The Ramsey Show - App - When You Have Debt Your Money Is Not Really Yours

Episode Date: August 28, 2024

Welcome to the Ramsey Show America. Thrilled to have you with us. This is where we help you win with your money, win in your work, and win with your relationships. The phone number to jump in for you is 888-825-5225. That's 888-825-5225. I'm Ken Coleman, joined by the fabulous Rachel Cruz. It's always fun when we're together. We always have some fun calls. She'll be our resident money expert today.

And I'm your resident work expert, otherwise known as income. I'm the guy to help you make more money, mo' money, mo' problems. Mo' money, mo' problems is what they say. We'll talk about those problems that you're having. We always have a good time with it, 888-825-5225. You ready to go? Yeah, let's do this. All right, very good.

Let's go to Stella in Tucson, Arizona. Stella, how can we help? Good morning. Thank you for taking my call. You bet. What's up? Nice morning in my time zone, at least. I was wondering, how do I protect myself in a family trust? And I can give you a little- Yeah, tell us a little bit more. My parents are putting their property into a trust for all of myself and my siblings. It's been mostly completed. They haven't finished the final paperwork on it. And I'm looking at finishing a house that they started on the property 20 years ago. It's going to be part of the trust. Is this a good idea? And how do I make sure that I don't get sold out?

Yeah. So will you guys be splitting their primary home then? How many siblings do you have? I'm the oldest of nine. Oh, wow. Okay. So nine of them will be splitting the primary residence, but you're saying on the property is another home that you're putting money into? Yes.

It's actually going to be the primary home. They've been working on it for 20 years and they live on a second home on the same property. Okay. Okay. So what was the, for you to be, you're using your own money to fix up this property? Yes. Okay. And what was the motivation for you to do that? It's an amazing property. And the house, once completed, will be absolutely amazing. And we've been looking at moving. And for the cost to finish out this house, I can't even touch it to buy it. Okay. The property. Okay. Yeah. I mean, I would sit down with the siblings with your, well, with your parents probably first and foremost, and I would, I would lay out exactly

how much out of pocket you have put into this property and that you want to be able to recoup that in the instance of a sale. So if they go and sell the whole property and they sell both structures, if you will, right, you should come out ahead of your siblings because you're upping the value of the property, but it's within your own money. So being able to get that at least back out. Do you have good records of everything you've put into it? We haven't started yet, but I'm making sure I. Okay. Oh, so you've amassed this money? You've got all this money saved up? Yes. And how much are we talking about?

To finish out the house, we're looking at $60,000 to $70,000. Okay. And how much could you sell it for? Like how much would it sell for today versus if you fixed it up? That's what I want to know. Well, today with the unfinished house, I am not sure what the value is because it would be based off the other home. It's a four-bedroom home. The home we're looking at finishing out is an eight-bedroom home.

Right, but the question we're asking is, and you may not know, but this is something I think you can know, is to sit down with a really good real estate professional. And if you don't have one, Ramsey, we've got some great options for you. Ramseysolutions.com slash agent. Ramseysolutions.com slash real estate. We've got all these slashes. The point is, you need to find a good expert to say, if I put $60,000 to $70,000 into this house,

what do I think that is going to evaluate what will the new value of the property be isn't that what you're getting yeah absolutely yeah and and so let me just say with home renovate because with how old are your parents sorry i have so many thoughts uh my dad's in his 70s okay uh my mom's a few years younger and they'll be on this property until they pass correct assuming so uh no my mom if my dad passes first and he's got some health issues um she's gone she doesn't want to be on the property okay too far out in the country for her okay okay that's good to know well because i was going to say just for your benefits if i'm going to be putting seventy thousand dollars into a property you know you want to run the comps

and make sure that, again, not only do you recoup that, but you get out of it to a degree the value. Because, Stella, you could put $70,000 in an index fund and make 12%. You know what I mean? So, like, this is an investment that you're making, and that needs to be said out loud. And it gets messy because it's a family property,

but I would get all nine siblings on an email and I would get things in writing the plan of what's going down the more communication the better so that's in my opinion how you protect yourself in this situation but I mean and it may just because you love the property and you think it is a really great investment and you work it out with a real estate professional and you really figure out okay this is what I can recoup and it's worth it on my end for the energy, the time, my money. I want to get a good amount out of it. But also just know, Stella, it gets real messy, real fast with redoing properties, period. Because you're going to get in there and they're going to tear drywall down and be like, nope, you got black mold and it's going to cost 20 grand more to do

this or that. It can get real expensive, real fast. So just know that ahead of time, it's going to cost, you know, 20 grand more to do this or that. Like it can get real expensive real fast. So just know that ahead of time, it's going to take longer and more money. And then you put the family dynamics on top of it. Can it, it can get messy. Yeah. Stella, I may have missed this, but are you guaranteed that you're going to get this house at some point? Right. The conversation has been, and I've included siblings on this and everybody's on board with us doing this uh nobody else wants the property right now i didn't ask you i understand that i'm saying answer my question is it guaranteed and and and and if it's not in writing uh where is it in the sense that you personally will take ownership of this house at some point in the future is that guaranteed guaranteed that we can live there i at some point in the future? Is that guaranteed?

It's guaranteed that we can live there. I don't have in writing that it's our house. All right, I'm going somewhere with this. I don't like this move. I wouldn't spend a nickel on this. You called to ask our opinion. I personally would not put one nickel into this home unless you knew, and what I mean by knew is it was in the will or it is actually transferred to you. I wouldn't put a dime into this. I just wouldn't. Yeah. Or you guys just outright buy it and make

it your primary residence and you put your money into it, right? And redo it. That's my point. Yeah. This is me. Maybe I'm too cautious. For all the reasons that Rachel laid out, she's right. Why? I guess here's my question. What in the world would cause you to put any money into this right now when it's so up in the air and it's just too complicated? And I didn't realize you guys were going to use this as your primary residence, Stella. I thought you were going to fix it up. And then when they passed or moved on, you guys as a group was going to sell it. You're going to move into it. Save the money. Invest it. We're planning to hold the trust. Like nobody's planning to sell. But are you going to move into it? You and your immediate family, you and your husband. Okay. So then that's a different deal because now you don't have real estate then under your name.

And as the years and decades goes on and that value, then there's nothing, you don't have it to your name. Does that make sense? And real estate is one of the biggest parts of your financial portfolio. Don't do it. Don't do it. If you want to fix it up and all of that, and you guys decide, hey, here's what I'm going to recoup out of it.

Here's the growth of it. That's the only way I would do it. I don't think I would buy a home unless it was deeded to me and I bought it outright. Don't fix up a home that you don't own. Listen, the audience in the lobby is agreeing with me here. Save the money. Look at them. Thumbs up everywhere.

Save the money. Invest the money. And then when it becomes yours, fix it up. Watch fix-it-up shows if you need to scratch that itch. Don't do it. It's not a good move. Sorry to be cranky. This is the Ramsey Show.

You're not cranky, Ken. Statistics show that half of Americans don't have enough life insurance. Or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something? Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your

wife and kids. And I immediately went and got term life insurance. That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. They don't know what to do next. You're going to have a crisis here. You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up. Or she's concerned how she's going to eat tomorrow. That's exactly the two options. It's saying I love you to your family term life insurance. Jeff Zander and the team at Zander insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282. Welcome back to the Ramsey Show. I'm Ken Coleman. Rachel

Cruz joins me. So excited that you're with us. By the way, we have a fabulous, fabulous live audience today in the lobby of Ramsey Solutions. And so come one, come all. We'd love to see. We just took pictures, Rachel Cruz and I, on the break with some folks who traveled from Germany. Unbelievable. It was exciting. And they had cowboy boots on and everything.

I was like, they're so Nashville. One guy was from Minnesota. I don't know how he got to Germany, but we're glad he's back. One lady was from the Netherlands I don't know how he got to Germany, but we're glad he's back. One lady was from the Netherlands, maybe a couple, and they got excited about my sweater because that's what the soccer jersey, that's the official jersey color of the Netherlands. So anyway. Wow, you're so sporty, so athletic. I am. Just call me Sporty Ken today. Just Sporty Spice over here. Speaking of sporty things, how about smart decisions? I don't know what the connection is to sporty there.

I tried. It didn't work. But here we go. So August, Rachel, we always have these great deals, right? And so we have a bunch of great books on sale for only $12, including my book, From Paycheck to Purpose, going to help you figure out what your path is to making money and experiencing meaning. And then your book, Know Yourself, Know Your Money,

beating that comparison trap that makes people spend money they don't have. These are just two bestsellers that represent a lot of bestselling books, all on sale until August 31st for only four more days. My goodness, $12. RamseySolutions.com slash store. RamseySolutions.com slash store. That's where you go get them. All right.

Brianna is up in Tampa, Florida. Brianna, how can we help? Hi. Thank you for taking my call. Sure. So I actually am trying to figure out what I should do to kind of up my income. I'm considering returning back to school, but I don't know if that's really the answer right now, mainly because I have so much debt that I would like to pay off eventually. That's the goal. But I do know that I have an income problem, and I'm just trying to figure out exactly what to do. All right, three quick questions, and we'll dive in. Question number one, how much debt do you have? So I have a little under $100,000. Okay, we'll just call it $100,000 for conversation. Question number two, what are you doing for a living now and how much do you make?

So I personally make $15 an hour. I'm a thrift store assistant manager and I love what I do, but I only am able to work part-time. That's what they hired me for, and I'm only making that $15 an hour. Okay, third question. What degree or what certificate, what are you considering going to school for, and what do you think the potential income is attached to that? So there's two different options. One would be I would have to go into more debt for sure for and that would be like graduating with all these bills from it and that would be nursing school and then and with nurses starting here in Florida it's about $75,000 a year. Okay. And then the other option would be to be a marriage counselor, and I have an opportunity

actually to pay as I go with my church's university. And with that, I would have a bill every month that I would have to pay, but I wouldn't be in debt, in more debt at the end of graduation. What would the bill be every month? It would be $185. Okay. And that certificate, Brianna, through your church, is that like an accredited program that you could use? It would have to be a degree to do counseling. Well, that's why I'm making sure that it's not something within their church,

that you can only counsel in their church or something, that you could actually use it out in the marketplace as well? Correct. What's the total bill on that? How many years are we talking about? It would be four years altogether. So four years, let's round it up to two a month. So $2,400 a year. So we're looking at about $9,900, something like nine grand, nine plus. Okay. Well, so a couple things number one um you're broke and you make very little money so paying for school right now is not an option it's a pause right it's a pause you have other income though just to say like my husband i'm married and what's your combined income sorry um so that is roughly about i'd'd say, $3,500 a month.

What does he do? So he works two different jobs. He actually works at Taco Bell at night, making $12.50 an hour. And then during the day, he actually just started a job this week that is a full-time position working for LifeLock Insurance. And it ranges just based on sales and how many hours he works, like he gets bonuses. So it ranges from $13 an hour up to $20. Okay. All right. A couple things. Both of you need to be thinking about your talent, your skill set, and where we can make the most money with that. So let me just take you for example. You're an assistant manager of a thrift store,

and you're making $15 an hour, and you're only getting part-time hours. So you're obviously very good with people, yes? Yes. Okay. I would be looking for management positions, full-time management positions, in a variety of – could be retail, could be maybe an office manager. I don't know, but the skillset, am I organized? Am I really, really good with people and communicating and serving? Because you need to be looking at, I'm talking about a Walmart job, okay, which is

nothing to sneeze at. And let me tell you why I'm saying Walmart as an example, and I'm not trying to hang this on you, okay? But right, you're only working to get out of debt and save money and then eventually fund your future. That's the order of this right now. So let me tell you why I like Walmart. Walmart is paying for people's college educations. So you take that thrift store management skill and you go in and go, I'll tell you what, I'll take the graveyard shift. I'll be a manager. or I'll go in and I'll start here and I'll work my way into being a manager within six months or a year. And I'm making 18, 20, 22, $25 an hour, somewhere in that range. All right. And then they're going to pay for my college and they'll pay for nursing school.

