The Ramsey Show - App - Where Should I Put My Money To Save for a House? (Hour 2)

Episode Date: October 19, 2021

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Thank you. Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, it's The Ramsey Show, where America hangs out and has a conversation about your life and your money. I'm George Camel, your host flying solo today, and it's a free call, 888-825-5225. If you want to hear more from me, the few of you that may want to, you can find me on the Fine Print and on Trade Leadership Podcasts, both podcasts you can find on the Ramsey Network or wherever great podcasts are found. Open phones this hour, and we are kicking it off with Jesus in El Paso. El Paso, what's up, Jesus? How's it going? Hey, good, and you, man? How you doing?

I'm doing great. How can I help today? Okay, so I have a question. So we were, me and my wife were working on the baby steps, and we paid off $24,000 in six months in car payments that we had and everything. Nice. Way to go, man. So the only debt I have right now is my mortgage, which I owe $99,000. Okay. Now, I've been thinking, as soon as I got out of high school, I started to work. I never went to college or anything. Straight to the workforce.

Yes, sir. high school i started to work i never went to college or anything straight to the workforce yes sir so i've been thinking about going back to technical school for a 19 month period okay just wanted to you know some advice on whether it's a good idea or this would be paid with student loans oh boy well that changes things for me i mean i love the idea of you going to tech school and getting an education, but I don't think you need to do it with student loans. Is there an urgency around you going to tech school? No. It's just that it just came to mind, you know, because it's for HVAC that I want to go to school for.

Yeah. What are you doing now for your career? I'm an automotive technician. I do service for all the automotive dealerships in El Paso. Very cool.

What's your household income? $45K a year. Okay. And it's just you? Yes. I'm the only one working. Okay. So we got $45K a year

but you're debt free except for the mortgage. Do you have a fully funded emergency fund? Yes. All right. And are you investing 15% of your household income currently? No. Not at the moment.

How old are you? 27. Okay. So you're nice and young. That makes me feel better. I want you to get investing, and I want you to cash flow this tech school. How much does this tech school cost for this 19 months? $25K.

$25K. And have you done your research as far as schools in the area, online programs, all of the options for this HVAC program? Yes. This is the one that I liked, everything they offered. And I've had buddies of mine that have gone there, and they always recommend that school. And they had a good experience. Yes. Okay. Is there any way to get your income up? Is there a way that your wife could work or you could take on a side job to get a bigger shovel?

Well, the thing is that I work from seven in the morning to sometimes seven at night, eight at night. You work in 12-hour days? Yeah, at times, yes. Man, is there another job in this field currently that you could jump over to and make more money? Right now, that's the reason I wanted to move to HVAC because I'm pretty much stuck from an apprentice technician and the sales reps, which the sales reps are all taking up other positions and those guys are going nowhere. Yeah. Well, I want you to explore your options for another job that's in the field you're in

currently so that you can get a bigger shovel, so that you can cash flow the college experience and get to this tech school. Because $25,000, I mean, it's not a small amount of money compared to your income, but you don't have any debt. And so any extra money you could be using to save up for that, and because there's no real urgency other than, hey, I want to switch into this field, you could wait another year to go to tech school. There's nothing driving you to go tomorrow, right? Right.

Okay. I mean, be looking for any kind of scholarships that might be available, grants. Talk to the school. Talk to the guidance counselors. I want you to really do some deep research here and do some deep work to figure out all of the options. I don't want you to just go, well, I'm out of options. I've got to take out student loans.

Guess I'm going to do that, especially when there's no urgency around this. Yes. Other than, hey, I'm not super happy with what I'm doing now. But I love your passion for going into the HVAC field. I think that's fantastic.

I'm a big proponent of the trades, but I don't want you to fall into the 45 million Americans with $1.6 trillion in student loan debt. I don't want you to fall into the 45 million Americans with $1.6 trillion in student loan debt. I don't want you added to that stat. So I would talk to your wife and figure out a plan to where you guys can cash flow this experience. And whenever you have the money is when you can do it. You're going to move at the speed of cash here. That is the best game plan. And if you aren't strapped with student loan payments, America, the odds are

you know someone who is. This is a hot topic and millions of people are putting their lives on hold. They can't buy a house or have kids because they are stuck. Or even worse, they're waiting and waiting and waiting for the government to save them with student loan forgiveness. What a joke. Have you seen the stats on this thing? Public Service Loan Forgiveness Program. 2%. That's the amount of people who actually have their loans forgiven out of everyone who applied.

