Don’t Look for a Hack When You Need a Grind

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people

build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, Rachel Cruz, number one best-selling author many times over, Ramsey personality, and host of The Rachel Cruz Show.
My daughter is my co-host today. Open phones here at 888-825-5225.
You call with questions about your life that's what we're here for the call is free and some say the advice is worth exactly what you pay for it so we're glad you're here Rachel big day today another book launch the third Rachel Cruz kids book is out ding ding ding ding it is I know I'm so excited so I'm glad when I can share so this is the kids book is out. Ding, ding, ding, ding, ding, ding, ding.
Yes, it is. I know.
I'm so excited. So I'm glad when I can share.
So this is the kids book on generosity. And I went with the sharing element because for our little ones, teaching them to open their hand and share is kind of that first step in generosity.
But it concludes my series. I did one on contentment, gratitude, and this is the final one for generosity.
So this is the three kids book series. and the third one is out today.
And they've all been bestsellers. I'm glad for what I have.
I'm glad for where I am. That's contentment, right? I'm glad for where I am is gratitude.
Gratitude. And the first one's contentment, and then this one is generosity.
I'm glad for when I can share. And it's a three-book series, and this is the third.
this is the third this is the third one so it's 1999 at ramsey solutions.com in the bookstore and again lauren just continued to uh these world-class uh illustrations make the book yes lauren gallegos is the illustrator for all of them and she just i mean did a fabulous job so yeah it yeah, it's a really sweet book and it's short. You're welcome, parents.
Yeah, for those of you who do bedtime stories, they're nine years long. Yes, this is a short one.
You don't have that here. And on each of these books, I always try to add an element for the adults at the end.
So just a sweet reminder, right? When it comes to contentment, there's that. And then this one for gratitude, that joy in life really is the gifts that God has given us from our brothers and our sisters and all of that to understanding that when we give, it is a joy unlike anything else that money can buy.
It's the most fun you'll ever have with money. We had Jimmy Darts on yesterday, who's got the big YouTube channel on Oh, yes.
Giving money away. And we were talking about the power of generosity.
And we teach you guys, as you know, to live like no one else so that later you can live and give like no one else. And Lauren even snuck that onto the license plate of one of the cars in there.
So you'll have to look for the hidden meanings in this book. There's some little Easter eggs in there.
There's a few little Waldo's in the book. call me taylor swift but i have my own easter eggs where's waldo yeah so there it is live like no one else on the license plate um probably need to get one of those for one of our cars for real that'd be pretty cool i never thought of that because but nobody knows what it means unless they know what it means it's just letters on that one yeah totally it's nuts but yeah anyway good stuff so i'm glad when i can share it's here it's on sale oh just in time for christmas and it's $19.99 at ramsey solutions.com in the store and of course um you can order it anywhere you can order great books as well the other two books in the series are only $17.99 so you can pick up all three of them uh for what 50 bucks roughly and um a little a little over 50 dollars and you'd have a wonderful little set for the grandbabies or for the babies whatever it is good stuff and uh speaking as the grandfather who has a few grandchildren that might be accused of picking out the longest possible book some of those dr zeus books go on for days and they have a way of finding this is the one i want to read papa dave translation i want to stall bedtime as far as i can and so uh doesn't work with any of the three of these these three all get to the point and you go to bed.
Yeah, they're pretty fast.

And they rhyme.

They're very sweet.

Great message.

But yeah, we get to the point.

So you're welcome, parents, for that.

Good stuff.

Lorena is with us in Dallas, Texas.

Hi, Lorena.

Welcome to the Ramsey Show.

Hey, guys.

How are y'all?

Better than we deserve.

What's up in your world?

Good, good.

I just have a couple of questions. I'll start off with that.
I feel like I cannot move out of my parents' house due to financial struggles that they're having and I'm also having as well. Okay, so what causes you not to be able to move out because of their financial struggles? Walk me through that.
They need your rent?

Basically, yes, sir. And so since I moved back in, I've been trying to get rid of my debt and following the baby steps.
But you pay them rent? No, I do not. Oh, how would it affect them negatively if you left? So, they're right now, they're in a rental property and, um, their city is actually planning on demolishing, uh, the area that they are in.
Is this the house you live in? Correct. How would it affect them negatively if you left? Cause I don't think they could, you know, uh, I don't think they could move into a new house without my help.
You're not paying them any rent. That's true.
There's no net loss to them when you leave. It's a net gain.
Yes, that is true. Because whenever they do have to move, eventually, their rent that they're paying will be up more than what they're paying right now.
And then you would start paying rent? Correct. To help them do that.

Okay.

Correct.

Bad solution?

Yeah, so that's why I feel kind of stuck.

You're not stuck.

Everybody's got to reset their expectations in this.

Right.

They're in an unrealistically low rental rate on a house that's being demolished.

Correct.

So they cannot rent the same house three streets over they can't afford it correct so they need to move to a different area yes sir so that's why i just feel stuck i feel like they're looking at me and it's not you it's them they need to move to an area they can afford to live they're like grown-ups and stuff right yeah maybe they need to act like it i mean it but but in a family dynamic i mean i think dave's calling out the the dysfunction in that that they're leaning on you to help them in their situation well or somebody made you feel guilty i don't know whether you took it on yourself or they did yes that that's what i would say to you is to is you have to be able to release that yourself because that is not your responsibility, even though the dynamic may feel like it is. And there's always a weird element with adult kids when their parents are in trouble to feel like they've helped me, they raised me, they gave me a roof over my head growing up.
So I, in turn, feel obligated and debted to help them. Is that true? Yes.
No, that's exactly what happened. I had recently moved back five months ago, and since they're not letting me pay any rent, that's why I feel obligated to help them.
Because they gave you that gift. Correct.
Right. Well, and that's a false obligation.
Yeah, that wasn't the deal. Okay.
The deal wasn't you move back in, and so you're indebted to us for the rest of your life.

Right.

That wasn't the deal.

You move back in.

Don't pay us any rent.

Get yourself straightened up.

It's a gift we can give you right now.

We can't continue giving you that gift because they're making us move to demolish the house.

And so now we've got to move to an area that's not even what we want to do because we can't afford to live here anymore.

Right. Correct.
Lorena, how old are you? I'm 26. Okay.
Yeah. I just want to give you that permission to have that freedom to build your own life.
And what it's going to force you to do as well is to say, oh crap, I don't have mom and dad as a safety net anymore because it's not good for them. And ultimately it's not good for me.
So I'm going to have to make hard decisions as well. And that's a tough spot.
And I'm sorry. I'm sorry.

