The Ramsey Show - App - You're One Step Away From This House Of Cards Crumbling! (Hour 1)

Episode Date: July 10, 2023

George Kamel & Jade Warshaw answer your questions and discuss:  George triggered the internet with his most recent YouTube video, from George's YouTube Channel: Why Most People Will Never Be Millionaires What to do with a house when going through a divorce, What Baby Steps George and Jade think are most important, from the blog: How to Win With Money in 7 Baby Steps How to prioritize saving in Baby Step 3 when expecting a baby, "I'm in $100,000 debt and don't know if I should sell my rental properties", from the blog: Should I Sell My Rental Property? Why you shouldn't stop investing while paying off your home, from the blog: How Do I Invest in Retirement, Save for College, and Pay Off the Mortgage at the Same Time? "How can we best use an inheritance when working the Baby Steps?" from the blog: What to Do With an Inheritance Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Here's an EveryDollar deal just for our listeners: get a 14-day free trial PLUS $15 off your first year of premium. Click the link below and start budgeting today! www.everydollar.com/jade Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined this hour by the incredible Jade Warshaw. There will never be another one. It's the only one. She's that unique and special. And we are happy to take your calls today about life, money and everything in between. The number to call is 888-825-5225. That's 888-825-5225. George, I feel the same way about you. Wow.

Thank you. That means you always come up with fun adjectives. I don't have it today. The parsimonious George Camel. We've been hanging out with Ken Coleman too long. We're coming up with $10 words. Well, Jade, as we get the phones going, I uploaded this video today on my YouTube channel.

It was called Why Most People Will Never Be Millionaires. And I broke down the four mistakes people make when it comes to building wealth and investing. I love that. And I've never seen a more aggressive, controversial comment section. I mean, I'm sure the people were feeling attacked, George. Wow. Let's be honest. I just defined what a millionaire is and I about exploded the internet by accident. Can you tell us more? Like even I'm like, tell me more. She's so intrigued.

You'll have to subscribe to my YouTube channel to find out. Well, here's the thing. As I opened the video, I said, let's just be clear what a millionaire is because some of y'all are confused out there. Yes, clear it up. A millionaire is not someone with a million dollar salary. Right. A millionaire is someone who has a net worth of $1 million or more.

Right. Assets minus liabilities equals net worth. Hey, well, for the people who are like, hey, I'm a first time listener. I'm just getting this money thing. Explain assets versus liabilities. Yes. So assets are things that you own,

like your house, your car, your bank account, your retirement accounts, all of those count as assets. That's right. Your liabilities count as assets. That's right. Your liabilities are your debts. That's right. So it's that simple. All of the debts. What you own minus what you owe equals your net worth.

And I cannot tell you how many people said, well, I don't think he should count his house as part of his net worth because that's not an income producing asset. And they're trying to get all smart with me, Jade. And I don't have the heart or the energy. I think I'm getting too old and curmudgeonly to have to fight back in the comment section you want to know what they're just dead wrong and it's their american right yeah it's their right to be wrong that's right george and why wouldn't they want you to be right i don't understand why the argument i like solutions where more people get to get involved on the action.

You lost everyone. You said, I like solutions. People like drama and they like problems and they want to wallow and complain and tell you all the reasons why they can't. George, you are snappy right now and I am for it. I'm for this. It's going to be a hot show. Yeah, this is my favorite version.

I'm done with cynicism. Because I was that guy. I was the troll in the comments section going, it'll never be me, and I don't want anyone else to have it either. And now I'm just going like, I know too much to be cynical. I know what hope can do for people. And I want to give you guys a taste of that. If you want to call on the show, let's talk about it. Let's do it.

George, I love that. And by the way, if you haven't checked out George's YouTube channel, you really should. I feel like this is the george everybody needs to see this is all facets of george snappy smart george is one of the smartest people i know um so kind yeah the only reason i'm not saying you're the smartest is because i don't want to insult some people who might be listening right now dave ramsey, namely Dave Ramsey. No, I appreciate that. $5 to Venmo on Jade goes a long way, it turns out. So thank you for that. You're welcome. Let's get to the phones. Megan joins us in Atlanta up first. Megan, welcome to the show.

