The Ramsey Show - App - You’re Out of Debt, Now What? (Hour 2)

Episode Date: June 30, 2022

Dave Ramsey & Rachel Cruze discuss: Doing Baby Steps 4, 5 & 6 all at once, Paying off rental property, Preparing to live off one income, Selling a business. 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 folks build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, Ramsey Personality, number one best-selling author, and my daughter is my co-host today. Open phones at 888-825-5225. That's 888-825-5225. Jeff starts off this hour in Indianapolis. Hi, Jeff. How are you?

Doing great. Thanks for taking my call Hi, Jeff. How are you? Doing great. Thanks for taking my call today. Sure. What's up? So my wife and I are on baby steps four, five, and six. We have three kids, a senior in high school, a sophomore, and an eighth grader. And we have a pretty good retirement built up. And we have about $130,000 left on our mortgage. And we were just

wondering, you know, what kind of is our next step? You know, how do we split? Do we split our money or do we kind of focus it in one of those three areas over the next six years? College is coming at you like a freight train, huh? Yes, sir. What do you have to say for that, Jeff? So we have about 10 for each kid and probably 20 for our oldest. We think that her college will probably be between 5 and 10 with her guaranteed scholarships to an in-state school so we could essentially finance that pretty pretty easily what's your household income over the next

um it's usually around 120 this year it'll probably be up to 160 wide ago good okay well it sounds like you're making good college choices in terms of choosing one that's affordable. That's very wise. I mean, if I woke up in your shoes, the college would be my first concern, but it doesn't necessarily mean that it has to get all the math. I just want to make sure that that box is checked and I've got a way to do it before I move on to something. In other words, I wouldn't've got a way to do it before I move on to something. In other words, I wouldn't pay extra on the house until I knew I had the kids covered.

Okay. That's why it's five instead of six. Yeah, what about throwing more into retirement because the market's on sale? That'd be tempting, but before I did that, I'd want to take care of my kids' college. Fifteen percent of your income going into retirement and then let's i would that's why it's four and then five is kids college and um you know now if you if you have said okay we make 160 and we can cash flow this if we do this this and this then a b and c then go do a b and c and cash flow it and that's the

kid getting scholarships college choice kids going to work while they're in school. None of those are bad things. It's not child abuse. But I want to know that we have a way mathematically figured out, and it's not just we hope we can do it. We've actually calculated it out, projected the budget out, and said this is how the math is going to flow for each of the three kids to get through school once you've got that then i would move and start paying off my house yeah then the wiggle

room starts to happen once you have mapped it out and i think that that's a powerful thing too jeff of what he just said though when you put facts on paper like when you and your wife sit down and you guys just plan out hey in the next five years, here's what 22, 23, 24, 25 look like and project out whether it's income, but the big chunks and you start to see it, then that kind of gives you more breathing room to be like, okay, we'll set that track going and then we're going to take this money over here and we feel good about throwing that extra on the house because we know that that's taken care of. But it just gives you kind of that peace of mind and answers the question because you

guys may look down and be like, gosh like you know because of the kids college maybe we pause on paying off the house early yeah uh may not be able to pay extra may not be able to pay extra especially when like like how old's the youngest one uh he's an eighth grader okay so you're you're gonna have two in max at the same time, but you're going to have several years of two people on the payroll. Absolutely. Yeah, so you can map that cash flow out over the next eight years, right? Yes.

And so that's just exactly like Rachel's saying there, and you can just put the – it won't take an hour. I mean, you sit down and do it, turn TV off and just lay it out on a yellow pad it's not hard but you you're gonna but in that you're gonna make assumptions about where they're going to school and so you can go and start communicating to all three of them this is where you're going to school yeah which is exactly what we do the boundary conversation yeah that's what we. Or if you want to go somewhere else, you've got to pay the difference, which was a conversation we had. So the other option is do we try to hammer down on the mortgage

and get it paid off in three years and then... You'll have kids in school. You've got a senior, right? Correct. But, again, I think her cost is going to be around $5,000 a year, which we have covered. Okay. We have four years of her school covered. Check number one.

