The Ramsey Show - App - When Will This Housing Market Clear Up? (Hour 2)

Episode Date: June 17, 2024

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Thank you for joining us, America. George Campbell, Ramsey personality, number one best-selling author, and, of course, big YouTube star and co-host of the YouTube show on Ramsey Networks. It's a big show blowing up the Smart Money Happy Hour show that he and Rachel Cruz do together.

He's my co-host today, and he knows some stuff about this stuff. So open phones at 888-825-5225. Grace is with us in Philadelphia. Hi, Grace. How are you? I'm good. Hi, Dave. Hi, George. Hey. What's up? I appreciate you taking your time. I know you and your team talk a lot about the trends in the real estate market.

My question is, when do you think the obnoxious overbidding on houses will stop? Wow. Is that happening in your area in Philly right now? I mean, I believe so. But, yeah, I could tell you personal experiences, but I just feel that I personally put in offers, and, I mean, I'm just getting beat $50,000 more than asking price. Mm-hmm. Well, the simplified answer is that that is caused by more buyers than there is inventory

anytime basic economics supply demand curve says that anytime there are a large number of people chasing a few goods it drives the price up scarcity drives the price up. The opposite of that would be if there was more houses on the market than there were buyers, then that would be called a buyer's market. This is a seller's market. A buyer's market means that the sellers feel just blessed to have anyone look at their poor little house because nobody's out looking at houses and because there's hardly any buyers.

In other words, there's 10 buyers for 100 houses. Right now because there's hardly any buyers in other words there's 10 buyers for 100 houses right now there's 100 buyers for 10 houses you see the difference and that's the simplified answer and that's being caused by several things um but one of the things that's driven it uh of late in the last five years as much as anything is all of the migration uh that has happened of people changing states because of taxation and archaic crazy uh laws having to do with the fauci pandemic and all kinds of stuff people just left california they left new york and they're in tennessee they're in georgia they're in uh florida and they're in Tennessee they're in Georgia they're in Florida and they're in Texas and the numbers are there to support that that's not a political statement it's just a huge change in

population shift and so that's created in those states in particular shortage now you're not in one of those states but just to say that's exasperated it in those states then the other thing that's exasperated it is if the economy if if builders of single-family homes do not believe in the economy then they don't build houses because they're afraid they can't sell them and that's happened hardcore in the last 18 to 24 months because the real estate market slowed down and so builders the number of new housing starts is way off and we were already had an inventory shortage and so now with not with not as much new housing coming online as it needs to now we've got even more of an inventory shortage and that's what's driving this is you've got a hundred buyers

or whatever the number is on 10 houses that's not an exact number but it's there's this tremendous oversupply of buyers and so they're doing stupid stuff like bidding $50,000 over what the appraisal is, which then ends up ultimately changing the appraisal. Because people do it enough, it becomes a new market value. Yeah, and that was a follow-up question, too. Exactly. I mean, how are these houses, townhomes, getting appraised to this value that, or just, it's kind of, I don't want to say made up, but how is it equaling the overbidding?

How are these appraisers saying, you're right, it is over $50,000. Well, if you have 10 houses in a row on the market and six of them sell with overbids, you now have a new market value. It's the overbid value because market value the definition of it in appraisal class is what a willing buyer gives a willing seller where no duress is involved now we could argue that this is a duress market but i'm but in other words no neither one of them are being cheated and neither one of them have a gun to their head uh and so that that buyer's willing to pay that seller that, knowing it, and if they do that enough times on that block, voila, you have a new market value, and it's the overbid price. It's not the original value.