Hi, thank you so much for taking my call. I love you all so much. I'm looking for your wisdom today. Sure. How can we help? So I am finalizing my divorce. First of all, thank you so much for all of the videos on financial abuse and financial infidelity from previous callers. That really helps to validate my situation and know that I'm making the best choice. I'm so sorry, Megan. Yeah, thank you. Thank you so much. But I'm at a point where I want to be the wisest possible

with how I pay out my ex. So I did decide to keep the house. We already went through mediation and negotiated that. And I need to pay him out $185,000. I have a few different options. I have a spreadsheet in front of me, so I'm just trying to figure out the wisest choice. Sure.

So what to know about our current mortgage, we only have 17 years left on it. We have a 2% interest rate, which is just killing me to get rid of. And we owe about $190,000. So that's why I'm a little hesitant to just, you know, go and do a cash out refinance. That being said, a cash out refinance, changing it to a 30-year loan, taking out that 185 is option number one with the current mortgage interest rates. Obviously, that option is heartbreaking.

Let me know if you have questions because I'm kind of running through everything really quickly. Sure. So that's option number one is cash out refi. That's option number one. Option number two? Option number two would be to get a home equity line of credit for that $185. I currently have zero debt, zero student loans,

zero credit cards, zero car notes, anything like that. So I could get a pretty good interest rate on that. I've already talked to the bank, but I have a hesitancy about taking out another loan. And it might just be in my head from, you know, not wanting to take out loans. And then my third option is I think the most controversial, which I've been going back and forth on quite a bit and running a lot of numbers, which would be withdrawing 200 K out of my 401k. Um, and then, yes. And then, um, essentially taking, um, just like working really hard to get the tax penalties paid by tax time and then throwing just a ton in my 401k after I'm done. I'm lucky enough that my employer does a 10% match. And so

I feel like I could recoup that. You're going to spend your whole life trying to get back to where you were in that 401k. I don't want that for you. And this is why I want your wisdom. So yeah. You're between a rock, a hard place, and a really dumb place. Yeah. And so we want to help you, maybe give you a fourth option. Hey, let me ask you. So you're wanting to keep, can I ask more questions about why you want to keep this house and not do a fresh start? Is it kids?

Can you give me more information on that? Yeah, good question. So it's kids, it's school district, and it's also with the housing market right now. I mean, if I were to take that 180 plus our equity, it would be impossible for me to get a house anywhere near what I currently have for when I'm paying for it. So I mean, it seems like a very wise choice. It's worth almost eight. And so yeah, it just, it felt like the better long-term financial plan, but I mean, feel free to poke holes in it. Well, I know I don't like option two and three. Those are just absolutely the HELOC and the 401k is definitely not it in my book. Yeah. Option one is your best

option so far, but I'm with Jade on wondering, can we actually afford this house if this is where we're at? If these are the options, I would love for you to do a cash out refi and stick to a 15 year. Obviously that's going to be tough with just your single income, correct? I can do it. So I make 150,000. Like I said, I have literally zero debt besides this mortgage note. So I can do it. I've not only been pre-approved, like I've done all the numbers. Oh, good. Something about losing that 2% interest rate, that just breaks my heart. I know. But Meg, I'm going to tell you right now, that is your best bet. And if the rates go down, you can refinance later on. But I'm not going to argue over 2% versus 6%. I'm going to do this because it's the right thing to do. And it's

the least harmful to your financial future. Thanks for the call. 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 helped them stay true to their values and avoid miles of red tape.

And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. Welcome back to The Ramsey Show. I'm George Camel, Ramsey personality, joined by my colleague, Jade Warshaw. There we go. Open phones at

888-825-5225. You jump in if you need some confirmation, affirmation, inspiration, motivation from Jade. That's her specialty. Well, you're preaching over there. She pumps me up every day. The best. All right, let's get to our question of the day first, Jade. It comes from Neighborly. They're your hub for home services here in Tennessee. We've got Mosquito the size of turkey buzzards here. They're frightening.

They're about as big as me. But Neighborly's trusted service brands like Mosquito Joe help make sure anyone, even in the South, can enjoy their backyard all summer. So go to Neighborly.com to find providers near you. That's right. Today's question of the day comes from the Ramsey Steps Facebook group. Great communities there on Facebook. And this person says, what baby step would you vote as the most important?

Whoa. It's like picking our favorite child i know um that's a fun question this is interesting you know this is very this is opinion this is put it out there yes this is op-ed um i would say that this is like my my they're all important it's very hard for me i mean they build on each other right because it's a plan so it's like one thing has to be true in order for the next thing to be true so on the one hand i'm like yes you've got to get debt free like if you get debt free that's changing your life but if you get debt free and you never save for retirement you're up a creek right so i'm going to vote the non-vote vote.

