Nobody Builds Wealth by Accident

live from Ramsey Solutions. It's the Ramsey show where we help people build wealth, do work that they love and create amazing relationships.
I am Rachel Cruz hosting this hour with bestselling author and my good friend, Jade Borshaw. And we are answering your questions.
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So first off, kicking us off this hour, is Jocelyn in Lubbock, Texas. Hi, Jocelyn.
Welcome to the show. Well, for taking my call, how are you doing? We're doing great.
How can we help? Well, actually, my husband and I have been together for 26 years. We have three sons, and he works as a software developer, and I'm a stay-at-home mom for 20 years.

And he handled all the money and I take care of the kids.

So it worked quite well until eight years ago.

I kind of expect him to step up for our teen son,

but that didn't happen.

So I wasn't happy

and then our marriage turned out.

And since then,

I no longer allowed to know the household finance.

He gave me a credit card to buy food and necessity for the kid and, you know, for the family. But I don't know how much he makes anymore.
And he doesn't even ask me to sign the tax return filing. So I really don't know what's going on.
And I asked him, well, during the COVID, he almost died at the hospital. And I asked him, you know, the password to pay the bills on his laptop.
And, you know, he refused to do that. And then I had to bring his laptop to the hospital.
But then after he got better and he got home and I told him that, you know, I should know our finance. And just in case if he goes to the hospital again, and he said, you know, he'll, he said, I will figure out after he dies.
Oh my gosh. Yes.
So we have been leaving like a housemate and I take care of the kids and like a married single mom. And he's like a married bachelor to check out.
So I don't know what I should do from this point on. And, you know, this is my only marriage.
And I have, you know, like, I think this is it for me. But then I don't know how to turn this thing around.
Yeah, Jocelyn, I'm so sorry. Thank you.
How old are your kids? My oldest one is 18. It's going to be 19.
And I have twins. They are going to be 16.
Okay. So, I mean, they are probably getting out of the house soon.
But, I mean, like. Yeah, I mean, at this point, Jocelyn, from the information you've given us, to me, this is way more of a marriage issue.
I think the effect and the symptom is that he's isolated himself with the money, which is a problem in and of itself, but it is a symptom of what's going on from the root of your marriage. And so, like you said, which I would agree, the context clues you've given us is exactly right.
You don't have a marriage, right? I mean, like this is not a relationship where there's a partnership and there's two people doing life together. You guys have two completely different lives is what it feels like.
And you just happen to live under the same roof. Well, the problem is I'm the only person who lives in this country.
So I think he sees that as I have no support system. So that may be the reason why he can take advantage of my situation and I have nowhere to go I mean and I have been you know being a stay-at-home mom for 20 years do you have I do uh-huh do you have friends do you have anybody here outside of family that you rely that you can trust I can talk to anybody but it if they a good listener but not really you know practically could be helpful you know like in the deep situation but I have a lot of friends I could talk to I mean they listen to my problem and they understand.
So you're not alone but if you're not alone have you voiced this I mean aside from like COVID situations where it's really, you know, stressed or extreme, have you had this conversation with him, brought it up, not in the midst of an argument and just said, hey, here's the way I'm feeling. Have you done that? And what's been the response? Here's the thing.
A lot of times he's very calm and soft, like quiet. Like if he can't counter all the problems he'll be quiet like you know basically it's it's his way that i have to learn to adapt which i'm very flexible and adaptable but a lot of time it's like this is the way and i mean maybe he's willing to share the information of the finance he he was able to give me.
Well, he's clearly not because you don't have it. So he's not.
And my worry is, is that he, he has a level of control and power over you, Jocelyn, that is so scary and unhealthy where you have no options or choices. So I think one of the best things you can do is put yourself in a position where you have options and choices.
And so where that starts from a tactical standpoint is money. Because like you said, like I'm a stay at home mom, I don't have, I don't have money.
And so it starts to be very, very hard lines for me of you either give me full access to our money, or there's going to be a more intense step of something else. And I think Jocelyn, I mean, and again, this is your decision.
And I always, these calls, I feel like a lot of weight and responsibility because we'll get off with you here in about three minutes, Jocelyn, and you're going to have to make these decisions. So what I am sensing and laying out for you, this is life changing, and I want to just be careful of how I even like coat this.
But I would be setting myself up possibly for a new life. People stay in marriages where they're unhappy.
But it's one thing to be unhappy in a marriage. You go through the ranks, you do what you can.
It's another to have no power or control over your own life where they've taken that from you. And I feel like that's what he's done where you don't have freedom to make even a decision to leave at this point because you have no access to money or information beyond that so yeah I would be getting myself in a position for you to um to get access for the money not only just to heal the marriage which I hope helps but it just doesn't it to me it seems like there's less hope of that turning around and probably way of a reality of you realizing, oh, my gosh, I have one life to live.

And unless he's willing to do intense work in therapy and us walk through this together, which I would pray that would be the best.

That's the best outcome.

But would he ever do that?

Would he ever go through it?

Not for money, but for your marriage, a marriage-int's really what he's very passive in life so it's either i am the one who is being the you know the the lead and plan for everything for the household or nothing get done well if you planned it and said i have a therapist and i want to go every tuesday for the next nine months with you at three o'clock every tuesday would he go probably yeah okay that i mean i don't know if i want that either why i don't know because it's it's to me i have so much accumulation of the grief anger or you know like it it i don't't know i mean it's a lot listen what you're saying is i i think i get what you're saying like you don't want to open the can of worms right like there's a lot there and the truth is when you do go through therapy it creates it's almost like it creates more work for you to do more to work through it's not a quick fix, right? It's going to create more and more. The work is on me, so it's like constantly.
So that's what the majority of the problem is. Yeah, so I mean, if I were you, Jocelyn, you need somebody, I think a professional in your corner.
And go get individual work for you. Because like you said, you're harboring and holding a lot in life towards him, which makes complete sense why.
And then I think over time, it's gonna get more and more clear of what you need to do, either pressing more into the marriage or not. But I would be making some hard lines to at least have access to the money.
You have to have that in my head. I mean, that needs to be your first step.
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Again, that's RamseySolutions.com slash tax pro. Next is, is this Isaiah? Yeah, from San Antonio.
Hey, welcome to the show. Thank you so much for taking my call.
Absolutely. Thanks for calling in.
How can we help? Awesome. So basically, I'm 18 and I got married this year in January.
And I'm super young. I own a home service business with my actual twin brother, so both 18, and we've been running this for about a year and a half, and I just want to know if I should maybe look at getting a traditional job because there is an opportunity for right now to make more money.
Sorry, I didn't mean to cut you off. I thought you were finished.
Keep going. All good.
Yeah. So I just want to know if maybe looking at getting a traditional job would be a better idea just for consistent income.
I also moved out this year. So maybe, well, late last year.
So basically this year, but all kind of happened at the same time. So I have a lot more responsibility, a lot more bills.
And I just want to know if maybe getting a traditional job, especially specifically something in sales where I'm something I'm already really proficient at, where I have the opportunity, you know, to make a lot of money. I just want to know if maybe that is a better avenue to take than continuing to grow this business, especially with the, you know, inconsistencies that can often come with small businesses.
Maybe. I mean, let's, what are you making right now and what are you guys projecting? So, uh, right now I make anywhere between like five to 700, sometimes on a good week, a thousand dollars, um, a week.
And, um, you know, it's not a lot. Um, we, we pretty much, We split most of the income down the middle, me and my brother.
And, you know, it's not a lot. We pretty much, we split most of the income down the middle, me and my brother.

