony and I help? Hi, Dave. Great to talk to you. You too. A question about we have a rental property that it's's paid for and the way the real estate market

is now. I'm thinking it probably makes sense to offload that and use that profit to pay off our current home. We have a current home with a 15 year mortgage on it. So having that paid for sounds really nice. But also wondering, you know, if we do that, how do you get back into the rental market? Not how, but like, you know, when's the right time? Do we buy another rental home in the next few years? Or just want to make sure we are well diversified with our assets, if you will. Cool. Good for you. What do you make? We make about 300,000 joints.

Wonderful. Good for you. Well done. How much is your current house payment? Current house payment is about $3,500 a month. Okay. So here's what I did when I was in your shoes. I didn't sell a rental property, but I had a check come in, and when I paid off my house, I rounded it up, and I had an automatic draft go into a mutual fund from my old house payment was freaking amazing. So what I'm doing in your case is I'm going to round it to $5,000 up from $3,500,

and I'm going to pop $5,000 a month. That's $60,000 a year. That's $180,000 in three years, plus what the mutual fund increases in value. So you're going to have $200,000 plus in there in three years to pay cash for your next rental. Okay. And I'm going to sell that one today and pay off the house today all during this time you live in washington dc with a three hundred thousand dollar income and zero debt in the world it's going to change your freaking life it's amazing where you're going to be andrew once you pay off your house with the selling this rental property will you have

anything left over that you can also put inside a mutual fund? Yes. Yeah, we're contributing monthly to the mutual funds as well, as well as maxing out 401Ks and IRAs and stuff like that as well. Yeah, I'd be maxing out everything because you're maybe step seven at that point. Yep. And once you've maxed out everything, then I'm going to take that one mutual fund. I just used an S and P 500. It wasn't anything fancy,

no commission. Uh, and it just does what the market does because it's a short term thing. It's not a 10 year play. It's not a 20 year play. It's a three to a five year play. And I still do that to this day. Extra cash beyond generosity and beyond living.

I just throw it in there until there's a big enough pile in there to buy some more real estate. Cause I love real estate. I'm a real estate junkie. Yeah, and do you try to, this was our first rental property, so do you try to somewhat time the market and wait for the market to correct? Yeah, I have to because I refuse to pay retail. Yeah. I'm not worried about the market correcting as much as I'm looking for a deal. And the market we're in right now, there is no such thing as a deal. Right. I mean, I don't know who would be asleep at the wheel that would sell me something under retail

when people are getting multiple offers and getting $40,000 over retail. So I'm sidelined right now. I'm not, actually, because I'm spending money over here at Ramsey Campus, like Congress building these buildings around here. Thank you, Dave. So I'm doing some real estate investing over here at Ramsey Campus, like Congress building these buildings around here. Thank you, Dave. So I'm doing some real estate investing over here. But aside from me actually out there buying real estate at a deal right now, I would be sidelined and just waiting because I can't find a bargain.

Yeah. That's where I would be today. Instead, I'm putting in concrete and bricks all over this goddamn 50-acre campus here. But that's okay. Whole different world. Hey, man, good job. This is The Ramsey Show. This is James Child, producer of The Ramsey Show.

Did you know The Ramsey Show is one of the most popular podcasts in the world? Subscribe or follow today wherever you listen to podcasts.