This is happening with big companies like this. I think Target does it as well. Check me on that, but I know Walmart does it. They made a big announcement coming out of COVID. This is the path for you. So no debt at all the rest of your life, but we've got to increase our income. If your husband, by the way, has basic skillset, you know what I'd rather him do? I'd rather him go to a trade school and cash flow through a trade school. And he's not working at Taco Bell anymore. He's working as an electrician or HVAC and he's making 30, 35, 40, $45 an hour. If you guys can buckle down and go, where are we able to make the most money in exchange for our time? And then you walk through the baby steps. And I want to hand it to Rachel to walk through that $100,000 in debt

and have her cast some vision through our baby steps. But I just wanted to preach at you there for a minute, and I'm preaching in a belief standpoint. I believe you guys could be making way better money, which will help you pay off the $100,000. And I think if we focus on that and you go to a Walmart or another company like that that may pay for your nursing I just yeah I think it's coming that's down the line. Yeah and it's finding other other

options too Brianna because when people say you know and I'll quote it back to you but you said at the beginning of the call well if I do this right I have to take on debt if you took debt off the table and just said okay so now what am I what now what are my options it's going to force you to be more creative to either thing okay I, I need to just find another job, be patient and save. I need to find a job that maybe will contribute to my tuition, like what Ken was saying. And also being in an environment, Brianna, that has an upward trajectory, which is why I like an element like a Walmart or something. You can use those same skills, but you're going to continue to raise your income, right?

And so, you know, and not that there's anything wrong with thrift stores or all of that, but I think for a temporary solution, it's fine. But your long-term career path for the rest of your life, we want something that you can grow into, right? And so putting yourself in those positions, like what Ken is saying, is so great.

And I want to encourage you too, you know, the world today, it is shifting. And there are still jobs that require a college degree, absolutely. And fields, obviously nursing, you have to go get schooling for or counseling even. But there are many companies that are paying, you know, 40 grand, 50 grand a year. And you could be a personal assistant, you can do online. I mean, you can find a niche that you don't need a college degree to just up your income in general. Now, you know, our goal and what Ken's goal is, is to be able to, you know, find something long-term for you that you love and are passionate about.

But I'm with Ken. I think in the meantime, you guys can find some other options. So hold on the line, Brianna. Christian's going to pick up because I want to, I'm going to gift you guys Ken's whole assessment. And the final work you're wired to do. Yeah, and his assessment for you and your husband both to check that out. And I think once you get those incomes up, then you start really attacking this debt. And you do that by the smallest amount to the largest amount. So hold on the line and Christian will pick up and get that stuff for you. Just a quick perspective. What can we do to pay off 30 grand a year in debt? That's a goal. That would get us to that 100,000 pretty quickly,

and then we can move forward on the work we really want to do. 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

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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 slash budgets. Welcome back to the Ramsey Show. I'm Ken Coleman, and Rachel Cruz joins me, and we are here for you taking your calls about your money, your income, your relationships, your situations around all of that. 888-825-5225 is the phone number. 888-825-5225. John is up next in Orlando, Florida. John, how can we help today? Yes, my question is basically to determine if I just have too much cash sitting in my core account. I own my home, I own my vehicles, and I basically have 92% of my money sitting in cash or treasury bonds.

How much is that? About $4,100,000. Okay, hold on a second. Well done, John. Hold on. A little cough. You have $4.1 million basically in cash, if I heard that right? That's where they're sitting in cash accounts.

Correct, in a cash account with and then I well and part of that is a million dollars in a 20-year Treasury bonds that have bought over the past year at an average of like four point eight two okay so about three million is in a cash account correct extremely liquid i you know well yeah so john how old are you 61 61 okay um what's caused you not to invest on any level whether that's real estate or the the market um the stock market like what's caused you not to invest I'm being in real estate I do have a few retirements accounts that you know that are in some stocks like Google and Amazon how much I start the retirement total of 273,000 in between a Roth and traditional and set. Okay. So no 401k, nothing like that?

Well, I own some real estates that will be paid off. Yeah, I've not done a great job with that. No, no, no. We're not judging you at all. We're just trying to get the full picture of the total amount of money you have available. And so your opening question was, do I have too much money in cash accounts? And the answer is, yes, you do. We'd like to see you invest that with our strategy. Yeah. I mean, I think...

You're still a young guy. For sure. And just being able to look to say, hey, with the average growth, 10%, 11%, 12%, what that could get you you know john your money making money is basically what it is because right now when you say that that's all liquid is that sitting in just like a high yield savings or is that a traditional savings account where do you have that three million it's like a it's like a fidelity you know they have these money markets and they yep the one i'm in pays 5.27 right now. Totally, yeah, yeah, yeah. And then the Treasury bonds, which has gone way up because those yields have gone down. Yes.

You know, it's at 4.82. So I figured rather than taking any risk, I'm just sitting on the side making 5% right now. But that's going to change. Yeah, but have you done the math on the compound interest if you got in the game? Yeah. You're scared. This is all fear, and there's nothing to be ashamed of, but I've never talked to anybody that told me the story you just told me.

That's astounding. It's truly amazing. You're certainly not hurting. You're 61. You've got a lot of money in the bank. You're safe. Man, you're safe. You've got a lot of money in the bank. You're safe. Man, you're safe. But you called us. Are you starting to feel as though I should probably be investing a good chunk of this?

Where can we help you? Because you're just afraid to death of the stock market and mutual funds and the whole nine yards. It's just fear that's driving this. Actually, I've watched a lot of the shows and uh the mutual funds seem appealing okay well we've got a strategy for that yeah i mean for sure yeah so i think john are you married yes yeah okay so i mean if i were you tonight i think you and your wife go buy a nice bottle of wine because you can afford it and sit down, open it up. And you guys start dreaming, dream about, hey, where do we want to be? We're 60. Let's just say the Lord's been good to us and we live till we're 90. We got 30 years. What do we want to do with this money? And there's a really interesting book, John, it's called Die With Zero. I want you to

buy it. I don't agree with 100% of it, but it's a very interesting take. Oh, boy. And I think it leans more in a John's case, right? If there is a lot of wealth, what the role money plays in our life and what you want to do with it. Because this book argues, which I think in your case would work, not for everyone listening, but in John's specific case, that to enjoy your money, and it's not just spending it all, but if you have kids, John, and you want to be able to help them, you know, do you wait till, you know,

you're gone at 90 and your kids are 60 and they, you know, or is there stuff you can do now, you know, with them to, to help that legacy happen in real time? The, the generosity portion,

you know, charity and, and what you give to is that, is there more you could be doing kind of in these buckets with the money you have today while knowing, yes, you need to live off of this for 30 years? But I'm saying all that to say you're in a great position just to dream. And we say dream in HD, like put pictures to words, as Dr. John Deloney says. But you and your wives tonight sit down and just say, hey, what do we want the next 30

years to look like? Because the truth is, John, you get off this call and do nothing and you're going to be fine to ken's point i mean you're going to be fine yeah but but i think also to say hey what if we grew a percentage of this um and look for the next six years and we put it in some mutual funds maybe some you know growth in income aggressive growth you know picking out some good mutual funds i have good track records and putting a portion of it and just seeing. And then you look up in five years, reevaluate and be like, okay, we like that. You know, so you can, you can step into this. I think there's some personalities that are like, put all the chips in the middle of the table and we're going all in and we're going to make 10, 12% starting today. And you

could do that. I mean, if I were in your position, I'd lean more towards that, but I think it's okay for you guys to kind of stair step your way into it. But, but I would really advise you to sit down with one of our SmartVestor pros with the SmartVestor pro, because sitting down with an investment professional in general is going to be really helpful because also John was playing in the back of my mind, which we don't have time to unpack right now on this call, but you is the tax implications to some of this, the estate tax, all of that. I just want to make sure that you're doing things specifically in a really wise way

that's going to be the best for you guys in your situation. So if, yeah, Christian can give you that link when we get off the phone and interview a couple of them. If you have an investment professional that you love and you trust, sit down and talk to them. But I think getting someone in your corner that does this day in and day out is going to be really helpful because I do think you can do a lot with this. And I think your money can make money. And again, not just for the sake of like, we're just going to build a bunch more wealth, but to be able to continue to live a great and rich life for yourself and your family and others. Yeah. And John, I agree with

Rachel. I think going to sit down with your wife first and laying out what you want to do with that money, where you'd like to see it go, have that on paper, ready to talk about when you go sit down with some of these smart investor pros. And as you interview several of them and talk about it, see what their plan is. And you get to pick the one you like. I really like that. But I also want to just hit something for you, John, and our larger audience. Rachel and I just got an email this morning that was forwarded to us. And it was from a local SmartVestor Pro that we know. And in short, was telling us about a friend of his who passed in his early 50s of lung cancer, tragically. But the point of the email was, is that they had invested

a decent sized chunk of money for their son in a 529 in 2012. So here we are just 12 years later. And it was an enormous sum of money now. And what he said to us is they got 12% return over that time period. So over the last 12 years, that 529 got 12% return. And I just wanted to highlight what Rachel said. And John, these are not numbers that we're pulling out of our ear to be shock jocks. That's a real life story. And I just want to underline that to say, imagine the 5% turning into 10 to 12%. That's not a fairy tale. And to Rachel's point, what you can do with that over the 5%, I think that's legacy stuff, John. And it's really doable. So you're a smart guy. You're incredibly disciplined. And I'll say, being a Ramsey at heart, too, being in the market, but also real estate. John, you mentioned that you have a couple of properties there.

And I mean, Dave's very honest on this show. That's where a lot of his money is. So there's different proven ways to grow your money, whether investing traditionally just in the stock market or paid for real estate. There's some great avenues out there to make your money work for you, and I think that's a great goal. So thanks for the call, John. We appreciate it. Pretty awesome stuff there.

Wow. $4 million in a savings account. What's your problem? It's pretty impressive. This is The Ramsey Show. What does the future hold for business? Ask nine experts and you'll get ten different answers. Economic growth or a recession.

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netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. Welcome back to The Ramsey Show. I'm Ken Coleman. Rachel Cruz is joining me this hour. 888-825-5225. 888-825-5225. All right, we go to Atlanta, Georgia now, and Jimmy's there. Jimmy, how can we help? Hi, thanks for taking my call. You bet. I'm 63, my wife is 52, and we have a household net worth of approximately 2.6, 2.7. Well done. We've got 400K sitting in the money market right now, and we've got five houses, including our primary, which is worth about 750.

We owe 220 on it, and it's at 4.25% interest, and all my rental properties are within a 15-minute radius of my house except for one that I've just completely remodeled. It's over an hour away. I'm considering selling it, doing a 1031 tax exchange, and replacing it with a house near me, or B, selling it and paying my house off? I like B. Can I do a C? Ooh, I like another option.

