The Best Financial Plans Don’t Rely On Debt

Stress from money problems doesn't just stay in your bank account, it shows up everywhere

in your life.

“Talking to someone can help you sort it out.”

Go to betterhelp.com/ramsy to get 10% off. Got to you by the every dollar app, start budgeting for free today. Normal is broken common sense is weird, so we're here to help you transform your life from the Ramsy network and the Fair Wins Credit Union Studio. This is the Ramsy show on Day Ramsy Rachel Cruz.

Number one best selling author, co-host of the Smart Money Happy Hour, Ramsy personality, and my daughter is my co-host today. Open phones here at Triple 8 8 2 5 5 2 2 5, Lynn is in Los Angeles. Hi, Lynn. How are you?

I'm fine. Thank you. How are you guys? Better than we deserve. What's up?

Perfect. I'm 77 retired and about 10 years ago I took out a reverse mortgage on my home. That was paid for, but of course now I owe that. 98,000 dollars and rocking interest of course every month at astronomical. And I don't use it.

I haven't used it publicly and in what after I first got it.

By using it. By using it.

“You mean you haven't been receiving the payments?”

I've been taking funds out. No. One time I think I did. Well, for a while we get it off to 90. Yeah.

So what is the interest rate? I think it's about six something. Yeah. I know the interest. When I look at the statement, it's about five hundred and some dollars a month.

It seems like now. I'll be by right. So that's time to kill on me. But I don't know what to do. I have a traditional IRA with about two hundred and thirty thousand dollars in it.

And I also have a high yield savings account. It's about eighty thousand dollars in it. I'm very reluctant to use my high yield savings account to at least pay a portion of it off. Because I just like having that security of knowing that money is there. And I was wondering if I used my traditional IRA with the taxes kill me.

You'll have taxes on it, but you won't have any penalty. Um, what, um, what other nest egg do you have? Is that it? You're total. You're total balance.

Then another fifteen thousand in just my regular savings account. What are you living on? I have retired. I'm at so security and a teacher retirement. Okay, cool.

So how much do you have coming in? About forty five hundred dollars. And you live on that. Yeah. And you're in Los Angeles.

Do you land you have it? I have no debt. I have no debt. Other than that. In a little reverse mortgage.

Yeah. Do what margins do you have per month? That I got of the forty five hundred.

“How much is left after you have all your living expenses?”

Oh, gosh. Probably. Um. Well, my son and daughter and all live with me. And they chip in and everything.

So I probably have about, you know, twenty eight three thousand dollars left by at the end of the month. But we share expenses. Okay. What's the home worth?

Probably about eight hundred and fifty thousand. Okay. So with the tune of six thousand.

So basically the six thousand dollars a year.

And interest is just being added to it. That's right. So it's just shipping away. So if we did that for if we did that for ten years, you'd be eighty seven if we did it for twenty years.

You'd be ninety seven. Right. Okay. And that would still only be a hundred and twenty thousand dollars. I'd be more than that because interest is going to be on the interest.

But it'd be a hundred and fifty thousand more. And so at that point, you're going to have three hundred and fifty thousand dollars. Oed on whatever that property is worth twenty years from today. Right. I don't bother me.

I'm going to let it sit there. You would. Now the other thing is a brother something happened to help lots. And I have to say moving with my daughter. Technically I'm with a reverse mortgage. I have to live in that house.

So then I have to sell it. Exactly. Exactly. The other option. Exactly.

And you probably would do that anyway. If you had a paid for me in dollar house and you moved in with your daughter, you probably wouldn't keep the paid for me in dollar house. Okay. So you're suggestion would be just.

I'm going to let it ride. If you told me. If you told me you had another three or four hundred thousand laying around somewhere,

But I don't want to take you down by a hundred grand from three hundred and ten thousand dollars worth of money.

What do you think?

“I guess I'm a little shocked just to say to keep it.”

But as you go out the map, one, especially since you're not working, and my thing is to even with the margin though per month, you're still not going to take a while to get to. You know what the other thing is you could do this. You could do what you're talking about.

I see where you're going already. You could take like fifty thousand of your 80, throw it at it, and then take it up, run over the credit union and get a loan, and pay off that loan out of your margin in a couple of years. And you'll be back to debt free in two or three, four years.

I could do that. I could also I also thought I thought about doing the 50,000 out of my high yield. And then also, maybe 50,000 out of my.

You could, but that's going to cost you a 20% or 10, 15% or something more than the interest at the credit union.

And I probably wouldn't be able to add it. And say thousand dollars a month for 50 months and be done that way or 40 months or something like that. You know, I got you. You could do a thousand dollars. And also if I paid it down even by fifty thousand dollars,

“the interest wouldn't be obviously that much.”

Well, your payment from that would be less right. Yeah, it's just going to accrue at whatever the balance is. But if you ran over the credit union, you got just a simple little loan. You know, on a four year note or something, you probably would pay off. Because a credit union interest rate would be lower.

Three, four. Yeah, probably I'll probably five right now. But somewhere in there, I mean, just ask them what they would loan 50,000

dollars on a million dollar house.

Oh, my gosh. Talk about a deal for a credit union, right? And, um, but. Yeah, I'll put our day going to consider the, well, I guess. I want to, I want to, I want to ridiculously good interest rate.

No closing costs. But I want if I'm you. But that's an idea. You could explore that with them. And then you could pay it off.

And, well, because that would be okay. That would be okay.

“Technically, I look at that as your emergency funds, right?”

And if you did three or six months of that, it would not add up to 80 grand. Yeah, you got, you got some extra there. Yes. So even if you left 30 and threw 50 out of like what you were saying, I think that gives you plenty of room to be there.

All we're all we're doing there is not solving a financial crisis. Because you don't have one. We're solving an aggravation. You do have that. And we're solving, as Dr. John DeLoni says, we're solving for peace.

And so I love the idea of you being 80 and zero debt on this house. Because it's aggravating you so much that you called us. When you're home, it's the, it's a, there's a safety net there. There's something to be said when you own it out, right? That's actually in your 80.

Yes. Yes. But if you don't get, you know, if you get in trouble or something. And the good thing is to land regardless of which way, you know, you slice it or you do it is, is the value of the home now.

So outweighs everything. So even if you did have a crisis and you did have to sell for something, you know, you still have a good amount of equity in there. Hundreds of thousands. Yeah.

Yeah. You're in good shape. Yeah. This is a, um, it's a bad product though. You see it on cable news.

Yeah. Reverse mortgages, walking bathtubs. You've stay away, people. Stay away. If you're buying your financial products where they sell snuggies and walk

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Thank you. Take my call. Sure. Certainly.

So I had a third generation in a family business.

We farm in Ranch. In 2018, my dad got real sick. And I stepped up to the plate and bought everybody out. And just made my wife run the place now. Wow.

How did you do that? I did. With no sleep, frankly. A big more hard work. Yeah.

How much will you owe in the Ranch? Well, that's high on nothing as of last November. Wow. You got it all paid off. Yeah.

It might be a luckiest person. You talked to Dave. How much was it for?

“A little over five and a quarter million.”

Wow. Good for you. I'm going to go, Eddie.

Just a few things kind of fill in my lap.

And we took advantage. Like I said, just a lot of luck. And I've got a really good partner on my side. My wife is fantastic. Yeah.

Sounds like a lot. It's not like you worked to create luck. I like it. I don't know. I think it's just luck on my end.

But anyways, I got to better think paid off. And now we're stepping into a different season here. And I have a neighbor place that connects straight to us. And it's a good place. And we've farmed in Ranch next to each other for a few generations.

And they don't have anybody in line. And they came to me here last month and asked if I was interested. And I am. I am interested. And the reason I am is I've got two little boys.

They're pretty young. They're seven and four. And I got a nephew 21. I'll all three someday. I hope will work for me.

I don't want to play anybody's life. But that's the goal. And to do that, I would need to grow the place a little bit. And this would be a heck of an opportunity for me. Sounds good.

Even if you were just building a business to sell it. You got so much. Family emotion in this one. You're probably not doing that. But you know, it sounds like an opportunity to grow the business period.

So what's the place you're going to cost? I'm going to cost 4.65. Well, that's what they want. It's 4.65. But they've got a residence on it.

When I'm on interest in owning. And I'd talk to two real estate agents and Matt and 40 acres. Should bring a little over a million in a quarter. And then there's another quarter section that is detached. That I'm on interest in owning.

And that should bring right around 380 to 400,000. So maybe about a million. So you came up with five and a quarter. How fast pay off your debt? 2018 to now.

Okay. So you did that in eight years. Eight years. Eight years, yes. Okay.

And now. And little sleep with a lot of luck is what you kept pushing. I understand. Yeah. So I don't borrow money for anything.

Particularly for business.

Because it doesn't always work out the way this last one worked out for you.

I'm proud of you. I'm glad you got out. But I don't want to sign up again for the hell you just got out of. But I do want this piece of property. So how do we do this?

So the way Dave does it. I bought an office building many, many years ago for five million. And I didn't have two nickels to rub together at the moment. But I was making really good money like you've been to. And you've got more than two nickels.

But I least that building with a five year option to purchase it for five million. And I closed on it at the five year mark. It took that.

“I mean, I scratched every nickel out of the corner of the couch, right?”

To get to get to do that. The good news is by the time I closed on it, it was worth 13 million. So it was a great deal, right? But I didn't have any debt. And I didn't have to close on it if crap went sideways.

And welcome to agriculture, right? Crap goes sideways. And so we cannot predict this rain and sunshine thing. We cannot predict disease and everything else that you guys deal with or the.

Specifically. Is it farm? You said ranching? Like what's what is it specifically? We've gotten cattle mainly cattle.

So we have beef prices. Hello, can we can we spell volatile? Yeah. And so, you know, if I'm you, I'm going to talk to them.

“How much cash could you scrape together to pay them for a right to buy it for five years?”

Could you give them a half million dollars?

