The Ramsey Show - Never Rationalize Debt!

Starting point is 00:00:00 Welcome to the Ramsey Show where we help you win in your life. We're going to help you win with your money, win in your work, and win with your relationships. The phone number to jump in is 888-825-5225. 888-825-5225. I'm Ken Coleman. George Campbell joins me on this momentous day. America votes, or in George's case, and millions of people, they've already voted early votes. And you are, from what I understand,

Starting point is 00:00:44 you're big on voting on election day. Yeah, I'm a traditionalist. I like to wake up on this day knowing that I've got a civic duty to perform. I respect that. A little pomp, a little circumstance, that's kind of the way I roll, as you know. Yeah, Christmas isn't the same

Starting point is 00:00:58 when you open your gifts five days early. That's right. Interesting you say that. I don't like to open up gifts on Christmas Eve. Very traditional. I like to wait. I don't like to open up gifts on Christmas Eve. Very traditional. I like to wait, you know. I respect it. But I tell you what, it doesn't matter who wins today, because we'll be here tomorrow.

Starting point is 00:01:12 And the next day, and the next day, we'll help you win with your money, no matter who's in the White House. So calm yourself. You got your money questions. George is here. I feel like if they're listening to the show today, they're doing pretty good. Right. You know what I mean? Like mentally, you're doing pretty good. If you're not glued to headlines and instead you're listening to us, that tells me something about how your life is going.

Starting point is 00:01:34 How are you doing right now? I'm doing great. You seem to be a, you're a self-admitted anxious person. That's true. Are you anxious about it? The more anxious other people get, the calmer I get. Because like, oh gosh, I guess I'm not that anxious. Okay. Yeah. That's kind. Are you anxious about it? The more anxious other people get, the calmer I get. Because like, oh gosh, I guess I'm not that anxious. Okay, that's kind of interesting. That's where I compare. All right. Well, we're calm. We're clear here today to help you win in those areas.

Starting point is 00:01:53 Let's go. Cynthia is joining us in Tallahassee, Florida. Cynthia, how can we help today? Hi, Cynthia. Sorry, thanks for having me. I'm kind of nervous. You're doing great. I'm sorry. Thanks for having me. I'm kind of nervous. You're doing great. Okay. Um, I feel like I'm stuck. I am here in Florida, originally from Texas. I moved to Florida in 2013 to help my parents. They were, you know, aging, so I wanted to be closer to them. Subsequently got married. We bought a house in 2017 and then, and then both of our houses, my parents' house and my house got damaged by the hurricane, Michael, in 2018.

Starting point is 00:02:31 It took three years to get both of the houses back together and, you know, with the help of my husband, he was able to help us get it repaired. It was an ordeal that I never want to go through again. My question is this. I don't want to live in Florida anymore, but my parents are elderly. My husband passed away two years ago, so I don't have him to help me anymore. I'm a full-time caregiver to them. I have a full-time job.

Starting point is 00:02:59 Should I sell my house to kind of get that burden off of me, the responsibility of having two houses, caregiver, full-time job is a bit overwhelming. If I sell my house, I'm thinking of renting until I can convince them to go back to Texas or, you know, God forbid until they pass away, which, you know, none of us know how long we have, but is it a good idea to at least get rid of my house, bank the money, put it in CDs, and then just rent and not have to think about, well,

Starting point is 00:03:32 if another hurricane comes, at least I won't be responsible for that house or two houses again. What's going on with the other house? That's my parents' house. They're living in that house. But you own it completely. That's theirs.

Starting point is 00:03:47 Is there a mortgage on it? No, they own it completely. Oh, so you don't have two houses. Their house, no. You keep saying, okay. Right, their house, no. I think she means she's responsible for her parents. She's kind of their chief caregiver.

Starting point is 00:03:58 Yeah, and you would rent. Would it make sense for you to just move into the parents' house if you are the caregiver? It would be difficult and be more stressful. Okay. I mean, I see no problem with you selling this house and renting. Now we gotta look at the long-term future

Starting point is 00:04:16 of you becoming a homeowner again to reduce your largest fixed expense as you enter into your retirement years especially. But right now you've been through a lot, Cynthia. Yeah. I mean, between the damage to the house, the passing of your husband, have you had time to even grieve all of this

Starting point is 00:04:31 or you've just been in survival mode taking care of mom and dad? Survival mode, COVID hit, we got, mom got COVID really bad. It was horrible. My husband passed away and she had a major blood clot And she had a stroke and it's just been That's heavy in biblical. So sorry for you. That's that's so thank you. So I'm blessed. I am blessed

Starting point is 00:04:57 What would it look like to rent? What's it gonna cost versus your current mortgage payment? Can you financially handle? Yes, I'm looking at apartments that are around $2,000 a month. Okay. And what's your take-home pay every month? Um, around $5,000. Are you working full time? I am. Okay. And did your husband have life insurance?

Starting point is 00:05:29 Do you have any other assets? He had a small amount of life insurance. I do have an emergency fund. I have about $50,000 in savings. Good. Maybe about, I carry five in checking. Do you have any debt other than the mortgage? I have one credit card that has about $900 balance on it.

Starting point is 00:05:55 Remind us again, what will you make, stand to make on this house if you sell it? What will you clear? I'm thinking around 200,000. And you would just put that in a high-yield savings account? Yeah. For a year or so? I would put it someplace where it would draw interest but be safe. I was thinking CDs haven't really gone that far with it, but you know.

Starting point is 00:06:19 Well your high-yield savings account will have competitive rates while keeping it very safe. It's FDIC-insured, and so it's not gonna disappear. You're not investing this money, and it'll just help it grow with sort of the pace of inflation. If you're talking about 4% right now, is what the rates are at.

Starting point is 00:06:34 I, you know, Cynthia, I don't know, George, what you think about this. I don't like the fact that her rent's almost half of her take-home pay, but yet I understand she wants to kind of get out of this house. I wonder if buying a condo or something that's, uh, much payment lower, get your payment lower, less expensive, not have to worry about, you know, like a single unit house and any kind of storm stuff, you know,

Starting point is 00:06:54 be a part of something. Have you thought through that? You understand our concern about your rent being almost half of your take home? Yes, I am concerned about that as well. What about my idea? There might be a better version of my idea, but what do you think of my idea of buying something much much smaller, maybe more of a not a single unit home? It's not a bad idea. I don't know the availability in my area. I've not researched it, but I'm willing to do availability in my area. I've not researched it, but I'm willing to do some research on that.

Starting point is 00:07:29 I think it's worth kicking the tires, don't you? Absolutely. Because what would your ideal number be to pay rent? What would be ideal? I could be at $1,500 or less would be awesome. That's what I'd be aiming for. What's your mortgage payment now? Around 1500, but I send in a little extra every month towards the principal. So I pay about 1850. Okay, what's left on the mortgage?

Starting point is 00:07:57 166. Okay. Yeah, I would do some more homework, but either way, you're gonna be okay. But again, we don't just don't want too much of your world being eaten up by that rent to where you can't accomplish other financial goals. And then you have a new version of stress, which is financial stress. So I think we're going to have to do some homework.

Starting point is 00:08:16 I mean, it's a rock and a hard place here, and I hope it's just a season for you and we can get you to smooth their ground soon. Yeah. So sorry, Cynthia, for all the storms you've been through, but it seems like you've got a really great attitude and that's what it takes to walk through these times of pain and come out on the other side. So thank you for sharing your story and time with us. Quick break.

Starting point is 00:08:37 He's George Campbell. I'm Ken Coleman. This is The Ramsey Show. One of the questions I get all the time is which life insurance company should I use for my term life policy? A valid question since there are hundreds of companies out there with rates all over the place and riders and add-ons that are simply a waste of money. You need to get this done and make the right decision.

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Starting point is 00:10:08 a national something day every day we have like a cyber security awareness month so I feel like we're lost the plot yeah we've lost the plot tell you what we haven't we haven't done too much about and that's celebrating Christmas that's something we can say it's nice we're moving into Christmas and that says to me and I've got some notes here. Once again, Ramsey with the amazing deals around Christmas time. We call it the 50 days of Christmas deals. 50 days, George. That's a lot of days. It's a lot of days. So whether you're shopping for yourself or maybe you're looking for the perfect gift this year, the gift that keeps on giving, if you can tell me what movie that's from, you get a bonus point. Oh boy, the gift that keeps on giving.

Starting point is 00:10:48 Christmas Vacation. You got it! Very well done, George. Sticker for you. Send me to Trivia. James will get that for you later. You can get up to 30% off on our best selling products. That's what you're gonna get in the 50 days of Christmas deals. Breaking free from broke. Hello. There you go. That's right. On sale for the first time ever. Yeah, because it's now reached its capacity of new book status. Almost there. We decided to just let it go.

