Don’t Let Others Control Your Future

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm George Campbell, joined by the Rachel Cruz, and we're taking your calls at AAA 825-5225. And we'll talk about your life and your money. Kurt is going to kick us off in Minneapolis. What's going on, Kurt? I've got a question for you. People regarding purchasing of new vehicles. As you know, manufacturers sometimes offer up a 0% financing for 48 months, sometimes longer, whatever. In our particular case, we're looking at purchasing a new vehicle in the future here. And are wondering if it's wise to take that 0% financing or to withdraw the cash and pay full for that vehicle in cash. And for context, we have no debt. Our vehicles are paid for and we hang onto them for a number of years. And so I just wanted to hear what your thoughts are on something like that. Yeah, it's a good question, Kurt. Well, the short answer is, no, we would recommend still paying cash for your cars. And it's for a couple of reasons. Yeah, the 0% financing can feel like a great deal, right? Because part of us avoiding debt is paying that interest on top of something that's going down in value, right? And in this specific situation, you know, it seems like you can skirt around the math. But the problem is, if anything happens between when you get the loan and you pay it off, at any level, what all the fine print is and all the fees and all the back interest that could build up is there. So there's a risk associated with it there. And then there's also the side of debt that we just see this progression moving forward with your money when you own something outright. And you don't know, even if there's not interest, it's still this emotional tie to something that you have. It's not fully yours. And so you're still making payments. You're still kind of living in that rear view mirror mindset financially versus just being done with it. And, you know, we just talked to a lot of people who have built wealth, who are baby steps millionaires and beyond, right? And they, they don't ask these kind of questions usually. Like really, you know, if you're, if you're going after wealth, you're not sitting there splitting hairs between interest rates and all of that. You just kind of simply ask, can we afford, can we afford the car or not? So if you have the money for it, Kurt, yeah, I would just cash it out and be done with it. Be done with the purchase instead of kind of tip-toeing around and trying to play this mathematical game because debt. Sometimes the toll on us is not always about math. What kind of car is this? Well, don't know yet. I'm not brand loyal or anything like that. So, you know, it'll be a mid-sized SUV if some kind probably to replace one that we have, which is at 2015, that we've, you know, had for a number of years. And again, paid off and all that. And so we just, you know, thinking of what we're doing here in the future. You know, we're both retired. We tired early. Both retired. What's your net worth? Probably 2.5. Oh, correct. For you guys. And you've got a ton of cash just sitting there and savings ready to go for a car purchase like this? Not a ton of cash that brings a little bit of a twist into this. We have cash sitting available for expenses and things like that. However, if we get the cash, we would have to sell some investments, which then is a tax, potential tax issue with us too. So we have to look at that as well. Yeah. That's one factor to look into depending on what bucket you're taking from whether it's cash, taxable brokerage, a traditional account, Roth. And so the other piece to think about with this card is that 0% is not free. There's no such thing as a free lunch and the house always wins. You've heard those two things. That's why I don't go to Vegas. Exactly. And that's why I don't go to car dealerships because number one, you almost never qualify. So they will push this 0%, but only the top, top tier credit folks will get that. And it's not really free because the manufacturer builds that 0% cost into the car. So you're paying full price, MSRP, zero discounts, no rebates. And so you're actually kind of getting screwed on the purchase price while feeling like you got a deal at 0%. Sure. I guess I didn't enter that angle. Yeah. When I went to the dealership, I said, hey, here's how much I have in cash to buy this car. Here's the check. And so that's exactly what I went in going with. And they ended up working with me to get that price lower. And so that alone saved me way more than any 0% financing deal would. And so I don't want you to give up your buying power and negotiating power, all for their fine print of 0%, which is very short terms only. So you're not going to make that much of a spread, even if you hung on to that money. So I would just go, if you're not comfortable using that amount of cash to buy a car, it's probably too much car for you guys emotionally. Yep. Got it. So that's a good way to think about it too. But I think you're on the right track here. I just don't want you to get. You've done so well to be completely debt-free. $2.5 million net worth. Yeah. Just go buy the car. It's not worth the brain calories. Yeah. Well, that's a good way to look at it. We've been blessed and worked hard over the years invested. Well, had a lot of dumb luck. I always, you know, the difference that how did you do it? Well, we had some dumb luck. And I really did. On top of your diligence, sometimes they go hand in hand. On top of our diligence, yep. The harder I work, the luckier I get. Really had dumb luck with Roth IRAs actually worked out really well for us. Wow. That's not dumb luck. That is being pretty strategic. Well, the dumb luck was when those first came out, I was working. And we had a chief financial officer that talked about Roth and what kind of poo pooing him. And I didn't really like the guy. So I thought, well, if I don't like you, I'm going to do the opposite. So I just ingesting heavily in Roth as did my wife. So obviously, as you people know, when you take that, you take that income tax free. And then that, of course, reduces your taxable income. So you can do some other things, just some other advantages there. So, you know, we take a blend. We take a blend of qualified and unqualified account for income and live comfortably. And are able enough, you know, comfortably enough to still do things with our adult kids. And take them on trips, you know, once a year or so. I love that. And remember that's what the bill for that. Although we do require that they buy dinner one night. Hey. Well, hey, you're living the dream, Kurt. That's a lot of people. Yeah, you've done really well. That's on their list that they always say. They're like, I just want to be able to do X, Y, and we hear that all the time. I want to be able to take my family on a trip with the grandkids and all of it. And so, yeah, you're living the dream, Kurt. Well done. And I'm going to say maybe some luck in there, but also maybe some awareness of other people's character. And you would choose to do the opposite of their advice, which I would say is not done luck. I think that's pretty wise on your part. That's true. And a good reminder for our car buying parameters. Number one, always pay cash. Number two, make sure the total value of all things, wheels and motors in your life adds up to no more than half of your annual income. So if you make 100 grand, no more than 50 grand tied up with those things. And then the last part of this is don't buy a new car unless you are a net worth millionaire. Because the depreciation on it thing, you can't take that hit unless you've got a sizeable net worth to stomach it. And luckily, Kurt is in that spot. He's retired $2.5 million net worth. He has the cash to do it. And so, this might be the first brand new car they ever buy. And it's worth it. Yes. Okay, so tell me this, George, because you said you showed up with the check. Yes. Jade has an opposite approach. She does not tell them that she's paying with cash. Oh, I didn't do it upfront, but eventually they do ask. Oh, okay. Yeah, they will ask, yes. But sometimes we have found if you actually lead with that, they sometimes are a stickler because they know they're not going to make as much money off of you. Because they make so much more when you actually finance. Yeah, we finance the vehicle. That's when the car dealer makes more. I've even heard where they'll charge you more. They'll say, well, that online price was only if you were financing. Yes, yes, yes. And then I go, okay, I'm going to take my business elsewhere. That's right. Yay, yes. So sometimes being strategic about how you're even going to pay toward the beginning of kind of the negotiation and the looking on the lot. Something to think about. Yeah, the thing that I always land is the out the door price. That's the word you want to say. Land the out the door price before you ever talk about payment. And you don't have to lie, but you can just say, well, once we figure out the out the door price, we can talk about payment. How are we going to pay for it? Yeah, exactly. That's it. That's simple. And it's that difficult because those dealerships, man, they're trained to sell. They are trained to get you to finance. And if you're not going in strong with the willpower to walk away, they'll sway you will lose. Yes, they'll sway you for sure. All right, let's go out to Michaela and San Diego up next. What's going on, Michaela? Hi, how are you guys doing? Great. How can we help? I am very sorry to talk to you guys. I have a question. How do we prepare and plan a six month emergency fund for our family? When our situation financially is constantly changing? What's changing about it? Well, we are military. So our BAH, I talked to Rain the online. And they're like, you need to have your BAH in there. Well, the thing is that adjust by rank and adjust by location. So we're up for three moves. And because of that, it's about a $20,000 difference between each location. How much would have to have saved up? Is there a way we can not shortcut it? But I hate to have $20,000 just sitting there. Well, we're going to be over here in like another year, so you know what I mean? Yeah, how often are you guys, you said you're up for, how long is the renewal for? Um, we will be moving three times in the next year and a half. Okay, it'll constantly be changing and then we're settled for about three years total. Okay, okay. Yeah, because the purchase of the emergency funds obviously is to cover anything major that's happening in that three to six months. It's a, it varies. So if you guys have six months, maybe there's a season where you go down to three, because you know, you're going to be moving in four months somewhere else, right? Like, I mean, so, so I would be comfortable with that. I think within that range and it's again, it's really there to protect the big stuff. The, an unexpected, you know, medical events, a job loss, right? And I would assume you guys are pretty job secure where you are. Would you agree? Yeah, yeah, we're pretty job secure. Um, the issue that we're having, I guess the corrects of the whole question is for our family living here in San Diego, because our housing takes care of everything for us, our personal emergency fund, including our out of cost deductible for insurance is about 14 grand. But if we include our housing allowance, which is what online is telling us to do, it's about 55 grand. So do you see like, and then it increases as we move, or might decrease dramatically as we move. So is there a way to account for that fluctuation? Because I hate to have money just sitting there. I hate to say just sitting there. Well, I don't want you to think it's sitting there. Really doing nothing. This is an insurance plan. And so it's not investment. It's okay. If it's not in the market, we always recommend a high yield savings account. That way, at least it's growing, you know, the rate of inflation around three percent. But you're not letting it just faster in a savings account, making zero either. And so don't think of it as I'm just wasting this money. It's sitting in this account. That's money that's helping you sleep better. And at major. Yeah. So what would just make you feel good? If you said this amount of money's in there, regardless if you need that much. My gut says about 40 grand, because that would cover where we eventually want to settle down. So if something were to happen, he would have this position. He was just a job in the Navy. We would have enough rent to cover six months in the desired location. Perfect. How much do you have now? But I just didn't know. Like, can we just stop that there? Well, we thought we were done, maybe set three. And then we consulted the AI. And they're like, no, you did the age. So we have about 14 grand in there right now. So by the end of next year, or by the end of next year, it'll be completely fully funded and then some great. I would just lean towards that higher number and not fluctuate every time there's a move. We can take it down. We can take it up. Just leave the 40 grand in there. And it's okay. If it's making 3% and it's letting you sleep better at night, and you're not worried about what the next move is going to entail. And what if, what if I would just let it sit there? No one's ever regretted having too much. It's when they don't have enough. That's a problem. And honestly, you know, a lot of people's problems. They look up. They do their emergency funds. They go on with the baby steps. And then they look back and they actually just happen to win tonight. And we're like, gosh, we probably should we should we should fill that a little bit more because our life has gone up, right? And so almost, you know, having that 40 grand for you guys that feels like a high emergency fund. Yeah. I mean, six months, depending on your level of income, isn't it really high? Well, that's, you know, six or seven grand in expenses, time six months. We'll get you there. Yeah. That's not outrageous for today's world. And in San Diego. In West Coast. Yeah. Yeah. Some people are going, man, I wish my expenses over six grand a month. If you don't have debt, that also helps out a ton. Yes. But I'll have to say, you guys could have this funded. And then who knows what life looks like in five years, you may not even have to fill it up because you guys have just set it there and let it be. So, yeah, I think with the amount of change that occurs with you guys, especially, I think you said in the next year or two, I think just good to have that buffer. And then if something comes up and you need to use it, it's there. That's right. And again, it's an insurance plan and that you're transferring the risk. So now you're, you're not