I vote for B. Rachel wants to introduce C, Jimmy. Stand by. I would do both, Jimmy. Do you need the $400,000 at all for the new rental that you're going to buy? I mean, if you're going to do the exchange, tax-wise, it's going to be close to the same value. Is that what you're shooting for? Correct. Okay.

And not touch the $400,000. No, I would take $220,000 out of your $401,000. Or, I'm sorry. Whoa. Hello. Hold on. I would take $220,000 out of your $400,000 that's in the money market today and pay off my house and have $160,000 in there, do the 1031 exchange with the property, get another rental close by,

and there you go. You got a paid-off house. You got five rental properties paid for with $160,000 in the bank. And you can build back up $200,000 a lot. Rachel knows how to spend other people's money. I'm telling you, that is fabulous. I like C. Now I'm going with C. Would you not, Jimmy?

Why aren't you wanting to pay off your house? You know, I just now thought of that, as you were saying. This is why you call Rachel Cruz. Right here, Jimmy. She knows how to spend your money better than you. Sometimes you just need a third party to be looking into the situation where you think, oh, I hadn't thought of that.

No, it's great. Does that remove the house that's an hour away though? Yeah, because he's going to do that anyways. So he'll sell that, but at 1031 Exchange you can buy the same one and not have to pay capital gains i'm telling you rachel you take the rest of the show off that was such good advice i'm not sure you can top that that's about as good as but i think you can do yeah you can do both what do you think jimmy well

sounds good let's try that it's a little nervous about touching that 400k because i've been broke before yeah i know you got a little scarcity mentality touching that $400,000 because I've been broke before. I know. You got a little scarcity mentality in you, Jimmy. So here, promise me this. I want you to do this. I want you to do it this week. I want you to pay off your house. And in January, okay, we'll go through an election,

all the craziness of the world. And if you hate having a paid-for house, Jimmy, I'm not going to give you permission, but you could go get a HELOC, right? Take some money out, put cash in the bank. Or we'll let you call Rachel up and say bad things about it on the show. Because my point is, Jimmy, you're not going. You wouldn't go back and borrow on your home at 4%. That's what this is. I mean, that's what it is.

And, Jimmy, what are the chances that you're going to be broke again? Let's handicap it. Zero. Zero. I was kind of going to go there. So. How much is your rentals bringing in a month? All five of them.

Approximately, once it's said and done, about $2,500 each. So you're talking $10,000, $110,000 a month. Jimmy, you've got more money buried in your backyard than most people will ever make. You're fine. There's zero chance of you going broke. All right. Well, I appreciate it. Yeah, she's going to get you a better return.

That's what she's doing. And good for you, Jimmy. I mean, that's hard work, Ken. I know. He's done it. You live the American dream. Are you? Where in Atlanta are you?

North Woodstock. Yeah, yeah. I lived in Suwannee for 11 years. I know where you're at. So, yeah, so you're a baby. I've never been in the market, mutual funds or anything, and I met with a couple of financial advisors that wanted me to sell the houses and put the money with them, and that was kind of a red flag with me.

Yeah, Jimmy, you're fine. You've got property in North Atlanta area? Come on, man. Yeah, but you don't have anything in the market? No Roth or 401k? Okay, none. Okay. The money market's paying 5.34 right now.

It is, yeah. And your rentals are great. I mean, I think, yeah. I mean, if someone comes in and is like, sell everything and do it our way. Does that change your opinion? No, it doesn't change my opinion. But I would say, though, Jimmy, diversification is always good in general, right? So we just had a caller last segment where we kind of talked about this, But I would say, though, Jimmy, diversification is always good in general, right?

So we just had a caller last segment where we kind of talked about this, where two great places to invest long-term is the market. I mean, on average, 10% to 12% returns. And real estate has great returns. Both can be volatile at different times, but you write them out and you're good. So I think you're fine, Jimmy. I would maybe kind of just tinker on the idea of putting some in like just an index fund. That's what I'm asking you. Let's go back to your plan. You've spent his $400,000 really quickly and effectively. No, I spent $200,000 of it.

No, but then you said take the rest of that and get another rental, right? No, no, no, no, no. No, I didn't. You didn't say that. No, I'd say leave $160,000 in the money market. Oh, good. Yeah, yeah, yeah. Because I was going to say, oh, I see what you did. Yep. All right. So my question is, of course, I hate capital gains. It gives me a rash just saying the two words. I'm going to have to calamine all over up to after the break here. But the question is, shouldn't you put some of that in the investment? Shouldn't you invest some of that? That's what I'm wondering, Jimmy. That's what I'm getting at. I mean, again, you're going're going to be fine but i do think diversification is great so if you did want to look into and do some research and find someone that doesn't gross you out as a financial advisor yeah uh check out a smart investor pro and and again i would not go have the conversation i would not sell all your

houses and put it in the market like this person said i would not do that but maybe there's an element that you have some good cash or maybe you take a percentage and just put some in the market. Just again, the diversification spreads around risk. And it's always a good thing in general. Jimmy, you're getting a call. All right. Jimmy, we're going to let you. I think we're great. We're going to let you go.

I appreciate the call. I think that's awesome. Got a call online too, Jimmy. Jimmy is a busy man. Yeah. Yeah. You got a tenant online too. The gutter, it fell off this morning. We're going to let him take care of that.

That's great. It's also, I love the like 1992 era phone ring. That was interesting to me as well. I bet it was a landline. It may have been a fax. No, didn't faxes have different rings than that? Yeah. It was just a bad joke.

Oh, man. Okay, but I really love, okay, back-to-back calls. I love this example. And baby steps millionaires. And I bet first generation. I wish I'd asked both of them. I know we should have. But here's the thing I want to point out.

I want your take on this. I'm teeing you up because you were talking to Neil Cavuto today. You're the big shot. All right, everybody's excited about the five plus plus percent but that's not going to be that way forever right now because the fed has raised rates steadily everybody's getting that really fat percentage they're like five percent here oh on the money i just want to point out that the long-term play right for a sizable chunk of money is not your money market account that's correct yes and that's interesting

the benefit of rates being high the benefit and the downside right the downside is that rates are high so meaning when you borrow on money it's going to be higher that's why mortgage rates are crazy right if you go get a car loan right now i mean everything is just high percentage when you're borrowing that interest but on the flip wonderful side those of us that are saving in things like a money market or high yield savings, we're getting higher returns than ever. I mean, usually it's like 2%. It was up to six at one point in our high yield savings. I'm like, this is crazy. But to your point, it's not going to be like that forever, right? Things are going

to shift. And as the Fed and the rates start to change, we're going to see some shifts. So yes, your long-term play for building wealth is not going to be in a high-yield savings account or a money market account. The stock market is up big time for the year. I mean, we had that one big scary day where most people who aren't veterans or don't listen to the Ramsey Show freaked out. And then it's back and it's just fantastic.

And so the compound interest is your friend. It is your friend. It is your friend. It is your friend. And that's what we're preaching. You got to be diversified. Diversification is the key. That's what we teach. David's taught that for decades. Any of the smart investor pros that you can get access to in your area, this is for our larger audience listening and watching right now. If they aren't giving you the strategy that we talk about walk away but they will and i'm telling you that diversification over the long haul it is and and it's nice and it's 15 of your income into retirement that's what we're talking about 15 once you're debt free and you have an emergency fund and then anything extra you have put it at your house once your house sells then looking into things like a

like real estate paid for real estate is that next step step. But it's a great plan and some people have been very successful. Great job with Jimmy. That was fun to watch you work, my friend. That was well played. All right. It's been a good hour. We got to hop. This is The Ramsey Show. This is The Ramsey Show. Thrilled to have you with us, America. We're here to help you win in your life. We want you to win with your money, win in your work, and win with your relationships. That allows you to have peace and to live with great purpose. 888-825-5225 is the phone number.

888-825-5225. I'm sitting alongside Rachel Cruz, and I'm Ken Coleman, and we're here for you this hour, ready to coach some people up. Let's go to Crystal now, who's in the Big Apple, New York City, love the city. Crystal, how can we help? Hi, thank you so much for having me. Hello, Rachel. Hello, Ken.

Thank you. I truly appreciate this opportunity and got to be here. Good. What's going on? Your advice too. Yeah. So we are a family of two, my husband and I. Currently, we recently have a combined income.

Recently, I mean in the last probably six to eight months of 190,000 growth yearly. 400 or 100? What'd you say? 190. Okay, perfect. Yes. And that would be 190. Okay, perfect. Yes. And that would be gross. Okay.

So in that pandemic, my husband and I had the opportunity to buy our first house, which we did. Two years later, we decided to rent it out, which we have. We moved out. And we bought a condo recently, four months ago, which we flipped. And we were hoping just to continue on to this path. Recently, my husband came into an opportunity where he was offered a fully remote job, but it would be a serious cut in our income and I wouldn't be able to work as well because it would be back home in the Dominican Republic, which our initial goal

when we came here eight years ago was to hopefully be back home with our family. So funny is that the cut is a big time for living in New York because it would be down to $60,000 gross. And here in New York, the lifestyle that we are having right now, our expenses being at $8,000 a month won't make it. So even if he keeps the 60K and I stay with mine, both of us won't be able to, you know, make ends meet in New York until we finally get rid of our debt or probably sell both of our properties. So what we would like your advice would be what would be the wisest choice in this case. Our rental income right now is on a month to month and it's $4,000 a month. And where we're at now, that house, sorry, has a 2.9% interest, and we owe $385,000 on that house.

What's it worth? Right now, I estimate about $500,000, $550,000. All right, let's pause for a minute because you gave us a lot of details. I know. No, no, no. No, you did a wonderful job. Wonderful job. My question is, what would you need to make to live comfortably in the DR?

We're going to put the debt aside because we need to remove the debt regardless of where we're living. But what, what would you need to live comfortably in the DR? So 60,000 would be beyond comfortable. That's what I was. And then what could you do in the DR? Well, I definitely, my family has small businesses over there, so I can definitely pitch in, but that would be something that I would have to start from scratch.

Well, hold on a second. I don't know about that. What do you do now? Well, I currently work for a retirement company for a principal. Are there any retirement companies in the dr yeah yes and no okay here's my point you have a lot of transferable experience and i think i think it's probably valuable that you're coming from the states with that experience and you got a lot of connections in the dr, true or false? True. So this idea, this notion that your only option is to go work for your family's small businesses and start from zero, I think that's not the right notion.

I think it's an incorrect notion. Would you agree with that? I would say so, yes. It would depend where we live, too. I get it, but my point is, is what's keeping you from going to the DR and he takes this job, but he does it there? Or are they saying they don't want somebody on site, they're only wanting a remote worker? So what's keeping us here is that we have the debt and we cannot leave with his job only and pay off the debt that we have now. And we would have to either,

we cannot rent this condo that we just bought because we bought it at a 5% down payment. Okay, so let me jump in on that. I'm going to tell you to sell that anyway. You guys don't need that right now. You're in debt. You need to sell it and take whatever money you can make from that. Yeah, how much would you make off that sale?