2%. I'm not taking those chances. You're better off in Vegas at this point. Our team produced a brand new feature-length film documentary called Borrowed Future. It launched last week. It was on all the charts on Amazon, Google Play, Apple TV, all the places, and it's out now.

You can go watch this thing. And it's 88 minutes long, and it's something that you can show to your kids, to your friends, your family. Have a party. Get some popcorn. It's riveting. It uncovers the dark side of the student loan industry. Is there a bright side?

I don't know, but we uncover the dark side. And it exposes how the system is built to work against you. You'll see Dave Ramsey weigh in on the epic failure otherwise known as the student loan program, along with featured interviews from industry insiders and thought leaders like Seth Godin, Seth Frotman, and Dr. John Deloney. We're coming hard at this, folks. We're swinging at the student loan problem with the goal to arm parents and students across the country with the truth. And here it is.

You do not have to take out loans to get a college education. Jesus doesn't have to do it, and you don't either. You can be a student without a student loan. It's possible. You can graduate debt-free and avoid the predatory student loan industry.

And we feature all kinds of inspiring stories, heartbreaking stories in this documentary. You've got to go watch this thing. It's just a few bucks to rent. And I promise you it's the price of your latte. So skip one latte and go watch Borrowed Future. You can watch it on Apple TV, Amazon Prime Video, Google Play, or you can watch it from our website, BorrowedFuture.com. And the stats on this are mind-blowing. America's student loan debt has grown from $240 billion to $1.58 trillion since 2003. One in four U.S. households have student loan debt, with the average borrower carrying $38,792. Y'all, this is the biggest crisis that my generation has to face. And you can get out. You don't have to wait for forgiveness. You don't have to pay it off for 20

years. You can do this thing. But you've got to be aware of the traps. You've got to be willing to change and make some sacrifices to get rid of the student loan debt once and forever. Sally Mae is not your friend. Navient is not your friend. Make a decision to get rid of the student loan debt once and forever. Sally Mae is not your friend. Navient is not your friend. Make a decision to change your legacy, to change the way you handle your money. This is The important than ever. While some circumstances can't be controlled, there are items within your budget you can take charge of, such as your health care costs. For nearly 40 years, Christian Health Care Ministries, or CHM, has provided a budget-friendly means of sharing for medical bills when our members need it. Learn more by visiting chministries.org slash budget.

That's chministries.org slash budget. Christian Health Care Ministries is a Ramsey-trusted provider. Welcome back to The Ramsey Show. I'm George Camel, Ramsey personality, host of the Fine Print Podcast and Entree Leadership Podcast. Open phones this hour. The phone number is 888-825-5225. Call me with your money question. I would be happy to take it. And Reggie did that in Chattanooga, Tennessee. Reggie, welcome to The Ramsey Show. Thank you for taking my call there, George. Absolutely. How can I help you?

I would like to know what would be the best way to invest $10,000 so that it's liquid, so that it's accessible for things like purchasing a car. And for me, home improvements, renovating a home, being able to have access to it. But it makes enough money that I can do those things. So you want your money to make money? Yes, sir. I love that. Well, you have two conflicting words here, invest and liquid. And when I hear liquid, it makes me think I would not invest that.

Now, if this is a long-term goal, we're talking five years out, and you want it to be liquid, sure. You could invest that in just a normal brokerage account outside of retirement and some mutual funds or index funds and have that money grow for you. But it sounds like these short term goals of yours, this is less than five years on the horizon, correct? Yes. Okay. At that point, I know it's not fun, it's not that sexy, but I would park that in a high-yield savings account, which right now will get you about a half a percent. Okay, high-yield savings. Is that disappointing to hear, a half a percent? Oh, yes.

Here's the good news. If you invest that money, you might lose 5% or 10% or 15%. You tracking with me, Reggie? What I want here is to keep your money safe. So it's going to grow at a very small rate. But right now, I would not be throwing this money into the market when it could become 5K instead of 10 if you need this thing six months from now? What if I just want to wait for a year and see what it has done for me and then do whatever?

