The Ramsey Show - App - Your Attitude Is More Important Than Square Footage (Hour 1)

Episode Date: June 22, 2022

Dave Ramsey & Kristina Ellis discuss: Selling your home vs. renting it out, Why being satisfied with the size of your home is more about your attitude than square footage, Diversifying your investments, Repairing a car vs. buying a new one, Should I wait for student loan forgiveness? How to best manage an inheritance. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. We help people build wealth, do work that they love, and create actual amazing relationships. Christina Ellis, best-selling author and Ramsey personality, is my co-host today as we answer your questions about your life and your money. Thank you for joining us. The phone number is 888-825-5225. Jared starts us off in California this hour.

Hey, Jared, what's up? Hey, how's it going? Better than I deserve, man. How can I help? I'm glad to hear it. Thanks for taking the call. So our little situation here is family's growing. We have a three- and five-year-old, my wife and I.

And we just pretty much like moving to a bigger home. We're in our first home that we purchased and just need a bigger home, bigger backyard. Well, I would say it's more of a want than a need, but I think you get it. So the question is, things that I've been kind of trying to figure out, should we sell the current home and take the equity and purchase a new home or save up for two to three years and put down five to ten percent for the new home and rent out the current home or just work on paying off our current home as soon as possible roughly maybe five six years and then save up for another home to move into.

Cool. What's your household income? Household income is about $160,000. Current home is how many square feet? $1,850,000. How many bedrooms? Three and an office. Okay, cool, good.

Nice home. All right. uh three and an office okay cool good nice home all right um i don't have any problem with you i don't have a would be my choice um what do you think i mean sell sell it and buy something else as long as when you do that your payment is no more than a fourth of your take-home pay on a 15-year fixed rate mortgage but that move up that, you definitely don't need to move out and keep a rental because you're not paying for it. We don't believe in rentals until you pay for them. Got it. Because we want you to have the margin to do that. Yeah, I don't see anything wrong with it.

As long as you can afford it, you have a strong income, you keep it 15-year, under 25% of your income, I think you're fine. But, I mean, there's also the great feeling that would come with paying off your current house. Does that, is that a big motivation for you getting completely debt free to baby step seven? Yes. Um, yeah, I think what I struggle with probably like most listeners is just, uh, trying to enjoy, you know, especially we have a three and five year old,

so trying to enjoy the next 10 years or so, you know especially we have a three and five year old so trying to enjoy the next 10 years or so you know um and so i think paying off the home we can do it and i like that idea for me but i think that that would kind of restrain the family a little bit um if that makes sense um well i like the idea okay i'll disagree with. I don't mind you moving up if you want to move up, okay? And you adequately or accurately quantified it as a want, and it fits, and go ahead and do A, you know, move up, sell the house and move up. Again, as long as it's a 15-year fixed and the payment's no more than four. Now, let me back up, though. Statement to all of America. The enjoyment of your 1,800-square-foot home with two children in three bedrooms and an office is not about the square footage. It's about your attitude.

Because you're talking to a guy whose parents raised a three-year-old and a five-year-old. I would have been the five-year-old in a 1,000-square-foot home. And no one at our house in those days ever talked about a lack of enjoyment. It didn't come up in the 60s. Okay? So enjoyment is your mindset, and so if you chose to enjoy that, and as a part of your family getting that smaller home paid off and owning it free and clear faster than you will the larger one, that is an issue of contentment, an issue of perspective.

