The Price of Freedom Is Discomfort

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 and the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm Dave Ramsey, Jade Walshaw, Ramsey Personality No. 1, best-selling author, is my co-host today. The phone number here is 888-825-5225. Matthew's in Chicago. What's up, Matthew? Hi, Dave. So I was just, you know, reaching out, been keeping an eye on your stuff for years, and I think I'm, you know, looking for some advice because I incurred a lot of debt throughout the years, including my son. You know, he got caught RSV when he was very young, so the NICU bill. I added it on my credit card, and over the years, it just kept occurring in debt and interest. You didn't have health insurance? I did, but my co-pay and the deductible is extremely high. We don't have great insurance with my employer. Extremely high, defined. Yeah, it's just. Like 20 grand or something? Or like 7 grand. It's about 8,000, 9,000. Okay. And how much debt do you have today, Matthew? I owe about. Right now, I've paid down 25%, so I owe about 70,000 in credit cards. How much debt do you have today, Matthew? 190,000. Okay. And 70 of that currently is on credit cards. What's the rest of it? One car and my home. What do you owe on the car? I owe about 35,000. Okay, that's 100. What's the other 90? About 80,000 is on my mortgage. That's all I have left for my house. Okay, good, good. Okay. So your son's NICU stay did not cause your debt, mathematically? Not necessarily. No, not period. It was just one debt. You have $100,000 in debt. 8 grand was your son. So, you know, that's not what you owe. That's not what you lead with in your mind anymore. You caused your debt when you bought a freaking car you couldn't afford, not your kid. Fair, that's fair. Okay, that's what the math says. Okay, cool. I love it. So what do you make, man? I make about $80,000 a year, 90,000. Does your wife work outside the home? Yeah, she does, but she dropped part-time ever since we had a kid. So that made it rough. And how's the baby doing? Is he doing okay? Pretty good. Yeah, he's doing great. Praise God. That's an important thing, right? For sure. Good, good. Okay, so we got you making $80,000 and her making part-time money, maybe $20,000 or something? About $40,000. Oh, good. Oh, that's even better. So we got $120,000 to work with and you owe $100,000 plus your house. Correct. Okay, cool. Well, that's not very bad. I actually, I sold my Tesla a few days ago because I had equity in it. So I sold that and now I have some play money to play with. How much play money? About $15,000. $15,000? Cool, cool. Great. The Tesla, that wasn't the $33,000 car. That's a separate car or it's the same one? No, that's a separate car. I have a Honda Accord now. Okay, can we sell that one or how far upside down are you? I'm upside down maybe like eight on that. Well, you got 15. So we could essentially- You could sell that car and buy two cars with what's left. Two hoopties. True. Why wouldn't you do that? And you'd have no car payments and you'd be down to attack on the credit card. You'd be down to attack on the credit cards. Correct. And your wife will hate Dave Ramsey. I'm already expecting the credit card to be pretty heavy. For sure. You can blame me instead of her. You can blame me instead of you. But yeah. Okay, here's the thing. You got two ways to go at this, Matthew. Here's what I know about you, okay? You already are taking action. You already know where you are. And so you're working on it. You're way ahead of the game. Most of the time, I got to talk people into getting to where you are before they call, okay? And so you're already there. You already sold a Tesla. I got some money to move around here. I got some things. You got to buy a car out of that money, right? Because you're only down to one car? Correct. Okay. All right. And so you got two ways to go at this. One way, you and your wife- Either way, you start with you and your wife, sit down, do a detailed budget on every dollar tonight, where every dollar of the $140,000 a year is going each month, and we're going to attack these debts smallest to largest. Number two, we're cutting up every single credit card. No excuses. Okay. These things have ruined your life. They're not a blessing. Okay. Number three, then you decide, are we going to fight this for a little while, go buy a $5,000, $7,000 car, throw the rest of the 15 at these credit cards, get this debt snowballed, or are we going to use the 15 and sell the other car and get two $7,000 cars that are paid for, or $5,000 cars that are paid for, and have no car payments to attack all of this with? And you can run the math out in about 20 minutes doing either one and say basically keeping the current car is going to cost us five months. I'd even throw a third option in there. My household was a one-car household for quite a while just to get ahead on debt. And if that's something that could work with you, you guys, just for a short period of time, it could really be worth it because then you sell a $33,000 car, pay for what's upside down, and you use the money to get one vehicle that fits everybody, do that for a while and use whatever margin is left to throw it at these credit cards. Yeah. You guys can play with some options. But the bottom line is if you're making $140,000, can you get out of $100,000 of non-mortgage debt? Yes, you can, sir. You can win. Would you recommend. So I have quite a bit of equity in my home. Would you recommend downsizing? Not unless you hate your house. Do you hate your house? Well, I have low interest. No, I love my house. I paid 2% interest. Then don't sell it. You don't need to do that. Don't sell it. I would give up two years of my life on beans and rice to keep a house. Okay. And that's what you're going to do. $50,000 a year, and you're debt-free in two years. Fair, yes. That's $4,000 a month. That means no eating out, no vacations, no whining. Everything's on a freaking coupon. Beans and rice, rice and beans. The cat's on Greg's list. The dog's on eBay. I mean, we're selling everything. And we're getting out of debt so we can keep our house. Because the house is the only thing in this whole equation that's smart. Correct. So let's keep the smart thing and dump the other stuff. I'd sell the car 62 times before I sold the house. Absolutely. Plus, I think if you keep the house, it's going to help your wife stay on board with this plan. Yeah. But you guys. You guys need to sit down together and say, if we are willing to pay a price together, if we're both willing to roll up our sleeves and be grown-ups and say, we're going to clean up this mess that is overspending and that is buying cars we can't afford, you've already started the process. You were willing to sell your Tesla. The other car is hers. I can tell by the conversation. And so. But he did good. He led and he went first. And now it's her chance to be an adult. And she can go second. That's a stud. Yeah. Yeah. And that's how you draw people. Instead of like, honey, I've been listening to Dave Ramsey. We're going to sell your car. Don't lead with that one, okay? Start with you. That doesn't work real good. So, yeah. So, anyway, there's a couple of ways to get at this. You can sell the cars, but the house is not one I would do. And a hundred times out of a hundred, I would live on nothing for two years where our friends think we joined a cult, our family thinks we need counseling, and we're getting out of debt for two years. No is the answer to every question when someone calls you. No, we can't go. We ain't got any money. We're broke people. And it's not based on your son's NICU stay. 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If you want the nerdy investing stuff from us, this is the place to get it. All new content this year, we're adding some stuff on wealth planning, which includes your estate plan, reducing taxes, so on. So you can get your ticket and join us. It's only $199, but it's going to be like two and a half hours a night and two whole nights of stuff. So, I mean, a lot. And if you're having trouble sleeping, I can probably help. I mean, this is serious nerdy stuff. If you like the nerdy stuff, you won't sleep at all. You'll be wide awake like you're on a Red Bull, but you'll like it. All right. Tickets at $199. Get them at RamseySolutions.com slash events or click the link in the show notes if you're listening on podcast or YouTube. John is in Tulsa, Oklahoma. Hey, John, what's up? Hey, Dave. Just want to know, I've been watching your ton of clips on Facebook over the weekend, struggling with finances and just can't seem to get ahead. So, we're just trying to tell my wife, I'm like, we really got to do something. She found out you guys had an app. And so, I just decided I was going to take it. Said, you guys took calls and I was going to call and see if there's something you can do to help us out because we feel like we're just constantly drowning and trying to get ahead and it doesn't seem to work out. That's a frustrating feeling. I'm sorry. I've been there and it's no fun. I feel like a freaking rat in a wheel. Work myself to death and all I got is bony fingers, right? Yes, sir. So, what are you experiencing? Do you feel like it's an income issue? Do you feel like more? Money's going out the door or is it a combination of both? I think it's both. I mean, we have a decent money coming in. I mean, we're not living high on the hog by any means. What do you make? I make $60,000 of my salary and then we make about another $20,000 or so with like iSpark doing a second job. And then my wife does it when she can. She's a stay-at-home mom. We have seven kids, five are adopted. And so, we just try to juggle everything we can. But we seem like we have to get a loan to get by and then we try to pay that loan. And then we have to get another one to get something else done. And it's just frustrating. Yeah. I mean, $80,000. You've got a big family, a family of nine. That's got to go an awful long way. Do you guys have a budget? We sort of do. We write all of our bills down on the paper and then we check them off as we pay them throughout the month. And then sometimes we get to the end and we're a little short. So, then I got to go. I stay longer out in the evenings or on my days off. What kind of debt do you have? We have about $10,000. $10,000 in personal loans and about $11,000 in credit card debt and almost $70,000 in cars and auto loans. Okay. Break those down for me. What's the two cars? One is $30,000. One is almost $38,000. Okay. So, one of them is the school bus. Yes. One of them is the nine-passenger vehicle. And then the other one I just recently bought like three months ago. And that's because it's a hybrid. And so, I bought it brand new. So, that way I can do the extra income in the evening and try to get ahead and get better gas knowledge. What do you do? What's your $60,000 job? What kind of work is it? I'm a manager at a convenience store. Okay. Okay. Your last purchase was dumb. It killed you. It put a nail in your coffin. It was not a help. It was a hurt. Agree. Okay. You were trying to do something smart, but I didn't say you were dumb. I said your purchase was dumb. And, dude, I've done some dumb purchases, so I know what they look like. That falls in the category. So, my experience is we have a lot of large families doing the Ramsey system, the Ramsey plan. And so, we see a lot of them. They visit the office here. We get pictures and videos. They post all these other things. And my experience is that people that have large families, one of two things happens. One is they completely lose their minds because of the chaos. But most often, that's not the case. Most often, people that have large families become highly structured and organized, down to the point that we have people come in here with two kids, and they can't seem to figure out how to get a picture taken. People come in here with eight kids, and they say, get in line for a picture, and 30 seconds later, they're all ready. They're so organized, structured, dialed in, and they know the whole world doesn't revolve around each one of them. Instead, the unit is what matters. And so, as a family, we have to learn to serve each other. We have to learn to serve each other. We have to learn to not be the source of the drama, and so on. And so, the large family just does that for emotional regulation. It does that for structure and for systems and processes, because otherwise, you lose your mind with that many people coming at you. Does that make any sense? Yes, sir, it does. I would suggest that you guys are probably that. Are you? We are, yeah. We're pretty structured. Until we got to your money. So, I want you to take this. I want you to take this same mentality where you crack the whip, so to speak, metaphorically, to keep the children in line and all lined up like little ducks. Let's start making the dollars stay in line and go where they're supposed to go with little ducks, because you're real structured and systematized until you got to your money, and then it's chaotic. Yeah, the problem is that you're doing it on paper, which you're. But not doing anything. Yeah, and even those, because I'm sure there's a lot of people listening who think, oh, I write my budget down on paper every month. But. What happens when you're spending in real time, and you're not going in and putting every single time that you go to the grocery store, you're just checking off, did we buy groceries, checking off, did we pay the light bill, checking off, and you've got to have the same plan for all the detailed spending and all the nuanced spending in between. So, we'll gift you every dollar, and on every dollar, you'll be able to put in all of your main income, but also everything you make from your side hustles. Don't leave that out. And then plan for every single