Make Decisions Based on Facts, Not Fear

Doing nothing with your Medicare plan could cost you hundreds or even thousands next year. Chapter can help you avoid that. Go to AskChapter.org slash Ramsey. 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 Dave Ramsey. George Campbell, Ramsey personality, number one best-selling author, is my co-host today. You can call in. The calls are live, and you are the reason we are here. The phone number is 888-825-5225. If you don't know, we're on the air from 1 to 4 Central Time every day. And have been for almost 40 years. And we're on 640 radio stations. And a whole bunch of those are live. And we're on big time on YouTube, big time on Spotify, big time on podcasts. We're everywhere. So some of you may be listening at a time other than 1 to 4. But you can always get through and call and ask your question. And sometimes, George, people think that these questions and these people are so weird that they're not real. You know, we don't have time to go out and find the weird. It just comes to us. It comes to us in mass. We don't have to cast calls here. And we don't script it. We don't tell people what to say. You guys are entertaining enough without our help. So just come on. Bring it on. We'll help you. Whatever your mess is, if you've screwed up something, we're welcome to being a human being. If you've made mistakes with money, that makes you over 12. That's it. Everybody has. I've got a Ph.D. in DUMB, and that qualifies me to do this show and answer your question. Been there, done that, got all the T-shirts. So, again, 888-825-5225. Jaden is with us in Boise, Idaho. Hi, Jaden. How are you? Good, Dave. How are you? Better than I deserve. What's up? Well, I've got just kind of a general financial question just because the money's getting pulled more directions than it can go. So I'll kind of give you our situation. When I was 28 and single, I saved up $100,000 to put towards building a house. I built a 3,000-square-foot house with -- it's a two-bedroom house -- with plans to add on more bedrooms someday when I had a family. So now I'm 35. I'm happily married. We have a one-year-old, and my wife's pregnant with our second. I work for a small family farm. They hire me, pay me as contract labor, and my take-home after taxes and tithe is about $55,000. And so I'm kind of just looking for some general long-term advice because I foresee that potentially my job could go away here in about 10 years, and I could be out of work. The farm that I work for, the dad's 75, and he's getting close to retiring. The son's 50, who manages the farm, and he -- I could see him retiring here in maybe 10 years or so. So I'm looking. What should I be prioritizing now? With, obviously, my limited income -- we have enough, but it is limited. So should I be prioritizing, like, my Roth IRA and retirement, or should I be trying to pay off the house early, or looking towards securing my future and trying to buy farm equipment and farm on my own? What are your thoughts there? A lot going on. Yeah. So do you have any debt other than the house? We don't. We have no debt. Our cars are paid for, our babies are paid off, we have no credit card debt. You got emergency savings? We have about a $20,000 emergency fund that we've saved, and the house is on a 2.5% interest rate, 30-year, and we've got about $209,000 left on it. Okay. So your current job has a fuse burning, it's going to run out. Yeah. And it's not the greatest job in the world. You're not paid, like, super-time. You didn't call me up making $500,000. You called me up making $50,000. Yeah, yeah. So what do you want? I think that the biggest thing on -- if I'm in your shoes, the biggest thing I'm looking at is, what do I want to do? Not sit around and wait on them to retire, it's what do I want to do with my life? What do I want to be doing when I'm 60, what do I want to be doing when I'm 55 that pays more than I'm getting paid now? And if that's get some farm equipment together and start a farm and you can make $100,000 doing that, that's fine, but if you're going to make $40,000 doing that, that's not a dream, that's a nightmare. Yeah. Yeah. It's hard to support a family on that. I know, I know. So, you know, I think the income side of your equation is what I'm working on more than anything else. You've handled the rest of it. You've been very responsible and done a great job overall. Okay. How much is left every month right now once you cover all of your bills? Are you saying after like putting into the Roth IRA and those types of things? Are you putting in? How much, what's the percentage you're putting in dollar amount? I'm putting in 500 a month into our Roth, so I'm close to maximizing it, but my wife's pregnant and we've got a baby due, so I'm trying to save for that in case there's extra medical bills there. So I'm putting 500 a month, which I know isn't 15%, but it's about 10. Right. Right. You're getting close. So, um, again, I'm going to go back to, you know, let's pretend two things. Let's take the extremes and that kind of gives wakes up my, my brain a little bit. Let's pretend you walked over there, the farm tomorrow and they just said, Hey, we're closing up. Friday's your last day. That's pretty extreme. I'd be like, Oh crap, what am I going to do? Well, what are you going to do? And let's pretend this, that you could do anything you wanted to do. What would you do? I mean, I'd like to farm, I'd love to raise my kids. Can you make, can you make a good living doing that in your situation? That's the big question. It's getting harder and harder to do in our area, the crops that we grow. And so that's, I mean, that's the big question. Farming is a business. It's a business with a big old heart, but it's a business. And so, you know, if I'm you, I'm going to run out of business. Pro forma, a business plan that if I raise this many acres of this type of crop with this kind of equipment expense, I'm going to make a hundred thousand dollars a year. Net profit average, some years better, some years worse, depending on the crop, obviously. But I want to have, I'm going to aim at getting my income up and living my dream. And I got to figure out then, okay, what must be true for that to happen? Well, I need to save up and I need to buy these three pieces of equipment. I've got to get a lease. I got to secure it on a piece of ground. I got to do whatever. And, you know, you need to be thinking about where you're going to go. And if farming is only going to make you 40, when you run it out and you really can't figure out a way to make more than that, then that's not fun. We've all already established that no matter how big the heart is, it doesn't matter. You still got two little baby birds there wanting to be fed. So in the meantime, as you try to get this business set up, you might find that you do something else in the agricultural space where you can get paid 60 while you try to build this thing on the side. Cause what I don't want you to do is just leverage to the hill, trying to make it happen and buy all this farm equipment on debt, uh, when you're really not a place to do it. So you can go slow. This doesn't have to be tomorrow, but let's aim to get that income up while being in this industry. And over time, I hope you get that dream where you're living on the farm and making a hundred thousand dollars. That's a great goal. Yeah. I think there's something to aim at. But again, we have to, you know, the, the, the, the part about being a dad and a new dad is you get that reality shock and it's like, I can't just do something that just cause it feels good. I can't do math with it. I actually have to be able to make money to feed my family. That's goal one. Then feeding other people's family is goal two. And so, um, I don't know, I don't know your world and I don't know what crops you're talking about and rotation. I have no idea what your profitability is, but that's what I'd be aiming at starting a small business that makes me more money sooner rather than later. Yeah. When you take your car to the shop, you're probably thinking two things. How much is this going to cost me? And is it going to get done right? What you need is a mechanic who will give you transparent information. So you can make the best decision for your car and your wallet. Christian brothers automotive is the official auto repair shop of the Ramsey show because you can trust them to take care of your vehicle the right way. Their digital vehicle inspections let you see exactly what their technicians see, giving you confidence on which repairs are urgent and which ones can wait. Plus every repair is backed by their nice difference warranty three years or 36,000 miles with a guarantee like that. You can walk away. Knowing that your car and your wallet are taken care of. Schedule your service today and get 10% off your visit at CBAC.com. cbac.com slash Ramsey, or click the link in the description. That's cbac.com slash Ramsey. 10% off, up to a $250 value. See store for details. Ruth is in New York City. Hi, Ruth. How are you? I'm doing okay today. Thank you for taking my call, Dave. My pleasure. That's what we hope. My husband recently passed away like five weeks ago. Oh my, I'm sorry. How long were you guys married? 41 years. Wow. What happened? And I was actually his caregiver for 14 of them. Ooh. So he's been, he's had health struggles for a while. Yes. Yes. I'm so sorry. So now I'm navigating the transition and like my tax status is going to change because this is the last year I can be married filing jointly. I do have one, my youngest child is 18, so she'll be going to college. So I believe I'll be able to be a head of household, um, coming this coming year. Yes, ma'am. Um, and I'm worried because like the brackets, this bracket still are not as good as they are when you're married filing jointly. And I have a lot of money in a traditional IRA. Um, even though I was a single, basically a single parent, I only had one paycheck for the last 14 years, I was able to amass. Um, a little over 700,000 in traditional IRA. Um, I have a loss of 150. I have a brokerage statement. I have an HSA, a DAF checking. Um, but my concern is the, the traditional, the money that's in a traditional IRA and whether I should be prioritizing switching it over to a Roth or am I better off? Like let's say if the taxes are about, let's say 70,000, I live in New York, so I'm in New York. I have New York and New York, they don't tax the whole 700,000 every year. I only got to tax the amount you pull out of the traditional each year. Right. So how much should I be pulling out? Like, should I be taking out the amount till the next tax bracket? What do you need to live? Um, like a hundred thousand. Okay. And you got the one 50 in a Roth. Okay. And you have other income coming in other than these two. I'm working still. Yeah. Okay. So how much do you make? Um, about two 50. Okay. So you don't need any of this money today? No. Okay. So that's the first thing. That's good news because our standard advice and it pretty much always works is don't make decisions, big decisions right in the middle of the tears. Give yourself a little time to cry. You've been holding everything together one hand on one hand on one thing, one hand or another, taking care of him, running the household, making 250,000 a year for 14 years as he's, as his health is apparently deteriorated. And now after 41 years, you know, your best friends in heaven. And so if I'm you, I'm crying a lot. Yeah, I am. Yeah. I mean, it's cause it's like a breath of air. It's just crazy. And so don't make big decisions in the middle of it. Yes. I would do nothing for a while, like six months or a year. Nothing. Right. But even I'll come back to it. I'll come back to it. But I just want you to breathe. I want you to breathe. In general, I should breathe. Okay. Okay. You're yeah. And so I don't want you to take this advice and go do it tomorrow, please. It's a bad idea. It's a bad idea. You'll regret it and you'll be mad at me later and it won't be my fault. It'll be yours. So just take your time. Oh, I know. But you're, you're, you're an overachiever. I can tell by talking to you. You get things done and you just put, you just go. And it's one of your ways of dealing with all this. So I want you to just, just, just ride this thing out a little bit. But now we've, we've established the ground rules. Now, then how old are you? 63. Okay. At 75, George, RMDs, I believe. Is it now 75? I think they've moved it to 75. Yeah. For my age. Yeah. I looked that up. Yeah. Okay. So 70, 75. So, so you've got 12, 13 years before you have required minimum distributions. So the tax bracket thing doesn't bother me a bit. You're already maxed on the tax bracket at two 50 before we do anything with this. So there's nothing you can do to cheat the tax brackets. You're just, you're just slammed. And so as long as you're making two 50, anything you pull out, it's going to be taxed at your tax rate period. Great. Uh, cause you've maxed everything out. And, um, so, uh, the advantage to moving everything out is, is that you don't have to pay for it. You don't have to pay for it. Is, uh, that you don't have RMDs later. And of course, from this point forward, it would grow tax free. So one scenario, an extreme scenario would be if you just pulled it all out at once. Okay. The taxes will be 210, 220,000 bucks probably. And so you'd have 500,000. Okay. And that's a year from now. You probably have more than that because the investment is probably going to grow in the next year. But, and if we just took it all out and paid the taxes out of it right now, then the 500,000 would double in about seven years. And so when you're 70, you'd have about a million. And when you're 77, you'd have about 2 million. And when you're 84, you'd have about 4 million just in that one account. If it's invested in good growth stock mutual funds. Right. Right. I follow your plan. Yeah. So that, that's the extreme. And if you want to do it a little bit slower, you know, I'm going to do a third, a third, a third over three years. If you're still making 250, it's not going to be that slow. It's not going to change the tax numbers. I don't think you get some professional tax advice to be sure. But what are you