And so, again, the shortage of housing versus the number of buyers is driving it up. And so we've got some markets like yours. I was not aware Philadelphia was that hot, but we've got some markets like yours. I didn't, I was not aware Philadelphia was that hot, but we've got some markets like yours where you put a house on the market and you're getting multiple bids over the weekend, even with interest rates almost double what they were two years ago. Yeah. And that's another piece of this, Grace, is that there's some golden handcuffs out there because people either refinance or bought at crazy low rates. And now they're unwilling to sell that home because they don't want to take on a new mortgage that has double the interest rate, which means

there's lower inventory. So I don't see this thing shifting drastically in the next, you know, year. I think when you're ready to buy, you got to buy. And if it means you had to get a competitive bid in with a good real estate pro, then that's what you had to do to get that home. There's not going to be deals out there where you're, you know, doing 20,000 under asking price. It's not going to be deals out there where you're, you know, doing $20,000 under asking price right now. It's not the time to look for a bargain in the real estate business. That's for sure. No, not at all. I mean, I'm a bargain buyer. I don't buy except in bargains.

Dave hasn't bought a lot lately. And I haven't bought anything in a while. I mean, it's – and I'd kind of like to. I've got some cash I'm sitting on, but I'm not going to pay. I don't pay retail, so it's just like a Ramsey rule. So – What's your price point, Grace? Well, I mean, and I've been guilty where I, I mean, to kind of get to be competitive,

I've gotten $20,000 over. But, I mean, I'm looking around at $300,000 to $320,000. That range goes real fast, especially in the hot market. That's the biggest shortage. Oh, yeah. I was talking to my real estate buddy yesterday, and he said, homes under $500,000 in Nashville are going like that. If I was a home builder in an average city in America right now,

I would build all the $500,000 houses I can build because you could sell everything you built. Because that's an entry level in some markets. It's a number two move up in other markets. And it's just, you know, I would build. There's a tremendous inventory shortage. I know this is going to be behind the scenes, but do you think banks are going to, when the appraisal comes back,

and they're saying, okay, this townhome that was, I mean, for example, I had a 309 townhouse. I bid for 330, and it finally sold for 363 so do you think the banks are going to counter offer that thing i don't think this is going to be appraised for that high well they're going to run an appraisal and if there's no statistical evidence that that other townhouses are selling at the 36369,000, then that deal is going to have a problem because that bank has got a bunch of regulations on them. They cannot loan more than appraisal. That's what got us in the 2008 debacle was them loaning on bogus appraisals.

And so the appraisal industry since 2008 has tightened way up on regulations, and the banks are tightened way up. The mortgage companies are tightened way up. So they don't have a lot of wiggle room so if somebody made that offer they have to disclose to the bank they're paying 369 but the if the appraisal comes back at 320 the bank's going to lend on 320 they got to have the cash in their pocket for the difference so grace you're gonna have to compromise on some things whether that's location you know the home type how old it is see past some things that you can renovate.

But I don't want you to sit on the sidelines hoping for the market to shift drastically. It's not going to, you know, and I don't really disagree with your word obnoxious. I kind of think it's accurate, but it is based on supply and demand. And especially if you're trying to buy, it's just, it's distressing. It's harsh out there. Weird. This is The Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas,

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Pretty cool. All right. Open phones at 888-825-5225. Today's question comes from Sadie in New Hampshire. She says, I'm being sued by someone who was seriously injured in a car accident. That was my fault. I know this process can take years and my insurance company is handling the legal, but I have substantial assets and I didn't have an umbrella policy. My home and my financial assets are at serious risk. I'm a 64-year-old single woman with about a million dollars in retirement funds, $800,000 in non-retirement investments,

plus $230,000 in cash in the bank. I also own a home worth about $600,000 with about $425,000 in equity. I've spent my life building a business and financial security, and I'm debt-free except for the house, but now I feel like everything is in jeopardy. I also still make a large salary from a business I own. At this point, what can I do to minimize my exposure and potential loss of wealth? Well, it's anything you do.

