Never Rationalize Debt!

Welcome to the Ramsey Show, where we help you win in your life. We're going to help you win with your money, win in your work, and win with your relationships.
The phone number to jump in is 888-825-5225.

888-825-5225. 888-825-5225.
I'm Ken Coleman. George Campbell joins me on this momentous day.
America votes, or in George's case, and millions of people, they've already voted. Early votes.
And you are, from what I understand, you're big on voting on Election Day on election day yeah i'm a traditionalist i like to wake up on this day knowing that i've got a civic duty to perform i respect a little pop a little circumstance that's uh kind of the way i roll as you know yeah christmas isn't the same when you open your gifts five days early that's right you know interesting you say that i don't like to open up gifts on christmas eve Very traditional. I like to wait, you know? I respect it.
But I tell you what, it doesn't matter who wins today because we'll be here tomorrow and the next day and the next day. We'll help you win with your money no matter who's in the White House.
So calm yourself. You got your money questions.
George is here. I feel like if they're listening to the show today, they're doing pretty good.
Right. You know what I mean? Like mentally, you're doing pretty good.

If you're not glued to headlines and instead you're listening to us, that tells me something

about how your life is going. How are you doing right now? I'm doing great.
You seem to be a,

you're a self-admitted anxious person. That's true.
Are you anxious about it? The more anxious

other people get, the calmer I get. Cause like, oh gosh, I guess I'm not that anxious.

Okay. Yeah.
That's kind of interesting. That's where I can be.
All right.

Well, we're calm. We're clear here today to help you win in those areas.
Let's go. Cynthia is joining us in Tallahassee, Florida.
Cynthia, how can we help today? Hi, Cynthia. Sorry.
Thanks for having me. I'm kind of nervous.
You're doing great. Okay.
I feel like I'm stuck.

I am here in Florida, originally from Texas.

I moved to Florida in 2013 to help my parents.

They were aging, so I wanted to be closer to them.

Subsequently, we got married.

We bought a house in 2017.

And then both of our houses, my parents' house and my house got damaged by the Hurricane Michael in 2018.

It took us three years to get both of the houses back together.

And, you know, with the help of my husband, he was able to help us get it repaired, which was an ordeal that I never want to go through again.

My question is this.

I don't want to live in Florida anymore, but my parents are elderly. My husband passed away two years ago, so I don't have him to help me anymore.
I'm a full-time caregiver to them. I have a full-time job.
Should I sell my house to kind of get that burden off of me, the responsibility of having two houses, caregiver, full-time job is a bit overwhelming. If I sell my house, I'm thinking of renting until I can convince them to go back to Texas or, you know, God forbid, until they pass away, which, you know, none of us know how long we have.
But is it a good idea to at least get rid of my house, bank the money, put it in CDs, and then just rent and not have to think about, well, if another hurricane comes, at least I won't be responsible for that house or two houses again. What's going on with the other house? That's my parents' house.
They're living in that house.

But you own it completely.

Is there a mortgage on it?

No, they own it completely.

Oh, so you don't have two houses.

You keep saying, okay.

Their house, no.

I think she means she's responsible for her parents.

She's kind of their chief caregiver.

Yeah, and you would rent.

Would it make sense for you to just move into the parents' house

if you are the caregiver?

It would be difficult and be more stressful. Okay.
I mean, I see no problem with you selling this house and renting. Now, we got to look at the long-term future of you becoming a homeowner again to reduce your largest fixed expense as you enter into your retirement years, especially.
But right now, you've been through a lot, Cynthia. Yes.
I mean, between the damage to the house, the passing of your husband, have you had time to even grieve all of this, or you've just been in survival mode taking care of mom and dad? Survival mode, you know, COVID hit. Mom got COVID really bad.
It was horrible. My husband passed away, and she had a major blood clot, and she had a stroke, and it's just been biblical.
So sorry for you. That's so sad.
Thank you, but I'm blessed. I am blessed.
What would it look like to rent? What's it going to cost versus your current mortgage payment? Can you financially handle it? Yes. I'm looking at apartments that are around $2,000 a month.
Okay. And what's your take-home pay every month? Around $5,000.
Are you working full-time? I am. Okay.
And did your husband have life insurance? Do you have any other assets? He had a small amount of life insurance. I do have an emergency fund.
I have about 50,000 in savings. Good.
Maybe about, I carry five in checking. Do you have any debt other than the mortgage? I have one credit card that has about $900 balance on it.
Remind us again, what will you make, stand to make on this house if you sell it? What will you clear? I'm thinking around $200,000. And you would just put that in a high-yield savings account? Yeah.
For a year or so? Put it someplace where it would draw interest but be safe. I was thinking CDs haven't really gone that far with it, but, you know.
Well, your high-yield savings account will have competitive rates while keeping it very safe. It's FDIC insured, and so it's not going to disappear.
You're not investing this money and it'll just help it grow with, you know, sort of the pace of inflation. If you're talking about 4% right now is what the rates are at.
I, you know, Cynthia, I don't know, George, what you think about this. I don't like the fact that her rent's almost half of her take-home pay.
And, but yet I understand she wants to kind of get out of this house. I wonder if buying a condo or something that's much...
Get her payment lower. Get your payment lower, less expensive, not have to worry about, you know, like a single unit house and any kind of storm stuff, you know, be a part of something.
Have you thought through that? Do you understand our concern about your rent being almost half of your take-home? Yes, I am concerned about that as well. What about my idea? There might be a better version of my idea, but what do you think of my idea of buying something much, much smaller, maybe more of a not a single unit home? It's not a bad idea.
I don't know the availability in my area. I've not researched it, but I'm willing to do some research on that.
I think it's worth kicking the tires, don't you? Mm-hmm. Absolutely.
Because what would your ideal number be to pay rent? What would be ideal? Oh, if I could be at $1,500 or less, it would be awesome. Yeah.
That's what I'd be aiming for. What's your mortgage payment now? I'm around $1,500, but I send in a little extra every month towards the principal, so I pay about $1,850.
Okay, what's left on the mortgage? $1,66. Okay.
Yeah, I would do some more homework, but either way, you know, you're going to be okay, but again, we don't just want too much of your world being eaten up by that rent to where you can't accomplish other financial goals. And then you have a new version of stress, which is financial stress.
So I think we're have to do some homework. I mean, it's a rock and a hard place here.
And I hope it's just a season for you. And we can get you to smoother ground soon.
Yeah, so sorry, Cynthia, for all the storms you've've been through. But it seems like you've got a really great attitude.
And that's what it takes to walk through these times of pain and come out on the other side. So thank you for sharing your story and time with us.
Quick break. He's George Campbell.
I'm Ken Coleman. This is The Ramsey Show.
Welcome back, America. Thrilled to have you with us.
How you doing out there? How you feeling? It's a big day today, I think. Isn't it? A lot of emotions.
Something going on today? I don't know what's going on. I've got to check the calendar.
It's National Something Day, isn't it? Something, what is it? What do they call it? Election Day. Is it called National Election Day? No, I was just poking fun at the fact that now we have a National Something Day every day.
We have like a Cybersecurity Awareness Month, so I feel like we've lost the plot here. Yeah, we've lost the plot.
Tell you what we haven't done too much about, and that's celebrating Christmas. That's something we can say.
It's nice. We're moving into Christmas.
And that says to me, and I've got some notes here. Once again, Ramsey, with the amazing deals around Christmas time, we call it the 50 Days of Christmas Deals.
50 days, George. That's a lot of days.
That's a lot of days. So whether you're shopping for yourself or maybe you're looking for the perfect gift this year, the gift that keeps on giving, if you can tell me what movie that's from, you get a bonus point.
Oh, boy, the gift that keeps on giving. Christmas Vacation.
You got it. Very well done, George.
A sticker for you. Send me the trivia night.
James will get that for you later. You can get up to 30% off on our best-selling products.
That's what you're going to get in the 50 days of Christmas Deals. Break it free from broke.
Hello. There you go.
That's right. On sale for the first time ever.
Yeah, because it's now reached its capacity of new book status. Almost there.
We decided to just let it go. It'll release in January.
We're putting it on sale for the first time for our Christmas deals. How about the Get Clear assessment? The very popular tool that we created to help you figure out what's that right place on the bus, right? Right seat on the bus.
How can I do work that I'm really good at and I get paid well? Those are just two examples of some of our best-selling products. Go to RamseySolutions.com slash store, RamseySolutions.com slash store, or click the link in the show notes.
Do you folks know that the show notes, it's kind of like being under the Christmas tree. You get to the show notes, George, and it's like seeing Christmas tree on Christmas morning.
I never thought about it like that. Lots of good things.
Every show has a few gifts in it in the show notes. You got to go to find out what's in that description.
So there you go. Thank you for that.
RamseySolutions.com slash giveaway. Or just go to the show notes.
We make it easier for you. You don't have to remember all the links.
George wants a link. You don't need a link.
You know what you need? Show notes. There it is.
All right, let's go to Rob in Los Angeles, California. Rob, how can we help? Yes, hi.
How's it going? Pleasure speaking with you guys. You bet.
Yeah, wonderful. So the situation here is, you know, I've been with my current company.
I work in finance. I've been with them going on about 12 years in June, so about 11 1⁄2 years right now.
And I have two different paths that I can go at the current moment, but I have a little bit of a dilemma in trying to figure out which way to go. So in my current role, I'm doing pretty well and I'm making enough money to be happy and comfortable.
And I can go into my next role, which would kind of be a step up in a different division of my company, which would be a situation where I'd work with, be doing a similar thing, but working with larger clientele, which potentially can get me, you know, give me a 20, 30%, you know, pay increase. Or my other situation is that I can stay in my current role and potentially move into leadership with my current company.
And the situation there is, you know, I would potentially make a little bit less doing that compared to what I'm doing now as the leadership role is more of a base salary position with an annual bonus at the end of the year. And my current role is I'm more on the kind of the sales arm.
And I'm doing really well with the sales part of my job. So going into leadership, I might make a little bit less up front.
However, what I'm struggling with is if I moved into leadership over the course of my lifetime, right, my total lifetime earnings might be higher. So it would put me down that career track where I can move into, you know, leadership and then potentially, you know, to an executive role and make more later on.
So I'm just trying to figure out what to do and to throw another curve ball into the mix, because I've only been in my current role with my company for about 11 months out of the, you know, you know, 11, 12 years I've been at my current company. So I'm just trying to figure out which direction to go.
And, uh, and yeah. Well, which one do you want?

