It’s Never Too Late to Start Building Wealth

Speaker 1 From the Ramsey Network, this is the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Dr.

Speaker 1 John Deloney this hour. The phone number to call is 888-825-5225.

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And it means the world to hear what you think.

Speaker 1 And it definitely affects the content that we do here for the rest of the year.

Speaker 2 And our pay, so it'd be nice.

Speaker 1 Doesn't affect that, but thank you, John. You can put a good word: John Deloney deserves a raise.

Speaker 1 He's doing so good. All right.

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Speaker 1 Let's try to help someone, John. How about that? Andrea's in Phoenix up next.
What's going on, Andrea?

Speaker 3 Hi, and thank you for taking my call.

Speaker 5 Absolutely. My name is Andrea, and I am 60 years old, and I am employed.

Speaker 3 I make about, I bring home about $24, $2,864

Speaker 7 a month.

Speaker 3 I live with my son and his family. The only outgoing bills I have is my car insurance, and I pay for gas and any other incidentals.
I want to know, is it possible for me to continue or to own a home

Speaker 3 and still save for my retirement? I have $69,000 in a 401k

Speaker 4 and I'll tell you a little bit.

Speaker 3 was in Ohio and I relocated to Arizona before the pandemic. And since I've been here, everything has gotten so inflated.
So my decision now is to go back to Ohio.

Speaker 3 But while I'm here in this kind of situation to save and not have to pay any bills, I have some time before I get go back to Ohio.

Speaker 7 So ask me anything.

Speaker 1 All right. So you told me your stated goal was I want to be able to own a home and retire one day.

Speaker 2 Yes. Okay.

Speaker 1 That's going to take a sizable nest egg and a pretty solid savings rate. So how much are you able to save right now? You're You're saying you get you got almost no bills.

Speaker 1 So, out of that $2,864, how much is left over?

Speaker 3 It'll be $2,154, like $2,154

Speaker 3 minus the car insurance and the gas. But I plan on getting a job where I look at to work from home, which that will save on the gas.
And I do have like $45,000 saved up.

Speaker 1 Okay, that's in a savings account?

Speaker 1 And no debt whatsoever?

Speaker 2 Well,

Speaker 3 no.

Speaker 3 If I have debt, I've just pay it off every month if I use a credit card.

Speaker 4 But I did get the every

Speaker 7 dollar app.

Speaker 3 I recently did that. I'm still working with that.
And I've just only been listening to you guys for like three weeks, three or four weeks.

Speaker 1 Awesome. Welcome to the party.
Well, we have a pretty controversial stance around here, and that is debt robs you from your future, even if it's temporary, even if I'm paying it off tomorrow.

Speaker 1 And so John and I do not own a single credit card. We just use our debit cards.
We use our own money. And what you're facing here, Andrea, is an income problem.

Speaker 1 We've got to get your income up because that's going to create more margin for you to save for that home.

Speaker 1 And so you're in what we would call baby steps four, five, and six if you're debt-free with an emergency fund, which you just told me you have $45,000 liquid.

Speaker 6 Yes.

Speaker 1 Great. And so we'll call that your emergency fund plus some down payment fund because you don't need $45,000, I imagine, to cover your expenses for three to six months.

Speaker 3 No.

Speaker 2 Okay.

Speaker 1 So your A1 goal, if it is buying a home, is to put money away for a down payment. But before we do that, we should be investing 15% of our income into retirement.

Speaker 1 So how much are you investing right now?

Speaker 3 So right now, I'm not investing that much. I think I'm at 1%,

Speaker 3 and I can probably put that up to where I should be.

Speaker 1 Why is it at 1%?

Speaker 3 Because

Speaker 3 my mind is thinking, before I listen to you guys, I was going to get more in my check to save more, but that just hasn't worked out as well as I wanted it to.

Speaker 2 Well, you can't save your way to wealth.

Speaker 1 We have to invest this money. Because right now, you're not even beating the rate of inflation if that money is just sitting in a checking account.

Speaker 2 Yes. If you invested,

Speaker 1 the stock market, the U.S. stock market last year, Andrea, in 2024, returned 24%.

Speaker 1 So you put $100,000 in that account, now it has $124,000. Do you see the difference? Okay.
Invested in the stock market. And we're not saying a single stock.

Speaker 1 You're going to do mutual funds within that retirement account that will grow at a steady pace, probably 10 to 12% over the next 10 years.

Speaker 1 And that will at least help give you some cushion. I don't know that we're going to have a dream retirement at this stage of the game.

Speaker 1 We might have to do what John Deloney says and choose our reality and grieve what could have been and create a new picture of what's next.

Speaker 2 Why don't you want to live with your son?

Speaker 7 I just, I don't know.

Speaker 3 I just don't. I don't.

Speaker 6 I don't watch.

Speaker 2 I think I just, I'm still wanting.

Speaker 9 I just don't want to do the option.

Speaker 2 You get to do whatever you want.

Speaker 2 Going all the way back to Ohio, that's a long way.

Speaker 2 It feels like an intentional move away from family.

Speaker 4 Well, it'll be away from,

Speaker 4 yes, it'll be away from this family, but then my sisters and brothers are all back east, and they're all getting older, and they're all like sickly.

Speaker 3 And I guess I wanted to be closer.

Speaker 4 to them not that i don't want to be closer here but it's easier for me to get here right now it's not easy for me to get there

Speaker 4 and be there as a help.

Speaker 2 Is there a possibility you could move in with one of your brothers and sisters in a garage apartment or something? I'm just trying to reimagine

Speaker 2 buying a house right now versus if you're going to be in a caretaker role,

Speaker 2 moving in with somebody.

Speaker 3 I could. That is a possibility.
I'm not going to lie and say it's not. It's a possibility.

Speaker 2 I know it might not be ideal, but man, I love the idea of you saving some money over the next five or 10 or 15 years

Speaker 2 until somebody can help you, right? Because you'll need that, you'll need somebody to love and care on you also.

Speaker 2 Yeah.

Speaker 2 If you move to Ohio, is your job going to go with you?

Speaker 3 Yes, if I get the job from home, my job comes with me.

Speaker 2 Okay, great.

Speaker 1 What does that job pay?

Speaker 3 About $40,000 a year.

Speaker 2 Okay.

Speaker 2 What job is that

Speaker 2 kind of role?

Speaker 3 I work in the medical records department.

Speaker 1 What would it look like to make $60,000 or $70,000 at your age with your experience in that field? What does the latter look like?

Speaker 3 I'm not understanding the question. I'm sorry.

Speaker 1 Like, what would your supervisor be doing in the medical records field?

Speaker 1 Is there another job out there where you could not just settle for whatever job you could get, but go, how do I grow in this field so that I can actually put more away for retirement and save up for that house?

Speaker 3 I do have a certification for medical coding, but it's been just difficult to get a job because I don't have any experience in that particular job.

Speaker 1 Would an entry medical coder make $40,000?

Speaker 4 They could start off at $40,000.

Speaker 3 Yeah.

Speaker 1 So that's what I would be doing if the trajectory is higher with your certification.

Speaker 1 Even if it's not the exact role you want, I would just try to get on A-ladders. And the the truth is, Andrea, you might be working into your 70s to make this dream happen.
Yeah.

Speaker 2 Are you okay with that? I really like that.

Speaker 2 Okay.

Speaker 5 I am.

Speaker 1 I just crunched the numbers for you. You know, you got 69 grand in that retirement account.
You keep investing, let's say, a thousand bucks a month.

Speaker 1 If you can do that to 72, you'll have over half a million in that nest egg. And on the way, get yourself, you know, a reasonable mortgage.

Speaker 1 And that way you're not stuck paying whatever market rent is for the next 12 years.

Speaker 2 Or yeah, you take the last two bedrooms in one of your brothers or sisters' house when you're caretaking and you're helping out and maybe you let that dream go of I have to buy my own three or four bedroom house, but we have a great place to live and you get to care and serve like you'd like to.

Speaker 1 Thanks for the call, Andrea. This is the Ramsey Show.

Speaker 1 Welcome back to the Ramsey Show. Open phones at 888-825-5225.

Speaker 1 Happy Martin Luther King Jr. Day.

Speaker 2 And George.

Speaker 1 It's Inauguration Day, John. A lot going on.
Very busy day. And no matter how you're feeling today, we've said this a million times.

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Speaker 1 Gene is joining us in Fort Lauderdale. What's going on, Gene? How can we help?

Speaker 6 Hello.

Speaker 2 Hey. What's up, dude? Yeah.

Speaker 11 Yeah. Hi.
How are you?

Speaker 2 Fantastic. What's up, brother?

Speaker 12 Yeah,

Speaker 11 I have an issue that I've been dealing with for the past few months. Okay,

Speaker 11 I recently got scammed by someone that I thought was a friend.

Speaker 11 And it's a very complex story. It's kind of hard to explain.

Speaker 11 I don't know if I have enough time to explain it.

Speaker 2 Give me the overview. How'd you get scammed?

Speaker 11 Okay, well, this started in California before I moved back to Florida.

Speaker 11 There's two different parts of this story.

Speaker 2 Give me the super, super, super distilled version.