thinking, George? Well, either way, like Dave's saying, if you wait a long time to do this, then the tax is going to be even bigger. So there's just a balance here. So we're trying to find a sweet spot with your tax brackets and how much you're going to pay in taxes to at least mitigate some of the tax damage. But either way, on some end, you're going to be paying some big taxes. I would be tempted to do it all at once. Um, but I'm not, I can't make a real. Solid case for that, except that every year you wait, you have more in there that is taxable. So we're making the problem bigger, the longer we wait. And that's what, that's what bothers me. Cause I just can't stand taxes. And, and so I'm number one, I'm a wait a year before I do anything. Number two, I'm either going to do it all at once or do it over about three years so that you don't ever have our MDs. And so that when you leave this as an inheritance, whoever your beneficiary is on it, they'll have no interest. They'll have no income tax on it whatsoever. Okay. What about the impact on Arma? For Medicare? Yeah. When would you be taking that at 65? Yeah. Well, they're going to look back two years at your income. So I wouldn't artificially, yeah. So I wouldn't artificially try to lower your income. It just going to be, it is what it is for a couple of years, uh, until you're actually retired and your income goes down. I kind of think. You're at 250, you're already hammered there too, aren't you? Yeah, probably. If you make 250 up to sit up to that, you're going to, you're going to pay. The other thing is this, you can just buy health insurance. If you've got a couple of million dollars, you just go buy some health insurance. Right. Well, if I'm continuing at work. Well, I mean, even if you just went in the marketplace and bought health insurance, it might be cheaper than doing the wrong thing with 700,000 bucks to try to get free government health care. Right. But as long as you have it through your employer, right, you're good to go there. Right. But what about the money that, let's say I spend 500 on taxes right now to make this change? You wouldn't. Not right now, next year. You wouldn't. Then what if that 500 were to just, I would leave it in the market and I would leave it in traditional and then it would keep on appreciating in value. Yeah. It's not 500 in taxes. You'd have about 500 left over if you had 200 in taxes. But anyway. That's all it would be was 200 in taxes. Probably. I mean, you're about 30, 30, about 30% is what I'm running. 220,000, 220, 230,000. Again, you need to sit down with somebody and figure out where to get that money from. Well, you would take it out of that. Take 700 out, pay taxes, and what's left after taxes would be around 500. That's what I'm, that's what I was saying. That's a, and that's a sticky thing. If you have any money that's not in this, that you can throw at the taxes instead of using this money for taxes, I wouldn't use the Roth money, but anything else, if you've got another 200 grand laying. Then somewhere else in a brokerage account, use that to pay the taxes and roll the whole thing to a Roth. That's what I would do there. Preferably. So yeah, but either way, um, don't number one, don't make a decision based on Medicare because Medicare is not a big enough number to wag the tail on this dog. Okay. It's a small number and it's just an emotional thing, but it's, it's not a big number. And, and number two, go slow. Give yourself. Some room to breathe. You've been fighting this battle a long time, kiddo. And, um, I want you to have just kind of relax a little bit and enjoy the ride. Nothing you do wrong. Nothing you do here is going to be terrible. You've got a million dollars way to go. Thank you. this episode is brought to you by better help every year you tell yourself you're going to handle the holidays differently you're going to stay calmer you're going to feel more peace and then it's the same old pattern the same family tension and you're cranky and you're tired and you find yourself snapping at people that you love listen you still have time to get ahead of everything and understand what's behind your reactions therapy can help you build a healthier plan before you actually need it when you're ready to have that conversation i recommend better help better help is an online therapy platform with more than 30 000 licensed therapists across its network if your first therapist isn't the right fit you can switch at any time for no extra cost and get this if you've thought about trying therapy with better help insurance options may now be available nationwide through participating providers and eligible members have an average copay of just 23 bucks a session listen you know what's coming this holiday season this year you have time to make a plan before the holiday chaos by preparing differently go to betterhelp.com slash ramsay to check out your payment options that's betterhelp.com slash ramsay or click the link in the description well if you don't have a million dollars yet and you're working the baby steps you're getting out of debt you got your thousand dollars saved you're paying off your debts or whatever then we teach you to uh not see the inside of a restaurant unless you're working there work extra jobs all of them all the time because you're in the ditch and you need to get out and until you get your emergency fund built that's what we do it's game long baby work work work work work and you have no life and don't tell me otherwise because right now you got no life you're a slave but once you break free of baby step three you're debt free except your house and you have an emergency fund of three to six months of expenses then you move from intense to intentional and that's when you go on vacation that's when you upgrade the car with cash that's when you uh buy the couch that needed to be upgraded and that one doesn't work seeing some things yeah yeah so that's when you would go on the cruise with us to live like no one else cruise baby step four and beyond and we would love to have you we're going to be doing this march 14th through the 21st it's our second ramsey cruise the whole ship is ramsey people all of the entertainment god help you is ramsey personalities so it's george and me teaching about uh wealth building it's rachel and george doing smart money happy hour it's john and rachel doing money and marriage i'm doing some entree leadership stuff jade will be doing some special stuff each of us are going to be taking different nights on the stage teaching and talking and doing okay all these pop-up question and answer stuff we'll do the world's largest debt free scream live tapings of your favorite ramsey shows it's going to be a lot of fun and it's a high-end cruise this is not the walmart on the seas this is like nice holland america okay and it's a sweet yeah and so you you can come with us they're still yeah you check it out uh for the limited time third and fourth passengers sail free plus you can unlock a free cabin upgrade with this code sail with dave and that's not s-a-l-e that's s-a-i-l baby sail with dave come on so for offer details book your cabin go to ramsey solutions.com slash events we're going to go sailing in march if your baby step four and beyond we'd love to have you george it's fun we're going with or without you we'd rather be with you that's it oh a little fomo there it's more fun with you guys oh absolutely matthew is in atlanta hey matthew how are you hey i'm good dave how are you better than i deserve what's up all right excuse me um i just had a uh question and was kind of looking for some advice on um what to do as far as my career and finances go uh i just for some context i have listened to you and you know watch you on the internet and i've been watching you on the internet for a long time youtube for a long time haven't done really what i was supposed to do as far as setting my family up correctly but um basically uh where i'm at right now is i was working a pretty good career matthew you with us yeah i'm here i'm sorry um so i was working a pretty good career and got injured on the job and uh what was your career matthew um i was in line work i was uh installing uh fiber optic cables yeah what happened um so i was uh working up on the side of the house and um i was on a ladder got sworn by some wasp and fell off and landed on some big rock and i was on the other side of the house and i was on the other side of the house and uh broke my back oh wow so and that's that's actually the the second time in my life that that i've had a pretty serious back injury i was a when i was a teenager i had a car accident and broke uh crushed my t12 vertebra so it's just it's just a couple things have kind of stacked up yeah i guess so brother i'm sorry wow how old are you just turned 28 when did this happen how long ago well so it happened in 2024 and and at the end of 2024 and then i went on workers compensation and you know kind of got drugged through the through the ringer with the insurance company and everything and you know ended up getting getting pretty screwed over with that so what's the status now for your income because it's been two years how have you been getting by yeah so you know like when i was on workers comp obviously i was getting paid even though it wasn't you know they were they were kind of screwing me in that area but so did that end um that yes sir ended back in july of this year and so um with my injury i'm i'm not able to return to that that line of work and do what i was doing so um i've been just i've applied at so many different places and and really i've been able to return to that line of work and do what i was doing so um i've been just i've applied at so many different places and and really i've been able to really really been looking and how mobile are you now what's what's the state of your health so i you know i'm wearing a back brace 24 7 um i i had recommended uh excuse me three doctors had recommended that i get a back surgery um prior to being out of workers comp and workers comp would just never pay for it and so when we settled i got a little bit of of a settlement not much it was like 30 i came after attorney got paid and everything i go out the way like 35 or something like that 35 000 and um so that's kind of what we've been using to supplement how much of that is left uh six thousand dollars so you got six grand to your name are you married did you say yes sir i'm married does she work outside the home yes sir she's a she's a teacher right now she's got her master's degree and all that and so she's what does she mean she brings in uh every month she gets paid once a month she brings in about thirty one hundred dollars she actually just got a little bit of a month because she completed her masters good okay dude so what's your level of pain so it kind of varies depending on what i do um you know worst case scenario um you know it's been you know where i couldn't even hardly move i couldn't i couldn't walk my legs would give out up under me but um after i got out of workers comp i actually used about um five thousand of that to go to a um there there was a specialist here near where i live that um they offer decompression treatments to kind of help uh rejuvenate and um you know heal the heal the spine and and do things like that and so i have been doing that have i'm still continuing to do that for and so if physical work is off the table would this be more administrative work you could do behind the scenes what kind of jobs you've been applying for yeah i honestly i've been applying it everything i've been applying i've applied at restaurants just to to serve because when i was you know at like early 20s i um had had been a server before i've applied it so many different things that feels pretty physically demanding based on what you told us but your your wife is bringing in 3100 what are your monthly bills do you guys have debt payments on top of your normal expenses yes sir how much debt like i said so outside of the home um we we have about um i believe it's about 80 80 000 outside of the home on what um yeah well and I know one of the things is is a truck and it's um we owe 23 000 on it and i know um i've talked to her talked to my wife so many times telling her that you know i need i need to sell it and all this but i just don't understand how that works um as far as like okay when we sell it like i don't have any like equity on it or anything so i won't get anything out of it it'll just kind of be paid off you'll need money outside of that to get you something else to get from a to b but right you can even sell for 23 it frees up how much of a payment hundreds of dollars right yes sir it's i have a it's like a 372 dollar payment yeah so matthew what we're gonna do is we're gonna hook you up with one of our ramsey counselors to walk with you through this as our gift um what's got to happen is you got to narrow your job search down to something you can actually do you can't wait tables in your condition it's not gonna work your back's gonna give out so you're gonna have to say what's my new career gonna be and and what kind of keyboard warrior am i gonna be uh what am i gonna use my mind for instead of my body and then how do i get tooled up to make some money doing that and we'll also send you a copy of ken coleman's book finding the work you're wired to do because you've got a whole new career ahead of you that's completely different when i hear the words open enrollment i'm immediately stressed out and the same goes when i hear deductible and premium you probably feel this way too choosing the best most affordable health care for your family can be overwhelming will my premiums go up is the doctor i want even in my network can i even afford this well the good news is there's a different option christian health care ministries chm isn't insurance it's a health cost sharing ministry where members share each other's eligible medical bills so instead of premiums you make a monthly contribution with programs starting at just 115 a month and here's something you don't hear often they're not raising their prices this year guys this is huge and you also get to choose your own health care provider no network limits and unlike traditional