The Ramsey Show - App - You Don’t Have Any Money! (Hour 1)

Episode Date: March 2, 2023

Jade Warshaw & George Kamel answer your questions and discuss: "Can we fly to see family while in Baby Step 2?" "Is my house too much of my net worth?" What is My Net Worth? Prioritizing retirement options, "Should we pay off our house before investing?" Annoying junk fees, Check out Smart Money Happy Hour "Should we rent our current home and buy something new?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Take our FREE 3 minute assessment: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Pod's moving and storage studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Give us a call today. We're talking about your life, your money, whatever it is you want to talk about. The number is 888-825-5225. We're just chopping it up here.

Me and my co-host, George Campbell. Chopping it up. We're chopping it up. So like I said, give us a call. We want to talk about whatever it is that's on your mind. And let's take our first call. We've got Christina here, Oceanside, California. What's on your mind, Christina? Hi, thank you. So basically, I would like your opinion. We would like your opinion

on a decision we need to make. So I'm from Peru and we would like to go there. So my parents can, and my parents and my sister can go and meet our baby before he turns two so you know they can enjoy him while he's little and he's currently seven months okay uh and we're kind of on a mission to break our family cycle of debt you know and being like that with money so we're really trying to do our best and we're just starting with the baby steps. We are fairly new to like everything Ramsey. So we are maybe step two. And two weeks ago, we started with all the steps and it'll we kind of said and calculated that it'll set us back maybe one to two months tops if we take the trip around December, January. So I don't know what your opinion on that would be. What's your projected debt payoff at this point?

So we have $44,000 in debt right now. What kind of debt is that? We have a medical bill, it's the car, and credit card. And have you looked to the future to say, okay, with forty four thousand dollars of debt, if we like go crazy on this, we will be done by this particular date. Have you guys gotten that far? So actually, yeah, I actually went on the debt snowball calculator on the Ramsey website and it said that we would be debt free by June, around June next year, 2024. And my husband has like side gigs and stuff that he has like extra money coming in every month. So we would actually, I think we will be probably debt free before June with everything extra that we have coming in. Question. Why can't your family come visit you

guys in California? Oh, well, my parents don't have a visa. And unfortunately, like I said, you know, we're trying to break that cycle. My parents don't have a lot of money. They're like, neither do you getting by. Yeah. And my no, no, you don't have a lot of money either. Well, that's true. I want you to I want you to sit with that for a minute, because it's very easy to look at somebody else and go, well, I understand why they can't spend the money, but not allow that same rhetoric to work for yourself. You don't have a lot of money either. You got $44,000 in debt and good on you for realizing,

okay, we need to do something to change that. I'm just gonna be honest with you. If it were me, I would wait. I would wait until I can take this trip and do this trip the way I wanna do this trip to where it's a blessing. It's not a burden. It's not setting us back. You know, I hear what you're saying. And the cause is noble. You don't want to repeat that cycle. And making the decision to take a trip that you can't afford is part of repeating that cycle. You've got to learn when it's okay to say no,

when it's okay to say yes, and how to prioritize the habits that are going to help you break that cycle. What do you got, George? Well, I'm wondering, by the time you take this trip, let's say you went in December, January, how old will the baby be? Baby would be a year and a half. Now let's say you waited until you were completely debt-free

and then saved up and paid for this trip in cash. How old would the baby be by the time you went on that trip? I would say around two or more. So the question is, we're talking about the baby's a year and a half versus two years old, but we're in a completely different place financially. Yeah. And so I don't see this as an emergency of we have to go before the baby turns 18 months or else it's not good. It's going to be special. Not with cameras the way they

are. Not with cameras the way they are and the internets the way the internets are. Let's FaceTime once a week with the baby and the grandparents until we do this thing. But I'm with Jade on making this a blessing instead of a curse. Because you said the reason you're doing this is because you want to change your family tree and break these generational curses. And part of that is sacrifice and doing things that are weird, things that are uncomfortable, things you're not happy about right now, but that will cause you to have long-term success in the future. That's where it's at.

