The Ramsey Show - When You Have Debt Your Money Is Not Really Yours

Episode Date: August 28, 2024

📱Watch the full episode for free in the Ramsey Network app. Rachel Cruze & Ken Coleman answer your questions and discuss: "How do I protect myself in a family trust?" "Should I go back to school to increase my income?" "Do I need to diversify my investments?" "I'm overwhelmed and don't know how to budget," Support Our Sponsors: Zander Insurance: Go to zander.com or call 800-356-4282 for a fast and easy quote today Christian Healthcare Ministries: Find out more at https://info.chministries.org/dave-ramsey Health Trust Financial: Discover Top Health Insurance Plans, All in One Place. BetterHelp: betterhelp.com/Delony to get 10% off your first month Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 💵 Start your free budget today. Download the EveryDollar app! 🚢 The Live Like No One Else Cruise is booking fast!  🏆 Set and actually reach your goals with the NEW 2025 Ramsey Goal Planner! Hurry—They sell out every year! 💸Enter The Ramsey Cash Giveaway for a chance to win $10,000! 📚 Shop the $12 Sale to get life-changing tools to help you make real progress!  Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Welcome to the Ramsey Show America. Thrilled to have you with us. This is where we help you win with your money, win in your work, and win with your relationships. The phone number to jump in for you is 888-825-5225. That's 888-825-5225. I'm Ken Coleman, joined by the fabulous Rachel Cruz joins me. It's always fun when we're together. We always have some fun calls.

She'll be our resident money expert today, and I'm your resident work expert, otherwise known as income. I'm the guy to help you make more money, mo' money, mo' problems. Mo' money, mo' problems is what they say. And so we'll talk about those problems that you're having. So we always have a good time with it, 888-825-5225. You ready to go? Yeah, let's do this.

All right, very good. Let's go to Stella in Tucson, Arizona. Stella, how can we help? Good morning. Thank you for taking my call. You bet. What's up? Good morning in my time zone, at least.

I was wondering, how do I protect myself in a family trust? And I can give you a little- Yeah, tell us a little bit more. My parents are putting their property into a trust for all of myself and my siblings. It's been mostly completed. They haven't finished the final paperwork on it. And I'm looking at finishing a house that they started on the property 20 years ago. It's going to be part of the trust.

Is this a good idea? And how do I make sure that I don't get sold out? Yeah, so will you guys be splitting their primary home then? How many siblings do you have? I'm the oldest of nine. Oh, wow. Okay. So nine of them will be splitting the primary residence, but you're saying on the property is another home

that you're putting money into? Yes. It's actually going to be the primary home. They've been working on it for 20 years. And they live on a second home on the same property. Okay. Okay. So what was the, for you to be, you're using your own money to fix up this property?

Yes. Okay. Okay. And what was the motivation for you to do that? It's an amazing property. And the house, once completed, will be absolutely amazing. And we've been looking at moving. And for the cost to finish out this house, I can't even touch it to buy it. Okay. The property is Okay. Yeah. I mean, I would sit down with the siblings with your, well, with your parents probably first and foremost, and I would, I would lay out exactly

how much out of pocket you have put into this property and that you want to be able to recoup that in the instance of a sale. So if they go and sell the whole property and they sell both structures, if you will, right, you should come out ahead of your siblings because you're upping the value of the property, but it's within your own money. So being able to get that at least back out. Do you have good records of everything you've put into it? We haven't started yet, but I'm making sure I. Okay. Oh, so you've amassed this money? You've got all this money saved up? Yes. And how much are we talking about? To finish out the house, we're looking at $60,000 to $70,000. Okay. And how much could you sell it for? Like how much would it sell for today versus if you fixed it up? That's what I want to know.

Well, today with the unfinished house, I am not sure what the value is because it would be based off the other home. It's a four-bedroom home. The home we're looking at finishing out is an eight-bedroom home. Right, but the question we're asking is, and you may not know, but this is something I think you can know, is to sit down with a really good real estate professional. And if you don't have one, Ramsey, we've got some great options for you. Ramseysolutions.com slash agent. Ramseysolutions.com slash real estate. We've got all these slashes. The point is, you need to find a good expert to say, if I put $60,000 to $70,000 into this house,

what do I think that is going to evaluate? What will the new value of the property be? Isn't that what you're getting at? Yeah, absolutely. Yeah. And so let me just say with home renovation, because with, how old are your parents? Sorry, I have so many thoughts. My dad's in his 70s. Okay. My mom's a few years younger. And they'll be on this property until they pass, correct? Assuming so? No. My mom, if my dad passes first, then he's got some health issues. Okay.

She's gone. She doesn't want to be on the property. Okay. It's too far out in the country for her. Okay. Okay. That's good to know. Well, because I was going to say, just for your benefits, if I'm going to be putting $70,000 into a property, you want to run the comps and make sure that, again,

not only do you recoup that, but you get out of it to a degree the value. Because, Stella, you could put $70,000 in an index fund and make 12%. You know what I mean? So this is an investment that you're making, and that needs to be said out loud. And it gets messy because it's a family property but I would get all nine siblings on an email and I would get things in writing the plan of what's going down the more communication the better so that's in my opinion how you protect yourself in this situation

but I mean and it may just because you love the property and you think it is a really great investment and you work it out with a real estate professional and you really figure out, okay, this is what I can recoup and it's worth it on my end for the energy, the time, my money. I want to get a good amount out of it, but also just know Stella, it gets real messy real fast with redoing properties period. Cause you're going to get in there and they're going to tear drywall down and be like, Nope, you got black mold. And it's going to cost, you know, 20 grand more to do this or that. Like it can get real expensive, real fast. So just know that ahead of time, it's going to take longer and more money.

And then you put the family dynamics on top of it. Can it, it can get messy. Yeah. Stella, I may have missed this, but are you guaranteed that you're going to get this house at some point? Right. The conversation has been, and I've included siblings on this and everybody's on board with us doing this uh nobody else wants the property right now i didn't ask you i understand that i'm saying answer my question is it guaranteed and and and and if it's not in writing uh where is it in the sense that you personally will take ownership of this house at some point in the future? Is that guaranteed? It's guaranteed that we can live there. I don't have in writing that it's our house.

All right, I'm going somewhere with this. I don't like this move. I wouldn't spend a nickel on this. You called to ask our opinion. I personally would not put one nickel into this home unless you knew, and what I mean by knew is it was in the will or it is actually transferred to you. I wouldn't put a dime into this. I just wouldn't. Yeah. Or you guys just outright buy it and make it your primary residence and you put your money into it, right? And redo it. That's my point.

This is me. Maybe I'm too cautious. For all the reasons that rachel laid out she's right why i guess here's my question what in the world would cause you to put any money into this right now when it's so up in the air and it's just too complicated and i didn't realize you guys were going to use this as your primary residence still i thought you were going to fix it up and then when they passed or moved on you guys as a group was going to sell it you're going to move into it save the money invest it we're planning to hold the trust like nobody's planning to sell yeah but are you are you going to move into it you and your your immediate family you and your husband okay so then that's a different deal because now you're that you don't have real estate then under your name and as the

years and decades goes on and that value then there's nothing you, you don't have it to your name. Does that make sense? And real estate is one of the biggest parts of your financial portfolio. Don't do it. Don't do it. If you want to fix it up and all of that, and you guys decide, hey, here's what I'm going to recoup out of it. Here's the growth of it. That's the only way I would do it. I don't think I would buy a home unless it was deeded to me and I bought it outright. Don't fix up a home that you don't own. Okay.

Listen, the audience in the lobby is agreeing with me here. Save the money. Look at them. Thumbs up everywhere. Save the money. Invest the money. And then when it becomes yours, fix it up. Watch Fix It Up shows if you need to scratch that itch. Don't do it. It's not a good move.