Speaker 1 Did you send the money? Just give us the details.

Speaker 13 Okay,

Speaker 11 I sent her money to help with

Speaker 11 her lymphedema surgery that she was supposed to get, but she never did it. She kept making excuses on why she can't get the surgery and all this stuff.

Speaker 11 And then the other part was co-signing a car for her.

Speaker 11 Which I co-signed a car for her before I left to come back to Florida.

Speaker 11 The money part was after I came back to Florida. Okay.

Speaker 1 So what are you on the hook for now? You sent money via what for the surgery? How did you send it?

Speaker 11 I sent it through Cash App and Apple Cash.

Speaker 1 Okay, and how much did you send?

Speaker 11 It was somewhere between like

Speaker 11 about

Speaker 11 somewhere between $30,000 to $35,000.

Speaker 1 And you had this money in cash?

Speaker 11 Not straight up cash. Like I didn't have it like

Speaker 2 a bank account.

Speaker 11 I went, yeah,

Speaker 11 I was already in debt, but now I'm in more debt. Like, I just, you know, I feel like the dumbest person in the world talking about this.

Speaker 2 No, you're good, man.

Speaker 1 We're not trying to beat up on you. I'm trying to get to the bottom of this to see what kind of hole you're in and how we can get you out of it.
So, you, do you owe $35,000 in debt?

Speaker 11 No, that's how much I lost.

Speaker 2 Okay.

Speaker 1 And the cash cards.

Speaker 11 I'm way more in depth than that. I owe way more in depth than that.
I have credit card debt, student loan debt.

Speaker 1 Yeah, you were in a bad situation before this. It just got way worse.

Speaker 13 Yeah.

Speaker 2 And I helped you. Wait, hold on.

Speaker 11 And they screwed me over.

Speaker 2 Yeah. So here's the deal.
Before we get to like the tactics part, you're going to have to do two things. One, you have to release that.

Speaker 2 You did it. It's over.

Speaker 2 Okay. Okay.
Somebody was hurting and you reached out and said, I can help you out. And they bit you twice.
Bad.

Speaker 2 Okay. Yeah.

Speaker 2 The more you hang on to that, the more you're choosing on a minute-by-minute basis to be miserable in the present and to not be able to move forward. Right?

Speaker 2 Yeah.

Speaker 2 So let's let go. The second thing is you have to forgive yourself, man.

Speaker 11 I've been having a hard time.

Speaker 2 I know you have. We've all done stupid stuff with people that we were romantically interested in.
We've all done stupid stuff with money. We've all just done stupid stuff.

Speaker 2 Now, we haven't all done it to the tune of $20,000 or $30,000 or $40 or $50,000 like you have. So congratulations on that one.
But like, we've all done stupid stuff.

Speaker 2 And you've got to forgive yourself because it's keeping you from doing the next right thing.

Speaker 2 You get what I'm saying?

Speaker 2 Yeah.

Speaker 2 You got a good heart, and I'm glad there are people like you out there that are willing to step in and help. And you got bit, man.

Speaker 2 And so now you got a big old pile of debt. You got a big old mess.
And you're the only person that can clean it up. Right?

Speaker 2 Yeah. Okay.
So let's own that. Let's release the other nonsense.
And we're going to, we're going to move on and do the next right thing. Cool.

Speaker 2 Yeah. Okay.

Speaker 2 Say, I forgive myself on national radio.

Speaker 11 I forgive myself on national radio.

Speaker 2 There you go, man. There you go.
You didn't have to say the on national radio part, but I'm with it.

Speaker 2 I'm with it. I'm with it.

Speaker 1 All right. Here we go, George.
All right. So, Gene, what is your total debt load all in?

Speaker 11 Of what I owe in like everything? Yes.

Speaker 13 I mean,

Speaker 11 I mean, it's a a lot. I have to add it up.

Speaker 1 Is it half a million dollars or is it $100,000? Give me just a ballpark.

Speaker 11 I mean, if you add everything with what I owe on my car, to my credit card debt, to my student loan debt, to what I owe the IRS, it's like probably more than $100,000.

Speaker 2 Okay.

Speaker 1 And what is your income?

Speaker 13 Right now, I'm like,

Speaker 11 if I had to make a guess, like

Speaker 10 $40,000 a year.

Speaker 1 And what are you doing for

Speaker 1 taxes?

Speaker 11 I work at FedEx.

Speaker 2 okay you can't make you can't make your monthly payments every month

Speaker 11 can you um

Speaker 11 i'm i'm barely hanging on by a thin string okay all right and you know i was doing so i i wouldn't say i wasn't doing like really bad but i i had i had a little something going okay i been i was investing in crypto for like almost seven years and all that's gone because I

Speaker 11 sacrificed and helped this person out and they screwed me over. I was too trusting.
I have too much of a heart. That's one of my problems that I have.

Speaker 2 Hold on, hold on.

Speaker 2 Remember when we just talked? Open your hand up. Right now, I can hear your hands are clenched.
I can feel it on you. Open your hand up.

Speaker 2 Let it go.

Speaker 2 Let it go.

Speaker 2 Because replaying what you had and what you did over and over and over again will keep you from moving forward.

Speaker 2 What I hear is somebody who, A, has done it before said you can do it again. And B, you got a great heart.
The world needs more of both of those attributes.

Speaker 2 You just need a little more wisdom, okay?

Speaker 11 Nah, I will never let this happen again.

Speaker 2 Okay.

Speaker 2 Good.

Speaker 1 What was owed on the car loan?

Speaker 11 For my own car or the one I co-signed for?

Speaker 1 The one you co-signed for?

Speaker 11 It's like, I think it's like $30,000 in value.

Speaker 1 Are they making on-time payments?

Speaker 11 Well, here's the thing.

Speaker 11 she's still making the payments even though they're late payments but she's still making the payments which which is the part that confuses me here you know and i get the feeling that she's i suspect that she's using my my my money to make the payments on the car

Speaker 1 what she does with that is is her business now that money's gone i'm just an attorney do you have a way to get in touch with this person have they cut off all communication

Speaker 11 I cut off all communication. I couldn't take it no more.

Speaker 11 She's a weirdo. She is a narcissist.

Speaker 2 Okay.

Speaker 1 I'm guessing it's too late to go, hey, I need to get out of this. Would you refinance the loan into your name?

Speaker 11 She's not going to refo. Like, if she were to refinance it, she's not going to be able to, she's not going to be able to do it until July of this year because I co-signed for the car

Speaker 11 last year in July. And at CarMax, you have to wait a year to refinance the car.

Speaker 1 And I'm guessing this credit was so bad. They work with these shady companies like Exeter.

Speaker 2 Yeah,

Speaker 11 she didn't have good credit, which is why

Speaker 11 I helped co-sign for the car in the first place.

Speaker 1 And then I'm guessing the interest on this thing is like, what, 12%, 15%?

Speaker 11 It might have, it might be 12%. I'm not sure.

Speaker 13 I have to

Speaker 11 call about it.

Speaker 1 We're running out of time, Gene, but I'm going to send you a copy of my book, Breaking Free from Broke. And in the book, I talk about this one line that will change everything for you.

Speaker 1 It's not all your fault, but it's your responsibility.

Speaker 1 So like John said, we have to let go of the anger and move forward and go, Gene has a hundred thousand dollar mess to clean up, your own life, right?

Speaker 2 Your own credit cards, your own student loans, your own cars. If she's making payments, let her make payments and go on about cleaning up your mess because you're not cleaning this deal either, man.

Speaker 1 And so, you're gonna have to get your income up. That might mean a second full-time job once you get off the first full-time job, but you can get out of this.

Speaker 1 It's gonna take a while, and it's gonna take stop borrowing money. And obviously, you're done getting scammed.
So, sorry you're going through this, man. This is the Ramsey Show.

Speaker 1 This is the Ramsey Show. I'm George Camille, joined by best-selling author Dr.
John Deloney. We're taking your calls at 888-825-5225.

Speaker 1 You call us and we'll help you take the right next step for your life, your money, your emotional health, mental health, relationships, whatever is going on. Tanner's up next in Manhattan, Kansas.

Speaker 1 What's going on, Tanner?

Speaker 15 Hi, how are you guys doing?

Speaker 2 Doing great.

Speaker 1 How can John and I help?

Speaker 15 Yeah, so I am getting married in May after my fiancé and I graduate. And thankfully, I've had some very generous parents and grandparents.
And I'll be graduating debt-free.

Speaker 15 My fiancé will have some student loans that we'll need to pay off because I know that I'll be inheriting that debt as well.

Speaker 15 My question is, should I use a trust fund that my grandparents have set up for me to help pay off those debts like right after the honeymoon.

Speaker 2 Okay.

Speaker 1 Tell us more. How much debt is this?

Speaker 15 I think it's around $60,000 or $70,000, but I'm not entirely for sure.

Speaker 2 Okay.

Speaker 1 And then tell us about the trust fund. What's it made up of? How much is in there?

Speaker 15 So I don't actually have access to it yet. I'll get access to I'm 25.

Speaker 15 I've been able to take out money to max out my Roth IRA these last couple of years, but I think it's around $250,000.

Speaker 2 Wow.

Speaker 1 Incredible.

