Getting Your House In Order Is The First Step To Financial Success

this is the ramsey show where we help you win in your life specifically win with your money win in your profession and win with your relationships excited to be with my pal, George Campbell. I'm Ken Coleman, and we're here for you today, America.
The phone number is 888-825-5225, 888-825-5225. Let's start it off with Randall in Homer, Alaska.
And Randall, we're here for you today. What's going on? Hey, Ken.
Hey, George. Thanks for taking my call.
You bet. What's up? Yeah, so unfortunately, I just wrecked my father-in-law's car by hitting a moose up here.
Oh, no. So much going on in that sentence.
Is that like a Tuesday in Alaska? Like, how often does this happen it we literally have a sign on the side of the road that has a number counter saying how many times the moose has been hit right wow you know i uh i have added a number to that okay and uh did you kill the moose uh i broke its leg and then the cops had to come you know put it down unfortunately that's how it goes up here terrible all it's the last frontier that's for sure hey i gotta tell you george you may not know this about me but back when i was in my early 20s i worked on a senate race in alaska and spent a summer campaigning in alaska i did not know that and so you would see moose at nighttime just chewing on people's trees in their front yard like we see deer are they a real nuisance over there randall oh yeah they they really are actually i had i had four of them in my front yard the other day and somebody else hit one of them and had and totaled their car so it it happens on a regular occurrence well we're very sorry about that and i gotta tell you that does the father-in-law know yet are we the first yes yeah boy okay he knows he knows but it's the insurance that's making things tricky well so tell me about this what's happened what's the deal with insurance this isn't this isn't the uh first car i total of his but it was his car that he owned i know i'm a terrible son-in-law maybe you should stop driving his cars car. So let's start with this.
You're the common denominator here.

I'm not even blaming the moose anymore.

I think you guys might be right.

But this instance, it was a little tricky because two years ago he bought the car

because he was going to come up and visit me and the wife and the kids.

And he used it for two weeks, and he hasn't been back in the last two years.

And so he told us we could drive the car as long as I maintain it

and I pay insurance on it.

All right.

But we put the car and titled it under my name

and registered it in my name because I'm up here in the state.

And if anything were to happen, I were to handle it.

And so I have this insurance policy,

and I expected this clunky $3,500 car to only get like a $3,000 payout but for whatever reason the insurance came back with a $10,000 payout and so it's a lot higher than expected but I don't know who that money should go to I kind of want the money but it's kind of my father-in-law's car at the same time, I'm the title holder and I'm the insurance policy holder. Which makes you...
I'm not quite sure what to do. Yeah, this is sticky, but I mean, legally, it's your car.
That's kind of what my thought process was going on. What was the agreement when you guys made this deal? Was it, hey, I'm going to pay you this much money eventually or what? It was, if I pay the insurance and maintain the vehicle, I can drive it.
And then we just kind of laughed and went on with our way. We didn't really communicate about it.
Well, wait a second. At some point he had to sign the title over to you.
Well, when he bought the vehicle, he never signed it over into his name. We just

went to the DMV and signed it into my name. He paid for it in full? Yes.
What did he pay for it?

$3,500. Okay.
All right. So what's the conversation been with him now? Because I

appreciate all this detail. Was this a loan? Did he say, hey, I'm going to need this money back,

but you're going to pay the insurance. It'll be in your name no it was just a no essentially a gift unfortunately he's not much of a communicator he never said that it was ours and it was a gift but he said we can use it we've used it like it's ours and we've used it for two years and he's used it for two weeks yeah but what is he saying now we now? We've established how this all happened.
What is he saying now? Yeah, now he is saying that he's the owner of the vehicle, and if I wanted a payout, then I should have bought the vehicle, but that's actually the scenario I tried proposing to him is, let me just buy the vehicle from you right now, and this was before I knew what the insurance payout was. Let me just buy it from you and make it a bid for it.
He is not entitled to the payout. If you want to give him the $3,500 that he put into it, that's fine.
And let that be off your conscience. But I'm not going to give him a check for $10,000 while you're out of a car.
You're going to be back in the situation again. He's going to buy you a car that you're going to have to maintain and own, yet he has these weird purse strings attached.

I don't like this.

Let me ruffle your feathers some more, George.

I'm ruffled.

He started contacting the insurance agencies so that he could get updates and try to get the total amount disclosed to him behind my back.

And he's the type that will cut off ties.

