The Ramsey Show - App - Why Car Payments Are Keeping Americans in the Middle Class

Episode Date: October 8, 2024

Welcome to the Ramsey Show where we help you win in your life. We want you to win with your money, win in your work, and win in your relationships. I'm Ken Coleman. Jade Warshaw is alongside, and we're here for you. The phone number is 888-825-5225. That's 888-825-5225. All right, let's get it started with Taylor in Los Angeles. Taylor, how can we help? Hi, guys. Thanks for taking my call. How are you? Good. How are you? Good. How are you? Good. Thanks. So pretty much some backstory. My husband and I have about like $105,000 in debt

between credit cards, cars, and student loans. And right now he makes $8,400 a month. And like, we're breaking even between like rent bills and whatever. My question is, I've been doing hair for three years off and on, and I've been doing it consistently for like the past four months now, and I'm just barely breaking even. I feel like I'm not seeing a profit. So my question is, would you advise like getting a different job, like a full-time job where I'm bringing in more income? Because I finished the total money makeover, and I feel like my mindset has changed about money. And I'm like, I feel like

I need to bring in more income in order to make a dent in our debt, but I don't want to quit what I went to school for. You know what I mean? Well, maybe it's not a matter of quitting it. Maybe it's just a matter of adding to until you're making the money that you want to make. Because I think you know the answer to this. Yeah, you do need to be making money. Like you can only go so long breaking even. And if the situation were reversed, let's pretend that you had a nine to five job that you were making money. And you said, I'm going to go over here and do hair on the side, how will I know when it's time for me to do this full-time? What would we tell you? When you're making more money

or when you're making as much as what you're making at your full-time job? Exactly. Okay. Okay. So how does she play this? Well, I agree with you. I think we look at a number that we're trying to make. So what's a number? I'm assuming that when you called in today, you've got an idea of the budget, the way you're talking about it. So what's the number? Let's take a take-home number after taxes that if you were to bring in that right now, that seems A, realistic, and B, it would really help on the margin here so

we can accomplish what we need to accomplish and knock this debt out. I would like to help out and knock out the debt, like $2,200, between $2,200 and $2,500 a month would be very helpful. Okay. All right. And so what are you making right now in your current job, what you went to school for? So I went to school for hair and like, like I said, after rent, no, no, no. You're right. After rent and like product and stuff like that. I mean, maybe I'm making $200 a week. Yeah. So is it, let's figure out where the issue lies. Is the problem that where your studio is, is too expensive or is the problem you don't have enough clients or is the problem a combination of three things where you are is too expensive you don't have enough clients and you aren't charging enough

probably a combination of of those three yeah because we moved to a new area so i'm so the past like four months i've been starting from square one as far as clients. So I'm just kind of, I feel discouraged because now that I read the book, I'm like, okay, I want to like go, go, go. Well, with that in mind, I feel like I'm not going anywhere. Yeah. Well, first of all, that's a low margin business. So I'm going to say amen to what Jade said earlier, which is we can come back to doing the hair. But right now, we want to get really intense. And so, yeah, I'm circling that number of $2,200 to $2,500. And the way I would come about it as I'd go, how can I help add that amount of money? What does that look like? And so you start playing it out.

Okay, so if I get a job making $20 an hour at Walmart, I'm just throwing that out there. I'm not telling you, Taylor, that's where you're going to go. But I'm just saying, you start to look at the possibilities. And you don't have a degree in certain things. So you go, okay, what can I do for the most amount of money per hour? I'm just taking an hourly job, all right? But you know what? You might be able to maybe get an office manager job or an administrative assistant job. And you start looking at that and you go, okay, what must be true for me to bring home that $2,200 or $2,500? That's where I would start, because that's where the ideation comes from. And you begin to say, okay, I can go over here, I can do this, I can do this. And so I wouldn't overcomplicate it. This is just about a

paycheck right now in order to get into the debt snowball and knock it out. Then once we get through where we want to be, now we can start to dial back and we get back to building your business over time and then you do well. But that's the advice I would give you because that's what I would do if I were in your shoes. I'd do whatever it takes to bring home that extra money. Absolutely. And can I just dig a little bit deeper just because I'm curious? So your husband's making, you know, a little over $100,000 a year. What's your rent or mortgage situation? How much are you paying a month?

Right now we're paying three grand in rent. Okay. For our home. Okay. And then you said the car. Tell me about the car. Because I'm looking for other ways that i can clear up some breathing room for you yes i mean we both have car payments his truck payment

is six hundred dollars a month and mine is four hundred dollars a month okay and what do you owe on them but we uh my car i own fourteen thousand and i think his truck we owe 20 and what are what's his truck worth if you were to sell it today private sale if you had to guess i'm not too familiar with the truck prices but i think he's he said around like you know 50 or maybe 45 i'm not i'm not 100 sure okay so i would be looking at these cars very seriously because of what you say is true. And I know that you're just taking a shot in the dark here, but if it's true that he owes 20, but it's worth 40, do you know what that means? That means that if you sell that car, you're going to have a $20,000 spread of profit, which means you could get into a cash car for

20,000 and no longer be paying 600 a month so that's huge so by the way just to plug that in taylor what that now means is that 600 comes off of the 2200 you said you need to make so now all of a sudden we we don't have to make as much and that's why that's such a huge play there and the same thing could be true with yours i i would say coming off of this call if you were to have homework, it would be first off, I'm digging into these cars because that could be a pile of money sitting right there in front of your nose. So I dig into both of those cars, get your husband on board.

And then after that, yeah, doing Ken's homework and saying, OK, what can I do? What's the job that I can get? This is not the be all end all. It's just to make that money. And I think that you're going to find a lot more money quicker than you thought all. It's just to make that money. And I think that you're going to find a lot more money quicker than you thought if you guys are willing to make some sacrifices with these vehicles. Okay. Awesome. Fair enough. Yes. Thank you guys so much for your advice. I really appreciate you taking my call. Yeah. And I love her spirit of

what can we do? Yeah. And I think that, you know, when anybody comes into the show for the first time, maybe some of you are listening or watching for the first time today. And one of the themes that you're going to hear from no matter who's hosting on any given day is that we're always going to recommend the shortest distance. getting out of debt, that's baby step two. Baby step one is $1,000. So we're going to say, what do we got to do? We sell stuff. We go babysit.

We do whatever to get $1,000. That's baby step one. Baby step two, smallest debts, largest debts, knock them out. We're always going to say the straightest, the shortest route, and that is intensity is what I'm getting at. And so it's first season. And in this case, Taylor is really willing to do that. I love that they jump in together. You've done this with your hubs and you guys paid almost half a million dollars off. The relationship strengthens when everybody's going, we're going to both go all in and do everything we can. That's right, Ken. So thanks for the call, Taylor. We believe you guys

are going to do this. We're thrilled for you. Don't move. More Ramsey Show coming up. 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. Terrifying. 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 right.

These are 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, and Jade Warshaw is alongside.

She takes my cool factor up multiple levels, as I was reminded by somebody in the lobby. I do my best, Ken. Listen, I need all the help I can get, and I was reminded by somebody in the lobby. I do my best, Ken. Listen, I need all the help I can get, and I appreciate it. Hey, the phone number is 888-825-5225, 888-825-5225. Jade and I are here for you. We want to coach you up. Jade will lead on the money stuff, and I'll help you on the income side of things. How about that? And that is how we get this thing right and work these baby steps so that you truly live like no one else. All right, we're going to Anchorage, Alaska, and Robert is joining us there.

Robert, how can we help today? Hey, guys. Thanks for taking my call. a small business that I've been building for six years and getting about 2.2 million before tax. Nice. Way to go. Yeah, thanks. What kind of business was it? It was a media business, like streamable assets. Great. Good for you. I'd been building it since I was 18. I'm 26 now. Good for you. How about that building it since I was 18. I'm 26 now. Good for you.

How about that? Yeah. How do you feel? I feel excited but also really scared because my income is going to be gone, my monthly income from this, and I need to invest this money properly in order to replace it. What were you paying yourself? I'm curious.

I was paying myself like $10,000 a month for me and my little family. Okay. And why'd you sell it? I sold it because the deal was a higher value than I was currently making. And I just wanted to get more into physical assets, asset creation and digital asset creation. Right. And the reason I ask that is because my next question is, what were you or what are you thinking that your next move is? I understand you're calling about the investment piece,

and we're going to get Jay to jump in on that in a second, but I'm curious, are you thinking about another business, going to work for somebody else? You think about taking six months, 12 months? Where's your head at right now as far as new income? Yeah, I guess, I guess I'm a creative person and I, I, things pop up and I need to be able to like quickly move on, you know, ideas that I have. The issue is that I took this deal thinking it was going to be a capital gains tax. And I recently moved to a new tax firm and they're saying it's going to be ordinary income. So it's

actually much less money than I originally intended taking this deal. What will it amount to? I think it's going to slim all the way down to like 1.4 million. Okay. Yeah, that's a little disappointing. Yeah, it's really disappointing. So originally I was going to have like 1.8 out of this and i could just put this in index funds as i've learned from the dave ramsey show is you know just moderate investments that are not super high risk high reward and and just live off of a small percentage for my family but now i can't do that i need to yeah and i don't know that i would how old are you 26 26 i i 100 if i i'm just going to tell you jade's point of view and can chime in if i woke up in your shoes and i saw myself getting 1.4 million dollars i would say to myself okay i i have this wonderful nest egg started so that when the time comes and I do want to retire,

I will be able to, but I don't think the day is at 26. I think if you start pulling the growth off of this now, you're just, I think it's going to stunt you in many ways because you're 26, you're just getting started. And if you had this idea, there's probably way more ideas in you that will earn you money.

And I would see this as, okay, this was a great wind you that will earn you money. And I would see this as, okay, this was a great windfall that we had. I'm going to put it over here. It's going to grow and multiply. And if at the time I'm 40, if I want to step back and go, okay, whatever I'm doing, I'm going to do it part-time or, you know, I'm working for a different cause. Now it's not really a money-driven thing. Fine. But I don't think that day is today. Yeah, I agree. In fact, here's what I would do. Because Jay's going to give you any investment advice you want on this, but I would take the $120 that you've been paying yourself, if you've been paying yourself $10 a month, I'd take the $120 out of the $140 and I'd put that in a savings account. Yeah. And because you've got to transition

and, and I wouldn't rely on that. I'm with you. Like I wouldn't, I would just put it over there and go, all right, let me get out and hustle a little bit. Maybe I'd take a month off, whatever. I'd celebrate. I'd go do something real nice with the wife, the missus, you know, and, and the kiddos. If you've got kiddos, really nice and celebrate. I'd take $120,000, and I'd put that. This is above and beyond your emergency fund. I would just put it over there just until we get rolling, and then I'd invest the rest. I would not even try to draw off of that for your income.