And, you know, we leave some for, you know, bills and leads and, you know, all the overhead that we have for our business, which is pretty minor.

But you personally take home as your pay somewhere between $2,000 and $4,000 a month is what you're saying?

Yes, ma'am.

Yeah. Okay.
And it fluctuates very heavily. But it fluctuates between the $2,000 and $4,000 a month is what you're saying? Yes, ma'am.
Yeah. Okay.

And it fluctuates very heavily. Okay.
But it fluctuates between the two and 4,000. Yes, ma'am.
Yeah, I would say. Okay.
How long have you guys been doing that? About a year and a half now. Okay.
And what are the other options? You said, should I get a better job in sales? Do you have like ideas of what that might look like? Or has someone offered you something? Yeah. So I, uh, I got an offer like a while back, uh, for car sales position.
And then I've also done my own research and looked into different sales positions from, um, companies that are kind of similar, honestly, to what I've been doing already, like selling. So like, you know, roofing and, you know, stuff like that.
know stuff like that yeah um does your wife work

yes ma'am yeah she does what does she bring home uh she brings home so she makes uh she just recently got a raise so she makes 17 an hour and she works full-time so okay per month what would you say she's going to bring home? I would say, I don't know, maybe like $2,000 max.

Go ahead, Rachel.

For your household, for you guys,

because you said you have a lot more responsibility

because you've moved out, you guys are on your own.

How much does it take to run your household per month? Have you

guys done a detailed budget? Yeah. So we don't have a super detailed budget.
We've only really been home from like our honeymoon for like three weeks. But, you know, it's roughly, you know, the bills for like, you know, rent and utilities and pretty much everything that we have to pay the company that we live under is around $2,000 a month.

And then,

um,

you know,

obviously gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas,

gas, and utilities and pretty much everything that we have to pay the company that we live under is around $2,000 a month. And then, you know, obviously gas and everything else is probably a couple hundred dollars a month.
And we know groceries is roughly at least $100 a week. Okay.
So I think what would be driving this for me, this decision is number one, knowing and doing a detailed budget. And before you get off the phone, we hook you up with some stuff to for you guys to sit down as newlyweds and figure this out um because you know you if so what would drive me number one is making sure that i we can cover everything we need from food utilities transportation all of that um and do you guys have any debt no ma'am neither have any debt okay great yeah so just knowing hey this is what we need to live off of can we live off of this with me doing this small business and you and your wife working and if this is a small business the other caveat is is this where you want to be long term like if you looked up in five years do you want this business to grow is this what you want to do is this Is this what you enjoy? Yes, ma'am.
Yeah. So I do enjoy what I do.
Like, you know, obviously the home services itself, like the pressure washing and window washing is not really like my preferred, like, I don't think anyone really like loves, loves that. I mean, some people do, but you know, running a business, I do enjoy it, especially with my brother.
Um, you know, we have a good time and we work hard but, you know, I also wouldn't mind, you know, doing something else job. It's always been something that's been in my head.
I didn't know if there was something you were doing that was a passion and you were like, this is what I want to do for the foreseeable future. But if it's kind of like it's fine and it's fun to run a business and you can make more somewhere else.
I mean, why not do both? It feels like from what you described, especially based on the pay and the like some timey nature of it, it feels like it could be more of a hobby side hustle as it grows,

if it continues to grow and maybe you continue to do it. But why can't you do this job while

you do another job? Like, is this like you've got a book of business? Is it something that

your brother takes on more of the load and you take on a smaller load? So you've still got, I don't know, a thousand bucks coming in a month, but you're still doing another full-time job. Yeah, that actually, I've never even thought of that.
And that's a really good thought just because he already, like he almost takes a more lead role in the business anyway, just with his, I don't know, he just, he just always has, he's just been more kind of hands-on always than me. And so I've actually never thought of that, you know, almost me just taking more of a backseat and just doing it as a part-time or side hustle, you know? Yeah.
I like that idea because at least you have some stability. It's almost like you can keep doing this until you land the thing that you want to do.
And then you can pull back on that, but it still serves as a really great side hustle because you guys are just getting started and there's a lot in front of you so being able to stack up cash and kind of just like get the wheels going I think is going to be good and I like what Rachel said about really deciding long term what that looks like like what your wife wants to do is there school at or any sort of training in the future that you might need to pay for So really stacking up money in this phase is also really good. Yeah.
And this is jumping a little bit ahead, but something to think about because the business is small, so you guys may not. But just know small business, especially when there's a partnership and especially between brothers, if this thing starts to scale and you guys start doing this long term, I would have some very formal documentation right up, even sitting down with like a business lawyer to make sure that the terms and everything, ownership, stock, I mean, anything that you guys in the future, if this starts to become bigger and more long term that you really want to think about, because sadly, I think people get into this, you know, small business with a friend or with a sibling and it all is great and fun and then it starts to grow and then we just see anything with money or business when you're with someone close the more communication the more that you lay out ahead of time the less messy it gets down the road because I just don't want this to hurt a relationship down the road that if he feels like you're not doing as much but he's doing it all but yet you still have 50 ownership but like you know what I mean like just talking through all the agreements and all the situations exactly what you're talking about like me and my brother we're twins so we have a very close relationship but there's even times where this has put a lot of strain on our relationship just because there's a it's especially since we both have bills we both have responsibilities there's a lot kind of Yes.
Yeah, and and Isaiah, and maybe one of these things you look up and you're like, hey, he can take it and own it and you can get paid out. And then you work for him.
Work for him for a season two. That feels better to me already.
Yeah, because I'm going to be honest, before he started it initially himself, before I ever joined him and quit the job I had and came and started working with him. Yeah.
And before I ever joined him, he was making a lot more than he's making now, which is sad to admit that. But, you know, a year and a half we've really grown.
You know, there are weeks that we've just, like, blown it out of the park and we're, like, so happy and so. For sure.
Yeah. Sorry, I have to cut you off.
We're going to a break. But, yeah, I would have that conversation with him and maybe there's a sense that he owns it and you work for him making some extra money.
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Today's question comes from Shannon in Alaska. She says, how do I save up for a divorce when I'm in debt? I separated from my husband of eight years after he committed multiple incidents of financial infidelity.
I've since increased my income to 100,000, which was what we brought in combined when he could work. The problem is that we have tons of debt, including money owed to the IRS and credit cards.
The house is in my name only, and I don't want to move our kids out due