How much would you make? That is, for this condo, we just bought it three months ago and we bought it at market price market value so we are gonna we either are gonna go negative or just go clean because we put in about 30 to 40k to make it nice okay okay and you i thought you told me earlier that it was it it was worth more than you, you talk about your current home. Well, that's the house. That's the house. How much can you get for the house if you sell the house? So if I sell the house, I would get like a 500, 550. I can push it to more, but I don't want to. No, no, no. What would you clear? Yeah. What would

you clear with what you owe? Um, so for the house only, so for the single family house that I have rented, if I sell it, I can probably have 150K to 130. Okay. And how much other, what other, what other debt do you guys have? So currently we have around 90,000 in credit cards. I would include the loans that we did to get this apartment, this condo, and plus some renovation that we did to the other house as well. So in total, we only owe $90,000. Okay. So if you sell the house, you clear $150,000, use that to pay off the $90,000, right?

So you got $60,000 over here. So I'm trying to understand, Crystal, you guys want to be in the DR, right? Isn't that what you're wanting? Are you wanting to stay in the DR, right? And that's what you're wanting? Or are you wanting to stay in New York for longer? No, we do actually want to go to the DR. Okay.

You go. So then why don't you go? Why don't you do that? And I would not live in the... And I would sell the condo, too. Me, too. You may have to wait a year for capital gains and all that. Make sure you look into that. But, I mean, I would go.

Sell it all. Go. Pay off it all go you said you said you would live comfortably off of his 60 in the dr yeah so you don't even have to work necessarily i mean i would do something but you're fine and you have no debt if you do what rachel told you to do so that's the whole point of our line of questioning if you want to go to dr what makes you not want to do that or what makes you not do that plan? So the only thing that I would say is since we never put any work in the Dominican Republic, buying houses or even buying, we would have to start from scratch. So yes, we would pay the debt, but we would be on zero dollars. You'd have 60 grand. How much is real estate in the DR? How much to buy a house there? Well, it can cost 200, 300,000.

But you're both living comfortably. You said you could live beyond comfortably off of his $60,000. Let's say you make $40,000. You guys aren't starting from scratch. You'd be able to save up for a nice down payment very, very quickly with no debt. Yeah, you could rent in the DR for a year, save up, and you'll have that $60,000, which I want that to be part of your emergency fund, but you've got to jumpstart on a great down payment for a house.

You need 5% is what we recommend well in the dr they don't have five percent is thirty percent down oh again you're still fine and they don't have but even if you had to don't have but even if you had to rent crystal at the in the dr for two years three years that'd be okay right i mean it's where you guys want to be yeah i mean i I would do it. I'd sell everything in New York. I'd pay off the credit cards, and I'd go to the DR. He's got a $60,000 job. It's awesome. And then if you make anything on top of that, that's just, yeah.

I was just there. It's a lovely country. That's your dream. Why delay the dream? Rachel and I can't figure out one reason why you would delay it. In fact, I think you put it at risk the more you mess around with this current financial situation. Get out of this deal and get home. My goodness, this is a no-brainer.

I love this idea. Ken's going to move with y'all, Chris. He's moving with y'all. I love the DR. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. Rachel Cruz is alongside. Excited that you are

with us, taking your questions about your money, your income, and your relationships. 888-825-5225. Jim is up in Phoenix, Arizona. Jim, how can we help today? Hi there. So I've been working with RV rentals for the past two years, and I have no debt. I'm looking to maybe, well, here's the situation. So I've been managing a subcontract for another guy in town. So he works for basically Cruise America. I manage the RVs for him. He makes the commission checks.

He wants to get rid of the subcontract. I'm looking to take it over. But if I'm not able to take over this subcontract, not able to find a good commercial location to run it out of, I was thinking about kind of running my own rental business because I've been doing this for a couple of years now. I kind of know the ins and outs of the RV business. I'll think about maybe buying my first RV with cash, renting it out. And then once I have enough money saved up from the profit from that, I could buy the next one and so on and so forth. So cash all the way through? That would be the hope. What's the margin on that stuff, Jim?

I don't know much about RVs and rentals and all of that, especially if you're the owner of it. What are the numbers around it? How much are they and how much could you rent it for? So I would probably want to go for something 2019 or newer, probably not brand new, Class C motorhome. We're looking at about seven, well, let's say 60 to 90 grand for each RV. What's the margin though? That's what she's getting at. So what's the margin?

How often can you rent it out? What do you think you'll make a year on it? The busy season is basically from May to September. So it's about a six month period, but 180 days out of the year, making about $150 an hour or excuse me, $150 a day. So I think that works out to maybe about 30 grand a year for a single RV. And then margin after, you know, fixes, repairs, housekeeping, all the fun stuff that goes with rentals, I think it's about a 15, 20% margin. Is what you make. Okay. And yeah, and this is something you want to do. I mean, I i guess i'm not a fan of it as a business model that's why i don't like that yeah and the the idea of owning an asset that's going down in value like plummeting year after year after year i mean when you get done with it it's not like oh

you have a pay you have a real estate that's gone up you got to buy another one it's gone down you know in in value um so i mean the numbers in my head i mean you've been doing it for two years so honestly jim you're from that standpoint you, more than I do about this world, but it sounds like your investment could be better spent somewhere else. Do you think? Well, perhaps, I guess. I mean, I don't know. I've done lots of jobs, gone back and back and forth here and there, done this and that. And I actually, actually kind of like this industry. Okay. Okay. So that's partly why I'm leaning towards it.

Well, again, if you do it with cash. Yeah, there's no risk in it, right? Well, I mean, again, it's just you're burning through. So what's the life cycle of an RV before you have to sell it for pennies on the dollar? Have you thought through that? Because to Rachel's point, you're not going into debt. And you said, I hope. So our deal is you're not going to go into debt for this. I think it would be a catastrophically bad idea to go into debt for RV rentals. So the question is, what's the life cycle when you buy one of these things before you pretty much, how many years can you get out of it? In other words, rental money.

Yeah, I would say five. Five is probably the max if you're buying a brand new. And then otherwise, I would probably retire them at 130,000 miles. Okay. I could be doing my math wrong, Jim. So in that case, so if you bought a $70,000 one, and you're making 30 on it a year, but you're only getting a 15, 20% rate of return back, I mean, that's $10,000. So in the five years. That would take seven years to recoup that $70,000. I don't know mathematically if it makes sense. And Jim, I am sorry.

That's why I've been digging and asking these questions. Well, I guess you could sell it eventually, but what it would be worth in seven years is... Yeah, what are you going to sell it for in five years? Right. So if I bought it for $70,000, it'd probably be worth like 30 this is not in my mind a good business i'm not trying to be shark tank guy but i wouldn't invest in this i don't think it's i think i think for the margins plus all the stuff that rachel just i mean it just

doesn't feel right i know you feel like you would make 10 grand at the end of five years though, right? If the math is, if the math is going through, you buy it for 70, you're making 30, you make 15 to 20%, right? 10,000 after five years, that's 50,000. You sell it for 30, that's 80,000. So you put $70,000 into something. And after five years, you make $10,000 versus if you put 70 grand into an index fund do you know what i mean i'm just i'm trying to get i'm trying to help you it's just not a great business money make more money on your money um it's got a lot of risk associated with it too we're not even getting into that i'm not trying to be mr you know droopy dog but i wasn't that the name of that dog that always had the pouty attitude? Droopy?

Eeyore? Wasn't it, James? Somebody help me out. She's too young. Snoopy was the Charlie Brown dog. No, not Snoopy. There was a dog named Droopy. Thank you, the audience. You know what I'm talking about.

Okay, great. Here's the point. I'm not trying to be depressing, but, Jim, there is so much risk associated with this. It's not a good business model. I'm out. I wouldn't do it. It's not even risk on my end. It's just the numbers as you just lay out the numbers. I said numbers plus risk. Okay. I'm saying all of it combined. We walk through the numbers. It's not a solid business

model. And then on top of that, there's so much more risk with the things breaking down. I'm just saying it's not, I wouldn't do it, Jim. Soim so sorry gosh i know you're hoping for a better answer no i wanted an honest answer so that that's uh helpful yeah can i can i address something i think that you think that this is the only thing you can do is that true uh it's the thing i feel most comfortable doing right now for for sure. All right. I'm saying you're successful. You're making good money now and selling these things or whatever it is that you're in. I just, I want you to look for a better business idea. Don't be discouraged is my point.

Yeah. And I think the line of work you're in is, is fine. I think it's when you start going into the ownership route, that's where the numbers start to play out to be like, you know, if you're making a cut of the rental thing and that's your, and that's your job, right? I mean, like you're making money, you're not owning the asset. And I think because the asset goes down in value so fast,

that's what makes it difficult. But to your point, Ken, Jim, if you hang on the line, Christian can pick up and I'm going to give you out your assessment. I'm going to give your assessment my treat because honestly, Ken, or honestly, Ken, Jim, this assessment, I think it would be great. And I do think, even when you said it's what I'm comfortable doing,

we all, you know, we do settle in comfortable. And not that you're not being successful or anything. I don't want to downplay what you're doing right now in life, Jim. But this could be an interesting play to just say, hey, I wonder what else is out there. I agree. And again, what I would do is $70,000. At, I wonder what else is out there. I agree. And again, what I would do is $70,000. At the end of the day is the question, you know, and I just think you can make way more on that.

You can. And Jim, here's the deal. The tool, the Get Clear Assessment comes with the book, Find the Work You're Wired to Do. This is going to help you ideate. And you just need some ideas to see what can I do from a skill set standpoint? What can I do from an enjoyment standpoint? And then there's where that idea, that money that you could invest and do far more. So we'd love to see you get a better business model, which was greater rate of return on your time and the money that you're going to invest and a whole lot less risk. That's the goal. And I think you can find

that by the way. In fact, I know you can. So a great point, Rachel, to point out that we kind of do the thing we know because we go, well, at least I can do that. Yeah. And I want you to see what you can do. You know, it's interesting. And I'm not saying this is Jim specifically, but just in general, um, the idea of being comfortable. I read the comfort crisis. Great book. Oh, Michael Easter. Fantastic. Where it's just, and it's so true I'm like we just the idea of pain the idea of change to expand and become greater it it takes this level of like oh my gosh I have to like you know be uncomfortable and I have to do something that's outside of the

box that's normal but in order to to continue to grow sometimes we have to do that and that's true with our money I mean that's true within our marriages and our parenting with our kids. I mean, every aspect, our careers, to continue to grow, you can't stay comfortable because you do end up being stagnant. Fun question for you.

30 seconds till we go to break. You can handle this. You're a pro. If you couldn't do what you're doing now, what would be something that you would try that would make you uncomfortable? Favorite? Oh, that would make me uncomfortable.

Oh, my gosh. You're interested by it. Interested. But it'd be outside of your comfort zone. Oh, man. Oh, no. Gosh, Jen. I don't know, Ken.

I was going to say I want to be a political correspondent, but I don't know if I'd be uncomfortable doing that. What would make me uncomfortable? Be different, though. A little bit different. What about you? College basketball coach. It would make me uncomfortable. I've never coached. Okay. Other than just my kids. And that would be, that would be, that's good. That's good. Maybe doing a, doing a talk show with Ken Coleman. Maybe really uncomfortable. This is the Randy show. There's a time in your life and at the baby steps for renting,

but you don't want to do it forever because when you rent, you're still paying for a mortgage just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on. Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent, manageable part of your monthly budget. Plus, when your home is paid off, that was your largest expense.

