Solve for Peace Instead of Screwing Around With Debt

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From the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

Rachel Cruz, Ramsey personality, number one best-selling author and co-host of the Smart Money Happy Hour hit on Ramsey Networks.

My daughter is my co-host today.

Open phones at 888-825-5225.

Jim is in Connecticut.

Hi, Jim.

How are you?

Hey, how's it going?

Better than I deserve.

What's up?

So I have a question.

I've been listening for some time now, and I haven't heard this question answered.

So basically,

we have

about $90,000 in student debt and we have the money to pay it off.

Good.

But my question is, so I have a friend that's in real estate and he basically is telling me to get into real estate with that money rather than paying off my student debt.

So essentially like, you know, putting down 20% on maybe two, three, maybe four properties, for example, using that money to cash flow the payment on the student loan and then obviously build equity and wealth for whatever, our kids, for the family, whatever.

Yeah.

What do you think about that?

Well,

I did

something similar in my 20s, and I went broke.

So I'm not a fan.

I think your friend doesn't know what he's talking about.

I now own several hundred million dollars worth of real estate,

but I I did not do it the way you're talking about.

I paid cash for it as I went, a little bit at a time, and it's gone way up in value while I've owned it.

So

the problem to break the theory down is debt equals risk.

More debt equals more risk.

Debt.

equals reduced cash flow in real estate because you got to pay the payments.

More debt equals no cash flow in real estate.

So when you have a tenant that pays you just a little bit more than the house payment because you only put down a little bit on the house, when you add up all of the repairs and the vacancies and the tenants that don't pay, which happens occasionally, when you add all of that together, you are actually losing money on a leveraged piece of real estate, like you're describing.

And so,

unless you're going to feed these three houses to the tune of about $500 a month each, average, about $6,000 a year each, with the numbers you're giving me,

you're not going to be able to keep them.

And so they do not become a blessing then.

And the idea that they're going to cash flow and pay off the student loans, it's actually mathematically not going to happen.

And again, I'm 65 years old.

I started doing real estate in 1978 when I was 18.

So I didn't just invent this and get on TikTok.

Well,

I was going to say that real estate, to your point earlier, is a major part of your wealth today.

So it's not that it's against real estate.

You know, you're not sitting there saying, oh my gosh, it's a terrible investment.

The idea of real estate is terrible.

But the way at which you do it is really important.

And I think the hard thing is too, Jim, you know, a lot of people set up these scenarios.

And, you know, for some people, it's like, okay, yeah, maybe it could kind of work out, but that means everything has to be perfect.

Everything Everything.

From the market, the tenant, the house.

You could get in this stuff and you tear down a wall and there's mold.

You can't put a tenant in for 12 months until you do X, Y, and Z and you've bought it.

I mean, like, it just, there are so many factors to it that it never works out perfectly.

It just doesn't because there's just too many things up in the air.

And so, um, so I would, I would pay off your student loans, fine.

Yes.

Yeah.

Yeah.

Because essentially Haley was explaining it's kind of like, you know, hey, you paid off your student loan.

You know, congratulations down the back.

Here's your paper that you paid it off.

Rather than like, oh, hey, you bought whatever, say one property, for example, you know, like, no, that's, no, that's like a bigger, you know, good job in a sense.

Yeah,

in a sense, you said, okay,

in the world of finance, we have a thing called opportunity cost.

When you take your $90,000 and you do one thing with it, you lose the opportunity of doing the other thing with it.

Yeah, yeah, yeah.

Okay.

And so the way to look at that is is kind of do a little reverse engineering.

Let's pretend you didn't have student loans.

Wow, that feels good.

Would you go borrow $90,000 to put down payments on houses?

No, yeah, that's why I knew you would, yeah.

Which is exactly what you're proposing if you look at the balance sheet of what you're proposing.

So

the data tells us that people most often build wealth not doing your friend's plan.

Instead, paying off your student loans, using the increased cash flow and the increased freedom to start saving, paying off everything, being 100% debt-free.

And then let's pile up a little cash and get our first property with cash and then to get our second property with cash.

And when you get about the fourth or fifth one, now you've got real cash flow coming because there's no payments.

Yeah, and what's funny is even from a net worth perspective.

It goes way up.

Well, that, well, his friend's way, it goes way down because you're borrowing on a $200,000 house and you have $90,000 of student loan.

You know what I'm saying?

You keep putting yourself deeper in the hole, even from just a net worth perspective, if you're just looking at the math too.

And Jim, always too, remember this.

An Excel sheet, a formula, is never going to factor in the emotion of peace.

And when you don't owe anyone anything, even a student loan, there is a level of peace there from an emotional, spiritual perspective that is not calculated in an Excel file.

And I'm telling you, when people become debt-free, they pay pay off their houses, even in an extreme sense.

When people stay on

the debt-free stage here and they're completely debt-free, their house and everything, they literally have no payments.

They never look back and say, I so regretted that.

I wish I still had all this debt and I was living how I was living.

You missed out on the opportunity to be highly leveraged and stressed out.

Right.

I mean, like, there, there is.

So there's a level of peace there that I think is really important to solve for.

And when you're just running and gunning and trying to do this whole thing to look good on a quote-unquote balance sheet and what you have to say for yourself, I would swap peace every time.

You're going to have time, Jim, to be able to do this.

You're going to, I believe you will have time to save up, go buy your first fixer-upper and get in the real estate game.

That's great.

When you do it all with cash, it's going to just take longer and there's way more delayed gratification.

But what that equals is a level of peace and sleep at night versus just that risk factor that's so real.

Full disclosure, Rachel knows what she's talking about.

It's what her husband does

when it's in the real estate business.

Well, and he does flips, but with cash flips.

He buys property and he does it with cash.

And he runs my portfolio as well.

And we do it with cash.

And it didn't start off pretty.

I mean, like, you know, the first couple, it was like a condo.

The first one was a little one-bedroom condo, and it was pretty stinky.

It was a stinky,

pretty stinky little condo.

And that was Jarl's first property.

But what's crazy is, you know, you put the money in, you go and work it, you fix it.

And then again, he's in more of the non-made money.

Yeah.

And he's not in the whole business.

But, but even some of these flips, and I've told you this, I'm like, you know, one or two of them, if the market kind of slows down for about four or five weeks and you're holding on, we don't think much about it.

His friends that kind of do the same thing that do have payments to the bank, they're like, God, when is this market going to pick up?

And there's a level of stress there.

And I'm like, I don't know.

There's just something to be said about not worrying.

You're fine.

You're fine.

You want to lose money in real estate, become a motivated seller.

That's the best way you lose money in real estate.

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Martin's in Los Angeles.

Hey, Martin, how are you?

I'm doing great.

Thanks so much for taking my call.

Sure.

How can we help?

So I've come into a um you know i've got a fair amount of uh debt um

and but i'm also you know there's some good things going on i've uh you know i've got a job where i'm making really good money and a lot of room for upward mobility and

so far my performance at the new job has been uh pretty fantastic so i you know i think there's a lot to to look at you know positively about the future um but the weight of the debt is really,

it's really hit me.

So I make about,

you know, I've got this job recently.

I make about $200,000 a year.

Cool.

What are you doing?

I'm in sales.

Good for you.

What are you selling?

And

I sell medical devices.

Great.

Good job.

Good position.

Well done.

And how much debt you got?

So I have about $20,000 in student loans, $20,000 in credit card debt,

which

I used to help pay for school because I got hit pretty hard during COVID.

How much you owe on your car?

About 30, but I get an 800, 900 a month stipend for it.

It doesn't matter.

You get that whether you have a payment or not.

Yeah, yeah, yeah.

All right.

And so

what other debt?

20, 20, 30.

What else?

That is,

that's it.

