Change Your Mindset, Change Your Life

Brought to you by the every dollar app, start budgeting for free today. [MUSIC] Normal is broken, common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fair Wins Credit Union Studios, this is the Ramsey Show.

I'm Dave Ramsey, the phone number is triple eight, eight, two, five, two, five, my co-hosts today, number one best selling author Ramsey personality, Rachel Cruz, also my daughter. Jump in and talk folks, it's what we do here. We're here to help you.

“Neo is with us and Jacksonville, Florida, hi Neo, how are you?”

Hello, I am so honored to be on the show. Thank you so much. I'm honored to have you, how can we help? All right, so I have recently had a conversation with my parents about what they are planning to do for retirement.

And I was a little concerned, they don't have any money invested at all right now. And so I was like, I didn't pick apart what they haven't savings or debt or whatnot, but how can I convince or how can I have a conversation of investing even at their age? So my mom is 55 and my dad is 62. Oh, I'm surprised there's still a lot.

There's old as me. There's old as me, I can't believe it.

Well, the thing that has always helped me sell hope, which when you say I'm too old to invest,

that means I've lost hope. And so if I want to sell hope in the world that I'm in, I often use the actual math. And so I would jump on and play with some numbers and then take the numbers to them and show them on your laptop. Okay.

And just go to ramsysolutions.com and look at our retirement calculator. Okay. And say, mom and dad, if you put in, I don't know what their income is or whatever, but you could guess at it and say, if you put in five hundred dollars a month, and when you're 72, here's what it'll be.

But here's what it'll be if you put it in at three percent in a high yield savings account, because you're too old to invest. All right. And the market has done unbelievably well in the last five years. And it's not going to stay at that level forever.

It doesn't average as high as it has lately. But in the last four years in 20, I mean, the numbers are in 23. It was 26 percent in 24.

It was 25 percent and 25 is 18 percent.

We're already at 13 percent up this year. So the stock market basically, if you put money in in 23, a lump sum, it would have doubled by now. So if you put 100,000 in and didn't touch it, it would have all ready to be 200,000 just four years later, five years later.

So.

“So is there anything I need to do on mine to help them?”

Like, okay, if the next step is investing and the ad convinced them that this is a good idea, what would be the next step? Well, the other thing that holds people back from investing, other than belief that it's not going to work, is knowledge. And so anything that we don't understand is scary.

That's human nature. Yeah. But to answer your question, though, you would reach out to a smart investor pro. Exactly. And sit down with an investment professional with them.

If they would, you know, if you're kind of guiding the journey with them and they want your help and you in the room and your opinions. Yeah. Sure, the smart investor pro on the Ramsey site and I talked to them for a minute and they said they'd love to sit down and talk to you.

And these people are not there to put their glasses down on the end of their nose and talk down to you. They are teachers. And if you learn, your fear goes down. And if you believe the numbers are going to work, your hope goes up.

And what you put your mind in. And then you invest. Yeah.

“And what you put your money in, you trust the system, right?”

Ultimately, which is the market.

Like you are putting your money in and saying, I trust that this is. It's not going to go to zero. I'm going to trust that if anything, it's going to make me more money. And so when you sit down with an investment professional, they can run those numbers. Run the history.

You know, you can just see and get kind of a confidence of, okay, it's not as dramatic is whatever one thinks, right? When you live in that fear bucket of the market, people, they dream up all this scenarios in their head that aren't, aren't true, you know, and so. So that is helpful.

So that they repeat the mythology. I'll give you an example. I was doing Fox yesterday. I was doing the parents on the Fox show, one of the Fox shows yesterday. And they were talking was yesterday or day before.

I don't know. The town has broken another record, 54,000. Okay, but does anybody remember when grandma said or your friend said, "We lost all of our money in the stock market in 2008." Does anybody remember that?

And that's an absolute lie.

Unless you bought a single company in that company, went broke. But if you were invested in a mutual fund, the Dow, which is now 54,000, had paid at 13,000. In a, in a way. And then dropped in half. Oh, like this.

Okay.

And so if you had a million dollars in at 13,000 and it dropped 6,300,

you're million turned into half a million. So I lost half of my money if I bought at the top and sold at the worst possible day. But if you kept it in, it went from 13,000 to 6,300 to 54,000. Right. As we sit here today.

The memories are so funny about remembering negatives and not positives. We, I read an investment psychologist that did a study one time. They said, "For every dollar you lose an investment,

“you have to make three dollars to feel the same."”

Mm. We're such negative nines. Yep. Yep. The human nature is we have this little black cloud over the top of us.

And totally. If we lose a dollar, it takes three dollars in gain to feel the same. But I would also say to the 62 year old dad, "Dad, you got to get out of it. The dollar you put in now is not like the dollar you would put in when you were 30." You know?

George Jamel. I was just in a, yeah. We were just in a content meeting and George was showing about. And I need to pop the numbers maybe for next segment. Because it was so fascinating.

But he talked about, you know, if you put in a dollar, I think it was like at 25, it actually means $72. Yep. We're talking to you back and out. But you start to see how quickly.

And that's not to lose hope. But there's a reality to your money and your time. So it's almost this urgency of getting out. Like, go now. How much can you save?

How much can you invest? Lump some wise. But you're going to be 72 in like you got exactly. It's going to be an alpha or you're going to have some more money.

Why do you always say alpha?

Because it's a thing. Save ramen. No, no. People actually poor people actually opened an eight dog food. Why?

Why? Because they have nothing to eat. Have you not heard these stories? I have, but I always wondered why not just ramen. Ramen is not dog food.

Exactly. Why? I know. Because it's not a dramatic and not a dog food. That's what I need it.

“I always was like, why do we always use this example of people eating?”

And maybe people did. No, they do. I mean, I've heard the stories. I've heard the stories. And so.

But if you need to eat, eat raw. I'm too poor. I'm eating raw. I'm eating raw. I'm eating raw.

I'm eating raw. I'm eating raw. I'm eating raw. I'm eating raw. Yeah.

Well, there you go. But still. I don't know. I don't know.

Um, I've never had either.

It took him flavor. You've never had ramen noodles. No. I have managed to avoid that. I eat well.

Can't you tell? Oh my god. You're not. You're not. You're not a millennial.

The way to call is during those days. You're right. I'm not a millennial. Full of your first clue. Beef.

Beef ramen noodles. So the best. Sorry. George's point is. And her point for her dad that you're making.

All drama aside. Oh, yeah. Is the best time. The old saying. I think his friend corner somebody said it.

Best time to plan an oak tree. 30 years ago. Next best time is today. That's right. Today.

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We're talking about the math giving hope.

I have a degree in finance with specialization in real estate, a degree in real estate and urban economics,

“which is a finance degree with real estate classes thrown in.”

And I had never sat down and looked at mutual funds.

They don't teach personal finance in that. They teach corporate finance and analysis and concepts of future value in that present value. Those kinds of things. And I went to this thing and the guy put up their compound interest if you do your investing in a mutual fund. And I was 23 years old.

And I can be rich. I ate a work. Oh, okay. What he put up there was a hundred dollars a month invested from age 25. And I was 23.

So I had to head start in my mind. A hundred dollars a month invested from age 25 to age 65 at 12%. Which is a little bit more than the stock market is average, but right around there. So average 11.8. A hundred dollars a month.

And it's still true. A hundred dollars a month at 12%. From age 25 to age 65 is 1 million. One hundred and seventy-six thousand dollars. And I went.

A hundred dollars. And guys, that was 1983.

A hundred dollars was a lot of money.

But I went a hundred dollars. I can do this. Now a hundred dollars if you don't do that and don't become a millionaire is laughable. And but it should you should be gone. You put that stuff in that Ramsey calculator on the website.

And it shows you that compound interest. And the compound interest gives you hope. And hope will make you act. It'll make you go do the hundred dollars. But if you thought, well, I'm too old.

I've put in a hundred dollars. You won't too late. Well, if you don't put in a hundred dollars, it's really going to be late. Yeah, you won't have anything. What do we make you sick is a car payment.

How much you have is a car payment. You're self-acar payments that are staying in debt on a stupid car. And it used to be that five hundred dollars was an outlandish car payment. Now two thousand dollars is an outlandish car payment. Bailey is in Lubbock, Texas.

Hey, Bailey, what's up? Hey, y'all. Thanks for taking my call. I'm so excited. Sure, what's up?

So my question is, how many are we bought? What we thought was a cosmetic fixer upper two years ago. Turned out to be a lemon. And we're trying to decide if we should sell it or keep working on it. Oh, man.

What's been wrong with it? Everything from like foundation. I mean, anything and everything. How do we do all of our plumbing? Um, oh, man, now that you're asking me, I'm kind of blanking on it.

No, no, it's fine. No, no, no. Did the inspector... Did you add that our inspector messed? Okay.

“And how much money have you guys put into the house already?”

We haven't really been keeping track of it, but we're in thinking we've put about 30 into it already. What'd you pay for it? We bought it for 163 and we still won 50 on it. And is it in worst condition now that you've been doing the renovation

or better than when you started? No, it didn't matter. We have been doing... I have been drilling handy for... We've just been doing all the work ourselves.

So what can you sell it for? Well, that's the thing. We don't know. We're... Well, let's pretend you could sell it for 200.

Would you not sell it? Well, that's kind of my question because I don't really know if it makes more financial sense to sell it. Nothing about this house makes sense. When did you guys buy it Bailey? How long ago?

Two years. Two years? August of 24. Okay.

“You've been working on for two years, you said, right?”

Yes. And you are emotionally over this house. We can tell by talking to you. Yes. Yes.

So it is a... Even if this house is completed and it's excellent when it's completed, you're still not going to like it because you want you bento. Yeah.

Maybe. Or maybe you fix it and it is what you love. So do you not like the house Bailey like when you're in it? What? Are you annoyed by it?

Yes. Very much because it's a constant construction zone all the time. We've got things going on here. Things going on there.

And so there's never any like piece at the house.

It's chaotic all the time because there's always something. And whenever we start a project, it just turns into... Yeah. How long will it take you if you finish the projects and have a perfect house? How long is it going to take from today?

We anticipated about a year and a half more. More. Yes. This is a three and a half year renovation. Y'all are slow.

Well, their husband's doing it. I know. Y'all are slow. But they're probably costs.

They're taking a little bit at a time.

It's when we tell people to do it on the show. And you eat salt dust for breakfast. Yeah, living in it is what that is fair. That's one thing. Yeah.

And the other thing too is that it's only a two bedroom house. And we do want kids in the future. So if we stayed at the house with kids, then we would need... I would cross the bridge when you get there, though. I wouldn't make the decision.

“That's what I'm going to do with it when you bought it two years ago.”

Yeah. Or kids in the future then. But what happened is this is taking three times longer than you thought it was going to. And it's going to. And it's costing more than you thought it was going to.