Yes. Without going in debt? Yes. Okay, how much could you give them now? Cash, probably a million in a quarter, but that lead me with.

I know. I don't want you poor. I'm just asking how much cash you got. Okay. I'm not suggesting that, but my point is, okay.

So we need four. If we turn around, so here you could. If you don't want to borrow money and I don't want to borrow money. So this is how I'm trying to figure this out, okay? You're probably going to go do it the whole way if you, but because you got away with it the last time you did it.

Okay. But if you did it my way, a way to do it would be to option it and line up the sale of the two pieces of property to simultaneously close the day you close to buy it. So that gets your need all the way down to under three million dollars. Yes.

And you've got a million of that.

You don't want to put it all in there today, but that's the number. So we need to have. So I need to me in box. So how fast am I going to come up with that? Oh, a three year or a five year option.

And I give you 500k to be applied to the purchase price. And I'm going to rent it from you for a maximum of five years. And as soon as I can scrape the money together, we're going to close on it. But I don't want to borrow money. And you talked to that old ranch that's four generations.

And he's going to understand, I don't want to borrow money. Understood. They want their money now, but they can understand you saying that. So if you could talk them in to give them a half million dollars now. And a three year or five year option and you scrape together the other two two and a half.

You line up simultaneously as closing on the other two parcels off the and you close on all of it the same day. Your actual cash need is not that high and you're going to get there. If you're going to run for them, if you really did that, that's one point eight that you pay them with the other property selling. Yeah. And then you throw in and you know, even if you threw in 200,000.

“It's two million bucks that they may get on closing day, right?”

So. You're getting there.

No, they're going to get their whole four million on closing day.

Four point six. The buy the seller next door. Yeah. We're going to give them four point six the day you close on it. But you're closing in five years.

Yeah. Yeah. No, but I'm saying, can you parcel out now and put and sell some of those properties go ahead now and let them sell all of those. You can sell all of them sell them off. Yeah.

Yeah. And then it takes it down for what you owe them. Yeah. You guys want some of your money today. That's what I do.

Well, because they want the cash is what you're saying. If they want some of their cash today, they can go ahead and get almost two million of it now. You know, whatever the whatever the 40. Yeah, 40 and then the back track that you don't want. Yeah, whatever the total of that is let them go into that.

And I do want this. But this is what the net net's going to be. And yeah, that that actually puts half the money in their pocket. Now if they sell off those tracks. Yep, which is what I just said about 45 seconds ago.

No, no. Thank you. I'm catching up with you. Took me a minute.

“So what happens when I'm not on the air for a while?”

I know. To have your great though. Run and slow. No, you're not. The mind is sharp.

Here's the thing. You love the puzzle though. I've real estate puzzles with you. And what I love is when you take debt as an option off the table. Now you've got to figure out what to do it.

And now you've got to figure out what to do it. And now you've got to figure out what to do it. And now you've got to figure out what to do it. And now you've got to figure out what to do it. And now you've got to figure out what to do it.

And now you've got to figure out what to do it. And now you've got to figure out what to do it. And now you've got to figure out what to do it. And now you've got to figure out what to do it. And now you've got to figure out what to do it.

So simultaneously it's closing. And I don't have the money. How am I going to figure this out? And so the way we've grown Ramsey, we've got 1,000 people working in this building. And 300 million a year in revenue.

100% the way we just talked about. We have, in every case, use the profits from something we were doing here. And the profits from that starts the things for the drives to the next thing. And which takes a lot more work. And a lot more patience and some frustration.

But so much more peace, right? Because at the end of it, there's no risk. And it's sustainable. Yes. Nobody's no banker is going to come and screw you over.

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[ Music ] Claire is with us in Charlotte, North Carolina. Hi, Claire, how are you? Good, how are you all? Better than we deserve, what's up?

“So my question to you is just, how do I continue to honor my parents?”

Biblically, if they are dishonorable, especially when you come to financial matters. They're dishonorable, meaning they're not great with money. What they do with money, you don't agree with? Well, so I'm assisting, but they say all kinds of things to me that are just to me not dishonorable as parents. I'm trying to still honor them, biblically.

Biblically to honor someone as not to honor everything they do. It's to honor the position of parents. We honor our father and our mother so that we may live long in the land. Okay, I had to quote Old Testament, right? And so we want to honor it, but if mom's doing cocaine, we don't honor the cocaine.

Of course, she's being verbally abusive to you. In other words, if she's misbehaving. Yeah, so we don't honor misbehavior, but we do honor the position. So the same would be true, where we're called biblically to honor our leaders and pray for our leaders. So you know, I didn't agree with much of anything Joe Biden did, but I honor the position he held as president.

And I prayed for him as a person, but I don't have to agree with any of his policies to do that. The same thing, you honor the position, not the, and that's got to do with your nobility and your dignity. But that does not mean you are enabling or allowing ridiculous, you know, interactions.

And so, you know, just if you get above that guy, you know, I honor, you know, you can honor fatherhood and never met your father.

“Claire, what's, what, what is it currently your relationship dynamic?”

Because are you taking care of them financially? What's going on? Yes, so my, my mom that's overseas, so I was financially taking care of them, taking care of her. And in terms of just like helping out monthly, but it got to a point where I was overexpending myself too much. And I fell back into a lot of debt that I thankfully was able to pay off by just hustling over the last couple of months with work and think of as much over time as a possible, but. And I still owe a little bit more, because I still have to pay for some things that I shipped overseas to her that have landed.

But we, I talked to her today and she got frustrated at me because I had to cut off some things financially because it just was not in mind me anymore.

And she said some very powerful things to me that I know it's not true to my character, but I just, and I, it was not right, I yelled at her and I got upset because of what she was saying to me.

And you know, I, I prayed about it and I repent to it and then I tend to attack, but she walked me. So it's like, I don't. So it's a, yeah, it's a, it's a dysfunctional relationship and then, you know, you're trying to be generous and kind and helping her right from with the financial support monthly.

And maybe you think I still want to be able to make sure that she's good and that's that route you want to take then maybe from the relationship perspective is where the boundaries have to be or vice versa, maybe you look up and you're like.

I can't have a relationship anymore and I don't feel good financially, maybe because of your numbers or just because of the whole situation, right, with whatever you decide.

Yeah, the thing that happens is when we're helping someone and entitlement can set in and she felt she felt entitled to your money.

“And when you said I'm not able to do that for whatever reason, it was as if you took her money away from her because she already owned it in her mind, that's what entitlement means.”

Okay, she feels like she already owned her money and like you stole it back from her and that can be compounded and made even worse by cultural norms, what country is she in. Yeah, for sure cultural norms are at play in this, right, because it's it's much more normal there for generations to take care of each other even if they go broke doing that, which is dysfunctional, then it would be. And in America where we have we're very compartmentalized from our extended family and that's a cultural norm here not one's not right one's not wrong it's just norm because you know that there has its roots and just sheer survival.

The idea that you take care of your mom you take care of your kid you take care of your auntie you know you take care of it. Well, yeah and yeah you could look at all different cultures right and families living together multi-generational all of it, but.

Okay, so going forward clear what you're got what are you what are you thinking.

So moving forward my thing was to use I told her I said I cannot help for a while because I have to get financially stable and I can't help you if I cannot help myself. That's right to get on a proper footing and she seems like she understood but at the day I really come I don't think she understood really because it's it's hard for her to comprehend that the more I try to explain.

“My financial situation to her the more she thinks oh well you make this much money then you should be able to help me with this much too.”

So I kind of had to stop telling her so much about it. So I sent her something overseas that should help her for the next six months to a year like I went back to me again because I I spent a lot of money on things that I knew will be beneficial to her for her to sell and make money over there.

So and I told her the reason why she's upset at me is because I told her I cannot transport the things from the dock to your house because she looks free out of the way from the poor.

So you have to figure out a way or I can talk to the shipper to maybe like work something out where you can go get it little by little and she says like oh you left me in the bind my husband's not working and I'm I'm like okay what if he's myself that but it's not. I didn't make him not work so I didn't know how to respond to that and I just like got so mad because she. I'm telling you that oh you're you're different nothing got it like you know help me out you put me in a bind you're doing this I'm like and I'm like wow okay so.

“I just started going I have feelings to you know and it's not fair to me she's like it is there to you need to like you know it was just a lot and I.”

It's yeah uh is that a pattern though with your relationship did that that shock you that she responded like that or it did not stop me on it we it was just more of like a quick instant response just because of. All that's been going on but it did not shock me I was not like that and I think but I was. Well you have I was he said two areas that you need to clarify in your mind. And you may want to sit down with your pastor somebody discuss it you need to clarify your relational boundaries as to what I'm going out what am I willing to let someone.

That I love say to me how I'm a you know mom I'm not going to have this discussion if you're going to raise your voice will have to talk another time. If you're going to cut that maybe we're going to talk another time. Okay and just hang up. And when you you know I'll talk to you as long as we can talk reasonably we can disagree but we're not going to be disagreeable and and that's one set of boundaries and the second set of boundaries is what amount of money. Is reasonable you putting yourself in debt does not make sense to do this so that's not that's unreasonable but if you're going to ship goods over there.

You need to think about how you're going to get them to her. You know the three hour gap is a bit of a problem on your hand so how I mean how do you think that was going to work I don't know why it would work you shouldn't work.

Yeah so you set your financial boundaries and your relational boundaries and they should be too different they're not tied together.

My financial boundaries aren't tied to my relational boundaries. I can have a quality relationship and give no money. I can give a lot of money and not tolerate misbehavior that they can they don't have to go together but for sure those things but that what this is it puts you just completely into a tornado. And it's it hurts it hurts and so yeah just back up and de-escalate and reset what you are willing to do and then the next time your approach to conversation. What am I willing to do with the way we talk about things our relationship one of my willing to do financially.

[Music]

Day we got a lot of calls on this show where life happens one day someone's healthy they're working providing for their family and then a curve ball hits.

You know we hear it all the time a car accident a cancer diagnosis a heart attack and suddenly everything changes.

