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

Speaker 1 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people

Speaker 1 build wealth, do work that they love,

Speaker 1 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.

Speaker 1 My daughter is my co-host today. Open phones here at 888-825-5225.

Speaker 1 You call with your 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.

Speaker 1 Rachel, big day today. Another book launch.
The third Rachel Cruz kids book is out. Ding, ding, ding, ding, ding, ding, ding.

Speaker 2 It is. I know.
I'm so excited. So I'm glad when I can share.
So this is the kids' book on generosity.

Speaker 2 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.

Speaker 2 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.

Speaker 1 And they've all been bestsellers. I'm glad for what I have.
I'm glad for where I am.

Speaker 1 That's contentment, right?

Speaker 2 I'm glad for where I am is gratitude.

Speaker 1 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 one.

Speaker 1 So it's 1999 at ramseysolutions.com in the bookstore. And again, Lauren just continued to

Speaker 1 these world-class illustrations make the book.

Speaker 2 Yes, Lauren Gallegos is the illustrator for all of them, and she just, I mean, did a fabulous job. So, yeah, it's a really sweet book, and it's short.
You're welcome, parents.

Speaker 1 Yeah, for those of you that do bedtime stories, they're nine years long. Yes, you know.
This is a short book. I'm just here.

Speaker 2 And

Speaker 2 on each of these books, I always tried to add an element for the adults at the end. So just a sweet reminder, right? When it comes to contentment, there's that.

Speaker 2 And then this one for gratitude, that joy in life really is the gifts that God has given us from our brothers and their sisters and, you know, all of that, to understanding that when we give, it is a joy unlike anything else that money can buy.

Speaker 1 It's the most fun you'll ever have with money. We had Jimmy Darts on yesterday, who's got the big YouTube channel.
Oh, yes. Giving money away.
And we were talking about the power of generosity.

Speaker 1 And we teach you guys, as you know, to live like no one else so that later you can live and give.

Speaker 1 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, the hidden meanings.

Speaker 2 There's some little Easter eggs in there.

Speaker 1 There's a

Speaker 1 few little Waldo.

Speaker 2 Tell me Taylor Swift.

Speaker 1 But I had my own Easter eggs. Where's Waldo? Yeah, so there it is.
Live like no one else on the license plate.

Speaker 1 Probably need to get one of those for one of our cars for real.

Speaker 1 That'd be pretty cool. I never thought of that.
But nobody knows what it means unless they know what it means. Well, it's just letters on that one.
Yeah, totally. It's nuts.

Speaker 1 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 ramseysolutions.com in the store.
And, of course,

Speaker 1 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 for, what, $50, roughly, and

Speaker 1 a little over $50. And you'd have a wonderful little set for the grandbabies or for the babies, whatever it is.
That's good stuff. And speaking as the grandfather who has

Speaker 1 a few grandchildren that might be accused of picking out the longest possible book, some of those Dr. Zeus books go on for days.

Speaker 1 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.

Speaker 1 And so it doesn't work with any of the three of these. These three all get to the point and you go to bed.

Speaker 2 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.

Speaker 1 Good stuff. Lorena is with us in Dallas, Texas.
Hi, Lorena. Welcome to the Ramsey Show.

Speaker 3 Hey, guys. How are y'all?

Speaker 1 Better than we deserve. What's up in your world?

Speaker 3 Good, good.

Speaker 3 I just have a couple of questions. So I'll start off with that.
I feel like I cannot move out of my parents' house

Speaker 3 due to financial struggles that they are having, and I'm also having as well.

Speaker 2 Okay, so what causes you not to be able to move out because of their financial struggles?

Speaker 1 Walk me through that.

Speaker 1 They need your rent.

Speaker 3 Basically, yes, sir. And so

Speaker 3 since I moved back in, I've been trying to get rid of my debt and following the baby steps.

Speaker 1 But you pay them rent?

Speaker 3 No, I do not.

Speaker 1 Oh,

Speaker 1 how would it affect them negatively if you left?

Speaker 3 So they're right now, they're in a rental property,

Speaker 3 and their city is actually planning on demolishing the area that they are in.

Speaker 1 Is this the house you live in?

Speaker 3 Correct.

Speaker 1 How would it affect them negatively if you left?

Speaker 3 Because I don't think they could, you know,

Speaker 3 I don't think they could move into a new house without my house.

Speaker 1 You're not paying them any rent.

Speaker 3 That's true.

Speaker 1 But there's no net loss to them when you leave. It's a net gain.

Speaker 3 Yes, that is true. Because whenever they do have to move eventually, the rent that they're paying will be up more

Speaker 1 than what they're paying right now. And then

Speaker 1 you would start paying rent. Correct.
To help them do that. Okay.

Speaker 3 Correct.

Speaker 1 Bad solution.

Speaker 3 Yeah, so that's why I feel kind of stuck.

Speaker 1 You're not stuck. It's just

Speaker 1 everybody's got to reset their expectations in this.

Speaker 4 Right.

Speaker 1 They're in an unrealistically low rental rate on a house that's being demolished.

Speaker 3 Correct.

Speaker 1 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.

Speaker 3 Yes, sir. So that's why I just feel stuck.
I feel like they're looking at me and

Speaker 1 I have my hands on it. It's them.
They need to move to an area they can afford to live. They're like grown-ups and stuff.

Speaker 3 Right.

Speaker 1 Yeah, maybe they need to be a little bit more. I mean, it's hard, Lorina.

Speaker 2 I mean,

Speaker 2 but in a family dynamic, I mean, I think Dave's calling out the dysfunction in that, that they're leaning on you to help them in their situation.

Speaker 1 Well, or somebody made you feel guilty. I don't know whether you took it on yourself or they did.

Speaker 2 Yeah, so 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.

Speaker 2 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.

Speaker 2 So I, in turn, feel obligated and debted to help them. Is that true?

Speaker 3 Yes, no, that's exactly what happened.

Speaker 3 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.

Speaker 1 Correct. Right.

Speaker 2 Well, and that's a false obligation.

Speaker 1 Yeah, that wasn't the deal.

Speaker 3 Okay.

Speaker 1 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.

Speaker 1 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.

Speaker 1 And so now we've got to move to an area that's, that's not even what we want to do because we can't afford to live here anymore.

Speaker 3 Right, correct.

Speaker 1 Lorena, how old are you?

Speaker 3 I'm 26. Okay.
Yeah.

Speaker 2 Yeah. I just want to give you that permission to have that freedom to build your own life.

Speaker 2 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.

Speaker 2 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

Speaker 2 I would look at it as a gift in that way.

Speaker 1 Yeah,

Speaker 1 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.