Don't they have to verify identity? How does he even have access to talk to your insurance folks? I'm not 100% sure, but the insurance has been sending him emails and, you know, discussing this policy with him. So I don't even know if this is kosher.
Well, first of all, this is a relationship mess. Right.
And I got to tell you, I'm very excited. George is ruffled.
I'm fired up. And I'll tell you why.
I always wanted to be one of those judges on TV. You know what I mean? When people come in and it's Judge Ken.
And this is a Judge Ken kind of dream scenario to try to figure out because you've got on one hand, George, the father-in-law does buy the car with his money in, and I'm going to make this up, but in natural law, that's his car, but he goes to the DMV and he literally lets Randall sign the title as though it's his. So legally, under the real law, it's Randall's car.
Now, father-in-law wants the money. He sees a little windfall.
This is my car. I'm letting you take care of it.
He was the best of both worlds. I'm a good father-in-law.
I got my daughter, sweet daughter. It's like you buying a car for me as loser husband down the road.
Oh gosh, I don't want to think about that. But Randall, you aren't a loser at all, I don't think.
Just kidding, Randall. So now you've got the situation where he does his favor for you guys, but he wants you to handle the insurance.
Now he wants the money. This is manipulative in every sense of the word.
And Randall, this is a problem, but I'm bringing all this up and kind of laying it out here because you have one response. This is not your car legally.
You let me use it. He's going to say, yeah, but you know what I did and I bought it and blah blah blah blah blah and so you're gonna have to come down to not what is right in the grand sense of the word but what is right for your relationship going forward unfortunately and i think there's got to be a meeting in the middle george in order to make thanksgiving that's why i think the compromise is i'm going give him the money he paid in.
That gets him out of this. Don't care what he feels like he's deserved.
I agree. That's what I would do, Randall.
But know that that's going to be ugly. What does Randall's wife think about this? Randall, what does your wife say? She's too much like her father, and I told her she's not allowed to talk to her parents right now until I figure it out, because she might make the situation worse.
You told her she's not allowed to talk to her parents right now until I figure it out because she might make the situation worse. You told her she's not allowed to talk to her parents? This is a soap opera.
Until we figure it out. No, you don't tell your wife she's not allowed to talk to her parents.
Well, I meant about the situation. I'm not going to refuse her from FaceTiming with Grandma and the kids.
Well, of you. Kind.
We set our pace. This is the Ramsey Show.
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Alongside George Camel, I'm Ken Coleman. And, George, we were just talking about it during the break.
I'm very excited. I've been working on a new show format for some time, and it's now out.
It's called Front Row Seat. So pumped for you.
And this is a conversation show. For those that have been around a long time, if you've been in your 30s or 40s, 50s, you'd know the show Inside the Actor's Studio.
And you also know MTV, Unplugged. It's got that feel to it.
Legendary. It's intimate.
Intimate. We have an audience of 12 to 15 people that surround me and a guest guest and we have a deep dive conversation designed to help you get better personally to move up professionally and to lead effectively and so that's what the show is all about and so we're often running on youtube and wherever you get your podcasts so uh you can check it out new episodes every tuesday again on youtube it looks fantastic the team did such a great job.
You've seen this set. I have nothing to do with that at all.
No credit to you there. None.
The content is also amazing. So it's front to back, soup to nuts.
This thing is just perfect. Back to my roots.
When I joined Ramsey 10 years ago, I was an interview specialist and for years hosted the Entree Leadership Podcast before I handed it off to you. That's why I first saw you, Ken, what, 13 years ago now? Yeah.
14 years ago. At a leadership event.
Yeah. And I've always said Ken is the best interviewer, maybe on the face of the earth, I don't know.
You're being a little too kind. That's too kind, but I appreciate it.
But anyway, it's called Front Row Seat. Check it out on YouTube.
Some great guests you've got that have already launched that are coming up. Oh, we've got some big names coming.
We launched with Nikki Haley, former presidential candidate. Oh, yeah.
And that was interesting. Not political conversation.
Don't worry. Those of you who immediately got your ackles.
Oh, she did this and she said that. Now, look, when was the last time you sat down with somebody that you agreed with on everything? You didn't.
You haven't. So we like to have conversations across the board designed, again, to help you get better.
That doesn't mean you're bringing a better version of work so you can move up. And for those that are moving up, you're going to lead at some point.
So it's for professional development and growth. So check it out.
Go subscribe. Oh, yeah.
Go subscribe on YouTube and podcast Front Row Seat with Ken Coleman. All right.
let's get to the phone. Steve is in Richmond, Virginia, my old stomping grounds, George.
Steve, how can we help? Hey, guys, thanks for taking the phone call today. Sure, what's up? So I found out in the last week or so that my parents' house is in the process of getting foreclosed on and my question is should I buy the mortgage out and find out some rental agreement for them to continue living there I just think it would be easier twofold one it's a decent investment opportunity and second off I think it would be easier twofold.
One, it's a decent investment opportunity. And second off, I think it's an easier process as they're aging to stay in the house they've been in for 30 years almost and not worry about moving and then trying to find a place and everything else.
They're comfortable where they're at. Well, what's going on with them financially to where their house is about to be foreclosed on? So that's another story I'm trying to unravel.
I will say my dad has been plagued with identity fraud for the last three or four years. I mean, it's like he'll get a debit card in the mail, and then within three or four days, he's got charges from California and Colorado and Mexico and everything else.
So something's weird going on. on a, you know, charges from California and Colorado and Mexico and everything else.
So something, something's weird going on. I know, you know, my sister had a boyfriend living in the house with them and then they, you know, allegedly he had hacked the system and put a virus in it.
I don't know. I'm working with some specialty companies trying to figure out if that's what's happening or I don't know.
They're just not making, haven't made the best financial choices in their lives and they're getting you know they're both turning 65 this year so they can start collecting social security which isn't much money but it's something i wow george i was already nervous i was already nervous about you just buying a house we would run the numbers and george will walk you through that as to because this is like buying another house so that's that you're going to lose money on because your tenants are broke. And I don't think they could pay you rent.
This is a disaster waiting to happen for you so far. The disaster has evaded you.
Right. So I can say I've been very blessed.
You know, we, my husband and I don't have any debt other than a small auto loan that i just had to buy and wasn't part of our investment portfolio um so we would be able to pay cash for the remaining balance of the house which is about 120 000 the house is worth about 350 to 380 um it's in a decent neighborhood where i grew up so So what price would you pay for it right now? Or do you? I'm trying to figure out, George, do you have a mortgage? Because you said you were blessed, and I didn't hear amazing blessing in the form of crazy numbers that would set you up to buy this house. Oh, no.
We don't have any debt except for an auto loan. We have no mortgage.
We have another investment property that's paid off. Our annual income is about $350,000 a year.
Okay. Now we're getting some numbers, George.
All right. And you're saying you could afford to pay cash for this property? Yes.
And buy it before they go into foreclosure? Hopefully. What could you buy it for? I'm not sure what stage they're at.

Uh, my dad just sent me the payoff letter, and like I said, it's about $113 left on the house,

and then, you know, late fees and taxes and all this other stuff, they rolled into the payoffs for $120,000.

But they're not going to sell it to you for $120,000. Why would they sell a $380,000 house for $120,000?

Uh, no, actually, both of them are very on board with doing this. They don't have money.
They need the equity in the house. What are they going to do? Because now you own the house.
They're going to live for free is what's going to happen, Steve. They can't afford to pay rent.
They have – it's a lot, but there is – Yeah. My grandma passed away two years ago, and they got some money from her.
And the issue is they maybe could pay off the house with that, but then they have nothing to live on. So I'm like, well, if I pay the house off, you have enough money to pay your electric bill, your insurance, and everything else along with the.
For how long? Yeah. I mean, they should have about $80,000.
So I would hope they could live on that plus social security and, you know, jobs and my dad. Let's play this through.
Let's say they continue financial misbehavior and blow through the 80 grand that you left alone, and now they're living off social security barely enough to feed themselves are you okay not taking any rent and just floating their bills for the rest of their life um i'm okay with not taking any rent um okay just know that you're not gonna evict your own parents if bush comes to shove and so i'm i would rather just not get involved and say hey mom and dad let's find you a place that you're not going to evict your own parents if Bush comes to shove. And so I would rather just not get involved and say, hey, mom and dad, let's find you a place that you can afford to rent with the money that you do have.
I don't want to artificially prop up their life because that's going to turn into entitlement on one side where they just go, well, Steve is a nice guy. He's going to cover our expenses forever.
And so anytime we need something, we're just going to go to Steve. It's now bank of Steve.
Or it's resentment, more financial misbehavior. You resent them.
You want them out. You regret getting into this.
And now you're stuck in a conundrum because now you're the landlord. So when they don't take care of the house, it's on you to fix it all.
And so if you're saying you're financially able to do that and willing to for your parents, I got no problem with that. Just know that what you're getting into and don't couch it as, well, this is an investment.
Sure, you'll get it one day. That's right.
And on paper, George is right, Steve. I mean, this is a good investment for you.
You're a good son, but I'm afraid it is going to turn into, because you bailed them out on this, you're going to bail them out on other stuff. The bigger issue needs to be, I'll bail, like if, okay, I'll just say this, George.
Steve, if I'm you and I was wanting to do this, I wouldn't do it unless they allowed me, that's you, to get into their finances and once and for all put some type of protections in place so the fraud's not happening all the time. He's just being careless at best if what you're describing is happening all the time.
So I would at least put some protections in there for you to say, this has got to stop. I'll buy the house.
It's an investment for me. You'll live rent-free until the day you die.
Fine. But that's it.
And on top of that, I i gotta know that this isn't going to happen anymore because i think george is right i'm afraid bank of steve is like i think that's a reality and i don't think you want that do you no i'd rather you help them sell this thing and help them downsize into a place with cash me too and you stay out of it and teach them how to manage the money they do have coming in that's the better scenario scenario to help them live an independent life where they're not reaching into your purse strings. This could really ruin your life.
I'll just say this.

I've never seen something like this work out great for all parties involved.

Well, he's trying. Steve's a good person, good son.

But he's trying to fix a situation he can't fix. And that's what I'm concerned about.

It messes his life up. But hey, we've spoken.
Quick break. We'll be right back.
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You've joined the Ramsey Show, where we help you win with your money, win in your work, and win in your relationships. 888-825-5225.
888-825-5225 is the phone number. Let's go to Chris in San Francisco, California.
Chris, how can we help today?

Yeah. Hey guys.
Thanks for taking my call. I am coming into some inheritance.
I've already gotten some. Right now I have about $400,000.
This next week I get another about $300,000 and then there's There's somewhere around 500 to 700 more coming down the line.