Starting point is 00:11:13 It released in January. We're putting it on sale for the first time. How about the Get Clear assessment? The very popular tool that we created to help you figure out what's that right place on the bus, right? Right seat on the bus. How can I do work that I'm really good at and I get paid well? Those are just two examples of some of our best-selling products. Go to ramsysolutions.com slash store, ramsysolutions.com slash store, or click the link in the show notes.

Starting point is 00:11:40 Do you folks know that the show notes, it's kind of like being under the Christmas tree. You get to the show notes, George, and it's like seeing Christmas tree on Christmas morning. Lots of good things. I never thought about it like that. Every show has a few gifts in it in the show notes. You gotta go to find out what's in that description. So there you go.

Starting point is 00:12:00 Thank you for that. ramsysolutions.com slash giveaway or just go to the show notes. We make it easier for you. You don't have to remember all the links. George wants a link. You don't need a link. You know what you need?

Starting point is 00:12:10 Show notes. There it is. All right. Let's go to Rob in Los Angeles, California. Rob, how can we help? Yes. Hi. How's it going?

Starting point is 00:12:18 Pleasure speaking with you guys. You bet. Yeah. Wonderful. So the situation here is I've been with my current company, I work in finance. I've been with them going on about, going on 12 years in June, so about 11 and a half years right now. But I have two different paths that I can go at the current moment.

Starting point is 00:12:39 But I have a little bit of a dilemma trying to figure out which way to go. So in my current role, I'm doing pretty well and I'm making enough money to be happy and comfortable and I can go into my next role, which would kind of be a step up in a different division in my company, which would be a situation where I'd work with. I'd be doing a similar thing, but working with larger clientele, which potentially can get me, you know, give me a 20, 30%, you know, pay increase. Um, or my other situation is, um, that I can stay in my current role and potentially move into leadership, um, with my current company and the situation there is, you know,

Starting point is 00:13:24 I would potentially make a little bit less doing that compared to what I'm doing now as the leadership role is more of a base salary position with an annual bonus at the end of the year. And my current role is I'm more on the kind of the sales arm. Um, and I'm doing really well with the sales part of my job. So going into leadership, I might make a little bit less upfront. However, what I'm struggling with is if I move into leadership over the course of my lifetime, right, my total lifetime earnings might be higher.

Starting point is 00:13:56 So it put me down that career track where I can move into leadership and then potentially to an executive role and make more later on. So I'm just trying to figure out what to do and to throw another curveball into the mix because I've only been in my current role with my company for about 11 months out of the, you know, you know, 11-12 years I've been at my current company. So just trying to figure out which direction to go and yeah. Well which one do you want? Well I think I'd like to go into leadership more than anything but I would be taking a pay cut. How much of a pay cut? Potentially 80 to 100 thousand dollars. Whoa and this is with your current company? They've

Starting point is 00:14:42 offered you this role? They haven't offered me the role in writing, so I applied for it. And what they told me is, you're doing a good job, we can see you doing it, but we're not going to give it to you right now. So what they're going to do is, there's an opportunity for me with another leader in the company who's going to be, they're not going to be around, let's put it that way, I don't want to give out too much information, but they're not going to be around for seven, eight months. And what they're planning to do is let me take over for that person. And that's the first thing you gave us.

Starting point is 00:15:15 You gave us two options. Is that the first option you just told me about? Yeah, that's the leadership track. The other one would basically just be continuing to do sales in my company with larger clients. And I think I would make more money for the next few years staying on the sales side. But I think over the next 10 years, I would make more in leadership. Yeah, I think that's right. But I don't like the idea of you taking an 80 to $100,000 pay cut for that. There's other ways to get into leadership.

Starting point is 00:15:46 And it's been my experience just observing, taking literally over 10,000 calls on the Ken Coleman show and feels like half of them were these kind of questions. If you eventually want to get into leadership, you will have an opportunity to get into leadership. And here's how it works in the American workforce. You keep getting promoted because you're doing a good job and eventually promote you into leadership. So I don't like the idea of you kicking the tires for what it sounds like seven to eight months as a tryout. And even if you win the tryout, your reward is an 80 to $100,000 pay cut.

Starting point is 00:16:26 If I'm a leader in your company, I would look at you and go, Rob, I'm not gonna give you this job because this is dumb. Yeah. So for that reason, George, tell him that I'm out. For those reasons, I'm out. What are you making right now, Rob?

Starting point is 00:16:46 What's the total comp? What'd you make last year in this past 12 months? Last year total was around 250, and this year it'll probably be around 280. And if you take the new sales job with bigger clientele, you're saying you're gonna make 300, 350, 400? Potentially, yeah. to make $300, $350, $400? Potentially, yeah. I mean, so I built up a pretty good system doing what I'm doing now, moving into this

Starting point is 00:17:10 next larger sales role doing what I'm doing. But leadership, you're saying they'd pay you like a $250 base and maybe some bonus on top of that? No, it's less than the $250. What are we talking about? No, I think it's more like 150, 180 base, plus the discretionary bonus at the end of the year, and I have no idea what that would be.

Starting point is 00:17:30 Yeah, I doubt the bonus is gonna be your total comp. It's called discretionary. I don't like discretionary bonuses. I like bonuses based on percentages and things that we agree to. So- Yeah, I'm with Ken on this. I wouldn't take this giant pay cut.

Starting point is 00:17:44 No, Rob, do you not see a ladder by you taking this bump in sales, bigger clients, bigger responsibility, bigger paycheck? Do you not see that that's going to lead to opportunities to lead, whether in your company or outside? I mean, I suppose I do. I suppose I do. Yeah, I mean, I do see an opportunity to do that. I just don't know when to take that, how to take that leap because I think... It's not a leap. It's not a leap. I can see you're still struggling with this because you're a guy who really wants to lead people. You want to lead. Yes, I do. Yes, I do want to lead them. And know, and I think that's great. Because not a lot of people who take leadership positions

Starting point is 00:18:29 want to lead. They just get pushed into it. That's what's wrong with corporate America. If you're really good at sales, they go, great, you're going to be a sales leader. Yeah, and you're like, I don't want to lead people, I just want to sell. You want to lead. And for that reason, Rob, there will be no shortage of opportunities for you to lead. I think you think that you're going to pass up on an opportunity to lead that will never come back to you. And I got to tell you, man, you keep performing in a sales role. It's like showing up at the train station.

Starting point is 00:18:56 Here's what I can guarantee you, George, a train will show up. So yeah, Rob, no, please don't get impatient here. Take the bump. It's a bump in every way. Influence, income, and opportunity. Take the new sales gig. It'll turn into the leadership influence that you want. You're a good guy, Rob.

Starting point is 00:19:18 Trust me on this one. I'm older than you, unfortunately. 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,

Starting point is 00:19:44 making your home a blessing and helping you build lasting wealth. Learn more at churchillmortgage.com. Churchillmortgage.com. This is a paid advertisement in MLS ID 1591 and MLS consumeraccess.org equal housing lender 1749 Mallory Lane, Suite 100 100 Brentwood Tennessee 37027. Welcome back to the Ramsey Show. I'm Ken Coleman. George Campbell is alongside and we are here for you today to help you continue to win in life no matter who wins at the polls today. So a good reminder. There you go. Vincent is going to be the next caller here in Colorado Springs, Colorado. Vincent, how can we help? Hey guys, huge fan. My wife and I are based Step 7 and we are FQ coordinators.

Starting point is 00:20:34 Wow, and thank you. Oh, of course. We are taking a break this year because we're having another baby. Oh, congratulations. this year because we're having another baby. So congratulations. Thank you. Um, this is a really a future estate question. Now let me explain my brother and his family have completely cut off contact with my parents and now with me and my family. And they've given me the power of attorney, et cetera, to deal with their estate once that time comes.

Starting point is 00:21:06 And here's the tricky part though. My parents bought and paid for my brother's house almost 20 years ago and still own it. And they're still paying for taxes and insurance, et cetera. They didn't buy me a house, which is not a big problem, but my parents won't give me much more direction other than he gets the house and I would inherit their house upon their death. But my parents have a rental I'd like to have. That's not in the will. My question is, how do I make these decisions from a moral and financial standpoint if they won't give me direction and my brother's basically gone

Starting point is 00:21:42 AWOL from the family? Well, I think it's pretty simple. The stuff that they're not giving you direction on, you sit down with them and go, Mom and Dad, this is not fair to me for you to put me in charge of executing on your will and having some things that need to be dealt with upon your passing that aren't specifically laid out

Starting point is 00:22:02 on the will, so please do so. And whatever isn't clear, I'm going to just use my best judgment on. And you're, you know. Yeah, then there's no moral problem. If you bring it up to them and they don't make these changes, to George's point, then you do what you think is right.

Starting point is 00:22:15 But I think this is just a sit down conversation. Is there some reason why this hasn't happened or why you haven't gone this route? I have spoken to them about, I need some more direction, this needs to be out in the air and I can't get any any progress with that. Then don't worry about it. Have you done all that you can do on this? From my standpoint I believe so I just don't like the pressure. There's no pressure. No pressure. No pressure.