You can't do that. Okay, well, okay. Baby step two is my favorite. Oh, okay. But it's not the most important. She put it out there. It's my favorite, but it's not the most important. That's a good way to say it.

They said most important though, so you have to choose. Okay, well, George, maybe you should just choose. Well, for those listening, like what in the tarnation are they talking about right now? Let me just lay them out real quick so that you can cast your vote, America. Baby step one, thousand dollar starter emergency fund. Baby step two, get out of all consumer debt using the debt snowball method. Baby step three, fully funded emergency fund of three to six months of expenses. Baby step four, invest 15% of your household income into retirement. Baby step five, put away some money for the kids' college funds. Then baby step six, pay off the house early.

And then baby step seven, build wealth and give and be outrageously generous. So, I mean, you can hear that. You're like, which one is the most important? I'm going to say the most important for your financial future is baby step four. Yes. Investing, building wealth, being able to retire with dignity, because that is going to give you a great life, you know, 20 years from now for the next 30 years after that. Yeah. But baby step two, I think is the most, is my most favorite. And I think the most paradigm shift. Yeah. And the most freeing.

Yes. Yeah. You know, and yeah, that's, that's a really good point, George, because it's the most freeing yes yeah you know and yeah that's that's a really good point george because here's the thing and here's where i kind of take this is a lot of people will look at the baby steps and they'll go i think these are the most important i think it's the most important to do baby steps one through three and then they kind of like go off on a tangent and do their own thing and it's like no you don't do the baby steps based on the ones you think are your favorite or the ones you think are going to be the most important. You choose to work the plan or you choose not to work the plan. That's the way I, because, you know, there's so many things, George, that we ask people

to do along the way because we know where they're headed. Like we say, pause your investing while you're paying off debt. Controversial. It's controversial. But we are saying that because we know what comes next. So if you're the person who's like, oh, OK, I'm going to pay off my debt, but you're like lollygagging through it. You're not being intense like we tell you to. These are the things that I'm weighing in my mind. They're all important. And if you're going to do this plan, do this plan. I'm going to render this question as a not good question. Oh, wow. Shots fired at the Baby Steps Facebook group. I'm saying the question that you need to be asking is not this one.

I'm going to try to figure out a better question. That's fair. Instead of saying what Baby Step do you vote is most important, maybe you should ask. The one that you're on. Come on, George. I just totally went philosophical on you. That's right. The most important one is where you need to be at.

If you're in debt, baby step two is the most important. Come on, somebody. If you have no emergency savings, but you don't have any debt, baby step three is the most important. I will say that- Be where your feet are. The Ramsey plan, what I love about it is it's more than about money. It's about transformation.

It's about living counter-culturally. And for that, I will say Baby Step 2 is the crux of the plan. 100%. Most people will go through their life and never pay off all their debt. Their debt will... They'll always have a car note. And it's the most confusing. It's the most like, wait, what?

You want me to get out of all debt? Like cut up the credit cards? Yeah. And Romans 12 too, do not be conformed to the pattern of this world. Be transformed by the renewing of your mind. That's right. Baby step two is the most transformational renewing of the mind paradigm shift I can think of when you go, oh my gosh, this whole world of debt and the culture and the marketing and consumerism, it's like we're living in the simulation. Yeah. And if we can just unplug

and go, I don't have to be a part of that. I can live on my terms. I can live with freedom and peace and joy and margin and options and meaning. That is what getting out of debt does for you. And then the next steps are kind of like, okay, cool. Now we can have some money in the bank and be investing for the future and kind of get these things on autopilot. Yeah. Yeah. I agree with you wholeheartedly.

I think the next controversy, like baby step 2, definitely different from what culture would teach. I even think Baby Step 6 a little bit. The idea of paying off your home mortgage early and the way we teach a 15-year fixed rate mortgage is what we prefer. In this economy, Jade, are you kidding me? They live in an alternate universe where you can get a 15-year. Yes, math hasn't changed since history has began. I'm sorry. So that's a very controversial one. It is. What do you think is the hardest one? Oh, I think baby step three is the hardest because you're done paying for the past,

but you're not quite ready to build for the future. Yes. And it's just this not non-excitement midway point in the marathon. There's no one's cheering you on. There's no live band. You're just kind of on your own. Yeah. And I think after you've paid off debt during baby step two, you've spent all this time sacrificing. Let's be honest.