insurance you can join at any time there's no enrollment window and best of all you don't have to choose between your health and saving money with chm you can have both it's why ramsey has trusted them for over 15 years visit ch ministries dot org slash budget and use promo code ramsey to get a 50 credit towards your first month of membership if you want to participate in this show we are on the air live monday through friday from one to four central time the phone number is triple eight eight two five five two two five sarah's in oklahoma city hi sarah how are you hi great how are you doing better than i deserve what's up great thanks for taking my call sure so um my husband has been in the military for 17 years and i am a stay-at-home mom we've got five kids uh we've been following your advice and been completely debt-free for 15 years we drive older cars and always live within our means we have never purchased a home and we we just showed up to our new base and uh so we move every two to three years with the military and we've always rented on base so with the military we get a housing allotment every month and we have a lot of rent that's tax-free and it is 2700 excellent um and so we can live on base um and that is uh utilities included so if we move off base we can keep that allowance to cover our own housing expenses whatever we decide to do with it right and there's very few rentals nearby so we would need to buy and so we have three options we can stay on base and rent like we like we always have and surrender our housing allowance to the base we could buy a house with roughly a 450 000 mortgage we can either buy a house on acreage or a home in the neighborhood um or we could sell some of our brokerage investments and pay cash for a modest 250 000 house off of base so if we buy a house we might keep it as a rental when the military moves us but we've never done that so we have no idea if that's a big headache or not our parents don't recommend taking money out of our brokerage accounts to put down a big down payment to buy a house in cash they say our money is worth more in the market than taking it out to buy a house so wondering what your recommendation is for only living here for two to three years at this assignment we've been working with the military for gosh 35 years i guess and your scenario is very standard um yeah the problem is number one you do not buy a house and keep it as a rental every time you move to a different base because you're going to have rentals scattered all over the united states and that's a really bad way to become a landlord um you know and just in order to have a place to live so we're going to take that one off the table bad idea okay if you're going to buy here's the formula okay talk to the real estate agent in the area and you can go to ramsey solutions.com and click on ramsey trusted for one of the agents the high protein agents we use in your area most of the time it doesn't work to buy and here's why the house has to do two things for it to be a good buy since we're not going to keep it it has to go up in value enough that you don't lose money as a result of having bought it with commissions and everything off the sale right so if it goes up one percent a year and your selling expenses are ten percent when you leave uh you're going to lose several thousand dollars for having owned we don't do that okay so are the homes going up in value fast enough that in two to three years when they move you again you can sell the house for a profit won't be much of a profit but at least a little bit that's the first thing is you need the rate of appreciation in the neighborhood that you're considering from the real estate agent they can pull that up off the mls statistics okay so i want to know how fast homes are going up in that neighborhood currently not in 2020 today okay and generally speaking house prices are not going up right now they're pretty much sitting standard so most of the time you're not going to find that to work if it goes up let's say it goes up ten percent a year in three years that'd be 30 percent right then you could sell it make a profit pay some expenses and still make a profit that'd be okay second number you're looking for is dom average days on the market okay when someone in that neighborhood not across town not with a piece of ground not different house prices that neighborhood house up for sale how fast does it sell if it's 27 days okay and if it's going up 30 percent going to go up 10 a year okay we can sell it quick and we can make a profit then that's a buy great okay you're not going to find that where you are right now okay and but if it says 275 days it's going to take you nine months to sell it you're going to be somewhere else and being paying payments on this thing or your money's going to be trapped from your brokerage account so okay i i don't think it's going to be a great idea to buy i think you're going to want to rent as cheap as you can rent and put as much money away for a house when you leave the military as you can get ready to have a house fund be paying into a house fund and create a chunk of money like your brokerage account is that's your house fund let's just keep adding to it and when you leave the military someday your parents are wrong cash the money out of the brokerage account and pay cash for a house today i wouldn't do that unless those two numbers appreciation rate and days on the market tell me to do it okay how much is in the brokerage account 250 um we've got total brokerage about 300 000 okay and you can keep adding to that and how long do you think he'll continue to be in the military um seven to ten years okay so now we kind of know if we keep investing for seven or ten years at the current rate here's how much money we might have in that brokerage account and that kind of thing kind of gives you a home fund but you got twenty seven hundred dollars to work with to go look for a rental okay yeah i'm gonna go look for a rental because i don't think in oklahoma city you're going to see heavy appreciation rates right now and short days on the market right now you might find it i might be wrong but it's it's going to be a pretty popular neighborhood that's going up in value and sells easily and then you don't get trapped when they move you because we're a hundred percent sure they're going to move you yep happens every two to three years exactly so i would probably rent but let's say you're uh in the navy and you're in san diego and you can afford to buy well you're probably going to see increases in value and you're probably going to see short days on the market in fairly normal real estate markets right now the real estate market's kind of just kind of sitting in the doldrums a little bit it's not really going up in value it's not really exciting uh it's not going down in value it's not crazy but it's just just kind of sitting there looking at us just looking at us and so you know that's that's the thing so you know and and by the way a modest home in oklahoma city right now is 250 000 that's the median house price in oklahoma city that's the middle house price So that's not like you're buying some junk or clunker. You're buying right in the middle of the market, $259,900 right now. You can pull it up on our website and look at it. Our team did while we were talking. And there's 2,473 homes for sale and median days on the market is 53. That's not bad. Not bad. What is bad is listings with a price cut are 42% of the listings have had a price cut. It's almost half are having to slash it to move it. I don't think I'd use the word slash. It said price cut. Oh, you know. We don't know how far they went down. 5,000 off. But they went down. But let's not create clickbait headlines. Fire sale. Oklahoma City market is a good market. I would buy a house there in a heartbeat, especially when you consider the median house price is $259,000. That's right in the middle of the market. What's great is if you're in the position to actually buy a house, you've saved up that down payment. Now's the time you can negotiate. This would be the time to buy. You don't have nine people knocking on the door day one. A city like that. Right there. That's a great place to buy and a great price range and everything. And so, but 450 is not the normal there. 450 is almost double the average house price. So just, you know, let's deal with the actual reality, the actual numbers, not what our emotions are telling us. And not all homes are half a million or a million dollars. Now, if you look at Bay Area or New York City, sure. But in generally, not everyone lives there. Huge population doesn't live there. An actual starter home in Oklahoma City would be like under 200K. Wow. See, people don't talk about that anymore. Ooh, I've been priced out. No, you haven't. You just don't live in Oklahoma City, you know? And so that's pretty cool, actually. That's a sweet situation. And you're right, George. If we have that many houses with price cuts of some amount, we don't know. Then you're good. You are in a buyer's market, and so I'd go out there and make some lowball offers and see what I can find. And so your 250 might buy a house really cheap. If you got into something cheap, then that also changes her equation. Yeah. Because she could get back out of it. Because 53 days on the market's not bad. That's not a dead market. Under two months, that's doable. But if it's six months, that changes my opinion. I mean, when 1978 got in the real estate business, we always took 90-day listings. Because it took, on average, 90. 90 days to sell a house. 53 days right now in Oklahoma City. Not exactly a dead market. If you've ever thought, I don't even know where to start with life insurance, you're not alone. And that's exactly why I recommend Zander Insurance. Because the insurance world will throw everything at you. Confusing words and add-ons like writers, whole life crap called an investment, return of premium, and it's all total junk. And most of that confusion you feel is by design. When you're confused, you make bad decisions. Expensive decisions. But Zander doesn't play that game. They cut through the noise and help you get simple, affordable term life insurance that actually does what it's supposed to do. Protect your family. They shop. The top term life companies to compare your options on the coverage that your family needs. No more, no less. No pressure and no upsells. Just clear answers and the protection you need. If you've been putting off getting term life because it feels overwhelming, stop worrying and get it handled the right way. Call 800-356-4282 or go to Zander.com. That's Zander.com. Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. If you want to be a caller on this show, it's pretty simple. Dial this number, 888-825-5225. George Camel, Ramsey personality, co-host of Smart Money Happy Hour and number one bestselling author is my co-host today, Rachel Zander. Rachel's in Atlanta, Georgia. Hi, Rachel. How are you? I'm good. How are you, Dave? What's up? I have been having a lot of internal back and forth about taking some time off of work. I'm just not certain that it's a wise financial decision for my family. Okay. Why would you be taking time off from work? I think it's a combination of feeling a little bit of burnout and a little bit of lack of passion for what I'm doing. So, I think a piece of me wants to regroup and maybe take the time to mentally just figure out what I'm doing, what the purpose is behind it, and what do I want to do moving forward. What do you do? I'm in operations and some things. I'm in administrative work as well. What do you make? With bonus potential, it could be up to $150. What's your husband make? My husband, with his bonus, at the minimum is sitting at about $225 now. Okay. Well, mathematically, it's pretty simple. Can you live on $225? Yes, we can. I think my hesitation is not necessarily can we live off of it, but what am I doing to set us back for a comfortable and hopefully potential early retirement. Well, you can become multi-millionaires on $225,000 in Atlanta, Georgia. Yeah. And you sit on your butt. Everything feels overwhelming today. The math is that. The math says you can sit on your butt and he could go, and with $225,000, you guys can be billionaires. Yes. But is that good for Rachel? I don't think so. Because I got a feeling Rachel just needs to reset, and that doesn't necessarily mean from a hero to zero. Yeah. So why don't we reset? How much PTO do you have? Definitely not enough to- How much PTO do you have? I think, well, I guess. It's one of resets the next calendar year. It's about three weeks. Okay. And so, and how many children do you have? Two children. What age? And we generally, high school and middle, and we rely on PTO pretty heavily. We do enjoy to travel. That's one of our core things, like it's something that's really important and meaningful to us, and our core memories are kind of intertwined into that with our children. Yeah, it doesn't really work if mom hits the wall and has a nervous breakdown. I don't want that to be the core memory either. So here's what I'm thinking. Instead of going, I mean, George, jump in here, but I'd like for you to take a week off with nobody and go somewhere by yourself. Go to a monastery and spend the week in prayer without saying a word. Go to the mountains and rent a cabin and spend the week writing and thinking. And taking assessments on your personality style and just reset and think, what do I want to do with the rest of my life? That's different than just cold turkey quitting. Okay. Our screen here says a year. That's a pretty big sabbatical to eat, pray, love. I think you can figure this out in a more sustainable amount of time than taking 365 days. And this might mean you go to counseling and get to the root of the burnout, because I'm wondering, is it the job or is it something within Rachel? And it really was. Never the job. I think. Because I don't want you to go from this job to another job only to realize you're feeling the same exact way. Yeah, I think it's a combination. I think there's a piece of that. And I think that, you know, we work really hard and we live relatively below our means. And we've built what we have in just about under