Now it's extra money in your pocket and an asset towards turning you into a baby steps millionaire. So get started on the American dream of home ownership today at churchhillmortgage.com. That's churchhillmAccess.org. Equal Housing Lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. Welcome back to The Ramsey Show. I'm Ken Coleman.

Rachel Cruz is alongside. The Ramsey Show question of the day is brought to you by WhyRefi. If you're in a default situation with your private student loans, contact YREFI. Now, obviously, we don't encourage letting your loans get into default. We teach responsibility. But these amounts have some of you struggling, and this is a way forward. YREFI was created for people in your situation. So go to YREFI.com slash Ramsey. That's Y-R-E-F-Y dot com slash Ramsey. It may not be available in all states. All right.

Today's question comes from Ava in Rhode Island. After my undergraduate studies, which I did on scholarships, I was accepted into law school. I graduated under the impression that I had about $80,000 in student loan debt. I didn't know that my parents also took out a parent plus loan or loans. And they now say that I owe an additional $75,000. I admit that that part is my fault. But when I was 18 years old is when they did this. And I didn't understand the ramifications of this type of loan.

I have opened a law practice in my hometown, which is small. So we only have two stoplights. So my income is very low my law license could be taken away if i default on student loan debt and the monthly payment is eight is about eight hundred dollars just on the loans that i took out should i allow my father's paycheck to be garnished for his part of the debt or should my husband and i buckle down and take it on ourselves wow good night yikes we're getting into the garnishing so that means it sounds like there's and I buckle down and take it on ourselves. Wow. Good night, Ava. Yikes. We're getting into the garnishing.

So that means it sounds like there's some tension and arguments about all of this. So she didn't know her parents took out $75,000. Yeah. And we hear this a lot, that either it's miscommunication or it's just done and there is no communication. What's your take on the parent plus loan. What's your take on the parent plus situation? What's your take on what the parents owe versus her? Well, I mean, it was for her degree, but it's under their name.

I know. I mean, so. And they didn't tell her. Yeah. So do you have, I just want to know your opinion on that. I mean, in this situation, I'd rather not get into a fight with the dad and have him come after his paycheck that's not going to make for a very nice thanksgiving no yeah and you don't want i mean you hate to see relationships and over this stuff i get out of this small town and start making some real lawyer well i think that's i think that's the key i don't

think you can afford to practice in your hometown i think you have to go somewhere else make a lawyer kind of money, and it's going to take a little while to get everything built up. It's very doable. Yeah. So I think the 80 grand is her portion that she knew about. What do you think about the 75? I know. I mean, the parents signed it, right? I know. I'm looking for an opinion over here. I've got one.

I mean, I think it's the parent's responsibility at that point. If you take it out on an 18-year-old and you don't tell her, that's on you. I agree. I agree. I agree. What does the audience say out there in the lobby? They agree with you, Rachel. Oh, look at that.

We got thumbs up. I love this audience, James. This is the most active audience that I've been with in months and months and months. They're giving us the thumbs up, thumbs down. It's real-time focus group right here. And these are Ramsey people. So Rachel, I agree. The sticky part is sounds like mom and dad are not in agreement. Well, and I wonder, she's 18. So she's after law school, right? So she could be in early 30s. This could have been 18 years ago when all this was going on, right? Can I go back to the audience real quick? Yeah. Audience, do you sick the loan people on them and let them garnish Pop's wages? Wow. We're getting, we're getting. I got mostly yeses.

One guy says no. Wow. Okay. Because apparently it's going to be an ugly Thanksgiving anyway. So I think I'm siding with the audience. Man. Okay. I like this real-time focus group stuff. Here's why. I'll be honest with you. You all bailed me out because that's where I was going to go.

At first I said no, but then I was like, ooh, and I started thinking through it. I don't want to be heartless. I know. And I always wonder about these situations because she's 18 when this happens. So maybe what if they had told her and she forgot because it was two separate conversations? You know what I'm saying? I don't think they did.

Of course, this is why we need these people on the phone. But bottom line is she throws it out there should my husband and I take it on. So she's got some character. This is a woman of character here. So I don't know. It was taken out in secret, so no. I don't think you owe it in secret. I agree.

All right. Tough one there. Ryan is up next in Oklahoma City, Oklahoma. Ryan, how can we help today? Hey, Mr. Coleman. Hey, Ms. Cruz. Thanks for everything you guys do. We really do appreciate it.

I had a question. It's a little bit of money, but mainly just career-based uh i used to work in media tv everything and then i've worked in sales recently i'm currently a senior uh lead generation specialist for a software company uh i've been here about three months and uh in the city that i'm in the school district that's right nearby i have friends that work there and everything uh they highlighted a job that was a high school media teacher position, something I've always kind of thought about was teaching, getting back in media, helping the next generation, but was never serious about it. And then they approached me with it. I decided to interview. And then yesterday they offered me the job. So now I'm having to decide between something

really difficult because I've only been at my job three months right now. So I definitely be burning them if I leave and that doesn't really fit well with me, but there is more of the longterm potential, I think for the other job being back in media, helping kind of the youth of, you know, of the area pouring back into the community. So just kind of looking for any sort of expertise or guidance on kind of weighing that option. Yeah. Okay. I'm going to ask you questions and let you decide. Okay. Do you pay attention to sports? Do you like sports at all? Yes. Okay. Give me an example of your favorite team. Oklahoma Sooners and the Green Bay Packers, either one.

Okay, good. Let's take the Packers because it's a professional thing. Okay. Sure. We've got thumbs down from the audience, Ryan. People didn't like your sports choices, but that's okay. You all behave yourself. I'll tell you when I want your opinion. You all just sit there and be quiet. I'm kidding, of course. Sort of. When a free agent leaves the Packers,

another team comes to them and says, we want you. You're not happy about it when one of your top players leaves, are you? No. But you don't think that they're doing anything immoral or that they're a jerk? They're taking an opportunity, another team won them, they're going to pay them a little bit more money,

and they feel like they can go play for another team and win a Super Bowl. You may not like it, but you understand it. True or false? True. I think that's your situation. This opportunity fell in your lap. Can we say that? True. I think that's your situation. This opportunity fell in your lap. Can we say that? Yes.

You weren't out looking for it. You weren't being a jerk. Nope. You're not being unethical. There's nothing illegal in this move, is there? No. No, definitely not. So here's my point.

Yes, they're not going to be thrilled that you're leaving them after three months. But that's not your problem. This is an opportunity to express your journey here. I can make some moves here. I can get a little bit further faster. This sets me up for the long term based on how you've described it. I think you sit down with you, tell them that. You go, listen, I didn't plan for this. This is this is an opportunity that has presented itself that I can't pass up. I am so sorry to leave you after only three months, but I have to take this opportunity. And if they call you bad names or if they treat you in a poor way, you just have to be a big boy and handle that. But I think you have to make the decision that's right for you long term.

And because of that, I think it's the right move. Sure. If I can ask one other thing with it, it is about a $20,000 to $30,000 difference. And I know I've recently gotten into, you know, listening to you guys and all the, yes, it'd be less. For how long? Well, within teaching, it's all pretty segmented. So I'd be going from about, I'm at 75 right now, and the job would be 55. Now, there is commission into my job, but just base salary. I'm currently 75. What do you want to do? What do you want to do with your life?

Where do you want to be 15, 20, 25 years from now? That is the biggest thing. Currently, it's this job with everything it provides, but I would not be doing this job two, three, five years from now. Right. Can you live on the teacher salary? Oh, definitely. Of course you can. I'm very good with that.

Well, I'm just making sure that he's not in some crazy position where he's like, no, I have all these bills. No, I know, but we did the largest millionaire study ever and the third largest group of net worth millionaires are teachers, so it can be done. I'm not saying it can't be done. I'm making sure Ryan specifically can do it for his circumstances. Of course he can do it.

We don't know until we ask. I wasn't talking to you. I was encouraging him. I'm only about one month, or by the time I was leaving, if I went to this new job at the beginning of October, I would have just hit my six months of the three to six months of. Yeah, you're great. You're great, Ryan. You got one shot on this globe. Do the thing that makes your heart beat. And I was. Yeah. As long as it's not a pattern in life of jumping jobs every three months. You know what I mean?

There's no issue. This is not a job. This is a young man who knows his role and he's ready to do it. Go, Ryan. We need great teachers. Go and be an everyday millionaire. You can do it. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman.

Rachel Cruz joins me. Folks, stuff is moving in the real estate market. What's going to happen? We don't know. We don't know 100%, but things are moving. And a lot of you are going, should we wait? Should we wait? Rates are down. A little bit. A little bit. Jerome Powell saying time to start cutting again. We'll see how that affects the mortgage rates. That's coming, I think, in September. So here's the point. Don't sit around and wait, wait, wait, and try to time all these rates. If you're ready to buy or sell and you know what you're doing, go for it. And if you don't know what you're doing and you do know what you're doing,

you've got to have one of the Ramsey-trusted real estate professionals. It's the only way to find an agent you can trust to keep you on track. And we've got the top agents in your area. We trust them. We've vetted them. And they're going to guide you through what may be, for many of us, you on track. And we've got the top agents in your area. We trust them. We vetted them. And they're going to guide you through what may be, for many of us, the most important investment and financial decision you ever make. Go to ramseysolutions.com slash agent. That's

ramseysolutions.com slash agent. To Chattanooga, Tennessee is where we go. Nina is there. Nina, how can we help? Hi, yes. Thank you both for having me on the show. So I'm just going to go straight into it. I'm 24 years old. I have two kids, an 8-year-old and a 4-year-old. And I just came across the Ramsey show about like two weeks ago. So I've been on my own since like I was 16. Obviously, I had my first child when I was young and never really thought about like I've just been surviving my whole life till recently.

And I'm just kind of overwhelmed. And I want my kids to be I want to be able to be financially free for my kids. And I just feel like it's kind of hard to do that when I solely take care of everything like rent do you know bills and all that it's a lot so um I'm just needing some guidance and how to like budget or where to start um I know the baby steps uh they just start off with the emergency fund and um out of the thousand I only only have 300 saved. But then again, I feel like it's just, I don't know how to budget with like the bills and everything. And I'm just kind of lost. Well, number one, you, that, that feeling and that emotion is

completely normal, especially the story you laid out for us. I'm like, yeah, I mean, you have, you have two kids, you're a single mom, you're young and you're trying to figure all this out. So I, I applaud you so much though, for the work that you're doing. I mean, that, that is so difficult being a single parent. So you're doing, you're doing a great job. So from, from the money side, where, where are you at? How much are you making a year? And how much debt do you have? Yes. So I make about $45,000 a year. And with my debt, I'm $12K in debt.

Okay. And so I'm going to break it down for you with the debt. I have in off the loans, I have $10,000. You know, I made a mistake in 2019. I bought a new car and it got repoed in 2020. And so they cut it down from 17 to 10,000. And in credit cards, I have 2,000. And then I have about 530 in collections. Okay. Now with the $10,000 car, is that from the repossession? And so you don't have the car or is this on a new car when you said the 10,000?

It's from the repossession. So the car I have now, I don't, you know, it's paid off. I bought a cheap car. Good, good. That's great. Yes. But you know, my driving history is pretty bad. So my insurance is at like 515 a month. Yeah. So it's, it's, that's all the debt I have. Okay. So what are you bringing home a month? Is it around 3,500? Yes. Okay. And have you done a written budget? Are you able to, when you look at, do you know throughout the month, hey, beginning of the month, I know how much my lights are going to be, you know, relatively, water, my rents, my,, but my rent is about $780. Right now, my light and water, it came out to like $500.