having to carry that. The emergency fund is carrying that for you. And another type of life insurance insurance we talk about is life insurance, which you're transferring a different risk of your income. And people fall into two camps on this one, Rachel, the ones who make a plan to protect their family or the ones who just fingers crossed hopes everything will work out. And that's not a strategy. And chances are, if you're watching this show right now, you're the kind of person who wants to make a plan, who wants to love their family well. So when you get married, you have kids, your money decisions aren't just about you anymore. Your income helps keep the lights on, pay the mortgage and put food on the table. And if something happens to you, you got to wonder, is my family protected? Or are they going to be in a lurch? Yeah, that's right. And we really recommend people getting 10 to 12 times their annual income, usually with a 15 or 20 year term. And again, you're thinking, you know, if you're, if you have kids at home, you know, if your mortgage is paid off and all of that, eventually, you can get to a point in your financial journey where you become self-insured. But until that point, which usually takes people a good bit to get to feel safe there. That's why a 15 or 20 years is there is exactly right. So by the time it expires, hopefully, if you're following the range of plan, you'll be self-insured. And so once and I have term life, you and Whitney, I know have term life. And especially you guys, if you're younger, it is inexpensive. It is something that, I think it's one of the biggest regrets if you don't get it and something happens. And we've taken those calls, which is just, it's devastating. But what we love is Xander insurance because they're an independent broker. So they're going to shop all different companies to really get you the best rate. So if you want an instant quote in just minutes, go to zander.com or you can call 800 at 356-4282 and get your family protected with term life insurance. It's a really important step. You guys, so again, zander.com. Let's go out to Alicia in Asheville up next. What's going on, Alicia? Hey guys, how are you doing? We're doing great. What's going on with you? Good. So I'm calling about two months ago. I found out that my husband worked up probably about $87,000 in credit card and personal loan debt. So wow. He was day trading with Robin Hood and I just found out about it. How'd you find out? I'm sorry, Alicia. Oh. So I, we were putting a trip to this world and, you know, we've had our finances separate. I know that's bad now since I've been watching the show. I've had a gut feeling about, I just had a gut feeling that someone with all of that asked him like, what can you pay? What can you do to contribute to the trip? And he was just kind of, I don't know, he was kind of dismissive. And so I finally asked him like, what's going on? There's some red flags here. And then I found out about all of the debt. I have all the logins, all of the accounts now. And so I found the debt. So he eventually told you once he started saying, hey, what's really going on here? He said, hey, I've been using this app, Robin Hood. I've been day trading and I racked up all this debt. Did he tell you exact amounts? Nope. He at first it was $45,000. And then when I got on his credit corner, I found all of the accounts and I went through spending and it finally came out to the total amount. At the 87,000 is just a debt. So he spent far more than that, but he's just in the hole by 87 grand at this point. Across personal loans and credit cards is how he did it? Yeah, yes. And he depleted his previous 401k and his previous employer. And he's taken about 18,000 from his current employer. So he's happy to pay that back. Took it from his Rob 241 case. His old one in his car. Okay. Okay. So where is he at right now in this? He's got my second job. I am the high earner here. So it's very difficult. I've tried to look for work but I can't compete with, you know, it's hard for me to find a job. I'm a pharmacist and I'm in retail at a clinic. So I can't go out to my CVS or Walgreens and get another job. I don't know that income is the number one solution right now. I'm all worried about his gambling addiction that he hasn't called out yet. Yes. Yes. So he's in counseling for that right now. We have he has separate counseling. We have counseling together and I also have counseling. So we've already started that. I'm watching his account. He just told me basically that he got an overhead and he just was trying to pull himself out and they've kept getting worse and worse. Yeah. And there's probably a reality to that for sure that I we see that a lot. And then what George said is true like when we see, and it is, it's the number one addiction by like a hundred fold is now gambling online. It's this kind of stuff. And so he is, you know, sadly, you know, walked right in to a trap that so many, so many people are dealing with and it's very, it's such a sneaky addiction because like what you just said is what we hear all the time is well just give me one more chance and I can and I can and I can get I can make more. And we different this time. Yes. And so you see it and you see the spiral happen. And so so yes, so for you guys, I think keeping your accounts separate, are they still separate? Good. Yeah. Which I would I would recommend at this point. And really, you guys figuring out a roadmap to rebuild trust together because the redemption on the positive side of all of this is after his awareness of what's going on within him, you know, getting even in GA, you know, like, whatever tools he needs in life to really overpower this is going to be so big and the positive, you know, the redemptive side is that he does get control of this and you guys then eventually do merge everything and you become one with your money, you get out of this debt and you guys run off into the sunset together and do you know what I mean today and it works. But until you have some really serious changes in him, I would still keep it separate and I'm curious how much do you make because you said you are the high earner. I make 150. Okay. Okay. And he makes probably 42. Okay. Where's his money going? Where's it depositing into? All of his loans into one account. He, I mean, he has probably $600 leftover from his earnings. I'm paying all the bills right now, which I used to have a lot more money left over now. I don't. And so I'm trying to navigate how what debt I pay all first because I've got a lot of student loan debt. How much debt do you guys have total? So he has 87 right there. What else is there? Probably about 511,000. We have our home of $225. Oh, that counts. I have student loans. I have to loan this like 156,000 but I do work for a non-profit. So I am on the public to get my loans re-paid off. How far are you into the process? I'm only three years. So I still have another seven years to go. That scares me a little bit. I know. We're hanging onto a lot of hope on the other end. The question to you is like, what do I do? Do I start throwing money at that? Or do I hope for forgiveness and start with another debt? No, I mean, I would not hang on to the idea of the student loan forgiveness because number one, seven years is a long time and you're changing your career. What people end up doing is not taking a better job. They hold on to a job because they're looking at $200,000 of student loan debts to be re-paid. It just limits your options in life. Personally, I'm like, who knows what the government's going to do in seven years? They change their mind. I feel like I'm so much. So to hang your hopes that it actually is going to happen, that's not where I would put my hope. I'd put my hope in you guys, Alicia. I would put my hope in. You guys working your way out of this and you put your future in your hands and it's not being lent out to the government out of all people. Right? That they're going to fix the problem. I think so his paycheck is just going straight to his loans to pay off that 87 is what you're saying. That's just a minimum payment. It's not really making a sense in the overall. How many loans are there? Did he have 14? 14. Okay. He has about seven personal loans and seven credit cards. Okay. Have you guys pulled your credit report? Yes. Okay. Have you frozen your accounts with all three bureaus with those? Yes. Okay. Because the part we need to watch for now is the boundaries to make sure that we don't bump into anything along the way, going to any further debt. So blocking all access, I'm guessing the Robinhood app is long gone, deleted account shutdown. Yes. Okay. Yeah. Okay. I would definitely attack this with the debt snowball method and your marriage healing is a huge part of that process. That would be the priority here. And then on top of that, we're going to work together to attack these debts. I don't want you to feel like it's all on you and he's got to pay off all of his debt. I would just make this a big pile and say, we're a team. All of this money is going to go towards debt payoff. That's the goal while covering all the bills. And by the end of this, you might be three, four years from now until you guys are completely debt free from your consumer debts. Okay. Yeah. In Alicia too, I would be and you probably are with your counselor, which I think is great. But in situations where the spouse is the one that ends up from a tactical level, being the thing that kind of cleans up the mess from the other spouse, you know, resentment can build, you know, which is human, right? I mean, like there's a lot of emotions that will go in this process that actually, as you process them and not suppress, but you actually get it out and having a third party like a counselor is such a good place to do all of that to work through that healing. That's going to be part of the healing. So I want you to feel all the feels and you know what I mean, be as pissed as you need to be because it is. It feels like, oh my gosh, this, this is not right because it's not right. It's betrayal. I mean, you've all trusted him. Yes. Yes. So that's right. So all like all of that is so cleansing honestly because like what George said in three years, I'm I'm praying from the emotional standpoint you guys are healed from a marriage perspective. And then financially, you know, I think you will get there. It's just going to be a day by day fight to do it. But yeah, I hope there's a I hope there's a road map, a very clear road map for him to rebuild trust with you because that's what he's going to have to do. And those actions coming up will be dictating how that's going to go. And if he's not willing to change, that's a separate discussion, but it sounds like he is willing to change. There's actually remorse here. And Rachel's the number one reason young people are always asking, what's wrong with Robin Hood? Why do you guys hate on Robin Hood? This is why yes, it is a form of the fidelity and vanguard account are not going to be pushing trading on you. I literally took a screenshot of this Robin Hood ad that showed up on my feed. Bitcoin is moving. Will it finish above or below trade the next 15 minutes on Robin Hood with 15 minute contracts now in your prediction markets hub. They don't care about your long-term wealth building plan. They want to take your money now with urgency, with day trading, with crypto, and it's why I rebuke all things Robin Hood. They don't have your best interest at heart. No, it's a short-term hit, just like any other medicator in life. It plays right into all of that, plays right into it. And people walk right in, you guys. And it's not worth it. It is so, so dangerous. So, Alicia, call us back if you need anything else because we're cheering for you guys. I really pray on the other end of this, you guys have such a stronger, more intimate marriage and financially that you guys are on the same page and you're working together. That's so tough, so tough. Well, you know, George, one place though, we nixed Robin Hood for sure, but one place that we do trust fully and somewhere that we do put our money is with Fair Winds Credit Union because it's really tough to find a financial institution that is for you. And they want you to win. They want to see even the Ramsey plan have progress with their customers. And that's when we love Fair Winds. Exactly. And I'm a consumer advocate. I like to think. And so I hate when, you know, banks are charging all these random fees and they're like, why do they, why do they charge me this? Well, Fair Winds doesn't do these nuisance fees. In fact, they got rid of something after watching my channel. There's some international transaction fees and they're like, let's get rid of that. We don't need any of these fees. Let's help the Ramsey audience win. So they're not going to push debt products on you. They have 10 different high yield savings accounts. You can open, so you can have different funds for all kinds of things, a no monthly fee checking account. And of course, I've got my custom debt is normal, be weird. Fair Winds debit card right here. Well, I've got my live like no one else. Do you see this? Yeah, that's the new one. This is the new one. Live like no one else. So that way every time you use this card, you're reminded about the goals. You're reminded about your own values. You're reminded about the end game. And so Fair Winds can help you do that with their smart bundle. Go check it out at Fair Winds dot org slash Ramsey. It's insured by the NCUA. Let's go out to James and Fresno up next. James, what's going on? Oh, thank you for taking my call. I appreciate it very much. Sure. I got a situation. I'm coming. I'm in a jam here. I'm I'm 60 years old and I don't I don't own a home. I don't have any debt. I started listening to you guys about six months ago, which I really enjoyed your show. And I did discover that I had to start off with square one in my life. So I started from the basis. And I'm trying to save up a emergency fine. And I've been doing okay with that. But tying and religious funds in my life as well. But my question is, do you think I am eligible to retire for my job? And I'm thinking, if I want to buy a home, should it be best to retire and try to find another job to supplement to add to my income? Do you have any any any retirement coming out of this current job? Yeah, but I don't have any money saved up, but the job that I'm working for, I look for the state. So I have I've been working for 27 years. So I have a pension if that's what you're saying. Yeah, but I don't have any money. I don't have anything saved up like on the side. Other than I'm trying to build an emergency fund. Okay, I do have a pension. Yeah, I'm eligible, I'm