dime, and that's not just the fixed expenses, it's the variable things. And it's all the fun stuff in between that maybe you guys do as a family. Make sure you're planning every single dollar. A zero-based budget is what we would teach for you to do, because it works. And then from there, you're going to be able to see, okay, where are we bleeding? Is there actually margin at the end of the month? My guess is you're overspending in certain areas, and that's what's causing you to go deeper into credit card debt. The chaos is causing overspending, because you're chaotic in the money piece, versus if you were dialed in, and you said, all right, honey, the two of us sit down together, this is how much we're going to spend on groceries, period. Period. This is how much we're going to, we're not going out to eat until we get this debt cleaned up. This is how much we're going to spend on X. This is how much we're going to spend on Y. Nothing else. That's it. This is what we are, it's a statement of fact, and then you hold to that, and you don't go over one of those categories, because if you lay all the categories out, no one plans to be in debt except Congress. Right? You are not going to plan. You're going to lay out a plan where every dollar has a name, and then you freaking stick to it, and regiment the crap out of it. Well, yeah, then, because when you have it in your budget, now you can look at it and say, we only have $1,000 of margin. At that rate, it's going to take us four years to pay this off. I'd sell that car in about 30 seconds. Exactly, but when you know how much. That thing's got to go. When you know how much you need, then suddenly you can get ahead of it and say, at my side hustle, I have to make $2,000. Not just, I have to make $2,000. I'm not just picking and being okay with however much the side hustle brings in. That's just what I make. You have to set an amount and go out and get that amount and work until you bring it in. Yeah, and her job, since she's head housekeeper, head, I mean, she's in charge. She's the head home economist, is what I was trying to say. Head home economist. Her job is to make every one of these dollars scream. It has to perform. The food money has to perform. It has to stretch. The food, every dollar, the clothing money has to stretch. Everything's got, she has to manage it with as much regimentation and discipline and strength as she does seven children so that you don't lose your freaking mind. And you can't justify the purchase of this car with a side hustle. You won't make enough by the time you're 100 to justify this car with a side hustle. That was bull crap. You bull crapped yourself. So I would sell that car in about 20 seconds if I were you. As your business grows, everything becomes more complex. There was a time when Ramsey Solutions had too many disconnected systems and not enough visibility across the business. We wasted too much time chasing information instead of making decisions. That's why we got NetSuite. NetSuite brings your financials, inventory, CRM, and more together in one place. More than 44,000 businesses run on NetSuite, including Ramsey. And now they're taking the next step with NetSuite Next, making it easier to put AI to work across your entire business. NetSuite Next helps you make the most of your time, automating routine work like forecasting demand and following up on overdue accounts. With NetSuite Next, AI is built into everything you do. So you can ask it questions, just like when you're talking to a member of your team. And right now, you can try NetSuite Next for free. If your revenue is at least seven figures, go to netsuite.ai slash Ramsey. That's netsuite.ai slash Ramsey. Sharon is in Los Angeles. Hi, Sharon. How are you? I am sick and tired of being sick and tired. I love it. Well, you're in the right place, kiddo. What's up? Um, how can I? I'm about to cry. Um, how can I set boundaries with my husband's spending? To help our marriage be healthy and strong, but also financially protect our kids and our goals. Tell him he cannot serve in Congress any longer. Agreed. Sharon, what's it look like, the spending that you're talking about? I mean, it's got you in tears, so it must be. Extreme. Yeah. What's it look like? Um, we have been trying to do the baby steps for eight years, and he keeps not keeping promises. This is our third time trying to get out of debt. We use every dollar. We've tried marriage counseling with church leaders. I had to sign a contract because I was so desperate. We've done allowances, wealth planning, therapy sessions, weekly budget meetings. Nothing's working. We're charging through $3,000 of minimum debt payments. It's each month. So the techniques you're attempting are not the problem. No. It's the fact that you're not doing any of them as a family because he keeps breaking the contract, not following through on every dollar, not following through on getting out of debt. And so what's broken? I mean, have anybody looked at him and said, Dude, what is up with you? No, because any time I try to bring something up, I get two answers. The first answer is you just need to be patient and compassionate with him. Or the second answer goes off the other deep end, which is you need to make a secret account and have a lifeboat bank account that's secret from him. But I don't believe in keeping secrets from my husband. Right. Well, there's a third answer, and that's divorcing. Which I don't think that works. We're at that point because I still love him very much. Well, you just told me eight years of misbehavior, and you called a show and talking to strangers, and the first thing that happens is you start crying. You're not in a good place. And you said. I realize that most of it is my enabling behavior. I don't think it's enabling behavior. I think it's more that you. He doesn't believe that there's any consequences for continuing to destroy. Plus, Sharon, there's no way that this behavior is just siloed to money. No, I'm pretty sure it's addiction. Yeah. Because at this point, like, finally, I'm calling it what it is. It's addiction. Now, let's talk about what you said before, because you said the advice you're getting is on both ends of the spectrum. I do think in instances where there's some sort of addiction, whether it's gambling, pornography, whatever it is, there does need to be a separation. I'm not saying it has to be done secretly. As a matter of fact, I'm saying it's not done secretly, but there does need to be a hard cut where you're keeping the money safe for you and the family. You're the one that's having primary control over it because he's not well. Until healing occurs. He's not well, and he's not able to participate today. If that's what's really going on, I don't know if I'm going to call it that or not. What are the. I think this guy's just a child. Well, I've been very patient the whole eight years. I've been very patient the whole eight years. Oh, you've been way too. I mean, I'm eight months, and I'm having a problem. But do you know. Can you see the purchases, or is it he has credit cards somewhere that you don't know of? What does it look like? No, I see everything. I am part of all the accounts. Very recently, I started squirreling away. Anytime he spends money, then I'll take that exact amount and put it into savings, because his habit is that if he sees the money, he spends it. He has to burn a hole in his pocket. But what gives you the idea that it's an addiction? If you told me, Jade, he's got $40,000 worth of credit cards. I can't log in. I can't see it, but my name is attached to it, right? What makes you think it's addiction? What are you seeing that's giving you that sign? Because we will set aside. Like I said, this is our third time going through the steps. We keep bouncing between one and two over and over. I understand. He keeps making promises, and we keep together. Right, but tell us what the money looks like. Tell us what you're seeing in the purchases. How much? What type of an expenditure is it? Give us those details. He's spending at least $4,000 a month on just his wants and needs, mostly lifestyle creep, like sodas and snacks and gaming purchases and lunch for work and gifts for family members, like our two-step kids' birthdays. Money for his friends. So what's giving you addiction? What are you seeing spending-wise that you're going, you know, I don't think. This is an unknown. Where is it going that's making you think addiction? I know where it's going because I'm the nerd. I think she's saying spending addiction, not side addiction. Got you. Yeah, specifically spending addiction. This is not spending addiction. This is a guy who cares only about himself. This is extreme selfishness and extreme immaturity. How long have you been married? He's a butt. Ten years. Ten years. So eight of the ten years. Yeah. Yeah. That's what's going on. And so, you know, you guys need a good marriage counselor that will help you form some adult boundaries that both of you agree to stick to or that this marriage ends. And that's the thing, Sharon. It takes two to make it happen. So if you're saying. It's been eight years. He won't go to counseling. He won't do this. He won't do that. You need to go. And the counselor needs to form the words and the sentences for you that turn into what we call an ultimatum that says, okay, either we're going to be working on this together and we're going to solve this as two adults or we're going to solve it separately. Now you need to decide, are you going to come to counseling and are you going to solve this problem because I'm simply not going to live like this? And that has never. That has never been said, apparently. I don't think so. And it's time for it to be said. I don't want you to divorce. But I also don't want you to live in another 10 years like this. You're a basket case girl. I mean, you're all to pieces. And it's not fair to live like this. I wouldn't live like this. I've cried like that, but not days on end. I get up and change something that's causing that, you know? We're just not going to be this way anymore. And so. Well, you know, we get those calls a lot. I feel like we get a lot of these calls and, you know, it's no indictment on men, but it just happens to a lot of times be women calling. And I feel like they're willing to put up with more of this behavior because. Until they're not. Well, they're looking at. They're looking ahead and they're going, gosh, if I make this move, what does it mean for me? If I've been a stay-at-home mom, oh gosh, now I'm going to be a single mom. Now I have to go back into the workforce. What can I do? And it's like they're just spinning out all of these hypotheticals that they don't feel ready for. And because of that, they'll stay in a situation with a dude like this who's eight years of just terrible behavior. And it just. I mean, my heart breaks for that because it's sad. But the way you fix it is, is that you go, okay, I'm going to restart my career. I'm going to contact a divorce attorney. I'm going to find out what the rules are in California about child support and alimony. And, you know, there's a bill, there's a new bill he's going to get to pay every month called taking care of these kids. And, you know, If he can't come to the table, I'm not going to live like that. this that's right and you have to decide are you willing to live like this if you're willing to live like this you don't need to call us you can just keep living like that i can't i can't i can't participate in you living like that because i think it's dumb i wouldn't do it um but i i do think there's a chance he could change uh but no one's hit him in the face with a big enough two before yet um and um i'm the guy that's perfectly willing you know so um you know you will do this or you don't stay yeah i mean it's the same thing like when someone's working here at ramsey okay these are behaviors you can't continue with we love you but the behaviors are going to leave or you are we don't do that here and if you want to be a we you can't you know you got to do this you got it otherwise you can't stay and and that's how life works y'all this show is sponsored by better help a lot of you are just trying to keep it together all the time you show up to work you pay the bills mostly on time you smile at all the right times but no one sees you when you're exhausted no one sees you snap at your spouse or sit awake at 2 a.m running through everything you wish you'd done and said differently during the day just because you're functioning doesn't mean you're okay talking to someone else is a great way to process what's happening in your life and get to the root of what you're experiencing that's where better help comes in better help matches you with one of their 30,000 licensed therapists you can't do it alone someone you can be real with and finally put down some of the weight you've been carrying they can help you get perspective and see other sides of your situations and help you move forward with a plan for getting well better help therapists all follow a strict code of ethics and if the first therapist isn't the right fit you can switch for no extra cost asking for help isn't weakness it's wisdom and strength if you're exhausted from always having to hold it all together trust a better help therapist to help you carry the load go to betterhelp.com slash ramsay for 10 off your first month that's better help help.com slash ramsay aiden is in asheville north carolina hi aiden how are you hey dave hey jade how are you guys better than we deserve what's up in your world excellent so happy to talk to you guys a good mentor handed me your book four years ago and it's really have helped my wife and i pay off about 130 grand in debt and we just got here that's awesome good for you we're very uh very thankful for what y'all do so my question