The time horizon on that is still too short where you're going to see it's too much of a roller coaster. When you look at the market on the long term, it's a steadier incline. But when you look at the short term, man, it is a roller coaster and that money is going to get jostled around. And if you need that thing within that under three-year timeframe, I just think it's real dicey to be investing that money. I mean, it's not going to turn into 20K. We're not going to go investing in some hot cryptocurrency and hope for the best year. We don't want to gamble this money away. You've worked hard for this money. And so the thing that you can do is protect it.

So if I'm you, I'm putting in a high-yield savings account. Do you currently have any debt? No, no debt. No debt, and you have a fully funded emergency fund? Fully funded, yes. All right, and you're investing 15% into retirement? Yes. Okay. You're on track, into retirement? Yes. Okay.

You're on track, Reg. You're doing great. How old are you? 54. 54 years old. Fantastic. And what are those short-term goals that you mentioned? You said house repairs and what else?

Home improvements. You know, the house is a little dated. I want to, like, improve it and add on. It's a rent style, so add on a garage and make room for purchase of a new vehicle instead of buying another used vehicle. You want to upgrade. They're always saying pay cash, pay cash, pay cash. Yeah, I would still pay cash. Are you a millionaire? I'm going to make money to pay cash.

Not yet. Okay. I'm on my way. Until you're there, I wouldn't be buying a brand new car. Now, you said new car. That may just mean upgrading to a nicer, slightly used car. But I want you paying cash for that. And these home repairs, instead of hoping your money grows in that high-yield savings account, just start a sinking fund. Start saving up every single month. You have no debt. And so you can just throw a few hundred bucks a month into that high-yield savings account and watch it grow at that half a percent. But I think you've got this. I would not recommend throwing this money into the market when you're going to need it six months, a year from now.

Thanks for the call. Jackie joins us in San Antonio. Jackie, welcome to The Ramsey Show. Hey, thanks for taking my call. Absolutely. How can I help? Hey, I have a question. We are working on our debt snowball.

We have about $23,000 left on our regular snowball, and then I kind of have our whatever I have in collection separate to pay once we're done with our regular snowball. And I've gotten served, and I have a judgment against me for one of the collections. And my question is, should I pay that off first and then continue working on our snowball or should I just let them hang out until I get to them? What kind of debt is this in collections? It's a credit card. Okay. How much debt? The balance on the account is $5,200 and I've called them before to try and settle and the lowest they would offer me was $3,600

and I just didn't have that at the time. I could probably settle for that amount now, but I would obviously want to negotiate a little bit lower if I could. I would, yeah, I mean, you can try to negotiate lower and if they give you a lower number, I would just pay that settlement in full and then continue on with the debt snowball.

I don't like that there's a judgment against you. I don't like them. Yeah, this is, I mean, I feel anxiety and it's not even my debt in collection. Yeah. And the rest of the debt snowball, what's the other kind of debt? All credit cards, pretty much, and a car. Okay. We've been on a spending spree. This has been fun. A little bit. It's been a journey, that's for sure. But now there's a judgment. So it got a lot less fun. Yeah. You got to pay the piper. Okay.

So yeah, I would go ahead and negotiate with them if they can. But really, I mean, the debt is the debt. And if they're unwilling to budge, I wouldn't push it too much further. I want to get this out of my life. Do you have a $3,600 on hand? Kind of, yes. We refinanced our house, so I have a refund on our escrow account that's coming back. So I will have that money. Okay. Well, make sure your four walls are taken care of. It sounds like you're doing okay in that category. You've got food on the table, utilities are being paid, all that stuff?

Yes. Okay. Yeah, I would get this collections mess cleaned up because of the judgment involved here, and it's a little bit of a fire, and I want to put this fire out and then continue on with my life with the traditional debt snowball. Awesome. Awesome. Thanks so much for the call. Appreciate it. Let's move to Chris in Winston-Salem, North Carolina. Chris, welcome to The Ramsey Show. Hi, thank you for taking my call. I have a question. I have about $100,000 in a mutual fund, no debt with exception to the mortgage, which is about $130,000. And so I was wondering if you think I should apply that mutual fund to the mortgage

and try to start getting that mortgage taken care of and out of the way. Okay, so we're completely debt-free outside of the mortgage. The mortgage is $130,000 and you have $100,000 in mutual funds. Is this just non-retirement, just in a general brokerage account? Yes, it's just in a general brokerage account. Yeah. I'm cashing that thing out and slapping it on the mortgage. Have you ever had any point in your life where you didn't have a mortgage, just completely debt-free?