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Hi, I'm doing well how are you better than we deserve what's up. Hi, well I wanted to ask you guys a question a little background. I'm 32 years old and I'm an attorney in LA county. I've been working hard to save up for my retirement and the investments and all that. And I've been in a long term relationship for about three years with my partner who's 41.

And marriage is on the horizon and I just kind of I had I had my suspicions but I recently found out that or confirmed that he doesn't have any investment accounts or like retirement account. And so this really concerned me and I just wanted to some insight from you guys about you know how big of a red flag is this you know can he catch up. Am I being superficial for even being concerned about this at all so just really wanted your insight. Do you know why Jessica that he has no retirement. I asked and kind of the common responses might be like you know why was just planning to work my whole life which it's like you don't have that choice right you could get injured.

Optimability other other things were like you know I haven't had benefits in the past maybe working for smaller employers. He's a super prior now so it's just kind of a mix of what does he make. I don't know exactly.

“Okay, it's three years you need to know I know I know I think approximately probably gross 100 to 150 that would be that's kind of my guess he told me once.”

Gross is not now I mean what's his taxable incomes when I'm as you make a 30 grand and trying to live in LA.

When you can start your own business you're one is you know zero pretty much you have a lot of debt Jessica.

No. If the reason that you want to know is because you're greedy and all about money then yes you would be superficial but if the reason you want to know. And the reason you want a plan in place is because the way we handle money is indicative of our emotional psychological spiritual maturity. The reason why I felt in this might come from a selfish place but I couldn't help but feel like all this time that I've. You know the money that I've responsibly saved in multiple accounts and whatever.

I couldn't help but feel like it would be a subsidy for someone else and I know the whole you know once you're married you're one I totally understand that but you can't help but feel.

“Like maybe your retirement quality of life would go down because yes but I think you would feel different Jessica if we painted is a little bit of a dramatic picture but if his.”

Parents were sick and he was there caretaker and like did all this and didn't have the margin to say for retirement but he was telling you at 45 this is his plan.

You know what I mean like if there was like effort for the reason why and a good reason I don't think you would feel like that I think you'd be like God you are a good man and you're going to be a really great husband and I'm excited to partner with you. It wouldn't feel like a subsidy if what he was doing. But if you're subsidizing if you're subsidizing I really don't want to plan and I kind of just want to work for myself even though I make half of what I would make working for somebody else and you know all of this.

Like a like a planning and and forethought and when you go into a relationship with someone right along term life long and they don't have the ability to think. Far out in the future and and monetarily of just taking care of. It's not a deal killer. It's not a deal killer but it is not superficial for you to be concerned either. It's because what it's indicative of and so what is what's the source that's driving his lack of doing it because you're you know and we could go on the other side and go are you obsessed with money and all you do is think about retirement.

“I don't want to live with somebody like that you know and no we don't want to go that way either right but but this idea that that we're solving for peace again to quote Dr. John Deloni which we do over and over and for it but.”

But yeah I'm solving for peace I'm so why am I saving for retirement so I can eat.

That's solving for. Yeah and if I don't have a partner that's going to be and that's not even equal dollar amount but you know effort. You know what I mean in that. Yeah that's yeah that's hard and it's not a you know a woman versus man thing I know the opposite would be the same if a guy called and said yes she has nothing she hasn't really thought about it. She I'd be like holly what is what is she doing like you don't even want to be a kept woman.

Yes yeah. That's an old phrase some of y'all have looked that one up. I will I will break. There you go. Kelly doesn't know either.

Well again it's someone who doesn't do anything and there's being taken care of. Yeah kept yes yes that's the definition that's an old. And that's not a say at home mommy and I know I said not earning in. I didn't tell you that I said doesn't do anything. Yes that's it that's it that's it that's it.

You're allowed yes your mother's a full-time mom for 40 years. She's anything but kept yes that's right. I'll just tell you that don't even cut that word near. It's not even going to be good. Hey buying or selling your home is a big deal and you want an expert in your corner because it's expensive.

Unless my fights for you to help you get the best deal for the right price.

“The Ramsey trusted program is the only way to find the top high octane high protein age.”

In your area that you can trust to make buying a home of blessing getting your home sold. Make it a blessing it's easy to find a Ramsey trusted real estate pro for free. Just go to Ramsey Solutions dot com slash age and or click the link in the show notes and in the description. And Rachel I I think the later people get married and they're getting married later and later and later. The more this type of discussion comes up 100% yeah to broke 21 year olds don't have this issue.

You know they're like game on here we go whatever it is let's go. You know and a saddle up right. Yeah and and it's it's worthy of the discussion because if you built it you have because if you've built a life and you've worked hard on something and you have. How to set a principles financially through your 20s even your early your 30s whatever that is timeline wise for you. And then you choose to get married to someone you you have built a substantial life over you know one to decades of working.

But when you're coming at it so separately and your results have been so different over the same amount of working time or hers are even.

“I mean he's 10 years older than her you know and he has nothing she's 10 years you know the last caller.”

You know you mean like that's that's where the that that's the hard part that that is that's the tension point because it reveals it reveals who you are and what kind of partner you're going to be. Yeah ratio wise of income to savings there should be some kind of something going on. Yes. So you don't dollar amount of money. It's not about the money amount.

That's right. It's not about I'm going to measure your value based on your bank account that's not it at all right. But we are saying what created that what character qualities and are those character qualities attractive or are they going to cause you to become better out of lack of respect. Yes. Resetment.

Yeah.

“If you lose respect right after that comes resentment.”

Yep.

And so you know okay I really like him he's you know he's a lot of fun and all that but but I don't respect it.

That's that doesn't play long that's right. But but if it's something as simple as I've got to address this because I'm afraid it could go to that that's okay. And you go before we go forward marriage I've got we got to be on the same page with this and I I want to be able to respect your effort. Yes respect your fourth thought your maturity. And if we can't do that that isn't it that's going to be a deal killer not the fact that there's no money. That's right absolutely no I totally that is a that's a deal breaker and that's really tough.

When you've been in something for three years and your 31 or 32 in your attorney. Yes and also knowing people's values can change we get the question a lot should I marry someone with debt and we're like yes you can marry someone with that but what is their value around that subject. Should you marry someone that wants to stay in debt forever no. If you want to be out. You're going to be pissed off your whole life.

That's going to be hard. Yeah. So people can can change their values right with what the decisions you make and that's that's the beautiful thing. There's redemption and it right it's not like who you were at 21 has to be who you are forever. Thank God.

Yeah. But but it is it's a more weightier discussion with people getting married later. You're exactly right because you have built a coming up more a life. We're getting a hair on the air more the questions coming in here.

“Okay guys let me ask you something what would it take for you to switch your bank because if you're still earning next to nothing on your savings you need to check out fair wins credit union.”

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That's fair wins dot org slash ramsie. Ensured by the NC UA. Welcome back to the ramsie show in the fair wins credit union studios. Randy is with us in green bay was constant high Randy how are you. Hi Dave and great how are you better than I deserve what's up.

So I'm going to try to keep this as quick as possible. My husband and I have a very income and recently sold one rental property. But now we're questioning whether that was the right move. We still want to do collect the cash flows. And we're also going to probate with an inherited home.

We could potentially sell both properties pay off around 200 to 5000 in debt. And fly through almost all of the baby steps besides retirement savings.

Okay, so you own currently two properties that are rented.

We don't understand that right. We have a duplex and both sides are rented. We just put the other home the other home that you said covid what you say. It'll be an inherited home. And it's it's not rented or anything right now we're just starting Kobe.

Also someone passed away. You run. Okay, who passed away. My husband's mom and mother. I'm sorry. Okay, and so you're going to inherit her home and you're going to do what with it.

Well, we don't know if we should rent it. There's there early as about 40,000 in debt on the estate. So the home is worth around 150,000. But we would have to pay the, you know, 40,000 to keep it.

“Yeah, was that a child was that his childhood home?”

No.

Okay, all right, and the duplex.

Does it have debt on it? It does. How much? It's about. So it's a little confusing because we have two properties tied up in one mortgage.

And we did just sell in older home that my husband lived in. We sold that and it didn't knock our mortgage down. All in all for our house on 40 acres and that duplex. We only all around 100 and 80,000. The duplex is on the same piece of property as your home.

No, it's in the same town. It's very close. It's in the same note. Are they just they have one mortgage on the two of them? Yep.

I'm sorry. Yes, they do. Okay. All right.

So 180 blanket mortgage across two pieces of property.

One of them is your home and one of them is the duplex. And then the inherited home has 40,000.

“And the 200 and something thousand dollars in debt is what?”

It's both our current properties, my car and some consumer debt. Okay. So it's the 180 plus the 40 is 220 plus a car. Right. Nope.

It's around all together 225. Okay. How much is the car? The car is and we're on it's around 28,000. And I'm about five to 10 underwater, depending.

I've had it for sale since summer of last year. And it's not selling. I even have it undervalued. No, you don't. What a sold.

The bank doesn't not sell it. So I'm all the listed for 22,000. And the bank told me it's worth 24 and I'd be silly to sell it. Yeah, bankers don't get to advise me on finance. They're just where I keep money.

The last thing you want to ask is a banker about debt. That's like asking a dog if it's hungry. And so, so what is your household income? It varies. So my husband works full time.

He doesn't make much and makes around 20 dollars an hour. They stay at home with my baby, but I do work on weekends at bar ten. So it's all over the board. How are you paying all these bills? Our rental income is a big one.

It does pay the mortgage and all of our escrow.

“That's why we're like, we don't know if we should sell because it cash flows so well.”

How much do you guys on average would you say Randy bring him a month, though? Everything in total. That's your own 4,500. I would sell mother's house and I would pay off your car and I would pay off your consumer debt. And I would get on a detailed written budget.

The way you're running this like a business, not just a wish. Not just like a wish. You've kind of just been throwing stuff around and hoping it worked. And you've got to really have to get very, very practical and very detailed and live on. And live on your income and the two of you're going to work on your careers.