Hey, we appreciate that call, Christina. Like George and I said, this is part of the sacrifice to win. You feel it. And trust me, little Junior, he's going to appreciate the sacrifices that his parents made to win when he's old enough and able to talk and able to say what he feels about it. All right, let's take another call. We got Sean from Seattle, Washington. What's going on in your world, Sean? Hey, how are you guys doing? We're doing good. How are you? Doing all right. I just had a general like house question related to net worth. I know the Ramsey parameters about 15 year fix on, you know, less than 25% of your take home.

But one thing that I've never really heard of is how much is too much when the house becomes like a part of your net worth? Are there like kind of safety nets around that or love to get some clarity? So you're feeling like too much of your net worth is tied up in your personal residence? Yeah. Do you need to tap into this money soon? No.

I mean, when I look at, okay, so Dave wrote a book, Baby Steps Millionaires, and he talks about how generally it breaks down to where a third of your net worth is in your home and two thirds of it is in your retirement accounts. So that's kind of what's normal. If you don't, I mean, how old are you? 35. What's your concern here? Are you concerned that over time you're not going to be able to invest and kind of balance that out? No, I just am trying to find a healthy balance because the market I live in is ridiculous. So if I move into a bigger home in the future, I just want to make sure that it fits within my numbers. And so I'm not trying to pull anything out and I'm trying to get to Baby Step 7 at the end of the day. But again, just the

ratios, I'm not too familiar. I'll tell you, Sean, my situation, because I don't fall into the mold that we found in Baby Steps Millionaires. I'm the opposite. We were super aggressive with paying off our house because it creates cash flow while we continue to live for the next 20, 30 years until we retire. And so over time, my two thirds of my net worth is in my house. A third is in our retirement accounts. Over time, that's going to shift. I might have two, three, $4 million in retirement accounts by the time we retire. And my house is probably not going to be worth $4 million at that point. And so it's not really about having an equal ratio. If you talk to a financial planner, they would probably say, hey, we want it to have more equal footing versus having way too much in house and you can't live

on retirement. So your house isn't going to create an income for you, whereas your retirement account will. So the goal is really to say, hey, 20, 30 years from now, when I need to tap into that retirement account, is there enough for me to where I don't have to work anymore and I can choose to work? And so I would think of it more in terms of your goals versus hitting a magical parameter. But it's a great question. Interesting conversation. Yeah. And you've got time. You've got plenty of time to be investing 15%. And for those of you who are new to this conversation, net worth is what you own minus what you owe. And that's the only way to become a millionaire is by calculating your net worth. It's not about how much income you make, right?

Your income doesn't make you a millionaire. You don't need to make a million dollars. You can make $40,000 and still become a millionaire. That's right. This is The Ramsey Show. you're listening to the ramsey show i'm your host jade warshaw i am joined by my good buddy george camel thank you for saying that you know john always says we're not friends even though we're actually bffs you know john doesn't have any friends we're best friends shots fired john deloney if you're listening i know you're feet away listening. Well, we all actually like each other, Jade. Can we just put that out there? We have a great time.

We do. And if you want to be with us all in the same room, which is actually pretty rare, you need to join us for our Smart Conference event next month. It's an entire weekend of good times, and we're almost out of tickets. This thing is selling out. Wow. It's at our brand-new Ramsey Event Center

just up the hill here from our headquarters. And in addition to giving you life-changing, practical, and proven wisdom to help you be successful in every area of life, we're going to celebrate like crazy. It's a good time. It's high energy, live music, April 14th and 15th. Join myself, Dave Ramsey, Rachel Cruz, Dr. John Deloney, Ken Coleman, Christina Ellis, and Jade Warshaw for an amazing weekend. We're going to talk about how to crush debt, find work that you love, improve your overall wellness, build wealth, all of it. So we'd love to meet you and hear your story. And maybe grab a photo, sign a book or two.