to their current schools. Do I treat saving for a divorce as a sinking fund or should I pull from my retirement so I don't have to spend more time in this marriage? That's a really good question.
The good news is you are making money, like you're making a good living, not just for a married couple, but for a single person. So that's a good part of it.
It sounds like you're spending a lot of the income on like whittling away at the debt, if I understood that correctly. So I would pause that.
I would pause whittling away at the debt because the truth is once you get divorced, it's gonna get, the assets are gonna get split, the debt's gonna get split. And I don't want you paying more than your share at this point.
Plus you've got to pay for for the divorce. So yeah, right now, I treat this like storm mode and I would stop and I would save up and I'd really kind of put my feelers out there and find out like, how much is this going to cost me? How much can I save up for it? And it doesn't say whether or not they're separated.
Oh, she does say I separated. Okay.
So I would kind of take my time and make sure I have the money because it sounds like you're in your own life at this point the paperwork just hasn't been done and so rather than go deeper into debt yeah I'd save up for it and pay as you go it's not like you have to have the entire you know lump sum all at once yeah and especially depending on who you hire to help you with it if if they want a retainer or whatnot. So I would say that, and depending on the states, I mean, divorces, depending on the state have different clauses and it, you know, it depends really state by state, but usually with the assets, yeah, it'll be split, including the debt.
And so what that looks like with, from keeping kids, like you taking the house, meaning less assets, you have to make sure the debt is all paid, but keeping the kids in school, all of that. And we get that call a lot of people that are, that have taken on, we got, I got this call with John Deloney last week.
And, you know, she took the house to keep the kids in and she can't afford the mortgage anymore. So there is, there's a lot, there's a lot.
Money is just one factor of a divorce when a marriage ends and it's just horrible and terrible for everyone around. But making sure, Shannon, that, yeah, you're setting yourself up well and that, especially in something like this, that the emotions don't drive all of this because that's where some people get into financial trouble is they just, they want to protect the kids, which makes total sense.
And if you can, absolutely. But also, I want to make sure that you're doing logical things to set you up well,

where you will have more peace and less stress when it comes to money after the smoke clears with this.

But I'm so sorry you're going through that, Shannon.

That's so difficult.

Up next, we have Aaron from San Francisco from the Bay Area.

Hi, Aaron. Welcome to the show.

Hey, thank you so much for having me on. It's a pleasure to speak with you.
Absolutely. How can we help? I'll do my best to be brief and succinct here.
But essentially, my wife and I have been presented with an opportunity by my in-laws, her parents, to take over a business that they've built very successfully. And the caveat to it that is making us a little uncomfortable is that they're offering half of the business to us, half to her brother, where they would essentially gift us half of the value of the business, which has no debt.
We would owe them back for the other half, but we'd be in partnership with her brother. Now, we love her, love her brother as a family.
Um, there's no real issues, but we both come from family businesses that we've seen just create a lot of turmoil and a lot of pain kind of in both of our families. And so when we got married, we swore that we would never go into any type of family business.
It would never be something that we really pursue. And then this opportunity came up, and we want to be wise.
We've worked really hard to get out of debt, have been longtime listeners and adherence to Ramsey's Baby Steps. And so we just feel like, man, are we going backwards by jumping into debt and going into a family business? Yeah, so I have a question.
Her parents, yeah, it's their business. sure i understand the terms correctly are they are you want are they needing you to buy them out basically for them to retire or are they gifting you all the business like are they basically going to put you guys as as owners yeah they're essentially gifting us half the business and then we would owe them back for the other half of what it's worth almost as if it was was kind of an early inheritance, essentially.
They want to, you know, my mother-in-law has expressed, you guys are good kids, you work hard, I'd like to help you out before I die, and I think they're looking for a way to give something early. So, Aaron, are they owning half, and then you all and the brother have half? So you basically have like a third? A third, yeah.
Or is it that the brother has the other half and you all have the other half? Yeah, so we would owe mom and dad back for 50% of the appraised value of the business. And then my brother-in-law would own a quarter.
My wife and I would own a quarter. Okay, so you and the brother together have to, you guys owe together 50%.
So you're 25 and he's 25. How much is that? Yes, ma'am.
But that's correct. How much will that be? About, yeah, it'd be about 4 million that we would owe back.
And then they would be gifting about 4 million. So your cut of that's 2 million.
You and your wife's cut. Correct.
Okay. Yes, ma'am.
If we decided to sell the day that the deal went through, which they've expressed, if that's what you guys decide to do and you want to stick a for sale sign on the ground the second the ink strive and that's your prerogative. But if you didn't, if you didn't, like what's the projection on being out of debt? Like have you run the numbers to see, okay, if we did this.
Yeah, what's your cash position now, you and your wife? So not $2 million,'s for sure uh not not not whatsoever i mean we we're doing you know i i think okay but um you know just maybe a couple hundred thousand yeah i think i honestly the cleanest way um that i see going forward would be would the parents consider just selling the business and then and then giving you guys part of the inheritance early in life where there doesn't have to be this ownership loop that happens yeah yeah that that's another um that's kind of another piece of the conversation that that we're looking at but it looks like they're leaning more towards because it's a family of business owners i think they like the idea of giving us an opportunity to grow a business. But do you like that business? Is it your passion as a person? Or your wife's? No, truthfully, no.
I wouldn't say that it's a passion, but we're passionate about the opportunity. Well, what kind of business is it? What is it? It's like a real estate company, essentially.
Okay. So what you're...
Sorry. Oh, no, I'm just...
I mean, what you said is really profound to me because what you're interested... You're interested basically in the money, but you're not interested in the work, like the type of work that it is.
And I mean, I get it it but I don't think that that would be a good reason so I feel like that's the recipe for disaster as you get into this it's not what you love it's not what you're passionate about the business suffers you feel some type of way because you're having to carry this thing that you didn't really want right you just cared about well yeah it feels nice to have the steak Like there's a possibility to really have a lot of money long-term, but I like Rachel's plan a lot better. So Aaron, there's a way that this all works perfectly and everyone's great.
That's just a very small percentage of all the things that can go wrong. And when you start adding the layers of complexity from the parents still have 50% ownership, you have 25%.
There's a brother that has 25%. It's in an industry you don't know.
And you owe on top of that, you're having to pay your way out of it over time. And again, people do this and it works, but it's such a small percentage of nothing going wrong from a financial or a relational aspect.
And so, you know, what I would do, it would be unfair for your wife to be cut out of a deal from an inheritance standpoint where the brother somehow gets it all because he wants to take on the debt. So there need you guys.
I mean, honestly, with this amount, because we're talking about a six million dollar deal here. So I would sit down with a family business estate planner and start kind of walking through.
I want multiple options for you and your wife, Erin, where there's a level of fairness within the family. But also you have multiple options of what you guys can do versus just A and B.
It's too big of a conversation to limit it to two because I think there's other ways around this. And I would get a professional involved from a family business standpoint and estate planner.
Sorry, Erin. I know that wasn't cut and dry, but I hope that helps.
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Welcome back to the Ramsey Show. I'm Rachel Cruz hosting today with Jade Warshaw.
And on this show, we talk about living like no one else so later you can live and give like no one else. And so this whole journey when it comes to your money and us talking about this so often, you know, there's a season of sacrifice of getting out of debt and saving up cash.
You know, 40% of Americans can't cover a $400 emergency in cash. So even getting above that step, right? I mean, like there's like these small winds along the baby steps, and then you get to a point where you actually start to get to build wealth.
And within that, you change your family tree, you have options and choices with your life, you get to be unbelievably generous. And you know, that starts that that's the second half of this journey.
So we always like to highlight some stories of people that have accomplished the first part. And as they move into that second part or living in the second part of living and giving like no one else always get to talk to them and share their story with you all and so we have rob from new york city on the line and he is a baby steps millionaire thanks for the call rob hey how's it going doing great okay so tell us your net worth right now.
That's about $1.1 million. Okay, and what does that consist of? So we have about, my wife and I combined about $480 in our retirement accounts, and then $520 equity in our home.
We have about $80,000 in paid-for vehicles, $10,000 emergency fund, and about $20,000 in miscellaneous investments. Amazing.
Okay, so for your income, what was the worst year from an income standpoint that you guys made, and what's been the best year? I mean, when I first started my career full time, probably about $50,000 income.

