If Your Money Plan Isn’t Working It's Time for a New One

Speaker 1 This is the Ramsey Show. Welcome, America.
This is where we help you win in your life, win with your money, win in your work, and win with your relationships. Triple 8-825-5225 is the phone number.

Speaker 1 Triple 8-825-5225. We'll get you in on the conversation.
I'm Ken Coleman, the fabulous, the incomparable, the stellar,

Speaker 1 the author of a very exciting book we'll talk about later in this hour. She is Jade Warshaw.
She is my friend. You know what I forgot to bring today? What? Forgot to bring my trophy.

Speaker 1 We'll talk more about that later.

Speaker 1 More about that later.

Speaker 1 Let's get right to the phones. There's some trash talk a little bit later if you want to hang around.
It's going to be a lot of fun. But we start with Robert in Hartford, Connecticut.

Speaker 1 Robert, how can we help today?

Speaker 2 Hi, sorry guys. I'm a little nervous, so bear with me.

Speaker 1 You're doing great.

Speaker 2 So I have a career-based question.

Speaker 2 I took over a ta um a business basically running a tax business preparation in four years ago.

Speaker 2 And I ultimately wanted to get my CPA, so you need to work under a CPA for a year.

Speaker 2 And I found a CPA firm a year ago to take me on in New York.

Speaker 2 And I worked there for the year. So I technically have my full year of experience and they're aware of that.

Speaker 2 And they brought me in to talk about that and the potential future.

Speaker 2 And that they've said things like, you know, we view you as a potential partner and things like that. And there's a path to that and whatnot.

Speaker 2 And I'm trying, I'm at a roadblock because this job would require me me to give up my business if I was to continue working with them and become a partner in the future.

Speaker 2 But I'm also trying to figure out if I should just keep my business because I am taking my CPA exams. I do have my year experience, and should I just focus on growing that?

Speaker 1 So do you want to be a partner in someone else's firm or do you want to be your own boss? We're looking 10, 15, 20 years from now.

Speaker 2 So I obviously would rather be my own boss. They're kind of trying to tell me things like being, which I have been for four years.
A sole proprietor is, you know,

Speaker 2 you do a lot of work on your own. You don't have that other person there to bounce ideas off always.

Speaker 2 I obviously plan to expand the business, and it's not just going to be me.

Speaker 2 I just didn't know if, I mean, obviously, maybe it's less risky to join them.

Speaker 2 They are offering me to keep 10% of my top clientele as well.

Speaker 1 So what's the better financial situation? If you stay working for yourself or go to work for this firm?

Speaker 2 Can I give you some numbers?

Speaker 1 Yes, that's what I'm looking for.

Speaker 2 Okay, sorry.

Speaker 2 The business nets about $50,000, but I only have to work three and a half months because it's tax season.

Speaker 2 This job they hired me on for $55,000 a year salary,

Speaker 2 But that's because they have a deal with me where I work part-time during tax season.

Speaker 1 Okay, but what would partnership look like? What kind of financial windfall?

Speaker 2 So that's sorry. So that's the same.
They really won't give me any numbers. They're really looking for me to go to them with a number of what it would cost for all these things.

Speaker 1 What are you doing in the other nine or eight and a half months of the year when you're only working for three and a half months?

Speaker 2 So that's I'm working here currently.

Speaker 1 With the firm that they've offered you to be the partner.

Speaker 2 Well, that's the thing. I don't think I would become a partner that day.

Speaker 1 No, no, I know. I know that.
But you're asking us, what should you do?

Speaker 1 And I'll be honest with you,

Speaker 1 I think you're confused. So instead of me trying to dig a little deeper, I'm going to switch gears on my tactics.
When you called a few minutes ago, which way were you leaning?

Speaker 2 To probably keep my business and stick with that.

Speaker 1 Why?

Speaker 2 Because I get to be my own boss.

Speaker 2 I make the same money now working much less months.

Speaker 2 It could probably contribute more time to my business.

Speaker 2 And once I get my letters,

Speaker 2 CPA letters, I would like to think that business could

Speaker 1 expand more. And long term, you want to work for yourself.

Speaker 3 Can I interject a question or

Speaker 3 just get clarity? Is the reason that you're only working tax season, is that because you don't have the CPA certification yet?

Speaker 3 But once you have the CPA certification, then you'll be able to work year-round doing other books.

Speaker 1 For yourself.

Speaker 2 Yeah, unfortunately, without the CPA, my client base is very specific.

Speaker 1 Right, but you're getting it.

Speaker 1 Yes, yes. And then you'll be able to do the whole gamut.

Speaker 2 Yeah, I should have my CPA by January.

Speaker 1 Got it.

Speaker 1 Okay,

Speaker 1 my opinion is, I'll see what Jade says. I think you need to not take the offer to eventually become partner that.
I think you stay in whatever arrangement you have with them.

Speaker 1 I'm slightly confused, but I would work for myself and freelance and do whatever you're doing until you get your CPA license and work on building your business. I think that's what you want to do.

Speaker 1 And quite frankly, I think it's probably the better play for you financially. So for me, it's check-check, Jade.

Speaker 3 Yeah, 100%.

Speaker 3 Listen, I think it's weird that a firm is offering you a partnership. You don't have your CPA yet.
They don't know what you can bring in revenue-wise yet.

Speaker 3 Like, they don't know anything about truly what you're bringing to the table. So that feels odd

Speaker 1 to me.

Speaker 1 Not to cut you off. Okay.

Speaker 1 No, it's okay. Tell me.

Speaker 2 They are fully aware of my business. They're fully aware of everything.

Speaker 2 They won't give me those numbers. They're more so trying to say, what would it cost for you to stay with us? And we basically promising down the line partner is what I'm trying to say.

Speaker 1 Yeah, and that doesn't change my answer.

Speaker 3 Yeah, me either. It doesn't change my answer.

Speaker 1 I think that you have a lot.

Speaker 3 You've tapped into like 20% of your potential on your own. And once you get that CPA certification, once you get that license, you're going to be able to really see what this business can do.

Speaker 3 And it's worth it to me to pan that out and see, you know, being your own boss.

Speaker 1 Few things rival that. Yeah.
I think you keep the course you're on and be confident in it. That's where you want to be.

Speaker 2 Okay. Thank you.
Sorry.

Speaker 1 Sorry if the question was so no, no, no, no, no, no. You're doing great.

Speaker 1 I just want to be able to make sure that I understand and that we understand which way you're coming to this thing, but I trust your gut. How about that? I trust

Speaker 1 your gut. I think you got a good gut on this.
And so understand that

Speaker 1 the desire to build your own firm, I think you're already in a position to to do that.

Speaker 1 The only way, Jade, I would have changed my advice in this situation for Robert would have been if the time spent with this firm would give him the necessary resources and or experience intangibles, blah, blah, blah, blah, blah.

Speaker 1 Yeah. To then

Speaker 1 set him up later to do his own thing. But the fact that he's already doing his own thing and he's just, all he's got to do is finish getting qualified.
This is the get qualified stage. Yeah.

Speaker 1 And the CPA license, once he's there, this is a no-brainer. And

Speaker 1 that's a really good business, by the way. 100% to own because there is, if you talk to anybody in the tax field,

Speaker 1 you're not enough people. Yeah.

Speaker 1 And so I, in this situation, Robert, we're on board, man. Stay the course, be patient,

Speaker 1 and do your own thing. Hang your own shingle, which you already have.
Stay with it. And I think you're going to be better off.
So good stuff there. Love it, love it, love it.

Speaker 1 Love the soul, the solopreneur

Speaker 1 who's going to then build a business, a small business that provides jobs. And it's what keeps this American economy going.
It's small business. Small business, small business, small business.

Speaker 1 Oh boy, I appreciate your vote in November, folks. Just kidding.
All right, quick break. We'll be back with more of your calls.
This is The Ramsey Show.

Speaker 1 Welcome back to The Ramsey Show. I'm Ken Coleman.
I'm joined by Jade Warshaw. We're here to answer your questions, 888-825-5225.

Speaker 1 Jade's our resident money expert today, and and i'm the resident income expert how about that mo money is my theme for you mo money mo money mo meaning right and uh more money more meaning is what we're going for here and uh you know one of the keys jade to being successful we know this from research is the people that you hang around with yep

Speaker 1 If you aren't where you want to be in your life, I can do an inventory of family members and friends, acquaintances, the stuff you're reading, the stuff you're watching, and I will tell you that it's a direct impact.

Speaker 1 So speaking of tribe, you should, when you can, vacate, vacation with people that are like-minded.

Speaker 3 Okay, now I see where you're going.

Speaker 1 You see where I'm going? Yes.

Speaker 1 And for all of you baby steppers out there, those of you that are in baby step four, five, six, and seven, I think you need to be thinking about the live like no-one-else cruise.

Speaker 1 I like that. Because you're going to be on this boat

Speaker 1 with Dave and Rachel,

Speaker 1 Shade, and me, and John Deloney and George Campbell, But you're going to be on this boat with a bunch of people who live the way you live, who believe in the value of debt-free living and making the most of your money.

Speaker 1 So that's my pitch on why you should join us.

Speaker 1 And I just found out you don't even have to have a passport because we're going from American port to American port. That's true.
And so some of you are thinking, oh, I don't have my passport.

Speaker 1 You don't need it. I just found that out.

Speaker 3 Although, I'd bring it, though. I don't want to be locked up abroad without my passport.