Wow. I get another about $300,000 and then there's somewhere around 500 to 700 more coming down the line.
Um, yeah. So, uh, yay for me, but, um, I just, I don't really have a good plan of what to do with the money.
Um, my only debt right now is a, uh, my, my primary, uh, residence, uh, about 70,000 on a pretty good loan. It's only like 2.25%.
So it's really not costing us a lot. So I haven't paid that off yet, but I'm wondering one, if I should pay that off with this next round of inheritance that comes in and then, um, kind of what else to do with the money.
All right. Who passed away? Parents.
Wow. Was this recent? This last year, my mom, yeah.
So sorry. Thank you.
It's all essentially coming from property sales, so multiple properties that'll... Have you looked into any tax implications of the inheritance? As far as I understand from our accountant that was helping us before my mom even passed away that there is...
We're not getting taxed on any of it, which is very surprising to me, but, um, yeah. That's a good place to start there.
And then, you know, the, the first order of business is take a deep breath. This is a lot of money and we don't want to, you know, manage it wisely and steward it wisely.
And most people, you don't, you're not the type, but most people would go, ooh, windfall, time to go get some toys, give some money, buy this, buy that. And just pausing for six months and just storing that money in a high yield savings account, just let it sit for a little bit before you make any decisions is wise.
And then filtering it through the baby steps, your house sounds like it's next if that's your only debt remaining. And I know it's a low interest, but I don't think we're worried about interest rates at this point of our life.
You're about to have so much wealth. You're going to free up a mortgage payment that you can now use to invest.
And so it's going to be a wash, but the peace of mind will be totally worth getting rid of that debt, regardless of the interest rate. Yeah.
And we, you know, before the money, my wife and I, we, we have a pretty good income. We're pretty, we're pretty, uh, uh, comfortable.
Um, we, we, our first house, we made like almost 300,000 on. And, and, um, when we moved, we, we got set up pretty, pretty comfortably with only having the, excuse me, the home loan.
So, um, what's your current net worth? Um, well, I guess with the house, um, and that somewhere over a little over a million right now, and that's, again, I don't, uh, next week, um, a house closes and that's somewhere around 300,000 that comes in, maybe even like 325. Awesome.
So you guys are already millionaires. So this is a lot of money.
You're doubling your net worth overnight, essentially. And so now we go, okay, what does the future look like as we want to build wealth and leave an inheritance to our children? And what kind of life do we want to set up for ourselves? You know, what does retirement look like one day? And what kind of work do we really want to do now that money is not an issue? And so there's a lot of life changes that could be happening.
Are you both of you working right now? Yeah. Okay.
Do you guys have kids? Yeah, two. Okay.
Awesome. So, you know, looking at this from a high level perspective, we want to go, all right, we got a primary home paid for, let's make sure that our retirements are fully funded.
We're maxing out retirements. Now we're going to go the kids college.
Let's fund that. Let's put a portion of this in a 529 plan.
Then it becomes, do we want to invest in real estate or just mutual funds? And how do we look at giving? Let's increase that. Let's increase our spending a little bit as well and enjoy some of this money.
So a good way to look at it is just not getting a flat tire where you're hoarding all of it in savings or you gave it all away or you spent it all and didn't save any of it. And so it's a good way to just filter it through giving, saving, and spending goals.
Yeah. Yeah.
I don't disagree. I think having a long-term plan sitting with somebody and now you guys actually have money.
A lot of young couples, we would say as soon as you get out

of debt and you begin to move into baby step three, then 40, okay, you sit down and as you

begin to invest every month, what's that long-term play? You guys are there. So this is, let's get

this money working for you. Like George said, and man, how exciting and what a blessing this is for

you.

I mean,

Thank you. I mean, you guys should be very, very wealthy by the time you're 60.
Very. I hope so.
How old are you now? 44. Okay.
I thought, you know what? I'll be honest with you. I thought you were a little younger than that.
He sounds like in the early 20s, mid-20s. Yeah, he's about your age.
Yeah, I'm a little older. I'm being generous to Ken.
Yeah, you're being very kind. But Chris, you're still going to be very wealthy, you know what I mean, by investing this and getting this working for you now.
So it just leapfrogs any goals you had and probably time to reassess and get a team of experts on your side. If you don't already have a good financial advisor, jump on RamseySolutions.com.
Same for a tax pro. You mentioned an accountant.
If you like working with them, that's great. An estate attorney would be wise at this point.
Maybe a real estate expert if you want to get into real estate. And then make sure that you have the right coverage now because you've a bigger target on your back if something were to happen.
So I would reassess all of your insurance coverage. You definitely need an umbrella insurance if you don't already have that.
And our friends at Zander can help out with all of that to make sure that you are maxed to the gills on your home insurance, your auto insurance. I would get all of the liability coverage.
That's a great call. I love that.
I would call our friends at Zander. I know Jeff personally, guy's been around forever, friend of Dave's.
They'll take very good care of you. That's why we recommend them.
That's very smart. Yeah.
As you gather and build wealth, you also need to protect the wealth that you're building. And that's where all of the different insurance products come into play.
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All right. Let's go to St.
Paul, Minneapolis area. McKenna is there mckenna how can we help hi thank you for taking my call sure what's up um so my husband and i completed baby step three last fall we've been kind of cash flowing to weddings we've been going to since then and investing in retirement and at the end of this month we're going to get ready to start thinking about our next home.
We have a mortgage on a townhome currently. My question would be, at the end of this month, we're going to start shelling out some money into a savings account.
We just don't really know if that's a money market account, a high yield, or if that is investing in the market. If we're not planning on moving for another five years, if that's enough time to ride out the market.
it. Yeah, five years would be the minimum for me to be investing in the market if we're not planning on moving for another five years, if that's enough time to like ride out the market.
Yeah, five years would be the minimum for me to be investing in the market versus a shorter term goal where you have your money parked in a high yield savings account, because you increase your chances of making money versus losing it. You know, when you start to extend the timeframes out, the bigger question is why not just pay extra on your mortgage and then sell the property, roll all the equity over to the next house?

That's sort of a forced savings plan.

That was the other thing that we were thinking of.

What's the townhome worth?

Amateurization schedule.

So it's about worth probably $265,000 to $270,000.

We have $239,000 remaining on it.

And according to an amateurization, it would be about seven years to pay it off.

Okay.

Well, I'll tell you what my wife and I did. We got a townhome.
the time was 300,000. The loan was, I think, 165.
And we just

aggressively attacked that and we got it paid off and rolled 100% of the equity into our next home.

And we just kept doing that. And so I'd encourage you to do the same to create a forced savings plan

because when you don't, here's what will happen. You'll call back and say, hey, we're thinking

about keeping this townhome as a rental

and taking on an even bigger mortgage for the next home

with very little down.

That's the temptation that happens

when you don't just force the savings plan into the mortgage.

So that's the way I would do it.

Ken, any thoughts?

I feel like you've taken that call before

because you went into a head voice there.

Oh, wow.