But the square footage does not cause enjoyment. Your brain does. Right. And if anything, I feel like the higher payment potentially and the longer trajectory to getting debt free could actually... That could take some of your joy. Right. Exactly. Like the more your mortgage is, the more you're going to have to work and make sure you're able to pay that mortgage and you're going to take a longer time to be debt free. So it's like, I think once you have not a payment in the world, you're going to have even more time with your kids which is really exciting to me so that's not to pick on you jared

i i'm going to go with a if i'm you okay i'm going to move up sell the house and move up but while you're doing that i do want you and i want to just take that moment to create a soapbox because it's something we've been talking about around here a lot with the real estate market going crazy and you know it went up 32 percent in 20 it went up 18 percent in 21 went up it's going to go up seven percent this year and probably about five percent next year is what it's looking like and so you and i particularly among the ramsey personalities have had this discussion of you know this idea that you're kind of getting priced out of the market and my pushback on that has been that the yes there is a legitimate thing a yes that's true some people are getting priced out of the market no question about it but some of getting priced out of the

market is this idea that you know the difference in a step the difference in the average home in America today is a 2,800-square-foot two-bedroom with a skylight, a jacuzzi, and granite countertops. The average home in America in 1962 was 1,000-square-foot, one-and-a-half baths, holocore doors, and Formica countertops. And there wasn't a skylight unless someone shot through the roof. And so, you know, they didn't even know what that was and so uh you know again there's nothing wrong with having better things we're not against having nice things but when you set that as the standard for quote enjoyment or the standard for this is i i i can't afford a house could be because you can't afford a house it could be because your standard of of a minimum is so much higher than any other generation in history if you're listening and so it's some of both that's going on that's causing the people to be in air quotes priced out of the real estate market. You and I have talked about this a lot.

Right, yeah, there's a lot of pressure, especially among my generation, to have the bigger house to move up. Like he said, it might make him a little bit happier to have more square footage, and it's fine if you can afford it, but just make sure that you can afford it, that it doesn't delay your other goals,

and that you can be happy regardless of the size of the house. Yeah, and be careful of the language that you use as to what your minimum is right you know well yeah i could afford a house but it'd be over there over there in that area oh you know that kind of thing and so you know in this county you can't you know well you're right i mean when i was a kid we knew where the rich people live and it wasn't where we were, you know. And I knew we couldn't live over there, but we never really set that as the minimum standard of where we were going to be. And we've had this discussion a lot around the office, even, because our offices, Ramsey Solutions, are located in the wealthiest county in Tennessee and the 11th wealthiest county in the nation.

So this is a very affluent county that we're sitting in. So to live within five miles of this office building where we're broadcasting right now is freaking expensive. So expensive. So, I mean, it's out of control. And so it's bringing up with our own team members here this same kind of discussion. But, you know, you can live over there. Yeah, it can work. This is The Ramsey Show. You've got a lot on your plate. A job, your home, your marriage, and your growing family. While you're enjoying

the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your health care. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you. Christian Healthcare Ministries is a Ramsey Trusted Provider. Christine Ellis, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. All right, is the real estate market going to crash?

Is the world coming to an end? Do you have friends that are named Chicken Little? The sky is falling. The sky is falling. Have you heard that? And people are really angry about their, they want to be right about the world coming to an end. They're angry about it. So, hey, listen, here's what we're going to do.

We decided that everybody's talking about it. So we're going to talk about it. We're going to give you actual facts because we work with facts and we admit that people have feelings. We just don't make decisions based on those. We make decisions based on actual data, not fear, because fear shuts down the actual critical thinking portions of your brain. And then you start coming to ridiculous drama-based conclusions. So July 14th, we're going to do a live stream called the Real Estate Reality Check. It's completely free.

George Camel, Rachel Cruz, and I are going to walk you through what is really going on in the housing market today with actual statistics and stuff, things that you use if you're actually going to do economics and not just watch the news, or worse than that, your social media feed, which is well known for their ability to predict the economy. Oh, my God. Really? So we're going to show you how to navigate this current real estate world, what's coming up in the next three to five years, what's coming up in the next three to five months what's coming up the next three to five months for sure and uh with data charts graphs but we're not going to bore you we're going to laugh we're going to cry we're probably going to piss some of you off but

that's one of our personal spiritual gifts so join us it is a free night it is the real estate reality check on july 14th spoiler alert we don't think the world's coming to an end. Spoiler alert. We actually can prove it to you. Spoiler alert. There's problems in the economy. You already knew that. We're going to talk about all of this stuff in a real-world way July 14th. You want to sign up, and you need to pre-sign up.