Speaker 1 I'm just telling you what I'm hearing. I'm with you.
I'm bringing mine as well. We're going to be in Turks and Caicos, St.
Thomas, Puerto Rico, and the Bahamas. Every stop is stunning beaches.

Speaker 1 There is a pickleball court situation on the cruise ship. If you're a nut like I am, I will be on the pickleball court every day, literally holding court.
I will take no mercy on anyone.

Speaker 1 I play to win.

Speaker 3 You know this. He plays for keeps.

Speaker 1 I play to win.

Speaker 1 Beyond the Ramsey personalities and Dave, you're going to see Trey Kennedy, comedian, Stephen Curtis Chapman, great award-winning musician, Monique Chauhan of the Food Network, Lore,

Speaker 1 Deanna Carter, Mrs. The Strawberry Wine, country music star herself, and more.

Speaker 1 It's a seven-day cruise, March 22 through 29, 2025. You don't want to miss this.

Speaker 1 90% sold, so you better get on it. It's going to sell out probably this month.
Go to ramseysolutions.com slash cruise, ramseysolutions.com slash cruise.

Speaker 3 Are you going to have your guns out?

Speaker 1 You know, I mean. Sun's out, guns out? Yeah.
I mean, when I play pickleball in the sun, I like to have no sleeves.

Speaker 1 The less hindrance for that forehand. You know what I'm talking about? When I come over the top, we definitely don't want any hindrance.

Speaker 3 No hindrance. No hindrance, Ken.

Speaker 1 Let's go to Cody now in Lincoln, Nebraska. Cody, how can we help today?

Speaker 2 Hi, guys. Thanks for taking my call.
You bet.

Speaker 1 What's up?

Speaker 2 So, the reason I'm calling is my wife's 31, I'm 32. We own an event rental company that does pretty well.

Speaker 2 And

Speaker 2 we, three years ago, we purchased a commercial building

Speaker 2 and opened up a event venue.

Speaker 2 The process of doing that, we

Speaker 2 went into debt about $900,000 after remodel.

Speaker 1 Yep.

Speaker 2 After the remodel,

Speaker 2 and then plus about another $150,000 to $200,000 to my in-laws.

Speaker 1 For what?

Speaker 2 For the remodel.

Speaker 2 The commercial property was, we had to do an extensive remodel on it to kind of make it how we wanted.

Speaker 1 And the in-laws gave you the money for it?

Speaker 2 For the extra. So we got a million-dollar loan

Speaker 2 with, you know, and then on top of that was about another $150 from the in-laws.

Speaker 2 And that was, that was three years ago. And

Speaker 2 it's going all right. We're in year three and it's starting to pick up.

Speaker 1 When do you break even on all this?

Speaker 2 That's why I'm calling.

Speaker 2 We're quickly finding out with this much debt, it's difficult, very difficult. And, you know,

Speaker 2 in reality, I think it would be 15 years from now before we'd even get close to.

Speaker 1 Your dream has become a nightmare.

Speaker 2 A little bit, a little bit. It's still fun and we enjoy it.

Speaker 3 How much do you guys take home? What's your income, you and your wife, off of this business?

Speaker 2 You know, I'll be, it's, we have it set up where we can live off of, we're living fine.

Speaker 2 I don't know the exact number, but I would say anywhere from 100 to 120,000.

Speaker 1 Okay, why don't you know the exact number?

Speaker 2 We probably should be a little better at this. We kind of just intertwine.

Speaker 1 Oh,

Speaker 1 do you have any other income?

Speaker 1 Yeah, we know what's going on.

Speaker 1 You don't have a budget. You have no other income, but this event business.

Speaker 2 The event venue and then our event rental decor, which the event rental side of it is probably making more more money than what our event venue is okay what does it make

Speaker 1 so that will probably make about 250 000 bottom line and that's probably yeah yes that's not gross that's a net number after all expenses yeah

Speaker 3 okay so what happens to that money when you when you net that profit out where does that 250 000 go that's our problem it's like we're making all this money and we're working super hard and it's like where does it go no that profit is profit like you're either reinvesting it or it's sitting somewhere in retained earnings or you're paying it back to yourself like if you're only paying yourself 150 then then to jade's point where's the other hundred

Speaker 2 it goes into things like our our uh ac unit um

Speaker 2 just all the things you got to fix up on this building it's a hundred year old building like it's great right but that's not

Speaker 3 if you're doing your books the correct way that would have already filtered through and it would not be reflected in your net profit that's the whole whole point.

Speaker 3 So is somebody managing your books or are you doing it?

Speaker 2 No, we have an accountant that does it. She helps us through all this.

Speaker 1 Something ain't right. I'm telling you.
When was the last time you had a meeting with said accountant and she walked you through your actual books to the point that you could understand it?

Speaker 2 I mean, not

Speaker 2 about every tax, tax season.

Speaker 1 Good Lord, man. I'll be honest with you, I don't even think this is a profitable business.
My guess is this thing is not profitable at all when we put both of them together.

Speaker 3 And, you know, we're not trying to, listen, you're, you're stressed up to your eyeballs clearly. You got a million dollars of debt and you don't know your numbers.

Speaker 3 So that right there is very, very stressful, but

Speaker 3 you gotta, you gotta right the wrongs on this and you've got to get involved in what's going on with these numbers because I would hate for you to think that your event business or the event rental side is earning money when it's really not.

Speaker 3 And I want you to get with whoever is doing your taxes. I want you to get to with whoever is doing your books and make sure you understand this.

Speaker 3 Because if you don't understand it, you need to work with people who are going to help you understand it.

Speaker 3 Because as long as you don't understand this, you don't know what's going on underneath the surface.

Speaker 3 You don't even really know if you can trust the person who's running your books because you can't look behind them and go, yeah, that looks right. Or yes, I get it.
I understand.

Speaker 3 So there's a part of this where being in business for yourself, you do to a certain extent have to wear these hats where you can at least understand, right, Ken, the basics of your bookkeeping so that you know you're not getting cheated so that you know if you're actually profitable or not it's like trying to fly an airplane blind

Speaker 1 yeah yeah i mean and you say you're having fun with all that so so okay we did a diagnosis what's your question for us okay so so my question is is we've

Speaker 2 had an appraisal done on our on our commercial property and we could sell it we could sell it for anywhere from about 2.75 million to 3.6 million.

Speaker 1 Dude, take it

Speaker 1 now. Like list it now.
Hang up with us now. Take the briefcase and run.
Are you kidding me? This is a get out of jail free card. They don't come along very often.

Speaker 2 Yeah.

Speaker 1 Take it.

Speaker 2 And that's what we thought.

Speaker 1 Well, there's no more thinking. There needs to be some doing.
If I'm you, I want Jade to weigh in on this. Jade, here's what I'm doing.

Speaker 1 I'm selling the building, but I'm going to keep the rental business.

Speaker 1 Yeah, I'm fine with that. I like that.
But only if, only if you get a really good bookkeeper like Jade is saying, who's going to hold you accountable?

Speaker 3 Because you started, Cody, with just the event rental, right?

Speaker 3 And then that was doing well. And so you guys were like, we're doing amazing.
We're going to go rent this or buy this space.

Speaker 3 So that was the, that was the mistake when you went to buy the building was the mistake. So let's offload the mistake.
You get your money back plus a million and so.

Speaker 3 And now you've got this really great income that you,

Speaker 3 you know, you're running the business you always wanted to run and you know how to run.

Speaker 1 Now you don't have to buy a building because you know how to rent equipment. so you can rent a building.

Speaker 1 If you want to keep the event side of the business going, you can do that without having to be in massive debt. So my goodness, Cody, this is this is a good day for you.

Speaker 3 This is a sign from hallelujah on high.

Speaker 1 Wow. I mean, I just went from like, that was a two Pepsi DC call to now my tummy feels okay.
I know. Feels okay.

Speaker 3 Listen, let us get a cut of that 2.7 million.

Speaker 1 It's so easy now. Jade wants a commission.
This is the Ramsey Show.

Speaker 1 The Ramsey Show continues. Thrilled to have you with us.
I'm Ken Coleman. Jade Warshaw is alongside.
The phone number is 888-825-5225. Let's go to Nicole, who joins us in Memphis.

Speaker 1 Nicole, how can we help today?

Speaker 2 Hey, I was just trying to see if you guys could help me undo the mess that I'm in. I don't know if I'm cursed or what, but I'm in a lot of debt, and I'm a single mom, and

Speaker 2 I'm be close to retirement age shortly and I just I I don't know what to do.

Speaker 1 Okay. How old are you?

Speaker 2 I'm 46.

Speaker 3 Okay. And what's going on? Tell us some more details.

Speaker 2 Okay. So last year my goal was to own a home and I know about debt to income ratio and my highest debt would have been my car note, which was $772.

Speaker 2 Long story short with that, I ended up making a bad deal, end up at $6.15 still, but no gap insurance.

Speaker 2 Since then, the job that I had,

Speaker 2 I have now lost. I have a new job, but it's $3,800 less.

Speaker 1 That's a lot.

Speaker 1 It is. Per month, isn't it?

Speaker 2 Yes.

Speaker 2 And I'm struggling right now. I'm close to addiction.

Speaker 2 I'm close to about to lose my car.

Speaker 3 So

Speaker 3 tell me what you're making now.

Speaker 2 I'm averaging about $1,200 to $1,400 a month, barely making it.