It's all coming to a head because of this situation, but I would, I would, I would look

at it as a gift in that way. Yeah.
Five years from now, when you guys are all emotionally and

financially sustained without leaning on each other, you're going to be better people and

better for each other. This is The Ramsey Show.
Rachel Cruz, Ramsey Personality, is my co-host today. Open phones at 888-825-5225.
Jennifer is with us in Phoenix, Arizona. Hi, Jennifer.
How are you? Hi, I'm doing well. Thanks for taking my call.
Sure. What's up? I wanted to see what y'all would do with a pile of money.
I'm in baby steps 3B and 4, but then I found myself in storm number one. Surprise, I'm pregnant.
Oh, well, congratulations. Thank you.
Storm number two, five weeks later, I suffered a major medical event, found out I have an underlying condition that will put me at risk for more major medical events. And we can't really address the problem for a year or two until baby gets here and we can do a lot of testing and investigate it.
So I had been saving a bunch of money for a house, but it had been sitting in a high yield savings account, but those rates are declining. So would you guys leave it in high yield savings or would you move it into like a brokerage account to maximize the yield? Because I feel like that goal is now three to five years down the road.
How much money in your emergency fund and how much money in this fund we're talking about? My emergency fund is $50,000. It's 12 months.
And this money is how much? My house fund is currently at $150,000. Okay, so you have $200,000.
So this medical procedure, what's the financial dent that this might make? That's a million-dollar question. Literally a million-dollar question.
I don't know. Well, you have health insurance.
Yes, I do. Okay.
And I have very good health insurance, but I'm also out of work and currently on unprotected leave

because of everything going on.

So all of that.

What do you make?

I make $140 a year.

What's your husband make?

I don't have one of those.

Okay.

All right.

And so you're unprotected. You're not making making any money you don't have an income right now um that is not a true statement i had a bunch of sick time and vacation time i thought you said unprotected leave i thought you meant your own family leave act with no pay okay so again what, again, what you've got to ascertain, not from a fear base, but just some actual analysis is, is this a $50,000 problem you're facing or a $200,000 problem out of pocket with your health insurance, with your potential loss of income that will be unpaid once you run out of these other things.
And I kind of think you've got a lot of savings here.

So I shouldn't tell you about my brokerage fund or my sinking fund?

You're a savings maniac, girl.

I love it.

How much is in the brokerage account and how much is in the sinking fund?

The brokerage fund is $80,000. And the sinking fund is $30,000.
What's it sinking for? A car, vacation, travel. Okay.
So now we have $310,000 to weather this. I think you're okay.
Breathe. Right? Well, I think the scary thing, Jennifer, is you don't have a lot of answers and you won't have a lot of answers until after the baby comes, correct? Absolutely.
With the health situation. So there's no panic to do anything with this money.
I would just keep everything. We would tell you to pause everything anyway, since you are pregnant, there's nothing else to like majorly do.
And I would wait till baby comes, you're good, run some tests. And if, and if you're in the same position in 18 months, financially, you're okay.
And then you can make some big know decisions but I think you can take a portion of this and put it in a brokerage account would you tell her to go get a house right now Dave's kind of smirking I feel like no no I wouldn't I would sit where I am and just you could throw it in a high yield savings and it doesn't matter what you do with this money for 18 months but you weren't going to put this brokerage account down as the down payment

on your house were you no that was see come on that was a retirement fund that's not a retirement fund it's a brokerage account well where i worked previously they didn't offer how much do you have in your 401k super saver?

500.

Okay, come on!

Okay, you need to put you when when this is over and you take your 3b 150k add the brokerage account to it for your down payment on the house i want you to put 230 down on the house when this is over right now i don't want you to do anything i just want you to lean into the security that you've built for yourself you are a master saver you're amazing saver but it you're you're taking it too far but for today it's okay that it's too far until you get past this storm so when you get past this to store the storm though um buy the house yeah buy the house and put all this money towards a stinking house you know seriously after med after the the realization of the medical expenses and the and the lost income yeah whatever's left yeah out of the brokerage account out of the 150 but a 12-month emergency fund no stop that you know plus a brokerage account just because i didn't have a retirement before but i got a half a half million over here. You're fine.
You're going to be so rich. It's unbelievable.
You can't keep yourself from saving money. You're amazing.
Well done. So yeah, your challenge, Jennifer, is going to be resting in the piece of what you've created.
Yes. I mean, that's it.
So lower the stress. Enjoy this pregnancy.
Breathe.

Just like Dave was saying, you're good.

You are good.

Don't make big moves right now.

Have the baby.

But between now and baby, you are secure and great. You're good.

Let's get the medical thing in your rearview mirror,

and then let's get the savings trim back down to where it should be.

And that's what I would do if I woke up in your shoes.

Zach is in Charleston, South Carolina. Hi, Zach.
How are you? I'm doing all right. Thank you all for taking my call.
Sure. What's up? So basically I was in a car accident not too long ago, and the guy totaled my car, and the settlement check is about $6,000, and I still have $4,500 left over on the car.

So I was wondering if I should pay off the car and then basically just wait until I can get another car

or get another car and then slowly chip off the debt.

You can't.

They're not going to give you the check unless you give them the title for the total car, and you're not going to get the title for the total car unless you pay the loan off that's a lien on the car. Well, I already gave them the title, and they were sending me the check today.
I bet it's net of the payoff. They probably sent the payoff to the bank.
Oh, okay. Because you got a lien on the car title.
Right, right, right. Yeah.
Unless you did something that was not a lean on the car title. But either way, let's pretend that I'm wrong on this for some reason under South Carolina law and I'm missing something.
Then when you get the check, pay off the debt. Okay.
And then you've got like $1,000 left or whatever it is, $1,500 left to go buy a beater car yeah okay and that's what i would do if i woke up do you have any money saved zach do you have like an extra thousand somewhere no i'm very new to office okay no you're great yeah yeah yeah the goal would be to get to to buy a car in cash and let me challenge you zach so we're in nashville and on sunday for whatever reason maybe it's because I knew you were calling in Zach and the Lord spoke to my heart but I was I literally googled $5,000 cars in Nashville because I'm like because because we get this car call a lot and people like well I can't get a $5,000 car and I looked up and I'm like oh my I mean you just can scroll and scroll and they're not terrible looking cars I mean you know they may be like 10 years old or something but i'm just saying you have fifteen thousand dollars i would save up another two thousand and you can and you can get what you can get a twenty five hundred fifteen hundred i'm sorry that's what i meant fifteen hundred but you can get a three thousand dollar car yes and they're out there they are out there what was your old car payment? My old car payment was like $400. Okay.
So I would say $500 a month after I buy my beater car so that I can move up in car in six months because I don't want to drive this piece of crap for very long. Right.
Okay. Yeah.
$500 for six months is another $3,000 and $500 for another six months is another $3,000. This is how you get rich.
You don't pay people car payments. You buy things with cash and don't have payments.
That's the goal. And that you're new to this stuff, that's the bottom line of what we teach, brother.
Proud of you. Thanks for asking the question.
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It's completely free, including the last hour of this show every day. And you can jump in and catch the video and the audio and whatever else.
You can search it. There's all kinds of good stuff.
And you can ask questions on the Ramsey Network app. This one is from Todd.
Yes. Todd asks, should I consider converting my employer match each year in my 401k to Roth dollars and pay the taxes now? I'm 31 years old and wondering if converting the match each year will benefit our financial future in retirement.
Yes. Yes.
Yes, yes, yes, yes, yes, yes. You got to do it and pay the taxes, of course, out of your pocket when you do that.
Especially, Todd, if you're out of debt, if it's going to be a large amount of money out of your pocket because of this, you may not want to do it for a while. Just let it build up and you can go back and do it all at once.
You can do it anytime you want. You let it build up for four or five years and then do it all at once.
Uh, at that time, I do mine every year because my company that I own is required to match my, because I'm an employee of the company I own, which is weird, but I get a 401k with the company match and the match is required to be in traditional, and I roll it to Roth at this time of year every year, and that creates that amount of money to be taxed on, but then I'm never taxed on the growth after that, nor are my heirs, because inheriting a Roth IRA is not anywhere near the problem that inheriting a taxable traditional IRA is, and so it even helps later on with your estate planning, because I don't have a single thing right now in my name or my wife's name that's not Roth. I have rolled everything to Roth and paid all the taxes in it.
So I'll have no required minimum distributions either at 72 and a half when other people will. So that's an interesting part of the equation.
But yeah, yes, definitely, especially if it doesn't affect your get out of debt plan. Now, if it's taking money out of your pocket that you need to use to pay off your car, no, let's wait a year or two and do it later.
Do you have to do it all at once? You can do it every year at one time. The match for that year, you can do it.
No, I know. But if you had a full one and and you were converting a lump sum could you divide the lump sum into half and just convert half of it half of it like take it at a time so if you had a hundred thousand dollars in traditional and you want to roll it but you didn't want all the taxes in one year yes you could do 50 000 and then next year do 50 000 if you want to do that kind of thing yep yep and so you can let it build up if you're still getting out of debt and then go back and fix it later.