I didn't realize that. You did an impersonation of what that call might be.
Yeah. You were a little whiny.
A little whiny. They love the idea of keeping it as the rental.
That's always the move. I know.
I'm telling you. You had a little disdain in that.
I just think there's a time and place for it. I think you're right, by the way.
Taking on two mortgages. I think you're right.
Yeah, yeah. I just like how you went there.
I think you've had that call one too many times. It haunts me in my sleep.
It gives you a little indigestion. It lives rent-free in my head.
You don't like it. I want to evict it.
Is that, do you cover that in your book, Breaking Free from Brooke? I do, actually. Thank you.
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It may not be available in all states. Today's question comes from Hayden in Washington, D.C.
When purchasing term life policy, the monthly premiums are affordable. However, while still paying off debt with gazelle-like intensity, it seems that those premiums should be used to get out of debt faster.
Any advice on, quote, adding a monthly cost in the form of a premium while also trying to get out of debt quickly? Yes, lots of advice here. Namely, this is not an added cost.
This is insurance. And this protects you as you get out of debt.
It protects you as you build wealth. So the same would go for your health insurance.
We would never tell someone to forego health insurance and auto insurance and homeowner's insurance to get out of debt faster. These are prerequisites to life as an adult.
You need a will, you need term life, you need auto, you need home, you need health. All of these things are requirements.
And therefore, here's what you do. You get the term life policy through Xander.
Let's say it's $240 per year. You can set up a sinking fund line item in your budget of $20 per month that gets added in there so that by month 12, you have $240 saved ready to pay that yearly premium if that's how you pay.
That's how I do it for my family. And that's how I would recommend you do this as well.
And I don't see insurance. I used to be very negative about insurance, Ken, when I was younger and go, oh my gosh, I got to pay the insurance premium.
Now, when I see that life insurance premium come through in particular, I just go, thank God. Thank God that my wife is going to be okay.
Because you got two special ladies in your life. Yes.
And that's peace of mind. I remember the same thing.
I remember every time I paid it or every time I would, you know, if I got a better rate, I was just, it wasn't about the money. It was about, I know that if something happens to me, Stacey and the kiddos are going to be provided for.
And that's what this is all about. Yeah.
And if you want proof of how important this is, go listen to some of the Ramsey show calls where a spouse passes away without life insurance. Now they're really in a lurch trying to pay off debt, losing that income.
And so that's the goal of term life to replace your income. If something should happen to you for the people that you love, you want 10 to 12 times your income and that policy, 15 or 20 year term policy should do it.
Because if you follow the Ramsey plan, you'll be self-insured by then paid for house. You've been investing for 20 years, your family's going to be okay at that point.
But in the meantime, you need to transfer that risk to the insurance company. And Zander is the folks we trust for all of those.
So go to Zander.com and get that done and start your EveryDollar budget and add it as a line item and thank me later. I agree.
The EveryDollar budget right there will help you see, oh, all right, I can move money from somewhere else. But that is a non-negotiable.
By the way, you can get every dollar in the App Store or Google Play or the link in our show notes. Clifton is up in Raleigh, North Carolina.
Clifton, how can we help? Hey, guys. First, thanks for taking my call.
Sure. Been with you guys for about a year now.
And me and my wife are completely on board with this. We paid off about $230,000 in debt so far.
Wow. Um, congratulations.
That is no joke. How long has it taken to pay off 230,000? 18 months.
Wow. What did you find gold? You sell some strike oil? No, no, no.
Um, my, my uncle from the family-owned business and passed ownership to me. It's a business that's been in business since 1965, and we do really well, and I've managed, just because I'm younger and can work harder, I've managed to triple the revenue from the last few years that he's getting in.
Congratulations. Yeah, it's going really well.
And my wife's a DNP, so she makes really good money too. Oh, wow.
And we live fairly frugally. You guys are just crushing it on all fronts.
Right, but that does not get rid of the anxiety and stress I have with the debt that I have left, which is the reason for my call. We have, we built a house two years ago.
I'm not really concerned about that. We sold our old house and built this one on a property we bought.
The business though, I, as soon as I took over the business, I reformed as an LLC, got the S election so that I'm not taxed so heavily. And I paid myself a salary from that business, which of course is taxed as personal income.
There was a loan that my uncle made to me, basically gave me the business, but I had to buy the complete inventory. And he was very, very nice to me and gave me that on a seven-year loan at and a half percent interest.
Um, and, and, uh, I've paid that down to about 240,000 is what I have left out on it and five years left to pay on it. Um, so this is my question though.
Um, uh, I'm paying myself a salary. So I get that every week, the rest of the money, because we're in S, taxed in S,

is being kept in the business as retained earnings.

And it's pretty significant.

The business, I think, retained earnings this year alone

was close to $200 in retained earnings.

Awesome.

And this is the question I'm concerned about,

just taking all of that money and paying the debt at once because then I'm kind of missing that safety that a business needs for a few months of operating expenses, that things go forward. I'm kind of paranoid, right? Because I've had the business for two years, and I'm concerned that at any moment work could dry up, and I owe all this money, right? Well, you got five years.
Do you have any other debt? No. The other debt I told you I paid for, we cut up our credit cards as soon as we started listening.
We cut up our credit cards. We have no car notes.
The only thing we have is the mortgage and the business debt. Okay.
All right, so Clifton, question I have for you. So what are your quarters? Are you on a traditional first quarter, second quarter, or when is your first quarter done? As far as, like, for tax purposes? No, just in your business, like with your books, like your profits.
Business starts January 1st each year. Okay.
So of that retained earnings, it's currently $247,000. How often do you put money into that? Is it every month? I put all of the business money into that except except for what I pay myself.
I know, but I'm saying, do you do that on a monthly basis, a quarterly or annually? No, no, it's done. Well, I guess you could say it's done daily.
I'm not understanding the question, but when they go to a savings account for retained earnings, they go to a savings account for retained earnings. Okay.
Here's what was asking it one way. I've confused you.
Let me come at this. What I would do if I were you, George, to push back on this, but you've got $240,000 roughly in retained earnings.
You don't want to empty it just to pay off the debt at once, and I agree with George. You've got five years, but I think where I was trying to go with this is what if you, right now, starting today, the 240 or whatever it is you've got to retain earnings, what if every month or every day or every week, as you're putting those in, from this point forward, I would put it all towards the debt.
So in other words, or let me say this, if the amount, What is a year's worth of operating expenses for you? Total expenses, what's a year's worth? Probably $500,000. Okay.
So George- That cost of goods sold and everything. Okay.
My point is you got a good chunk. Leave the big chunk in, but now instead of adding to the chunk, George, I'm saying he should start.
Now the retained earnings don't go to the account. They go straight to the debt.
I like that. What's your household income that you're taking home? I pay myself, well, between me and my wife, it's right at 200.
Okay. So based on the 200 and you paying off 230 in 18 months, is there a similar trajectory? Could you pay off the 240 in less than 18 months? I think so.
Well, okay. My wife has a very small part of the debt we've paid off already was student loans from when she went back to school to get her doctorate.
And I think I have 21,000 left to pay on that, but it'll be paid within 30 to 60 days. Yeah, but that's personal.
The question is, on this business debt... That's my question.
There's a difference here between personal expenses. I can begin taking the margin that we have in our personal budget and applying it to the debt I own in the business too.
Yeah, exactly. Plus, like Ken's saying, with your future profits coming in, instead of adding to the giant pile you have, let's also add that to your debt.
For instance, George, if he could put $20,000 a month towards the equipment line.

Oh, yeah.

That's one year.

And speed this thing up.

He pays it off in a year.

It's done.

That's the idea.

Just put all of your debts in the debt snowball.

It's all tied to your name.

So there is no business debt versus personal debt.

You're just going to snowball this thing and be done in a year, year and a half.

Good call.

Good hour, George Camel. This is The Ramsey Show.
What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession.
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It's free at netsuite.com slash Ramsey. This is the Ramsey Show, where we help you win in your life, win with your money, win in your profession, and win with your relationships.
Alongside the snappy, attired, and also witty-brained George Campbell.

You're too kind.

I'm Ken Coleman.

I got to give you two compliments.

All I keep thinking of is

you used the word magnanimous earlier,

and I can't stop thinking about it.

Oh, that's such a great word.

That's a fun word.

We should have a word of the hour.

You would love that.

Maybe we'll kick that around in a program meeting.