Well, I think I'd like to go into leadership more than anything. Um, but I would be potentially taking a pay cut.
So that's the, how much of a pay cut? Um, potentially 80 to a hundred thousand dollars. Whoa.
And this is with your current company. They've offered you this role.
they haven't offered me the role in writing

so I applied for it

and what they told me is, you know, you're doing a good job. We can see you doing it, but we're not going to give it to you right now.
So what they're going to do is there's an opportunity for me with another leader in the company who's going to be, they're not going to be around. Let's put it that way.
I don't want to give out too much information, but they're not going to be around for seven, eight months, and what they're planning to do is let me take over for that person. And that's the first thing you gave us.
You gave us two options. Is that the first option you just told me about? Yeah, that's the leadership track.
The other one would basically just be continuing to do sales in my company, both larger clients. And I think I would make more money for the next few years staying on the sales side.
But I think over the next 10 years, I would make more in leadership. yeah i think that's right but i don't like the idea of you taking an 80 to 100 000 pay cut for

that there's other ways to get into leadership.

And it's been my experience just observing,

taking literally over 10,000 calls on the Ken Coleman show

and feels like half of them were these kind of questions.

If you eventually want to get into leadership,

you will have an opportunity to get into leadership.

And here's how it works in the American workforce. You keep getting promoted because you're doing a good job and eventually promote you into leadership.
So, uh, I don't like the idea of you kicking the tires for what it sounds like seven to eight months as a tryout. And even if you win the tryout, your reward is an $80,000 to $100,000 pay cut.
If I'm a leader in your company, I would look at you and go, Rob, I'm not going to give you this job because this is dumb. Yeah.
So for that reason, George, tell him that I'm out. For those reasons, I'm out.
What are you making right now, Rob? What's the total comp? What did you make last year or in this past 12 months? Last year, total was around $250,000, and this year it'll probably be around $280,000. And if you take the new sales job with bigger clientele, you're saying you're going to make $300, $350, $400,000? Potentially, yeah.
I mean, so I built up a pretty good system doing what I'm doing now, moving into this next, you know, larger sales role doing what I'm doing. But leadership, you're saying they'd pay you like a $250 base and maybe some bonus on top of that? No, it's less than $250.
What are we talking about? No, I think it's more like $150, $180 base plus a discretionary bonus at the end of the year, and I have no idea what that would be. I doubt the bonus is going to be your total comment.
It's called discretionary. I don't like discretionary bonuses.
I like bonuses based on percentages and things that we agree to. I'm with Ken on this.
I wouldn't take this giant pay cut. No.
Rob, do you not see a ladder by you taking this bump in sales, bigger clients, bigger responsibility, bigger paycheck, do you not see that that's going to lead to opportunities to lead, whether in your company or outside? I mean, I suppose I do. I suppose I do.
Yeah, I mean, I do see an opportunity to do that. I just don't know when to take that, how to take that leap, because I think, you know.

It's not a leap. It's not a leap.
I could see you're still struggling with this, because you're a guy who really wants to lead people.

You want to lead.

I do, yes. I do want to lead.

I know, and I think that's great, because not a lot of people who take leadership positions want to i do yes i know you want to lead it i know and i think that's great because not a lot of people who take leadership positions want to lead they just get pushed into it that's what's wrong with corporate america is if you're really good at sales they go great you're gonna be a sales leader and you're like i don't want to lead people i just want to sell you want to lead yeah and for that reason rob there will be no shortage of opportunities for you to lead i think you think that you're going to pass up on an opportunity to lead. That will never come back.
That will never come back to you. And I got to tell you, man, you keep performing in a sales role.
It's like showing up at the train station. Here's what I can guarantee you, George.
A train will show up. So, yeah, Rob, no, please don't get impatient here.
Take the the bump it's a bump in every way influence income and opportunity take the the new sales gig it'll turn into the leadership influence that you want you're a good guy Rob trust me on this one I'm older than you unfortunately this is the Ramsey Show Welcome back to the Ramsey Show. Welcome back to the Ramsey Show.
I'm Ken Coleman. George Camel is alongside and we are here for you today to help you continue to win in life no matter who wins at the polls today.
It's a good reminder. There you go.
Vincent is going to be the next caller here in Colorado Springs.

Colorado, Vincent, how can we help?

Hey, guys.

Huge fan.

My wife and I are based Step 7, and we are SPU coordinators.

Wow, and thank you.

Oh, of course.

We are taking a break this year because we're having another baby.

Oh, congratulations.

Thank you. This is really a future estate question.
Let me explain. My brother and his family have completely cut off contact with my parents and now with me and my family.
And they've given me the power of attorney, et cetera, to deal with their estate once that time comes.

And here's the tricky part, though. My parents bought and paid for my brother's house almost 20 years ago and still own it.

And they're still paying for taxes and insurance, et cetera.

They didn't buy me a house, which is not a big problem.

But my parents won't give me much more direction other than he gets the house and I would inherit their house upon their death.