Sorry to be cranky. This is the Ramsey Show. You're not cranky, Ken. Okay, here's the hard truth. Your investment dollars could be winding up in the pockets of companies that hold positions you don't agree with. People are unknowingly putting money into tech giants and household brands that don't match up with their core values. But here's good news. Timothy Plan is at the forefront of biblically responsible investing. That means Timothy Plan uses a strategy that lets investors chase competitive returns while staying rock solid in their beliefs. So if you're ready to invest with a clean conscience,

it's time to check out Timothy Plan. Request information at timothyplan.com to learn more or contact your financial advisor today to see if Timothy Plan is right for you. timothyplan.com. Investing includes risk, including possible loss of principal. Before investing, carefully consider a fund's investment objective, risk, charges, and expenses contained in the prospectus or summary prospectus available at timothyplan.com. Read carefully before investing. Mutual funds distributed by Timothy Partners LTD and ETFs distributed by Forsyth Fund Services LLC. Welcome back to The Ramsey Show. I'm Ken Coleman. Rachel Cruz joins me. So excited that you're with us. By the way, we have a fabulous, fabulous live audience today in the lobby of Ramsey Solutions.

And so come one, come all. We'd love to see. We just took pictures, Rachel Cruz and I, on the break with some folks who traveled from Germany. Unbelievable. It was exciting. And they had cowboy boots on and everything. I was like, they're so Nashville. One guy was from Minnesota.

I don't know how he got to Germany, but we're glad he's back. One lady was from the Netherlands I don't know how he got to Germany, but we're glad he's back. One lady was from the Netherlands, maybe a couple, and they got excited about my sweater because that's what the soccer jersey, that's the official jersey color of the Netherlands. So anyway. Wow, you're so sporty, so athletic. I am. Just call me Sporty Ken today. Just Sporty Spice over here. Speaking of sporty things, how about smart decisions? I don't know what the connection is to sporty there. I tried. It didn't work.

But here we go. So August, Rachel, we always have these great deals, right? And so we have a bunch of great books on sale for only $12, including my book, From Paycheck to Purpose, going to help you figure out what your path is to making money and experiencing meaning. And then your book, Know Yourself, Know Your Money, beating that comparison trap that makes people spend money they don't have. These are just two bestsellers that represent a lot of bestselling books,

all on sale until August 31st for only four more days. My goodness, $12. RamseySolutions.com slash store. RamseySolutions.com slash store. That's where you go get them. All right. Brianna is up in Tampa, Florida. Brianna, how can we help? Hi. Thank you for taking my call. Sure. So I actually am trying to figure out what I should do to kind of up my income. I'm considering

returning back to school, but I don't know if that's really the answer right now, mainly because I have so much debt that I would like to pay off eventually. That's the goal. But I do know that I have an income problem, and I'm just trying to figure out exactly what to do. All right, three quick questions, and we'll dive in. Question number one, how much debt do you have? So I have a little under $100,000. Okay, we'll just call it $100,000 for conversation. Question number two, what are you doing for a living now and how much do you make? So I personally make $15 an hour. I'm a thrift store assistant manager and I love what I do, but I only am able to work part-time. That's what they

hired me for, and I'm only making that $15 an hour. Okay, third question. What degree or what certificate, what are you considering going to school for, and what do you think the potential income is attached to that? So there's two different options. One would be I would have to go into more debt for sure for and that would be like graduating with all these bills from it and that would be nursing school and then and with nurses starting here in Florida it's about $75,000 a year. Okay. And then the other option would be to be a marriage counselor, and I have an opportunity actually to pay as I go with my church's university. And with that, I would have a bill every month that I would have to pay, but I wouldn't be in debt, in more debt at the end of graduation. What would the bill be every month?

It would be $185. Okay. And that certificate, Brianna, through your church, is that like an accredited program that you could use? It would have to be a degree to do counseling. Well, that's why I'm making sure that it's not something within their church, that you can only counsel in their church or something, that you could actually use it out in the marketplace as well?

Correct. What's the total bill on that? How many years are we talking about? It would be four years altogether. So four years, let's round it up to two a month. So $2,400 a year. So we're looking at about $9,900, something like nine grand, nine plus. Okay. Well, so a couple things number one um you're broke and you make very little money so paying for school right now is not an option it's a pause right it's a pause you have other income though just to say like my husband i'm married and what's your combined income sorry um so that is roughly about i'd'd say, $3,500 a month. What does he do? So he works two different jobs. He actually works at Taco Bell at night, making $12.50 an hour.

And then during the day, he actually just started a job this week that is a full-time position working for LifeLock Insurance. And it ranges just based on sales and how many hours he works, like he gets bonuses. So it ranges from $13 an hour up to $20. Okay. All right. A couple things. Both of you need to be thinking about your talent, your skill set, and where we can make the most money with that. So let me just take you for example. You're an assistant manager of a thrift store, and you're making $15 an hour, and you're only getting part-time hours. So you're obviously very good with people, yes?

Yes. Okay. I would be looking for management positions, full-time management positions, in a variety of – could be retail, could be maybe an office manager. I don't know, but the skillset, am I organized? Am I really, really good with people and communicating and serving? Because you need to be looking at, I'm talking about a Walmart job, okay, which is nothing to sneeze at. And let me tell you why I'm saying Walmart as an example, and I'm not trying to hang this on you, okay? But right, you're only working to get out of debt

and save money and then eventually fund your future. That's the order of this right now. So let me tell you why I like Walmart. Walmart is paying for people's college educations. So you take that thrift store management skill and you go in and go, I'll tell you what, I'll take the graveyard shift. I'll be a manager. or I'll go in and I'll start here and I'll work my way into being a manager within six months or a year. And I'm making 18, 20, 22, $25 an hour, somewhere in that range. All right. And then they're going to pay for my college and they'll pay for nursing school. This is happening with big companies like this. I think Target does it as well. Check me on that, but I know Walmart does it. They made a big announcement coming out of

COVID. This is the path for you. So no debt at all the rest of your life, but we've got to increase our income. If your husband, by the way, has basic skillset, you know what I'd rather him do? I'd rather him go to a trade school and cash flow through a trade school. And he's not working at Taco Bell anymore. He's working as an electrician or HVAC and he's making 30, 35, 40, $45 an hour. If you guys can buckle down and go, where are we able to make the most money in exchange for our time? And then you walk through the baby steps. And I want to hand it to Rachel to walk through that $100,000 in debt and have her cast some vision through our baby steps. But I just wanted to preach at you there for a minute,

and I'm preaching in a belief standpoint. I believe you guys could be making way better money, which will help you pay off the $100,000. And I think if we focus on that and you go to a Walmart or another company like that that may pay for your nursing I just yeah I think it's coming that's down the line. Yeah and it's finding other other options too Brianna because when people say you know and I'll quote it back to you but you said at the beginning of the call well if I do this right I have to take on debt if you took debt

off the table and just said okay so now what am I what now what are my options it's going to force you to be more creative to either thing okay I, I need to just find another job, be patient and save. I need to find a job that maybe will contribute to my tuition, like what Ken was saying. And also being in an environment, Brianna, that has an upward trajectory, which is why I like an element like a Walmart or something. You can use those same skills, but you're going to continue to raise your income, right? And so, you know, and not that there's anything wrong with thrift stores

or all of that, but I think for a temporary solution, it's fine. But your long-term career path for the rest of your life, we want something that you can grow into, right? And so putting yourself in those positions, like what Ken is saying, is so great. And I want to encourage you too, you know, the world today, it is shifting.

And there are still jobs that require a college degree, absolutely. And fields, obviously nursing, you have to go get schooling for or counseling even. But there are many companies that are paying, you know, 40 grand, 50 grand a year. And you could be a personal assistant, you can do online. I mean, you can find a niche that you don't need a college degree to just up your income in general. Now, you know, our goal and what Ken's goal is, is to be able to, you know, find something long-term for you that you love and are passionate about. But I'm with Ken. I think in the meantime, you guys can find some other options. So hold on the line, Brianna. Christian's going to pick up because I want to, I'm going to gift you guys

Ken's whole assessment. And the final work you're wired to do. Yeah, and his assessment for you and your husband both to check that out. And I think once you get those incomes up, then you start really attacking this debt. And you do that by the smallest amount to the largest amount. So hold on the line and Christian will pick up and get that stuff for you. Just a quick perspective. What can we do to pay off 30000 a year in debt? That's a goal. That would get us to that $100,000 pretty quickly, and then we can move forward on the work we really want to do. This is The Ramsey Show.

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Rachel Cruz joins me, and we are here for you taking your calls about your money, your income, your relationships, your income, your relationships, your situations around all of that. 888-825-5225 is the phone number. 888-825-5225. John is up next in Orlando, Florida. John, how can we help today? Yes.