And that took all the fun out of the fixer upper. You watched too many of those fixer upper shows on TV and thought it was going to be that easy. Oh man, yeah. Yeah. I hate those shows.

Because they're a lie.

It's not what really happened.

You've lived the reality. Mm-hmm. They're a lot. Yeah. So I used to do historic rehabs and a bunch of rehabs of all kinds.

But we would buy houses in the historic end. And I bought several houses from like 1898. They're beautiful. All gingerbread looking houses when you get them done. But they, you know, the construction techniques in 1898 and in 1905

were substantially sucky compared to today's construction techniques. They don't build them like they used to. Thank God. It was crap. Okay.

And we would open up a wall.

“One of these plaster walls, which won't you open it up.”

You got to do the whole stinking wall. It's not like draw. We used to open up one little piece and then put it back. We'd open up a wall. And then we'd end up taking the whole stinking room down to the studs and hadn't anticipated that.

It was a freaking nightmare. And we were doing it for investment. It was crazy. I bought one house for 13,000. It's been 78,000 fixing it.

By any, for 130 and spending 780,000. So for someone like Bailey who's asking. I would move if I'm Bailey. I put it on the market. If you can get, if you can get your money.

Get it so ready. If you can get your money out of it and get out of there today, get out of there. This is lost. It's clamor. There's no romance in this relationship.

And it just keeps going. Yeah, it's just not fun. It's not fun. And by the way, her husband blesses hard. He'd been working his butt off.

And he's got, you know, he's got a black fingernail from hitting his hand with the hammer. And all this stuff, the pipe wrench slipped and busted his butt off. You know, he's sick of this thing too. He's sick of it too. I've been that guy, too.

You know, like the problem with knowing how to fix stuff is you've got to fix stuff. And so yeah, man. Okay, don't you think, though, homes like good old ranchers from the 60s and 70s? They're built well, though. Yeah.

When you say, there's a period of time. 62s different than the 1902. No, that is true. Yes. And the 1962 in most areas, the construction technique is very similar to what it is today.

Yeah, just or even better than some of these pop up houses that go quick, too, you know? Yeah, yeah. Be good. That's not good. Okay.

It is, I will say, though, basic foundation. So recommendation, I would never buy a fixer upper that I'm going to leave it. I'll say. On less, I'm in the construction business and unless I've already owned a home before that.

Never do that as your first home.

“And if it is, if it is their intention, I think, when she said was cosmetic, right?”

Like if you want to like change out cabinetry and like those kind of things, you can do. You wouldn't do that. Paint and bushes and roof. In carpet. Well, our floors.

Yeah. But I'm not going. I'm not touching the plumbing or the electrical. Right. Right.

That's right. And once you pull the cabinets out, you just got in the plumbing. And you just got into all the appliances. And so here we go. Paint cabinets.

Just paint the cabinets. Yeah, from a distance. Yeah. It's just not touching. The romanticized idea.

Okay. Okay. And I'm going to keep going back around, though, is because the market is high people are buying smaller, older homes that do need some work. And so you do have to estimate that you may not be able to afford the nice new home.

I'm in with that. Yeah. But don't get into these major rehabs and just go rent the old movie. The money pit from the 1980s or 90s or whenever that movie came out. And you'll just see all the humor around it.

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If you're not sure where to start, text quiz to 33789 and we'll help you figure out which option fits your situation. Nick is with us in Detroit. Hi, Nick. How are you? Hey, good. Are you? I've been shaking my call. Sure. What's up?

“Sure. So my voice and I remain as you must find best in itself.”

And we just sort of follow the broad strategy if you can mix things or other broad mutual funds. But recently it's a network that's been increasing. Stability has been calling and trying to sell us on SMAs or separately manage accounts. And come from reading, we've got some reservations, but curious what you guys thought about.

Well, it's basically an individualized mutual fund without as much diversification.

But it's really appealing to you DIYers. There's nothing wrong with it except it's just not as efficient as a good mutual fund. I can buy good mutual funds and whip your butt with it. I see. So one of the things that they were pushing that they do in the past service in turn, I'll say all the gains, but you're taking the losses. Yeah, that's fine.

You can actually do the mutual fund too. You don't have to have single stocks to do that. That makes sense. The one thing that concerned me though is like with buying mutual funds, we typically just buy a hold for a long time. So everything sort of turns to long-term gains pretty reliably. And with this, like they'd be sort of buying and selling stocks frequently, and so we wouldn't sort of have that.

And we'd have some short-term. Now if you really need that money, we'd be paying essentially income.

“If the only way, if you don't pay any taxes with it, it's because your tax harvesting out-did your gains, which means you're not making money.”

You have to lose as much money as you make to have no taxes with tax harvesting. It's the only way it works. And so tax harvesting is smart because we're going to take the losses and offset some of our gains. And we're getting out of the stupid stock that we're losing money on. They'll take tax harvesting.

Yeah, and with the fidelity of countenaked, somebody would be doing that for you managing that, or with this SMA, we will be you doing that. Because that's a lot of work. That's a lot to be done. Okay, okay. Okay.

It's good. Yeah. Fidelity is a good company. I own some of their funds. I do not use them to manage my money.

I have a professional broker who is not dialed in on one brand, a smart vester pro. They're not brand loyal. And they're going to do what's best for Dave, not for fidelity. And that broker is going to manage that in such a way that if there's tax harvesting to be done fine. But I don't want to set up my portfolio to go rushing towards tax harvesting.

That means I'm losing money. I would rather have no taxes to harvest, meaning no losses. It's not possible. Right. But I would rather have that to be my goal, rather than, oh, tax harvesting.

You know, it's kind of cool, but let's just take an advantage of something that went bad.

So, no, I, you know, Charles, you've chosen to do this this way.

I've got Nick. I'm sorry Nick. You know, Rachel and Winston have substantial money in mutual funds. Dave and Sharon have substantial money in the stock market. And neither one of us use either of the processes you've been using.

And index funds are easy to just the S&P. I mean, yeah. If you want anything in under that umbrella. Yeah, index funds. What's got, you know, it's a bogal head, a bogal invented the Vanguard brand.

And he started to push on the index funds because the index outperforms a lot of the mutual funds. And that's true. But there's a lot of mutual funds that still outperform the indexes. You just got to go find them. They're not, it's not.

“That's why having a smart investor pro in your corner is great because they know it.”

They know those accounts inside and out, which is great.

My smart investor pro is never going to bring me a mutual fund that is not outperform the index.

Because he knows immediately the first thing I'm going to ask is, this is outperform the index, right? And that's kind of a Ramsay thing, you know? Yeah, so for people up there investing have those high standards, that's not just for you to be pushing to, if you have a mutual fund for it to be outperforming. Yeah. They have some, like, those are very, very valid.

You know, they'll understand that. Okay, so let's, let's talk about that. Let's be very valid. Uniting mean, like, that's a valid question. That's not just, or a statement to make if you have an investment profession in your life.

Push them on that. Yeah. So Nick back to your original question. Fidelity is a good company. I don't know a problem with them.

They're not like a whole life company that's ripping people off of. I tell people stay away from their good company. They've got, I guess, Fidelity, Magellan is probably still the largest or one of the largest, one of the two largest mutual funds in the world.

Over, it's the first one to go over a billion dollars years ago when I was first getting in the business.

It was like, ooh, Fidelity, Magellan. It was the thing. And it was the hot, it was the hot chick. You know, and so the, it's a good company. The concept that they're talking about is not a bad concept.

Tax harvesting is not a bad thing. It is a bad goal. But it's not a bad thing to do as a minor goal. Take advantage of the things that went wrong. That's all it is.

But we don't want things to go wrong very often. It's not that. But overall, whether we're doing your DIY approach or whether you're doing your modified DIY approach with them, the research says you're going to underperform a portfolio of actively managed people looking at good, gross, stock mutual funds with long track records and you ride the ups and downs in the market.

And you don't sit and chew your fingernails off looking at your computer screen all the time talking about this. And so the research says getting in the market in a good, steady fund that has a good performance ratios, good expense ratios and staying and don't screw around with it all the time. Outperforms all the stuff you're talking about. That's what the research says.

And also, it has a lot less anxiety.

“So that's what we do and it's also what we recommend.”

But I would not throw you under the bus or what you're talking about under the bus. I just think if you click to the right two better notches, you would do what we're doing. But if you want to stay where you are, you're not over in the dumb side. Okay. You're not over in the crazy you're getting ripped off side.

You're not buying whole life or indexed universal life or something where you're insurance agent, like an investment professional and they're not really, they're just a stupid insurance agent. And so, you know, that kind of stuff. You're not anywhere near that end of the spectrum. You're over on our side of the boat.

Okay. So we love you. And we hope it works for you. And you get, you apparently get some joy out of tinkering with all this in your nerdiness. And that's fun too.

I don't get joy from messing with it. That's the other thing. I don't want to screw with it. I was going to say for the average person out there, that's, that's to me, the parts of money. You can outsource once you understand it all, right?

You're not turning a blind eye. But you have someone else helping you with this. And it's almost like a automatic out of your checking that you pay bill. Like, there's something about outsourcing some of this button clicking in the financial space. Is it takes the brain calories out for you that are all juggling a thousand different things in your life.

“This is one less thing that you feel like you need to check in on all the time.”

I know how you need to everywhere. I really don't have to cut my grass. And I know how to make it look perfect. It's a lot more fun for someone else to do it. Yeah.

They outsourcing. They outsourcing. I know how to change my disc brakes, but I want to bust my knuckles with a range. Yeah. It's more fun for somebody else to do it to know how to do it.

And they're going to be faster at it, more efficient. That's it. The net net. I'm not saving that much after I pay myself a dollar an hour for changing my own breaks. You're moving my own ground.

Yeah. And when you try to do DIY all financial stuff, you guys, you missed out on these professionals. Whether it's real estate. You're trying to sell your home yourself versus having a real estate agent. Yeah, your taxes could be right either way, but you find the date on that one's there.

Yes, I know. For sale by owners on average get 12% less in price than a professional high octane real estate agent. Yep.

You might beat them.

“But if you get a professional high octane real estate agent that knows what the flip they're doing,”

they're going to kick your little for sale by owner. But you don't really save the commission because you don't know what you're doing. You don't know what you're doing. [ Music ] A lot of banks are happy to hold your money, but Fairwin's credit union helps you make progress.

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Ensured by the NCUA. [ Music ] [ Music ] >> Thank you for joining us America. So, Rachel, you're seeing some people comment about the $1,000 baby step one you said.

>> Yeah, I just mentioned to you in the break that we're, number one, more and more new audience is coming to Ramsey show. It's a podcast YouTube, I feel like we're just easy to find these days or on social media. And the very first step as you are starting the baby steps is $8,000. And so, I see kind of two ends of this spectrum either some people because we see 40% of Americans can't cover a $400 emergency cash. So, getting a $1,000 for that group feels like, oh my gosh, that's a lift.