I'm not an attorney, and I'm certainly not an attorney in New Hampshire. I don't even know one law in New Hampshire except to follow the speed limit. But in general, as a business person, I've learned the legal theory is this, that if you move assets after a lawsuit has been filed in order to avoid people getting those lawsuits, the judge can come back later and undo that move and still give it to them. So if you took, for instance, if you took something and moved it into an LLC or moved it into a trust or something in order to do risk management, it's too late. They can undo that in most states uh again i'm not an expert on the law

but i think that's a pretty standard legal uh business law piece of knowledge so uh i would i would hire your own attorney that really knows new hampshire law and ask that question you have enough assets you need to spend 10 or 20 000 bucks on your own attorney and say okay what can we do here what is at risk what is not at risk what helped me assess the um the potential on this thing and um uh you know what is this injury an injury of this type, do some research, normally have a payout of, and that kind of thing. And so a 69-year-old, 64-year-old single lady does not typically,

in most court cases, have all of her personal assets taken from her. That would be highly unusual, but it can be done. It can be done, and it depends, depends of course on a lot of things but how egregious was the um was your mistake um in the in the car accident in other words how uh careless were you or was this an accident or were you doing something over the top you know in the car that kind of thing weird i don't know i have no idea but i'm going to start assessing every one of those things uh in most cases the one million you have in retirement funds are is not accessible to a lawsuit your 401ks they can't get them okay and your roth iris they can't get them in most cases so but the rest of stuff which is several million dollars that you've laid out here

is probably you're probably right it probably is exposed and i'm just going to start investigating what i can do to um protect it or at least maybe make it difficult uh which gives you then the ability to try to negotiate and um attempt to do that, but, you know, you're not in a real strong position. So I'm going to analyze all of my options. And I think you need legal counsel because I'm not that and I'm not any good at it. But George is the reason that I don't own anything anymore. Nothing is in your name. I don't own anything.

My cars are in LLCcs my all of my properties are in different llcs all and once we get a certain amount of dollars in an llc we don't add make a new llc yeah because you don't want too much of a target i don't own them and i don't there's not a dave ramsey i don't know anything i'm really pretty poor actually personally and so on a personal level but sharon the actual man. Sharon's fairly well off, yeah. Hope Sharon doesn't have a car accident. Well, this is a good reminder, honestly, for everyone listening out there. If your net worth hits half a million or more, it's time to get an umbrella policy.

That's good. I was just looking at mine. I got a million dollar umbrella policy once I hit that level. And it costs 300 bucks. Yeah, 300 bucks a year. And I got underinsured motorist on there, uninsured motorist on there, protection as well, because that stuff can decimate you. And so you want to transfer that risk over to the insurance company for those premiums. Yeah, LLC's splitting this stuff off, number one. Then number two, having the right amount of insurance.

You know, just call somebody like Xander Insurance. It's an insurance broker. Let them shop around and get you a policy. In her case, a million would have gone a long way. Yeah, and being underinsured on your auto insurance if you've got a policy it's 100 300 100 instead of you know 500 250 500 you got to make sure you have enough coverage yeah the cheapest the best insurance there's not many things you can say that's a good buy there's really two types of insurance that are really a good buy and that's long-term disability insurance when you're an

employer buying it as a group for your team i buy it for our team but a dirty little secret is it doesn't cost much and uh the other piece of life is liability insurance like an umbrella policy and or upping the liability on your cars and on your home uh and then adding to the top of it an umbrella policy i carry a 10 million dollar umbrella and i think it's about 3 500 a year 10x something like a million it's roughly it might be four grand and a great tool for everyone listening watching out there go to ramseysolutions.com slash checkup and we'll do the work for you and show you the areas you might be exposed or underinsured i just helped a team member do this dave and they saved 80 bucks a month with better auto insurance coverage yeah you're paying too much you got to get rid of that

company and go talk to our friends at you know zander the auto and ramsey trusted go to the plc the pnc on the website for their uh elp the endorsed local providers for property and casualty and they're all insurance brokers they don't work for one company they shop for you and get you the best these are top rated companies on homeowners and and on and you'll save money yeah but you need to keep your liability high especially when you start building your net worth and then and you'll save money yeah but you need to keep your liability high especially when you start building your net worth and then once you get to a half million you're right you need to pick up a million dollar umbrella and then once you get to four million or five million go ahead and pick up a 10 million it's just it's the best buy in the insurance world because of what

she's facing it's so sad i know well you know to minimize the potential loss of wealth i hope your insurance company has a great lawyer that's going to fight for this. Well, they got a lawyer that's equal to the amount they're exposed. Yeah. Well, this happened to me, Dave. This was over 10 years ago now. I bumped into a lady. I remember this. She ended up suing me months later because I was on my dad.