Speaker 3 Oh, man. Yeah.
Okay. $1,200 to $1,400.
Tell us what your rent is.

Speaker 2 My rent right now is $9.80, but it's behind, and I'm close to eviction, so it's about $2,700 plus a $350 fee for their attorney fees.

Speaker 1 It's crazy. What do you do for a living?

Speaker 2 I'm a barber.

Speaker 3 And before that, when you were making the $3,800 more, what were you doing?

Speaker 2 I was still a barber. I was working at another barber shop and I was let go.

Speaker 3 What was the difference? Is it just the way that they do it and they weren't the old place was sending more clients your way?

Speaker 1 Tell us.

Speaker 2 Yeah, I had more clients. I was still on the low end.

Speaker 2 I was still on the low end, but I was still making, I was making weekly pay. This is only every two weeks, and I'm averaging about $500 every two weeks or a little over.

Speaker 3 And is it just the salary you get or is it based on the number of heads you do?

Speaker 2 So it's basically

Speaker 2 50% commission or $12 an hour, whichever, the greater of the two.

Speaker 1 Okay.

Speaker 3 So

Speaker 3 yeah. Okay.

Speaker 3 The problem, the glaring issue here is the income.

Speaker 1 And this can't go on

Speaker 1 because

Speaker 3 my thought here is If it's 50% commission or your base pay, then that means you're not making the commission, which means there's not enough people coming through, which means

Speaker 3 essentially you're kind of standing there like waiting for something to do, right? Are you spending a lot of your day kind of standing around waiting?

Speaker 1 Right.

Speaker 2 So, what I did was what I was doing the first, when I first started there, I was like, this makes no sense. I can do lift rides, right? Yeah.
To make up the short.

Speaker 2 But now my car is breaking down and it's still not enough.

Speaker 2 Lift rides sometimes are not as great as it was when I started.

Speaker 1 Right.

Speaker 2 So it's, so it's, it's, it's not, it's it's not coming in. And I tried to get an I've been applying for other jobs.
Like what? Nothing is coming through.

Speaker 2 Like I am great at customer service and things like that. I love barbering.

Speaker 1 Okay. But

Speaker 2 I really do love it. But I was trying to get an additional job, like work at Amazon at night.
And it's hard to work at Amazon at night. See, six years ago, I lost one of my kids.

Speaker 2 And my other children were there.

Speaker 2 And so what's happening is I have to kind of be at home with my younger daughter because she's feeling the repercussions of all of that she's got a lot of mental issues you know going on trauma stuff we've got we've gone through so I can't really leave her here at night and it's hard and that's the other reason why I've also lost jobs because I have to stop and go to school and it's heartbreaking I really wish that I could get a job that was financially stable where I could be at my child's disposal.

Speaker 2 You know, I just put one through college. I just dropped her off at MTSU.

Speaker 2 And thank God she had a lot of scholarships, but I still have to pay a small amount for the next three months.

Speaker 1 That's right. I don't know where it's going to come from.

Speaker 1 Well, let's look at this. Let's look at this.

Speaker 3 Okay, you love barbering, but right now barbering is not making you money.

Speaker 3 And for sure, for certain, I feel like you could go on. What do you do? Are you a braider? Do you do sew-ands? What do you do?

Speaker 2 No, I don't do that part anymore. I can do women's hair, but I love cutting men's hair.

Speaker 1 Okay.

Speaker 3 Okay. Okay.
So here's the thing. I think barbering goes on the shelf for now because it's not making you money.

Speaker 3 Maybe you do it on the side and that's your side hustle, but it's not your main core income right now.

Speaker 3 I want you to get a full-time day job.

Speaker 3 Go over to Target, go over to Walmart, go over to Wendy's, go over to Chick-fil-A, anything today because you got to make a little bit more than what you're making now and then make barbering the thing that you do on the side on the weekends, early in the morning, if nighttimes don't work for you.

Speaker 3 That's the only way. Here's the thing.
The good news is

Speaker 3 you were earning a salary that was making your life run and making your household run. So you know you can do it.

Speaker 3 It's just a matter of filling in the puzzle to make sure we're putting the right pieces in to get that income.

Speaker 1 Let's talk about the car.

Speaker 3 So the car is not running. That's the only vehicle, correct?

Speaker 2 Yeah, it's running, but it needs work.

Speaker 1 Okay.

Speaker 3 What year is it and what's it worth?

Speaker 1 And what do you owe on it?

Speaker 2 It's a 2022 Volkswagen Tiguan.

Speaker 2 I owe about $29,000 since it went up. I I was at $26,000, but since I refinanced, it's back up to $29,000.

Speaker 3 Okay, and what's it worth? Nothing?

Speaker 2 Probably not right now.

Speaker 3 Okay. I want you to go.
Your homework is to go on Kelly Blue Book and see what is it worth private sale. You're probably going to be upside down in it,

Speaker 3 possibly substantially, because I don't know what all you've done with this thing.

Speaker 3 But we may need to get out of this vehicle because it's costing you, what, $600 a month?

Speaker 2 It's costing me $6.15 a month, yes, ma'am.

Speaker 1 Oh, my gosh.

Speaker 3 Okay. So yeah, we're gonna have to sell this car eventually.
And probably what you're gonna end up doing,

Speaker 3 Kenna, if you have a minute, if you look this thing up, maybe you can give me a ballpark on it. But by the time we get off this call, maybe we can give you a ballpark on it.

Speaker 3 But if I were you to get out of that 30,000, what other debt do you have?

Speaker 2 I have a $8,000 signature loan. Okay.

Speaker 2 I have some student loans, which I got to try to figure out how to get back because I was in a settlement. And for some reason, just

Speaker 2 tell me how much they are for the sake of the call it's like six thousand sixty thousand dollars sixty thousand

Speaker 2 back on yes it's sixty okay and they're federal it's not supposed to be on there

Speaker 1 they're federal

Speaker 2 uh they're federal loans yeah it was it was a one in a

Speaker 3 settlement that they were supposed to take that off oh because the institution is not is no longer with us

Speaker 2 it's not they've come back but it's gone through a lot of stuff uh they've They've been in the news and everything.

Speaker 3 How much of the 60K is that settlement?

Speaker 2 All of it.

Speaker 1 All of it.

Speaker 3 Okay, so you're going to have to do some due diligence on that and figure out what's going on with that because $60,000 is not a lot that you want to lollygag with. Okay, what else?

Speaker 3 Is there anything besides that?

Speaker 2 No, just a $400 credit card that I was paying.

Speaker 1 This is an income issue.

Speaker 1 And by the way, we're running short on time. Let's get her a session with one of our financial coaches coaches as our gift because there's a lot to layer through here.

Speaker 1 But Nicole, you have got to come up with a situation with your daughter, friends and family.

Speaker 1 It takes a village. I'm not betting against a single mama.
I know you can find a way to get some care for your daughter.

Speaker 1 It's hard.

Speaker 1 I know it is, sweetheart. But I'm telling you.

Speaker 1 I'm not betting against you, but you've got to get some help with your daughter. She's been through a lot.
You've got to get some people around you who can be with her.

Speaker 1 We're in therapy, but it's not a lot.

Speaker 2 I mean, it's not a lot of help. I just.

Speaker 1 I know, but listen, I'm talking about people around you in your community.

Speaker 1 You have got to say, I need some help because you've got an income issue. And the more you work, if you were to get back up at $3,800 a month, Jade, she can work her way out of it.
100%.

Speaker 1 And so, Nicole, all I'm saying is we're going to get you with one of our financial coaches who's going to spend more time with you.

Speaker 1 But listen, you've got to get more income and you've got to get a community around you who say, you say, look, I need help with my daughter who's still going through this trauma over here.

Speaker 1 I need some support because I'm Mama Bear and I got to go make some money. And the more money I make with our financial coach, and we're going to give you all the resources, by the way.

Speaker 1 So, Christian, if she needs total money makeover,

Speaker 1 every dollar. Give her everything.
Give her everything we got. Christian's going to take great care.
And listen, if you don't,

Speaker 3 I don't know if you go to church or not. I want you stepping foot inside of a church this Sunday.
I don't care what you believe.

Speaker 3 You need people around you who want to help you and love on you and they will do just that.

Speaker 1 We're going to walk with you, Nicole. You're not on your own, but go get some income and watch this thing turn around.
Hang on the line. We're going to take care of you.
This is the Ramsey Show.

Speaker 1 Welcome back to the Ramsey Show. I'm Ken Coleman and Jade Warshaw is alongside 888-825-5225.
That's the phone number to jump in. We'd love to hear from you.

Speaker 1 Taking your money calls, your income-related calls today. Matthew is joining us in Houston, Texas.
Matthew, how can we

Speaker 2 Hey guys, how are you today?

Speaker 1 Good. How are you?

Speaker 2 I'm good. Thank you.
So I'm 25 years old,

Speaker 2 career salesman. At the beginning of this year, I landed a new job, which I've been, you know, my income has grown drastically.
And I'm closing on a house at the end of the month.

Speaker 2 And I just wanted to know, you know, at my age, I want to start investing early. I also want to be debt-free.
Is there a balance to investing

Speaker 2 post-tax dollars and paying off the home? Or should all of my excess cash just be going to the principal and

Speaker 2 I start investing once that's paid off? Because at my age, the value of the compound interest, if I start now, I feel it could really pay off down the road.

Speaker 2 So I just wanted to get your thoughts on that.