Speaker 2 Okay. And how old are you now?

Speaker 15 23.

Speaker 2 Okay.

Speaker 1 So you couldn't even do it immediately. You'd still have to wait.

Speaker 10 Correct.

Speaker 15 So I guess I'm wondering if I should even ask about trying to get access to some money to pay off that debt, even though I won't technically have access yet.

Speaker 1 What will your household income be once you guys are married?

Speaker 15 Yeah, we both accepted jobs, and I think we'll both be making $58,000.

Speaker 2 Okay. So I guess a total of $120,000.

Speaker 15 Yep.

Speaker 1 Awesome. And this is all the debt that will be to your names is the $60,000, $70,000 in her student loans?

Speaker 13 Yes.

Speaker 15 We'll probably have to buy a new car.

Speaker 15 So or not a new car, but buy a car.

Speaker 2 Who's the custodian of the trust?

Speaker 2 What's that? Who's the custodian of the trust?

Speaker 15 My grandparents set it up, but I know my parents can move money around.

Speaker 2 Are your grandparents still alive? Yes, they are. Okay.
So

Speaker 2 are they in charge of it? Like, if you had to go ask,

Speaker 2 how do you take withdrawals? Let me ask you that.

Speaker 15 It's always just been we get to the end of the year and it's time to contribute to the Roth IRA. So then I ask my mom and she is able to transfer the money.

Speaker 2 Okay. I would find out who's in charge of the trust.

Speaker 4 Okay.

Speaker 1 Sounds like your parents might be trustees on this thing where they can control it.

Speaker 15 That sounds right.

Speaker 1 Okay. Do you have any savings?

Speaker 15 Yeah.

Speaker 15 I just studied abroad last semester, so it's a little low now, but around like $4,000.

Speaker 2 Okay.

Speaker 1 And with your newfound income, I would begin paying it off in the meantime. And if you're able to get access to it to knock this out faster, that's great.

Speaker 1 But there's another piece of this that I want to make sure you get, and that's I want you to be able to have your own investing savings muscle and not rely on this

Speaker 1 trust fund.

Speaker 1 And it's not because the trust fund's bad. I just want you to have the muscle to where you know if I needed to put 5,000 of my own money away every month from my income, you could do that.

Speaker 1 And that's going to be a really good habit for both of you to build as you build wealth together.

Speaker 15 Yeah, that's definitely the plan as soon as we start the job and have a stable income is to set up slide slide that 15%.

Speaker 15 I guess another part of the puzzle is like, do I take the 15%, whatever, do the company 401k, and then afterwards I meet that 15%, do I go to my trust and max out Roth?

Speaker 2 Beyond the 15%,

Speaker 1 you'd go into baby steps five and six, which would be Safer Kids College. I'm assuming you guys don't have kids.
And then baby steps six is attacking a mortgage. Do you guys have a house or will you?

Speaker 15 Well, plenty of renting.

Speaker 1 Okay, good. So here would, if I was going to financially coach you guys as pre-marital counseling, I'm going to go, let's get gun-ho on this debt.
Let's take all of our savings, future income.

Speaker 1 If we need, if we can dip into the trust fund, let's knock out this debt fast. Let's get a fully funded emergency fund, begin investing 15%.

Speaker 1 Beyond that, I would begin saving up a down payment for a house. Okay.
And if you need a car in the meantime, let's set up a sinking fund.

Speaker 1 Is this like an emergency situation or is this a year from now we need a car?

Speaker 15 It's not a great car that she has now. I think she's just ready to start new and get a new one.

Speaker 2 So I would tell you that is one of the top two or three wealth killers for new couples, especially when they're under the age of 25.

Speaker 2 Is this quote unquote, I'm just tired of, or this was my college car, or

Speaker 2 we just feel like we, or you're my new wife, and so I want to buy you.

Speaker 2 That's when people get themselves, they buy a depreciating asset that just is such a wealth suck

Speaker 2 versus if y'all shook hands and agreed on the first two years, let's just keep driving the same crappy cars and let's just get so far ahead financially that we can get whatever car we want for the rest of our time together.

Speaker 2 Yep.

Speaker 2 I can't think of a bigger mistake I made right when I graduated college than running and trying to buy, after driving a tiny little crummy car that is probably still running somewhere because you can't kill those old Toyotas.

Speaker 2 I went and bought the stupidest, biggest, dumbest truck I could find. It was so dumb.

Speaker 1 That's a rite of passage for every Texan.

Speaker 2 For every idiot, not for every Texan, but for every goofball like me.

Speaker 2 Yeah, dude. And

Speaker 2 I think an important call out here, George, is your heart is right, brother.

Speaker 2 Tanner, like when y'all get married, her student loan debt is y'all's student loan debt. I would want to know what was the main purpose of this trust?

Speaker 2 Was it to get, was it set up for everybody, all the grandkids to get everybody through college? And now you're through college and it's still there. Like, what's the purpose of this, of this trust?

Speaker 2 What is the original, um, what was its original intent? And what I don't want you guys to do is be married and have your mommy still dangling this account over your head.

Speaker 2 Like, well, are we going to get granted? Like, I don't, I don't like that. That makes me feel like, meh, I don't, yeah, getting out of college, man.

Speaker 2 I want to know if there's a trust with my name on it.

Speaker 2 I want to know what the rules and regulations are of this thing, when it's fully mine, when I'm in control of it, what the original intent was, all that kind of stuff.

Speaker 2 And that's just about having a grown-up conversation with whoever the trustee and the custodian is.

Speaker 15 Sounds good. Thank you, guys, very much.

Speaker 2 You got it, absolutely.

Speaker 1 Yeah, the conversation might be grandma and grandpa go, yeah, we'd love for you to use this as a down payment on a house and get your financial future going and knock out her debt and get you guys some, you know, the right financial steps.

Speaker 2 But I could see

Speaker 2 a very real-world scenario where, oh, well, this wasn't for you paying off your wife's student loans. She needs to, and now we're in a...

Speaker 1 There's strings attached.

Speaker 2 That's right. It gets messy.
It gets super messy. And that's what I want.
If that's the case, then

Speaker 2 best of luck to you guys. We're going to take care of our own financial future at our house.
Thank you for having this thing. Get me through college debt free and getting some Roths funded.

Speaker 2 But I don't want to be controlled by this imaginary puppet string over off to the side in a new marriage.

Speaker 1 Yeah. And that's the context we don't have.
That'd be an interesting call to get grandma on the line. That's right.
Say what's going on here.

Speaker 1 No, absolutely. Use it forever he wants.
We just want to leave a legacy. And, you know, as long as you're not mismanaging the money,

Speaker 1 which John and I would say, paying off debt is not mismanagement of the money. But I could see a family going, no, this is for us to build wealth with.

Speaker 2 This was actually for you.

Speaker 1 Not to pay for someone's past mistakes and debts. And that's not who this family is.

Speaker 2 You just never know. Right.

Speaker 1 Whew. Yeah, that part gives me just

Speaker 1 some pause. You've got to take a thumbs just thinking about some of those conversations.
But the idea of a trust fund, I mean, that's... That's legacy.

Speaker 1 As much as we, you know, people make fun of, oh, you're a trust fund baby.

Speaker 1 And I'm like, go create that same privilege for your family if you're so upset and jealous jealous that someone would have money left over instead of leaving their children with a pile of financial mess to clean up.

Speaker 2 Or I think the TV show version is a trust fund has $80 billion in it and you're just not working and flying around the jets when actually most trusts are

Speaker 2 like that. I don't say it's small, but it's a chunk of money.
It's got a very designated purpose, gets you through school, gets you that first house.

Speaker 2 It gives you a leg up. Get you married.
That's right.

Speaker 1 But it's not a sit back, relax in a hammock for the rest of your life

Speaker 1 situation. So I think there's a lot of wisdom there, Tanner.
And you're you're asking some great questions, especially at 23.

Speaker 1 At 23, John, I was a knucklehead, you know, still making a lot of mistakes. And clearly, this is what happens.
It's not just the money side.

Speaker 1 It's the character, the financial literacy that was built by his parents, his parents' parents. And, you know, the Bible is very clear, leaving inheritance to your children's children.

Speaker 1 I believe that's not just about money. I mean, that's, you know, inheritance of a lot of things.
Character.

Speaker 2 And that's where it's one of those moments where it's been about money and it's been about asking. Now it's about a transfer of wisdom and trust.

Speaker 2 Hey, I want to sit down and talk about the guts, the nuts and bolts of this trust. And that's just an adult conversation that's uncomfortable, but you got to have it.

Speaker 1 Thanks for the call, Tanner. This is the Ramsey Show.

Speaker 1 Ramsey Show question of the day is brought to you by YReFi. YReFi refinances defaulted private student loans.
Defaulted means when the borrower can't make the required payments.

Speaker 1 So if that describes you and your private student loan, contact YReFi. They can offer a low-fixed rate loan built for you.
Go to YReFi.com slash Ramsey. That's the letter YREFY.com slash Ramsey.

Speaker 1 May not be available in all states.

Speaker 2 All right, today's question comes from Kathy in Rhode Island. Kathy writes, Am I supposed to pay off a loan my husband took out from the bank without my knowledge?