Y'all suck at earning money. And so you need to really get some income coming into this house. And then you can work to pay down the 180. But now I wouldn't sell the duplex today. I would sell mom's house and clear this stupid car.

And there's only $8,000 cars when you make $20 an hour. Yeah. And hopefully they could clear what almost 100 after if she owes 40, it's 150. Yeah. And then well, you've got to pay off the 28,000 of a car and the consumer debt.

So I didn't get all the way to the bottom of that. Yeah. So another 10 or 15 probably there because the numbers don't add. But anyway. Yeah.

So you need to get very detailed on your monthly income.

Everything else I would, I was so mom's house.

And I would pay off your car and then get on a detailed budget. Pay off all the consumer debt. How about the credit cards? And I don't think she didn't give us her primary home total of what they owe and the duplex. All together at 180.

But all together. It was when it was a blanket mortgage. One mortgage on the two of them. On both of them. Yeah.

So they've got that deal down the credit. Yeah. The banker helped them with that. Yeah. So, yeah, blanket mortgage just sets you up for problems when you get ready to divest properties.

When you get ready to sell a property.

Because most of them don't have properly done release classes. Meaning that you can sell the duplex for 180 and they take the whole 180 against the debt. And you get nothing. Because there's no partial release classes. Yeah.

Yeah. On blanket mortgage. So there. That's set you up for a problem. And that's typical.

“Is that one reason why you went and sell the duplex?”

Because of that? No. I think she's making money on it right now. And they're dependent on it right now. Yeah.

But if we got rather car payment.

Yep. Now the cash starts to flow. And we get on a tight budget. Now the cash starts to flow. And we can start to whittle it down.

You might be able to keep the duplex in time. But I'm hoping it can. And I can't tell where this is out. Where this. You know, we didn't get into every single dollar there.

But yeah. Yeah. So. But then come as key there, Randy.

“If you guys and run and after you sit down and run your numbers, I think it will give”

you some piece of having actual plan. Because everything is just feels so muddled together. And you're like, I don't even know like what to do here and there. And once you've laid out a plan. Then you guys are able to say, OK, I need to work.

Eximate more per week. He needs to work. Eximate more per week for us to clear everything in four years, three years. You know, whatever the time frame looks like for you guys. And to actually have a plan and then you can then you can shape your life around it.

And that actually will probably give you the motivation then to actually play all this out. Because when everything is just in your head and it just feels like there's no succinct order, it feels like more like chaos. [ Music ] Let me tell you something I see all the time.

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So check it out every dollar for free in the App Store or Google Play. Nate is in Cleveland. Hi, Nate. How are you? I'm doing well in you. Better than I deserve what's up.

Well, my question today is so me and my wife were about $65,000 in debt.

My question is, I want to get the heck out of debt.

And my question is, how much should I be taking home from the business,

“but also leaving enough in the business to grow it?”

Okay, so what is the business profiting? You said you're doing a lot better. That's awesome. What's your process? Yes, so my profit, I am consistently bringing in $2500 to $2800 a week. Profit or gross?

Profit what I'm bringing is what I'm doing home. My gross is being closed to $5500 to $6500. Okay, what are you doing? What kind of business? I have a mobile mechanic business. Oh, good for you. That's awesome.

Thank you. Okay, and so it cost you about $2 to $3,000 a month to operate and you're making.

Did you say a week or a month? You said a week.

A week, the past three weeks I've brought in consistently $2500. After expenses. Yes. Okay, so you're making $10,000 a month? Close to you.

Yeah, if you keep this pattern going anyway. And good for you. And your house is well done. That's awesome. Thank you. And so yeah.

“So what do you need to put back into the business to grow it?”

You seem to have it operating very well already. Well, part of this is I've been operating part time about 16 hours a week since January and the last three weeks I went full time. Yeah, but that doesn't mean you put money back into it. You're making more money. Right. So I have about $50,000 in tooling that I still have to get.

And I'm also getting to the point where potentially in the next two to three months I could look into adding another person. Okay, I'm not adding anybody right now. This is a whole three weeks old. Right. So now we don't need to, we need to just put off talking about adding somebody. Right. And by tooling, you mean purchasing tools to do the job?

Yeah. So you already have enough tools to make $10,000 a month.

If you never bought another tool.

Right? I guess that's correct. I guess he's excited about his business. I want you to be excited. I'm excited too. But let me tell you, let me tell you what happens with guys like you and guys are like me.

Okay. If I go in home depot, I discover things I need. Right. That I don't even know what they do, but I need one of them. And so what happens in your world is you can tool yourself all the way through your profit.

Right. And the Matt co-guys making all your money then. Yeah. And down that road and getting out of that road. Exactly.

“So whoever's pitching you the tool. So you need to be very careful.”

Tools are not fun. Tools are overhead. Overhead is evil. And so you don't buy a stinking wrench unless that wrench is going to make you more than it costs you within the next two or three weeks. Well, the reason why I'm talking about tooling is specifically like there are jobs that I'm currently not able to do.

So what I make. Okay. You're making $10,000 a month after three whole weeks in business. I mean, you can get it's okay to add some of those jobs, but I don't know when you're going to do them. Right.

But he's saying they pay more. Right. So one job could be two grand. And then if you had this tool, I don't know what double. I don't know or whatever it is for you.

Yeah. Only if you buy yourself can make more money because you bought the tool. Not because you can get jobs. Yeah. The tool has to make you more money because we get caught up in this thing.

I can, you know, I'm turning down work. No, you're not. You're busy already 15 hours a day. Right. Unless you can make double the hourly rate because of the tool.

The tool has zero value to you right now. Because it's logistically you booked up. Gotcha. So I'm doing accounting now is what I'm doing. I'm not working on cars.

I'm doing accounting with you. So if you're averaging $10,000 a month with the hours you have, unless you can average an extra $5,000. Don't spend $2,000 on the tool.

Because it doesn't cause your income to go up. It just meant you could go to a different kind of a job that you're doing right now. I booked the dupti. Now, when we get ready to hire somebody six months from now.

“And you've actually got some downtime that you need to fill up some available hours in the day.”

And the tool adds those jobs. Now, that tool's going to ROI quickly and you're going to buy that one. Gotcha. But your goal is not to end up with the trailer full of tools. Your goal's end up with a power money.

Yeah. That's what the tools are for. And that that I get that like I'm sitting in a studio right now. It's a different world, but it's the same kind of principle, okay. When it comes to computers and electronics and cameras,

my friends in the engineering department that work for me in Ramsey have no end to their appetite.

They will buy $2 million worth of crap that this crap sitting here would already do.

And I have to go, no, we're not doing that. So, but then also it's going to take you're going to look prettier. I'm like not that much prettier. And probably not. It's just probably going to show off my ugly a little better.

But that's all. I mean, this is, this is the world you can get into where the, You're not careful. Increasing equipment, minimal functional. Yeah.

“Okay, so where was the balance of putting money back into the business?”

Only put money versus paying off the 65,000 that he has in his consumer, like in his household debt. I don't think he's going to have a trouble with this because I think it needs to take most of it home right now. And pay it off. The reason is is that putting money into the business right now is not going to cost us income to go up.

Because he's already fully booked.

Now if you're not fully booked and you can buy a tool, it causes you to be fully booked. Then you put that money back in. But that's not $50,000 worth of tooling. That's, which was as original quote. And I'm all the way down to about 2,000 now.

And so, but $2,000 at a time. Then when you add somebody and you've got available with just two hours. Now we can grow the scope of the business as of the business with the tooling. So you know, we're going to tool up a little bit with cash. But you still got plenty of money.

Making more money than you ever made in your whole life. Awesome. Because you're in a free to work. And you're out there doing it, man. And you know how to do it.

This is, I got a feeling you're going to, I think. This business when we talk to you in three years is going to be six trucks running. And if you're not careful because also. I would say him. I would say you certain personalities.

You do get excited. And then you get up over your skis. And you're like that. And that's where why I could borrow on this truck. I could do that.

You know what I mean? And you start to. Right. But you, it can start to expand so quickly. And so.

But let's, let's pretend that. There's a level of stability that's good. Let's pretend he wasn't making 5,000 before he quit his job. Now he's making 10. And he got 65,000 dollars in debt. He's debt free in a year.

Easy. Yep. Easy. And so, you know, just, just figure out your math that way. And then what we have done at Ramsey,

I've organically grown this from a card table in my living room, where we're sitting now. And organically mean I took profit from the company and I bought tools. I hired people. I used some of the, I didn't take the money home.

I put it back in here. But in every case, those things have to give me a return on investment. Otherwise, we're going backward. And backward ain't the plan. [MUSIC]

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Good day. How are you?

Better than I deserve. What's up?

Well, I have just that mine is probably pretty simple there. I have a question as far as our mortgage and pay in it off. So we owe 110,000 on our house. It's worth about 400,000. And we pay $5,800 a month right now.

Our mortgage is only almost 1,500, but we've been paying extra. And in doing that, our pay off, if we pay it off in, we have 23 months and we'll have it paid off. But if we chose to pay it off in 12 months at $5,800, then we would have to get some money out of our high yield savings to finish paying it off.

And we have about 70,000 in high yield savings right now. And I propose that we take out after 12 months, continue paying the 5,800 for 12 months, and then take out 55,000 out of our savings is what we would have.

“I believe that we would have to pull out and leave about 15,000 in there at that time”

and pay the house off. So I just want to...

So the difference between the difference is...

12 months with your plan or the original plan is 23 months. So the argument is 11 months difference. And how old are you guys? This I'm 26 and I have been 60. And how long have you been married?

For 11 years. And how much do you guys have in your nest egg? Your retirement nest egg? In retirement, we almost have... Almost close to 200,000 in 403B.

We've quit putting so much into it, while we've decided to pay this 5,800 a month, rather than the 1,500, the almost 1,500 we cut back and only... Yeah, and your household income is what? 160,000.