I don't even know if it's worth starting because it does feel so such like a big mountain decline. Other people in the other spectrum are like, gosh, that's not enough. Like, $1,000 would have been fine in 1992, but in today's world because of inflation and everything. Most, you know, what it feels like anything big that happens, it's going to be over $1,000. Very quickly, very easily.

>> Yeah, I mean, I mean, I think it was about 1995, but that's about it. >> Oh, I just, I mean, yeah, I mean, yeah, yeah, yeah.

>> It's not enough, it was never meant to be enough.

Let's talk about it for a second. But we figured out years ago, and it's, and so some of the things we teach kind of get people a head tilt, they kind of go, oh, that feels weird. It's like, stop your retirement. Even if you get a match temporarily while you attack the debt, because your most powerful

wealth building tool is your income and you've given it all the way in the form of debt.

“You have to clear the debt to build wealth.”

Mathematically, emotionally, relationally, habitat pattern wise, everything. And we've proven that because now, teaching this since 1995, right? That tens of millions of people have become millionaires, doing what we teach. We've got baby steps, millionaires everywhere. And so when I started teaching, we didn't have the baby steps.

I just said, shut up, get out of debt. And sell everything that's not retirement, all your stocks, clean out all your savings, put it all on your debt's smallest to largest, get your debt snowball rolling. And what was happening then was that people would come in, and we were teaching for an Anthropician University.

People would come in and say, yeah, that's all great. I just did what you said to do. I got zero money. I got $50 in my checking account. And the alternator on my car just blew in his 400 bucks.

I'm screwed. So now I got to go back in debt or not get to work to have the money. And so I'm screwed. I was cornered. And so I started looking at that.

And that was a very real thing. And it happened a lot because I'm so hardcore.

“I mean, can you imagine personally meeting with me once a week?”

And you're not getting out of debt. I pound them, man, because because I want you to win. I want you to win so bad, sometimes I want it more than they want it.

So I said, okay, we've got to have a little baby, starter emergency fund to cover the little stuff. Because it was little stuff that was knocking people off the wagon. Yeah. And so we said, okay, $1,000.

Then fast forward to today. People say, well, $1,000 is not enough. It wasn't enough in 1995.

A properly funded emergency fund has always been three to six months of expenses.

So in 1995 that might have been 10,000 today. It might be 20,000. But it wasn't enough. $1,000 is enough. And if you, so if you inflation adjust, it's okay.

We're going to make baby step one $2,000. It's still not enough. It's not an emergency fund. It's a starter, little baby, tiny, horrible emergency fund. It's not designed to cover you if you lose your job and you're out of work for six months.

It's not designed if the $14,000 heating and air system goes out. It's not designed to cover that. It's designed to cover the little stuff which is what most things are while you're learning to budget and you're selling everything inside and you're cleaning off your debt. And it's only until you work your baby step two.

What you're working your baby step two with the focused intensity,

extreme intensity that we teach.

You've stopped your emergency fund. You've cleaned out every bit of savings. It's non-retirement, thrown at at your debt, non mortgage debt. If you're a tac attack attack, you're on beans and rice rice and beans. You're not going on vacation.

“You're not whining about your $5 coffee that you have to have.”

You're not doing any of that. You're just totally nose down getting out of debt. Your friends think you've lost your mind. You're out of debt in 18 months on average. And we've taught millions of people this.

Now that's the average, meaning some people do it in 18 days and some people do it in three years. Right. I don't know what your debt is. But 90% of the bell curve on the people that get out of debt is right around the 18

month mark. So the only 18 months, you're only living 18 months with only a thousand dollars. And by the way, you're already broke. So what's the big deal living like you're broke? You know, and so you're only saying a thousand dollars is not enough.

But I will cover a lot of little tiny things while you're learning to budget. And yes. Because when you don't know how to budget, everything's in emergency. You don't have money sets for car repair. When you don't know how to budget, the kid for getting that they have a field trip is an emergency.

You know, because you'd never talk to kid.

Yet they've got to put it in the budget or they don't get to go on the field trip. Or you don't have a miscellaneous. There's no organization. There's no organization. Everything's chaotic.

Every little thing is an emergency, but the longer you budget and the more wealth you build, the larger the event has to be to be declared an emergency. So $1,000 in the first 18 months will cover almost all your emergency. Well, and my thing is to, if it doesn't, if you're deep in the debt snowball and you're throwing so much of your income, that used to be going to that payments where those debt payments are now paid off because you're rolled onto the bigger debt.

You could pause it for a month and collect a couple of thousand bucks. If you need, if something did major happen, fix the emergency and then plug back in. Right? Because that happens. Life does happen.

It goes up and down. We hear that a lot from people.

“And so that's, I think that's the important thing is to know that there's a way to”

FNAGLE it to figure out how to get through this event. It's not supposed to be enough. That's right. And if it is, if a thousand dollars is a lot to you, that means you really need to do this. Your new name is Facebook Marketplace.

You need to sell everything. So so much stuff that kids think they're next. Name the dog eBay and the cat Facebook Marketplace. I mean, everybody's got a new name. You're all for sale.

We're getting out of debt. Those golf clubs are seven sets of golf clubs. But eBay, baby, get rid of the crap in your house and clean out this debt. You got to get completely dialed in and focused on this. And Rachel, you were a baby, so you don't remember this.

But I would distinctly remember two things that were emergencies. So I've got a wife who's been through bankruptcy and is living on the edge of terror at all times who has a toddler and a brand new baby. And our roof started leaking. And we had started working this.

We're not borrowing money. We did not have thousands of dollars to put a roof on the house. And it was dripping through the light fixture over the top of the kitchen table. So it would drip onto the kitchen table running down electricity. Water electricity.

This is not good. And so that's what's right. We said, okay, this is bad. This is an emergency. Yeah.

“But you know what, when you decide you're not borrowing money?”

I got the hardware store.

I crawled around like a redneck up on top of the roof.

It spread that black tar stuff around. It looked like what trash lived there. And it was a nice home. But why trash was there right then? Because we were broke people.

And it stopped the leak.

“And 18 months later, we had gotten out of that.”

We'd save some money. And we put a roof on the house. The same summer, stupid air conditioning goes out. August and Nashville where you can cut the humidity with a knife. And there's nobody happy.

The dogs aren't happy.

Everybody's sweaty and mad.

And the air conditioner guy says, you know, it's going to be $2,000. I ain't seen $2,000. I don't know when. So we bought some box fans, little fans. And then I've talked to a guy at church who works on heat and air.

And he said, if you'll buy the parts, I'll try to fix it. And they ended up fixing it for $89. And it made it for four more months to winter.

“By the next summer, we saved up the money in bought it air conditioner”

to replace the condenser that was bad on the back of the house. Now, this was a house that was a reasonably nice home. It was not a, it was not a white trash house. But it was just, if the air conditioner was old, the roof leaked. And we don't borrow money.

But this is what you do when you change your mindset. We made the decision after filing bankruptcy. We don't borrow money. The people think we'd lost our minds up there spreading that black stuff around on the roof. A hundred percent of them did.

I had no black stuff on the roof cheerleaders. Nobody going, you're the wisest guy I've ever met. They all looked at us like a, like we have one eye in the center of our head. We'll welcome to be in different. Normal is broke.

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[Music] Welcome back to the Ramsey show in the Fairwins Credit Union studio. Rachel Cruz Ramsey personality. My daughter is my co-host today. Lindsay is with us in Los Angeles.

Hi, Lindsay, how are you? I'm drowning and on the dumb side of things. Thanks for taking my call. What's going on, kiddo? So I'm with hold my motion.

That's as I can because I know this isn't a therapy session. But I'm definitely, I'm someone general. You're right now, which is $221 a month and food stamps. I've been on disability for about two years. I had temporary disability run out in February, which is why I'm on general.

You're right now with food stamps. And just found out, I'm not allowed to pay that off with the $221 I received, which is, I mean, obviously, how can I survive on that and pay off debt. I have $20,000 in plus in credit card that over the last couple years.

And unfortunately, this isn't my first rodeo of paying off debt and trying to,

What is the nature of your disability? So I had a total hyperplacement and I had, when I tried to go in for surgery last year, I had an anxiety attack and that kind of put me in about three to four months of hot flashes. And basically, palpitations and emergency room visits and medications and all that.

I'm still under doctor's care, though, and I'm not allowed to get unemployment or work.

So that's, how old are you, Lindsay? 49. 49. Okay. And so your head started for you.

Did you do a hip replacement? Yeah, total hyperplacement. Okay. And you're up and around.

“And the hip replacement was how long ago?”

That's, um, March, beginning March. So about four months out. Okay. So based on the hip replacement, you would be able to go back to work, but the anxiety and some of the mental issues, the emotional issues are keeping you from it.

Is that right? Well, this is fairly, um, I just, they, they haven't cleared me completely. Why?

And I, most people that I know that I've had a hip replacement are back going within two weeks.

And sadly, I've been kind of, that's been thrown at me. Why are, are you special? Because you're six months still on disability. Um, so I don't know, other than my expertise or my training is a medical field. And the surgeon did say that because of the work that I do, he prefers to keep people six

month out. So, um, that's the only reason that I have been given. And that's what I tell others. Okay. The reason I'm asking you all these questions is that you, what you have is an income crisis.

Agreed? Yes, sir. Okay. Just $221 isn't going to do anything. That's not even going to feed you.

I got the grace. I've been blessed to have a rent for you.

Stay with the lady from church.

So I'm, and homey surviving. Yeah. I insist feeding you and everything. So yeah, I mean, that's, that's, that is great. So you're right.

And that's generosity. It's wonderful. It's a, it's a wonderful thing on the short term. It's not a long term plan, obviously. And so, um, you know, if we want to solve a, a, a debt problem or a, a situation like

you're in, um, and it's very scary where you are because you feel, um, overwhelmed. I'm sure I'm sure it's added to the anxiety problem. Not subtracted from it. And so, um, the weird thing is is that, um, what, you know, I really, um, I'm not a medical person. If I were in your shoes and we're as scared as you are, I would go to work.

Right. Here it is. Even work from home. I would do something. Yes.

I would do something starting today. Right. And interestingly enough, I do have a trade of making jewelry and, um, like, some catchers and things, so that actually just got a free desk last week. And the Lindsay, I started to clean it up.

Yeah, and you do that, too. But also, you, I mean, you need a job. You need a job. Like, I, I would, you know, be a, be on a phone bank for a company. And what are you, what are you going to do?

You know, if anything, you know, that's surely be walking around or lifting something. No, no. Something else. I don't care, but you need an income. Get a hat.