Speaker 3 Yeah. I mean, I think it's a good question to have, and I think it's a question that a lot of people have.
So you just closed on this home.

Speaker 3 Let's make sure you're in the position to begin investing. Do you have three to six months of expenses saved?

Speaker 1 I do. Okay, great.

Speaker 3 And then at that point, you would be considered baby step four, which is you're investing 15% of your gross income every single month. Are you doing that?

Speaker 2 I haven't started. Well, I contribute to my company's 401k plan, but other than that, I haven't.
I haven't started, which is pre-tax, but I haven't started investing any post-tax money yet.

Speaker 3 Okay, good. So

Speaker 3 what I would say is whatever you're doing now,

Speaker 3 if you have access to a match through that employer account, I would invest up to that match. And you said it's an after-tax.

Speaker 2 It's a pre-tax with employers. So they match 3%.
I'm contributing 6% right now.

Speaker 3 Okay, so I would do up to the match, and then I would go over to a Roth IRA, and I would go ahead and max something like that out.

Speaker 3 And then if you still have money left in your 15% of contributions, then you could go back out and get as close to maxing out that 401k as possible.

Speaker 3 The goal here is, again, for you to be investing 15% of your gross income. And most people do it on a monthly basis because, you know, you can kind of set it and forget it with your employer.

Speaker 3 And so that's what I would do. And then beyond the 15%,

Speaker 3 any money that you have extra, I would put it towards the paying off of the house. And so that's the way we teach.
At 25 years old, you're not married yet. You don't have any kids yet.

Speaker 3 So you can kind of forget for now about baby step five because you don't have any kids. There's no 529 that you need to really add to.
And so then for you, the next step is baby step six.

Speaker 3 You're putting extra money towards the house and you get to decide how intentional you're going to be about that, right?

Speaker 3 You don't have to go crazy like you did with the other baby steps, but you're a single guy. You could probably, you know, make a lot of headway on that.
What do you owe on the house?

Speaker 2 So around $450, $460. Okay.
I haven't even made my first mortgage payment yet.

Speaker 3 Yeah, you said you closed here.

Speaker 1 You haven't even closed yet, right? Or you just haven't closed yet.

Speaker 2 Right.

Speaker 3 Okay, yeah. And so that's what I would advise you to do.
That's what I did, and that's what I do.

Speaker 1 Yeah, I'm going to agree with you. I mean, I love Jade's advice.
Follow it. But I just want to commend you.
I love this. Excellent.
I love this mindset that you've got, man.

Speaker 1 You haven't even made the first payment yet. You're calling and going,

Speaker 1 what do I do first?

Speaker 1 But we want you to be set up for the long term and you're going to have no problem getting rid of of the house payment.

Speaker 3 And the reason I suggested you going to the Roth right after the 3% is we want that 3% match.

Speaker 3 I mean, obviously, that's free money, but then I love the Roth option for you because on down the line, you're going to want money that you have access to that you don't have to pay taxes on and that you don't have that required minimum distribution.

Speaker 3 And so, that's why we would say that, and then come back and you can fill up that 401k when you're done.

Speaker 1 What do you expect to make in the next 12 months?

Speaker 2 I'd say around $400,000.

Speaker 1 Wow, my son. See, I've been wanting to ask that.
I had to wait.

Speaker 1 I didn't want to interrupt, but I was going, I had a sense that he was, that he had jumped into a well, when he told us the amount on the house, I was like, wait a second. Yeah, yeah, yeah, yeah.

Speaker 1 So here's the only reason I asked that, again, this is all an exclamation point to what Jade said. I can't add anything to what she said on that.
With that kind of income, you're going to be fine.

Speaker 1 You're going to be more than fine. So just follow the baby steps.
And with that kind of income, man, it is going to be ridiculous. Okay.

Speaker 1 Have you gotten your hands on an investment calculator?

Speaker 2 So I was just going to mention I took a look at the amortization schedule on the loan, and that really just kind of ticked me off, you know?

Speaker 1 So I want to let it tick you off, but go in order. You know what I mean? Right.
Get your investment strategy because with that kind of income and

Speaker 1 what Jade's talking about with the investment calculator, it's one of our favorite things to do. It is.
Are you running some numbers?

Speaker 3 I'm going to run a few numbers for him.

Speaker 1 Because he's so upset about his loan,

Speaker 1 his mortgage, his amortization payment. We need to get his mind focused on this part of the advice.

Speaker 3 Okay, so then let's play a game. How much do you already have in retirement investments? Do you have any?

Speaker 2 Only maybe

Speaker 2 six or seven thousand dollars.

Speaker 3 Okay, I'll put seven thousand in there. All right.
And then let's say you contribute,

Speaker 3 let's see, $60,000 a year. So let's say $5,000 a month.
All right. And then we'll get you at 10, 10% rate of return because you make a lot of money.

Speaker 3 Dude, if you don't do anything else from now until forever, like from now until 65. Oh, actually,

Speaker 1 hold on, hold on. Yeah, I was going to say.

Speaker 3 I accidentally put in the wrong retirement age, but it's actually worth noting. I put in 48.
Like, if you were to retire at 48, you'd have 5.3 million.

Speaker 3 I thought I put in, I thought I put in 65. Let's put in 65 and see what it says.
If you go till 65,

Speaker 1 I'm shook. Tell him the number.
Now, don't remind him what he's putting in every, every, every year.

Speaker 3 No, this is monthly.

Speaker 1 If you, if you put in $5,000 a month, because you make $400,000. Yeah, that's $60,000.

Speaker 3 That's $60,000 a year at a 10% annual rate of return. You already have $7,000 there.
If you do this from age 25, you said you're 25, right?

Speaker 3 Yeah, I'm 25. Until age 65.

Speaker 1 You sitting down?

Speaker 3 Are you sitting down because I'm standing up?

Speaker 1 $31 million.

Speaker 1 $31 million.

Speaker 3 $31 million.

Speaker 3 That's crazy.

Speaker 1 I had to put my pinky like on Austin Powers. Yeah.
Yeah.

Speaker 1 So

Speaker 1 now you're feeling a little bit better?

Speaker 2 I do. I feel a lot better.
But, you know, and that's really why I called you guys. Because I know that, you know, if I start now, by the time I'm, you know, 65, it's going to make a huge difference.

Speaker 1 It's a huge difference. And oh, by the way.

Speaker 1 And oh, by the way, that doesn't mean you aren't paying your house off. You're still paying the house off.

Speaker 3 Yeah, we didn't even talk about that. And we didn't even talk about the fact that

Speaker 3 this is you starting. Like, this is not you at your full potential.
You're still going up in the world. You're still on an upward trajectory.

Speaker 1 Yeah.

Speaker 3 Man,

Speaker 3 I thought something was wrong with my calculator.

Speaker 1 No, that's 15% of your income. And oh, by the way, after you budget all that, you are now making extra payments on the house.
Oh, yeah. And you'll pay the house off before you know it.

Speaker 1 So this isn't an either-or. It's both and.
That's the point of the exercise.

Speaker 3 Matthew, I'm happy that I know you. I'm happy I got to talk on the phone to you.
Hey, check back in with us.

Speaker 3 Keep letting us know how this goes because so many people need to hear this.

Speaker 3 If you can get these things firing on all cylinders, even if you're not making 400,000 a year, if you're making 200,000 a year, what is possible when you get a hold of your finances so early is so amazing.

Speaker 3 And for anybody listening, if you've never played with an investment calculator, I suggest we have a great one, ramseysolutions.com.

Speaker 3 You can check it out, or you can just just Google Ramsey Investment Calculator and it'll pop up. But start playing with those numbers to see what your life can be.

Speaker 3 And I mean, that's motivating at the very least.

Speaker 1 Yeah, absolutely. Thanks for the call.
Love the breakdown, Jay. That's always fun when we get into the numbers because, you know, in his mind, he's like, I got to pay that house.

Speaker 1 I got to pay that house.

Speaker 1 It's like, no, it's both and.

Speaker 3 It's both and. It's not either or.

Speaker 1 And fun to run those numbers.

Speaker 1 Boy, that's a staggering number.

Speaker 3 That is a staggering number. And let me just.

Speaker 1 And not many people make his money. No, they don't.

Speaker 3 don't i want to at least call that that early in life at 25 to be making 400k no this he's in a he's in the top one that's top one percent one person 100 so i just want to at least call that out but let's also ken let's explain why we care so much about paying off the primary mortgage because at the end of the day, yes, we want you to have the compound interest.

Speaker 3 But at the end of the day, there is going to be a time where you do not work and you don't want to be making payments on a mortgage. Your mortgage is the biggest line item in your budget.

Speaker 3 You want that

Speaker 3 done and paid for by the time you're, you know, that age so that you can just live.

Speaker 1 Yeah, I totally, totally agree. There's a young man that's living like no one else.
I promise you, he's going to be living like no one else and also giving like no one else at a young age, by the way.

Speaker 1 Great stuff. Good hour, Jade Warshaw.
All right, does it for this hour? There'll be more Ramsey Show, I promise.

Speaker 1 Welcome to the Ramsey Show, where we help you win with your money, win in your work, with that income of yours, and win in your relationships when you're tackling things like money problems.

Speaker 1 Thrilled to have you with us. Triple 8-825-5225 is the phone number.
I'm Ken Coleman. Jade Warshaw is with me.
Triple 8-825-5225. Let's get right to the phones.
Doug is joining us in Dallas, Texas.

Speaker 1 Doug, how can we help today?