Okay. All right.

So let's just back up and say, both plans are in the smart column.

Okay. There's no, you're so stupid. I can't breathe. Checkmark on this one. Okay.

I mean, both of these are very wise. This is the argument between... You know, minutia. Okay. And so neither one... he... he wants to do it the other way.

You want to pay it off early. But he's worried about having not as much emergency fun. Is that my reading between the lines? Yeah. And I told him, "I watched your show once."

“And I said, "I think he said, "Get uncomfortable for a while."”

And that's when I came up with the plan of... I even suggested we leave a thousand in there. And he's like, "No, no, no, no. That's not our plan." Our plan is...

Okay. Maybe it's that's four through six. Four through seven. You leave your fully funded emergency fund in place. And I think 15,000's a little tight.

I'll kind of come down on his side there. So maybe between the two of you is the answer. Because I also think 70's a little high. Okay. Yeah.

How much are your expenses every month, Mary? You know, not much read. We're bringing home about 80, 200 a month. And like I say, we're able to pay 6,000 on our... And live with this means you're not taking out of the higher you're savings or anything like that.

So our expenses aren't. Yeah. We don't wear out of debt. So if you went in the middle and just said, "If we lost all income." Right.

And we had four months worse. Right. That's 32,000. So maybe you do throw. You know what I mean?

Some at it. But you guys are reasonable in the three to six month emergency fund, right? Four to five months. Yeah. You're in good shape.

The 70's is high. The 15's probably a little low.

“And so here's a fun game if you want to play it.”

Do the 5,800 for 12 months. And then keep doing it every month. Until you look up and the balance and the high yield. I don't like that game all of a sudden. Because the high yield is not paying you what your mortgage is.

What your mortgage interest rate? It's high. It's 6.87. Yeah. And the more annual high yield is not by three, right?

Yeah. It's good health victory. Yeah. So I want to go ahead and hold a good and pull some of the high yield now. Yeah.

Why don't we say 15?

And you said 50. I'd go, I'd go 35. Yeah.

Let's split the difference.

Because that leaves you guys again with a four to five month emergency fund. Yeah. And with what you're going to save in the mortgage once it is paid off. You're going to have a bumped back up in six months, you know. And then you can also play my game.

Okay. So you put 35 on it today. You pay 5,800 on it. And if you look up and he's okay with one month pulling another 10,000 out and knocking it off. And that's the last 10,000.

You can ever month look at it and go, if we paid off this month, that would leave us this amount. Oh yeah. We paid off this month, that would leave us this amount. And both of you sit down and look at it and beat, beat laughing and giggling while you're doing it. It's not wagging your finger.

Okay. It's like this is fun. Okay. Are we going to pay it off this month? Are we going to pay it off this month?

Keep the levity. Yeah.

“Are we going to pay it off this month or the next month?”

And then, you know, he's going to look up one of those times and surprise you. You know, go on down to 20,000 balance or 25,000 out of balance. Mary, I would want you guys investing in retirement though.

And if you are following the baby steps, you guys need to be investing 15 percent.

Are you? Because you said you pulled back some. And putting none. We pulled back. We were doing it completely.

You pulled back completely. Yeah. You got it. We're still investing 4 percent. We were 15.

You need to go back to 50. If you go back to 15. Go back to 15. Yeah. Okay.

I would advise to cut back while we're paying the house off. Because our mortgage is so high. 6. Our interest rate and the mortgage is so high. Yeah.

But the interest rate.

The rate of return on mutual funds and a good retirement account is higher than your mortgage.

Okay. Okay. Okay. Whoever advise you. And your age right now.

I mean, like you know what I mean.

“I think it would be a little bit of a move point though.”

If it, you know, but if you're in your early 30s doing this. But they're in their, I mean, he's going to turn 60. So I'm like, I want. You want some in that more than 200. Yeah.

Yeah. So be able to retire. Yeah. Because that's that is the balance about the, the paid off home. Like where we are all about.

Yes. Getting to that point, which is our baby step, you know, baby step six. But, but it doesn't know good if you've paid off house and you have no money. Exactly. I'm not.

So like you do, you do want my retirement. Okay. So what we teach Mary to follow our plan exactly. We'd be to start putting 15% of your household income. That's another 10% more than you're doing now.

Actually under retirement. Lower the emergency fund. And lower the emergency fund down to, you know, three to six months, which will be 25,000. Okay. And so I'm going to put 45,000 onto the house.

I'm going to start putting 15% of my income away for retirement. And then I'm going to figure out how much I can put towards the house. While putting 15% under retirement won't be 5,800 anymore. Yep. It's going to be more like whatever 50, 200 or whatever.

And you're still going to be out in 23 months. That's right. And you will have been all along putting money under retirement. And all along had a sufficient 3 to 6 months of expenses retirement plan. And all along all your extra money then is going towards the house.

And so that's what we teach. The baby steps 4, 5 and 6 are simultaneous. 4 is 15% of your income into retirement. 5 is kids college. Not relevant in this discussion.

And 6 is everything extra goes towards the house. And the expense and no more should be in savings. Non retirement savings. Like I yield. Then 3 to 6 months.

And we're going to call that 35,000 right now. And call it a day. That's what we actually teach. If you're going to work our plan exactly. That's what we would do.

“And the truth is you'll end up with more money working that than either of the plans we discussed”

for the last 8 minutes. But it was fun discussing. And either way, Mary, you're going to look up into yours. And your life's going to be great. None of these.

None of these. You're going to be doing good. None of these options are in the stupid column. None of them. And well done, Mary.

Yeah. I mean, to get to this point, that's a lot of hard work. So you have been both. It's amazing. Good, healthy discussion.

Between someone who's dead, averse, and someone who wants a policy savings. Husband and wife. Who loves this discussion. And the fact that they're having the discussion. And it's a healthy argument.

I like it. [MUSIC PLAYING]

Hey, Chris. What's up in your world? Hey, guys.

Thanks for taking my call.

I'm big to anyone else. Well, thank you. How can we help? So I wanted to ask the basic question.

“Did my fiance and I make a poor decision on the house we just bought?”

And I was hopeful to kind of briefly go over my plan going forward. And see if it aligns with y'all's advice slash what you might suggest I do differently. Okay. What do you, what'd you do on the house tell me about it? So the house was a $670,000 house.

And we did 10% down. And so our monthly payment is $4,700. And what do you make? So I have a salary of 120,000 per year. And my fiance has a salary of 70,000 per year.

The big variable in that is that I work in sales. I get a bonus every quarter that can vary. Typically, it can free the quarters. We'll vary between 10 and $40,000 and then one quarter. We'll vary between 30, although I have to maybe $100,000.

Okay. Well, what we recommend for married people is that your payment should not be more than one fourth of your take home pay.

“And you should be well under that with the numbers you gave me.”

So that's what I was so with the outside of the bonuses. If you remove the bonuses, our take home pay is roughly $11,540 per month. Yeah, but we're not removing the bonuses because they're there. Even on the small end, they maybe around 60,000 per year at this small end. That would still still put you, that's so put you to fourth of your take home pay.

I guess our main question was, you know, did we overindulge? Because it did drain pretty much all of our savings to get to it. Now, I did invest and the way I did it was before listening to y'all show and learning your take on it. I invested in real estate before I was paid off fully on. So we do have some debt that I wanted to go over as well.

And so I, but I lost or short, I invested in real estate. And it's not fair to pay off all of our debt and not only including only having 10% down on our primary residence, worried me a little bit. And I know that that's not. It's not best and no, I would not be investing in real estate before you bought a house and no, I would not be buying a house if you didn't. If you weren't that free, but you already did.

So now let's get out of that, aren't you selling the rental in pay off the debts? That was going to be one of my questions. We've only owned it for about a year and a few months. My thought was selling the rental before it appreciating to its full value. It's not going to appreciate to its full value. At what date when does it stop appreciating?

Yeah, no, I, I, I understand that. There's no window that. But you just feel like the quick turn after you pay commissions and everything. All you're doing is admitting your mistake and that's the problem. Yeah, but if you sold, but if you sold the property, Chris, I mean, if you only had it for a year, it probably doesn't have much equity in it.

Which means it sucks. Like it's because it should have some equities. No, it's it's draining him. He's not making money on it. Right. Unless you got a bunch of equity, you're not making money on it.

But when he, if he sells it for the same price, basically he bought it for a year ago because it hasn't really appreciated much.

And he pays commission, I mean, all fees, all of it. He's going to be, you know, can you get out even? Yes, that's my question. We, we probably could get out even. Yes. Good.

After everything. Okay. 20% equity in it, but we do have very stable monthly income on it. We're not, you know, you don't. No, you don't.

You're, you're, you're, you're, you're spitting your wheels. You're breaking even at best on the monthly cash flow. But the time you include vacancy repairs and crap, owning rental property.

“You have to make a lot more than you're making to break even.”

You are not breaking even. Not net net net over a 12 to an 18 month period of time. When you look back on it, that's what's going to happen.

I've only six hundred million dollars worth of real estate.

Believe me. You have to have more margin than you've got to break even. Now, so I would get out of that. That's what I would do. And then all of a sudden, your house starts looking smarter.

I have 20,000, student loans, 9,000 car.

She has 20,000 roughly student loans. Yeah, and you guys make a parliament. He's so clean that mess up. Yeah. Yeah.

So if you don't have, if you don't have this rental property hanging over your head, like a hatchet, and you don't have this, the any personal debt at all. All of a sudden, we're not sweating the house. Yeah, but I do hear you, Chris, with when the bonus has come, depending on the month, right, the instability is, yeah, on the low end.

You said you bring home 11,000, right? And 5,000 almost of it's being taken by the mortgage.

“On that one particular month, you need to have a fund.”

We call it the peaks and valleys fund. So when the bonuses do come in, throw some of it in that fund.

So when there is a low month, you can pull from that fund and that the house, you know, is fine.