Box check one. Box check two. Box check three. And then you can play with the variable of jumping in and knocking off the house, and that increases your cash flow, which enables you to be more able to pay to cash flow college. That makes me more nervous, though, than just having it covered and then reaching over and paying off the house. You're going to get to all three.

You're going to be wealthy, you're going to have a paid-for house, and you're going to get all three paid for. But you just need to have a game plan laid out to do it, and you decide, you're called asking what the priorities are. And Jeff, that may be the priorities are maybe the case like i don't know yeah you may look and be like okay daughter's taken care of 20 000 that's all she needs so before the next one gets to college and he's gonna go to in-state school and have that he only needs that okay that's cover we can do that i mean yeah you can kind of map it out and you may be able to pay off the house in three years if you want to do that but i wouldn't't put the kid, make sure that you're not rocking over the edge of the cliff

on the kid's college. Because if I'm choosing between paying off my house two years earlier versus paying cash for the kid's college, there's no choice here. You pay off the kid's college first before you pay off the house two years early. You're going to get it paid off. It's just a matter of when. So it's okay, but just make sure you've got that math laid out. I mean, if you told me you had $200,000 in the bank right now

and you're just going to write a check and pay off the house, I'd say, okay, go ahead and do it. Because we know we can get to the college, right? That's the thing. But you don't, and that's not where you are. So map it out, map it out, map it out. All you've got to do is be intentional here. You're going to make good choices.

I can tell from talking to you for 10 minutes you're going to figure it out. It's not like this. It's just a math riddle of sorts, and it's not a complicated one. It's just flow. It's the, you know, here's September, here's October. I mean, here's September, here's January. You know, here's April, three tuition payments or two tuition payments or whatever they are every year. And here's dormober i mean here's september here's january you know here's april three tuition payments or two tuition payments or whatever they are every year and here's dorm or not dorm and

here's the school cost today and here's how much we've got and here's what the state scholarships are and and you just map all that in there and it's there's about six variables and you can pull it together it's not going to be rocket science it's really not it's not it doesn't even require a spreadsheet you can do it with you know a calculator on your phone and your yellow pad if you want to. So it's not that hard. But the good news, you're the secret sauce for figuring this out, not some formula or adherence to the baby steps or something like that. You are the sauce, and you've got what it takes to do this.

You're going to do it. I'm proud of you. Very, very well done. That's a good call, Rachel. That's a good dad. Jeff, you're a good dad. He is a good dad. Your kids better say, thanks, Dad.

Yeah. They're going to look back later and say, they may not like where he lets them go to school, but, oh, well, life goes on. This is The Ramsey Show. I just saw a study that really made me sad. It showed that families owning life insurance in the U.S. was at its lowest point since the 1970s. After what we've been through the past few years,

I'm just lost on how people don't make this more of a priority. How are you going to make sure your family needs are met if something happens to you? This is why getting term life is an absolute necessity. Rates have never been cheaper, and the whole process to apply is pretty simple, with many companies not even requiring an exam anymore. This is why I send you to Zander Insurance, and I have for almost 25 years. They'll make sure you get the right protection at the lowest cost possible, and they're there for you and your family every day. I challenge all of you to make sure your families are protected. It needs to be a top priority.

Call Zander at 800-356-4282 or visit zander.com. That's 800-changing. Rachel Cruz, Ramsey Personality, is my co-host today. If you've taken Financial Peace University, you know it's life-changing, and that makes it really tough to watch your friends and family struggle with money when you know there's an actual way to do it. There's hope. But you can help them. You can help them change their family tree just like you did,

and everything you need to win with money is in a financial peace university gift card they'll learn our proven money plan with financial peace university just like you did and then they'll put that plan into action with the premium version of every dollar and when they get stuck they can talk to our team of financial coaches it's all in there with a financial peace university gift card this summer share the hope you've discovered for your life and that money. Get your Financial Peace University gift card at ramseysolutions.com slash gift. That's ramseysolutions.com slash gift. You jump in, we'll talk about your life and your money.

Rachel Cruz is here. Terry is with us. Terry is in San Diego. Hi, Terry. How are you? Hello, Dave. Hello, Rachel. Thanks for taking my call. First-time caller, long-time listener. Sure. What's up? Well, what I've got, Dave, is I've got a rental house. This was a house that my wife and I bought a long, long time ago.