And the, and some catchers are not an income. That's a nice sign. It's a nice sign house. I think there's nobody making 60,000. There's nobody making 60,000 dollars a year with sun catchers.

No, I, I, you're right. Okay. So that's, that's what I think.

“I think if you make 60, because here's the thing.”

Yep. It, a whole bunch of your anxiety and all of your financial troubles go away when you get a 60,000 hour of your job. I don't even know how to spell that, but I'm just, I'm, I'm speaking that for you. Okay.

Because I'm talking to a lady who's not unintelligent. She's had a really rough patch. And we're coming out the other side of the rough patch. And no pun intended, but I want to run out of this rough patch. Yes.

Okay. And so I want you to get up and go right now. And just tell your doctor, I'm sorry. I would love to have laid around and rehab for seven months like your theory of your textbook. But I had to do this thing called eat.

And so me and I, we went and got a job. Me myself and I, all three of us went and got jobs. And so, you know, that, and, and the weird thing is what I've found in working with people over the years, I'm not a psychologist. That's Dr. Gloney's field.

But I have found that depression and anxiety leave with increased physical activity and increased income. Right? They are, they don't leave completely, but they're diminished to where they're not overwhelming.

“And you're not struggling with depression, but you should be.”

No, it's definitely bubbling up. Yeah, using your mind to get body, yes. I've been there when you're that broken, that's scared. It takes your breath away every morning just to get out of bed. And I, you're right about the work and functioning because it gives a sense of purpose.

At the beginning of the year, I was trying to figure out who's going to take care of me.

Your brain is too busy to spin out.

“Lindsey, what were you doing in the medical field?”

What was your position before? Just a caregiver. I mean, actually just because it's the, you know, bottom of the wrong in that security. Is that what you said? Your caregiver, okay, got you.

You're not going to be lifting anybody though. Not right now. No, no, no. I just was wondering going forward, you know, two, three, four, five years from now. What's your new career going to be?

Yeah, you're only 50. Right.

And you're just half done.

What are we going to do with the other half? So I've spun out because of all the options. Do I go to school? Um, then the other side of it, David's my hand is starting to show nerve damage. So I, and I also have like spinal stenosis.

So there are other physical ailments that could contribute. And actually when I went in for the hit. Dr. He said, oh, people think it's their hit, but it's their back. And I didn't really believe him because what screams the loudest is what gets the most attention. And that was my hit.

And I couldn't walk for seven years. I mean, I really was, you know. Yeah, are you overweight? Of course. Okay.

I mean substantially. Um, I'm on the, I'm walking up to two, three miles a day now. Oh, good. Okay. So you're doing something about that, too. See, that's awesome right there.

You're walking to three miles a day. You can go to work. This is awesome. I'm so happy. Hey, listen, we'll help you anyway.

We can't kiddo. You have an income crisis. And it's because you've been through a hard time. I'm sorry. You've been there, but you're going to be okay.

It's an income issue. Get the income flowing. A lot of this is going to self fix. [Music] If you're behind on your bills, doing more of the same isn't going to fix it.

You need a different plan.

“And that's why I tell people about guardian litigation group.”

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Guardian litigation is a law firm, not a call center. Today one, you are assigned an attorney who represents you. So if a creditor moves forward, you're not caught off guard and you're not hit with surprise legal fees. Guardian litigation only gets paid when the debt is negotiated and the client accepts the settlement offer. This is about stepping in early while you still have leverage.

Don't ignore the problem. Take control of it. Go to guardianlit.com/Ramsik right now. The attorney advertising results may vary and no specific outcome is guaranteed. Hey guys, if you like this show, we could use some help.

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“The only way it gets spread out is if you tell people about it.”

That's how it works. Now we put it out on social media. That's stuff we do that stuff but I don't have. We don't like buy ads come listen to the Ramsik show. You're it.

So if you like it help us and send your friends and your family. We would appreciate it. John is in Pittsburgh. Hey, John what's up. Hey Dave's appreciate you taking the call.

So yeah, just looking mostly for I guess some career slash life advice. Okay. Yeah, ultimately, you know, curious right now I'm looking, you know, if it would be an unwise move to maybe take a job that pays a lot less to sort of get rid of the stress that I have with my current job.

That's ultimately a high level of a mask in but I'm happy to map out anything you need for some advice.

What's the nature of the stress that your current job? So I am a essentially doing a split role with this company, some renewals and growth specialist and also an accounting executive for one of their products. So why is that stress? Consent firefighting on the renewals and growth and contracting side.

On top of that, trying to manage a quoted carrying experience for the kind of executive side managing that. It's just becoming a lot mentally for sure. What do you make? So my base is, so I have a base salary in an OTE and the base is 85 and then if I had my own target earnings, it's another 35 so all in the 120 per year. All right.

“Is it essentially two different jobs you're doing, two full-time jobs into one? I could, could you hire someone and do something and that position be filled with just your time half of it?”

I think so. Yeah, they don't necessarily look at it that way, but yeah. Yeah. I certainly feel bad. How old are you?

I am 27. How long have you been there? A little over four years.

Well, the first thing I want to do is say reset your narrative on how you're looking at this.

Somewhere along the line in human nature, we're taught and our brain goes negative and so I get this call. It sounds like this John. Hey Dave, I just got laid off and do I just take any old job to get back in the workforce and make half of what I used to make? Why do we just assume, why does that person assume that if they got laid off that they can't go get a job making more than they used to make? Because we all kind of have this little negative nanny in our head, you know?

I everybody does. And so I'm going to have you reset your narrative. I think I want you to get a job making $150,000 a year that is less stressful than the one you have. Stress does not equal income. Okay.

So you don't have to go make less to get rid of the stress. Yeah, I mean that's definitely true. And I guess with them, yeah, I guess just my concern is I, you know, we're to stay in the sales slash renewals field. You know, maybe it is companies specific where, you know, it's kind of a lot on me and that's where the stress is coming from.

Well, there's always a pressure to perform.

Everyone has that if there's no pressure to perform your bureaucrat, you work at the DMV. Okay. But everybody else has pressure to perform. The plumber has to stop the leak. The electrician has to get the light to turn on or they don't get to keep their job.

Okay.

“And you have to get enough lights to turn on, so your lights stay on if you're the electrician.”

I mean, there's the marketplace is always got pressure to perform. So I don't want you to think you're going to get away from that. That's just called being a grown-up. You're going to carry some weight. You're going to carry some water in order for somebody to be willing to pay you.

But it sounds like that your day has gotten extremely chaotic. And the stress is coming from the unknown. Like about the time you feel like you've got this thing on the rail. Somebody comes along and hits the side of it and knocks it off the rails again. Exactly.

Yeah, that's what it feels like. And there's no one inside. It's not like it's season all right. It's every day. Every day, all day long.

And it's just like, well, crap. Could we just follow through one time?

And so what I'm going to do if I'm you is the first step is I'm going to sit down.

It's a supervisor and say, all right, the way I'm experiencing this pressure to get this job done is it's really. I need some help with that. Okay. And so can we restructure some of the flow in my day so that I still get the work done.

But so that everything's not an emergency. You know, it's like the old guy with the thing on his desk that says you're like a planning is not my emergency. Some people would follow that a little bit more to hard. Yeah, sure. But you're going to have to have backup from leadership.

“You can't just do that to your fellow coworkers and not get fired, right?”

And so now, and then if an emergency does occur occasionally, you're easily going to handle that. But living life emergency to emergency is called stress. And it's a emergency is not created by you or your lack of anything. It's just stuff that keeps dumb. They just come along and throw up on your desk every so often.

Yeah. Yeah. And so what I want to do is restructure that. And if you work here and we could that could happen at Ramsey. I mean, we work hard at Ramsey.

We throw stuff around and we're moving stuff and anything that moves as shoved and everything is shoved as friction. I mean, there's stuff going around this building. And if you came in and sat down with one of our leaders and said, help me restructure my day,

And we need to set up and go, okay, all emergencies have 24 hours to be solved, not 24 minutes. Okay, that's a new system. It's a new policy. And so then what we're going to do is we're going to stack all the emergencies and do them from 4pm to 5pm before I go home. And instead of stopping in the mid flow on being account executive and fixing somebody else's crap.

Right. Am I reading the mail, right? Yeah, I think so. It's a system.

“Is it a company culture that would listen to that, John, or do you feel like it would fall on deaf ears?”

So I think it might be, I think it would probably be received on deaf ears. Excuse me.

Okay, here's what I want to, I want to try that first.

I'm going to sit down with a leader first and say, I think we have a systems and a process problem. Would you help me fix it? I want to participate. I want to be a good team member, but the way we're doing it right now is killing me. Okay.

And if they say, I'll screw it, you just do your job. Then I'm going to go look for a new job. But I'll try keeping my 120,000 out of your job first. Okay, so the first thing is one conversation, a simple short, when kind and respectful honoring, listen, I want to be a good team member. I'm not saying anybody doing anything wrong.

I think we just have a systems and a process flow. And the way I'm experiencing that pressure is stress. And I don't think I'm doing this good at job as I could do if we could put together a little bit of a system. Would you help me with that? And if they go, no, you just shut up and do your work.

Then I go get another job.

Because this is a bunch that's going to run this car into the wall. Yeah. And what I want you to get is a job that makes 150 a year. Okay. Okay.

All right. And hang on. I'm going to send you a copy of Ken Coleman's book, the proximity principle. And I want you to use it to land that job. Because obviously, you know how to juggle.

Mm-hmm. You can join the circus, man. I mean, you know how to juggle. You can join anybody's circus. Hey, having a large capacity to be able to handle up to things for you.

That is a skill set. Do you want to ask? And do you want to be in that forever, though, in a high stakes rate,

“or you just, you know, it's like you're never getting traction either?”

I don't mind having a bunch of tasks as long as I can get them accomplished within reasonable expectations of the people that I'm doing it. Yes. And that there's a reasonable-- And I don't feel like I'm being abused. That it's yes.

Yes. The abuse of-- They take advantage of the lack of respect of your space is the thing. And so, like, we've got a whole bunch of workstations through our thousand people here. And a lot of them just put up a little sign that says, "Not now, I'm working."

Send me an email. Because people just walk by those workstations and erupt people, right? So it's a system-- I would never-- Not just you.

Shut it up. [LAUGHS] [MUSIC PLAYING] This show is sponsored by BetterHelp. Hey, it's Deloni.

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you can switch therapists at any time for no extra cost. Don't let stigma stand in the way of support. Visit BetterHelp.com/Ramsying@10% off. That's BetterHelp, H-E-L-P, dot com/Ramsy. Debbie's in Jacksonville, Florida.

Hi, Debbie. How are you? I'm great. How are you? Better than I deserve. What's up? So, I have a question. My husband and I are looking at retirement. He's retiring actually in a couple of months. I'm already retired.