And now it's $150,000.

And then my wife probably started around $30,000 and is now $90,000. Okay.
Awesome. How old are you guys? I'm 33.
My wife's 35. Wow.
Way to go. Well done.
Was any of this money inherited? uh ironically we actually just uh were gifted fifty thousand dollars but that was after we

hit our

uh Was any of this money inherited? Ironically, we actually just were gifted $50,000, but that was after we hit our millionaire status. Okay, yep.
So the inheritance did not equate or help in that sense advance it. And what do you guys do? What do you and your wife do? I'm a police sergeant for a small city, and my wife is a high school special ed teacher.
Wow. Both just public servants and teacher yeah rob you guys are literally you're part like when we do our millionaire studies uh the one the recent one that came out teacher was in the top five uh of millionaires and so yeah and you guys i mean that that's it uh did you guys go to school i guess she did obviously for teaching what's your what's your um do you have any higher? Yeah, so I actually don't need any college degree for my career, but I do have an associate's, and I am going back online.
My job is paying for it. And then my wife has a master's, obviously, as you can imagine.
Yes. You guys are pretty young, I mean, to accomplish.
This is a major accomplishment. So my guess is you've avoided debt, or did you have a big amount of debt to payoff.
Tell us about that. No, I mean, to accomplish this is a major accomplishment.
So my guess is you've avoided debt or did you have a big amount of debt to pay off? Tell us about that. No, I mean, I made some dumb purchases early on.
I bought a new truck and a new motorcycle when I first started my career, but I quickly paid it off and then just saved and saved prior to buying a home. Wow.
Well, clearly that paid off, like that way of life of getting out and staying out of debt paid off. Wow.
That's amazing. Okay.
So what do you tell someone? Cause you guys are in your early thirties, which again is so impressive. Because I think that there's, you know, it's, it's, it's hard out there.
And a lot of people feel this tension of either the paycheck to paycheck cycle. They feel inflation when you go grocery shopping, like life feels expensive and just keeping up for some people just feels hopeless and they're just trying to get traction.
And they look at you guys as like, oh my gosh, I could never imagine, you know, being at that state. So what encouragement do you have for people out there of kind of the American dream that it's still this ability that you get to make choices in your life.

And from a timeline perspective,

it may be different for everyone.

But what would you tell someone out there

that wants to be you guys in the next 10 years?

Just work really hard,

have a plan and live within your means.

That's all there is too.

And that's the secret.

Yeah.

I mean, truly though, like we say all the time, it so true it's a simple concept the work is hard but it's simple just to talk about doing which i so appreciate it because again i think there's so much especially on social media and everything it's like this um this attention grab of what can i do today to get me something different tomorrow where i just make tons of money like it's like like this, this quick approach, but it really does come back to this common sense way of living of below your means, know what you're doing, pay attention, stay away from debt. And it's incredible what you can do.
Well, I love this example. They're 33 and 35 years old.
They started out making 50 to 150. I mean, for each of them, nobody is making 300,000, you know what I'm saying? Right, right.
And they're not in their 60s or even in their 50s. And so I really do think this is a great example of how if you just avoid debt and whatever debt you have, you pay it off as quickly as possible.
And then it's just, all right, we're stacking, we're maxing out our 401ks, we're maxing out our IRAs. Yep.
I mean. Yeah.
So Rob, my last question for you is when we when we talk about building wealth, it is not just to like accumulate dollars in an account. Right.
There's so much of our world and society that there's like such a pride and this like ego driven thing of like, what's my net worth? Right. But doing it so that you're able to be generous and have margin to do things.
So what has living life in this way, in a common sense way with money that you guys have succeeded and are Baby Steps millionaires, what's the pro of it? What would you say is the advantage besides just having money? I mean, really just having that financial security. We have two kids and one on the way.
So just never having to worry about food and paying utilities, that's just big for us.

We work just as hard as we do now with a really good income as we did when we didn't have a good income.

So no matter what our net worth is, we just stay focused and keep working hard.

Owning a home is insanely expensive, especially in New York.

So, you know, people out there that are questioning renting, you have no idea how expensive it gets until you start having to replace things yourself. I know, that's right.
And paying insane electric bills. So it's not easy, but you have to just keep working hard and stay focused.
Yeah, so good. So great.
Well, Rob, we really appreciate you calling in and sharing your story. I always think it's encouraging and helpful just to hear from, you know, from real life people that are doing it.
So thank you, Rob rob for your time i think i appreciate it it's also i feel like i feel like that call really cut through a lot of the stigmas even the the home purchasing part of it where it's like uh there was a lady that called in a couple of days ago and she's like we're you know we're we're millionaires including our house but my husband says we shouldn't include our house you know that kind of thing i'm like just'm like, just because you're, even if your home's not paid off yet, if you still have the equity, like that's still counting towards this. So it's like, yeah, I mean, it's still value.
Yeah, it's still value and assets. And so I just love their story.
Really good. Yep.
So good. All right.
From TikTok, Jade, are you ready? Yeah. TikTok action from Sydney.
Okay. She's asking, is it worth consolidating debt if the interest rate is lower i would not consolidate um i don't know she's talking about student loans or just in general no she didn't say we can make the caveat with student loans but yeah with student loans even on that sometimes i'm on the fence because let's say you have let's say you have a total of seventy000 of debt, but it's broken up into little bits and

pieces. On the one hand, if you're working a debt snowball, that can be so motivating to say,

okay, I just knocked out the $5,000 one and now I'm doing the $7,000 one. But when it's a big

chunk, even though it's a lower interest rate, sometimes that can be very, very overwhelming.

So part of me, it's kind of like your personality type on that. But for student loans, I will tell you, I tend to be one of the people that's like,

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person.

I'm not a person. I'm not a person.
I'm not a person. I'm not a person.
I'm not a person. Sometimes that can be very, very overwhelming.
So part of me, it's kind of like your personality type on that.

But for student loans, I will tell you, I tend to be one of the people that's like,

hey, if you can go quicker and be motivated, the interest rate might not matter as much in the end.

Because I know for Sam and I, our last student loan was a $91,000 student loan.

I was going to ask how much. I knew it was your largest one.

And it was one chunk. And I was like, shook.

I was just like, no, God, no.

I don't want to do it. I don't want to do it.

So that's probably the reason that I would take that approach.

I'll see you next time. it was your largest one.
And it was one chunk. And I was like, shook.
I was just like, no,

I don't want to do it. So that's probably the reason that I would take that approach.
Obviously,

mathematically speaking, you would say, yeah, if you can get a lower interest rate, like do that. But these consolidation companies, like when we talk about like debt consolidation,

the ones you see at midnight, those are the worst. I would never pay someone to do for me what I can

do for myself, which is basically ask for a lower payment or get yourself on a payment plan. Those are all things you can do on your own.
You don't need to pay somebody a lump sum. You don't need to tank your credit in order to get a deal.
Right. Like all of those things.
So I would not use one of those like late night credit consolidation situations. Yeah.
And I think it's a question

we always get and it always goes back to, it's more than just math. Yes.
Right. From a mathematical standpoint, sure.
But also from the motivational standpoint, totally different. And you actually can get out faster with better motivation.
That's right. So great.
Well, Jade, thanks for the great hour. Thanks to all the guys in the booth.
And thank you, America. We'll be back.
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That's fieldofgreens.com slash Ramsey to save 20% on your first order. Live from Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.
I am Rachel Cruz hosting this hour with bestselling author and my good friend Jade Horshaw. And we are answering your questions about life and money and relationships, career, anything and everything.
So give us a call at 888-825-5225 and we will be taking your calls this hour. Up first, we have Maya in Atlanta, Georgia.
Hi, Maya. Welcome to the show.
Hi. Thank you so much.
Can you hear me? Yes, we can. How can we help you today, Maya? I am terrified, to be honest.
I'm expecting my first child soon.