My question is basically to determine if I just have too much cash sitting in my core account. I own my home, I own my vehicles, and I basically have 92% of my money sitting in cash or treasury bonds. How much is that? About $4,100,000. Okay, hold on a second. Well done, John. Hold on. Yeah. A little cough. You have $4.1 million basically in cash, if I heard that right?

That's where they're sitting in cash accounts. Correct, in a cash account. And part of that is a million dollars in 20-year treasury bonds that have bought over the past year at an average of like 4.82 okay so about three million is in a cash account correct but yeah you have too much extremely liquid i you know well yeah so john how old are you 61 61 okay. What's caused you not to invest on any level, whether that's real estate or the market, the stock market? What's caused you not to invest? I've been in real estate.

I do have a few retirement accounts that are in some stocks, like Google and Amazon. How much? The retirement total of $273,000 in between a Roth and traditional and set. Okay, so no 401k, nothing like that? Well, I own some real estate that will be paid off. I've not done a great job with that. No, no, no.

We're not judging you at all. We're just trying to get the full picture of the total amount of money you have available. And so your opening question was, do I have too much money in cash accounts? And the answer is yes, you do. We'd like to see you invest that with our strategy. Yeah, I mean, I think... Because you're still a young guy. For sure. invest that with our strategy yeah i mean i think you're still a young guy for sure and i and and

just being able to look to say hey i you know with the the average growth you know 10 11 12 percent um what that could get you you know john your money making money is basically what it is because right now when you say that that's all liquid is that sitting in just like a high yield savings or is that a traditional savings account where do you have that three million it's like a in just like a high yield savings or is that a traditional savings account? Where do you have that three million? It's like a it's like a fidelity. You know, they have these money markets and they. Yep. The one I'm in pays five point two seven right now.

Totally. And then the Treasury bonds, which has gone way up because those yields have gone down. Yes. You know, it's at four point eight two. I figured rather than taking any risk, I'm just sitting on the side making 5% right now, but that's going to change. Yeah, but have you done the math on the compound interest

if you got in the game? Yeah. You're scared. This is all fear, and there's nothing to be ashamed of, but I've never talked to anybody that told me the story you just told me. That's astounding. It's truly amazing. You're certainly not hurting. You're 61. You got a lot of money in the bank. You're safe. Man, you're safe. But you called us. Are you starting to feel as though I should probably be investing a good chunk of this? Where can we help you?

Because you're just afraid to death of the stock market and mutual funds and the whole nine yards. It's just fear that's driving this. Actually, I've watched a lot of the shows and the mutual funds seem appealing. Okay, great. Well, we've got a strategy for that. Yeah, I mean, for sure. Yeah. So I think, John, are you married? Yes. Yeah. Okay. So, I mean, for sure. Yeah. So I think, John, are you married? Yeah. Yeah. Okay. So, I mean, if I were you tonight, I think you and your wife go buy a nice bottle of wine because you can afford it and sit down, open it up. And you guys start dreaming. Dream about, hey, where do we want to be? We're 60. Let's just say the Lord's been good to us and we live till we're 90. We got 30 years. What do we want to do with this money? And there's a really interesting book, John, it's called die with zero.

I want you to buy it. I don't agree with a hundred percent of it, but it's a very interesting take on, on, and I think it leans more in a John's case, right? If there is a lot of wealth, what the role money plays in our life and what you want to do with it,

because this book argues, which I think in your case would work, not for everyone listening, but in John's specific case, you know, that to enjoy your money, and it's not just spending it all, but if you have kids, John, and you want to be able to help them, you know, do you wait till, you know, you're gone at 90 and your kids are 60? And they, you know, or is there stuff you can do now, you know, with them to help that legacy happen in real time? The generosity portion, you know, charity and what you give to is there more you could be doing kind of in these buckets with the

money you have today while knowing, yes, you need to live off of this for 30 years. But I'm saying all that to say you're in a great position just to dream and we say dream in hd like put pictures to words as dr john deloney says but you and your wives tonight sit down and just say hey what do we want the next 30 years to look like because the truth is john you get out this call and do nothing and you're gonna be fine to ken's point i mean you're gonna be fine yeah but but i think also to say hey what if we grew a percentage of this um and look for the next six years and we put it in some mutual funds maybe some you know um growth and income aggressive growth you know picking out some good mutual funds i've good track records and putting

a portion of it and just seeing and then you look up in five years reevaluate and be like okay we like that you know so you can you can step into this i think there's some personalities that are like put all the chips in the middle of the table and we're going all in and we're going to make 10, 12% starting today. And you could do that. I mean, if I were in your position, I'd lean more towards that.

But I think it's okay for you guys to kind of stair step your way into it. But I would really advise you to sit down with one of our SmartVestor pros, with the SmartVestor pro, because sitting down with one of our SmartVestor pros, with the SmartVestor pro, because sitting down with an investment professional in general is going to be really helpful. Because also, John, what's playing in the back of my mind, which we don't have time to unpack right now on this call, but it is the tax implications to some of this, the estate tax, all of that. I just want to make sure that you're doing things specifically in a really wise way that's going to be the best for you guys in your situation.

So if, yeah, Christian can give you that link when we get off the phone and interview a couple of them. If you have an investment professional that you love and you trust, you know, sit down and talk to them. But I think getting someone in your corner that does this day in and day out is going to be really helpful because I do think you can do a lot with this. And I think your money can make money. And again, not just for the sake of like, we're just going to build a bunch more wealth, but to be able to continue to live a great and rich life for yourself and your family and others. Yeah.

And John, I agree with Rachel. I think going to sit down with your wife first and laying out what you want to do with that money, where you'd like to see it go, have that on paper, ready to talk about when you go sit down with some of these smart investor pros. And as you interview several of them and talk about it, see what their plan is. And you get to pick the one you like. I really like that. But I also want to just hit something for you, John, and our larger audience. Rachel and I just got an email this morning that was forwarded to us. And it was from a local SmartVestor Pro that we know. And in short, was telling us about a friend of his who passed in his early 50s of lung cancer,

tragically. But the point of the email was, is that they had invested a decent-sized chunk of money for their son in a 529 in 2012. So here we are just 12 years later, and it was an enormous sum of money now. And what he said to us is they got 12% return over that time period. So over the last 12 years, that 529 got 12% return over that time period. So over the last 12 years, that 529 got 12% return. I just wanted to highlight what Rachel said. And John, these are not numbers that we're pulling out of our ear to be shock jocks. That's a real life story. And I just want to underline that to say, imagine the 5% turning into 10 to 12%.

That's not a fairy tale. And to Rachel's point, what you can do with that over the 5%, I think that's legacy a fairy tale and to Rachel's point what you can do with that uh over the five percent I think that's legacy stuff John and it's really doable so you're smart guy yeah you're incredibly disciplined and I'll say being a being a Ramsey at heart to being in the market but also real estate John you mentioned that you have a couple of properties there and if and I mean that's I mean Dave's very honest on this show. That's where a lot of his money is. So there's different proven ways to grow your money, whether investing traditionally just in the stock market

or paid for real estate. There's some great avenues out there to make your money work for you. And I think that's a great goal. So thanks for the call, John. We appreciate it. Pretty awesome stuff there. Wow.

$4 million in a savings account. What's your problem? It's pretty impressive. This is the Ramsey Show. Hey, 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 doing things intentionally, including how you spend your healthcare dollars. And one way to be intentional 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.

Find out more and join at chministries.org slash budget. That's chministries.org slash budget. Welcome back to The Ramsey Show. I'm Ken Coleman. Rachel Cruz is joining me this hour, 888-825-5225, 888-825-5225. All right, we go to Atlanta, Georgia now. And Jimmy's there. Jimmy, how can we help? Hi, thanks for taking my call. You bet. I'm 63.