You had a car wreck right in front of the office. It was so embarrassing. The whole office watched George have a car wreck. All of Ramsey's looking out the window, and I'm just out there in my little Chevy Cobalt. And I'm just going, oh, my gosh. Tearing up other people's stuff two fire trucks an ambulance two police officers there could not have it looked like a parade out there well i mean you were just driving you were just a regular door and yeah guess what a few months later this lady i get i get served she's suing for like 385 000 and i'm broke and i'm on my dad's insurance so he was exposed too

they ended up getting 25 000 from my insurance company which was my limit and 25 000 from her insurance company she should suit her own insurance company and she got 50 grand out of the deal so but i didn't pay a cent out of pocket was she really hurt no no she wasn't they said we never seen as many medical boxes that she sent over. She's a literal ambulance chaser. Oh, really? She had a lot of the, not her first rodeo, Dave. Let's say that.

Well, maybe she hit you, George. That's what I was. I got a camera the next day. I was like, I'm going to get a dash cam. You got a little body cam because George's body's. And I increased my insurance coverage the next day. Wow. Never again.

The next day is too late, by the way. Too late. That's the point of this whole email. You don't get to go back in time. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer,

and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs.

They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org budgets. George Campbell Ramsey personality is my co-host. You're invited by the way to join us anytime you're in the Nashville area. We charge absolutely nothing to sit and watch us do this show and it's worth every penny.

So we want you to come out and the coffee is free and it's good coffee and the homemade cookies are free and they're really good smells kind of like mama's kitchen when you come into our building instead of corporate america which is iron tent by the way they do a great job over in the baker street cafe a little nod to the opener on the show by the way but we've got a lobby here full of folks almost every day monday through friday one to four we do the show central time a little south of nashville in a beautiful town called franklin tennessee and so come out and visit us anytime we'd love to have you in that lobby on the debt free stage is anthony and shauna hey guys how are you pretty good awesome awesome where do you guys live temple florida oh fun welcome to nashville and all the way to nashville from big tampa to Awesome. Awesome. Where do you guys live? Tampa, Florida. Oh, fun. Welcome to Nashville

and all the way to Nashville from Big Tampa to do a debt-free scream. How much have you two paid off? We've paid off $71,102.49. Excellent. How long did that take? Nine months. Good for you. And your range of income during that time? was about a hundred and a hundred thousand to 112 just in personal not including the business okay well i mean do you make money in the business yeah okay what kind of money do you make in the business uh we do about 350 000 wow very nice good for you guys well done so you're killing it you two how old are you two 33 32 yeah what kind of debt was this 71 000 um so we had taxes which was 8 921 dollars and 50 cents student loans which were 28 8 dollars and 36 cents and credit cards which were 34 172 dollars and 63 cents awesomeness very cool So what happened nine months ago or 12 months ago that said we got to change this and then

nine months later, boom, you're out of debt. Well, we actually have a very interesting story. So when we first started dating, this was about March of 2020, we were sitting. Oh, that's good timing. Yeah, right. We were in his room because we were not living together yet and he had these floating shelves and he had your total money makeover book on the shelf and we're just sitting there just hanging out and all of a sudden the book falls off the

shelf like true story out of nowhere so we were like the spirit of george pushed the book off the shelf read this well we did we read the entire book in one day i would that would have freaked me out i would have made put that book away i would have a ouija board it was it was pretty crazy um so we read the entire book in one day we cut up up all of our credit cards. We got rid of his life insurance policy. Wow. A whole life insurance policy. Yeah, the whole life. And yeah, and then we got to work paying off our credit card debt, not any of our other debt. And we were just living life. You know, we were making about $10,000 to $12,000 a month and things were going great,

but we weren't really taking it very seriously because we didn't pay anything off after the credit card debt. And then about a year later, we decided we wanted to move from an apartment to a house, renting. And so then we got right back into a whole bunch of credit card debt. So we had to get furniture and washer and dryer and deposits and all that kind of stuff.