What'd you make last year?

Before you had this job, what'd you make?

So I made $150.

The year before that, I made $85.

So

I've gotten promoted twice in the last few years.

So if you could live on 85, you could be debt-free in a year?

I didn't have the car payment

back then.

I didn't have the credit card payment back then.

If you could live on 85, you could be debt-free in a year.

Okay.

all right i mean really

here's the thing 200

minus 85 is 115

yeah

and you only have 70 000 in debt

okay

is that right

yeah i think with taxes and putting about 12 percent into the 401k stop um

stop doing the 401k temporarily till you get this dad gum mess you made cleaned up okay

Completely focus on clearing the debt.

When I picked up the phone, Martin, I heard amazing amounts of stress in your voice.

You were sighing,

breathing hard,

all kinds of anxiety indications in your verbal patterns when you started talking about the debt.

When you talked about the job, You started lighting up again and your voice pattern changed.

Okay?

Okay.

And you said, if I could, I'm drowning, the words you were using, I'm drowning in this debt.

And so I want you to react to this debt like your life depends on clearing it.

Because if you could make $200,000 a year and you had no payments, you can be wealthy, sir.

Okay.

But if you hang around with stupid car payments, stupid credit cards, and stupid student loans, and you keep them around like they're a freaking pet, and you try to ease your way out of this with the kind of money you're making and try to work some kind of thing where you scam the system, you're still going to have that stress in your voice.

Get it.

Martin, what makes you think you can't?

If last year you were doing 85, what's the hesitation?

It's not that so much.

I put a fair amount of debt on in the last

year and I mean just you know stupid purchases and things like that

But it's, it's not so much that I can't.

It's more just kind of trying to figure out, like, what do you think is feasible?

Like, what, just understanding, like, what would you do?

You know, I'm, I'm, I'm new to this.

You know, like, I've got to.

So if you're making 200 and you stopped your 401k contributions, what would your take-home pay be?

Per month?

Probably around

10 a month.

Yeah.

How much is your rent or mortgage?

Rent is $3,000.

That's the really tough one.

It's not like it's crazy.

Yeah, it's 30% of your take-home pay.

Something's wrong, Martin.

$200 minus $120,000.

$10,000 a month is $120,000.

You don't have $80,000 worth of withholding.

Isn't it about $50,000 withholding at that point?

Well, $50,000

federal.

And then you have another

$20-ish in

California.

California maxes out.

Their rich people tax is 15%.

Okay.

Because they're trying to run off all the rich people.

Wait, 15%?

Yeah, California has a rich people tax of 15% of your income.

I thought it would be more than that.

No, that's it.

But that's more than any other.

That's more than any other two states put together.

But that's addition to your.

I mean, so it's

then you've got your federal, but your federal is not even going to be $50,000 in this case.

So

you need to get really get above your numbers here and start working them through.

So I know you're dead free in a year.

What, 30% federal for him?

No.

At 200, it would be 30% bracket, but it's not 30%.

It's a whole thing.

That's right.

It's a marginal income.

Yeah, yeah, I know, I know, yeah, yeah.

And bracket is not the amount.

I know, I know.

I mean, so it's, it's about 26% is what

above the bracket, yeah.

Including California.

Yeah.

Yeah.

Yes, Yes, it is.

Yeah, yeah, yeah, yeah.

Believe me.

So, yeah,

because these are incremental marginal tax brackets, they're not taxed at the tax bracket.

So

that's the point.

So, anyway, you need to get into this and figure it out and sit down and go, I'm going to be on beans and rice, rice and beans.

I'm going to stop the stupid purchases.

Three grand worth of rent for a single guy that's broke.

I don't know, man.

I may be looking at that too.

And so, but for sure,

for sure, I'm going to work my butt off and I'm going to do nothing but work.

That's all I'm going to do.

No vacations, no buying crap.

You are broke.

Quit acting like you're rich.

You're not rich.

You're broke.

Act like it and pay down this debt and be done with it.

Because

you reach over and knock off all those credit cards in two or three months, which you could do.

You probably do it in about four months, actually, three months, something like that.

Then you're free to knock out that student loan and then reach over and knock that car out.

Think about

what your budget looks like when you don't have any of those payments anymore.

This is where you've got to go to.

And so what the plan is is stop everything temporarily and attack the debt, listing your debts smallest to largest, pay minimum payments on everything but the little one and attack the little one with a vengeance.

And please, God, don't figure out a way you can't do it.

Figure out a way you can do it.

That's the point.

And so stop your 401k temporarily.

Stop your vacations.

Stop your happy hours.

Stop all this junk you're spending money on.

on, unplug stupid Amazon and go get out of debt.

And then when you're free, you're going to make a lot of money and you'll be able to stack cash really quick because you'll be used to living on less than you make.

And that changes everything.

You're resetting the wires in your brain.

Yeah, and it is a rewiring because I think our natural tendency always

is

to be moving forward, meaning like bigger, better.

You start with the starter house, you get the bigger house, like our life, you know, you get promotions.

Everything that we're used to is gradually increasing in life.

And when you do this and you actually pause your life and go backwards in lifestyle, it kind of messes, it'll mess with you

because you're not used to that, right?

The celebration of moving forward always, oh, I got a bigger job.

He's getting paid twice as much, you know, as he used to.

And it should feel like, oh, well, I should have twice as of a better life, not with this, not when you have debt.

And so there is a rewiring of what feels like like going backwards.

And that natural tendency is not to like it.

I don't want to go backwards.

I should be moving forwards.

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That's my other thing.

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I feel like we just had Christmas, right?

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Jim and Sarah are in Michigan.

Hi, guys.

How are you?

Pretty well, Mr.

Ramsey.

Thank you for taking our call.

We're anxious to talk to you, sir.

Our honor.

How can we help?

Well, we've been married for 40 years, and we've

gone through a lot of finances successfully.

We've managed to save a substantial out of money.

And about three years ago,

I acquired a 30-foot sailboat.

And it costs roughly $6,000 a year to own and operate.

What did you pay for the 30-foot sailboat?

Well, my neighbor gave it to me, or I should say Jesus gave it to me.

Free?

To be more accurate.

He gave you a 30-foot sailboat free.

Jesus did.

Yes.

We have three sailboats given to us for free.

Three.

Okay.

Do you currently own only one?

No, we own three.

You currently own three sailboats.

Jesus owns.

Three free sailboats.

And you said you had piled up a substantial amount of two.

Hey, Jim,

a substantial amount of money.

What's your all's net worth?

Not that much.

About 3.7 million.

Sarah!

Not that much.

She said not that much.

That's pretty good, Sarah.

Well, I listened to you every day for two hours, and

we could do better.

Okay, so what are the three sailboats worth?

The cars.

All together, the cars and the sailboats.

No, I asked what the sailboats are worth.

The sailboats altogether are worth $7,000, and we have a camper worth $500.

Okay, so a 30-foot sailboat is worth $2,000 of the $7,000 or $3,000 of the $7,000.

Does that sound right to you?

$2,000 of the $7.

$5,000.

Okay, so you got two junkers and one good one.

Okay.

So you have a $5,000 sailboat, but you want to spend $6,000 a year to keep a $5,000 thing alive.

I'm confused.

I am too.

Now, Jim.

Jim, we already figured out what you want to do, Sarah.

Jim, why do you want to spend $6,000 to keep something that's $5,000 alive?

Well, that's just the normal cost of marinas, marina swims, and then launching and recovery in the spring and fall.

Yeah.

And, you know, minor incidentals.

It's not that much, but I kind of expected that when you said you were spending $6,000 on it, that it'd be worth $30,000 or something.

Well, you know, it's worth what you can get on it on a good day, but, you know, it could easily be worth

$20,000.