Speaker 2 Hi.

Speaker 1 Hi, Doug. Thanks for taking my call.

Speaker 2 You bet.

Speaker 2 Well,

Speaker 2 I guess I'm trying to figure out the next steps for my family economically.

Speaker 2 Had a change in employment status.

Speaker 2 Had a whistleblow in my

Speaker 2 last job after 10 years, unfortunately, and cost me my job. I had set my wife down before this happened to kind of explain what was going to take place.

Speaker 2 Met with an attorney and made sure I knew kind of what was going to happen. And

Speaker 2 obviously it cost me my career and I've kind of been blackballed in the line of employment that I was in at this stage. I'm 55 this year,

Speaker 2 so I'm kind of running into

Speaker 2 some challenges with ageism and just

Speaker 2 kind of getting

Speaker 2 looked at

Speaker 2 dealing with navigating AI.

Speaker 1 Okay, so let's dive in here. So what were you doing? What industry were you in and what role were you playing?

Speaker 2 I was in health insurance, in the health care,

Speaker 2 payer side,

Speaker 2 and

Speaker 2 had been in the provider side for a number of years and moved over to the payer side.

Speaker 2 And I was in working in administrative

Speaker 2 services only accounts.

Speaker 1 What does that mean? I understand those words, but I'm not sure I understand what that day-to-day looks like.

Speaker 2 So I was on

Speaker 2 an account that was a public-funded account, taxpayer money that was paying

Speaker 2 on claims for public employees.

Speaker 1 And so were you leading?

Speaker 1 Were you leading the business?

Speaker 2 Yeah, I was in the leadership role.

Speaker 1 Okay. And is that just your classic management role?

Speaker 1 Like if you described what you were doing day in and day out and you didn't tell me the specifics, you just told me how you were dealing with your team, would I know that you were in health insurance?

Speaker 1 Yeah.

Speaker 1 Oh, okay.

Speaker 1 I kind of thought you were going going to answer that differently. It's why I led you into that one.
The point is, is you are leading people and you can lead people, true or false. True.

Speaker 1 Doesn't matter the industry, does it?

Speaker 2 Mostly healthcare.

Speaker 1 No, no, no, no.

Speaker 1 Let me ask it a different way. You can manage people.
You know how to lead a team of people that has a very clear direction and they have a very clear agenda attached to the direction.

Speaker 1 You know how to lead and manage people, true or false.

Speaker 2 Yes.

Speaker 1 Doesn't matter if it is in healthcare or not. You know how to lead a team.
True. All right.
That's where I'm going with this.

Speaker 1 I don't know what to say, and I doubt Jade does either.

Speaker 1 We don't know the circumstances. There's no way for us to talk you through, well, you haven't been blackballed in the healthcare industry or you're not dealing with ageism.

Speaker 1 There's really no way for us to counter that.

Speaker 1 And so what we've got to do is we assume that this is what's happening and then give you advice based on that. So first things first, and Jade will weigh in here in a second.

Speaker 1 I would say that you can lead. You have an extensive resume.
You were 10 years with this one company. You can lead.
You have transferable skills and transferable experience.

Speaker 1 And I would be looking throughout multiple industries. And the narrative is, I was in healthcare for a long time.
I don't want to pivot. I want to pivot.

Speaker 1 And it doesn't matter what happened in the situation where you felt like you had to blow the whistle on somebody and it ended up backfiring on you.

Speaker 1 But you get a new chance. You're out of a bad situation, sounds like to me.
And so that's the issue that I would be focusing on is I can lead people.

Speaker 1 And so if I've got to go manage a Chick-fil-A or an Applebee's or I've got to manage in a technology field. There are transferable skills and experience, and that needs to be the narrative.

Speaker 1 Now, on the ageism issue, if ageism is happening to you, and I'm not saying that it isn't, but if it is, that's because you are playing the normal game, which is I'm going to go on LinkedIn, I'm going to go on all these company websites, and I am a, I mean, just a, I'm just a profile, I'm a digital profile, and they see how old I am, or, you know, or I get in interviews where I don't have an edge, meaning I don't have a relationship.

Speaker 1 And so now I am compared against other people.

Speaker 1 What you've got to do is, and I'm going to give you my book, The Proximity Principle, as a gift, you have got to leverage relationships in these companies that you're going to so that, and let's say I'm trying to get in a company and I know Jade works there at company ABC.

Speaker 1 I got to go to Jade and say, Jade, listen, we've known each other for X amount of years. I'm going to apply.
I'm going to do the online thing. In fact, I just submitted it today.

Speaker 1 But would you be willing to take my resume? And would you hand it to this guy named Bart Jones? You know Bart over there and what you call it? She goes, I know Bart.

Speaker 1 And she walks by Bart's office or his cube and she puts a personal touch on it and says, I know this guy, Ken. He just applied.
He's a really good dude. Here's how I know him.

Speaker 1 Here's how long I've known him.

Speaker 1 And I think he's a viable candidate. I can vouch that he is not a wing nut or whatever.
That's the game, Doug, that you got to play.

Speaker 1 Sure.

Speaker 2 Yeah, I've leveraged some

Speaker 2 relationships in different industries to get my resume in front of some people. And I've I've restructured my resume a couple of times to get away from a linear presentation to try to downplay the,

Speaker 2 you know, the, here's when I went to college, here's when I did this job, here's when I did that.

Speaker 1 I tell you what, I've got a template that we'll give you. Christian,

Speaker 1 let's give Doug my free templates.

Speaker 1 I got six templates you can get at kencolma.com, but I've totally flipped the resume on its head years ago, and this thing's been really popular, and we just use common sense. Yeah.

Speaker 1 I have no HR background at all, but we were like, let's try this. And it really works.

Speaker 1 I've had Fortune 100 employees email me and say, I got through this because my resume looks totally different than everybody else's. And I'm not going to go through a breakdown of it for sake of time.

Speaker 1 But Doug, it starts off with who I know.

Speaker 1 That's the top of the resume. It says, Doug, whatever your last name is, and the first bold heading is, who I know.

Speaker 1 And what you've got to do there in order to fill that resume out is, is have a one or two or three or four or five degree connection to somebody in that company.

Speaker 3 So you're making it custom for each. You're customizing it for each company.

Speaker 1 And you're also, or it might be industry-specific. So if you're going to get in the tech industry and go, go, I know so-and-so who's

Speaker 1 a leader of programmers over at big name company. And people start to go, oh, Doug knows, Doug knows some people.

Speaker 1 Doug's connected. I'm saying try it.

Speaker 1 Add it, it only works if we're going to actually leverage. Right, right, right.
So here's my point, Doug. This is a numbers game.

Speaker 1 I'm trying to give you pep talk here to go, I believe all those things happen to you or may be happening to you, but that does not, that does not, you know, cancel you out. You can get hired.

Speaker 1 You will get hired, but you're going to have to be really, really intense. Like this is a, I am burning the ships moment.
I'm going to keep going.

Speaker 1 I'm not going to just submit resumes and sit back and wait. I'm going to submit resumes where I've got a person in that building who's willing to submit that resume as well.

Speaker 1 I'm talking to anybody and everybody I know going, hey, I've been a leader for 10 years. I'm leaving my current company.
I'll lead anywhere, anytime.

Speaker 1 And this becomes your full-time gig

Speaker 1 is spreading the word, talking about it. That's where opportunities show up on our doorstep.
But absent of that kind of intentionality and resilience,

Speaker 1 you're going to be calling us a year from now going, I've been trying to apply for jobs for a year. Nobody's paying attention to me.
Yeah, I know. Because you're a ghost.

Speaker 1 Can't be a ghost. You got to have gumption.
There's your theme. Look up the word gumption, Doug.
There's your new theme word. This is the Ramsey Show.

Speaker 1 Welcome back to the Ramsey Show, where we help you win with your money, win

Speaker 1 in your work, and win in your relationships. Triple 8-825-5225 is the phone number to jump in.
888-825-5225. I'm Ken Coleman, my colleague, and friend Jade Warshaw is with me to take your calls.

Speaker 1 And by the way, she has got a very, very exciting announcement. I mean, you're holding something fresh.
I'll take it from here, Ken.

Speaker 3 What you got? I'm just kidding. That looks good.
You know what? Today is the day, the official launch date of the Graduate Survival Guide. This is five mistakes you can't afford to make in college.

Speaker 3 And if you notice, the color is the same as my nail polish.

Speaker 1 I was going to point that out if you didn't.

Speaker 3 Because they were like,

Speaker 1 yes.

Speaker 3 They were like, this book needs to be Jade because when it comes to college and making mistakes in college, Jade knows a little something about that. Yes.
And that is true.

Speaker 3 This book is literally crafted on the five biggest mistakes that I made made going from a senior in high school to a freshman in college. I love it.

Speaker 3 And so the book outlines five mistakes that I don't want your grad to make.

Speaker 3 Because if you're listening right now and you've got a college senior, if you're listening right now and you've got, I'm sorry, a high school senior or if you've got a college freshman.

Speaker 3 This is for you. Yeah.
Okay. So we're talking about.

Speaker 1 Great little book. Look at that.
Look at this. No.
It looks good. Look at it.
It's just practical.

Speaker 3 The size is perfect. It's like, there's no jacket on it.
So it's like a journal. You can just knock around on this.
You can put it in your backpack. It's not, but it reads, Ken.

Speaker 3 It reads like a magazine.