That it is around a fourth year take home pay. You didn't have any car payments or you wouldn't be noticing it. Okay. Okay. Yeah, my plan going forward was to try and save three months reserves,

and then get to 20% equity in the house. So you would add step one to that, sell the condo. I would sell the condo. I'd get that free. I'd build my emergency fund by B steps.

You guys have any cash saved, Chris? So we really did pretty much get put everything there. Okay. But in a few days. When's the wedding?

I get in October.

“We are very lucky that we do have family help for that.”

We did put a small portion of our money already into it. But that that wasn't a big factor. But I should be in a few days. I'll be getting another one of those quarterly bonuses. I will at least replenish some of that.

So the advice I gave you is what you do from today forward. Okay. Had you called me a year ago?

Here's what I would have told you for the rest of you guys out there.

Not to shame, Chris, but for the rest of you guys out there. Don't buy a home until you're married. Number one. Number two, don't buy a home unless you're out of debt. Period.

Don't buy a home unless you're out of debt. And have three to six months of expenses plus a down payment. And then don't buy a home or the payment on a 15 year fixed is more than half. Our more than a quarter of your take home pay and don't buy rental property. Unless you pay cash for it.

Which is way after all those other don't things that I just covered. So if you had done that, you would now have you be planning a wedding with a polymoney sitting there and no debt and you'd have no rental property and no house. And you'd be looking at October going, "I'm sure ready for it to come." And then the following spring after your marriage after renting an apartment for six months,

I would talk about buying a home. By then you'd have a great down payment and you'd have no debt. And you'd have an emergency fund too. That changes the level of anxiety to this discussion dramatically. And when you buy a home or someone you aren't married to, you are extremely vulnerable.

Both of you. It is legal and financial suicide to do this. They're probably going to get away with it because it's probably going to work out. Well, they have a wedding date. They have a wedding call and they're like, "What's up, sir?"

I mean, Saturday works for me. But the, as a wedding date. Because something happens with this relationship. And everything's already exactly tied down and tight. And so we're stressing this relationship right now.

And if anything, God forbid, happens. Y'all are going to find out what screwed looks like. It's going to be a mess. But I'm hoping that, for y'all, it just sales right on through October. And you can just execute the plan we talked about.

And we're going to start selling stuff. And we're going to get this mess cleaned up.

“But that's what I, again, not to shame him.”

But all, you know, you guys got to quit barn. And houses aren't married yet. It's really the night mirror stories that come into the show. It houses together when you're in the mirror, yes. Both your names on it.

It's just... The stuff that can happen is all bad and not good. So yeah, please don't do this. And again, Chris, we're hoping you, for you, that this all works out. We're not trying to beat you up, but you called an ass.

So we're going to tell you. [music playing] Welcome back to the Ramsey Show. In the Fair Wins Credit Union Studio, Rachel Cruz, Ramsey Personality, my daughter, is my co-host today.

Matthews in Portland, Oregon.

All right, good. How are you, guys? Better than I deserve. What's up?

“Well, I'm just wondering how to, you know,”

attack this mess that I'm in, basically.

Yeah, I kind of figured out where to start. What's going on, Matthew? Well, I have a total of $48,000, $90, and $49. So total bets. I have some goals for myself, I want in the next year or so,

but I want to climb on all this before I can start doing those. What are those goals? I want to be able to buy house. The house payment is kind of an interesting situation. So I've really great parents who basically are giving me 300,000 for a house.

And I want to be able to be secure and able to be able to buy home, but I want to get out of all this debt I have before I can get out. What do you make? So I make $77, my wife makes about $55. Okay, very good.

All right.

Okay, and so how much of the $48,000?

What's the breakdown on that? It's $19,305 in student loans for my wife. $12,639 for one dollar, and $11,145 for another car. Got you. And then $15,45 on one credit card in $31,39 on another.

Okay. So when the two of you sit down at the kitchen table with the television off,

“and you put these numbers in front of you, what do they tell you?”

Um, probably then there's an above our means. That's what tells me. Okay, but what they tell me is, I mean, you make $120,000 a year. Um, you have $48,000 in debt. I think you can attack this debt fairly rapidly.

The $300,000 is this a cash gift for our parents? Yes. And where are you living now?

Um, I'm living outside of Portland.

No, I mean, are you living in a rental? I'm renting. I'm renting. Okay, and how much is your monthly rent? 1470. Okay.

And you're outside of Portland, Oregon, right? Yes. Okay. What will $300,000 buy outside of Portland, Oregon? Um, it won't outright buy anything?

Oh, yes, it will. Um, I mean, it would get close.

“It won't buy something you like, but it'll buy something.”

Sure. Okay. That's what I asked. What will it buy? Um, small piece of property.

Probably need some fixing up at that price. Not to cheap up here unfortunately. No, I mean, that would be reasonable. Because the median house holds median house price in all of America. And Portland's much more expensive than most of America.

Um, but the median house price is 400, uh, right now 400,000. In the Midwest, it's, uh, I can't see that. You're flipping it. But anyway, the, uh, it's like, six hundred and fifteen in the West. In the West, but that includes California. That's not.

Clothesport. Or would two. Okay. Anyway, that's the median. And so you would be.

But bottom line is you're going to be substantially lower than median. How old are you, too? I'm 29 in the life 30. Okay. All right.

So it may not buy an outright house, though, in Portland. Like outside of Portland. Yeah, well, yeah, well, it's just not a house you want. Yeah, it definitely will. I mean, it, a hundred percent would buy one.

But I'm not sure that you want to live in it. I want to live in it. Or he wants to live in it. Okay, that's fair. I'm not saying it won't buy.

I'm not going to say it won't buy a house. It definitely. You can find a property, a hundred percent chance. We're three hundred grand. We're not going to get none of us are going to like it.

But we could find one. Okay. Okay. Now we've gotten that established for real. Well, I mean, I'm, I'm, I'm still considered yet even if I don't like it.

So one thing that's interesting about this money is my folks want it split in a certain way. They want a, um, a title, title this, certainly when we do it. No, I'm not paying. No, I have to pay. Wait, wait, stop.

Why? Why? Um, attendance and comment titles. What they want to own. I don't know what that is.

Say it again. Why?

If attendance and comment titles.

I don't know why. How was it? Was there? So they could have it. It was happening to you.

No, between her and I. Between your wife? They don't like your wife. Oh, no. I'll pass.

“I mean, they've, they've done this for all five of us.”

They've, I've, siblings. And their ideas that not that they think it means going to happen. But if it was, you know, this is their mistake. They've worked for a long time to keep and have.

And giving it to us, if something was happened between us.

They wouldn't want some of that going towards, you know. Yeah. And a divorce or something. I'm sorry. I completely disagree with them.

And I would turn that gift down. If it requires that. If that's, if that's, if it gives this contingent upon splitting you and your wife. And to protect you from your wife and protect them from your wife. No, thank you.

They are now interfering in my household. They came across my threshold. No, thank you. I'll have to pass. And then I would not do that to Rachel and Winston in a thousand years.

And if I did, Winston would bow up and he would be right. One of that happened to me. I feel like I'd be pissed. Yeah. I feel like we just got mad.

Like, I don't know. Yeah. I don't like it. No. Nope.

Nope. I have about 47,000 invested in a brokerage account. And I just really want to get. If I were you, I would just start working my way out of that. Work your baby steps.

“You guys need the two of you need to get on a budget together.”

And you need to be on beans and rice rice and beans. Let's start paying off these $48,000 worth of debt with your 125,000. And then start saving towards the house. But you're going to, you're going to do it unless your wife bows up and she should. But you guys are probably going to do this, but you shouldn't do it.

This is bad medicine. Well, it's just bad relationship. It's bad emotional side. Yeah. It's not, it's not good.

You're insulting, you're inserting spiritual things into this. There shouldn't be there. These are, this is bad. Yeah. And sorry, Mom and Dad, you don't get that level of control.

Well, if you want my money, you have to get that way. Okay, I'll pass on your money then. You're not driving a wedge between me and my wife, not a chance. You don't have enough money to do that.

“And so, because you don't have enough money to be generous.”

Instead, you're still got your fingers and everything. And you can't let go. Ugh, control people. And all my siblings did it. Yeah, I'm sorry.

You get to be the first one to say, well, all the siblings didn't do it.

I didn't. There you go. Oh, man. Hey, George Campbell here, so you're thinking about buying or selling your home. It's exciting, but there's a lot to think about.

And all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence.

You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps towards your home goals, go to RamseySolutions.com/realistate. That's RamseySolutions.com/realistate. [MUSIC PLAYING]

The Ramsey show question of the day is brought to you by Wi-Refi. Out of control, private student loans can make a feel like you're stuck financially. But Wi-Refi helps borrowers explore refinancing. With low fixed rates and payments that make it sense for your budget. Visit Wi-Refi.com/Ramsey.

That's the letter Wi-Refi.com/Ramsey might not be in all states. Today's question comes from Allison and Alaska. I recently discovered my husband has been opening credit cards,

Should I put my home into a trust to ensure it cannot be touched by his decisions?

“All of our assets are in my name since I own them because I owned them before we met.”

And we both agreed that they need to be protected for my children to inherit. I fully understand the bigger issue of him hiding debt.

But first, I need to take steps to fully protect my children's future before addressing the elephant in the room.

Oh man, would it address, protect the home? I don't know Alaska law. In most states, if you enter a marriage owning a piece of real estate, you will exit that marriage owning that same piece of real estate. Now, then the question becomes, if he takes out a bunch of debt,

can they put a lean on the house that she owns because he's married to her. And in some states, they can. So in some states, they could lean. In the event, it's an unpaid credit card debt, for instance. It could become a lawsuit that would become a judgment against any real estate.

And his marital rights to that real estate in some states would be, it would cloud the title for her children.

“And putting it in a trust probably won't change that.”

You'd have to ask an attorney about all that.