I mean, you're only 31, so if you fixed it at 36, you're still going to have all the benefits of it growing tax-free for years and years and years and years and years. Gus is in Boston.
Hey, Gus, how are you? Hey, Dave, I'm good. How are you? Better than I deserve.
What's up? So I was working a well-paying job, $100,000 a year, and I got laid off. I've been looking for work, something similar, something paying about the same for the past few months, but no luck.
I haven't gotten any interviews at all. I believe that it's just the current market conditions.
There's been lots of layoffs. This is in the biotechnology sector, by the way.
And so right now I'm debating going back and getting a master's degree because I think it would make me more qualified, more likely to land one of these high paying jobs again. However, I think that I would need to either cash out a brokerage count that I've been saving for a house eventually, um, or take on debt to pay for this.
Now I have no debt otherwise, not even a credit card. Um, I've been listening to you for years.
And so I guess I'm really nervous at the idea of either cashing out this brokerage account, which I'm making gains on, um, or taking out debt to get another degree. But I don't have you married? No, I'm not.
Okay. What have you been living on while you've been laid off for six months or three months? So I have an emergency fund, fully funded six months, but also I've been collecting unemployment.
Okay, and you're living on the unemployment? Yes. Because you're not touching the emergency fund.
I can tell by talking to you. Yeah, no.
Yeah. Okay.
How much longer does that run? So unemployment will go through the end of February and then I'll have six months on the emergency fund. But as you know, I don't want to touch that unless it's a true emergency.
Yeah. Gus, what's the line of thinking that this degree is the thing that will get you in the job if you haven't had interviews anyways? Is it on the applications like what you're seeing? You're like, oh, I need that advanced degree for sure.
Or is this just a it's going to look better in general and you think that's going to help you? So previously, my title was senior research associate. And I got that with a year and a half experience and a bachelor's degree.
Now I'm seeing for the same titles, largely same responsibilities, all of the postings are saying bachelor's or master's. And then I got a free trial, a LinkedIn premium, and it's been telling me that, you know, there's 60 plus applicants all with master's degrees who are applying to these same jobs with the same title.
So I'm concerned that because a lot of biotechs went bankrupt this year, the market's been flooded with high quality applicants. Gotcha.
So what was your day job? What did it look like? What did you do as a researcher? researcher? So it was operating automated

liquid handling systems, you know, like pipetting, working in a lab, lab coat, goggles, gloves, the whole deal. And so specifically, it's next generation sequencing.
So it's all sort of furthering research objectives of these large pharmaceutical companies

got that dave yeah i did yeah i'm just trying to what i'm looking for and the reason i paused is what i'm looking for is what that is how that is applicable beyond just the narrowness of this field something else yeah, yeah. Because the other thing is that we're starting to see some early signs of the economy getting a jump start.
And so by first quarter of next year, I think the job market may look considerably different than it looks today. That's an opinion from your perspective.
What I don't know is the world that you're in and what the lab coat goggles and the bunsen burner how that applies to other industries other than the specific one you were in um i'm not sure that a master's degree gets you a job let's say for instance that 30 of the players in that nuanced area now out of business. A master's degree doesn't necessarily get you in the door on the remaining 70% because the job market shrunk so dadgum much.
What does get you in the door is Ken Coleman's proximity principle. You know somebody that knows somebody there, that they'll at least give you a look, and your one and a half years of experience actually doing the sequencing and actually doing the research is far superior if I'm the employer to someone that got a sheep scan, got a master's degree.
Yeah. So, so now I'm at three years experience.
Okay. That's okay.
Three years experience is far superior to a master's degree. I don't want someone that was taught to do it by a college professor.
I love someone who's actually done it, like for three freaking years. I think your experience is superior to their master's degree is what I'm saying, but you haven't just gotten your foot in the right door to where someone will actually talk to you and will respect that three years.
But within that nuanced world, the number of people walking around with a master's degree and three years experience is fairly low you might have a bunch of kids coming out of school with a master's and no experience and I think you got them beat I think you're holding a straight flush here so um yeah I I'm gonna work Ken Coleman's system and I'm gonna to work some other jobs and I'm going to start expanding my idea. Maybe I don't want to be doing