Thank you. Not a big problem, but my parents won't give me much more direction other than he gets the house, and I would inherit their house upon their death.
But my parents have a rental I'd like to have. That's not in the will.
My question is, how do I make these decisions from a moral and financial standpoint if they won't give me direction and my brother's basically gone AWOL from the family? Well, I think it's pretty simple. The stuff that they're not giving you direction on, you sit down with them and go, mom and dad, this is not fair to me for you to put me in charge of executing on your will and having some things that need to be dealt with upon your passing that aren't specifically laid out on the will, so please do so.
And whatever isn't clear, I'm going to just use my best judgment on. Then there's no moral problem.
If you bring it up to them and they don't make these changes, to George's point, then you do what you think is right. But I think this is just a sit-down conversation.
Is there some reason why this hasn't happened or why you haven't gone this route? I have spoken to them about, I need some more direction. This needs to be out in the air, and I can't get any progress with that.
Then don't worry about it. Have you done all that you can do on this? From my standpoint, I believe so.
I just don't like the pressure. There's no pressure.
Of when this happens pressure. It happens.
No pressure. I'm getting some undertones here that you're resentful towards your brother.
Number one, for cutting off all contact. Number two, for being financially irresponsible and then somehow benefiting from it all with mom and dad funding his life and buying his house.
Am I incorrect? I would be. I feel I'm resentful toward him, you know, putting myself in your shoes.
I think I'm more mad about it than than vincent so i are is what you're saying hey i don't want him to get the house but that's what they're wanting and i have to follow their wishes i'm okay i think with him getting the house they already bought him i don't want to deal with that but you're saying he shouldn't get other things think it's the rental. I think it's the rental, unless you're not telling us what else is unclear.
But one thing we know is unclear is we don't know who gets the rental upon their death. Correct.
And you want it. And I just don't want that to go through courts.
I don't want it to go through all the things if it's not in the will. I agree.
Again, I think you stay on them about it to the point that one of two things is going to happen. Either they're going to deal with it because you keep pestering them about it, or they go, okay, you're no longer involved.
And then you go, then it's not my problem. But you need closure on it.
Closure. And so you need to drive for closure.
Okay. To be unclear is to be unkind, we like to say.
And so we need clarity here. Do you agree, George? Absolutely.
I mean, you need to go say, put the rental in the will. I would have the will out going, all right, we're going to update this now.
Maybe it's in the presence of an estate attorney where you go, hey, we're going to knock this thing out once and for all and make sure that the I's are dotted, the T's are crossed and say, that is my job as power of attorney. This is what I've been tasked with.
And you're not allowing me to do this job properly until we get all the details out there. And then you can make suggestions and say, here's my suggestion.
Clearly, brother has not been financially responsible. He has cut all ties.
And therefore, I believe it makes the most sense for me to acquire the rental. He can keep his house.
He can keep what he's got going on, but we should not give him any more to manage. That would be unwise.
Would you agree? I would agree. Then lay it out there.
I appreciate that. Lay it out there along with the boundary of, guys,

either take care of this or take me off the situation.

I don't want to be stuck with this.

I do not want to go to court after your death. Along with the boundary of, guys, either take care of this or take me off the situation.

I don't want to be stuck with this. I do not want to go to court after your death because you didn't put everything, all of your assets in the will.
That's just incredibly insensitive, and you're putting me in a tough situation. I would just hold firm on that.
Okay. Yeah.
Appreciate the call. It's far more relational than it is a tactical thing because it sounds like mom and dad still love the, you know, they love their son even if he has been misbehaving.
And the other brother says, I don't want to enable and incentivize this poor behavior by giving him more to manage. And yes, but I also think the biggest contention, George, is that he doesn't want to go to court he doesn't want to fight his brother over this asset doesn't want to be that's not been stipulated in the will and he doesn't want to deal with that i think this i think he's just exhausted from whatever this drama is i think that's the driving force and i understand that uh things like mom and dad might be kicking this can down the road because they're not ready to decide.
They're not ready to deal with it either.

Michelle is up in Seattle, Washington.

Michelle, how can we help?

Hey there.

Thanks so much for taking my call,

and thanks for doing what you guys do.

I really appreciate it.

Thank you.

How can we help today?

Hello?

Did we lose you?

Are you there?

Uh-oh.

We are here.

We are here.

Michelle, are you talking to your phone? Oh, shoot. Just flipped over.
Okay, there we go. Now I have you.
All right. Can you hear me? Yes.
Hey, thanks for doing what you do and being there for all of us. I really appreciate it.
Yeah, no problem. What's going on? Well, I'm nearing the end of my divorce, and I owe my ex $226,000 to buy the house.
Whoa. Currently we owe, no, no, this is a good thing.
There's lots of equity in it. Currently we owe $24,000 on the house.
And my question mainly is I'm 55. I have plenty of money in my 401k to pull out money to pay him off.
But tax wise, tax implications, I don't know if that's my best choice. Should I pull the money out of my 401k or should I just refund? Can you do a cash-out refi? Yes, I could.
That would be a better option than taking the money out of your 401k, mathematically, and for your future. Can you afford the payment if you do a cash-out refi? Yes, I can.
I make about $10,000 to $12,000. $10,000 very conservatively a month.
Okay. And what do you think the payment would be if you did the cash-out refi? Probably $1,900 to $2,200 a month.
So we're talking 20% of your take-home pay. Yes.
That's way better. That's way better.
Not wanting a house payment. I know.
but I also don't want you to pay a 35% tax to rob your retirement and unplug all the future growth.

You pop that in a calculator and you'll be like, oh my gosh, okay.

Yeah, let's not lose a million dollars by making this move happen.

So the cash out refi is sort of the least evil of the options.

It's still not fun, but that's what we would recommend in a divorce situation. Okay.
And guess what? You're probably going to knock it out pretty fast. You know, I think I will.
I'm pretty disciplined and all right. And you want to keep the house.
Interest rates are killing me. Yes, I do.
Well, the way you're going to pay it off, truthfully, Michelle, if you crunch the numbers on this as aggressively as you're going to pay this down, making an extra payment or three every month, this thing's going to get knocked out so fast that the interest is really not going to be, it's going to be a nothing burger at the end of the day when you own this house free and clear and you didn't touch your nest egg. Okay.
All right. I really appreciate you guys in here.
Real quick, we only got about 40 seconds, but I'm curious. What is your 401k nest egg? What is that? $850 in my main one and $50,000 in my other.
Yeah. How old are you? $55.
Yeah. Unplugging a quarter million dollars and taking a 30 plus percent tax hit? No way.
You are going to be set. You just leave that money alone.
You are going to be a very happy lady. Okay.
And so I can just rent my little guest house out for income to help me pay extra on that. There we go.
George's favorite words. He likes that.
What's the word? Well, you're either always like, get a roommate or rent your thing out. I love that.
She's getting creative. That means that mortgage payment isn't going to be that much when you look at your total budget.
Bringing home 10 grand,

she's going to be making double, triple payments on this thing. It'll be gone in a few years.
I wonder what she can get for that little guest house. I bet you it's close to the number of her mortgage payment here.
100%. I like that.
All right, quick break and we'll be right back. This is The Ramsey Show.

Welcome back to The Ramsey Show.