Here's the thing. When we're talking about, and when I'm teaching leaders in small business, and we coach in our trade leadership, we coach about 10,000 small businesses. And when I'm teaching, for instance, business legal issues, from a business perspective, more than a legal perspective,

I remind those guys that contracts are useless when you are contracting with a crook. You can't sign a contract with a crook, and then yell later, I have a contract because it's not worth the paper. It's written on you've heard that saying. And the reason is, as you just did a deal with someone who doesn't have integrity.

And so you could put the house in a trust and according to Laskan Law, that could protect it. That's possible. But then he could just decide to sue you in divorce court, because you fraudulently did the trust without his permission. Even though you didn't, he could just make that crap up.

And you can make up crap in a lawsuit in any state. And just follow lawsuit and just make up crap. It's called pleadings. And so what you do just make up crap and follow lawsuit. And the only recompense the other party has is to spend thousands and tens of thousands and hundreds of thousands of dollars

to disprove the lie that was in the pleading. And that'll be coming out of her pocket. By the way, that's going to cost you the house and legal fees to defend against the crook.

So the problem is you can't anticipate the moves of a crook.

Except that they're going to be a crook. That we can establish. And now I'm talking about your husband. And so you can't fix this problem with a legal document. Ultimately, you might make it somewhat safer,

but you'll be under the illusion that it's done. And it's not done until the crook quits crook and until the husband quits being a jerk and hiding and spending like he's in freaking Congress and running up credit card debt. So you have to deal with the problem. The elephant in the room is going to crap on whatever you try.

So you got to deal with the elephant. Because a hundred percent chance you're going to have elephant crap if you don't. There's a hundred percent chance. And no matter what you do, it's going to poop on it. So I mean, you really have to deal with it.

So you got to go, you can't, you know, legal maneuver that makes this guy not be a problem. Except divorce. And he's not a, and he's still a problem until the divorce is final. And I'm not suggesting divorce. But I am suggesting that you can go do everything exactly right according to Alaska law.

And he could make up a big story and follow also. And you will spend the cost of the house defending it. That's my point. Can you tell that's happened to me? Yeah, and so I mean, people make up crap.

Okay. They just lie. And the course of the house. So I was going to get away with it. Yeah.

“So for you, Allison, I mean, honestly, yes.”

If you wanted to go and do it to make yourself feel better, that's great. But the elephant is in the room, just like you're saying.

Is the thing that it does in the past.

Oh, the zoo. It has to go get the elephant. He's lost. Yeah. Oh, my gosh.

Yeah. It's really sad. It's horrible.

“You're facing this, but you're trying to fix the problem without fixing the problem.”

And you can't. You're going to have to fix the problem. You got to deal with the dude. The dude is the problem. Not your legal structure.

It's going to be. Yeah. So you can't get a lot of time pack. Sorry, Allison. Yeah.

So an example of that is, okay, you do a will. And you do a full estate plan.

That doesn't keep someone from suing.

Yeah. It, they might not win. But by the time you finish paying them to win. But it may very hard for them to win. You can put a very detailed thing in place.

But by the time you finish writing checks to lawyers, so they can send their kids to Harvard. But by the time you finish writing all those checks, you ain't going to feel like you won. Although you won.

And so you're still dealing with, you know, entitled little trust fund, maybe brats who didn't get what they wanted. And so they sued the estate.

“And so the problem was not how the estate was structured.”

The problem was you raised entitled trust fund, baby brats. And so you suck as a parent. That's what that was. And so you got to go back and deal with the issue.

Because the legal system does not. There's not legal processes or systems that protect. The righteous. From being sued or from having to learn. I don't know.

But it will. I mean, that that stuff holds up in court for people out there to get a will in place. It does. You need to get a will. And it will hold up in court.

But if you have crazy, if you have crazy in your family. You might spend a hundred thousand dollars making sure that will is appealed. You might spend a hundred thousand dollars. But still do it. So yeah, do it anyway.

It's your only shot. But don't do that and say, this fixes the crazy in my family. Because you still hadn't dealt with the crazy. That's the problem.

You got to go to the root behavior when you're dealing with this.

“And so when I'm teaching these small business guys,”

I'm like, don't sign a contract with a crook. Here's an idea. If he's a known crook, the guy's doing cocaine. I'm kind of worried about him. Well, then quit using him as a sub.

Hello. No kidden. He's going to steal everything off your job site. Don't butt of he's doing coke. Hello.

Have some sense. You know, this is this stuff. I get all these questions on our trade leadership all the time. It's the same thing. So you got to fire the sub.

You got to get rid of it. Well, we got it. This is a great segment. We got elephant poop. We got cocaine.

We got elephants in there. We have mercy. There's so many metaphors here. Yeah. There's nothing else.

Now there's an elephant on cocaine. All of them. Oh, because I Allison's question. All poor Allison. Question of the day.

Poor Allison. So yeah, you got to deal with the husband. Does. Wow. If we could, you know what, we'd be out of business.

If the husbands would behave. We wouldn't have any callers. Money and marriage. That's a real. We wouldn't have any callers.

It's a real thing. Yeah, we'd have people. We'd be reduced to boring 401k questions. All tax in a state. It's a tax in a state law.

That's all we'd be doing in 401k. I don't want to invest in that. I don't want to get that. This is so much more fun. We've got elephants in cocaine.

It's just a lot more stuff in this question. It's a lot better. [MUSIC PLAYING] . You work your butt off for your money.

But your money's never going to return the favor.

If all you do is hope for the best. If you're ready to learn how to make your money work for you. Check out the smartvester program. Smartvester can help you find advisors who specialize in retirement planning, charitable giving,

advanced investing strategies, and more. Whatever your goals your pro will take the time to explain your options. So you never have to invest in anything you don't understand. Head the Ramsey Solutions dot com slash smartvester. The get connected.

Ramsey Solutions is a paid non-client promoter of participating pros. Learn more at Ramsey Solutions dot com slash smartvester. [MUSIC PLAYING] Well, we wish we could get to every call and question here on the show.

head on over to our website and use Ask Gramsey.

Ask Gramsey is our free AI tool that's built and trained on only proven Ramsey principles.

“So if you want to follow the baby steps and you want to know the details about any type of question.”

We've loaded three or four years worth of shows, quite answered into Ask Gramsey. We've loaded the books and articles into Ask Gramsey. And so it's going to sound particularly like one of us here on the show. Actually, answered your question.

And no other crap was led into the database. And so you don't have to worry about the artificial intelligence part being screwed up. Nope, it's just us and it'll give you the same answer. So ask your question today. It's completely free at Ramsey Solutions dot com.

Or click the link in the description if you're listening on a podcast or on YouTube. And you can ask Ramsey for free. Johnson, Boise, Idaho. Hey, John, what's up?

Dave, thanks for taking my call and Rachel.

I tried using Ask Gramsey on this one, but it didn't come back with an answer. Really? What is that? Plenty of issues. Well, it said unable to answer this question at this time.

Interesting. Okay. I can't wait to answer the question. It might have been the topic, but it's pretty simple. I've got plenty of data.

I've got a lot of issues. But specifically, I know you guys tell council not to do that consolidation. But you also tell us to be very wary and try to give rid of our IRS that is quickly as possible. So I owe about 20,000 to the IRS. And wondering if I should consolidate that or transfer that over to another lender and have the IRS paid off.

And I just deal with that lender. Yes. Okay. The interest rate will be better. And they have nowhere near the power to screw up your life that the KGB, I mean the IRS has.

And so the what you're paying in penalties and interest with the IRS. If far exceeds a credit card rate, far exceeds a home equity loan rate, far exceeds anything else. And I'm not suggesting this, but the IRS is not bankruptible and all other debt just about is. So if you got, if you did hit a worst case scenario, even it turns out better, but you're not going to be there. You're going to be your problem.

But yeah, I would move it. How much total debt have you got? Oh boy, here we go. Here we go. What the house, too?

No, everything but the house. Okay. 315,000. Oh, no. Let's see.

We've got 192 in one school on the sea. Let me do that real quick. We've actually probably got about 220 in school loans. My wife was as an attorney. Okay.

And she graduated recently, although we're in our 50s. Great. So she make them all your money yet. She is making government service lawyer money.

“Why did she take like a real lawyer job and get this debt?”

Because she's got this bleeding heart. She's looking to make it change soon. And so we're hoping for a good change in the positive there. Okay. All right, that's so we out.

I'll also keep you broke. Okay. And 30,000 is in a 435,000 and a 401k loan that I'm paying back. That's 10% interest paid back to myself. Lending club.

We consolidated some other loans. That's about 15 grand. My student loan is 13 grand. And when we got to do this, we get together. We make, we bring home about 10,000 a month.

What is she being paid? She is getting paid 80. She just got a raise to 90. And I'm getting paid 100. But I see only about 4200 a month after I have everything taken out.

So what is out of my paycheck comes in my 401k, maxed out on, you know, maxed out on benefits and everything now. This is coming paycheck.

This Friday is going to be my first paycheck without putting $1,200 a month into my 401k.

Okay. So what's the benefit of the debt?

“Are some of the benefits rip off stuff that you need to get out of?”

I don't know. I haven't dealt closely into that. Yeah. That's kind of crazy. So I want to find, I want to just clean that paycheck up so we can address this thing.

And get this masculine up. Yeah. Good. Oh, yeah. But yeah, I'll answer your original question.

“And that question, I don't remember answering it in the last five years.”

So I have answered it, but I don't remember. Let recently answering, well, whether I would refinance IRS debt. So it would not have been in Asgram, so now it makes sense why it didn't answer it. Because it wouldn't have had the data to do it with. So anyway, yeah, that's the answer. Yes, refinance IRS debt.

Because it's better interest rates. You don't have the penalties and they don't have the power to, you know, suddenly come start leaning accounts and everything else. If you non, folks for the year listing out there, the IRS can just place a lean. They don't have to ask a judge. If you have a loan with your bank, they have to sue you when and then ask a judge to place a lean.

