The Ramsey Show - Draw a Line in the Sand and Say “I’m Done!”

Starting point is 00:00:00 Hey guys, if you're ready to get ahead with money and start building wealth this year, don't miss our free take control of your money live stream. It's on January 23rd and you could win $4,000 just for signing up. You got nothing to lose. Go sign up right now at ramsysolutions.com slash live stream. Live from Ramsey Network, 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 by my good friend, Mr. Ken Coleman, and we're here to serve you in whatever's going on in your life. Maybe it's the job that you want to quit.

Starting point is 00:00:50 Maybe it's that side hustle thing that you want to go do. Maybe it's how do I move up in my career? How do I get out of debt? We're here to answer those questions and help you take the right next step. The number to call is 888-825-5225. Dante's gonna kick us off in Chicago. What's going on, Dante? Hey guys, I just have a quick question. So I'm $68,000 in debt, credit cards and loans.

Starting point is 00:01:16 50 of it has already been charged off from the bank. The other 18, I'm still currently paying off. So my question to you is, what do I do with the 50 grand that's being charged off? I don't know if I should do bankruptcy or like that relief program or what are my other options? None of that. And here's why.

Starting point is 00:01:36 Number one, you're not actually gonna change any of the habits that got you here. So we got to dig into that part of what caused me to go $68,000 into debt with money I don't have. And the other piece is it will destroy your financial life for the foreseeable future. So what I'd rather see you do is go, what do I need to do with my income and my spending in order to climb out of this thing in the next 18 to 24 months? If that was the only option, then you'd start getting creative. You go, all right, what can I do with my work?

Starting point is 00:02:05 What are you making right now, Dante? I do landscaping. So all this debt came... I bought a landscape business and I bought a bunch of equipment. So all this debt is mostly used equipment. So we do landscaping about the last year or so. It went kind of down. And then winter, we do snow removal. And when there's no snow removal, we went down even some more. So that's what ended up

Starting point is 00:02:28 Getting us into debt with much Spencer and how much value does landscaping equipment hold in other words is Let's say you paid X amount of dollars For the equipment. How much can you get for it now? I could get maybe 20, 25. They're all used and then the other one was just like running expenses. I have it with used equipment, have it with running expenses. How much equipment could you get away with not having? In other words, if you sold it, it wouldn't put you in a tough spot given your current business load. I mean I could maybe get 20 now and maybe still move forward.

Starting point is 00:03:09 Bro, there's the answer. Without hurting the revenue for the business? Yeah. Dude, 100% go do that. That's the 18 right there, plus some. Who put this idea of bankruptcy in your mind as the way to get out of this? I just been doing my research myself. I've just been Googling and trying to see what I can do. And then I've, like, that was one option was bankruptcy. Like I had $25,000 in the credit card, $25,000 in the line of credit, and then $10,000 in

Starting point is 00:03:40 the personal loan. And then I have another, and that's 50, those 50s has been charged off. And then the other 10 is on another credit card that I'm still currently paying. And then the eight grand is another credit card separately also, and I'm also paying that down as well. Now you said you were using it for business expenses. So your business wasn't profitable

Starting point is 00:03:59 and you were artificially propping it up with debt? Yeah. Was it profitable now? Where does it stand? And now where it's profitable, yeah. What's it making every month? What's the net profit? We are net profit.

Starting point is 00:04:14 I'm not sure net profit at the top of my head. It's roughly like 120 gross. I'm paying myself like 40 grand top of my head. And I have like one part-time employee. That you pay out of the 120 gross? Yeah. Okay, so how do we get this business to where you can pay yourself 60?

Starting point is 00:04:35 What must be true? I'm not sure, I need help. No, no, no, no, no, no, you know the answer to that. You may not know how you're gonna do it, but what's the answer? Is it charging more? More clients? Yeah, maybe, yeah, no, no. You know the answer to that. You may not know how you're going to do it, but what's the answer? Is it charging more? More clients? Yeah, maybe. Yeah, yeah. Charging more. Are you working 40 hours a week? How many hours are you working right now in the business?

Starting point is 00:04:52 I'm working a lot. Like 50, 60 hours a week. Yeah, it's more clients. I mean, you know the answer to that. I think it's a great question that George asked and I think you cannot let yourself cop out. Now I understand the emotion behind your answer. So I'm not picking on you but I'm actually trying to encourage you that you actually know the answer because if you and I went to lunch today, let me tell you who doesn't know the answer to that is me because I've never run a landscape business George. However, I've run businesses before and if I were to sit with you long enough Dante, I then would be able to answer the question, true or false?

Starting point is 00:05:30 True. If I understood your business the way you understand it, I could figure it out. And so there, I want to make sure that the mindset right now is, alright, I started out in this deal, I got over my skis a little bit, didn't have the business with all the equipment, went through downturns. By the way, that's the nature of business. I don't care what it is. Okay. And so you've learned a lot, but you've got to make sure that you've got a mindset right now that you are not a victim. And so George, I don't know why we're not talking about selling this equipment. We just brushed right past this. That to me would be a resetting of the business.

Starting point is 00:06:07 And then going forward, we're gonna cut up these cards. We're not gonna put a dime on credit for this business or in our personal life. Can you draw a line on the same today and say I'm done? Yeah. You know what I would do? If he's got $20,000 worth of equipment and he owes $18,000, I would pay off the credit cards, cut them up, take the $2,000, and that becomes the retained earnings that we teach

Starting point is 00:06:32 in Entrez Leadership. And let's get that part going. Let's go, we got at least $2,000. Our goal is to not touch that unless it is an absolute four alarm fire emergency, and I'm going to build on that $ 2,000 and have a goal to have 20,000 in the bank and then have a goal of 50,000. That's how you build a business. You go one month at a time and you take everything that you've learned to this point and you go, okay, now I know actually how I'm going increase revenue. And I'm gonna keep the revenue

Starting point is 00:07:06 in the form of retained earnings and then pay in yourself more as George was saying. And in your personal life and in your business life, here's the number you wanna focus on is margin. It's the gap between what you're taking in and what's going out. So in your personal life today, what are your monthly expenses?

Starting point is 00:07:24 Probably about 4,000 a month. Well, you just told me you're making 40 grand a year, which means you're in the hole by 8 grand. Yeah, yes. That's why these all your credit cards are the way they are. So here's one lesson. We got to go what is causing us to spend four thousand dollars a month. If that's cost of living, we need to find a different place to live. We need to get a roommate. If it's eating out, we need to cut off that whole piece and go, we're gonna meal prep.

Starting point is 00:07:49 It's gonna be rice and beans for the next few months, maybe a year or two. So you're gonna do an audit. I'm gonna help you with this by giving you our budgeting app called Every Dollar, and you're gonna list out your income for the month, list out every single expense, and then see where you actually stand.

Starting point is 00:08:04 And if you don't like what you see, change it. I gotta spend less, I gotta make more. Because here's the math on this. Instead of filing bankruptcy, what if you made a goal to say, I'm gonna be debt-free in two years? I'm gonna sell 20 grand worth of equipment, that'll get me out, right?

Starting point is 00:08:18 Now we're down to 48 grand in debt? Yeah, so that's another question. That's charged off already. What can I do with that? Well, you're going to need to settle eventually, right with the creditors? Yeah. So they're going to be coming for you. I'd be proactive and saying, hey, I'm trying to figure out a way to get this paid off. It's going to go into your debt snowball. And maybe a year from now, they're willing to settle for, you know, 30 grand instead of 50. We don't know. It may not be new enough. You may need to pay the full 50, but this is not going to go away.

Starting point is 00:08:49 This is going to take you busting your butt two grand a month toward the debt. You're debt free in two years. That's the math on it. If you do what Ken and I said. So bankruptcy is not the only option. You've got a ways to go. Call us back. If you need help, hang on the line.

Starting point is 00:09:01 We'll send you every dollar. This is the Ramsey show. Call us back if you need help. Hang on the line. We'll send you every dollar. This is the Ramsey Show. Mortgage rates have dropped. So if you're thinking about buying a home in the next year, contact your local Churchill mortgage team right now. If you wait, more people will be in the market competing for the same homes and potentially driving up prices. Churchill will help you do the math to be sure your budget is correct, making your home a blessing and helping you build lasting wealth. Learn more at ChurchillMortgage.com. ChurchillMortgage.com. This is a paid advertisement. NMLS ID 1591

Starting point is 00:09:39 NMLS ConsumerAccess.org. Eagle Housing Lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee, 37027. Welcome back to The Ramsey Show. Exciting day around here because we are launching our Investing Essentials event. It's a two-night virtual event hosted by Dave Ramsey and yours truly, George Campbell. We know investing can be overwhelming and confusing.

Starting point is 00:10:06 It's not something that you can pick up in a 60 second social media post. So at this virtual event, Dave Ramsey and I will walk you through how to maximize your retirement plans, how to pick mutual funds, how to invest with confidence. And it's the only place to get Dave's personal playbook on real estate investing. And Dave will explain how he made hundreds of millions in property investing debt free.