Thrilled to have you with us. 888-825-5225.
888-825-5225. So we always have a live audience that come to the lobby here at Ramsey Solutions, and they watch the show, listen to the show, and we go out during breaks and say hi and take pictures.
And we just met an awesome guy named Clark, and Clark brought us gifts. And there they are.
That's me and George. These are custom Funko Pops, which I was explaining to Ken.
It's a very popular figurine brand. Which I was unaware of what Funko Pops were until moments ago, and now I'm glad I know about them.
And he also brought a themed candle for you, George, and I feel like you've got to explain that. It says, smells like horse girl energy.
So if you remember my famous call where I told a girl to sell her horse and other unkind things, and it literally somehow, the candle smells like I'm in a barn. For good and for bad.
I smelled it. It's wonderfully done.
So thank you, Clark. You're very thoughtful.
Amazing work. Very fun.
And so they're going to sit here. The hair is on point, I just got to say.
Yeah, he's got your hair. He's got my hair down.
Tortoise glasses, the denim jacket. I'm known for a paper crinkle, and he's got that i'm known for my iced coffee and you got your iced coffee so nailed it very fun so those are going to sit there during the show in fact we talked about every time we coast together we may bring those in i think they have to be staples we need our own custom desk ornaments when we were together so there you go a new tradition has started uh all right uh speaking of traditions george know, I like when you talk nerdy.
You do like when I talk nerdy to you in today's segment. What are you going to talk? I'm told you're going to talk nerdy to me.
What is the topic? I can't think of anything nerdier than the S&P 500. Standard and poor, baby.
That is- If you know, you know. Yeah.
Well said. So we hear about this term all the time in the news, they news.
The S&P 500, a lot of people's eyes glaze over. So I'm going to give you the talk nerdy to me, kind of put the cookies on the floor for everyone listening, because we do talk about it a lot, and it's important for you to understand.
Maybe the bottom shelf. Bottom shelf.
Nobody wants to eat cookies that have been on the floor. Five-second rule.
Yeah. All right, so the S&P 500 is an index that measures the top 500 companies and how they perform.
And standard and poor, that's who's running this thing. And so an index fund, when you think about it, Ken, we talk about mutual funds a lot.
We're talking about a giant group of stocks pulled together. Investors pool their money to purchase these funds and shares.
And so an index fund is a type of mutual fund that buys stock in these 500 companies. And when we think about mutual funds, we have the actively managed, professionally managed funds that we talk about a lot on the show.
You work with a smart investor pro, an investing professional, they purchase the funds for you. And then there's the S&P, which is considered a passive form of investing.
These are passively managed funds because it's just tracking the index. There's no one that is handpicking the funds and companies that go into this.
They're just tracking the top 500 companies. And the S&P 500 now represents about 80% of the total stock market value.
That's right. And it's largely, you know, if you're talking about the largest companies, these are large cap companies, companies with a large market capitalization.
And so if you invest in the S&P 500, your return is going to mirror whatever those 500 companies do. And you will own all 500 stocks in that index if you have an S&P 500.
And the average annual return, when you look at the history of this thing, has been around 10 to 12% since its inception. So when we say on the show, hey, if you invest this much, you expect a 10 to 12% return.
It's not out of thin air. This is not our opinion.
This is just based on the historical average annual return of the S&P 500. Some years it's going gangbusters, like we've seen the past few years.
Some years it's going to be down. But over time, we've seen plus 10 to 12%.
And so the pros of this are you're diversified across investments. When you think about 500 companies, 11 major industries, so you're reducing your risk since your money isn't dependent on one fund's performance.
And they're pretty predictable because they're just going to do what the market's doing. So you kind of know.
Now the cons are you're settling for the average returns. So the goal of these actively managed mutual funds is to beat the S&P 500.
That's what these investment pros are trying to do, is to handpick the companies and funds they think are going to outperform the index. So that's the simplest version I can give you in one segment, Ken.
And for folks out there who are ready to invest or excited, they want to learn more, we've got a whole hub that's totally free for you. RamseySolutions.com slash invest.
And we have a complete guide to investing that's totally free. This is a very in-depth resource, but we only give you what you need to know.
And you can also click the link in the description, in the show notes, Ken, if you're listening on YouTube. I've been talking about the value of the show notes.
It's where the magic happens. Go there.
You'll get this free complete guide to investing. We'll give you a link to the hub.
And you'll feel a lot smarter next time you're at a dinner party. Yeah.
Your friends bring up the S&P 500. You'll go, do I know about the S&P? And you're going to say, and they're going to go, how do you know all this? And you're going to go, because George Cam will talk nerdy to me one day.
On the Ramsey Show. On the Ramsey Show.
So there it is, folks. It's one of the hottest segments on the show.
If you want more of George talking nerdy, let us know. Comment, like, subscribe, share, all that.
And are you adjusting our guys there? Yeah, I was seeing if it bobbles. There's no bobble.
I was excited to see. Because I think you've got a great bobble, naturally, Ken, on your actual head.
So I was excited to see. Oh, it's funny.
oh it's funny kens does a little thank you wiggle i'm just going to try to do that in between calls there stephanie's up next in phoenix arizona stephanie how can we help hi um i just had a question general um so i was in a car accident not too long ago and because that, I do have a backup car that I'm currently in and it's a 1996, uh, Chevy Blazer and it's, it runs good. It has AC, it has a heater.
It's perfect as is. Um, but I do commute a lot.
So I'm looking to buy a car. Um, I do have money cash to buy one, but my dad used to be a car salesman.
And he was saying that I shouldn't use this money to buy the car out cash that I should get comfortable with paying a little bit of down payment and then make it adjust. So that way I'm comfortable with the monthly payment that I receive.
But I don't like the idea of debt. I don't like the idea of paying interest because you're paying money for essentially money that you don't have.
So I don't really understand that part, but I just, I want a second opinion. Well, I'm going to caveat this by saying I'm sure your dad is a lovely, wonderful, intelligent man, but he has been brainwashed by the car industry.
And can I tell you, car salesmen have some of the worst money habits, if I had to generalize, that I've ever seen in my life. Have you seen these TikTok videos that have been going viral? They go to car dealerships and they go to the staff at the car dealership and they say, what is your payment? What car? These people have like $900 a month payments on these cars.
They are so all about their ego. They want to look good.
Then they say, well, you got to get a new car. It's like asking a dentist if you should get your cavity filled.
And so I would strongly encourage you to not take your dad's advice when it comes to buying this car. I think it's kind of like somebody who packages drugs telling you that a little bit of drugs are okay.
know what I mean? It's a little bit too biased. He's a little too close to it.
And this idea that we have to just get comfortable with the payment is insane. That's why we're so broke in America is because we said, well, if I can afford the payment, I'll be fine.
And then one day something happened. Life happened.
You couldn't afford the payment. You realize you have no margin to actually live your life or invest.
And so I would strongly encourage you to use the money you have to buy a car with cash you can actually afford. That's how grandma did it.
So how much cash do you have?

I'm comfortable spending 15, but I could spend up to 20.

Oh, you got 20 grand in cash.

That's a great car.

Just to spend on the car. This is outside of an emergency fund?

That's a little, the 5,000 extra would be from the emergency fund. Okay.
So the $15,000 is separate. Let's call it $15,000 out the door is what you're wanting.
So when you go to shop for a car, you're always looking for the out the door price. And here's the first question they're going to ask.
What payment are you looking for? Right? First question they ask if you call a car dealership. That's the key word that you're about to get scammed.
Because all they're looking to do is get you comfortable with the payment and you are then not focused on what the car is actually costing you. Right.
That makes sense. So that's it.
I would be searching an independent used car dealership for this car and searching online to do some research. I want to throw an idea at you, George, that I've been kicking around in the old noggin.
Okay. I've always wondered what's going on up there.
Well, nobody really wants to know. Quick question.
If you use cash and you buy an older car, a classic, not an old junker, but a classic antique car, fix it up. That car now becomes more valuable the longer you have it.
Potentially. No, if it's the right car.
I've got one in my garage. Yes.
It keeps going up. Cars can hold their value if you're buying some of these antiques.
I think people ought to be doing more of that. It's not a depreciating asset.
Then I'm scared to drive it. No, it's totally fine.
Think about it, George. Come back to me later.
This is The Ramsey Show. God bless America and welcome to the Ramsey Show.