My wife is 52. And we have a household net worth of approximately 2.6, 2.7. Well done. We own, got 400K sitting approximately 2.6, 2.7. Well done. We own, I've got 400K sitting in a money market right now. And we've got five houses, including our primary, which is worth about 750. We owe 220 on it. And it's at four and a quarter percent interest. And all my rental properties are within a 15 minute radius of my house except

for one that I've just completely remodeled it's over an hour away I'm considering selling it doing a 1031 tax exchange and replacing it with a house near me or B selling it and paying my house off. I like B. Can I do a C? Ooh, I like another option. I vote for B. Rachel wants to introduce C, Jimmy. Stand by. I would do both, Jimmy. Do you need the $400,000 at all for the new rental that you're going to buy? I mean, if you're going to do the exchange, tax-wise,

it's going to be close to the same value. Is that what you're shooting for? Correct. And not touch the $400,000. No, I would take $220,000 out of your $401,000. Or I'm sorry. Whoa, hello. Delete. I would take $220,000 out of your $400,000 that's in the money market today and pay off my house and have 160 in there. Do the 1031 exchange with the property, get another rental close by. And there you go. You got a paid off house.

You got five rental properties paid for with 160 in the bank. And you can build back up 200 grand a lot. You have. Rachel knows how to spend other people's money. I'm telling you, that is fabulous. I like C. Now I'm going with C. Would you not, Jimmy?

Why aren't you wanting to pay off your house? You know, I just now thought of that, as you were saying. This is why you call Rachel Cruz. Right here, Jimmy. She knows how to spend your money better than you. All right? So now you just need a third party to be looking into the situation where you think, Oh, I

hadn't thought of that. No, it's great. So that's what I would do, Jimmy. Now, does that remove the house that's an hour away, though? Yeah, because he's going to do that anyways. Getting rid of that one. So he'll sell that, but at 1031 Exchange, you can buy the same one and not have to pay capital gains.

I'm telling you, Rachel, you can take the rest of the show off. That was such good advice. I'm not sure you can top that. That's about as good as you're going to do. But I think you can do, yeah, you can do both. What do you think, Jimmy? Well, sounds good. Let's try that.

I was a little nervous about touching that $400,000 because I've been broke before. I know. You've got a little scarcity mentality in you, Jimmy. So here, promise me this. I want you to do this. I want you to do it this week. I want you to pay off your house. And in January, okay, we'll go through an election, all the craziness of the world. And if you hate having a paid-for house, Jimmy, I'm not going to give you permission, but

you could go get a HELOC, right? Take some money out, put cash in the bank. Or we'll let you call Rachel up and say bad things about it on the show because my point is jimmy you're not going you're not you wouldn't go back and borrow on your home at four percent would you that's what this is i mean that's what it is and jimmy what are the chances that you're going to be broke again let's let's let's handicap zero zero that's i was kind of going to go there so how much is your rentals bringing in a month all five approximately uh once it's said done about 2500 each so you're talking 10 grand 110 grand a month jimmy you've got more money

buried in your backyard than most people will ever make you're fine there's zero chance of you going broke all right well i appreciate it yeah she's gonna get you a better return that's what she's doing good for you jim return. That's what she's doing. And good for you, Jimmy. I mean, that's hard work, Ken. I know. He's done it. You live the American dream.

Are you? Where in Atlanta are you? North Woodstock. Yeah, yeah. I lived in Suwannee for 11 years. I know where you're at. So, yeah, so you're a baby. I've never been in the market, mutual funds or anything,

and I met with a couple of financial advisors that wanted me to sell the houses and put the money with them and that was kind of a red flag with me yeah jimmy you're fine you got property in north atlanta area come on man yeah and but you have you you don't have anything in the market no roth or 401k or okay none okay the money market's paying 5.34 right now it It is, yeah. And your rentals are great. I mean, I think, yeah. I mean, if someone comes in and is like, sell everything and do it our way. Does that change your opinion? No, it doesn't change my opinion.

But I would say, though, Jimmy, diversification is always good in general, right? So we just had a caller last segment where we kind of talked about this, where two great places to invest long-term is the market. I mean, on average, 10% to 12% returns. And real estate has great returns. Both can be volatile at different times, but you write them out and you're good. So I think you're fine, Jimmy. I would maybe kind of just tinker on the idea of putting some in just an index fund.

That's what I'm asking you. Let's go back to your plan. You've spent his $400,000 really quickly and effectively. No, I spent $200,000 of it. No, but then you said take the rest of that and get another rental his 400 000 really quickly no i spent 200 000 no but then you said takes the rest of that and get another rental right no no no no no i didn't no i'd say leave leave 160 in the money market oh good yeah yeah yeah because i was going to say oh i see what you did yep all right so so my question is that of course i hate capital gains it gives me a rash just saying the two words um I'm going to have to calamine all over up to after the break here.

But the question is, shouldn't you put some of that in the investment? Shouldn't you invest some of that money? That's what I'm wondering, Jimmy. That's what I'm getting at. I mean, again, you're going to be fine, but I do think diversification is great. So if you did want to look into and do some research and find someone that doesn't gross you out as a financial advisor yeah uh check out a smart investor pro and and again i would not go have the conversation i would not sell all your houses and put it in the market like this person said i would not do that but maybe there's an element that you have some good cash or maybe you take a percentage and just

put some in the market just again the diversification spreads around risk and it's it's you and it's always a good thing in general. Jimmy, you're getting a call. All right. Jimmy, we're going to let you. I think we're great. We're going to let you go. Jimmy, I appreciate the call. I think that's awesome.

Got a call online too, Jimmy. Jimmy is a busy man. Yeah. Yeah, you got a tenant online too. The gutter, it fell off this morning. We're going to let him take care of that. That's great. It's also, I love the 1992 era phone ring.

That was interesting to me as well. I bet it was a landline. It may have been a fax. No, didn't faxes have different rings than that? Yeah, it was just a bad joke. Oh, man. Okay, but I really love, okay, back-to-back calls. I love this example.

And baby steps millionaires. And I bet first generation. I wish I'd asked both of them i know we should have uh here's the thing i want to point out i want your take on this i'm teeing you up because you were talking to neil cavuto today you're the big shot uh all right everybody's excited about the five plus plus percent but that's not going to be that way forever right now because the fed has raised rates steadily everybody's getting that really fat percentage. They're like, 5% here. I just want to point out that the long-term play for a sizable chunk of money is not your money market account.

That's correct. Yes. And that's the interesting thing. The benefit of rates being high, the benefit and the downside, right? The downside is that rates are high. So meaning when you borrow on money, it's going to be higher. That's why mortgage rates are crazy. If you go get a car loan right now, I mean, everything is just high percentage when you're borrowing that interest. But on the flip wonderful side, those of us that are saving in things like a money market or high yield savings, we're getting higher returns than ever. I mean, usually it's like 2%. It was up to six at one point in our high yield savings. I'm like, this is crazy. But to your point, it's not going to be like that forever, right? Things are going to shift. And as the Fed and the rates start to change, we're going to see some shifts.

So yes, your long-term play for building wealth is not going to be in a high yield savings account or a money market account. The stock market is up big time for the year. I mean, we had that one big scary day where most people who aren't veterans or don't listen to the Ramsey show freaked out and then it's back and it's just fantastic. And so the compound interest is your friend. It is your friend. It is your friend. It is your friend. And that's what we're preaching. You've got to be diversified. Diversification is the key. That's what we teach. David's taught that for decades.

Any of the smart investor pros that you can get access to in your area, this is for our larger audience listening and watching right now, if they aren't giving you the strategy that we talk about, walk away. But they will. And I'm telling you that diversification over the long haul, man, it's nice. And it's 15% of your income into retirement. That's what we're talking about. 15% once you're debt free and you have an emergency fund.

And then anything extra you have, put it at your house. Once your house sells, then looking into things like real estate, paid for real estate is that next step. So, but it's a great plan. And some people have been very successful. So great job with Jimmy. That was fun to watch you work, my friend. That was well played. All right.

It's been a good hour. We've got to hop. This is The Ramsey Show. Do you ever feel like you're finally making progress towards your goals only to get quickly distracted by something else in your feed? Well, that's why we created the Ramsey Network app, your single source for content that keeps you motivated. The Ramsey Network app is designed to keep you laser focused on reaching

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and win with your relationships. That allows you to have peace and to live with great purpose. 888-825-5225 is the phone number. 888-825-5225. I'm sitting alongside Rachel Cruz, and I'm Ken Coleman, and we're here for you this hour. Ready to coach some people up. Let's go to Crystal now, who's in the Big Apple. New York City. Love the city. Crystal,

how can we help? Hi, thank you so much for having me. Hello, Rachel. Hello, Ken. Thank you. I truly appreciate this opportunity and got to be here. Good. What's going on? Your advice too. Yeah, so we are a family of two, my husband and I. Currently, we recently have a combined income. Recently, I mean in the last probably six to eight months of 190,000 growth yearly. 400 or 100? What'd you say? 190. Okay, perfect.