No, no, no.

$5,000, $5,000.

And we spent...

Wait a minute.

There's a bit of a discrepancy here, boys and girls.

Yes, sir.

Dollar fun.

Well, you know, with old sale books, it's what you can get for it on a good day.

No, really, Jim.

The stinking thing has a market value.

Seriously.

The range of value is not between 5 and 30.

It's one or the other.

You know that.

$12,000.

Where did you get that number, Sarah?

You sound so sure.

The insurance.

What?

The insurance.

Insurance does not determine value.

Okay, then I'm wrong.

Okay.

It is between $5,000 and $12,000, possibly.

If you put a sign on it, you might sell it for $12,000.

No, you can't sell it.

It's so bad.

People can't give them away.

Well, they did to you.

That's the problem.

Yes, sir.

And so far, he's spent $30,000 and

$37.86

on a boat that people give to you.

Over $30,000 on a...

You've had it five years?

About a year.

About three.

This is my third summer with it.

And he spent $30,000 and $37.

Yeah, but we're talking like,

I don't know.

Okay.

$500 a month.

There's two issues here, okay?

I don't know.

Jim, we're not going to make Sarah happy.

Okay.

Sarah's not going to be happy with a sailboat.

Sarah's not happy with a sailboat.

We know that.

$3.7 shit.

We know that.

We know that.

Sarah's not going to be happy with a sailboat.

So then the question is, Sarah,

if you take...

the value of the

sailboat and what you spend on it and you burn it in the middle of the floor does it change your life when you have three point seven million dollars if you take six thousand dollars and throw it out the window as you drive along the interstate no it does not change your life so this is not a deal breaker you're not going to be poor and on food stamps because of jim's sailboat sarah you're fine uh he you can afford to do this it's not a big deal um but jim you probably do need to think about

i mean we're sitting are you still sitting on the other two boats as well Yes.

I can only count one other sailboat except for a model sailboat in the living room.

No, no, no.

We have another boat, another boat.

Oh, another boat, but not a sailboat.

Well, yes, we have another boat.

Oh, you mean the rowboat?

Yeah.

Oh, yes, sir.

We have a 12-foot aluminum boat.

Yeah, that's true.

Okay.

And a camper.

Yeah.

Okay.

And, all right.

And so,

other than mess with Jim, Sarah, what are your hobbies?

Well, actually, to be honest with you, I actually like a kitchen sink.

Oh.

Hey, Jim.

It's going to cost you a kitchen sink.

Jim, remodel the whole freaking kitchen as your tradeout.

Yeah.

All right.

You two cheap skates are made for each other.

Y'all are fun.

I love y'all.

You're great.

Listen, $3.7 million, if it's growing at 10%, is growing at a rate of $370,000 a year.

And we're having a discussion here about an aluminum 14-foot rowboat and a kitchen sink, y'all.

You need to back up about three notches, pan your camera back, and start enjoying some of this money.

Now, being tight and smart is what got you here, but now you need to enjoy some of it.

And if, Sarah, if $6,000 makes Jim happy,

it's $6,000.

You can afford it.

Okay?

And Jim, if getting rid of the aluminum rowboat and the camper and the odd sailboat makes her happy, get rid of them and remodel her kitchen too.

You guys can afford to do all of that.

But don't major in minors.

It's stealing your piece, okay?

Well, when she says remodel, we have a three-year-old home

countertop and a triple.

Okay, all I'm saying is...

Buy her a sink.

All I'm saying is she wants me to tear that out and and go down and get her a commercial sink like you find in the

McDonald's.

And I don't want you to do it.

I want you to pay somebody to do it.

Well,

it's a high-grade steel.

They're high-grade steel.

Yeah.

Kind of like that aluminum boat.

It's high-grade.

Use the aluminum from the aluminum boat.

Make you a sink.

We need to recycle.

Kill two barrels of one stone.

Hey, guys.

Well, listen, you're stepping over dollars.

You're stepping over dollars trying to pick up nickels.

And it's stealing your fun.

It's stealing your fun.

So there's stuff that my wife buys that I do not understand, but she gets joy from it.

And

what I do get joy from is her getting joy.

There's stuff that I buy that she has absolutely, she thinks it's stupid when I buy it.

But she doesn't hassle me about it because we have the money and I get joy from it and she wants to see me get joy.

So let's major in you guys giving each other some joy starting going forward here.

Okay, you knew it's a funny call.

He's like, We've been married 40 years, and she's like, 41!

41!

We ain't got any money, we're broke, it's only 3.7 million.

We didn't do good, we didn't do good,

they were funny, y'all are great.

That was so fun.

Oh, my gosh!

Hey, give each other some grace and love, and to the tune of about 30,000 bucks each, and just go blow some money on your 41-year marriage.

What a wonderful thing to do!

You won't even know what happened.

You'll still have 3.7 million.

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That's betterhelp, H-E-L-P.com/slash Ramsey.

That was the most fun I've had in a while.

What, that call?

Those two were a hoot.

They were funny.

If y'all want to call up and argue on the air in front of like millions of people, we would have you anytime.

We had a segment for a little while with the person honest called Settle the Debate.

Oh, yeah.

People would call in and do.

Yeah, but they were very entertaining.

They were fun.

God, man, I mean, just going to dinner with those two would be a hoot.

Arguing about what you're ordering.

It's like, that's too expensive.

Don't get the cheaper chicken.

Don't do that.

I love it.

Jenna is in San Antonio.

Hi, Jenna.

Hi, guys.

Thank you so much for taking my call.

Sure.

I was calling because I'm looking for some guidance.

So a little backstory.

My dad sold us, me and my older brother, our childhood home back in 2021.

And like the stipulation was that he could still live on the property and not have to pay like rent rent or utilities.

And we, my older brother and I rent out the house and

we make about $3,400 a month in profit off the rent.

And my dad, right now, he's a single parent growing up and everything.

So he didn't save for retirement.

He lives off Social Security and he says, money is tight right now.

And he reached out to us and asked if we could give him $400 from the profit of their rent each month.

And my older brother was like, sure, 100%.

And I just like did not feel good about it.

I was like, I think we we need to look at your finances first, figure out why money is tight, and then draw some boundaries.

So it's not like every year, oh, I need 500, 600, and it adds up and everything.

And I recognize none of this money is coming out of my own pocket.

It's like purely just profit.

And I don't know if I sound like a brat as a child by not just giving it to him.

And so I'm just looking for guided hangouts.

He sold you the house?

Yeah, so we did a

so he sold it to, or we did a parent-to-child transfer, and all he wanted was $50,000, and then we took over the rest of the mortgage.

But like, me and my brother are on title and loan.

Like, it's legally our house.

Yeah, and so what was at the time that the mortgage plus $50,000 at the time this happened was how much?

$450,000.

So he had a mortgage of $400,000, and you gave him $50,000 cash.

Well, we did a cash out refinance, so we gave him $50,000 from that.

Oh, okay.

And so the two of you have a $450,000 mortgage now.

And at the time that he sold you the house for $450,000, what was the home worth?

Oh, like $1.30.

Okay.

Okay.

So, and now he doesn't have any money?

He says, yeah, money's tight.

But I mean, he doesn't have any money.

He had $50,000,

and that was many years ago, and he's gone through that,

and he lives on the property

humbly

after he gave you a half a million dollars.

He's not very wise.

He shouldn't have given you that money.

He shouldn't have given you this money.

I know.

I mean, not, I mean,

his first obligation is to pay his own bills.

His second obligation, or his second,

only after you're paying your bills and have a plan for your bills do you start giving stuff away.

Yes, I think he had that plan.

I think things,

I'm not sure.

That's why I wanted to look at his finances, but

I look at it because the house is worth a lot of money, and then I feel like I don't know.