a decade. And so there's a piece of me that's just like, we've done so much. And I feel like we've come so far. Like, do I deserve a break? Yeah. Yes, but you might be defining break wrong. Okay. It could be that you deserve to start your own business that you get great joy from. It could be that you change careers and move into something that gives you all kinds of fulfillment that you don't have where you are. Break doesn't mean sit on your butt necessarily. You know the old saying, if you have a job you love, every day's a vacation. You're right. Yeah. And you're way past that. You've just been hustling and grinding and are out of breath. I'm just saying, move off the track for a minute, get your breath, then let your mind clear up, and you'll make better decisions than a cold turkey quit or somehow walking through Europe by yourself for a year is going to solve this. Because it's not. Because it's inside of you. You're going to go with you wherever you go. Okay. You mentioned this. the idea of retiring early as a goal. behind that yeah um that's that's just one of our goals that's financially what we're working towards i mean technically you could retire now if you wanted to you said you don't need the money you can cover all the bills and then some with 225 just me no yeah but i don't yeah i think the goal is for us to retire together at some point that's what i'm trying to not take away from is selfishly making a decision that yeah then my partner earl nightingale used to say that the problem with hitting goals is not what we're willing to do to get to the goal it's what we're not willing to give up to get to the goal you've listed like three or four different things in this conversation that sound like to me you think they're non-negotiables like memories and retiring early and and and and and and and all of that has got you trapped to the point that you're talking off which means you're quitting your job and so i it might just be you adjust your job to where you can breathe a little better or you take a different career path or i don't care i just want you to do this for the right reasons and it feels like you're running from something instead of do something and and i've met with too many people in this situation over the years that at the end of this little period of time they're just as lost as they were at the start of the time because the goal wasn't to find our way the goal was just to run away from it and i think that's the goal of the way and that's that that'll kill you different yeah and so i don't want that for you i think financially y'all are fine you can live on 225 000 and you just have to decide we're not going to make as many memories and we're not going to do some of the stuff but you can live on 225 and you can make a lot of money might retire a couple years later than you had in your mind but he had in his mind because you're not you're retired now but i mean if you just quit cold you mathematically can do it as the answer but i just kind of don't think that's what you i don't think that's who you do something you've just been doing the wrong thing at the wrong pace we can we can help you with a soul search we'll send you a copy of find the work you're wired to do it comes with a get clear career assessment you can do that without quitting your job you can do that this weekend and sit down with your husband and start dreaming a little bit and that might get you on the path maybe you and your husband take a dream vacation for four days and plant the kids with the grandpa grandma like that happens to me sometimes i love it and um your face doesn't show you spend that weekend dreaming okay let's reset this dream and i'll see you next time we've been living a lesson we make we've been plowing the field let's reset the dream what's the new dream look like i love a good sale i also love the holidays but if you're like me sometimes those days are the best days for me i love a good sale i also love the holidays because six promo codes and a commercial later it's so easy to convince yourself that you need just one more scented candle or a waffle maker shaped like a christmas tree and some flannel pajamas the temptation to spend more than you budgeted for is real that's why i love having a bank that keeps my free spirit in check and for me that's fairwinds credit union with their smart bundle you can choose a ramsey themed debit card that says live like no one else it's a great finder to stick to your goals and what you're working toward especially in a season that wants you to spend instead of save you get a no monthly fee checking account and a high yield savings account you can even open up additional savings accounts like a holiday fund for gifts so you can finally pull the trigger on that waffle maker because staying on track for the holidays doesn't mean giving up your free spirit it just means being smart about it so get your live like no one else debit card by opening a smart bundle today at fairwinds.com slash ramsey that's fairwinds.org slash ramsey insured by the ncua so we've been teaching people how to become wealthy for almost 40 years at ramsey and we've created as a result by teaching you you've created more millionaires in north america than you've ever had in your life and we've created more millionaires in north america than any other organization we did it using the understanding that personal finance is 80 behavior it's only 20 head knowledge the problem with my money is the guy in my mirror if i could straighten him up he could be skinny and rich but he's got issues all of us have that person in the mirror that we try to make behave all the time and it's just hard but to the extent you can behave with your money you can't do it all the time you can't do it all the time you can't we all kind of know what to do already and then we figured out the most efficient way to pull that off is called the baby steps the seven baby steps ramsey's famous for them some people like them some don't those that don't like them are what's known as wrong because they work and then if you're working the baby steps what's the most efficient way to get through the baby steps as fast as possible well it's with a plan a budget and that's where every dollar the app comes in it is the plan and it's where every dollar the app comes in it is the plan and it's where every dollar the app comes in it is the plan it's the budget that's going to tell you exactly what you need to do on the baby step that you're on as if george camel was sitting in your back pocket telling you what to do or dave ramsey or rachel cruz or jade marshall maybe even john deloney you could track your progress you get personalized recommendations for right where you are coaching for your situation and you're going to free up more money work the plan faster and therefore get out of debt and become wealthy faster it's like having one of us with you all the time start every dollar for free download it in the app store or google play jamal is with us in new orleans hey jamal what's up all right um a quick question brother i appreciate you for taking the time i had ran across a million dollars i was in an injury working in oil field um i took 500 000 putting the s&p 500 and i put another 100 000 in the money market i bought me a little small house about 30 000 when i get through fixing it up probably worth 150 took him um looked out for my daughter from school no ul that's a expensive college i've got a little car for and looked out for mom and um my son you know and i'm 100 disabled veteran that's gonna make sure i'm making the right move with what i did you know and think about putting 500 a month towards that account to keep it going so i don't make sure i'm making the right things you know so you can live off your uh veteran's disability yes sir good for you that's a pretty good start jamal that was a really good start i've heard people do a lot of dumb things when they get this kind of money and you were very conservative and very smart to get started yeah so you invested half you got 100k just in savings for emergencies and other things you bought yourself a cash car it's in the money market okay how much is left over if anything or did is that all allocated then uh cost allocated probably about 25 000 i got put up for remodeling my house fixing it up i do a little construction on the side um i got a little smaller um i didn't call handyman handyman business but you know i do towel work stuff like that i do a little just a little work here every time i get a little bit no little part-time so today there's a half a million in snp and how much is in the money market today 100 100 000 and no debt anywhere no debt that's wonderful i got i just no debt well i got a truck now i just got me a little small truck about thirty thirty thousand if you will continue to live on your how old are you i'm 41 okay if you continue to live on your disability and don't take any of the half a million out and you leave the hundred thousand there for emergencies and so forth and living your life you're now right at about a year in february yeah so that that that five hundred thousand is going to double about every six or seven years so when you're 48 it'll be a million when you're 55 it'll be two million when you're 62 it'll be four million and when you're 69 it's going to be eight million if you just don't touch it okay sitting where anything to it if you don't add anything to it and don't and don't touch it that's just your math to tell you how smart you are now can you do better yeah probably but not a lot this is not a bad plan it's not a horrible plan what i would tell you is this managing money is like anything else that um when you you were smart because you only put it in something simple that you understood that you understood and that was very wise you didn't try to get too fancy but you also didn't bury it in a coffee can in the backyard so that was very wise you've done a really good thing now if i woke up in your shoes i you know the s&p is fine i've got some mutual funds that do a little better than the s&p and i got them through my smart vestor pros as a group and you might sit down and interview with the smart vestor pro for two reasons the main one is that you're not going to be able to is to just learn let them teach you and once you learn and get comfortable with i could move some of that money out of that s&p into some other funds and do a little bit better and i could get this this person looking over my shoulder and helping me uh i might do a little bit better and the stats the statistics say you would but you're not going to do twice as good you're just going to do a little bit better so i would just challenge you to do that just so you can to learn because in anything we're working on that matters, matters. Our marriage, our parenting, our physical bodies, our spiritual walk, our money. We need to continually be learning and getting better. And if you just do that, plus what you're doing now, which is living on less than you make, continuing to build wealth for the future, living on that disability, you're going to be in great shape. I mean, I just crunched the numbers here. Half a million bucks, if he just adds his 500 bucks to it a month for 20 years at 11% average rate of return, that's almost 5 million bucks right there. That's 61. It's pretty impressive. At age 61, yeah. So if you continue that on, it's just going to keep compounding. So you're doing great. If you can just learn to not touch that and act like that money doesn't exist, future you will be very thankful. And that little calculator that George just used, by the way, is on our website. We'll drop a link. You're looking at it on, yeah, we'll drop a link to it. If you're watching on YouTube or Spotify, you can jump in there and use that calculator to figure out this stuff anytime. The calculator I was using is in my brain, and here's the number, okay? There's an interesting math riddle. It doesn't work perfectly, but it works pretty close. It's called the rule of 72s. If you take an interest rate and divide it into the number 72, it tells you how long it takes your money, a lump sum adding nothing to it, to double. And so he's got a half million dollars. If he's making 7.2% on his money, then it would take it 10 years to double. 7.2 divided into 7.2. If you divide, say, 10% on your money, then that'd be every seven years your money's going to double, which is pretty safe if you're, you know, this year the S&P's up 12.5% as of this moment, year to date. So you're pretty safe on a 10% number that your money's going to double about every seven years if you're out there like that. Here's a good example right here on the calculator. 