Starting point is 00:10:27 And he's gonna go, this is Nerdville. All right, we're gonna be, we got charts and graphs and formulas. It's gonna blow your mind. Stuff we have never covered here on the show. So join us, Investing Essentials. It's happening virtually, March 4th and 5th. And you can watch from the comfort of your own home,

Starting point is 00:10:41 wherever you are. Tickets start at 199 bucks. Get yours today at ramsysolutions.com slash events, or click the link in the show notes if you're on podcast or YouTube. Well, it's a recommended snack for that, since people can watch that in the comfort of their own home.

Starting point is 00:10:55 You kind of know the content. We went deep into the cookie jar at the event, and so I'm feeling it's gonna be a cookie kind of evening. Yeah. Kind of a comfort food. Yeah, that's in March. You're kind of just like, get me to spring already. So yeah, get your favorite snack

Starting point is 00:11:10 and post up and watch for two nights. You are famously gluten-free. I think America would love to know what is your favorite go-to gluten-free cookie? Oh, well, you know, you got Tate's. That's a standard, feel like a crispy cookie. Chips Ahoy did come out with one recently that hits. And Oreos now, gluten-free as well. So there are a lot of options for us gluten-free gladiators out there.

Starting point is 00:11:29 There's the bonus content you didn't know you came for today. Thanks for thinking of us, Ken. Well, I'm always thinking of the people. Man of the people, I've been told. I love it. Well, let's be men of the people, and let's go out to Christy and see if we can be of service in Grand Junction, Colorado.

Starting point is 00:11:43 What's going on, Christy? Hey. Hey. How can Ken and I help? Um... We can be of service in Grand Junction, Colorado. What's going on, Christy? Hi. Hey. How can I help? So I am wanting to buy a new car. I want to be financially able to buy a house. And I am also needing to get out of debt. So I have about $7,000 in debt from school loans.

Starting point is 00:12:07 I just recently graduated with an associate's degree. And so I've been working a lot. Um, I also have a four year old. Um, I'm a single mom and I make roughly $2,000 a month. And by the end of the month, I'm left with maybe like a hundred dollars to eighty dollars to do things that I need to do like get an oil change and buy clothes and stuff like that and I'm just really struggling financially and I'm done I don't want to be this way and I don't want to do this the rest of my life. Love it. Christy that's a great place to be. You know, being done is an awesome place to be.

Starting point is 00:12:47 Now, I know it doesn't feel that way, but George, can I get an amen on that? Oh, absolutely. So, we can help. So Christy, what are you doing for your job? I am a medical assistant. Okay, and you're making what per hour? 19. Uh-huh. And what did you get your associate's degree in? Science, my associate's in applied science. And what was the purpose of that? What were you thinking? What are you aiming towards? What are you thinking about? The original plan was to get my associate's degree to help me get a foot into the door for getting my bachelor's in nursing. Nursing is very competitive and so having that on my record makes me look a little better I guess than most people applying. So I kind of just thought it was a way to get me in. Did you want to do nursing? So you want to be... Okay, so if we could fast

Starting point is 00:13:40 forward your life you're a nurse right now. Okay. Right? I'm asking. That's what you want. What kind of nurse? You have any idea? I eventually would like to get my master's in OBGYN and become a midwife, but that's like four years down the line. Okay, but let's stay. Yeah, I love that. No, I love it. But if we could be a nurse today, you would be a nurse, a labor delivery nurse? Yeah. Okay, great. It's really important that you visualize that and write that down. So the question becomes, how much money and time is it going to take to get the other two years so that you get the nursing degree and you're ready to go? To get my master's there would probably be another two to three years.

Starting point is 00:14:25 No, no. You don't need the masters to become a nurse. I'm asking what is it going to take for you to be qualified to be a labor-delivering nurse? I'm not sure. Okay, hey, fun homework assignment number one. You got it? You started this call. I'm done. So before you lay your head on the pillow tonight, you need to know the answer to how many more years of college do I need to get a nursing degree? The second thing you need to know before you lay down your head tonight is in your area, where are all the institutions? Like a list of the schools that have nursing programs?

Starting point is 00:15:08 If there are some online programs that'll help you get certain amount of, I mean, I don't know, I want you literally to have a list that if George and I knocked on your door tomorrow morning and we said, Christy, what are our options in the future to get that nursing degree? You could hand us a piece of paper. You go, there it is, George, right there. And we would say, okay, great. And it has the cost. It's really important for someone who's in your position that's really frustrated with where you

Starting point is 00:15:35 are in life to have a clear picture of what it would actually take to do the thing that you actually want to do, because it takes away all of the fear. Right now, you're in an emotional state that is probably frustrated and intimidated by what it takes to get where you want to go. Is that true? Yeah, a little bit. And I understand your question a little better. So I might to get my nursing degree, I would need two more years. That's what I thought two years of the prerequisite prerequisite course. That's what I thought so two more years I'm kind of just waiting. Yeah, how much money do we need to complete that two years worth of coursework? so I signed up for FAFSA which

Starting point is 00:16:21 Here in Colorado is a program that you can sign up for and it like signs you up for every single scholarship grant anything that you can get. So I think that I could get enough scholarship money to pay for it my entire schooling seeing as how I'm a four-year-old and I'm a single mom. I think that I'll be okay there but until then I'm like okay. That's awesome news. So here's the deal I want to hand it over to George to kind of pour through your expenses because I think you got to do some work there too. But here's what I want to tell you. I want you to aggressively be looking for something that's paying you 25, $30 an hour. Okay. Okay. Because it doesn't matter what you're doing now. It doesn't even

Starting point is 00:17:03 need to be the medical assistant or medical, like it's anything, anywhere that pays you more money than you're making right now. And the reason is to create some margin, okay? And then George is gonna talk you through paying off that $7,000, which is gonna also free up more money. We've got to get you a raise through income and expenses. George, tell her how we're gonna do that. So Christy, my first question is,

Starting point is 00:17:26 why are you paying 40% in taxes and deductions? Because you told me you're making 19 an hour, it's about 40 grand a year, but you're only taking home 24,000 a year. Are you investing right now? No, so I am trying to pay back my school loans. I have $7,000 in debt and school loans. Um, I just recently bought a phone too, cause my old one broke.

Starting point is 00:17:52 And so that's about $800 to pay that off. And then my son is in school and I'm paying $300 a month for that. And I'm also on scholarships. So that is $300 with scholarships for paying for my son's school. And then just normal, I got food, rent. Then I got a pay. So when you said take home pay, this was after all of those other expenses were paid,

Starting point is 00:18:15 your debt payment for the phone and okay, got it. That makes a lot more sense. Yep. So you actually have more margin than you think, but you're saying after all that's paid, I have a hundred bucks extra I could throw at the debt. It's not gonna make a debt. And that's where Ken's advice comes into play.

Starting point is 00:18:28 Think about it this way, for every extra dollar an hour you can go make, that's two grand a year at 40 hours a week. So if you can go make 25 an hour, you're gonna get a $10,000 raise. Can you get out of debt a little easier if you had an extra 10 grand a year laying around? Oh yeah.

Starting point is 00:18:44 Exactly, and this might be a side hustle. Yeah, you might do your 40 hours out of debt a little easier if you had an extra 10 grand a year laying around? Oh, yeah. Exactly. And this might be a sign of, yeah, you might do your 40 hours and then do another 10 hours doing this. I don't know your, your family life and you know, I want to respect that, but this is going to be some sacrifice and hustle. But to Ken's point, if we can get you out of the student loan debt, free up a payment, get your emergency funds. You never have to go into debt again.

Starting point is 00:19:01 Now we have a foundation to where we can step forward from a place of strength into that next piece of education. And then once you're a nurse, goodness gracious, sky's the limit. Yeah, and now you're gonna cash flow the master's degree. That's your next goal. So car and house, love that for you. That's gonna have to be on the back burner. Down the line.

Starting point is 00:19:19 I wish we could do it all at once, Christy. But we need... What's the car? I am kind of in dire need of a new car. My car right now- Then let's pause everything and stack up money for this car. And then we'll push play on the dead snowball.

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Starting point is 00:20:19 slash Ramsey. Your family will thank you. That's knockboxnokbox.com slash Ramsey. Welcome back to the Ramsey Show. I'm Ramsey personality, George Campbell, joined by bestselling author, Ken Coleman. Hey, George. We are here, Ken. We're live, we're doing it. Call us up, 888-8 two five, five two two five,

Starting point is 00:20:46 and you'll be blessed to talk to Ken today. I'll tell you that much. It's a blessing. I don't know if I, boy, you're really setting me up there, blessed? We'll see what Grant thinks, he's in Chicago. Boy, now I gotta bless Grant. Grant, how you doing?

Starting point is 00:20:58 All right. Hey George, hey Ken, thanks for taking my call, guys. I'm really excited to say that right before Christmas, I paid off my house. So I'm officially on baby six. Woo! Way to go! Strong golf clap for that one right there. You got how many kids?