It was worth a lot of money when he gave it to you.

He gave y'all a million-dollar house for half a million.

Yes.

Yeah.

And yeah,

and yet he ran out of money.

So the whole thing he's a single dad, he hasn't saved for retirements, bullcrap.

Because he would have had a half a million dollars in the account living off of that and not been calling you if he had just simply sold this house.

Correct.

And he's told us that he regrets it.

Yeah.

I can say it's 2020.

It's dumb.

Yeah, and so I assume he has absolutely no other money that you know of.

It's not like he's got a million dollars in the bank from something else.

No, I think he has some

things.

I don't know because I haven't looked at his finances, and so I was like, hey, if we give you this $400 a month, like, let's sit down, look at your finances, see where money is going.

Because

you don't have a car

73.

And how is his health?

Great.

He looks like he's 55.

Okay.

All right.

And he's retired, not working, Jenna.

Correct.

Yeah.

You don't have an obligation at all, morally, ethically, spiritually, anything.

But if someone had given me a half a million-dollar gift and in return they're asking for $200,

because 400, 200 of it's yours, 200 of it's your brothers.

I wouldn't think anything about giving them $200.

So you wouldn't do it?

I would do it.

Oh, okay.

I don't think it would be a problem at all.

I mean, he gave you a half a million dollars.

He stupidly gave you a half a million dollars that he shouldn't have done.

Then he wouldn't be having this trouble.

Yes.

So I don't know what was going on in there in your life.

Well, I'm curious, Jenna, why $400 for him?

To your point, wanting just to look.

I'm just curious at $400, you know, does that change.

He's probably probably living on social security living in the shed out back.

That's what it sounds like.

Right?

Yeah, I'm not sure.

That's why I was like, I didn't know if I was in the right to ask him, like, to ask him to.

Well, I mean,

it would be not to ask him to justify you doing this, but just to make sure he's okay.

He might need $800.

I'm just worried.

My biggest worry is that he

is going to to give it to my little brother because my little brother just doesn't do anything.

That's a fair question.

That's where I'd want that.

That's new information that you never brought up until now.

Sorry.

That's okay.

But now, I mean, so I think you can address that with your dad.

Dad, I want to make sure you're okay.

I'm happy to do this, but I'm not happy to give my little brother money because he sits on his butt.

And if you're going to give it to him, no, I'm not going to do it.

And if you'll let me look at your stuff with you and make sure you're okay, I want to make sure you're okay.

You gave us this wonderful gift all these years ago.

And little brother got cut out of that gift, by the way, didn't he?

On paper, yes, but my dad is now coming back and saying that, hey, you need to split the house three ways.

No.

No.

I don't think he wasn't

financially responsible at the time of the sale, so that's why he wasn't included.

Yeah.

No, we're not redoing the deal.

I've been dealing with this house, and now I'm dealing with you.

No.

The deal's done.

But again, you see how haphazard this whole thing was.

When y'all did this deal, it shouldn't have happened.

It was a bad deal

for your dad, and he didn't think it through well.

And now he's trying to come back and slide the brother in, and now he's trying to come back and slide 400 bucks out because he should have never done this in the first place.

He didn't have the half a million dollars to give away.

He was too broke to be giving away half a million dollar gifts.

Okay.

And so, yeah,

I would be concerned that he's okay because his judgment's bad.

We've established that.

I want to make sure he's okay.

I want a loving act.

Yeah, I'm happy to do this to help you, dad.

Yeah, and I'm not going to put the little brother on the deed, period.

Yep.

That's done.

And the money's not going to the little brother.

But if all is said and he says, no, it's not, this is for me.

No, no, take care of of him.

Yeah.

I mean, if he gave you a half million dollars, you give him $200.

Zippy.

It doesn't matter.

I mean, yeah, I would do that.

Definitely do that.

But step back two notches and y'all, as a family, learn your lessons from all those ridiculous things that have been done wrong in this whole thing.

So, and now I'm really worried about you and your older brother being partners in this thing.

And now little brother decides he's going to go into orbit about this.

Yeah,

this is not clear.

It's not good.

So, bad deal all the way around.

Bad deal.

Man, so.

But, Jenna, I don't think you're being a brat for having these questions.

You asked that at the beginning.

I think you're having some like critical thinking.

Yeah, you've got some concerns that are valid.

Yeah.

And I would look into those concerns, but I want to do it through the lens of love.

I love my dad, and he was generous to me, and I want to make sure he's okay.

Not Not of, oh, I'm not going to give him 200 bucks.

That is Bratty if you're going to do that.

But, you know,

if he's going to give it to the little brother and the little brother's buying weed with it, no, we're not doing that.

I'm with you on that.

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Welcome back to the Ramsey Show.

Rachel Cruz, Ramsey Personality, my daughter, best-selling author, is my co-host.

Open phones at 888-825-5225.

Emily is in Maryland.

Hi, Emily.

Welcome to the Ramsey Show.

Hi.

So my question

revolves so a little background about me.

My husband and I are both accountants.

We

make about 10K take-home pay right now after we put in about 10% of our earnings into 401k and, you know, insurance and everything.

And how much is the 401k and the insurance a month?

I don't know exactly, but for me, for my husband, I don't know, but for me, I take home about 48,

45.

Yeah, but your take-home pay, real take-home pay, as you know, is not after insurance and 401k.

Real take-home pay is after taxes.

Right, so this is after taxes.

It's after taxes and after 401k and after health insurance.

Yes.

Yeah, so what I'm trying to ascertain is what your real take-home take-home pay is.

Okay, go ahead.

Right.

Yeah.

This is the paycheck that we get.

So the dilemma we have right now is that we have, we are living in our house right now, which we bought about 10 years ago, a foreclosed property.

Needed a lot of work done, but we bought it because it was cheap.

And over the years, we have, but so I've always tried to live below our means.

And we have no debt, we have savings, we have an emergency fund.

So we're kind of on the step where now it was time to pay off our home.

But recently, I was working at a school where my kids were going for free.

It was a private school, but both my kids have learning issues.

And so we had to take them out of the private school.

And now they're in the public school in our local neighborhood, which are not that great.

So dilemma we have right now is that we want to move to a better school district, but

obviously the house prices, everything that we're looking at is really going to put us

in a position where we're going to end up living paycheck to paycheck.

And

what

so, like, we don't know whether we should make that move or not because our house is more than enough for us.

We're living comfortably in it.

It's only the schools that we're not happy with.

Yeah.

Well, I mean, I don't know the math yet, but if your statement is true that you're going to be broke because you made the move and paycheck to paycheck with no margin, that obviously means you can't afford it if that statement's true.

But you might be an accountant who's super tight, so I don't know.

It sounds like that your

after-tax take-home pay would probably be around $12,000 or a little bit more per month, not counting

$401.

If you added $401K and health insurance back in, I think that's going to add a couple thousand dollars a month to your take-home pay.

Does that sound right?

Yeah, I think we'd be around 11K.

I think you'd be around 12K.

I don't think you're doing all that for $500 a month.

What's your household income?

Well, no, I know you're not.

You told me your household income.

Okay, so no,

you're not.

That's not $500.

So unless you're not putting much in your 401k.

I know that I put about 12% and my husband puts about 10%.

So

I don't really know what that comes out to be.

I haven't looked at it in a while because Well, the average would be 11% between the two, but let's just call it 10% and you make $100,000 a year.

That's $10,000 a month or $10,000, $11,000.

So $401K alone is $1,000 a month plus health insurance is going to be another $1,000 a month.

So yeah, I'm right.

It's $12,000.

Okay.

Something like that.

Yeah, I guess.

I guess.

But what we get in hand right now is about 10K.

And

I know.