Probably we'll educate some viewers. Yeah, we'll do that.
But nonetheless, we're here together for you. I'm Ken Coleman.
He is George Camel. George will coach you up on the money, what to do with it.
I'm going to coach you up how to make more money. How about that? Make more money, keep more money.
Those would be our names. That'll help you through the baby steps.
I think it will. So let's get started, shall we, George? Seattle, Washington is where we go.
Michaela is there. Michaela, how can George and I help today? Hi.
It seems kind of silly, and I'll try to keep this short, but I'm a pretty long-winded talker. I know that.
I am too. My ex and I, I'm 28.
We got married when I was 24, you know, we did all the right things. We got married.
We bought a house. We got the toys to go along with it.
We had a daughter. And he really struggled with alcoholism.
And because of her safety, I ultimately decided to leave. He does not pay child support.
In our divorce, I said, you know, 200 bucks a month, I'll take care of it. You know, at that point I had been doing it by myself for so long that I was like, you know, it really doesn't matter.
Um, my main thought at that time was, uh, I, I tried to give him, I think more grace than he probably should. I wanted him to be able to get back on his feet.
He was living with his mom and, you know, the truck that we had bought was $30,000. We got a loan, put five down, he owed 25 or we own 20 or owed 25.
And I just got a statement from them. And this has been a couple of years now that there is still $25,000 left.
And so what happens is he doesn't make any payments. They threaten to take it.
He makes a big payment, you know, to give him off his back. And I've talked to the lender and said, you know, what can I do? And they're basically saying nothing unless he refinances, which he has no interest in doing.
So between the truck getting behind and then like he doesn't pay child support i think he's paid it once um last december he paid me the 200 who told him it was optional um well so our we don't have it enforced um i haven't like gone through the child support division we just put it on paper in our divorce but i can make the call today to do it um the courts actually said his child support would be about 800, but again, I was just going to say it sounds low. Keep the truck payment current, and we'll kind of go from there.
Because the truck is in your name as well? Yeah, and so I'm just kind of wondering if there's anything I can do to kind of get off that, and if I should call and get the child support just taken out.

My fear is... And so I'm just kind of wondering, like, if there's anything I can do to kind of get off that and if I should call and get the child support just taken out.

My fear is whenever I've got this up to him, he kind of withdraws and stops taking our daughter.

And I just I know it's not my responsibility to keep their relationship good.

But I do feel, you know, an obligation because she's so young to at least buy some time for her to make the choice on how their own. How old is she? She's two.
Yeah. Is he stable now, at least from an employment and living on his own, or is he still with Mama? No, he's still with Mom, and he's actually never taken me off of the joint account we had.
So I don't use it, but I can see it. I imagine there's some cash coming through that I don't see because I've never seen a payment to his mom.
I've never seen any sort of large withdrawal from the account. I mean, it's literally all, I'm sorry, it's alcohol.
It's $30 at gas stations here and there, the occasional gas stop. Does he have a job? $100 at Walmart.
Yeah, yeah, he has a job. And from what I can say, he gets about $800 a week to do that job.
What is his job? But he doesn't help. I think he's working construction now, doing concrete.
And he just, I mean, he doesn't do daycare. He doesn't, he sees her on Monday and Wednesdayss for a couple hours and then he sees her, he gets her for an overnight on Friday.
And if he were to be paying you, if he were being, uh, sorry to interrupt, but if he were to pay you $200 a month, would it make that much difference to you? Well, that's why I'm kind of like torn because I'm working through the baby steps on my own, um, to get ahead. I've got two credit cards that, I mean, my debt's less than $5,000.
My car, I paid off when we sold our house. Like, I'm doing okay, and that's why I'm kind of like, is it even worse, roughly, in the feathers? But at the same time, I'm like, it's been, you know, a year and a half, and you haven't done anything, and you're flaking on taking it all the time.
So if you're not going to at least feel it, you you're not going to at least... Michaela, you're the sweetest person I've ever talked to.
You have spent your whole life trying to avoid feathers getting ruffled. You're very kind.
At some point you can't let people walk all over you like this. What's that? Say that part again.
He's a good friend to his friends. He's a good, you know, but he's just not a good partner, and he's not been a great dad up until the last few months.
You can be a great drinking buddy and be a terrible husband. Yes.
Well, I would say this. Yeah, and that's kind of.
If you were my sister, and that's how I'm going to react to this. If you were my sister, I would be saying I would be putting up strong boundary because my concern is the alcoholism and the time like my number one concern is not the $200.
I'll get to that in a second. My number one concern if you were my sister would be that's my niece that's your daughter and and I don't like her with an alcoholic father.
I don't care how nice and sweet he is and how many stuffed animals he buys. there needs to be a boundary there and he he needs he needs to hit rock bottom and as long as he's staying with mom and he gets to see your daughter um he's not hitting rock bottom so i would be dealing with that um if it were just the 200 i would say forget it because it's not worth the fight and i'm not sure it is is.
And I'm still on that note of it's $2,400 a year. Sure, it'd be great for you to get it.
To George's point, he owes it. But George, I'm more concerned about the alcoholism, the custody, and I might use the $200.
I might go to the court and go, I need some help with this. And you let him know.
Give him some fair warning. Hey, listen.
Oh, yeah, I'm very transparent with him. I sent him a long message last week.
I said, here's kind of where I'm at. Like, I need you to think about this because we can't continue what we're doing.
Did he respond? I do have solace. Yeah, he just kind of says, okay, you know, I'll see what I can do.
But I know nothing will come. I have comfort because he's living with living with his mom and i know her mom and we have an okay relationship but my daughter's at least safe while she's there because right they're there you know so i'm like i have part of me is like don't lose out of your house well then i wouldn't mess around i mean george what do you think i i just feel like you did you go through the courts for this was there a decree yes so everything was actually finalized this month on the 18th.
So why did the judge not finalize and say, hey, he's got to refinance, sell, or pay this car off and force it as part of the deal? So they did. So on paper, it does say that he's responsible for that because, I mean, I gave him everything else.
He's responsible for what? For the house and pass for the truck loan, but the lender is saying, well, you signed the loan, so you're not off the hook. Well, they need to force, the decree would then force a refinance in order to get your name off of it, and so you need to go, it's not going to be fun.
You got to go back to the courts and say, here's everything on paper, which, by the way, is now the law of what he has to do. And he's not doing it.
And as long as you keep letting him not do it, he's going to keep not doing it. And so I'm, I would not have as much grace as you.
I'm going to fight this on behalf of my own family and my own financial future. If I were ever a governor of a state, one of the first things I'd do is a deadbeat dad policy.
And I'd put them to hard work, hard labor until they shaped up. This is the Ramsey Show.
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Welcome to the Ramsey Show. I'm Ken Coleman.
George Camel is alongside. We're glad you are with us.
888-825-5225 is the phone number to jump in. Kristen is up in Billings, Montana.
Kristen, how can we help? Hi, thank you for taking my call. My husband and I have a slight disagreement.
I have most of what our income is, is rental houses. And in 2023, we purchased four new houses that puts us up to 24 and we've already paid one of them off.
We still have three outstanding mortgages and the total for all of them combined is right about a 420,000. And I have a stock portfolio that has $506,000 in it.
His, his idea is that we go cash it out right now and go just pay off the mortgages. I'm like, no, that's kind of my, that, that was my plan for retirement in case everything else went south.
Um, the way things are sitting up, we sitting up, we're scheduled to have all three of these other mortgages paid off by the mid of 2028. And I don't see what would be the point of cashing out all of my stock portfolio to pay them off now if we're literally going to have them paid off in the next couple of years.
Well, I don't think anyone's in the wrong here. I don't think anything is on fire.
I do think we might need to get to the motive and heart behind it. And then we can look at math and go, okay, what mathematically should and would happen? We pay off the mortgages, we free up those payments, which we can now invest, right? So there's one side of it.
It also reduces your risk, gives you more peace. We don't know what the next three years hold.
I hope it's all sunshine and rainbows. The world is a wild place, right? We don't know what's going to happen with the tenants and all of that.
And so it's going to give you a little more peace and less risk. On the other side, you have the stock portfolio.
Is this your entire nest egg?