this. Yeah, I'm going to work Ken Coleman's system, and I'm going to work some other jobs, and I'm going to start expanding my idea.
Maybe I don't want to be doing this three years from now, five years from now. Maybe I want to apply these skill sets in some other areas of research in the lab, but not necessarily this nuanced area.
I want to broaden the scope of my search and how applicable are these skills in other labs and in other situations, even petroleum or something way off the grid. I mean, where is it that there's a lab? I don't know.
And I'm going to try to get in those labs because lab experience is lab experience. I understand petroleum would be different than gene sequencing.
I get that. But I still, you would know more about going into any lab of any kind than I would because I've never been in one as an employee.
So that's, you know, I think you've got some broadening, number one. Number two, I'm going to send you Ken Coleman's book, The Proximity Principle, and I want you to use that to get in touch with people that you know that know people that know people that get your resume looked at because I think you've got a trump card here.
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I'm Dave Ramsey, your host. Thank you for joining us, America.
Rachel Cruz, Ramsey Personality, is my co-host, number one best-selling author. And the new book is out.
The new children's book came out today. That means a set of three is now available.
I'm glad when I can share. There it is.
Teaching Kids Generosity, the last of the three. So contentment, gratitude, and generosity are the messages of the three books.
This is the third in the trilogy and the final book. They're all available at RamseySolutions.com starting today.
Great Christmas presents. Elisa is with us in Jacksonville, Florida.
Hi, Elisa. How are you? Hi, Dave.
Hi, Rachel. How are you guys? Great.
How can we help? So I was wondering how much a mortgage rate should decrease before it's worth refinancing. Well, the weird question is, are you going to break even on the savings before you get rid of the mortgage is the way you look at it.
So here's how you do the math. Okay.
What is your current loan balance? 256. Okay.
And so if you save 1% a year, you save $2,500. If you save 2% a year, you save $5,000.
Does that sound right? Yes. Okay.
So if your closing cost, if you're saving, if your closing cost is $10,000 to refinance, I'll just make up a number. Okay.
Then how quick do you get your closing costs back with the rate that with the savings that you have from a lower interest rate? And so if you're saving 2% in your case, you're saving about $5,000 a year, you would recoup a $10,000 closing cost in two years, and everything after two years, you're going to make money. That's gravy on the biscuit after two years.
You see how I did that? Yes. So you divide the actual dollars saved with the lower interest rate into the closing costs, and that gives you the break-even point, and that should be less than three years.
Typically, people say two years. You need to break even on the closing costs in about two years.
So a lot of times it takes a 1.5% to a 2% savings for it to make sense. Okay.
The average mortgage rate right now is adjustable after 10 years. When does the 10 years come up? Not until 2033.
Okay. So you've got a little time to ride the market.
And, again, when the market is – what's your current interest rate? 6.5%. Okay.
And, um, so, you know, you're, you're not going to get a 2% savings right now. No, definitely not.
And you're probably not even gonna get a 1% savings today. You might, but depending on how you structure the loan, whatever, but that doesn't account points.
We're not paying points to create a false thing but the bottom line is the interest the refinance saves you money on interest and that gives you the money to pay back the closing costs and you need for those closing costs to be paid back in two to three years for it to make sense and that that's how you run the actual calculation on it and um you'll have that happen long before your adjustable rate kicks in in 2033. I was going to say, in that many years, who knows what the interest rates are going to look like.
Who knows? But the average mortgage folks out there across the span of my 40 years of being around real estate and in the real estate business, the average mortgage stays on the books only five and a half years, either due to refinance or sale of the property. And so, you know, you really don't keep a 30-year mortgage 30 years in reality.
So very often, I mean, a few people do. I'm talking about the average.
And so you certainly don't want something where the break even on your refinance is 10 years in a world where the average mortgage has gone in five and a half. So that's bad.
Of course, also you would include in that if I'm paying aggressively on the mortgage, how quickly will it be paid off? Am I going to have it paid off before I break even? That's another thing you would have to look at. So, but we're just, you're trying to look at the actual dollars saved as a result of the lower interest rate versus the actual dollars in closing costs and that gives you your break-even analysis from an accounting perspective and that'll help you make the decision very very quickly the good news is Rachel that that's now a thing again um that you know rates have softened a little bit they're not up they're you know they're not they're not way up they're not way down but um there's a lot of optimism out there and a lot of people starting to look at this and four months ago no one was even talking about that they're just frozen right during the headlights that and it's just fascinating the way real estate shakes out because uh we were even talking on one of my shoots the rachel crucio shoot yesterday that you know in 2021 2022 people were afraid it was a bubble and everything was going to pop and in the right you know the because the how quickly prices rose and increased and now they've just stayed there which has made the market tough right to get in what you had to have in 2017 looks so much different than what you have to have So it is difficult.
But if you go to RamseySolutions.com slash real estate, that's kind of our real estate home base, if you will. And we have so much information because we know this is a big topic for people.
So this is everything from talking about agents to your first time home buying, or if you're looking to move, what the market's doing, there's articles, podcasts. There's so much there.
So if

you have interest on real estate and more of what Ramsey has to say, you can go to RamseySolutions.com slash real estate and check it out. Check it out there.
Matthew's in Omaha. Hi, Matthew.
Welcome to the Ramsey Show. Hi.
So I'm looking to basically minimize the taxes my parents are paying in retirement on their IRAs that they're taking distributions out of. That's basically my question.
Can't. You can't.
No. Required minimum distributions are taxable.
You can't get out of them. Well, so we're not in required minimum distribution yet.
So my dad's 66 and my mom's 61. Why are they drawing on it?

How are they growing on it? Why are they drawing on it? They need the money?

Um, I mean, they're drawing on it basically for, um, you know, just like they want a deck. So

they want to put a deck on, uh, the back of their house. So they're thinking about drawing on their

retirement fund. They're still making about 140K a year plus around 20,000 in dividends.
So, and they've also got a, they've got five real estate properties with about a, they're making about 60,000 a year. I think they're pulling.
So they have a $200,000 a year income, and they can't figure out a way to buy a deck? Yeah, so they're trying to put about an $80,000 deck on the house, the residential house. Nice deck.
I'm sorry? Nice deck. Oh, yeah.
It will be a very nice deck. It's going to have a covering, and it'll be pretty nice.
But, yeah, so they're looking to do that. But they were thinking about pulling $100,000 out on the house.
How much do they have in retirement? In their portfolio, they have about $2.2 million. Okay.
And then they have about $1 dollars worth of real estate that it makes rent, and then they have about a million dollar residential house. Okay, I think they've got this figured out.
I don't think they need you or me. I think they've got the money, and when you pull money out of a traditional IRA, and you've got $2 million in there, and you pull money out, it's going to be taxable.
There's not a hack on that, man. There's no hack.
It's just taxable, period. That's the problem with the traditional instead of the Roth.
That's why we want to move as many people towards Roth as we can, because when they get up here, if it was in a Roth, it'd be a no-brainer. There'd be no taxes on it.
Is there any time to pull money out of retirement if you're still working, you're at retirement age, you can do it without penalty? Is there ever a time you'd say, yeah, yeah, use your retirement for retirement age you can do it without penalty um is there ever a

time you'd say yeah yeah use your retirement for that they can do it without penalty and they can pull this hundred grand out of there and it's 2.2 million they can afford it yeah but he's wanting to not pay taxes on it you can't do that pay taxes on it there's not a hack for that dude it's just taxable period and there's not a there's not an offset on it if there's an offset you know um you know all right interesting so i i'm probably personally not going to do that if i'm in their situation i'm going to budget for the deck they can afford it it's not going to kill them it's not bankrupting them but they don't want to pay the taxes on this it's an ouchie i hate taxes i don't pay the taxes on this. It's an ouchie.
I hate taxes. I don't pay the taxes on it either.
It's an ouchie. So I'm going to find another way out of $60,000 worth of real estate income and 140 to get the rest of this paid.
It's that simple. That's going to be my plan.
So that puts us our of the Ramsey show in the books. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.
Rachel Cruz, Ramsey personality, is my co-host today, my daughter and number one best-selling author. And the new book, the new children's book, I'm Glad When I Can Share, is out today.
So be sure you check it out at RamseySolutions.com. That's the third of the children's books.
That trilogy makes a great Christmas present. So be sure and check it out.
I am Dave Ramsey, your host.

Don is with us, and Don is in Alaska.

Hi, Don.

How are you?

I'm doing good, sir.

How are you?

Better than I deserve.

What's up?

I have a gold dredging operation that I'm part of, and I can expect to gain just about 24 to 35 ounces of gold this upcoming season and that is the operation is paid solely in the metal that we collect and no cash or payroll is given and i'm kind of curious on what would be the best way of selling that gold or capitalizing on that gold, because with the current gold price, that would be right around from the very worst that we could do on averages speaking. I could get around about $50,000 or so with the current gold price.
So that's your pay for a year? Not for a year. It's a three-month operation.
Oh, okay. So in January to April.
But it's your pay for your job? For the hours go, yeah. It's more of a kind of a partnership than it is a job necessarily.
Okay. All right.
So some guys are going out dredging gold. You're going to get your cut.
Yeah. And it's 50 grand.
Well, you may know more about actually liquidating the raw gold than I would know. But what I would do is liquidate it.
I'm going to turn it into money. Okay.
I'm not holding it as an investment. I'm going to turn it into money and use that money to achieve my particular financial goals,

which around here we would call baby steps.