Credit cards again. So we got into all that credit card debt again. And then we also got married and, you you know so got into some debt for that so uh fast forward to november of 2022 and we were we're making about 10 to 12 thousand dollars a month and but it was off of one client and we didn't have second jobs we only had the business and then they just said this this was like right before Thanksgiving. So they said, sorry, on December 1st, you're out of here. We're not giving you any more money.

So in December, we actually had to use all of our wedding money to pay our bills. And then after that, we started having to put all of our bills on credit cards. So that's how we racked up even more credit card debt. And that was when things kind of snapped for us. We're like, this is never happening to us again. So we had nothing in place. We had nothing. So we were like, we need to change something.

So that's when we started going really hard in the business, and we also both got second jobs, and here we are. Did the book fall off the shelf again? But we definitely picked it up. Like, wait, I remember this. Yeah, pay off debt. That's good. And then you guys just went for it,

because now you had the income to go, all right, we're no more fooling around. Now will you go back again? No. Sure? Yeah yeah as soon as i knew that i was a problem with the money and i gave it up to her we literally got out of debt free like as soon as i gave her all power of handling all finances so that's that's my biggest lessons let her run everything ah okay all right but you got to know what's going on, right? You know that. We talk every month about all the bills. Yeah. I look at it daily.

Yes. I can tell you're the nerd because you have it down to the penny on the phone and he's just hanging out having a good time. Yeah. He's the free spirit. You guys call it the every dollar budget. I call it the every penny budget. Wow.

Because every single, I mean, we run payroll and we we run you know four thousand one hundred and thirty two dollars and nine cents we run exactly down to the penny of what we need and that's how we do it okay never gonna be there again never again moment that changes things that's right yeah and if you really won't go back in debt and you really will not ever live on one client again then you'll have a great business and you'll build wealth and you'll be in great shape and so yeah you learn some harsh lessons there yes so way to go y'all i'm proud of you how's it feel to be free it feels amazing free absolutely we really um our big goal is to buy a house so you know we don't really feel like there yet you know so we're out of debt but um well you're making great money you ought to be able to stack the cash and be able to do that tampa's a great market to buy in yeah we're almost

there keep living like you're broke and you know a year or two you'll go oh my gosh we have hundreds of thousands of dollars for this down payment actually um he for his um you know his w-2 job that he got um he had actually gotten a raise about four months into him having the job but we continued to live on the original amount and everything from the raise just went towards it that's amazing that's a big deal yeah very good yeah good job y'all well done well done what do you tell people the secret to getting out of debt and staying out of debt is um so i have two things um so the first thing is you have to want to get out of debt more than you want the thing, more than you want the coffee, more than you want the nails, the clothes, whatever.

And then the second thing is, which this has helped us probably the most, was continue the credit card stacking amount even after you've paid off your credit cards. So by the time we got to the end of our credit cards, our stacking payment was $1,000 a month. So even when we moved into paying off my student loans, we kept that $1,000. You're talking about your debt snowball amount? Yes.

Okay, all right, cool. And then when we went into saving for emergency fund, we kept that $1,000. And then, you know, now that we're saving up for the house, we kept that $1,000. So we always, bare minimum, have $1,000 going towards, you know, debt or savings. Yeah. So that's really, really been helpful. Yeah. Once you learn to not need it anymore because you're throwing it on that, then just don't need it ever again.