Starting point is 00:21:13 I got six kids ranging from 12 years old all the way down to 10 months. So I got eight of us living in this beautiful paid off house. Good for you. My question is, I know I could save up for another eight years and pay cash for a bigger better house. Good for me. My question is, I know I could save up for another eight years and pay cash for a bigger, better house. But by then, my kids are gonna start graduating. They're gonna move out. Then you'll be downsizing.

Starting point is 00:21:31 Would it ever make sense under the Ramsey plan to upgrade to a bigger house with another mortgage, or is it better to just stick drinking this debt-free Kool-Aid and eventually pay cash? Well, in a perfect world, if Dave was on air, he'd say, well, I wouldn't want you going back into debt, but also it's not a sin to go revert back to Baby Step 6 for a few years and knock out the mortgage.

Starting point is 00:21:54 And so as long as you're doing it, you know, 15 year fixed rate, the payments no more than a quarter of your take-home pay. And with all the 100% equity you have in the house, roll that into the next one plus any savings and try to minimize the mortgage and then knock it out quickly. So what are we talking?

Starting point is 00:22:10 What would it take for you guys to upgrade to a home that's like, all right, we got room. Six kids. We got room for all eight of us with room to spare. But for all eight of us, it looks like if we hit something in the $400,000 range based off of our location, we'd be stepping up from 1800 square feet

Starting point is 00:22:32 to somewhere approaching 3000 square feet, like 2800, 2900. How many bedrooms? That's what our market's looking like. Four bedrooms at least. That's what we've got right now. There's 10 bedrooms. But do you need five bedrooms, six bedrooms? Well, you got multiple boys?

Starting point is 00:22:50 Nope, one boy. The rest are lovely girls. Oh, I was gonna say, because if it was mostly boys, she'd just pile them on top of each other. They don't care. They live like rats anyway. I got two boys. I can say that. I can make them live under a bridge. Yeah, I literally was gonna go that direction, but the girl boys, I can say that. I can make them live under a bridge. Yeah, yeah, I literally was gonna go that direction, but the girl thing, I only have one girl and I don't know, I feel like I'm on thin ice if I recommend that. But, you know. But I think you're still going, all right,

Starting point is 00:23:14 for the house that we would want. That's great. What's your current house worth? Our current house is worth 270. 270, and let's say the next house was 450, right? And let's say you wanna do that. How long do you have? Is this a year from now?

Starting point is 00:23:30 What's the urgency? The urgency, no urgency. Yesterday? I'm living my best life now. It's just close quarters. You're very cheery for a guy with six kids. I'll be honest with you. How do you have time to make this call?

Starting point is 00:23:42 I got no payments. Okay, that's good. Yeah, but you also don't have any sleep either. Oh, here's a question America wants to know. I know this. Are you done having kids or are there more on the way? No, no. If the Lord wants me to have more kids, I'll have some more. Oh, God bless the Catholics. There we go. Whoa, easy. I'm kidding, I'm kidding. Wow. Thank you, Grant, for that. You just dropped Catholicism on him. I just thought maybe, you know, they're like, let's have more babies. More and more. But I'm happy for you guys. He's living his best life. So you think there's a possibility that more kids are coming? Well, everybody tells me like, you know what causes that, right? And I say, yeah, and I'm not willing to give it up.

Starting point is 00:24:20 Well, you got a 10-month-old and a 12-year-old. Oh, wait a second. You're getting partial information. No one says you got to give it up, but there you got a 10-month-old and a 12-year-old. Oh, wait a second. So you're getting partial information. No one says you got to give it up, but there are other things you can do. Maybe you should seek a family planner as a side to this call. Ken will give you advice off air for that one. Yeah, hang on the line. I'll give you a couple of tips

Starting point is 00:24:35 when we go to commercial break. Thank you for that. All right, Grant, let's talk. He's not willing to give it up. Let's talk facts. That's the best thing I've heard in a long time. You're in Baby Step 7. Do you guys have a bunch of money in savings

Starting point is 00:24:47 outside of your emergency fund? So not a bunch of money in savings. Why? Because I got a little gazelle intent on paying off the house there at the end. I have three to six months of expenses because I have no expenses. But yeah, so savings are a little low right now.

Starting point is 00:25:03 I've got $6,000 in the bank. How much could you save up in 12 months for, you know, as a kind of a down payment plus your equity? Plus equity, I would be approaching 285. So you could save up, you're saying 15 grand in the next 12 months? I think so. Okay. So just set a goal, you're saying 15 grand in the next 12 months? I think so. Okay, so just set a goal and you're married, you have a wife?

Starting point is 00:25:30 I am, I am. Okay. You didn't know the answer to that? I thought I had to ask, you never know. Thought we had covered that earlier. But I would set a goal with her and say, hey, here's what we're wanting to do, we wanna upgrade about a year from now,

Starting point is 00:25:41 here's how much I think we can save, we're gonna take all of our equity plus the savings and throw it at the next one. And then there likely will be a gap of, let's say, 50 to $100,000. And here's how we're gonna tackle that. We're gonna attack that in two years or three years, whatever it is.

Starting point is 00:25:56 Just set a goal and don't let this linger. And don't do a 30 year with as little payment as possible. Get aggressive and get rid of it and get back to baby Step 7 in no time. Yeah, yeah, yeah. But you have Ken and I's blessing that you're not, you know, it's not going against the Ramsey plan to get another mortgage and to be temporarily in Baby Step 6. You guys have done such a great job.

Starting point is 00:26:16 You sound like you're a young family. You've got a 10-month-old. How old are you two? Yeah, so I'm 36. Amazing. And so if we say, hey, by 40, we're going to be debt-free again back in baby step seven, the house will appreciate. And so I would go down that path.

Starting point is 00:26:31 That's a lot of kids to bunk in a 1800 square foot helmet. He's a better man than I, I tell you. You'd be out of there? Well, I reached my max capacity as a father at three. I readily admit that. I'm glad we have three. I do think people are hardwired for a certain number. There's no question. That guy right there was born and created to father a lot of kids. He's very, very

Starting point is 00:26:54 bubbly. A very positive young man. I'm a curmudgeon with one child. No, you're a curmudgeon. Without children. Right. We were hoping that your sweet little prince's knocked off some of the the mud. has she brings me joy yeah yeah she's a sweet boy wow we got through that one Ken let's move on to Federico all right just down the road in Nashville what's going on Federico how's it going guys big fan of the show just by the way thank you David MC in high school so oh yeah so my situation, I'm 23. I'm a recently graduated college

Starting point is 00:27:30 out of Middle Tennessee University and debt free. I was able to pay it out of pocket between some, what I was making and scholarships and stuff. So yeah, I had my degree in engineering and I started being a, in May I started as a NASCAR engineer for the number 25 truck. How about that? That's really cool. Yeah. Was that a dream of yours? Yeah, pretty fun job. I'm sorry?

Starting point is 00:27:54 Was that a dream of yours? Yeah, so I've always been in the automotive field or whatnot. I used to be a technician and I mean, now that I have my degree, being able to use it for NASCAR, I mean, it's definitely pretty cool. Oh yeah, you can write your ticket. I've always watched it on the TV. Yeah, good for you man. That's great. So what's your question? Yeah, so downside, it is a 1099. It's my first year ever being on 1099. I've been on W2 since I was 15. With this being said, I was able to, you know to get a lot of money from not having any debt. I was able to save $15,000 on my savings. I had about $3,000 invested in dividend yielding stocks and the SP500.

Starting point is 00:28:40 But with that $5,000, a big chunk of money, I didn't want the, in better or worse, I didn't want the government to take it, right? They didn't want it just sitting there, not compounding any interest or anything. So my big question was, should I invest into maxing out my 2024 IRA, making that a deductible for next year, for last year. You could, I don't think it's gonna be

Starting point is 00:29:07 that much of a game changer. I mean, and if you did that in a Roth IRA, you wouldn't be able to get a deduction on your taxes because you've already paid taxes, it's gonna grow tax deferred and you can withdraw it tax free and all that. So I don't think it's worth doing it for the tax deduction. I would do it because of where you're at in the baby steps,

Starting point is 00:29:24 which is if you're debt-free with an emergency fund, invest 15% of your income. And because you don't have a traditional retirement plan, the Roth IRA would be a great place to do that. Okay, so I do believe, so I have my fidelity. I believe it's a traditional IRA. And I was reading up that you can, if your employer doesn't give you retirement,

Starting point is 00:29:45 you can deduct up to 100% of it, which is 7,000 for one tax period. That's on the traditional side. Yes. And I'm saying, if I were you, I'd do Roth side. I wouldn't do it for the taxes. I'd pay whatever taxes are owed and I'd rather be tax-free.

Starting point is 00:30:01 At your age, man, that's all gonna grow tax-free till retirement. So that's what I would do personally, but it's a great point. You can still max out your raw fire rate for 2024 people until tax day. So get to it. This is the Ramsey Show.