Starting point is 00:22:45 No pressure. I'm getting some undertones here that you're resentful towards your brother. Number one, for cutting off all contact. Number two, for being financially irresponsible and then somehow benefiting from it all, with mom and dad funding his life and buying his house. Am I incorrect? I would be. I feel I'm resentful toward him putting you know, putting myself in your shoes.

Starting point is 00:23:05 I think I'm more mad about it than Vincent is. So is what you're saying, hey, I don't want him to get the house, but that's what they're wanting and I have to follow their wishes? I'm okay, I think with him getting the house, they already bought him. I don't want to deal with that. But you're saying he shouldn't get other things. Right. I think it's the rental. I think it's the rental unless you're not telling us what else is unclear. But one thing we know is unclear is we don't know who

Starting point is 00:23:32 gets the rental upon their death. Correct. And you want it. And I just don't want that to go through court. I don't want it to go through all the things if it's not in the will. I agree. Again, I think you stay on them about it to the point that one of two things is going to happen. Either they're going to deal with it because you keep pestering them about it, or they go, okay, you're no longer involved. And then you go, then it's not my problem. But you need closure on it.

Starting point is 00:24:02 Closure. And so you need to drive for closure. To be unclear is to be unkind, we like to say. And so we need clarity here. Do you agree, George, if I got it? Absolutely. I mean, you need to go say, put the rental in the will. I would have the will out going, all right, we're going to update this now.

Starting point is 00:24:18 Maybe it's in the presence of an estate attorney where you go, hey, we're going to knock this thing out once and for all and make sure that the I's are dotted, the T's are crossed and say, that is my job as power of attorney. This is what I've been tasked with. And you're not allowing me to do this job properly until we get all the details out there. And then you can make suggestions and say, here's my suggestion.

Starting point is 00:24:38 Clearly brother has not been financially responsible. He has cut all ties. And therefore I believe it makes the most sense for me to acquire the rental. He can keep his house, he can keep what he's got going on, but we should not give him any more to manage. That would be unwise. Would you agree? I would agree.

Starting point is 00:24:57 Then lay it out there. Lay it out there along with the boundary of guys either take care of this or take me off the situation. I don't wanna be stuck with this. I do not wanna go to court after your death because you didn't put everything, all of your assets in the will. That's just incredibly insensitive

Starting point is 00:25:16 and you're putting me in a tough situation. I just, I would just hold firm on that. Okay. Yeah. Appreciate the call. It's far more relational than it is a tactical thing. Cause it sounds like mom and dad still love the, you know, they love their son even if he has been misbehaving. And the other brother says,

Starting point is 00:25:35 I don't want to enable and incentivize this poor behavior by giving him more to manage. And yes, but I also think the biggest contention George is that he doesn't want to go to court. He doesn't want to fight his brother over this asset. He doesn't want it to be messy. That's not been stipulated in the will and he doesn't want to deal with that. I think he's just exhausted from whatever this drama is.

Starting point is 00:25:56 I think that's the driving force. And I understand that. Things like mom and dad might be kicking this can down the road because they're not ready to decide. They're not ready to deal with it either. Michelle is up in Seattle, Washington. Michelle, how can we help? Hey there, thanks so much for taking my call and thanks for doing what you guys do. I really appreciate it. Thank you. How can we help today? Hello? Do we lose you? Are you there? Uh oh, it sounds like you're in a tunnel.

Starting point is 00:26:23 Michelle, are you talking to your phone? Oh, shoot. I just looked over. Okay, there we go. Now I have you. All right. Can you hear me? Yes. Hey, thanks for doing what you do and being there for all of us.

Starting point is 00:26:32 I really appreciate it. Yeah, no problem. What's going on? Well, I'm nearing the end of my divorce and I owe my ex $226,000 to buy the house. Whoa. Currently, we owe, no, no, this is a good thing. There's lots of equity in it. Currently, we owe $12,000 to buy the house.

Starting point is 00:26:40 Wow. Currently, we owe, no, no, this is a good thing. There's lots of equity in it. Currently, we owe $12,000 to buy the house. Whoa. Currently, we owe, no, no, this is a good thing. There's lots of equity in it. Currently, we owe $6,000 to buy the house. Whoa. Currently we owe, no, no, this is a good thing. There's lots of equity in it. Currently we owe $24,000 on the house.

Starting point is 00:26:52 And my question mainly is, I'm 55. I have plenty of money in my 401k to pull out money to pay him off. But tax-wise, tax implications, I don't know if that's my best choice. Should I pull the money out of my 401k or should I just refi? Can you do a cash out refi? Yes, I could.

Starting point is 00:27:12 That would be a better option than taking the money out of your 401k mathematically. And for your future. Okay. And can you afford the payment if you do a cash out refi? Yes, I can. I make about 10 to 12 thousand. 10 thousand very conservatively a month. Okay. And what do you think the payment would be

Starting point is 00:27:31 if you did the cash out refi? Probably 1,900 to 2,200 a month. So we're talking 20% of your take home pay? Yes. That's way better. That's way better. Not only the house payment. I know. But I also don't want you to pay a 35% tax to rob your retirement and unplug all the future growth. You pop that in a calculator and you'll be like, oh my gosh, okay, yeah, let's not lose a million dollars by making this move happen. So the cash out refi is the, you know, sort of the least evil of the options.

Starting point is 00:28:04 It's still not fun, but that's what we would recommend in a divorce situation. Okay. And guess what? You're probably gonna knock it out pretty fast. You know, I think I will. I'm pretty disciplined and all right. And you wanna keep the house.

Starting point is 00:28:17 It's just interest rates are killing me. Yes, I do. Well, the way you're gonna pay it off, truthfully, Michelle, if you crunch the numbers on this, as aggressively as you're gonna pay this down, making an extra payment or three every month, this thing's going to get knocked out so fast that the interest is really not going to be, it's going to be a nothing burger at the end of the day when you own this house free and clear and you didn't touch your nest egg.

Starting point is 00:28:38 Okay. All right. I really appreciate you guys in here. Just curious, real quick, we only got about 40 seconds, but I'm curious. What is your 401k nest egg? What is that? It's 50 in my main one and 50,000 in my other. Yeah. And how old are you? 55. Yeah. Unplugging a quarter million dollars and taking a 30 plus percent tax hit? No way. You are going to be set. You just leave that money alone. You are going to be a very happy lady. Okay. And so I can just rent my little guest house out for income to help me pay extra

Starting point is 00:29:12 on the house. There we go. George's favorite words. He likes that. What's the word? Well, you're either always like, get a roommate or rent your thing out. I love that. She's getting creative. That means that mortgage payment isn't gonna be that much when you look at your total budget. Bring it home, 10 grand.

Starting point is 00:29:27 She's gonna be making double, triple payments on this thing. It'll be gone in a few years. Well, I wonder what she can get for that little guest house. I bet you it's close to the number of her mortgage payment here. 100%. I like that. All right, quick break and we'll be right back.

Starting point is 00:29:40 This is the Ramsey Show. Hey you guys, when you go against what society thinks is quote normal, like avoiding debt for example, it might seem weird at first and that is totally okay. We want you to be weird if that means you're doing things intentionally, including how you spend your healthcare dollars. And one way to be intentional

Starting point is 00:30:00 is with Christian healthcare ministries. CHM isn't health insurance. They're a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of healthcare costs without sacrificing their freedom. Programs start as low as $98 a month. Find out more and join at chministries.org slash budget. That's chministries.org slash budget. That's chministries.org slash budget. Welcome back to the Ramsey show. Thrilled to have you with us.

Starting point is 00:30:28 888-825-5225, 888-825-5225. So we always have a live audience that come to the lobby here at Ramsey Solutions and they watch the show, list the the show, we go out during breaks and say hi and take pictures and we just met an awesome guy named Clark and Clark brought us gifts and there they are. That's me and George. These are custom Funko pops which I was explaining to Ken is a very popular figurine brand. Which I was unaware of what Funko Pops were until moments ago, and now I'm glad I know about them. And he also brought a themed candle for you, George,

Starting point is 00:31:10 and I feel like you gotta explain that. It says, smells like horse girl energy. So if you remember my famous call where I told a girl to sell her horse and other unkind things, and it literally somehow, the candle smells like I'm in a barn. For good and for bad. I smelled it. It's wonderfully

Starting point is 00:31:26 done. So thank you, Clark. You're very thoughtful. Amazing work. Very fun. And so they're going to sit here. The hair is on point. I just got to say. Yeah, he's got some really, he's got your hair, he's got my hair down. He's got the- Tortoise glasses, the denim jacket. I'm known for a paper crinkle. And he's got that in my hands. And I'm known for a paper crinkle and he's got that in my hands. And I'm known for my iced coffee. And you got your iced coffee. So very fun. So those are going to sit there and show. In fact, we talked about every time we cove together, we may bring those in. I think they have to be stapled from the desk. Because we need our own custom desk ornaments when we were together. So there you go. A new tradition has started. All right. Speaking of traditions, George, you know I like when you talk nerdy. You do like when I talk nerdy to you.