We moved on to a bigger house and everything else, and right now it's the only debt we have. About, you know, 2016, when they changed the tax laws and they went to the standard deduction, I went ahead, that house had been free and clear. I took out a loan against that house and paid off my home mortgage. Right now, the loan on the rental house is at 3.5%. Right now, I'm 57 years old, and I'm approaching retirement, and I'm toying with the idea of paying this mortgage off. But at 3.5%, I don't know if it's the right thing to do. Terry, how much money do you guys have just cash flowed since this is your only debt?

Well, this is the only debt. Our gross family income is about $300,000 a year. We fully fund our retirements, our 401Ks. I do a backdoor Roth. What's your net worth? You know, our net worth right now is probably around $3 million. That's all of our... And the balance on the rental house is what?

$320,000. Okay. Well, you've done a wonderful job. Congratulations. Well, thanks. I assume you did not inherit this money. I assume it came from your investing and saving. Exactly.

Good. Very well done. I'm proud of you. Good work. So let's first establish that paying off this mortgage or not paying off this mortgage is not going to bankrupt you, nor is it going to make you wealthy. You're already wealthy. Understood. So this question is, in a sense, virtually irrelevant.

But it's a fun discussion to have, so I'd love to have it, okay? Because it's not going to make you or break you is my point. I understand. Okay. So now, having said that, here's what I have discovered. And I discovered this after I went broke in real estate. And I love real estate. And real estate people like me that grew up in a real estate household,

one of the things they do is they take you and they break your risk meter so you have no measurement no ability to measure risk anymore and so you just borrow out your eyeballs because you say at three and a half percent how could this possibly go wrong and you just borrow up and on up and on up and on up yours is so small it's irrelevant as a percentage of your world okay it's less you know 10 of your net worth or whatever it's not you could you could burn that much money in the middle of the freeway and it won't change your life hardly at all so it's not that's that's my point earlier now having said all that i will tell you that something happens when you don't have any debt there is a sense of release that is very very real for some people it's it's so physical that they can

they literally feel it um other people it just they start making a little bit different decisions there is a weight to this it's like you're not carrying around a 300 pound weight on your back but you're walking around with an eight pound weight in your hand trying to do everything you do and when you don't have the eight pound weight in your hand anymore you're going to feel a different level a slight different level of freedom but if i strapped an eight pound weight to your hand you could do everything you do today all day long it wouldn't be the end of the world for you but you but if you took it off you're going to notice wow wow, look at that. And it's not a mathematical thing.

It's a spiritual thing, emotional thing, relational thing. And you just don't have it anymore. And there is a freedom that people do not grasp that have not been debt-free until you're debt-free. So I would challenge you to pay it off today. And if you hate it, go get you another mortgage when rates come back down. But I don't think you will. I would add that the converse is true. Not only is it liberating what I pay it off, but having the debt right now is burdensome.

And that's one reason why I'm thinking about it. It's not that I can't pay the payment, but peace of mind has a price, too. Exactly. The only thing that's getting me at 3.5%, I could take the same money that I have in the bank right now, put it into some other vehicle. If you put it in an S&P, over time, it typically would average 10% to 12%, right? And so you appear to make that spread. But what that calculation does not involve is the calculation of risk.

And it's a little tough to put an actual risk math number. And just your mental health. I mean, there's just something about when you don't have the payment. And, Terry, I won't name the person, but there was someone visiting the office the office dave and we were walking the back hallway because we were going to go do something and he stopped he was like dave's y'all were kind of chatting and he and i thought that he kind of followed from like what i know about him followed everything we teach and all that and he was like dave you know he goes you know what i did for the first time ever i paid off my house i never and and i remember thinking oh i would have assumed his house was paid off i just assumed it and he was like and everything you say he's so right once i paid it off like it just does

something to you know and y'all had this like that guy had a 10 million dollar network yes that guy totally could have paid it off and i just assumed and he was like laughing like he was laughing like dave what's your teacher's right like well you do but i've known you 15 years how come you didn't know i was right my gosh you know so it's just such a funny conversation to overhear because i thought you don't put a brand that's the thing too with money is that you don't there's not a price tag there's not a number there's not like a a logical sitting on you know black and white on paper to point to when you just have when you owe when you don't owe anything and john deloney talks about this suddenly your