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Starting point is 00:31:23 are also 10% off for our listeners. Just go to Berna.com slash Dave to learn more. That's B-Y-R-N-A dot com slash Dave. The Ramsey Show question of the day is brought to you by Wye Refi. Student loan debt is a swamp thousands of people find it hard to escape from. So don't be another statistic in the student loan swamp. For distressed private student loans, there's Yreify. We trust Yreify because they help you with a low fixed interest rate you couldn't get

Starting point is 00:31:55 anywhere else to help you stick to your budget and get out of debt. Learn more at yreify.com slash Ramsey. That's the letter Y, R-E-F-Y dot com slash Ramsey. May not be available in all states. Today's question comes from Maria in Connecticut. I recently received my license to practice architecture. I'll be having a conversation soon with the management at my current job about a new role in the responsibilities that come with it.

Starting point is 00:32:19 I also suspect that with those responsibilities will come a pay increase. My employer has always been generous, however, I would like to go into that meeting with an idea of what a fair salary looks like. I understand there are nuances to salary such as your years of experience, geographical location, and specialty. I want to manage my expectations of what their offer might be so that I can be grateful to my employer if it's generous. Oh that's fun, if it's generous. I want to be grateful if it's generous. On the other hand, here's the here's the other one, if I'm offered less than expected, I want to be

Starting point is 00:32:56 prepared to find out why, prove my value, and prove my value. Where can I find accurate salary data to know what FAIR is? Well, there's no Bible on this. So let's start with that. There's no one source. There are multiple sources. I would be checking job sites. And again, I'm not going to say names because I'm not endorsing,

Starting point is 00:33:22 but you can go look and try to get a range with research. You can also, I would consult LinkedIn, reach out to people that have similar experience. There are ways to get a range, and what you want to do is get a range. And you already laid out in your question, Maria, what we're looking at here. Geographic region, you start with that

Starting point is 00:33:41 because that's very, very different. You know what region you're in. You look at years of experience, qualifications, etc., etc. And because this is a new qualification that you will be getting, you are going to be at the bottom rung of the experience ladder, and so you've got to take that into account. So I think you've got enough markers to be able to do pretty good research and have an idea of the range of what you want. But do not lose sight of the fact that this employer has, by your words, always been very generous to you. And this is an opportunity to make a nice pivot. And even if it's not exactly what you want, you can't get lost in the number being absolutely ideal.

Starting point is 00:34:24 You have to focus, George, on the fact that you've made the switch. And now you're in the line of work you want to be in. And you got a chance to get experience, which sets you up for your future. So mindset and prioritizing your focus is the key here on how to handle this conversation going forward. Yeah, to your point, Candida,, the initial number is less important to me. It's more about how quality is the leadership at this company? What does a growth track look like in the role that I'm in?

Starting point is 00:34:54 That's what I'm more interested in versus what am I making day one when I just got my license? Right. And she knows these folks. She feels valued by them and appears. So that's a pretty good situation to be able to make that pivot. Yeah. But I think having a range in your mind is good. It's not going to be $30,000. It's not going to be $300,000. So having a range is good. I wouldn't plant on one specific number and if it's a dollar less, I'm going to leave. That feels unhealthy at that point.

Starting point is 00:35:21 I agree with you there. All right. Let's go out to the phones. Thomas is in Sacramento up next. What's going on, Thomas? Hello, how's it going? Great. How can we help? So my question is, my wife, not recently, but a couple years ago was diagnosed with cancer and had a hysterectomy and so we're trying to have a surrogacy to have a biological child and we're just trying to find out the best smartest way to get that much cash because it's around it depends on how we do it but like 80 to 100k and so we have like 40 saved up but yeah I just don't know if we should sell our stuff like our house like our other house. What do you mean by other house? Tell us about an investment property? She, well she's, we were both in

Starting point is 00:36:19 the military and then I got out and then she piece moved. So now we live in California. So our old house in Arkansas, we just rented it out at the time. What's it worth and what do you owe on it? We owe like 170 and Zillow says like 270. I think we just found our answer, man. There's the answer. I think this baby tr's having an investment property. Are you guys gonna be financially okay

Starting point is 00:36:47 losing the rental income? Yeah, I mean, we only make like a hundred bucks after, cause we don't charge that much rent. Man. But the other issue too is she's in the, they're gonna kick her out of the military because of the cancer has reoccurred now a couple of times. So then we're losing, she's primary breadwinner.

Starting point is 00:37:09 What does kick out mean? They just medically separate, like they look at her and go, well, she can't deploy, she can't do her job. I mean, she could still do her job, but she can't deploy. So they're gonna medically separate her essentially. We'll get to keep the health insurance. That's good. But the-

Starting point is 00:37:31 And is there any income that will still come in? Yeah, we don't know exactly how much she'll get VA disability. Okay. But they won't give us that rating until kind of the final steps. Like that's like right before they do the deed. They pretty much tell her, okay, you're going to get this. But we're estimating.

Starting point is 00:37:52 I mean, with cancer, she should get a hundred percent, but you can never be too certain. So what would your income need to go to, to make you feel comfortable after all of this? We've already figured out how to fund the, uh, yeah, I would've told you to sell this house even if this wasn't the case. I agree.

Starting point is 00:38:08 Just to not be a long distance landlord and be done with it. So we have one thing solved. Sell it, take all the profits and use it to fund the surrogacy. You already got 40,000 in the bank. And so, yeah. So let's say you walk with, what did we say? You said it was worth what, 280, he said?

Starting point is 00:38:23 270. 270 270 I mean yeah I take Zillow with a grain of salt it could be a right I feel like it I feel like it's overprite on Zillow personally but I mean I don't know much but you still stand to walk with about a hundred thousand or eighty thousand somewhere that right something like that which on top of your forty is more than enough to cover that takes care of that plus emergency fund that's right So what kind of income would you need to, how much would you need to increase your income to make you feel calm at night not knowing what that military number is gonna play out to be? That's like the big issue is I don't really know because right she's definitely gonna lose like two

Starting point is 00:39:06 she's gonna lose like two to three thousand a month and income but once she gets kicked out we don't have to live where we live because you know we're the military's making us live here so it's like what's a conservative what's a conservative number can we say say 36,000? Like if you increased your income by 30, if she's gonna stand to lose 3,000 a month. I'm being very conservative because I'm thinking ahead. I'm thinking rainy day. What's the umbrella? So what I'm asking you is does that make sense? If not, give me another number. Yeah, that sounds about right. Probably another 20 to 30 somewhere in that range that I would have to supplement to be comfortable Living where I mean we could deal with

Starting point is 00:39:51 Because we already dropped like 3000 and savings each month right now So I mean we could you've got more theoretic which is we would be fine, but then we wouldn't be able to be Because we're already pretty tight with our money, so we would not. But don't do that, don't accept that. In other words, I appreciate what you're saying from a numbers standpoint, from an attitude standpoint, I'd prefer you go, I'm not gonna deal with anything, I'm gonna happen to something. And so I'm gonna go make an additional,

Starting point is 00:40:16 I'd like to see you try to make an additional 2,500 a month to come up with an additional $30,000 a year. I don't care how you do it, but if it was me, George, that's what I would be doing. I don't know if you have a different thought on that, but I would be wanting to pad my stats, if you will, on that situation. Then if it's extra and we don't need it, awesome.

Starting point is 00:40:35 We got gravy, we got the college fun started. There's many things you can do with that extra 30 grand, but I would be trying to do that. Yeah, I think that'll give you a lot of peace during this chaotic time is just control what you can do with that extra 30 grand, but I would be trying to do that. Yeah, I think that'll give you a lot of peace during this chaotic time is just control what you can control. Control your spending, control your income, and we're wishing you guys the best with the surrogacy.

Starting point is 00:40:53 I mean, what a blessing to have this house that we can just sell to fix this problem. It's a beautiful problem to have. So again, I think this baby trumps the investment property, especially when you're essentially losing money on the deal. That baby will trump it all. So wishing you guys the best with that. Thank you so much for the call. That puts this hour of The Ramsey Show in the books.

Starting point is 00:41:12 Thank you to my co-host, Ken Coleman, everyone in the booth, keeping the show afloat and you, America, will be back before you know it. This show is sponsored by BetterHelp. Hey folks, we all have stories. The family and cultural stories that we were born into, the stories of the things that have happened to us, both good and bad, and the stories that we constantly tell ourselves. And while we can't go back and change any of our old stories, the world is waiting to see what you and I are going to write next.

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Starting point is 00:43:19 whatever else is on your mind. I thought you were going to say something else because you're telling me I was the man. So I thought it'd make you feel good. I appreciate it. A little disappointing, but that's it. Wow. But let's help some people, shall we? That's the goal. What do we have up first? We got Rob in Columbus, Ohio. Rob! What's going on? Hey, guys. Hey. Hey, so I'm looking for a little guidance here.