Speaker 1 Rachel Cruz Ramsey Personality is my co-host today. Open phones at 888-825-5225.

Speaker 1 Jennifer is with us in Phoenix, Arizona. Hi, Jennifer.
How are you?

Speaker 3 Hi, I'm doing well. Thanks for taking my call.

Speaker 1 Sure. What's up?

Speaker 3 I wanted to see what y'all would do with a pile of money.

Speaker 3 I'm in baby steps 3B and 4.

Speaker 3 But

Speaker 3 then I found myself in storm number one. Surprise I'm pregnant.

Speaker 1 Oh, well, congratulations.

Speaker 3 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.

Speaker 3 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

Speaker 3 It had been sitting in a high yield savings account, but those rates are declining.

Speaker 3 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.

Speaker 1 How much money in your emergency fund and how much money in this fund we're talking about?

Speaker 3 My emergency fund is $50,000. It's 12 months.

Speaker 1 Uh-huh. And

Speaker 1 this money is how much?

Speaker 3 My house fund is currently at $150,000.

Speaker 1 Okay. So you have $200,000.
So this medical procedure, what's the financial dent

Speaker 1 that this might make?

Speaker 3 That's a million-dollar question. Literally, a million-dollar question.
I don't know.

Speaker 1 Well, you have health insurance.

Speaker 3 Yes, I do.

Speaker 4 Okay.

Speaker 3 And I have very good health insurance, but I'm also out of work and currently on unprotected leave because of everything going on.

Speaker 1 So all of that

Speaker 1 is change.

Speaker 3 I make $140 a year.

Speaker 1 What's your husband make?

Speaker 3 I don't have one of those.

Speaker 1 Okay.

Speaker 1 All right.

Speaker 1 And so you're unprotected. You're not making any money.
You don't have an income right now.

Speaker 3 That is not a true statement. I had a bunch of sick time and vacation time.

Speaker 1 Oh, I thought you said unprotected leave. I thought you meant your own family leave act with no pay.
Okay. So

Speaker 1 again,

Speaker 1 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?

Speaker 1 And I kind of think you've got a lot of savings here.

Speaker 3 So I shouldn't tell you about my brokerage fund or my sinking fund.

Speaker 1 You're a savings maniac, girl. I love it.
How much is in the brokerage account and how much is in the sinking fund?

Speaker 3 The brokerage fund is $80,000.

Speaker 3 And the sinking fund is $30,000.

Speaker 1 What's it sinking for?

Speaker 1 A car,

Speaker 3 vacation,

Speaker 1 travel.

Speaker 1 Okay. All right.
So now we have $310,000 to weather this.

Speaker 1 I think you're okay.

Speaker 1 Breathe.

Speaker 1 Right?

Speaker 2 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 till after the baby comes, correct?

Speaker 2 Absolutely. With the health situation.
So

Speaker 2 I'm in no, 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.

Speaker 2 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 decisions.

Speaker 2 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.

Speaker 1 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.

Speaker 1 But you weren't going to put this brokerage account down as the down payment on your house, were you?

Speaker 3 No, that was

Speaker 3 a retirement fund.

Speaker 1 That's not a retirement fund. It's a brokerage account.

Speaker 3 Well, where I worked previously, they didn't offer...

Speaker 1 How much do you have in your 401k Super Saver?

Speaker 1 500. Okay, come on.

Speaker 1 Okay. You need to put

Speaker 1 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.

Speaker 1 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 an amazing saver.

Speaker 1 But

Speaker 1 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

Speaker 1 this storm, though.

Speaker 1 Buy the house. Yeah, buy the house and put all this money towards a stinking house.
You know, seriously.

Speaker 2 After the realization of the medical expenses and and the ongoing account.

Speaker 1 And there's ongoing treatment. Yeah, whatever's left

Speaker 1 out of the brokerage account and out of the 150, but a 12-month emergency fund. No, stop that.

Speaker 1 You know, plus a brokerage account just because I didn't have a retirement before, but I got a half million over here.

Speaker 1 You're fine. You're going to be so rich.
It's unbelievable. You can't keep yourself from saving money.
You're amazing.

Speaker 2 Well, yeah. So, yeah, your challenge, Jennifer, is going to be resting in the peace of what you've created.

Speaker 2 I mean, that's it. So this, so lower the stress, enjoy this pregnancy, breathe, just like Dave was saying, like, you're good.
You are good. Don't make big moves right now.

Speaker 2 Have the baby, but between now and baby, like you're, you are, you are secure and great.

Speaker 1 Yeah. Let's get the medical thing in your rearview mirror and then let's get this savings trim back down to where it should be.

Speaker 1 And that's that's what I would do if I woke up in your shoes. Zach is in Charleston, South Carolina.
Hi, Zach. How are you?

Speaker 4 I'm doing all right. Thank y'all for taking my call.

Speaker 1 Sure. What's up?

Speaker 4 So basically, I was in a car accident not too long ago, and the guy totaled my car.

Speaker 4 And the settlement check

Speaker 4 is about $6,000, and I still have $4,200 or $4,500 left over on the car.

Speaker 4 So I was wondering if I should pay off the car and then basically just wait till I can get another car or get another car and then like slowly chip off the debt.

Speaker 1 You can't. They're not going to give you the check unless you give them the title for the total car.

Speaker 1 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.

Speaker 4 Well,

Speaker 4 I already gave them the title and they gave me, they're sending me the check today.

Speaker 1 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.

Speaker 4 Right, right.

Speaker 1 Yeah.

Speaker 1 And unless you did something that was not a lien on the car title. But either way, let's pretend that

Speaker 1 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.

Speaker 1 Okay. And then you've got like $1,000 left or whatever it is, $1,500 left to go buy a beater car.

Speaker 1 Yeah, okay. And that's what I would do if I woke up at the end of the day.

Speaker 2 Do you have any money saved, Zach? Do you have like an extra thousand somewhere?

Speaker 4 No, I'm very neutral.

Speaker 2 Okay, no, you're great. Yeah, yeah, yeah.

Speaker 2 Yeah, the goal would be to get 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 of i knew you were calling in zach and the lord spoke to my heart but i was i i literally googled five thousand dollar cars in nashville because i'm like because we get this car call a lot and people are like well i can't get a five thousand dollar 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 I would save up another $2,000

Speaker 2 and you can get, what, you can get a $2,500? $1,500. $1,500.
I'm sorry, that's what I meant. $1,500.
But you can get a $3,000 car.

Speaker 1 Yes.

Speaker 2 And

Speaker 1 they're out there.

Speaker 1 They are out there. What was your old car payment?

Speaker 4 My old car payment was like $400.