Speaker 2 He recently passed away, and it was only then that I I learned that he had a $10,000 loan.

Speaker 2 When I asked the bank what it was for, they told me that information was confidential and they couldn't tell me why he needed it. They just said that I'm liable for it as his spouse.
What?

Speaker 2 Should I pay it off or let it go to collections?

Speaker 2 But yeah, you're going to have to talk to somebody in Rhode Island because I don't know what the particular

Speaker 1 laws there are.

Speaker 2 Yeah, yeah.

Speaker 1 You may want to contact an attorney to see if there's a way out of this

Speaker 1 versus co-signing on a loan.

Speaker 1 But generally, if it was only his name on the debt, the spouse wouldn't be liable for it.

Speaker 2 Unless the estate's liable for it. Yeah, who knows, man?

Speaker 2 You need some more information here.

Speaker 2 My fear is the bank's coming for you and they're not being fully open

Speaker 2 because whatever is confidential is going to be in that bank file. And if you inherit everything, then you inherit everything.

Speaker 1 I feel like there's more going on here.

Speaker 2 Yeah, there's some stuff going on here. And I don't know what that is.
She doesn't know. I need to get an attorney and dig into it, Kathy.
Yeah. That's really the best.

Speaker 2 Yeah. In some situations, your estate is liable for the debt.
And in some places, like student loans, when you die,

Speaker 2 the loans go with you.

Speaker 1 That's the only way to get rid of student loans in most cases.

Speaker 2 It'd be debt.

Speaker 1 That's right. That's dark stuff.
Oh, my goodness. I'm so sorry for your loss, Kathy.
Yeah. And if you have the money and you you don't want to burn the brain calories on this, pay it off.

Speaker 1 That's right.

Speaker 2 Yeah. And by the way, don't let it just go to collections.

Speaker 2 If you are on the hook for it and you're going to, it's going to go into collections and you're attached to it, then yeah, you got to just pay it off.

Speaker 2 Or if he somehow took it out in both of your names or he took it out under an account y'all share, yes, you're going to have to pay this thing.

Speaker 1 That's the only thing I can think of is if it was a joint account with the bank and somehow they took out the loan under that same account. That's right.

Speaker 2 If he did just go to a rando bank, open up an account, take a loan out in just his name, and that bank got your name, is trying to collect on you, then

Speaker 2 you may have a case to not pay it. But you need to check with a local attorney there.

Speaker 1 I'd also pull his credit report and make sure there's no other outstanding

Speaker 1 debt sitting out there, too.

Speaker 2 Yeah. And this is a yet case number 5,870,000.

Speaker 2 Don't have secret accounts. Don't keep secrets like this from your spouse because one day you will die and you'll leave them with all of that nonsense, man.
Don't do it. Don't do it.

Speaker 2 If you're trying to take secret accounts, trying to take secret loans, George and I, we do this all the time. You will be found out.
Don't do it. Don't do it.

Speaker 2 For gambling debts, for secret girlfriends, for secret

Speaker 2 gifts that you want to buy,

Speaker 2 just don't do it. Don't do it because this kind of crap happens all the time.
And you just leave a grieving spouse wondering, what else do I not know?

Speaker 2 And it's just, it's just, it's bad all the way around.

Speaker 2 Don't do it.

Speaker 1 All right, let's go to the phones. Kayla is up next in Eau Claire, Wisconsin.
What's going on? How can we help, Kayla?

Speaker 3 Well, my husband and I recently spent two years paying off $152,000 in student loans.

Speaker 2 Congratulations.

Speaker 4 Thank you. It was a grueling journey.
So we want to make sure that we make wise decisions moving forward as we kind of, you know, restart our financial foundation.

Speaker 5 So we have a fully funded emergency fund, and we're contributing in a $529 for our son. And currently we rent, rent so we're working on a down payment

Speaker 3 and I guess one of my big questions it all kind of surrounds around we were able to get a life insurance policy for myself

Speaker 3 but my husband has a medical condition where he cannot get term life insurance and so as we move move forward we're trying to decide like should we be looking at a smaller house so that like you know that kind of stuff is within our means since we won't have his life insurance if something were to happen.

Speaker 3 When we do buy a house, do we get insurance for the mortgage that would kind of act as like, you know, like life insurance that would pay the mortgage if he were to pass away?

Speaker 4 Or like, even like looking at our jobs, like, should I get a job that pays more?

Speaker 3 Just, you know, trying to look into the future and how can we best protect ourselves since we can't get life insurance for him.

Speaker 2 What is the medical condition he has?

Speaker 4 He has cystic fibrosis.

Speaker 2 Okay. All right.
Does he have, have they given him any sort of

Speaker 2 timeline here? Or is it just in the...

Speaker 8 No, he is

Speaker 14 super healthy.

Speaker 3 So, I mean, he doesn't have any kind of a clock or anything. They're expecting him to have a really long kind of normal life.

Speaker 2 Okay, great. Can I just applaud you before we get into the nuts and bolts? Can I applaud you for,

Speaker 2 for lack of better terms, just owning reality?

Speaker 2 Because a lot of folks get so mad and they go to war with reality.

Speaker 2 And you're already like okay well maybe we'll need to have a different kind of house or i'll need to have a different kind of job or we'll have to take a different kind of mortgage insurance whatever that just shows a level of maturity and wisdom that is is just awesome so i just wanted to high five you for that

Speaker 10 Thank you.

Speaker 1 Yeah, you're asking really good questions. And you're right.

Speaker 1 This is one of those tough things where if there's just no way he's going to get life insurance, we're going to have to look into probably a more expensive option with a worse payout.

Speaker 1 And so that's something like a guaranteed issue policy. And then like you mentioned, mortgage life insurance, which would just cover the mortgage balance.
And so those are two I would look into.

Speaker 1 Have you contacted our friends at Xander about this? Or where'd you go through for the life insurance?

Speaker 3 That's who we talked to initially of trying to get term life insurance.

Speaker 4 And then we didn't really like go back to them after.

Speaker 2 Okay.

Speaker 1 I might reach back out and just get their take on what might make the most sense for you guys between the guaranteed life, mortgage life. And then beyond that,

Speaker 1 if I was you in your shoes, I'd go, how do we become self-insured as quickly as possible? How do we make sure that if something did happen and we needed to replace that income, that we would be okay?

Speaker 1 That might mean a bigger emergency fund. That might mean we pay off the house faster and get the smaller house like you mentioned so that we have less liabilities and we can reduce our expenses.

Speaker 1 Because if you can keep your expenses low and learn to live off your income alone, that's going to reduce the risk in your life.

Speaker 4 Yeah, because like right now, even like with the job that I do have, we do basically live just like on my income, and then the rest has been going towards our down payment funds.

Speaker 2 So awesome. So we're at a good spot in there.
What if y'all built a world where that might just be your reality forever?

Speaker 4 Yeah, that is a good idea.

Speaker 2 Well, and by the way,

Speaker 2 grieve it, because that's a bummer too, right?

Speaker 2 Yeah. Because maybe you wanted to be a stay-at-home mom one day, or you wanted to do this, or you wanted he wanted to become X, Y, and Z.

Speaker 2 Like, it's just a matter of being like, that was our dream, and it's not going to happen.

Speaker 2 And that doesn't mean everything's bad in our life. That means it's just going to be different.

Speaker 2 And so what if for the next 20 years while he's super healthy or 30 years, we just socked his income away?

Speaker 3 Yeah, that just reminded me.

Speaker 3 Like another question that I have kind of related to this is I currently work in the school system.

Speaker 3 And so my retirement is wrapped up in a pension.

Speaker 14 And so

Speaker 3 I've been like waffling back and forth of if I should

Speaker 3 go change jobs to a job that where I can invest in like a 403b or something like that

Speaker 4 to add even further stability.

Speaker 1 Well, you can always invest on your own through a Roth IRA as well. Yeah.
And that can be a hedge for you.

Speaker 2 Yeah. So let's have a world where, let's say in 10 years, y'all bought a smaller house, y'all paid it off, and you just used his salary and every bit of his salary just goes to paying that house off.

Speaker 2 And, you know, at Ramsey, we tell you to take your time, paying your house off and do other stuff. But y'all know your life situation is a little little bit different.

Speaker 2 And so now you've got a paid-for house. And yeah, then you dump his money into Roth IRAs and just general index funds for the rest of your time.

Speaker 2 Y'all are going to be, and plus your pension, y'all going to be loaded up if y'all learn to live like that.

Speaker 1 Okay. Yeah, you do that for 10 or 20 years.
You'll be self-insured in no time.

Speaker 1 And generally, when we say get term life, it's for a 15 to 20-year term because by the time it's over, you've self-insured. You got the house paid off because you did a 15-year mortgage.

Speaker 1 You've been investing for 15 or 20 years. And that nest egg is several hundred thousand dollars.
And so you're doing all the right things. John and I want to applaud you.

Speaker 1 We're here to just cheerlead you on and say, keep at it.

Speaker 2 Yes. And there's going to be days you're driving a used Camry 15 years from now and you're going to see one of your colleagues pull up in a brand new Tahoe.
You're going to be annoyed.