For the most part, it's literally, that is mine aside from, I only work 26 hours a week doing home health care. And so then I also manage our 24 rentals.
But so I only have 7,000 in a 401k of my own and then has $22,000 in his 401k. But other than that, that's really...
Is this stock portfolio non-retirement, just in a taxable brokerage account? And what is it invested in? It's in a combination of mutual funds, independent stocks as well. I've had it managed by the same gentleman for the last 20, I'm 41, and he's managed it and he gets somewhere between a 13%, 14% every year return, even when the market took a crash in 2023.
Okay, so you trust this person. So I think he knows what he's doing, Yes.
Okay. And I just, I don't know if it would be worth pulling it out to pick, because we bring in, if you average how, we always have one or two tenants who is either late or misses a month, but we bring in about 21 and a half thousand every month on rent.
So it's not like if we were to have to worry about, there's enough to cover. And what are the total mortgage payments that you're making right now? The three of them combined, the minimums would be $3,800.
We're putting $10,000 a month on the other one, on one of the three. So you take $3,800 a month and invest it instead, you're going to be okay from $41,000 to $60,000, right? Do you see his point? I'm just trying to, I'm playing devil's advocate to show you the other side on top of the interest savings of not paying interest on these mortgages for the next three years, having them paid for.
So again, I don't think there's anything wrong with following your plan and going, hey, I'm going to just, we're going to pay these off in the next three years. I think it's a great plan to have a fully paid off rental portfolio.
You guys have done really well. Nothing is on fire.
Nothing's going to put you in crazy risk, but I can see his point. And I don't think it's as bad as you think.
I know you want a nest egg portfolio. The rental properties are part of your nest egg.
You have 24 paid for rental properties. If you need money, you know where to get it, either from the cashflow or you can sell one if worse comes to worse.
What's the total worth? Did you get that number? What is the total? All 24. What's the value? Well, our market here has been absolutely nuts.
So I have the tax valuation is $4.2 million. I don't want the tax valuation.
If you were to sell all 24 today, a modest projection on what you could get for them. Not a fire sale, but you get market value.
What is the worth of all 24, roughly? I would say it's probably closer to $5 million. Okay.
See, that's the point George is making. I was kind of waiting to go, who cares about the $22,000 over here and the $24 there? The $5 million is the number.
And you can cash out of those at any time and invest that. I mean, that's just a whole different ballgame.
So I could see both sides as well. I really can't.
So is there a compromise where maybe we go, all right, once every year, I'm going to cash out enough to pay off one mortgage. Split the difference.
That would be entirely doable. There we go.
I think that makes him feel a little better and it does reduce your risk. It causes you guys to make a little more progress than you would have.
And it causes you to slowly deplete this portfolio. And remember, you're going to free up a payment that you can now invest on your own volition as you please.
That's right. And so either way, this is a good problem to have.
You guys are doing really well. No, we're not wringing our hands for you guys.
You guys are in really good shape. I am the least worried about this, but I do think just some compromise would get you guys to an agreement and cause you to move forward because this is living in your head rent free right now.
It doesn't need to. No.
That's good. Thanks for the properties to manage.
Yeah, absolutely. Way to go, Kristen.
That's incredible. Well, thank you very much.
Five million portfolio. Yeah, five million dollars.
At 40 years old, you can do worse. She's right.
She's talking about that area of Montana is going bananas. People wanting to get out there.
You and I should have seen that craze. Should have done it.
We should have went out there and bought ourselves. You and I, could you imagine with our big cowboy hats and boots? Living off the fat of the land.
Yeah. It's always been a dream of mine.
Yeah. I see one of us having a blister and the other a splinter.
You know what really bothers me? Never see a cowboy with glasses on What's going on? You know what? You make a very good point They all have 20-20 vision out there I'm trying to think of the last major movie or television show that had cowboys in it where they were wearing glasses Who said that you can't be a cool manly cowboy and have vision impairment? I'll tell you what I'm thinking. I'm thinking Jason Priestley's character.

He's from 90210.

You don't even know that show.

You're dating yourself.

He had a character in Tombstone.

And his character wore glasses, but he was a wimpy guy.

There you go.

This is what I'm saying.

So I'm with you.

I'm done with it.

You know what?

Hollywood needs to cast a cowboy with some glasses and i'm available you know america's ready for it you think so yeah a middle eastern cowboy with glasses hey they call me the costco cowboy so i'm already halfway there who is they the people is this a thing as one person got in your dms one time and called you the costco cowboy the amount of times people send me just kirkland signature related content would blow your mind ken well you've made a big deal out of it that's my fault that is on me so there it is i love it can we get to a social question we have time for do you have yours i've got them ready i was looking for one actually as we were talking about you being a cowboy oh this is a great one for you go for it johnny from tiktok johnny during what point in the baby steps is it best to start a business what say you uh baby step at what during what point four that's when you're debt free with an emergency fund yeah we've got an emergency fund and now we're able and now we have enough margin to do baby step for, which then tells me, all right, I've got enough margin to start something on the side. Now, the way the question was worded, it says, when is it best? Is that correct? During what point is it best? Is it best? That's ideal.
Ideal is you've got the financial foundation. I'm not going to get mad at somebody if they are able to start a side hustle, for instance, with very little cash, capital outlay, and it helps pay off debt.
In other words, you know, I've talked about this. People have started trash can washing businesses, a lawn mowing business.
So it's okay if it's that to help us get through the baby steps faster. But something that's like, I want to try to live on this and this is my future.
I don't like you trying to do that during baby step two and three. And the more the startup costs, the more we say, Hey, you need to wait until you are dead free with an emergency fund, my friend.
So baby step four is when it's time to start going, okay, what could this look like? Good question though. John from Johnny from TikTok.
TikTok.. You gotta love TikTok.
They also call me Johnny TikTok. They call you that? Yeah, nickname from high school.
I like, I could combine those and call you the Costco cowboy, Johnny TikTok. This is the Ramsey Show.
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That's B-Y-R-N-A.com slash Dave. 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. Starting April 21st, we'll be in Louisville, then on to Durham, Atlanta, Phoenix, Fort Worth, and Kansas City.
Grab your tickets at ramsaysolutions.com slash tour before they're gone. Welcome back to the Ramsey Show.
I'm coleman and george camel is joining me this hour

888-825-5225-8888-825-5225 you know george before we get to the phones i thought it might

be fun to talk nerdy you know i love talking nerdy i mean you talk nerdy is about as well

as anybody I know.

Well, you know more big words than anyone I know.

So we both relate in that way.

So this is a fun little segment where George nerds out on the fine print, if you will,

as the former host of the fine print.

Do you still do those?

You don't do those.

No, I miss it.

We kind of switched it up and did my YouTube channel, which is a version of the fine print podcast.