Starting point is 00:43:42 You know, back in 1980, long before I became a Ramsey disciple, I purchased two Northwestern mutual whole life policies. They have a cash value of 96,800 and a death benefit of 150 now. I'm just looking for a little guidance on, you know, is it worth my while to cash this out, pay the taxes and reinvest it? Or has the train too far down the tracks with that significant death benefit? How old are you?

Starting point is 00:44:16 69. Okay. And you're wondering, hey, if I cash this out, I'll get 96,000 that I could invest minus some surrender fees. I would deduct the basis. I would probably end up, my calculation I'd end up with about $78,600 to invest.

Starting point is 00:44:34 Okay, $78,000 that you can do what you want with, or you go, I'm just gonna keep paying this monthly premium and I'll have $150,000 death benefit, the face value of the policy. Right, currently, right. Okay, what's your financial situation? I'm very financially secure and no debt at all. Well, I mean, what does that look like?

Starting point is 00:44:57 What's your retirement look like? Do you have 10 million in the bank or like where? What's the nest egg? About 3.7. Amazing. So you're self-insured. You don't need life insurance. Probably not.

Starting point is 00:45:09 So the question is for you, why in the world would you continue to pay that monthly premium knowing what you just told us? Well, I mean, last year, interest and dividends, it came to about $4,000. So, and that, you know, after I paid the interest in dividends, it was just, you know, do I set that up? What are you paying per month? What are you paying per month to keep this policy going? Well, it's $741 a year for both policies. Okay, so here's my question. $741 in the grand scheme of things, not a huge amount of money, but it's still $741 for a benefit that you don't need. You don't need $150,000 upon your death.

Starting point is 00:45:57 You're right. Okay. So when you think about the purpose of life insurance, which by the way, we only recommend term life insurance instead of these whole life policies because of how expensive they are and because of a whole host of other issues. The goal is to replace your income if something should happen to you so that your loved ones won't have to grieve financially.

Starting point is 00:46:15 And so are there people in your life who rely on your income today? No. Okay. Just my wife, no. And on top of that, you're self-insured. If something happened, she's got $3.7 million sitting there, right?

Starting point is 00:46:28 Correct. So the 150,000, that's cute compared to the nest egg you've been able to build up. And so that's the point and the goal of having that term life for 15 or 25 years. Over that time, you follow the baby steps, you pay off your house, you've been investing consistently for decades,

Starting point is 00:46:43 and here you are with this policy. So if I was in your shoes, just because it would pain me to keep making this payment with this crappy product, I would be done with it. I'd take my 78, invest it, go on vacation, do what you want with it, but I wouldn't continue paying it. Yeah. I agree with George. You just got $78,000 wealthier.

Starting point is 00:47:00 That's the way I'd look at it. Well, we love that. Now, if you were in, you know, if you were destitute financially, you had no nest egg, this was all the money to your name, and you were in ailing health, I'd go, okay, I'd probably just keep paying the policy, because it's going to be more helpful than it is harmful.

Starting point is 00:47:17 But man, you've done such a great job, regardless of this crappy product, that it's impressive. Yeah. What do you, if, you know, there's a 25 year old listening who says, I'd like to have $3.8 million. What do you tell that person? What was the key to your success? You know, I mean, I've worked hard, I've invested well,

Starting point is 00:47:36 but also, I mean, I got to give some credit to Ramsey. I attacked my mortgage first, and I did not spend money that I didn't have. That simple. Live on less than you make. Get rid of your debt. The things my grandmother taught me. I mean, it was very, very, very simple and, yeah, I've done well with it. Yeah, good for you. That's amazing. Thanks for the call, Rob. I'd be planning a $78,000 spend party.

Starting point is 00:48:06 I'd be like, let's get together. What do we want to do with 78 grand? Divvy it up, have fun with that. Yeah. You know, give a little. You know, fund the kids or grandkids college fund, go on a nice vacation, upgrade a car. And then maximize that money.

Starting point is 00:48:20 That's living like no one else. All right, Aaron is in Youngstown, Ohio. Up next, what's going on, Aaron one else. All right, Aaron is in Youngstown, Ohio up next. What's going on Aaron? Hey George, how are you? Great. How can we help? So first and foremost, thank you guys for taking my call. It's it's such an honor to shoot you guys today excited Secondly Over about me. I'm 22 years old. I work for Altium Cells in Lower South Ohio. I make around $90,000 a year, including profit sharing.

Starting point is 00:48:54 And the only debt that I have is my mortgage. Awesome. What's your question? So my question is, given the circumstance, how would I diversify my portfolio? Given right now, my company also does a 10% match. Amazing. I'm only investing in the Roth right now.

Starting point is 00:49:24 So are you investing 15% of your gross income regardless of match? Right now, currently, I do 50% of my income after taxes. So that would be the Roth right now. I'm not doing anything towards the 401k. Okay, so you've got a Roth IRA that you're contributing to? Correct. Do they have a Roth 401k option through your employer?

Starting point is 00:49:51 No. Okay. I would check in on that, but here's the strategy. Match beats Roth beats traditional. So you're investing, you got the match, it's 100% return next to all the Roth you can. For you, that might just be the Roth IRA. And if you still have money beyond that, in that 15%, go back to your traditional options

Starting point is 00:50:07 in the 401k. And as far as diversifying, what are you invested in right now? What funds did you choose inside of your retirement plan? Right now I'm currently doing American funds. Just a couple different growth index funds, few different mutual funds, I think right now, I have a couple separate stocks that I'm also investing in as well. I would avoid single stocks because of the risk and volatility.

Starting point is 00:50:38 I would stick to those funds that you mentioned, mutual funds, index funds, and there's four types you wanna diversify across, and it basically is like a large cap, mid cap, small funds, and there's four types you wanna diversify across. And it basically is like a large cap, mid cap, small cap, and international. Cause that'll diversify even amongst those funds. And to help you do a deep dive on this, jump onto ramsysolutions.com slash guide.

Starting point is 00:50:56 We have a free investing guide. We walk through exactly how to choose those funds. Appreciate that. You should invite him to your live stream. You and Dave. Join us for the investing essentials live stream. The ticket Dave. And join us for the Investing Essentials live stream. The ticket is on me, Aaron. How about that?

Starting point is 00:51:08 So hang on the line. It's on us today. Thank you so much for the call. He may have planted that to get a free ticket. I don't know. I'd like that move. Appreciate that. Smart move.

Starting point is 00:51:17 This is the Ramsey Show. You know, every year I hear the same excuses for why people don't get the life insurance they need to protect their families. So this year, let's clear the air and look at the facts. Most people are concerned about price, but term life rates have never been lower. Having 10 to 12 times your income on a 15 or 20 year plan is, in many cases, just plain cheap. Second, life insurance through your work is not

Starting point is 00:51:45 enough, especially since these plans go away if you change jobs. You need to have your own policy so you're not without protection when your family really needs it. Third, stay-at-home parents need life insurance, especially those with young kids. People don't realize how quickly the costs add up without someone at home taking care of things. So no more excuses folks. Get the protection your family needs. Go to Zander.com or call 800-356-4282. They've been my choice for all my insurance for over 25 years and are the only people I trust. Hey guys I've got a big announcement. George Campbell and I are bringing back Investing Essentials, our tonight virtual event deep diving into

Starting point is 00:52:29 investing and real estate. Learn step-by-step how to get the most out of your 401k mutual funds and real estate investments, because there's no better time to get the clarity you need to invest with confidence. Watch live on March 4th and 5th. Get tickets today at ramsysolutions.com slash events. This is the Ramsey Show. I'm George Campbell joined by Ken Coleman. The number to call is triple 8 825 5225. Andrew's up next in Pittsburgh.

Starting point is 00:53:04 How can we help Andrew? Hey guys, can you hear me? Yeah, loud and clear. Hey, great to talk to you. Huge fan. I'm calling today about my parents. My dad has Alzheimer's and my mom had a pretty significant stroke about four months ago. So they're not able to live independently much anymore. Fortunately, my sister has been able to take care of them at her house most of the time and I'm taking them to their cabin on the weekends. But ultimately, we're looking to build them like a small residence next to me with lots

Starting point is 00:53:36 of grandkids to drop in on them through the day and stuff. We're hoping to keep construction costs under $ 250,000 and pay cash for it. My parents have done an awesome job at living well within their means, but we're looking at their statement from their financial advisor and it's kind of like a mixed bag of things that don't give us a good feel for exactly how much is available or liquid, at least at this point. So I guess our question is if or how we try to consolidate all these accounts to keep it simpler and have enough money to cut checks for the home they're building in the next few months. And I have the list for you when you're ready.

Starting point is 00:54:19 Okay. Are you like a financial power of attorney? Can you make financial decisions on their behalf? Fortunately, no. It's my sister. She has all that responsibility right now. Are you like a financial power of attorney? Can you make financial decisions on their behalf? Fortunately, no, it's my sister. She has all that responsibility right now. Okay. And you and her are working in tandem to figure this out? Yeah, as well as my other sister, yeah. Okay.