Yeah, because we didn't ask you. What baby step are you on? I'm on, I mean, I have no debt. I paid off my house throughout this business and um wow yeah so your baby's step seven yeah we own our hundred thousand dollar house outright good we own every car outright fantastic yeah we yeah we just but the issue is that now our income's gone. We're just sitting on this lump sum of money. But your income is not, it's not gone.

I want you to reframe that. We just said we're going to take 120, which would, let's say that's your income for the next 12 months. I mean, you've earned that. You sold the company that you started with your, with your own two hands. So I take the 120. That's my guaranteed income. I don't miss a beat for the next 12 months. Invest the rest because you're already in baby step seven and get after it and

start doing some creative stuff. Start doing some fun stuff. Okay. That's really helpful. Thank you guys. Yeah, you're welcome. Hey, I'm proud of you. You've done something really cool. And the good news is I can tell you guys are like frugal people. You're not, you know what I'm saying? If you've done all of these baby steps by 26, you guys know how to live on less than you make. My guess is that you're going to come up with something to do next. And you might live on 70 for a while or, you know, until you get it back up. But I, I'm with Ken all the way. I, congratulations. That's all I have to say. Do you have an investment pro that you have and you're working with beyond the tax pro? Yeah. And I think because I'm 26, I just assumed this investment would make at least 7%. And the more I talk with my pro, they're like, you should be way more moderate about what this is going to do

like i don't know about that hey hey i want you to get with a smart vestor pro uh ramsey we have a team of people that we vet and they they do things the ramsey way and so a smart vestor pro is going to help you invest this money the right way for you. And we say all the time, you should be looking for an annualized rate of return around 10% at the least. That would make my life. Yeah, it will. And it's not crazy. Like, Ken? No.

It's not crazy. I know what my stuff makes and so it's not crazy. Yeah, that's historic. That's not Jade's opinion. And just look that up and look how it does. But again, let me just say this. It won't make your life, Robert. This is a nice windfall for you. Jade's absolutely right. You're only 26. Now, if you invest this and you invest it well, the way we teach. You're different. This money sitting still is going to do awesome things for you over the next 30, 40 years.

A lump sum doubles every seven years. That lump sum is going to be great for you, but it's going to change your life down the road, not right now. So this is a long-term play, 10%. With that kind of money getting started, you're going to do fine. You're going to keep making money. You're an entrepreneurial guy. You said it yourself. The wind blows on you the right way way and there's a new idea. And to Jade's point, you've already proven an otherworldly discipline for a 26-year-old dude in America. I mean, you're way, way, way ahead of most 26-year-olds.

100%. Yeah, you're a freak of nature. You're a unicorn. Let's just say it. I just stay really paranoid, I guess, about like, oh, I'm just going to, that's why we're so frugal. I think it's like a paranoia that we're going to lose it all. You're not. You're not going to lose it all.

Go celebrate. And Ken and I will give you some ideas. I love Europe this time of year. Look at Jade. She knows how to spend other people's money about as well as anybody I've ever met. Yeah. Practice your French. Yeah.

What has your wife always wanted to do? Because you got the money to do it. Go to New Zealand and see where they filmed Lord of the Rings. Wow. Look at you. You're a virtual postcard today. It's like I'm flipping through postcards. Vac're a virtual postcard today. You just keep, it's like I'm flipping through postcards. Vacation Ideas by Jade. Yeah. I love that. Enjoy it. There you go.

All right. We got to take a quick break. We'll be right back. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also

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Welcome back to The Ramsey Show. I'm Ken Coleman and Jade Warshaw is joining me here in the studio here of The Ramsey Show. So excited that you're with us. 888-825-5225 is the phone number. 888-85-225 is the phone number. 888-825-5225. If you've got questions about income, feeling stuck, feeling a little stale, and want to make some moves, I'll coach you on that. Get your money problems, Jade's got you on that, and we combine as well. Let's go to Jennifer, who's in Jackson, Mississippi.

Jennifer, how can we help today? Yes, I just have a real quick question. I have a son who is 17 about to turn 18, and my credit score is 830, and my husband's is like 780. And we want to start him off on the right track of having a particular credit card or how y'all would maybe suggest helping him get and obtain a good credit score as well. Okay. I've never heard that question on this show before actually. No? Really? Don't think I have. I've gotten it a couple of times. Jennifer, when did you start listening? I just started like about a month ago. Okay, great. That makes sense. Okay, very good. We're happy to have you. Yes, welcome aboard. So what is it that, what are you hoping he'll

be able to do with that credit score? I just want to learn a little bit more about your intent here. Well, I just want to know that when he, he is also about to start college. He's a senior in high school now, and so he'll be starting college, and I know that he'll need, you know, we bought him his first vehicle, but I know that down the road that he'll need to get a vehicle and possibly be able to have to rent an apartment for college and this, that, and the other. So I just want to make sure that he has a good enough credit score to be able to get the things that he would need to get, like a vehicle later down the road, or maybe an apartment or something like that. Well, here's, I'll be honest with you. Here's

why I don't like credit scores. And here's why I don't, I've never focused on one. And for, you know, for all intents and purposes, I don't believe in them at all. Because you have to have debt, you have to interact with debt in order to have a credit score and we also know that when you borrow money the borrower is slave to the lender and so there's this part of the credit score that it has never it doesn't make sense to me because it's all about how you interact with debt how much debt you have what types of debt you've had how long you've had your debt what percentage of your debt that you're using, right? It's all, nobody's asking questions about, can you actually afford the item?

How are you managing the cash that you actually, and the money that is actually yours that is in your bank account? And so that's why I have an issue with the credit score. What I would love is for you to teach him a way that says, okay, if you have the money, you can afford it. If you don't have the money, you can't afford it. Now let's go back to the things you talked about. He is a very good saver right now. So he only works part-time like two days a week and he has since this past summer. And he's already saved like almost three thousand dollars and has love that purchased like a like he's purchased like a two thousand dollar cd and this that and the other so i mean we have taught him like you do your ten percent time then you have some that you put in

this much you put in savings and this much is like your fun money so he's done that but what i mostly worry about is like once he gets off to college and he has to rent an apartment. I know a lot of apartments look at credit scores. If he doesn't have one, they may be like, oh, we can't rent to you. Well, the truth is you're right. A lot of credit card or a lot of apartments do look at your credit history, but a lot of them don't. And the ones that do, if you simply go to them and say hey here's the thing i know you guys look at credit scores i have a zero credit score which means that i don't borrow money because i don't believe in debt but i also brought a copy of my bank account and you can see

how much money that i have here so i'm good for the money i also brought you my pay stubs so you can see how i work and you know if you if you kind of dig deeper and also let them know, hey, they might charge you a little bit more for first and last month's rent. But the truth is you may have to do a little bit of due diligence to find people who believe the same things you believe and can actually understand, hey, I actually have money

because those apartment complexes are out there. So let's check that one off the list. And then if we talk about the car, well, I don't know about you, but I'd rather him buy a car in cash and not have payments, then put money down and be loaded up with a car payment. Because now we're teaching him, hey, if you want a car, you have to pay payments on it. As opposed to teaching him, hey, if you want a car, let's buy one in cash you got five thousand dollars three thousand saved in two thousand in a cd once that cd is available let's buy five thousand dollar car in cash and then in a year or two if you want to upgrade and add three thousand dollars more with it now you're driving an eight thousand dollar car and let's do that and so that

you can always have your money freed up because one of the things we've learned, Jennifer, is the car payment is what keeps middle class middle class. Most people are walking around here with a $700 a month car payment. And because they have that car payment, it's tough for them to do things like invest for their future. And so I'd love to set him up with the mentality that I keep my biggest wealth building tool, which is my income at my disposal. I don't give it away in payments every month. And therefore, if I'm not in debt, I don't need debt, which means I don't need a credit score. OK, it's a new way of thinking. I know that it is because people don't talk about it.

It is. it's scary it's scary new way of thinking but yes i i see your point tell me the fear i it's not scary what are you scared yeah and it it goes it goes beyond the rent because so college will only be four years and then after that it'll be he'll probably want to buy a house and I know it's a lot harder to you know obtain a house with no credit score and save up for okay so let me let me let me uh break in and I want my colleague to tell you about that fear go ahead explain it what if I told you that's not true I Jenniferennifer i love this call so much i'm so glad you're with us because you are every woman usa right now calling in the truth is credit scores they benefit from us right they benefit from us being in debt they make money off that when we

when when you get a credit card when you sign up for a loan, there's a little thing called interest. And so there's a lot of people making money off of that. And so that's why you don't see on TV people advertising zero credit scores because nobody's making money off of that. And so this whole thing is a product. But the truth is, you can buy a house. It's no harder. You can buy a house with a zero credit score. It's called manual underwriting. And it's the same thing You can buy a house with a zero credit score. It's called manual

underwriting. And it's the same thing like I told you at the apartment complex. All they do, it's literally the same process, but instead of looking at your credit score, they're looking at your actual money. And they're going, okay. I've never heard of that. I know, but it's true. Do you want to know that I bought my house with manual underwriting? I had a zero credit score. And so just to clarify, not just for you, but anybody listening, a zero credit score is not the same as a bad credit score. A bad credit score is you haven't done well borrowing money. And so you have a bad credit score or a low credit score. A zero credit score is just as good as a high credit score. It simply means I don't borrow money. And if you were to look at my credit report,

it would say indeterminable. And so there are plenty of places. Churchill Mortgage is one that we talk about all the time. They're everywhere in the United States, except New York and Alaska. And they do manual underwriting. And literally all they look at, I'm going to tell you right now,

they look for 12 months of trade lines. And that could be you pay your cell phone bill you pay your utilities that sort of thing online or I'm sorry on time they look for 12 months of your rental history so if he goes to rent he just needs to show 12 months I paid my rent on time and then they want to see your I'm sorry I just said uh-huh okay And then they want to see what you made over the last year. And they'll ask for your pay stubs just like anything else. And then they go, okay, great. And if he happens to be self-employed, they might ask him for his tax returns. But that is it.

And I just want to clear the air for anybody. You're helping so many people right now because a lot of people don't know that this is a thing. And it 100% is. And once you know that, all of a sudden it's weird because, Ken, the credit score don't mean a thing but a chicken wing at that point. So true. And I love what you just said. The zero credit score tells people, this is somebody who's very solid with their money. And that's all they care about is, are they going to get paid? Yeah. So when you prove, as Jade really laid out well, that you can pay and your son's got nothing to

worry about. So that fear is natural, Jennifer, but it's because you've never heard what she just laid out. Most people never have, but she's right. Go do your homework on it. Check her on it. I promise you. Oh yeah, it's popular to do these days. Fact check us. I think you'll like what you see. This is The Ramsey 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 churchhillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. Welcome back to The Ramsey Show. Thrilled to have you with us as we talk with you about your life,

specifically your money, your work, and your relationships. I'm Ken Coleman jade warshaw is joining me this hour the phone number to jump in is 888-825-5225 that's 888-825-5225 well we've just launched a brand new tour dave ramsey and dr john deloney are going to hit the road and they're calling this the money and relationships tour a little bit different twist maybe on on a live event that if you've experienced any of our events before, this would be a little bit different.