This is where Ramsey Show. God bless America and welcome to The Ramsey Show.
This is where we help you, America, win in your life, win with your money, win in your relationships, and win at work. I'm Ken Coleman and George Camel is alongside.
888-825-5225 is the phone number. 888-825-5225.

Let's go to Julie in Jackson, Mississippi.

Julie, how can we help?

Well, the problem is we are doing very well.

Me and my husband.

We've been married 31 years, and everything together were worth about $4 million.

Wow.

About half of that is his inheritance.

And about half of that inheritance is a million dollars for a company

that he inherited that was then bought out.

So my question is, I don't have that much in my name.

Thank you. So my question is, I don't have that much in my name.
I have an account. I have about $100,000 in my name alone, and then I have about another $100,000 in retirement, and that's it.
And the rest of it I think of as his, and I know that's not right. i know that's not how i need to think about it he doesn't think about it that way he's told me as far as i'm concerned it's half years are you the beneficiary are you do you guys have all that worked out to where you're the you you each are the beneficiary of each other's like it's actually your money or is it all in his name and nobody even knows that you're there um i want to say the business money may be in his name only well is it do you guys have a does he have a will he won't he won't do one i made him do one during covid but it um we sat with a lawyer, talked about it, drew it out, and I've not seen it since then.
So I haven't signed one. Does that seem strange to you? It does.
I think he doesn't want to admit he's going to die. And his father was the same way.
Well, I have heard that if you don't do a will, then you never die. So he has, there's some merit to that argument.
So you're telling me there's a chance. Okay.
So there's one piece of homework. We need to get him to finalize this will, get it signed, sealed, delivered, and that'll get, will help you both sleep better at night.
Number two, we have some homework to do because you said, I want to say that's not going to cut it. We need to figure out where is this money? What are the accounts? Is your name, are these joint accounts? Are you a beneficiary on these accounts? I think you have a right to know in a marriage.
Right. And so we need to get to the bottom of that part.
And then on the other side, we need to figure out what is your next goal? Are you looking to spend more? It sounds like you feel like you have nothing to your name and that you're broke when really you have a $4 million net worth. Right.
And I don't know why that is. I don't know why I feel that way.
Well, what is your, what's your household income? Um, I bring in about 2000 a month and he brings home a hundred thousand a year. So he's bringing home something closer to $7,000 or $8,000? Mm-hmm.
Okay. And do you guys have a joint checking account where all this money goes? Not all of it.
A section of it, there's a checking account that I write from that my Social Security money goes into, and that's all that goes into it. His name is on that account, but he doesn't use it.
And then there's a joint account where he used to put all his bonus money in that I write joint household expenses from. But now with the company of buyouts, he's not going to get those bonuses anymore, so I don't know yet how I need to straighten the back.
You guys have created a real complex financial situation with 19 accounts floating around out there. I think it's time to streamline and simplify and go, I think it's time for you to fly to their house and spend an afternoon with them.
They don't get to get up from the table until they've walked through all this stuff, George. You were talking about this earlier this morning.
That's what this calls for. Yes.
Now that's not going to happen. But Julie, George is going to give you a checklist as if he were flying to your house and locking the doors and taking care of business with you two.
You guys have got to figure this out. Let's put it all on the table and go, what are all the accounts? What's in every account? What's in my name? What's in your name? How can we simplify all this? I want to be on the same page.
We've been married 31 years. We've done really well, sort of accidentally.
And now I want to do better intentionally. And that means having one account, all the money flows in, all the money flows out of this joint checking account.
That'll give us both transparency, accountability, and it's going to change our marriage for the better. Okay.
Because I'm no longer going to be in the dark. You know exactly what's going on with my money.
I know what's going on with your money. Do you think he would be upset with that conversation? Would he shut down? I mean, 31 years.
I think he would want, I think he would really, his actual reaction would be, why are you worried about it? Well, it's not a worry. It's just that the best marriages have full accountability, full transparency.
And okay to good marriages can survive with 19 accounts floating around. Well, George, but play that out, though.
Go deeper than that. I think this is what's going on.
So pretend as though you're talking to Julie's husband and he goes, well, why does this even matter? Why is she so worried? Go deeper than good marriages and all this. There's some real reasons as to why this thing is so disjointed and why bringing it together.
What would you say to him if he pushed you? Well, I would say that we're not here to attack you and get you defensive because we don't trust what you're doing with the money. It's just that you are clearly in the dark after 31 years of being married.
You have no clue what's going on out there. And if something were to happen to him, that would put you in a real bind.
While you're grieving, you'd be trying to pick up the pieces from 19 different accounts, trying to find policy numbers. Is that true? Does that sound right, Julie? Yeah, it would be difficult.
I know where all the paperwork is, but yeah. And this is something we're going through still with his dad's estate.
His dad's estate was still the same way. It still messed up two years after he's dead.
Right. You want to avoid that.
Yeah. Understandable.
You guys are searching for coffee tins in the backyard with money. It's a disaster.
I don't want to have it be a full-time job to pick up all the pieces. Right.
And if we can just get ahead of this now,

we're going to have the next 20 years is going to be a dream because we are fully on board on the same page.

We know where we're going.

We know what's going on.

Yeah.

Okay.

That's the angle.

And then I think there's another piece

where you need to stop acting like you're broke because you're not.

You guys make six figures,

and you need to be on a budget that you both have say in right now you're living like you get an allowance right if you wanted to go spend some money is it a conversation do you just go spend it without telling him what happens yeah i do i spend but it's my money that i spend so as long as you spend only your money yeah well that feels wild doesn't't it? I feel like I have to ask him. So he gets to spend five times what you spend because he makes five times more.
Is that how it works? Yeah, it's been working. Oh boy.
That's a problem. How long you been married? 31 years.
Oh boy. We didn't come into so much money until a couple of years ago.
My wife now stays at home with her child. If I said, well, honey, you don't bring in any income, so I get to spend all the money.
I'll give you a little bit of allowance for some fun, but I get to spend like 10 times more. You know where you'd be? My guest bedroom.
That's where you'd be. I'd be lucky to be inside of a house.
Well, we'd take you in for about a week. I might be in a tent in the backyard at that point, too.
I'd let you stay in the backyard. So I want you to know you have a vote in this marriage.
And so far, it sounds like you've had the idea of a vote. But we need to make it very clear, especially on Election Day, that you have an American right to vote in what happens in your marriage.
I see what you did there. I think this is a clean this mess up with camel.
This is a show where people bring you in and you just fix everything.

You just get it all.

I like this.

You say, listen, Julie, you sit there.

Clarence, you sit there.

I feel like her husband's name might be Clarence.

It's like hoarders, but I clean up your finances.

And you just kind of walk through.

Clarence is what we're doing.

Julie is what we're doing.

You just clean it up.

You're the cleaner.

We'll think about it.

This is the Ramsey Show. Welcome back to the Ramsey Show.
Thrilled to have you with us. 888-825-5225.
888-825-5225. All right.
I've been told that sometimes I come across like an alpha male, George. Literally never heard that in my life.
You've never heard that? I appreciate that. Yeah.
It's very generous of whoever said that to you. Yeah.
Well, you know, I was thinking, you know, you think about alpha because guess who's on the line right now in Los Angeles? Omega. Line four.
Tell everybody. Omega is on the line in Los Angeles.
Omega is on. This is very fun.
This is very exciting. I've never, ever actually talked to an Omega before welcome to the ramsey show heck yeah come on i love your introduction thank you because i'll be honest with america james the producer was rolling his eyes a little bit he had a little cringe going on behind the glass he's a very nice man he's very kind to me but he had a little cringe on that but i knew you would appreciate it and so so would America if they stayed with me.
So thank you, Omega. I appreciate it.
I appreciate it. You should.
You've got a great name. No, a lot of people make that joke, but the way you made it was special.
He's a special guy. Take that, James.
You just made a friend for life, Omega. Omega's my friend, and I'm her friend.
So how can we help you today?