Okay.

So what I'm trying to say is that if the mortgage comes out to be like between 3,500 to 4,000, which is what the houses we're looking at right now, if you put that on a 15-year fix, that's going to be about a fourth of your real take-home pay.

That's going to $3K, would be a fourth, would be about your max.

Could you find something for $3K, Emily, in that area?

So we have about 400K equity in our house, our house,

and what we're looking at is obviously to upgrade.

I know that that's kind of going above our needs.

Well, don't upgrade to go paycheck to paycheck.

Can you get a smaller house in the nicer area just to get the kids in the school?

We can, but long term, I feel like it wouldn't be a good move because we wouldn't be able to

have the same kind of equity in that house or like be able to sell it.

Because we do want to have like just this.

So, Emily,

so it's a values conversation at this point because, as you're saying, you're going to live paycheck to paycheck if you make this move because you're already assuming you're going to upgrade houses to get a bigger house than what you guys are currently in.

And the reason you're getting a bigger house is not for your kids.

Yeah, so there's a value system conversation of do my value, am I going to do what I have to do for the kids?

That's number one.

And we'll figure out the math and live somewhere smaller because that's our value.

That's our number one value.

Or is it we want to have a place where our family can grow in a home and get X, Y, and Z, you know, type of house?

And if that's the value, then go there.

But one has to trump the other.

For the math, you can't do both.

And it sounds like the kids are the number one, Emily, right?

And so for now, I would, as a mom with three kids, I get that.

Like you want them in a, in a great space where they're going to thrive and it's awesome.

And if that means we have to move to a smaller house, we have to move to a smaller house.

And then in maybe five or six years, we can upgrade, right?

I mean, you can, your income's going to go up over time.

But if you need to make the move, it it sounds like you can't do both.

Yeah.

Don't strap yourself to buy a bigger house that you want and blame it on the kids.

That's not fair.

Yeah.

So if you want to buy a house for the kids, move over in the school district.

And it's going to be a nicer area, so it's going to be a smaller home.

And it's going to go up in value.

Yeah.

So the equity is going to be.

You're not going to lose equity.

You're going to increase your equity because you're in a better area.

Yeah, maybe an older, smaller home, but it's in a better area for the kids.

And we did this for the kiddos.

Yeah.

And that's the situation.

But the formula that we use, the reason I was poking around on your stuff, your interest, your take-home pay so hard is a fourth of your take-home pay on a 15-year fixed is what we suggest because that gives you room where you are not living paycheck to paycheck.

You've got margin in there to save for Christmas, save for the next car, save for a trip.

You've got margin in there, and you can start putting 15% of your income into retirement at that point.

But if you go over 25% of your real take-home pay and you're calling take-home pay,

I'm talking about, when I say take-home pay, we're talking about only taxes,

only taxes coming out.

And you've got at least $2,000 in non-tax things coming out of your checks.

So you're dealing with about a $12,000 take-home pay the way we're defining it after taxes, maybe a little bit more, which would mean one-fourth of that, which is $3,000.

And that's what we would recommend on a 15-year fixed rate.

And 15-year fixed rates just went down a tiny bit this week, just a little bit, not much, but just a little bit.

So that's how we get at it.

But the thing you've got to do, Rachel's right, is you have to separate these discussions and keep it very clear what the primary goal is, what's the primary value we're trying to solve for.

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Not in all states.

Today's question comes from Ashley in Colorado.

We are the parents of three young kids and have a YouTube channel which has been monetized for just over a year.

Right now the funds are sitting in the bank in our names.

We'd like to know how to grow that money wisely, but also keep some liquid.

Our plan is not to give them any access to it until each of them reaches the age of 25.

We are longtime listeners and really value your guidance.

Should we leave it all in the bank or invest some of it or all of it?

This is the,

we've had this kind of question.

I've had it three or four times in the last few months about monetizing on the internet accounts and stuff.

It's like, really.

Well, we don't know what it is.

You can monetize on YouTube and it's a small amount of money or it could be a million dollars.

And so I don't know what we're dealing with here.

So

the best antidote to money screwing up your kids is for you to not have screwed up your kids.

Money does not screw up kids.

Money reveals that your kids are already screwed up.

And so

you can't keep it away from them long enough for them to not be screwed up 25 is not a magic number and so i'm going to teach them responsibility generosity i'm going to teach them wise spending i'm going to teach them saving i'm going to teach them work ethic uh to age appropriately we don't know how old the children are she says young kids i don't know what that means um

and so but age appropriately so that when this money does come to their hands they see it as what it is a responsibility

not that they are a four-year-old who hit the lottery.

And so, and you turn them into a trust fund baby of some kind.

So, having said all of that, I'm going to be really, really, I'm going to spend 90% of my calorie burn on this, on making sure the kids are okay

first and foremost.

Then we can talk about the technicality of the investment.

Okay, the only way you keep it away from them until age 25 is if you put it in a trust.

If it's in anything else, it goes to them at age 21.

And you can't stop it unless it's in a trust.

So you're going to have to go see an estate planner.

No, and it sounds like it sounds like the funds are in our names, which makes me sound like the parents' names.

Yeah, well, it has to be in your name because

a child can't do a contract.

And so if you open a bank account for a kid, it's an Uniform Transfer to Minors Act.

And that means it's in the parents' name or it's in the kid's name, but the parent is the custodian.

Yeah, but I don't know if the kids are getting paid for the YouTube channel.

Do you know what I mean?

It could just be the parents getting paid.

I don't know.

Okay,

that could be.

That would solve it.

That would solve it.

You give it to them whenever you want it.

It's your money.

Yeah.

If it's your money legally, if it's not their money legally or morally for that matter.

So anyway, what would I do with it?

I would make sure that some of it was available for their first car and that they add some to that.

And so that's the part that's liquid.

I would make sure there's some money available for fun, a small amount of some kind.

And again, we don't know how old these kids are and what how this is going to unfold but this is what we did with rachel and denise and daniel and so uh and then the um the rest of it i'm probably going to sit down with smart investor pro and get some money going into mutual funds but again if you're talking about fifteen or twenty thousand dollars here it's irrelevant you're spending way too much effort to worry about it.

If you're talking about a million dollars or $750,000 or something like that, then it becomes relevant.

And YouTube channels can monetize at all kinds of levels.

We have a YouTube channel, we know.

And so I know exactly what we make on our YouTube channel.

So on the monetization portion of it, anyway.

But so the,

you know, I remember the first time I met someone.

You remember Shay Carl?

Yeah, that's the first guy I ever met who had monetized a million dollars on YouTube.

And that was...

Twitter was new.

That's how long ago that was.

So long time ago.

And they had a family channel at the time.

The kids and the family were all on there and their YouTube channel that blew up.

And

when I found out he was making a million dollars on YouTube, I about passed out because as far as I knew, it was cat chasing lasers everywhere.

But

anyway, so it could be.

And I'm going to say this, and I don't know it, so I even hate to say it out loud, but I think there are some laws in some states happening for child creators that they have to be paid because a lot of these families are doing family things and the kids are part of the monetization and stuff.

So make sure like the whole Duggar stuff.

Yeah, I don't know how much of how big of a deal you guys are on it, but that's starting to become

I'm fine with them giving them the money at some point.

I just want to make sure that

the kid is able to care.

Yes, talk about it.

Obviously, if you raise a kid and they're a heroin addict and you give them a million dollars, you're going to kill them because they're going to overdose.

And so they're going to go buy a lot of heroin.

And so you got to, you know, you have to build the character into the individual.

That's the best way to leave an inheritance and to handle something like this where the kid becomes.

So the problem, like in the old days, it wouldn't have been YouTube.

It would have been a Hollywood child star

that made all this money.

And then what happens?