That's how we know you're coming. It's a free live stream July the 14th, RamseySolutions.com slash reality check. RamseySolutions.com slash reality check. Jump in, and we will talk. Phil is with us in Naples, Florida. Hi, Phil. What's up? Hey, Dave.

How are you? Better than I deserve. How can I help? Good. Me too. So I am in baby step four, five, and six, and I've got a little over $10,000 in a Fidelity Roth retirement fund. And just with everything kind of going on, our budget is a little bit thinner than it

used to be with daycare and just everything else starting out and uh well just gasoline i filled up my car this morning i about passed out well i've got a 2004 f-150 and so that's uh yeah my raptor man i swear to god i can buy a house for what i can fill up the raptor for it's weird when you're standing the gas pump and people are just yelling biden randomly yeah there's a lot of stickers uh around're standing the gas pump and people are just yelling biden randomly yeah there's a lot of stickers uh around here on the gas pumps too those are pretty funny it does make it does make the uh budget tight so how can we help today well i'm wondering um so with our my fidelity account uh it seems that i have to have a twenty five hundred dollars to open up

another um mutual fund and so i have over $10,000 in one mutual fund, a large cap and wondering now that it's a little hard to save, you know, $2,500, should I diversify that and put it into three other mutual funds? So now I have the all four that you guys talked about. And it's a little easier i guess to keep investing instead of now saving to try to invest yeah you don't have to have 2500 if you have it on a monthly draft and the easiest way to do your roth is set your set your investments up on a monthly draft auto auto drafting your checking account instead of doing it in lump sum once a year. Yeah, it just seemed like when I had started this, it was you had to have $2,500 to...

You don't. You don't. Not to do a monthly draft. To do a single... To set up an account and do a single occasional investment, like once a year you fund your Roth or something in a lump sum, you do what you do with some mutual funds 2,500 some are a thousand i think there's two or three that are 500 minimum

some are 5,000 minimum there's all kinds of different minimums but uh but yeah that's what you're running into you can set it up with almost all of fidelity's funds on a monthly auto draft it's an authorization to draft your checking account and it's it's easier on you and it's auto it's automated discipline as well yeah for sure okay so there wasn't you know generally that kind of situation there wouldn't be um taxes or fees if i were to try to diversify no you can roll it around among all of those or you could roll it over to just uh you know you can go get a smart investor pro, one of the folks that we recommend in that area, and they can help you set it all up and just put it on autopilot. But there is a huge advantage to doing automatic draft on things that you want to create.

For me, it's automatic discipline because I forget to do stuff. Right. Yeah, and it's also just with the budget getting tighter he's talking about gas and inflation and daycare and all these different costs having that automatic pay yourself first kind of mentality where it's like you don't have to think about it you're not debating at the end of the month do i have enough money to put into it it's already just there and going out it's just you will cut the quote disposable income stuff so you make your investment yep and you can still do that i mean so because there's gas and groceries and that kind of stuff

have not gone up enough yet to completely squeeze you if you're at baby step four meaning you don't have any debt except a house payment and so you've got room to do your 15 and eat even though eating costs more. But, you know, you may not be going out to eat as much. You may be limiting a vacation. You may be limiting your clothing budget, but you've got plenty of clothes. And, you know, maybe one less $6,000 purse or whatever. I don't know.

But, you know, there's some other stuff. But you're right. You want to force yourself when things are tight to continue to be smart. Right. Take that temptation away. Take that ability to just use it on something else. And it can be really real needs. You might feel at the end of the month, I have to stretch my budget for groceries and

these needs that we have in our household. But if you're not seeing that money and it's going straight to investments, it's just you put your pressure more on your day-to-day budget versus taking away from your investing. And the way to know that that's right is you never missed a car payment. Right. Back when you had a car payment. And so you know you can, you know, even if cash prices went up, you made your car payment. You figure it out.