And don't forget, because this is the first event at the new Ramsey Event Center, every ticket includes a special commemorative badge. That's exciting. I hope I can get one. So general admission tickets are just 119 bucks each, but they're almost gone. You don't want to miss this weekend event. Go to ramsaysolutions.com slash events and grab yours today. And Jade, it's going to be your first time speaking at Smart Conference, right?

Yes, it is going to be my first time. I'm already preparing, George. I hope so. It's coming up. I'm getting my ducks in a row. You better be preparing by now. This thing's coming up. I know. I'm excited. I can't. It's coming up. I'm getting my ducks in a row. You better be preparing by now. This thing's coming up. I know.

I'm excited. I can't wait to see you guys there. In the meantime, let's go ahead and take some calls, George. We got Eric's in Phoenix, Arizona. What's going on out there in Phoenix, Eric? Hey, I'm a longtime listener, first-time caller. I've been listening today since the early 2000s. Wow.

Good deal. Quick question about my 401k and my Roth 401k contributions. What's going on? I am debt free except for my house and putting 15% away into retirement accounts. My question is, according to what I read,

my Roth 401k, I can put up a total contribution of $22,500 into my Roth. Right. And my company will match me a certain percentage of that. So the question I have is, Dave has always said, hey, put up to your company match in your 401k, then go outside and match out your Roth, and then go back into your 401k to get to your 15%. My question is, should I put my total 15% into my Roth 401k instead of going outside of my Roth? That's an option. And that's actually what me and my wife have done because it's a Roth option. So

that advice, the match beats Roth beats traditional is what you're talking about. And because you have Roth options in the 401k, you don't have to deal with any traditional options. And so if you go beyond the 15% with your employer, you could then put someone to that Roth IRA if your income would exceed that. Now, there are income limits with the Roth IRA. There are not income limits with the Roth 401k. What's your income? I just wanted to make sure. About 140,000. Okay. So you'd probably get, are you going to hit the max limit this year? Yes. That's exciting. So anything beyond that, I think with 140, look into it, what the limits are for this year, you may still be able to contribute to a Roth IRA.

I'm not sure about that. Okay. But if not, you could still contribute to the traditional IRA to finish out that 15%. Okay. Sounds good. Thank you very much. You got it, man. Awesome. Thanks for your call. I appreciate that. I think a lot of people wonder about that.

They're not sure how to invest their money. So the rule generally would be match beats Roth beats traditional. But in his case, he had the match in the same place that he had his Roth benefit through his 401k. Yeah, so if you don't have a Roth 401k option, you just have traditional through your employer, we would say get the match if there is one, then go fully fund a Roth IRA outside of your employer,

and then you can go back to your traditional 401k and finish out the 15%. But if you've got the Roth 401k, the point here is to get the tax advantage growth. Now, what about, George, if you exceed the limits for doing a Roth IRA, what would you say to those folks? So that would be if you have a real high income and you are above those limits, you still have other options. Number one, an HSA is a great place to sock away money for retirement. It can actually become a retirement account. So if you max that out, number one, you get the tax benefit. It'll be deducted. And when you're, I believe 65, it kind of becomes like a traditional 401k account. That's right. It does. I love that.

And of course you can use that money towards qualified medical expenses and get the full tax benefit there. So that's an option. There's also taxable brokerage account outside of retirement, which means you're not getting any real tax benefits, but that money's going to get the power of compound interest. Yep. I love it. Very, very cool. Let's take another call. Let's see what Thomas is talking about in Kansas City. What's going on, Thomas? How can we help today? Hey, how y'all doing? Doing good. Yeah, so my wife and I, we don't have any debt except for our house.