You know, the parents abscond with the money immorally.

Or the child is just so dysfunctional because of the way they're treated in the spotlight that they're not capable of handling the money when they become an adult.

Right.

And so that's what we've got to guard against are those kinds of things.

I don't sense anything in here about Ashley taking possession.

No, I don't think that's that.

She's trying to figure out how to bless her kids.

Yeah, yeah, yeah, yeah, absolutely, for sure.

There's nothing in this that even between the lines of the way the words are formed.

No, it just made me think Family YouTube channel.

I'm like, oh, I just read an article recently talking about child modernization and how children now are going to, you know.

But anyways, that's it.

Well, I mean, the Duggars, that whole thing on that.

And, you know, they were accused.

The parents kept all the money, and the kids

resent that.

And that came out in not only the documentary, but

we've met some of them, and they're not happy about it.

So that's the kind of thing.

So that's very real.

If your kids are a prop in your reality show, you know,

that's a thing.

So anyway, the...

Character the kid, number one, and then number two.

Yeah.

Figuring out to teach them.

And, you know, guys, the book that Rachel and I wrote is Rachel's first bestseller, and and she and I did it together, first number one.

And it was Smart Money, Smart Kids, teaching your kids how to handle money.

And the beautiful thing about using it is it's not really about the money.

It's about

you're using money as

a methodology to teach character, to teach generosity, to living with an open hand, that other people are important.

The access to the world doesn't run through the top of your little head.

And so, you know, to teach work ethic.

And yeah, you will brush your teeth so you have some later.

You will, you know, you will do this chore.

And not just because you're going to get paid, but just because I said so, because you're going to leave my home knowing how to work.

That way you stay gone when you leave.

And so,

you know, that kind of thing is loving your kids well.

And it goes back to what Andy Andrews used to say.

And one of my favorite Andy Andrews quotes, I'm not trying to raise great kids.

I'm trying to raise kids kids that become great adults.

And it's a different skill set.

We're trying to raise kids, not kids that look like little Stepford children and they are weird because they act like they're 32 years old and they're four.

I don't need that.

I want a little four-year-old to act like they're four.

But I do want to raise them in such a way that when they are 24,

they're a person of substance, a person of poise,

a person of integrity, a person who knows how to work and how to save and how to give.

And if you do all of that, then some of this other stuff is not going to matter.

Yeah, it'll work itself out.

It will work.

You can't mess it up then.

Yeah.

You can leave them a million dollars at 18.

You can leave them a million dollars at 25.

You could doile it out gradually.

You could put it in a trust.

You could not put it in a trust.

You could do all kinds of stuff.

And so, but yeah, as far as the investment part of it, if it is a substantial sum, I would sit down with a Smart Vestor Pro.

Click at ramseysolutions.com, click on Smart Investor.

You'll find the people in your area that we have vetted and that we love and that have the heart of a teacher.

And they're going to give you advice that sounds ridiculously Ramsey.

Sarah is in Ohio.

Hi, Sarah.

How are you?

Good, how are you?

Better than I deserve.

What's up?

I was wondering if you guys had another suggestion to help me clear my credit report of a credit card that was opened by my husband before he decided to take his own life.

Oh, wow.

I'm so sorry.

He, last, thank you, last summer and into the fall, he

started to accrue a lot of credit card debt.

Unbeknownst to me, I did not know about any of this until about a week before he passed away

and then after his death I found out about a credit card that he had opened in my name only

and charged roughly close to twelve thousand dollars worth of stuff to it when I received the first invoice in the mail I reported it as fraud because I didn't know and through their investigation is how I found out that he opened it in my name still fraud and it's because yes because he made two payments to the credit card out of our joint checking account.

And because it has my name on it, they denied it as fraud.

They lose.

They lose.

No, it is fraud.

Period.

I went a step further asking for the application and things like that and the transactions.

Yeah.

They provided those to me.

He was a very good person.

Which company is

Chase.

Ah, big figures.

Okay.

Yeah.

They're scum.

They're scum.

Lastly, I filed a police report

because he used his phone number, his email, and his mother's maiden name on that application because he did not know mine.

Right.

So

I've been denied twice, and the police report is the last thing I just sent in last week.

Yeah.

After this, I really don't know what else to do to get this off of my credit report.

Okay.

I got you.

We can handle it.

I'm sorry.

Oh, my gosh.

So it was he,

you said he committed suicide in December?

Yeah.

So how long were y'all married, huh?

Just two years.

Oh wow.

Been a long two years, huh?

Yes, it was.

So he was struggling with.

It sounds like he was struggling with some mental illness, obviously, of some kind.

Yeah.

Yeah.

Yep.

That's what I'm gathering after the fact as well.

Was he being treated for any of it that you know of?

No, he was not.

Okay.

So we don't have any.

His father also committed committed suicide so i think this is a long history of within his family oh sarah i'm so sorry wow

all right i'm currently raising his daughter and she wants to stay with me she does not want to go home with her mom um and the court system is allowing that i have not yet to open the estate

um and i know that's going to be an even bigger thing to tackle to be honest with you i've had i've called multiple people and i have not even received a call back um of some local lawyers to help me tackle that.

I was waiting past the six months so that all that credit card, those creditors

would go away.

No, that doesn't work.

They still can file a claim against the estate because

you've not handled the estate yet.

And so

what is the rest of the situation?

My home is in my name,

but we purchased another home while we were married and actually in the same neighborhood.

And we were going to do an Airbnb with it.

And we did do that for a short amount of time.

And we currently have a renter in it now.

The home is in his name financially.

It is deeded to a business name that he started up last fall.

That's the estate, essentially.

What's that homework?

Online, it states roughly $450.

And what is owed on it?

$320.

Okay.

So just for cleanliness' sake and to help you, we can help you with the first thing to start with.

I'll come back to that.

But it's not going to help ultimately because it's going to land back on him.

So when anyone passes away in any state,

what you own as an individual, anything he had any ownership in, any assets, stands good for any debts that he is responsible for.

Okay.

And so the equity in that house is going to stand good for

the debts that he has run up.

Okay.

And

that includes the debt that after we fix this identity theft and it's off of your name and it goes back on his name.

This $12,000 with Chase is going to get paid out of the equity of that

Okay.

Even though you are not personally liable.

So all we're doing is moving the shell,

the P under a different shell, okay?

Okay.

But so it's not going away is my point because

he's got $100,000 in equity over there.

And how much debt did he have?

From what I could tell, on credit card debt, he was pushing $100,000.

One of his cars was taken back.

Like the bank came and got it.

And so that's

anything else jointly with you or at all?

Any other assets, bank accounts, investments, anything?

There were some bank accounts, yeah, joint checking and savings.

Yeah.

But there's not a lot of money in there at all.

And we did own a truck together, a 2025 GMC truck.

I was able to get that

title put in my name by providing the death certificate, and then I was able to sell that back to the dealership.

But I took a $17,000 hit on that.

But I had to get it out of my name because I couldn't afford the payment on it.

I understand.

So

I had to dump that quickly.

My credit score last year was an 842 before all of this happened, and it's a 620 today.

That's okay.

That's okay.

We don't need a credit score.

All we need is a life.

I agree.

And I have my home and my car is paid paid for, so I don't need my credit, but it's definitely hard to look at.

So it sounds like when you liquidate anything that's got his name on it, it might come close to covering the debts that had his name on it, but you're not going to benefit anything.

You're not going to have any net of anything.

It doesn't sound like what you're describing to me.

But you need to do it anyway, because otherwise they're going to come after the stuff that has both your names on it.

So you've got to get the estate cleaned up or those bank accounts, the checking accounts that had both names on them and they may come back after that truck transaction because that was technically his.

Okay.