When you list out your food, your rent, your utilities, and gas for your car and insurance, how much does that come out a month? Do you know that number off the top of your head? off the top of my head no i don't but i know it's like close to what i make it's close to that okay to that 3500 yep okay yes yeah so in your case nina what we find with money

so often is that there's really two ways that it flows it flows in from the income standpoint and then it flows out with expenses and everything you've listed to me and as we've talked in this conversation my assumption is there's no outlandish uh cuts to probably be made i mean i mean maybe some restaurants here or there but you're not you know you're not going on vacation on credit cards or doing you know those kind of things this is pretty your your bills your basic bills you'reaking by, which means on the expense side of it, there's probably not a ton to cut. I would challenge you just to look because even 30, 40 bucks from a random subscription or, you know, some restaurants, like if there's any amount of money you can squeeze out, do that. But I think your biggest up play is your income side.

What do you do for a living? I'm an operations coordinator, so I work in logistics. Oh, nice. So what do you think is the next rung or two up the ladder in your current workplace? Is there even a rung or two above you that is reachable? So I'm not going to lie. This is actually one of my first good jobs. That's great.

I actually was a dropout, so I didn't finish school, so I don't really have an education. Neither do I, Nina. I'm a college dropout. Did you get a GED? Do you mean even high school? Yes. Because you left home at 16.

Did you get your GED? Yes, ma'am, I did. Good for you. Good for you. That's great. So, okay, I hear what you're saying. So you're kind of going, Ken, I'm not even thinking about the next rung of the ladder. I'm thrilled to be on this one.

And I'm not trying to get you, but I'm just wondering, now that I know that, how long have you been in that role? So I just started. I'm like hitting four months already. Okay, good. So, you know, I'm very blessed to be a part of the team. But before, you know, I had like jobs working in the carpet mill. So this is actually a very stable job for me. All right. So let me switch gears on you real quick. Okay. Back to the budget. Because I think

right now, I think you could probably pick up a side gig. Is it possible? Do you have somebody to go watch the kiddos and you could pick up maybe a 15 or 20 more hours a week for a season, a small season, but a season? So I know it takes a village to raise the kids, but I don't have a village. You don't have anybody. Yeah. All right. Maybe from, well, let me say from home. There's a lot of, you know, remote stuff. Can you do some customer service stuff at night when the kids are in bed? This is all by phone or by computer? Yes, I can. I do sometimes work from home. Okay, great. All right, so with that in mind, I want to get back to the budget thing. And by the way, before I forget, I want to tell you this.

We're going to put you on hold in a minute when we're finished, and we're going to get you a session, our treat. We're going to pay for it with a financial coach because I think you need a little bit more time, and I think when they walk you through penny by penny where you're spending, I want someone to be hands-on. And if you'll promise me, Nina, that you'll let them coach you and show you how to do your first real budget, I want to give you a session with them. Will you do that? I will. Because listen, let me tell you something, Nina. Listen, I'm not betting against a single mama and you've got what

it takes. You've got a good job. I think you're making enough money. I think you've got to see where your money's going. And I think some side hustles to pay this small amount of money off. I know it seems like a mountain, but 12K is very doable, but here's what I want to encourage you on. Okay. I think that you've got to treat your budget like it's a full-time job. And I think you're going to be surprised how much money you can find. Yeah. And then pay that off.

And we'll give you every dollar premium too, Nina. That's our budgeting app to do that. Perfect. Good for you. And FPU and stuff. So we'll load you up for sure, Nina. But I've got a quick question. Okay.

How much money, Nina, just ballpark, I'm not holding you to this, how much money, if we handed it to you every month, would you think would make the difference right now? Giving you some breathing room. How much? Okay. Ballpark. In order to pay off my debt. No, no, no, no. Just to be able to have some breathing room. What's that amount of money that you go, Ken, if you gave me this much a month, what's the number? Probably, okay, so I make about $35,000. So I guess another $1,000. Another $1,000. Okay, so here's the point.

I want you to just think about through the debt payments and then getting a budget that $1,000 a month. All right, real quick for the rest of you who are not on the radio audience, we're going to stay with you. For the rest of you on YouTube and podcast, the show is done for you unless you go to the Ramsey app, and that's where you get the rest of the calls. And we've got some good ones lined up.

So head over there. You can search for the Ramsey Network in the app store. Welcome to the Ramsey Show, where we help you win with your money, win in your work, and win with your relationships. The phone number for you to jump in so we can help coach you up is 888-825-5225, 888-825-5225. I'm Ken Coleman. Rachel Cruz is with me.

And we're having a blast today. Great studio audience, by the way. We've been talking about the calls today, fun calls, and great studio audience. So let's get right back to it. Bentonville, Arkansas is where we go next, and Laura is there. So let's get right back to it. Bentonville, Arkansas is where we go next. And Laura is there. Laura, how can we help today? Thank you for taking my call. I look forward to your feedback. My daughter is a senior in high school and she has a five month old baby. She's finishing high school virtually, so she's at home and taking care of the baby so we don't have, like, child care costs that she has.

And once she graduates, she's going to be going to cosmetology school. We have a 529 set up for that to pay for that. Good for her. My big thing is trying to, I guess, organize next steps beyond that. We really didn't want to get her an apartment because around here, apartments are running like $1,000 a month. And she's got like our upstairs, we were going to convert it to like a little economy efficiency apartment by adding like a bank of,

so that she has, you know, an area up there and maybe like charging her $200 a month and putting that just in a savings account for later. So right now we've told her, you know, don't get a job because right now for my first husband, after he passed away, she's got a social security coming in monthly to use that towards like any expenses for him. Primarily just looking for feedback on like how we can set her up to be successful after she graduates to get on her feet and kind of guide her in the right direction. Yeah. Well, I think, I think the moves so far, I think sound very appropriate. You know, you're 18 with a baby and I think she's probably going to need all hands on deck. And I applaud you,

Laura, and your husband. Are you married again? Yes. Are you married? Yeah. For you and your husband to support her in that. And I think that's beautiful. You know, I think some, I think, you know, a teen pregnancy and all of that can scare off some parents. And I think that you guys have done a really beautiful job being the hands and feet for her in life because she she needs it right so um so I applaud you guys in that way and I think the I mean the next step I think encouraging um the next stage of education whatever that looks like and I think cosmetology school is great I mean I think if that's what she if she wants to do and she knows she can make a living on that uh I think is beautiful and I so so that would be for sure the next step.

And you guys have that laid out. And then beyond that, I think that there's, of course, the emotional support of saying, OK, let's eventually her being out on her own and supporting herself would be the goal. And I think that may take longer because of her circumstances than just the average you know teen that's going out I mean she's she's having to take care of a baby so I would be patient with that but I think my next goal and track for her and again it could be three years or so I mean I don't know what time frame after graduation to get get her a job going which will mean finding some childcare

and doing a couple of things that's really in the big leagues at that point to start earning an income and start living as an adult. So I think that would be my next step. And again, I would be patient with her, but giving her the dignity to stand on her own sooner I think is a great yeah i think

it is uh i'd like to dig in a little bit here i'm curious how much is a social security payment that she's getting from her father she's getting a thousand okay so like a thousand dollars a month okay thousand dollars a month social security payment and uh she's got high so the years i've built yeah over the course of the year i've years i've built up her an account and it's got high school. Over the course of the year, I've built up her an account, and it's like $6,000 that she's got so that I've saved for her. What kind of an account? Savings? Yeah, savings account.

Okay. And cosmetology school will be how long and how much is that going to cost? It's like a year and roughly $25,000. And then the 529, we've got like $35,000. Perfect. Okay, great news. So that's fully covered. That's great.

You know, the only thing, I agree with Rachel. A couple of specific things I'm going to suggest for you to consider. I would not, when she begins to pay you rent, and I'm going to use the figures you gave us, I would not take the $200 from her and put it in a savings account for her. She needs to feel the $200. She's safe. You guys have not thrown her out. She's living with you for a season. And I'm with Rachel. I don't have this number in my mind, but I think while she's in cosmetology school, maybe that's when she gets the first job, I would try to get her into her own apartment or some

type of living situation coming out of cosmetology school. I would try. And again, I'm not trying to put a hard and fast rule on you. But the only thing I disagree with, I don't like the fact that if she pays you $200 a month in rent, that you then you're putting that in to that savings account and she gets it back. I want to ease her in to paying rent. Unless she doesn't know about it. And then it's like a gift at the end. Okay. This is where Rachel and I disagree. Her heart's way bigger than mine. I want her to feel some sense of responsibility. I know the lady in the front row agrees with Rachel.

But maybe you decide that later. But you don't tell her you're putting... Maybe. But I still want her, at some point, she's got to get out of the closet. She is. She's raising a baby at 18. She's feeling it, you know? But the $200 a month is...

All right, you know what? Ken Coleman, I am allowed to disagree with you without you throwing a fit i'm not unbelievable i'm not you think this is a fit my goodness no it's not okay here's the deal uh it's two thousand dollars at the end of the day right i think she needs to feel the extra responsibility raising the baby because i like to see her on her own when she gets the first job out of cosmetology school. That's my only thing. I think I would make her feel some of that. And that's the only thing I disagree with. And in that while she's in school, you know, be showing her how to budget, Laura. And again, not that she has to contribute to the bills necessarily of the house. I wouldn't go. But to say, okay, you know, if you, what's your insurance, like what are the things that she's going to be covering yeah um and again she's

not making an income while she's in school right so so maybe again this is just showing her though and starting to build a habit of that i agree i just wouldn't do that one year after right so that she maybe still live with you guys for the year after while she gets her first job she's getting her feet under her she's getting some savings she you know is feeling out apartment you know it's it's gonna be it's gonna take some time all that but i do like the idea of her feeling some level of responsibility i'm with you ken i just don't want one year at the end okay that's fine and i don't that's not that's not a big contention to me there's no fit on that but i would say this she made some decisions and so now it's time to grow up

because baby's here and you're amazing. And I think you're a model in how you're handling this. I'm just saying, you don't want one year to turn into two years and two years turn into four. Right. I would say it's not a punishment at all. This baby is a gift. However, she's got to own this. And I think it would be very easy for you to fall into a reasonable trap of doing too much for her. I wouldn't do any more than what you suggested. That's kind of what we don't want to. Yeah.

And I don't think y'all are at that place yet. I think that line is far away. I think if we talked to you and she had been out of school for four years and they're still kind of, that's different. But I think this is, I don't know. I think she's learned a hard, I mean, she's getting her high school degree online, you know, like it's amazing. It's amazing though. It's amazing. It is fun. Good call. Thank you for the call. You're a good mama. This is The Ramsey Show. Welcome back to The Ramsey Show, where we help you win with your money, win in your work with that income, and win in your relationships as you navigate getting out of debt and living like no one else, so that later you can live and give like no one else. Hey, the best way to make the most of

your money is by creating and sticking to a monthly budget. Every dollar is our tool to help you plan and track spending, expenses, all of that good stuff, so you can save and make your money work for you. It's every dollar. You can download it for free in the App Store or Google Play today. I'm Ken Coleman. Rachel Cruz joins me. And now we're going to Jason in Pittsburgh, Pennsylvania. Jason, how can we help?