Speaker 2 And that's okay. You have permission to be annoyed.
And then you go do the next right thing.

Speaker 1 That puts this hour of the Ramsey Show in the books. Thank you to my co-host, Dr.
John Deloney, all the folks in the booth keeping the show afloat. And you, America, will be back before you know it.

Speaker 1 From the Ramsey Network, this is the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camill, joined by Dr.
John Deloney.

Speaker 1 Open phones at 888-825-5225.

Speaker 1 You call us, and we will do our best. to give you advice that only John could give.

Speaker 2 Or George.

Speaker 1 They say the advice is worth what you paid for it. Amber's going to kick us off in Cedar Rapids, Iowa.
What's going on, Amber?

Speaker 2 How can we help?

Speaker 7 Hi.

Speaker 4 So I have, it's kind of like a threefold question.

Speaker 10 We got ourselves into

Speaker 10 quite a big mess with our finances.

Speaker 7 We took out a HELOC on our house

Speaker 10 a little over five years ago. And when we did it, they did not, all they told us was that it was 1% interest rate.

Speaker 4 It would be, it would take care of all the debt that we had.

Speaker 10 We wouldn't have that debt hanging over our head anymore, and we would be fine.

Speaker 4 So, we did that. They did not tell us that the HELOC would balloon or mature, which it did.

Speaker 10 And

Speaker 10 now they're saying that we have to refinance the HELOC or pay off the total amount.

Speaker 10 And on top of having to do that, we have to include our other debt as well.

Speaker 2 What's the other debt? debt on top of that?

Speaker 10 I'm sorry, what was that?

Speaker 2 What's the other debt?

Speaker 4 So we have two credit cards through the bank and then we have

Speaker 10 six other credit cards that had gone into collections and we were working with them to pay those ones off. The ones through the bank, we cut up the cards.

Speaker 10 when we found you guys and stopped using them, but they still have a balance and we're current on it. It just still has the balance.

Speaker 10 So it's $17,000 for one with the bank, another $4,400 with another one from the bank. And then with the ones that had gone to collections that we were working with them on, that total is about

Speaker 10 $19,000 total. And they're saying that we have to include the two through the bank and two of the ones that had already gone through like the beginning legal proceedings

Speaker 10 of the other credit cards, which was one was $7,000 and another one was like, was $2,400.

Speaker 2 And you want to include all of that onto the HELOC. Well, they want to do that because they want to,

Speaker 2 they want, they don't see you guys as likely to pay all this back, and so they want to have your house on the block.

Speaker 1 It'll become a secured debt.

Speaker 2 That's why they're doing that.

Speaker 2 Right. And so you might need to go, George, I don't know if you can go get another bank and see if you can get a HELOC with another bank and refund.

Speaker 1 could you get a traditional mortgage with another bank

Speaker 10 yeah so that was my that was my question I guess I didn't lead with that I was wondering like so they're saying this isn't our only option and this is the trap we've fallen fell into every time I understand it was us that got us into this situation but like as soon as we did that

Speaker 10 COVID hit like a year and a half later and then

Speaker 10 I had a company reach out to us and tell us it was a debt relief company.

Speaker 2 Oh, my God. And they said to

Speaker 2 not only

Speaker 2 let your credit crash,

Speaker 2 you give us the payments.

Speaker 10 And beyond that, they said to because they would just take care of everything and the payments would just kind of go away, they would be able to settle it all to max out the cards because the more debt that we had, the more they would be able to

Speaker 10 work with them to the more likely they would be able to get rid of it.

Speaker 2 Okay.

Speaker 2 You hear yourself telling us that, and you can even hear that that sounds insane, right?

Speaker 10 I understand how insane that sounds.

Speaker 2 I've eaten you. I feel like an idiot.

Speaker 2 Well, George and I have both done stupid stuff with money.

Speaker 2 You're like millions and millions. Like, they wouldn't run this playbook if those plays didn't work on people.

Speaker 1 They're a sucker born every day. That's right.
And I hate that you got caught up in it.

Speaker 2 But here's the thing. Two different times, somebody told you, if you just do X,

Speaker 1 all your debt goes away yeah and that's why I was calling you guys because I don't want to do the same okay stupid thing over again they're telling us this is our only option and I've heard you guys say countless times there are other options yes yeah the best option is to go to a completely different lender stop doing business with this bank get a traditional mortgage that covers all this

Speaker 10 so we do have our mortgage company our main mortgage company that we work with and that was going to be my other question was would it be better to reach out to them and see if we did,

Speaker 10 if we worked with them and explain to them that we had the HELOC with the bank and that now it matured and see if we can work with them

Speaker 14 adding all of this additional debt onto our house.

Speaker 2 I would tell them we found ourselves five years ago in a scared place during COVID in a predatory HELOC.

Speaker 4 Okay.

Speaker 2 Can we, I wouldn't give all the balloon and maturation. I wouldn't do all that stuff.
And yes, see if you can roll us up in a traditional mortgage.

Speaker 1 My bigger question is, can you guys actually afford to live in this home?

Speaker 10 So we can afford to live in the home. My husband brings in, on average, $2,000 a week.
Our mortgage is,

Speaker 6 well, we had a,

Speaker 10 we were behind a little bit on the escrow because of our homeowner's insurance that had to switch. So they added that on to the principal.
So it went from $1,300 to $1,700 a month.

Speaker 10 So, I mean, the mortgage payments are not a problem.

Speaker 2 So if if you took on a new mortgage,

Speaker 1 could you refinance and just do one new mortgage that encapsulates all of your debt?

Speaker 2 And move your payment to $2,500 a month?

Speaker 10 To talk to the mortgage company to do it all in one.

Speaker 1 Yeah, I would keep the credit cards separate and deal with those on their own. And debt snowball those, settle on your own.

Speaker 2 But with this HELOC, could you absorb the HELOC?

Speaker 10 Add all of that onto our house.

Speaker 1 Agreed. And I don't know if the bank would even let you.
Yeah. Because they need that tied to their collateral, not tied to your personal debts.

Speaker 1 What's the balloon payment on the HELOC?

Speaker 10 The total amount or the payment amount?

Speaker 2 The total amount. Total amount.

Speaker 10 $29,000. And they want to add that $17,000 plus the $45,000

Speaker 10 plus

Speaker 14 plus another $10,000.

Speaker 4 So we're looking at over $60,000 that they want to put onto the HELOC.

Speaker 2 To get you out of this.

Speaker 1 And so if you refinanced your current home and added $60,000 to the mortgage, that would get you out of it?

Speaker 10 Well, we would only need to add... They want to add all of that on.
The HELOC itself is only $29,000, but they're telling us that in order for them to redo the HELOC,

Speaker 1 we're not redoing any of that.

Speaker 2 No, we're not doing any business with them.

Speaker 1 No more HELOCs.

Speaker 2 You're going to have another balloon at the end of a new HELOC. You just need to.

Speaker 10 Yeah, and they're telling us that we won't, and I don't believe them.

Speaker 1 Do you guys have any other debt, car loans, student loans?

Speaker 4 We have all of our current debt that we have is through the bank.

Speaker 10 We have a van payment through them. We have a camper through them.
And we have the two credit cards that we already cut up and don't use.

Speaker 2 Amber,

Speaker 1 you know all this needs to go, right?

Speaker 2 All of it.

Speaker 4 Yes.

Speaker 1 The van gets sold tomorrow. The camper gets sold tomorrow.
We use all of that to clean up our debts, and we stop playing with this. Stop.
You guys have debt all over the place.

Speaker 1 You're hiding debt in the couch cushions at this point.

Speaker 2 So how would I go about

Speaker 10 we are planning on selling the camper, but we don't know how we would be able to sell the van because we're upside down.

Speaker 1 You need the difference in cash or go to a local credit union and get the difference. There's the only ways out of that.
You need to come up with the difference to clear the title.

Speaker 2 And Amber, you're going to have to get probably one job, two jobs, three jobs. Your husband's going to have to get another job.
You'll have a huge mess. And y'all have to make an ironclad commitment.

Speaker 2 We will never borrow money ever, ever again.

Speaker 2 Ever again. Got to stop.
Got to stop. Yeah, the bank sees y'all as a huge liability, so they want to roll all this debt into that house so they can take your house if you can.

Speaker 2 your house on any of these small credit cards they can take your house from you so don't do that this is the ramsey show

Speaker 1 welcome back to the ramsey show i'm george campbell joined by dr john deloney open phones at triple eight eight two five

Speaker 1 two two five

Speaker 1 Leslie's up next in Grand Rapids, Michigan. Hey, hold on, before we go to Leslie.

Speaker 1 I won't do it.

Speaker 2 Sorry, Leslie. Well, hang on one second.

Speaker 2 Like, I...

Speaker 1 You're stuck on our last caller.

Speaker 2 I'm stuck on the last caller and

Speaker 2 how it sounds nutty, but it is America. It's the current state of personal finance in America.
Seven credit cards,

Speaker 2 a mortgage, a HELOC on that mortgage because somebody said, oh, you got equity. And

Speaker 2 what Amber said, the last caller said, was so important that somebody called her and said, you won't have to worry about this other debt ever again. And it just sounds so amazing, right?