Well, wait.

Did you guys get my question already

or should I say it all again? We don't know your question.

They tell us nothing. We're flying blind.

Oh, okay.

So, basically

I

I'm a remote closer.

Basically sales

online, so phone sales,

sales and DMs. Basically my goal

Thank you. I'm a remote closer, basically sales online.
So phone sales, sales and DMs, basically my goal is to help people make better decisions so that you can improve their life through sales. Right.
Right. And so usually the goal is to work for programs that, you know, offer some sort of solution to someone's problem.
And so I am new to the field. And so I recently started applying for jobs.
And one of them was for a leadership program where they teach leadership to people so that they can like lead their companies better. Right.
And so in order to be a part of their team as a remote closer or DM setter, the woman I spoke to on the phone said that I have to invest in their course first. All of their employees have gone through their course.
Their course is $5,000. No.
I have budgeted. Go ahead.
Hard pass. Please don't give them a dollar.
This is a scam, Omega. It's a total scam.
This is how they're actually making money as a company. Yeah, they're not helping anybody lead.
It's like a multi-level marketing thing where they go, hey, you got to pay us $5,000 as a startup cost to take this course, to then sell this course. Don't do it.
If Dave Ramsey hires people, he doesn't charge them to go through Financial Peace University. He goes, hey, as part of a team member, you're going to go through this course.
We're paying for it. And Omega, legitimate companies, they hire people that they believe they can invest in and get a return on the investment.
They don't make people invest in them. They hire them, and then they train them.
Legitimate companies hire people and put real manpower, real resources behind training someone. And so this is all backwards.
And I want you to run from this. I cut you off because there is zero reason for you to continue considering this opportunity.
It's not an opportunity. It's an absolute trap.
And I hope you know this, but in the industry you're in, there are a lot of hucksters out there. In this DM setter,

online sales, I think you're in a legitimate field, but I'd be very cautious about what companies I work with. Okay.
Are we still friends? Okay. We're still friends.
I appreciate real truth. That's true friendship right there.
You should never be. I don't want you calling us saying, I paid $5,000 for this course to get a job.

Did I get scammed? Yeah. You should never pay to get hired.
Okay. So that answers that question.
Can I have a follow-up question? We will allow it. Okay.
So when I was on the phone with her, she was telling me all all about it right and um i told her that my one concern was that i only had a hundred dollars to spend i have money in my account but it's all budgeted i have it in my in my emergency fund which by the way saved my life a week ago hey hey all right we like hearing that uh-huh yep and so I have it all budgeted, so I can't spend that. So I only have $100 that I can spend.
And I made it a goal earlier, like at the beginning of the summer, that I was not going to go into debt. So I told myself I'm not going into debt.
Good. And then when I was on the phone with her, I told her that.
I was like, yeah, I mean, I could do that, but I don't want to make my parents go in debt for me. I don't want to go in debt for myself.
Like I'm going to like make the money and then pay for the course. Okay.
So what's the question? But, so the question is when I told her that she basically was like, well, when you're in sales and you're trying to like grow, you're young, you need to yourself and right now is the ideal time to invest in yourself and the way she said it was so convincing that it made me like she's in sales she's a huckster did you do something with it or you why are you asking this follow-up we've already told you what we did why are you asking us this we've already told you don't spend a hundred dollars don't spend a cent with these people. You're saying, well, she's saying I should invest in myself.
Is that not true? Is that what your question is? Well, my follow-up question isn't regarding the course. It's regarding investing in order to get a return later.
Yes, you should. You should invest in an actual course.
Not from a fake guru selling a $5,000 DM setting course. If you want to invest in a certification from a legitimate training school or a trade school or something like that, that is directly tied to, I now have a skill that I need to be able to climb my ladder, the professional ladder.
Yes, invest in yourself. But can I also say this? I would like you before you ever spend a nickel right now investing in yourself as a salesperson, I'd like you to get books from libraries.
Libraries, they're free. They're free on sales books, okay? Or get used books on Amazon.
You can get them at a fraction, George. Or how about podcasts on sales and things of that nature? There's so much YouTube that you can do for free.
And now we're investing time and investing our focus, not investing $100. So you're good, kiddo.
Okay. You're good.
So even as a rule of thumb, like, I can just be confident in, like, never going into debt, even if it is alluding to the fact that I'm investing myself.

Just find a way around it.

You don't need to go into debt.

You should never rationalize investing in yourself to allow yourself to take out debt.

You should never go, well, I'm taking out debt, but I'm investing in myself.

That's actually not the truth.

George, what would you call that?

It's a shmarmy sales tactic they're using to go, well, you got to invest in yourself. If you want to make a hundred grand, you got to put five grand in.
That's just how it works in the business. That's the kind of stuff they're telling you and you need to run far away.
I don't know if this industry is even for you because it's mostly for people that fall for scams and that's not my friend Omega. Yeah.
So I would find a different sales role that's legitimate with a real company that sells a real product. Yeah.
Not this we sell sales offers and appointments. You can invest in yourself by paying cash.
You can invest in yourself by taking free resources. All of that's an investment.
It's a false narrative, a faulty notion that you have to go into debt to invest in yourself. So there it is, Omega.
Thank you. You are a bright, bright soul.
I love it. She's so hungry to win and she's going to win.
But you talk about this a lot in Breaking Free from Broke. You call them traps.
If you follow the trends, you'll fall for the traps. This is a trap that has now become a trend.
A lot of young people have fallen for it. They're hooking people on social media.
It's the get rich quick, all this kind of stuff. And there's so many of these guru hucksters out there being like, I'm going to increase your sales by 100x and if you just, I can help you get 900 offers and it's all just a scam.
And here's what they're doing. They're selling their course.
They're not actually helping anyone. They're just getting a bunch of people to take a course.
And literally trying to trap this young lady. Well, you've got to invest in yourself.
This $5,000 you spend with us will be the best investment you ever make. I can hear the crap right now.
So because we're friends with Omega, I mean, she and I are friends. You are kind of like an acquaintance because you're, you know what I mean? Thank you.
But if you're okay with it, I would like to gift her your book, Breaking Free From Broke. Oh, I love that.
Great call. I think it'll keep her out of these trends and traps.
So, Christian. Can we also gift her your book, Find the Work You're Wired to Do with the Get Clear Assessment? Let's give her the assessment.
Omega, let's take the assessment as well. I was going to say that, but thank you.
Help you avoid some traps. Help you get some clarity around your career.
Find the work you're wired to do. Take the assessment, Omega, and read the book.