Starting point is 00:54:37 All right, so what, as you dug into the numbers, what do you mean parts of it may not be liquid? Well, they have traditional IRAs, each of them. So my mom has $150,000 in hers. My dad has $580,000 in his. They also have a $47,000 investment, which sounds like a blend of mutual funds. Both of the IRAs are set up with annuities. Okay. They also have a Pacific Life,

Starting point is 00:55:14 it sounds like a whole life policy. It shows a value of $31,000. They also have a bunch of gold, probably at least 20,000. And they have about 90,000 in their checking account. All right. And you're going, okay, what's the- And I'm intentionally leaving out the $80,000 worth of long-term care insurance coverage because that's a whole other nightmare that we're going through.

Starting point is 00:55:43 Was this an advisor? Was this the one who got them into all this? Yes. Oh boy. I might find a new advisor. Yeah. They've been selling them crappy products for a long time. Yes. All I heard was, ka-ching, ka-ching, ka-ching, more commission for me, more commission for me.

Starting point is 00:56:00 Here's a whole life, here's an annuity. These are some of the most complicated and expensive products that your parents honestly didn't need with this level of wealth. That was my initial thought also, so I'm glad to hear you guys say that. Neither here nor there, but here's what I would do, is figure out which of these has the least impact tax-wise.

Starting point is 00:56:21 So think through some of that tax strategy, because the traditional IRAs, they haven't paid taxes on the funds. So if you just withdrew 250, no, you're going to have to pay taxes on that as they file their taxes. So I would sell whatever else, like the gold. Again, you're going to have taxes probably with anything that's not just straight liquid cash in a checking account. The cash value in the whole life, that's 31,000 worth of cash value. Right. I might get rid of that

Starting point is 00:56:53 before I dip into the retirement accounts. You're gonna need to dip into the retirement accounts anyways with a project this big. Right. And you guys need them living on the same property with you? Yeah, I actually have a couple other lots next to me that are mine. Oh, nice.

Starting point is 00:57:10 And we're going to set them up on one of those. How many square feet is this potential build? We're trying to keep it under a thousand. It's just going to be a single level, you know, the basics. Okay. But you're still thinking 250 grand is what this might cost? Yeah, we have some grade to deal with on the properties. Okay. So you've done your homework, it sounds like.

Starting point is 00:57:33 This is not a wet finger in the air. No. You're right. Yeah. So, if that's the case, I'm gonna go strategically through a prioritized list of what I would liquidate first. And I would liquidate first. And I would honestly get a second opinion. And if you want one, you can jump onto ramsysolutions.com

Starting point is 00:57:50 and click on trusted pros. And you'll see a network of investment pros that we trust to help you out in this situation. And they're not gonna sell you garbage products. I can guarantee you that. So what are your thoughts, George, maybe on a tax advisor as well? Yeah, Tax Pro as well would really help go

Starting point is 00:58:07 and here's what's gonna have the minimal tax impact based on what you sold, what the cost basis was, what the capital gains tax, all the nerd or nerd tron stuff as you dig into this. But it sounds like your sister's gonna have to be very involved too. Right. Because she's making all of these moves happen

Starting point is 00:58:23 on your parents' behalf. But the good news is the money's there. It's not going to decimate. You're probably talking about liquidating a quarter of their nest egg to make this happen. Right. And then what's the ongoing cost to take care of them? They need 24-hour private care? Well, we're trying to work that out.

Starting point is 00:58:45 No, I don't think they do need 24-hour around-the-clock care. But being that they'd be living next to me, we'd set them up with cameras and things like that. You know, in case of emergency or something, we'd be pretty handy to go over and see what's going on. Yeah. to go over and see what's going on. But now we're trying to get home care to come by, at least for some of the basics, but my sister is able to handle that right now, and I think that's probably one of the problems we're running into with the long-term care insurance is they don't want to pay because

Starting point is 00:59:23 it seems like we can handle it. And we're just, you know. So you're having to fight that and go, no, this is something, this is exactly why we got long-term care insurance, so that if it got to this point, they could have care, that was covered. Yeah, Andrew, I would encourage you

Starting point is 00:59:39 to talk with their doctors, also get some advice from people who may have walked this road a little bit. I'm only saying this because my brother-in-law is dealing with this right now, and I will tell you that unfortunately the Alzheimer's situation is not going to get better, it's going to get worse. With your mother, you know, it's probably limited on what she can do depending on her symptoms, post-stroke. At some point, assisted care, assisted living is something that you need to at least kick the tires on. I just don't know how long your sister or you with cameras can, you have to think about

Starting point is 01:00:17 you guys and your ability to step in and do what you need to do while your life is moving. And I'm not trying to be sober, but I am trying to give a bit of wisdom, just a little bit of observation I've been able to take in as my brother-in-law walks through this. They're just not, that situation is not gonna get better for your mother. Yeah. And so-

Starting point is 01:00:41 Well, my dad's actually the one with all, the one with Alzheimer's. I know, I know. So yeah, we've know but she can't she can't take care of him It's all you guys and I'm saying before I spent two hundred fifty thousand dollars on a home I would really look at this from multiple angles to see you know, how long that solution That you're describing and I understand your heart not trying to talk you out of it I'm just trying to give you another perspective because I got no emotion attached to it, but I would really be playing that out with your sisters as to how long that model is sustainable.

Starting point is 01:01:13 Yeah. I would also just come up with a game plan with whoever's involved. Is it more than just your sister involved? My other sister. She's got two sisters. Okay. I would get together with all three of them and go, okay, here's where we're going to lay this all out.

Starting point is 01:01:30 Here's how we're going to fund this project. Here's what the ongoing care is going to look like. Here's the priority in which we'll spend this money. And that way everyone's on the same page. Because this is the kind of stuff that will destroy relationships. When there's surprises, things weren't communicated. I expected this. I was supposed to get this, and I want to at least savor these relationships. And that's what I'm cautioning Andrew, is look at all of the possibilities of how this

Starting point is 01:01:54 thing could go so that there are zero surprises. Do they have a will in place? Yes. Okay, good. Sorry you're going through this too, Andrew. You're carrying a lot. Okay. Good. Sorry you're going through this too, Andrew. Yeah, you're carrying a lot. Thanks. It's not going to be easy, but you're doing the right thing. You're a good son.

Starting point is 01:02:11 Very noble thing to do. And I'm wishing your parents and your whole family the best through this process, man. This is the Ramsey Show. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or recession, business taxes will go up or down, AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why

Starting point is 01:02:41 more than 40,000 businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities. With one unified business management suite, there's only one

Starting point is 01:03:10 source of truth for the visibility and control you need to make quick decisions. NetSuite's real-time insights and forecasting help you see into the future with actionable data. And when you're closing the books in days not weeks, you can spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's Guide to AI and Machine Learning at netsuite.com slash Ramsey. It's free at netsuite.com slash

Starting point is 01:03:43 Ramsey. You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted providers have been coached and vetted to serve you like we would. Find what you need at ramsesolutions.com slash insurance. Welcome back to the Ramsey Show. I'm George Campbell joined by Ken Coleman. Hey, if you're ready to get your finances in order once and for all in 2025, you gotta join us for our free live stream. It's on January the 23rd. Take control of your money.

Starting point is 01:04:31 It's hosted by Dave Ramsey and Jade Warshaw. You're gonna learn how to stop living paycheck to paycheck, how to free up more breathing room so you can pay off debt fast, finally get ahead with money. Plus Rachel Cruz and I will join at the end for a Q&A where you can ask your money questions live. And if that didn't sell you, here we go. When you sign up, you'll be entered to win into our cash giveaway. Five people will win four grand each.

Starting point is 01:04:54 Oh, wow. And again, this is a free live stream. So go sign up, ramsysolutions.com slash live stream or click the link in the description if you're listening on podcast or YouTube. You know, I was thinking about that when you said that that means four people or five people? There will be five people who win four grand each, so 20 grand total will be given away. Five people are going to sign up for this thing for free and get a massive boost into their baby step situation. Four, 4k is 4k. Worst case, you get information and motivation to help you get out of debt.

Starting point is 01:05:21 Best case, you might get a little cash to speed it up. I'll take the odds on that one. All right, Judy is up next in Tampa. How can we help, Judy? Hi there, thank you for taking my call. So I am 65 years old. I have zero savings right now. And I wonder if I should start,

Starting point is 01:05:43 instead of building up a savings account, build up a investment account, like mutual funds, as you and Ramsey speak about all the time. Yeah, we say, you can't save your way to wealth. The thing is that I'm 65, and nobody knows how long I'm gonna live. So like 65, what if in five years, it's not gonna move a lot? Sure. Well, if you're not here in five years, you know, it's it's not going to move a lot.