Speaker 1 Well, when you're that desperate. That's right.
And someone calls you like, this is the savior we needed.

Speaker 2 And people get onto us all the time. They beat us up all over the place because you have all this quote-unquote equity and you can just pay off everything.
But here's what happens. People don't.

Speaker 2 Then they go are like, oh, we got some extra money. Let's go get a camper.

Speaker 2 And instead of buying a used car for $7,000, because that's all we have, it's so easy to go to the lot and be like, well, we got the new ones over here. And it's like, we took out that HELOC.

Speaker 2 We have another.

Speaker 2 And you find yourself.

Speaker 1 And they go, we can make, hey, what payment do you need? We can make that work.

Speaker 2 We'll make it work. Yeah.
And we'll just, we'll balloon it later. That's a problem for future you.

Speaker 2 And if people need any, if they're thinking about taking out a loan, man. Oh, and then, oh, and then COVID happened, right?

Speaker 2 If you're thinking about borrowing money, go back and listen not to the question Amber was asking, listen to her voice that haunts me.

Speaker 2 Because because people call and they call and they call and all they did was what the banker told them to do all they did was what the lender told them to do or the guy on the phone called or their uncle called and everything you get so desperate that you begin looking for as brene brown says whatever you go looking for you're going to find it a magic wand

Speaker 2 take it all away and you just dig a deeper deeper hole till they come and say hey you're going to do what we say now or we're taking your home from you and that's when you realize oh gosh we're about to lose everything right?

Speaker 2 It's terrible. Over $29,000.
You might lose your house, right?

Speaker 1 It didn't seem like a big deal at the time. It never

Speaker 1 credit card didn't seem like it would be the thing that sinks us. And here they are in a giant mess.
That's right. Making over $100,000, which we can all agree is a great income.
Right.

Speaker 1 But not when it's propped up artificially with thousands and payments every month.

Speaker 2 Thousands and thousands of payments. But more,

Speaker 2 it's when a banker calls you and says, hey, you're ours now. You're going to do what we say.
You're going to take all this debt because we don't trust you anymore. And

Speaker 2 because we've owned you for a long time, and now we're going to call it out. We get to decide what you do next.
And there's just a panic in somebody's voice and it haunts me.

Speaker 2 Please, please, please don't borrow money.

Speaker 1 Proverbs 22, 7, the borrower is slave to the lender. That's right.
It was true back in the ancient times, and it's very true today.

Speaker 2 Yeah. Man.
All right, let's go out to Grand Rapids. Now we can talk to Leslie.
All right, Leslie. Hey, Leslie.

Speaker 1 What's going on? How can we help?

Speaker 10 Hi.

Speaker 8 My question is,

Speaker 8 should I take out a loan to purchase a family veterinary practice?

Speaker 2 No way.

Speaker 1 I hope you weren't listening the last five minutes of the show.

Speaker 2 Oh, geez.

Speaker 14 I was listening, yes.

Speaker 2 Okay.

Speaker 1 Tell us why you're the exception.

Speaker 2 Oh, incredible.

Speaker 1 Now, tell us more about this business.

Speaker 8 Yes, so this is a father-daughter business.

Speaker 4 My father owns the business.

Speaker 8 I have been working in the business for almost 11 years now as an associate veterinarian.

Speaker 7 I'm not a partner.

Speaker 6 I'm not an owner.

Speaker 8 And I work full-time as a veterinarian.

Speaker 4 I've got two little girls, beautiful little girls,

Speaker 8 one and four and a half. And my amazing husband works as a school teacher.

Speaker 2 And

Speaker 8 my,

Speaker 8 I guess, my

Speaker 8 currently the practice is grossing last year in 24, we grossed 1.3 million and our profits are 80,000 a year.

Speaker 8 My

Speaker 8 biggest question and my brother actually said that I should call and ask about this because my gut reaction is absolutely no.

Speaker 4 I do not want to purchase this practice with a loan.

Speaker 8 But the reason the question is coming up is because my husband and I in June finally paid off $250,000 in student loans.

Speaker 2 Yeah, you did. Congrats.

Speaker 1 Way to go. Thank you.

Speaker 8 Thank you.

Speaker 8 And we are debt-free except our mortgage for the first time in our lives.

Speaker 2 Awesome. And it's amazing.

Speaker 1 And you're like, why would I want to go back into hundreds of thousands of dollars of debt?

Speaker 2 Absolutely. Yeah.
So is your dad trying to get you to, is he trying to get you to buy this or has he offered it to sell it to you?

Speaker 2 How did it come up?

Speaker 6 Yeah, so we've been talking about it for years now.

Speaker 8 I'm pretty vested emotionally in the business.

Speaker 8 I'm a 120% kind of person.

Speaker 10 And so

Speaker 8 I run the day-to-day

Speaker 8 and I manage our team.

Speaker 8 And so

Speaker 8 we have talked in the past, and I've been very undecided if I wanted to move forward with purchasing the practice or at least becoming an owner.

Speaker 8 And my

Speaker 8 and I finally agreed that yes, if we can do this, if we can figure out a way last year, about a year and a half ago, I said we can figure out a way without me having to take out a loan to do this.

Speaker 8 I'm on board.

Speaker 8 And it came up again recently

Speaker 8 and

Speaker 8 he said that he didn't actually believe me when I had told him that I didn't want to take out a loan when it came up again.

Speaker 8 And so that really made me feel very unheard.

Speaker 8 And my,

Speaker 14 our relationship is very strained because of this business.

Speaker 8 And I have worked really hard to try to be mentally healthy for my patients and my family and my team.

Speaker 8 sometimes

Speaker 10 working against him.

Speaker 2 Okay, so let me hop in here. So a couple of things here.
Number one,

Speaker 2 please don't go to a bank and take out a loan and buy this from your dad like that. Okay.

Speaker 2 There is some ways that,

Speaker 2 like, for instance, y'all shake hands and he agrees to take 25% of the profits over the next five years. That kind of thing's okay.

Speaker 1 So revenue sharing, a gradual buy-in, some sweat equity, something like that, like you're talking about, is we're not going to do debt, but I'll give you this much revenue over this many years in order to essentially pay this off.

Speaker 2 And what I like about the percentage is

Speaker 2 if suddenly there's a COVID hits,

Speaker 2 then you're not like if you take out a loan from the bank and COVID hits, you're still paying the bank what y'all agreed on.

Speaker 2 If you have a percentage payout over time and that $80,000 of your profit goes down to 20 for a couple of years because of, I don't know, there's a dog flu that hits or I don't know.

Speaker 2 Then y'all both have skin in the game. And if he looks at his daughter who's been with him for 11 years and says no,

Speaker 2 then I don't want to do business with him.

Speaker 2 Okay. Okay.
Here's the other side of it.

Speaker 2 You're going to have to take language like, I don't feel heard and I have, it makes me sad. This is a business transaction and you are going to have to get business partners to help you because

Speaker 2 when family does business transactions like this with family, it gets very emotional. So what's that mean?

Speaker 2 You're going to have to get a third-party appraiser to come in and say, we're going through your books. This is what this is.

Speaker 1 It's not how he feels about the business. It's what is it actually worth?

Speaker 2 Okay. Because dad might say, it's worth $10 million.
I want $10 million.

Speaker 2 And I deserve $10 million. I put 40 years of my life in this thing.
I want $10 million.

Speaker 2 And now he's put his daughter in a really precarious situation, both financially, but also you're going to look at your dad and say, dad, it's only worth $3 million. It's only worth $2 million, Dad.

Speaker 2 Right. So now we've we've got a problem.
We're going to get a third-party appraiser. And if he says, well, I'm not doing that.
Then, again,

Speaker 2 if you're running this practice, essentially, if you're already a veterinarian and you're leading the team and you're running payroll and you're hiring and firing people anyway, then you can go start your own company.

Speaker 1 Yeah, I'm questioning if this is the place for you long term, whether you own it or not,

Speaker 1 because of this strained relationship. It hasn't been going well so far.
Owing dad $400,000 or a million dollars is only going to make it worse.

Speaker 2 And by the way, in his generation, you just went and took out a loan, which is why his generation is in the mess that they're in. So don't get mad if he's like, what?

Speaker 2 I didn't know there's another option. That's fine.
I'm not going to get mad at him about that.

Speaker 2 But I'm not going to go to a bank and mess up every Christmas for the next 15 years because I owe somebody

Speaker 2 because I didn't have the courage to tell my dad no.

Speaker 1 Welcome back to the Ramsey Show. I'm George Campbell, joined by Dr.
John Deloney. The phone number to call is 888-825-52225.

Speaker 1 Well, John, it's tax season, and that means a lot of people get a little sweat on their brow. They go, oh, my gosh, this again.
Every year we have to do this.

Speaker 2 I know it's like Christmas. It just surprises us.

Speaker 1 At least Christmas, there's some joy. You know, unless you're a CPA and even a CPA is probably going, oh, gosh, get me through this, please.
So here's the deal. We want to make it easy on you.

Speaker 1 We know taxes are confusing. And so we have a hub for you at ramseysolutions.com slash tax where you can find our no-nonsense tax software called Ramsey Smart Tax.