Speaker 1 Okay, so I would save $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.

Speaker 1 500 bucks 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.

Speaker 1 You buy things with cash and don't have payments. That's the goal.
And that you're new to this stuff.

Speaker 1 That's the bottom line of what we teach, brother. Proud of you.
Thanks for asking the question. This is the Ramsey Show.

Speaker 1 If you want to listen in to everything we do around here, you can do it it on the Ramsey Network app. Download it.
It's completely free,

Speaker 1 including the last hour of this show every day.

Speaker 1 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.

Speaker 1 This one is from Todd.

Speaker 2 Yes. Todd asks, should I consider converting my employer match each year in my 401k to Roth dollars and pay the taxes now.

Speaker 2 I'm 31 years old and wondering if converting the match each year will benefit our financial future in retirement.

Speaker 1 Yes. Yes.
Yes, yes, yes, yes, yes, yes. You ought to do it.
And pay the taxes, of course, out of your pocket when you do that.

Speaker 1 Especially, Todd, if you're out of debt,

Speaker 1 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.

Speaker 1 You can do it anytime you want. You let it build up for four or five years and then do it all at once at that time.
I do mine every year

Speaker 1 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 a company match and the match is required to be in traditional and I roll it to Roth at this time of year every

Speaker 1 year

Speaker 1 and that creates that amount of money to be taxed on but then I'm never taxed on the growth after that,

Speaker 1 nor are my heirs, because inheriting a Roth IRA is not anywhere near the problem that inheriting a taxable traditional IRA is.

Speaker 1 And so it even helps later on with your estate planning

Speaker 1 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.

Speaker 1 So I'll have no required minimum distributions either at 72.5 when other people will. So that's an interesting part of the equation.

Speaker 1 But yeah, it's definitely, especially if it doesn't affect your get out of debt plan.

Speaker 1 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.

Speaker 1 Do you have to do it all at once? You can do it every year at one time.

Speaker 1 The match for that year, you can do it anyway.

Speaker 2 No, I know, but if you had a full one and you were converting a lump sum, could you divide the lump sum into half and just convert half of it to half of it? Like take it at time.

Speaker 1 So if you had $100,000 in traditional and you you wanted to roll it, but you didn't want all the taxes in one year,

Speaker 1 you could do $50,000 and then next year do $50,000 if you wanted to. That kind of thing.

Speaker 1 And so you could 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.

Speaker 1 So if you fixed it at 36, it was 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?

Speaker 4 Hey, Dave, I'm good.

Speaker 1 How are you? Better than I deserve. What's up?

Speaker 4 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.

Speaker 4 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.

Speaker 4 And so right now, I'm debating going back and getting a master's degree degree because I think it would make me more qualified, more likely to land one of these high-paying jobs again.

Speaker 4 However, I think that I would need to either cash out a brokerage account that I've been saving for a house eventually

Speaker 4 or take on debt to pay for this. Now, I have no debt otherwise, not even a credit card.

Speaker 4 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, or taking out debt to get another degree.

Speaker 1 Are you married?

Speaker 4 No, I'm not.

Speaker 1 Okay. What have you been living on while you've been laid off for six months or three months?

Speaker 4 So I have an emergency fund, fully funded six months, but also I've been collecting unemployment.

Speaker 1 Okay, and you're living on the unemployment. Yes.
Because you're not touched the emergency fund. I can tell by talking to you.

Speaker 4 Yeah, no. Yeah.

Speaker 1 Okay. How much longer does that run?

Speaker 4 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.
No.

Speaker 2 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?

Speaker 2 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?

Speaker 4 So

Speaker 4 previously, my title was senior research associate. And I got that with a year and a half experience and a bachelor's degree.

Speaker 4 Now, I'm seeing for the same titles, largely the 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.

Speaker 4 So I'm concerned that because a lot of biotechs went bankrupt this year, the market's been flooded with high-quality quality applicants.

Speaker 2 Gotcha.

Speaker 1 So

Speaker 1 what was your day job? What did it look like? What did you do as a

Speaker 4 researcher?

Speaker 4 So it was operating automated liquid handling systems, you know, like pipetting,

Speaker 4 working in a lab, lab coat, goggles, gloves, the whole deal.

Speaker 4 And so specifically, it's next generation sequencing. So it's all sort of furthering research objectives of these large pharmaceutical companies

Speaker 1 Got that Dave?

Speaker 1 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.

Speaker 1 Because

Speaker 1 the other thing is that we're starting to see some early signs of the economy getting a jumpstart.

Speaker 1 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.

Speaker 1 What I don't know is the world that you're in and what the lab coat goggles and the Bunsen Bernard, how that applies to other industries other than the specific one you were in.

Speaker 1 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 are now out of business.

Speaker 1 A master's degree doesn't necessarily get you in the door on the remaining 70% because the jog market shrunk so dadgum much.

Speaker 1 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.

Speaker 1 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 sheepskin, got a master's degree.

Speaker 4 Yeah, so now I'm at three years' experience.

Speaker 1 That's what I'm doing.

Speaker 1 The 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.

Speaker 1 Like for three freaking years. I think your experience is superior to their master's degree is what I'm saying.

Speaker 1 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.

Speaker 1 But within that nuanced world, the number of people walking around with a master's degree and three years' experience is fairly low.

Speaker 1 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,

Speaker 1 yeah,

Speaker 1 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.

Speaker 1 Maybe I want to apply these skill sets in some other areas of

Speaker 1 research in the lab, but not necessarily this nuanced area.

Speaker 1 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.

Speaker 1 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.

Speaker 1 I understand it's petroleum would be different than gene sequencing. I get that.

Speaker 1 But I still,

Speaker 1 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,

Speaker 1 I think you've got some broadening, number one. Number two, I'm going to send you Ken Coleman's book, The Proximity Principle.

Speaker 1 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.

Speaker 1 This is the Ramsey Show.

Speaker 1 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.

Speaker 1 The new children's book came out today. That means a set of three is now available.
I'm glad

Speaker 1 I can share.

Speaker 1 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.

Speaker 1 They're all available at ramseysolutions.com starting today. Great Christmas presents.
Elisa is with us, and uh, or Alyssa rather, in Jacksonville, Florida. Hi, Alyssa.
How are you?

Speaker 3 Hi, Dave. Hi, Rachel.
How are you guys?

Speaker 1 Great. How can we help?

Speaker 3 So, I was wondering how much a mortgage rate should should decrease before it's worth refinancing.

Speaker 1 Well, that's a the weird question is how long are you going to 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.

Speaker 1 Okay. What is your current loan balance?

Speaker 3 256.