You want to give yourself a little something, something. And you're like, I don't. Come on. Can I just. Not quite time to treat yourself. That's right. It's not time to treat yourself. Oh, my goodness.

That's a fun conversation. It is. Thank you for indulging us. All right. Hector's not time to treat yourself. Oh my goodness. That's a fun conversation. It is. Thank you for indulging us. All right. Hector is up next in San Antonio. Hector, welcome to the show. Hello. Hey, how can we help? Hey, well, so thanks for taking my call. I've been listening to the show for about a year and my wife and I have just finished paying off her vehicle. So as of last Friday, we are completely debt-free. Yeah, it feels good. It feels really good. And the next thing, I guess, because now we don't make a whole lot.

Her and I both work full-time. She's about to have to quit work for a little while because our first child is going to be born next month. Congrats. Thank you. Thank you. We're really excited. I just don't know what to do next. I had an emergency savings, and unfortunately, at our home, the well burned up on our property, so I had to replace the entire system, and that set my emergency savings back. And now I have about $3,600 in cash

and about another $1,000 in our savings account in the bank. Okay, so you've got no debt, but you have $4,600 liquid cash, and you're about to have a baby. Yeah. Okay, so that puts you at baby step three, but you have 4,600 bucks liquid cash, and you're about to have a baby. Yeah. Okay. So that puts you at baby step three, but you're also in what we call stork mode, because this baby's coming, and we've got to make sure mom and baby are home healthy, safe, and we have the funds to cover anything that comes up. And so it kind of is a duel.

You're doing baby step three, but really you're saving for mom and baby right now, and if mom and baby are safe and good and healthy, then that can be your baby step so just start building start saving up stack up cash don't use it don't touch it yeah yeah that's yeah that's the hard part right yeah we were just talking about how baby step three is the hardest but when it comes to having a baby when it comes to having a baby like nothing gives you more peace than knowing all, like we're not focusing on anything else. It's just the wellbeing of the situation. And once baby is born at home, most people hit their deductible and have to at least meet that. So knowing that you've got that money saved up and ready is going to be very helpful. Yeah. So however much money you can save up in the next month before baby gets here,

that's your next goal. Okay. It's that simple and it's that hard. I wish I had some life-changing, like here's the secret sauce, man. Just save up. If you gotta get side jobs, if you gotta sell stuff, now is the time to do it,

to get your financial foundation in place. And then hopefully I'm praying that mom and baby are home safe. And that just keep, that stays as your emergency fund. You keep building on top of that till you get to three to six months. Then we investing that's right just in time for baby that's fun man you're changing your family tree proud of you guys this is the ramsey show welcome back to the ramsey show we are giving you some money advice and it's free. So take

that into consideration when you call. The number is 888-825-5225. I'm George Campbell, joined by Jade Warshaw this hour. And if you're a new listener and you want to dive deeper into the Ramsey baby steps that we've been talking about, you can go to ramseysolutions.com and click on the Get Started button. Our team has created a really cool tool that will help you figure out what the next best step is for your financial journey based on where you're at today. So go to ramseysolutions.com and click on Get Started. Jonathan is up next in my hometown, Boston, Massachusetts. What's going on, Jonathan? How are you, sir? Very good. How are you? Very good. Thank you for taking my call. Sure. Um, I'm here from, uh, from,

I'm an hour from Boston and, um, I, I love real estate, but I'm currently a truck driver and I, um, um, I got two rental properties and I, and, but I'm in $100,000 of debt. And I was wondering if I should just stick to baby step number two and pay off slowly this debt of $100,000, or if I should just sell one of these properties because I have a good amount of equity and just make that step quicker to be debt-free. Is that $100K, is that consumer debt or is that including any debt on the rentals as well? That's, no, that's like 20k is is i owe for my dad that i borrowed

for the renovation um 40 is credit card um and the rest is like uh it's all split up in in different little things like personal loans or what? The rest is, I have... Sorry, you didn't answer my question. So the renos are, do you pay cash for the renos? Or I'm sorry, for the rentals? No, no, no, they're not. They're both, they're both financed. Okay. What do you owe on each rental? One of them I owe $250,000, and the other one I owe $500,000. Oh, my goodness. Goodness gracious. Are you even cash flowing on this stuff?