Starting point is 01:06:08 Sure. If you're not here in five years, it won't matter. That's true. So you can't you can't use that you can't use that line of thinking, right? You got a you got a plan for the best, you know, and hope for the best. But you know, once the worst happens, it really doesn't matter because this is for your long term play. Do you work right now? happens it really doesn't matter because this is for your long-term play. Do you work right now? I work part-time yeah I work I make about $1,600 a month. Are you single? Married? I live with my boyfriend he covers most of the expenses most of my income is disposable as I said I hate that term, but yeah. What happens if, and boy, I'm sure that's nothing but bliss with you guys. Go ahead, say it.

Starting point is 01:06:50 Well, what happens if you guys have a breakup? He's been your sugar dad. I've had... yeah, yeah, yeah. How old is this young fellow? I'm talking about looking 20. Oh, wow! He's my age. He's your age. And did you just slip in there that you've tried to break up with him a couple times? We had, well, yeah, we, yes. But um, there was a big difference. Well, the last time he was, his drinking was out of control, but he stopped drinking. And so we're back together the last two months.

Starting point is 01:07:26 Okay, he's been two months sober, that's good. Yeah. Okay. Yeah, really, really, really good. I really appreciate you sharing all this, and I'm glad we know this now, because I think it really, it's really, I'm really, really passionate now about making sure that you stop relying on him. Now I'm happy you guys are back together.

Starting point is 01:07:47 Hopefully that sustains. But you've tried to break up with this guy twice. This is a relationship that we could at least say has not been stable. So Well, it is 18 years. Okay. But my point is, is you guys aren't married. There's no legal involvement.

Starting point is 01:08:04 No, he has two kids. He doesn't want to marry me. That's the problem. no legal involvement. He has two kids. He doesn't want to marry me. That's the problem. I get it. And you're broke. But I'm saying it puts, he's saying it puts you in a precarious situation financially because you don't have any legal

Starting point is 01:08:13 or financial protections. And so you need to treat your finances. No, I do own a home. I do own a home. That I am, I mean, as I said, as you know, I live near Tampa, so the home just got Flooded so we so that put me back in the not in a hole. I'm not a hole I'm not in debt, but it wiped out any savings. I had do you are you living in his home?

Starting point is 01:08:37 Right now I'm living in his home, but I was in my home, okay, and what's going on with your home? We're going to rent out. Is it being? we're going to rent out my home. Oh boy, what's your home worth? Well there's good news and there's bad news. The good news is we bought it at 50 and it's probably anywhere between two and three hundred thousand now. Is what it's worth and is it paid for? Yeah yeah yeah we bought, yeah, yeah. We bought it together and we paid cash for it at $50,000 during the hosting market crash. You and your boyfriend did? Yeah.

Starting point is 01:09:13 So what happens if you guys split and you wanted to sell it? It's my name. It's in my name only, only. But you said you guys bought it together. Well, he gave me the money. He said, well, he and you would get very rich. Wouldn't he want to write to some of the money if you sell it? Hold on, hold on, hold on. I need to hear the voice. What, he gave me the money. He said, well, wouldn't he want to write to some of the money? Hold on, hold on, hold on. I need to hear the voice. What did he say? Give us the whole voice

Starting point is 01:09:29 treatment on that. What did he say? I didn't do it very well. Do it again. Well, here, we won't get married, but you can have this house and now and then if anything happens, you always have this house. Wow. This is delightful. I feel like you guys are a reality show waiting to happen you know 65 year old's been dating 18 years but this is interesting yeah this is a netflix series I can't force him to marry me I mean no Judy no no you want to you want to you want to hear something even worse yes you do yeah do? Yeah. My work, I work for him. Oh boy. He has a small business.

Starting point is 01:10:09 You're right, Judy, that was worse. See, George and I are on Team Judy, okay? We're wearing Team Judy t-shirts right now. And, good. And so you need to accept this, that you have got to get a different job, a full-time job that's not paid by this guy. And you need George, I want you to step in on what you think she should do at the house. I'm just wondering what's it like when you ask for a raise from your boyfriend. That's got to be awkward.

Starting point is 01:10:38 I think the last time I asked he said, he's a book-killer. I love this voice. I could talk to Judy forever. Yeah, this Judy you're nominated for my favorite caller ever. Okay, George, let's help out. Let's answer your original question. You gotta save money. You can't save and invest until you make more. So here's the deal. There's a foundational savings you need before you ever put a dime into investments, and that's an emergency fund. So you need three to six months of expenses. She doesn't have any expenses. Let's pretend like you do have expenses. So what would it be? Okay, well I do have to pay, like now I'm on Medicare and I

Starting point is 01:11:16 so I have to pay that and I have to pay for my phone and I have to pay for my car insurance. Great. Okay. So that does, and I get a social security check. So that kind of eats up my social security. What's your social security check? It's about, well, it was a thousand, but now they take Medicare out of it. So it's a little less than that. That's basically nothing. It's like 875. Okay. That's not enough for you to retire on. So our game plan is, hey, when and if

Starting point is 01:11:40 Judy can't work anymore, how is she going gonna survive if sugar daddy's not in the picture? The other shame of income I have is that we're gonna rent out the house for approximately 1,300 a month. But yeah, but that's not enough to live off of. Would all that money go to you? Yeah. He wouldn't take a dime of it. Well, as soon as I pay back some money

Starting point is 01:12:04 that I borrowed from him. Do you see how this gets messy and complicated? I really do, but I'm really stuck. You said, no, the house is in my name. I mean, what's Dean Judy going to do when she doesn't have the ball? Oh, Judy. I'll tell you right now, if Judy doesn't make some changes, Judy's going to have to find another sugar daddy.

Starting point is 01:12:22 And I don't know how many of those are left, sweetheart, when you get to your age, you know what I mean? I mean, just keepin' it real. I don't want one, I don't want one. Okay, great. So then how do we exist without a sugar daddy? The answer is more income. As George was taking you down the line. Get your own savings in place,

Starting point is 01:12:39 then you can begin investing, and all of that is going to take more income, because you don't have a ton to throw any of this right now. Okay, so like I should, if I have five to $10,000 saved, then I can start investing? Is that what you're saying?

Starting point is 01:12:53 Yeah, I would say 10,000 minimum, and then you can begin investing, and we'll send you our investing guide. Go to ramsysolutions.com slash guide, and we have a whole guide showing you the right way to invest, what to invest in. You don't need to be risky. I got that.

Starting point is 01:13:08 The mid cap, the large cap, and the small cap and the international mutual. Yeah, index and mutual funds and tax advantage caps. You need to make some money and start taking care of Judy. If this guy wants to keep. I lost some money twice. I mean, I had some money, but. I know.

Starting point is 01:13:23 I know, Judy, but that doesn't matter. Like, you know, the hurricanes, the hurricanes. I get it, the hurricanes. As you said, that cost $20,000. I know, but we're talking about the future. George, let's put her on hold. Christian, let's get her a free ticket to the live stream investing event with you and Dave.

Starting point is 01:13:38 Yeah, that'll be great. I think that'll also help her. Join us, March 4th and 5th, Judy. You can watch with your boyfriend. I don't know if he's gonna like it, but he can be there and hang out. But he can make that voice the whole time. It'll be great. Best impression I've heard today. This is the Ramsay show. There's just something so exciting about a new year. But honestly, sometimes it can feel

Starting point is 01:14:00 like, oh, I thought I'd be so much further along by now, especially when it comes to money. But here's the truth. No matter what your current money situation is, I promise you can turn it around this year. That's why I want to invite you to EveryDollar's free live stream on January 23rd. It's all about helping you take control of your money so you can make progress this year. Plus, I'll be taking your questions live along with Dave, Jade, and George. Anything you want to ask, it's on the table. And get this, you could win $4,000

Starting point is 01:14:32 just for signing up. Guys, this can be the year where you go from feeling behind to getting ahead. Sign up for the free live stream at everydollar.com slash live stream. That's everydollar.com slash live stream. That's everydollar.com slash live stream. Welcome back to the Ramsey show. The moment you've all been waiting for. It's here guys. What is? The Ramsey show annual listener survey is now live. Ken can stop texting me every day wondering when it's going to drop.

Starting point is 01:15:01 When's it going to drop? I feel like you oversold that one. That was good tease. That was the goal. I'm a real pro. We do like to know what people think though. No, really, this is our biggest survey of the year. And we wanna know your favorite parts of the show,

Starting point is 01:15:12 what you like, what you don't, what you wanna hear more about, whatever it is. We wanna hear from you. And we actually, our team pours through this data and uses it to craft what happens on this show. And to tell us what to stop doing. Exactly, they go, Ken, don't do that, they don't like it. It's usually a long list.

Starting point is 01:15:28 So there you go, enough with the YouTube comments, let us know in the survey and we'll take it to heart. Oh, there we go. Two ways to participate, you can just text the word survey to the number 33-789 or go to ramsysolutions.com slash survey and if you're listening on podcasts or YouTube. Show notes. Just go to the show notes.

Starting point is 01:15:46 It's Ken's favorite place to hang out. It's my favorite place to send people. Ken loves sending you, because it's all there. Everything you could ever want on this show is in the show notes. What was that link? It's in the show notes.