500 grand just left alone for 21 years. So that's three buckets, 777. Look at that, $4 million at a 10% rate of return. So 500 into a million, seven years later, it's 2 million. Seven years later, it's 4 million. That's the basic math. That's how it works. And so just take your interest rate and divide it into that tells you how many years it takes for it to double. That's what I was doing. George was a little, a lot, a thousand times more sophisticated over here with the Ramsey calculator. I just like to double check Dave, keep him, you know, keep him honest over here. Make sure, make sure his math is not off. You're like a magician who showed people how the trick works. Now they're less impressed. How did Dave do it? How did he do that so fast? He's a prodigy. Not at all. He's goodwill hunting over here. Not even close. Not even, well, maybe hunting, but not goodwill. All right, there we go. So, hey, the good news is, so let me tell you what Jamal did that was smart. He was real careful to not blow the money. Number one, go buy six new cars and mama, a new $500,000 house. And then the money's just gone. He was number one, brilliant. And most people don't have the self-restraint to do that. He's a disabled veteran. So he's probably had some discipline in the military to learn some of these things. He was very wise. The second thing he did that was very wise. Don't put money in something you don't understand because somebody else said to don't do it. If George said to it, don't do it. If I said to it, if you don't understand it, don't put money in it until you understand it. And so he picked out fairly simple ideas, basic stuff to put the money into nothing wrong with that at all. You will actually have some money at the end of the day. When you do that, even getting a reasonable car, a reasonable, I mean, $30,000, that's pretty reasonable for the house, not the car. Wow. Pretty wild. You know what I love most about Thanksgiving? It's not just the sweater weather and the pumpkin everything. It's that I get to spend quality time with my family without the constant interruption of spam calls and emails. And you probably feel this too, because when you fill out a form online, your info, like your name, phone number, even your home address gets sold to data brokers. And the next thing you know, someone named Olivia is calling about a personal loan inquiry that you never inquired about. So tip number one, don't answer the call that only leads to more spam. Second tip, let Delete Me handle it for you. They cut back on spam and scams by removing your personal info from hundreds of data broker websites. And it's not just one time. They stay on top of it and keep removing it, which is why I'm so grateful to have you on our show today. And hey, listen, I like to shop. So protecting my privacy and family time is priceless. And you can have that too. Go to joindeleteme.com slash Ramsey to get 20% off all plans or click the link in the description. Our question of the day is brought to you by Ask Ramsey, our free AI tool. That provides personalized money answers based only on Ramsey principles. There's nothing in the data set except our opinion on stuff. If you want someone else's opinion, you'll have to go somewhere else. It's all us. Ask Ramsey. It's free at ramseysolutions.com slash Ramsey. Today's question comes from Kurt in Wisconsin. I'm 31 years old and contribute to both a Roth 401k and Roth IRA. But I'm confused on how I use those funds when I retire. When you say to live off the interest earned, does that mean we should withdraw only the dividends or interest paid to the fund without selling the funds that have been acquired? Or do we withdraw a certain percent of the whole balance every month to use toward living expenses? Great question from Kurt. So this is really about, we talk about accumulation, how to build wealth, but when it comes time to decumulate and start using it, what is the best strategy? Well, you already are onto one thing here, which is using Roth accounts, because that's tax-free, which is fantastic. Think about that like net income. When you pull off of it. So the simple answer is pull off as much as you actually need to live, which means if you got a million bucks, you're not peeling off 500,000 bucks in a year. You might peel off 60 grand in a year. And you might do that once a year. It could be quarterly. It doesn't have to be every single month, but if that works for you, go for it. Yeah. So here's the thing, Kurt. If you say, say for instance, you had a million dollars, which you're probably going to have at the rate you're going with what you're talking about. We don't know your numbers, but you're starting at 31. I'd be shocked if you don't reach at least a million dollars by the time you're at retirement age. Okay. So let's say you got a million dollars and let's say it's invested in good growth stock mutual funds that are averaging what the S&P is averaging of 12, 12 and a half percent. This year it's 12 and a half percent to date. Okay. If that's, if it's making 12% and you pull off less than 12%, it will always be there. You understand? So you're never going to actually touch the million. If you live on less than what it makes, it runs in perpetuation in that simple. Okay. And I wouldn't recommend pulling off that much. And so let's say you pulled out, let's say it made 12% and you left a four and a half in there for inflation to let it, let it grow. You let, let you grow enough so that you're, you know, you're the amount of that it takes to buy a loaf of bread is going to be different 10 years later. So, um, let, let's only pull off 8%. Well, that'd be $80,000 a year. Can you live on 80,000? Oh, I can live on 60,000. Okay, good. Then only pull off $5,000 a month and the thing's making 125,000 a year and you're going to leave 65,000 in there. So next year you have a million 65 and the next year you'll have about a million 50, about a million, uh, uh, one 50 and the next year you'll have about a million two 50. Okay. If you just live on the 60, the thing's going to keep growing. It's not only not going to decumulate to use your, your thing, but it's going to run in perpetuation mathematically. Now, again, that is dependent upon you having invested in something that's making that. And you stay invested wisely because if you go to, you know, 60% bonds, that's going to really hurt your returns. And that's not what we teach. I don't teach to do that. I never have taught to do that. And so if you're going to put the money in money markets and make 3%, you can't pull off 8% without destroying the nest egg. You're going to kill the goose that's laying the golden eggs. So let the goose stay healthy, live off only the eggs. That's the idea. And if you've got it big enough that you can live off the eggs only, it'll run in perpetuation. It'll just have even more when you, uh, when you pass and someone's going to inherit that, which is cool. But the technical thing here is you are selling off shares to create that money. Just tell them how much money you want them to send you. Send me 8% a year and that's 80,000 bucks. So send me 80,000 bucks a year and you on a monthly basis or a bi-weekly basis or whatever, or 60,000 bucks or whatever it is you want to live on. I don't care. But, um, most people asking this question will never have a problem running out of money in retirement. That's sort of the catch 22. Yeah. That's where all the theories break down on the internet. All these stupid people on Tik TOK, like you're not going to have enough money. Well, your theory breaks down because you've got it invested poorly because you believed in this mythology called asset allocation. move it all day into bonds when you turn 65, which is dumber than hell, but people do it all the time and uh so because their stupid financial advisor told them to do that because he believed the stupid financial advisor that trained him and instead of actually using your own brain and thinking about this i'm 66 i own zero bonds i own zero gold i own zero bitcoin shocking actually i don't own zero gold i've got some really nice gold cufflinks well that's it other than that. I don't have any. No bars. And I have real estate that I paid cash for, and I have good growth stock type mutual funds, period. And guess how much of it I'm touching? None of it. I still make a lot of money. I don't need to touch any of it. And you guys are the same way. That's what really happens in the real world, George. To your point, all these theories break down when you actually put them into the real world and people start doing real world stuff. So you've been investing from age 30 to age 65, so what, 34 years in good growth stock mutual funds, and you suddenly change that. Why would you do that? It made you a multimillionaire. Don't change it. Keep going. And you don't need the money anyway. Just let it run. Let it make money. And most people, the studies are actually showing that most people actually end up with more than they started with from retirement to when they pass. Really? So that's the fascinating part is you end up with two million usually ends up being five or six. You know, and here's the number on that. There's a curve on that. I'll bet you. I'm going to jump in with a set of assumptions. Watch out. Careful. Okay. I like it. But I mean, if you got 300 grand and you're trying to live off the income of that, you're not going to end up with more later. You're probably going to end up chipping away at that goose, not just the eggs, because you're only going to be making about 20 grand off that thing, right? But if you got up close to a million or more, you're going to be able to live off of what it's producing. And then you're going to be able to live off of what it's producing. What it's producing. And then it will continue to grow. So the more the rich get richer and the poor get poorer. You should know. That's a good quote, Dave. Write that down. Somebody should quote me on that. I mean, seriously, that but that's it. You keep doing the stuff that got you rich and it makes you richer. How's this work? Dance with the one that brought you. It's just this is not hard. So, yeah, I live on less than I make. I drive used cars and I don't. But I mean, that's that. You dance with the one that got, you know, what got you here? What are the principles? I stay out of debt. I'm continually generous, you know, tithe to my local church. So, I mean, what are the things, what are the money principles that got you here? Then keep doing them. It's this is why don't make it hard. Everybody thinks when they get a little bit of money, they need to get fancy. Don't get fancy. That's what I loved about our caller earlier from New Orleans, Nylons, right? He got a million dollars from a settlement on on the job injury as an oil dollar house, paid for his daughter's school, bought her a little car, put a half a million into an S&P 500. Simple, simple, just very, you know, he didn't go, oh, I hit the lottery. I'm going to go spend 10 million because people a million is not 10 million. It's only a million and it will go away quick when you start going cray cray. So fun stuff. Sam is in Las Vegas. Hey, Sam, what's up? Hey, great to be talking to you, guys. I love what you guys do. And thank you for taking my call. Sure. How can we help? All right. I have 84K in consumer debt. Six of it is for student loans. Three of it is to Verizon and 75 is on a vehicle. Good Lord. Now. Yeah, I know. Now, on top of the 75, I'm upside down on that 30. Well, even if I wanted to get rid of it. Yeah. I mean, did you roll stupid into this deal? yep so this is the second round of stupid uh yeah wow what did you buy what kind of car is this it's a 2025 ford explorer st she should kill me okay so you're telling me you owe 75 on it the stupid thing's worth 35 or 40 40 uh 45 yeah who said 45 is what i think i can get for it why do you think that where'd you get that number uh k kbb on dealer trade-in or retail uh that was not trade-in it was a sale yeah you need to get rid of that car man god i might get you a three thousand dollar paid for car you're killing me you're gonna have to come up with a difference either save it up borrow it get from your credit union but that thing is crushing you yeah you got to get that thing out of the driveway there's no excuse for keeping that three more days if you're in a really bad debt situation i know how scary that is you might be getting harassed by debt collectors every day threatened with lawsuits and maybe you think bankruptcy is the only way out i've been there i remember feeling so scared i couldn't breathe but it's not too late to get out of this mess contact guardian litigation group guardian is not a call center they're a real law firm you get a real attorney assigned to you so if a creditor sues you're protected from day one not scrambling to find legal representation when you're already in the middle of it and guardian only gets paid when your debt is negotiated and you accept the settlement guardian has helped over 55 000 people settle more than 600 million dollars in debt that's why i trust them and send people their way the longer you wait the fewer options you have the more expensive it gets but it doesn't have to end that way guardian can defend you go to guardian lit.com slash ramsey that's guardian lit.com slash ramsey or click the link in the description attorney advertising results may vary and no specific outcome is guaranteed drew is in auburn alabama hi drew how are you pretty good thanks for taking my call dave i'm hoping to get some insight from you um i moved from detroit to auburn alabama and in doing so i basically cut my income almost in half and um i'd like to upgrade housing next year and the only way i can do that is if i cut back on my 401k contributions and i wanted to get some thoughts on that what was your income um when i was in detroit i was around 125 to 150 and in auburn i'm gonna be somewhere in the mid 70s okay was this for work what was the cause of the move uh yes for work i had an opportunity to move to auburn so i was like you know what i'm gonna i'm gonna uh i'm gonna try it okay are you married i am not okay single making somewhere in the 70s and how much do you currently have saved um in my savings i have uh 40 and in my ira and my 401k i have around 600 all right so you have 40k is that outside of your emergency fund um that's just savings in general total savings is 40 okay yes and you're saying are you saying you'd need to pause investing just to save the down payment or would you have to pause investing or slow down investing in perpetuity to make this work well i'm um 50 i'm and i've been doing the catch-up and so i'm putting in 50 of my paycheck um well i get paid bi-weekly and like i said i'm putting in 50 so that's 30 what is it 32,000 500 this year yeah okay so how much are you going to cut back to um i'm looking at spending about a thousand a month all right that would put you you know even over 15 which is what we'd recommend until you have a paid house i would reduce i would reduce your retirement contributions to 15 of your income until you purchase a house and have it paid off okay no more retirement savings above 15 percent no nothing above 15 right really yeah really because i've been i've had it maxed out i can tell you've killed it you got 600 grand way to go you also don't have a house um i have a house here i paid cash for it but i want to upgrade oh i see okay how much is it worth a buck and a half okay and you're going to upgrade to what uh probably i've been the stuff i've been looking at is around 250 to 300. okay well you can do that tomorrow and put 20,000 down with the in the sale of your house and then pay it off in three or four years by doing what we're talking about okay so that would be like 130,000 mortgage