Speaker 1 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?

Speaker 3 Yes.

Speaker 1 Okay, so if your closing cost,

Speaker 1 if you're saving, if your closing cost is $10,000 to refinance, I'll just make up a number, okay?

Speaker 1 Then how quick do you get your closing costs back with

Speaker 1 the savings that you have from a lower interest rate?

Speaker 1 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.

Speaker 1 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

Speaker 1 the closing costs. And that gives you the break-even point.
And that should be less than three years.

Speaker 1 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 one and a half to a 2% savings for it to make sense.

Speaker 1 The average mortgage rate.

Speaker 3 The pay mortgage rate right now is adjustable after 10 years.

Speaker 1 When does the 10 years come up?

Speaker 3 Not till 2033.

Speaker 1 Okay, so you got a little time to ride the market. And again, when the market is, what's your current interest rate?

Speaker 3 6.5%.

Speaker 1 Okay. And so, you know, you're not going to to get a 2% savings right now.

Speaker 1 No, definitely not. And you're probably not even going to get a 1% savings today.
You might, depending on how you structure the loan, whatever. But that doesn't count points.

Speaker 1 We're not paying points to create a false thing. But the bottom line is the interest, the refinance saves you money on interest.

Speaker 1 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.

Speaker 1 And that's how you run the actual calculation on it. And

Speaker 1 you'll have that happen long before your adjustable rate kicks in in 2033.

Speaker 2 I was going to say, in that many years, who knows what the interest rates are going to look like.

Speaker 1 Who knows?

Speaker 1 But the average mortgage folks out there

Speaker 1 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,

Speaker 1 either due to refinance or sale of of the property. And so

Speaker 1 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.

Speaker 1 And so you certainly don't want something where the break-even on your refinance is 10 years

Speaker 1 in a world where the average mortgage is 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?

Speaker 1 Am I going to have it paid off before I break even? That's another thing you would have to look at.

Speaker 1 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.

Speaker 1 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.

Speaker 1 That, you know, rates have softened a little bit. They're not up.

Speaker 1 They're not way up. They're not way down.
But 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.

Speaker 1 They're just frozen. Right.
During the headlights.

Speaker 2 And it's just fascinating the way real estate shakes out because we were even talking on one of my shoots, the Ritual Cruise Show shoot yesterday, that

Speaker 2 in 2021, 2022, people were afraid it was a bubble and everything was going to pop and

Speaker 2 because of how quickly prices rose and increased. And now they've just stayed there, which has made the market tough, right? To get in.

Speaker 2 What what you had to have in 2017 looks so much different than what you have to have today. So it is difficult.

Speaker 2 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.

Speaker 2 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.

Speaker 2 So if you have interest on real estate and more or what Ramsey has to say, you can go to ramseysolutions.com slash real estate and check it out. Check it out there.

Speaker 1 Matthew's in Omaha. Hi, Matthew.
Welcome to the Ramsey Show.

Speaker 4 Hi.

Speaker 4 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.

Speaker 4 That's basically my question.

Speaker 1 Can't.

Speaker 1 You can't. No, required minimum distributions are taxable.
You can't get out of them.

Speaker 4 Well, so we're not in required minimum distribution yet so my dad's 66 and my mom's 61.

Speaker 1 why are they drawing on it

Speaker 1 how are they growing on it why are they drawing on it they need the money

Speaker 4 um i mean they're drawing on it basically for um

Speaker 4 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 fine they're still making about 140k a year plus around twenty thousand dividends um

Speaker 4 So

Speaker 4 and they've also got a

Speaker 4 they've got five real estate properties with about a they're making about $60,000 a year, I think they're polling.

Speaker 1 So they have a $200,000 a year income. They can't figure out where to buy a deck?

Speaker 4 Yeah, so they're trying to put about an $80,000 deck on

Speaker 4 the house, the residential house.

Speaker 1 Nice deck.

Speaker 4 And

Speaker 1 I'm sorry. Nice deck.

Speaker 3 Oh, yeah.

Speaker 4 It will be a very nice deck. It's going to have a covering, and it'll be pretty nice.

Speaker 4 But yeah, so

Speaker 4 they're looking to do that. But it's kind of, they were thinking about pulling

Speaker 4 $100,000 out on the house.

Speaker 1 How much do they have in retirement?

Speaker 4 In their portfolio, they have about $2.2 million.

Speaker 1 Okay.

Speaker 4 And then they have about $1 million worth of real estate that it makes rent. And then they have about $1 million dollar residential house.

Speaker 1 Okay, I think they've got this figured out. I don't think they need you or me.

Speaker 1 I think they've got the money and when you pull money out of a traditional IRA and you got $2 million in there and you pull money out, it's going to be taxable. There's not a hack on that, man.

Speaker 1 There's no hack. It's just taxable, period.
That's the problem with the traditional instead of the Roth.

Speaker 1 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 taxable.

Speaker 2 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?

Speaker 2 Is there ever a time you'd say, yeah, yeah, use your retirement for that?

Speaker 1 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.

Speaker 1 You don't pay taxes on it. There's not a hack for that, dude.
It's just taxable, period. And there's not an offset on it.
If there's an offset, you know,

Speaker 1 all right.

Speaker 1 Interesting.

Speaker 1 So 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.

Speaker 1 But they don't want to pay the taxes on this. It's an ouchie.
I hate taxes. I don't want to pay the taxes on it either.
It's an ouchie.

Speaker 1 So I'm going to find another way out of $60,000 worth of real estate income and $140,000 to get the rest of this paid. It's that simple.
That's going to be my plan. So

Speaker 1 that puts us hour of the Ramsey Show in the books.

Speaker 1 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.

Speaker 1 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.

Speaker 1 So be sure you check it out at ramseysolutions.com. That's the third of the children's books.
That three that trilogy makes a great Christmas present. So be sure and check it out.

Speaker 1 I am Dave Ramsey, your host. Don is with us, and Don is in Alaska.
Hi, Don. How are you?

Speaker 4 I'm doing good, sir. How are you?

Speaker 1 Better than I deserve. What's up?

Speaker 4 I have a gold dredging operation that I'm part of,

Speaker 4 and I can expect to gain just about 24 to 35 ounces of gold this upcoming season.

Speaker 4 And that is the operation is paid solely in the metal that we collect, and no cash

Speaker 4 or

Speaker 4 payroll is given.

Speaker 4 And I'm kind of curious on what would be the best way of...

Speaker 4 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

Speaker 4 on averages speaking I could get around about $50 or so $1,000 with the current gold price.

Speaker 1 So that's your pay for a year?

Speaker 4 Not for a year. It's a three-month operation.