Very interactive and a lot of fun elements to this where the audience is voting, deciding on content. Of course, they're going to cover money, relationships, and whatever you want to talk about. So it's going to be a lot of fun. Kicking off Louisville on April the 21st, 2025, and then Durham, North Carolina, Atlanta, Georgia, Phoenix, Arizona, Fort Worth, Texas, and Kansas City at the end of the tour.

So again, kicking off April 21, 2025 in Louisville. If you want to get your tickets, get them at ramseysolutions.com slash tour, ramseysolutions.com slash tour. And if you're tuning in on YouTube or podcast, you can click on the link in the show notes to get the tickets. So go ahead and jump on that. All right, to the phones we go. Zach is in Salt Lake City. Zach, how can we help? Hey, how are y'all doing? Good. How are you? Good. Hey, thanks for taking my call. My main question is, I'm a recent college graduate. I graduated less than a year ago. I just started working full-time. My long-term goal is to go to law school, but I'm just really not sure how to financially plan for that and plan for my financial future as a whole.

Are you familiar with the amount of law schools that will give a full ride based on LSAT scores? Are you familiar with this? Anybody ever share that with you? I've done a little bit of research. I know I hear mixed things where the ones that are maybe more willing to give out better scholarships for a lighter range of LSAT scores are ones where it's harder to get a job out of law schools because they're lower ranked. So I feel like in some of those ways, it's, you know, I don't know where to weigh out the pros and cons versus a cheaper law school or one where I get a scholarship versus one where there's a higher promise of a better job or an easier process of finding a job outside of law school. Okay. Well, I'm glad you're familiar with what I'm talking about because this is the advice I give every time I get this call and I'm getting this call several times and I've said it with Dave on the air. I'll say it with Jade on the air.

If it were me... Sounds controversial. Are you going to say something controversial, Ken? You may think it's controversial. I don't think it is. Let me just get comfortable. All right. I would go to the school where I could get the full ride, and I don't care if it's got a big name brand or not, because that's what you're hearing. And you're hearing people say things like, well, the more prestigious, the more sizzle factor that the law school has, the greater chance you have of getting placed in a firm. And I think that's garbage. It's just like people saying you can't get a house without a credit score. These are all popular ideas that no one's really shown the light of accuracy on. And I'm here to tell you my opinion. I don't think anybody cares what law school you went to and if you go to a

a smaller law school that doesn't have the sizzle factor and you get a full ride or most of it paid for because of a great lsat score and by the way that's happening all over the country it's very available the reason they do that is because they're competing with the vanderbilt law schools or the ivy league law schools that have all the name brand stuff. But I'm here to tell you, the same people that make J.Crew, they make Old Navy. Okay. And we got to get to a point where we start really looking into this and we go, a law degree is a law degree. And your ability to practice law is the same whether you come out of a fancy school or a smaller school. And is there some competitive advantage that can be proven?

If you go to an Ivy League school and they've got all kinds of connections in the big firms, yes. Yes. But do you know what the competition factor is there? You're competing with everybody else in your class. And what I'm here to tell you, Zach, is if you want to practice law and you don't want to go into debt, then I would do what I just said. And I'd brush up on my LSAT. I'd take it 10 times if I had to, because I can cash flow that. And then I'm going to get a full ride or pretty close to a full ride to a smaller law school. And I'm

going to get trained on the law and then I'm going to bust it. And I'm going to get an opportunity to go out and be the lawyer that I want to be. And I'm not encumbered with any of the debt that all these other big shot guys that you think went through, they got all this debt and they're stressed out of their mind. So that's what I would do. Cause I can tell you anybody you ever represent will never ask you where you went to law school. Is that controversial, Jade? It wasn't as bad as I thought it was going to be. I guess I know you better than I thought. I don't even know what any of that means.

What did you think I was going to say? I don't know. You were setting us up for a cliffhanger. No, I'm just saying, go to a law school with an LSAT score that wants you, and they're going to pay for your law school, and you have zero debt. Yeah, and you can keep taking the test. Take the LSAT 60 times. What's it cost to take it? I want to say it's around like $200. Yeah, and you can keep taking the test. Take the LSAT 60 times. What's it cost to take it?

I want to say it's around like $200. Oh, yeah. I don't know if you can take it 60 times. I made that part up. Yeah, but you're saying prep and knock it out of the park so you can get... That's what I would do. There's just no reason to go into debt to then get in a scramble with everybody else in your

class. You go to Harvard Law and you're all competing for the same firms. Yeah. Were you thinking about Ivy League? No, I just made that up. I was mainly, there's a school, it's a local here in Utah. It's probably my top school. And I think it's ranked number 22 in the nation.

It's pretty good. And tuition every year is about $15,000. So I'd come out, you know, if I didn't cash flow, it would be about $45,000 in debt on top of, you know, any other living expenses, depending on how much I'm working and stuff. And I know that's way less than a lot of other law schools. Okay. Now here's the other thing. Here's the other thing. Law school is going to be there. So go, go make the $45,000 in cash flow. Yeah. Why not? Yeah. How long would it, how long would it take you to put that away?

Um, that's the other thing is I'm not, I'm not a hundred percent sure like what that looks like currently in my job right now. I make about 52,000. I try to save as much as I can. I'm trying to get out of debt in terms of paying off my car. Um, so I'm hoping, you know, within by next spring I can, you know, be up to the $70,000 range. I don't know. Sometimes you kind of worry about the timeframe of when you kind of age out of these kind of things in terms of starting too late in your career. Yeah, that's up to you. How old are you now?

I'm 26. Okay. First of all, you're going to be ready to fund law school in two years, two and a half years max if you get after it. So you're not too old. You got all these things in your head that I think this is conventional wisdom telling you, Zach, it's okay. Get a loan. I mean, that's the conventional wisdom. It makes so much sense.

You said something that I found to be revealing. You said right now I'm working to pay off my car note, which lets me know you don't like being in debt. And if you don't like being in debt. Right. And if you don't like having a car note, I can guarantee you're not going to like having $45,000 of student loans. So that was just a little light into your soul on that one. But hey, let me just tell you, my brother, we both went to college together and then he went and served a couple of tours in Iraq and came back and did social work for a while. And then he decided, I want to help people even more. And he became a lawyer and he went to night school and did it. And he was in his mid thirties. And then by the time he turned 40, he became a judge.

So it's not too late to decide what you want to do. And there's ways to do it to where you're not going in debt for it. So just a little, little story time there. Yeah. Zach, the point is, is there's, there's no reason in our minds that you should take out loans to go to law school. You just don't need it. So that's our, that's our verdict. I'm going to, I'm going to steal like, I think you need your own show, Judge Jade. Oh, don't. See how excited you just got? I could see you. Oh, man. I would love to.

I could see you in your own version of a Judge Judy. I'd be presiding. You'd have a loud collar. Remember how she had the little polite white, felt like a teacup collar? I'm going to put like spikes on mine. Yours would have some personality. I would love that. That would be so fun.

You coming in in your big black robe and you kind of sashay behind the... I want like a gospel robe. I wasn't going to go there, but I like that even more. It's your show. But tell me you wouldn't love like... I would love it. Yeah. People coming in with their little...

We need a segment on this show where you wear that robe and people call in with their... And you make financial judgments. The judge is in. Yeah. The judge has presided. All right. We'll keep brainstorming that amazing idea. Are you the bailiff?

I would love to be the bailiff. That's funny. I'd look like Barney Fife, the old school bailiff. Oh, boy. That would be a lot of fun. I think people would watch that. Hey, fun hour. We'll keep concepting the show. We'll be back a lot of fun. I think people would watch that. Hey, fun hour.

We'll keep concepting the show. We'll be back before you know it. This is The Ramsey Show. Welcome to The Ramsey Show, where we help you win in your life, win in your money, win in your work, and win in your relationships. That's our aim. We're so excited that you're with us. The phone number for you to jump in because it is your show. Ask questions so we can coach you to get you where you want to be.

888-825-5225. 888-825-5225. Alongside the incomparable, the fabulous Jade Warshaw, I am just simply Ken Corwin. Ken, don't do that to yourself. It's good. It's good. I'm telling you, it's fun. We have a lot of fun together and we're going to help you out. Let's go to Katie in Springfield, Missouri. Katie, how can we help? Hey guys. So I am typically very frugal and try to be wise with decisions when it comes to money. But I've been going back and forth on this idea of taking my daughter to a Taylor Swift concert. She's 15 and she

really likes her and I do too. But the frugal side of me is struggling with the price for a three-hour experience. But then on the other shoulder, I've got the Spaniolo side that says, let's make the memories. So I just would like to talk through that. Interesting. Oh, my goodness. This is – I have been involved in another very popular Taylor Swift call. I heard it. You did?

I heard it. My daughter wanted to be Rachel when I called in, I'm sure. She's probably Ramsey. All right. Well, I tell you what, I'm going to listen along. I mean, we can – so we've got to find out where you're at financially. Yeah. Right?

So give us the picture. You guys got any debt? Just the home. Okay. Just the home? No debt besides the house. Correct. All right.

What's the combined income? It's right at $175,000. Nice. Okay. How much are the tickets going to cost? Probably $5,000 and then travel. So probably right under $6,000 for three hours. Oh, so you have to drive three hours?

The tickets you're getting, are these like really? We'll have to drive seven hours, but it's a three-hour experience. Got you, seven hours. So you're staying overnight in a hotel? Yes, ma'am. So $6,000 total for this trip. Is this for her birthday, or is this just because? It's just because. How are you going to buy the tickets?

What would be the method of payment? So I would sell some of my employee stock purchase plan. Okay, interesting. I would sell some of my employee stock purchase plans. Okay. Interesting. That's your retirement? That's crazy. No, no. It's separate from retirement. It's single stock.

Single stock. Single stock. Yeah. I'm going to wait for Judge Jade, but I've already reached my answer. How much single stocks do you have? I'm just curious wait for Judge Jade, but I've already reached my answer. How much single stocks do you have? I'm just curious. How much in that?

So we have about $141,000 in employee stocks and about $50,000 in single stocks. So that's right under $200,000 in both. Okay. By the way, are these tickets, and I'm asking because I'm completely clueless, Katie. Are these like really close? We're looking at $2,500 a each, right? For two tickets?

That's a pretty good experience, right? I wish. It's the fact that it's the last part of her tour and so they're just really priced high for nosebleeds. Oh, so those are nosebleeds at $2,500 a piece? Wait a second. Wait a second.