is a bit of a soul-searching one and it's when does it make sense to sell our house and buy a new one from a lifestyle and a financial perspective well i mean i'd want to know what's causing you to want to do that in the first place is it the kids are getting older or is it that they're moving out like what's driving the decision yeah so we're 29 no kids yet um i bought the house in 2023 before we got married and we're actually in like the really nice part of town you know we're close to schools and conveniences but i'm i'm more of a country guy and uh my wife and i are trying to look at houses a little bit further out of town and because we only bought the house so recently we're kind of just i'm a bit of a spreadsheet spreadsheet nerd and she's kind of like i don't know i don't know i don't know i don't follow your heart woman and uh we're trying to just wrestle with when do we do this so okay so you bought the house before you were married and after you were married you discovered that you bought the wrong house yeah that's what it sounds like i bought the house yeah i bought the house this is why we tell people she's like i would never choose this had i been been involved yeah so anyway the um yeah okay well i mean you're out of debt you said right except the house or is yes sir no sir we have about 220 000 in equity in it okay and what do you owe on it about 315 okay so it's a half million dollar 550 600 000 house and the price of the property that you would attempt to move to would be what it'd be about hopefully 490 to 500 is kind of the highest we're willing to go okay so you're moving down in price correct and as long as and you would take out less of a mortgage than you have now correct well that's kind of a no-brainer mathematically are you doing this on a 15 year uh we have been kind of we haven't picked out an actual loan yet because we haven't uh we've looked at houses we haven't actually like put in offers or listed ours yet so yeah i mean if you move down in house and you keep the same size mortgage or less especially if then you put it on a 15 like we teach and you read that in the book you already know that so um then that becomes a no-brainer yeah and it's a house that more suits your needs well that's a no-brainer but let's say you were living in a half million dollar house when do we make the decision to go to an 800 000 house that's a different discussion right um when you save up the money to pay the difference or when you take out the new mortgage is it on a 15 year fixed where the payment's less than a fourth of your take-home pay would be the same as you would do but you're not talking about moving up you're talking about moving down and so do it i don't see any reason not to do you yeah i mean as long as the payment suits your you know your budget at 25 after taxes and i again i'm going to push you to move it to a 15 year you need to get in the business of getting the rent follow all the way through on the total money makeover book that you got which is baby step seven let's get the house paid off you're young you're smart you've already paid off 130 000 and you're making good money and uh you guys are this decision together so let's take a you know a 15 year fixed and even if it means we have to cut back on our vacation a little bit or something for the first couple years i would do that and lean into that that's exactly how i would do it great call man you're doing good congratulations bob's in ocala florida hi bob what's up yeah hi jay hi jay um i i've been following you guys and i don't believe i've heard this question or um anything close to it actually um i do have some money and i live in florida and you can't drive 100 yards without seeing a lawyer billboard saying you know we sued or we got our client five million dollars and three million dollars and i'm concerned about preserving money that i do have and i'm wondering what what i don't know insurances and trusts and what is out there that can help me preserve my money from lawsuits if i get an offender bender i'm figuring a lawyer is going to say not how much damage was done but how big is your bank account and i don't know what uh avenues are out there to protect the money that i do have yeah you know what ten thousand dollar ten thousand lawyers at the bottom of the ocean is a start okay anyway i'll agree with that yeah uh yeah go ahead and send me the emails people i love reading your your griping when i do something like that it just makes me happy so anyway the um yeah so what is your net worth about two million good for you well done bob well done well the first thing we would tell people to do is have a minimum and in your case a larger one a minimum of a one million dollar umbrella policy the typical person can add a million dollars of life insurance and a million dollars of life insurance and a million dollars of life insurance liability to their homeowners and their auto for around three to four hundred dollars a year for five million which is what i would get if i were you okay then um that's going to cost you thousand fifteen hundred bucks a year and so if you have a wreck and it's your fault or you get blamed for it being your fault whatever and someone wants to sue you in your example then uh the first five million is going to come out of your insurance company's pocket which is going to take care of 99.9 of the greedy lawyers and their customers okay okay and um that so that that's the first thing in my case i carry an umbrella that's even larger the second thing you can do is you can move properties and or assets into individual llcs and then the thing that happens in the llcs the thing that the llc owns is the only thing that can be sued so i'll give you an example i've got one llc that's got five houses in it a tenant the other day had a had a uh not the other day a few years ago had a guest over who got drunk off his butt and fell off the porch and broke his arm and guess whose fault they thought that was someone who was not attending the party me okay so they decided to sue the landlord because this drunk bozo friend fell off the porch and broke his arm well number one it didn't get very far we beat the snot out of them with a lawyer on our side because they deserve to have the snot beat out of them. threatened to sue the other lawyer just for malpractice for even taking the thing on but had they prevailed and won a five or a ten million dollar judgment against us the only thing they could have taken would have been the things that that LLC owned which in this case would be five houses so it'd be a lot for one drunk bozo but still they wouldn't get all the rest of the real estate I own or anything else I own they wouldn't come over and try to take Ramsey they wouldn't have done anything like that because they couldn't because Ramsey doesn't own it I you know the other LLCs don't own it the only thing that owns that property and all the business is done in that LLC so you can put your personal residence in something like that or you can put it in a trust you can put uh your investments in that to at this point Bob um we've kind of seen it all in our place and so I don't own anything anymore there's not a single thing in my personal name even my cars are in LLCs which is the most stupid thing in the world but they are just because of what you're talking about because if I bump into somebody they're going like are you okay yeah I'm fine what's your name Dave Ramsey oh god you know it's like right so that's messed up that that's what's coming so um I think I'm I think I just died and came back to life yeah so that but that's what you're worried about Bob and that's a real thing out there because we live in a litigious culture how do you decide where to cap the LLC uh well where we have a piece of property that's a large piece of property it's a singular LLC for the property the old office building the old financial peace plaza is a it's worth about 13 million that's its own LLC okay um and so on on houses we we just decided randomly five of them yeah you know okay because it gets up to five you know it gets three three to five million dollars in there and then they don't get a hundred million dollars worth of other stuff right yeah so um but I'm sure it does so um but that's part of the risk and none of it's for tax purposes by the way it's all for risk management so trusts and LLCs dividing up properties making the targets smaller by the greedy lawyers and their dysfunctional clients and um then on the other side uh uh big umbrella policies and those are the two things bought people do primarily Bob Hey guys it's Rachel Cruz if you're working the baby steps every major expense deserves a second look and health care is one of the biggest expenses in most families budgets and that is why I recommend that you check out Christian Health Care Ministries CHM isn't insurance it's a health cost-sharing ministry that means members help pay one another's medical bills and they've been serving Christians since 1981 CHM programs start at just a hundred and fifteen dollars a month and here's why that matters if you are paying more than you need to for health care that money could be going toward paying off debt building your emergency fund or reaching your next financial goal and your monthly cost isn't based on your medical history or where you live y'all a lot of families find CHM gives the budget that's why so many members say they're better with CHM and right now new members can receive a fifty percent credit towards their first month of membership go to chministries.org slash budget and use promo code Ramsey that's chministries.org slash budget and promo code Ramsey welcome back to the Ramsey show in the Fairwinds Credit Union studio Stephanie is with us in Phoenix Arizona hi Stephanie how are you hi guys how you doing thanks for taking my call sure what's up so I'm a recent newlywed my husband and I got married in May currently we're debt-free except for the house and I'm calling because we want to grow our family and have a baby but we're trying to figure out how to afford it my husband's income isn't enough to support us financially so my main question is how can we prepare to be a single income household when we currently need two incomes to survive well there's no magic wand kiddo I know you're working or he's making more money right yeah so which is it so or it might be it might be in where you live it might be in your rent or mortgage what does he what does he make now so my husband currently makes thirty eight thousand dollars a year what's he doing careers last year he's a mail carrier for the USPS okay and what do you make I make about thirty six hundred dollars a month and I work as a server at a restaurant okay so when you guys were dating and talking about marriage and getting engaged and having babies and all that kind of stuff you probably talked about this yeah we did talk about it and he used to make about seventy five thousand a year working as a bartender but we didn't have any benefits so he switched jobs so we could get health insurance and I still wonder if that was even the right no not mathematically for forty thousand dollars worth of benefits I don't think so yeah I how are you guys living are you renters do you own a place what's it look like we own our house we owe three hundred and sixty four thousand dollars on it and what's the mortgage itself is twenty two hundred dollars a month yeah so I mean it one hundred percent is an income problem and the question is is there something that you can do part-time to close those gaps and if not if there's nothing that you can do even part-time to close those gaps then he's going to have to look in a different career field because did he set out my next how old is he thirty eight we're we're kind of at that stage where if we need to have a baby soon or we're not going to have one that's not the point I mean it is the point that's why you called but the thing is this if you if you had if this was not the way the question was framed and a thirty eight year old guy called me and he said I make thirty eight thousand dollars a year and my wife wants to stay on with a baby I would have said pretty simply you need a different career path and this is your wake-up call you probably needed one anyway honey he did right calling him honey and so you know I'm going to call him and I'm going to call him and I'm going to you know he probably needed to be thinking about that anyway going okay I don't want to be a eighty four year old one of these right I don't want to be a sixty four year old one of these I want to be a sixty four year old makes a hundred and forty thousand dollars a year and so I'm got to be thinking about what I want to be in the next chapter of my life and what is it what does that thing I want to be require of me that I don't have now do I need to get a certification do I need to get a degree do I need to get an apprentice program or a mentorship program but the average household income in America today is about eighty thousand dollars that includes some single earners and some dual earners okay you guys are just below that yeah as a dual household if we go to him as a single household then you would be by far well in the category of lower income and a lower income doesn't live in a three hundred thousand dollar house right so all that to say you know I I'm going to sit down with both of you and say what career adjustments can you make that over the next ten years makes this doable we don't want to wait ten years to have kids but we've got to have a light at the end of the tunnel and you're not going to get a hundred percent raises as a mail carrier carrier right so okay you just simply can't do the life you're doing on his income. mathematically and so and so you know I I'm going to figure out what I want to be in the next chapter of