You just squeezed out everything, some other stuff. And that's what you end up doing here in these situations. And hopefully some of this inflation will calm down, particularly the stuff at the gas pump eventually it will eventually it's just a matter of which politician susan is in boise hi susan how are you i'm good thanks for taking my call sure my question is about um car repairs so we have a 2008 Honda Accord that needs a new timing chain to the tune of $2,200. And the car's probably

worth $4,500. So we can't decide if we should do the repairs or is it time to get another car. There's two things there. That sounds like you've got a dealer price. Yes. Yeah.

So you don't fix $4,500 cars at the dealer. Yeah. Well, I take that back. The $4,500 is... No, no, no, no, no, no. I'm talking about the timing chain price. Oh, the timing chain. The repair sounds too expensive and inaccurate since inaccurate to me oh okay i think you

got a very high bid like did you take it to the honda dealership to get the repair done no we took it to the mechanic that we've used for quite a few years okay then i then i may be wrong i may be wrong but that sounds high for a timing chain to me okay so here's the here's the here's the math here's the way you can the math there's three pieces of information here the vow or four pieces of information or whatever but okay the value of the car if it's fixed and running properly is you're saying forty five hundred dollars if you were going to sell it. Correct. Okay.

Yeah. The value of the car, if you sell it as is, basically salvage, let's call that $1,500 just for fun. Okay. If you take the value of the car as is, plus the repair, and it's more than the value of the car as is plus the repair and it's more than the value of the car after it's fixed you don't repair it and so if this car is worth fifteen hundred dollars it's questionable to fix it if you can get fifteen hundred or seventeen hundred for it i would sell it as is put the twenty two hundred i would have spent on it with that and go buy a different car because this is a huge repair so your gut instinct was correct on this i think this needs to go but uh if that if that

repair price is right Christina Ellis, Ramsey Personality, is my co-host today in the lobby of Ramsey Solutions. Joining over 100 folks joining us today. Thank you for hanging out with us. We appreciate you dropping by. Drop by anytime. We've got a great visitor center, free coffee, free cookies, and a debt-free stage where people stand to do their debt-free screams. And that would be Eric and Linda.

Hi, guys. How are you? Good. How are you? Welcome. Where do you guys live? Orlando, Florida. All right. Welcome to Nashville. How much debt have you paid off? $237,000 in 22 months. Way to go. And your range of income during that time?

We started at $120,000 in 22 months. Way to go. And your range of income during that time? We started at $120,000. At the end of our debt-free, it was $180,000, and now we're at $234,000. Whoa! Way to go. Excellent. What do you guys do for a living? I am a payment strategy manager for a telecommunications company. I'm a national sales manager for an access control um manufacturer ah okay and things are

going well huh really good yeah very good so what kind of debt was the 237 000 um typical you know average american fancy cars you know camaro tundra and then um timeshare and getting out of the timeshare and tons of credit cards anytime someone offered us one we'd say sure why not absolutely sign me up so you're kind of normal very normal yeah normal sucks though i know i love to be weird now so you're debt-free everything but the house yes all right very good you cleaned it up and sold it or whatever you did all right so what happened 22 months ago that put you on this ramsey journey why did you decide to do this um well it's actually been about 10 years of this

journey but you know as the nerd i tried to do it and he would agree but he wasn't really involved and at some point he saw us put on a big whiteboard of our amount of debt we had and the interest that we had that we've been paying on. And I think that was his light bulb that turned on, and we decided to start that journey. Okay. So, Eric, what was it you saw on that board when you went, okay, I'm in? I saw those large numbers that we were just throwing out to bank companies and all the interest, right? So it really felt like somebody was digging into my pocket like you're working for somebody else i felt like i was getting robbed for so long you

were it just got me so fired up i said you know let's start looking at this on a week-to-week basis we started having household meetings we even introduced all of this to our daughter as well so it just kind of made it a crew thing. Eric found a villain. He got to have a villain. And once he had a villain, he's like, ah, superhero. That's it. That's it. So that's a pretty huge amount of debt to pay off.