body feels safe like even if it's a little bit of that eight pound weight like you're talking about with terry that it's not a big part of his world but there's still this element there of gosh i i owe something someone else still has their name on my life and when that is just gone free and clear you just can't put a price on it you can't put a price on the idea of just this absolute ultimate piece i mean you can tolerate a small amount of back pain and get to where you live with it hardly know it's there totally but boy when it's gone it's a big deal you feel it it's it's the same exact thing it falls in that category so it does add risk to your life and mathematically the risk does neutralize some of the difference

in the perceived returns the spread of the three and a half over what you could invest it in but the peace of mind the decisions that are made differently the breathing deeper the um i have less need to watch the news moment and my life is just better because of it and i'm just a little bit kinder i'm a little bit calmer all of these and those things actually end up affecting your health bill later they do affect you and they affect your marriage they affect me and you really can't it's hard to quantify it all in a simple i know you can't quantify it all in a simple math formula it would be very interesting to find out the research of over a 40-year period of time if you could do it it would be very interesting to find out the research of over a 40-year period of time

if you could do it it would be ridiculous but uh you know your stress level your anxiety level the hypothesis would be that obesity would be less uh that uh health would be better and your medical bills would be lower that would be the relationships that the percentage of divorces is smaller uh and by the way you know marriage, marriage is grand, divorce is 50 grand. I mean, just try splitting your assets and starting over. See how that works for your wealth building plan. And so, you know, that kind of stuff. So, you know, when you take out and your kids are, you know, they're having a different experience in the household.

So they're more functional and you don't spend money on kid dysfunction and whatever category that falls into as often. And so it's not to say it's perfect, but there's a whole thing here, a holistic view of this, that it'd be really interesting to see how many millions of dollars that we waste on debt-related problems that are not math. Yeah, there we go. This is The Ramsey personality is my co-host today. Open phones at 888-825-5225. If you're visiting the Nashville area, put Franklin, Tennessee on your list. We're about 10 miles south of Nashville, a suburb of Nashville.

And the Ramsey Solutions headquarters are right on the interstate. You can jump off and come and sit in our visitor center and watch the show happen. We do it from 1 to four every day central time and three hours of talk radio every day and um there's a visitor center uh all kinds of fun stuff to see and do bookstore a coffee shop that the coffee's free and the homemade chocolate chip cookies are free oh my gosh they're awesome too i mean you'll hate them you'll just you won't like them at all in the lobby by the way we're oh by the way we've usually got 50 to 200 folks watching the show every day out here and it's completely free to do all that as well luxurious or luxurious a um easy going home atmosphere out here you can hang out with it's great yeah the visitor center made it feel like there's like pamphlets and stuff around no it's just come it's wonderful it's wonderful

yeah no we don't have any pamphlets we haven't had pamphlets in years on the stage uh the debt free stage which is also in that lobby that we're talking about thus i was doing that lee and linda are with us hey guys how are you we're you? We're good. How are you? Good, Dave. How are you doing? So good to have you guys. Where do you all live? Grand Junction, Colorado.

Oh, beautiful place. Very nice. Well, welcome to Nashville. And all the way over here to do a debt-free scream. How much have you paid off? We've paid off $215,000 in about eight years. Wow. And cash flowed four kids.

Cash flowed some home improvements to house the four kids. And what was your range of income during that eight years? You know, we started at about 80,000, but then when we started having kids, Linda came home and the income dropped to 40. And now I'm finishing up about 130,000 a year. Cool. What do you do for a living? I co-own a building automation company. We do temperature control systems. Ah, a year. Cool. What do you do for a living? I co-own a building automation company. We do temperature control systems. Ah, very good. Very nice.

And I'm going to guess since it was eight years, maybe you paid off the house? We did. Yes. We're talking to weird people. That's us. Way to go, you guys. 100% debt free. How in the world does it feel to not have a payment in the world?