I'm kind of a spreadsheet nerd, so I've got like a budget and I've got a bunch of formulas all set up. So based on my projections and how much money we're able to put towards the principal, we should have it paid off within three and a half years. Yeah. Pretty exciting. So, but my question is, um, we don't have any money in for retirement. Um, so I know, I think part of the program is you start, you get all your debt paid off except the house. Then you start putting 50% towards 401k or retirement accounts. And then, then you start working on paying off the house, I think is the process. So I'm kind of jumping the gun doing the house part first because, yeah. So I guess my question is like, is that, is that fine? Cause once we have the house paid

off, then I'm like, all right, let's just start piling money into retirement and setting money aside to like get like a rental house. So that's kind of what I'm thinking to do. So right now you're working your own plan, which is the Thomas plan. And if that's what you want to do, that's cool. But since you called us, you know, we we work things through a series of baby steps and you were close to it. The first for those of you listening and also for you, Thomas, the first step is baby step one thousand dollars saved. Then baby step two, you're paying off all of your debt except the mortgage using the debt snowball. And then after that, we don't go to investing.

We go to baby step three, which is making sure we have three to six months emergency fund saved so that we're not using our investments as an emergency fund. And then after that, baby, step four, Thomas, is when we start investing 15%. So you are kind of doing this thing. You got it ghetto rigged a little bit and doing it your own way. I would really urge you and suggest to use it the correct way, because we know that this is the plan that has helped millions of people build wealth. George is one of those people. And there's there's method to the madness. We want to make sure we have that savings first, because when folks don't have savings, their 401k becomes their savings. And that's a horrible place to be because you're hit

with penalties and you're hit with fees. Paying off the home before you have the rest of your debt paid off, also not a great idea. So there's a reason that this works the way that it works. Does that kind of answer some of your questions or give you peace about it? Yeah, no, it does. And yeah, I forgot to mention, we do have about three to six months of money saved up as well. So I forgot to mention that. We do have that stuff, but yeah, it's just, I've got the retirement account and then the house payment kind of flipped

a bit. Yeah. And, and let me also encourage you in this way, you know, when it comes to your retirement, you want that compound interest to work for you for as long as possible. You know, the time is the key on that. So no, I would not pay off the mortgage first because that's time that you could have spent in the market that you're now sacrificing. Does that make sense? Yeah, it does. And that's kind of what I was trying to do. How old are you two? I'm 31. She's 32. You got plenty of time, but you got to get started today. Turn that thing on 15% household income into retirement accounts and whatever's left, we can start throwing out that mortgage. You know, George, it's funny. I hear people calling all the time and they're calling us,

but they're doing what Dave would call ish, right? They're familiar with the baby steps. Maybe they've been listening, but they've kind of developed their own. Well, it's buffet style. It's like, well, I'll just take a little bit of that. I'm going to grab some crab rangoon over here, you know? But the problem with that is you don't get results. You get ish results. That's right. And what's it based off of? Because you don't have a track record. 10 million people doing this and becoming baby steps millionaires. I mean, that's enough social proof for me. Okay. Because I was an idiot who thought my plan was going to somehow be better than that. I know that's right. I would rather go with the

proven track record, a plan that has helped millions of people, not just myself, but my guy George Campbell over here, build wealth, become millionaire status. This is The Ramsey Show. You're listening to The Ramsey Show. My name is jade warshaw i am your host today along with my buddy george camel and uh we want you guys to give us a call we want to discuss the things that are important to you today so give us a call the number is triple eight eight two five five two two five and uh just before the break george and i were we were having some some pretty interesting conversation heated discussion heated discussion george i felt like you were losing your temper break, George and I were, we were having some, some pretty interesting conversation. Heated discussion. Heated discussion. George, I felt like you were losing your temper there. I tend to do

that over trivial things. So here's what happened. We just released a brand new episode of Smart Money Happy Hour, which Rachel Cruz and I host. And the entire episode is about junk fees. And so the title is there's a fee for that and we're over it. And so we just get, we're getting heated and in debates about should there be fees for some of this stuff? So I want to run it by you, Jade, run it by our audience and you guys respond in your cars or your homes or wherever you're listening. So for example, Postmates, which is food delivery, they add a delivery fee and charges more if

you want your food delivered without additional stops. Which who's like, yeah, you can stop three times. I'll take my food cold. It's fine. I don't trust these places anyway well i've seen video like someone ate a piece of my pizza they took some of my fries they took a nugget they did think about it you go through the drive-thru if you go and get mcdonald's fries just for your family of course you're dipping in the bag having a couple

of fries you're telling me that these folks are going to Chick-fil-A, Burger King, McDonald's. It's one of many reasons why I don't use these services because I have trust issues. Oh, they're eating the fries and they got dirty fingers. I'm telling you that right now. I don't know where those fingers have been. Okay. Here's one that I actually agree with. Uber and Lyft now have a wait time fee. So here's the deal. There's a charge incurred if a driver has to wait for you more than two minutes upon pickup. That's fine as long as I get to charge a fee when I have to wait for them. Oh, but see, that's out of their, like, what if they hit traffic?