Even though you didn't benefit, you lost money.

But that had your name on it too, right?

Yes, financially, yeah.

I was the main buyer.

He was the co-buyer.

Yeah.

So, you know, they won't come back after you because you lost money.

I didn't make money.

But your bank accounts and that title to that house over there, they're going to eventually come after all that.

And you're better off to be proactive to get a probate attorney, and you're going to spend a few thousand dollars to work this through to get that all done.

Now, back to your other thing.

We've endorsed a company called Zander Insurance for identity theft protection for, I don't know, 20 years, since before identity theft was even a thing.

And now it's definitely a thing.

And when someone has their identity theft and something occur, or their identity is stolen, the unique thing about this protection is they assign a counselor to you, a coach to you, that goes and cleans it up for you.

Okay.

You did not have that protection when this happened,

but

you know someone who can get it done for you, and that's Rachel.

I'm kidding.

It's both of us.

All right, so we're going to put you on hold, and Kelly's going to connect you with Xander, and occasionally as a favor for someone in a specially hard situation, they will take something even and run it through the system and take care of it for you, even though you did not have the coverage at the time, okay?

Okay.

Can't really buy home insurance after the fire.

Okay.

Right.

But we're going to do that anyway, and so we'll take care of that.

And they'll take this case and run it down just because I don't like Chase, and that'll help.

But the point is, I want you to clearly understand we're really not

getting rid of it.

We're just putting it over into his estate so it's going to come up again when you clean up his estate.

Okay.

All right.

Well, I appreciate it.

All right.

You hang on, and Kelly's going to pick up and we'll try to help you get through this, kiddo.

Hey, Kelly, also set her up with a Ramsey coach as our gift.

She's a widow.

We're going to take care of her, okay?

Well, buying real estate, selling real estate, trying to get a new place, a lot of drama out there right now.

And when there's drama, there's one thing you need to depend on, and that's facts.

And facts are generally not your hyped-up friend who has an opinion about socialism.

No, let's just find out what was really going on, what's really happening, what the real prices are, what the real interest rates are, and let's try to get those straight up.

If you want to know what that is, just go to ramseysolutions.com/slash market or click the link in the show notes if you're listening on podcast or on YouTube.

Dallas is in Louisville.

Hey, Dallas, what's up?

Hey guys,

Davis.

I'm sorry.

Hey, Davis, I'm sorry.

Okay.

Not a problem, buddy.

Starting off with my question quickly here.

I'm a divorced dad of two, just got through the divorce.

I'm just trying to figure out what kind of route I should take to build my retirement and future for my two children.

I currently have zero in retirement.

Wow.

Hard times.

I'm sorry.

Yeah.

Okay.

What do you make?

I've been a stay-at-home dad for the last four and a half years as my wife ran a successful business.

I just got back in the workforce in June doing

self-employment remodeling that I did before I was retired.

I make currently about four to five a month.

Before I was retired, I was making about 80 grand a year.

Okay.

So you're going to be able to get it back up to 100 now?

Okay.

Exactly.

All right.

And so you're making $100,000 a year.

You're 38 years old.

How much debt do you have?

Zero consumer debt.

My truck's paid off.

I am only purchasing a house, which I just did for me and my two kids.

And I'll have about $40,000 left in my bank after I put a 280 down payment down on my new house.

Way to go.

Nice.

Okay.

Thanks.

And so the finances and the divorce were in pretty good shape.

Yeah, we were fine.

We came to an agreement.

We kept it as admissible as we could, obviously, mostly for the children, and we're settled on that and signed.

And now it's just me moving forward and sitting on my finger.

Yeah, but I mean, before the divorce, y'all weren't broke is what I'm saying.

That's good.

No, no, no.

No, my wife made a salary of about $25 per month.

Yeah.

Okay.

Cool.

All right.

So you got a good head start here.

You got a house.

You got a good income.

You know, make sure you got the emergency fund in place.

You don't have any debt.

So that takes you right to baby step four, which is 15% of your your income going into retirement.

And that'd be $15,000 a year going into 401ks and Roth IRAs.

And if you're running your own business, you could call it a simple 401k or a simple IRA, which is a 401k for a small business.

You can do a lot of stuff, and you could easily get $15,000 into good mutual funds a year.

And if you do that from 38 to 68, you're going to have millions and millions of dollars.

Okay, that works.

I do also be getting approximately $80,000 in a couple months from my father, and I was just seeing what I should do with that money.

I guess throwing it into a Roth or something as well.

I'm probably going to pay the house down.

I want to get the house paid off while you're putting 15% of your income away.

How much do you owe on the house, Davis?

It'll be about $130,000.

Oh, wow.

That's great.

And you're getting how much from your dad?

About $80,000.

What's that from?

He's got a settlement from his mother in a nursing home that they basically gave him the wrong medicine and seemed to have got her.

Wow.

Oh, my gosh.

Okay, so he's distributing it to her grandkids.

Yeah, he's distributing it to me.

He already gave my sister a front for their property a year or two ago, and he wanted to even us out.

Yeah, so that means you only owe $50,000 on your house now.

Yeah, that's true.

Yeah,

you got that thing paid off, boom.

Now you got a big chunk of change to throw towards investments

with no house payment, right?

So yeah, throw the 80 at the house and then get knock that other 50 out as quick as you can too.

And let's be clear and no debt, stay away from debt and be investing and be generous.

And you're going to be in great shape, man.

You're going to do fine.

As far as setting all that stuff up with your Roth IRAs and everything, just click on SmartVestor Pro at Ramseysolutions.com.

Yeah, and above that, once the house is paid off, that's the baby step seven, where you continue to build wealth and be generous.

So you can go above that 15% at retirement and max out some of the stuff if you can.

I mean, if you can max out your Roth every year and, you know, put some money into a 401k or that simple 401k, simple IRA.

Yeah, guys, y'all forget to, sometimes y'all are listening to us do this and you forget how this math works.

So we paid off our house many thousands of years ago, it feels like, and it was $1,500 a month.

And I was paying about $2,500 down on it.

And then I got a chunk and I took it out.

Okay.

So

I took the $1,500, I rounded it up to $2,500, and I put $2,500 a month automatically coming out of my checking account into a mutual fund.

And I kept it a separate mutual fund.

I just want to see how fast a house payment became a million dollars.

It was unbelievable how fast that was a million dollars.

It was just a few years I looked up and I went, paying yourself a house payment really is a lot of money.

It's a lot of money.

And so when you get that house paid off,

you turn it around like you're talking about.

That was forever ago.

That's thousands of years ago.

There were dinosaurs in the backyard.

Yeah, yeah.

So remember that.

It's more expensive these days.

So even if you get your house paid off now, think about how much more money.

Well, I mean, yeah.

That was only $2,500.

That was a big house for $2,500 back then.

But that's when you could buy a house for a box of strawberries.

I know.

You traded two oranges.

Two oranges for

a year and you could get a lot of money.

Really?

Did crazy.

You boomers.

You don't know how life really works.

You had a great housing market.

Oh, geez.

What I mean.

You should have seen the income.

It's my poke.

Should have seen the end card.

Always.

Rudy's in Chicago.

Hey, Rudy, what's up?

Hey, Dave and Rachel.

Thank you so much for having me on.

Sure.

How can we help?

Well, just want to say we're a huge fan, started a few months ago.

And I also want to mention my seven-year-old, also a huge fan who has memorized the baby steps and will recite them to anyone willing to listen.

I just wanted to pass that on.

Oh, no.

Oh, no.

Rudy, I don't even know my kids can, so that's impressive.

It's pretty funny.

But so my question, I guess to begin, so we're basically in full gazelle intensity and on step two,

but we plan to be on steps four and five in about six months.

Good.