Oh, man. It feels amazing. It's great. Almost like we were talking about with the guy a minute ago. Amazing. How important it is that feeling is there. House and everything, man. So what in the world plugged you into all this Ramsey stuff

eight years ago? Tell us your story. So, you know, our work, we're in Grand Junction, Colorado, but we work everywhere from Breckenridge over to Telluride. So, there's multiple hours of driving to different projects, job sites. So, my father-in-law, he kind of got me into the Ramsey Show, you know, the podcast. And in 2014, when we started this, I actually hosted Financial Peace, and I've taught nine lessons. Well, thank you.

And I've had 172 people come through. Wow. Oh, my gosh. Thank you. They have paid off $450,000. So they are the real heroes. I love it. Yeah, amazing.

That's very good. Very good. A super coordinator. Wow, thank you. You're welcome. Pretty amazing. And I co-host with my father-in-law. Thanks, Dad.

He was definitely one of our big supporters. They were. They paid off their house a couple of years ago. Yeah. That's incredible. Well, having the goal of paying off your house, that's the big one, right? Yes. Obviously, getting completely consumer debt free is huge.

Yeah. And then when you go to move to the mortgage, so what caused you guys to want to do that? Was it, you know, what was the thing that was like, let's work on the house. Let's do it. We have a, we have a eight years ahead of us, but it's going to be worth it. I think my dad, my mom and dad paid off theirs. Um, and they were in their late fifties. Um, and we just kind of looked at that and we thought, you know, if they can do it, then it then we can do it um and lee was a driving force he had the vision yes and i was sort of i think the discipline is the big thing though once you get past that first hissy fit of not getting what you want

you're like wow what was hard about it because i mean here's the long time you guys and we say that you don't have to go like gazelle intense when you're paying off the home but you're because you're doing a retirement and kids call i mean mean, you know, there's other stuff happening. I think, I think once you pass that first AC fit, you're like, okay, I can say no to myself and it'll be okay. Um, and then by the time you get a couple of years down the road, you just don't even care. Like that stuff that was so important to you is now no, it's not important. Now you can do anything you want. I mean, now you got $130,000 income, not a payment in the world. That's a great perspective though

of the things that you think are important and you're like oh I need to have this I want to have this and suddenly when you deny yourself of it for so long you're like oh wow we are okay we can really survive without this stuff discipline equals freedom and the farther you get down

the easier that is to apply to yourself and to your marriage and to your home and to your children and you know it works you know, it works. That's amazing. It works. Incredible.

There were some rough years there, you know, a lot of overtime. Sure were. Some extra work in there. Yeah, overnight. Working too late, waking up early. So I don't think that's a Colorado accent. How long have you been in the States? So I've been in the States since 2005. So about 18't think that's a Colorado accent. How long have you been in the States? So I've been in the States

since 2005. So about 18 years, I guess. 17 years. From England. South of London. Oh, okay. Just south of London. I came over here to teach skiing in Utah and worked out to Colorado and we met actually at the ski resort in Utah.

This is how it ends. This is how the end of the story for the ski bum thing looks. This is what it looks like at the end of the story. They did. That dream got crushed. He's got four kids. I had to give up the ski bum. I couldn't afford it.

We call Lee the dream killer. People come into these classes, and he's like, this is week two. The dream crushing begins. His ski dream was crushed. It was crushed with reality. crushed the dreams in week two i like that that's good that's funny well done you guys very well done we're so proud of you okay when they do come into class other than crushing their dream what do you tell them the key to getting out of debt is? I just talk about, you know, the budget. Kind of, I really like your buyer beware section.

You know, don't go for the bling. Don't go for the fancy item. You know, whenever you research long enough, it turns out it's really not that good, like a Black Friday deal somewhere. It really just isn't worth it. And obviously, don't take on any more debt. And just forevering you can work extra and get rid of that debt

because it's great to be free. Well, congratulations, you guys. We're very, very proud of you. And I know your father-in-law is proud of you. It's good stuff. And thank you for leading so many other people through the process that's so powerful it's a powerful reinforcement for you while you're doing it but it's uh has the uh the side benefit of all those people got help too so it's pretty pretty incredible well done well done sir we've got a

copy of baby steps millionaires for you because that's definitely the next chapter in your story. What's this house worth? It's about $500,000. Yeah, you're getting there, huh? All right. Good, good, good. I love it. And a copy of Total Money Makeover. You'll be able to give that away to someone deserving in one of your classes and a subscription to membership for one year of Financial Peace University.