It's like me coaching you through. And then breaking free from broke, you've got to read it.
I'll coach you up on money. George is going to keep you from getting into all of those trends and traps.
So it's nice to make friends. It's very sweet.
You know what I'm missing right now? What's that? My Mr. Rogers cardigan.
We can get that on the break. Yeah, maybe we'll do that.
This is The Ramsey Show. Welcome back to The Ramsey Show, America.
Thrilled that you are with us. I'm Ken Coleman.
George Camel is with me. The phone number is 888-825-5225.
The Ramsey Show question of the day is brought to you by YRERefi. Y-Refi refinances defaulted private student

loans that other places won't touch and gives you a low fixed rate loan built just for you. Sharice Kaye lowered her payment from, get this George, $2,000 to $680 a month with our friends at Y-Refi.
Go to Y-Refi.com slash Ramsey to learn more. That's the letter Y-R-E-F-Y dot com slash Ramsey may not be available in all states.
Today's question comes from Cameron in Arizona. My best friend has bounced around schools trying to pursue his dream of being a sports team mascot.
He has a math degree, $100,000 in student loan debt, and a terrible living situation with his parents. He can't manage to get any reasonable paying job for a person with his education.
He currently earns $17 an hour, counting money at a casino. Several years ago, I inherited $5.5 million, which I've safely invested and have since grown to over $7 million.
I've never touched that money except for the house that I paid for in cash, and I live off my real income of about $110,000. Can I gift or lend my friend $100,000 to pay off his loans? If not, why? Wow.
A lot going on here, but we'll stick to the question at hand. I'll go first because you're the- You go.
I want to hear your take. You're the money guy.
I feel like we're going to agree on this one. The question is, can I gift or lend my friend? You can give it.
You can lend it. But I think the question is, is it okay? And the answer is, I'm going to go 50-50 split on this one.
Okay. It's okay for you to gift the $100,000 to pay off the loan.
If it is truly that, a gift, and you don't expect anything out of the friendship, you don't expect anything other than, I care for my friends so much that I want to help them this way, and there's no emotional strings attached, you can do that and I'd be okay with it um but no you're not lending it because now you're just replacing the you're moving the the debt from one pile to the other and it could create a lot of the chances of him ever paying you back is zero is zero so i don't like that but if because of the money that this Cameron is telling us,

if that's what you want to do, you want to give it,

that's fine, you can give it.

You've got a lot of money.

You can give them that.

I'm not going to say no to that.

Now, if you're asking me what I would do,

it would be based on the relationship to where if I felt like this would be a massive hand up to somebody, uh, then, then I'd probably consider it. I don't know that I'd do it, but the question is George that I've, that I'm wrestling with on this.
I'm really 50, 50 on it, given the net worth and all this kind of stuff. Um, the question is, would it be a hand up? Like, would it revolutionize this person's life? Because it sounds like this is a professional surfer.
And I don't mean that knocking surfers. I'm saying he's just kind of riding the next wave and the next wave and the next wave.
I think he needs to grow up and he needs to make some real commitments to growing up, to adulting. So from that standpoint, George, I'm a little nervous about that.
Does it really help him that much? Agreed. What are your thoughts? Yeah.
Based on principle, I would not do this. Like you said, can you? You can do whatever you want, but I think it's going to hurt the relationship when you kind of have this handout to him without ever really changing his habits, his behaviors.
And clearly his growth is stunted here. And just handing him $100,000 to pay off his debt or do Lord knows what he would do with it if you just gave it to him, that's a dangerous scenario.
I would not do that. He might use it at the casino he works at.
That's frightening. Yeah.
So again, I don't think that's, the student loans are just the symptom of a very, I agree, a much bigger problem, which is this guy has no real life purpose. He's got all this debt.
He's living with his parents. He's got the degree with nothing to show for it.
He's trying to be a mascot while counting money at a casino. He needs to aim higher in life.
And you giving him this money does not solve any of those problems. Most likely.
And that's what I'm getting at. So if it was a true hand up to where his life had changed and it was going to be like man this is this is helping somebody that cannot in this situation help themselves he can so i i i understand the heart behind this i think it's a really really kind thing to do feels like we're enabling but it's like but you would have to know that you're essentially agreeing to burn a hundred thousand dollars exactly and this relationship may not get better and in fact it probably will get worse because of this's going to feel a level of guilt.
I feel like a softie. I can't believe I even considered you.
I went harder on that one than you. I would never do it personally.
I'd never advise anyone to do it. Yeah.
But, you know, it's a free country. You can do what you want when you get $7 million.
That's the only reason I'm even on that fence. But again, that money was given to you to manage through inheritance.
And you want to manage it wisely. I don't think giving this money to this person.
It doesn't feel like it. And wise money management.
Yeah. All right.
It's my take. I like it.
Sarah's up in Bozeman, Montana. Sarah, how can we help? Hi, thank you for taking my call.
You bet. What's going on? Yeah.
So my husband and I are on baby step number two and we're hoping to buy a home in about three years. So my question is about our credit.
We each have one credit card each, and we've recently realized it's really not a good thing for him to have a credit card. So he cut it up the other day, which was great, and we'd like to close the account.
But my concern is that we want his score to go down to a zero. What I've read online is that it can take between like two and 10 years to do that.
You read the wrong blog, my friend. It's more like six to 12 months.
Yeah, so it's more like six to 12 months. Once you have paid off all of your debts, all the accounts are closed, so no open lines of credit whatsoever, 6 to 12 months later, in general, your score will become indeterminable.
It doesn't actually go to zero. It'll probably take some dips, and then it'll just fall off completely.
If I check my credit report right now across all three bureaus, it's just going to come back indeterminable. Okay.
So when I was in your shoes, Sarah,

yeah, well, I want to tell you when I was in your shoes, I paid off my debt and I went to go buy a

house with no credit score. And I went through a process called manual underwriting.
And that's

where they just go through your actual tax returns, you know, your utility bills, as long

as you have proof of making payments on some trade lines, like your utility bills or cell phone bills, and you have proof that you've made on-time rent payments every single month, then they'll grant you a manual underwritten loan and give you a no-score loan. So I wouldn't let that stop you, and I wouldn't let it keep you playing the credit card game just to keep up a score.
Okay, great. I know you guys are not about the car loans and our goal is to never finance a car ever again.
We owe about 17 left on my current vehicle and then we're hoping to be done with the car loans forever. However, we do want a big family, so we're going to be hauling a lot of kids around someday.
So we're just kind of keeping that in the back of our mind. If we ever hit a point where we needed a larger vehicle, like a van, and we didn't have the cash to pay for it, if we have an indeterminable credit score, are we able to finance a vehicle or is that off the table? I feel like we're asking the wrong question here, Sarah.
The real question is, what must be true for us to be able to pay cash for a reasonable van? The answer then becomes, oh, I guess we're going to buy the $10,000 van

with more miles on it, and we're going to do a pre-purchase inspection.

Do you see how the mindset shift changes as you get out of debt

and decide you're done with it?

When it's no longer an option, you get creative,

and you start to go, what can we actually afford?

I know four years from now we're going to need the van. Because you don't have a bunch of kids yet, right? Right.
We just have two. We've got two.
So now if I know, hey, two years from now, I'm going to need a minivan. I want to buy a $24,000 minivan.
That looks awfully like saving a thousand bucks a month for 24 months. Okay.
That's how successful people actually hit their goals. That's right.
Not how can I get the the lowest payment how can i get my score high enough that they give me the best financing that's broke people talking my friend sarah is not broke person anymore she's done with that life you agree yes and sarah you've already got two kiddos how old are they i've got one who's going to be in December and a three-month-old. Yeah, so you already know how quickly a two-year-old destroys the inside of a car.
So we don't need a $25,000 van. We need a functional van from a good automaker that has a reliable car.
Just Sienna, a carnival, an odyssey. They're going to destroy the inside of it with all the little, you know, the goldfish and the things, you know, and everything's sticky.
And it's like, I try to tell young parents, don't go buy a nice car to haul the kids around. They don't care.
They'll just be upset when they draw on it with Sharpie. Yeah.
That actually happened to our friend Rachel Cruz. Has Mia done this? Not yet.
She doesn't have access to Sharpies. Good father.
This is The Ramsey Show. Thank you for listening and watching The Ramsey Show.
888-825-5225 is the phone number. Excited that you're with us.
I'm Ken Coleman. George Campbell is joining me.
And boy, oh boy, we've been talking about this. I mean, we've got to be getting close to setting sail, aren't we, George? The Live Like No One Else Cruise, March 22 through 29, 2025.
This is a premium Caribbean cruise. Holland America's new Stottendom ship with all the great foods, all the fun things to do, world-class content that you can expect on a great cruise like that.
Plus, you've got all the Ramsey personalities speaking. We're going to be doing some fun stuff together.
Country music legend Deanna Carter, Stephen Curtis Chapman, Trey Kennedy is a great comedian, kind of known for spoofing Dave. And world-class chef Manit Shohan will all be joining the Ramsey personalities, including George and I.
So, RamseySolutions.com slash cruise is where you get your ticket, RamseySolutions.com slash cruise. And it's going to be a lot of fun.
So we're hitting Turks and Caicos, Puerto Rico, St. Thomas, and the Bahamas.
Have we validated whether or not James is coming? James, the producer? I don't think he is coming. Let's get an official word.
We're not doing any live Ramsey show, so he's off the hook that week. Okay.
He'll probably be having his own vacation here. Are you doing the show while we're on the ship? I don't think so.
It's a little too far out to tell. We'll all be on the ship, Ken.
There'll be no one here to host the Ramsey show. He'll be doing the show.
I'll host it. James will do it himself.
I feel like he could do it. It'd be a very chill, very nice version.
Love to see his impressions of us. Oh, he could do it.
It'd get dark real quick. He could do it.
It'll just me and Kelly Daniel will do a tell-all of all our history here. That would actually get the most viewership.
I think it would actually blow up, actually. It probably would.
That'd be really great. All right, so you can check it out, RamseySolutions.com slash cruise.
All right, Carlos is joining us now in Phoenix, Arizona. Carlos, how can we help? Hi, how are you guys doing? We're having a blast.
How are you? Pretty good here. I'm actually in a little bit of a situation here.
I'm trying to see what the best course of action would be to make the best decision possible. Okay.
I have a car payment right now. It's a truck payment.