eligible to get a pension if I do retire. what would the pension look like if you were tired today if I retired today supposedly and I was going back and forth with with with the countersus with the company is and they were saying I'll probably bring home maybe a couple of hundred dollars more than I made which right now bring home seven thousand and then I'm supposedly to get a two percent I guess cost eleven grades every two every year and they're anywhere from two to four percent I just you know I listen to you guys talking about home ownership is really good and to me see right now I pay I rent and I pay twenty one hundred a month so I don't know where now I think that's right in that area a little bit higher than one for what I take home sure but you're saying you could leave your job still get that seven thousand plus a month go work somewhere else and that'll help you bolster the emergency fund and save up for a house yeah you know and I've been praying about it man because like I said what's on paper what I see is totally different and this is from I'm here from other people in the same situation doesn't retire this at eight if you retire you know they're telling me this but I'm type of person I need to go down and check it out for sure oh yeah let's cross those to use another eyes not just one person told me the supposedly one of the last of the few that's at a 3.0 at 50 and be able to retire with 100% medical because right now they changed it about 2013 where now if you work you have to you know you it's 2.5 you have to do 30 years well I'm grandfathered in at 3.0 at 20 years so technically I could have retired at 51 whatever so if you keep working is there any benefit to the pension that's the question I've been trying to figure out I keep thinking that because of the 3% that and then whatever additional raises the space throws at me throws at us right now you would say the economy is not the best but at the same time everything is calculated as we get raises and and I suppose you know I mean now we part of my homework is yeah figure out if you're going to get more pension as you stay longer because the goal right now is how do we fill up the emergency fund as fast as possible and save up for a house as fast as possible and I hope there's a job on the other side of this but what if it's hard to find a job that you know making decent money that you were doing exactly is that and then I'm not the type of person listening to you guys for I'm into this cash paying things so that's like if I if I can't get it I you know and if you look at my numbers now it's just like it says me my wife my children are grown they got their degrees and that thank God for that I've been blessed to live here for a while but you know do you like the job which you keep working at if without money being a factor would you be like hey I'm ready to be done let's visit this way I'm in a good I'm in a good position to where I mean it's it's yeah I like what I do I would but when you look at I could probably work somewhere I mean California so I don't know even if I took the base and set minimum wage and I did for you know full-time I can at least bring home $2,000 more on top of what I'm doing yeah you know here's what I would I would just like go up high I don't like to add stuff in until it's like you know I would just start applying for jobs and if you get a great one that's sort of your ticket to go all right I'm out I know I have a guaranteed pension of over seven grand plus I have this new great income but I wouldn't I would get the boat close to the dock first yes a hundred percent but man if you could go replace that and bring in 14 grand where he's that that emergency fun gets filled up and then you know you can find a condo for 300,000 probably in Fresno the I think the median home price that area is like 450 so you think you know find it's just a great one bedroom if that's what you need or two bedroom just to be a homeowner get your foot in the door right I mean after a year of savings you could have an amazing like if you put 7,000 away a month for example if your expense is low and just sock away 10 months you'll have you know 70,000 for a down payment which will be great you know so I do think that that pension's amazing so if there was a way to get that and then be working on top of it just just till maybe 65, 66 like another you know five six years you can make massive progress to be able to do that I love it thanks for the call I know James you're a newer listener and so if any of you are new around here one thing to know is that we answer every money question through the foreign framework of the seven baby steps so we're talking getting out of day getting the emergency fun in place before you invest so if you're not familiar with the baby steps check them out at the link below in the description that'll help you follow along let's go out to George and Dallas Texas up next George welcome to the show hey those are the things we're taking my call sure what's your question I am a international student I graduate in December they do not yet have open tea and I have student loan debts from a private lender and I was wondering if I should pause payments which I have already right now continue to defer until I graduate or you probably should start making payments so that I don't need as much interest when I do graduate in December so you graduate in a few months and do you and you have enough that I guess this semester's been paid for already is that right yes and this is covered right now okay perfect and your student loan total is will be what when you graduate 70 70 okay what's your degree in cybersecurity oh good for you okay and will you be when you're looking at job the job market on average you know probably what your entry-level job in that field will be yeah entry-level probably been around 80 to 90 okay but the thing is I am an international student and two things need to happen at the same time for me to get a job okay which is OPT and then get a job that's willing to use my OPT for allowing me to work so it's going to be more difficult for you likely at the moment yeah yeah well the problem with these private student loans is that the interest is adding up every day even though they're in deferment have you checked in on the fine print on that yes it is yeah so that's my fear if you just let these hang out well they're not requiring a payment you're going to wake up in the 70s going to turn into 80 and so if you have income right now and you can throw some or even make the minimum payments that's going to help keep the interest at bay so what is your current income if anything I'm only working on campus which I make 15 bucks an hour and I'm only allowed to work 20 hours a week so every month it's around 12 1100 if I don't work as much and what are your expenses every month my expenses are covered by my siblings okay good so that is that money you earn is that money you could be throwing at the debts no the only money I could do with the debt is 1200 a month yeah so do you have more upcoming payments for the next semesters no this is my last semester yes done in December perfect so if you're done then I would start I would start now because I'm like federal loans obviously where the answer ever nothing really starts until you graduate these private student loans yeah just what you're just saying they're continuing so any money you can throw at it do you know how much the interest payment is a month have you looked into it I think it's maybe 600 bucks right now okay so yeah so I mean I would be that would be my my minimum what I would do just to just be paying the interest to keep it keep it there but yeah anything that you could throw at it today to answer your question is what we would do especially when you know you have income coming in because I don't know if there's going to be a gap between once you graduate you're not working on campus and you have a job so I would use the money you know you have coming into at least attack the interest plus some of the principle and that way you have less of a mountain to climb once you do graduate best of luck there man that's a tough one well if you are watching the show and doing your best to budget work the baby steps every major expense people are looking at and health care George is one of those biggest ones that a lot of people pay for and so that's one reason we recommend Christian healthcare ministries because CHM is not insurance it's a health cost sharing ministry and that means that members pay each other's medical bills and they have been serving Christians since 1981 and their program started just a hundred and fifteen dollars a month and it does matter because if you are paying more than you need for health care that money could be going towards paying off debt or investing or giving or spending or anything in your life just that freed up margin that's huge I just saw video actually it was a primary care doctor who said they're insurance because she self-employed was like forty thousand dollars a year oh my god and so because of that they switched over to one of these health cost sharing ministries to lighten that load so this can be a great option for a lot of people out there so and here's something really cool they're not raising their prices this year which is huge in the health care world right now if you know what's going on you get to choose your health care provider no network limits and right now new members can receive a fifty percent credit toward the first month membership go to ch ministries dot org slash budget use promo code ramsey all right let's get back to the phones Leah awaits and grand rapids what's going on Leah hi I'll make this short and sweet I'll just read my question a little nervous so take your time oh you're doing great Leah you're doing great my husband and I are separated and I want to work on a relationship that he says he'll only work on things if I say in a post-map. We already have a pre-map, I think, because it's insulting and indicates he's not really committed. I need some guidance. What's the conditions of this? What is he wanting at this? Well, he wants the business to be completely separate. We have that. We're self-employed. We have a construction business. You're both in business together. We're both on the LLC, and we have joined accounts, yes, but his separate property started the business. He started the business, and so he's wanting full ownership of that? Well, the business started after we were married, but his separate property went into starting the business. Okay. One of his assets was used to start the business, and so he's saying does he just want that asset, or does he want the whole business as part of the post-map? No, whole business. Did something happen in the business that was part of the separation that he doesn't trust you for some reason? No. He just wants it in order to get back with you. Right. That's a very odd bargaining chip. He thinks that it protects his life insurance, because the business has had losses and gains over the years, and that initial investment has, we don't know where that initial investment is now. How much was it, do you remember? The initial investment was about 1 million. Okay. And how much is the business worth today, about three and a half? Well, that makes no sense. You said the business was started after you guys were married, and you've been contributing every step of the way. Not physically working, but I do the books. Okay. I would call that a contribution. Yeah. Do you guys have kids? Okay. Yes. Yeah. And are you home with them most of the time and doing the books? Yes. Yeah. So I see this business as an asset in the marriage, and I mean, and even the way we talk about prenups to people that, if there's a prenup, and there's because there's a big difference in a financial standing with each other, even the one we kind of all lean toward I think is that whatever you bring into the marriage is yours if something were to happen. But everything you build from that point on, if you say I do then, is considered-- Comingle. Yeah. It's a marital joint, right, at that point. And so this business would be that. So signing something away that gives you nothing at the end of this, Leah, I feel weird. That feels wildly unfair. What other assets do you guys have besides this business? How much money do you guys have? So the majority of the assets are all in-- In the business. In the business. It's not cash. It's okay. Okay. So it leaves you with nothing, essentially. Yeah. It leaves you with nothing at the end of the first place. Verbal and emotional abuse. I'm assuming from his end to you. Yes. And what's causing you to want to go back? The children. How old are the kids? We've got two, and seven, and ten. Leah, are you seeing a good counselor or a therapist through this process? Yes. Okay. And what is she saying? She's saying that I need to look towards the future and taking care of the children. Yeah. Yeah. Yeah. His language already, with you guys getting back together, feels very wrong, which would put him in that category of what abuse feels like. It's a power move over someone. This is another manipulation tactic right here. Yes. Is dangling this thing over you. And we-- I mean, I can't even imagine being in your position with these kids and how badly you want what you thought you were building a life towards, and you want that life back. But I mean, I've heard our friend, Dr. John Solone, talk about all the time that, you know, the reality you're in now, there's a true moment. You just have to grieve of what you wanted is not. And for your safety, Leah, and for the well-being of you as a whole human being, doesn't feel like you can live a great life with a man who is an abuser. And he doesn't sound like he's willing to change. Yeah. I don't think him getting this business fixes your marriage. That's my big hang up move. If anything, it's a bigger red flag to me. It's one thing if he's just overly remorseful and is like, I will do anything to get you back. And do you know what I mean? But the fact that he's already thrown a post-knop, which I don't really even heard of. And the only asset that you guys have in your livelihood that he's not even willing to give you that, I think he's telling you something without actually saying it. Have you talked to your own family law attorney? Not much. That a little bit, yes. And it's yours personally, not his. Correct. Okay, I would find out what this business is actually worth and what your legal claim to it already is, independent of what he's offering. I don't want you to rush into this, trying to save the marriage. And then it still doesn't work out, and you have nothing. That's a very scary proposition. Yeah, and I would want to know if you go the opposite direction, Leah, and you end up filing for divorce from this man, what your legal standing is with this business to create a life for you. Because I don't think none of us can, I can't and good faith sit behind this microphone and tell you to walk back into a marriage with a man that treats you like that. You can't do that. It's not worth it. And I understand for the kids sake, but it actually creates a worse environment and setting them up to show a picture of what they should expect in marriage. And you know that that is not what they should expect. You want better for your kids. Yeah. Yeah. So I'm so sorry, I just can't and good faith tell you to go forward with that. I just can't. And how heartbreaking that is. And I know I can say that, and then we move on and you have to live with the repercussions of it, but I think you and five years are in a much healthier, better spot than living under the roof with a man who's abusive. You just can't, there's no, there's no alternative to that. And those kids are, they can see it. They know what's going on in the house, even at two or seven and ten, they're, they're emotionally taking this all in. And so for your own sake, I would go to safety, I would talk to the lawyer, and it doesn't sound like on the other side of his post-knop is this beautiful, perfect marriage all of a sudden. I've just never seen it work that way. And based on everything you said, he hasn't changed. That's the scariest part. So I'm wishing you the best. I'm so sorry, Leah. I'm so sorry. Hey, it's Rachel Cruz. I don't know about y'all, but I can build something up in my head until it feels way harder than it really is. 