Speaker 1 See, this is the colors.

Speaker 3 Super colorful. It's just.

Speaker 1 Pay attention, parents and grandparents. Yeah.
Because this younger generation, this is how they read. This is how they read.
It looks like social media.

Speaker 1 Yeah, I was going to say, it looks like an Instagram post.

Speaker 3 It looks like Instagram. It looks like TikTok.
And honestly, it reads like TikTok as well.

Speaker 3 And so I talk about student loans, Ken. I talk about credit cards and avoiding credit cards.
I talk about dumb choices when you're, you know, you buy your first car note.

Speaker 3 So I talk about how to buy a car in cash. I talk about what happens when you have no plan and you don't have a budget.

Speaker 3 I talk about what happens when you have no money in college and the desperate things that you start to do. And so this is the guide.
Here's the thing.

Speaker 3 Your kids might not listen to you, but they might listen to me.

Speaker 1 Right? I think so. I know my kids listen to you.

Speaker 3 My kids hardly listen. My kids don't even listen to me.
They're five years old. But if my brother or sister tells them something, they listen.
I agree.

Speaker 3 Because it's just another outside voice that they think is.

Speaker 1 You're Auntie Jade. I'm Auntie Jade.

Speaker 3 I like that. And that's how, actually, that's how I describe myself in the book, Ken.

Speaker 1 I did not know that.

Speaker 3 Yeah. I describe myself as your younger, your older yet surprisingly young looking sister.

Speaker 1 I love that. I love how you described yourself.

Speaker 3 Yeah. And so

Speaker 3 this is the book. I want you guys to get this.
It's out today.

Speaker 3 Guys, I've been there. I went into, Ken, let me tell you the dumbest mistake I ever made.

Speaker 1 I want to know. I want to know.

Speaker 3 I had a full volleyball scholarship and a full academic presidential scholarship, and I still took out student loans. Why? Because they said, Jade, you need to live, right?

Speaker 3 Like, you want to go to the homecoming game. You need to buy clothes.
You need to buy groceries. You need a car.

Speaker 1 So you took out a loan just for the living experience.

Speaker 3 Just to live. I took out a student loan.
Okay, here's dumb thing number two. I remembered hearing Dave Ramsey say, you buy a car in cash.
Yeah.

Speaker 3 I took out a student loan and caught myself saving that money in cash and then bought a car and thought I was buying a cash car because I used actual cash to buy it. But it was loan money.

Speaker 3 That feels wrong. That feels wrong.
But that's the kind of, listen, that's what goes on in the mind of an 18 and 19 and 20 year old. We don't know.
We don't know yet.

Speaker 3 And so I'm trying to get into their mind and tell people where to get it.

Speaker 1 Okay, you can get it. It's on sale today.
It's on sale today.

Speaker 3 Go to the graduate survival guide. You can get it at ramseysolutions.com slash store.

Speaker 3 You can click the link in the description if you're listening on YouTube or podcast, or you can check out my Instagram at Jade Warshaw. You'll definitely find it there.
Get it today.

Speaker 3 This is the most important. If I had had this,

Speaker 3 I would have been a Scrooge McDuck by now. I would have had millions.

Speaker 1 I like the Scrooge McDuck reference. It's very fantastic.
By the way, if you're watching on YouTube

Speaker 1 and you understand what I'm about to say, if you're listening on the radio or via the podcast or the Ramsey app, you're going to get, with buying this book, you're going to get a great suggestion of a nail color for all you ladies out there.

Speaker 1 It's a neutral. Because you are, I don't know that that color is neutral.
Ken, I guarantee you. I don't think it matches everything.

Speaker 1 Oh. It matches you.
That's what that means.

Speaker 3 Yeah, it means it matches everything.

Speaker 1 Oh, I stand corrected. But that's one of the bonuses.
The five mistakes,

Speaker 1 the five colors, the same as your nails. I'm going to call that lemon meringue.

Speaker 3 It's called lemon juice, Ken.

Speaker 1 Is it for real? Yes. Well, that's close.
I mean, I'll be honest with you, way closer than I would have ever guessed. I thought you were going to make fun of me for that.
All right, good stuff.

Speaker 1 So there you go. Ramseysolutions.com in the store to get the book right now.
Fantastic. Can't wait for people to get that.
It's a great gift that keeps on giving. Yes, it does.

Speaker 1 All right, Nicole is joining us now in Philadelphia, Pennsylvania. Nicole, how can we help?

Speaker 2 Hi, thanks for taking my call.

Speaker 2 You're probably going to think this is a stupid question.

Speaker 1 No.

Speaker 2 Speaking of college loans,

Speaker 2 should you take out, if you have the money for college, should you take out a loan for the sole purpose of helping your child establish credit, cycle score, and a repayment history.

Speaker 1 What do you think the answer to that is?

Speaker 2 Take a guess.

Speaker 2 I think it's a dumb question.

Speaker 1 It's not a dumb question.

Speaker 2 I think the answer is don't take out the loan.

Speaker 3 Yeah.

Speaker 1 Survey says. But this is my

Speaker 1 other question. Okay.

Speaker 2 This is my other question.

Speaker 2 And I know Dave has talked about

Speaker 2 cycle scores and apartments. How easy or hard is it for someone to rent? I've never had to rent an apartment.
So how easy or hard is it for someone, a college graduate, 25, 26?

Speaker 3 It's not hard.

Speaker 1 It's not hard.

Speaker 3 It's not hard. You just have to do your due diligence.
It's not going to be, it might not be the first apartment complex that you wander into, right?

Speaker 3 So there are some complexes that say you have to have a credit score, but there's plenty that say you don't.

Speaker 3 Or if you're renting outside of an apartment, if you're renting a house, maybe he and a couple of buddies rent a house or they rent a you know a condo or they rent a townhouse, something like that.

Speaker 3 Yeah, you can definitely find it. It's just going to require you to do, like I said, it's not going to be the first complex that you throw a rock at.

Speaker 3 You might have to visit a couple of them and let them know and just go in there with cash and say, Listen, I've got cash for first and last months. They might charge you a little bit extra.

Speaker 3 That's fine. Just go in with the money and

Speaker 3 you'll be fine. It's not that big of a deal.

Speaker 2 Okay.

Speaker 1 Got it.

Speaker 1 Yeah. Great questions.
Got it. No, No, no dumb questions.
No dumb questions. No, only dumb actions.
Right. Okay, I'm with that.
You know what I mean? Like, we can all do dumb, and we all have.

Speaker 1 But to ask a question before doing something dumb does not make it a dumb question.

Speaker 3 Yeah. And especially with her question, because it was based on what she's been hearing.
Oh, 100%.

Speaker 1 You know, oh, yeah. And she knew, by the way.
Yes. She knew.

Speaker 1 By the way, just a little nugget here. The reason I did that with Nicole is because I could immediately tell that Nicole had a lot of common sense.
Yeah.

Speaker 1 And so I wanted to just illustrate before we weighed in on our opinion that our opinion is not based on expertise. It is based on common sense.
Okay, I'll go with that.

Speaker 1 I'm not saying you aren't an expert.

Speaker 3 I am not a self-proclaimed expert.

Speaker 1 Yeah, but you get my point. It's not that we're smarter than anybody else.
It's that all of our answers on this money stuff and work stuff, it's all common sense-based. So if you apply some

Speaker 1 sense to the situation. Yes.
In other words, if your gut's telling you this is probably a bad idea,

Speaker 1 it's a bad idea is all I'm getting at. You know, and so many things that we get into, financial troubles, relationship troubles, professional troubles

Speaker 1 is where that little voice,

Speaker 1 that feeling in our gut, we were like, I don't know.

Speaker 1 That just feels, it's a feeling.

Speaker 1 And now I'm going to get some other facts and I'm going to get some other opinions and I'm going to put them in a glass and I'm going to stir them. Okay.
You feel what's happening?

Speaker 3 Yeah, I feel what's happening. Keep going.

Speaker 1 And so then we talk ourselves

Speaker 3 out of

Speaker 1 the common sense feeling. And I'm going to give you a little bit of research on this just so you don't think I'm.
Woo-woo-wooing. No, I'm not.
I'm nerding out. Okay.

Speaker 1 So I read a book written by a physicist and a neuroscientist. And they were talking about the gut feeling.

Speaker 1 And they described a test that some world-class researchers did on grandmaster chess players. They put a heart monitor on them.

Speaker 1 What they found was before every fatal move in a chess match, the chess player's heart rate spiked, telling them not to do it. They did it anyway.
So what was the point of the study?

Speaker 1 That gut feeling is attached to your actual brain. Don't ignore it.
It's your body saying, stop, stop, override the brain.

Speaker 3 Some call it a still small voice.

Speaker 1 There it is. So trust that common sense.
You're sensing it. Believe it.
All right. Quick break.
More of your calls coming up. This is The Ramsey Show.

Speaker 1 Welcome back to The Ramsey Show. I'm Ken Coleman and Jade Warshaw is alongside.
We're here for you, 888-825-5225. Time for our Ramsey Show question of the day.
It's brought to you by Why ReFi.

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Speaker 1 That's the letter Y, R-E-F-Y dot com slash Ramsey. It may not be available in all states.

Speaker 3 Okay, today's question comes from Aiden in Massachusetts. He says, I'm 20 and attend college to get my bachelor's in electrical and computing engineering.

Speaker 3 I took Ken's Get Clear Assessment and Engineering was one of the careers it suggested, and it's the one I'm most passionate about pursuing.