Yes. And that would be growth. Okay. So in that pandemic, my husband and I had the opportunity to buy our first house, which we did. Two years later, we decided to rent it out, which we have. We moved out and we bought a condo recently,

four months ago, which we flipped and we were hoping just to continue on to this path. Recently, my husband came into an opportunity where he was offered a fully remote job but it would be a serious cut in our income and I wouldn't be able to work as well because it would be back home in the Dominican Republic which our initial goal when we came here eight years ago was to hopefully be back home with our family so funny is is that the cut is big time for living in New York because it would be down to $60,000 gross. And here in New York, the lifestyle that we are having right now,

our expenses being at $8,000 a month won't make it. So even if he keeps the 60K and I stay with mine, both of us won't be able to, you know, make ends meet in New York until we finally get rid of our debt or probably sell both of our properties. So what we would like your advice would be what would be the wisest choice in this case. Our rental income right now is on a month to month and it's $4,000 a month. And where we're at now, that house, sorry, has a 2.9% interest and we owe 385. What's it worth? Right now I estimate about 500, 550. All right. Let's pause for a minute because you gave us a lot of details.

I know. No, no, no. No, you did a wonderful job. Wonderful job. My question is, what would you need to make to live comfortably in the DR? We're going to put the debt aside because we need to remove the debt regardless of where we're living. But what would you need to live comfortably in the dr so 60 000 would be beyond comfortable that's where that's what i was and then what could you do in the dr well i definitely my family has small

businesses over there so i can definitely pitch in but that would be something that i would have to read i would have to start from scratch. Well, hold on a second. I don't know about that. What do you do now? Well, I currently work for a retirement company for a principal. Are there any retirement companies in the DR? Yeah.

Yes and no. Okay, here's my point. You have a lot of transferable experience and i think i think it's probably valuable that you're coming from the states with that experience and you got a lot of connections in the dr true or false true so this idea this notion that your only option is to go work for your family's small businesses and start from zero. I think that's not the right notion. I think it's an incorrect notion. Would you agree with that?

I would say so, yes. It depends where we live, too. I get it, but my point is, what's keeping you from going to the DR, and he takes this job, but he does it there? Or are they saying they don't want somebody on site, they're only wanting a remote worker? So what's keeping us here is that we have the debt and we cannot leave with his job only and pay off the debt that we have now. And we would have to either, we cannot rent this condo

that we just bought because we bought it at a 5% down payment. Okay. So let me, let me jump in on that. I'm going to tell you to sell that anyway. You guys don't need that right now. You're in debt. You need to sell it and take whatever money you can make from that. Yeah, how much would you make off that sell? How much would you make? That is, for this condo, we just bought it three months ago, and we bought it at market price, market value.

So we either are going to go negative or just go clean because we put in about 30 to 40 K to make it nice. Okay. Okay. And you, I thought you told me earlier that it was, it was worth more than you, you talk about your current home. Well, that's the house. How much can you get for the house if you sell the house? So if I sell the house, I would get like a 500, 550. I can push it to more, but I? So if I sell the house, I would get like $500, $550. I can push it to more, but I don't want to... No, no, no. What would you clear? Yeah, what would you clear with what you owe?

So for the house only, so for the single-family house that I have rented, if I sell it, I can probably have $150,000 to $130,000. Okay, and what other debt do you guys have? So currently we have around $90,000 in credit cards. That would include the loan that we did to fix this condo and plus some renovation that we did to the other house as well. So in total, we only owe $90,000. Okay.

So if you sell the house, you house you clear 150 use that to pay off the 90 right so you got you got 60 grand over here so i'm trying to understand crystal you guys want to be in the dr right and that what you're that that's what you're wanting are you wanting to stay in new york for longer no we do actually want to go to the dr okay you go so then why don't you go why don't you do that and, and I would not live in the, and I would sell the condo too. You may have to wait a year for capital gains and all that. Make sure you look into that. But I, but I mean, I would go sell it all and go pay off your debt. You said you would live comfortably off of his 60 in the DR. So you don't even have to work necessarily. I mean, I would do something,

but you're fine. And you have no debt if you do what Rachel told you to do. So that's the whole point of our line of questioning. If you want to go to the DR, go. What makes you not want to do that? Or what makes you not do that plan? So the only thing that I would say is since we never put any work in the Dominican Republic, buying houses or even buying, we would have to start from scratch. So yes, we would pay the debt, but we would be on you know you'd have 60 grand how much is real estate in the dr how much to buy a house there well for it can cost 200 300 but you're but you're both living comfortably you said you could live beyond comfortably off of his 60 let's say you make 40 you guys aren't starting from scratch you'd be able to save up for a nice down payment very, very quickly with no debt.

Yeah, you could rent in the DR for a year, save up, and you'll have that $60,000, which I want that to be part of your emergency fund, but you've got to jumpstart on a great down payment for a house. You need 5% is what we recommend. Well, in the DR, they don't have 5%. It's 30% down. Again, you're still fine. Yeah, and they don't have.

But even if you had to rent, Crystal, in the DR for two years, don't have five percent is 30 percent down oh again you're still fine and they don't have but even if you had to still don't have but even if you had to rent crystal at the d in the dr for two years three years that'd be okay right i mean it's where you guys want to be yeah i mean i would do it i'd sell everything in new york i'd pay off the credit cards and i'd go to the dr he's got a 60 grand job it's awesome and then if you make anything on top of that that's just yeah i was just there it's a lovely country. That's your dream. Why delay the dream? Rachel and I can't figure out one reason

why you would delay it. In fact, I think you put it at risk the more you mess around with this current financial situation. Get out of this deal and get home. My goodness. This is a no-brainer. I love this idea. Ken's going to move with y'all, Chris. He's moving with you. I love the DR. This is the Ramsey Show.

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Rachel Cruz is alongside. Excited that you are with us, taking your questions about your money, your income, and your relationships, 888-825-5225. Jim is up in Phoenix, Arizona. Jim, how can-825-5225. Jim is up in Phoenix, Arizona. Jim, how can we help today? Hi there.

So I've been working with RV rentals for the past two years, and I have no debt. I'm looking to maybe, well, here's the situation. So I've been managing a subcontract for another guy in town. So he works for basically Cruise America. I manage the RVs for him. He makes the commission checks. He wants to get rid of the subcontract.

I'm looking to take it over. But if I'm not able to take over this subcontract, not able to find a good commercial location to run it out of, I was thinking about kind of running my own rental business because I've been doing this for a couple of years now. I kind of know the ins and outs of the RV business. I was thinking about maybe buying my first RV with cash, renting it out. And then once I have enough money saved up from the profit from that, I could buy the next one and so on and so forth. So cash all the way through? That would be the hope. What's the margin on that stuff, Jim? I don't know much about

RVs and rentals and all of that when you um especially if you're the owner of it what is what what are the numbers around it how much are they and how much could you rent it for so i would probably want to go for something 2019 or newer uh probably not brand new class c uh motorhome uh we're looking about seven well let's say 60 to,000 for each RV. What's the margin, though? That's what she's getting at. So what's the margin in this business? How often can you rent it out?

What do you think you'll make a year on it? The busy season is basically from May to September, so it's about a six-month period, about 180 days out of the year, making about $150 an hour, or excuse me, $150 a day. So I think that works out to maybe about 30 grand a year for a single RV. And then margin after, you know, fixes, repairs, housekeeping, all the fun stuff that goes with rentals, I think it's about a 15, 20% margin. Is what you make, okay. And, yeah, and this is something you want to do.