No, because, George, here's the thing. They're hustling. You're deciding every time you're like, am I going to do Uber or Lyft? I always do the quote with them both and see who's cheaper. But that's the thing. You pick the one that's cheaper and maybe the time is less. And you see you look in the little the little car is flipping right to left i'm so cheap i'll choose the option that's like hey if you wait 14 extra minutes we'll give you three dollars off i'm like done i'm willing to wait look i hate it when they tell me it's going

to take 15 minutes and before i know it i've been waiting 20 minutes so as long as i can charge the same way they charge wow Wow. I'm just trying to be fair, George. Well, how about this one? Airbnb. This one grinds my gears. They'll add on everything from cleaning fees to cancellation fees, to service fees, to insurance packages, to where I just stay at hotels now. I just truly don't do Airbnb unless we have a big group of people and we all want to be in a house together. Now, see, these charges kind of make sense to me because I'm like, okay, they got to clean it. I want to know that-

If the place costs $100 a night and you're charging me a $250 cleaning fee, it just doesn't make sense to stay there. But can I also say, I feel like when people go to Airbnbs, it's like we're wilding out. Like we're going hard. Like there's parties.

Money is not an issue for Jade when she's at an Airbnb. No, no, no, not me. Not me, George. I'm just saying like even on the commercials, like you get a house with your friends. Yeah, but here's the issue. I don't know. I feel like there's a lot of things that can go be destroyed in an Airbnb house.

They're going to charge you $250 for the cleaning fee, but they're still going to be like, but also I need you to strip the sheets, start a load of laundry, start of laundry start the dishwasher i need you to feed that the lawn needs to be mowed and there's a creaky door if you could take some wd-40 to that on your way out that'd be great i'm out i'm out so okay i see i see i see yeah and uh travel is a big one there's a lot of fees in the travel world on top of airbnbs so airlines and with you know some of these frontier and spirit the flights are like four dollars but then they'll nickel and dime you and be like oh you wanted to breathe it's an extra five dollars if you want to breathe sorry sir i hate that look

i go can i say spirit you can say it so there's a airline that is called spirit you just said it guys it is not worth it it is like a greyhound bus in the skies i was sky bus i once went on one and there was graffiti you know how like in the eighth grade bathroom there's like you know people just write stuff people the seats had graffiti on it and i'm like is this what i paid an extra 25 to have my seat fee plus my bag fee and I got to pay for a water. Are you kidding me? Oh, it's out of control, which, you know, I'm a Southwest fan. They just went through this whole debacle, but they do give you two bags for free. That's true. But then I got to fight over my seat. I don't want to have to bite somebody's forearm to get my seat. I'm not big enough to intimidate

anyone into not sitting next to me. I'm prime. I'm prime bait. You know, if I'm sitting in a seat, they're like, I'm sitting next to that guy because you know I got the armrest. George, all you got to do is put your glasses on the end of your nose and look down your nose. Oh, I puff up like a blowfish when I'm in a seat on Southwest. I'm taking up as much space as I can.