That changes my answer, which is why I asked, by the way. Oh, my gosh. Because $2,500 was like, I was thinking that was Artist Circle or something. Yeah, like I need to be in the pit. Is that what you were thinking? Yes. I want the sweat to hit me for $6,000. Yeah, I could do without the sweat. In fact, if I'm paying six grand, I don't want any

sweat to hit me. You don't want T Swift's sweat to hit you? No, no, no. I don't want anybody's sweat hitting me. Certainly not hers. Okay. I mean, I got nothing against the Swifty sweat. I'm just saying I don't want to be sweat on for that kind of money. I'm going to let you know, Katie and Ken, I'm shooketh to my core. In a biblical sense that these tickets are $6,000. What do you tell her? Listen. Give me a specific ruling, please, because she's got the money.

She has the money. Actually, I have more questions about your investments than i do about taylor swift but um i mean if you want to go you can i struggle i struggle with the seats for the money that's where my struggle is it's not on whether or not you can afford to do it it's the value it's the value in it yeah that i'm i'm there that's if i'm being honest katie that's where my struggle is is the value of the tickets. Not whether or not you can afford to spend $6,000 on a thing. Does that make sense? Yes.

You can afford to spend $6,000 on something. Is that where you were leaning, Katie? Why'd you call us? Which way were you leaning? I can do more. I'm, I'm, I'm struggling because, um, I just like to be really frugal, but my daughter said,

well, you know, I'm almost 16. And, uh, have you guys never done anything like this? No, not the two of us.

No, we haven't. So did I, did I detect a hint of emotion? Yes, because she said, well well we're just very frugal um and she said you know like money's just money it's it's so um yeah so it is kind of emotional because i would love to go with her but it it's like, oh my goodness, it's a lot of money. I'm going to take, I am ready. Oh, okay. I'm going to take a page out of the Stacey Coleman handbook, which is...

I'm unaware of this. The Jar of Marbles. Yeah. Oh, yeah. I'm going to take a page out of the Stacey Coleman, which is the days they go by and you don't get them back is basically the essence here. And I think you have an opportunity to make a really cool memory, something you've never done before, and also prove that you can be a cool mom and you can come off the wallet every now and then and you can afford it. Do it. Boy, am I surprised.

I love that. You could knock me over with a feather right now really yeah i didn't i thought you were coming in hot but uh i'm gonna say because they're so frugal this is not a lifestyle for you guys uh no we just go hard in the paint all the time you have the money you weren't planning on putting on a credit card you didn't mention points one time yeah it i she's by the way it's stock. It's not out of a retirement. She said she's going to sell some things. Do you have three to six months of expenses laying around for other things? Yeah, we have about $30,000 savings.

I'm 100% in agreement with you. And for the reasons that life is short, they have the money to do this. It is outrageous. If George were in here, he'd freak out because he can't, George can't spend money on anything nice. But it will be so unforgettable for them. That's what I'm saying. And to me, this is a priceless trip with your daughter, Katie.

I also feel like I hear your heart saying, yes, let's do this. And your brain's going, hold the phone. And you thought, well, I'll call Ramsey and we'll get somebody else to talk to my brain. And in this case, yes, it's a lot of money. Yes, it's overpriced. Overpriced. Completely overpriced. Painfully overpriced. But our daughters don't know this and in the case that you can do this this is about a memory and one day she'll go good grief i can't believe you did that for me mom yeah and i think that's why i do this but just don't mom you don't don't complain if you say yes i'm gonna do it don't be like these seats are crazy and don't just enjoy it

enjoy it for the experience because in the nosebleed, nosebleed sucks. Let's be honest about that. I'm going to actually push back on that. I have watched football games in the very top row of NFL arenas, and you would be surprised. These people know what they're doing. Okay, let's go. I think she's going to enjoy the heck out of it.

The energy is going to be amazing. I'm okay with nosebleeds for this. Okay. It will be a good experience. But put aside some extra money for a t-shirt. This is the Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story, and it's a lie. In our self-obsessed society,

we're obsessed about our own diets, our own workout routines, our own jobs, our own social media feeds, everything. It's easy to forget that no one can do life alone. And I don't care if you're an introvert, an extrovert, or whatever you wanna call yourself, we all have to have a community and a support system to do life with.

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first month. That's betterhelp, H-E-L-P.com slash Ramsey Radio. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is alongside, and we are together here for you. 888-825-5225, 888-825-5225, taking your money questions and your income and work-related questions today. It's time for our question of the day, brought to you by YREFI. We've made – let me start over. All of a sudden, I forgot how to read, Jade. That's all right. It happens to the best of us.

Yeah, that's right. And live. It's always exciting. Hey, we've all made money mistakes. So if you've defaulted a private student loan, we're not judging you, but we are saying that there's something you can do about it. And that's contact YREFI. YREFI was created for people in your exact situation. Go to YREFI.com slash Ramsey. That's Y-R-E-F-Y.com slash Ramsey. It may not be available in all states. All right. Today's question comes from Hudson in Florida. He says, I'm 26 and married with three kiddos. I've worked for the

same company for six years. During that time, we've had a lot of growth, which I played a key role in developing. The company now grosses over 10 million a year, and I've been offered a partnership position with the two current founders. This has been what i've been working towards this whole time that i've been with this company but now that it's here i'm second guessing myself and i feel like i have imposter syndrome do you have any advice for me so that i don't set myself up for failure yeah love the um love the transparency here yeah imposter syndrome is nothing more than doubt so the first thing i would say uh hud Hudson, is that you're not an imposter. Imposters are people who pose as someone else.

And typically this is in an illegal operation. So someone who would try to steal my identity or poses me or poses someone else to do something illegal, that's an imposter. A complete fraud, a complete fake. And then a syndrome is a fancy word for some type of a disease or sickness, and you don't have a disease and you don't have a sickness. What you have, Hudson, is good old-fashioned doubt, and doubt only comes to people who are attempting to move forward.

And so all of a sudden, after all these years, you've been offered an opportunity through your hard work. Because, Jade, you know business. You know small business. Yeah. People don't just come up to somebody and tap them on the shoulder and say, hey, we'd like you to be a partner. They are giving you, my friend, a good portion of this company and their own equity.

And they're saying, we're going to split some of our pie for you. That is the ultimate endorsement. So I would remind you to remind yourself that the doubt you're feeling is because you're taking a major step up and a step up or a step forward is always connected to the unknowns. And the fear of the unknown is what's creating the doubt. So what you're really dealing with is you've got some fear, you've got some doubt, and that's very, very normal, but you've earned this. And so to set yourself up to win, you got to say, Hey, I've earned this. There's going to be some new things. There's going to be some, some growing pains, but that comes with the territory. And I'm going

to do then what I have been doing, and that is learning and growing and becoming better. So this is all mindset stuff. And the doubt, by the way, is very, very natural when we all step into something new. Doubt on the first day of kindergarten. Doubt on the first day of high school. Doubt the first time Jade goes into a Division I volleyball game. Listen, doubt only comes to people who are moving forward, Jade. You know who never experiences doubt? Who? People with their elbow deep in the popcorn in the bleachers. Wow. Because they're just sitting there watching the rest of us. Comfort zone. Oh, she should have done this or he should have done this and all this kind of garbage. Those are people that are sitting on the bleachers and they have no doubt they're quite certain of their opinion yeah and what you should have done right very good ken and and that always

kills me you know it's like yeah get off the bleachers yeah why don't you why don't you put on a pair of shoes and then you see what you'll do in that situation let's go how about you get out on the field or on the court let's go go. You want to compete? Let's see how sure you are, Johnny Rocket, up there in the bleachers with your hot dog and your Diet Coke and your whatever. Kills me. So I like to encourage people that are dealing with doubt. That tells me that you are moving forward and that you want to move forward, and as a result, you're facing some unknowns. And that's all that is. You're going to do fine.

You're going to do fine. Congratulations. Yeah, my goodness. All right, let's get to Nancy in Los Angeles, California. Nancy, how can we help today? Hi, thank you so much for taking my call. Yes, okay, so I'll just get into it. My question is, how do I, as a Christian, as a believer,

how do I walk in contentment daily while also creating goals and aspiring to goals and aspiring to, you know, move forward? And also, like, if I've heard from the Lord that I'm in a waiting season, what do I do with that? How do I balance all of that? And how do I, I guess, wait well? And just for a little bit of context, I'm completely paid off debt earlier this year, March of this year, and really happy about that. And just different moving parts. And so that's really where I'm kind of stuck. And you tell us what you're waiting on and where the lack of contentment is rearing its head? Sure, yeah. So if I'm being honest, I hate my job.

We prefer that. What happened? I really dislike my job. I can't stand going at all. And, you know, I've, I've heard a few phone calls and, you know, I'm really embarrassed to say that it's been 10 years, almost over 10 years. Yeah. That I've been at this job. I inherited it. It's a union job. It's very coveted in my area. A lot of people, you know, wish they could have this job. What are the reasons that you do not enjoy the job? Um, well, it's not challenging at all. Um, I don't feel like I'm, you know, using,

I don't, it's not challenging mentally or intellectually. I'm not, I don't feel like I'm really going anywhere or doing anything moving forward. And then also, um, just, it's kind of rough. Like the people I work with, it's mostly men. It's like, I would say I count sometimes it's like 40 men to two women. It's a, it's a blue collar job. Can I tell you something? Can I tell you something? I'm going to be really, really honest with you. Um, I love your spirit, but I think you've got this all wrong. And I think you're trying to justify this movement inside of you, this restlessness inside of you. You're trying to justify not acting on it. I think you needed to leave a long time ago. Go, Ken.

And I don't say that as a criticism. I say that as a coach. You don't need to be content. You need to follow the restlessness in your soul. You aren't being challenged in this. And that means you aren't using your God-given ability to the extent that you can. And that's why you feel this way. And it's okay to go, I'm one or two women in a blue-collar room with a bunch of dudes. That doesn't make you discontent. That makes you a living,

breathing human being who is aware. And Nancy, I'm going to hand it over to my colleague, but I think you need to be leaving. You do not need to be any more content. I think you're now relying on this excuse of contentment to step into the question we just got. Right. Because what did you think you were going to feel when it was time to go? That's my question. If you weren't going to feel discontented, if you weren't going to feel frustrated and tired and like it's time to go, then what did you think that you were going to feel?

I don't know. I guess since I inherited it, I just have felt like I need to just be grateful. I think you have been. I think you've been grateful in heavy doses. Yeah. You've done everything you needed. It's time to leave. Yeah, you can be grateful and move on. Yeah.

Just because you don't stick around with something forever doesn't mean you weren't grateful for it. It's like you go to a restaurant, somebody served you a meal, you ate it, you were grateful for it, and you left. You went to your next destination. That's a good call. Do you know what I'm saying? I was really grateful for seventh grade, but I don't want to stay there. Yeah.

Seventh grade was a good year for me. It was a big year. I may have peaked, but that's a whole other call. You know, Nancy, do you have a sense, we only got about 40 seconds, so real quick, yes or no, do you have a sense of what you want to do? I have a few ideas. I'm in school for herbalism. I'm interested in UX design, graphic design.