I mean, I guess. I'm not a fan of it as a business model. That's why I'm driving on that. Yeah, and the idea of owning an asset that's going down in value, like plummeting year after year after year. I mean, when you get done with it, it's not like, oh, you have a real estate that's gone up. Yeah, you got to buy another one. It's gone down, you know, in value. So, I mean, the numbers in my head, I mean, you've been doing it for two years. So honestly, Jim, from that standpoint,

you know more than I do about this world, but it sounds like your investment could be better spent somewhere else do you think well perhaps i guess i mean um i don't know i've done lots of jobs gone back and back and forth here and there done that and uh actually actually kind of like this industry okay um well that's partly why i'm leaning towards it well again if you do it with cash yeah there's not a lot there's no risk in it right well i mean again it's just the you're burning through so what's the life cycle of a of an rv before you have to sell it for pennies on the dollar have you thought through that because that to rachel's point you're not going into debt

and you said i hope so our deal is you're not going to go into debt for this that'd be i think it would be catastrophically bad idea to go into debt for RV rentals. So the question is, what's the life cycle when you buy one of these things before you pretty much – how many years can you get out of it? In other words, rental money. Yeah, I would say five. Five is probably the max if you're buying a brand new. And then otherwise, I would probably retire them at 130,000 miles.

Okay, I could be doing my math wrong, Jim. So in that case, so if you bought a $70,000 one and you're making 30 on it a year, but you're only getting a 15, 20% rate of return back, right? I mean, that's 10,000. So in the five years. That would take seven years to recoup that 70 grand. I don't know mathematically if it makes sense. And Jim, I am sorry. That's why I've been digging and asking these questions. Well, I guess you could sell it eventually, but what it would be worth in seven years is... Yeah, what are you going to sell it for in five years? Right.

So if I bought it for $70, it'd probably be worth like $30. This is not, in my mind, a good business. I'm not trying to be Shark Tank guy, but I wouldn't invest in this. I don't think it's I think I think for the margins plus all the stuff that Rachel just I mean it just doesn't feel right I know you would make 10 grand at the end of five years though right if the math is if the math is going through you buy it for 70 you're making 30 you make 15 to 20 percent right 10 000 after five years that's 50 000 you sell it for 30 that's 80 000 so you put 70 000 into something and after five years you make 10 000

versus if you put 70 grand into an index fund do you know what i mean i'm just i'm trying to get i'm trying to help you it's just not a great business money make more money on your money um it's got a lot of risk associated with it too. We're not even getting into that. I'm not trying to be Mr. Droopy Dog, but wasn't that the name of that dog that always had the pouty attitude? Droopy?

Somebody help me out. She's too young. Snoopy was the Charlie Brown dog. No, not Snoopy. There was a dog named Droopy. Thank you, the audience. You know what I'm talking about. Okay, great. Here's the point point I'm not trying to be depressing but Jim there's

so much risk associated with this it's not a good business model I'm out well it's not even I wouldn't do it it's not even risk on my end it's just the numbers as you just lay out the numbers I said numbers plus risk okay I'm saying all of it combined we walk through the numbers it's not a solid business model. And then on top of that, there's so much more risk with the things breaking down. I'm just saying it's not. I wouldn't do it, Jim. So sorry.

Gosh, I know you were hoping for a better answer. No, I wanted an honest answer. So that's helpful. Yeah. Can I address something? I think that you think that this is the only thing you can do. Is that true? It's the thing I feel most comfortable doing right now, for sure.

All right. I'm saying you're successful, you're making good money now and selling these things or whatever it is that you're in. I want you to look for a better business idea. Don't be discouraged is my point. Yeah, and I think the line of work you're in is fine. I think it's when you start going into the ownership route, that's where the numbers start to play out to be like, you know, if you're making a cut of the rental thing and that's your, and that's your job, right? I mean, like that you're making money, you're not owning the asset. And I think, cause the asset goes down in value

so fast. Um, that's what makes it difficult. But to, difficult. But to your point, Ken, Jim, if you hang on the line, Christian can pick up and I'm going to give you out your assessment. I'm going to give your assessment my treat because honestly, Ken, or honestly, Ken, Jim, this assessment, I think it would be great. And I do think even when you said it's what I'm comfortable doing, we all, you know, we do settle in comfortable. And not that you're not being successful or anything. I don't want to like downplay what you're doing right now in life, Jim, but this could be an interesting play to just say, hey,

I wonder what else is out there. And again, what I would do is 70,000. At the end of the day is the question, you know, and I just think you can make way more on that. You can. And Jim, here's the deal. The tool, the Get Clear Assessment, comes with the book, Find the Work You're Wired to Do. This is going to help you ideate. And you just need some ideas to see, what can I do from a skill set standpoint? What can I do from an enjoyment standpoint?

And then there's where that idea, that money that you could invest and do far more. So we'd love to see you get a better business model, which is a greater rate of return on your time and the money that you're going to invest and a whole lot less risk. That's the goal. And I think you can find that, by the way. In fact, I know you can. So a great point, Rachel, to point out that we kind of do the thing we know because we go, well, at least I can do that. And I want you to see what you can do.

You know, it's interesting. And I'm not saying this is Jim specifically, but just in general, the idea of being comfortable. I read the comfort crisis. Great book. Oh, Michael Easter. Yeah.

Where it's just, and it's so true. I'm like, we just, the idea of pain, the idea of change to expand and become greater. It, it,

it takes this level of like, oh my gosh, I have to like, you know, be uncomfortable and I have to do something that's outside of the box that's normal. But in order to continue to grow, sometimes we have to do that. And that's true with our money. I mean, that's true within our marriages and our parenting with our kids. I mean, every aspect, our careers to continue to grow, you can't stay comfortable because you do end up being stagnant. Fun question for you. 30 seconds till we go to break. You can handle this. You're a pro. um to continue to grow you can't stay comfortable because you do end up being stagnant fun question

for you 30 seconds till we go to break you can handle this you're a pro if you couldn't do what you're doing now what would be something that you would try that would make you uncomfortable favorite oh that would make me uncomfortable oh my gosh you're interested by it interested but it'd be outside of your comfort zone oh man oh no uh gosh i don't know ken i was gonna see i want to be a political correspondent but i don't know if i'd be uncomfortable doing that what would make me uncomfortable a little bit different what about you uh college basketball coach it would make me uncomfortable i've never coached okay other than Other than just my kids. And that would be, that would be, that would put me. That's good.

Yeah. That's good. Maybe doing a, doing a talk show with Ken Coleman. That'd be really uncomfortable. That's easy. This is The Randy Show. This show is sponsored by BetterHelp. This is the season for Halloween.

It's October. We're wearing costumes and we're wearing masks. So if you haven't started planning your costume yet, get on it. And while you're thinking about it, I want you to be honest. A lot of us hide ourselves. We hide our true selves behind costumes and masks all the time. We do this at work. We do this around our friends.

We do this around our families. We even do this when we look at ourselves in the mirror. I know because I've been there multiple times in my life and it's the worst. If you feel like you're stuck hiding behind masks and costumes all the time, if you find yourself hiding from your true self, I want you to consider talking with a therapist. Therapy is a place where you can be honest, where you can talk to somebody else and reflect and learn and you can accept all the parts of yourself over time and start living an authentic life. Masks and costumes should be for Halloween parties, not for our emotions and our true selves.

And if you're considering therapy, try calling my friends at BetterHelp. BetterHelp is 100% online therapy. You can talk with your therapist anywhere so it's convenient for you and your schedule. Just fill out a short online survey and you'll be matched with a licensed therapist. Plus, you can switch therapist at any time for no additional cost. Take off the costumes and take off the mask with BetterHelp. Visit betterhelp.com slash deloney to get 10% off your first month. That's betterhelp.com slash deloney. Motivating your team to work and lead with the same passion you have is one of the toughest things in leadership, but it's crucial if you want to scale your business.

Fortunately, Entree Leadership Summit is the leadership event that will equip you to build a team that fights shoulder to shoulder with you so you can grow like never before. Join us in Denver, Colorado, May 18th through the 21st by going to ramseysolutions.com slash summit or click the link in the show notes. Welcome back to The Ramsey Show. I'm Ken Coleman. Rachel Cruz is alongside. The Ramsey Show question of the day is brought to you by WhyRefi.