Congratulations.

Thank you.

I am in a very big hole.

I'm considering filing bankruptcy just because that's kind of what's been recommended to me by a couple of friends.

But I'm just more so looking for guidance because I don't really know where to start or what to do or if that's even the best option for my situation. Yeah.
Well, tell us more. How much debt are you in? A little over $200,000.
Oh, wow. And what kind of debt is that? So it's kind of a mix.
About $25,000 of it is strictly credit cards. $14,000 is from student loans.
And then the remainder is pretty much delinquent, like previous bills that I am behind on or kind of got charged off. Or auto loans.
Tell us about the auto loans. Okay.
So I had a car rental business that started last year, but it's pretty much a failed business at this point because I'm not really making any revenue. And I've considered and tried multiple times selling the vehicles and, you know, trying to trade them in.
How many? But no one, there ones can you tell can you go through and tell us the the story on each of them like what you owe on it and what it's worth yes um so there's five different ones i can pull it up if you give me one second sure so what were you doing like turo or something yes okay and so my guess is you pulled debt on all of these vehicles with

the intent to rent them and you ran up the miles on them. So probably they depreciated very quickly, but you just weren't making the spread that you thought you would.
Is that what? Right. One of the vehicles actually started out as a personal vehicle, but then I eventually, We, of course, used it for um business side of things once I resigned from my my previous job got it okay okay so that makes sense because before when you said hey 25,000 credit cards 14,000 student loans the rest is in like other stuff I'm like gosh that's like 160,000 dollars and other, it makes sense now that it's cars.

Do you have that info?

If not, we can move on to the next thing.

I do have all of the cars and how much is owed on each one. But as far as the value of them,

I kind of got the information a little while back,

so it's not as up to date.

Okay, well, as much as we can go through them

and kind of give you some insight.

So the first car, let's call it car number one. What do you owe on it? The first one I owed $24,000.
And what do you think it'd be worth, private sale? What I've tried or what I got last information on was about $20,000. Okay, and how long ago was that information? Probably about

three to four months ago, and this is for all of them, about three to four months ago. Okay,

so one is $20,000, you're $4,000 upside down. Okay, not as bad as I thought.
What's the next one?

The second one is about $28,000. $28,007 is what's owed on it.

Do you want me to keep going on the other one? You said you owe $28,000. And you can get $28,00 from it? As far as that one's worth, it's probably a couple months ago, it was around $25,000 is what it was worth.
Okay. What about car number three? Number three is $37,005.
Okay. What I was told it was worth is about maybe 33 ish and some change and just for clarity what did you go to like a car max type place where did you get that information correct that's where i got them all previously appraised okay that's good to know the good news is what i want to encourage you like before we even get through the list.
The good news is Car what I want to encourage you, like before we even get through the list,

the good news is CarMax value is like probably the lowest value you would get for them.

If you sold these private sale, you might actually break even.

Yeah, yeah.

So keep going.

Let's hear number four, number five real quick.

And then Rachel and I will give you our advice.

Okay, number four is about $40,000 that's owed on it. And that's the one I really don't know what it's worth.
But if I'm guessing, it's probably about $5,000 upside down, but I'm not 100% for sure. Okay, and then the final one? The final one is $42,000.
Two is what's owed. And the last time I got it appraised, it was about $6,000 upside down.
Okay. So the good news is, I really think for sure the first three, if you sold in private sale, you could probably break even or get really, really close.
But I think if I were in your shoes, and I'm not saying this, this is not a sexist comment comment by any means but I'd be getting with whoever I know that has a little bit more cojones in this area and like more expertise like I'd be calling up my dad and brother be like help me sell these cars when these app yeah I just added this up that's 171 thousand dollars in cars yeah and if in worst case scenario you're probably 15 16 thousand dollars upside down so this this I mean I would be making I would say I'm getting these I'm getting rid of these in the next two weeks yeah I mean like I would be putting them everywhere all over the internet anywhere I could I have some great cars and I'm selling them get them out of my life because that frees up I mean I can't imagine the car payments you're paying every month on these maya i mean like that's yeah i mean i that would be my number one and so there is a lot of hope in that situation that 100 yeah the majority of all of these i mean yeah you could be have you tried to sell them and not had luck is that what's holding you back yeah um they're also a few of them are like extremely tied to the point where they're kind of out for repossession so it's like i'm trying to get rid of them so they're back payments okay okay yeah um okay which would make me get that and i would take less to get them out quicker yeah so that it doesn't they don't get repoed because then you have nothing to offset the debt so um even if you have to take less uh i would i mean this is more of a desperate situation because of what you're in. You know, Maya, it's kind of like, you know, with people that are behind on their mortgage and it's like you'd rather sell it quickly than get foreclosed on.
I mean, it's kind of the same equivalent. So the hard thing, though, is you've got to be able to give them the title.
So how are you going to close the gap from the one? Do you know what I'm saying? If you take less, how are you going to close the gap so that you can actually sell it free and clear do you have any money anywhere saved i only have as of today probably about a thousand dollars to my name okay so what i would do then with that thousand dollars because one breaking loose on one of these is going to help you avalanche through all of them so the one that you was the least upside down was number two the one that you owed 28 000 on that was worth 25 if you can just really quickly get 3 000 bucks saved and just focus on that one you even clearing one of these immediately is going to rock your world yep you know absolutely and so that's what i'd focus on and after that, they're going to go like dominoes because it's going to clear up that payment. You're not going to feel the stress of it.
And so focus on one at a time, but there's a lot of hope here, like Rachel said. Yep, for sure.
And what you can do to make money between now and when baby comes is going to be as helpful as possible. That's right.
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Um, Maya, if you stay on the line, Christian's going to pick up and we're gonna get you with with a financial coach to even walk with you through some of this because there's a lot here. And with a baby coming, I know it's just life is difficult.
So hopefully that helps. Thanks for the call.
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All right. Next, we have Joseph in Lafayette.
Hi, Joseph. Welcome to the show.
Hello. Thank you for having me.
Absolutely. How can we help? Okay.
Well, my fiance and I and i well i should say my fiance wants to move we currently live at her on her parents property in a back house while we're paying off our debt and when we get taxes in she'd like to pay off one of the loans but then move and i like from all the numbers i've touched it's like i'm trying to not break her heart but tell her that we might need to stay longer until we pay off all of our debts before we add another bill. Expense.
Yeah. Why does she want to move? It's always we're getting a bit older just to get away from, you know, parents.
Nothing wrong with parents. It's just something we want to move to a bigger place for the kids.
OK it's more out of a desire not a necessity it's not like something is going awry relationally and it's like we got to get out of here for the health of our family there's not an urgency to it necessarily it's just a deep desire of like i want to be on my own yes ma'am okay perfect um so how much um how much extra do you guys have a month if you were to try to say, okay, yeah, here's what we would probably rent for. Have you guys put that into a budget just to see what that looks like? I have paying off the loans still, like if we were to move instead of paying off the loans, I'd be like negative $350 every month.
How much are the loans?