that you can knock out pretty quick i was looking to spend around 100 so that's kind of what my thing was and i was going to make up the difference in cash yeah how much cash do you have um i could you know i mean you said you had you don't have the difference in cash uh i was hoping something would move here there's just back when i was in detroit i was working two jobs there's no opportunities for that here i'm not saying you did anything wrong i'm just saying you have $40,000. You need to keep 20 for an emergency. That gives you 20 plus 150 on the house. That's 170. You don't have the cash to pay cash for the house today, right? No, I do not. Do you want to save up the cash before you make the move or do you want to make the move and then pay off the little loan quickly? I'd rather make, I would rather make the move and then pay off the loan quickly. Okay. Then take 20,000 of your cash and the proceeds from the sale of your house and buy the house that you're talking about buying and put the other thing on a 10-year loan, but pay it off in three. Okay. That was also my plan too. So, okay. Dave, I got one other favorite I'd like from you. Okay. Can you start a dating website? I've met so many women that just are not on the same level financially that I am. I bet. I mean, I've been called a gold digger more times than I should have been. I'm looking for a financially sable woman. There you go. Hey, come on the Ramsey cruise. We're going to have a singles event on the cruise. That's your best bet. Are we really? That's the only in-person version. That's not a bad idea. It's going to happen, Dave. The people clamored for it. And so we said, all right. Are we really doing that? We're not doing an app or we're going to have a night with an event. Not doing an app. For anyone that's single. I promise you we're not doing an app. Just anyone, any solo travelers. It doesn't have to be that, you know, you're looking for love. Just if you've traveled solo, you want to make some friends. There you go. A solo traveler. But no, the app feels, that feels like dangerous territory. Don't you think everyone would want to be on that app to find people who are fiscally responsible? I know for all the wrong reasons. They'd only be looking for baby step seven, baby steps, millionaires, sugar daddies are us. That would be the name of the app. Dave doesn't want his name plastered on that. You don't want this mug on that. Oh boy. Oh, I have heard that from ladies and from gentlemen. That it is difficult to find financially responsible singles. I've already come up with the app names. I thought endorsed love providers was pretty good. Thoroughbreds only. I thought that one was also strong. You think that's better than sugar daddies are us? I think it's a better selling point. It's a little tamer. It's a little scary. Oh, there's so much cougar. We'll workshop it. I just can't think about it. Oh my gosh. That one's on the cutting room floor. Sorry. You know what? Uh, it is, you know, after all the joking and laughing since, uh, you and I are both happily married. Uh, thank God I don't have to be in a dating app. Yeah. I can't imagine how hard it is out there in the world to find even just somebody for set the money stuff aside. Just find somebody who's not cuckoo. I mean, it's just cause there's cuckoo everywhere. Something's in the water. I mean, it's this, the people are cuckoo for coconuts. Is it the fluoride? I don't know what's going on. Um, I can't even imagine. I, I, I'm so far, uh, uh, on the other end of that, that I can't grasp the idea, but yeah. Oh man. See that. That's why our estate plan has me dying first. That makes sense. I didn't know you could do that. You just plan for that to happen. Yeah. Well, apparently. Yeah. Yeah. Well, Sharon's a picture of health, so she's going to outlive us all at this point. That's probably true. That's gluten-free lifestyle. I know. I know that the grim reaper scared of Sharon. I'm just saying, ah, that that's fun though. Very cool. So the thing is, um, let me tell you what he did. He put himself in a position that he had choices. He made a move to a difference. I mean, Auburn, Alabama, Detroit, Michigan, two very different cities to do two very different thing to walk down the street, you know, and, um, you might like one more better than the other, but he, he made a lifestyle decision was able to take a considerable pay cut in order to do that and still had 600 grand and still had a paid for $150,000 house, which honestly in Auburn, Alabama, it's not bad. It's not a bad house at all. I'll bet you the median is probably 200. Probably. It might be a little bit more. Pull it up there, Kelly. Here we go. Whoa. I lied. Look at you, Auburn. They got fancy completely. Auburn people are going to be pissed at me. The median. The median is 471. Maybe he's in the outskirts. He might be in the outskirts. That's high. I mean, it's a small town, but it's a, it's a highfalutin college. You know what? It's a college town and that's driven the prices. And Auburn people, they have that Auburn money. You know, what, what is that? Auburn university. I'm just, as a guy who lived in mobile money, well, Auburn university, you know, a lot of, a lot of wealthy families want to send their kids to a good sec school. And so they have the money to just go buy. Yep. Some houses over there, I guess. I never heard of having Tennessee money. That's true. Auburn money, Tennessee. You got, you got Alabama money in Tallahassee? See, that's the thing. Alabama, different. It's a more working class. We're both dead. It's just a little more working class. I can say that. I lived in Alabama. I had to make my choice pretty quickly if I was going to be an Alabama fan or an Auburn fan. So, I mean, you have, you have Georgia money if you're in Athens? I think so. I bet Athens, I bet the price, median listing price over there is probably pretty high. It's a cute little town. I bet it is too. I think, just think, you know, the more expensive the college, the higher the median listing price around it. Athens, Georgia, $464. There it is. There you go. See, I told you. I knew that one. Yeah. I imagine Tallahassee is going to be high too, though. Now, I don't know about Knoxville. Or Tuscaloosa. 422. Look at them. Boom. Holding up. Way to go, Tuscaloosa. See, George, you just got put in your place. I'm not trying to slam the. You said there's no Alabama money. They said at 422, median house price. I egg on my face. Tusca-freaking-loosa. Mobile. That's where I live. 279. Let's go. Working class folk over there, making it happen. That's where you went to school. That's mobile money right there. That's what I'm talking about. That's what George is. George has got mobile money. That's where I come from. Mobile. George Camel, Ramsey personality, number one best-selling author, is my co-host today. I'm Dave Ramsey. If you'd like to talk to us, we're here for you. And we're here from 1 to 4 Central Time, Monday through Friday. Answering your questions. So call in. If you happen to call in at a different time, leave a voicemail, and our team will get back with you and set you up. We do not tell people what to say here on the air. We don't let some people on. That's called call screening, because some of y'all are nutty. But most of you, you just want some help, and we're here to help you. Pretty simple. And again, the phone number is 888-825-5225. Roberto is in Orlando. Hi, Roberto. Roberto, what's up? Hey, Dave. This is a pleasure to speak with you and George. I think I couldn't find a better duo to get on the phone with. So really appreciate you guys for answering my call. Thank you. How can we help? Yeah, so a little bit about me. I'm in a situation where my wife and I, we've been aggressively paying our debt off since 2023. We were both in real estate. We've been in the real estate business for the last eight years, nine years as a wife. And we both switched occupations slightly. On past 2023, I'm an acquisitioner for a singular investor, which is commission-based. And then my wife is the director of property management and assets. So she's the one who helps flip these homes, and we sell them off. Now, our income is about $150,000 in a year. But our income is a salary with quarterly bonuses. And then mine is just full commission. We have paid last year around $26,000 of debt. Which were settlements, because we're commission-based. So we just settled with a lot of the credit card consumer debt we've had. We have no credit card that we're actively using. We've cut them all up. Now, my question is this. We have $362,000 of total debt. $74,000 of that is consumer debt. $30,000 of that $74,000 is IRS debt. Because we were not responsible in our real estate careers in terms of paying for our taxes per year. So my question to you is, even though I have all these problems of debt, I feel like I'm running out of time to invest. I have a four-year-old and a two-year-old. What do you suggest? I'm looking for wisdom here. How old are you? I'm 31. And you're running out of time? I feel. What do you know that we don't? Well, I know. I've done financial peace with my church twice. And the second time around, I just. A lot of my good friends who have been doing Dave Ramsey, I see them, you know, investing. Obviously, they're out of their debt. But, man, I just feel like I'm behind the ball. Okay, so comparing to other friends who are further ahead, you feel behind. Let's just rephrase it to be clear. Okay, that's a fair thing to feel. And you're right. There are people who are always going to be doing better with you in life. But I would just run your own race and go, Man, I'm 31 and I'm still carrying a bunch of consumer debt. This sucks. IRS. Especially. the IRS did. How do I get out of this fast? And we have found the fastest path is to direct all of your focus all of your energy towards that one thing which is debt payoff and when you do a bunch of things at once you're doing some good things right you're investing you're saving you're paying off debt but it's not with focus intensity and that causes you to number one slow down debt payoff and number two get a little more comfortable because if you pause investing it'd make you angry wouldn't it yeah would that anger then fuel you to get out of debt faster it would i'm not even paying into any sort of investment like i have it's already more focus on you're already there already so how much longer to knock out the irs debt and the other debts all 74 000 you're gonna have to increase the depth of your cut in your budget 26 000 a year reduction uh it's going to take you three more years i'd rather you do it in two especially making 150 how little can you guys live on in a year yeah you need to chop your lifestyle more yeah we have um our we purchased our home in 2021 um it was definitely like a little bit higher than our debt-to-income ratio but we wanted it right now it's um we're only paying 21.80 a month for our mortgage and um we have one car that's fully paid off we just have one car that has a 26 000 debt it's kind of a break even if i try to sell it right now um and we we're not we don't spend a lot of money externally we we if you make a hundred and a half dollars we're not going to be able to sell it and you only paid down 26 you you need to cut further yeah because you guys are making what nine grand a month i want you i'd want to put 35 or 40 so i'd be done in two years not three years yeah and that may and you know another thing you can do is you can sell a car how bad do you want to invest i i want to get there yeah i don't want to stay in this position yeah so would it be worth driving a cheaper car and be done and be done in one year yeah cut the budget to the bone and sell the car you're done in one freaking year and then this whole conversation is not even needed to be had but you're going to have a year from hell and your wife's going to you know your wife's going to have to be on board because otherwise you're going to have an unhappy spouse in this too and you don't want that but no we're full unity here and she's the one who does the budget i come in we we we strategize these everyday dollars so i tried for years to out earn my stupidity you are an abundance person you're a person that believes in abundance you're not a scarcity guy you've always been able to make money doing something you go out and find deals you know you know how to do this so i'm i'm an abundance guy and i tried to out earn my stupidity for years and i finally had to cut my spending i finally had to look in the mirror and say you spend too much money i thought that it was the federal law that you had to spend two hundred and fifty thousand if you went into costco or and that's why they check that little ticket on the way out to make sure you actually spent what your allocated amount i didn't think you were allowed to leave without spending 250 bucks and so i remember the first time i went in costco and i walked out without buying anything it was will freedom the willpower no five gallons of peanut butter nothing not even a hot dog didn't even buy a hot dog not even a dollar fifty hot dog there you go man so but that's the thing you got it you got to break that part inside of you that's keeping you all from cutting this to the bone and selling that car and then the you're going to be freed up because when you got no payments and you start making 150 two little kids in orlando florida you can make some money man i mean you can stack some cash you're going to be a millionaire but if you keep screwing around with the freaking irs oh my gosh they'll kill you they'll kill you man and let's say they paid cash for a car six seven eight thousand dollars whatever you saved up real quick that would bring your debt down to 48 grand which listen four grand a month going towards that debt it's gone in a year which means if you take home nine you got to live off five yep that's the simple math the hard part is doing one hundred dollar house payment okay so now we have another you know what 2800 to live on it's called beans and rice rice and beans for all of other expenses rice and beans so roberto i would do an every dollar ramen noodles tonight do that budget tuna fish i know dave's not eating tuna again after what you've been