Awesome. And again, you may want to give that away since you're coordinating them all the way. That's fine. We'll give you some stuff to give away. I like doing that. Great. And you brought the new babe with you. And who is this? This is Josephine and we have three older children. Ah, okay. And how old is Josephine? She's seven months. Ah,

very perfect. Very perfect. I love it. Good job, you guys. She's precious. Fun, fun, fun. All right. Lee linda and josephine grand junction colorado 215 000 paid off in eight years make an 80 then 40 then 130 house and everything they're weirdos count it down let's hear a debt-free scream three two one thank god Dream. Three, two, one. Thank God we're dead free. Yeah. Yeah. Woo.

Man. Amazing. We live in a culture where people can't stick with something eight minutes. And those people stuck with this eight years. Those are heroes right there. That's pretty studly. Pretty impressive. Very, very well done.

One of the attributes of the successful. People who can stick with this. Stick with something. Even when it's hard, you just keep pushing through. Tension span of a gnat out there, man. It's unbelievable. Stick with it. Stick with it. Don't you just keep pushing through. Tension span of a gnat out there, man. It's unbelievable. Stick with it. Stick with it.

Don't quit. Don't quit. It's worth it. Live like no one else so that later you can live and give like no one else. Thank you. so so Rachel Cruz, Ramsey Personality, is my co-host today. Chris is with us in Chicago. Hi, Chris. How are you?

I'm doing well. I'm doing well. Thanks for taking my call. Sure. What's up? First of all, I just want to say thank you because of the baby steps we've gotten out of debt and our home to my wife and kids, you've become Uncle Dave. Thank you.

Well, I'm honored. Thank you. I'm the crazy uncle. Yeah, Uncle Dave. Well, I'm honored. Thank you. I'm the crazy uncle. Yeah, Uncle Dave. That's what we call you. But my question is we are newly into Babysit 4

and we should be investing 15%, but my wife will be stepping away from work to go to school full-time. So we'll be only on my main income plus my side hustles. And we are wondering if we should forego 15% and just do minimum 403B match, provided at my job, or should we still push our investments to 15%?

Why would you do that? Why would I forego or why would I do this? Yeah, why would you stop? My wife is saying because we're on the one um we it'd be kind of tight on the budget um that's kind of the reason i i'm leaning towards the 50 and just keep living in a blur means like we have been um not like crazy like we were but how are you paying for her college uh i work for a university so she goes full uh free oh wow that's wonderful what's she studying she's going back to be a teacher okay and how long will it take her

uh we're thinking roughly about two years good okay and how much do you make chris uh with side hustle about 100. How many kids you got? Four. What did she make before? Uh, she made around 55. Okay. So you took a one third of your income is gone. You took a 35%, 33% cut in your income roughly.

And, um, and you're going to have a tight two years in order to achieve a bigger goal, which is her goal of being a teacher. Correct. And there's a sacrifice to get to that goal. So I think you can make 15%, and I don't hear a reason to not do it. I agree with her that it is going to be tighter, but that's one of the sacrifices you're making for her to go to school is giving up her income. And then she'll get her income back when she graduates. And maybe then some, maybe some on top of that, depending on what she's teaching, where, that kind of thing. But I don't see a reason to stop it. Yeah.

Just to keep going. I mean, it's what we teach, Chris. Now, for two years, if you guys pulled back and just did the minimum, I mean, you sound young. I didn't ask your age. But is it going to make or break you? No, but you miss out on that growth when you guys still can be putting that 15%. So there's really not, I mean, there's not a reason not to. So I would continue to do it. I think the tightness is part of the decision you made when you made the decision for her to quit and go to school.

And we made the decision for things to be tight for two years. And that's not unreasonable. You can do that. I mean, and so it's not like you're not going to have food on the table or something else. So, no, I think you need to stick with it. That's what I would do if I were in your shoes. Georgie is with us in Springfield, Illinois. Hi, Georgie.

How are you? Good. Awesome. How are you? Good. Awesome. How can we help? I was wanting some financial advice. I recently sold my company, and I have an influx of cash, and was wondering what you would advise me to do with it. Cool.