I kind of did the baby steps a little bit out of order with my fiance. We got a house.
It was the emergency fund, and now we have that car payment. But my biggest issue here is my work.
I currently am a plumber full-time. I like doing it, everything like that, but it's not really my passion.
so I kind of wanted to see

if I should

turn back the car in

to I like doing it, everything like that, but it's not really my passion. So I kind of wanted to see if I should turn back the car in to, like, trade it back in, get rid of that debt, and that's finally we're over debt.

Baby step two.

Or if we should look for another job, I keep the car, but I might be taking a little bit of a pay cut.

No, we're definitely not taking a pay cut while in baby step two, period. Okay.
Ever. So in baby step two, no, because in baby step two, and I'm going to go ahead and say baby step three as well.
I would never take a pay cut in baby step two or three because those steps as baby step one also requires intensity. And so we want to make the most money we can.
And in this situation, you're good at it. It may not be your long-term play, but I want you to stay being a plumber and then see if you can pick up extra hours, extra jobs, maybe work for a couple different plumbing companies.
I mean, I know just about every major city in America, there's a demand for plumbers. So in my case, if I were you, I'd be working extra using that very skilled trade.
What do you make per hour? Actually, piece rate, that's the big thing. So anything I do or everything I do, that's what I get paid for the day.
And it makes pretty good. I think overall in the year I make about $80,000.
I mean, so my point is you could get extra work as a plumber, true or false? Yes. Yes.
So that's what I would do. Now, I want George to weigh in on this because I tend to be more aggressive on cars.
So in other words, I would get rid of the car, not keep the car payment. So if I were to get rid of it right now, it's worth around 25 and I will 30.
It's a truck. And the reason I actually got it was for the plumbing, like side jobs and everything like that.
Cause I have a company work truck. So you don't need this car? I don't need it right now.
Get rid of it. Get rid of it.
When you say it's worth 25k, are you talking about trade-in value or if you sold it private party? If I sold it private party, maybe I'll get like 28, 29. Let's do that instead.
And then the difference that you can't cover the part you're underwater on, we're going to use the savings to cover that. How much do you have in savings? I have about $20,000.
Oh, perfect. You got $20,000 in savings.
Perfect. So you're pretty close to just being able to pay this whole thing off.
Yeah, that was my other question. Should I completely just go super intense, pay this off? Yes.
I mean, I'm pretty sure within like two months I can get this. So let's say you need to save up another $10,000 to go ahead and just get this thing paid off

and leave you with a few thousand in the emergency fund.

Then we'll restock the emergency fund.

So basically we're doing the baby steps in order.

I changed my opinion, George.

You know what I'm going to say now.

Keep the car and aggressively pay it off.

Stick to the plumbing jobs.

Once you're debt-free with the emergency fund,

then we can think about the new career path. Yes.
And I would liquidate it now. I mean, go down to 1,000 in the emergency fund, put 19 down on that car that leaves you with 11 left.
That's going to really put the fire under you. Yeah.
Because number one, you're going, oh my gosh, oh my gosh, I'm not safe. There goes my emergency fund.
And you go, oh gosh, there's only 11,000 left. I'm making good money with between my wife and I's income, getting on a budget.
We can knock this out in four months, right? Yeah, just about. And you bought this truck, you said, so that you could do side jobs.
How many side jobs have you been doing? What kind of extra income have you been bringing in the last 90 days? The last 90 days, it varies, but it could be up to like another five to it pretty much covers the car payment each month i got to like 700 that's not a lot my friend do you know i had a sneaky suspicion and carlos i'm not being unkind i'm on team carlos i had a sneaky suspicion you weren't doing a whole lot of extra work 500 700 bucks for a plumber is nothing. You're not, you're not busting it.

Get out there and bust it. And then you're going to be able to do what George told you to do.

That's that. So we're, we're revising our answer.
I think in this case, keep the truck,

but pay it off. Now, what's the, what do you want to do long-term when you say passion?

That makes me nervous sometimes, and I want to make sure you got the talent to do it and it's're motivated to do it. So do you have an idea about what direction you really want to go? That's not what I'm too sure about because I'm also a realtor.
I have my real estate license and I do it every year and they're part-time and maybe close about like three deals a year. So not too much, but at the same time, I've always been more into learning about finance and and all that type of thing so maybe like a banker or even helping people out like with their finances i'm not like the the most educated person when it comes to that but that's something i've always wanted to do so it sounds like to me that's the path to take right so there's a way to get sure and the answer is to get clear you've got to be clear on what you're really, really good at doing, what work really, really fires you up, and then what results you want to contribute to the world.
And I'm going to give you, because I think you've got some work to do on this, but I'm going to give you the book, Find the Work You're Wired to Do. It has the Get Clear assessment in it.
And if you'll commit to me to take the 15 to 18 minutes to take the assessment and then take 45 minutes to read this little book that I wrote, it's like me coaching you. It will give you some real ideas and give you a process to confirm which idea you want to go for.
And that's going to keep you going in this season where you're working a lot, getting out of debt, but stay in the plumber job, figure out your next path, and then get the emergency fund fully funded. And then now we start cash flowing whatever training.
So let's say you decide you want to go into being an investment coach. I mean, I'm sorry, what is the word, George? Financial coach? Thank you.
No, just an advisor, like you're doing in retirement. Oh, like an investment advisor.
Thank you i'm i'm in a hurry here and so uh carlos if that's what you decide there's training involved with that right and there's cost yep now we've got all of our debt gone we've got our fully funded emergency fund and so we now have discipline and we've got margin in cash to be able to pay for the training and then we step from plumbing work right into this new path. That's what we want for you.
Make sense? Yep. That's the path.
But you've got to pay this truck off and get out of debt. George, final words? I still consider selling it.
It sounds like it's weighing on you, and your goals mean more than this truck does. I'd probably just sell it and cover the underwater difference with your savings.
Well, if he sells it, he's got enough cash to go buy a $10,000, $12,000 truck

and still have a nice emergency fund to build on.

I like this plan.

That's what I would choose, too.

I would absolutely choose it.

Hey, we've got to let Carlos go, and the rest of you remember this.

If you are not on the radio audience right now, this is the end of the show,

but you can go get the rest of it on the Ramsey Network app.

So just go to the show notes, click on that link and we'll see you over there.

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