my life and it's not this yeah I mean I hear three goals that you want do you want a baby you need more income and you want to be a stay at home mom and so you've got to decide which is the highest priority and something's going to be a trade off if you want to do this before like you said you don't have a lot of time then you might have to consider having a baby and not staying home for a while like you might have to give and take in order to get while he's building his career his career. change might take a three-year curve and you may want to have a baby during that time and so you keep working yeah people do it all the time and it's a sacrifice but sometimes it's like that people do it all the time and so but there's no have your cake and eat it too mathematically you've got a mathematically you have to face the math math will not bend to your passions wills desires it will cause you to change how you're doing those things so that the math changes. yeah and we can give her find the work you're wired to do she can pass on to her husband and hopefully that'll get the juices flowing on a new career path yeah that's what needs to happen yeah so that was a fine career path there's nothing wrong with it until you add these other goals yeah that's true and then it exposes the fact that it's kind of stuck Mike's in Bismarck North Dakota hey Mike what's up hey Mike or hey Dave and Jade super super excited to be on a call with you guys so I have a question for you. quick um financial question right before I get to it I just want to say the impact that you guys have on people goes far beyond finances the beginning of this year I made a goal to run a marathon or a half marathon and every day I went out training I listened to your guys's show the day of the race. I ran and finished your guys' show. Wow, wow, thank you. What you guys do. Good for you. Thank you, guys. It's what you guys do. It's pushing people to be better in all aspects of life. I love that. And it doesn't come easy. Thank you. Good for you. Thank you, guys. So my question is, I have three retirement accounts, one from my current employer, one from a past employer, and then my personal Roth IRA. And it's the one from my past employer that I'm wondering if I need to move it over into my personal retirement account. And here's why. So I used to be a high school teacher in the state, and so I have a state-funded retirement account that currently has $32,900 in it. Yes, I would get online and get a SmartVestor Pro and sit down with them and do a direct transfer rollover from that account into an IRA. Immediately? Immediately. No question. Okay. Because the options, there's $8,000, there's $8,000 mutual funds to choose from when you do that. You have limited options at your old workplace, and probably a state-funded retirement account, it probably sucks. Most of them do. Right. And that was the two reasons why I haven't done it is because, yes, the return is basically 5% to 6% at best. At worst, 0%. Yeah, that's horrible. And it was kind of that security blanket of like, well, if everything goes, A-wire, I'm not going to see that number go down, but again, it's not ever going to climb up. And then the other side of it is, if I would happen to go back and teach for one more year without touching anything in that account, then I'll qualify for a pension. And so that was the other side. I'm not going to, listen, here's the thing. In 23, the market went up 26%. In 24, it went up 25%. In 25, it went up 18%. In 26, it's up 14% so far. If you had started in 23, the 32,000 would be 64,000. And then you wouldn't care about a stupid pension because your money's growing. So you need to get your money growing, man. I would move it. And it won't be the exact same account. You can put it in the same mutual fund, but they're separate account numbers. But it's called a direct transfer rollover. Anytime you leave, people take your 401k and roll it. Take your retirement and roll it anytime you leave. You can always upgrade. I'll see you next time. Take care. Bye. Bye. Bye. Bye. Bye. Bye. John is with us in New York City. Hey, John, how are you? Hi, Dave. I'm not doing better than what I deserve, to be honest with you guys. Me and my wife, right after COVID, we bought our apartment and things were great and life was good. After a few years, we felt like the condo was too small. The two of us were not enough as a family. So we had our daughter and we moved in a bigger house. Things were fine. I did. I didn't really feel like the 30 years mortgage was that bad. And we kept living our life very humble. So in a little amount of time, my job changed. I started making more money. My income increased. Received a promotion, another promotion. I worked more, more and more. And, you know, I shared those promotions with my wife, but she doesn't really know how much money I really make. So I quietly started to use the extra income to change our future. I paid off my car, her car. I made some improvements in the house. Open IRA, Roth IRA. I opened a 401k with her employer. At one point, I even increased her weekly contribution to 75%. So, you know, I started attacking the house, the mortgage. I want to get rid of the mortgage of our primary residence. And a little over two years, I paid down an amount of money that honestly surprises me. And we've gone from 30 years of change almost to the finish line. And if everything goes according to the plan, I could potentially pay off our home by next Christmas. And that brings to me the question I want to ask you today. Should I tell her now or should I just wait and do things the way I've been doing them and eventually give to my family the best Christmas they could possibly imagine? By just saying, guys, we are rich. We made it. And so this is my question for you guys. What should I do? I just think that you have a good intent. You know, I think. You have a good heart. I could tell it by at the end, you wanting it to be a surprise for your family. But the question I have is, why didn't you want your wife to be a part of it all along? Is that a cultural thing? Are you Indian? No, no, no. It's not a cultural thing. I would say that this is more of a race that I'm running, you know, with myself, with step one and two intensity, with gazelle intensity. Part of me wants to tell her everything. I want to share the excitement because this is our life. This is our family. And this is not a goal that I was rich. I was able to reach together. But at the same time, I think that maybe she doesn't need to carry the weight of the race that I decide to run. She she's happy. She she sacrifices without knowing. She doesn't see the money that are in our account. And the widows that I have dealt with when their husband did this and thought he was giving her a gift, but left her ill equipped to handle the real world when he died. Because she's never actually faced the real world because she was so cared for. The old fashioned term would be a kept woman. And while I'm with Jade, it's a good intent. But you've robbed her of the adult part of this instead of the child process. It's like you're giving your daughter a gift instead of having a full grown woman walking beside you. And and enjoying carrying the weight and being your partner and those kinds of things that's been taken from her. And so and she might be OK with it. I mean, John, I remember like when we went broke, my wife before we went broke, my wife used to say things like whatever you want to do, honey. And she meant it. She didn't want to fool with it and just go do whatever you want to do. Well, I drove the dadgum car off a cliff. In your case, you did the other way. You've been very smart. You've been very wise and have gotten raises and have ever gotten, you know, you've prospered. But whatever you want to do, honey, leaves the other partner with without emotional and without the emotional muscle to carry on if something happens to you. Yeah, you're not a bad guy. I don't sense that at all. I think you're I think you guys leaned into what you were most comfortable with. Not necessarily what was best for each of you going forward in a partnership. You're more bent towards being a nerd. She's more bent towards whatever you want, honey. But sometimes we have to press ourselves to be what's better for the partnership. Yeah, that's a good that's a good point. So what would I do in this situation? If you've got everything paid off by Christmas, the difference we're sitting in August right now, the difference in August and December doesn't matter in this discussion. So if you want to unveil and have the big Christmas surprise, that's fine. There's worse things. That's fine. But after Christmas in January, each month, I want her to spend 15, 20 minutes with you looking over where the money is going and being a grown up and making the decisions with her husband and being aware of what things cost, what it takes to live and so on. And again, so that in a worst case scenario where she's left without you because of the proverbial milk truck. Right, right. Poor milk guys. Blame for everything. But all the number of deaths by milk truck, hypothetically, are a lot versus the ones that actually occur is almost none. But anyway, yeah, the yeah, you get hit by the milk truck and she's left there. She doesn't have any. She doesn't. Understand reality. That's right. And we get those calls, we get them in there. They feel very helpless. There's no muscle tone in the math and in the you know, and they're like, you know, they say things like, but I. "I really, I wanna. " No, you really can't. don't have any money or you've got enough money and calm down yeah and i just want to say because i know there's a lot of couples who operate just like this it's kind of like whoever's bent towards money and being the nerd they do that and whoever has no interest in it whatever you want honey and that's what we did yeah and i just think it's it's worth it to know you know the way that we teach it's okay for someone to take the lead in the area you know it's okay for someone to be hey i'm the one who kind of uh gets out the budget i'm the one who says hey today the meeting's coming up but the other spouse has to attend they have to pay attention they have to have eyeballs on it they have to make approvals right you can have a you can play a part in the process without being the main lead and i think that's the thing because when you do at least you know how how much money you have where it's going where it's being invested you've agreed yeah that's the right amount for groceries you've agreed yes that's the right amount for vacation or what have you and then each person has a say in it even if the nerd is the one that you know filled in the numbers yeah exactly and and um it's just a healthier environment when um things come up then i mean and usually it's when there's a problem right that this is exposed not in his case everything's gone good good for him so there's no there's the the system he's using has never been stress tested yeah you know and when you start stress testing your system that's when you can tell if something works or not and my case we started stress testing whatever you want to do honey and we discovered that honey wasn't doing bright stuff me yeah and so i like i went broke because i borrowed too much money honey and so um you know that that was what happened now would her objecting to that have uh kept that from happening probably not we probably would have argued and i would have won the argument but um but still the the idea that she had i remember distinctly walking down the street one night and saying um the kids were you know had just gone to bed it was early like eight o'clock at night and uh high stress in our house and going um well i don't think we're gonna make it i think i don't think i'm gonna be able to turn this i think these guys i've been fighting them for a year and a half and i think it's gonna come unraveled and she said well i had a feeling and i yeah you had a feeling but she had no knowledge of exactly the tactical nuanced garbage i was shoveling that i had buried myself under and so but i remember having to confess that my plan uh what was causing us to be bankrupt and then she had an opinion and uh no honestly she's still like to her she she didn't say whatever you want to do honey but um she didn't say well i told you so because she didn't you know can't really do that if you didn't do that so but i mean it was like it was it was more of a like i had adapted to the stress and to the reality that we were going to lose everything and then she had to swallow all of that at once yeah that's tough and that's that's not fair yeah you know and that's not john's situation he's on the other end you know like she has adapted to um not having to be stressed about anything and now she's going to get a big christmas present yeah and what a great guy though he's a good guy he had a good heart yep hey george camel here listen if you're behind on debt payments and drowning in debt i already know what you're thinking i can't afford a lawyer to help and honestly that's exactly what creditors are counting on but here's what most people don't know guardian litigation group doesn't work like a traditional law firm there's no massive retainer there's no hourly billing that costs more than the debt itself guardian is a law firm built specifically for people in default behind on payments or staring down bankruptcy and their model is designed so people in that situation can actually access real legal protection from day one you're assigned an attorney if a creditor sues you you have someone who can actually represent you not a call center that isn't built to defend you when things escalate the best path out of debt is still doing it the right way budgeting working the plan changing the behavior but if you've