I'm mean mugging him. I might start coughing. Yes, that's all you have to do. All you have to do is start coughing and sneezing and nobody's going to sit next to you. Well, the next, Vijay, this is a new one. AMC movie theaters have now added variable pricing called sightline seating so uh if you want to have a seat that's not in the front row you might pay an extra two bucks to get that prime seat okay i don't like this no they're treating it like a concert yeah it's not i'm not

going to see taylor swift the screen's plenty big i just have a hard time whenever something has been the same forever like it's always been like that you've done nothing new and now you're just charging for something that's always been does that make sense sure like what did you guys add that is of value you've just decided hey these front row seats have always been here let's charge more unfair. Well, and companies can just do it. And obviously it makes their bottom line look better, increases their profits. And concerts and games, this happens a lot with these major events, these processing fees. StubHub is one of them. They add 15 to 20% in service fees on top of the ticket costs. Ticketmaster, these people are the worst. Service fee fee taxes venue fee they start blaming the clients

and the artists and uh there's non-refundable fees uh as well and i hate that and specifically this one i don't like because i feel like the music industry they're putting they're putting the dollar on us when y'all need to just figure out how to get these musicians the money that they deserve for their streams. I just don't go to shows anymore is what happened. Yeah, that's what happens. I don't. Well, I am going to see Kenny Loggins here in a minute. Wow. Still touring old Kenny? How old is he? This is his last tour. He's got to be in his 70s. How do we know it's not like a weekend at Bernie's situation? They just got him up there like a Chuck E. Cheese animatronic. He can still sing. This is his last one though i cannot wait kenny

loggins all right i like this next part george okay this is fees that we we want to bring to life that should be a thing so these are your pet peeves that you wish you could charge people for okay you have any of these uh yes i have some but i want you to say this first one first. All right, here's one that really gets to me. A fee for people who say supposedly instead of supposedly. Yes, it's nuanced, but they're the same people who say expresso instead of espresso. Now, you want to see me give somebody an eye jammy real quick is when they say expresso. It's like right in the eye. It's not express. It's espresso.

Espresso, people. How about this one? A fee for people who aggressively lean their seat all the way back on airplanes. It's not express. It's espresso. Espresso, people. How about this one? A fee for people who aggressively lean their seat all the way back on airplanes. These people. I saw one where a girl threw all of her hair to the seat behind her so that it wasn't up against her seat. Look, if you've never been hit in the eye with somebody's hair when they flip their hair, that is, number one, it's painful.

That's an assault. You got to know who's around you when you do that. Okay. What's your that's an assault you gotta be you gotta know who's around you when you do that okay what's your fee what's your pet peeve fee okay i'm gonna say this and then i'm gonna be the worst offender but when people say the word like every other word i mean like george is kind of like i mean i was just like going over here and like my money like it's like a swear jar i think i just made four dollars from you just doing it's terrible like jar start with your friends and see how much money you make now there are some fees that i think are fair i don't want to just put fees you know um one is you know valet parking yeah that's a convenience yes especially at the airport there was one though that's like

local you know we live in the suburbs out here and this restaurant had a huge parking lot it's right there i can go the parking spot is three feet from where i am and they want to go take my car to move it three feet to charge me wow i went now i'll do the self park yeah so that's one that's legit you know at the airport though valet will change your life not if you're in baby step two i've never done valet at an airport what george with your bougie self let me tell you i know get get on it because this will change your life immigrants okay i do the like the hotel I've never done ballet at an airport. What? George, with your bougie self, let me tell you. I know. Get on it because this will change your life. I'm the child of immigrants, okay?

I do the hotel parking and take the shuttle so that I can pay $7 a day instead of $24 a day. So that's me. There's some things I am unwilling to pay a fee for. I get that. Isn't it true? Sometimes $20 seems like nothing. And then sometimes $20 feels like the most expensive thing in the world. You're like $20. It's the principle, Jade. If you want to hear more about this, Rachel