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Go to boostmobile.com/ramsey and make the switch today. That's boostmobile.com/ramsey. $25 forever requires customers to remain active on boost mobile and limited plan. Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm George Campbell here with Rachel Cruz, taking your calls at AAA8255225. We want to hear from you guys. So jump in the comments on YouTube, Spotify, wherever you're listening. Tell us what connected with you about today's show. you enjoyed some feedback how you would have taken it. We want to hear it all. So jump in the comments. We love to see you guys jump in there. Katie is up next in Chicago. Katie, how can we help? Hi, I just had a question. I am part of an S corporation that's family owned. I own only about 5% of it. However, my uncle embezzled millions from it. He sold one charm that can I believe 21 for 5.2 million and another farm for 7.8 million. He then unbeknownst to us did not pay the capital gains taxes on it, which created a massive tax liability for my family to assume about $90,000. In addition to that, he also encrupted my own business and therefore a slasher income by 2/3. We are having a heck of a time trying to pay our mortgage, pay just general expenses. We have two small kids and just need some guidance on what to do and where we go from here. Oh my gosh. So the $13 million of property that he sold, where did that money go? He embezzled it into an LLC that he set up a full number LLC that we didn't. We recently found out about this within the past year. Is he in jail? I'm trying to make that wait. No, not yet. We have a lawsuit out, but it's so slow and people really just don't. Yeah, it just seems to never move. Is there a real chance you get any of this money back? I have strong suspicions, but it's off-shore somewhere. So you're saying this is not coming back into our bank account? Anytime soon. Yeah. My gosh. Katie, that's horrible. How many family members were in part of the business? So my mom is at like 42 percent. I believe I have 5 percent. My brother has 5 percent. And then my uncle had an equal share of my mom. And he was the one managing the business. He was the one who did all this. And we kind of ran it off of trust. Because he's our uncle. What kind of business is this? Yeah. It's real estate land management kind of stuff, a lot of farmland. Okay. And is there any chance he can continue to embezzle funds from this business? No, not currently. He pretty much drained everything we had. Okay, that's what I'm wondering. What is your 5 percent worth at this point? Not much. Probably nothing. Is that what you were dependent upon that 5 percent to live off of? No. My husband and my wife both have different jobs and separate from the business. Yes. We have, we've soon gotten other jobs. Okay. So how much do you guys make a year now? My husband makes about 80s and I make about 48. Okay. And you said you're having a hard time paying your mortgage? Yes. I was with the business that he bankrupted in addition to our family company. I was making about $6,500 a month. And you know, that more than paid our mortgage and stuff like that. So you can't pay your mortgage from the 128. You guys bring in? Our mortgage is about 40, 300. So it's really, really tight. And that's your primary home? So that's primary and taxes included. Okay. I'll want our insurance as well. Oh goodness. And who's going to pay the 90 grand to the IRS? Is there a payment plan there? That's what we're fighting. So we have an agent and she has been hopefully being this uncollectable right now. And so that will get them off our backs for two years. However, our passports are suspended and they have a federally on our home. We have tried to sell our house. And now they've faced the lien. And so we can't, we can't really sell anymore. So the only way to remove the lien is to pay the taxes? Yeah, I have a right now. Yeah. Goodness gracious. Does anyone of your family have money at this point? Not really. No. It was all wrapped up in that business. By your estimates, he's in bubble time of $15 million. Okay. Well, it sounds like there wasn't a lot of wise financial moves happening outside of that. I mean, in their personal accounts. No. It was no retained earnings in the business. He took that. Yeah. He drained all of his assets. I'm just trying to figure out. Let's say you guys decided to pay the 90 grand in taxes to remove all of these liens for yourselves up and then try to recoup it later. Yeah. Cause I don't know what you're going to do. If you can't pay the mortgage, they can still foreclose on you. Yeah, I'm wondering. Right. Katie, have you talked to a good realtor? Like, if you didn't have the lien on the property, do you know how quickly you could sell it? Well, we tried before the lien was placed on our home, like last fall winter ish time. We tried to sell our home for about 620 and then dropped the price eventually all the way down to like 580 or something like that. We owe about 440 on it. And you know, we were obviously just going to go try to find something a lot more affordable. Yeah. And it was not selling. It just was with not sell. No matter what we did. Cause I'm just wondering if you could take out. It's like cute and clean. I mean, like it's like that. And it's been a year. And you know, there's more, yeah, there's more inventory probably than there was even last year. So that may not. 58% more sellers and buyers right now. And the ones that want to buy can't afford it at the rates and home prices. So it's causing a little bit of a standstill right now in the market. But my person, I mean, if I was in your shoes, that's how I answer things. I would try to get out of this IRS debt to free up the lien so that you can even make a move. If you could get a personal loan even, I don't know, if your credit is shot because of everything, but I don't know if there's a personal loan to go get for 90. And you shouldn't be paying it. I mean, I think it should be your, if your mom owns 42% of the business and would get that if anything was recouped, you may want to split it differently. Okay. And maybe she's in a better financial place than you guys. I don't know. Yeah. Cause if, cause you owe 90,000 because of your 5% is that true? Is that right? Yes. She was like over 500. Oh my gosh. She's not in a great position either. Yeah. Well, I hope the the attorneys can get this guy and fight it and at least make it uncollectable, even if you can't recoup. Yeah. That would solve some of this. But the other factor you can control is your income. So if you can go out, I mean, clearly you have great skills and talents. If you can go from making 48 to 80, now we're at 160, we can afford the mortgage for the foreseeable future. Right. Right. That would be the one thing in your lever you can pull right now. Yeah. My husband and I just got serving jobs as well that we can hopefully supplement and get out of some of this. Um, but. Oh, Katie, I'm so sorry. I mean, this is such a crazy story. That's insane. Yeah. Yeah. Yeah. We completely. Yeah. I mean, just screwed everybody in the process. I mean, my prayers that they get him and that the court system, the money is accessible. I know. I would be the best case scenario. Yeah. I mean, family business, not always. If anything, getting a good attorney on your side, yeah, see if it's uncollectable. I mean, if you can get that off, but man, I would want the IRS out ASAP if nothing really moves in six months, even if that's through personal. That's stopping everything else from happening. Let's go out to Ashley up next in Fort Worth, Texas. Ashley, welcome to the Ramsey show. Hi, I am so excited to have the two of you for my question today. My husband and I, we love smart money. How happy hour so much. So I'm excited to have the two of you guys for today. Yeah. Um, so I'm 31. My husband's 32. We're on baby, baby steps four, five and six and we are on track to pay our mortgage off in 2028. Awesome. My, yeah, we're super excited. My husband makes about $175K and he gets about a $75,000 bonus at Christmas and I make $70,000. Our kids are six, four and three and we're going to be bringing them on our very first Disney World trip in January. Oh, the best. Yeah, we're excited. I've really been budgeting and planning everything out. And so with flights, hotels, park passes, meals, we're planning on it being probably about a $12,000 trip all in. And so my question is, I know that Disney can really get out of hand just with all the toys and just things that I know that kids are going to want to buy when we get there. And our thought to get ahead of that is to give them kind of each a little budget. So like a hundred to maybe $200 each of spending money that they can spend on whatever they want for our at Disney to keep it reasonable. But am I going to be a totally lame mom if I put my kids on a budget at Disney World? No. For 200 bucks for them to spend. I was like, that's nice for them probably what I could spend that Disney. You're taking them to Disney World. No, you're not a lame mom at all. If they have any entitlement at Disney World, I've been like, Mom, but you didn't let us go on an unlimited shopping spree. That's insane. Then you've created a monster. No, what I was going to say, if anything, you just have like one yes a day that they get to, you know, pick one thing they get one yes. What do you want your yes on? You know, that's about as much as I I would have done a shopping spree before this. the trip and go, "Hey, you can spend a hundred bucks, 200 bucks to get the merch beforehand. We'll bring it into the park, but once we're in there, we're not buying the thing. We'll feed you, but that's it." Or maybe we get one souvenir at the end of the trip. That's under $100. And then they know ahead of time. The key is the boundaries ahead of time. Between days, they're surprised that they throw the fit. That's right. Yeah. And, you know, when you do this with your kids, my parents did this all the time for us. We had, like, spend our own money and once the money was gone, it's gone, because what that did is it really does set you up as an adult when that becomes how you spend money as a kid. Actually, you're actually setting them up to live life on a budget, and that's not, and that's not lame at all. You're actually raising very responsible kids. And so when they get their first paycheck, you know, they'll hopefully be downloading every dollar, which is our budget app, right? And it's the way you live your life as you have categories and you know where your money's going and you're in control of it. And when you can start to learn that as a little kid, and especially in a fun, magical place like Disney out of all places, yes, yes, and amen. So no, I think you are a wonderful, wonderful parent for doing this. And you're a great parent, even if you didn't take them to Disney, right? Because it's so beyond beyond this trip. But I think that that is a-- You're not a lame mom, Ashley. No. Only people who are cool moms question if they're a lame mom. You know what I mean? The lame moms aren't thinking. I appreciate that. So you're an awesome mom. And I'm taking my kids to Disney for the first time this year, Ashley. So I'll report back any tips and tricks as my three-year-old has a meltdown once she can't buy them any mouse ears. Yeah. I'll eat my words and say, "Tangue, Ashley was right." Ashley was right now. But if you do, when I start budgeting, though, that's, I mean, every dollar is it. And for trips that you have in the future, and this is for anyone listening, start a sinking fund in every dollar. Start preparing for it. So you can be like, Ashley, when you look up and you're like, "Oh, yeah, we got 12,000 bucks for this trip, and we're going to budget 150 a day for the kids to spend." Like, you have it all year marked. And that is part of having control and being able to spend and have that permission to spend emotionally, which is awesome. So yeah, you guys can check out every dollar for free. You can download it in the App Store Google Play because whether it's a vacation or your monthly expenses, knowing and having a plan for your money, that is not lame. Right, George? That's cool. And age appropriate. I mean, the three-year-old has no concept of money. So they're not going to know, "Well, I have $200 to spend." The six-year-old might have a little bit more awareness. The four-year-old's probably somewhere in between. And so I would just make it reasonable. But I think letting him know ahead of time, "Hey, guys, we're going to buy all the fun stuff before we go to the park and make that its own adventure." You know what? It's funny. I did two trips with the kids to Disney Winston and I did. And one trip. Well, one trip when some was with us. And we, not because I held them, but just in general. We, like, I was just, I refused to spend on, I mean, I would spend on snacks. But I bought all the stuff before he had, and I was like, "No, we're not buying all these bubble wands." And