Starting point is 00:32:08 In today's segment. What are you going to talk? I'm told you're going to talk nerdy to me. What is the topic? I can't think of anything nerder than the S&P 500. Standard and poor, baby. That is... If you know, you know.

Starting point is 00:32:20 Yeah, well said. So we hear about this term all the time in the news, they have the S&P 500. A lot of people's eyes glaze over. So I'm gonna give you the talk nerdy to me, kind of put the cookies on the floor for everyone listening because we do talk about it a lot and it's important for you to understand. Not the floor, maybe the bottom shelf.

Starting point is 00:32:37 Bottom shelf. Nobody wants to eat cookies that have been on the floor. Five second rule. Yeah. All right, so the S&P 500 is an index that measures the top 500 companies and how they perform. And standard and poor, that's who's running this thing. And so an index fund, when you think about it, Ken,

Starting point is 00:32:52 we talk about mutual funds a lot. We're talking about a giant group of stocks pooled together, investors pool their money to purchase these funds and shares. And so an index fund is a type of mutual fund that buys stock in these 500 companies. And when we think about mutual funds, we have the actively managed, professionally managed funds

Starting point is 00:33:10 that we talk about a lot on the show. You work with a SmartVestor Pro, an investing professional, they purchase the funds for you. And then there's the S&P, which is considered a passive form of investing. These are passively managed funds because it's just tracking the index. There's no one that is hand picking the funds

Starting point is 00:33:28 and companies that go into this. They're just tracking the top 500 companies. And the S&P 500 now represents about 80% of the total stock market value. That's right. And it's largely, you know, if you're talking about the largest companies, these are large cap companies,

Starting point is 00:33:40 companies with a large market capitalization. And so if you invest in the S&P 500, your return is going to mirror whatever those 500 companies do. And you will own all 500 stocks in that index if you have an S&P 500. And the average annual return, when you look at the history of this thing, has been around 10 to 12% since its inception. So when we say on the show, hey, if you invest this much, you expect a 10 to 12% return, it's not out of thin air.

Starting point is 00:34:07 This is not our opinion. This is just based on the historical average annual return of the S&P 500. Some years it's going gangbusters like we've seen the past few years. Some years it's gonna be down, but over time we've seen to plus 10 to 12%. And so the pros of this are you're diversified

Starting point is 00:34:24 across investments. When you think about 500 companies, 11 major industries, so you're reducing your risk since your money isn't dependent on one fund's performance. And they're pretty predictable because it's just gonna do what the market's doing. So you kinda know. Now the cons are you're settling for the average returns.

Starting point is 00:34:42 So the goal of these actively managed mutual funds is to beat the S&P 500. That's what these investment pros are trying to do is to handpick the companies and funds they think are going to outperform the index. So that's the simplest version I can give you in one segment Ken. And for folks out there who are ready to invest,

Starting point is 00:34:59 they're excited, they wanna learn more, we've got a whole hub that's totally free for you, ramsysolutions.com slash invest. And we have a got a whole hub that's totally free for you. Ramsesolutions.com slash invest. And we have a complete guide to investing that's totally free. This is a very in-depth resource, but we only give you what you need to know. And you can also click the link in the description,

Starting point is 00:35:16 in the show notes, Ken, if you're listening on YouTube or podcast. I've been talking about the value of the show notes. It's where the magic happens. Go there, you'll get this free complete guide to investing. We'll give you a link to the hub and you'll feel a lot smarter. Next time you're at a dinner party, your friends bring up the S&P 500, you'll go, do I know about the S&P? And you're going to say, and they're going to go, how do you know all this?

Starting point is 00:35:37 And you're going to go, because George Campbell talked nerdy to me one day. On the Ramsey Show. On the Ramsey Show. So there it is, folks. It's one of the hottest segments on the show. If you want more of George talking nerdy, let us know. Comment, like, subscribe, share, all that. And are you adjusting our guys there? Yeah, I was seeing if it bobbles. There's no bobble. I was excited to see. Because I think you've got a great bobble naturally, Ken, on your actual head. So I was excited to see if Ken's does a little wiggle. I'm just going to try to do that in between calls there. Stephanie's up next in Phoenix, Arizona.

Starting point is 00:36:11 Stephanie, how can we help? Hi. I just had a question, General. So I was in a car accident not too long ago. And because of that, I do have a backup car that I'm currently in and it's a 1996 Chevy Blazer and it runs good, it has AT, it has a heater, it's perfect as is. But I do commute a lot so I'm looking to buy a car.

Starting point is 00:36:42 I do have money cash to buy one but my dad used to be a car salesman and he was saying that I shouldn't use this money to buy the car out cash, that I should get comfortable with paying a little bit of down payment and then make it adjust so that way I'm comfortable with the monthly payment that I receive. But I don't like the idea of debt. I don't like the idea of paying interest because you're paying money for essentially money that you don't have. So I don't really understand that part, but I just, I want a second opinion. Well I'm going to caveat this by saying I'm sure your dad is a lovely, wonderful, intelligent

Starting point is 00:37:21 man, but he has been brainwashed by the car industry. And can I tell you, car salesmen have some of the worst money habits, if I had to generalize, that I've ever seen in my life. Have you seen these TikTok videos that have been going viral? They go to car dealerships, and they go to the staff at the car dealership,

Starting point is 00:37:37 and they say, what is your payment, what car? These people have like $900 a month payments on these cars. They are so all about their ego, they wanna look good, then they say, well, you gotta get a new car. It's like asking a dentist if you should get your cavity filled. And so I would strongly encourage you

Starting point is 00:37:54 to not take your dad's advice when it comes to buying this car. It's kinda like somebody who packages drugs, telling you that a little bit of drugs are okay. Yeah. You know what I mean? It's a little bit too biased, okay. You know what I mean? It's a little bit too biased, he's a little too close to it. And this idea that we have to just get comfortable

Starting point is 00:38:09 with the payment is insane. That's why we're so broke in America, is because we said, well, if I can afford the payment, I'll be fine. And then one day, something happened. Life happened, you couldn't afford the payment, you realize you have no margin to actually live your life or invest.

Starting point is 00:38:23 And so I would strongly encourage you to use the money you have to buy a car with cash you can actually afford. That's how grandma did it. So how much cash do you have? I'm comfortable spending 15, but I could spend up to 20. Oh, you got 20 grand in cash. That's a great car. Just to spend on the car.

Starting point is 00:38:40 This is outside of an emergency fund? The 5,000 extra would be from the emergency fund? That's a little, the 5,000 extra would be from the emergency fund. Okay. So the 15 is in separate. Let's call it 15 out the door is what you're wanting. So when you go to shop for a car, you're always looking for the out the door price. And here's the first question they're gonna ask.

Starting point is 00:38:58 What payment are you looking for? Right? First question they ask if you call a car dealership, that's the key word that you're about to get scammed. Because all they're looking to do is get you comfortable with the payment and you are then not focused on what the car is actually costing you.

Starting point is 00:39:14 Right, that makes sense. So that's it, I would be searching an independent used car dealership for this car and searching online to do some research. I wanna throw an idea at you, George, that I've been kicking around in the ol' noggin. Okay? I've always wondered what's going on up there.

Starting point is 00:39:28 Well, nobody really wants to know. Quick question. If you use cash and you buy an older car, a classic, not an old junker, but a classic antique car, fix it up, that car now becomes more valuable the longer you have it. Potentially. No, if it's the right car. I've got one in my garage. Yes.

Starting point is 00:39:49 It keeps going up in value. Cars can't hold their value if you're buying some of these antiques. I'm just saying, I think that's what people ought to be doing more of that. It's a classic. Then I'm scared to drive it. No, it's totally fine. Think about it, George. Come back to me later. This is The Ramsey Show. God bless America and welcome to The Ramsey Show.

Starting point is 00:40:08 This is where we help you, America, win in your life, win with your money, win in your relationships and win at work. I'm Ken Coleman and George Campbell is alongside. Triple 8, 825-5225 is the phone number. Triple 8, 825-5225. eight two five five two two five is the phone number triple eight eight two five five two two five let's go to julie and jackson mississippi julie huckabee the problem is are doing very well

Starting point is 00:40:37 me and my husband with a very thirty one years and everything together or work about four million while About half of that is his inheritance. And about half of that inheritance is a million dollars for a company that he inherited that was then bought out. So my question is, I don't have that much in my name. My question is, I don't have that much in my name. I have an account, I have about $100,000 in my name alone

Starting point is 00:41:20 and then I have about another $100,000 in retirement. And that's it. And the rest of it, I think of as his and I know that's not right. I know that's not how I need to think about it. He doesn't think about it that way. He's told me, as far as I'm concerned, it's half years. But I don't know how to make this. Are you the beneficiary? Do you guys have all that worked out to where you each are the beneficiary of each other? Like, it's actually your money, or is it all in his name and nobody even knows that you're there? Um, I want to say the business money may be in his name only.