already hit a wall and you need real help guardian delivers their attorneys have settled over 600 million dollars in debt for more than 55 000 people so go check it out for yourself guardian lit.com slash ramsey that's guardian lit.com slash ramsey attorney advertising results may vary and no specific outcome is guaranteed i'm so excited about ai everybody's all worried that it's going to take over the world like robots are going to tell you what there is some oh bullcrap so here's the thing about artificial intelligence artificial intelligence is artificial it's not real that's helpful if you think about it the other thing about artificial intelligence that you need to know is it can only regurgitate spit out an answer based on the data set that it's operating from so unless you feed it garbage or you allow it access to a garbage dump like google allows their artificial intelligence to search reddit so you're going to get trash out of that because reddit's full of trash if you allow it to search tiktok you're going to get trash okay so that's a data set we decided our team decided to take uh three years of this show with the answers from jade and rachel and george and me and deloney and every book that we have all written all the bestseller books and the over 2 000 articles that are on our website on all kinds of different money subjects and dump them in as the data set and the two the tool is called ask ramsay and so if you can't get through here on the air and it's kind of hard to do if you can't get through to us to get your question answered just go to ramsay solutions.com click or click the link in the description and use the free ask ramsay tool and it will give you an answer that sounds exactly like you would hear here on the air because it's what you would because it's from what you would hear here on the air we didn't pollute the data set with a bunch of trash from reddit or tiktok or some bozo's opinion and we didn't pollute the data set with a bunch of opinion about something we don't need anybody else's opinion we're right this is what ramsay says if you want to know what ramsay says ask ramsay janet's in canada hi janet how are you i'm great thank you how are you better than i deserve what's up i have a daughter who is a young adult um and she's also neurodivergent um if you're not familiar with that term it it means that you know she um might uh um be impulsive lack sort of regulatory um like is she on the spectrum is that what you mean well a blend between autism and adhd okay if you met her high functioning okay gotcha yeah she seemed lovely um the implication is when it comes to finances or financial decisions she doesn't have the same um control or she might be impulsive and agree with something and because she can legally sign leases or agreements um she has gotten herself into some situations where she's disadvantaged and as a parent i'm happy to see her be independent she's moved out of the family home she has a job but it's low paying so i do help a little so that you know she can buy solid food um she has a job but it's low paying so i do help a little so that you know she can buy solid food so that she can get therapy so that she can get therapy so that she can get therapy you know that she can continue to advance you know that she can continue to advance you know that she can continue to advance in life how old is she in life how old is she in life how old is she she's uh 25. okay very cool what's her she's uh 25 okay very cool what's her she's uh 25 okay very cool what's her attitude about accepting attitude about accepting attitude about accepting advice from you advice from you advice from you well well well accepting advice is limited and that's accepting advice is limited and that's accepting advice is limited and that's part of part of part of part of the dna of sometimes people that are the dna of sometimes people that are the dna of sometimes people that are neurodivergent neurodivergent neurodivergent um um um well she's open to and she's open to um well she's open to and she's open to um well she's open to and she's open to um persuasion by others but not by you persuasion by others but not by you persuasion by others but not by you correct correct correct correct correct correct um um um you know sometimes social cues sometimes you know sometimes social cues sometimes you know sometimes social cues sometimes understanding the big picture seeing understanding the big picture seeing understanding the big picture seeing around corners around corners around corners that's not always a strength and that's not always a strength and that's not always a strength and sometimes there's a little bit i get sometimes there's a little bit i get sometimes there's a little bit i get that that's not the strength but what that that's not the strength but what that that's not the strength but what i'm asking for i'm asking for i'm asking for because basically you there's no middle because basically you there's no middle because basically you there's no middle ground with this ground with this ground with this you either have got to leave her where you either have got to leave her where you either have got to leave her where she is which is what i would love to see she is which is what i would love to see she is which is what i would love to see uh and that she's standalone she makes uh and that she's standalone she makes uh and that she's standalone she makes her own decisions or she's declared her own decisions or she's declared her own decisions or she's declared incompetent incompetent incompetent and then you just have to care for her and and then you just have to care for her and and then you just have to care for her and i don't i would not want to go there i don't i would not want to go there i don't i would not want to go there this is you've come too far you've come this is you've come too far you've come this is you've come too far you've come too far in the right direction and so too far in the right direction and so too far in the right direction and so correct uh things have turned out at at correct uh things have turned out at at correct uh things have turned out at at the best you would hope for i assume the best you would hope for i assume the best you would hope for i assume and so um i'm happy for her but you and so um i'm happy for her but you and so um i'm happy for her but you know that what goes with that though is know that what goes with that though is know that what goes with that though is i would ask her i would ask her i would ask her that as a part of her independence that as a part of her independence that as a part of her independence that it's wise for her to remain humble that it's wise for her to remain humble that it's wise for her to remain humble about asking for a help about asking for a help about asking for a help opinions on things uh to keep her as i say to keep her from getting taken advantage of. And so I'll give you an example in a different setting, and it's not exactly the same, but it's the best I can come up with off the fly. It's when we teach people to start handling money together, one of the things we found is that if a married couple will agree to not make a decision unless it's A, in the budget, or B, anything over a thousand dollars, we have to do two things. One is we have to talk about it, and two is we have to wait overnight. And so this is an act of humility to submit yourself to that system to keep you from being, to keep a person that's not got the issues your daughter has, but people like me, to keep me from overspending at Sam's Club, right? Yes. And so I got to check in with my wife. It's got to be in the budget, and I can't come up with a solution. I can't come home with a new bass boat, right? And so, and just because of my emotional immaturity in that case, right? But a little different, but it still has the same effect. So I've submitted myself with humility to a system that protects me from my impulsiveness, and that's called growing up. Now, I don't know how that applies in this situation, but if we could get her to do that and say, honey, you do whatever you want, you're independent, but- For your own sake, please agree to check with dad, or check with me, or check with your pastor, I don't care whoever it is, someone outside the deal, before you do a deal of a certain size, and it'll keep you from getting screwed over, honey. Yes, and that's excellent advice. I think the complexity to this situation is she actually has a decent amount of money, and you might say, well, I don't know, how did she get a decent amount of money, but she ran her own business at different stages, and it was cash business, and she actually has a decent amount of money, properly invested, but she's entered into life, which is moving out and living, you know, on her own, and now, because of the lack of judgment, because of the lack of understanding of- Yeah, and I would sit down with her and scare her about that. Honey, this is not working. Will she be, does she, is she able to follow the advice that Dave is suggesting, or will her impulse take over in a moment? That's an excellent question, and thank you for asking. I think because there's a high functioning, functioning individual, it's almost like they're rebelling like a team, and I think, you know, a teenager would, because maybe they're a little bit delayed, so having a parental voice or having the scaring, there's a high desire to be independent, and on the one side, I think, yes, let her create her own problem. No, I don't want to do that. That's not the purpose of the call, but here's the thing. It's a little bit like when my teenager would say, Dad, treat me like an adult, and I would say, sure. Act like one, and that applies to this situation. You want independence? You want to be left alone? Then act in such a way that you're not going to lose your independence, because you lose all your money with bad decisions, and that means, the Bible says, in the multitude of counsel, there is safety, and that applies to all of us. To get counsel, there's safety, and that's just what smart people do, regardless of our issues, and we've all got something, but yeah, I mean, she's going to have to deal with that. To maintain her independence, or she's going to lose her independence, because she's going to lose her job, she's going to lose her money, she's going to be handcuffed by these car leases and all these people that ripped her off and signed her up for a bunch of stuff because she would not humble herself to the idea that I need other people in my life, which, by the way, we all do. That was kind of my point. It's not unique to her, and that's part of being a teenager moving into adulthood, too. Dad, I just want to be an adult. Great. Act like one. Adults talk to other people before they make big decisions, and then they get to maintain their independence. They don't lose it. 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Y-Refi helps borrowers explore refinancing options with a low fixed rate and payments based on what you can afford. Go to Y-Refi.com slash Ramsey. Might not be available in all states. Okay, today's question comes from Renee in West Virginia. She says, my husband and I disagree about what to do for our daughter. She is an 18-year-old incoming college freshman. We have a 529 for her and she has scholarships, so college is paid for. She has some money in savings and her checking and she's not a spender, so she won't need all of that anytime soon. I suggested we help her open a mutual fund account to allow a portion of her funds to grow so that she can use it when she graduates to start her life. He wants to put money in a retirement account because she is so young that a small amount can end up being more. What is the wiser thing to do? I have a couple of thoughts on this. Assuming it's, if it's her money, if it's money that she has, I would just have her put it in an HYSA, a high yield savings account, have it there, let it grow. That's her emergency fund. That's money for her to continue to build on later on if she wants to, you know, one day have an apartment as she's ready to move out and start life on her own. If it's money that's coming from you all, you know, Dave, I'm the type, if you want to gift kids money, I kind of feel like now is more helpful. I think it's a good time to do that. I think it's more helpful than later, like them making a retirement account for her. It's like, that's really nice, but I would be more likely to throw it in a brokerage account, have it build up. You guys still have control over it, but when you're ready to gift it, you can. I'd probably go that route. Yeah, I like that. I like that. The thing is, we don't know how much money we're dealing with here. We don't. So in this call and this, there's a lot missing. So if it's $5,000, it's one discussion. If it's 50,000, it's another. It's a different. Okay. It sounds like it's, I'm just, I just have a feel that it's north of 20 or something. Okay. And so it's enough that it doesn't need to be sitting and checking. Right. So, so there's a couple of things this can be used for. If it goes into a simple brokerage account, into a mutual fund, some of it, let's say, let's say there's 30,000 bucks there and you move 20 of it that way. Okay. That could be the purchase of her first house when she gets out of college and talks about getting married or just purchase her first house when she gets out of college, whichever, right. That could help move that that way. If it's 50,000, there's another thing. Oh, by the way, there's another thing. Let's, we can add some money to this. Yeah. You can pull out of the 529 and you should pull out of the 529 the amount equal to the scholarship with no taxes. That's very good. That's a good loophole. And I would take that money and do her, do a Roth IRA because