like, no, no, no, no, no. I said, "No, the whole trip." And they were fine. Fast forward. I'd go with one of my friends, Christie Wright, who used to be here. And she brought her daughter. I brought my two. And for, like, two nights, we went for, like, a really fast trip with the girls. This was, like, if this was a few years ago. And Christie's a yes mom. She's like, "Oh, Rachel. Oh, my gosh. Just say yes. Just say yes. Just say yes." So that trip, I did. I was a little bit more like, "Okay, if you want the bubble wand." You were the cool mom. You get the bubble wand. You want the extra pair. I did. We spent some money on the extras. But can I tell you, those kids don't even remember that we bought that stuff. And that was probably three years ago. So, like, they're, at the end of the day, they're really not going to remember. They make, keep one stuffed animal. Yeah, they might throw a fit in the moment through all the purging and stuff. But if you set it up ahead of time, we told our kids were like, "We're not buying you all this stuff. I'm around that first trip." And they didn't really ask. And I don't know. It just wasn't. It wasn't a thing. And then when you buy it for them, it's still not a thing. A few years later, it's all just crap throwing away. Oh, I got a bubble wand when I was at Disney without my daughter. I was like, "Oh, let me buy you something." So I found the cheapest. I thought you meant for you. Oh. Oh. I thought George was walking around Magic Kingdom with his bubble wand. But I found a clearance section bubble wand at Disney. And it was like $5 and it's so glad that I only spent $5 because it broke within two days when I got. I know. I know. Yeah. This is why we shop clearance for the tour. The memories are usually not in the things. People remember that. That's right. If your business is making seven figures or more, you should be proud of that. But that growth probably brought a mess with it, systems that don't talk to each other. It's impossible to track down your numbers because they're scattered everywhere. That's a visibility problem. And NetSuite has solved that problem for more than 44,000 businesses like yours. NetSuite brings financials, inventory, CRM, and more into one place. 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With annual enrollment time coming soon, you need to talk to chapter right away. Chapter is the only Ramsey trusted Medicare advisor. And they save Ramsey fans an average of $1100 a year. They explain your options simply and help make the smartest decision for your situation. And whether they find you a better plan or confirm you're already in the right one, chapters services don't cost you a thing. Medicare annual enrollment runs October 15th through December 7th. So review your plan with chapter now and avoid expensive mistakes later. To talk to the unbiased Medicare experts at chapter, go to askchapter.org/ramsey or click the link in the description. That's askchapter.org/ramsey. Up next we've got Kay and Colorado Springs. Kay, welcome to the show. Hi. Good afternoon. Thanks for taking my call today. Absolutely. How can Rachel and I help? I'm new to the baby steps, but not to saving. And I can already hear Dave respond to my question saying stupid, stupid, stupid, stupid. But in my 20s, I invested in a whole life insurance plan. Stupid, stupid. Stupid, stupid. I'm kidding. I'm kidding. I'm kidding. Okay. Okay. Well, so I lost my dad when I was 16 and it felt like the responsible thing to do in my 20s because life insurance plans not pay out and it felt like, oh, this is the kind that will. But I'm 46K paid in right now and it's worth about 30,000 and I just started listening to you guys really at the beginning of this maternity leave. So thank you for giving me something to listen to. And I'm thinking I should cash out of the life insurance plan because it's about a 558 per month premium and I think that 558 can go way further if I invest it. And I think that the advice from you guys, okay, and I just don't know what to do with that 30,000. I have about 127,000 in consumer debt, I guess 28 is a car and then 99 is a land loan with an arm. Oh, no. And I just don't know if I should pay off the car or if I should pay into the land loan. What's the car? Worth. Probably it's probably a wash, I think the car is about 28 to 30 and then the loan on it is 28. Okay. And what's your household income? We're doing really well. We're at about 460. Amazing. Wow. Great job. So either way, all this debt could get paid off within 12 months. Probably. Yeah. Okay. And if you take that 30K, you can knock out the car loan today. Immediately. Yep. You guys have savings as well? So that's where I think we're doing not as well. So we have savings, retirement savings, but we don't have a lot of cash savings where we put everything into both IRAs, 401Ks, PSP accounts, but my cash savings is only about probably 30,000. Okay. We'll call that a light emergency fund. Yeah. And then total network is about 1.3. Amazing. Great job. I'm wondering where this amazing income is going every month. If you're taking home, I don't know, 30K every month. I think a lot of it is easy button. We have two young kids and we just decide to eat out. And I think we really need to cut down on eating out and be actually start budgeting because we haven't had the budget because we have the good income. And so. Can you pretend like you make $10,000 a month? I think we need to. And then throw 20 at the arm land loan and knock it out in a couple of months. That'd be a pretty fun idea. Yeah. Yeah. Because 10 grand is still a pretty good life. I don't know what your mortgages, what your expenses are, but if you can just pretend like you've got 10 grand and immediately transfer the other ones, the other money to the debt, you'll have this knocked out by spring, everything. So the car is gone today. The land loans gone by spring now are completely debt-free with tons of money in the bank with tons of margin and we've learned how to live on $10,000 a month Which is the best part? Well, and you kind of coming through already your expenses cave in with this whole life insurance policy and being like okay Where could this five you know to mean like you're you're doing the right steps to look through all of this and just ask yourself Do we need this can we move this around yeah? And if you just do that and a few of these categories like what you're saying and tying up and it won't feel great Because you're gonna feel like you make 10,000 versus making 30,000 about right? You're gonna feel a difference, but that's okay for a few months, you know to just to get through it and be done Man, that's powerful. How old are you okay? I'm 36 and my husband is 48 so you have a little bit of an h gap. Okay, okay, and you've been paying in About five 58 a month to this account since you were 18 I know since mid 20s like 26. Okay, so the last 10 years probably okay, okay But but even that you've only come out. It's only worth 46,000 you said you've paid in 46 right and you've you've 30,000 cash value in the cash value Yeah, so the cash out okay, so here's the here's the crazy part about whole life just surround those numbers So if you put that 558 and you just contributed that monthly for 10 years Instead of this whole life policy you'd have a hundred and 21,000 sitting in that account in that brokerage account or investment account Versus this that's why it is such a it has such a terrible rate of return when people pair Insurance and investments, so But the beautiful thing is that you know if you just said hey for the next 30 years We're gonna just put that money in investments instead of paying this whole life insurance. That's 1.5 million In 30 years, so they get a dang. That's pretty cool Yeah, so it's pretty it's pretty wild where that money can go So I think it's just a great and you already knew that but I think just for people listening when you actually run numbers Of what you're putting your money into it's it is good to double check where else your money could be growing So if anyone is trying to push you into one of these cash value permanent whole life policies Just run just run far away. They don't like you In fact, they hate you if they say you want these policies and the sad part is it's usually close like family family friends Yes, that push you and see you trust them you go other said. It's a great thing to get yeah or K looks up and she's like oh my gosh My dad died and I was a teenager and didn't have insurance. I need to call I need life insurance right and you run to Whichever thing you see first Which is understandable in her case for sure But I just make sure that you're there always make sure you have term life insurance in place before you cancel the whole life policy So we got ours through zander. I know Rachel's family has theirs through zander So you can jump on zander dot com get 10 to 12 times your annual income 15 to 20 year terms should do the trick and you'll be in far better shape That's the difference then you would have paid with that whole life policy and you will think this later Okay, well done though on all your on all the two guys are doing you got a great income. You guys have a great future It's great. Yeah, it's hard to feel bad for you guys. You're crushing it. You're making half a million dollars You're about to be debt free by spring. I like this plant way to go. All right. B is in New York city up next B welcome to the show Hi, thank you guys so much for having me on Um, so I just want to give a little backstory. So I'm 35 and last year I was running a daycare business I did that for nine years and do some hospitalization. I've been out of work since May of 2025 Um, so I've been relying on family for the Last year and a half and I'm currently being sued by a debt collector And so I have to give them an answer by next month Um, I tried to call them to see if I could Work out some type of pain that plan but what they're asking for I don't think I can feasibly I don't have any income at the moment and I don't think family is really able to help me I call the lawyer and they were suggesting that I filed bankruptcy, but I'm not really sure As to what to do and I have other debts on top of that as well How much how much is your debt total everything? Um, it's a little over 37,000 so I think 38,000 and what debt specifically is this one that's going to court How much is it? Um, so this is 5800 okay, and What is your plans for working in the future when will you get another job? I've been applying over the last year, but I only got one interview that didn't work out and So far I'm really not hearing back. I've been updating resumes sending in things, but nothing so far. What kind of work have you been applying for? Um, everything target Walmart it I really want to do some type of office or clerical or administration type of work um But I'm not getting anything is that because you don't have like resume experience for those things And not for target well for the clerical administrative work if you're trying to get to Yeah, I mean with today care I was already doing like administration and paperwork so I feel like I have the skills And I did go to school for animation so I know computers and so it's not I don't have like any technical issues But I don't know. I'm just not getting anything. I don't know if it's a resume issue. I've been updating it But usually just putting your your resume into a you know black hole on a website doesn't always have you gone in person to some places To some places, but usually it's like old people already hired or oh hey can you apply online? I'm like you have done that So But the ball hasn't been going in any direction. So how have you been paying bills like how did you pay bills last month? Um I haven't been but That's outside of necessities families been helping me with that but I just don't have the money right now to pay any bill Okay, and like going and you know But I've sold things like I sold all of my daycare equipment all of the daycare toys all of that But even like a restaurant like waiting tables or driving Uber or Instacart anything Yeah, I don't have a car right now, but like I said I have been going into places Are you in New York City proper? No, I'm in New Jersey Okay, but you can take public transportation Yes, okay, I'm just wondering for the in the meantime There's about to be a lot of seasonal work happening in retail and there's so much turnover there that if you just show up every day You'll be promoted within a couple months So I would keep hitting on that and then the end goal is to get into that administrative You know work and hopefully scale up from there because the goal right now is income It's hard to pay off any debt with a debt collector if you don't have the income coming in But I would not file for bankruptcy. I would definitely Respond and not just let it sit and respond and say hey, I don't have a job right now. Can we negotiate a payment plan a settlement And over time what you're going to find is they're going to have to make do with less so instead of 6800 You might be able to settle for two grand once you actually have that money as a lump sum So that's your goal right now is just work Stack cash so you can get these debt collectors off your back then you can attack the rest of your debts with the debt snowball and working any job Be you know, they mean like I mean this is I mean two three jobs working weekends doing what you can because you really have an uphill battle to climb here And it's all income. I mean at this point So that you're not you know waiting on family to take care of you at that point What a gift that they've been able to step in But after a year of this we got to be Find something to do and then slowly working your way into an actual career for the second half of your life That's the key to all this and if you want to connect with our friends at guardian litigation This is the kind of stuff they specialize in don't go to these you know debt settlement places This is a nationwide law firm that helps with these collection issues and they can fight for you on their behalf with a real attorney So reach out to them you go to guardianlit.com/ramzie to get in touch with them and I tell them George sent you All right, let's go out to Kira in Denver, Colorado. Did I say that right Kira? You sure did hey How you doing? I'm good. How are you guys doing great? We're doing great. How can we help today? Good so glad to talk to you you guys are going to hate this question so much But I genuinely I feel like I genuinely want your perspective So I have been leasing a vehicle since Well it's about three years now the least term is almost to an end It's a 2024 Subaru and Preza and the payment is