And I've been looking at our investments. I have one annuity that isn't. It's not a lot of money. It's about 120,000. It's not earning much interest at all. It's matured.

Well, actually, we'll be flowing matured next year. And I'm wondering if there's any downside. I've been thinking about trying to contribute to each of my poor grown children's

but to help encourage them if they're doing their 401ks.

And also to be still alive during part of the time that I, you know, during a time when I can see them enjoy it and get excited about it. And if there's any possible downside to that. It's an interesting question. Well, the two issues are separate issues.

The annuity comes due cash it out. It's a crappy product. And then we're going to invest that money into a good product. Okay, into some good mutual funds. And move away from that insurance garbage.

And so then there's a different issue. Do we want to give our kids money?

“And if so, do we want to do it in the form that they open?”

You can't open a Roth IRA for someone else. They have to open it. Do they have one already? Debbie. They all have them.

Yes. So you're just going to be funding them every year? As soon as soon as no I haven't been, but I open it.

Are they funding their Roth IRAs?

They are. You can't do another one on top of what they are doing. Right. No. They are.

But they have slowed down. A couple of them have had some challenges. So some are sending more than others. I feel like if I did that, they could still contribute to their 401k. But as my husband and I are looking at retirement, as you know, all I can see is, oh, my gosh,

pay so many taxes for all the savings you've done your whole life. And if it's not in a Roth, if it's not in a Roth, you do, yeah. Right. So how much do you guys have? So Debbie, you just want to give them each $7,500 a year to just max out their Roths.

And as a gift is kind of what you're thinking. About that, it's a $120,000 newty. I can give them $5,000 a year for five years. Okay. Which would just help them and encourage them to put the additional funds that would max it.

My husband and I are, this is not money.

“I think it's going to be important to us.”

We have about, well, are you asking me? Yeah, you want your net worth. I'm sorry.

We've got about $4.5 million.

Okay. And you want to give a boy a couple hundred thousand bucks. That's fine. No problem. Yeah.

And again, we're going to move it out of the annuity. And do a good mutual fund. And then you're going to decide later. It's a separate decision from moving it out of the annuity into a mutual fund. Now, I've just got some money here.

Period. It doesn't have to be the gift and that to be tied to the annuity in any way. It does no good to tie to the annuity. Okay. It's just that you, this for you, it's just emotionally found the money.

And you don't need it. And so that's how you're tying it. But they're not necessarily connected. How old are your kids, Debbie? Yeah.

They're older. No time. They're in between 33 and 45. Okay. Well, you just made the comments.

And in Maine, we think of the book. There's a book called Ty was zero.

“And I don't agree with everything in the book.”

But it's a little bit of that premise of parents who have done well. And there are adult kids are there. And they're in a time alive. Maybe they're buying a house. They need upgrade a car, fund retirement.

I guess could be anything. Whatever. And you help them while you're alive. What you said were your words. I want to see them enjoy it.

So I would just throw out that. You know, if you if you you're actually not going to see. See, if you put it in the Roth. They're going to be 59 and a half. And you're going to be dead.

Well, help for longevity for Debbie. But I'm just saying if you want. I'll get to see them enjoy it as it grows. Yeah, you'll get to say the growth. You'll get to say the growth.

Well, none of them have any debt. Well, I have one child. Yeah. That's okay. But Debbie, I'm just saying if that's your heart.

You know, there could be if you wanted. You don't have to. I think this is a great. A loving thing to do for sure. What a nice kind of gift.

Yes. But if you wanted to see it, you know, I don't know if the kids are having babies. And you're like, listen, we just want to upgrade them and even for you. I mean, I don't know. You, there's another way.

Put money in a college fund for grandkids. Or the guests or that. About 20, yeah. But a Roth would be a beautiful legacy. There's nothing building on the Roth.

There's nothing special about the Roth either. There's Rachel's point. And so if you want to give, you can go. An individual can give an individual up to $19,000. Without any gift tax.

And if you're married and your kid is married, you can do four times that. So you got 19 to each kid in spouse. Your husband gives 19 to each kid in spouse. So each family unit could get, you know, almost $80,000.

If you wanted to do that in one fell swoop. And if you wanted to do that, and it sounds like you have good relationships and respect for them, you could just say, what I would like to see you do with this is put some in the 529

Because I just discovered taxes on IRAs.

Not a like it. And I want you to do some Roth IRAs. Make sure your Roths are maxed out. But you do what you want to with it. Here's our gift.

I mean, you can do that. That's another way of getting at this. Because you're going to have to get their permission anyway. You can't just write a check into someone else's Roth. Yeah, you're going to be giving them the money.

“And then it will be up to them to put it in if that's what you want it.”

You can be very controlling about them putting it in there. But it doesn't sound like that's your relationship. No, but it is a really creative way to think through, you know, I haven't really thought about that. Funding your kids Roth.

Because that is something that's going to grow. Versus adults. I don't show them. Versus a depreciating asset like a van. I throw out the van as an example.

That's going to go down.

But this will be something that builds forever, never any man.

Which is, that's a pretty cool way to build that like a sea. There's nothing wrong with any of that. You will done Debbie for $4.5 million in your husband. We probably at Ramsey would say use it for wherever you are on the baby steps. That's what we would do.

That's what we would do with it.

“And what we would tell our kids to do with it.”

But we say, hey, we suggest that you finish up that debt. And that you get yourself cleared on that budget. And then you make sure you're putting 15% away and you throw the rest at the mortgage. And that's what we suggest. And we would walk right up that with whatever the size of the gift is.

If we did it with our kids. And in this situation, but there's nothing wrong. There's nothing dysfunctional or wrong. There's no advantage to it being a Roth for you or them. Tax wise today.

There's no tax right off for you contributing to a Roth or them contributing to a Roth. A Roth is all after tax as you know. It does grow tax-free. But that's the whole thing. So yeah, that's an interesting question.

Thank you for calling with it. Charles isn't Charlotte North Carolina. Hey Charles, what's up? Hey Dave and Rachel, thanks for taking my call. Sure.

How can we help? Yeah, so I'm under contract on a new house supposed to be closing at the end of the month here. And I'm starting to have some reservations. Just want to make sure I'm making the right move for my family here. I'll take you have a choice.

Just on the contract. Yeah, I mean, my realtor, I've talked in a little bit about it. And he said, you know, you haven't, you're not closed. Yeah, so if you, you know, if you're not sure it's not done. Let me just not do that.

“Is there a contingency in the contract that if you get coffee, you can walk away?”

Yeah, that's what I've been told. Really? Yeah. What makes you uneasy? Well, I have only ten years left in my current home and to give you a little context.

I have a baby and another one on the way. So the how we're just outgrowing the house right now. We talked about doing renovations. But either way, the current home, I've ten years left on it. 110,000, I'm out of two and a quarter interest rate.

The new home, I'd be taking a $210,000 loan out. It's going to be $1,800 a month. Which you're in, like I, I make 100,000 right now. And my wife has not been working, but she's actually trying to get a job now. So she should be back to work.

Is there anything wrong with the home at all? Is it just the move up and money this bothering you? Yes, the cash flow and then starting over 30 years when I'm going to start an over. You're not starting over. You can attack it at whatever rate you want to attack it at.

I'd close on the deal. You gave your word.

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Shopify.com/Ramsy. That's Shopify.com/Ramsy. [Music] Folks, our every dollar app, the number of you that are now using it, and using it almost every day is exploding.

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Check it out in the App Store or Google Play. Fill is in Phoenix. Hi, Phil. How are you? Hi, Dave.

I'm good. Thank you so much.

Sure. What's up? Okay.

“So I have about a combined debt between business and personal $55,000.”

I'm liquidating the business. I'm going to get out of it. I just took on a new commission's job. And it's slow going right now. I've only been doing it three months.

My take home pay is about $2,450. Right now. But I could expect with a little with a little wrapping up to be about seven to ten a month. My question is primarily. I want to avoid bankruptcy at all costs.

So I'm trying to figure out if that's the only option I have or if there's a way to deal with the creditors by settling in what that process looks like. What kind of debt is the $55,000? It's all credit lines. Credit. It's all credit lines.

Yeah.

With a bank or credit cards or I apologize.

It's credit cards I apologize. Credit cards. It's 100% credit card debt. Yes, sir. How many different ones? How many different cards?

There's eight cards for personal for business. Well, they're all personal. You signed for them. Okay. Your business did not that was not big enough for them to loan your business money.

Without your personal signature. So they're all personal. They're all in a suit. You eventually. If you don't take care of it.

But that's okay. How long has it been since you paid on them? I've been keeping up. I've been making minimum payments. Oh, you're making minimum payments now.

Hell. Yeah. I'm trying to. Well, it's. The business is winding down.

But as I realized, I had to get out of it and get a new deal. Oh, so you're still making a little bit of revenue. Yeah. I mean, minimal. Okay.

I don't have the time to. I don't have time to commit to it.

“And when you said liquid aid is there anything being sold except just selling off the inventory and closing it?”

That's exactly it. Yeah. Okay. How much inventory you got left? Oh, gosh. It's probably less than a thousand.

Okay. All right. So you're just about done with that. So there's no real asset as far as the business goes. Correct. You got equipment or anything that you're going to sell off furnishings or anything left over from the business.

It's going to bring in money. No, sir. It was e-commerce. Okay. Pretty much just it was inventory that just went into the various platforms.

Gotcha. Okay. All right. That makes sense. Okay.

You're nowhere near bankrupt. Not even close. Okay. Okay. You're going to be able to work through this.

And actually, I mean, there's a couple of ways you can do it. They are not going to settle with you for less than a hundred cents when you call them as an individual while you're making payments. Okay. But if you're six months behind, which I'm not going to recommend. Okay.

Sure. Then you could call them up and say, okay, I owe you $10,000. And I have $3,000. And I will offer you that as settlement info. And after a bunch of hagling and whining and spit and all that other stuff going on, then eventually you'll get them to about to do that.

Okay. The other thing in your situation, you could do. We have a sponsor called Guardian Litigation. And they specialize in working with people where you are, not people that are six months behind. But people that are worried that they're going to get there because their income is not able to maintain the payments on these.

Because it's $2450, you're not going to eat and pay all these payments. Correct.

And you're saying this is coming to a screeching halt.

And then these people are going to get mean and nasty and you're right. They are. So I'm going to put you on hold and Christians going to hook you up with Guardian Litigation. Again, it's a sponsor of ours. They have attorneys on staff.

And they will start the negotiation process while you're current. They don't require you to get behind in order to put you into a plan. And they work with the companies all the time and are able to pull things off that the individual can't.

“And so that's why we brought them on as a sponsor.”

Generally, there's a lot of people in that bucket that I don't recommend debt consolidation people. We don't recommend. But Guardian does a great job. And so we'll send you that direction and see if you can't get some help. You're not going to file bankruptcy.