only 7,000 bucks, do a Roth IRA and then do the rest of it towards a brokerage account for the house. Now we're talking like it's a lot of money. So if it's all 5,000 bucks, then we're not doing that. Okay. But, but if there's 20, 30, $40,000, $50,000, including what you're pulling out, like every semester that she doesn't have to pay tuition, you're allowed to pull the equivalent amount of cash out of that tuition out of the 529 to completely tax-free. And then I would use that maybe to fund the Roth and use her stuff to fund her future house purchase or something with an HSA, I'm sorry, a high-yield savings account, and maybe a little mutual fund in there too. Some mix of all of that. The big thing here is not actually the money, it's the teaching moment with her. You've done a great job not being a spender, and this gives you the opportunity to think long-term. I wouldn't only think retirement long-term, that's too far out there. But if I got enough, I would throw some that way, just because the numbers are real. But I would also, so I kind of think you all win the argument here. That's what it sounds like. I would do all of it if you can. And if we add to it that you can pull out of the 529 equal to the scholarship tax-free, that helps the equation even more. So that might be the way to do it. But I agree with you. The biggest thing here is, it's kind of like when somebody calls and says, hey, my 16-year-old has $5,000, they've been cutting grass. They want to open a mutual fund. That's okay. Well, we got all this compound interest for the next 492 years. It's going to be a lot of money. Yeah, sort of. It's hard for the teachers. It's hard for the teenager to get excited about that, too. But that's the biggest issue. The big reason you don't want to open a mutual fund for a 16-year-old is for them to learn how mutual funds work and learn that their hard work can be put to work in an investment. I want them to get those emotional, philosophical, mathematical understandings more than I'm worried about what $5,000 will turn into when he's 65. Yeah. That's, you know, it will turn into a lot of money because that's a long time to compound. But it's still not, you know, it's not $20 million or something. Right. Yeah. It's, but teaching a kid how to invest and how to work hard and how to live on less than he makes and how to have the chops and how good it feels to see your mutual fund statement come in and know how to calculate it. That's cool. A little nerdy, but it's a pretty cool, pretty cool skill. And by the way, that's what rich people teach. They teach their kids how to handle money. And they talk about money because they have some. And that's how, that's what the discussion is around the kitchen table. So. Make that the discussion. This is a good question by Renee. Very good question. Tony's in Omaha, Nebraska. Hey, Tony, what's up? How's it going? Thanks for taking my call. Sure. How can we help? So I was calling about a potential career move that I don't know if it's a good idea or not. Right now I have a interesting job where I'm going to make around 24 bucks an hour. And I work for a local municipal. So I work for the parks department. How old are you? I live rent utility free. I'm a, I'm 35. Okay. You're single? And, uh, uh, yep. I'm newly single. I have two kids. Okay. I've got a. So you make $24 an hour and you're 35 and you work for parks and rec. Yeah. So I make around 58 K a year because I did get a lot of overtime. Um, but that's, I also live rent utility free. And after that's all factored in, it's, it's not too bad. Um, my main thing is the amount of overtime and, um, working weekends, I have to kind of juggle like my kids. And so the other option that you have is what the other option I have is, um, another job, which would be Monday through Friday and I'd make anywhere from 60 to 66 K a year. I also do, I have additional income coming in. I'm, I'm, uh, I play gigs around the area and I, I pull in around, like, why would you not take the job with more money? Is it because of the rent, the rent allowance, the rent, the rent around here? Like when I do the math, it's, it would actually be less money on paper. No, it's not. I'd be, you're doing the math wrong. So you're making a, you're making a total of 8,000 more a year. You're not making 54 at $24. There's not that many hours on the calendar. I'd make a, so I work six days. A week and then I work overtime on top of that. Yeah. So what are they paying you? Triple time and overtime? Uh, it's sometimes on holidays, it's double time. Uh, like the highest year I ever made was 60 grand and you're working like 80 hours or 90 hours to do that. Cause dude, $24 is 30,000. What do you bring home a month? Uh, I, so my paychecks and that's, that's before tax. And that's, that's before my pension. I know, I know, I know. What do you bring home? What do you bring after tax home every month? So after tax home every month, about, let's see, when I'm not working overtime, it's about 2,400 a month. Which is $30,000 a year, oddly enough. But yeah, that's not 54. And so you're telling me you're making another $25,000 in overtime. Bull. No, you're not. Mathematically impossible, dude. You're doing your math wrong. You can't do it. I don't know why I'm screwing up here, but. I don't either. I don't either. But I mean, you'd have to be making $60 an hour and working another 40 hours to get there. You're just not doing it. It's not, it's not happening. On a month with overtime, what is, what, what's your paycheck? So my paychecks, I'm biweekly. It could be depending on the overtime between like, uh, 16, 1800. I've had $2,000 paychecks biweekly. Um, it just kind of all, it's just depending on what's going on. I would take the new position, buddy. I don't think you're going to have to work as much if you take the new position as well. I would take the new position. You're going to make more money and work less. And you have to buy your own apartment. Why? Yeah. Just go rent you an apartment and get your life back. You're starting over after your family falling apart and you need the margin. You need the, you need the time in there. You're working all the time now. Hey, I want to talk to you for a second about love and not love like in Titanic or something. I mean, responsible love, the kind of love that moves you to take care of the people closest to you. And one of the most important ways to show that kind of love is by having term life insurance. If you have anyone, depending on you, a spouse, kids, anyone, you need term life insurance. Term life insurance gives your family real protection. If the unthinkable happens so they can spend their time grieving and not worrying about how the bills are going to get paid. Xander is a broker who works for you shopping the top companies to find the right coverage options for your needs and your budget. In many cases, there are options available with no medical exam and instant approval. My wife and I had term life insurance. I worked with Xander for years long before I worked at Ramsey because we trust them. Getting term life insurance is a way of saying I love you when you can no longer say it yourself. Go to Xander.com or call 1-800-356-4282 to find the coverage that fits your family. Welcome back to the Ramsey show in the fair winds. Credit union studio. I'm Dave Ramsey. Jade Washall. Ramsey personality is my cohost today. Chris is in Seattle. Hey, Chris, what's up in your world? Hi, Dave. My call today. I really appreciate it. Sure. How can we help? Um, well, uh, I have a real estate question. So my wife and family and I, we are moving out of Washington state. We're moving away and there's a lot of people that are leaving Washington. State right now. And because of that, the market is really flooded. Our property would be considered luxury real estate at this point. And all luxury real estate specifically is really dumping into value right now. So we could all the rich people are later sale it. Exactly. You are a hundred percent correct. And family people are leaving as well. So we basically are at a point where we have, we just, we just built an ADU on the property. Uh, I was the general contractor for it. We were able to build that without taking on any debt. And if we have to fire sale, this place we'll be taking, we'll be basically breaking even on what we put in to it over the last several years, but we couldn't sell it. And it would give us enough equity to where when we move, we could be debt free or thanks to our, low mortgage rate that we have here. And you know, we didn't take on debt to build the ADU. We could keep this property, use it as a cash flowing rental immediately. And we would still be able to afford our new mortgage payments at our new home. And that's just kind of where we're stuck is we have two good options and we just don't really know which one's the better one to take. I would not invest in real estate in an area that I believed was going in the wrong direction that's very true and keeping this is the same as investing yes yes it is because if you believe it's going in the wrong direction you're going to continue to see a flooded market and values are going to stagnate or drop if that if that actually occurs okay i don't know i don't know the market and i don't know what's going on i'm going on what your observation is but um for the same reason that you're leaving i would not keep it as a rental is that logical that's that's very logical it's also what i thought you'd say and i mean you're right unpredictable now the other thing the other thing is this the other thing is this you could it sounds like you guys are in good shape financially you we are okay which means you could have patience on selling the property patience equals price yes and that's yes um one thing that we are considering as well is uh take it off the market let it be a rental for about 18 months until we get into the spring of 2028 and then i don't know if it's going to be a rental for about 18 months until we get into the spring of 2028 and then i don't know if it's going to be a rental for about 18 months until we get into the to resell it then it's no skin off our backs we'll definitely be able to get renters that are going to cover the mortgage see if the market heals a little during that time you feel there's some indication the market will get better in that 18 months not worse no okay i mean i'm not i'm not being i really don't know i mean that's a fair thing to think of if to dave's point there's some indicator that it's going to be better you're not saying hey i'm renting with you and you're not saying hey i'm renting with you and you're not saying the idea to be a renter i'm just renting this to buy time until i can sell it for a fair price i feel like those are two different two different things yeah and the second makes sense i guess not to be it does make sense and not to be too political about it but there's a key bit of legislation that's that's in contention in the state right now and that's a millionaire's tax yeah if it gets struck down by the people which it might the conditions in washington state will buoy and they will get better they won't be as good because the damage has been done but right now the potential buyers for a property that we're selling are very limited because they are the type of people that are currently leaving this state yeah because it turns out you can't tax people they leave now correct that's a basic tenant i mean people for some reason people that want to tax millionaires don't understand that you can't tax them they leave so i'm not right i mean it's it happens all the time we've seen it we've seen it in mass anyway so the answer to your question is if i'm what's the price point on this thing so that's what i was about to bring up the price point this property should sell for a little over a million or right around a million because of its location uh the two buildings all that jazz in order for us to sell we would probably have to get it into the high 800s sell in what period of time any time that's just kind of the going right so it's just no longer worth it's no longer worth a million now it's worth 900 yes because market value is what people will give you for it it's not what we wish it would bring yeah or what it used to bring yes it's what people will give you for it what a willing buyer will give a well willing seller when neither is in duress that's the definition of market value in a in real estate all right so um and 18 months from now you don't think that price is going to change much unless it went down no no depend on that piece of legislation i guess yeah yeah um here the other thing is this you are leaving for um um what has become for you for you a very emotional reason and i don't blame you um and for that reason everything you do with this house is going to piss you off i'm getting rid of it just because i want to be free you've said i'm i'm gonna head up i'm gonna load up the truck and move to beverly i'm out of here hills that is swimming pools and movie stars i'm out of here i'm leaving okay and every time you got to go back over there and something doesn't go just right you're gonna be mad again all over again all those emotions are gonna bubble up in your stomach and in your throat again and i really like a clean break when it's from something extremely negative and i don't have to continue to deal with it unless there's a serious return on investment for the crap i'm getting ready to shovel and there's not here you're not telling me this is gonna be worth a million two in 18 months you're telling me it might be worth 700 yeah and you got to deal with a renter long distance yeah yeah i i think i might agree with that i just didn't see a a good enough chance that things would turn around and even so with the legislation he was talking about it could