pretty low. It's like $300 a month So as this least term is coming to an end I'm honestly having a hard time understanding and I have been listening to your show for a long time. So I know The the dad it's always worth paying off that but I'm having a hard time understanding why leasing another vehicle Would be a bad idea. Oh this is George's favorite question. I just love a good car These questions, yes for you please help me Okay, how about I want you to explain to me what you love about it because here's what's happening right now You told me it's a low payment. Do you know why it's a low payment comparatively to a car loan? I guess I don't But It's because you don't have any collateral you own nothing You are just renting a car from them very expensively and you are pre paying the biggest piece of the depreciation on behalf of the dealership Right that makes total sense here's where I'm a little bit hung up First for the term of the lease I don't pay for oil changes. I don't pay for cars mean is I don't pay for new tires. I don't pay for any of that stuff. And I do have some money in saving. So in theory, I could just go buy a vehicle and cash, but I just have worked so hard for that savings account and it would completely drain it. So here I am saving $300 a month, which seems fine, but that doesn't seem like enough savings a month to rebuild the savings account that I'm about to wipe out. How much say do you have in savings? Right now it's about 14,000. By the time the lease term is up, I'm guessing it would probably be about 18,000. Do you have any other consumer debts? I don't. Well, I have a student loan and there's like $7,000 left on it. So again, it's like that payment so low is it worth wiping out? Well, at this point, you should go around collecting low payment debts. It sounds like that's the that's the plan. If I get the payment low enough, it's a good deal. And that's my fear. It's hard to wipe out my savings account. But that's what I want you to feel is the pain of purchase of, wow, this is a lot of money I'm letting go of and you have worked hard to build up your savings. And I think you work too hard to give these dealerships and lenders your money for the rest of your life on these contracts that are built to screw you over. And it's kind of a misnomer to think that you do have, you know, $14,000 because technically you don't, you owe $7,000. So really, the feeling that you have, you know, an upside over here is kind of false because there is money owed over here. So really, your net worth is not what it feels like when you're looking at your savings. It's kind of this like, it's like, it's like a fogged mirror where it feels one way, but the reality when you look at the numbers, you're carrying all that rent, you know, the risk of the, you know, the student loan, the $7,000, you have debt over on the other side. And so you really don't have, you really don't have 14,000. You really technically have 7,000 to your name, right? Yeah. I guess that makes sense. I did, I have a salary full time job and I did pick up a little side hustle. I wait tables on Saturday nights. It's really fun. I enjoy it. It helps me build up that savings account a little bit more. Yeah, the point of that was really so that my family and I could travel a little bit more because they feel like, you know, we're in a position, we're not in debt. We pay the bills. We're living comfortably, but that, that felt like it was missing. We just didn't have enough money to really travel the way I wanted to. So I got this weight or a big job. And so, but now it's like, should I, do I pay off? Do I just buy a car and cash and have no travel savings? Have you ever done that? I kind of build back up. No. Can you try it? Would you be willing to, as an experiment to the audience listening? Would you be willing to try out buying a car and cash and paying for your own oil change? I promise you you can afford it. If you promise me it's worth it. If you, if you promise you what? You promise me it's, if you promise me it's worth it. Well, listen, I can't control what car you buy. I, here's what I do. I get a pre purchased inspection and I get a vehicle history report from a company like bumper so that you know you're not buying a lemon. So that's going to give you a lot of peace of mind. And then all you do, that 300 bucks that you're budgeting for a lease payment, you can now budget for car maintenance and repair. And look at that. You've created your own little bank account over here where you're not robbing savings when it comes time for oil or new tires. And now you actually own the thing. And there's no buyout. There's no wear and tear fees. There's no disposition fee. There's no extra mileage fee you have to worry about. You can drive a thing like it's yours because it is. And then you just build up that savings account for travel. You just build it back up over time. Exactly. Just separate everything. Earmark, my emergency funds over here, travels over here, car maintenance and repair over here. Instead of saying, well, this is just one giant pile of savings and I'm robbing it to do this thing over here. That's where you're getting trouble. Right. Okay. And can I tell you this, the interest rate on these things because they don't have to be disclosed is enormous. They run around 14% when you actually do the math, but they don't have to tell you that because it's a lease contract and not alone. And that's really how they get you the payment feels so low. So here's my last, here's my last thing, here. Why do you think the dealerships want to push you into a lease so badly? Do you think it's because it benefits you the most? So much money. Who are they making the money from me? Now, how are you both winning in this scenario? How are they making a bunch of money and you're also winning? I'm just so sad to see that vacation savings fund go away. Me too. But I'll do it. I'll do it. I'm also sad for you, but the good news is you're about to pay off those student loans today because you told me we're debt free. Well, let's make you actually debt free by paying off those student loans with the money you have in savings. We'll rebuild for travel over time and I promise you your family's going to be okay. You're how old are you? Okay. I am 39. You're 39. So great. Yeah. Let's just say for the rest of your life, you just leased for the fun of it. Okay. For the next like 40 years. And instead of that, versus if you had just invested that even 300 bucks, which I know you said doesn't feel like a lot, but when you actually let your money work for you versus working for the car dealer, you would have $2.5 million sitting in that account. Okay. This is what 10 lease cars through your lifetime. So it's a mindset of saying, I'm going to use my income to help me and my family versus helping everybody else, right? These banks and car dealers and all of it. So it's just, it's a different, it's a different mindset. But the thing is your mindset is so normal. That's literally how people live. They live with, oh, well, it's just, you know, a thousand bucks credit card bill every month. It's just a $300 lease. It's just a little bit of a student loan. We got a personal loan. Cause over here and it's not that much. And you just kind of live your life, little payment by little payment, but over the scope of your life, if you don't change your habits, that's what it's costing you to live that way. And so one small change literally makes you a multi millionaire. That's it. Yeah. So start asking this question, ask this question. Instead of how much down, how much a month, which is broke people talk, just ask how much total cost. And if you can't afford it in full and you're willing to part with that money, that's your body telling you, this is a bad decision. Yep. We were meeting people at the break and a sweet lady said that her parents grew up in the great depression. And she said, we were told from the very beginning, if you don't have the money, you don't buy it. And it was just simple. And I was like, I know, we've made careers now with that one simple phrase. You know, I'll leave you with the Arabic version. Mama Camel says this, as Jim, a bit ish, umat on the ish, it means the camel costs one penny. And I don't have a penny. You know, it's just one penny. Get the camel borrowed. I don't have a penny. If you don't have the money, you just don't buy it. She doesn't say that. Camel Camel. It's an Arabic saying, okay, I can't make this up. That's too why we leave that into every single show from now on that you're on. I think we need a little Arabic phrase today. Oh, we love it. I'm going to say this wrong. Someone out there is going to be, he didn't say it right. Is Jim, a bit ish, umat on the ish. That's as good as it gets. We love when George talks another language. You spend hours researching before making a major purchase, like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey trusted pros. Whether you're looking for car, home, or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would find what you need at Ramsey solutions dot com slash insurance. Listen guys, I've heard just about every excuse for why folks think they can't get ahead with money. So let's go ahead and settle this right now. You get the final say on what happens with your money. That's why you have to start telling your money where to go so you can stop wondering where it went. So if you're going to start winning with money, you have to get on a budget and the easiest way to get started and stick to it is with the every dollar budget app. It'll help you make a plan for every single dollar coming in and every single dollar going out every single month and guess what? It's free. So no excuses download every dollar in the app store or Google play today. You know Rachel, as we get callers that hit baby step seven or even baby set four, five, six, one of the things that's the hardest is to let your foot off the gas and remember what it was like to enjoy life. And it's one of the reasons we came up with this crazy idea of the Ramsey cruise that live like no one else cruise because there's two ends of the spectrum. You guys you live like no one else. So later you can live and give like no one else and part of living like no one else is having a paid for vacation, right? That you pay for yourself because you're debt free. You have your emergency fund. You're in a place to go and enjoy life again responsibly, if you will. And why not be irresponsible on a cruise with us. It's the most fun because what I love about a cruise and this was my first real cruise. The last Ramsey cruise we did is that you just walk around and everything is there. Everything's covered. You're like, Oh, the food's there. The entertainment is there. I already paid the taxes, the tips. You can just enjoy yourself. And the ship is so nice. It was a real I probably spoiled myself by making this my first cruise. This ball was fantastic. The restaurants are amazing. The cool bars set up and the coffee shops like all of it. It is spectacular, you guys. It is such a fun vacation. And it's a fun week. And we want you to come spend it with us. Right. March 14 through the 21st, 2027, Dave Ramsey, all of us personalities and about 2500 of your closest newest Ramsey friends will be there all in the ship. All inclusive pricing starts at about 21 hundred bucks per passenger. That includes it all. Cabin food, entertainment, taxes, tips. Click to link in the show notes or go to Ramsey Solutions dot com. slash events to book your cabin and join us. Carrie is in Washington DC up next. Carrie, welcome to the show. - Hi, good afternoon, it's so nice to speak with you. - You as well. What's going on? - Thank you. Yes, so my father-in-law is 72 years old and he lives, he owns his home in Florida and he is relocating to Virginia near my husband and I. And he is buying house about 15 minutes away from us with cash and he wants to add my husband to the deed of the new home. We know that this is not a good idea but we need help explaining to him why it is not a good idea. - Oh boy. - What is his reason? - Yeah, what does he want to do it? - I think he believes that it's going to be easier when he passes away if my husband's already partial owner of the house. - Why are you not involved? - 'Cause it's not my father. - So he's like, "Well, I'll give it to my son." Okay, well here's the main issue that hopefully, now I don't know if he's a man of logic but part of this is a huge tax liability. When you put your kid or whoever on the deed of your property while you're alive, that is considered a gift by the IRS. So the tax basis, so let's say he, I don't know how much he's going to buy this house for. - The new one or the new one, we'll say like 350. - Okay, so he buys it at 350 and then he, let's say he passes away, I don't know, 20 years from now when the house is worth $700,000. Well, your husband is going to owe the taxes on that house because it was a gift. And so when he sells that property, there's going to be a huge tax liability versus dad just letting his son inherit the house. Because now there's a stepped up tax basis. So whatever the market value of that house is when your father-in-law passes, now becomes the value that your husband is going to pay taxes on. So if he inherits it and it's worth 700 grand, he could sell six months later with no tax liability. - Okay. - So that's the problem. The season tangling is their financial lives together at the wrong time. - Yeah, and he can put it in the will, even do a trust and get through probate without it. I mean, there's some ways to get around it for it to pass, quote unquote, easily to your husband without having to do that without having to pay taxes on 350,000 dollars. - Okay, so just adding it into his will, would that be the easiest way? - That's the simplest. - Yeah, that would be the simplest. It'll go through probate and all of that. So there will be a little bit of cost, but nothing like $350,000 taxes on that. - And you can also look into something called transfer on death, TOD. This varies by state, but you can sometimes add a TOD, so that way it transfers outside of probate. - Okay. - Is that something he would be able to do when he is purchasing this new home or is that something he could do afterwards? - He could do it after he purchased it. You can add that. So I would talk to a good state planning attorney to figure out the state laws and Virginia and what all that entails, but the one thing he doesn't want to do is add him to the deed while he's alive. That is definitely the worst case scenario. - Okay, okay, perfect. - Good luck. - Great question, Carrie, thanks for calling in. - Thank you. - Thank you, really. - And even a good estate planning