Okay. All right, so here, I've got something for you. Something using my creativity. All right, so hang on the line. Christian, let's get her a copy of Find the Work You're Wired to Do. It comes with a get-clear assessment. Nancy, I want you to take the assessment first, then read the book. It's like me coaching you through your results. I think it's going to reveal and confirm some things for you, but hear this from Jade and I,

you don't need to be content in a place that you're not supposed to be. It's time to get a plan together and eventually we're leaving. We believe in you, Nancy. You're a good, good lady. This is The Ramsey Show. The Ramsey Show rolls along from our Nashville area-based headquarters. Thrilled that you are with us. I'm Ken Coleman, and Jade Warshaw is alongside. The phone number is 888-825-5225. Let's go to Chris in Sacramento, California.

Chris, how can we help today? Hi, guys. I just want to say thank you for hearing me out. I'm 27, and I'm getting married within a week. And I have a debt, no debt, sorry, but 65% of my income is going to my house. And we're drowning about negative 20% per month on our utilities and groceries and we've cut back and I'm debating on whether I sell my home, rent my home, I have an opportunity out of the area for a job that I would be able to live rent-free and just trying to figure out life. Wow, Well, what we know to be true is the 65,000,

the 65% mortgage can't continue. So we know that's true, right? Right. So that kind of takes the weight off of our shoulders to know, okay, we can't stay here. And then the question is, what do we do next? Because you said you've got an, now we can start to say, okay, do we want to do the opportunity that's outside of the area? What does it look like? I think you mentioned renting this house. And so now let's talk about those other options. So is it fair to say that we both agree you can't stay in this house?

Yes. Okay. So now let's talk about what do we do with the house. If I were you, I'd sell it. I'd gross about $150,000. I'd probably net after real estate fees about $135,000. I like that. What's wrong with that? Nothing. It's more, it's just my first home. I just put $100,000 into it last two years. And, you know, I was envisioning having my kids here.

Yeah. So there's just the emotional connection to it um how long did you have the property two and a half years I put about 150,000 dollars down on the house when I bought it and I had a really good management position at a restaurant before and that's where I'm going to now for the new opportunity. I tried to start my own business, and it didn't work out exactly how I hoped, but I'm recuperating my losses, and I'm just trying to get back on my feet. I'm currently serving at a restaurant right now,

and I've been getting by with that. Me and my fiancee, our net income together is just, we're not making it. You're in Sacramento. Why are you guys staying in Sacramento for jobs that sound like you could do them really in any part of the country? Well, and that's why we're moving. It's just more of a, do we rent the home and make a profit per month about $100, $200? Or do we sell the home, put the entire net into a money market account? Yes. And make about $400 a month on money market.

Let's do the latter. Let's do the latter. Because if you have the opportunity to rent somewhere out of the area and they're covering the rent, then this is an opportunity for you to start over. Let that money grow, that equity that you're going to get out of the sale of this home. Let it grow over time because the time is going to come when you want

to buy again. I did have a math question on this because I thought I heard you say that you put 150 down on the home. And then I also thought I heard you say that you put 100 into it. Is that right? So you put 250 into this home, but you're only coming out with $135,000. What happened there? Bad contractor. I got really jacked up by that. I lost probably about $50,000. Maybe more. Yeah. And I mean, I'm not a contractor guy. I was doing my job and I ended up going underneath the house and I just solved problems and I didn't solve problems. Long story short, it cost me a lot more. And I was paying the mortgage at the same time as I wasn't living in it. So I was, you know, unfortunately paying double.

I see. Yeah. So it just really drained us out. And then I just paid off all my credit card debt. I had about $17,000 in debt. We're completely debt free. That's excellent. Yeah. So there's some silver linings here. I think the hardest part is you had a vision for this house. You got taken for a ride and that sucks. And now as a result, you know, it's not going to be the house that you raise your family in. But I love that you have other opportunities. And I mean, you can, Ken's here on the career side of this to weigh that out

I take advantage of that while you're on the line. Yeah. Well Chris if I heard you right you've got a really good manager gig you're heading into so you feel good about this? Yes. I'm super it's a nice restaurant in South Lake Tahoe. It's to the nines. It's like my dream job.

Fantastic. And did you say South Lake Tahoe? Yes. Oh man. That ain't a dream job. Fantastic. And did you say South Lake Tahoe? Yes. Oh, man. That ain't a bad place to work. Okay. Come on, Chris. Yeah, it all makes financial sense. With my business, I've kind of had some regrets on that, and I don't want to have my cart in front of the horse. I love it. You're asking the right questions. Jay gave you great advice. You do not want to be a landlord from long distance.

This is time to move on. This is a clean start. And I think it's great for you. You're going into your dream job in one of the nicest places in the United States to live. And you're going to get free of this house, which has just been nothing more than a money pit for you, unfortunately. So, yeah, sell and move on, my friend. Sell and move on. I love that. Do you want to take another call or can I highlight this for the people? Jump in. Go for it. I want to highlight this because a lot of times people are like, why does it have to, you know,

we teach that the mortgage shouldn't be any more than 25%. And I know there's a lot of questions around that. And this is a really great, it's just a cautionary tale of what takes place when you don't heed that advice. Because if you really think about it, if you look at your money as a whole thing, 100%. I love that you've got an orange. For our listening audience, she has a little tangerine in her hand. Yeah. And if you think about it as segments, right? We got to cut it up into segments. It's going into segments. And so if you think, you think okay if you do let's pretend like yeah i'm taking your advice 25 okay now we got 75 left and then it's like okay if you're a person who values generosity most of us do so you give another 10 now you're at 35 and now you say okay well you've got to invest baby step four i'm investing 15 now before you

know we're already at 50% of our income and we haven't even paid our other bills yet. We haven't done childcare yet. We haven't put aside for kids college yet. We haven't, you know, done taking a vacation. We haven't even done anything yet. And we're already out 50. So imagine what it would feel like if your mortgage was at 40% or 45%. You feel that very, very, very, very quickly. So it behooves you. It's a great word. You know, I like a good word. It does behoove you to think about, okay, what are my ratios here? And is this sustainable long-term? Because 65%, like you said, they're burning 20% every single month. There ain't enough tangerine left over.

There ain't enough. You got to eat the pith. By the time you do. That is fantastic. That's why I showed up today for that moment. That was good. Yeah, but it's a wonderful illustration. And then I want you to, while we're on this, also why we give him the advice, don't try

to stay, don't become a landlord. Don't keep that house because you think, well, don't try to stay, don't become a landlord, don't keep that house because you think, well, I'm going to make 400 bucks a month. I want you to walk through the math, the real math when people think that that's a good idea. Well, I think for him, it was more of a sunken cost fallacy. I feel like he thought, well, I put this much into this property. If I hang on to it for a while and keep dumping effort or whatever it is into it, maybe I'll get it out. And for a lot of time, for a lot of us, that's kind of what keeps us locked in to something that's just a bad

break. And you kind of have to just eat pith and go this. This was a bad break. It wasn't a good investment. You know, I got taken for a ride and walk away. And for him going all the way from Sacramento to South Lake Tahoe, and now you're going to be a long distance landlord. Yeah. Trust me. When he rolls in in that moving van to South Lake Tahoe, he's going to be like, I'm not knocking Sacramento. Yeah. All right. But that's a difference. He's going to be like, forget y'all. You want to leave all that behind. Yeah. You want to leave it behind. And he had a bad taste in his mouth. So I think for him to come out, he's clearing 135. It's not as much as he should. That's right.

But it's still money. And it's going to sit in a high yield for however long until they're ready to buy. I agree. And when they buy, they're going to put as much down possible on a 15-year fixed rate mortgage, hopefully, that they can get paid off quickly. He's already debt free. Yeah. And so the principle of this whole segment is, do you know what it is? You've been saying it. Don't eat pith. There it is.

By the way, spell that for people. P-I-th. P-I-T-H. Is that right? I think. I feel like there could be a hidden letter in there. We did. We got validation. The guys in the booth. Great. Yeah. Yeah. Think about the ratios of your income think about each section like this clementine i hold in my hand oh it's clementine it's even better mandarin love it that's how we're gonna do this make sure it's a lesson i feel like we went back to sesame street you laid it out for us i love it good stuff all right quick break she's jade warshaw i'm ken coleman we'll be right back welcome back tosey Show. Thrilled that you're with us. I'm Ken Coleman. Jade Warshaw is with me as well. 888-825-5225, taking your money questions and your work-related or income questions. To that end, the Get Clear Assessment, a tool that I was privileged

to create a few years ago. It's helped hundreds of thousands of people and just wrote a new book called Find the Work You're Wired to Do. It came out a little earlier this year and it includes the Get Clear Assessment. So what does the assessment do? Well, it answers four really big questions. Who am I? What's my unique wiring? And we're talking about in the context of work. Why am I wired that way? What do I want to do professionally? And how do I get there? And that's what these two tools combined do for you. You're going to spend about a third of your life at work. And I just believe with everything in my being that you shouldn't spend it just doing something that you're okay at or

that you're good at, but you don't at but you don't enjoy that doesn't produce a result that motivates you. So you can get the book, find the work you're wired to do, and it comes with the assessment, the Get Clear assessment. You can get it at ramsaysolutions.com slash store, ramsaysolutions.com slash store, or you can click the link in the description of the show if you're listening via YouTube and podcast. All right, to Susan is where we're going to go. She is in Dallas, Texas. Susan, how can we help? Hi. I just went through a divorce or finalized it recently. It took a while. And I've been a stay-at-home mom during my entire marriage for the past 14 years. Anyway, I got what I consider a pretty good amount of money. I'm just curious. I don't

really know what to do with it. I let my ex-husband handle every single bit of finances. I never knew how much money we had or anything. How much are you getting? Well, there's a couple components to it. I got a check for $1.1 million. Okay. I got a 401k for $715,000. Okay. And then $15,000 per month for the next seven years. Okay. How old are you? I'm 40. Okay. So you've got a guaranteed income for the next seven years. That's nice. Okay. Um, okay, great. So tell me your question. Okay, so my question is, I'm completely debt free. I also don't own a home because I just got divorced. Okay. So you need a place to live. Right. I'm renting right now, which is $3,600 a month, which I feel like is really expensive. It is.

It's also all bills paid. So my question, I guess, is I've got like $95,000 in a high-yield savings account. I started a Roth IRA. I'm like totally, I know nothing about finance. So I've just been trying to learn just in the last month or so. Anyway, my question basically is, A, can I live off of part of this money, like off of the monthly income? Or do I need to get a significant job? Well, the good news is you do have a monthly

income for the next seven years. So you've got some time to reinvent yourself and figure out what you want to do with life. And if I were you, obviously you don't need $15,000 per month to figure out what do I need? What's a fair budget for me? Maybe it's $7,000 a month and then you take the rest and you invest it every single month, right? So that's thing one. You've been bought time to figure out a career path for you and I'm going to toss it to Ken in a moment for that. But let's talk about the rest of the income that you have. So let's say just to keep it simple, let's say you invest half of what you're getting every single month for the next seven years. So around seven and a half thousand dollars or seven and a half thousand dollars.