I've got three loans that all average about $2,500. $2,500.
Okay. Okay.
Yes.

And what are you paying right now to live in this other property that your parents have?

Electric loans. Are you there? Yes.
Okay. How much are you guys paying? Are you paying anything or are they letting you live there for free? Pretty much free.
I just pay the electric bill. Okay.
How much do you make a year, Joseph? You and your wife combined? My wife's a stay-at-home mom and this year I made $44,000. $44,000.
Okay. Because I was going to say, I mean, you have $8,000 of debt.
Yeah. Well, were you paying off other debt before this, and this is just what's left? This is what's left.
Oh, God. Okay, that makes more sense.
Okay, sorry. Yeah, that's true.
Okay. So when do you think, like, based off of the progress you've been making, how quickly can you have this 7,500 paid off?

I mean, I could pay off one loan and that loan, that's $400 a month that I can put towards other loans.

It's like paying off one, but it's times the hard variables.

So it's like I could pay off the biggest and then pay off the other ones.

Well, you want to move smallest to largest.

Like that's the way that we would teach you to do it.

But even doing that, how quickly do you think you'd be through the whole 7,500? Within the next six months. Six months.
Okay. Yeah.
So that gives you adequate time to start doing your research and seeing what it would look like to rent. Like Rachel said, you're throwing it in a budget.
You're kind of running the numbers and getting used to what that idea would feel like. And by the time this debt is gone, it's going to be, you know, you packing up that.
Yeah. I mean, how many, how many kids do you guys have? Three.
How many? Three. Three.
Okay. Because Joseph, I would say, what do you do for a career? Warehouse management.
Okay. Because 44 grand, you know, with a family of five.
Before taxes. Before taxes, you know, I mean, yeah, you guys are running on a tight ship.
And so to just, I mean, I'm going to say as the kids get older and as you guys start looking, because eventually, yes, the goal is to own your own place one day. You know, it's either going to take longer, right, on a $44,000 salary.
Yeah. Or if she decides to pick up some work and do something from home to bring in, I mean, even $1,000 a month or something to help kind of speed this up as well.
Right? I mean, I think that's what's always, you know, difficult in a situation is, you know, we are all for stay-at-home moms. That is not a slam against her.
I I think that that is incredible absolutely incredible but when you make one choice there then other choices you know so she has to understand too that there's a reality of what you guys make every year and what you bring in a month and there's a reality of what you can afford so either if you know and I don't want you working 80 hours a week to be able to own a home right i mean like

they're like there's a reality too to your time and enjoyment of life but um but that's a that's a reality she needs to realize so even though i know she doesn't like being there um there's a math issue here too how old are the kids uh six seven and two so is she doing the homeschool thing or are two of them already in kindergarten?

And six seven and two so is she doing the homeschool thing or are they are two of them already in kindergarten and yeah homeschool okay yeah yeah which is great so i think that you know and you guys do a budget together i mean i'm assuming she sees all these numbers we just started like i just discovered the ramsay solution okay three months ago oh awesome well you guys made great progress well done that's awesome so and and how old are you guys you may have said this i am 24 she is 25 okay okay well and the positive thing is to joseph i mean if you know if this was the case and you guys were in your late 30s or something i'd be like okay we gotta we gotta keep moving but you're young in a sense that you know you will only be moving up yeah um in income from you know every year you should

progressively be making more and and that's the positive so it may not happen as fast as she may

want it um but also they're you know i would make it a goal though to at least get out i understand

what she's saying and become you know your own crew somewhere and renting but buying a home and

Thank you. you know i would make it a goal though to at least get out i understand what she's saying and become you know your own crew somewhere and renting but buying a home and all of that it may just take a little bit longer yeah that's true that's true yeah i i understand that and like i hope she does too it's just i don't want to break her heart because she was like we need to move we need to move well you're not breaking her heart math is breaking her heart because she's not living in reality.
I mean, she could be sad about it. And that's appropriate too, right? Where it's like, oh my gosh, I want to be gone out of here.
And this sucks and I hate it. But you know what? Grownups, we all do things that we don't like.
But I would say, again, hear me say, we are pro being on your own. Even if you were a single guy, Joseph, and you were 24, like, hey, Joseph, how can you get out of your parents' house, right?

So for the time being,

you guys are on a plan

and have an end date as well.

This would help her too

when you actually look,

because you said we can be done in six months

and, you know, it's February.

So what is that?

August-ish or so.

And make it a plan to say,

okay, by September 30th,

we are renting a new spot. October 1, we'll be paying rent for a new spot right and you guys together need to be at a timeline and have that end date because that's going to help her if it's this just like forever we're gonna try we'll see that ambiguity i feel like stresses people out and i understand that in her case so have a plan and then you guys yeah rent and then again um I don't know there there's a reality too for her to realize I mean you guys are in a great spot a situation to pay off the step fast versus having to pay $800 and rent somewhere in Lafayette so that's what I would do yeah what do you think Jade I I think you're right you know I like I love when moms want to stay at home I think it it's a great idea.
I love the idea of homeschooling, but there's two really, like you said, facing the reality of a financial situation. And like I've said many times on this show, a dream deferred is not a dream denied.
Just because you say, hey, in this season, I'm not getting you know, I'm not able to have my cake and eat it, too. So in this season, I've got to work hard.
And then once I get ourselves in a better situation, then I can do those things. I can stay at home.
I can do the homeschooling. And so I think that there's a little bit of sacrificing to when that needs to take place here.
Yes. Or you're sacrificing by choosing to be home and homeschooling, which again is great, but then you're sacrificing homeownership down the road.
And that's the thing, right? You guys have just have to look at the math and the values of your family, Joseph, and that's what you want to drive you. But math has to be a reality that we have to live in, that we can't just want something and it just happened.
That's not being a grown-up either. So I hope that helps, Joseph.
But you guys are killing it. I mean, you guys have made so much progress already, so keep up the great work.
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Pre-order today. Every quarter, our research team sends out a survey to listeners of this show, but also just the general public, just to get a pulse on what's going on when it comes to personal finance in America.

And our Q4 results are in, and they've taken everything, all the data people.

They're so good at it.

They are good at it.

And they figure out all this stuff.

But we have some highlights from the study, which we just think are interesting.

It's very interesting.