It sounds like you're probably breaking even if you're lucky. I don't even care. them. My mortgage is $1,700, and I get around like three and a half. I just feel like you're one misstep away from this house of cards crumbling. Yeah. With $100,000 in debt. And the $40,000 in credit cards, it's probably what, 20-something percent interest on that? Yeah, yeah. Trust me. That's why i'm calling because i'm very stressed out i i've always wanted to get into real estate but i've never had

somebody to guide me so so um i did like the opposite of what they we've all done dumb and dave did it with a whole lot more zeros than we'll ever know so it's okay. We want to help you, and you can undo some of this, and I think selling the rentals is probably part of that, because right now you need a clean slate. No, I know it is, George. Not I think, because— I mean, what's your income? My income right now, it's about $50K a year.

Yeah, these rentals are gone, man. Yeah. No, these rentals are gone, man. Yeah. No, no. If you were making $300,000, I'd be like, all right, let's pay off this $100,000. But $50,000, you're going to be crawling for years trying to pay off this debt. Yeah, so it's like me and my dad, we kind of like, we bought them together. Both houses, we bought them together. In both of your names?

No, just, it's all in my name. It's all in my name. So this is all your debt? Yeah, so this is all my debt. And me and my dad are like, we were working hard on doing the baby step number two to pay off this debt. Why is he involved with your debt payoff? Well, because he lives in one of the properties and he bought it with me as well.

So he's paying you rent? No, no. This is real confusing. You said he lives in one. So he's living in one and you're not getting the money every month in his rent. He's just what's he doing with that money that he would have paid for you in rent? debt that we owe because we had to renovate and it was on pandemic and our budget went over. So we had to borrow money. I'm not mad at you for wanting to get into real estate. I think a lot of people do. I think a lot of people see it as a quick path to earning money or a quick path to wealth, but there's a right and a wrong way to do it as you're learning. And I'm sure that you feel an enormous weight, Jonathan, right? To know that you owe 500K, 250K and another 100K in debt. And I've got to believe, and you can correct me if

I'm wrong, but because you're tangled up in this with your dad, with a family member, there's probably a lot of pressure, right? To make this right and get right side up in this with your dad with a family member there's probably a lot of pressure right to make this right and get right side up on this and there's some sunk cost fallacy because you guys have sunk a lot of money into this stuff and now to back out of all of it that's right like no we just got to keep going we'll crawl our way out we'll dig a hole all the way through yeah and well that's why it's a fallacy because just because you got a hold of it doesn't mean you can't stop, go a different direction and sell off this property. And honestly, what George said, I 100 percent agree. I think that these rentals need to go on the market today.

Both of them. If you were to sell them today, what would you make off of each one? On the one that I that I owe 500, which is it's a four family on an acre lot here in a really good uh city okay um i could get i could get like 400 to 500 um in equity off that one yes in equity and you would have to split it hold on and'm guessing 50% has to go to your dad. Is that the agreement? Yeah. Yeah. That would be the, that'd be. Did he pay half the money down? Yes. Yes. Uh-huh. Okay. So let's, let's assume that I'm, if you said this is a deal you did with your dad,

I'm assuming it's 50-50s. So if you got $400, then you'd get to take home $200 of that. You're saying this thing would sell for $900,000? It would sell for a million. I already got it. It would sell for a million, and you're saying after the mortgage is paid off, after fees are taken out, you would walk away with $400 total? Oh, yeah.

With real estate fee, no. Okay. I would factor all that in, start to do the math. But either way, if you sold one or both of these, you could pay off all of your debt and probably start to knock out the other rental if you just sold this one. Yeah, exactly. So the other one, it's a three family and that one um i owe right now around 250 on it okay and in in that one i could get 400 like 500 max okay and then split with your dad assuming so you'd be bringing home about 250 so what i really want you to go away from this call understanding is that a need to sell off these properties you need to get debt free as soon as these properties sell but very closely underneath

that i really want to make sure that you and your dad are very clear on what this deal is because in asking you it kind of sounds like oh yeah that yeah that sounds about right. I think we said that. Yeah. We need some real clear terms written in a contract. And under overarching all of this, I understand that you and your dad went into this as an agreement or a deal or something that you were going to do together. Sounds like nothing's in writing. And if you're feeling some sort of pressure from your dad

to hang on to these properties, because maybe he's living in one or he feels like he's got money to make off of it that is something that you guys really need to get into because all of this is in your name right so if you want to sell them you can right are you feeling pressure yes um yeah well um i feel pressure because like uh I live in one of the units too. So where am I going to put me and my family and my mom and my dad? You're going to have plenty of cash after you sell these to take care of new living situations for you and then your dad. That's up to him to decide what he does with his portion of the cash. Yeah, maybe get a primary residence where you just live there.