Yeah, thanks for taking my call, guys. I really appreciate the advice here. So my wife and I have been disciples of Dave now since about 2017, I'll say. And a side effect of that is we have not had a car payment for quite some time. Looks like we're thinking about getting into a new car here in the short term. And we currently have about $20,000 saved specifically for a car, and I'm just wondering what you guys think. Should we stick to what we have saved for a car, or do you think that we're in a financial position that we can finance a little bit

and get something new? Jason, you started off the call saying you were a disciple. You sound like Judas. You sound like Judas. Oh, my gosh. How can you be a disciple and ask if we think you can finance the car? Do you think we could be bought for 30 pieces of silver? Do you want us to lose our jobs?

I'm going to work this metaphor. We would be fired. Yeah, Dave would have going to work this metaphor. We would be fired. Yeah, Dave would have me cleaning out my desk. We would be done. Sure, go for it. How much are you thinking? Why do you want us to lose our jobs, Jason? That's the real question.

So, well, I recall at one point while taking the class that Dave said, once your net worth reaches a certain point, then that's a time when you can buy a car. But not to finance it. A new car, yes. Okay. Yeah. But he's talking about paying cash, not financing.

That entire piece. Well, I have you, though. Oh, okay. We have $20,000 saved specifically for the car. Switching gears. And I'm wondering. Go ahead. Can we maybe use our emergency fund To fund the rest of it

Or would you suggest against that Jason you guys got $20,000 For a car that's what you can afford Spend $20,000 on a car It may not be brand new but that's okay Yeah Sounds good Or Jason here we go

Or wait another six months keep saving Get more cash What do you want to buy What is the car that, get more cash. What do you want to buy? What is the car that you started off this call with that you want to buy? I want to buy a Honda Ridgeline. How much is a Honda Ridgeline? Like $45,000. You want to, yeah.

Why? Why do you need the brand new Honda Ridgeline as opposed to a $20,000 truck that you paid cash for? I don't know. I've driven a car for 13 years now. I just feel like I wanted something new, but this is why I'm calling you guys. I needed to be set straight. Here's the deal. We're trying to set you straight, but don't lead into that you're a disciple and then

go to that because you knew that we weren't going to say that, correct? Well, I was hoping maybe you would say, well, with all your other finances in place, yeah, we think it's time for you. You might be able to do a new car. And get a credit card while you're at it. I mean, come on. You're a responsible guy. You're going to get the points, the miles.

It's going to be great. What was that, Rachel? Well, I was going to say, to say so i mean just to go over for the audience listening the the reason why that this is yeah why we don't want to why why we we are against car payments there's two sides of the equation one there's the mathematical side you are going into debt and paying interest on something that's going down in value. And I'll tell you, people in our space, in the personal finance space, all the influencers on TikTok and all the people,

the one thing everyone agrees with, some people do the credit card points, some people want, you know, take out debt for real estate. Like everyone has their stick in our industry. The one thing we all agree on is staying away from car payments and car loans because mathematically, it's one of the dumbest debts to get into, so and again it is it's a status thing like it's to get you from

point a to point b and again what your money is doing it's going down in value and you're paying interest and fees on top to do that versus if you invested it right so from a mathematical standpoint no bueno and then the second part of just going into debt it's just the idea that someone else owns you that there's not complete freedom and you guys are there jason you're completely debt free and and even though you have the margin maybe let's just pretend you did to be able to pay for a car payment i would go back to number one okay ken has found you a car jason car salesman kenn Kenneth has entered the lot. This is my favorite thing to do on this show.

He's got a car for you. I've got a 2018 Honda Ridgeline RTL-E. I have no idea what that means. And it's only got 73,000 miles on it. It's a handsome looking. And it's $20,000. $20,872. If you walk in and pull the Ken Coleman routine and go, I'd like to see the fees and the entire amount of money

wrapped into the $20,872. Even though they say no haggle, oh, you can haggle. And you show them $20,000. Like, pull it out of a briefcase for some drama. Open it up. You know that sound? And then crack it open oh yeah 20 000 you're walking out with a with a with a nice night 2018 look at this rachel 2018 did you know jason the moment

you drive a new car off the lot it loses nine percent of its value within the first five years 60 he's had enough of us let the five let the person that bought this Honda Ridgeline take the hit. Take the beating. And then now you get the reward of it. So I'll tell you what. Wow. I knew you guys were going to say this. I was just hoping that there was some chance you wouldn't tell me I can get my new truck.

No. No, dude. You knew better than that. I'm looking at this truck right now. So you did your good deed for the day. I did. And you said you wanted a Honda Ridgeline because you've driven a car. This is a beautiful one. Look at this. right so you did your good deed i did and you said you wanted a honda ridgeline because you've driven a car this is a beautiful one look at this the back seat is

in phenomenal shape no goldfish in the seats that i can see let me tell you this too you drive that down the road you pull up next to someone like me that knows nothing about cars and you ask me what year is that truck i have no idea i'll tell you what 2013 28 i mean nobody knows the years of these cars it's got a little green button it's got a green button on the dashboard that says econ so that means it's saving you some gas mileage you can tell i'm not a gearhead uh let's tell you something you pull up next to me in this and i go that's a good looking honda ridgeline right there i wouldn't even know what it was i wouldn't either i don't even know how to spell Ridgeline. But nonetheless, hey, our work is done here, Jason.

Well done, Jason. I'm glad you called. I'm glad we saved you money. That was in a two-minute search. And I typed in, used Honda Ridgeline for sale in Pittsburgh. Well, I found used ones. I just wanted a new one. Oh, believe me.

We know what you want. I think we all want that. Mr. I'm a a new one. Oh, believe me. We know what you want. I think we all want that. Mr. I'm a disciple. Here's 30 pieces of silver. Come on, Jason. How long have you been listening to this show? 2007 years. When that was built.

When that truck was built. A while back. Yeah. Otherwise, we're basically paid off and have lots to save for the future. So I thought maybe you guys would be like, yeah, go ahead and have some fun. I got a sneaky suspicion you're going to do this anyway. No, he's not. What's that?

I got a sneaky suspicion you're going to get off this phone call and then you're going to talk yourself back into it. No, absolutely not. Trust me. When I told my wife, she said, no, there's no chance. Oh, good. Oh, she was not on board with this. That's great. She's Peter.

No, she kind of was on board, but I was like, we should call them and see what they think. Your wife is Peter and you're Judas. Peter, Petra, rock. Your wife's a rock. Oh, my gosh. And you. We got to get off this call. I know.

This biblical metaphor has gone too far. But nonetheless, we've done our good deed today. I bless you, Jason, in the name of Dave Ramsey. We really saved. Man. How about that? We could have made him a millionaire. If he invested that car payment, whatever that would have been, into a good mutual fund.

Jason, I think we just made you a millionaire. You're welcome. You are welcome. Look at us, hurting our arms trying to pat ourselves on the back here. That was the most interesting call that i've had in quite some time because the way it started out long time disciple uh just wondering can we finance that new truck uh uh and then he said dave said it that was the best part well i think dave said an fpu one time that you can get a new car and i'd like you to reclarify that what dave is talking about is

your net worth and your cash position. You're paying cash for the car. Yes. If you have a million dollar net worth, you can take the hit of buying a brand new car with cash. Cash. Not financing it. Jason, thanks for making our day. The gospel according to Jason.

That was interesting. We're going to take a quick break and we'll be right back with more interesting calls. This is The Ramsey Show. Welcome back to The Ramsey Show. We're here to help you win with your money, win in your work, and win with your relationships. 888-825-5225 is the phone number for you to jump in. I'm Ken Coleman. Rachel Cruz is alongside, and we number for you to jump in. I'm Ken Coleman. Rachel Cruz

is alongside, and we're excited you're with us. Sebastian is going to be up next, and we're going to Dallas, Texas. Sebastian, how can we help? Hello. So two days ago, I got a call that said my payment didn't go through for my school, and I was wondering what the best decision would be because when I called they said that my spot had already been filled and I was wondering there's two options one of them's in California one of them's in Texas. So what happened to the payment was was late or didn't go through? What happened?

It was, so I was waiting on my FAFSA. I knew it hadn't gone through yet, but then I was told my last day to pay would be the 30th. So at the end of the month, but then they gave me that call and that wasn't the case. So they were, you were wrong or they were wrong i guess they gave me the wrong date okay and so your spot's been filled they're saying tough sorry about this that there are no other options you're out yeah pretty much was this for you to show up for your freshman year or second year, third year?

Where are you at? Final semester. Final semester? You've been with them for four years? Yeah. Boy, that's customer service at its finest. Jeez. Yeah.

Are your parents involved here? Have you gone back to somebody, maybe talk to the manager? I mean, I'd want to talk to somebody in leadership above the clown that told you. Yeah. Have you done that? No, I have not. I would try that. Yeah, because when you're going to be transferring schools, your credits may not pass.

I mean, like, that could be a mess. Yeah, and to fast forward on that, if for some reason they don't let you in, if I'm you, I'd sit out a semester and then just come back in and finish. Yeah, for sure. The pain to go through all the transferring, I would just, you know what I'd do? I'd sit out a semester and work and then finish. You only got one semester left. I wouldn't go to Texas. I mean, I wouldn't go to another school.

Okay. But I would appeal that. I would get a manager on the line or somebody in leadership. Yeah, go to the school okay but i would appeal that i would i would get a manager on the line or somebody in leadership yeah go to the admissions office i mean i would be asking and by the way i show up in person yes not not the phone call yeah because it's two days i mean they said the 30th so they're did this just happen yesterday yeah okay so so yeah. Something smells of pure just laziness or incompetency on this. There's another way. It has to be, right, Rachel?

Yeah, oh, for sure. Yeah, yeah, yeah. I would keep pushing, and I think worse comes to worse, you sit out a semester. This would make James and Dave very nervous, but you know what I wish we could do is dial that person in right now. That would be so fun. Get them in admissions. And I would play the professional. Can I talk to so-and-so?

And get the supervisor on and go, hey, we got our friend on the line, Sebastian, here. Is there some way we can work this out? Because this just seems so ridiculous to me. One semester left. And what's the, is it a small school? How's your spot already filled? I mean, like all of that is so interesting. Yeah, it's a pretty small school.

And there's a bunch of people, like they warned me, like get your classes in as soon as possible because within the first two days, it's usually filled. So they gave me a fair warning there, but they didn't tell me that it was going to be dropped they never gave me it's a small school small operation there's a very very uh rule conscious person that you talk to and i think you got to show up and show up with respect and you need to eat a lot of crow on this and what that means is say i i didn't get it in as probably as soon as i

should have gotten it in i have some documentation here that said it was the 30th. If you can show that, and I would be kind, I would be humble, professional, but I would push a little bit and go, I got one semester left here. And then if they won't play ball, then sit out first semester and line yourself back up, finish, and then get out of Dodge. Yeah. That's my – That's good.

Sorry about that, Sebastian. So sorry. Sophia is up next in Denver. Sophia, how can we help? Hi. Thank you for answering my call. I got offered a contract job, but I'm not a contract worker. I've never done anything like this before, but I've been met with some hesitation from my husband to do a 1090 contract job. His concern is doing the extra

work it takes, like the accounting and taxes and setting my wage and what that work looks like. Let me ask a quick question. If it wasn't a 1099 situation, would you be jumping at it, and would your husband be going, take it? Yes. Okay. The reason I ask that question is this is a good opportunity, and I think the 1099 is freaking you out. And can I say I've done 1099 income for many, many, many years before I got to Ramsey.