Yeah, and I already have the $25,000 for emergency funds.

Good.

I was just kind of curious.

Are you debt-free?

I am debt-free right now. You own your house free and clear.
I don't have a house. I currently live in employee housing with my current employer, uh, in Dutch Harbor.
Um, and I would like to get, eventually get to the point where I'd have a, um, a duplex or a triplex or something of that nature.

But current gold prices or, sorry, the property prices where I call home is a little bit more than I'd be able to save up for, in my opinion.

Well, what would a duplex cost?

The current one I'm looking at right now is about $4.99.

Okay.

All right.

So it'll take a few years of saving up to do that.

What else do you do other than this?

I'm a commercial diver.

I dive for gold, and I also work for a company up here.

Yeah.

So what's your income on that annually?

About 60 a year.

Okay.

So your household income, so to speak, you, is 50 and 60. So 110, does that sound right? Just about.
Okay, cool. All right.
And you're a single guy with all your housing paid for. So you can save a ton of this and just start throwing it in good mutual funds and use those mutual funds to pay cash for a, uh, a duplex later.
So the danger of what you, of your situation your situation is that you and your buddies, your employers, are all very familiar with touching and owning and transacting in raw gold, because it's just part of your culture where you are, right? It everywhere it's all around you yeah i mean and so the danger of that psychologically is it causes you to kind of normalize that where it's not normal anywhere else to do that but it is right there in your world uh and if it normalizes it cause you not to look at it through the lens of an investment instead,

it's just kind of part of your life.

And so I'm going to step back and look at it as an investment and say,

I don't want to do this as an investment.

I would rather have my money in good mutual funds and,

um,

let the volatility of the gold world,

not affect a young single diver in Alaska.

I want you to make a bunch of money and end up with a bunch of it instead of rolling the dice. And when you're playing with medals like gold, you're rolling the dice.
You see what I'm saying? Yeah, it's definitely a gamble. That's what I mean.
In the different ways that you can do it. I mean, we're only, since it's 90% pure, it's not that kind of stuff you go buy at Costco necessarily.
It's 90% gold, 70% silver. So it's a little bit different than what you go and liquidate at a jeweler or go and.
Yeah, so how do you sell the raw gold? I don't know how to do that. How do you do it? So there's a few different ways.
The first way that a lot of people do, there's a company up here called GCR. I think I got that right.
They'll take a small cut of it, and they'll refine it. They'll give you a 50% check right off the bat, and then a couple weeks later after everything is said and done, they give you a check of it, but that check is about 10% less than the actual value of it.
So that digs in a little bit to it. Uh, the other way

that I've been doing it, um, I will either go to a, uh, somebody who wants to sell like a truck or something and I'll buy the truck with the metal. Um, I did that and that was pretty fun going off.
Uh, got my, uh, vehicle. Um, and the last way is, uh, some people, especially those folks that do the Bering Sea Gold

show, they will

do what's called pay dirt bags. They take a little bit of gold.
They take a handful of dirt and put it in a bag and sell it to people that think they want to be all cool and fun and be a prospector for a day. And that's one way I was kind of wondering if it would be smart to do that kind of thing.
That's a business move. You're starting another business now.
I'm not doing that. I'm just looking for a way.
The first way sounds the most logical to me is you're giving up a cut to turn it into money. It's that simple.
And, um, the only question I would have, is there someone, uh, down in the lower 48 that you can jump on a plane that does the same thing that company does but gives you a better cut? Like, are they up – because they're up there, are they leaning into this? In certain cases, yes. There's – I mean, New York's kind of one of the big places, but that's quite a large plane ticket to get over there, and that would be cutting into the amount that you get back.
But roughly the GCR is kind of the one that you want to go with. Really, it's anywhere, depending on the purity, it's anywhere from 5% to 10%.
Yeah, your option is you've got a pile of rocks in the corner or you go GCR and give up 10% and turn it into cash. And so I'm going to turn it into cash.
I'm going to turn it into cash. I like that.
And I'm not getting getting in the dirtbag business that's a different thing that now it's a tourist thing and you have a new business and it's a business move we're starting a small business in order to liquidate this stuff and so that's probably not the way i'm going either how interesting i know well i was gonna say because first time i've gotten that call in 32 years he actually finds the gold. Yeah.
It's pretty cool, Don. The cold water deep diver in Alaska dredging gold call.
Now, Mike Rowe actually knows those guys. And so he's up there all the time.
He's been out on those boats. Yeah.
Yeah, that's a different thing. Interesting.
Fun way to make some good money, too. 50.
Yeah. Pretty cool.
Honored to have you in our audience. Very neat what you're doing, Donna.
Very adventurous. This is the Ramsey Show.
All right, Dave, you have some strong opinions. Possibly, yeah.
I think so. Okay, because you really prefer credit unions over big banks.
So why is that? Well, credit unions, for one thing, are non-profit, which means that the members, the customers, own the credit union. So any profits that the credit union makes goes back into customer pricing.
So you get better interest rate on savings, cheaper checking, and so on, that kind of thing. And, but that's, what's more important than that though, is the fact that the customer pricing.
So you get better interest rate on savings, cheaper checking, and so on, that kind of thing. But what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union.
So I find very few credit unions that aren't very customer-centric. Yes.
Well, and I think we have found one that is incredible, and that's Fairwinds. They are an incredible credit union that is really out with the heart to help the customer.
You know, that's why we're partnering with them because they've got a scope to be able to handle the Ramsey audience and they're the right kind of people with the right kind of values. And they've done a really, really good job with customer service and the deals that they're offering.
The Ramsey tribe is incredible. Yeah, absolutely.
And you're right. Their customer service is unbelievable.
Winston and I just signed up and we got an account. And I'm not kidding.
It took less than five minutes. It was so user-friendly.
The step-by-step approach was unbelievable. And then the next day, my phone rings and it says fair wins on my phone.
So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience.
And I so, so appreciate that. So again, you guys, I know it can be a pain to switch banks or to open up new accounts, but Fairwinds, again, they make it so easy.
Plus anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app, and you'll have free access to over 33,000 ATMs. Hey, you guys know how much I hate banks in general, and so for me to do this is a big deal.
Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey tribe. You guys, it's incredible.
Yeah, you guys, it's so easy to join Fairwinds no matter where you live. So go to fairwinds.org slash Ramsey to learn more.
That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. Hey guys, good news.
Pre-sale is on now for my new book, Build a Business You Love. If you're a business owner, you know running a business is hard.
That's why I wrote this book, to share what we learned over the last 30 years so business owners can grow your business faster with fewer mistakes. Pre-order your copy today, and you'll get access to over $350 in bonus items only at RamseySolutions.com slash store.
RamseySolutions.com slash store. Pre-order today.
Rachel Cruz, Ramsey Personality, is my co-host today. The Ramsey Show question of the day is brought to you by Why Refi.
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Today's question comes from Jamie in Minnesota. She said, my husband and I are 51 and 53.
We're debt free and have three cars that are fully paid for with a household income of $150,000. We are debating whether or not we should sell one of our cars worth $50,000 and apply that to our mortgage.
We owe about $90,000 on our mortgage and will be paid off in one year if we sell the car versus three years if we do not sell the car. My husband thinks you should not pay off your house early because we can't deduct the mortgage interest on the tax returns and he's afraid we'll owe the IRS.
Last year, we paid $3,097.66 in mortgage interest. Can you provide some feedback on that and what your recommendations are? Okay.
Well, the mortgage or the tax deduction in general, including mortgage interest, is the biggest piece of mythology in all of personal finance because it requires that people forget how to do sixth grade math. Let me walk you through it.
If, Jamie, if you actually itemize, then you can claim your charitable deductions and your mortgage interest rates. By the way, last year, because the standard deductions are so high, almost no one itemized, including you.
You probably didn't even itemize. So your husband is completely unaware of how this whole thing works because you didn't take a deduction for your mortgage interest unless you itemized.
9% of Americans itemize. 91% do not.
If you do not itemize, you do not get a tax deduction for your charitable or for your interest. So 91% of the people this doesn't even come up with.
Right. So that's just dumb.
Not you, Jamie, but when people are saying, well, I don't want to lose my money, you're not taking it anyway. You just don't even know how your taxes work.
You're that, gee, plug into it. All right? Now, if you did itemize, then itemize, then you sent the mortgage company, $3,000, $3,097, 3,100 bucks.
And that reduced your income, your $150,000 income by $3,000. A tax deduction is not a tax credit.
It lowers the amount of income that is taxed.