Speaker 1 Okay. So

Speaker 4 in January to

Speaker 1 April. But it's your pay for

Speaker 1 your job.

Speaker 4 For the hours go. Yeah, it's more of a

Speaker 4 kind of a partnership than it is a a job necessarily.

Speaker 1 Okay. All right.
So some guys are going out dredging gold. You're going to get your cut.
Yeah. And it's 50 grand.
And it's 50 grand percent.

Speaker 1 Well, you may know more about actually liquidating the

Speaker 1 raw gold than I would know. But what I would do is liquidate it.
I'm going to turn it into money.

Speaker 1 Okay.

Speaker 1 I'm not holding it as an investment. I'm going to turn it into money and use that money to to achieve my particular financial goals, which around here we would call baby steps

Speaker 4 yeah and i i already have uh the twenty five thousand in in uh uh for uh what emergency fund sorry good um i was just kind of curious are you debt free

Speaker 4 i i am debt-free right now you own your house free and clear

Speaker 4 I don't have a house. I currently live in employee housing with my current employer in Dutch Harbor.

Speaker 4 And I would like to get eventually get to the point where I'd have a

Speaker 4 a duplex or a triplex or something of that nature.

Speaker 4 But current gold prices are, or sorry, the property prices where I call home is a little bit more than I'd be able to save up for,

Speaker 1 in my opinion. Well, what would a duplex cost?

Speaker 4 The current one I'm looking at right now is about $4.99.

Speaker 1 Okay. All right.
So it'll take a few years of saving up to do that. What else do you do other than this?

Speaker 4 I'm a commercial diver. I dive for gold, and I also work for a company up here.

Speaker 1 Yeah, so what's your income on that?

Speaker 4 About $60 a year.

Speaker 1 Okay. So your income, your household income, so to speak, you, is $50 and $60, so $110.
Does that sound right?

Speaker 4 Just about.

Speaker 1 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

Speaker 1 duplex later. So the danger

Speaker 1 of your situation is that

Speaker 1 you and your buddies, your employers are all

Speaker 1 very

Speaker 1 familiar with touching and owning and transacting in raw gold.

Speaker 1 Because it's just part of your culture where you are, right? It's like everywhere. It's all around you.

Speaker 1 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.

Speaker 1 And if it normalizes it, it causes you not to look at it through the lens of an investment. Instead, it's just kind of part of your life.

Speaker 1 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.

Speaker 1 I would rather have my money in good mutual funds and let the volatility of the gold world not not affect a young single diver in Alaska.

Speaker 1 I want you to go make a bunch of money and end up with a bunch of it instead of rolling the dice. And when you're playing with metals like gold, you're rolling the dice.
You see what I'm saying?

Speaker 4 Yeah, it's definitely a gamble.

Speaker 1 That's what I mean.

Speaker 4 The different ways you can liquidate it. I mean, we're only, since it's 90% pure, it's not the kind of stuff you go buy at Costco necessarily.

Speaker 1 No.

Speaker 4 It's 90% gold, 7% silver.

Speaker 1 So

Speaker 4 it's a little bit different than what you go and liquidate at a jeweler or go and

Speaker 1 sell that.

Speaker 1 I don't know how to do that. How do you do it?

Speaker 4 So there's a few different ways.

Speaker 4 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.

Speaker 4 They'll give you a 50% check right off the bat. And then a couple weeks later, after a thing is said and done, they give you a check of it.

Speaker 4 But that check is about 10% less than than the actual value of it. So that digs in a little bit to it.
The other way that I've been doing it,

Speaker 4 I will either go to somebody who wants to sell like a truck or something, and I'll buy the truck with the metal. I did that, and that was pretty fun going on.

Speaker 4 Got my vehicle.

Speaker 4 And the last way is some people, especially those folks that do the Bearing Sea Gold show, they will do what's called pay dirt bags.

Speaker 4 They take 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.

Speaker 4 And that's one way I was kind of wondering if it would be smart to do that kind of thing.

Speaker 1 That's a business move. You're starting another business now.
I'm not doing that. I'm just looking for a way.

Speaker 1 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.

Speaker 1 And the only question I would have is, is there someone 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?

Speaker 1 Like, are they up there? Because they're up there,

Speaker 1 are they leaning into this?

Speaker 4 In certain cases, yes.

Speaker 4 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.

Speaker 4 But roughly, the GCR is kind of the one that you want to go with.

Speaker 4 Really, it's anywhere, depending on the purity.

Speaker 2 It sounds the easiest, too.

Speaker 1 5 to 10%. Yeah, your option is you got a pile of rocks in the corner or you go JCR 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.

Speaker 1 I like that. And I'm not getting in the dirtbag business.
That's a different thing.

Speaker 1 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.

Speaker 1 How interesting.

Speaker 2 I know. Well, I was going to say.

Speaker 1 First time I've gotten that call call in 32 years.

Speaker 2 He actually finds the gold.

Speaker 1 Yeah. Never got the.
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.

Speaker 1 He's been out on those boats. But,

Speaker 1 yeah, it's...

Speaker 1 It's a different thing. Interesting.

Speaker 2 Fun way to make some good money, too. 50 grand.
Yeah.

Speaker 1 We're done, Don. Honored to have you in our audience.
Very neat what you're doing, Don. don't very adventurous this is the ramsey show

Speaker 1 rachel cruise ramsey personality is my co-host today the ramsey show question of the day is brought to you by why refi why refi refinances defaulted private student loans which are different than federal student loans.

Speaker 1 Why ReFi refinances your defaulted private student loans and builds a custom loan based on your ability to pay.

Speaker 1 So kick your private student loan debt out of your life by going to whyrefi.com slash Ramsey. That's the letter YREFY.com slash Ramsey might not be in all states.

Speaker 2 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, $50,000.

Speaker 2 We are debating whether or not we should sell one of our cars worth $50,000 and apply that to our mortgage.

Speaker 2 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.

Speaker 2 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.

Speaker 2 Last year, we paid $3,097.66 in mortgage interest. Can you provide some feedback on that and what your recommendations are?

Speaker 1 Okay.

Speaker 1 Well,

Speaker 1 the mortgage or the tax deduction in general, including mortgage interest, is the biggest piece of mythology in all of personal finance

Speaker 1 because it requires that people forget how to do sixth-grade math.

Speaker 1 Let me walk you through it.

Speaker 1 If, Jamie,

Speaker 1 if you actually itemize,

Speaker 1 then you can claim your charitable deductions and your mortgage interest rates.

Speaker 1 By the way, last year, because the standard deductions are so high, almost no one itemized, including you.