If you're in a default situation with your private student loans, contact Y-Refi. Now, obviously, we don't encourage letting your loans get into default. We teach responsibility. But these amounts have some of you struggling, and this is a way forward. Y-Refi was created for people in your situation. So go to Y-Refi.com slash Ramsey. That's Y-R-E-F-Y dot com slash Ramsey. It may not be available in all states. All right. Today's question comes from Ava in Rhode Island. After my undergraduate studies, which I did on scholarships, I was accepted into law school. I graduated under the impression that I had about $80,000 in student loan debt. I didn't know that my parents also took out a parent plus loan or loans. And they now say that I own an additional $75,000. I admit that that part is my fault. But

when I was 18 years old is when they did this and I didn't understand the ramifications of this type of loan. I have opened a law practice in my hometown, which is small, so we only have two stoplights, so my income is very low. My law license could be taken away if I default on student loan debt, and the monthly payment is about $800 just on the loans that I took out. Should I allow my father's paycheck to be garnished for his part of the debt, or should my husband and I buckle down and take it on ourselves? Wow. Good night, Ava. Yikes. We're getting into the garnishing, part of the debt or should my husband and i buckle down and take it on ourselves wow good night yikes we're getting into the garnishing so that means it sounds like there's some tension and and

arguments about all this so she didn't know her parents took out 75 000 yeah and we hear this a lot that either it's miscommunication or you, it's just done and there is no communication. And so, I mean, well, the parent plus loan. What's your take on the parent plus situation? What's your take on what the parents owe versus her? Well, I mean, it was for her degree, but it's under their name. I know. I mean, so.

And they didn't tell her. Yeah. So do you have, I just want to know your opinion on that. I mean, in this situation i'd rather not get into a fight with the dad and have him come after his paycheck that's not going to make for a very nice thanksgiving no yeah and you don't want i mean you hate to see relationships and over this stuff i get out of this small town and start making some real lawyer well i think that's i think that's the key i don't think you can afford to practice in your hometown i think

you have to go somewhere else make a lawyer kind of money and it's going to take a little while to get to get everything built up but it's very doable yeah so i think the 80 grand is her portion that she knew about what do you think about the 75 i know i mean the parents signed it right i know i'm looking for an opinion over here i've got one i mean i think it's the parents signed it, right? I know. I'm looking for an opinion over here. I've got one. I mean, I think it's the parents' responsibility at that point. If you take it out on an 18-year-old and you don't tell her, that's on you. I agree. I agree. I agree. What is the audience saying out there in the lobby?

They agree with you, Rachel. Oh, look at that. We got thumbs up. I love this audience, James. This is the most active audience that I've been with in months and months and months. They're giving us the thumbs up, thumbs down. It's real-time focus group right here. And these are Ramsey people. So, Rachel, I agree.

The sticky part is sounds like mom and dad are not in agreement. Well, and I wonder. So she's after law school, right? So she could be in early 30s. This could have been 18 years ago when all this was going on, right? Can I go back to the audience real quick? Yeah. Audience, do you sick the loan people on them and let them garnish Pop's wages?

Wow. We're getting, we're getting. I got mostly yeses. One guy says no. Wow. Okay. Because apparently it's going to be an ugly thanksgiving anyway so i think i'm siding with the audience man okay i like this real-time focus group stuff because i here's why i'm i'll

be honest with you all bailed me out because that's where i was gonna go uh at first i said no but then i was like oh i started thinking i don't want to be heartless i know and i always wonder about these situations because she's 18 when this happens. So maybe what if they had told her and she forgot because it was two separate conversations. You know what I'm saying? I don't think they did. This is why we need these people on the phone. But bottom line is she throws it out there should my husband and I take it on.

So she's got some character. This is a woman of character here, so I don't know. It was taken out in secret, so no. I don't think you owe it in secret. I agree. All right, tough one there. Ryan is up next in Oklahoma City, Oklahoma. Ryan, how can we help today?

Hey, Mr. Coleman. Hey, Ms. Cruz. Thanks for everything you guys do. We really do appreciate it. I had a question. It's a little bit of money, but mainly just career-based. I used to work in media, TV, everything, and then I've worked in sales recently. I'm currently a senior lead generation specialist

for a software company. I've been here about three months, and in the city that I'm in, the school district that's right nearby, I have friends that work there and everything. They highlighted a job that was a high school media teacher position, something I've always kind of thought about was teaching, getting back in media, helping the next generation, but was never serious about it. And then they approached me with it. I decided to interview.

And then yesterday they offered me the job. So now I'm having to decide between something really difficult because I've only been at my job three months right now. So I'd'm having to decide between something really difficult, because I've only been at my job three months right now. So I'd definitely be burning them if I leave, and that doesn't really fit well with me. But there is more of the long-term potential, I think, for the other job, being back in media, helping kind of the youth of the area pouring back into the community. So just kind of looking for any sort of expertise or guidance on kind of weighing that option.

Yeah, okay. I'm going to ask you questions and let you decide, okay? Mm-hmm. Do you pay attention to sports? Do you like sports at all? Yes. Okay, give me an example of your favorite team. Oklahoma Sooners and the Green Bay Packers, either one.

Okay, good. Let's take the Packers because it's a professional thing, okay? Sure. We've got thumbs down from the audience, yeah well didn't like your sports choices but that's okay you all behave yourself i'll tell you when i want your opinion all right y'all just sit there and be quiet all right uh i'm kidding of course uh sort of uh so when when when a free agent okay leaves the packers all right so another team comes to them and says, we want you.

You're not happy about it when one of your top players leaves, are you? No. But you don't think that they're doing anything immoral or that they're a jerk? They're taking an opportunity, another team won them, they're going to pay them a little bit more money and they feel like they can go play for another team and win a Super Bowl. You may not like it, but you understand it. True or false?

True. I think that's your situation. This opportunity fell in your lap. Can we say that? Yes. You weren't out looking for it. You weren't being a jerk. Nope.

You're not being unethical. There's nothing illegal in this move, is there? No. No, definitely not. So here's my point. Yes, they're not going to be thrilled that you're leaving them after three months, but that's not your problem. This is an opportunity to kind of express your journey here.

I can make some moves here. I can get a little bit further faster. This sets me up for the long term based on how you've described it. I think you sit down with you, tell them that. You go, listen, I didn't plan for this. This is, this is an opportunity that has presented itself that I can't pass up. I am so sorry to leave you after only three months,

but I have to take this opportunity. And if they call you bad names or if they treat you in a poor way, you just got to be a big boy and handle that. But I think you have to make the decision that's right for you long-term, and because of that, I think it's the right move. Sure. If I can ask one other thing with it, it is about a $20,000 to $30,000 difference. I know I've recently gotten into listening to you guys and all the –

Yes, it'd be less. For how long? Well, within teaching, it's all pretty segmented. So I'd be going from about, I'm at 75 right now, and the job would be 55. Now there is commission into my job, but just base salary, I'm currently 75. What do you want to do? What do you want to do with your life? Where do you want to be 15, 20, 25 years from now? That is the biggest thing. Currently, it's this job with everything it provides, but I would not be doing this job two, 20, 25 years from now. That is the biggest thing. Currently, it's this job with everything it provides, but I would not be doing this job

two, three, five years from now. Can you live on the teacher's salary? Oh, definitely. Of course you can. I'm very good with that. I'm just making sure that he's not in some crazy position where he's like, no, I have all these bills. We did the largest millionaire study ever and the third largest group of net worth millionaires are teachers.

So it can be done. I'm not saying it can't be done. I'm making sure Ryan specifically can do it for his circumstances. Of course he can do it. We don't know until we ask. Well, I wasn't talking to you. I was encouraging him. I'm only about one. I'm about one month or by the by the time I was leaving, if I went to this new job at the beginning of October, I would have just hit my six months of the three to six months of. You're great. You're great, Ryan. You got one shot on this globe.