So the tax savings is not $3,100.

The tax savings is $3,100 times your tax rate, which is 32% in your case.

Okay?

And so you saved $1,000 in taxes if you itemized.

Shots And so you saved $1,000 in taxes if you itemized. So here's how this works.
Your husband is suggesting, absurdly, that you send the government $3,100, or you send the mortgage company $3,100 to keep from sending the government $1,000. You're trading dollars for quarters.
Dumb trade. So always pay off your mortgage.
Never keep it for the tax deduction. If you send somebody $10,000 to keep from sending the government $3,000, by definition, that's mathematically stupid.
And then I call myself sophisticated because I didn't pay off my mortgage because I had the tax deduction. But I don't even take the tax deduction because I'm not even one of the people that itemized, and I just didn't even know that.
That's most people with this opinion around the Thanksgiving table. They're just absolutely do not know how to do math and they don't know the reality of the situation.
Now, worse than that, worse than your broke brother-in-law telling you this at Thanksgiving, you're silly. Dave Ramsey doesn't, but worse than him, the one that pisses me off to no end are people that do taxes for a living and they tell the small business person or they tell you to not pay off your mortgage because you'll lose the tax deduction or to run your expenses up on things you don't need to buy you need to spend some money by the end of the year.
Otherwise, you're going to get taxes. Well, that is asinine.
It's ridiculous. You own a hair care place and you spend $10,000 you don't need to spend because your tax preparer is a moron who told you to do that? That's dumb.
Let me help you. You got two words for these people that give you that advice you're fired the tax write-off it's like the schitt's creek uh episode where he's like well just it's a write-off and he's like yeah but who's writing it off he's like i don't know the write-off people it just gets written off it's like this like mystical idea of the tax write-off like it is like it yeah, always.
It's like, well, I don't know. It's a tax write-off.
It's a write-off. Well, who's going to pay for it? I don't know.
The write-off people. That's great.
I haven't seen that episode. So, listen, if your tax person is telling you to run up your expenses or to not pay off debt because you're getting a tax deduction, they're telling you to trade dollars for quarters.
You don't need someone that can't add doing your taxes. You need new tax people.
Go to RamseySolutions.com and get with one of our tax people. They do not make this mistake, believe me.
They would not have a Ramsey trusted sign on their door if they made this mistake because they wouldn't be trusted by me because they don't trust people that can't do math. So there you go.
That's what we're doing here. So, guys, whatever whatever you do don't fall for the tax deduction myth and the irony of ironies is all of these people discussing it 91 percent don't itemize in america today that's everybody y'all i mean so because you because for majority of people you get a better deal if you just take the standard deduction anyways.

That's what I mean.

That's why you don't.

They don't need to.

You don't need to.

Yeah, it's not like you're stupid.

Actually, under the Trump tax code in his last administration, he ran the standard deduction way up.

Yeah.

You get an automatic deduction just because you breathe.

Yeah.

And your real deductions don't add up to that, so you're better off to take the big one.