Starting point is 00:41:51 Well, is it in the, do you guys have a, does he have a will? He won't, he won't do one. I made him do one during COVID, but it, um, we sat with a lawyer, talked about it, drew it out, and I've not seen it since then. So I haven't signed one. Does that seem strange to you? It does. I think he doesn't want to admit he's gonna die,

Starting point is 00:42:17 and his father was the same way. Well, I have heard that if you don't do a will, then you never die. So he has, there's some merit to that argument. So you're telling me there's a chance? Mm-hmm. Okay, so there's one piece of homework. We need to get him to finalize this will,

Starting point is 00:42:33 get it signed, sealed, delivered, and that'll help you both sleep better at night. Number two, we have some homework to do, because you said, I wanna say, that's not gonna cut it. We need to figure out where is this money, what are the accounts, is your name, are these joint accounts, are you a beneficiary on these accounts?

Starting point is 00:42:48 I think you have a right to know in a marriage. Right. And so we need to get to the bottom of that part. And then on the other side, we need to figure out what is your next goal? Are you looking to spend more? It sounds like you feel like you have nothing to your name and that you're broke when really

Starting point is 00:43:03 you have a $4 million net worth? Right, and I don't know why that is. I don't know why I feel that way. Well what is your household income? I bring in about $2,000 a month and he brings home $100,000 a year. So he's bringing home something closer to $7,000 or $8,000? Mm-hmm. Okay.

Starting point is 00:43:28 And do you guys have a joint checking account where all this money goes? Not all of it. A section of it, there's a checking account that I write from that my social security money goes into, and that's all that goes into it. His name is on that account, but he doesn't use it. And then there's a joint account where he used to put all his bonus money in that I write joint household expenses from.

Starting point is 00:44:00 But now with the company buyout, he's not gonna be getting those bonuses anymore, so I don't know yet how I can straighten this out. You guys have created a real complex financial situation with 19 accounts floating around out there. I think it's time to streamline and simplify and go. Okay. You said I have a vote here.

Starting point is 00:44:15 I think it's time for you to fly to their house and spend an afternoon with them. They don't get to get up from the table until they've walked through all this stuff, George. You were talking about this earlier this morning. That's what this calls for. Yes. Now that's not going to happen. But Julie, George is going to give you a checklist as if he were flying to your house and locking the doors and taking care of business with you two. You guys have got to figure this out.

Starting point is 00:44:37 Put it all on the table and go, what are all the accounts? What's in every account? What's in my name? What's in your name? Well, how can we simplify all this? I want to be on the same page. We've been married 31 years We've done really well sort of accidentally and now I want to do better intentionally And that means having one account all the money flows in all the money flows out of this joint checking account That'll give us both transparency accountability and it's gonna change our marriage for the better Okay, because I'm no longer gonna be in the dark, you know exactly it's going to change our marriage for the better. Okay. Because I'm no longer going to be in the dark. You know exactly what's going on with my money.

Starting point is 00:45:09 I know what's going on with your money. Do you think he would be upset with that conversation? Would he shut down? I mean, 31 years. I think he would want, I think he would really, his actual reaction would be, why are you worried about it? Well, it's not a worry. It's just that the best marriages have full accountability, full transparency. And OK to good marriages can survive

Starting point is 00:45:36 with 19 accounts floating around. Well, George, but play that out, though. Go deeper than that. I think this is what's going on. So pretend as though you're talking to Julie's husband, and he goes, well, why does this even matter? Why is she so worried? Go deeper than good marriages and all this. Like there's some, there's some real reasons as to why this thing is so disjointed and why bringing it together. What would you say to him if he pushed you? Well, I would say that we're not here to attack you and get you defensive because we don't trust

Starting point is 00:46:03 what you're doing with the money. It's just that you are clearly in the dark after 31 years of being married. You have no clue what's going on out there. And if something were to happen to him, that would put you in a real bind. While you're grieving, you'd be trying to pick up the pieces from 19 different accounts, trying to find policy numbers. Is that true? Does that sound right, Julie? Yeah. It would be good. I know where all the paperwork is, but yeah. And this is something we're going through still with his dad's estate. His dad's estate was still the same way. It's still messed up two years after his death.

Starting point is 00:46:32 Right. You want to avoid that. Yeah. You guys are searching for coffee tins in the backyard with money. It's a disaster. I don't want to have it be a full-time job to pick up all the pieces. Right. And if we can just get ahead of this now, we're gonna have, the next 20 years is gonna be a dream. Because we are fully on board, on the same page, we know where we're going, we know what's going on. Yeah. Okay. That's the angle.

Starting point is 00:46:54 And then I think there's another piece where you need to stop acting like you're broke, because you're not. You guys make six figures, and you need to be on a budget that you both have say in. Right now, you're living like you get an allowance. Right? If you wanted to go spend some money,

Starting point is 00:47:12 is it a conversation? Do you just go spend it without telling him? What happens? Yeah, I do. I spend, but it's my money that I spend. So as long as you spend only your money. Yeah. Well, that feels wild, doesn't it?

Starting point is 00:47:24 It feels, I feel like I have to ask him. So he gets to spend five times what you spend because he makes five times more? Is that how it works? Yeah, it has been working. Oh boy. That's a problem. How long you been married?

Starting point is 00:47:36 31 years. Oh boy. We didn't come into so much money until a couple of years ago. My wife now stays at home with her child. If I said, well, honey, you don't bring in any income, so I get to spend all the money, I'll give you a little bit of allowance for some fun,

Starting point is 00:47:50 but I get to spend like 10 times more. Cause I'm bringing home the bacon. I'll tell you where you'd be, my guest bedroom. That's where you'd be. I'd be lucky to be inside of a house. Well, we'd take you in for about a week. I might be in a tent in the backyard at that point, Julie. I'd let you stay in the backyard.

Starting point is 00:48:02 So I want you to know you have a vote in this marriage, and so far it sounds like you've had the idea of a vote, but we need to make it very clear, especially on election day, that you have an American right to a vote in what happens in your marriage. I see what you did there. I think this is a clean this mess up with camel.

Starting point is 00:48:21 This is a show where people bring you in and you just fix everything. You just get it all, like, listen. I like this. You say, listen, Julie, you sit there, Clarence, you sit there. I feel like her husband's name might be Clarence. It's like hoarders, but I clean up your finances.

Starting point is 00:48:33 And you just kind of walk through, all right, Clarence is what we're doing. Julie's what we're doing. You just clean it up. You're the cleaner. Good pitch. We'll think about it. This is the Ramsey Show. Hey guys, I've never done this before, but I'm partnering with a nutrition company, Field of Greens.

Starting point is 00:48:51 Each fruit and vegetable in Field of Greens is selected by doctors to support heart, liver, and kidney health, plus metabolism for healthy weight. And your doctor will notice your improved health or Field of Greens will give you your money back. I can get behind a promise like that. Go to fieldofgreens.com slash ramsey and get 15% off with promo code RAMSEY. fieldofgreens.com slash ramsey. If you own a small business and you like the Ramsey Show, then you're going to love the Entrez Leadership Podcast. Almost 200,000 listeners tune in every Monday to hear me take calls from real business leaders and give tactical advice based

Starting point is 00:49:31 on my 30 years of experience leading. This is not a podcast about business theory, it's real insight from a practitioner who actually does this stuff. Find it anywhere you listen to podcasts or if you're listening on YouTube or podcasts now, just click the link in the description. Welcome back to The Ramsey Show. Thrilled to have you with us. 888-825-5225. 888-825-5225. All right. I've been told that sometimes I come across like an alpha male, George. Literally never heard that in my life. You've been told that sometimes I come across like an alpha male, George. Literally never heard that in my life. You've never heard that? I appreciate that. Yeah.

Starting point is 00:50:09 It's very generous of whoever said that to you. Yeah. Well, you know, I was thinking, we got to think about alpha because guess who's on the line right now in Los Angeles. Omega. Line four. Tell everybody. Omega is on the line in Los Angeles. Omega is on. This is very fun. This is very exciting. I've never ever actually talked to an Omega before. Welcome to the Ramsey Show. Thank you.

Starting point is 00:50:29 Come on. I love your introduction. That was epic. See? Thank you because I'll be honest with America, James, the producer was rolling his eyes a little bit. He had a little cringe going on behind the glass. He's a very nice man.