And then you've got one point one million. That's a check, right? Yes. Yes. And I didn't know what to do with that. So I just put it in a money market account because I didn't even know how to deposit that. Great. I think that's a good place to start. What I want my homework for you is I want you to start learning about investing I want you to start understanding okay I know husband ex-husband used to do it but it's now time for you to start learning because the time is going to come where you're going to need to invest this and you're going to want to understand it you don't want

to just hand a check for for 1.1 million over to anybody and say, here, you handle this. You're going to want to say, OK, I get it. And a great place to start is here. Here at Ramsey, we do teach that investing is a better place for you to build long-term wealth than a money market account or a high-yield savings account, simply because of rate of return, right? If you invest that money, you'll get a higher compound interest

rate of return on that. So it'll grow faster. And so I would tell you to get hooked up with a SmartVestor Pro. They're going to have the heart of a teacher and they're going to be able to teach you about this. And that's the key thing. Tell them, I don't want to invest anything yet. I just want to learn. Right. And they're going to ultimately have you invested in a way that's um uh four different types we're spreading it out it's not going to be high risk it's not going to be just in a set of stocks but i want you to understand that so when the time comes we are investing that check but in the meantime we're getting with a smart fester pro to teach us and then as far as the 715 000 401k yeah leave it let it grow. You're probably going to have to do a direct transfer rollover into an IRA.

And so the SmartVestor Pro is going to help you do that. And then for you, now it's all about career and what you're going to do with your life because you're super young. I got a couple questions on the money first. So the $715,000, how old are you? I'm 40. Oh, my gosh. It's going to be so much money. So the $715,000 that is in the 401k, that is going to be a lot of money.

What is that going to be in 30 years? Okay. Did you tell me you're 40 now? Yeah, she's 40. Okay. So let's just say you retire, I don't know, let's say 65. Does that sound good? Okay. Okay. Let's say you retire, I don't know, let's say 65. Does that sound good? Okay.

Okay, let's say you add nothing to it. That right there is going to be $8 million. Holy cow. Just not touching it. The reason I went to that, Susan, is because on this work thing, this may or may not be a thing now. How old are the kids? They're 14 and 11.

My other thing is, can I buy a house? Yes. I was going to say that. I was working that. And which money do I use? I would take the 1.1. The check. The 1.1 check is what you need to do. Plus you already have $95,000 in another savings account. So I was going to ask you, what is a modest house in a nice area? What is a house price? You know your area for you and the kiddos. What does that look like? What's the money on that? I mean, right now there's like nothing to buy. I've been looking. I mean, there's a nice home for $500,000. Okay. So let's just use that. Let's just use that as an example, okay? So if I'm you, and then I'm going to pay cash for the house, because right now you're paying $3,600

a month in rent. So you take just a little bit less than half of the 1.1, and you've got to pay for a house. Now that monthly budget, which I'm using as the $15,000 you're getting in the settlement, now that $3,600 was coming out of the $15,000, it's not anymore. Right. And your utilities and things like that are going to be nothing. You still got the two kiddos and school. So I would come up with the every dollar budget and budget off of the $15,000. would do some type of an investment strategy based on what a smart investor pro tells you, because Jay has already proved to you, you don't have to put another penny. And I'm not saying not to, but I'm guessing their investment strategy is going to be, you're going to diversify some

stuff because right now you are more than fine, Susan. Like you're going to be very very wealthy and based on just the 401k and what it does over time so for me if I were you I would take my time you just came out of this divorce you've just settled I'm fine with you renting for a little bit longer you're saying the market right now is not a lot on the market let's see what happens after this presidential election the point is grieve stay cool the. The $3,600, while it's a little expensive, it's not even phasing you. I would take my time. I'd buy a nice house cash. And now you still have over half a million dollars to invest. And when you invest it, you're probably going to look for something that's non-retirement, something that you can

get to sooner that's in some sort of a bridge account so that you can access it you know before you're six i agree with that and that's that should be the advice that you yeah yeah but for seven years my goodness but here's the deal um you're gonna have some margin in that monthly as well that's 180 000 a year for the next seven years yeah you're good so from a standpoint of work uh hang on the line we'll give you the the book find the work you're wired to do and the get Clear Assessment. But that is a relaxed, like, what would I do if I didn't have to work? Which, by the way, you don't have to. You don't have to.

I was just talking purpose. Yeah. So, sorry, we're running out of time, Susan. Hang on the line. We'll get that to you. But thank you for the call. You're going to be in good shape. This is The Ramsey Show.

This is The Ramsey Show, where we help you win in your life, specifically winning your money, winning your work, and winning your relationships. 888-825-5225 is the number for you to call in. We'd love to coach you up today. We're here for you. It is your show. I'm Ken Coleman.

Jade Warshaw is sitting alongside, and we're ready to go. We started off with Alba in San Diego, California. Alba, how can we help today? Hi, thank you for taking my call. I'm a new listener, so I'm very happy to be here. Oh, welcome. By the way, did I say that right? Is it Alba or Alba? Yeah, it's like Jessica Alba, but not famous. Alba. All right. I was worried that I said that wrong. Thank you. You're very kind. How can we help you? My question is, should I continue attempting to recuperate my inheritance that my father left me, or should I abandon my hopes of getting closure because of the extensive legal fees

and emotional turmoil that this is causing me? Yikes. Paint a picture for how nasty this fight is and who it's with. Okay. So my father unfortunately passed away five years ago. He designed his brother as an executor. The brother had issues with what I had stated in my father's obituary, which was only but the truth. And I think I formulated it in a kind way saying that my father's obituary, which was only but the truth. And I think I formulated it in a kind way, saying that my father had suffered from addiction problems. And I was raising funds for a local rehab center.

And he took that very much to heart because he himself has addiction problems. So ever since, he has basically been withholding the funds. I believe he and the estate attorneys are in on it together and that they're mismanaging them. They even stated in a written email that they lost some of the funds and they have offered no form of recompense. In the five years that this has happened, they never contacted my former mother-in-law, who's owed 30 percent of the estate. I'm the one who told her that she was owed anything. Has this gone before a judge? It has not. So my issue is the current one. I was living abroad when this was happening.

I was unaware of how long legal issues could take. I hired an attorney who was basically cashing in my checks and telling me that she was doing work and she was not. Okay. Now that I've moved back to the U.S., I've been shopping around for state attorneys that are geographically in the area that they're supposed to be in. But I'm finding that the executor has basically called all of these practices and created a pre-existing conflict. So I can't find representation. That feels interesting because you're in California, in San Diego. You're telling me you can't find an. That feels interesting because you're in California, in San Diego. You're telling me you can't find an estate lawyer in San Diego?

So the estate is being dealt with in the state of New York. Got you. Oh, well, even more. So I've attempted to contact estate attorneys that are basically all around that specific county and also some that are further. Many attorneys that are further are very interested in the case but they will not take it on because it's going to cost them too much in terms of transportation i'm just telling you what i've been told by the professionals that i'm not gonna lie

that sounds far out that sounds i understand what i have called i have a list i have called probably upwards of 50 practices. So your uncle has called all 50 of these things, all of these law firms, and so that's created and gotten their advice on something, and that's created the conflict? This is something that he did with my aunt when she asked for a divorce. Oh, gosh. Toxic. Yes. So this is— How much money are we talking about?

Let's say that it got resolved today. What, what do you, what, what would come to you? So I'm owed 70% of $325,000 that I know of. I believe that there is more in the estate, but I've never received a formal accounting document. I sent a letter to the surrogate court last year explaining my concerns i never got an answer i also solicited the uh investigator the investigators of the of the attorney bar and they told me that i did not have enough grounds for an investigation to

be opened and this is all your uncle your uncle and his lawyer they're the ones i i well i i have difficulty understanding where else the problem is coming from um i i am short on cash but i mean i can always you know summon up the ability to make more money to pay for more legal fees but it just seems kind of interminable what have you spent so far um i'm not exactly certain how much I spent with the first attorney. It's in the several thousand dollars, probably a little bit under 20. I mean, at the very least, I understand what you're saying about, hey, I wanted somebody close to the area. I would just start calling to find, hey, I just need advice. What do I do?

Here's what's happening. I'm calling and they're saying it's a conflict. Maybe it's finding a way, the judge that issued this, maybe it's finding a way to be able to get in contact with that. I'm not a lawyer, so I can't sit here and say, here's what you have to do. But I do know that if the executor of the will is not following what's going on with the will, that they... Yeah. So that's what I was going to say.

So again, I couldn't even play a lawyer on TV. Not even. All right. But Alba, if I were in your shoes, I would be going to the county. Yeah. I would be spending a little money on a hotel or family members live there and I'm going to camp out for a week. So physically going, okay. Yes, because to Jade's point, the will is a legal document and the fact that you haven't even read it yourself. So action item A

would be, I have a right to see the will, so I'm going to go see it. Hey, uncle, I'd like to read the will. And if then you go, worst case, you could represent yourself in front of a judge. Because I'd even take that shot. I'd go, I'm going to get my day in court and go, here's the will. And I have gotten all right. All right. There is a will. I'm this this guy.

My uncle is keeping me from reading it. I would get in front of a judge, whatever that looks like. And where there's a will, there's a way. And I would be on top of the uncle to go, all right, here's the deal. I want this to be done and it's going to be done quickly. I need to read it or else I'm going to get in front of a judge and I just want to know what is owed me and let's move on. Like I'm not going to fight you tooth and nail, but to me it's worth it. If you're saying it's 70%, call it $210,000. Yeah, it's a lot. That's a lot of dough. Where the additional point of contention is, is that I know what the will states. It states 70% versus 30%.

Oh, I thought you said you hadn't seen it. No i have seen it it's simply that i haven't seen formal accounting okay then my point is is if you know what the will states then i would get in front of a judge and go here it is and i've i've been asking for this and my uncle's been fighting me on simply executing he's the executor of the world he Yeah, he has to do it. He has to do what it says. Legally. Okay. I think you're tired. Hey, I think you're just tired.

I'm so tired you have no idea. Yeah, but you also have not been hands-on with it either. I'm not criticizing you, but I don't think you've been hands-on. Oh, no, of course, of course. And you've been fooling with knuckleheads and you've been fooling with these uncles. And I think you just need to take a moment, like re-square your shoulders and just, okay,

I'm going to go in here and I'm going to be the force. And they're going to be the ones that are going to get tired of dealing with me. Like just flip the script on them and turn the tables so that you can get, yeah, to Ken's point, $220,000 is a lot of money. And I would raise a little hell to get this. Yeah. That's just me. And trust me, there's a lawyer.