Right. And it turns into serious money. Like someday when you don't have a house payment anymore and you take that amount and just that amount always you always pay yourself a house payment that turns into a million dollars so fast it's scary yeah yeah we did that when we paid off our first house and um it was like 2,500 bucks a month or something back in those days and I just set that up going into a mutual fund and that turned into a million dollars so fast i looked up and i was like wow savings rate is amazing amazing yeah yeah pretty cool way to go y'all very very cool very proud of you thank you for coming up from tampa florida to do

your debt-free scream anthony and shauna tampa florida 71 000 paid off in nine months, making $100 all the way up to $350. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Woo-hoo-hoo! We're also going to give them two every-dollar premium subscriptions for a whole year that they can use and give away

as they save up for this new house. And they'll love it because they're already using every dollar. Every penny. Every penny instead of every dollar. There we go. Well, maybe we have a new subtitle. This is The Ramsey Show. George Campbell, Ramsey Personality, is my co-host today. Thank you for joining us. So many years ago, we started building a network of real estate agents across America that are high octane, high protein, that sell more houses than just about anybody in the area and that understand and run their whole thing the way Ramsey talks about so that when you go to them to list your house or you go to them to buy a home, you're going to recognize the lingo that they use if you spend time on this show. So they're called Ramsey Trusted because they do stuff the way we do, endorsed local providers for

your real estate. And so if you're thinking about buying a house or selling a house, this is the best possible way to do it especially when you've got a difficult market time as a seller there's some unique challenges right now you may be in a position if you price it right to be fielding multiple offers depending on the market other markets are stagnant sitting um and because people are frozen by these interest rates other places we're getting multiple bids it's a weird, and you can't just assume that anything you saw on the news or Zillow is correct. As a matter of fact, you can pretty much assume both of those things are wrong. And so, you know, you need to get with a professional in your area that's got some experience and doesn't sell three houses a year

and got their license last week because they thought it'd be fun. That's just not what we do. It's a side hustle, i go to church with him he's a nice man yeah but he's dumber than a rock he's just it's a good thing he's in church no you don't need to that does not need to be your real estate agent no absolutely not you get somebody that sells a lot of houses you know 50 300 200 what are houses a year these are people that real because if they're moving that kind of volume they know what the flip they're doing okay so these are ramsey trusted check them out for free at ramsey solutions.com slash agent if you're getting ready to list a house or look for a house and by the way it is a great time to do either um i love a market like this where things are weird there's opportunity when things are weird

and so um on both sides of this equation you can make things happen janet's with us in palm springs california hi janet how are you good how are you better than i deserve what's up sure um okay so my question today uh revolves around uh transferring or rolling over a Roth into a traditional 401k within an employer. So my husband's been with this company for over 10 years, and they had previously not offered a Roth option, and they just announced that they would now have that option for them. So we're wondering if it would be best. I know that you do suggest having them the cash available to pay the taxes we would have to pay on it but does it make sense to keep it within the company or should

he just roll it out of the company altogether and does he still work there he still works there yes you can't you can't move it out if you still work there okay okay now he has two possible three options here one is he can keep doing what he's doing, which I don't recommend. Number two, he could make all future contributions be Roth, and there's no taxes caused by that. Yes, he plans to do that. Okay. Or he could roll whatever his balance is with that company into a Roth 401k

now that it's available and that will activate taxes on that balance how much is that current balance uh the current balance is like seven uh close to 18k $18,000 yes and his traditional 401k with his employer yeah do you have any money? Are you guys in debt? What's your situation? No, we're actually in Baby Step 3B. We found your FDU through our church over a year ago, so we're out of debt. We have paid off cars. We have our fully funded emergency fund, and we just started saving for a house. Do you want to use $4,000 of your house money to make this 18 a Roth?