still be yeah time yeah yeah it's just it's moronic when i mean california did it to themselves too and others have done it it's moronic when these legislators and in the state of washington state the governor is an absolute moron um the when they pass when they want to pass the governor when they want to pass something and they think they're going to tax the rich it's logistically impossible in a free country to tax the rich unless you do it to the entire country and even then they'll leave and go to costa rica yeah just pick up and move and be an expat you know i mean so you just they're gonna leave and so you know who left california all those people that were producing money who stayed some that were producing money and everybody else that i mean you guys that's just straight up basic economic stupidity dave ramsey here for more than 30 years i've been talking to folks on the air and i can tell you that most people are broke not because they don't make enough money but because they don't have a plan you need to give every dollar you earn a job because when you do that something's changes you stop guessing you stop worrying you stop stressing our every dollar budgeting app will show you how to find extra cash pay off debt and finally start winning with money but most people won't do it they'll keep living paycheck to paycheck keep hoping things will change without making a change it's time to say enough is enough it's time to take control of your money it's time to start your every dollar budget for free today go download it in the app store or google play annie is with us in dayton ohio hi annie how are you hi i'm doing well thank you um so i've got a i have two children and we've always had very open financial discussions i think we're fairly reasonable people modest but like reasonably financially um solid and i'm thinking of doing something that might not be so reasonable and more emotional so um we lost my i lost my husband a number of years ago so it's just me and the boys and at 21 and 24 both of my kids have recently purchased a home and in our like part of the world you can do that fairly reasonably so they both have mortgages and they don't have any other kind of debt uh like college debt or anything like that and i want to start i don't believe in spoiling children that's why they've got grandparents but i would like to give my kids something um and i don't know kind of the best way to do that i feel like i want to just help them pay their mortgage because when i paid my house off like the security that gave me felt like something good good for you i just you know as a parent that's what you want how old are you any i'm at 55 yesterday good for you happy birthday and uh what's your net worth um well like a little under two million yeah good for you well done why are you hesitating like you're ashamed you didn't do anything wrong you did everything right well i know but it's yeah i i don't know i'm i'm nervous because i'm thinking about trying to retire and i'm that's okay again it comes to security like how much are you talking about giving the boys just just like little bits like instead of like giving them a thousand dollars for christmas like can i just put that on a mortgage or we're selling the home that we that we raised the boys in and i now have a new house and i'm close to them which is very very good and i feel like i want to take some of that money because that was the house that their dad was in and that i was in and we raised them i want to give them a little bit but not like they're doing okay they have jobs like they're are they married one of them just got married and they bought a house and then my other son i'm 21 and he just bought himself a house he's not married and and you're not remarried no okay all right uh well you can do what there's nothing wrong um you're not going to suddenly break their character with a two thousand dollar gift okay um and just if you give them just write them a check and uh tell them that your your request is is that they pay it down on their mortgage of course two thousand dollars doesn't move the needle much on the mortgage either it's not a lot of money no no but and i i mean when i die they're going to get it all anyway so they're going to get it eventually so an individual an individual can leave an individual up to or give an individual up to nineteen thousand dollars a year with no gift tax okay but i don't know if i can do that and then retire i said up to we're not saying you have to if you want to up to and yes you can if you did that for ten years you'll still have two million dollars if your two million dollars is invested well you could give away you know twenty thousand dollars a year and still have lots of money okay but i'm not saying you have to but i'm saying you know that this idea that somehow you're going to even approach with a small gift like that destroying your nest egg you're not now you start talking about giving them a couple hundred a piece we're going to have to sit down and do some math and you're going to have to sit down and do some math and you're going to have to sit down and do some math yeah no and it's just the idea because i thought well maybe if i open a brokerage account like finance no no just just do just let them run their lives okay tell them what you would do if it were you hey i'm going to give you this you do what you want to with it if it was me i'd put it on the mortgage okay or if it's me i'd open up a brokerage account i could i can do that and maybe after i'm retired for a little while i might feel like i could because i just want to give them that that security but i feel very insecure about retiring like that that kind of that kind of scares me so you say well invested i i do tend to hoard a little bit so some of it's invested really well the other part of it it's just the security thing i mean if you've got a million dollars invested in good mutual funds it's producing 100 to 150 thousand dollars a year oh wow okay okay all right and so if you don't spend more than that you're probably not going to run out of money no no i'm of your two million if a million is invested in good mutual funds as an example i'm just giving you some math okay because you know this year the stock market to date and we're only in august is up about 14 and so that'd be 140 000 on a million since january okay all right and i don't have quite a million because i have several properties i don't have well if the properties are producing 10 of what they're worth yeah same thing okay so that that the point is i i sometimes if i sit have people sit down and do math they quit worrying about their retirement like you and i'm not trying to do that to get you give them more i'm just wanting you to quit worrying there might be something where you can sit down annie because it sounds like you you want to give but you're not exactly sure what you want to do and what impact you want it to have there may be something that you save up for for a while and then you're able to do more of a lump sum to go specifically towards whatever it is that you decide versus a thousand dollars here a thousand dollars there now what's the balance on the boys mortgages um one has like 127 and the other i i'm not sure that i know exactly what they're about but they're young about yeah probably probably 200 okay so they're both under 200 okay i mean you could do something like if you once you sit down with your smart investor pro and do some calculations about your retirement and if you see you've got room you could you could do something like i'm going to match whatever extra you pay on your mortgage up to nineteen thousand dollars a year okay and you throw that on the mortgage and so if they pay down twenty thousand and you pay down twenty thousand that's 40 on 127 that mortgage is going away in a couple years yeah yeah i like that when i paid off when i paid off our house like it just opened a whole that's what i'm trying to get to yeah yeah and then you change your you change your family tree right yeah yeah because these boys everything you've said about them is positive about the young men oh they're great kids yeah like they really so they're not going to screw this up paying off their mortgage they're not going to suddenly go off off the ranch right right of course no no they're they're good yeah they're they're smart we've always kind of walked logically through things so i would i would stretch you and say if you sit down and do the math and you can get calm that you could give away forty thousand dollars a year and not go broke which by the way you can then i would probably do something like i'll match you guys on your debt reduction up until whatever you put extra on the mortgage i'll match it up to 19 a year in a calendar year i can do that without any gift tax and that's more than you were thinking of but i i but the math tells me you can do that and not even blink it's not even going to scratch the surface for you you're going to be just fine so assuming you get this stuff well invested and you're looking at these properties they're actually producing good rents you're doing a good job managing the property and getting good money out of it same thing with your mutual funds and if you take two million dollars you can do all of that and uh and by the way if you did nothing except make 10 on that two million you're 55 when you're 62 it's four million when you're 69 it's eight million if you don't touch it and don't add to it don't take any out and don't add anything to it and it makes 10 that's what it'll do so that's the thing to kind of keep in your head and that's what's going through my head when i'm going 19 grand she's just getting started it's not even going to be a thing so um yeah and we can get their houses paid off early and then these guys can be millionaires by the time they're 30 because they don't have a mortgage and they have a smart mom that taught them how to live right live on less than you make sounds like she changed her family tree to me absolutely wow and hope her boys pay off their houses there you go that's it i hope they're smart enough to do that match i think it'll work i think it'll work good and that's the kind of work when you do a match like that you're rewarding the behavior you want to cause to happen yeah and you're actually causing the mortgage to get paid off when you put enough on it to cause it two thousand dollars is more symbolic than actual you Thank you. You have only one more day to get your ticket before Investing Essentials starts. You shouldn't feel uncertain about investing, and you don't have to. At this two-night virtual event, me and George Camel will walk you through my playbook for investing and wealth planning. We'll simplify everything from 401ks and mutual funds to passing on wealth. Join us. September 1st and 2nd. Tickets start at $199. Don't wait. Get yours at ramseysolutions.com slash events or by clicking the link in the show notes. Guys, if you like what you hear around here, help us out and share this show. Tell people about it. Click the like button. The save button. The subscribe button. And all of those buttons and do what they do. Let people know we're here if you like what you're hearing. If you hate what you're hearing, well, we're sorry. Good luck next time you stop somewhere. Hope it works out for you. Folks, if you're sick and tired of working so hard but have nothing to show for it, well, that's normal. Normal's broke. And you don't have to live that way. Our Every Dollar Budget app helps you find extra money every month and builds you a personalized plan to beat debt and build wealth. In just 15 minutes, you'll find thousands. A hidden margin and you'll feel like you got a raise. Don't be normal when you can live and give like no one else. Start Every Dollar for free in the App Store or Google Play. Stacey is in Dallas. Hi, Stacey. How are you? Hey, Stacey. Hey, Dave. How are you doing? Thank you so much for taking my call. Sure. What's up? I've been a huge fan, first of all, before I start with a question. I just love watching your show. Thank you. Very quickly. I am worried about paying my kids' college education. My daughter just went to college out of state. So I have to pay $400,000 for my daughter. And that made me think that now I have to pay another $400,000 when my son goes to college in the next three years. How much money do you guys have? I have cash, liquid cash, $900,000. I have non-liquid. with 401k, my house, gold, jewelry, all that. kind of stuff is about 1.7 million um we make me and my husband together we make about 480 000 annually okay would you allow me to argue with you for a minute yes sir i don't think you ought to spend 400 000 on education in your situation i should not no it's too much oh what is she studying she is going to study economics where going um she went to uc berkeley this year okay and what does an undergrad economics professor or economic student make when they graduate um i would think about 120 150 to start out with no not even close you didn't even research it you just made that number up i think so dave okay no one is hiring first year undergrad students for 150 grand out of uc berkeley nobody not with an economics degree no sorry um so you're you know the thing is education is not an education it's an education it's an education it's an education it's an education the purpose of blessing our children with an education is to give them the tools to become an adult and stand on their own okay and so what i want to do is i want to teach i want the kids to get an education that allows them to go uh uh pursue the career that they want to pursue as long as it is a reasonable career that um can have implications in the marketplace and i don't think somebody with a three million dollar net worth ought to spend a million dollars on