Paid for house? I have not. How would it feel to not have to pay that mortgage ever again? I've been dreaming about it, so I would love to see that. I would love to see it too. How old are you, Chris? 47. 47. And you're real close to having a paid-off house, man. That would be nice. I love it. I hear it in your voice. I'm excited for you. Yeah, I would cash out this mutual fund. We always tell people if it's in retirement, don't touch it. But you just have this outside of retirement, and so this is liquid money that you could use today to pay down this mortgage.

And you can get to investing later. You're going to have plenty of time to invest. Okay. Okay. Well, great. Great. I appreciate that. Man, you are crushing it, Chris.

$100,000 in liquid cash, and he'll be down to $30,000 on that mortgage and get rid of that thing in no time. Hey, call us up when you're completely debt-free or come to a debt-free scream. I'd love to hear that story. What an incredible guy. Guys, a lot of fun calls on the show today. A lot of mix. We've got a lot of housing questions, a lot of people moving around. They're maybe starting to rethink some things due to the pandemic or the great resignation going, hey, I live here, but I don't have to live here. Should I move? Hey, I want to go back to school.

Should I take on the student loans? I have a budgeting problem. I've got a debt problem. These are all things that I love to help people with. So call me up. The number is 888-825-5225. This is The Ramsey Show. Imagine a world where people never have to worry about money ever again. At Ramsey Solutions, our mission is to teach people how to get out of debt and build lasting wealth. And if that means we have to take on the toxic money culture that says you need debt to get ahead, then we're okay with that. We've seen millions of lives changed, and we will continue to create digital products and services to help people transform their lives.

If you want to join our thousand-member team on this crusade, we're currently on the hunt for software engineers with expertise in Ruby on Rails, Java, C Sharp, and front-end technologies. Or if you're a UX designer or an SEO and content marketing specialist, we'd love to talk with you. Together, we will disrupt the toxic money culture in America. Find out about all the available jobs by texting careers to 33789. Text careers to 33789 to find out about all our open opportunities. I'm George Camel, Ramsey personality

flying solo today on the Ramsey Show give me a call, 888-825-5225 you know I love going out during the breaks of the show and meeting our amazing guests who travel from all over the country to see the headquarters, to hang out. A lot of people come to celebrate where they've come on their money journey. So I want to encourage you guys. We are just south of Nashville, Tennessee.

It's a great trip. And whoever is hosting the show that day, they're all waving. Look at them on the screen there if you're watching. And it's a great time. We'll give you a free Ramsey Show mug. We'll load you up with free coffee, free baked goods and cookies. You can get your picture made, all that fun stuff. We've got a little museum back there, a hallway where you can walk and see the history of this place. And the team did an incredible job with the whole experience. So come down, make a trip

of it. A lot of families do that. They'll make it a pit stop on the road trip. And our team is very friendly, and they'll be happy to host you. You can go to RamseySolutions.com and schedule your visit. We'll let you know what's going on that day and make sure we are ready for your arrival. All right, let's go to the phone lines this hour. Elizabeth is in Las Vegas, Nevada. Elizabeth, welcome to The Ramsey Show. Hi, thank you so much for having me. Sure, how can I help?

So I'm currently on baby steps, my husband and I, and we're in the process of making sure that we are putting money towards our retirement. I currently have about $250,000 prior to the marriage, and my husband has always said that he has money within his family trust, but he has no control over it, and he sees that as part of our retirement savings. And I'm trying to find a good way to kind of persuade him to understand in like a loving way that if we have no control over it, then that means that we can't plan for our future with that money. If it comes to us later on down the line, extra money, great.

But right now we need to kind of follow and stick to a plan with that not being in mind. Yeah. I'm with you on that one. How much does he have saved in retirement? For probably maybe $2,000 currently. He transitioned from a new job into a role here in the U.S., and so this is all new to him. Oh, okay. So he's new to investing in general.

Investing in general, correct. It's all been kind of controlled by the family. His dad passed away and left them money, and they all just sort of decided to leave it to the mom to do everything. There's nothing legally in that regard to his name even. Whoa. So mom can just say, hey, I'm not giving you a dime of this. In theory, yes.

Yeah. Oh, boy. We trust him, but in theory, yes. Yeah, but there's no legal things going on here where he's going to get $100,000 when he turns a certain age. There's none of that. No, it's not considered like that. It's more of a retirement that the three siblings have with the mom. So what's the agreement with this trust?