Starting point is 00:50:41 He's very kind to me, but he had a little cringe on that. But I knew you would appreciate it, and so would America if they stayed with me. So thank you, Omega. I appreciate it, I appreciate it. You bet, you should. You got a great name. No, a lot of people make that joke,

Starting point is 00:50:55 but the way you made it was special. He's a special guy. Take that, James. You just made a friend for life, Omega. Omega's my friend, and I'm her friend. So how can we help you today? We're friends now. Well wait, did you guys get my question already or should I say it all again? We don't know your question. They tell us nothing. We're flying blind. Oh okay. So basically I'm a remote closer, basically sales online. So phone sales, sales and VMs,

Starting point is 00:51:30 basically my goal is to help people make better decisions so that you can improve their life through sales. Right. And so usually the, the goal is to work for programs that, you know, offer some sort of solution to someone's problem. And so I am new someone's problem and so I am new to the field and so I recently started applying for jobs and one of them was for a leadership program where they teach leadership to people so that they can like lead their companies better right and so in order to be a

Starting point is 00:52:03 part of their team as a remote closer or DM setter, the woman I spoke to on the phone said that I have to invest in their course first. All of their employees have gone through their course. Their course is $5,000. No. I have budgeted... Go ahead. Hard pass. Please don't give them a dollar. This is a scam, Omega. It's a total scam.

Starting point is 00:52:24 This is how they're actually making money as a company. They're not helping anybody lead. It's like a multi-level marketing thing where they go, hey, you gotta pay us $5,000 as a startup cost to take this course, to then sell this course. Don't do it. You know what? Dave Ramsey hires people,

Starting point is 00:52:41 he doesn't charge them to go through Financial Peace University. Yeah. He goes, hey, as part of the team member, you're gonna go through this course, we're paying for it. And Omega, legitimate companies, they hire people that they believe they can invest in and get a return on the investment.

Starting point is 00:52:57 They don't make people invest in them, they hire them and then they train them. Legitimate companies hire people and put real manpower, real resources behind training someone. And so this is all backwards and I want you to run from this. I cut you off because there is zero reason for you to continue considering this opportunity. It's not an opportunity, it's an absolute trap. And I hope you know this, but in the industry you're in, there are a lot of hucksters out there. In this DM setter, online sales,

Starting point is 00:53:31 I think you're in a legitimate field, but I'd be very cautious about what companies I work with. Okay. Are we still friends? Okay. We're still friends. I appreciate real truth. That's true friendship right there.

Starting point is 00:53:45 You should never pay. I don't want you calling us saying, I paid $5,000 for this course to get a job. Did I get scammed? Yeah. You should never pay to get hired. Okay. So that answers that question. Can I have a follow-up question?

Starting point is 00:53:59 We will allow it. Okay. So when I was on the phone with her, she was telling me all about it, right? And I told her that my one concern was that I only had a hundred dollars to spend. I have money in my account, but it's all budgeted. I have it in my emergency fund, which by the way, saved my life a week ago. Hey, hey, hey, all right, we like hearing that. Uh huh, yep. And so, I have it all budgeted so I can't spend that. So I only have a hundred dollars that I can spend and I made it a goal earlier, like at the beginning of the summer that I was not going to

Starting point is 00:54:37 go into debt. So I told myself I'm not going into debt. Good. And then when I was on the phone with her, she, I told her that. I was like, yeah, I mean, I could, I could do that, but I don't want to make my parents go in debt for me. I don't want to go in debt for myself. Like, I'm going to like make the money and then pay for the course. Okay. So what's the question? But so the question is when I told her that she basically was like, well, when you're

Starting point is 00:55:02 in sales and you're trying to like grow, you're young, you need to invest in yourself. And right now is the ideal time to invest in yourself. And the way she said it was so convincing that it made me like, sold out myself. Yeah, she's in sales. She's a huckster. They're really good at this. Did you do something with it?

Starting point is 00:55:17 Or are you, why are you asking this follow-up? We've already told you what we think. Why are you asking us this? We've already told you, don't spend a hundred dollars, don't spend a cent with these people. You're saying, well she's saying I should invest in myself. Is that not true? Is that what your question is? Well my follow-up question isn't regarding the course, it's regarding investing in order to get a return. Yes, yes you should. You should invest in an actual course. Not from a fake guru selling a $5,000 DM setting course. If you want to invest in a certification from a legitimate training school or a trade school

Starting point is 00:55:52 or something like that that is directly tied to, I now have a skill that I need to be able to climb my ladder, the professional ladder. Yes, invest in yourself. But can I also say this? I would like you, before you ever spend a nickel right now investing in yourself as a salesperson, I'd like you to get books from libraries. Libraries, they're free. They're free on sales books. Okay. Or get used books on Amazon. You can get them at a fraction, George. Or how about podcasts on sales and things of of that nature there's so much YouTube that you can do for free and now we're investing time and investing our focus not investing $100 so you're good kiddo okay you're good even as a rule of thumb like I can just be confident in like

Starting point is 00:56:41 never going into debt even if it is alluding to the fact that I'm investing myself, like just find a way around it. You don't need to go into debt. You should never rationalize investing in yourself to allow yourself to take out debt. You should never go, well, I'm taking out debt, but I'm investing in myself. That's actually not the truth.

Starting point is 00:57:02 George, what would you call that? It's a shmarmy sales tactic they're using to go, well, you gotta invest in yourself. If you wanna make 100 grand, you gotta put five grand in. That's just how it works in the business. That's the kind of stuff they're telling you and you need to run far away. I don't know if this industry is even for you

Starting point is 00:57:16 because it's mostly for people that fall for scams and that's not my friend Omega. Yeah. So I would find a different sales role that's legitimate with a real company that sells a real product. Not this we sell sales offers and appointments. You can invest in yourself by paying cash. You can invest in yourself by taking free resources.

Starting point is 00:57:39 All of that's an investment. It's a false narrative, a faulty notion that you have to go into debt to invest in yourself. So there it is, Omega. Thank you. You are a bright, bright soul. I love it. She's so hungry to win, and she's going to win. But you talk about this a lot in Breaking Free from Broke. You call them traps.

Starting point is 00:57:59 If you follow the trends, you'll fall for the trap. This is a trap that has now become a trend. A lot of young people are falling for it. They're hooking people on social media, it's the get rich quick, all this kind of stuff. And there's so many of these guru hucksters out there being like, I'm gonna increase your sales by 100X, and if you just, I can help you get 900 offers,

Starting point is 00:58:18 and it's all just a scam. And here's what they're doing, they're selling their course, they're not actually helping anyone. They're just getting a bunch of people to take a course. And literally trying to trap this young lady. Well, you've got to invest in yourself. This $5,000 you spend with us will be the best investment you ever make. I can hear the crap right now. So because we're friends with Omega, I mean, she and I are friends. You are kind of like an acquaintance because you're, you know what I mean? Thank you. But if you're okay with it,

Starting point is 00:58:46 I would like to gift her your book, Breaking Free from Broke. Oh, I'd love that. Great call. I think it'll keep her out of these trends and traps. So, Christian. Can we also gift her your book, Find the Work You're Wired to Do, with the Get Clear With It. Let's give her the assessment. Omega, let's take the assessment as well.

Starting point is 00:58:59 I was gonna say that, but thank you. Help you avoid some traps, how to get some clarity around your career. Find the work you're wired to do. Take the assessment, Omega, and read the book. It's like me coaching you through, and then you. Help you avoid some traps, how to get some clarity around your career. Find the work you're wired to do, take the assessment omega and read the book. It's like me coaching you through and then breaking free from broke, you gotta read it.

Starting point is 00:59:10 I'll coach you up on money. Keep you from getting into all of those trends and traps. So it's nice to make friends. It's very sweet. You know what I'm missing right now? What's that? My Mr. Rogers cardigan. We can get that on the break.

Starting point is 00:59:22 Yeah, maybe we'll do that. This is the Ramsey Show. Hey you guys, I'm not. This is the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years and they serve hundreds of thousands of members worldwide.

Starting point is 01:00:05 You can feel secure because your deposits are federally insured by the NCUA up to $250,000. It's easy to join and FairWinds partners with more than 5,000 credit union locations around the country so you can bank in person wherever you live. But if you prefer the online experience you can log on to Fairwinds and do anything you could do at a physical location. So go to fairwinds.org slash Ramsey to learn more and while you're there look at the combined checking and savings account bundle they created just for Ramsey fans

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Starting point is 01:01:29 Welcome back to the Ramsey Show America. Thrilled that you are with us. I'm Ken Coleman. George Campbell is with me. The phone number is 888-825-5225. The Ramsey Show question of the day is brought to you by WhyRefi. WhyRefi refinances defaulted private student loans that other places won't touch and gives you a low fixed rate loan built just for you.

Starting point is 01:01:52 Cherise Kay lowered her payment from, get this George, $2,680 a month with our friends at Yreify. Go to yreify.com slash Ramsey to learn more. 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 Cameron in Arizona. My best friend has bounced around schools trying to pursue his dream of being a sports team mascot. He has a math degree, a hundred,000 in student loan debt, and a terrible living situation with his parents. He can't manage to get any reasonable paying job for a person with his education. He currently earns $17 an hour counting money at a casino. Several

Starting point is 01:02:34 years ago, I inherited $5.5 million, which I have safely invested and have since grown to over $7 million. I have never touched that money except for the house that I paid for in cash, and I live off my real income of about 110 grand. Can I gift or lend my friend $100,000 to pay off his loans? If not, why?" Woo! A lot going on here, but we'll stick to the question at hand. I'll go first because you're the... You go. I want to hear your take.