And then if you want to buy investment property later, do it with cash. But right now I'm looking at a guy making 50K who owes 850 and I can't breathe, man. Okay. Let's restart and do this the right way. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell joined by Jade Warshaw this hour. Open phones at 888-825-5225. Quick reminder that we're deep in summertime now, and I love there's a lobby full of wonderful people who travel from all over the country to come hang out with us. Maybe it's a pit stop. Maybe it's the destination. But I want to invite you all to come by. A lot of people don't know. Look, they're all waving if you're watching on YouTube.

You can come by and just hang out in the headquarters. We've got free cookies and baked goods in the coffee shop at Baker Street. We've got a timeline wall museum. It's a whole experience. And Nashville is a great city to visit to begin with. So for no other reason than that. But we'd love for you to come by and walk away with a free mug, free cookies, smiles, and come see us through the glass like zoo animals. It's a good time. Well, we also go out there and talk with the people, George.

That's right. Twice an hour, we'll go out, we'll take pictures and sign things and have a good time. I love meeting everyone, hearing your stories. So there's your invitation. Don't say I didn't invite you. There it is. Let's get to the phones. Leroy is up next in Denver. Leroy, welcome to the show. Yes, thanks for taking my call. Can you hear me okay? Yeah. Perfect. So I got a quick question. So I'm looking to pay my mortgage off. We've paid off all our debt, and right now we're doing extra payments. My question is, I'm considering reducing my contribution to my

401k. Right now I'm contributing 20%. And I'm contemplating reducing that down to like 10% to get more money on the check and pay more towards my mortgage. Right now, I'm at under $100,000 to pay off our mortgage. So the end is getting, we're getting closer, and I'm eagerly wanting to just pay it off. And I was wondering if you think that'd be a good idea. Cool. It's a great question. And I love that you're a gun hoe about paying this thing off, and you're seeing the light at the end of the tunnel, and you're getting a little ants antsy and that can cause us to do some extreme things. And you've been extreme on the investing side. And I say we split the difference and come down to 15%. Yeah, I love that idea. 15. would suggest 15% of your gross, and then that's going to obviously give you 5% more than what you had before to put towards retirement, and you're still, I'm sorry, to put towards your mortgage,

and you're able to be as intense as you'd like to be with that. So what would that do to the mortgage? If you went down to 15%, how much money would that free up? How much faster would it speed up this home payoff? So it'll free up about $1,000 a month extra. That's great. Just by going 5%? Yeah. Wow. You guys must have an awesome income. We're doing really well. So all my income goes to the bills. My wife's income goes to the mortgage. So we make about a payment and a half each month, and I'd like to double it. And if I can get it paid off in like a year or maybe two years, then we become completely debt-free. Yeah, then we can really ramp up investing. Exactly. So you're saying

drop it down to at least 15%? Just right at 15% until the house is paid off, and then So you're saying drop it down to at least 15%? Just right at 15% until the house is paid off. And then once you're there, you can bump it up to 20%, 25%, 35%. Do what you want. Increase your giving, increase some of your spending and enjoy some of it. And I think that's a well-balanced approach to all of this. That's exciting. You're going to be there. You're going to be there in a year, you said? I'd like to. I mean, I'd like to go at it aggressively.

Right now, if I can do $2,000 a month, I can probably get a payoff in about three years. That's great. How old are you, Leroy? I just turned 50. Way to go. Way to go. That's exciting stuff. Huge part of your wealth-building journey, and it's going to help you retire with dignity, and maybe even early at this point. I mean, imagine having no house

payment and being able to invest 30% of your income. That's the plan. We bumped it up to 20 when the stock tanked, and we've been at it at 20% for a little over a year and a half, and it's grown pretty good. We're happy where we're at. So I'm to the point where I've got enough in there to where I can cut back a little bit and just go after the mortgage to be completely debt-free. That's awesome. I'm proud of you. And you've got some catch-up contributions too once you hit 50, which is going to only help your wealth building journey at this point. So love that. You guys are changing family tree, man. Thanks for the question. Bree is up next in Indianapolis. Bree, welcome to the Ramsey Show. Hi, thank you. Yeah,