Speaker 1 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%

Speaker 1 of Americans itemize. 91%

Speaker 1 do not.

Speaker 1 If you do not itemize, you do not get a tax deduction for your charitable or for your interest.

Speaker 1 So 91% of the people this doesn't even come up with. Right.
So that's just dumb.

Speaker 1 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.

Speaker 1 Now,

Speaker 2 if you do.

Speaker 1 If you did itemize, then you sent the mortgage company $3,000, $3,097, $3,100,

Speaker 1 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.

Speaker 1 So the tax savings is not $3,100.

Speaker 1 The tax savings is $3,100 times your tax rate, which is 32% in your case. Okay?

Speaker 1 And so you saved $1,000 in taxes

Speaker 1 if you itemized.

Speaker 1 So here's how this works. Your husband is suggesting

Speaker 1 absurdly that you send the government $3,100 or you send the mortgage company $3,100

Speaker 1 to keep from sending the government $1,000.

Speaker 1 You're trading dollars for quarters.

Speaker 1 Dumb trade.

Speaker 1 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.

Speaker 1 And then I call myself sophisticated because I didn't pay off my mortgage because I had the tax deduction.

Speaker 1 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.

Speaker 1 They just absolutely do not know how to do math and they don't know the reality of the situation. Now.

Speaker 1 Worse than that, worse than your broke brother-in-law telling you this at Thanksgiving. You're silly.
Dave Ramsey doesn't.

Speaker 1 worse than him, the one that pisses me off to no end are people that do taxes for a living.

Speaker 1 And they tell the small business person

Speaker 1 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.

Speaker 1 You need to spend some money by the end of the year, otherwise you're going to get taxes. Well, that is asinine.

Speaker 1 It's ridiculous.

Speaker 1 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.

Speaker 1 Let me help you. You got two words for these people that give you that advice.
You're fired.

Speaker 2 The tax write-off, it's like the shit's creek

Speaker 2 episode where he's like, well, just...

Speaker 2 It's a write-off. And he's like, yeah, but who's writing it off?

Speaker 1 He's like, I don't know.

Speaker 2 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.

Speaker 1 It justifies almost. Yeah, always.
It's like, well, I don't know. It's a tax write-off.
It's a write-off. But who's going to pay for it? I don't know.

Speaker 1 The write-off people.

Speaker 1 That's great. I haven't seen that episode.

Speaker 1 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.

Speaker 1 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 our tax people. They do not make this mistake, believe me.

Speaker 1 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.

Speaker 1 That's what we're doing here. So, guys, whatever you do, don't fall for the tax deduction myth.
And the irony of ironies is all of these people discussing it, 91%

Speaker 1 don't itemize in America today. That's everybody, y'all.

Speaker 2 I mean, so because you, for the majority of people, you get a better deal if you just take the standard deduction, anyways. That's what I mean.

Speaker 1 Yeah, for sure. That's why you don't.
They don't need to automatically. You don't need to.

Speaker 1 Yeah, it's not like you're stupid.

Speaker 1 Actually,

Speaker 1 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.

Speaker 1 And your real deductions don't add up to that, so you're better off to take the big one. Right, right.

Speaker 1 The breathing deduction. Yes.
From the write-off people. That's right.

Speaker 1 They're there.

Speaker 1 The standard deduction has changed the game, and it's made the tax filings very easy.

Speaker 2 And that's probably up to more in the last, what, 10 years? Way up. In the last, what, 10 years?

Speaker 1 Because this used to be. 15 years ago, if I was talking about this, it had been 70%.

Speaker 2 Because this was a main point back in the day at our live events, back in

Speaker 2 2004.

Speaker 2 This was a big discussion. And now it's not, you don't hear it as much in the middle.

Speaker 1 Because the standard deduction was raised, and the number of people therefore

Speaker 1 that don't itemize is so few. Yes.
So

Speaker 1 it was absurd back then because you're trading dollars for quarters and we used to cover it in the live events in those old arena events.

Speaker 2 That's right. That's right.

Speaker 1 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.
Anybody anymore?

Speaker 1 And I'll bet you money, Jamie doesn't itemize. Yep.
91% does.

Speaker 1 And so it doesn't even come up. So her husband's arguing a theory that he's not even doing.

Speaker 1 And then if he was doing it, he's trading dollars for quarters. So don't trade dollars for for quarters.
Pay off your mortgage.

Speaker 2 And the other argument for not paying off the mortgage is I can make more in the markets versus what I'm paying in interest.

Speaker 1 Yeah. Said no millionaires ever.
Right.

Speaker 1 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.

Speaker 1 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.

Speaker 1 So, yeah,

Speaker 1 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.

Speaker 1 When you get to baby step six, finish the baby steps and pay it off.

Speaker 1 And don't deal with tax people that can't add. Please, God.

Speaker 1 This is the Ramsey Show.

Speaker 1 Rachel Cruz, number one best-selling author, Ramsey personality. My daughter is my co-host today.

Speaker 1 Feel free to drop by and visit us in the Ramsey headquarters. We do this show from 1 to 4 Central Time every Monday through Friday, and it's free to drop in and watch the show.

Speaker 1 We do the show on the glass in the lobby, and there's always 50 to 200 folks out here watching the show.

Speaker 1 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.

Speaker 1 Whoever's taping it and doing it that day, it's not taping, it's live, but you know, we're here doing it.

Speaker 1 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.

Speaker 1 And one of our favorite things is to do a debt-free scream on the debt-free stage.

Speaker 1 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.

Speaker 1 She's one of our team members. Welcome, Brianna.
Hi. Way to go.

Speaker 1 Congratulations. Thank you.
I can't believe I'm here.

Speaker 1 Tell folks what you do here at Ramsey and how long you've been with us.

Speaker 5 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.

Speaker 1 So our Ramsey trusted real estate agents all across the nation benefit from your hard work. Yes.

Speaker 1 And you writing, doing the content on the website and other things to cause content marketer to cause all that to happen. Yes.
Okay. Very cool.
Good for you. Four years you've been on the team.

Speaker 1 All right. Now, we do not, this is the one time we don't ask the folks income because,

Speaker 1 you know, 30 or 40 of the people standing around, 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.

Speaker 1 But we will ask you this: How much did you pay off?

Speaker 5 $204,000.

Speaker 1 Oh, my God. Oh, my gosh.

Speaker 1 And how long did it take?

Speaker 5 Six years.

Speaker 1 Six years.

Speaker 1 Wow. And 40, 40, what kind of debt was this?

Speaker 5 Student loans, 164 of that was the principal, and then 40,000 of that was interest.

Speaker 1 So it was all student loans?

Speaker 2 Yes. Student loans.