Speaker 1 You can find highly qualified tax pros that are Ramsey trusted across the country in your area. And we have some great tax resources.
I personally use them every year.

Speaker 1 I go to the site and I download the tax prep checklist. I read over the beginner's guide to taxes as a little refresher to go, all right, I'm ready for this.
Puts a little pep in my step.

Speaker 1 So go check it out. Ramseysolutions.com slash tax is the place to go.
Cindy's joining us up next in Miami. What's going on, Cindy?

Speaker 16 Hi, John. Hi, George.
Thank you for all your good work and your sound advice.

Speaker 2 Thank you.

Speaker 16 I'd like some clarity, and I'm looking for your professional guidance. I'm currently with my husband on step four and six.
I'm a teacher in Miami.

Speaker 9 My husband's a firefighter.

Speaker 4 We purchased the house in 2017.

Speaker 16 It's now valued at $1.3 million. We have a 15-year fixed mortgage at 2.35

Speaker 16 and we have 160,000 left on our mortgage.

Speaker 2 Amazing.

Speaker 16 We always overpay our mortgage when my husband gets overtime, but that comes in waves. So we're anticipating maybe six to seven years left on this mortgage.

Speaker 16 I'm very concerned with our property insurance.

Speaker 16 When we bought in 2017, our property insurance was $1,200.

Speaker 16 When we paid it in 2024, it was $7,700.

Speaker 7 We don't escrow.

Speaker 16 And what's happened in Asheville and these horrid fires in California,

Speaker 15 I'm anticipating a huge

Speaker 4 property insurance hike.

Speaker 16 Now my question is, since we're on step six and we're anticipating this, should we go back to Gazelle Intense

Speaker 16 and try as hard as we can to pay off this mortgage and then become self-insured?

Speaker 1 I would never get rid of property insurance if that's what you're talking about. You're saying, hey, we'll take on the risk of having to rebuild this million-dollar home?

Speaker 16 Well, what we're thinking of is just

Speaker 16 we currently contribute to, we have a six-month emergency fund, and we're continuing to put $1,000 a month into it.

Speaker 16 I just don't know if it's better to be self-insured or stay with these high prices of property insurance that I'm thinking, because we've never seen something like this in California.

Speaker 2 Sure.

Speaker 9 This has been a lot of fun.

Speaker 1 I'll tell you two quick things to help. Dave Ramsey has hundreds of millions in real estate.
He insures every property.

Speaker 1 Even though he doesn't, he could afford it, but he says the risk isn't worth it on my part. I would rather pay this premium to have it covered for me and they shoulder the risk.

Speaker 1 And I think the same is true for you. So there's a simple solution, and I'll hand it to John, but just set up a sinking fund.

Speaker 1 And even if it goes up to $10,000 and you want to live in Miami, call it the Miami tax. You got to pay.
It's like having a high HOA fee because you live on a beachfront condo. That's the tax you pay.

Speaker 1 So we're going to put away $833 a month into the savings account so that when it comes time to pay the property taxes, the money's there.

Speaker 2 And Cindy, every bit of your language reminds me of a guy I used to know, and I'll call him John Deloney 2.0.

Speaker 2 So tell me if I'm wrong.

Speaker 2 You survived COVID as a teacher.

Speaker 4 Yes.

Speaker 2 Your husband's in a very high-stress first responder job. Yes.
You're in a very high stress, I'll call it teacher's first responder job.

Speaker 6 Correct.

Speaker 2 Caught up in all the politics, all the nonsense. Plus, I grew up in Houston.
Your situation is worse than what I grew up in.

Speaker 2 And I still have in my nervous system Hurricane Alicia when we had to eat on a camp stove for 10 days because we had no power in the city. And you deal with that every year now in Miami.
Yes.

Speaker 2 And you've probably been scrolling and scrolling and scrolling through your hurricane season, through what happened in Tampa, or almost happened, bad, bad in Tampa, and what happened to North Carolina, what happened in the fires.

Speaker 2 You're an anxious, anxious mess.

Speaker 9 Yeah, I wouldn't, I would agree.

Speaker 2 All right, and now here's what you're trying to do: you're trying to take what's happening inside your nervous system and create future tragedies that you're trying to solve in the present.

Speaker 2 You're making yourself nuts.

Speaker 2 Okay. Okay.
Okay. So here's what I want you to do.

Speaker 2 Cancel for 30 days. Get social media off your phone.

Speaker 2 Okay.

Speaker 2 Commit to not going to a news source for 30 days.

Speaker 2 You're a teacher. If something bad happens, your students will let you know.

Speaker 1 They know about it before you do.

Speaker 2 Yes. Yeah,

Speaker 2 for sure.

Speaker 2 I want you to detox, okay?

Speaker 2 Okay. Now

Speaker 2 here's the simple thing. Are y'all going to leave Miami?

Speaker 2 No. This is our long-term goal.
Okay, so this is where you live. You have a million-dollar house.
Your husband's a firefighter. You're a teacher.

Speaker 2 You will never be able to accumulate a million dollars in cash to self-insure yourself.

Speaker 2 No, it would be very difficult. You're going to make yourself nuts trying to catch that dream by the tail because you can't.

Speaker 2 And so all you're going to do is scroll job listings. You're going to scroll extra job.
You're going to make yourself bananas.

Speaker 2 So y'all are living there. This is our home.
This is our castle. This is where we planted our flag.
And so, like George said,

Speaker 2 okay, well,

Speaker 2 our dream tax or our home tax, they might make it

Speaker 2 $10,000. I don't think they're going to.
I think they've priced it in the market. They've gone up 8 jillion percent over the last five years.

Speaker 2 But if hurricanes keep happening and they keep getting more intense and happening more frequently, then it's going to go up. They have to cover their spread or they're going to go bankrupt.

Speaker 2 Okay, so let's just put 10,000 bucks. If we pay our house off, we'll have a $500 a month plus our

Speaker 2 property taxes. This is what it will cost.
Ta-da. That's problem solved now.

Speaker 2 Okay. You get what I'm saying? And I'm saying it this calm on purpose because I want you to practice this.

Speaker 2 Because

Speaker 2 Brene Brown calls it dress rehearsing tragedy.

Speaker 2 You have already imagined yourself standing in front of a knockdown house and wondering what we're going to do. Don't do that until it comes.

Speaker 16 Yeah, we'll cross that bridge whenever it's

Speaker 2 right.

Speaker 2 Okay. So, yeah, I like the idea of getting, get that 10,000.

Speaker 2 Now, if you're, if I'm you, and this is going to kind of break with the Ramsey protocol a little bit, if I get to, I'll just tell you what I did with my, with my last house, we got right to the very end where we owed 100, whatever.

Speaker 2 Yeah, we, I went full baby step two.

Speaker 2 I went bananas, but it was for a very limited sprint. You can't do that for five years.
You can do it for two.

Speaker 2 Okay. So you and your husband, where I needed clarity.
Y'all could do math.

Speaker 2 But listen, that's about making a more peaceful, less anxious house than it has anything to do with being able to predict what an insurance company what the weather's going to do or anything like that okay that's you controlling what y'all can control and a part of making a non-anxious house for me and my family was i don't want us to owe anybody anything

Speaker 1 right

Speaker 1 that was part of john creating that world he was running towards something versus just away from the thing that could be and that's what i would tell you is you're when we talk about baby steps one through three it is gazelle intensity once you're in four five, six, it's intentionality.

Speaker 1 And that's a tough move to make when all you know is go, go, go. Dave said, right.
And so I would set an intentional goal with your husband of, hey, what if we could do this in 40 years?

Speaker 1 Could we do that? It's 40 grand a year.

Speaker 2 All right. Yeah.

Speaker 1 Let's commit to that. Spit shake.

Speaker 2 We're going to commit to that. Two years.

Speaker 1 Be bananas, right? Two years if you want. 80, could we do 80 grand?

Speaker 1 Yeah, we could do that. Whatever that is for you guys.

Speaker 1 But like John said, do it for the right reason. So I love paying off the house regardless of the interest rate because it's going to set you guys up for freedom.

Speaker 1 You can invest that payment, but I would keep your property insurance forever, no matter what, and just make a sinking fund and do it and say, well, we did our good deed for the day.

Speaker 1 We paid our property taxes. Hopefully it went to something good.
We paid our insurance. It covered us.
I can sleep better at night knowing my house is going to be okay.

Speaker 2 And one last thing I want you and your husband to do, this is for all teachers and first responders.

Speaker 2 At night, when y'all have shared meals together, Open the meal with five things you're grateful for.

Speaker 2 Look each other in the eye and say them out loud because I want us to remember when the world feels like it's burning down around us, we do have things we can be grateful for. It's a practice.

Speaker 1 Thanks for the call.

Speaker 1 Welcome back to the Ramsey Show. I'm George Camill, joined by Dr.
John Deloney. Open phones at 888-825-5225.
Noelle joins us up next in Dallas, Texas. How can we help Noelle?

Speaker 17 My question is,

Speaker 3 am I in the wrong because I don't want to go on a spring break trip with my husband and daughter to visit their sick grandma?

Speaker 2 Ooh, wow. Okay, what's the heart behind?