I'm sorry? Do you want to use $4,000 of your house money to make this 18 into a Roth? No, we would save up for that. You can't save up for it. When you roll it to a Roth, it's going to activate taxes the following year. Yes, correct. What Dave is saying, there's going to activate taxes the following year. Yes, correct. What Dave is saying, there's an opportunity cost. If you're trying to save for a house, it's going to delay that because now you need to take a portion

of that money to pay the taxes. Yes, correct. So I wouldn't fool with this. I would just make future contributions to the Roth, leave traditional assets. I would, just because it's only $18,000. It's only $4,000. If only four grand it was 180k you'd have a whole lot more taxes i'd rather pay it sooner than later where it's larger amounts yeah i agree

i would move it just because it's small but you need to understand that basically there's four thousand dollars in taxes that you're activating and that's going to lower the amount you have for a down payment by four grand so figure out how much that's going to hold you back we have about 2,000 2,500 extra a month that we've been throwing at at debt and all that stuff so that we'll just continue to roll into saving for this so it'll take us about two months to save that four thousand dollars exactly and you would have been putting that towards a down payment because you're in 3b and that's four thousand dollars it's not going to be available for a down payment now that's what i was saying yes so as long as you're willing to do that i and because it's such a small amount i would if it was double this i probably

wouldn't okay but if you know it's just it's it the other thing i like about it quite honestly because i've got so i'm old and i got so many different accounts from different stages of my life now uh this is very clean and it simplifies your future because now you're 100% roth everywhere right and that's going to be very sweet later instead of this weird little 18,000 account from that's now grown to 200 and it's been 25 years and you're like oh crap i've got that thing laying over there now so i like all of i like the cleanliness of it now i'm curious dave when it comes to employer match that sits in the traditional side so at ramsey yeah now when i'm when i retire one day hopefully 40 years from now from ramsey i'll have a traditional side with the

match in it that's true so you already kind of have you know you've got the different buckets there if you have an employer match it's likely going to that traditional side now the match in it. That's true. So you already kind of have, you know, you've got the different buckets there. If you have an employer match, it's likely going to that traditional side. Now, in your case, you won't because you could take that and roll it because you're a baby step seven millionaire. So pay the taxes. You can roll that once a year, the employer match into your into Roth. But but the employer cannot make the match in Roth. And so you've got to pay the taxes on it when you roll it once a year. But in your case, because you're in good financial position, I would do that. That's generally the time to do it. In her situation, because it was such a small amount

in there, it's not a deal breaker. 99% of the time you folks call here and ask us if you're going to roll something to a Roth before everything's paid off, including your house, we're going to tell you no. You got priorities. Because you would put the money towards debt instead of toward taxes. That's what we would rather you do. But the only reason we're answering her differently, or I'm answering her differently, arguing with George,

was that it's just a small account. We found the exception to the rule. Wow, it doesn't happen very often around here. It's something to celebrate. I have no hobbies. Malcolm is in Seattle. Hey, Malcolm, what's up? Hi, how are you today?

Better than I deserve. How can I help? I'm looking to ask you a question, get a reality check from you. So I started a small business about 60 days ago, and it's been much more successful than we thought. This isn't my primary job, nor am I going to leave my primary job. We buy and sell paintball equipment. And we do quite well on it,

but it's hard for us to get inventory because there's only a couple events per year. So I was thinking of doing an equity deal with another person. He buys the inventory, I sell it. Basically, it's a way to fund the business without taking debt but I don't know if I'm just being delusional is this another form of debt no it's a partnership that's what I was thinking but I just didn't want to be it's easy to look at things yeah it's a partnership and I think it's probably unhealthy.

Okay. I think you're probably paying a pretty serious premium out of your profits in order to bring in a partner to do this. Okay. I would suggest that you just grow a little bit slower and grow with your own profits. Okay. You'll make fewer mistakes, and you won't end up with somebody over to the side pissed off at some point

because something went sideways on you. What's the inventory cost? It's tricky because every marker... What are we talking about, $100,000 or $10,000? Like $75,000 six times. Okay. Yeah. Six times a year yes okay you need to what i would do is do

about a tenth of that and roll it and just roll up a little each time you don't have to be king of the mountain on day one dude you can be the little guy at the bottom of the mountain at the start and just don't don't be on the cover of fast company magazine be on the cover of slow company magazine and you'll survive that That's what I would do. It's what I did, by the way. That's how I grew this $300 million company. This is The Ramsey Show. Take care.