But it's the same thing. I want to break down these money concepts that can feel overwhelming, complicated.
I never fully understood it. And I want to break it down quickly for the benefit of the people listening and watching.
Wait, what is the topic today? Refinancing. Ah.
So you've heard of financing. We're talking about re.
We're refinancing. Coming back to the table.
Booyah. Okay.
And we're going to specifically focus on refinancing a mortgage. Okay? So if you bought a home when interest rates were high, you may be wondering if refinancing might save you some money now that rates have dropped a little bit.
Well, it can, but it also depends. So what is this? Mortgage refinancing, very simply, it's when you replace your current mortgage with a new one.
Why should you do it? Why do people do this? Well, number one, to get a lower interest rate. All right.
So you got to make sure that refinancing will save you money in the long run more than it costs you. Number two, people do it to reduce the loan term and become debt free faster.
So you go from a 30 year mortgage or an adjustable rate mortgage to a fixed rate 15 year mortgage, for example, and that can get you a lower interest rate, shorter mortgage payoff, get your house paid off sooner, double win. Another reason people do it is to get rid of PMI, private mortgage insurance, and that's a great way to pay less on that monthly payment because you're not paying the lender anymore and it really just protects them in case you foreclose.
And lastly, like I mentioned, you're switching the loan type. A lot of people have an adjustable rate mortgage and maybe they want to go to a fixed rate mortgage.
That would be a good time to refinance as well to avoid those rate fluctuations. So for everyone out there, here's the questions to ask yourself.
How much will my interest rate go down? How much will it save me? And what will I pay in closing costs? And closing costs can run about 2% to 6% of the total amount you're borrowing depending on your situation, where you're at, all of that. So here's the deal.
Simply, only refinance if it gives you a lower interest rate and saves you more money than it costs. So an example, if you save $2,500 a year refinancing but you have $10,000 in closing costs, it will take four years to break even before you start saving money.
So refinancing is only a good idea if you plan to stay put long enough to save money. So that's kind of where you got to weigh it and go, all right, you know, we do plan on staying here long enough to get the ROI on this.
So it's that simple. Here's six steps.
If you're ready to do this, crunch the numbers to see if it makes sense financially. Number two, you've got to shop around for the best interest rate.
Three, you got to choose a lender. Don't forget to ask about those closing costs, the fees, the prepayment penalties.
A lot of them will lure you in and go, oh, we're going to give you a great rate. But then they ding you with all these fees on the back end to make up for it.
Don't fall for that one. A little bait and switch.
You love that term. I was looking for it.
You helped me out. I got there faster.
I'm quick to the draw. You are.
Cowboy camel here. That's it.
And number four, you got to lock in the rate. Five, you'll go through the underwriting process, just like you did when you got the original mortgage.
And then six, you close on the new mortgage. Good for you.
So here's the deal. If you need help, you got questions with this about refinancing, do what I do.
Reach out to our Ramsey trusted friends at Churchill Mortgage. They are experts in this and you can go to ramseysolutions.com slash mortgage or click the link in the description.
If you're listening on YouTube or podcast, quick and painless, Ken. This is why I like when you talk nerdy.
I mean, we all need a little nerdy talk. Some people fell asleep at the wheel.
I don't think so. In that segment.
I think you laid it out beautifully. Some people were so riveted.
Yeah. I loved it.
I thought it was very helpful. So there you go.
And by the way, he mentioned it very briefly. I got a call back to it.
This is why you want to go to George Campbell's YouTube channel. He's got all kinds of really fun and it's made for you too.
We break it down for the people. You break it down.
You make it fun. You make it palatable.
No matter what it is, we make it palatable. That is true.
Joseph is up next in Dallas, Texas. Joseph, how can we help? Hey, how's it going? Good.
How are you, sir? Good. It's just a real privilege to be on the show.
It's kind of surreal. So thank you very much.
I feel very honored. Appreciate it.
Well, we're honored to talk to you.

What can we help with today?

Well, so I just recently started a job going on six months ago. I do enjoy my job, and my bosses are great.
It's a good company. I mean, I think they really do right by their patience.
and the trouble I'm having is

I am making less than

I was expecting when I started because I am on a pay per visit scale. So my base salary is 73,000.
But what I was initially told was on average, if I see a certain amount of patients were weak, I would probably get around 85,000. But over my time working here, I haven't been seeing that, unfortunately.
And it's not because it's

not their fault. It's just external factors like patient cancellations and such.

What business are you in?

Oh, so I guess I should have mentioned that. I apologize.
I'm a physical therapist.

Oh, okay. And so if I understood you correctly, the anticipated number of 83,000 that you got excited about when you signed on hasn't been met because you've not seen the amount of patients that they said you would need to see in order to hit that number.
Correct. And what is it that you think you should be making? Because you led off by going, I'm not making what I should be.

So what is that number?

I mean, about $85,000 is what I anticipated making.

Okay.

Well, but you anticipated it based on them saying,

you'll make roughly this if you see this many patients.

So what options do you have?

Are there other physical therapy businesses that have a higher foot traffic? There certainly are. I chose this particular setting just because I would work with the neuro population and it was, I liked what the company was about.
But for me as well, I'm also just, I have a lot of student loan debt, and this, you know, I'm just trying to make sure I make that right decision, so. Well, the right decision right now, at this point in your career, how old are you? I'm 27.
Okay, at this point in your career with a lot of student loan debt, and do you have other debt outside of student loans? I do have a car payment, but that would be it. Okay.
So what's your total amount of debt? It's 247,000. Okay.
The answer is really easy. Yeah.
We're not staying at a place because we really like it. We need to make money, and you need to make as much money as you possibly can.
Now, this is doable. George, you've coached a lot of people to do this, but if your call is – your question was, should I stay? Is that what I'm getting at? Yes, just because I've only been – I mean, I've been there a short time.
Doesn't matter. Doesn't matter.
Can you get a job right now where you can get a $15, $20,000 bump? You think that's even possible? Oh, that's definitely possible. My man, we get the best paying job possible in order to attack this debt with everything you have.
And there's more than one great company in America, and so you will find it, but you need to be making six figures in order to pay this off in the foreseeable future, Joseph. And that might mean you get that new job and you take on a bunch of side hustles and work overtime and, and, and for the next three to four years in order to knock this out.
What's the car line? I agree. What's left on it? 7,000.
Okay, so the majority of it was PT school? Yes, yes, just PT school. Do you have any savings? Yeah.
I do have some savings, and I did have a sign on both, so I'm trying just not to use that up. How much savings do you have? The majority of the savings.
$4,000. George, tell him what he does.
Well, you got a bunch of loans out there, right? Probably 15 to 20 different student loans. You're going to attack that smallest one and free up a little payment.
What that's going to do is give you a little light at the end of this tunnel that you're actually going to get out of this thing. So the longer you hang on to all of the savings, it's going to give you a false sense of relief because, my friend, there's an avalanche on the other side, and we have to start attacking that thing one bite at a time.
That's the baby steps. So hang on, I'm going to send you a copy of my book, Breaking Free from Broke, to give you the step-by-step plan, give you the motivation to climb out of this thing.
And I'm also going to send you Ken's book. Which one should we send him, Ken? What's going to be most helpful to him? I think the proximity principle because he needs to be leveraging relationships as much as he can to move up the ladder as quickly as he can to be able to take that income and do what you just told him to do.
So hang on. We'll give you the proximity principle as well.
All right. Quick break.
George has to gargle with saltwater. Thank you.
And then I'll check on him, make sure he's okay, and we'll be back. This is The Ramsey Show.
Listen, guys, I've heard just about every excuse for why folks think they can't get ahead with money. So let's go ahead and settle this right now.
You get the final say on what happens with your money. That's why you have to start telling your money where to go so you can stop wondering where it went.
So if you're going to start winning with money, you have to get on a budget.

The easiest way to get started and stick to it is with the EveryDollar budget app.

It'll help you make a plan for every single dollar coming in

and every single dollar going out every single month.

And guess what? It's free, so no excuses.

Download EveryDollar in the App Store or Google Play today. Welcome back to the Ramsey Show.
Alongside George Camel, I'm Ken Coleman. 888-825-5225 is the phone number to jump in.
Oh boy, George, I was looking the other day at the calendar and I thought I got to get with my tax pro. You were dreading it.

Not dreading it, but just the very word of tax gives me indigestion.

A little anxiety.

It's what I like to call a Tums moment.

Meanwhile, I just scanned some tax files for my upcoming appointment at the printer, and I was stoked.