What was the hardest part of this journey for y'all? Just keeping consistent with it. I hate to say this because I know COVID was a very negative thing for most people, but for us, it was truly a blessing because the first, you know, 90 days we were doing it, but that's typically when we tip fall off and we go back to using debt again. So I think with COVID forcing us to be at home, forcing us to make food at home, doing things at home, allowed us to keep on this journey and then become, it became habit for us. Kept you out of the restaurant, huh? Yes. Kept you out of the shopping mall.

I became a really good chef too. I like it. Very good. For people who are kind of in that similar mindset, they've got credit cards, they've got fancy cars, they just are kind of stuck. What would you tell those people? That it wasn't worth it. You know, physically, I was sick almost on a daily basis, not realizing that it was really due to all the stress that the finances had. And I don't think people realize that we just go, you know, working our nine to five thinking, oh, it's just this is how we're supposed to be. But knowing that if you get out of this debt that your your life will be so much better we're giving so much more now to other people we are telling our story helping them it's just we feel much healthier now to be able to do more things

and spend more time with our daughter as well yeah well done good very good what did you sell everything so really camaro We sold the Camaro. Camaro's gone? What else? We sold all our expensive cars. What was the other car? It was the Camaro, the Tundra, and then we ended up doing kind of like a mid-sized car, like average range cars, like a Mazda, and then we sold that, and then we bought a $5,000

Honda Civic. You went all the way to Hoopty. Yes. Everyone knew I was serious when I sold a Tundra and5,000 Honda Civic. You went all the way to Hoopty. Yes. Everyone knew I was serious when I sold a Tundra and I got a Honda Civic. Because he drives the Civic. So we always call. We always say I look like Mr. Incredible getting into the vehicle. But we make it work.

I'll use a superhero. That's right. That's right. So my job, when I got a promotion, we moved from Atlanta to Orlando. And so we sold everything in our home, all of our furniture, and said, we're just going to start over. And once we get debt-free, then we're going to pay for our furniture one by one. So you got Bella sleeping on the floor? Well, we were sleeping on the floor, but we let her keep her mattress.

All right. You really were. I was exaggerating oh my gosh but you cleared it all yes and you can buy more i mean you make two hundred thousand dollars a year and you don't have any payments now yes and you have control of your money yes i think a lot of that too came from minimal financial stress now where we can we didn't have to jump into a new job just because i needed that paycheck, that immediate paycheck. We were able to find what we really wanted to do for the next 30, 40, 50 years. And what had opportunity to it.

Absolutely. Absolutely. And then we also had a side hustle. So we're both, we followed you obviously for so long. And so now we are life insurance licensed. So that was kind of our side hustle to make additional money of helping families make sure that they are protected with term life insurance as well yeah very good guys well done what do you tell people the key to getting out of debt is sell everything sell everything uh

teamwork you have to do it together although i'm the nerd and he was okay with the process he wasn't fully invested in it so you have until that moment in january so i think that's the biggest key for us is just staying together always having an open communication i think that's really good for marriage too so you know this is actually making our marriage a lot better i think i think the weekly meetings too being able to see those numbers because it got addictive every time we paid something off and we were celebrating every week and saying, okay, we've got this much more. So it just kind of helped us to stay on track. And then using your tools.

So we use the EveryDollar app because with COVID we couldn't use cash anymore in a lot of places. So just being able to track our finances with our debit card through the app. You know, we did Financial Peace University. And then with the help of our SmartVestor Pro, we were able, during the COVID time, making sure that we weren't just paying off the debt. We saved a lot during the critical moments of not knowing what the world was going to be like. And then at one point, we said,

okay, now we can start paying off our debt. So just being able to use all the tools that you have really provided for everyone, that has really helped us. Wow, you plugged into everything. Yes. And that accelerated the process. That's what they're for.