What did you sell it for? How much? I've got partners. My portion will be around $2.6 million, and that will be before taxes are paid. Way to go! Awesome! Cool. What kind of business was it? Assisted living. Very good. How old are you? I'm 53 years old congratulations that's amazing

thank you yeah a lot of hard work well what you are entering into is much like you did when you started a business you're entering into territory that's unfamiliar thus you're calling someone like us to get some advice that's smart okay so what we're going to do is we're going to gather a group of experts around you if i were you that's what i would do to advise you and teach you not to make decisions for you okay you don't do something because someone said to you do something because someone taught you something and you decided to does that make sense so you do need the first and foremost let's get a tax person in your corner you have a great tax person on your board um i do actually okay good so we've got we're beginning to build georgie's new board for her 2.6 million dollar decisions right okay

so first thing we do is we figure out what your tax bill is going to be and we carve that out to the side absolutely okay so here's my question so should i take that tax bill say it's a half a million it will be should i you know initially i'm a you person i don't like to be in debt i was thinking i'd just pay it off to the government but then i started talking about different short-term uh places i can put it into and maybe I shouldn't do that, and I should earn interest on it until... Yeah, you earn interest on it until the last possible second. Okay.

And then you send it to them. You don't owe the money until April 15th of next year or whatever the date is, and you send it on that moment, not a day before, because we're going to earn interest on it as much as possible. You have zero um uh penalty for waiting until then and so you might as well let the money sit but i would set it aside in a separate account oh yeah where you're not confused and it doesn't accidentally go to something else okay and then there's three things you can do with money you can enjoy it you can uh invest it

and you can be generous with it. We always recommend you do all three. I plan on it. And not necessarily evenly, okay? And so you decide how much you're going to spend on enjoyment and go ahead and make a list of those things, what some generosity moves you're going to be are, and you make some of those moves, and we're going to invest the rest.

And you need to just go ahead and lay that out. Lay yourself out a little budget. Really, there's only four items in the budget. Taxes, enjoyment, investment, and generosity. Georgie, do you have any debt? Do you have a mortgage? No, no. I've been disciplined since I was different before I started my business.

It's amazing. Let's pretend that you ended up with $2 million in investments, okay? If you sat down with a smart investor pro, which is what we call the people that we endorse, we're not in the investment world or investment business, but this is who I personally use as a smart investor pro for my investments and who we recommend all over the country. You can find one at RamseySolutions.com.

Click, and it'll give you a list of the people in your area. You choose which one you want to talk to. I'd talk to a couple of them and interview them. But let's pretend you invested this money, and it made – the stock market has averaged just a little under 12% for the past 80 years. So let's pretend that you made about 10%, less than average. Okay? Here's the way the money will work.

It's going to double every seven years. You said you're 52, right? I'm 53. 53. Okay. So when you're 60, it'll be $4 million if you put $2 million in there. And don't touch it. Okay.

And don't touch it. Okay? And when you're 67... there, and don't touch it. Okay. And don't touch it. Okay? And when you're 67, it'll be $8 million. Okay? And it'll be $16 million when you're 74. Is this fun or what? It's kind of cool. That's why i was so excited for you i mean it's amazing georgie but also i enjoy it too she said i said 600 000 aside for taxes enjoyment and generosity i'm just goofing off i mean if you you can start with a million and

a half and run those numbers out you You'll still be okay is the point. What percent of my net worth should I be in the market? So I already have other money, and before I even saw my business, I had $800,000 sitting in a money market account getting 0.4%, which is ridiculously cheap. Yeah, that's silly. I'm in the market. Listen, 80, 90- something percent of my net worth, several hundred million dollars is in two things. Real estate that is paid for and in good growth stock mutual funds in the market.

So I've got a ton in there and I'm not taking a dime. I'm not taking a dime out today. A matter of fact, I'm trying to scratch together some extra to put in right now while it's on sale. And so that, yeah, I wouldn't worry about it. If you have other things you're going to buy another business, that'd be great. If you're going to start another business, that'd be great. If you're going to buy some real estate, that'd be great.

If you're going to invest in mutual funds, that'd be great. Or in something that you know and understand. But that's the things I know and understand. That's where my money is. Hey, thanks for calling. Congratulations. I'm so proud for you. Dave here.

You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today.