Speaker 2 What'd you get your degree in?

Speaker 5 Digital media management. It's a business, four-year business degree.
Yes. At a private school in Austin.

Speaker 1 Wow. There you go.
Yeah. And you paid

Speaker 1 for it.

Speaker 1 Wow.

Speaker 2 Oh, my gosh. How great, though.

Speaker 1 Okay. How long have you been out of school?

Speaker 5 Six years.

Speaker 1 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.

Speaker 1 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.

Speaker 5 Yeah, it was definitely easier and more fun and I felt less shame telling people how much I was paying off.

Speaker 5 So that was really fun to be like, yeah, it's your coworkers are like cheering you on, right?

Speaker 1 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 i'll be with you

Speaker 5 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 um and so towards the end of college i knew okay it's kind of a non-negotiable.

Speaker 5 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 I had something.

Speaker 1 How did you know to do that?

Speaker 5 My parents informed me of you and your program.

Speaker 1 Yeah.

Speaker 5 They're everyday millionaires and teach FPU. So they

Speaker 1 were able to.

Speaker 5 kind of learn with me at first and become those everyday millionaires and everything too. And then we kind of like did it together.

Speaker 1 And they're here with you today, right?

Speaker 2 Yeah, yeah. They're so fun.

Speaker 1 Way to go, mom and dad. You got to be proud.
Very good.

Speaker 1 So that's some of your other cheerleaders other than your teammates. Yes, Yes, yeah.

Speaker 5 But yeah, so after graduation, took FPU, started paying it off, and I would actually like cry myself to work because I hated my job.

Speaker 5 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.

Speaker 5 And I would listen. I'm sorry.

Speaker 1 I knew I was going to cry. No, you're great.
You're doing great.

Speaker 1 Okay.

Speaker 1 Where were you living?

Speaker 5 In Houston with my parents.

Speaker 1 All right.

Speaker 1 Sorry. That's okay.
No, you're good.

Speaker 1 It's been a long journey of doing this. Six years is a long time.

Speaker 1 You're fighting this by yourself, Warrior Princess. Way to go.

Speaker 1 Proud of you.

Speaker 5 Anyway, so I would listen to the Ramsey show on my way to work and

Speaker 5 cry and listen to the Duffery screams and envision myself doing this one day.

Speaker 1 So it's really cool.

Speaker 5 And I didn't know I was going to work here.

Speaker 1 How did you end up coming to work here?

Speaker 5 Y'all found me on LinkedIn and asked me to apply, and I did. And then y'all gave me the job.

Speaker 2 Great recruiting team.

Speaker 1 Wow. Shout out to Aisha.
Yeah, that's a good idea. We tracked her down and snagged her out of a miserable job.
Pretty much, yeah.

Speaker 5 And yeah, so then the rest of the four years has been here and it's been an amazing journey.

Speaker 5 Wow. Oh my gosh.

Speaker 2 Okay, so you moved to Nashville. Yes.
And it's a fun.

Speaker 1 Now, wait a minute.

Speaker 1 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?

Speaker 1 Yeah.

Speaker 1 I mean, that had to be weird.

Speaker 5 It was, it was very much a

Speaker 5 thing, yeah.

Speaker 1 Jesus. Yes.

Speaker 1 Don't call Jesus weird. Okay.

Speaker 1 All right. But yeah.

Speaker 1 Oh, my gosh.

Speaker 2 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.

Speaker 2 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,

Speaker 2 you know, to a life? Like, what were the things that you said no to that were really difficult?

Speaker 5 Um, shopping, yeah, girl. I'm like, I like to look cute, and I couldn't for a long time.

Speaker 5 Um, so shopping, definitely. Um, for six years, though, I did have to budget like some fun in there because I was just gonna go

Speaker 1 insane if I didn't.

Speaker 5 So, I was able to do some very small, like, weekend trips with friends and keep it in control, like, control it.

Speaker 1 Totally. Um,

Speaker 5 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.

Speaker 1 What were you doing?

Speaker 5 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

Speaker 5 freelance jobs where I had SEO clients on monthly retainer. And so I was doing that for several years.

Speaker 5 And it was exhausting and miserable. And I was just working nonstop.
I would work here.

Speaker 5 I have 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 to work out and then going home and working until I went to sleep.

Speaker 5 And I would do that for just like five days in a row.

Speaker 2 Just straight, all the way, grinding it out.

Speaker 1 You were making some good money on the side job.

Speaker 5 Yeah, I was making on a low year, $15,000, all the way up to like $30,000 a year in side jobs.

Speaker 2 Amazing.

Speaker 2 Which is what helps put a dent in 200K, right? Of debt.

Speaker 1 I mean, yeah, that's what had to be done.

Speaker 5 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.

Speaker 5 I had to do anything to make more money.

Speaker 1 Good for you. It's how it feels to be free.

Speaker 5 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 paid off my debt and I got in a car accident.
Somebody hit me and totaled my car.

Speaker 5 So I haven't really felt that free because I've been financially dealing with that too.

Speaker 1 So I'm like, hopefully after today, I'll feel really that free.

Speaker 1 Wow. Well, it's official.
You are. Yes.
By the way.

Speaker 1 Congratulations. So proud of you.
So your mom and dad, your teammates cheered you on. Anybody else was your cheerleader?

Speaker 5 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 coworkers.

Speaker 1 Yeah, very cool. Well done.
Congratulations. Thank you.
All right.

Speaker 1 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?

Speaker 5 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 no matter how much you have, you can do it. I did it as a single person

Speaker 5 and I made it happen.

Speaker 1 How old are you?

Speaker 5 29. That was the other thing I was going to say.
I had paid it off three days before my birthday.

Speaker 1 That was my goal. That's great.

Speaker 5 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.

Speaker 1 Happy birthday.

Speaker 1 Well done.

Speaker 1 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,

Speaker 1 four of those years working on this team. Count it down.
Let's hear a debt-free scream. Three, two, one.

Speaker 5 I'm debt-free.

Speaker 5 Yeah.

Speaker 5 So good.

Speaker 1 Man, she leaned in. She's amazing.
That was strong.

Speaker 1 So good.

Speaker 1 This is the Ramsey Show.

Speaker 1 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.

Speaker 1 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.

Speaker 1 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.

Speaker 1 And that's when you get to buy that new couch or upgrade your car or go on vacation. That's why we named

Speaker 1 the crews, the Ramsey Cruise, the Live Like No One Else Crews, because it's for Baby Step Four and beyond. It is almost sold out.
There's a handful of cabins left for March 22 through 29 in 2025.