No one is quickly as you can get to that 7 to 10,000. That changed your line up. Yeah, absolutely. And in the meantime, I'm probably working extra working side jobs on the weekends just to keep something afloat. Because 2400 in general is in Phoenix.

Yeah, I don't think you can live on that. So that's tough. Yeah. All right, Grace is in Raleigh. Hi, Grace, how are you?

Hi, Dave and Rachel. I'm doing great. How are you guys? Better than we deserve. What's up?

So I was just calling my husband and I do two series of unfortunate events.

Our car got total. Not our fault. Have you had insurance? Yes. About 5,000 for it.

That's what the cars were, right? Yeah, exactly. Okay. But we are currently under contract on a house. And so obviously, no buying cars yet.

But looking ahead just because we didn't share in a car. And it's been a little bit cold with work and schedules and such. I'm sorry. You have a $5,000 check from the insurance company. The contract on the house does not provide but you from buying a $5,000 car.

Okay. Yes.

“Which leads me to my question, which was, do you think it would be smarter to get like a $5,000 car?”

Or were we in total closed on the house and we have some funds coming in and get a nicer car. If we're looking ahead, you haven't kids in the morning. And I think the or many of them. You're doing fine in the $5,000 car before this happened. We were, yes.

So it's a little bit earlier than we were expecting. So what are your cars?

You have extra money set aside for a car already in addition to the house.

Just the $5,000. We had not been planning on getting a car quite yet. Do you have an emergency fund? We do. Yes.

How much is in that? About 25,000. Okay. And what should your emergency fund be? $25,000.

She's about right for six months. Is that a six month? Do you guys have kids, Grace? No, not yet. You're kind of helping next year.

Sure. Yeah, totally. Pretty stable jobs. Yes. Okay.

And what's your household income? Household income is about $1.40. Okay. That's probably about three months. Yeah.

That's six months. Yeah. It's not. Well, we.

“I guess now with the mortgage might be about three.”

Okay. Okay. That's plenty. That's losing on the house. Okay.

And you're not using any of the 25,000 of clothes on the house. No, no. We're doing the lambs away. Good. Good for you.

Good for you. Well done. All right. I'd be okay if you're on a couple of thousand. Yeah.

I mean, if you took it to 20 or something. But I'm not. It's not an emergency to move up in car. This is more of a gyration in your budget than anything else. You make a lot of money.

You don't have any debt. Yeah. Get a 10,000 of a car. Don't get a minivan. Yeah.

Get a 10,000 of a can. Get whatever you want. And then, you know, when life happens. Get a 10,000 of a car. Put the 5,000 back in the emergency fund.

Yeah. And then start saving for the next car after you got the house. Yeah. But you don't need a 25,000 of a car when you totaled a 5,000 of a car. For sure.

And you certainly don't need a car payment. But purchasing a car and using some of your emergency fund or some of your 5,000 dollars from the insurance with no payments at all. No bank involved is not going to spoil the purchase of your home in any way. That's fair.

We just want to be safe. It won't mess up the mortgage company. If you bought a 25,000 car, I would just call you stupid. Yes, that's fair. Okay.

So don't do that. You're awesome. Thanks for the call. We appreciate you. We had a 5,000 to 10,000.

That's a big jump. That's a jump. So take it. And then drive it for 8 to months. And it's a similar.

What they did. They have a fully funded emergency fund. They're 100% dead free. Yep. Make 140,000 dollars a year.

They're buying a home. Nobody can buy a home. But they're buying a home. And guess what they were driving.

They're doing everything right. And then some stupid person totaled their car. Somebody teaboned them at the light. You know? Now she gets a $10,000 car, though.

Blessings, guys. Hey, guys. It's Rachel Cruz. If you're working the baby steps,

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Thank you for joining us America. Open phones at Triple 8, 825-5225. Rachel Cruz, your host, your host, your host, your host. Thank you for joining us America. Open phones at Triple 8-825-5225.

Rachel Cruz, Ramsey personality, never want to be selling author.

My daughter is my co-host today. David's in Virginia Beach. Hey, David, what's up? Hey, David, how you doing? Better than I deserve, man. How can I help? I was wondering, I'm in 35 kid credit card debt.

And I'm keeping up with minimum payments, and I can just a little bit over them every month. I'm wondering if I should get a personal loan to get rid of all the credit card debt, that way it's not a lower interest rate. And then I just try to tackle that loan as aggressively as I can.

Interest rates, not your problem. The amount that you're paying on the debt is the problem. Yeah, no, for you.

“What are you doing for a living? Virginia Beach, are you military?”

Well, I work with an ISP and internet service provider. I work as a construction project engineer, managing public cruise and construction. Gotcha. What does she make?

40 hours a week. Around there, it's more or less. I kind of like the work I do, so I do more. I just kind of say I have my stuff, but I make around 84,000 a year.

Okay. And how much is your car payment? Car payment is around 800. But I've also got a, I've got my own business where I do fiber splicing. And that, I bring in around 2 to 6,000 depending on how much work is available.

And I can do in that month. How hard is it to get more work? Just dependent on. Because you're not getting the 6000 very often or you wouldn't ever call me. Right, exactly.

“Yeah, it's more on the 2000 on the minimum of month is what I'm bringing in consistently with the business.”

But I'm going to try. The way that I can get more is the most. It's stuff out of my hands, permits, and stuff, how much build. Okay.

Let's put 10th or second that we took 33, 35,000 dollars.

And we put $4,000 a month on it. It will be gone in nine months. Okay. And the interest rate doesn't matter in nine months. The interest rate only matters if you keep it nine years.

Right. What you need is $4,000 a month to put on this. You have a stupid $800 car payment that's insanity. So maybe we sell a car and get a beater. And maybe we work $6,000 worth of splicing.

And gosh, that's $7,000 a month. If you just lived on your other income. You're free to up $800 plus $6,000 splicing. You'd be done in just a handful of months. So what I would tell you to do is work your tail end off.

Live on nothing. Don't go to happy hour. Don't go out to eat. Don't go to happy hour. Don't go out to eat.

So your car and you'll be out of debt in no time. And don't go to happy hour. Definitely don't go to happy hour. I think loud and clear. You can listen to smart funny happy hour.

Now I'm certain you have to focus on you. If you focus on getting out of debt like your life depended on it, you would work all the time. You wouldn't have time to do anything else. And you would sell everything in sight because your life depended on it.

And you'll be out of this debt in no time when you do that. So four to seven thousand dollars a month makes thirty five thousand go away. Really fast. Right.

“And I think you've got that at your fingertips.”

But we just got to adjust a few things. Because you make good money. Exactly. And you've got a great skill set that is very remarkable.

I mean, this first time I heard a splicing is a side hustle.

And I just love it. I'll tell you. Yeah. Yeah. It's definitely going to get opportunity. I was just super stupid when I got into it and made a bunch of money. And then I just got out of hand and now I'm like.

How old are you doing? I'll do a grandje. I'm 24. Perfect. Okay.

Have you cut up the credit cards? I threw them in the freezer into a giant. I went to a pot and then the bottom of the frozen pot. Well, we're not going to eat them as leftovers. So just get them out, thaw them out and cut them up.

Okay. You don't need them. They've not been a blessing. Get you a debit card, which will mean you spend your own money to buy crap. You know, that's it because that's the problem. You've been buying crap with other people's money.

And that's what a credit card is. So yeah, just the thaw them out. That freezer thing has been around for 40 years. People have been putting them in freezer to 40 years. And if we were going to thaw them out and they're suddenly going to be okay.

It's like, oh, now they work good. Still like a safety of like, they're still there. But they're still really hard to get to. And get to them still. It takes work.

Here's the other thing. If you cut them up, I'm sorry. I don't, I probably shouldn't say this. But if you cut them up and you call the bank. Glue them back together.

No, the bank will send you another one in the morning. Okay, there you go. I mean, you really, it's easier than the freezer actually.

“If you want it, if you want to fall off the wagon, the bank will help you.”

They like having you in that. Yeah, they're not going to be mad at you. We're going to be in a credit court. You know, I placed some scissors across someone went up. And so can you send me another card?

And they're like, oh, yeah, well, that happens all the time. Those day ramsy people will send it. We'll send you one in the morning. They'll fix you right up, man. Sarah in Austin, Texas.

What's up in your world? Hi, Dave. How are you? Better than I deserve. How can we help?

So, Dave, I get married in three weeks. Congratulations. It's cold already. I've been Texas. I'm 27.

Awesome. Awesome. Cool. How can we help? How can we help?

My fiance is 30. And after we get married, we are considering buying, I mean, building a home. Mm-hmm.

“And I'm curious of your opinion about building rather than just buying.”

On your first time I would purchase an existing home.

Yeah. I don't think. Because building is a royal pain in the butt. And I don't want to put that strain on your relationship and your first year of marriage. I want you to concentrate your energies on other things in the first year of marriage.

Rachel, you guys have built a home and you have bought a home before that. Straight up. Yeah. I mean, you're just a buy. And building a home is a hassle.

And it's, but it's fun. Yeah. If you enjoy it. So later, make that your next goal. Yeah.

Just to say, maybe number two house with you. Yeah. Yes. So, you know, you could look out and say three to four years. But I dream a goal is to build.

But there's a lot of decisions. Unless, I mean, my husband is in real estate and does project management all of it. So he, he was up his alley. It was, we were fine. We, we loved the process actually.

You had an actual builder too. And a great builder. Yeah. We had a great, great experience. But that's a feel like more rare.

It's also because they went into it with their eyes wide open and they've been married a while. And they had a basis in the relationship to make the arguments about. It's just a lot of decisions. It's a lot of decisions. It's a lot of decisions.

Yeah. You're picking out a lot of stuff. And unless it's, I mean, there are a ton of neighborhoods going up of, you know, homes at the four planes picked out. You may pick out a couple of fixtures. It's not a custom from the ground up.

And that's still wouldn't do that. On your first home, they've been, they're not even married. They're getting married next week. Yeah. The first one I just go by house.

Go by house. And, you know, pay for it. Yeah. But if, if it is built. And it's just say new house.

And it's like, it's a brand new house. And it's a spec house. Yeah. That's what I'm saying. Or maybe you get to pick out the light fixture here or there.

And it's not, it's not from the ground up. The ground up process. Yeah. That's a mountain. Let's start with dirt and a piece of paper called a blue print.

And then let's lay out a budget and lay out a schedule and get the builder. And you're going to know Sarah, how to build the house that you guys would want. You don't even mean like you haven't lived together and created a family.

And so it takes, we always laugh and say it takes a year of being married and know how close

You got to get to know each other.

“You work your butt off for your money, but your money's never going to return the favor.”