When does he get this money? In theory, each of them can pull out money when they want. We've had instances where one of the siblings had talked about it, and then they all came to a consensus and decided that wasn't a good idea, so that particular sibling didn't. So, you know, I believe in the family. They're fantastic. They're super loving.

It's not an issue of not trusting them. It's just that we have no control over it. I don't even know what, how much is in there, what it's accruing, anything like that. So in that regard, my husband's like, well, I don't want to pull the money out. So again, in my eyes, it just, I see it as down the line if we get it, great. But currently we have to just focus on what we are doing with the money that we have control over. Absolutely. So how old are you two? I'm 33, and he's 46. 46? Okay, so you guys are way off from retirement. I would continue investing 15% of your household income into retirement.

Are you guys debt-free? Other than the mortgage. And I think we'll be able to pay that off in about two years. We have an apartment overseas that we're looking to probably sell, but I think it'll take about six months before we even start that process. Okay. Well, that puts you guys in a good position to build wealth and give generously when you're in baby step seven there. So I'm not as worried as far as your retirement, but I do want him to understand that if it's out of his control, then we can include that. Now, the day that he pulls the money out and it's in your bank account and in your investments, then we can say, okay, this is part of our retirement. So I'm with you

on that. I think you may need some outside third party opinions on this. So if I'm you, I'm going to contact a smart investor pro in your area. These are investing pros that can walk you guys through your situation and go, all right, here's what I'm seeing for your retirement plan. Are you on track based on all of the factors involved that are in your control? So that's what I would do because when you're hearing it from an investment professional versus just his wife, it may come across differently. Yeah, because I think it comes across as maybe I know better or that I'm trying to be controlling. And I think you're right.

I think coming from somebody who's, quote, unquote, an expert, it comes across better. And maybe he would listen. Yeah, I don't want this to cause a rift in the marriage. So you can jump on RamseySolutions.com and click on Trusted Pros, get in touch with an investing pro in the Vegas area. It'll show you, you know, five options there when you enter your information. And sit down with them and just lay out all the information you laid out with me, and they can get you on a path and go, hey, here's what you're on track to do. Is this good enough?

Does this line up with your goals? And I think you're right here, but I don't want to make this an argument of who's right and who's wrong, and I know that's not your heart behind this either. So get with a smart investor pro and have them lay it out for him, and hopefully that changes his mind. But he's not in control of the money, and so therefore I'm not counting it. It's icing on the cake if he does get it down the line. Thanks for the call. Matthew is in Jackson, Mississippi.

Matthew, welcome to The Ramsey Show. Thanks for having me. Absolutely. How can I help? So I am a pastor, and as a pastor i live in a church owned parsonage and so we are looking to save uh eventually for a house possibly when i get closer to retirement which is going to be probably 25 30 years down the road and our current plan had been to use contributions to a Roth IRA to put towards that eventual down payment and hoping to pay it off, to buy it in cash completely. Love that. And wanted to get your opinion about that.

I had spoken to, we have a financial advisor firm that is available to us through the United Methodist Church. I'm a Methodist pastor. And so they had suggested to us that instead of contributing total Roth for the house, but instead tiling all that we could into our 403b that we have that i have through the conference and then using so saving and tax saving and then also we're able to make a loan of half of the amount that we contribute at the point that we buy the house and that was their way of of saving towards the house and that was their way of uh of saving towards the house uh so i just wanted to get another opinion about you know which idea is better uh in in what we're looking at so if i'm hearing you correctly your financial advisor said to dump it in the 403b

and then take a 403b loan out to get the house yes and his his uh the reason behind it was you save taxes on the front end and you're paying yourself back with the loan and my thought is if we put it in the roth because i know we can use the roth to help buy the house and make either a huge down payment or pay it off completely and it's you know we can do it early if we end up finding ourselves in a situation where we need a house prior to retirement. If I move to a church that doesn't have a parsonage and I need to purchase a house. And so it kind of conflicts with what he was saying, and so I wanted to get another perspective on that.