through makes my net worth go down to think about it yeah it's awful yeah i mean but yeah that's what you have to do it's a pain in the butt roberto there's no magic it's not easy all i can promise you is it's worth it i talked to couples all the time who want to be more intentional about their marriage but they don't know where to start that's why i created the marriage kit i'm going to talk to couples all the time who want to be more intentional about their marriage but they don't know where to start that's why i created the marriage kit i'm going to talk to couples all the time who want to be more intentional about their marriage but they don't know where to start that's why i created the marriage kit i'm to give couples a roadmap for working toward a better marriage all year you'll start the year by getting on the same page with an annual planning retreat then i'll walk with you every month as you make it happen together we only have a very limited supply so order yours now for 84.99 at ramsay solutions.com slash store you okay halloween's just barely over and you guys give me christmas ads to read i put my christmas tree up the day after i'm ready our christmas deals are here at ramsay i cannot believe this get life-changing gifts for every age and stage at prices that make holiday shopping easier we have 13 best-selling hardcovers that's a deal including rachel cruz's kids books those are great for christmas i'm lightening up here a little i'll be okay twenty two dollar career assessments twelve dollar questions for human decks seven dollars and ninety nine cents for audiobooks and ebooks there's a bargain if you want one for christmas we've already started go to ramsay solutions.com slash store and you could be just done you could be over be over that's that simple alex is in charlotte north carolina hey alex what's up hey thanks so much for having me i'm calling because after graduating college i was presented with my portion of student loans to pay um my parents you helped me get logged in and this is what i owe it was twenty eight thousand dollars which i was so proud i paid it off within thirteen months um that was a little over two years ago ever since then i've been living debt-free living um saving really well and just last week it was suggested that i run my credit report since i've never done this before um it came back with um really bad news it turns out there is still thirty nine thousand dollars of outstanding student loans uh half of it is in just my name the other half is joint with my mom and i um one one loan wasn't being paid at all so i took a major credit hit and um it's been it's been shocking i can at least pay off what's left in my name um and i can you know pay most of it still keep a little emergency fund the way you're saying left in my name are did did you sign these no i knew that college was going to i knew that my parents couldn't pay for college we never had a great conversation about it before going uh. really any conversation which i i wish we would have so no the remaining loans were a complete surprise so they fraudulently signed your name essentially it's called i don't know essentially it's called identity theft it's a criminal act it's a criminal act yes um but obviously i mean it's my parents so i can't or i would never and i they're obviously in a really bad spot if they couldn't even take out the loan in their name um so i can i okay so today there's thirty nine thousand more in your name that you did not sign for but it's in your name and there's how much in their name in just their name nothing that i know of that's what came up on my report well it wouldn't have you wouldn't hurt their name only would not come up on your report you're saying it was a parent plus loan what was this you said it was joint okay so so the total of the whole thing outstanding today is thirty nine thousand some of it has your mom's name and your name some of it just has your name that was fraudulently signed correct that's right and what do you make of your home um roughly sixty five thousand mm-hmm and have you said anything thing to your parents about this yes I talked to my dad about it and I think it was a major blow to him I know their finances are separate which obviously we don't agree with so this seems like it was a huge surprise for him and I know he's upset and that their financial financially for them life has not been easy but they certainly don't help I don't agree with their spending and obviously I mean they've hardly paid down the principal when I looked at it only like five thousand dollars has gone towards principal payments on these loans okay well I'm sorry but there's the bad news is there's not much middle ground okay one is you treat this like what it is which is identity theft and you file a police report and you begin the process of being the theft identity theft victim and you have them removed and you report the criminal which is your mother that's option one you took that off the table a minute ago but that's not that's one option then they'd go after her for the money yeah an option to which is you know to me I just it's I cannot think of a worse form of child abuse there is worse form of child abuse this is a this is a horrible form of child abuse there's a lot of worse but um this is child abuse I can't imagine doing this to my children and in any way justifying that in my mind as being a good deed you need to stay away from business transactions with your mother and you need to have a conversation with her that if she ever signs your name to anything again that she's going to jail because she'll do this again it'll be a credit card next you need to freeze your credit today with all three all three euros anybody that would do this to their own kid cannot be trusted this is horrible I feel so sorry for you because you're going to feel guilty for going after them or you're going to feel resentful for paying a debt that wasn't yours so either way and the other option is as I said there's no middle ground because you're not going to do what I just suggested you already said that and you're going to feel guilty for going after them and you're and so your other option is pay it yep that is in in my mind I'm really I'm willing to pay the half that is no you don't get that option you're going to pay the whole stinking thing because let me tell you what they're going to pay nothing they're not going to pay a dime and you're on the hook for the whole thing if you don't handle it as identity theft you either is or you isn't there is no middle ground do you think I could if no have them refinance the joint into just their name well yeah if you could get them to do anything and you told us they're broke they probably can't even do that but there's no there's no refinance program in student loans that that takes off people's names it only puts more people's names on so they're if they could go to the bank and borrow the money against their house and pay it off that's fine that's get it go get a loan for 40 grand and pay off your loan should you shouldn't have stolen your own kid's identity uh they should do that but I don't think these people are going to do that do you I I don't know it's all it's so shocking and I just I wish I wish they would get help I wish they would live a little bit differently because I've got two younger siblings that also going through college holy crap and I would check on them and their credit report yes yes and obviously we should have had conversations going into college yeah you need to have a preemptive strike here to keep them from doing the same thing to your brothers and sisters but what relationship is left anyways from this denial just act like it didn't happen what I mean even if you went after them is that going to change a relationship that's already been tarnished by this situation I don't I would never I don't I would never go after them okay then you're going to pay for it 40 000 because if you have any expectation that these people are going to pay anything you're being naive and that balance will just grow yeah you need to just plan on paying this off as fast as you can just like you did the other thing and you don't get any halves because there is no halves it's what's called joint and several in the law meaning that when you co-sign with someone else you're both obligated for the entire debt until it is paid so just because your name's on half of it doesn't mean you get half of it that's not how it works I'm sorry kiddo yeah you got a screwed up family I hope they're not doing that to your brothers and sisters and I hope you have enough backbone to keep them from doing it to your brothers and sisters and like George said freeze your credit bureau report the next thing is your mom's going to want to buy something and put it on a credit card and can't and then there's going to be a credit card pop up with your name on it because she ain't afraid to sign your name she's a crook it's the holiday season so here comes all the excuses for not sticking to a budget it's just this one time it was on sale and how about this one i'll start fresh in january yeah right money's not a math problem it's a plan problem and without one your paycheck will disappear on you so fast that's why we built every dollar it helps you give every dollar a job before it's spent so you're telling your money where to go instead of wondering where it went every dollar is backed by the same proven plan that millions of everyday people have used for over 30 years to beat debt and build wealth get on a money plan now so you can get into the new year already making progress not excuses start every dollar for free Download it in the App Store or Google Play today. Tim is in Dallas. Hey, Tim, how are you? I'm doing well. How are you, sir? What's up? All right. So my wife and I own a business. She works in the office. I work in the field. We have no employees that we're hoping to hire next year. In addition to our business, we also have a large media following for our business, which has fueled our success. Our business has no debt anymore, but we personally have about $150,000 in debt. That's down from more than $250,000 about a year ago. We think we can be done with the rest in the next year to year and a half, so that's all great. Unexpectedly, we've been approached by a larger company who has offered to buy us out. They want to use our social media channels to grow their business and our experience to lead a new division of their business. Their offer is enough to pay off the debt plus a little extra with salaries and commission. The salaries are competitive, and they're probably a little bit more than we take home right now. We'd also get a small percentage of ownership in their company. My question is, do we take the deal, get out of debt right now, but work as employees and not entrepreneurs anymore? Or do we stick to the plan and grind it out and grow our business? Or really, how do we make this decision ourselves? The temptation when you've got something like this in front of you is to think about the short term, but the wisdom will give you the long-term perspective. And so what I always do in a situation like this is 15, how old are you? 38. 38, okay. So when I'm 58, 20 years from now, which of these two choices will I be glad I did? That's a great question. My tendency, because I'm a small business owner and I've grown this business from a card table in my living room, and I've had lots and lots and lots of opportunities to sell pieces of or all of this thing over the years, for lots and lots of money, but my joy comes from doing this and running it and making the money associated with it, not just from the lump sum check that would come in the door and then me be working for someone else. So because that's who I am, my answer would be easy. I would want to keep running it and I'll just make my money to pay off the debt out of the profits. But there's nothing wrong with, or ethically, morally, even business acumen, there's nothing wrong with taking the deal if that's what you would rather do. There's not a wrong answer here. Yeah, that's how we felt about it as we were looking at it, because on the one hand, you know, we've been grinding this out ourselves, and we're sort of exhausted, but we can kind of see the end. But on the other hand, we sort of really, really enjoy what we do, and we'd probably be able to make a bigger impact like on the industry as a whole that we work in. trying to tease out. The good news is that we should be able to be done with our debt you know 12 months either way yeah if the debt wasn't there would you do this deal if debt wasn't a concern i probably would not do the deal then don't do the deal understood you're going to be done in 12 months anyway that's what we think as long as uh nothing crazy happens in the universe well there's something crazy welcome to business something crazy is going to happen in the universe i can't control that but you know if you can keep making similar money and you're done in 12 months and you get to keep your deal and your dream is still alive and you get to put the foot on the gas at a reasonable level rather than all the way to the floor where you're exhausted um yeah you need to move to the next stage of business i'll send you our latest bestseller the state our building a business you love talks about the five stages of business you got to get to the point that you've got some delegation going where there's revenue being produced in the business by someone other than you then you have a business that you own until then you just kind of own your job that's right and that'll get rid of the burnout feeling you're talked about if this was an eight-year journey to pay off debt and you could just kill it in one fell swoop i think i would say man that's a pretty sweet deal based on what you're saying one year yeah and if this business believes in your business that much you should believe in your business that much if they think they can make it even more profitable i like that so i would go out right how do i triple this business in the next couple of years yeah yeah absolutely and and you know getting clear the dad will be hey put you in a position to do that it'll help you make better decisions