That's very cool. So proud of y'all. Well done. Thank you. Who are the biggest cheerleaders outside the two of you? Our daughter, you know, because she, I think she felt a lot of the stress too because she's used to getting everything she wants. And, you know, we just really focused on her softball journey and just focused trying to say hey this is going to be our path you're going to have so

much more so our daughter our cheerleader our really our smart investor pro he's he plugged in with us all the time just making sure that we were still on our journey sending text messages late at night making sure that we stayed plugged in so Wow, good for him. Total accountability. I love it. All right, we got a copy of the Baby Steps Millionaires book for you. That's the chapter or the journey you're on for sure. You're going to be there for it. You know it. And a Total Money Makeover book, which you probably already got.

You can pass that along. And another sign-up for Financial Peace University. You can pass that along. It's brand-new classes all the way through now. And one-year subscription to that. So we'll give you every bit of all those things and get you guys signed up. And or you can pass them along. So congratulations.

All right. Your daughter's name is Bella. I cheated and read that off the screen over here. And how old is Bella? 11. All right. Way to go, Bella, for hanging on. We're proud of you.

I'm glad they kept your bed. It's a good thing. All right, Eric and Linda and Bella Orlando, Florida. $237,000 paid off in 22 months, making $120,000 to $180,000. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free! Yeah! Ha, ha, ha! Whoop, whoop, whoop, whoop, whoop, whoop. That is how it's done, boys and girls. This is The Ramsey Show. We'll be right back. Thank you for joining us, America. Christina Ellis, Ramsey personality, best-selling author, is my co-host today. Open phones at 888-825-5225. Paul is in Cincinnati.

Hey, Paul, welcome to the Ramsey Show. Hey, Dave, hope you're doing better than you deserve. I am, sir. How can we help? Hey, so I've been listening for just one week. My wife and I are actually on baby step two right now. We've got about $250,000 in debt. About $130,000 of that is our mortgage. We just bought a house in April. The other $120,000 is between car and student loans between my wife and I. Just didn't know what the heck we were doing when we went into school, especially me. $80,000 of that is from my student loans. I've been working in children's services for the past seven years. I recently got a job a job as a nonprofit manager with a free clothing boutique for foster kids.

Thankfully making a little bit more money. I've got about three or four more years to go for the public service loan forgiveness program. And I'm wondering, is it better to try to get actual forgiveness from that program or start paying down those loans now, considering I've got less than five years to go for it. Well, here's the problem with the PSLF, okay? Last year, or since it began, rather, in the last couple of years, it's really started kicking in. 726,000 people have applied for it after working 10 years in a nonprofit or a qualified area, right, which is what you're trying to do.

Right. 726,000 people have applied for it. All of them but 8,400 were turned down. So far, the program has a 1.16% approval rating. Approval rate, I guess is a better way of saying it. So what that says is 99% of the people who were on what you're trying to do, it didn't work. I don't know how to say that anyway except to say that the government lied. Because they are finding some reason to not execute the student loan forgiveness. There's three types of student loan forgiveness.

Death, if you die, your student loan is forgiven if you your spouse or whoever's left behind sends in a death certificate they'll forgive your student loan it doesn't pass right it doesn't pass on to your estate it doesn't count against your estate disability if you become permanently disabled and sign up for and qualify for ssi under the social security department then you can take that qualification and have your student loans forgiven. And then there is a few, actually it's four types. There's another type that is underserved areas, and most of those forgiveness programs are three years, not ten.

The biggest one that everybody's plugged into is this 10-year program that you're in, the Public Student Loan Forgiveness Program. And so far, the other three actually do work. They actually do forgive you. It's a lot of hassle to go through it. But so far, the folks on your plan are at a 99% failure rate. And so if I saw that and I was in your shoes, I wouldn't be counting on the government to help me. Yeah, that's the biggest problem is it's just not reliable.

The idea behind it is great. I see why a lot of people feel, you know, that they want to follow that plan. It's just like you said, the numbers, the data of who've actually had their payments forgiven. That's just not showing up. Yeah. So it's just not something you can count on. And especially since we've seen so many people pay off their debt by getting on a budget, following the baby steps. We know you can do it without waiting.