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One bad deal could cost you tens of thousands of dollars. Got called in the other day. And his mother-in-law had sold her house for 325,000. And the appraisal came in at 399,000. Well, she sold her house, it's over.

She made a huge mistake because she hired a realtor to know what they're doing. Real estate agent didn't know what they're doing. And so you don't want to make a big mistake in real estate business. You want to make a small mistake. It's tens of thousands.

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That's the letter yrefy dot com slash Ramsey might not be in all states. Today's question comes from Lisa and Maryland. I have been getting paid once a month for 10 years. But my employer just changed their process. And now we're getting paid every two weeks.

Even though I am getting the same yearly salary, it's divided into 26 page checks throughout the year instead of 12.

“How should this impact the logistics of the budgeting process?”

It's a good question Lisa. Well, you just need to make sure that when all your bills hit that you have money in your account for it, where you used to have a lump sum that you could probably pull out throughout the whole month. Now, I used to have to plan and make sure that there's enough in there that's going to hit between the first and the 15th before that next paycheck. But if you're beyond baby step, I mean, I would even say beyond baby step two or three.

You need at least a good amount in your checking that could cover one of those pay checks just for a buffer.

It is always a great safety net from just a logistics standpoint.

But yeah, it would just be maybe moving some bills around so not everything hits. Right. Every dollar, every dollar has the paycheck planning. That would you just lay it out. That's right.

Which item comes out of which check? Exactly. And then if you have every dollar, plug it into the paycheck planning and then it'll flag you. Yeah, it'll say, you know, pay it right out here. In a bill in the second check and pay your, you know, your electric bill in the first check.

And it'll show you what, you know, you figure out which one comes out of which check before the month begins. That's right. The other thing is with every dollar, you're spending your that month's income on that month's bills and goals. Before the month begins. So two times a year, you're going to have a larger month because you have two times a year.

We call them magic months that you get an extra check. You're going to get three checks in a month. Yep. Two times a year when you get paid every two weeks. And so.

And it always confuses people sometimes because if you do get paid at least twice a month.

Or I guess in her case, it would be every two weeks. Um, but when that paycheck hits for some people, the paycheck hits at the, like, like an October 31st. And technically that's quote unquote October money, but you're going to use that as if it is November 1st. Exactly. And you use that through November.

Some people get no members. There's a pay from October is going to be an November 1st. Yep. And that's what we have to work with. And so you got that two weeks.

You got the next two weeks. And then twice a month, you're going to get another one at the tail end.

And so you just for those two months, you're going to budget that money. You're going to spend all that money on paper both times. And it's a little less on the 10 months and the other two months. It's a little more. And then it used to be.

And so you're going to make a little less progress on some of your goals as all that is. And then a little more progress suddenly. Some big chunk, like in a little bonus track is kind of what it is. But you're still going to spend that money that month. Whatever the month has.

And it's just going to change that around a little bit.

“You need to be doing a unique budget every single month anyway.”

These budgets are not templates. This month's income on this month's needs and goals. Yeah.

And the truth is 75% will probably stay very similar.

Yeah. But it's not the same. No, it's not. And it comes like change a little in this case twice a year. And life is different.

And then you know, you get that card paid off. So you have a new goal. You're going to move it up the baby steps. You're moving up the that snowball or down the that snowball. Jenna is in Des Moines.

Hi Jenna, how are you? I'm great. Thank you. How are you? Better than I deserve.

What's up? Well, I am approaching the 62 year old Marc Dave. And I've made some police decisions. And I have their retirement. And I also was my hearing in 2013.

“And did not know that my health insurance and paper of cochlear implant until 2022.”

So I went through a major income shift. And I started cleaning houses. And I have a successful quality cleaning business. Go. And I'm the only employee.

Thank you. I'm proud of that. However, my mom passed a few years ago. I'm sitting on a hundred and fifty thousand dollars in the bank.

And I don't know if I should give a second job.

I mean, I'm working as a financial amount five days a week. What are you making? What are you making? Between 30 and 40 after my expenses? How much?

How much debt have you got? Zero. Oh, good. What about the house you live in? My friends.

Okay. Cool. All right. Well, I will sit down with a professional and begin to learn how to invest the 150. So that it will grow while you're still working.

Instead of it sitting in the bank. When you are putting money with the bank, you are loaning them your money at 3% on high yield savings. Okay, when you buy an investment, you're an owner, not a loaner. And it grows.

We should, like, contact for that.

Just jump on Ramsey Solutions.com and click on Smart Vester. And it'll drop down to the number of different people in your particular area. They're in the morning that we have checked out and that we trust. And the big thing they're going to have that I really, really, really want for you is I want you to go slow and I want you to learn.

Do not invest money because I said to or someone else said to do it when you understand it. And the good news is, it's not super complicated. Everyone can understand it. But I want to find an answer for do, Sherry. I guess that.

That is who I'm talking about. That's what I'm talking about. Financial advisor. Thank you. Okay.

And they're going to walk. They're going to hand help you, but the way they help you is they teach you. And then they say, okay, here's an example of a mutual fund like I'm talking about. And it's one that I might do and you look at it. Now I now you understand it.

And but people put money sometimes in investments and they can't even spell investment. Don't do that.

“You need to understand it because otherwise it'll rob your piece.”

You're not afraid of that money sitting in the bank. If you put it into an investment that you don't understand, you're anxiety level is going to go up, right? No. Don't do that. Do I need to do it incrementally like that helps you have peace and knowledge and understanding?

Yes. If you have full understanding and it's not going to steal your piece to put it all in it once, I'll put it all in it once. But I would say too easy, Matthew. If you think about it every seven years that money should double.

If it's in a mutual fund making 10% or more. So that one 50 in seven years if you don't touch it turns into 300,000, right? So as you continue down, now you'll probably be living off some of this stuff. You know, some of that money eventually. But that's the point.

You want to take as much advantage as you can with it just sitting there. And so the compound interest it. It will happen. Yeah. Yeah.

Your money will grow. And so if you learn about this and you get comfortable and you're invested in a mutual fund that makes 10% or more. In seven years as 69, your 150 will be 300.

And if you have earned enough through there and/or living on social security,

“one or the two without touching this mistake and let it loan and let it grow,”

that's what's going to happen to it. And that's good news. Thank you. You spend hours researching before making a major purchase like a home or car. But it's also a good idea to put in the work searching for the right insurance coverage.

To protect your biggest assets, I recommend using Ramsey trusted pros. Whether you're looking for car home or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com/insurance. In the lobby of Ramsey Solutions, we have the famous debt-free stage.

On the debt-free stage is Keith and Candace. They're now famous because they're debt-free. Congratulations, you guys. Where you all live? Abbyville, South Carolina.

Very fun. What's that near? Greenville's about our South. Oh, yeah. Love it.

Love that area. It's beautiful.

And I see a little button on your dress.

It's your anniversary, is that right? Yes. Today is how many years? 32. Wow.

Way to go. Look at you, guys. And how much debt have you paid off?

“Two hundred and one thousand five hundred and fifty five dollars.”

Cool. How long did that take? About five years. Okay. And your range of income during that five years?

A hundred and forty pretty much all-time. Okay. What do y'all do for a living? I'm a funeral director. And I'm a nurse educator.

Ah, very cool. Good for y'all. Well done. So if it took five years and it's 200,000, and it's in small towns, South Carolina.

Is that your house? No. No. No. Right.

It was, let's see, cars, credit cards, camper, sea dude. See it alone. Student alone. Ah, y'all were normal.

You had a little bit of everything. We were, yes. And normal sucks.

“And you said, "I don't want to suck anymore."”

Are we getting out of this? That's right. Look at y'all, man. Way to go. I'm so proud of you.

Man, you've been scratching and clawing for a while at this. Not a balloon. [laughter] Very good. Okay.

Five years ago, something flip, something switch flip, something happened, because y'all been married for 32. So at that time, you would have been married for 27. Right. So you've been doing it a long time one way and you went,

we're getting out. We're changing. What happened? Trying to figure out when to make a truck payment. What I was going to put off to make the truck payment.

Or, you know, if I was going to put the truck payment off. Hmm. And I said, "I'm tired of this." There's almost 600 bucks a month. And I just put the information.

And I just got curious about Carvonne. And I put the information in. Got the offer. Two days later, the truck was gone. Whoa.

So quick. Got more than what I paid for it. You should enough already. Okay. And then, then, how did you find Ramsey?

How'd you get to with us? We failed financial piece. You were very sick twice. We had to repeat, of course. A beauty school dropout.

That's right.

I told you the first time that we took it.

I said, "This is crazy. This will never work." Well, we might as well not even try. You know. And so we did.

And we stayed broke for 27 years. So you took it a long time ago? Yes. Back into O's. Oh, wow.

Back in the O's. Wow, I'm sorry. Wow. Yeah. I wish I'd have been a bit more persuasive.

Well, I mean, we're a little bit hard-handed. A little stubborn. But you look up and you say, "I'm trucks gone. Maybe Ramsey's not lost his mind. We're doing this."

We're doing it. We did it. And you plug back. You got your old tapes back out. Your old CDs back out.

It does it off the envelope.

Yes, I did. Yeah.

We have all the CDs from the original.

Back in the day. Wow. How funny. I had hair. Man, this is a long time ago.

So did I. No, no, no. No, no. No, no, no. That's so good, you guys.

Oh, okay.

“So were you both kind of at the same point to jump in and do this?”

It's so hard to be insecure. Both of you. You kind of hit the wall at the same time. You're like, "All right. This is worth it.

I don't have to figure out how to hide the $600 truck payment under a P. It's just so I should put it real. I look good at the red light." Right. We were like, "We were going to look good at the red light."

Right. We were like, "We're going to look good at the red light." Right. We were like, "We're going to look good at the red light." We were like, "We're going to look good at the red light."

We were like, "We're going to look good at the red light." We were like, "We're going to look good at the red light." We were like, "We're going to look good at the red light." We were like, "We're going to look good at the red light." We were like, "We're going to look good at the red light."

We were like, "We're going to look at the red light." Right. We had one of the houses we lived in. We lived two summers with window units in it because we're getting forward to replace the H-back.

Dear in this. But dear in one of the comms when we were failing, I'm sure. Yeah. Back before we did this. Back before we did this.

Okay. So then you get on a budget and you start selling the truck. The camper. The camper one. The C-Doo one.

Wow. You know, it sounds pretty. Yes. We sold. There was nothing left.

I mean, everything else. We just took to the dump because we couldn't sell it. Yeah. And so you just cleaned house. And how much did that reduce the debt?

Well, the truck went 35,000.

“The camper I think it was another ten or so.”

And then the C-Doo was actually paid for it. It all fell ready. But I sold it anyway. So that was another five thousand. Okay.

Just to throw at it. Right. Because two at one of consumer debt. That's a big. Yeah.