attorney, just getting on a call with him and dad, walking him through all this with a third party expert versus his daughter-in-law, that might help too. - Yeah, for sure. And a lot of these attorneys are pretty great. Something like this is pretty simple. They do this stuff all the time and they can get the documents ready for you. You can do doc you sign and it's done. Like it doesn't have to, it's not a big complicated process for them. - You can knock it out on a Thursday afternoon. All right, Linda is in Milwaukee up next. Linda, welcome to the show. - Hi, thank you. Excited to be on the call. - Absolutely. How can we help? - Well, I am 52. I am single empty master. My son went to the Air Force a couple of years ago. And I don't have any major debt as far as credit cards do the loan, card debt, nothing like that. I own my primary home and I own a Duplex. Both have equity. And, but I'm not sure if I should sell the Duplex because I have a Helac loan. The Duplex is paying for the Helac loan. So I'm not like receiving any money from the Duplex. - It's just a wash. - There's cash flow. Yeah, I mean, there's a good cash flow, but everything washes. And the Helac is at like $55,000. So I feel like if I got rid of the Duplex, I would get rid of the anxiety of owning all that debt. But I'm 52. I only have like 250 and my 401(k) and I don't have any savings, really. So I'm nervous because I'm 52. So I don't, I'm in this like pickle. Do I invest the next several years and pay off the Helac? Or do I sell it all? And my primary home, I only own like 130,000 left. It's worth like 350. My Duplex, I owe like 175 and it's worth like 300. - Plus you have the 55K Helac? - Yeah, I got the Helac, which is killing me. But that's the only debt I have, just real estate debt. - Okay. - So you could really walk away from that Duplex probably with like 60 grand after it's all said and done. - Depending on capital gains, what I'm gonna all for that. - Would you pay for it? And cause it's only worth 300, you said? - Yeah, I mean, I originally paid 130. - Yeah, so you shouldn't have capital gains. - I took out a, well, what? - Cause you, you'll be exempt for 250,000 in capital gains. - For investment properties? - Oh, for the investment property. - Yeah, she'll pay for it. - Yeah. So after taxes, net fees from a realtor, what do you think you walk away with? - After paying off the mortgage plus the Helac. - Everything with the investment property selling that, I'll walk away after capital gains, but I assume maybe, paying off the Helac, maybe 20 grand, 26 grand. - Okay, how much do you have in savings now? - Nothing, really. - So you just will become debt free except your primary mortgage and have 26 grand in the bank. - Yeah, that sounds pretty good to me. - That sounds pretty good to me. - And 401, you think so? - And you got 300 in retirement though, you said, right? - 250. - 250 in retirement. - And you'll continue to invest. I mean, you're 52, not 72. So I want to tell you, have done it. - No, I know. - Cause the investment, if you didn't even touch it, it could double in the next seven years. So at 59, it's 500. At 66, it could be a million. And you're gonna add to it. - So the question really is, so do I sell bad duplex even if it's got a great cash flow coming out? You know, it's like bringing in $1,000 a month cash flow. - Well, the problem is you don't have enough margin to knock out the HELOC and have this thing really cash flow for you. Right now it's a wash, which means you're probably closer to losing money than making it because of all the other expenses. - Potentially. But I get the tax cut at, you know, each year too. So I'm worried about that. - Well, I'd rather set you up for retirement in a way that you are walking into that thing, debt free versus trying to tax cut your way and write off your way into it while carrying this debt. 'Cause I don't see a way you're gonna pay off all of this debt by the time you're 60 with a current cash flow you have. What's your current income? - About a hundred. - Okay, good. So think about, if you were making a hundred K with no debt but your mortgage, how much could you then invest? - Can you repeat that? - How much could you invest out of your $100,000 income if you didn't have this duplex mortgage in the HELOC? - Well, that depends on my spend, you know, I'm 52 trying to be 32, so there's a lot of investment there, but I joke with that. But I could probably, I don't know, $1,000. - A month? - Yeah. - Okay, that gets you close to 15%, 15% would be 15 grand. - So I was thinking, if you did, if you could walk away and put that money from the duplex, and I think you may be walking way more than 26, I could be wrong, but let's just say at the end of all of it after you throw some more money in these investments, let's say all said in Denver, time you sell it, you have now 300,000 in your retirement, okay? Just in investments. And then if you go for the next 10 years and put in 1,500 a month, you'll have 1.2 million in 10 years. - 1,500 a month. - Invested, yeah, which is probably what I would do just to catch up, 'cause you don't have, I mean, 300,000 is amazing. Like you did a great job, but I think your money could be working harder somewhere else than trying to get like a tax break here, he lock payment, you know what I mean? And then you're having to keep tenants in it. And all of that up here. When you even said the stress of holding that debt, which is more on your investment property than your primary home, 'cause you owe $175,000 on it. So just being, just kind of simplifying your life, Linda, from this point on, and for the next 10 years, just be throwing stuff in investments. And I think you're gonna end up being great at 1.2 million in 10 years. - Well, that's great, 'cause I try to work these numbers. That's why I call them, cannot grasp it. - Yeah, so if you just go into our investment calculator at mzsolutions.com, I just typed in current investments. I put 300,000, I was probably being a little generous there, it's your 256. some money from the stuplex and then monthly contribution 1,500 a month for 10 years rate of return I put I put 11 in which could be aggressive depending on the market it's been pretty great the last couple of years so we'll see what it does but yeah it'll be it'll be well over a million okay okay and that's if you just retire 62 you might decide all right I'm gonna go to 65 and build a little bit more of a nest egg and the longer you work the more time you give it then more you'll end up having a retirement and you'll get a better picture for what your income stream looks like there between social security and your nest egg but way to go I would clear the decks and just simplify my life at this point and get rid of that all right let's go out to Mike and Baltimore up next what's going on Mike basically I am looking to buying a house 28 and I have a bit of not saved up and I went to house touring recently and I ran into a house my realtor called a piggyback house where basically there's multiple instead of it is being houses right next to each other it's like in front and behind I want I didn't see that many people talk about it online so I'm a long time listening and I wanted to call on and get your opinions on that there are decent choice for me to choose my first home it's like three floors it's like an Annapolis Maryland and yeah I have my question for the most part and there's a lot of HOA fees as well it's went up from eighty dollars to I think the original seller got it was eighty dollars originally for HOA and now it's three fifteen which is something that worried I'm sort of worried about I'm trying to stay away from condominiums because I heard the HOAs are a big worry so I'm trying to well same thing going to apply for townhomes with a higher HOA fee because more is being covered for that town home than a single family home so you're gonna find higher HOA fees across the board for any condos or townhomes but the bigger question is what why this specific piggyback townhouse idea is that because you can get a tenant in the other side no I just wanted the one individual unit because I just wanted to get my own of my own okay so it's just the way the development is it's the way the developments set up exactly and I'm like this is sort of interesting to me and it also is like in the back instead of the front so I'm like ah this is a sort of new to me well how much is it the house is three twenty nine but one recently sold for three fifteen so I like to see if I could like you know say the recent prices sold sooner or for less than that but uh and how much do you have to say with a month right now um have eighty seven k saved right now awesome and you have no debt no debt and that's aside from your emergency fund the eighty seven k is just down payment fund oh no eighty seven is all-in I also have a gift from my parents because I've been investing or I'm that I've been not giving money to them on a monthly basis and uh they're planning to give it once I used to invest in a home they plan to get me the gift back um but they also don't want me to rely on that but uh that would be approximately like forty k so it's great yeah yeah just it just kind of sounds like uh I'm not familiar with piggyback townhouses but I guess it's just kind of a quirky development so I think as long as it's not so odd that you could resell it in the future you know what I mean I wouldn't buy something that's so weird that no one would ever want it yeah I would look at the appreciation over the last decade compared to other areas and that'll give you a pretty good idea if this is going to be a worthy long-term purchase but it's about half of the median price there in an office Maryland because we're seeing median listing prices six hundred and thirty five thousand dollars according to yeah so what you got was half of which granny it's a smaller home I know kind of more like a townhome see my first two homes were townhomes Mike so I'm not anti-town home by any mean no I think it can be great but you want to make sure you're making a purchase in a neighborhood that's going to appreciate things like good school zones all of that will affect your resale value if you're looking at this like a long-term play so how much do you make every month what's your after-tax monthly income after tax it's approximately 4.2k I have a lot of deductions in my my tension and my 401k if we remove those out just after just your federal state taxes all that without any investing healthcare premiums what would it amount to every month I don't really know per month of my salary is like a little bit over 91k I don't know how much it is monthly without it because our parameters about quarter of your take home pay going towards that mortgage that includes principal interest taxes homeowners insurance HOA and right now on a 15-year fixed it's looking like your payment would be if you put a hundred K down on a house is three hundred fifteen grand your payment would be a little over twenty five hundred bucks yeah yeah I was about to have a yeah yeah it is I have talked some wonders too as a proximate would be twenty I think it is I think you're right I think might be twenty four I'm also trying to align it with some with some grants too which is why I'm not like rushing but I'm trying to talk to the lenders and see what I can do the first time of home loading and stuff I would okay just make sure you're I would stick to a conventional loan here a lot of these FHA loans and first-time homeowners they they have a lot of restrictions and red tape and it sounds great on paper until you get into it and on top of that other fees so I would tread lightly I mean I think you're close you got a great solid start 87k save plus your parents 40 if you can put a hundred K down and make the payment work right now you're it sounds like you bring home about five grand a month so that's my fear if this is twenty five hundred bucks out of five grand a month that's a problem yeah that makes sounds yeah I'm planning on also ranking up as my friends to like own some rooms if if I was one or two this is three floor and uh three floor townhouse and everything will just the the how it looked is not like a regular townhouse that's the reason why I call them and oh my god I don't really see much information about this around yeah like let me see if you got the thing in about it that's my fear is that if it's so odd that not a lot of people would be wanting that kind of house that just could hurt you in the future yeah that's that would be the long thing if the development is kind of quirky and weird and it would be hard to sell um that'd be my only caution and again making sure that that payment is still not half of your take-home pay because we don't want that either so um yeah unless your income's gonna go up I wouldn't make this purchase just for that reason alone yeah and I wouldn't either depend on other people helping pay the mortgage either um I would have that be a bonus right that it's still um you know around a fourth of your take-home pay and then if you do have some extra income that's right but if you do have some extra money coming in from roommates let's just kind of the cherry on top great question you've heard from me and the Ramsey personalities for years but nothing beats actually getting together in person that's why we created the live like no one else crews for seven days we're vacationing with you and twenty five hundred Ramsey people in the western Caribbean with live shows us new content us and more if you're on baby step four or beyond come spend the week with us next March choose your cabinet Ramsey solutions dot com slash events or click the link in the show notes welcome back to the Ramsey show and the fair winds credit union studio let's go to Alex in Miami up next Alex what's going on thank you for taking my call guys um I got to give you guys a little background about myself like 16 years ago I became a convicted felon and that kind of cost me like forty thousand dollars of restitution since then I've been able to pay it all back but also between that time I've been trying to speak to my siblings and my mother about group economics in order for us to prepare for her retirement around I was there around twenty fourteen to twenty twenty I think the more the interest rates were kind of favorable her interest rate was around seven point eight and I think we could have got around like four points something I'm not 100% sure but I think we missed out all sixty thousand dollars that kind of went directly toward my mother's retirement or towards the house principal and lately I've been speaking to my mother about preparing because she's now sixty five and she's ignoring me