Speaker 3 I currently work part-time for a retail store, and thankfully, they are paying for my degree at no cost to me.

Speaker 3 But as excited as I am about my future, I'm discouraged because I still live at home, and my job is not fulfilling at all.

Speaker 3 And on top of that, the process of getting my degree is a long and grueling process. Am I overthinking this, or is this a thing most college students experience? I could use a pep talk.

Speaker 1 Okay, yes, and yes.

Speaker 1 Yes, you're overthinking it. And yes, this is normal for college students to go through this.

Speaker 1 There is a roller coaster where a college student first leaves the nest. Many are excited about it.
Many are scared about it.

Speaker 1 So whatever that range of emotion is, that's the kind of the beginning, right? And then you get there.

Speaker 1 And

Speaker 1 for again, let's just leave it. Most people are kind of like, I'm on my own, living my best life.
Mom and dad aren't breathing down my neck, telling me to clean my room, the whole nine yards.

Speaker 1 And then we start getting into classes. And, you know, depending on your situation, you're going to deal with some hardship there.

Speaker 1 Very different ballgame there. Sometimes it's a lot harder, depending on the major.
You're on your own. You don't have a bunch of study aids.
It's like, oh, hello. I got to be an adult.

Speaker 1 Then we start moving into,

Speaker 1 okay, I know what I want to do. And in this case, he knows what he wants to do.

Speaker 1 But he's looking at four years.

Speaker 1 Four years.

Speaker 1 and to have this emotion um it's very normal are you overthinking it yes because all you're thinking about is the climb it's the climb thank you miley i'm sorry thank you miley cyrus that was actually perfect what you're not thinking about is the destination and so what has to happen is um

Speaker 1 you have got to come up with a mental approach to I got to do what I have to do so that one day I can do what I want to do.

Speaker 1 And the only analogy that I could give here is a pep talk, and I'm going to hand the baton to you, okay, for your locker room speech.

Speaker 1 When I train for the half marathon, and you're currently training for a marathon,

Speaker 1 I hate to run unless I'm running in a game involving a ball and a victory, and a pickleball paddle. But the idea of just running.

Speaker 1 And so, I remember in my training, Jade, early on that I figured it out, and I would be approaching a long grade or a sizable hill. And that's where my hate of running

Speaker 1 voiced itself the most to the point where it was like, you're a grown man. What are you doing? You could stop right now and walk home, crack open a beverage and watch TV.
What are you doing?

Speaker 1 This is absurd.

Speaker 1 And what I learned was, is what I'm describing here.

Speaker 1 I had a mindset for the short term and the long term. So you know what I started doing? You may laugh at this.
What? I stopped looking at the top of the hill. That's a genius.

Speaker 1 Once I knew the hill was there, I went, I got to get to the top of that hill and I'm going to feel better about myself. I'm going to gain endurance.
It's going to be good for what I'm training for.

Speaker 1 But once I saw the top of the hill, I took my eyes off the hill and I started looking at my feet. And I literally mentally just looked at one foot running against the next.

Speaker 1 And when I just looked at, there's one foot, there's another one. I'm just doing this right here.

Speaker 1 And all I'm looking at, and occasionally I would glance up just to make sure I wasn't about to run into a parked car. Yeah.

Speaker 1 But I never looked at the top of the grade anymore. And I'm going to say I think that's the approach.

Speaker 1 If you know that the degree is leading you to the field that you want to be in and you got to get that degree, if that's the case here. So the pep talk is

Speaker 1 a glance at the destination to say that's what I'm aiming for. But now I better focus on one week, then the next week.
The next week, before I notice, semester is over.

Speaker 1 And before I know it, I'm at the top of that hill. And I will tell you, the moment I adopted that, I had a much better mental approach to running hills.

Speaker 1 And I will also tell you that I started measuring, my pace didn't drop off as much.

Speaker 3 Because you stopped focusing on the thing that was freaking you out.

Speaker 1 Stopped going, good grief, I got to run to the top of that. And it was, nope, one foot, one foot.
And I would say to myself, one foot, one foot, one foot.

Speaker 1 Because you can't have two thoughts at the same time.

Speaker 3 You know what, Ken? That's actually genius because that's a big part of this. I agree with you 100%.
You can't look at the summit. You have to look at where you're at in the moment.

Speaker 3 And I mean, this is not going to sound very eloquent, but it's the truth. Hard work is hard work.

Speaker 1 Like people say hard work like kind of like a euphemism, like, oh, that's going to take a lot of hard work. I can't believe I got to do this.

Speaker 3 And then when you do it, they're like, why is this hard? I'm like, hard work is hard, but you can't look at, you can't look at, like, like Ken said, you can't jump to the finish line.

Speaker 3 Like right now, I have an app that, you know, does my training for me. If I were to skip forward and look at a couple of weeks from now, my heart will start pounding.
It's a great illness.

Speaker 3 Because I'll be thinking, oh my gosh, there's no way I can run 20 miles.

Speaker 3 Because right now I can't.

Speaker 3 But if I keep going day by day, by the time that day comes, I will be able to run 20 miles.

Speaker 3 And so this guy, he's just got to look at it one day at a time, focus on the reward, focus on what it's going to build inside you.

Speaker 3 Because at the end of the day, you're going to get this degree and you're going to know how to do the things in the field that you need to know how to do. That's right.
And that's motivating.

Speaker 1 And for you right now,

Speaker 1 what is your personal?

Speaker 1 What's your personal why for this marathon? in other words let's fast forward to race day yeah and you're gonna finish let's not even think about your time uh-huh

Speaker 3 what personal why what's your why on this a couple of things number one i started hearing a lot of people with a lot of money run marathons

Speaker 1 so you go i want some of that heck yeah and then i looked at dave

Speaker 3 and i said if dave ramsey ran ran a marathon

Speaker 3 i think he was what how old was he james like 40 in his 40s i think older than that yeah mid-40s i think i mean i'm four i'm exactly 40 And I'm like,

Speaker 3 if Dave can run a marathon, mama's gonna run a marathon.

Speaker 1 Like, no, for sure.

Speaker 3 And then the other thing is, there's been two things that have really been definers for me. One was when we paid off the 460,000 of debt.
I was like, you can't tell me nothing.

Speaker 3 Like after this, like, nobody could, don't try to tell me anything because that just created a confidence. The second thing was when I had my two babies.

Speaker 3 I was like, now you really can't tell me nothing.

Speaker 1 That's tough.

Speaker 3 And now I'm like, if I can run this marathon mentally, that just, it's a toughness that I want.

Speaker 1 Have you, have you, because you've done halves before. Yes.
So it's not like your first time, but this is the longest and the most grueling workout.

Speaker 3 26.2 miles.

Speaker 1 Are you hitting, are you experiencing that halfway mark where you start to hate yourself? Not yet. You question your...
your reason for living?

Speaker 3 No, not yet.

Speaker 3 Last weekend, I ran 13 miles. This weekend, I'll run 15 miles.
And for me, and I don't know, maybe I'm crazy, but for me, this is like, yes.

Speaker 3 Like, I am like full Dragon Ball Z, like powering up mode right now.

Speaker 1 Like, I am telling me in the middle of the 13-mile run, you're saying, I didn't, I didn't hit a moment where I had to press through.

Speaker 3 I have hit those moments, but Ken, you said it, and it is so true. What you say to yourself,

Speaker 3 you can only have one thought attack. That is so good.
Because when I'm running, if you could hear my brain in my brain, I'm like, come on, Jade, like you're a freaking boss, Jade. Like, you got this.

Speaker 3 Like, you have to talk to yourself like that because there's nobody else yeah to say it yeah when I'm running I'm by myself ain't nobody else

Speaker 1 yeah well you want to do it you want to do it Ken I'll I'll zipple on beside you in a bottle on a bicycle I mean I exercise but I keep mine too short Ken Coleman is in shape let me tell let me let me brag on you and for anybody I know you guys you want us to talk about money um I play pickleball

Speaker 1 mindset I play pickleball with Ken and Ken I'm saying this in your favor okay

Speaker 3 Ken is older than me and older than a lot of the other players. He has more years on us.

Speaker 1 I'm the oldest Ramsey personality. I can handle it.

Speaker 3 But Ken dominated the courts. Let me just tell him,

Speaker 3 Ken had on his sweatband and his bad guy hair was in his face.

Speaker 1 That's true. And

Speaker 3 he won. That's true.

Speaker 1 He was in shape before all of us. I was like, oh, my God.
The thing I'm most proud of is how long I can play pickleball for. I can play for three hours and I can keep going.

Speaker 3 Ken wanted to keep playing after the pickleball tournament was over.

Speaker 1 Everybody else is exhausted. They needed lunch.
We needed a margarita. I'll tell you what I needed.
I needed more competition.

Speaker 3 Feed me. He eats competition for breakfast.

Speaker 1 Feed me more competitors. I'm a gladiator with a paddle.

Speaker 2 This is the Ramsey Show.

Speaker 1 Welcome back to the Ramsey Show, where we help you win with your money, win in your work, and win with your relationships.

Speaker 1 So, hey, we're about ready to get back to the phones, but I want to let those of you know that are listening via radio. We're going to continue with you after this segment.

Speaker 1 But for those watching on YouTube and listening via the podcast app that you prefer, this will be our last segment unless you move over to the Ramsey Network app.