Y'all did it. That's a lot. That's a lot. That's a lot. That's a lot.

That's a big amount. Yeah. Yep. The educator. Yeah.

Right. Wow. Well, congratulations, John. Well, John, you guys. How does it feel?

Feels great. I mean. We're here. Yeah. On your anniversary.

On our anniversary. Come here to this romantic spot. I chose to get all an airplane for the first time in my life. No way. Yeah.

And I was a little anxious because when I got here, I didn't have a car. I couldn't just, you know. So we're ride sharing and that kind of thing. Good for you guys. Well, you're on a trip.

You're on a trip. Definitely on a trip. Yeah. We're on a trip. We're on a trip.

Yeah. We're on a trip. Yeah. We're on a trip. Yeah.

We're on a trip. We're on a trip. That was April 28th. Okay. So tell the audience two things.

One, tell them what we always ask, which is what's the secret to paying off $200,000 worth

of that in, you know, 50 something months. Paying it off. Actually paying it. Do it. Just got a--

It's not a theory. You got to make the decision. Okay. I can keep having fun and keep being broke. But living paycheck to paycheck, or I can just not worry about when the paycheck comes

because there's already money there. That's the way we are now. And we love it. How connected were you all through this time? I mean, were you a lot of communication?

Oh, yeah. Yeah. Yeah. Good. I hate the budget meetings, but I know it has to be done.

I am the murdered. Oh, look. I guess what I am there. Yeah. Like you can.

“But from a relationship standpoint, does it feel different not having the stress of money?”

Yeah. I mean, it's like there's a freedom there. The only money arguments we have are where we're going to eat dinner. Yeah. Where we're going to actually go to the restaurant.

Yeah. Yeah. Not if we can go to one. Now that you can go. Good for you.

I actually had a conversation with my boss at the school at the dean. She said in a meeting the other day, he said, "I'm probably going to die with my student owns." I said, "Well, if I can have this, you can't do." I could tell, "Did you have?"

And she said, "What's that lie?" I said, "Freedom." I like it. It's great. So the next question I got down is, you took it years ago and we laughed and said you flunked it.

But basically, what happened was you didn't believe it would work enough to go do it.

Right. That means we failed you and I apologize for that because we didn't sell it to you hard enough. I think it was laziness on that. That's true. Well, if you got somebody that's been listening to the show, maybe they didn't go to financial peace,

but maybe they didn't listen to the show. And they're kind of going on that same collision. Yeah, but that won't work for me. That's it. What advice do you have for that person this listening that was you many years ago?

You're crazy for the thoughts. That's a crazy way of thinking. It does work. And we're living proof that it does work. And we're not, we're not, you know, we're on that,

we're not in any Forbes list or anything. We just have a normal everyday average income.

And not worrying about what we're going on this cruise or we're going on this vacation. We're not going with you. We're paying off debt. We're going to pay off some stuff. And now you can.

And now we can.

And now that you flew to Nashville for the first time.

By the way, I'm amazingly honored that your first airline flight is to come do this. Well, I think that is a great thing. I think that is a bad amount of honor. That's very cool. It's a very big honor you pay us with that.

Thank you. You're welcome. You guys are incredible. Keith and Candace from South Carolina, two hundred and two thousand eight off.

And five years making 140 count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. Yay!

Yay! That's how you do it. Hey, what's up, guys? It's Jade Warsaw.

Listen, summer spending adds up so fast between vacations and road trips and camp fees and events.

And all the extra gas and grocery runs money can get tight before you know it. To really get your money under control and keep it that way, you're going to need a plan.

“And that's what you'll get with the every dollar budget app.”

Help you track your spending, free up cash to put toward debt and savings. And it's the simplest way to make a plan for your money before the month begins. So, no more wondering where your money's going. You're telling it where to go. Download every dollar in the App Store or Google Play and start for free today.

Our description of the day, Galatians 69, let us not grow weary of doing good. For in due season, we will reap if we do not give up. T. Harvecker said it's simple arithmetic. Your income can grow only to the extent that you do.

True, true, true. Joe is with us and Phoenix. Hi, Joe. How are you? Hi, David and Rachel. It's honor to talk to you today. How can we help?

Thank you. So, I'm the trustees for my parents' estates. My father passed earlier this year and I'm the year before. I'm sorry. But thank you for that time.

As the trustees, you probably know what that job entails. But I'm consolidating assets. And I'm almost done with everything.

“And I was wondering if you could tell me the best way to distribute this inheritance”

that the beneficiaries are going to receive. I'm one of them. I'll take it as all actually in a trust. Yes. Okay, because you are using the proper terminology for a trust,

which is your the trustee and the errors are the beneficiaries. And that's the proper words. What's the size of the estate? By the time everything is consolidated and liquidated and consolidated. It will be a little of a 300,000.

Okay. There will be no estate taxes on it on the federal level. Federal, no federal estate taxes. Is there anything that was in a 401(k) that's traditional or a traditional IRA? No.

Okay, because that would be taxable income tax when it comes out in traditional. But any other investments? What was the money in? They had a, they had just a standard investment type of portfolio.

They were looking a lot. And then they had a couple of bank accounts and the house. They'll be no taxable. They'll be no taxable. They'll be no taxable.

There's no federal estate tax and no federal income tax on anything you've described.

“That's a general statement and if you want to check me out, that wouldn't be a bad idea”

to sit down with one of our tax ELPs and comb through the details to be a 100% sure. But in general, the type of accounts you're laying out there should not have any taxes. If there's an inherited IRA that is a traditional, it's going to have income tax on the entire amount

because it's never been paid income tax because it's stuck in an IRA.

Or in a 401k if there was, if the estate was over 20 million, you might have some federal estate taxes.

But we don't have either one of those concerns.

Any capital asset you sell like stocks or bonds or stuff in that investment account or that home is considered to be sold at market value. If it's done within six months of death or so, and the IRS won't question, that's pretty much what it's worth. It's so for what it's worth.

And the basis in something like that is market value at the time of death. So there's no tax, there's no gain, there's no taxable gain. Now if you took that house and held it, and it's worth $200,000 in you held it 10 years, and it's worth $200,000 at the time of death, and you sold it 10 years later for $500,000, you'd have taxes on that 300 gain since death.

But because you're selling it within six months of death, it's considered sold at market value, so zero gain. Okay. See what I'm saying?

Yeah, yeah, yeah, yeah, yeah.

And so you're perfectly clean. And the stuff you're describing is very easy, very clean, and thank you for loving your mom and dad well by honoring their wishes and executing this in a business like and thoughtful manner. Wow, that's very, very big of you and very good of them.

They pick the right person to be the trustee.

“And again, to be a hundred percent sure if you want to spend 200 bucks”

and sit down and have a tax professional, not a guy on the radio, go through your stuff and be sure I'm right. That's not a bad idea, because I'm not that great at taxes. I do know what I'm talking about on what we just talked about, obviously, but there might be something down inside this that I missed

because it's a simple three-minute conversation. So just go to RamseySolutions.com and click on tax prepares for ELPs and door-slocal providers. And their people in each market would definitely got them in Phoenix that in each major city that do those things that we have vetted

and their people we believe in and we endorse. And their local and they provide help, endorsed local providers as where that comes from. Guarants in Los Angeles, I Garrett, how are you? Good, how are you, sir? Better than I deserve, what's up?

So, and I miss Cruz. Thank you for taking my call. So the short version of my question is the following. And I know I'm blessed to be in the situation, but in a nutshell, I'm trying to figure out

with our current amount of money saved and our current income. What is the right amount to continue to save,

“which we will versus how much we can safely spend it on your life?”

Travel and look, let's say my wife beautiful person is nice things like that. Yeah, how do I come up with those numbers? And I'm happy to tell you, tell me where you're going to start. Sure, well, how much do you guys make here? So, the average of the last three years is about around 800 to 900,000?

Nice, what do you do? So, I own a small company in my wife's a doctor. Okay, good for you guys. Now, you have any debt? So, our house and paid off, our cars were paid off.

We have no consumer debt and nothing like that. We do own a rental property home that we share with some friends. It's fully rented and long-term rental. It's cash flow positive. What do you all own it?

We owe five, 50, between the two of us. Okay, got you. And how much do you have an investment right now? We also own an industrial property that my business also uses. And that one we also can't prepay because it was an SBA loan.

So, there's a entertainment penalty.

And that I share with a business partner and that's a million and a half.

And we owe about a million on it. Okay. And what do you have in investments? In liquid, we have about 3.2, 3.3 million. Okay.

The first thing before we go back to your question, I'm going to stop where it goes. I got stuck on this. I don't run into any SBA loans that actually have prepayment penalties on them.

“So, I think you've gotten some kind of tangled information either.”

This is not an SBA loan. Or it is, and it's some kind of other loan. Or it's an SBA loan. And someone misunderstood. I don't think there's a prepayment penalty on an SBA loan.

So, it's a 504, and I double in triple check and surround the answer. Okay. When does the prepayment penalty run out? 10 years. And in the--

I would consider how much the prepayment penalty is. And look at it very carefully, I might pay it off anyway. I don't know why. I don't want to get into that on this call, because you ask a different question. So, you make a gob of money.

How much did we save and how much did we enjoy?

Well, I think the balance of giving, saving and spending has to be there.

So, I would be maxing out. All that you can't invest. Why is with retirement.

“So, you know, the backdoor Roth, if you don't--”

Yes, you own your company. You own your business.

But all of that I would do.

And then you're going to be surpassed that with that 15%. So, I would for sure be hitting that 15% in retirement. And then I would have external goals of we make this amount. What feels reasonable to set aside for these other goals that we have long term. And the next two, three, four, five years.

Oh. Have a goal out there.

Be putting money aside for those goals.

And then beyond that, lifestyle wise. I mean-- Enjoy some of it. Yeah, for sure.

“I would set a percentage of my income that the two of you agree to,”

that we are going to spend on excess lifestyle. Wonderful travel, wonderful cars, wonderful persons, wonderful whatever. Okay? And then beyond that amount, we're going to invest and be generous. Because it's really the only three things you can do.

You can invest. You can be generous and you can enjoy it. And so, set a percentage of your income that you're going to do that with. And so, if you put-- if you said, I'm going to enjoy 20%. That's $180,000 a year.

You're still going to be unbelievably wealthy. Yes. Or if you want to enjoy 30%. You'd be driving anything you want to drive traveling. Anywhere you want to travel, and carrying any person you want to carry.

Yep. But you would keep you from accidentally being one of those morons that spends 900,000. Yes. But being intentional about it because being sloppy is that that starts to feel gross spiritually. I feel like in the financial space.

We'll be back with you before you know it.

“And the meantime, remember, there's ultimately only one way to financial peace.”

And that's to walk daily with the Prince of Peace Christ Jesus.