Cruz and I have a great time talking about it on the latest episode of Smart Money Happy Hour. You can listen to it. You can watch it now. We can see our reactions on our YouTube channel, Smart Money Happy Hour. We'll link it in the show notes and put it in the YouTube description for you all. Let us know what you think. Add in your fees you're the most angry about in the comments. Let's get angry together. Start a revolution against fees. I love it. I love it. This is The Ramsey Show. You're listening to The Ramsey Show. My name is Jade Jade Warshaw I'm joined today by George Campbell and we're taking calls about your life your money the things that are concerning you the things that

are keeping you up at night anything that's on your mind we're here to talk about it today you can give us a call the number is 888-825-5225 and let me tell you something if you're a new listener and you want to dive deeper into the Ramsey baby steps, go to ramseysolutions.com and click on the get started button. You may hear us talk about things all the time, like the baby steps or, you know, a rule about this or a rule about that, or we use the jargon, you know, and we think that y'all know the answer. But if you're like, what are they talking about? This is the thing for you to do. We'll help you figure out the best next step for you on your financial journey. There's lots of resources there for you guys to understand what this is all about, these baby steps, all of this. It's based on exactly where you're at today. So it's super

helpful. So head over to ramseysolutions.com and click get started. All right, George, let's go ahead and take some calls. I think we've got several on the board here. We got Logan from Kansas City. What's going on, Logan? How can we help today? Hey, guys. Yeah, thanks for taking the call. So basically, it's just kind of a housing market question.

Here's the scenario. My wife and I own a house, and we currently rent the upstairs for about $1,100 a month. The mortgage is only $790 on the home, and we live in the basement pretty much for free by doing that. We all just kind of share the kitchen and the laundry room and the common spaces, but everybody's got their own space, and we're good. The offside to that is that we have to go through a garage to get to the kitchen, and we don't really have our own kitchens. It's shared space. And so it would be nice to have our own space given that we're married. So the scenario would be, you know, looking at potentially purchasing another home and turning

this into a full-fledged rental. If we did that, we'd probably be able to get around $1,600 a month for the property. So that'd be an additional $, um, of cashflow, not including all the expenses that go along with that. But, um, so yeah, we're, we're considering buying a property, getting some of our own space and then turning this into rental. Um, what's, what's, what's your guys' thoughts there? So would you buy another property near, near that property? Yes. Yeah. Uh, still, still same Casey metro area. And would you do that with cash? Unfortunately, no. Yeah. Our situation right now would be probably a 3% down situation, live in it and kind of 3% conventional. Well, there's a lot of risk there when you're carrying

two mortgages now. And if one thing goes wrong with this plan that looks great on paper, it leaves you guys in a real precarious situation. So that's my big worry with this. And we always recommend, we love real estate, we love rental property, but we only recommend doing that once you have a primary residence paid for and you buy the next one in cash, your investment property, which I know sounds like, well, that's years away. Yes. But it also lets you walk into this with a lot of peace. That's a good point. Okay.

Because I mean, the spread right now you're making is about what, 300 bucks and that's without anything going wrong. Something needed to be replaced, repairs, whatever else happens. So you're making about three grand off this deal. so it's not like it's changing your life even to rent out the upstairs and so to me is it if you said hey i'll give you a three grand pay cut but you get to go through your house freely i'm taking that deal what would you make if you sold the house sold the sold the house that you're in now and purchase something that makes sense for you and your wife, you've got your privacy, you've got your own kitchen, you've got your own space, what would that look like? So yeah, we've got a little over 20% into the home. It might be worth around 200. So let's see, I owe 110 on it. so we'd probably be able to walk away with $80,000-ish, maybe,

and then put that down payment towards something that we really wanted and really liked. What's your household income? We average probably around $70,000 together. Okay. So how quickly could you pay off your mortgage at the current residence? Yeah, that's a great point. I'm not entirely sure. I've not done the math on that, but if we can, I mean, we're probably around $1,500 a month as far as what we can save. So that would allow us to kind of put that much down on anything else

per month. Do you guys have any other debt? We do not. We're both debt-free. We've got some investments, both of us, that are in the stock market. And I've actually kind of paused mine just for the time being, but I do need to get those back up and running again as well. And you have a fully funded emergency fund? We do, yes. Okay. Yeah, I'd get those investments back up to 15%. Whatever's left, start throwing it at the house. And if you just don't want to rent her anymore, there's nothing wrong with saying, we're just not going to make this amount of profit and we're going to have our life back and we'll be back in the real estate investing game one day, but that day is not today. Would you keep that same house as your personal residence without the renter,