Yeah, Stacey is gathering all of our documents.

I am Stacey in this situation.

We will meet with our tax pro.

Anyway, nonetheless, hey, it's coming around the corner.

and we'll see an email from him. David, Stacy, and I love you.
We appreciate you, sir. He takes good care of us.
He's our tax pro. I'm not kidding around.
I sleep very, very well at night knowing David is on the job. And so they help you.
He helps us. I mean, he helps us think about so many different angles.
Deductions. Life changes.
Oh, he's the deduction king. He's amazing.
Go to RamseySolutions.com slash tax pro to find a CPA and enrolled agents that have been vetted by our team at Ramsey. It's RamseySolutions.com slash tax pro.
Do you do your own? No, I've got a tax pro because again, it's one of the, it's like getting my lawn. You don't do a shout out for your tax pro.
I love my tax pro more than you love your tax pro. Here's the thing.
I don't want other people to find them and now they're booked up. I just did a first name only.
I still don't. I got trust issues.
They have a very unique name. All right.
Can't give it away. Whoever George's tax pro is, I tried.
I tried. He's not willing to give you some love.
Once you got a good one, you don't give it up. But you can find a trusted one in your area at ramsysolutions.com slash tax pro.
And here's the deal. Our tax pros aren't going to be like, have you ever thought about getting a G-Wagon to write it off as a business? No, no, they're not going to give you trash.
I've thought about getting a G-Wagon. Tax advice for some write-off.
Do you think I would look good driving a G-Wagon? Would you look good? Yeah, who doesn't look good? You know? Well, I don't know. I mean, some people shouldn't probably drive a G-Wagon.
Yeah, I did see a pink Cybertruck the other day. And I thought, wow, it could get uglier.
I didn't think. I've not seen those and that had to be like some kind of mary k such i don't know what was happening with that pink cybertruck george it's a dark time you won't shout out your tax probe but you'll give mary k some love that wasn't love i'll tell you that much you know me oh we're having fun folks what are you waiting on.
Levi's up in Las Vegas. Viva Las Vegas.
Levi, how can we

help?

Hey, folks. What are you waiting on? Levi's up in Las Vegas.
Viva Las Vegas. Levi, how can we help? Hey, Ken.
Hey, George. Thanks so much for taking my call.
Sure. So I'm getting ready for about $100,000 in expenses at the same time that I'm going to be losing my income.
Oof. My wife and I are getting ready for graduate school.
We're both going to be starting grad school this year.

I'm going to get a doctorate in physical therapy,

and she'll be getting her master's in dietetics administration.

And, I mean, eventually we'd love to start a business together

where we can kind of help people improve their health through diet and exercise.

So we've known this has been coming for a long time.

We've been married for four years, and we've been preparing since the moment we knew that we wanted to start this career. And so if I'm understanding, let me jump in real quick just for us and then the folks following along at home.
So that's with you both going full time to grad school, that's why we're losing the $100,000 income. Yeah.
So, well, I also, my current job, I take care of a kid with autism and he graduates in may so it just happens to work out really nice that i don't there's no more need for my job so i lose my job and then the next two weeks later i start school but what was your plan to cover living expenses while you both are in grad school so we've been saving a lot of money uh we've been blessed in so many different ways. So we have about $70,000 in high yield savings account.
We're closing another investment account that's got about $30,000 in it. And we're going to transfer that money into our high yield savings account.
And then we've got about $20,000 in another investment account and about $20,000 in cash between our savings and checking accounts. Okay, so you have $140,000 that you will have liquid.
You need to use $100,000 to cover grad school for both of you? Is that what you were saying? So my grad school will cost $90,000 and hers will cost $20,000, but her family has graciously offered to pay for her tuition. Wow, Okay.
Good for her. So you'll have 40 grand left over after grad school is covered and you got a baby on the way.
So let's keep a big portion of that saved up as an emergency fund. Do you guys have any debt? Yeah.
No, we have zero debt. We own a house and we've got three bedrooms and we rent out two of the bedrooms to friends and they pay $550 a month.
And so really after taking all our living expenses and our rental income, we only have to pay about $12,000 a year for our housing expenses. Wow.
Okay. And you guys are living pretty frugally, it sounds like.
That's good. So we've got most of this figured out.
What's the question? So my big question is we want to be good parents. We didn't think that we'd be able to have a child.
And now the due date is the week after my wife is supposed to start graduate school. And so I'm worried that the money that we do have won't quite stretch far enough through grad school.
And I'm also worried about how can we buy time with our child. We don't necessarily want to do daycare or anything like that.
But how long is your program? Three years. So you won't be working for three years? so I'll be out of a job for three years and my wife will not be able to work for the first year her program is accelerated but we're also um how is that you don't have the money you do not have the money right now to make it you know that right for three years so i'll tell you what i would do i'm going to throw this at george because he's crunching the numbers over here um if it were me i would um i would have your your wife continue to work and have her pause grad school have her pause grad school her two-year program oh well i didn't ask hers is a lot less money and we know long is it? It's one year.
I would push hers and knock yours out so that you guys can, again, have some income coming in. I know she's going to have a baby, but – and what about health insurance? Yeah.
Health insurance will be covered through my graduate school. Okay.
And Medicaid for me not having a job. George, do you...
I just think we're trying to do a lot at once here. I almost want to push his back another year.
Yeah, what's the game plan? If you're not working for three years, she's going to keep working. She's going to take a maternity leave for a few months, I imagine.
And then is she planning going back to work? Because you said you want to also have time with the baby. If she's not in grad school, if we do the plan that I'm suggesting, where we wait for her to go to grad school after you're finished, but she has the baby, what kind of income does she bring in? So if she doesn't go to grad school right now, she's making well under $20,000.
This year she made less than $10,000 this year. That's not even real money.
That's like a part-time babysitting job. Yeah, she's a full-time student and president of lots of clubs at our university.
But if she gets her master's degree, then she could potentially be earning $70,000. Yeah, but you guys are going to starve.
You called us and asked us what we thought.

We don't think you got enough money to do this, so I

would delay either her and she

goes and gets a $40,000, $50,000

job at minimum

to be able to

make up the difference.

And that means somebody's watching the baby

while she's working. I mean, you guys got to figure this out.

Or if I were you...

She can't be a full-time mom at home with the baby

and full-time at work pursuing

this dream. You may have to push your

Thank you. the baby while she's working i mean you guys got to figure this out or if i were you can't be a full-time mom at home with the baby and full-time at work pursuing this dream and you may have to push your grad degree off two years you go get a good job push it off a couple years have baby i would have a you know a come to jesus reassess conversation with your wife tonight and go hey listen we both had we both had these dreams.
Yeah. They'll happen one day.

Right now, we got to delay one of these dreams so that we can eat and provide a home for this baby. I'm with you, George.

And Levi, I'm talking like I'm old enough to be your dad, so here you go.

Plenty old enough.

Thank you, George.

I would, the baby is the number one dream right now.

Yeah.

And you've done very well to put that money away.

And to stay death free.

Oh, my God. Uh, I, I would, the baby is the number one dream right now.
Yeah. And let's, you've done very well to put that money away.
And to stay dead free. You are not hurting your professional, listen to me, Levi, you are not hurting your professional chances and your potential by delaying this a year or two.
Okay. Let's, let's get the wife out of school, a part-time job or full-time mama,

and you're working full-time.

We keep stacking cash.

Please take your time on this.

Don't rush this.

George, thoughts on that final word?

No, I'm with Papa Ken over here.

Thank you.

This is the best thing for you and your family and the careers.

If they need to take a back seat for now, I'm okay with that.

Yeah.

That education will still be there.

Trust me.

All right, George, good hour.

Good stuff. Appreciate all of you next time.