Right, right, exactly. The breathing deduction.
Yes. From the write-off people that's right but they're there that's the standard deduction has changed the game and it's made the tax filings very easy and that's probably up to more in the last what 10 years way up in the last what 10 years 15 years ago if i was talking about this it would have been 70 because this was a main point back in the day at our live events back in 20 oh you know 2004 yep this was a big discussion and now it's not you don't hear it as much anymore because the standard deduction was raised and the number of people therefore that don't itemize is so few yes so it's it's it was absurd back then because you're trading dollars for quarters and we still cover it in the live events in those old arena events that's right that's right and it was absurd back then it's just as absurd now for the same reason but it's doubly absurd because it really doesn't apply to hardly anybody anymore yeah and i'll bet you money jamie doesn't itemize yeah 91 percent yeah and so it doesn't even come up so her husband's arguing a theory that he's not even doing.
And then if he was doing it, he's trading dollars for quarters. Yes.
So don't trade dollars for quarters. Pay off your mortgage.
And the other argument for not paying off the mortgage is I can make more in the market versus what I'm paying in interest. Yeah.
Said no millionaires ever. Right.
The millionaires that we, the 10,000 millionaires that we studied, none of them, precisely zero said I became a millionaire by not paying off my house and investing the difference into the market. None of them say that it's always broke people that say this stuff, the broke people that don't want to lean in and do the smart long-term financial plays like getting your home paid off.
Yep. So yeah, it's, it's, It's asinine, you guys.
The data just does not back it up. The math does not back it up.
Pay off your house, people. When you get to Baby Step 6, finish the Baby Steps and pay it off.
And don't deal with tax people that can't add. Please, God.
This is The Ramsey Show. I hate to admit this, but I don't always eat right.
I know. I need to eat more fruits and veggies, but sometimes I just have to pound some chips because they taste so good.
That's why I love my field of greens. It helps me eat healthy when I don't have much time.
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And Only Field of Greens makes this promise. Your doctor will notice your improved health or your money back.
So go to fieldofgreens.com slash Ramsey for 20% off your first order. That's fieldofgreens.com slash Ramsey to save 20% on your first order.
If you're a small business owner and you feel burned out, then you've got to join us at Entree Leadership Summit this May, 18 through 21. This leadership conference will refuel you with fresh vision and connect you to like-minded leaders so you can take your business to the next level.
But you better hurry because we're running out of seats. We've got less than 200 seats left.
If you want to join us in Denver, Colorado, go to RamseySolutions.com slash summit right now. Or if you're listening on YouTube or podcast, just click the link in the description.
Rachel Cruz, number one, bestselling author Ramsey personality. My daughter is my co-host today.
Feel free to drop by and visit us in the Ramsey headquarters. We do this show from one to four central time every Monday through Friday and it's free to drop in and watch the show.
We do the show on the glass in the lobby and there's always 50 to 200 folks out here watching the show. There's free chocolate chip homemade cookies.
Smells like mama's kitchen when you walk in here and free coffee. So come hang out with us.
Watch the show. Whoever's taping it and doing it that day.
It's not taping, it's live, but we're here doing it. And in the lobby of Ramsey Solutions, when we built this building, we put up the debt-free stage right across from our glass here.
And one of our favorite things is to do a debt-free scream on the debt-free stage. The only thing that is more exciting for us than to do a debt-free scream on the debt-free stage is to do it with a Ramsey Solutions team member.
And Brianna Moore is with us. She's one of our team members.
Welcome, Brianna. Hi.
Way to go. Congratulations.
Thank you. I can't believe I'm here.
Tell folks what you do here at Ramsey and how long you've been with us. I've been here for four years, and I do SEO and content marketing for our amazing real estate department.
Shout out to real estate. So our Ramsey trusted real estate agents all across the nation benefit from your hard work.
Yes. And you're doing the content on the website and other things to cause content marketer to cause all that to happen.
Yes, sir. Okay.
Very cool. Good for you.
Four years you've been on the team. All right.
Now we do not, this is the one time we don't ask the folks income because, um, you know, 30 or 40 of the people standing around and 50 of the people standing around work with her and that would be a wee bit awkward. So we're not going to do that, but we will ask you this.
How much did you pay off? $204,000. Good Lord.
Oh my gosh. And how long did it take? Six years.
Six years. Wow.
And what kind of debt was this? Student loans, $164,000. That was the principal.
And then $40,000 of that was interest. So it was all student loans.
Yes. Student loans.
What did you get your degree in? Digital media management. So business for your business degree.
Yes. At a private school in Austin.
So there you go. Yeah.
And you paid for it. Wow.
Oh my gosh. How great though.
Okay. How long have you been out of school? Six years.
Okay. So you started immediately.
Yes. And it took you six years to clean it up yep you leaned in four of those years you've been here yes so does it make it more awkward to work at ramsey while you're working your debt snowball or easier because i would think all the peer pressure is positive yeah it was definitely easier and more fun and i felt less shame telling people how much i was paying off um so that was really fun to be like yeah it's your co-workers are like cheering you on right I mean your team members right they're like yes yes yes yes yes yes okay that I hope so yeah if not tell me who they are yeah I love it very cool so incredible okay so what happened six years ago so you graduate college yeah so I think it was towards the end of college I was realizing what I had gotten myself into.
I don't think before I went to college, I really understood what, you know, is a loan and that you have to pay that back. Yeah.
And so towards the end of college, I knew, okay, it's kind of a non-negotiable. I can't live with this debt for the rest of my life.
So I knew I was going to have to take FPU. So I did that as soon as I graduated.
And I knew how did you know to do that um my parents informed me of you and your program yeah um they're everyday millionaires and um teach fpu so they um were able to kind of learn with me at first and become those everyday millionaires and everything too and then we kind of like did it together and they're here with you today right yeah yeah so fun so way to go mom and dad you got to be proud very good so that's some of your other cheerleaders other than your teammates yes yeah um but yeah so after graduation took fpu started paying it off and i would actually like cry myself to work um because i hated my job and i was doing it basically because i knew that i had to have an income and do something and I was living rent free at home. And I would listen.
I'm sorry. I knew I was going to cry.
No, you're great. You're doing great.
Okay. Where were you living? In Houston with my parents.
Okay. All right.
Sorry. That's okay.
No, you're good. You're good.
It's been a long journey of doing this. Six years is a doing this six years is a long time you've been fighting this by yourself warrior princess way to go proud of you anyway so i would listen to the ramsay show on my way to work and um cry and listen to the death-free screams and envision myself doing this one day so it's really cool and i didn't know i was going to work here how did point how did you end up coming to work here um y'all found me on LinkedIn and asked me to apply and I did and then y'all gave me the job great recruiting team wow shout out to Aisha yeah that's right we tracked her down and snagged her out of a miserable job pretty much yeah and yeah so then the rest of the four years has been here and it it's been an amazing journey.
Wow. Oh, my gosh.
Okay, so you moved to Nashville. Yes.
And it's a fun— Now, wait a minute. You get the call from us, and you're working this plan because of us, and your mom and dad are FPU graduates, and you've been through FPU, and we call up out of the blue and say, Do you want to join us? Yeah.
I mean, that had to be weird. it was very much a god thing yeah jesus yes don't call jesus weird okay all right yeah oh my gosh okay so i want to know from the moment you so you moved to nashville and nashville's a fun city right i mean there's things happening stuff is you know people are going out i mean it's it's an enjoyable town so what what was the pressure like or what was the feeling the sacrifice like the hard of saying no you know to a life like what were the things that you said no to that were really difficult um shopping yeah girl I'm like I like to look cute and I couldn't for a long time um so shopping definitely um for six years though I did have to budget like some fun in there because

I was just going to go insane if I didn't so I was able to do some very small like weekend trips

with friends and keep it and control it totally um and I just really the sacrifices were not having

any time to myself I was working up to seven jobs at one point oh my gosh what were you doing

so working full-time I have a photography business on the side and then I was doing anywhere from like

The next step is the first step. I was working up to seven jobs at one point.
Oh my gosh. What were you doing? So working full time.
I have a photography business on the side. And then I was doing anywhere from like three to six to seven additional freelance jobs where I had SEO clients on monthly retainer.
And so I was doing that for several years. And it was exhausting and miserable.
And I was just working nonstop. I would work here.
I have memories of memories of working here getting off at four going downstairs and sitting in the cafe and working for an hour on side jobs going to work out and then going home and working until i went to sleep and i would do that for just like five days in a row just straight all the way grinding it out i mean you're making some good money on the side yeah i was making um on a low year 15 000 all like $30,000 a year inside jobs. Amazing.
Which is what helps put a dent in $200,000 of debt. I mean, yeah, that's what had to be done.
Yeah, the budget was obviously helpful, but I'm already kind of naturally a frugal person. So for me, having that much and being a single income, I just had to get more money.
Yeah, I had to do anything to make more money. How does it feel to be free? Feels good feels good I kind of didn't I haven't really felt what it feels like to be free Murphy hit me two weeks after I um paid off my debt and I got in a car accident somebody hit me and totaled my car so I haven't really felt that free because I've been financially dealing with that too so I'm like hopefully after today I'll feel really that free well it's official you are yes by the way yeah congratulations so proud of you.
So your mom and dad your teammates cheered you on anybody else was your cheerleader? Yeah my parents my brother my sister-in-law and then all my friends Annalise and Alyssa specifically and then all of my awesome teammates and co-workers. Yeah very cool.
Well done. Congratulations.
Thank you. All right other than getting a job at Ramsey and having us track you down what is the key to getting out of debt for all those FPU graduates out there listening for me it was making extra income definitely and just not there's no other option but to do it and get out of debt and And no matter how much you have, you can do it.
I did it as a single person and I made it happen. How old are you? 29.
That was the other thing I was going to say. I paid it off three days before my birthday.
That was my goal. That's great.
So I had a little over $30,000 at the beginning of this year. And I said, okay, I want to do this before I turn 29.
Happy birthday. Well done.
I love it. I love it.
I love it I love it well we're proud of you I know your mom and dad and all your friends are way to go all right it's Brianna she paid off 204,006 years four of those years working on this team count it down let's hear a debt-free scream! Three, two, one. I'm debt-free!

Yeah!

So good.

Man, she leaned in.

She's amazing.