I don't see the benefit in doing this. I mean, I don't understand the full tax benefits of what he's saying, but taking out a loan when you have the cash to pay for a house is asinine. And so I think you might need a new financial advisor. I would get in touch with one of our SmartVestor pros. What I would tell you to do is to park this money into some good mutual funds, just in a brokerage account outside of retirement. I don't want you using your retirement money to purchase the house. You're going to unplug all that growth that you're going to need

to live on for the rest of your life. So that's what I would do if I'm in your shoes. And to get that process started, get in touch with one of our smart investor pros at RamseySolutions.com and they can help you do things the Ramsey way without debt. You don't need to take on a loan, man. You're going to save up and pay for the same cash. We're talking 25, 30 years from now and you're following the Ramsey plan. You got this. Don't listen to your financial advisor.

Get a new one. This is The Ramsey Show. I'm George Campbell, Ramsey personality, host of the Fine Print and Entree Leadership Podcast. Flying solo today, taking your calls. The number is 888-825-5225. Let's talk money. Call me up. Micah is in Dayton, Ohio. Micah, welcome to The Ramsey Show.

Hi, thanks for having me. Absolutely. How can I help today? I've just got a question. I'm relatively new to listening to you guys, so I'm still kind of learning the baby steps and things of that nature. But I also got a suggestion with my life $34 right now for the term insurance. And it would basically be, I think the same dollar amount of coverage, but I would have the death benefit passed where I guess my whole life. And, but it just seems to me like it's a lot of money to put on the month. But I also, I think I heard that you guys don't really think that would be a wise decision.

I was kind of wondering why. I'm just really completely new to all this. Yeah. Well, I appreciate the call. If you could see my face, I was almost laughing. And I have a very honest question for you if you know the answer. Does your financial advisor sell whole life insurance? Yes. Also a concern. Ding, ding, ding. We have our answer. Okay. Does your financial advisor sell whole life insurance?

Yes, also a concern. Ding, ding, ding. We have our answer. Okay, so let's do some quick math here. What do you think your financial advisor is going to make more money on? Your term life insurance that's about the cost of a pizza? Or is he going to make more commissions off of a $220 a month premium? Definitely the $220.

And he even said that the first two or three years would go toward basically paying, from what I understand, paying him and whoever was a part of that back, and then it would turn into a savings plan, which is kind of what he was pitching as far as the reason for me to do it. Yeah. Oh, I bet. And I bet he sees dollar signs sparkling in his future if he can get you to switch over. You need to get a new financial advisor today. Okay.

You need to find someone with the heart of a teacher who's not out to make a buck off of you but is going to help you do things the Ramsey way and help you make smart decisions with your financial future. And I can tell you why we don't recommend Whole Life. but that's a whole nother discussion from the fact that this guy is trying to make more commission off of you. That's it. You really think so? I mean, he told me that he thinks that I have a good short term and a good long term as far as my savings and retirement. And what he said was he wanted me to have kind of a medium ground,

like five, 10, 15 years from now if I need something to draw from. But I mean, I was kind of thinking, why don't I just do that through a normal savings account? Like, I don't really understand what the benefit was. So that kind of makes sense that it was possibly. Yeah, this guy is trying to screw you. And here's why whole life really sucks. It's a lot more expensive, which you already know. It's trying to do two financial jobs at sucks. It's a lot more expensive, which you already know. It's trying to do two financial jobs at once. It's trying to be insurance, and it's trying to be an investing vehicle. And it ends up doing neither thing very well.

It delays or stops you from ever becoming self-insured, which is why we teach you to get term life insurance. And once it runs out, you're in a place financially where you don't need it. And it can lead to having a huge amount of your cash value in the policy disappear if you die without cashing it out. That sucks. Yeah. So I would jump on to RamseySolutions.com and get in touch with a smart investor pro who can lead you to much better financial decisions, because this guy is out to make a commission, and that tells me that he doesn't have the heart of a teacher.

I'm sure he's a fine person, but he's a terrible financial advisor. He's just trying to make money off of you. Well, that's, yeah, that's what kind of stinks. Like, I really do hope, like, he seems like a good guy, but I know that's probably part of the job, too. Yeah. Well, he's less of a good guy now in my book,

but you can still be friends with him, but I wouldn't take financial advice from this dude. I would get in touch with a SmartVestor Pro who has the heart of a teacher, who's going to show you what you're doing and why, and they're going to do things the Ramsey way. And what we teach is to get that term life, 15 to 20 years level, that's 10 to 12 times your income for each of you, which it sounds like you've got good term life in place. You're doing the right things. Stay on track. Do not listen to this buffoon. Thanks for the call. Josh is in Tampa, Florida. Josh, welcome to the Ramsey Show. Hey, thanks for taking my call. Absolutely. How can I help? Yeah, so my wife and I have 10 years. We've been going through counseling and we've been trying to save our marriage, but