Do the thing that makes your heart beat. And I was. Yeah. As long as it's not a pattern in life of jumping jobs every three months. You know what I mean? There's no issue. This is not a job. This is a young man who knows his role

and he's ready to do it. Go, Ryan. We need great teachers. Go and be an everyday millionaire. You can do it. This is The Ramsey Show. Listen up. Trying to reach your money goals

without a rock-solid budget is like trying to climb Mount Everest in ice skates. It isn't going to work. That's why we built the EveryDollar app to help you win with money. It's the simplest, most straightforward way to track your spending and give EveryDollar a job. That way, you can stop letting your money push you around and start reaching those money goals. Download EveryD dollar for free on the App Store or Google Play. Welcome back to The Ramsey Show. I'm Ken Coleman. Rachel Cruz joins me. Folks, stuff is moving

in the real estate market. What's going to happen? We don't know. We don't know 100%, but things are moving and a lot of you are going, should we wait? Should we wait? Rates are down. A little bit. A little bit. Jerome Powell saying time to start cutting again. We'll see how that affects the mortgage rates. That's coming, I think, in September. So here's the point. Don't sit around and wait, wait, wait, and try to time all these rates. If you're ready to buy or sell and you know what you're doing, go for it. And if you don't know what you're doing and you do know what you're doing, you for it. And if you don't know what you're doing, and you do know what you're doing, you've got to have one of the Ramsey-trusted real estate professionals.

It's the only way to find an agent you can trust to keep you on track. And we've got the top agents in your area. We trust them, we vetted them, and they're going to guide you through what may be, for many of us, the most important investment and financial decision you ever make. Go to ramseysolutions.com slash agent. That's ramseysolutions.com slash agent. To Chattanooga, Tennessee is where we go. Nina is there. Nina, how can we help? Hi, yes. Thank you both for having me on the show.

So I'm just going to go straight into it. I'm 24 years old. I have two kids, an eight-year-old and a four-year-old. And I just came across the Ramsey show about like two weeks ago. So I've been on my own since like I was 16. Obviously, I had my first child when I was young and never really thought about like I've just been surviving my whole life till recently. And I'm just kind of overwhelmed and I want my kids to be um I want to be able to be financially free for my kids and I just feel like it's kind of hard to do that when I solely take care of everything like rent do you know bills and all that It's a lot. So I'm just needing some guidance in how to like budget or

where to start. I know the baby steps, they just start off with the emergency fund. And out of the thousand, I only have 300 saved. But then again, I feel like it's just, I don't know how to budget with like the bills and everything. And I'm just kind of lost. Well, number one, you, that, that feeling and that emotion is completely normal, especially the story you laid out for us. I'm like, yeah, I mean, you have, you have two kids, you're a single mom, you're young and you're trying to figure all this out. So I, I applaud you so much though, for the work that you're doing. I mean, that is so difficult being a single parent. So you're doing a great job. So from the money side, where are you at?

How much are you making a year? And how much debt do you have? Yes. So I make about $45,000 a year. And with my debt, I'm $12K in debt. Okay. And so I'm going to break it, um, with my debt, I have, I'm 12 K 12 K in debt. Okay. And, um, so I'm gonna break it down for you with the debt. Um, I have an awful loans. I have 10,000, but, um, you know, I'm a, I made a mistake in 2019. I bought a new car and it got repoed in 2020. And so, um, they cut it down from 17 to 10,000. And in credit cards, I have 2,000. And then I have

about 530 in collections. Okay. Now with the $10,000 car, is that from the repossession? And so you don't have the car or is this on a new car when you said the 10,000? It's from the repossession. So the car I have now, I don't, you know, it's paid off. I bought a cheap car. Good, good. Good for you. That's great.

Yes. But, you know, my driving history is pretty bad. So my insurance is at like $515 a month. Okay. Yeah. So it's, that's all that I have. Okay. So what are you bringing home a month is it around 3500 yes okay and have you done a written budget are you able to when you look at do you like do you know throughout the month hey beginning of the month i know how much my lights are going to be you know relatively uh water my rents water, my rents, my, you know, all of that, my food. Like, do you, have you done a detailed budget yet?

So, uh, yeah. So my light kind of like fluctuates, um, and my water, but my rent is about 780. Um, you know, right now my light and water, it came out to like $500. Okay. When you list out your food, your rent, your utilities, and gas for your car and insurance, how much does that come out a month? Do you know that number off the top of your head? Off the top of my head, no, I don't. But I know it's like close to what I make. It's close to that, okay, to that $3,500. Yeah. Okay. To that $3,500. Yeah.

Okay. Yeah. So in your case, Nina, what we find with money so often is that there's really two ways that it flows. It flows in from the income standpoint, and then it flows out with expenses and everything you've listed to me. And as we've talked in this conversation, my assumption is there's no outlandish cuts to probably be made. I mean, maybe some restaurants here or there,

but you're not going on vacation on credit cards or doing those kind of things. This is pretty, your bills, your basic bills, they're squeaking by, which means on the expense side of it, there's probably not a ton to cut. I would challenge you just to look, because even 30, 40 bucks from a random subscription or,

you know, some restaurants, like if there's any amount of money you can squeeze out, do that. But I think your biggest up play is your income side. What do you do for a living? I'm an operations coordinator, so I work in logistics. Oh, nice. So what do you think is the next rung or two up the ladder in your current workplace? Is there even a rung or two above you that is reachable? So I'm not going to lie. This is actually one of my first good jobs. That's great. I actually was a dropout, so I didn't finish school, so I don't really have an education. Neither do I, Nina. I'm a college dropout so I didn't finish school so I don't really have an education I don't really neither do I Nina I'm a college dropout did you get a GED do you mean even high school because

you left you left school you left home at 16 did you get your GED yes ma'am I did good for you that's great so so okay I hear what you're saying so you're kind of going Ken I'm not even thinking about the next rung of the ladder I'm thrilled to be on this one and I and I'm not trying to get you but I'm just wondering um now that I know that, how long have you been in that role? So I just started. I'm like hitting four months already. So, you know, I'm very blessed to be a part of the team. But before, you know, I had like jobs working in the carpet mill. So this is actually a very stable job for me. All right. So let me switch gears on you real quick. Okay. Back to the budget. Cause I think right now, I think you could probably pick

up a side gig. Is it possible? Do you have somebody to go watch the kiddos and you could pick up maybe a 15 or 20 more hours a week for a season, a small season, but a season? So I know it takes a village to raise the kids, but I don't have a village. You don't have anybody. Yeah. Let me say from home, there's a lot of remote stuff. Can you do some customer service stuff at night when the kids are in bed? This is all by phone or by computer? Yes, I can. I do sometimes work from home.

Okay, great. All right, so with that in mind, I want to get back to the budget thing. And by the way, before I forget, I want to tell you this. We're going to put you on hold in a minute when we're finished, and we're going to get you a session, our treat. We're going to pay for it with a financial coach because I think you need a little bit more time. And I think when they walk you through penny by penny where you're spending,

I want someone to be hands-on. And if you'll promise me, Nina, that you'll let them coach you and show you how to do your first real budget, I want to give you a session with them. Will you do that? I will. Because listen, let me tell you something, Nina. Listen, I'm not betting against a single mama and you've got what it takes. You've got a good job. I think you're making enough money. I think you've got to see where your money's going. And I think some side hustles to pay this small amount of money off. I know it seems like a mountain, but 12K is very doable. But here's

what I want to encourage you on, okay? I think that you've got to treat your budget like it's a full-time job. And I think you're going to be surprised how much money you can find. Yeah. And we'll give you- And then pay that off. And we'll give you every dollar premium too, Nina. That's our budgeting app to do that. Perfect. Good for you. And FPU and stuff. So we'll load you up for sure, Nina. Because's our budgeting app to do that and FPU and stuff. So we'll load you up for sure, Nina.

But I got a quick question. Okay. How much money, Nina, just ballpark, I'm not holding you to this. How much money, if we handed it to you every month, would you think would make the difference right now? Giving you some breathing room. How much? Ballpark. In order to pay off my debt?

No, no. Just to be able to have some breathing room. What order to pay off my debt. No, no. Just to be able to have some breathing room. What's that amount of money that you go, Ken, if you gave me this much a month, what's the number? Probably, okay, so I make about $35,000. So I guess another $1,000. Another $1,000. Okay, so here's the point.

I want you to just think about through the debt payments and then getting a budget that thousand dollars a month. All right, real quick for the rest of you, uh, who are not on radio, radio audience, we're going to stay with you for the rest of you on YouTube and podcast. The show is done for you unless you go to the Ramsey app and that's where you get the rest of the calls. And we got some good ones lined up. So head over there. You can search for the Ramsey Network in the app store. 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?

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.