I'd get some, you know what I'd do, Alba? I'd go find some sharp, young law, so just out. Just got, just got out. Just got their, and just go, let's go. I'm going to make you the biggest paycheck you've ever had in your life. But you're going to tell me what to do, and you're going to work for me. Find some bird dog, somebody young and hungry. They know the law. They know what to do. That's all you need. Somebody honest to tell you what to do. All right, hang in there, Alba. This is The Ramsey Show. Welcome back to The Ramsey Show. Jade Warshaw

is with me. I'm Ken Coleman, and we're thrilled that you're here. 888-825-5225 is the phone number. Hey, if you're selling a house, you need to sell it the Ramsey way. And if you do that, it's going to be a blessing instead of a burden. The Ramsey Trusted Program is the only way to find an agent that you can trust to keep you on track with what we teach here at Ramsey and make sure you get the best offer or find the right house. So we're going to connect you to some of the top agents in your area who we trust so you can trust them. They've got the years of experience you need and they can help you in this time. Find a Ramsey trusted real estate agent for free at ramsaysolutions.com

slash agent. That's ramsaysolutions.com slash agent, or click the link in the show description if you're listening via YouTube or podcast. All right, John is up next in Oklahoma City. John, how can we help today? Yes, my house burned down back in July, and I just got the money to rebuild it a few weeks ago, and I have to make the decision to either rebuild it or pay off the loan and walk away. But it's not a lot of money. And I was wondering, I'm considering walking away just because it seems like it's too much stress. And I don't know the first thing about building a house. And I'm wondering if that would be a big mistake because I have like a 3% interest rate on the home loan. That actually does make me wonder. I mean, so if you rebuild what you have, you get, how much is it by the way? It's like $212,000 is what I have to rebuild with and I owe $112,000. You owe $112,000. So you were thinking, what if I just paid off what I owe and then take what's left and put a down payment on a new home? Is that what you were thinking? No, I was going to pay off my debts and just rent for a while. Interesting. What are your debts?

I have a student loan for $48,000. And I have, against my 401k, I use it to buy the house I borrowed money like 5400 out of that okay I have left to pay off anything else I have a car loan but it that deal is unwinding so I don't think I'm going to have to pay that back what is it it's like 16,000 when do you say it's unwinding what does that mean it was just they shouldn't have sold me the car. There's a lot of issues with that. And they gave me back my down payment and everything. So they said they're going to unwind the deal. Oh, gosh. Okay. Okay. So tell me, let's rewind back before this fire. If the house, what I'm getting at is if the house hadn't burned down, were you thinking, hey, I might get out of this house like i might sell it take the equity pay off my debt and rent for

a while were you thinking that anyway no i was thinking about just paying it down more and saving up money buying a house somewhere else and renting it out so your play was i'm gonna be a a landlord yeah eventually okay um emotionally how do you feel about this house are you connected to it or because when when ken and i offered our condolences you were like yeah it's good do you feel connected to this house at all not really well it's been like three months so i'm kind of i don't have any tears for it anymore if that makes sense got you sure but it was but obviously a very devastating loss for you yeah i lost everything yeah man i'm so sorry um that's tough i mean i emotionally i get the rent play and i and i also like to see him get out of debt.

Yeah. If you were interested, if you're like, hey, I wanted to be a homeowner, you bought the house for a reason. You wanted to be a homeowner. And I do like the fact that you're at 3%. I'm not going to lie. As far as rebuilding it, I feel like that's just as simple as finding a contractor and pricing it out to do the work. And when I say simple, I don't mean simple. I just mean that you're going to have to do some due diligence here. But it's your decision to make. If you look up and say, listen, Jade, I'm ready to count my losses here.

And this kind of presents itself as a great opportunity for me to get clear on my debt and just kind of have a fresh start. I'm not mad at that either. Okay. Which way were you leaning when you called us? I was leaning more towards walking away because this has been pretty stressful so far. Yeah. Okay. In your situation, you could give me this call 10 different times and it'd be a different person with the same scenario and I might I might

have a five and five in this particular situation John um I think you should I think you should clear all your debt and I think you should heal and just kind of distance yourself from this tragedy and uh but I wouldn't rent for a super long time we eventually want to get you back into the house so will you have any money left over once you pay off the loan and all the debts? How much will you have left over? I can cash from $75,000. Okay. Jade, yeah, what would you have him do with that $75,000?

So now he's debt-free. He's debt-free. The $75,000, I'd put aside whatever you would think six months of expenses is. So maybe put $25,000, $30,000 aside. And then from there, yeah, the rest is going into a high yield and it's labeled down payment for when the time comes. I don't think going into rental spaces is where you want to go as far as being a landlord. If you're going to buy a house, the next house you need to buy needs to be for you um and that's what that's the way i play it yeah okay john we're so so sorry yeah so sorry that's um can you imagine no i was just getting ready to say i i can't imagine just the trauma of watching your house burn but then everything inside of it i i can't i'm not able to get there yeah i can't either and then the overwhelming of like i gotta rebuild this thing yeah i gotta find a guy yeah because here's why i connected to john i to the best of my ability and i again none of us can understand that unless you walk through that yourself but psychologically i could see how i

don't want to build, rebuild what was here. Yeah, it burned. I kind of want to walk away from that. For sure. So I get that. I get it. Let's go to Andrew next in Minneapolis. Andrew, how can we help today? Yeah, how are you guys?

Good. What's going on? Say, I'm working through baby step three and then moving into four here. For your three to six month emergency fund, do you guys want 100% of that liquid cash or is a percentage of that and like an HSA for medical emergencies okay? I understand that not all emergencies are medical, but is there a portion of that that's all right?

Well, the way I look at the emergency fund is, yeah, if you want to do some of it in your HYSA, that's fine. And if you're also thinking, hey, I also have my HSA here and that can cover the medical stuff. The only problem with that is it's locked in. So you have to ask yourself, what percentage of that do you want locked in? Because the big benefit of the HSA, in my opinion, is the ability to invest through it later on when you get to baby step four. So for what you're thinking, it makes more sense to keep it liquid in a HYSA. So that way, if you have an emergency that's non-medical related, you can still get to it.

Because let's say your deductible is, I don't know, $5,000. If you tuck $5,000 in that health savings account, it's there. And if you pull it out, you're going to be penalized on it because it's not for a health expense. Right. That makes sense. As you're investing with it then, in the baby step forward, do you guys include your employee matches of the 15% or do you want to harbor the 15% to be straight from my wife and I? Well, at that point, it's probably above and beyond your normal 15%. So for instance, it's not the place I would start. Sorry, I should say for normal, if it's not the place I start when we're just investing in the 401ks and whatnot, do you want

the employee matches to be included in that 15% or just 15% out of my paycheck? Oh, I see what you're saying. No, the 15% needs to be out of your paycheck. And the reason for that is, again, if something changes, say you go to another job and they don't have the same match, you want to be in the habit of saying no matter what, 15% of my money goes into this account. And so it's just building habit. And just think of whatever match you get kind of just as, you know, the icing on the cake. That sounds great. Yeah.

Does that help? It does. Very good. Yeah. Great advice. Thank you. Yeah. Works every time.

It does work. It does work every time. When you have a plan and you know that it works, it's tested and true. It's fun to give that advice. It is. every time. When you have a plan and you know that it works, it's tested and true. It's fun to give that advice. It is. All right. We got to do what they call a break for commercials. Got to pay the light bill.

While you're on a break, we're going to be on a break, but we'll be right back. She's Jade Warshaw. I'm Ken Coleman. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is my co-pilot. This hour, 888-825-5225 is the phone number.

Jana is up next in Seattle, Washington. Jana, how can we help today? Hi, Ken. I have a question specifically for you, I guess, and Jade. Hi. Hi. Let's go to Ken, though. We like you. Jade loves to weigh in, I guess, and Jade. Hi. Hi. Let's go to Kim now. We like you.

Jade loves to weigh in, so she's got something to say. Well, because you said you're the income guy. You're here to help people increase their income, get out of debt. I actually, luckily, don't have that problem. I'm kind of the reverse. Okay. I am wondering if it's ever okay to take a substantial pay cut. Well, the answer to that, is it ever okay?

The answer is yes. That made Dave very uncomfortable. He and I have gone back and forth on that a few times. I understand his point of view on it, but I'm reading the tea leaves here. So you set me up, and I want to answer the question intellectually honest. Yes, there are times where it's okay. You know what makes it okay is when you can afford to do it and you've got the margin and the freedom of life to do so. So you would agree with me on that one? So what is your situation? As in like assets and stuff or why I want to leave?

Just financially, give us the picture and then the why. So you're going to go from what to what and why and then how that will not affect you. Give me that picture and then I'll tell you what I really think. So I have about $500,000 in retirement. I have a 12-month emergency fund, $265,000 left in my house, which is the only debt I have, which is worth about $900,000, I believe. Nice. I've been really lucky in the last several years. My salary has increased about 50-ish percent.

Wow. What do you make? I'm at $148,000. Okay. Are you single or double income? Single. Okay. How old are you? 46. Way to go, mama. She's young. Hello. She's young. I've been lucky. Or unlucky. Lucky and lucky. Whatever you want to call it. Right.

But okay, so keep going. And so what are you doing and what do you want to move into? Um, really hope that no one I know is listening. Okay. Um, I do HR and just kind of want to take a different role in the HR world. Okay. Well, Jana, first off, Jana's not your real name and you don't really live in Seattle, so nobody knows it's you. That's exactly right. So, so, so you've already got this role figured out, you know know exactly the one you're walking into or want to? I think so.

I want to focus more on benefits. Great. And how much would you make in that role versus the $148,000 now? Somewhere like $105,000 is my goal. Okay. Yeah. You know, I mean, again, you're in such good financial situation. This is not risky. This is about quality of life. And you're fine. And so, yeah. And here's the deal. I wouldn't

assume that this role, you know, that the only way you can do this role is to make less. Let's go verify that. And if in fact, that's the case, and it's just for whatever reason, that type of work that you want to do in HR is a level a slight bit lower than what you're making now because of your financial stability. And this is when you start doing the numbers on this, the actual take-home changes is going to be minimal. Nothing burger, in the words of Ken Coleman. Thank you. Yeah.

Oh, sorry. Go ahead. I've done the take-home changes and what that would be. And right now I'm putting an extra $800 into my mortgage to get that done faster. I'm putting 15% of my retirement, extra spending money here and there. So that kind of stuff would go away, the extra to the mortgage and maybe some of the extra spending. But I wouldn't be digging into my savings or anything. So I guess less into retirement, like maybe not 15%, maybe 5%.

No, I'd keep that. Taking longer to pay down my mortgage. No, we don't want that. You want to keep your 15% the same. And then your mortgage, yeah, right now you're on a $800 a month every month, no matter what. But the truth is you can be a little bit more flex on that and still be intentional and say, okay, whenever I have the extra money, it's going on to the mortgage. And whatever I can pull from other categories, I'm going to make it happen on the mortgage.