And that's a proven, reliable plan. So my vote is that you take control of what you can control and to start paying down the debt versus waiting to see if the government might forgive it. And here's an interesting thing, almost philosophically, that goes with that, that we do find in the data of people who become like baby steps millionaires you're right your vote is is correct the people who build wealth control what they know they can control and that's the person in your mirror in other words they depend upon themselves not an outside force, to cause their prosperity. And psychologists call that the locus of control. Where is it you look? What source do you look to to cause you to do this?

And even those of us that are people of faith, we look to God. But when you're a Christian, God says those that don't work, don't let them eat. God says you reap what you sow. So if you want some corn, you should plant some corn. God says if you sow sparingly, if you put out very little work or very little corn, you're going to get very little corn back. And these are principles of life that we see, you know, agricultural analogies, but they're principles of life. And so this locus of control, this idea that my destiny is most likely going to come to pass

when I cause it to, don't have control over all the variables. I can't control idiots. I can't control racists. I can't control people that hate people from the South. I can't control people and hate people on talk radio. I can't control all of that, but I can control what I do. And when you have that, you're exactly right, Christina. There's a high correlation between that type of person or the person that adopts that mentality and the person that succeeds financially. So all of that to say, go pay off your student loans. Right. Well, and in contrast to that, with the public student loan forgiveness program, even if it did, in theory, work the way that they said, that payments were processed correctly, there still are things within that that you can't control. You could get laid off. You could change jobs. You could move locations. We've heard some horror stories of people who, you know,

they did what they were supposed to do for years. And then at the last minute. Right. Something changed that they had no control over and it disqualified them. You know what? There is another type of loan forgiveness that does work 100 percent, too. And no, I'm not joking. It is the if the institution like if you went to one of these rip off colleges and they go broke, then the loan that you took out to go to the college that went broke is forgiven. And that's what's going around right now.

Joe Biden just forgave $5 billion. No, it was Corinthian College. Yeah. And it went broke. And it was a huge, huge scam. Huge. And a lot of people went. And so this latest wave of loans that biden forgave he didn't

forgive him it was department of education by regulation forgave it had nothing to do with the white house it had nothing to do with politics it had to do with that that was already on the books if the college that you go to goes bankrupt and you took out student loans that student loan can be forgiven automatically it It's a regulation. It's not a White House dictate. And it's not a, I get to say, I forgave student loans. You don't have nothing to do with it. All right, Amy's in Eugene, Oregon.

Hi, Amy, how are you? I'm good, Dave. Thank you for taking my call. Sure, what's up? I have a question regarding an inherited 401k that I just received. My mom passed away 20 years ago, and at the end of May, I had just received those funds. And so I want to make a smart decision on what to do with that. Why was it 20 years before you got an inherited IRA?

She was at the end of a very messy divorce when she passed away. I'm not sure if it was finalized or not. I mean, she just passed, right? She committed suicide. No, I'm saying recently. No, in 2002. Oh, okay. Well, that money should have gone, okay okay so you should have gone to you immediately it shouldn't take 20 years for you to get it but you got it how much is in it um to date there's 113 000 okay i'm so sorry for your mom i'm sorry honey thank you a horrible thing to go through

uh you have on an inherited ira i don't know if it starts when you receive it or if it starts from death i thought it started from death which means the whole you have under current law i don't you you're gonna have to go get tax advice because i'm not sure whether this started in 2002 or whether it started now if it starts now you got 10 years you have to take out a tenth a year if it started back then it's on a required minimum distribution process. And so you're going to have to go figure out, since you didn't have control of this, when your liability kicks in. My guess is that, well, I just don't know what happened.

I've never seen one that took 10 years for somebody to get it. So you're going to have to go get tax advice. Get in touch with one of our SmartVestor pros. I think they can walk you through this or one of our tax ELPs, either one at RamseySolutions.com because I just don't know the answer to your question is what it comes down to because the situation is so unique. This is the Ramsey Show. Have you been inspired to make a change with your money? Want to know where to start? Take our three-minute money quiz to get a plan you can follow.

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