Speaker 1 This is a premium Caribbean cruise. Turks and Caicos, Puerto Rico, St.
Thomas, the Bahamas. Holland America is one of their newest ships.
It is a high standard.

Speaker 1 Listen, I don't go on these cheap cruises, okay?

Speaker 1 I like the nice ones. Dave is bougie with his travel, so it's going to be nice.
It's a big bougie, but I'm not staying in the freaking holiday inn anymore. I've worked too hard.

Speaker 1 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.

Speaker 1 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.

Speaker 1 World-class chef from the food channel, Manit Shauhan, will be on the ship.

Speaker 1 Dove award winner, Grammy Award winner, Stephen Curtis Chapman, and Dina Carter both will be on the ship. And there's going to be others.
It's going going to be a wonderful, fun,

Speaker 1 laughing, celebrating, entertaining week. And most of you are not going to get to go because there's just a handful of cabins left.
You need to get your cabin while you can.

Speaker 1 You can put down a small deposit and lock it in. And we would love to have you do that.
Ramseysolutions.com/slash/cruise.

Speaker 1 If you don't get this done, you're going to have FOMO or whatever that version is for CruiseMo.

Speaker 1 So there you go. Don't miss out on this.
Open phones at 888-825-5225. two five john's in pittsburgh hey john what's up

Speaker 4 hi mr ramsey thanks so much for uh for talking to me all right so in a nutshell our issue is that our home is more expensive than we probably should have gotten uh we are living paycheck to paycheck and quite often the paycheck doesn't even uh cover for two weeks so we are bleeding from our minimal savings and paying uh for other things with our credit card and only paying the minimum to get to the bank.

Speaker 1 How much is your house price going anywhere?

Speaker 4 It is $2,090 a month.

Speaker 1 And what's your take-home pay?

Speaker 4 Take-home pay is about $65 to $70.

Speaker 4 $55,000. Sorry, no, that's not taken on.
That's total $60.

Speaker 1 Your take-home pay in a month.

Speaker 4 Sorry. Take-home pay in a month is $4,200.

Speaker 1 You have to sell the house, John.

Speaker 4 That's what we were thinking about doing.

Speaker 1 You don't have a choice.

Speaker 1 Your house pays 50% of your take-home pay, hon. You can't do that.
That's why you're dying.

Speaker 1 I mean,

Speaker 1 you had a feeling of that, but the arithmetic is screaming that you're starving to death.

Speaker 4 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,

Speaker 1 John, you can't stay in the house.

Speaker 1 You can't stay in the house.

Speaker 4 How does that, how does that look? Like, where does that money come from, I guess?

Speaker 1 Well, right now you're putting it right now, you're putting it on credit cards.

Speaker 1 Yeah, that's true. Yeah.

Speaker 1 So I'd rather have $5,000 on a credit card than a mortgage you can't afford.

Speaker 1 So you.

Speaker 2 What's the math of the mortgage right now, John? What do you guys owe?

Speaker 1 We owe $287,000.

Speaker 2 Okay. How much is it worth?

Speaker 4 Or can you say that we actually just got it back down to

Speaker 4 what it was worth when we got it? It was $287.5, but some of the closing costs were rolled into the

Speaker 4 $2.90. It was in November of 22.

Speaker 1 Okay.

Speaker 1 Go online at Ramseysolutions.com and get one of our Ramsey trusted real estate agents that are high performers.

Speaker 1 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.

Speaker 1 It's not sustainable. That's what you already knew.
You just needed someone else to say it out loud.

Speaker 4 I think you might be right.

Speaker 1 It's not even close.

Speaker 1 You're not like on the bubble or anything. You're over in the deep end of the pool.

Speaker 1 There's no debating.

Speaker 1 Now, the only thing that could happen is,

Speaker 1 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?

Speaker 4 Second job would be the no, no, no, no.

Speaker 1 I wasn't what I was 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.

Speaker 1 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 owns you. You don't own it.

Speaker 1 I'm so sorry.

Speaker 1 And

Speaker 1 it's going to be a little embarrassing.

Speaker 1 But

Speaker 1 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.

Speaker 1 And the idiots at the mortgage company just signed your butt up and they put you in a crack, didn't they?

Speaker 1 Feels that way. Yeah.

Speaker 2 Yeah. Do you guys have kids, John?

Speaker 4 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.

Speaker 1 Sure.

Speaker 4 But we were not expecting.

Speaker 2 Is your wife expecting or do you guys already have, do you have the baby?

Speaker 1 Oh, no,

Speaker 4 she's been around for a little while.

Speaker 1 Okay, okay. Good.
How long have you guys been married?

Speaker 4 Since 2015, it's almost 10 years. Yeah.

Speaker 1 Okay. So you're like 30 years old?

Speaker 1 35. Yeah.
Yeah. Yeah.
Okay.

Speaker 1 Well, let me tell you a couple things, all right?

Speaker 1 When I was 28, 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 about situations with stress in this.

Speaker 1 The number one cause of divorce in North America today is money fights and money problems and money stress.

Speaker 1 And you got that.

Speaker 1 So your wife is afraid and she may not want to leave this house and you're

Speaker 1 confused and feel like you did something really dumb and maybe, you know, maybe it hit, maybe you took a hit in your confidence in that. That would be normal, those things.

Speaker 1 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.

Speaker 1 What I want you to do is get away from all that.

Speaker 1 The destabilization of your marriage, your lack of confidence,

Speaker 1 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.

Speaker 1 And you'll get you another house that doesn't get you. You'll never do this again.
You'll never make this mistake.

Speaker 1 You've got the rest of your life to make other mistakes, but you'll never make this one again, right?

Speaker 4 Yeah.

Speaker 1 It's no fun, is it?

Speaker 1 It's not. Yeah.
Is what I was saying true?

Speaker 4 Everything except for my wife, she's totally on board with getting rid of this place.

Speaker 1 Okay.

Speaker 1 She's like, I want out. Yeah.
Well, it's not fun for her.

Speaker 2 And the interesting thing, John, is, you know, we have a phrase called financial peace. It's one of the books that Dave wrote.
But that is, it is what we want for people is peace. We want peace.

Speaker 2 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 home ownership or like whatever the play is for you.

Speaker 2 It's not worth it. Your peace 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,

Speaker 2 it's a $300,000 idea and it's where your family lives. There's emotional attachment.
I mean, all of it. But get rid of it and go rent somewhere and just breathe for two to three years.

Speaker 1 And save some money and get a down payment and then buy something else based on your income at that time.

Speaker 1 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.

Speaker 1 And just because the idiots at the mortgage company will give you the loan does not mean it's a good idea.

Speaker 1 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.

Speaker 1 This is the Ramsey Show.