we decided it was best that we get a divorce at the end of this year. I'm sorry to hear that. So yeah, we've tried a lot and now I'm really just kind of looking forward and seeing, you know, what would you guys do if you woke up in my shoes? So, um, I have a, I have some cash saved and there will be additional cash once we sell our home that we own together in equity. So that'll be approximately 180,000. So my, my question is, if you woke up in my shoes and you had $180,000, what would you do? I'm kind of torn between trying to buy a house cash and or trying to invest in more passive income, whether that be real estate or a business venture. I'm trying to just make the best decision. real estate or a business venture. Well, Josh. I'm trying to just make the best decision.

Yeah, I totally understand that. And I'm so sorry to hear what you've gone through. And it's easy to be in your shoes and get there because I've been there. And I know what it's like to deal with the aftermath of a broken marriage. Obviously, 10 years is a long time. And I care more about Josh right now than I do about Josh's money. It sounds like you're in a fine place financially, but you need to grieve this. You need to just take a pause, take a breath. There's no

urgency around this. The money's going to be there tomorrow, three months from now, six months from now. So I want you to take a breather, and maybe you get counseling on your own to grieve and heal and do whatever you need to do to get Josh well, and then we can deal with the money. Okay. How are you doing? I'm good.

Okay. Are there kids involved? What's the ramifications of all this? One kid. Okay. Well, is everything finalized? No, not yet. Okay.

I would let the dust settle here. Finalize everything, and once you have this pile of money, I want you to just wait and get some wise counsel. Get some people in your corner. Maybe get a tax pro, a real estate pro. If you're,

if you're wanting to get into that later on, make sure you have a financial advisor who's helping guide this money. It sounds like you've got a good head on your shoulders on what to do with it. I would put it towards your next goal, you know, filter it through the framework of the baby steps. It sounds like you're debt free. More or less. There's like 3000 I owe in a car and i don't have any credit card debt or student loan debt okay do you have an emergency fund in place yeah yeah i have about 40 000 like 80 000 total saves and wow half is half is in a brokerage account and the other half is in a bank account i would the other half is in a bank account.

I would cash out that brokerage account. I'll get out of that debt, pay that thing off, become completely debt-free, park that three to six months of emergency. I'd probably lean towards six months in your situation, going through what you're going through. Are you investing 15% after that? Yes. Okay.

I have like $170,000 in my 401k. It's like I'm good with retirement. Okay. So you're on track for a solid retirement. I would get rid of this debt and just live a debt-free lifestyle. That's going to take away, you already have enough stress and drama here, and that debt is just going to add to it. So get out of debt, never look back, have that emergency fund, look forward to whatever to it. So get out of debt. Never look back. Have that emergency fund. Look forward to whatever that house purchase may be down the road, and I would use that money towards that. I wouldn't get into real estate investing or anything shiny right now.

I would focus it on whatever your next primary residence is. Use that as a giant down payment aside from your emergency fund while investing, and I don't know what the financials look like with the child in the mix and child support and custody and all that. I'm sure you're still working some of that out. But I would put it towards that primary residence and try to get that paid off. And then we can focus on if you want to do some real estate investing down the road when you're in baby step seven, that's a fine choice to make.

Okay. All right. Thank you. Absolutely. Josh, I'm so sorry for what you're in baby step seven, that's a fine choice to make. Okay. All right. Thank you. Absolutely. Josh, I'm so, so sorry for what you're going through, man. Divorce is so difficult and emotionally taxing, physically taxing, financially taxing. And so take your time with this. There's no rush. You're in a good place financially. You've got a big pile of money. So just take care of Josh right now. And the money part will take care of itself later on. That puts this hour of The Ramsey Show in the books. My thanks to Ben Hill, our producer, Kelly Daniel, our associate producer and phone screener, and you, America. This is your show, and we appreciate you listening in.

We'll be back with you before you know it. Until then, this has been The Ramsey Show. Hey, it's Kelly, associate producer and phone screener for the ramsey show if you would like to do your debt-free scream live on the show make sure you visit the ramsey show.com and register we would love for you to come to nashville and tell dave your story