their is not there, return on investment. You can get an economics degree from University of Texas in Austin for half of that and be just as marketable as you are at a UC Berkeley. Now, that might not make your little 19-year-old smile, but I'm not real concerned about that. What I want is your 29-year-old to smile because she's a standalone woman on her own. So, I would not spend, and I did not. I have three kids that graduated with undergraduate degrees, all three of them. They went to school for four years, graduated in four years. That, in and of itself, is a statistical anomaly. But they did do that and went to a state school, University of Tennessee, and they're all very successful, all three of them, and are functioning in their degree field, actually. All three of them are. So, and again, we didn't spend the money so that we can say we went to Berkeley. Now, you can if you want. I mean, if you told me you had $20 million and you want to spend a million of it on this, okay. I don't really agree with it, but I might consider that's your choice. But out of $3 million, you should not spend a million dollars on two kids' undergraduate degrees. I just think I wouldn't do that. The return on investment for your children is not there, and the purpose of sending them there is not so that they can say they went to a certain school. It's not a prestige move. It's a gathering of education, of knowledge that's usable in the marketplace. That's the purpose of education. It's not a purse. Not that we buy a coach purse. It's will the purse carry the money? That's all we care about when it comes to education. We don't care if it's a coach purse or not. Because no one has a coach purse. hires you based on where you went to school. And if you don't believe me, where's your doctor graduate from? You don't know, do you? Where'd your lawyer graduate from? Oh, you don't know, do you? I know where my general counsel graduated from because we just interviewed him and hired him the other day. So I can tell you where one of my lawyers graduated from. I can't tell you where some of the others that do workforce out in the marketplace graduate from. I never even asked them. I just said, can you lawyer? Can you help me with my pain, doctor? And can you show me a supply demand curve, economist? Yeah. I'm just shook she was going to do this times two. So I'm sorry, Stace. I hate to burst your bubble, but you got caught up in one of my speeches. But I hope you guys would. I'm going to ask you and your husband to reconsider this because I think it's a bad investment. Not your child is a bad investment. Not an economics degree is a bad investment. But spending $400,000 on one is kind of ridiculous. And you need to rethink that. That's what I would do if I woke up in your shoes. Now, I don't think she's going to tell her daughter no, though. Do you? No, because she's got 900 cash. And she's sitting there looking at it and it's spent in her head. And her daughter's dream is to be at Berkeley. And the problem is you're not going to create a business. You're not going to create a business. You're not going to create probably not going to create a capitalist there. You're probably going to create another socialist. So and you spent $400,000 to do that, which is kind of an irony if you think about it. But yeah, man, you think about where your kids go to school. Oh, man. Yeah. The chances of coming out of Berkeley, UC Berkeley, anything but liberal and left wing and socialist leaning from an economics perspective. Fairly low, fairly low. If you want to study socialism, and if you want to study John Maynard Keynes, Keynesian economics, and Keynes was a socialist, instead of Adam Smith, who was the ultimate capitalist, if you want to, and I've studied all these things, obviously, I've got a degree in finance and economics. So but if you want to study that, that's, you know, you'll get a good dose of it there. So, oh, man. Yeah. Oh, man. I guys, let me go back aside from her just a second and remind you of the movie, Borrowed Future, the documentary that we did that's award winning. You can see it for free on YouTube. We've almost got $2 trillion in student loan debt now. Now she's not taking our student loan debt. So it's not okay. But the biggest cause of student loan debt is the choice of where to go to school. Not whether you go to school, and not whether you study, but whether you go to school in state versus out of state, because if it's 12,000 in state, it's 22,000 in state. And it's almost exactly the same school. I mean, University of Tennessee is in state. If you go to the University of Georgia, it's out of state. They're both excellent state colleges. You get a business degree from either one of those. We would hire you here in a heartbeat. But you're going to pay twice if you live in Tennessee just because you went across state line. So don't. Their football team is better than ours usually, but don't go across state line. And you don't pay for a football team. That's it. That's the thing. So don't do it. Don't do it. You know, think about what you're getting for what you pay. And that's the primary cause of student loan debt. Now, not in Stacy's case. She's got 900,000. Way to go, Stacy, by the way. Very nice. Way to go. Building up some wealth. Yes. Hey, guys, Dave Ramsey here. Every day on the show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com. Our scripture of the day is Jeremiah 29, 13. You will seek me and find me when you seek me with all your heart. C.S. Lewis said there's only two kinds of people, those who say to God, thy will be done, and those to whom God says, all right, then, have it your way. I don't want the second one. And watch out when you trip over that second one. Ouch. Bryce is in Philadelphia. Hey, Bryce, what's up? Hey, guys, how you doing? Great, man. How can we help? Great. So I'm a 31-year-old man. I live in Philadelphia. I'm currently, I'm an assistant principal at a school, and I also invest in real estate, out-of-state. I currently moved back in with my parents just to get my finances together and pay off some debt. I own four rental properties in Ohio, and I'm help managing. Well, someone helps manage them out there. I'm a property management company. I mean, all of this, your parents are in Philadelphia, your job's in Philadelphia. How do you end up owning real estate in Ohio? Well, long story short, I used to live in California in New York City, and it was too expensive, so I just invested in real estate out there. So my portfolio is worth about $545. And how much debt do you have? About $324, so the equity I have is $220. So my question is, I have about $36,000 in personal loan debt I took to fix up properties and stuff like that. I don't have any car debt or student loan debt. So I'm trying to figure out, should I sell my portfolio out of state and just buy a house out here? Yes. Put a decent amount of down payment down? Yes. Yes and yes. Because you're living with your parents right now, right? Exactly. I'm kind of like, I don't need to. Yeah. What caused you to move in with your parents? Well, so what happened was I was buying properties fast out of state, and then the first big expense came up after we placed a roof, and I didn't have the cash to buy it, so I had to take out a personal loan. So the TikTok course didn't give you the whole picture. No. This didn't work out. Yes to everything you said. It's a cry and shame that you have these properties. They're not producing cash for you. They're causing you to go into debt, and they're causing you to live with your mom and dad. That's a really great indicator that we need to go in a different direction. So I'm glad that you called, and I'm glad that you're even considering going in a different direction, because I would. I would look at these properties. You said there's four of them. I would sell all four. Yes. What will it bring if you sell all four? $200,000. $200,000. So you have like $220,000 equity. Yes. And by the time I sell them, I probably have like $190,000. And you've got to pay off the $36,000 loan. Mm-hmm. And then you've got to put a down payment on a house. Yeah, that's perfect. And I'd have a lot of cash reserves. My fear, I guess the fear I have, the only thing holding me back is the properties do generate money. No, they don't. No, you're broke. No, they don't. Right. They couldn't even cover their own expenses. You had to take $36,000 out in personal loans, and you had to go live with your mom and dad. Yeah, that's how I feel right now. Yeah. Okay, so let's stop a second, Bryce. Because, I mean, Dustin or Bryce, here's the mistake the TikTok get-rich-quick real estate morons don't tell you, okay? Rent minus mortgage does not equal cash flow. In the real world, where those of us who know how to do real estate investing professionally, what we know is rent minus mortgage, minus heating and air, minus tenant didn't pay, minus lawyer to get rid of tenant that didn't pay, minus roof that leaks, minus taxes, minus insurance, equals cash flow. You don't have any real cash flow. You've got what we call gross cash flow. Your rent minus your mortgage is a positive, but by the time we adjust for reality for the other things that are hitting you, you end up not having the money. When the repair occurs, and that's how you've ended up where you are. And so don't let the mythology that you were taught stay as a reality in your head. Learn something from this experience, and that is that properties that have a mortgage of more than 50% of their value never actually cash flow. Residential properties don't cash flow. Okay, if your mortgage payment, if your mortgage balance is 250 and that property is worth, 500, you're breaking even. If you owe more than 50%, you're losing money in a calendar year, cash flow. And you're not going to get rich in real estate. You're going to go broke in real estate, following some moron on TikTok. And so that's, that's what's going on. And so Jade's exactly right, Bryce. Hey, just visualize what your life would be like if you had no mortgages and no tenants and no debt and had purchased your own home. With an apartment. With an emergency fund. And you're the principal of a college, I mean, principal of a high school and you're a 36-year-old guy. You're like, and you, you know, it's a perfect situation. So the only good news is you're going to sell these things and make some money on them. Absolutely. And do it today. I would. I would call, go to Ramsey Solutions, click on Ramsey Trusted for a real estate agent in that area. Find one that's high octane, get a sign in the yard by day after tomorrow and get these things gone, gone. Yeah. And life will be so much better. There's no reason to keep these. And I love real estate, but I hate what real estate done poorly does to people. And that's what these idiots on these social media things, $3,000 to buy nothing down real estate. Come see me. That's been going on for like 45 years and it's never worked. The guy who wrote nothing down was a guy named Robert Allen in 1982. I read that book and went and did what he teaches. And Robert Allen went bankrupt doing what he teaches. And Dave Ramsey went bankrupt doing what he teaches. Did he never bounce back? I had never heard from him again. He disappears. He wrote off into the sunset. Two books, nothing down and creating wealth. And neither one worked. Oh, that's too bad. And I, Hey, if he's dumb, I'm dumber. I did exactly what he said to do. Yeah. Yeah. Yeah. Yeah. And that's what happened to Bryce. Bryce fell into somebody like that and thought, Oh, I got to get in the real estate business. I got to get in the real estate. Real estate's where all the money is. No, it's not. Real estate would cause you to go broke if you do it wrong. It's a horrible investment for broke people. And when broke people buy real estate, it makes them broker. That's why they call them real estate brokers. Man, it's a problem. Oh, Bryce, please, please go get your life back, honey. All right. Dustin is in little rock, Arkansas. Dustin, I got just a minute. Ask your question fast. Uh, hello. Um, first off, I'm a pretty big fan. I'm kind of new. I've been watching for six or eight months. Thank you. Um, for about seven, a little bit over seven years, I've been a surveyor. Uh, I've primarily worked on the road and I've made, you know, the past few years, roughly 13 to $15,000 a month. My son will be two in December. My daughter is six and working on the road. It was just getting to be too much time away. What's your question, Dustin? Uh, I took a job local with making about a little bit over $3,600 a month doing survey after. Yes. That's a big cut. Yeah. I'm doing civil survey now and I was surveying on the pipeline. Yeah. Can you not make more than that doing civil? That sounds low. Um, I'm not sure. Sure. Um, I reached out to all the companies that were pretty close to where I live. But you need to find out what a surveyor makes. I think they make more than you're getting paid. That may be the case. I've looked around and most of the places right here close pay $20 to $25 an hour. That's not right. No, no, I bet they do for somebody dragging a chain, but not somebody knows how to actually do a survey. That that's not a $25 an hour job. Um, it's a, uh, it's a. Valid profession and it pays more than you're getting paid. So you need to do a little work on your career tracking and make more. I agree with you coming off the road, but we're going to have to make a little more money or you're not going to eat son. So bad move. Oh, wow. Surveying. I hadn't run into that in a while. You know, it, that's an ancient art actually. I don't know that. I know all that it entails. I mean, you think about George Washington did survey, you know, interesting. Daniel Boone did survey that puts this hour, 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.