It's a five step process and you're going to get like tons of paperwork at your front door by the sheriff before that any of that happens with the IRS. They won't even tell you. That'll just be money disappearing out of your checking account. You won't know what happened.

Because they have almost constant amount of power.

Not that often, but I have had it happen.

The clients and I had it happen to me when I was going broke. They just came in and just took money and I want, where's my money? We just took it. You can do that. We can do whatever we want. Yeah, apparently you can. Yeah. Be very afraid of your government.

Yes. So yeah, it's especially if you owe them money. That's the thing. Get them out of your life and that's a five percent of your situation, though, John. Ninety five percent is getting organized and starting to squeeze the juice out of everything here to be able to clean this mess up as fast as possible.

And get yourself where you're not broken, you're very wealthy. And then your wife can do pro-bonar work the rest of our life if she wants to help the hurting and not charge or something. That's cool.

“That's wonderful if you want to do that.”

You just can't be broken to end that with 300,000, 200,000 students on that. So you kind of lose your options for your heart to bleed when you do that. Yep. And I just got, I just did ask Ramsay because I was curious. Because we've answered that recently.

You have. Yeah, yeah, it's, yeah, I mean, it gives you an answer. Yeah, and it just, you have to, which is great about it. You could type, you know, it's asking me to have a $1,000 starter, and we'll just see if I can take you through the baby steps.

And then you get to it. And it made you jump some hoops. Yep. And then the apartment agreement. Yep.

Offering compromise currently known collectible. Yeah. It goes on one. Okay. All right.

There's plenty in there. Oh, oh. Okay. May it's been a fluke. Yeah.

Yeah. Might have been. But more often than not, but we do, I mean, I think we've gotten that question. A good bit with the IRS debt.

And the answer is to anyone out there.

“If you have a large amount enough that you have to put on a payment plan,”

that you can't pay off in 30 to 60 days. Yeah. The IRS is not an installment plan company. No. Yep.

This is not, um, Clarina. Yeah. After pay. Don't do after pay. Don't do after pay.

Yeah. Yeah. You want to clear it up as fast as possible. Because they got power. Well, I'm glad to know it.

Ask Graham. She's doing that. That's good. After I just did it. I had four.

And they got come up. Doesn't work. No, no, no. Doesn't work. Well, good news is it worked for Rachel.

Okay. So I had that. There we go. Yeah, John, but I hope I really do hope for you guys that y'all can get into a high-income situation. Knock this debt out.

And then you can, yes, spend the rest of your life with that degree that she has. And use it. But you know, for good and where she wants to, to have the freedom to do that. It's just hard to have that freedom when you have $300,000 to come to work debt. Yeah.

[Music] Hey, George Campbell here. We often talk about how being normal sucks when it comes to your money. But guess what? Normal isn't so great when it comes to your job either.

Normal is staying in a job you hate, dreading Mondays and working for people you don't even like. Sound familiar? Well, the good news is you can break free from normal because Ramsey Solutions is hiring. And we refuse to settle for the ordinary. In fact, we are anything but normal and we are proud of it.

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[Music] Our scripture of the day Matthew 1129. Take my yoke upon you. Let me teach you because I am humble and gentle at heart. And you will find rest for your souls.

Jim Rohn said formal education will make you a living self-education will make you a fortune. Scott's in Twin Falls, Idaho. Hey Scott. What's up? Hey guys.

I've been following you guys on my Facebook videos for a long time. So good to jump in. Well, thank you for that. I have you. Hey, I'm engaged.

Hey!

When you get married, you're pretty.

It's super excited. And there's no, or sorry, it's a timber. And there's a timber coming up. Hey, good to hear. Thank you.

So listen. Mike Yante on the house. She's got three kids. The house is the house where the divorce went down all the, you know, the bad stuff. I guess that led us here.

And so we are now trying to make a decision on what to do with this house. And the realtor is recommending a short sale. I don't love that idea, but I'm just, I guess trying to decide whether to take this financial hit now for kind of a clean break, fresh start, or preserve cash. Stay put here temporarily while we stabilize, even though that will delay sort of this,

I guess breaking free of that baggage. So anyway, if it loves me. So she owes more on the house than she can get for it. Yes, sir. Yes, sir.

Anywhere from 25 to 40 issues, what the realtor is recommending. And the house is obviously in her name. Yes. And does it have the ex on it? Um, I believe that the ex is on it.

The ex has got medical issues out of a job right now.

We're basically considering him is.

No. Does he have to sign to sell it? Oh, yeah. He made. Yeah.

Yeah. And if he's on the deed and he's on the mortgage, if you're going to do a short sale,

“he has to sign that he's not paying his bill, because that's what a short sale is.”

So a short sale is like a voluntary reposition. Okay. It's like turning in a car on a repo, and not paying the difference. So if you do a short sale, or if she does a short sale, you're not involved. Okay.

But if she does it technically, if she does a short sale, make sure you remember these words. It is without recourse without recourse. And then what that means is they can't come after her for the difference. Okay. That 25 or 40, they're accepting that the houses, if they foreclose on it,

their analysis tells them the mortgage company that if they foreclose on it and resell it after foreclosure, they're not going to get any more for it than they're offering than you're offering them. Okay. You see what I'm saying? Nor is if they go through all that, and they lose 45,000, or they accept a buyer's offer,

and do a short sale, they lose 45,000, that's their analysis. If they think they can take it back and sell it for enough to get all their money, they would rather foreclose than take a short sale. But that means that the house is worth more than your realtor says it is, and I doubt it. Right.

“Why is the house going down in value in Twin Falls, Idaho?”

I wouldn't think that's the case. I don't understand it to be honest. I'm trying to get to the bottom of it. Is there something wrong with the house? The house is fine.

I suspect that there was some mortgage payments not being made. Yeah. I'm still trying to get to the bottom of it. I feel like there's details on missing. $45,000 for the mortgage payments not made.

I doubt it. Yeah. The thing is, Dave, I've got-- I've been saving-- I've been following your principles. I don't have any debt.

I have money set aside that I've been saving up for a house payment myself before she have debt. Other than this. Only a small student alone, a 5k, which I'm expecting to just kind of write off as soon as we go together, and we better car.

Yes, sir. And you've got to pay off the car, OK? Yes, sir. If you're going-- I'm debating on doing that.

You know, I paying it all down right now.

and still not be shed of the X because he's on everything.

Or you can let it be. Let her do a short sale before you're married. Mm-hmm. But she's going to have the equivalent of a repo. Her credit score is going to disappear.

No, you wish you would disappear. It's just going to be very low.

“And would that be a problem when they go to buy a house?”

Yeah, it's going to be a problem when you get ready to buy something later. Could I not do it my own? Probably. Probably. You probably can.

Depending on how to hold on. Yeah. Great. And she probably has marital rights even if she's not on the mortgage. So you could talk to Churchill mortgage and they can tell you,

you know, if your spouse has a super low credit score in Idaho,

and you have the money and a good score or no score in your case, it'd be a good score. Then, you know, can I qualify that way and get a house? I really, I think this lady and these three kids needs to need to physically be off of that site.

Yeah. I agree. I think I heard you say that clearly between the lines. And so I, you know, at based on their emotional well-being and being rid of the medical, the guy with medical problems,

which that can mean a whole lot of bad stuff. I don't even want to get into. Yeah. I'm going to ask her. I'm going to ask her to put this house on the market and get it sold.

I will tell you that the short sale is a long and arduous process, though mortgage companies don't forgive debt easily. Right. They're going to want to praise us. They're going to go.

They're going to drag us thing out. It's very difficult. And real estate has appreciated in most areas enough, that they don't do many short sales anymore, so they're not as adept at it as they used to be,

like back in 2008, everybody got to be experts on short sales. But, yeah, it's where the bank agrees to accept a price that yields them less than they pay off, and they eat the difference if you do it without recourse. For God's sake, there's no point in doing it with recourse.

I'd let her be foreclosed on before I did it with recourse. Because then they, that's the same thing we've got to do. I'm going for them to agree to.

“No, no, they pretty much, that's what a short sale usually is.”

Yeah. But just make sure they don't forget to put that in there. Yeah. Yeah. So that, yeah, wow, interesting.

All right, Josh isn't Canada. Hey, Josh, what's up with you? Hey, Dave, thank you so much for taking my call. Sure, how can we help? So I'm wondering if I should quit working for my family business

and work on my side business that I had started to get out of debt. My wife and I are in baby step three. And I was just, it's, it's. It's taken off more than I ever expected it to. How long have you been doing it and what are you making?

So I've been doing my side business for about three years. I've started taking it more seriously. This year, when we decided to just completely knock out the debt. Currently, it's making about ten to twelve thousand dollars a month in profit. That's just before taxes go.

And I'm making about 90,000 at my job working for the family. Business. What is your side business? My side business is automotive and commercial residential window tinting.

So I just go to people's places and tint their windows basically.

But it's, it's great margins. And it's just like I'm already booking three weeks out at this point. And you are good. And I'm like, oh, what a go. I'm proud of you.

Yeah.

“So what are the relational repercussions when you quit the family?”

I don't know what you're doing. When you're leaving the family. Some of you. I feel like they're going to basically cut off the relationship with me. Wait.

Some things are real, but some things are real. I mean, yes. You think the type of thing? Something something. Yeah.

The reason being my brother left the business. He was in it for a bit left the business and he had moved away. There was problems on his part two. He didn't do it like their same way. But anyways, yeah, he left the business.

And now they don't they just don't talk anymore. Part of that is mutual. But yeah, it's just kind of a he doesn't exist. I would give them a long run way of communication. Yeah, don't make it.

Yeah. Just go, hey, dad. I'm making 90,000 over here. I'm probably going to, or I'm making a $10,000 a month. I think I'm going to go this direction.

I need to know how I can do that and help you guys and be a blessing to y'all. If I need to put six more months in here to help y'all will. But I'm probably not going to be here a year from now. So let's talk about how I can do that and be a blessing to you, dad.

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.