So the first one is that saving money was the top New Year's resolution for Americans. Saving money.
Yeah, I get that piece. I can understand that.
Okay, 37% of Americans said their personal finances will get better during the second Trump presidency. Listen, I think that's, we saw that at the polls, obviously.
For sure, 37%. One in four U.S.
adults plan to use their tax refund to treat themselves whether it's travel clothes eating out or something more which caveat y'all if you're in debt and you don't have savings use your tax refund for that stuff when you get it and adjust it so you don't get a big refund i know right that's so funny to me that's that that Disney money right there. Okay.
I love this one. Grocery shopping was the number one category where Americans said they're likely to overspend, which we've been telling you guys that for years.
That's us. Food is the budget buster, right? We did a Costco run two weeks ago.
I don't even want to tell you. It was terrible.
Absolutely terrible. I thought, oh my gosh, if I spent this on clothes, I would have...
I already know what it is because it's the same at our house so bad it's so bad um nearly six in ten American adults said weekly meal planning is an essential task but 44 wish they did it better well six out of ten 60 that's pretty good because back to this grocery thing eating out food in general yeah is always a budget buster so grocery shopping for sure but if you don't plan for it you end up going to a restaurant getting to go I mean it just ends up being like the catch-all where you end up spending more doing that yeah but it's like I mean when I look at that it's like eating eating your vegetables like we all know like yeah I'm supposed to eat broccoli like I should probably eat brussel sprouts but we don't do it you know what I mean but meal planning do you find this is like, it's a love language to me. I love it.
I feel in control. I'm like, I know exactly.
Tonight we have spaghetti and meatballs. Yes.
Yesterday we had chili. We plan out exactly what we're going to eat every night.
And it feels good to me. I'm like, I feel in control.
I think if you have, Rachel, those go-to meals, the ones that are easy, the ones you know your family likes, it does make meal planning easier. I think it's the folks who are like, I hate cooking.
I'm bad at cooking. I don't know what to, like those are the folks who really struggle.
That's fair. That's fair.
All right. So this one is a heavy hitter.
It says American said the ideal interest rate for them to consider buying a home in the next 12 months is 4.5%. Keep in mind that right now it's 6.13 or something like that.
Yep, absolutely. Okay, 45% of Gen Z and millennials said that if the government increased the child tax credits, it would be a big or moderate impact on their decision to have a child or additional children.
That's 45%. That's a lot.
And we're going to have a kid or not. Depends on the tax credits.
I mean, don't get me wrong. Like Rachel, we're always talking about considering finances and family planning, but I feel like that's definitely next level.
All right. About half of Americans have given money to a person in need or a charitable cause in the last three months.
I think that's great. Prioritizing generosity.
I think no matter where you are in the baby steps, if you do that, like there's nothing wrong with that. That's a wonderful thing.
Gives us some humanity. That makes me feel good about people.
All right. 30, the last one, 33% of Americans said that it's acceptable to borrow money from the person you're dating to pay a bill.
Let me tell you something, Rachel. Let me tell you something Rachel if I'm dating listen if I'm dating Leroy and he slides into my text like can you give me says Jane I need any extra 300 bucks to cover the car payment this month I do you think it's different between guys and girls um it shouldn't be to a guy.
It shouldn't be. It shouldn't be.
But it feels different. It does.
It does. It's way less attractive for a guy to come to a girl for some reason for money.
Can you spot me a few singles for my utility bill? No, I can't. Sorry, Leroy.
Leroy, bunch it. What are you doing? Unbelievable.
Oh, boy. Well, I'll go back to one, though, Jade, with buying a home.
And they want to, you know, have the interest rate drop, which, again, makes sense. If it's around 6.1% right now and they want a 4.5, almost a 2% drop.
Yeah. It does.
It saves you a ton of money in the long run. But let me tell you guys, get in the game if you haven't already.
Like the ability to buy a house meaning you are out of debts you have an emergency fund you have at least five percent down and your you know your payments you know no more than 25 percent of your take-home pay on a 15-year fix like all the parameters are there don't sit and wait on an interest rate because you can always refinance later but we do you don't have control over that but getting in the market as soon as possible i really think is a a good bet because Jade, as we've seen it, that the housing market, it's not, it's not shooting up. Prices are not shooting up like they were three years ago, but they steadily are still increasing.
That's right. A small percentage.
So it's just going to get more and more expensive. So if you have the ability to get in, go ahead and get in the earlier, the better.
And again, I want you to be financially ready before you do so.

But if you have any questions around housing,

go to RamseySolutions.com slash real estate.

And we have so much information on there, you guys.

Because again, buying a house is a big part of your financial plan.

And we want you to be set up well

with the information and with the people around you

to be able to make that as smooth as possible.

All right, up next, we have Lisa in Raleigh. Hi, Lisa.

Welcome to the show. Thank you, Rachel.
Rachel, my husband and I are 64, we'll be turning 65 at the end of the year. So, of course, we're thinking about retirement and that kind of panics me a lot.
I feel that we did not plan very well and it came very fast.

We do not have a pension. I took my 401k to pay off some debt.
But we do own a home with no mortgage of $700,000. And I do own a business that is grossing $1.3 million.
A month? Or I'm sorry, a year? A year. A year.
And what do you take home from that? If it's grossing,.3 million a month or I'm sorry a year a year a year and what do you take home from that if it's grossing what's it what's the profit of about about 200 good for you great job I know but we just find it very hard to save money and money is always going back into business and of, um, of course we like to live a lifestyle too as well. But, um, so my question is, how do you have enough income for retirement? If you don't have the pension or the 401k, would it be wise to sell the house at some point and the business and then invest that and live off the income.
Yeah, do you guys, are you married, Lisa? Yeah, so married 40 years. Okay.
Oh, congratulations. Do you guys have any retirement, any Roth IRAs, any 401Ks, any mutual funds, anything? No, I took it.
You know you'll you'll love this we paid off our kids

college with that so um no okay and does the business you guys run together so your husband doesn't have a separate income uh he he takes social security he doesn't take um a salary from the business so he takes $2,000 a month Social Security. And just to clarify for me, you said the net profit from the business was $200,000, but it sounded like that's not necessarily what you take home because you were investing a lot back into the business.
Did I hear that right? Well, I would say $200,000. Is what you're taking home.
Right, of course. And that's what you guys make a year total household because he's not working.
So are you guys living off of $200,000? Yes. Okay.
What are you doing? Where's the $200,000 going? Exactly. Well, we do help his parents, and that's about $2,000 a month.

They're 92 years old, and they have round-the-clock care.

Okay.

And so we do help with that.

We do have two car loans.

Oh, okay.

How much are those?

Those are two cars, $400 each.

But what do you owe on them?

They're leased.

Okay, so you're paying $800 a month in leased cars, $2,000 to parents. So, I think what you guys really need is to get on a budget.
And we'll give you an every dollar budget, but that's going to help you see where all the money is going. And when you see that, you're going to have this moment of, oh my goodness.
And that's going to give you the opportunity to reshift your priorities, you and your husband and saying, we might not be able to afford some of the things that we're doing, specifically the leased cars. And we're going to retire soon either, Lisa, unless you have a plan to sell the business.
You guys could downsize and put some of that money in investments. But my fear is, Lisa, your habits haven't changed when you do that.
And you guys will blow through that money. So I would sit down with an investment professional, a trusted pro, and really look at this retirement.
If you hold on the line, Christian will pick up, and we'll direct you where to go. Thanks so much for the call, Lisa.
I talk to people every day who want to know how to do better in two areas, money and relationships. That's why I'm pumped to bring the Money and Relationships Tour to a city near you.
Join me and Dr. John Deloney for a night that will challenge the way you think about this stuff and possibly change how you live forever.
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Are you on track with the baby steps and complete the quiz? And I'll just give you a quick snapshot of where you are financially. All right.
Up next, we have Edward in New York City. Hi, Edward.
Welcome to the show. Hi, thank you so much for taking the call.
Absolutely. How can we help? Yeah.
So I'm looking to, I have an opportunity to invest in a house in a small city in western Pennsylvania.