Starting point is 01:03:02 You're the money guy. I feel like we're going gonna agree on this one. The question is can I gift or lend my friend? You can give it, you can lend it, but I think the question is is it okay? And the answer is I'm gonna go 50-50 split on this one. Okay. It's okay for you to gift the hundred thousand dollars to pay off the loan. If it is truly that a gift and you don't expect anything out of the friendship, you don't expect anything other than, I care for my friends so much that I want to help them this way and

Starting point is 01:03:40 there's no emotional strings attached, you can do that and I'd be okay with it. But no, you're not lending it because now you're just replacing the, you're moving the debt from one pile to the other and it could create a lot of risk. And the chances of him ever paying you back is zero percent. Is zero. So I don't like that. But if because of the money that this Cameron is telling us, if that's what you want to do,

Starting point is 01:04:09 you want to give it, that's fine, you can give it. You got a lot of money, you can give them that. I'm not going to say no to that. Now, if you're asking me what I would do, it would be based on the relationship to where if I felt like this would be a massive hand up to somebody, then I'd probably consider it. I don't know that I'd do it, but the question is, George, that I'm wrestling with on this, I'm really 50-50 on it, given the net worth and all this kind of stuff. The question is, would it be a hand up? Like, would it revolutionize this person's life

Starting point is 01:04:45 because it sounds like this is a professional surfer. And I don't mean that knocking surfers. I'm saying he's just kind of riding the next wave and the next wave and the next wave and I think he needs to grow up and he needs to make some real commitments to growing up, to adulting. So from that standpoint, George,

Starting point is 01:05:03 I'm a little nervous about that. Does it really help him that much? Agreed. What are your thoughts? Yeah, I- Are you no-no? Based on principle, I would not do this. Like you said, can you?

Starting point is 01:05:14 You can do it however you want. Yeah, that's what- But I think it's gonna hurt the relationship when you kind of have this handout to him without ever really changing his habits, his behaviors. Right. And clearly his growth is stunted here. And just handing him $100,000 to pay off his habits, his behaviors. And clearly his growth is stunted here. And just handing him $100,000 to pay off his debt,

Starting point is 01:05:28 or Lord knows what he would do with it if you just gave it to him, that's a dangerous scenario. I would not do that. He might use it at the casino he works at. That's frightening. So again, I don't think that's, the student loans are just the symptom of a very, I agree, a much bigger problem,

Starting point is 01:05:43 which is this guy has no real life purpose. He's got all this debt. He's living with his parents. He's got the degree with nothing to show for it. He's trying to be a mascot while counting money at a casino. He needs to aim higher in life, and you giving him this money does not solve any of those problems. Most likely, and that's what I'm getting at. So if it was a true hand up to where his life had changed and it was going to be like, man, this is helping somebody that cannot in this situation help themselves, he can. So I understand the heart behind this.

Starting point is 01:06:12 I think it's a really, really kind thing to do. It feels like we're enabling misbehavior. But you would have to know that you're essentially agreeing to burn $100,000. Exactly. And this relationship may not get better. And in fact, it probably will get worse because of this transaction. He's gonna feel a level of guilt. I feel like a softy.

Starting point is 01:06:29 I can't believe I even considered you. I went harder on that one than you. I would never do it personally. I'd never advise anyone to do it. But you know, it's a free country. You can do what you want when you got seven million bucks. That's the only reason I'm even on that fence. But again, that money was given to you to manage

Starting point is 01:06:43 through inheritance, and you wanna manage it wisely. I don't think giving this money to this person is- It doesn't feel like it. And wise money management. All right. It's my take. I like it. Sarah's up in Bozeman, Montana.

Starting point is 01:06:55 Sarah, how can we help? Hi, thank you for taking my call. You bet, what's going on? Yeah, so my husband and I are on baby step number two, and we're hoping to buy a home in about three years. So my question is about our credit. We each have one credit card each, and we've recently realized it's really not a good thing

Starting point is 01:07:17 for him to have a credit card. So he cut it up the other day, which was great. And we'd like to close the account. But my concern is that we want his score to go down to a zero. What I've read online is that it can take between like two and 10 years to do that. So my question is- You read the wrong blog, my friend. Okay.

Starting point is 01:07:36 It's more like six to 12 months. Can you explain to me how that process works? Yeah. So it's more like six to 12 months. Once you have paid off all of your debts, all the accounts are closed, so no open lines of credit whatsoever. Six to 12 months later, in general, your score will become indeterminable. It doesn't actually go to zero.

Starting point is 01:07:53 It'll probably take some dips and then it'll just fall off completely. If I check my credit report right now across all three bureaus, it's just going to come back indeterminable. Okay. Great. So when I was in your shoes, Sarah- Thank you for answering my question. three bureaus, it's just gonna come back indeterminable. Okay, great. So when I was in your shoes, Sarah. Thank you for answering my question.

Starting point is 01:08:07 Yeah, well, I wanna tell you, when I was in your shoes, I paid off my debt and I went to go buy a house with no credit score and I went through a process called manual underwriting. And that's where they just go through your actual tax returns, your utility bills, as long as you have proof of making payments on some trade lines, like your utility bills

Starting point is 01:08:25 or cell phone bills, and you have proof that you've made on-time rent payments every single month, then they'll grant you a manual underwritten loan and give you a no-score loan. So I wouldn't let that stop you, and I wouldn't let it keep you, you know, playing the credit card game just to keep up a score. Okay, great.

Starting point is 01:08:44 I know you guys are not about the car loans and our goal is to never finance a car ever again. We owe about 17 left on my current vehicle and then we're hoping to be done with the car loans forever. However, we do want a big family. So we're gonna be hauling a lot of kids around someday. So we're just kind of keeping that in the back of our mind. If we ever hit a point where we needed a larger vehicle,

Starting point is 01:09:07 like a van, and we didn't have the cash to pay for it, if we have an indeterminable credit score, are we able to finance a vehicle or is that off the table? I feel like we're asking the wrong question here, Sarah. The real question is, what must be true for us to be able to pay cash for a reasonable van? The answer then becomes, oh, I guess we're gonna buy the $10,000 van with more miles on it,

Starting point is 01:09:30 and we're gonna do a pre-purchase inspection. Do you see how the mindset shift changes as you get out of debt and decide you're done with it? It's when it's no longer an option, you get creative and you start to go, what can we actually afford? I know four years from now, we're gonna need the van. Because you don't have a bunch of kids yet, right? Right, we just have two.

Starting point is 01:09:50 We've got two. So now if I know, hey, two years from now I'm gonna need a minivan, I wanna buy a $24,000 minivan, that looks awfully like saving a thousand bucks a month for 24 months. Okay. That's how successful people actually hit their goals. That's right. Not how can I get the lowest payment? How can I get my score high

Starting point is 01:10:08 enough that they gave me the best financing? That's broke people talking. My friend Sarah is not broke person anymore. She's done with that life. You agree? Yes. And Sarah, you've already got two kiddos. How old are they? I've got one who's gonna be two in December and a three month old. Yeah, so've already got two kiddos. How old are they? I've got one who's gonna be two in December and a three-month-old. Yeah, so you already know how quickly a two-year-old destroys the inside of a car. So we don't need a $25,000 van. We need a functional van from a good, you know, automaker that is a reliable car. Just a Sienna, a Carnival, an Odyssey. Yeah, they're gonna destroy the inside of it with all the little you know the goldfish and the things you know

Starting point is 01:10:47 And they everything's sticky and it's like I try to tell young parents Don't go buy a nice car to haul the kids around they don't care when they draw on it with Sharpie Yeah, that actually happened to our friend Rachel Cruz has Mia done this not yet She doesn't have access to Sharpies good father. This is the Ramsey show Not yet. She doesn't have access to Sharpies. Good father. This is The Ramsey Show. Hey guys, Dave Ramsey here and I got a big announcement. I'm coming to a city near you live on the Money and Relationships Tour with Dr. John Deloney. This is the most interactive event we've ever done.

Starting point is 01:11:19 You get to decide what we talk about. You do not want to miss this. We'll be coming to Louisville, Durham, Atlanta, Phoenix, Fort Worth, and Kansas City in April and May of 2025. Get your tickets and more information at ramsysolutions.com slash tour. Thank you for listening and watching the Ramsey Show. 888-825-52225 is the phone number. Excited that you're with us.