too very good i love it good question david is in columbia south carolina hey hey david what's up hey how are you doing it's nice to talk to you guys um so i wanted to call in today to i kind of ask a retirement question so my wife will be receiving pension when she it's kind of hard to compare and also we have a few paid off rental properties that will generate income i'm just kind of curious if we should still be or i should still be investing or saving 15 percent absolutely towards retirement absolutely you should yes yes absolutely you need some money other than the rentals and other than her pension yes okay i mean that was a i guess pretty straightforward yeah and if you need if you need some help setting it up just go to ramsey solution dot com and click on smart investor pro you can do the the um depending on your age that the roth iris are 7500 right that's right 7500 each that's 15 000 you could do um automatic draft out of your checking account into roth iras it's simple if you need to do more than that there's some other things you can do as a self-employed business owner to do more of the simple ira which is like a 401k for small business um or a sep ira either one in addition to that you can do a self-employed in addition to your roth but if 15 000 gets you to 15 percent then just do two roth iras one on her one on you have it automatically drafted from your checking and put it into good growth stock mutual funds growth growth and income aggressive growth and international and you'll feel better having some diversified investments there outside of just the pension and that rental income because those pensions i'm probably not returning much eric's in new york city hi eric how are you i'm good thank you so i discovered your show maybe about a year or so ago and i enjoy listening to it in the last few years i've been you know setting up all my arrangements and and uh setting up trusts for my family and one of the things that came up was my mortgage i want to pay it off the people i've been talking to have advised me not to i have about 96 000 left on the mortgage during covid i re-fired and got myself a 1.99 loan and your uh net worth is what eric about 11 million okay why are you pissing why are you pissing around with a 96 000 mortgage well my portfolio i understand where they're coming from my portfolio i don't understand where they're coming from that's dumber than crud why are you pissing around with you have 11 million dollars and you still got a mortgage and you know in your heart before you called that was dumb no get rid of that mortgage yesterday and get rid of anybody that's telling you to not get rid of it okay man that's just you got 11 million dollars it's like this paying off this mortgage like me buying a biscuit you made a million just in the market this year so far it's just a tiny percentage of that so you're not you're not getting rich off this low interest mortgage it's a burr under your saddle but i'm i'm saving i'm making eight percent more of my money no you're not i'm dealing with no you're not you haven't paid taxes yet when you did that net of taxes and net of risk and you've made almost nothing and besides that you're where your time is worth a lot more than screwing around trying to make two thousand dollars on something do you have it in liquid cash outside of retirement of course um about four or five million got in checking right check the day and get rid of it this is just a finance this is just a mathematical uh gymnastics in your brain the amount of money you're actually making on what you think is a spread here is laughable nah i wouldn't do it if i could borrow two ten million dollars at that rate i would and reinvest it i wouldn't do it it's not worth the risk i don't want to screw it's not worth my life is so good all my mortgages are zero percent interest because i don't have one all my credit cards are zero percent interest because i don't have one all my cars are zero percent interest because i don't have any card debt it's just an amazing thing and i'm not going to do anything that's and you know what i do have i got cash flow ding ding ding ding ding ding ding ding ding oh and the guy not wanting you to pay that off he's making a commission on the money that he's caught telling you to leave in investments called a vested interest uh it's called a conflict of interest there we go you we're taking over an entire cruise ship and i want you to join us seven days with me and the ramsey personalities in the caribbean for a week of new ramsey teachings five shows and more the live like no one else cruise set sale march twenty twenty seven all inclusive pricing starts at twenty one hundred and five dollars per passenger that means your cabin food entertainment taxes and tips are all taken care of reserve your cabin today with a six hundred dollar deposit at ramsey solutions dot com slash events or click the link in the show notes our scripture today colossians two eight see to it that no one takes you captive by philosophy and empty deceit according to human tradition according to the elemental spirits of this world and not according to christ paul samuelson says economists have predicted nine out of the last five recessions that's fine and i think that's what's going to happen yeah i can't listen weather forecasters the only people who can be wrong most of the time and still keep their job all right dylan is with us in houston texas hi dylan how are you i do welcome him yes sir hi i had a question uh. i wanted to see you i've heard you talking about a will turn to see what's the best way possible to inherit my grandmother's property and when she passes on going to be taking it over uh. having a will uh. but we had had gotten a ladybird deed done i wasn't sure if you're aware of those but um i wasn't sure if that was a good um kind of legal form to have for me to inherit the property i just kind of don't want anyone to backdoor me or anything like that so i just wanted to know what your opinion was if i should get a will or if a ladybird deed i'm not sure i understand your grandmother's house is going to go to you yes okay a ladybird deed is just a life estate it's nicknamed ladybird after ladybird johnson and you're in texas so linda johnson was from texas that's where it comes from okay but all it is is a life estate so you're telling me the house has been deeded to you or if you finish this transaction will be deeded to you now with your grandmother having a life estate it was just i kind of wanted to avoid i am no no is that what you're telling me is happening yes so i'm already in the house right now but you're in the house is on i'm in the house where is she there she lives in another house okay and so she's so she's going to she's given you this house in your name already but she has a life estate to the house that you live in no so she does own the property and that's not a lady that's not a ladybird deed okay so then what does that specifically do because whenever i looked it up at least it said whenever a person passes this is just kind of like a beneficiary to who gets that property no it's it's it's a life estate product is what it is and life estate means that you deed it to someone today and that person owns the property but they have no rights to the property until the person dies the other person so you're when your grandmother dies that you it's already in your name and then you would have access to it but until then normally the person would stay in it. So for instance, if my wife, if I left my house to my kids and I put it in a lady burger, put it in a life estate product or life estate in there, then it's in my kid's name upon my death. It goes into my kid's name, but my wife can live there for free as long as she's alive, but she doesn't own it. Okay. Okay. And that's how it functions. And so in this case, you would become the owner today, but you couldn't really have any access. You couldn't do anything with the property until your grandmother dies. Okay. Now, if you want her to just deed it to you, she could. I don't recommend that though. Okay. I guess the main part of it was just, I was trying to avoid kind of like paying taxes on it to when I do get the property. Taxes on probate in Texas are almost nothing. Okay. You don't have much taxes in Texas. I don't have much taxes on probate. So it'd be just a little bit here or there, but what's the property worth? I think it's around 230, 250-ish. Yeah. Okay. What is it, George? I'm looking it up now. I'm also curious, Dave, if just a transfer on death deed were to solve this, a much simpler way to achieve it, if it just, she wants it to go to you upon her passing. You could do that, but you could also just have a will. It just says it goes to you and it just goes to you. I'm saying there's no probate tax in Texas, no state estate tax. Okay. There might be some court and attorney. Zero taxes. Yeah. I mean, that's. So anything you spend on this is going to be. So let me walk you through one other piece of this. All right. The property is worth $230,000 today, correct? Yes. Okay. If she dies today and it's already in your name from a tax basis, when you get ready to sell it, nothing to do with probate tax, about capital gains tax your basis is what she paid for it which is probably close to nothing right yeah so that's the thing is that she's acting as the bank so i am paying her but i'm trying to avoid you know having to pay a tax for it so what are you paying i mean she's i'm paying i'm paying the 200 and i'm basically paying 200k but i'm giving it to her i don't have a loan i don't have anything like that it's just she's acting as a bank pretty much okay so the property's already in your name no sir it's in her name oh worse yet okay okay yes but you're but you've been but you're paying payments as if it's yours yes sir yeah that's a contract for deed is what that is okay or a land contract it's sometimes called uh nothing to do with life estates nothing to do with ladybird okay that's very dangerous also because if something happens to her she's going to have to pay for it and she's going to have to pay for it and that she gets sued and she were to look like she had a car wreck and someone sued her because she accidentally killed someone and uh they sued her they would take all of her assets which would include the house that you don't own because it's not your name so the house should be in your name and you should be paying her payments when she dies you would owe her estate those payments whoever the beneficiaries are to her estate and so what i would do is say granny we need to put the house in my name and i'll and we'll set up a payment schedule and i'll pay the payments and that payment schedule becomes part of your estate you owe her 230 000 when she dies whoever she wills the 230 000 debt to will be that if it's you and she just wants to forgive it upon her death she could do that um which would be fine too but what a tangled mess it's a complex way to buy a two hundred thousand dollar house yeah so guys don't do land contracts or contract for deeds i've run into it too many times because the property is not in your name let's say you pay on it for 10 or 15 years you pay it down a hundred grand you still don't own the house and someone that owns the house could get sued and lose the house that you thought was yours they could take a lien against that house and so you just don't do land contracts you don't do contracts for deeds so dylan um you guys are an example of someone who needs to get legal advice before you do all these transactions because you've made about six mistakes in this entire conversation that are pretty pretty dramatic and i'm worried for you i'm not picking on you i'm just worried for you because there's a lot of ways this can go sideways because the property is not in your name and now let's say she dies and someone contests the will or the will is not clear that the property is to go to you now you've been paying payments you thought this house was yours it's not yours it's gone that's biggest part biggest thing or she something happens to her and she gets sued and your house is gone same thing because the house is not in your name if you're going to be paying payments on something the house the property needs to be deeded to you with a mortgage lien against it and pretty simple and uh written up and then that mortgage becomes part of her estate the house no longer is she doesn't own the house anymore at that point you own the house and she's acting as the bank as you said and so the bank has this $230,000 debt that is owed to them her and she's going to leave that debt to whoever so she left that to your mother and she's going to leave that to your mother and she's going to leave that to you then you'd be paying your mother the payments on that if she left it to you you'd cancel your own debt and be debt free but whoever she leaves that debt to is really what you need to be concerned about so i would redo this paperwork like by the by friday where the property is in your name and the mortgage is owed to her otherwise i wouldn't be paying any more payments on it because you're going to end up getting screwed by one of your crazy butt relatives this is going to be a tangled one of those tangled up estate mess deals where people didn't do stuff right because they read about it and they didn't know what to do with it and they didn't know what to do with it on the internet instead of getting good good legal advice and the only downside of deeding it while she's alive is losing the step up in basis it's already gone she sold it to him it's officially he bought it for 230,000 oh that's the contract for deed part so no no if he if he gets it in his name he bought the house for 230,000 because he got a mortgage against it for 230,000 so he got a basis he's got a new basis that part's over 230,000 so there's no stepped up might as well property do it at death because of stepped up basis but that doesn't have anything to do with this transaction because this is prior to death and he's actually paying her for the house so that becomes his basis wow that puts this hour of the ramsey show in the books we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace christ jesus you