It's a rental and, um, I've never bought, um, just to give you a little background, if you don't mind about, you know, my finances, I'm 29. Um, I'm single.
Um, my retirement has about 85,000 in it. Um, I have about 85,000 in cash, uh, brokerage account in stocks and stuff like that is about 40.
Um, I pull in about 4,400 for my day job, uh, a month. Okay.
And then, um, and then I have a property of, uh, my own, uh, rental property, um, that I own. Um, and I do have a mortgage on that.
How much is that? The mortgage? It's about $83,000. Okay.
It's valued around like $175,200. Okay.
Great. And where are you living? I think you guys are...
What's that? Where are you living right now? Yeah. So I actually had another apartment and I was fixing it up and then I actually sold it.
I was going to rent it out. Um, so I moved back home to my parents.
Okay. So what's that property? Yeah.
You saw, Oh, you sold it. You sold it.
Yeah. I sold it.
Okay. Where's the proceeds to that? Yeah.
That's like, I'm just holding that in cash right now in my brokerage is that the 40 000 yeah got it okay interesting okay and and the question is another property yeah i have a third opportunity that a friend gave me um also i think if you if you guys don't i think you'll laugh at this uh my rental property actually burnt down um Oh, no. I wouldn't laugh at it.
Yeah, no, rental properties are not passive income. I've learned that the hard way.
Yeah. Got you.
Amen, Edward. Say it louder for the people in the back, as they'd say.
It's all good. So tell us.
Yeah, it's being rebuilt. So it's fine.
When you tell me. Anyway, so I have an opportunity to buy a small house for $44,000 cash.
It has a tenant in there. They pay about $675 a month.
The taxes and the insurance, I was told, are about $150 a month. Okay.
Here, can I pause for just a second? Let me get a little bit more. So the one that burnt down, what's the status on that it's being rebuilt um it's a townhouse okay um i and i'm a i'm the president of the hoa board so um i'm closely aligned with you know the construction process and everything like so when it's when it's built out are you planning on keeping it as a rental are you going to sell it going to rent it.
Yep. You're going to rent it and keep it.
Okay.

I mean, I think my, my, my next goal for you, Edward, is a,

is a home for yourself is a primary residence.

Yeah. I'm going to,

I'll be moving in with my girlfriend this summer and we're probably going to rent. Okay.
So, well, again, I mean,

I would be putting my, I, my next financial goal financial goal because you you don't have any debt correct other than the mortgage yeah no consumer debt you have an emergency fund in place um you have this rental i mean again from a um from a goal of getting yourself not trying to play play some game with the real estate market but just truly trying to get you in the best position at word financially is going to be owning a primary residence and paying it off as quickly as possible. And then beyond that is kind of when we factor in looking into real estate as an investment, because it is a great investment, but also doing it in the right order, I think is key.
It brings, I think, more stability and peace to you.

So can I clarify the first rental that you were talking about, that you have somebody in there?

Did you say that you owe $83,000 on it and it's worth $175,000?

Yeah, that's the one that burned down.

Okay.

But if you, and it's where you live, like it's in your area.

Yeah.

So my question is, you told me, you said you have $85,. Then you've got 40,000 in a brokerage.
Why wouldn't you, now don't get me wrong. I don't think you should do the deal in Pennsylvania.
You're nowhere near there. But why wouldn't you pay off the one that you plan to keep? Yeah, I think about that daily.
Yeah, and live in that townhouse, be completely debt free. Then, yeah, then you can look and say, okay okay is there another rental i want to do i would not do 44 you know how far is how how far is this from pennsylvania oh it's far it's um it's on the western border yeah i i mean i wouldn't edward i mean i think that's going to be exhausting and it's not going to be i mean it's not a ton so i think you could save that money i would only make i would only make maybe 450 500 a month yeah it's not worth it yeah so we crossed that one off the list you pay off the one that you have for 85 000 now you've got a paid for rental and then you've got another 40 000 to start putting towards a down payment on yeah would you live in that townhome uh my girlfriend won't why uh she doesn't like it um but i mean with some convincing and showing other financials i might be able to convince her but yeah because i don't know okay yeah because i mean i'm gonna be honest edward i mean you putting to a degree your financial, not your financial future.
It sounds so dramatic, but your decisions about your finances in the hands of a girlfriend, not your wife, not someone that, you know what I mean? So there is, just remember that. I mean, because honestly, Edward, if you thought about it, just play out a scenario.
What Jade said was brilliant, that paid off. What if you lived in there, You had no rent, right? Like nothing.
And you're making, how much are you making a month? Just $4,400. Yeah.
So you're making that. You live off that and put some in investments, put some away, have a goal for a property.
Run some numbers out of what life could look like. Because when you don't have a mortgage, that is the largest expense in somebody's line item of a budget.
I mean, it is. Your living expenses is always your home.
Whether rent or a mortgage is always the highest. And if you can eliminate that and you have absolutely no debt, no debt at all, then you can say, yeah, maybe I'm going to sell this townhome in two years because it's going to be worth $250.
100%. And then I'm going to go get some, you know what I mean? And I can step up in up in house the way people step up in a car you have the ability to do this kind of from a home perspective and just because the girlfriend doesn't like it i mean i i just i wouldn't i wouldn't put a lot of stock in that honestly and um i don't know that's you know just just to end off i totally agree honestly that's the wise decision but you know if i was like a seasoned investor, let's say I was like 20 years older and I had a large portfolio, even then, would you think that investing in out-of-state properties is a bad move? Yeah, we always say no to that because of the headache, the hassle.
You don't have eyes on it. You end up honestly paying a property manager most of the time.
Yeah, that's what I was going to do. And then it just eats into the profit and and for the most part you're not getting a lot out and and as you you'll see with real estate for most people you're either making money on a flip buying it low selling it high making the spread and you have to know what you're doing if you're doing that and or you're buying property and you make you make your money at the table right when you're buying the property that's usually where you're going to make the money and then you you don't make a ton of money off the rents like that's not what's going to make you rich it's the value of the property increasing and selling it eventually and taking the equity right that's where you're really going to win so having a having a rent is not that's not the mindset I go into it's either I have this and I'm holding it and I'm going to make the money off the equity,

off of the value of the property long-term,

or I buy a crappy, you know, $44,000 property

that you can see.

And if you're into it, Edward,

and you're like, yeah, I mean,

I could get some subs in there.

We could fix it up and I could sell it for 125.

You make some cash that way, right?

But that's a whole other, do I?

Yeah.

He said that's not happening. Oh, that's not happening.
Yeah, yeah. So those are the two ways i see it's not okay yeah that's the way i see the um the investment on real estate it's either doing it with cash and you get some short-term gain from a from a flip which again know what you're doing if you're doing that uh which you're getting yourself into or when you're doing it it's more for the long game of the equity yeah you know i was i was gonna i put a loan a mortgage in or i'm sorry an application and buy a house near me um it was severely damaged and um um everyone is i got outbid by a bunch of cash offers and it over asking.
Like I can't even compete in this market.

Yeah.

Yeah.

And let me encourage you to,

you know,

like in 10 years,

maybe this is a game you end up playing,

but maybe you just invest for now,

you know,

build up some money that way. And then taking that and doing some real estate later down the road.

It doesn't have to be today,

but,

but you're doing great,

Edward.

I mean,

you're,

you're in a great spot.

Jay,

thanks for a great hour.

Thanks to all the guys in the booth

and thank you, America.

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