That was strong.

So good.

This is The Ramsey Show.

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That's RamseySolutions.com slash Smart Tax. Rachel Cruz, Ramsey Personality, is my co-host today.
We tell you around here, if you'll pay a price to win, you get to win. We say live like no one else so later you can live and give like no one else.
And when you're in baby steps one and two and even three where you're finishing the emergency fund and you're paying off all your debt but your house, you should not go on vacation. You should not go out to eat.
You should lean in and knock your debt out as fast as you can. But when you get to baby step four, you go from intense to intentional.
And that's when you get to buy that new couch or upgrade your car or go on vacation. That's why we named the cruise, the Ramsey cruise, the live like no one else cruise because it's for Baby Step 4 and beyond.
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It is a high standard. Listen, I don't go on these cheap cruises, okay? I like the niceamas.
Holland America is one of their newest ships. It is a high standard.
I don't listen I don't go on these cheap cruises okay. I like the nice ones.
Dave is bougie with his travel. I don't know about my bougie but I'm not staying in the freaking Holiday Inn anymore.
I've worked too hard so and I'm not staying in the Holiday Inn on the seas either so this is a nice ship. It's going to be a lot of fun.
Sharon and I will be on the ship the entire time. lot of fun Sharon and I will be on the ship the entire time all of the Ramsey personalities will be on the ship the entire time the comedian Trey Kennedy that makes fun of me will be on the ship that's fun uh world-class chef from the food channel Manit Chauhan will be on the ship uh Dove award winner Grammy award winner Stephen Curtis Chapman and Dina Carter both will be on the ship and Dove Award winner, Grammy Award winner, Stephen Curtis Chapman, and Dina Carter, both will be on the ship.
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Ramseysolutions.com slash cruise.

If you don't get this done, you're going to have FOMO or whatever that version is for Cruise Mo.

So there you go.

Don't miss out on this.

Open phones at 888-825-5225.

John's in Pittsburgh.

Hey, John, what's up?

Hi, Mr. Ramsey.

Thanks so much for talking to me.

Sure.

I'm sorry. 525-5225.
John's in Pittsburgh. Hey, John, what's up? Mr.
Ramsey, thanks so much for talking to me. So in a nutshell, our issue is that our home is more expensive than we probably should have gotten.
We are living paycheck to paycheck, and quite often the paycheck doesn't even cover for two weeks. So we are bleeding from our minimal savings and paying for the things with our credit card and only paying the minimum.
How much is your house payment? It is $2,090 a month. And what's your take-home pay? Take-home pay is about $65 to $70.
$55 to $70? No, that's not take-home. That's total.
Your take-home pay in a month. Sorry, take-home pay in a month is $4,200.
Oh, yeah. You have to sell the house, John.
That's what we were thinking about doing. You don't have a choice expense yeah your house spends 50 of your take-home pay hon you can't do that that's why you're dying i mean you had a you had a feeling of that but the arithmetic is screaming that you're starving to death so i guess my biggest concern with that is if we're not able to,

like if we don't have enough equity in the home to cover clothing costs.

John, you can't stay in the house.

You can't stay in the house.

How does that look?

Like where does that money come from, I guess? Well, right now you're putting it on credit cards.

Yeah, that's true.

Yeah.

So I'd rather have $5,000 on a credit card than a mortgage you can't afford. What's the math of the mortgage right now, John? What do you guys owe? We owe $287,000.
Okay, how much is it worth? Or what can you sell for? We actually just got it back down to what it was worth, and we got it was $287,500, but some of the closing costs were rolled into the mortgage. When did you buy it? It was $293.
It was in November of 22. Okay.
Go online at RamseySolutions.com and get one of our Ramsey-trusted real estate agents that are high performers that actually know what the flip they're doing.

Have them come out and look at this and give you a market analysis and tell you what you can do.

But you've got to find a way out of this thing.

It's not sustainable.

That's what you already knew.

You just needed someone else to say it out loud.

I think you might be right.

It's not even close.

You're not like on the bubble or anything. you're over in the deep end of the pool there's no there's no debating yeah now the only the only thing that could happen is are do you have anything in the near future in the next six months with your daytime career your normal career that looks like you're going to have a huge increase in pay second job would be the no no no no i wasn't talking about second job is not sustainable i don't want to sign up for something where i do a second job for 15 years i'll do a second job for a short period of time to get out of a mess clean up a mess right but you don't want to do that your house poor this house you.
You don't own it. I'm so sorry.
And it's going to be a little embarrassing, but you guys, you got married, and everybody yelled at you and said, young couple, go buy a house, go buy a house, go buy a house, go buy a house, and then we went and found a house we liked, and the idiots at the mortgage company just signed your butt up, and they put you in a crack, didn't they? Feels that way. Yeah.
Yeah. Do you guys have kids, John? Well, that's one of the other things that's costing is we kind of have one that we weren't exactly expecting, very thankful for.
Sure. But we were not expecting.
Is your wife expecting, or do you guys already have the baby? have the baby oh no she's she's been around for a little while okay good how long you guys been married uh since 2015 it's almost 10 years yeah okay so you're like 30 years old 35 yeah yeah yeah okay well let me tell you a couple things all right when i was I went broke and lost everything. And I was in a much more severe situation than you're in, but it taught me some things about situations with stress in this.
The number one cause of divorce in North America today is money fights and money problems and money stress. And you got that.
So your wife is afraid and she may not want to leave this house and you got that. So your wife is afraid, and she may not want to leave this house, and you're confused and feel like you did something really dumb, and maybe you took a hit in your confidence in that.
That would be normal, those things. If y'all are having money fights, and she's very afraid, and you're not as confident as you were before all of this mess, you would be normal.
That would be a normal reaction to your situation, okay? What I want you to do is get away from all that. The destabilization of your marriage, your lack of confidence, her being terrified.
This house is not worth it. It's just a stupid house.

There's a house on every corner in Pittsburgh.

I've been there.

They're everywhere.

And you'll get you another house that doesn't get you.

You'll never do this again.

You'll never make this mistake.

You've got the rest of your life to make other mistakes, but you'll never make this

one again, right?

Yeah.

It's no fun, is it?

It's not. Yeah.
is what i was saying true um everything except for my wife she's totally on board with getting rid of this place okay she's like i want out yeah well it's not fun for her and and the interesting thing john is you know we we have a phrase called financial peace it's one one of the books that Dave wrote. But that is, it is what we want for people is peace.
We want peace. And just like you said, Dave, like, it's a house.
It's just, it's a house. And it's not worth the stress and the anxiety and any level of status of homeownership or like whatever the play is for you, it's not worth it.
Your peace is is worth so much more than stuff and that's true for cars or anything but it feels magnified because a house it is big i mean it's you know it's a three it's a three hundred thousand dollar you know idea and it's where your family lives there's emotional attachment i mean like all of it but get rid of it and go rent somewhere and just just breathe for two to three years and just save some money and get a down payment and then buy something else based on your income at that time and you don't take out folks more than a house payment more than a fourth of your take-home pay not half your take-home pay and just because the idiots at the mortgage company will give you the loan does not mean it's a good idea. They will ruin you if you let them,

and they'll pinch you if you let them, and they'll make your life miserable if you let them.

They don't care. They don't have a soul.
This is The Ramsey Show. We'll be right back.
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