So I'm not speaking from just out of the top of my opinion here. It is not difficult if you have a very good accountant and good for you guys. You can go to ramseysolutions.com and interview multiple what we call trusted, Ramsey trusted tax professionals who can help you with the 1099. It is not difficult. It requires a little bit of discipline. And I'm not speaking as a tax pro, but I'm saying what you would do is you talk to the tax pro and you save a percentage of every check and you just put it away and don't touch it. And you do a good job of following the plan that a tax pro will advise you on. You guys are going to be fine. This is a no-brainer.

You got to take this gig. And you can rewind this on. You can rewind it or wherever. I don't know. Go to the Ramsey app is where this is going to be. And download this and play it for your husband. This is not a reason to pass up. How much is the job going to be for you? Well, they said that I could set my price. Oh, that's great.

You can what? Set your price. I don't know. What does that mean, set your price? I'll take $100 an hour, thank you very much. What does that mean? Yeah, like kind of negotiate what I think I deserve. Okay, what are you doing?

What's your job? Well, right now I work as a liaison for a nonprofit that works with families in poverty, but it's only like a 10 to 15 hour a week. And I want to add more work in. And I mean, maybe I think part of his concern is like consistency too. And me doing all of these random jobs or whatever while we have like two little kids well that's a different well that's a different phone call yeah that's a different that's a different issue of the time management and the family and what you guys need or want what you want your time to look like yeah that would be a yeah so i wouldn't let the 1099 scare

you away to ken's point uh but what's good for your family and all of that? That's a conversation you have to decide. Right, right. I think that, but like I live in a town of 1200 people. So the opportunities are really small and I really love this opportunity. It's like a marketing design opportunity, and it's something that I really want to get into. Great. So I feel like I have to take it. But I think you want to, don't you? You don't have to, but you want to, to get your foot in the door and to start all this. Yeah. Yeah, it's great.

So something else has to give. But for what you asked us, this should not scare you off. The 1099 is not going to add a bunch of grief to your life. It is not. Okay. Okay. It is not going to create a nightmare for you if you're just relatively disciplined and you've got a good tax person and they're going to help you. But you've got to make some other changes in your life.

But to Rachel's point, I wouldn't let this deter you at all if this is what you want to do. Yep. Is that helpful? Yeah. Can I ask you a personal question you want to do. Yep. Is that helpful? Can I ask you a personal question, Sophia? Sure. I'm heading to Denver soon. What's your favorite

restaurant? Or what's a good kid-friendly thing to do? Well, it's funny because I live three hours away from Denver. Oh, okay, okay. So that was just on the map in general.

I'm in the middle of nowhere. That's the closest city. Never mind. I thought she was going to be my travel agent for a second. I like where your head's at. I know. I saw Denver and I thought, oh my gosh, I got to ask her. I've been there a lot, and the one place I do love,

but I don't know the name of it. That's okay. No, that's not helpful. Describe it quickly. I know. It's a Brazilian steakhouse. I don't know. Oh, look it up.

I'll Google. I'll Google. Sure. There's probably only 20 of those there. It's not a problem. We'll take a guess. Thanks, Sophia. Do you like the Brazilian steakhouse?

It's a lot of meat. You know, it's a lot. We had hibachi the other night. It's a lot ofouses? A lot of meat. You know, it's a lot. We had hibachi the other night. That's a lot of food. A lot of food. Got to wear the Sands Belt pants when you go there. This is The Ramsey Show. Welcome back to The Ramsey Show.

I'm Ken Coleman. Rachel Cruz is with me. And we are here for you. 888-825-5225. Our scripture today comes from Psalm 62, verse 5. Let all that I am wait quietly before God, for my hope is in Him. Our quote today from Elizabeth Elliot. Lord, deliver me from the urge to open my mouth when I should shut it.

Boy, oh boy, that's like my life theme. Every report card I ever got. He talks too much. He talks too much in class i got that too ken and here we are that was my number one yeah we're all those teachers now guess what i do for a living i make our money i just talk talk talk talk that is exactly what i told my oldest did you know that amelia she was so my uh daughter she was sitting next to a girl a few years ago in class and she came home so nervous she's my kind of my perfectionist oh yeah and that's what she told me

she said mom I'm sitting next to you know this girl and she talks all the time mom I'm gonna get in trouble and I looked at her and that's exactly what I told her I said Amelia if you come home and you get in trouble for talking do you know what it was on my report card every year through elementary school now if you're being disrespectful or mean or you're talking when she's talking we can't do that but if you're just chatting it up that's what i do every day yeah that's how i make money yeah you and i we would have been if you and i would have been in the same class they would have separated us we would have been they know those kids oh 100% they can't sit next to each other yeah there you go say it turns out though teachers some of us

just we needed we needed to get rid of more words than the others. Okay. It's not our fault. We were born this way. All right. Casey's up in Nashville, Tennessee, our hometown. Casey, how can we help? Hi. Well, I, uh, first off, thanks for taking my call today. Um, hopefully I don't ramble too much because I'm a big talker and a nervous person too. Oh good. We can all talk together. You're doing great. We'll ramble too much because I'm a big talker and a nervous person too. Oh, good. We can all talk together. You're doing great. We'll ramble and interrupt each other. It's going to be wonderful.

Yes, it will. So I guess the short question is, are we wrong, are my husband and I wrong for considering buying a house when he gets out of residency? He's finishing up. He's a third-year med resident right now here in Nashville. And when we're done, we're going to have about $383,000 in med school debt. Woo! Yeah. What kind of doctor is he going to be?

The room is spinning on me. Yeah. Family medicine. Okay. So we're, I know I'm trying not to think about the number because it's, I almost don't even see it as something. The good news is though that we really don't have any other debt. My schooling was paid for by the time I was done. We've got- What kind of income do you have? I'm a stay-at-home mom.

I work. I really don't have any income right now. How are you guys paying bills right now? Is he working? He is working, yes. He is? Yes. So he's working right now.

He's a resident, but he makes, you know, not much, about maybe $70,000 a year. And it's enough for us to pay the bills, make ends here, and save a little bit here and there. Okay, so when will he graduate? When will he graduate? July of next year. And what's the projected income at that point? Depending on where we go. He's really looking to move back to california because that's

where we have family and over there he could make the starting pay is going to be about 300k a year beautiful well see you got a you got a big hole but a big shovel and that's what we're looking for but you're not buying a home no i was not in california or anywhere yeah i would pay off this debt first casey and you don't want to buy a home anyways you're not i california or anywhere yeah i would pay off this debt first casey and you don't want to buy a home anyways you're not i mean he's still going to be in school for a year so you guys may not even be in nashville in a year so you're definitely not buying a home in the next 12 months uh and then wherever you know yeah so then wherever you guys land yeah it would probably take you you know two three years uh i mean, well, at 300, I mean, you could clean this up in 18 months.

I mean, if you guys made 300. You have to get after it. Well, two years, yeah, two to three years, and then I would save up for a down payment. So, no, you guys are a few years away from it. You're renting, and renting's okay in your situation. Yeah, and that was kind of the more I was playing with the numbers, the more I was like, well, maybe we want to rent.

Is he in alignment with you? For the most part. What's the part that he's not? He's not entirely into the Dave Ramsey mindset. We're slowly getting them over. But the point that he brought up was it'd be nice to be in a position where even as we're tackling that debt, we're starting to build equity. I hear that. I mean, it makes sense, but it's not a reality.

You guys are going to be so strapped. You're going to be so stressed. The last thing you're thinking about is equity. Yeah. This debt is a massive stress and casey my fear is if you come out making 300 dave calls it doc itis i don't really i wish there was a better word for it but it's this idea that you come out and you're making an incredible income and you start to live a lifestyle like that and then there's not a lot of margin because you guys

suddenly are making insane money and you're buying houses you're buying cars you're going on trips you're enjoying yourself because you guys have been working away for so long while he's been in med school you're exhausted and you let it slip and then we talk to you guys in eight years and there's still you know 284 000 left right so so there is a level of this like intense all-in for a short period of time and then after that okay so you guys are making 300 grand a year. I mean, it's amazing. So then that's all yours. So it's going to be a, that's the most important thing is that you guys are on the same page

because you're going to be frustrated if he's not fully on board. He's going to be frustrated that you're on some crazy plan trying to do this, right? So you guys have to come to an agreement on this um or it's going to create a lot of tension and resentment so i think regardless of what you guys choose we obviously believe in a certain way of doing it but you guys need to be on the same page with that and um i mean this this stuff can stick around forever and ever and amen and and it's and it gets more difficult you know some people think well if i just made more money it would be easier where we find sometimes the more money you make the harder it is to back off that lifestyle. So

start where you guys are. Act like you're still living on 70 and get this debt cleaned up quickly. Yeah, that was originally the plan. And then I think we slowly started drifting. Well, maybe we can make it work with a little bit more still keeping that mindset, but allowing for additional expenses here or there. But I am a little afraid of that snowballing into something because we both tend to be spenders. He's a bargain hunter and I'm a comfort spender. The idea of starting a new chapter of your life. Okay.

Cause that's what this is going to be with kids. And I wake up every day and I've got the mindset of, I've got to make it work. That's exhausting to me. And it's, and it's a false choice. This idea that, Oh, we got to grit and just try to survive because we're getting some equity. I think it's a fool's errand. I really do. I think you got to be careful of that. And I love your honesty, by the way, because my wife and I are spenders and we have to be self-aware. We had to be much earlier on. We're in a very different place in our life and we've got habits and maturity and we've learned from the mistakes. I love that you're calling this out. And I think it's a trap that Rachel, I think with a lot of wisdom, points out.

If you're not careful, the idea that, well, I can make it work gets you to a point where it doesn't work. And then it's a disaster. Because, Casey, also what happens when you guys go to buy this house, the bank is going to be like, you make how much a year? Oh, well, you could get this, right? Oh, that's a great point. And then you how much a year oh well you could get this right that's a great point and then you stretch the budget even more because you can get this amazing beautiful house and then the mortgage payment's insane and you're making 300 and you call in the show right and we get these calls that they're making 200 grand still in paycheck to paycheck

and you're like oh my gosh you know so you just gotta it's a lot of caution which takes a lot of maturity a lot of delayed gratification it's everything that goes against how we are formed in our world today, honestly. I mean, it's the complete opposite. And so you guys, that's why locking arms and married couples working as a team towards the same goal is so crucial. It really is. If you're not careful, Rachel, making it work is sitting in lawn chairs in the living room. You know? Yeah, yeah, yeah.

Watching a movie on an ipad yeah yeah to your point uh california real estate is not a pleasant thing to take on uh so i just we're imploring you uh casey for you and your husband to get on the same page and just be patient because of that income it's that you're going to win in the end yes it's that same mindset college students coming out of college act like you're a broke college student still while you're going to win in the end. Yes. It's that same mindset. College students coming out of college, act like you're a broke college student still while you're making an income to get the debt paid off. So same idea. Wow.

Good stuff. All right. Thanks for the call, Casey. Rooting for you. And Rachel, fun times. Always fun to be with you, my friend. Good stuff. Want to thank James Childs, our fearless producer, and the merry men behind the glass to keep

us on the air. Thank you, America, for listening and also to an amazing studio audience. Best studio audience ever, and I mean it. This is The Ramsey Show. Thank you.