or does it not make sense? Would you move into something different? No, yeah. I think the house we're in now currently makes a lot of sense. So it may make the most sense to just take it over for ourselves and kind of then start snowballing and saving and getting that ball rolling. And like you said, get this paid off and then purchase the next rental property. Yeah. So you've got a lot of options there. The option that you don't have is to have two mortgages because that right there is a recipe for disaster. With 3% down and having no equity in that thing. And it's just, that scares the crap out of me. Absolutely. We've got time to take one more call. This is Connor from Austin, Texas. Let's make it pretty quick, Connor. Let us know how we can help you. Yeah, of course. Thanks, y'all, for taking the call.

So my question is around, I am starting a new job and I had a 401k match for 4% of my previous employer. So I have a 401k. This new employer doesn't offer a 401k until the first year, but then it's a 6% match. So I'm just wondering what to do with my old employer 401k in the meantime. Aha. So it's still sitting with the old employer? It is. And it's a traditional 401k or Roth? It's a traditional. But there was a, okay. So I would just do a direct rollover to a traditional IRA. That's going to give you the most control, flexibility, and investment options. Okay, got it. Would I be able to roll that over to my employer 401k after the year is up, once I'm eligible? Depending on your employer's 401k, you may be able to roll it in there,

but personally, I would rather have full control of it by putting it into an IRA, which is one of the benefits of leaving an employer. You have the ability to move it into an IRA. Okay, got it. And then when I'm eligible for my employer's 401k, just start from scratch and contribute to that? Yes. Do you have any debt? I have a solar panel on my house, kind of my stupid tax, if you will, but outside of that, no debt. Well, here's a plan. Before you invest any more dollars, what if we could get that solar panel paid off before the 401k benefit kicks in? That is something I've thought about and something that I could do this year and then just start recontributing again to that 401k.

Do you have any savings? I do. I have about $6,500. Okay. And what's left on the solar panel loan? About $29,000 or something during the minimum payments. Okay. So we could take five grand from your savings, throw it at the solar panel loan, and get about the business of paying it off. Could you pay it off within the year with your income? Not with my income. I'd switch to a commission-based job, but I'm thinking some commission, I should be able to pay it off outright within a year.

Love it. Well, commission's great because you can just go kill stuff and drag it home and bust your butt. So that would be my goal. And I think that'd be really cool if you could have a three to six months emergency fund with no debt and be ready to invest when that one year benefit kicks in for the 401k. I love that idea.

I feel like that's the way to go. I like having just something dangling in front of me. I think as humans, we need that behaviorally. Yes. Just to stay motivated. And so, you know, when we were paying off our house, I said, I'm not going to upgrade my 09 Civic with a bumper hanging off until I pay off the house. And it's so much more rewarding at that point. I mean, I think that's the way that the baby steps are designed, right? You know, I say it all the time. I feel like one and two, you're just like, you're just busting it and you cannot wait because all the money that you're giving,

it's to somebody else. You're paying off debt. You're giving them the money. And then it's like, but if I could just get to baby step three and I get to pocket everything, right? I feel like the whole thing is designed that way. Then it's like, oh, I finally get to start investing. It's like you've waited for that moment. So it's all about, like you said, that carrot dangling in front of you. And when you start to be able to enjoy those moments, it makes it even more sweet. We say personal finances, it's only 20% head knowledge. It's 80% behavior. It's psychology. It's not about the math. And once you get a hold of that, it changes you on top of changing your money. Absolutely. Because most people that you talk to, they know the right thing to do. Yes,

I'm supposed to save money. Yes, debt is bad. Credit cards are bad, but they don't do what it takes. It's the behavior that makes the difference. Well, that does it for today's show. Be sure to join us next time. And remember this,

when it comes to changing your life and your money, you can tell me that you won't do it, but please don't tell me that you can't. With God, all things are possible. Hey, what's up guys? It's Jade. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramseysolutions.com today to sign up for our newsletter. Again, that's ramseysolutions.com to sign up for our weekly newsletter.