And if it's not 800, if it's 200, great. And I got the budget queen with me. So I'm going to say something and she's either going to agree with me or she's going to fix what I'm about to say. But whether it's 105 or 148, your financial situation, you are single. You got all kinds of margins. So there is zero reason on the planet to say that you're going to cut back on your 15%. You've got more money than you need in a month. Am I right, Jade? 100%. Yeah. 100%. I mean, you're single. It's not like you got three kids and two dogs like I do. Come on. I'm walking around with budget problems all the time. Something new popped up. Oh, the dog did this. I mean, you're okay here.

You've got all kinds of margin. That's why I'm so okay with this. What's in your 12 months of emergency fund? I'm just curious. How much is in that? $55,000. $55,000. Okay. Okay. Yeah, that's a 12 month. The truth is you only need six months. So if you were really feeling some type of way and you wanted to reach over and take some of that and throw it at your house, you could. I knew that was coming. Okay. Can I, is there time for a quick real estate question? Let's go. How do I know when the best time is to sell? So I've only ever bought one. I was a first-time home buyer at 26, and I'm not in a rush to move, but I feel like it's a little bit too big for me. How do I know when it's okay to get rid of it and then buy something smaller? And then do I take all that money and use it to buy the next house so that I don't have to have another 30 or more kids?

What's your equity situation right now? About $600,000. That's awesome. And how big is the house you're in? 1,800 square feet. And you think it's too big? I'm only one person. I have three bedrooms.

I'm with you. I'd sell it tomorrow. I was going to say, the time to do it is when you're ready. Yeah, like when you want to. But like for the market, whether it's like a seller's market or a buyer's market or whatnot, like does any of that matter? In Seattle, the Seattle, greater Seattle area, I don't think that's that much of a difference. It's not going to matter. If you're ready, the key here is the same with buying. The time to buy is when you can afford to buy. And the time to sell is when you can afford to buy. And the time to

sell is when you're ready to sell and you can afford to sell. And you definitely can. And at this age, like what kind of, I can't, I don't think, I don't know if I'll pay it off in full with the $600,000 in case I can't. Is it like a 15-year mortgage I should be going for? Yeah, I'd go for a 15-year fixed rate mortgage. That's what I'd go for. And I'd put down as much as possible. I mean, if you were to ballpark, what's it going to cost you to get what you want? What would it be? I'm honestly not sure. Okay, well, maybe do a little research on to that, because that also might inform your choice on this. You might look around and go, oh, gosh, what I can get for 800,000, you know, I may, maybe I may as well

keep what I have. So do a little research before you pull the trigger just to see, okay, I found what I like. I see the price point. And that way you're thinking of it from all angles. And that will inform if you sell this or not, because again, you might look around and say, man, for the money, this is bogus. And I'm just going to stay where I am for it for right now. You might decide that. I don't know. You have to see what's out there. But if the goal is I want to sell and I want to get into something cash, that's the right size for me, then yeah, do that research. But let me ask you this. If your current house was paid for, would you even be thinking about selling it? I think so. I think it's just, I don't need all the bedrooms and bathrooms. Great.

Great. I'd get rid of it. I'd do the homework. I'll tell you one other thing you could think about, and this may not be, this could be a non-starter for you, but single as you are, maybe you could rent out those other two bedrooms to other single ladies, and that's how we pay that house off. Interesting. I mean, I'm just throwing it out there. That may not be your jam. I get it. I personally wouldn't want roommates, all right? I mean, at this stage in life, I'm like, nah.

No, I wouldn't either, but I'm throwing it out there. Okay, I got you. Listen, we're going to throw it right back. I love that. I like that. And Jana was so nice. That was the politest. You're out of your mind.

And by the way, I agree with you, Jana. I just felt I was supposed to suggest it, but at this stage of life, 46, no. No thanks. Hey, great job. I mean, $500,000 in retirement, $55,000 sitting in the bank, a home worth $900,000. Jana. That's called options. Yeah.

And by the way, so back to the original question. Yeah. Go do the work you want to do. You've earned it. You've earned it. I love that, Ken. You've been disciplined. Life is too short to just stay in a job because it's, well, it makes more of the...

A little bit more. Who freaking cares? Come on, Ken. Be happy. That's a dap. That's a dap. Can we just do the life we want to do, please? Come on, Bobby Darin.

Bobby Darin, don't worry. Be happy. Don't make me sing it. The audience won't like it. This is The Ramsey Show. Welcome back to The Ramsey Show. Jade Warshaw is alongside. I'm Ken Coleman.

The phone number to jump in is 888-825-5225. Our scripture of the day comes from Philippians 3.17. Join together in following my example, brothers and sisters. And just as you have us as a model, keep your eyes on those who live as we do. And then our quote of the day from Honest Abe, Abraham Lincoln. Character is like a tree and reputation like its shadow the shadow is what we think of the tree is the real thing oh and speaking of reputation can i have to clear my reputation because i quoted the wrong musician oh going to break yeah i said don't worry be happy i said

bobby darren it's bobby mcfarran see it was so close that i didn't pick up on it. Yeah. And you said something, and I was like, well, I thought you got it right. I was like, that's not right. And she needed to clear the air. All right, we will allow it. Consider it cleared. It was a great reference. Thank you. All right, Andrew's up in Los Angeles, California.

Andrew, how can we help? Hello. Thank you, guys. I have a little web with relationship and finance and I'm hoping you guys can. We love the webs. Well, I'm loving your hope. You're loving to help. So the situation is me and my girlfriend. I just I moved abroad about six months ago to pursue a job opportunity,

and the job opportunity went really well for me, and so I somehow convinced my girlfriend to move abroad with me. And then since moving out there, you know, finding a job in a foreign country is a pretty hard feat, so I don't downplay that, but her prospector panned out as well as I have over the course of the last three months since she's joined me without any income she has found and I would say a little too significant amount of debt has become quite about 20,000 just north of, yeah. So, and there's no question that we have different approaches to money and finance, but just without her income, I guess her spending habits haven't changed too much. So here we are. And there's been, you know, obviously significant

arguments or conversations or such about whose responsibility the debt is and some solutions to help it. Whoa, whoa, whoa. So tell us more. Yes. Am I understanding? Am I hearing that she thinks you should be helping her with her debt? I don't think that it's as pointed as that it's maybe like i was you know convinced her to take maybe the risk of joining me abroad and so that was maybe the first domino that fell but i

don't think there's a responsibility of the debt being mine um but i think like i guess she just blames you for the fact that she's gone into $20,000. Well, the way you said it, it sounded like she's expecting you to help her with it. I think help her with the situation. I don't, like, I myself don't think our relationship is in a place where I would pay down her debt. Once you say I myself, I already... Wait a minute, let me clear this up. Okay. First off, I'm sorry that you're having to deal with this

i can tell my guy's been in a lot of arguments and you've just tried to be like oh yeah calm okay uh can you afford rent without her living there or was this a play for you to be able to afford living there yes yes i currently am paying for rent and cost of living to help her not increase her debt okay now when the when the when the offer was relayed and it was like hey i'm here this is going well for me why don't you move out here and join me realistically how long did y'all think it was going to take for her to get a job what was the plan because it sounds like you guys were on a no plan plan which i think is the issue yeah yes that that would have been you know hindsight 2020 move number one um but three months isn't that long to get recalibrated in a new country i mean i she's got to get what was she

doing before that's the real question uh she's a creative a photographer okay so she was doing photography stateside what was she earning uh she was making salary about 80 or 70 000 and then freelance on top of it um probably another 30 okay so she was doing good she's's making $100,000 a year. Did she think she was going to up and do that same thing in Argentina or wherever you guys are? I think the expectation was that we weren't going to take a step back in our income, as naive as that might sound.

Because I think the job that I pursued out there turned out to be well for my income increase. So I think maybe it was just, you know, we thought it was going to be the same for her. So, Andrew, all right, we got a decent handle on what's going on. What can we help you with? Why did you call us? What's the question? Yeah, so I guess the main, like, we've had a bunch of arguments, conversations.

They're constructive. But right now we're kind of talking over, know in the course of the three months um this the debt wasn't really apparent to me or communicated to me up until like this last month but what did you think she was doing i i'm on your side but at the same time i do have questions if you saw if you knew she was making i'm just talking to you because she's not on the phone if you knew she was making a hundred thousand dollars a year you knew she was making i'm just talking to you because she's not on the phone if you knew she was making a hundred thousand dollars a year you knew she was going to up and move to argentina let's just call it argentina she was going to up and move to argentina surely you knew that it was going to take time to even recreate a portion of that in a new city in a new country in a new life then the question goes well how long should this? And what will take place in the meantime?

Yeah, but he doesn't know her finances. He knew enough to tell me she made $70,000 and $30,000 on the side. All right. Before the train gets completely off the tracks, Andrew, you were trying to get to a question. You keep explaining. Andrew, we're on your team, but my friend, what is your question? You got to ask a question.

Here's the question. So during the time that I didn't know about the debt, we were splitting things because that was the standard of our relationship. Now that we know about the debt, and I don't want her debt to get worse, and she's kind of brought the debt forward, she's talking about back pay for what we did split and what we kind of shared expenses for. So for me to contribute back to that to help the debt. Are you asking a question in there? Are you saying should I help her? Should I help repay?

No. You're not on the hook for this. She made a bad decision, but you didn't help her. You helped her make a bad decision. And that's the part that you need to, coming from Jade, and can you say if I'm wrong, if I'm looking at this, I'm going, your part in this is you encouraged her

and helped her make a bad decision in which there was no plan. And so that's the part that you have to own and be like, listen, we should have planned this better. I'm on the hook for this because I encouraged you to come out here. And that's about all I can do. You choosing to go into debt was up to you.

And I wish that you hadn't have done that. I would understand if you wanted to go back to the States and make your money. We are 25 and 26. All right think i agree with jade but she's a grown woman with her own job her own taxable income and you are irresistible i'm sure andrew okay so we'll blame that one on you but other than that she's's a grown up. And so I don't think you owe her a nickel. And I think it's time to define the relationship because this is a mess and you guys aren't even married and she's putting, you guys are arguing and you've come out and finally

said it. And I do think he's impact. He's scared to death because you finally came out and said, well, she wants some type of back pay that that is to me I gotta tell you it's ludicrous well when you say back pay that's why I was it's like what are you talking about I mean I myself when you say no pay when you say the word back pay the relationship is over 100% she has got him in a corner yeah and and and so, I hate to tell you this, but this is a serious relationship conversation. You guys may have messed up. Do you want her to stay or do you want her to go back? What do you think she should do? I have no question that we messed up, but I do want her to stay, but I don't want the situation to get worse. And obviously, if it does, then the relationship will probably blow up in a not so awesome fashion.

This relationship is smoking. If this were a car, I would be pulling this car over immediately. Do not drive this car any longer. Oh, man. I'm sorry. They had love goggles on, Ken. They did. They did. I feel bad for them. All right, good show.

Thank you, Jade, for being with me. Thanks for the team and keeping us on the air. Thank you, America. This is The Ramsey Show. Take care.