Starting point is 01:15:58 What was that? It's in the show notes. There you go. I can answer every call that way. I can just go next, show notes, next call, show notes. I could get through a record amount of way. I could just go next, show notes, next call, show notes. I could get through a record on the amount of calls. I'm impressed.

Starting point is 01:16:09 And here's the deal, if you sign up for this survey and you actually complete it, you'll be entered to win a $500 gift card. As a little thank you, enter to win. You're not guaranteed, but there's a chance. Nothing says I appreciate you more than cash. Exactly. I don't know where the gift card's to,

Starting point is 01:16:24 but I'm excited to find out. Where would you like a gift card to, George? If one, asking for a friend, if one was to get you a gift card that delighted you, where would it be to? Oh man, my practical says Amazon or Costco. Love it, cause Costco, that one $500 gift card, that's one trip to Costco, if you're lucky.

Starting point is 01:16:45 I'll be honest, that's a disappointing answer. Someone's buying you a gift? Where do you want a gift card to? Pick a specific brand. Where do you want one to? I don't know. Academy, so you can get more pickleball gear? Maybe Ralph Lauren, I don't know.

Starting point is 01:16:56 J. Crew, I'm gonna pick a lot of specifics. You gave me Costco. They have everything. What do you want? Like the show notes. Exactly, full circle. Let's get to the phone. Raymond is up next in Portland, Oregon. What's going on Raymond? Hi Ramsey. Thanks for having me. Sure. I was wondering, would it be worth for me to finance a vehicle? My vehicle is in

Starting point is 01:17:19 the shop right now. It has a blown head gasket and it also has a timing chain that needs to be replaced. It's going to cost me $4,000 to replace and they can't find an engine for that vehicle because it's so old. Okay, how old is the car? 2012. That's old? Oh my goodness. They can't find an engine? 2012 what? Nope, 2012 Chevrolet Colorado. They said the engines are discontinued. Alright, let me ask a question. Are there other Chevrolet trucks or SUVs where that engine is compatible?

Starting point is 01:17:59 They said they can find one, but it's going to be a used one. Right. But I would be barking up that tree to see what that's going to cost. Well, the question is, you put four grand into this thing. At that point, what is it worth? Right now, it's probably worth four grand. Oh, I see. So it's worth four grand right now, but if you did this repair and put four grand into it, what would it be worth?

Starting point is 01:18:21 Probably the same thing, four grand. That's what he's saying. Okay. That changes my answer, I guess. And how much money do you have saved right now? Right now, I got $600 in savings. I got $10,000 or no, $11,000 in retirement. Okay, we're not gonna touch retirement.

Starting point is 01:18:41 So you're down to, in liquid cash, you got 600 bucks? Yeah, I got 600 in savings, and then I got just a little over, right now, just right about $1,000 in checking. Okay. So you don't even have the money to do this repair? No, I do not. And your solution is to go finance a $25,000 car? Well, the thing with this vehicle is I have a warranty on it.

Starting point is 01:19:07 I bought a warranty package when I bought the vehicle. The vehicle is paid off cash. I have the title in hand. But I have an extended warranty on it. And right now they're going through to verify if they will cover anything on the vehicle for under that warranty. Okay, so let's play the scenario out. Let's say they cover it,

Starting point is 01:19:30 and they cover all $4,000 of the repair. Now you have a drivable $4,000 car? Right. Okay, and we'll drive that while continuing to save up. And then once we have enough money to- That's what I have with- What I have the problem is, is if they're gonna say it's going to need a new engine and

Starting point is 01:19:47 they tell the warranty company that where are they going to get an engine at? I don't know. Well, they'll put a used engine in it and you'll ride it out. Yeah, you already said we already covered that you could get a used engine. This isn't your forever car. We just need to go, there's a gap right now. You're broke. And I would imagine the warranty is going to cover the engine, the gasket on it, unless

Starting point is 01:20:07 you didn't put oil in it. Well, I put oil in it. I do my regular maintenance on it. All right. So I've got to believe that it will be covered. How long have you been living paycheck to paycheck, Raymond? I've been living paycheck to paycheck since I was born. You want to try another way? Would you be open to that? I'm actually on your guys system right now. You're calling me asking if you can finance a $20,000 car. I don't know what

Starting point is 01:20:37 system you found out. But the Ramsey Plan was saying... It's on the backside of the page. If we have to make the repair to get by, we make it happen, we pause all of the baby steps, we save up aggressively, sell anything we can to avoid debt. So that would be the game plan for you. And the question is, how can I build a habit

Starting point is 01:20:56 where you learn how to save up 500 bucks or a thousand bucks a month to pay cash for things versus turning to payments to solve problems? You see the difference? I hear you, right. So that's where, if they can't fix it and you need to get rid of this, if it's undrivable, then we need to go, we'll sell it for what we can,

Starting point is 01:21:14 plus use any savings we can to buy a car from Facebook Marketplace. And whatever car we can afford in cash, that's what we drive for the time being. And the goal is that you're not doing this for very long. It might be five months. It might be a being. And the goal is that you're not doing this for very long. It might be five months. It might be a year. And so what is your income?

Starting point is 01:21:30 I make about $54,000 a year. And what other debt do you have? I have a mortgage. I bought a house for the first time. My mortgage is $342,000. What's the payment on that? Credit card. 2278 a month. And what's your take on pay? Right about 4000.

Starting point is 01:21:53 Wow. Dude, you're not even living paycheck to paycheck. I got my mom helping. She lives with me. She co-signed the house with me and she's paying her portion. She pays me a thousand a month for her portion. I pay the rest.

Starting point is 01:22:11 What's the long-term game plan? Well, um... You get married, kick mom out, but she's still on the mortgage and has to pay? No, no. She just pays... She lives with you and your wife and chips in? I'm not married. I know, he's asking you what the long-term play is. I think I'm the only person thinking about Raymond's future right now. I am, I'm just enjoying your version of it. Okay. So I'm with you. Anyways, I'm playing, I'm just, I'm kind of role-playing here, Raymond, to go, we've got to make different decisions. This house was a mistake.

Starting point is 01:22:45 I'm not telling you you need to go sell it tomorrow, but this is a glaring problem in your life as you try to get out of this paycheck-to-paycheck cycle. And this car is one symptom. This is one Jenga piece in this mess. Can you make more money? What are you doing full-time right now? I am a fuel driver for Amazon. Okay, can you work more hours?

Starting point is 01:23:11 I can, yeah, I can request overtime. I would be doing that. It's just you and your shoes. Yeah, it's just you and mom at the house. I'd be working a lot if I were you. And my car's in the shop and I'm desperate for a better car? Dude, I'd be working as much as I can selling anything

Starting point is 01:23:26 in that house that's not tied down to get out of the situation. You have no other debt other than the mortgage? Well, come back to the work part is I have a problem with that because my mom works too. She works on the days that I don't work. And then she goes work on the days that I don't work. and then she goes work on the days that I don't work. Why can't you guys work at the same time?

Starting point is 01:23:49 Did I miss something? So I have a 13-year-old daughter. Oh, so someone needs to be there? Yeah, so when I'm at work, she watches her, and then when she's at work, I watch her. And then when I'm at work, when she's at work, I watch her. Man. Is there a special condition? I mean, why does the 13 year old need to be watched?

Starting point is 01:24:10 I think we might need to figure out a childcare situation to where you both can work at once. Man, that's messy. Hang on the line, I'm gonna send you a copy of my book, Breaking Free from Broke. And hey, if you wanna catch the rest of the Ramsey show, we got more where that came from. Head over to the Ramsey Network app,

Starting point is 01:24:24 just search that in your app store or click the link in the show notes. If you're on radio, stick around. The show will continue. Hey, what's up guys? Episode two of 90 day money makeover is available right now on YouTube. This series follows real people as they take on the challenge of transforming their finances and their lives in just 90 days. In this episode, watch as they face new obstacles, celebrate wins, and push forward on their journey. And of course, I'll be walking alongside them every step of the way. Okay.

Starting point is 01:24:58 Now here's a little sneak peek of what the new episode is all about. Me and Dara, back in November, have a new son, a baby boy. We have $87,000 in debt. I've been in debt since I was like 18 years old. I gave birth to him. I knew, I said, I cannot leave him

Starting point is 01:25:20 with someone that I don't know. I don't care if we're eating rice and beans, Sean, I told him. There was no going back. When you guys called into the Ramsay show, it was like, I think that we should push them harder. Baby Jonathan being born is a wake-up call for us to finally change.

Starting point is 01:25:37 I can't go on another month. Wake-up call. You know, over the next 20 years, this is important. You know, we've got to get this right. You want to pay off your debt. You want, for the next 20 years, this is important. You know, we gotta get this right. You want to pay off your debt. You want to get your time back. You want to get your home. Nothing usurps those three.

The Ramsey Show - Draw a Line in the Sand and Say “I’m Done!”

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