Speaker 1 Yes.

Speaker 2 You're wrong.

Speaker 1 Is there more context? Is there more context?

Speaker 2 Or is that it?

Speaker 19 The context is we're in baby step two,

Speaker 4 and we had already invested about $800 to get a plane ticket for just my daughter to go out and visit grandma.

Speaker 4 Grandma has been battling cancer for years, and

Speaker 19 she's probably on her last year.

Speaker 19 and so we definitely wanted her to spend time with her but that's what the we had discussed and then today my husband says why don't we all go and I'm just not sure that's the right thing to do

Speaker 1 so he he's going with her without you

Speaker 17 to see his mom sounds like it the other

Speaker 17 it's so it's his grandma so my daughter's great grandma okay and

Speaker 19 the stipulation I guess that's important is grandma's willing to foot the bill

Speaker 4 to pay for our tickets. Okay.

Speaker 2 Can you get a break?

Speaker 17 She can.

Speaker 4 She's got a paid-off house.

Speaker 18 You know, she's invested well.

Speaker 19 She's ready to spend her money at the end of her life.

Speaker 17 But my thing is I'm missing out on an opportunity to earn money when it's spring break.

Speaker 18 I'm a school teacher.

Speaker 17 And so

Speaker 4 when I'm on break, that's a great time for me to pick up extra jobs and make more money.

Speaker 4 And my son can still go to daycare.

Speaker 4 But I am going to miss out on the opportunity to make money and pay off our debt if we go on this trip.

Speaker 2 How much do you talk? I mean, how much can you earn in a week?

Speaker 3 $500,000, $600.

Speaker 1 How much debt are you guys in?

Speaker 19 We've got $11,000 in a car that should be paid off by March

Speaker 18 due to cashing out a whole life plan.

Speaker 19 And then we have my husband's student loans.

Speaker 1 How much is that?

Speaker 6 $60,000.

Speaker 1 Okay. So the current trajectory, when is all this debt going to be paid off? All $71,000 with your household income?

Speaker 17 If I continue working,

Speaker 7 then in 18 months.

Speaker 2 Okay.

Speaker 1 And if you skip this extra week of work that would have amounted to $500,

Speaker 1 it would slow it down to 17.

Speaker 1 seven months?

Speaker 2 Yes. Okay.
Well, and noel.

Speaker 1 So I just want to make sure we like that's really what we're talking about.

Speaker 2 No, this has nothing to do with that. You're mad at your husband.

Speaker 8 Yes.

Speaker 2 Because you want to stay at home and you're having to work to pay off his student loans.

Speaker 2 Yes.

Speaker 2 Yes. Yes.
You have to get to the root of this thing.

Speaker 2 Because on its face, let me just say, you can feel however you want to feel. Your feelings are yours and you get to do them.

Speaker 2 And there's lots of spouses that go visit family members that don't want to, but they do it.

Speaker 2 And if it's grandma's last year of her life and she's offering to pay to fly everybody to say goodbye one more time, then if you can do that, I would say do that. But you've got to address your anger.

Speaker 2 And maybe it's not wholly at your husband, maybe it's at just life and you love him and you're glad you married him and all this stuff, but it just is what it is, what it is.

Speaker 2 You need to address that because you're creating a life that you're resentful of.

Speaker 2 Does that make sense?

Speaker 6 That sounds true.

Speaker 2 Okay, so, okay, I was going to make sure I'm not crazy. Like, so so have that conversation with yourself and with him.
Because right now, for him, he thinks he just figured it out.

Speaker 2 Oh, we can all go and it's going to be free for us.

Speaker 2 Got it.

Speaker 2 I mean,

Speaker 2 and if you don't want to go and you need to work and you've already committed, spring breaks just a few weeks from now, if you've already committed, then say, I've got to commute my commitment.

Speaker 2 And if this is the last year, we're all going to be going back anyway for the funeral, you know, in the next year. So if that's the the case that's the case

Speaker 2 but i'd much rather you deal with what's really going on here which is you're stuck in a situation having to work when you want to be home with your baby and it's real frustrating

Speaker 2 yeah

Speaker 2 i mean tell me i'm bananas

Speaker 1 you're not okay i think you you were able to justify the tension in my body yeah i can hear it through the phone man you're you've been trying to justify it by going well we're in debt and i could make more money it'll speed it up and we just proved with math that it's 0.3 months of, you know, it's really not about that.

Speaker 1 But I do think relationships are not convenient. Family is not convenient.
Health crises are not convenient. And that's a part of life on the baby steps.

Speaker 1 And so we would tell you, hey, if this is really important to your family, you might need to just pause and take the trip and let it slow it down by a few weeks. And we'll make it up on the back end.

Speaker 1 But right now, I think you might need to be there for your husband.

Speaker 2 Or the other side, if being around grandma and her family aunts and uncles are going to be there make you sick to your stomach there's been they've said ugly things about you whatever then have that honest conversation because it's going to be bewildering to your husband who doesn't know that you are this against going or you're this frustrated with the life that you're leading and he's not going to be able to figure out over 400 that you're or 500 bucks that you may earn over a spring break week you know what i mean

Speaker 19 yes i know what you mean I think I need to be honest with myself about where the anger is coming from and have that conversation.

Speaker 2 There you go. And if you get to the end and you still don't want to go, don't go, but just be honest about why you're not going.
And if

Speaker 2 every

Speaker 2 George, this is kind of epidemic levels of people opting out of family because they're annoying or they're, man,

Speaker 2 sometimes you just go.

Speaker 2 Sometimes you go and you sit by your husband, you sit by your wife, and you hold their hand and make sure they're not alone when they're going through a really hard moment, right?

Speaker 2 And again, you and I don't know if this grandma all meant to him.

Speaker 1 If it's hard for her husband to share this, that, hey, here's really how I want you to go.

Speaker 2 Yeah, yeah, yeah, yeah. What I'm guessing is happening is he sees how stressed she gets and how frustrated she gets when she has to work this extra week.
And he thinks he just solved it.

Speaker 2 He's like, oh, dude, vacation,

Speaker 2 expenses paid trip. And I get to see grandma, but we get to go to Texas.
And she's like, I don't hate all of my life and you.

Speaker 2 Not really hate, but you know what I mean. So yeah, sometimes getting to the root of the root of the root of the issue is where we got to go.
Absolutely.

Speaker 1 Good word. John is in Oklahoma City up next.
What's going on, John?

Speaker 12 Hey, guys.

Speaker 1 Hey, get right to the question.

Speaker 12 So my question is, I'm in baby step two right now.

Speaker 12 So I drive a beater.

Speaker 12 It's a 2004 Chevy 12 laser. Has 295,000 miles on it.
Starting having to do a lot of repairs on it and everything.

Speaker 2 Hey, John.

Speaker 2 A A lot of times people call us and say they got a beater and they tell us what they're driving. You actually are, so I applaud you, brother.
Yeah. Congratulations.
You got a real beater there, dude.

Speaker 2 Yeah, it's a true.

Speaker 1 It's old enough to drink this year, so there's something to sell.

Speaker 2 Congratulations, man.

Speaker 9 So

Speaker 12 my deal, I'm starting to put some more repairs into this, which is taking extra money.

Speaker 12 I have roughly $80,000 of consumer debt to pay off, and then I'll start maybe step three.

Speaker 12 But my is, if I can make this vehicle last through

Speaker 12 the debt payoff, is it okay to save up some cash to buy a better used vehicle before I start the 36 months of expenses?

Speaker 1 Yeah. I mean, if you need to, like, you know, repair it, drive it until it can't be driven anymore, but also know it might not have two years left in it.

Speaker 1 And so I would set up a sinking fund that'll probably slow down your baby steps, but at least it won't be this, oh my gosh, I got to to go finance a $30,000 car. I had no idea it was going to explode.

Speaker 1 You know, just set aside, you know, $400 a month so that a year from now, you got five grand. That'll get you another beater to get you through.

Speaker 12 I'll do that. I'll just set up a sinking fund to put, you know, some cash in.

Speaker 12 Like I said, it will slow down my debt payoff.

Speaker 12 I do work full-time and I do a side gig doing door dashing. So I just make extra money.

Speaker 2 You're getting it, brother. And hey, it'll slow you down.
But if you go borrow it, you're going to go backwards. And so that's what really slows you down.

Speaker 1 That's right.

Speaker 2 And George and I, like, we'll all tell you, just be cautious because,

Speaker 2 man, it's tempting when you get on that lot

Speaker 2 and you see what you get for five grand and you see what you could get for 10.

Speaker 1 Gosh, it's automatic windows and power steering. Don't tempt him with a good time.

Speaker 2 Air conditioning that works always for 15 to, I'm in, right? So just get that sinking fun and commit to just that being the number.

Speaker 1 Drive like no one else. So later you can drive like no one else, John.
You're doing it right, man. Hey, the rest of the the Ramsey show is in the Ramsey Network app.

Speaker 1 That's where we're going to keep the party going. So download it for free using the link in the show notes or just search Ramsey Network in the app store.
If you're on radio, stay tuned.

Speaker 1 Everyone else, don't miss what's next. We'll see you in the Ramsey Network app.