what's going on? My husband and I recently lost my in-laws. Both of them two months of each other. Oh my goodness. But we are going to be inheriting some money from them and we just kind of wanted to know what was the next step um we've never inherited money before and so we just want to make sure we're doing it right um we're going to be getting about eighty thousand dollars cash and then um i think around 260 or so in investments um we just weren't sure. The only debt we have so far is, or currently, is our mortgage. So we were trying to decide, do we roll those investments into another investment account or leave those alone? Or do we go to paying off our mortgage? Just kind of what's the next step? Yeah, great question. Well, I'm so

sorry to hear about your in-laws. Was it just a health-related old age or what happened? One was a complete surprise, had heart surgery and then ended up with MRSA and passed away. And then my mother-in-law had been fighting a year-long battle with cancer. Wow. So it was just a lot in a couple months. Yeah. Well, I hope you guys leave some space to grieve and you're wanting to approach this wisely, but we always say don't make any big moves after something like this happens, something traumatic, something you've got to grieve. So it's okay to just let that money sit for six months in a savings account or in the investment account. So don't feel like we've got to do something with this now. Next, what is left on your mortgage? We've got $300,000 left.

Okay. And you have an emergency fund and no consumer debt? Yes. Nope. Great. And you're already investing 15%? Yes. We've been investing for probably 15 years now, So we've got a pretty decent investment, like kind of portfolio saved up. Cool. And do you know what these investments are that you are inheriting? I think that's, we're meeting with them next week. That's why I wanted to call and get your guys' opinion and have a heads up before I went in there, but I believe they're IRAs. All right. So I would obviously look into the tax implications. If you did, you know, withdraw this money, you want to make sure you do it wisely. So I would kind of set up a team around you as you inherit this money and you want to walk wisely. Number one, get a

good investment pro in your corner. We call them SmartVestor pros, and we can connect you with one at ramseysolutions.com. The other that you can also get connected with there is a tax pro to understand all of the tax implications and what this means with the IRS come tax time. Because I don't want you guys to have a huge burden you weren't expecting when you cashed it out, paid off the mortgage, and we're celebrating. And now the IRS is like, you owe us $60,000. And that was our other fear because I didn't know what all came with that. And I know different states have different taxes on inheritance. Exactly. So everything's going to be state-specific, you know, depending on what kind of investments

and if taxes have already been paid on those investments, you know, with a Roth account, for example, there'll be different implications. So just make sure you do your due diligence there. But my goal for you guys would be to get that house paid off. That's kind of where we're at too is, man, we're so close and we were planning on having it paid off within eight to ten years. We've been paying double payments for quite a while. Awesome. You guys sound like you have a fantastic income.

Well, it's way better than it's ever been. My husband, between the two of us, we make like $95,000. Great job. It's not a lot, but we just, like,, the baby steps and you guys have definitely changed our lives. We started following you when we got married and have just been really on those baby steps. And we're trying to get our house paid off and moving on to that next step. Very good. Well, you know, this...

I think this will get us there, hopefully, sometime. And it's a silver lining. What a blessing and legacy they left you guys. Instead of a pile of mess, they left you with this incredible blessing that propels your financial future and helps you guys leave a legacy. We are so, so thankful for that because they were probably two of the most selfless people that I know and did everything for their family. And so I know this is a huge blessing and we want to honor that for them and do what we can to keep our family stable and secure.

Incredible. Incredible stuff. Well, it sounds like you guys are on track financially. I would use as much of that money as you can to pay off this mortgage and looking into all the implications and taxes and all that. But once you do that, you'll still have money left over. So keep a lot of that investments and keep it rolling. Way to go. Thanks so much for the call. That puts this hour of the Ramsey Show in the books. My thanks to my co-host, Jade Warshaw, all the folks in the booth keeping the

show afloat, and you, America. Thank you for listening. We'll be back before you know it. Hey, George Camel here. If you love the show and you want a deeper dive on your money journey, we've got a weekly newsletter that gives you helpful articles and tips on following the Ramsey way. Just go to RamseySolutions.com today to sign up for the newsletter. Again, that's RamseySolutions.com to sign up for our weekly newsletter.