Speaker 1 That's where you get the full episodes, the full three hours, the only place you can get it

Speaker 1 unless you are listening on radio. So, just wanted to let you know that.
And again, you can check out the Ramsey Network app in the App Store

Speaker 1 or on Google Play. So, check that out so you can get the full show.
We got some great calls lined up for the rest of today.

Speaker 3 What's Google Play?

Speaker 1 Google Play.

Speaker 1 Just kidding. Oh.

Speaker 1 Listen to me struggle.

Speaker 1 I was like, well, it's a.

Speaker 1 All right. Andrew's joining us now in Toronto, Ohio.
Andrew, how can we help today?

Speaker 2 Hi. Thank you very much for taking my call.

Speaker 2 I actually live in Canada, where everything is quite a long ways away. I live in the northern region of Canada, and I drive about 7,000 to 8,000 kilometers per month.

Speaker 2 And I was wondering, should I be looking at maybe leasing an electric vehicle or keeping my current gas SUV?

Speaker 1 Okay.

Speaker 3 Is there anything you want to add to that? You seem like you're going to say something else.

Speaker 2 I was just going to say, because the amount I spend in gas each month is roughly $200 less than an electric car lease with the extra kilometers for 80,000 per year.

Speaker 2 So that's why I thought, I'm usually very against leasing, but I thought, I don't know, is this the one time that there's an exception here? I'm not 100% sure.

Speaker 3 Well, I think there's two, it sounds like there's two issues here. One is the affordability of your gas and if you want to lower your gas bill.

Speaker 3 And the other issue is if you choose to change vehicles, can you afford it? And do you have the cash to buy the vehicle? So let's look at it kind of separately for that purpose.

Speaker 3 First off, for your gas SUV, what are you spending now?

Speaker 3 How many dollars are you spending a month to fill it up and do all that?

Speaker 2 About $1,280.

Speaker 2 That's the average in the past three months I looked at.

Speaker 3 Okay, and you're saying that with an electric vehicle, you could lower that by $200?

Speaker 2 No, so the electric vehicle with,

Speaker 2 because leases usually only go to 24,000 kilometers here in Canada. So buying the extra kilometers, which is 8 cents a kilometer,

Speaker 2 totals me about $1,400-ish per month for

Speaker 2 leasing on a two-year lease.

Speaker 2 And the reason is because I'm assuming there's no residual value left in the electric car. And if there is, it'd be small.
So the warranty is for 160,000 kilometers.

Speaker 2 And I thought, well, I'll probably reach that within two years. So, you know, leasing it over two years, then here's the keys.

Speaker 2 And I don't have to deal with the speculation on how consumers are going to perceive the value of the

Speaker 3 here's the thing. I'm never going to advise you to lease a vehicle and I'm never going to advise you to go into a car note for a vehicle.

Speaker 3 For the lease, I'm not going to suggest that because it truly is the most expensive way that you could possibly operate a vehicle. Even though you're like, hey, it's electric.

Speaker 3 There's, you know, rebates that I'm going to get, all that.

Speaker 3 When you do the math on how the payment is,

Speaker 3 how they come to the conclusion of the payment, you're going to realize, oh my gosh, this is the most, and I can go over that in a minute.

Speaker 3 What I would do if I were you, it kind of feels like you're going from one extreme to another. You've got the electric vehicle on this end, but then you've got a gas SUV on this end.
What if you had a

Speaker 3 gasoline car that wasn't guzzling as much gas? What if you did that? So I would kind of advise you to look at your options.

Speaker 3 But at the end of the day, what's really going to inform this is how much money you have. Do you have money to spend on a new vehicle? And that's really where my mind is.

Speaker 2 So I own my current vehicle. and yes, I do.

Speaker 2 I actually teach corporate finance, of all things.

Speaker 2 But, yeah, I have enough to, you know, if I was to go into a dealership and comfortably buy a vehicle, I was going to buy a lot instead. But, you know, if I have to buy a car with it, that's no issue.

Speaker 2 But honestly, my current vehicle is fine. It has a lot of life left to it.

Speaker 1 Okay.

Speaker 2 You know, it's just more of the fact that there's a depreciation expense, right? And

Speaker 2 there is a gas expense.

Speaker 3 And by the way, when you lease a car, the depreciation is built into the price of the lease. Like that's built in.
So

Speaker 1 you're not avoiding that.

Speaker 2 No, what I am saying is, you know, if I could buy the electric car in cash, except the car salesman said once they're out of warranty, they're really only worth

Speaker 2 maybe $15,000 or $20,000

Speaker 2 in residual value. And he gave an example because he had one that he recently had to buy.

Speaker 2 And he said it's because consumers don't realize you can maybe replace the battery, but, you know, still it's kind of early. And

Speaker 2 so

Speaker 3 to your point, we are saying, I mean, we're getting more and more people calling in saying, I bought an electric vehicle. It's now barely a year later and the value has gone down substantially.
So

Speaker 3 there are issues there.

Speaker 3 I'm not necessarily saying that I'm in favor of you having an electric vehicle. You're just saying, hey, this is what I want.

Speaker 3 What I'm simply saying is if you decide to do that, I would buy it outright and I would buy it used. I would not lease it.
So that would be my advice to you.

Speaker 3 I mean, you're grown, so you'll probably go away from here and you'll do what you choose to do. But that would be my advice.

Speaker 2 Okay, I'm going to stick with my gas car then. The only incentive I thought was the lease payment was cheaper than the gas.
But you know what? The way that you're going to be.

Speaker 1 But

Speaker 1 I don't understand

Speaker 1 why not even maybe try to come to the States and get a used electric car. That's what I'm thinking.

Speaker 2 Would they be under warranty, though, right? And how long did those electric car batteries last in lifetime?

Speaker 1 You're risking the wrong cat because I don't want an electric car ever. I'm a classic car guy.
In fact, the older the car, the better for me.

Speaker 1 So I'm just being honest. I don't know.
I'm asking you. So you came at us with a lease.

Speaker 2 You have a lapfill about 200,000 kilometers, and then

Speaker 2 they have like a, you have to pay 20,000 for a new battery to be installed.

Speaker 1 Yeah. And Andrew.
Okay, good. So in my asking that, you've given yourself another, an answer as to why it's not a good play for electric cars in general.

Speaker 3 And there's another part of this with the amount that you're driving, and I don't know, I don't have an electric vehicle. I only talk to the only person I know who has one, which is George.

Speaker 3 And the few calls that come and hear about them

Speaker 3 is the charging. Like there's more to the charging than meets the eye.
There's the time.

Speaker 3 And then if you want to do the quick charge, that costs more. Do you know how much you can get?

Speaker 1 And then you got to make sure. You can't get a cost for my gas car.

Speaker 1 Why would you buy something? Here's what I, and I'm not even, Andrew,

Speaker 1 I don't even know why anyone would buy an electric car based on what you just told me. Because it's like once the battery goes.

Speaker 3 That's that. And you have to know where you can charge it.
You're driving long distances. Can it make that distance? Like, how many trips can you make per charge? That's the way my brain is thinking.

Speaker 3 That feels like a headache to me. So

Speaker 3 as they say on Shark Tech, for that reason, I'm out.

Speaker 1 Yeah. Yeah.
I love that.

Speaker 2 And that means I'm out too. So I was leaning towards keeping the car, but the mass was going the one way.
I'm like, ah, this can't be true. But let's call it a rampy show.

Speaker 1 But I'm glad you guys agree.

Speaker 2 You know, as a society, we really don't know enough about these cars to make a

Speaker 1 car,

Speaker 1 are you using your car for your own business or do you work for someone else and it requires you to do all this driving?

Speaker 2 My own business.

Speaker 1 So you do write that, you write off all those expenses, or at least every expense that you can. I don't, I mean, on the car, so that's, that's at least a positive.

Speaker 1 You know, there's some breaks there about running that through your business. But I mean, that's just, that's what it is, man.
And that's the nature of what you're doing.

Speaker 1 So you got to build into that, you know, my retained earnings on a business like that would be like car replacement. 100%.
100%. I'd have a line item on that.
Yeah. Are you doing that, Andrew?

Speaker 2 No, I usually include travel in with my consulting practice that I have. I usually include travel in the price that I give for the engagement, but maybe for that, which is great.

Speaker 1 That's a better idea. Well, no, it's great.
But what I'm saying is, is I would, Jade, you're with me. If you're going to do that, I would put all that money into a car replacement fund.

Speaker 1 It is a huge huge part of your business, my friend.

Speaker 2 I see what you're saying.

Speaker 1 Like, you should be putting,

Speaker 1 well, let's just run this through. We've got about a minute and a half.
I'm going to give it to the budget guru. Walkie.
So

Speaker 1 how much money do you pay yourself?

Speaker 2 Mean right now? Yeah.

Speaker 2 $150,000 a year.

Speaker 1 Okay, great. And do you have some margin? I'm guessing you have some margin in the business after you pay yourself?

Speaker 2 Yeah, I usually keep very little profit in the business to minimize corporate taxes.

Speaker 1 But how much money could you put away, real quick, how much money could you put away a month in your business for a car replacement after paying yourself and all expenses?

Speaker 2 $1,500.

Speaker 3 That's great. I'm doing that today.

Speaker 1 Yeah, I would too. I mean, you've got some margin there.
Start putting a car replacement fund in your corporate bank account. And boy, that's going to be great.
Good hour, Jake. Great call.

Speaker 1 Enjoyed that. This is The Ramsey Show.