when I speak to my siblings as well they are also ignoring me and I think I've accomplished enough in my life where I feel like you know what my opinion should matter and at this point I kind of want to just give up and just like live my life on my own and just put everyone to the side because no one's planning at all and and planning for your mom specifically is what you're talking about correct exactly yeah oh man Alex welcome to family you know just don't listen when you want them too that is function doesn't discriminate I know I don't know your relationship with them prior to this but it sounds like it was already kind of estranged um with my sister definitely um all the brother he just passed he had cancer over the last year um like the way like the family as a home has been progressing I'm honestly I don't know what to do besides of just being the independent individual and just moving on and whatever happens with my mother when she made he because she's obviously doesn't want to plan that's on her and however however everyone feels about it that's what will be on them as well I mean I hate to be that bleak Alex but that's what ends up happening And we talk to a lot of people that are in a position of yours saying, hey, I'm trying to like wave the flag here and say, guys, we gotta make some plans because she's not getting any younger. We want to make sure she's taken care of. And the hard thing is, Alex, you cannot force anyone to do anything. And so your attempt was so good and then at the end of the day, you kind of do have to come to peace and terms with, you can't force people to do something. And I think that's, I mean, I lived so much of my life really believing if I could just say it this way or phrase it this way or get certain people in the room, then the light bubble come on, you know, of what you're looking at and seeing and you want everyone else to see it. And when they don't, it's like you're just hitting your head against a wall over and over and over again. And so I think there's a level of coming to terms with, you can't control people, you can only control you and your humility in it to say, hey, mom, because the siblings probably are not going to, you know, budge much. But I probably would let her know one more time, hey, mom, I love you. And I want to make sure that you are taken care of and everything that you're wanting in this life and this is morbid, but it's true. And when you pass away, that your wishes are shown through of what you want, what you're going to leave to be distributed the way you want. And I want to make sure there's a will in place, right? Like, I want to see these things for you, mom, and I'm happy to sit down with you today to do that. Or if there's a time in the major issue in that because I became a convicted fellow and I had problems in my past, no one trusts anything that I see. That's at the root of your frustration is this resentment. You're going, hey, I changed. I'm doing well with money now and no one wants to listen to me. But the picture they have in their head is, well, how would I listen to this guy's genius financial advice? And so that's the hardest part about you creating this new chapter for yourself is realizing these people may not ever understand. They may not ever ask you for advice and you need to be okay with that and not give, I don't even personally give unsolicited financial advice, Alex, to my own family. I've played this game and it doesn't work out. I just get angry. My mother cannot read or write, like, it's very dysfunctional, like my mother doesn't have like an elementary education. So, like, for her to go on for it and like, without, like, sure, actually the reason that it's her, like, when if I'm out of the picture, who's here with you? I'm trying to figure all of this out and I'm trying, like, screen, I just nuts me not to talk about my lungs, but trying to explain it logically and everyone seems to want to wash your hands. I think the path of my brother, my, all those brothers, everything seems to have gotten worse. And my sister doesn't, don't even speak anymore. And I'm upset 'cause she decided to plan what to her husband, which she's known for a year and not her own siblings. And I'm really like, okay, I should do that at this point. Alex, you're hanging on to a lot of anger, man. And I understand and a lot of it is reasonable. You feel like, man, I've changed my life. I want to help my family. I'm trying to do a good thing and it's all backfiring and no one cares. And I want you to release that, which is a really hard thing to do. That's going to take some time, probably some counseling. But there's a lot that you want to get out there that is just stuck and there's nowhere to put it. And so what you need to do is live your life and create this new chapter, maybe new friend group and kind of create your own family at this point because clearly they have opted out of this relationship. You've done everything you can and you've realized the hardest way that you can't change people, you can't make them take the advice. So the best thing you can do is just use your energy where it's actually going to be fruitful, which is your own life and people that you can help. And finding your worth and your value, Alex, sadly, will not be coming from your family because they're not valuing you, which is really hurtful when it comes from your own family. And so, yeah, there'll probably be some grief to walk through of what you thought this was going to be with them in this second chapter of your life as a changed man. But I think the work is having to release that, what George is saying, which is so sad. It is so sad. And you know what's coming to. That's the hard part. And you're worth it though. Just for you, when you said, I feel like I should just vanish, no, I don't think you need to vanish. Maybe from a family standpoint, yeah, your input may not be needed anymore because they're not going to listen. But finding who you're created to be Alex in this next chapter of your life and the good that you can do on this earth, that's what I would chase and that you are always there for them. And there may be a day they circle back. But you cannot force them to do something that they're not willing to do or have a conversation. They're not willing to have. I am. Well, we wish we could get to every calling question here on the show. So if you have a money question, you want to answer for your situation, head over to our website and use Ask Ramsey. It's our free AI tool that is built and trained on proven Ramsey principles. You'll get an answer the same way we'd answer it right here on the show. You can go back and forth, have a conversation, save the questions. That's really incredible. So ask your question today at ramseysolutions.com or click the link in the description if you're on podcast or YouTube. Jeff is in Orlando. Up next, Jeff. Welcome to the show. Well, thank you. I was calm, basically, to see, I'm trying to decide I've never invested before. I don't even know. Not about investing. So I don't know if investing would be the best or to continue to keep throwing extra money towards my mortgage. I also just bought a year ago, and then I just refinanced a couple months ago. Okay. Great. Do you have any consumer debt, Jeff? No. I have no credit card card. I'll pay it off. Wonderful. Do you have money saved just in an emergency fund? A little about three, three and a half months worth. Oh, good. Okay. Amazing. And how much do you make a year? I am on a disability pension that doesn't get any raises, so this is why I'm so concerned about my future. And I'm also on social security disability because of an accident ahead. Okay. So how much money do you have coming in a month? We met in between my wife about 7,200 to 7,500 depending on her bonus for the month. Okay. That's great. And you guys have nothing saved in retirement at this point. How old are you guys? No. I'm 48. And my wife is about to be 46. Okay. Well, what we teach is investing 15% of your income in two retirements. And then anything above that, then be throwing at the house. They're growing. Okay. My daughter's in college and my son's 26. Okay. Great. So, yeah. Yep, some of this money, maybe like 900 bucks a month into an investment account. And so you guys could open up a Roth IRA is a great place to start for both of you. You can fund. We did just do that. I'm sorry. Oh good. Okay. So you can fund 7,500 each into that account, which is great. So 15,000 could be going in to into that account. So that'll take up most of that monthly investment that you'll be making into it. And then if you guys have anything extra, since you're not, is your wife working? Yeah. She works. And that's why I forgot about the Roth. She just, they just offer her, they'll match up to 50% up to 5% with an IRA Roth. So she's maxed that out. Is that like a 401(k) because an IRA would be outside of an employer? Yeah. I guess it's a 401(k). I mean, it says IRA Roth through the job, and like I said, they match 50% up to 5%, which was also confusing to me. I didn't quite understand that wording, but I was like, well, just max out to 5%. Yeah. Because if you get that 5% basically, they're saying, hey, we'll give you another two and a half. Yeah. So that's a great start because that's free money pretty instantly. And if you guys do that, we can crunch the numbers for using our calculator. If you let's say you maxed out those two Roth IRAs per year, just an example that's 15 grand a year. That's 1250 a month. You said you're 48 and 46. So can we take it to 66? Is that fair? Yeah. If you do that for 20 years, even starting from nothing, we'll show you how much this could turn into. And if you're watching on Spotify or YouTube, we'll throw this up on the screen. Yeah. If you have nothing currently invested, but per month that it's about, yeah, 1,250 bucks going into all these accounts for 20 years, it'll be about a million dollars, Jeff. Good Lord. But I mean, it seems like, I mean, 1200 seems like an awful lot though. Like how do you? Well, that will deliver gets the problem. Well, you have 75 ever coming in. So the goal now is, how do we live on what's left after investing? Because 7,500 is your take home pay? Is that right? Yeah, roughly. Usually it's about 72. It depends on my life's bonus from work. It turns it to about 75, but even if that came out of your net income right there, 63 hundred, still leave you with about 5,700 to live, and that would cover all of your bills. Yeah. What's your mortgage? It's 16, 81 a month for tax, before taxes and insurance, with taxes and insurance, I'm about 2,000 with tax insurance at another 420 dollars, so about 21 hundred. Okay. That's fairly reasonable. It's a little less than a third of your take. They don't pay right there. So you should still have margin left over, and this is where you and your wife just need to sit down and make a budget each month and go, hey, our priorities are, let's cover all the bills, the four walls, food, shelter, utilities, transportation, investing has to be a priority because we need to make up for lost time. And so you're wondering, man, that sounds like a lot of money. It is, but once you get the muscle memory of that's just money's gone. We're going to learn, we're going to pretend like we live off 5,700 bucks a month. Your life will change because 20 years from now you're going to look up and have a million bucks instead of nothing. Right. That's it. That's it. As much as you give me some more to think about and see that now we would have been like for investing rises. My cousin told me, you know, since I don't know much about it, just do like a simple S&P, like to vanguard or something like that. That's not a bad plan. I mean, we recommend four types of mutual funds, and when you look at an S&P 500, it essentially is a mutual fund. It's, you know, many, many companies, 500 of the top American companies and it's weighted. So the larger companies have more of a weight than the smaller ones, but what you'll find is that the average rate on it, all of those is going to be 10 to 12 percent. And so the S&P 500 is a great starting point. We recommend having even more diversification because those are large cap companies. So I think the biggest companies, over 10 billion dollars, well, then you also want some in the mid cap companies and the small cap companies because they can also see some great growth over time. And then international is the last one that we want to diversify across. Know that if the U.S. market takes a dip, the international one can help bolster it. So those are the four types. And I want to send you our investing guide. You can go to RamseySolutions.com/Guide. I believe that's the link. I'm going to double check it for you. But there's a free investing guide. If you read through that, it's going to be like a little master class on investing. Even if you've never invested a dime, it's going to help you. Okay. Thank you very much. I appreciate it. Absolutely. Jeff, and anyone listening, when you get to this point of investing, you can even sit down with a Smart Vester pro. If you go to RamseySolutions.com, you can find a few in your area and talk to them and make a plan because they're going to be able to really map out the next 20, 30, 40 years being a hold you are of what you need to do. And they really follow our principles and our steps because all of what you're just saying George is so important, that's aversification of it all. And when you start a little later, which is not bad because he's starting, you want to be that much more intentional to make sure you have enough for retirement. Yeah. There's less margin for error at that point. You have to make sure that money has to go to investing and has to go to the right places to help it grow over time because compound growth is doing the heavy lifting on that million bucks. Well, yeah. You didn't actually invest a million. No. He would have put in 300,000 and the growth is 782,000. So that's wild. Double the growth. Yep. It's all in the growth. So the sooner you start a matter, made some money, that new pile of money, made some money and so over time that really balloons into something incredible. All right, Rachel. That was fun. We had a good time. Our scripture of the day, Luke 12, 15, and he went on to say to them all, "Watch out and guard yourselves from every kind of greed because your true life is not made up of the things you own no matter how rich you may be." Lord Einstein said, "Not everything that can be counted counts and not everything that counts can be counted." Simmer on that one for a little bit. You'll get it. Love it. That puts this hour of the "Ramesy Show" in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. [Music]