Starting point is 01:11:48 I'm Ken Coleman. George Campbell is joining me. And boy oh boy, we've been talking about this. I mean, we've got to be getting close to setting sail, aren't we, George? The Live Like No One Else cruise, March 22 through 29, 2025. This is a premium Caribbean cruise, Holland America's new Stottendom ship, with all the great foods, all the fun things to do,

Starting point is 01:12:11 world-class content that you can expect on a great cruise like that. Plus, you got all the Ramsey personalities speaking. We're gonna be doing some fun stuff together. Country music legend Deanna Carter, Steven Curtis-Jattman, Trey Kennedy is a great comedian, kind of known for spoofing Dave. and world-class chef Manit Shohan will all be joining the Ramsay personalities, including George and I.

Starting point is 01:12:33 So, ramsysolutions.com slash cruise is where you get your ticket, ramsysolutions.com slash cruise, and it's going to be a lot of fun. So we're hitting Turks and Caicos, Puerto Rico, St. Thomas, and the Bahamas. Have we validated whether or not James is coming? James, the producer. I don't think he is coming. Let's get an official word. We're not doing any live Ramsey show,

Starting point is 01:12:54 so he's off the hook. Wow. That week, yeah. He'll probably be having his own vacation here. Are you doing the show while we're on the ship? I don't think so. It's a little too far out to tell. We'll all be on the ship, Ken. There'll be no one here to host the Ramsey show. He said, well, he'd be doing the show. we're on the ship? I don't think so. It's a little too far out to tell. We'll all be on the ship, Ken. There'll be no one here to host the Ramsey Show.

Starting point is 01:13:07 He said, will he be doing the show? I'll host it. James will do it himself. I feel like he could do it. It'd be a very chill, very nice version. Love to see his impressions of us. Oh, he could do it. It'd get dark real quick.

Starting point is 01:13:17 He could do it. It'll just be me and Kelly Daniel will do a tell all of all our history here of all you guys. That would actually get the most viewership. I think it would actually blow up, actually. Probably would. That'd be really great. All right, so you can check it out. ramseslusses.com slash cruise. All right, Carlos is joining us now in Phoenix, Arizona. Carlos, how can we help? Hi, how are you guys doing? We're having a blast. How are you? Pretty good here. So I'm actually in a little bit of a situation here. I'm trying to see what the best force of action would be to make the best decision

Starting point is 01:13:48 possible. So I have, I'm currently, I have a car payment right now. It's a truck payment. I got it. I kind of did the baby steps a little bit out of order with my fiance. We got a house supposed to be emergency house emergency fund. And now we have that car payment. But my biggest issue here is my work. I currently am a plumber full-time. I like doing it, everything like that, but it's not really my passion. So I kind of wanted to see if I should turn back the car in to like trade it back in, get rid

Starting point is 01:14:21 of that debt, and that's finally we're over debt. Maybe that's too or if we said Look for another job. I keep the car, but I might be taking a little bit of a paper No, we're definitely not taking a pay cut while in baby step to period okay ever So in baby step to know because in baby step to and I'm gonna go ahead and say baby step three as well. I would never take a pay cut in baby step two or three because those steps as baby step one

Starting point is 01:14:52 also requires intensity. And so we want to make the most money we can. And in this situation, you're good at it. You may not be your long-term play, but I want you to stay being a plumber and then see if you can pick up extra hours, extra jobs, maybe work for a couple of different plumbing companies.

Starting point is 01:15:16 I mean, I know that just about every major city in America, there's a demand for plumbers. So in my case, if I were you, I'd be working extra using that very skilled trade. What do you make per hour? I'm actually piece rate. That's the big thing. So anything I do or everything I do is what I get paid for the day.

Starting point is 01:15:35 And it makes pretty good. I think over on the year I make about 80,000. So my point is, you could get extra work as a plumber, true or false? Yes. Yes. So that's what I would do. Now I want George to weigh in on this because I tend to be more aggressive on cars but so in other words I would get rid of the car not keep the car payment. So if I were to get rid of it right now it's worth around 25 and I will 30. It's a truck and the reason I actually got it

Starting point is 01:16:05 was for the plumbing, like side jobs and everything like that, because I have a company work truck. So you don't need this car? I don't need it right now. Get rid of it. Get rid of it. When you say it's worth 25K,

Starting point is 01:16:19 are you talking about trade in value or if you sold it private party? If I sold it private party, maybe I'll get like 28, 29. Let's do that instead. And then the difference that you can't cover, the part you're underwater on, we're gonna use the savings to cover that.

Starting point is 01:16:33 How much do you have in savings? I have about 20,000. Oh, perfect. You got 20K in savings. Perfect. So you're pretty close to just being able to pay this whole thing off. Yeah, that was my other question. Should I completely just go super intense, pay this off?

Starting point is 01:16:48 Yes. I mean, I'm pretty sure within like two months I can get this. So let's say you need to save up another 10 grand to go ahead and just get this thing paid off and leave you with a few thousand in the emergency fund. Then we'll restock the emergency fund. So basically we're doing the baby steps in order.

Starting point is 01:17:04 So I changed my opinion, George. You know what I'm going to say now. Keep the car and aggressively pay it off. Stick to the plumbing jobs. Once you're debt free with the emergency fund, then we can think about the new career path. Yes. And I would liquidate it now. I mean, go down to 1,000 in the emergency fund, put 19 down on that car, that leaves

Starting point is 01:17:22 you with 11 left. That's going to really put the fire under you. Because number one, you're going, oh my gosh, oh my gosh, I'm not safe. There goes my emergency fund. And you go, oh gosh, there's only 11,000 left. I'm making good money. Between my wife and I's income, getting on a budget,

Starting point is 01:17:38 we can knock this out in four months, right? Yeah, just about. And you bought this truck, you said, so that you could do side jobs. How many side jobs have you been doing? What kind of extra income have you been bringing in the last 90 days? The last 90 days, it varies, but it could be up to like another five to, it pretty much covers the car payment each month. I'd say like 700. That's not a lot my friend. Do you know, I had a sneaky suspicion, and Carlos, I'm not being unkind. I'm on Team Carlos.

Starting point is 01:18:07 I had a sneaky suspicion you weren't doing a whole lot of extra work. 500, 700 bucks for a plumber is nothing. You're not busting it. Get out there and bust it, and then you're gonna be able to do what George told you to do. So we're revising our answer.

Starting point is 01:18:23 I think in this case, keep the truck and pay it off. Pay the truck and pay it off? Okay. What do you want to do long term? When you say passion, that makes me nervous sometimes because I want to make sure you got the talent to do it and that you're motivated to do it. So do you have an idea about what direction you really want to go? That's not too, like I'm too sure about it because I'm also a realtor. I have my real estate license and I do it every year and they're part time. And maybe close about like three deals a year.

Starting point is 01:18:50 So not too much, but at the same time, like I've always been more into like learning about finance and all that type of thing. So maybe like a banker or even helping people out like with their finances. I'm not like the most educated person when it comes to that, but that's something I've always wanted to do. So it sounds like to me, Right, so there's a way to get sure and the answer is to get clear. You've got to be clear on what you're really really good at doing,

Starting point is 01:19:17 what work really really fires you up, and then what results you want to contribute to the world. And I'm gonna give you, because I think you get some work to do on this, but I'm going to give you the book, find the work you're wired to do. It has to get clear assessment in it. And if you'll commit to me to take the 15 to 18 minutes to take the assessment and then take 45 minutes to read this little book that I wrote, it's like me coaching you, it will give you some real ideas and give you a process to confirm which idea you want to go for and

Starting point is 01:19:46 And that's gonna keep you going in this season where you're working a lot getting out of debt, but stay in the plumber job figure out your next path And then get the emergency fund fully funded and then now we start cash flowing whatever training So let's say you decide you want to go into being an investment coach, you know, I mean, I'm sorry, what is the word George? Financial coach? Thank you.

Starting point is 01:20:11 No, just an advisor, like you're doing in retirement. Oh, like an investment advisor. Investment advisor, thank you. I'm in a hurry here. And so, Carlos, if that's what you decide, there's training involved with that, right? And there's cost. Yep.

Starting point is 01:20:24 Now we've got all of our debt gone. we've got our fully funded emergency fund and so we now have discipline and we've got margin and cash to be able to pay for the training and then we step from plumbing work right into this new path. That's what we want for you. Make sense? That's the path. But you got to pay this truck off and get out of debt George. I still consider selling it It sounds like it's weighing on you and your goals me more than this truck does I probably just sell it and cover the underwater difference with your well He sells it he's got enough cash to go buy a ten twelve thousand dollar truck

Starting point is 01:20:55 I still have a nice emergency fund to build on I like this plan. That's what I would choose to I would absolutely choose it Hey, we got to let Carlos go and the rest of you remember this If you are not on the radio audience right now, this is the end of the show But you can go get the rest of it on the Ramsey Network app So just go to the show notes click on that link and we'll see you over there. This is the Ramsey show Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right?

Starting point is 01:21:51 All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom. All right, I'm getting out of here. Enjoy, we'll see you on the app.

The Ramsey Show - Never Rationalize Debt!

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