And so my questions revolve around my wife, who's a stay-at-home mother.

So my questions are, once we're done paying off debt, should we be investing more than 15% of our household income to account for the fact that she's not building her own retirement?

No.

She has rights to your retirement.

Gotcha.

And also, so with that, do you recommend setting up like a spousal IRA?

Yeah.

Yeah.

But not because she needs her own retirement, because she's got rights to your retirement.

Ask anybody who had a 401k with a half million in it and got a divorce.

I understood.

Yeah, so that she's, she's in good shape.

She's fine.

But yeah, I've done spousal IRAs every year just because it was a good way to keep the government's hand off of money, right?

Yeah, absolutely.

Yeah.

So, yeah, do Roth IRAs for sure in both your names and as a part of your 15%.

And then, you know, but I would max it at 15%.

Let's get the house paid off and then let's load up like we were just talking about before we picked up this call.

Yeah.

And you can do backdoor.

I can still do a Roth IRA because I can do backdoor Roths regardless of your income.

Basically,

the right to do a traditional, a regular Roth IRA goes away when your household income is up over 200K.

And so

obviously mine is over that.

But what you can do is open an after-tax traditional IRA, not a pre-tax, an after-tax traditional IRA, and roll it to a Roth 30 seconds later.

And I do that every year for Sharon and me.

And the spousal IRA, I don't think many people realize that that's even an option.

Seeing that if yeah, if there's a stay-at-home IPA.

My wife does not have an earned income, but I have an earned income in excess of both IRA limits, and so I can fund my wife's IRA, or in the case the wife is the working one, fund the husband's, either one.

It works both ways.

But if you're, you know,

my wife has not had an earned income.

You don't have to make a certain amount to qualify for the spousal.

You don't have to make anything to qualify for the spousal.

No, I'm saying the spouse that's working, though.

Yes.

You have to make more than the two IRAs

combined.

Than the amount you're putting in.

Which is nothing.

I mean, you've got to make $16,000 a year.

Or whatever it is.

But yeah, it's nothing.

But you've got to have an earned income in excess of both of them.

But that's all.

Wow.

Wow.

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Welcome back to the Ramsey Show.

Rachel Cruz, number one best-selling author.

My daughter is my co-host.

Hope and phones at 888-825-5225.

Samantha's in North Carolina.

Hi, Samantha.

How are you?

I'm good.

How are you?

Better than

sure.

How can we help?

I appreciate it.

So I'm 57.

I'm a single mom and have been for about 15 years.

When I got out of school, my mom and dad didn't have a huge great financial education.

They were both teachers, and I always knew that I would make sure that I kind of did the right things when I got older.

So I had jobs from the time I was 14.

And when I got through law school when I was 21 or 22, I started to kind of immediately invest in my 401k and have done that for 20, 30 years.

The problem is,

circumstances happen, and became a single mom and

ended up with two daughters who

basically I ended up putting them through co you know through college and

part of grad school and

long story to make short used up most of my income and my retirement to get them through obviously I realized that wasn't the best call at the time

they're just both amazing kids incredibly hard workers they're what did you

how much did you spend on their education honey

between college and grad school and they took out loans in grad school I

um probably

at least 300 for my 401k, and then, of course, how much?

Throughout $300,000.

Okay.

So.

And you paid all the taxes and the penalties on all that, obviously.

Yeah.

Yeah.

And I know.

So do you have debt, Samantha, with it now?

You said you took out some loans?

Yeah, I have about $65,000 left to pay off.

Obviously, fully aware this was probably not the best way to approach it at the time.

That would be an understatement.

No, no, I know.

I know.

A, they went to a college they couldn't afford.

And B, you should have never used your 401k ever to send a kid to college.

There's not a circumstance on the planet that that makes sense.

I know.

But you're there now.

Okay.

All right.

So what do you make?

You said law school.

That's encouraging.

What do you make?

I

now make about $100,000 a year.

Why?

You've been practicing law for years.

I have.

I kind of took a different path and ended up at a firm where I was able to kind of juggle the raising of the girls and

okay.

But now they're gone and they have degrees and they're on their own, right?

Yeah.

Yeah.

Just recently.

Yep.

Yeah.

Good.

They need, I mean, good, good financially.

It's time for these kids.

They kind of got it.

It's time for you to quit feeding them, for sure.

So

now can you go make 200?

You kind of need to.

Yeah.

What do you have left, Samantha, in the 401k?

Anything?

About 80,000.

So my question that I was trying to get to, and fully aware of all this,

no excuse other than the fact that things happen quickly and something

their dad kind of

dropped out at a time when when you made an emotional decision I understand yeah I did I understand okay I don't regret it

what is your question then my question is I'm 57 trying you know I probably have what 10 years to try and make up some

something and I recently came across the Ramsey program and took financial peace

last year

and it was fantastic.

Wish I had taken it 20 years ago, right?

But it is what it is.

I know better now.

Okay, that's good.

So my question is, one of your kind of general thoughts is that you shouldn't, until you pay off with the baby steps, but you shouldn't invest at all until you pay off the debt, which I understand, but my question is, if it takes me like, say, a year to get the debt paid off at this point when I'm this time-wise.

Still mathematically, we're not going to make another emotional decision, okay?

I know you're scared, and this retirement thing is bearing down on you, and it's causing you to have incredible regrets for the things that have happened in the past.

But all of that aside,

the fastest way mathematically for you to get a good NIST egg is first get rid of the $65,000 and make sure you have no debt and you're living on a detailed budget.

And anything we can do to increase your income to accelerate both of these things,

the debt removal and the rebuilding of the NIST egg, is absolutely vital.

And so

if I'm you, it's time for you to go make some money.

And you've been putting everybody else first for a very, very long time.

And

you now have no choice in the matter.

You have to put Samantha first.

Yeah.

Yeah.

No, I appreciate it.

And just to clarify, these two girls are not.

You know, we're talking

incredibly hardworking.

I didn't question their character, honey.

Yeah.

I just questioned where they went to school

and where they got the money.

But that's all in the past.

You know, I'm not going to beat you up anymore.

That's not what we're here for.

We're here to move into the future.

So

the future is you go make as much money as you can make.

And if you change law firms, you're going to make 200.

I'd kind of love your girls to step up and take on the 65.

Yeah, hello.

Yeah.

Well,

I mean, one is.

They're so great.

No, they're great.

They're just one is literally just graduated from Columbia and she's in a doctorate program.

And so she's paying it's a fully funded program and she's paying all her bills now.

And the other one is actually heading to have an interview at NATO.

And so they're, they're, that's awesome.

I just think, yeah, I, no, I hear you, and I don't question that.

It just would be nice if they stepped in.

They don't have to legally because your name's on the move on the loan.

Nor do they have to morally because

you win the deal you made.

But it would be cool if they go make $300,000 a year if they reach over and take care of this loan.

So their

mother doesn't have to retire on Alpo.

No,

that's a non-issue.

They're both great kids, but they're just literally getting on their feet.

So, you know, and that's cool.

Okay, so Samantha, yeah.

So between now, hey, between in the next 10 years, though, for real, working as hard as you can, upping the income, getting the 65 paid off.

And then what's your housing situation?

Do you own a home?

No.

No.

Okay.

I did.

I did.

And the divorce.

Okay.

No, that's fine.

So that would be

how long ago were you divorced?

Irrelevant.

Probably about 15 years.

Okay.

But there's a whole lot of issues that I wouldn't want to

help.

That's fine.

It's all good.

I'm not putting in a situation where I did the best I thought for you girls.

Yes.

Okay.

So moving forward, though, again,

getting that debt paid off.

And then

you got to get a home that you get paid off, a little one-bedroom condom

that you get paid for and so forth.

So,

okay.

She loves her kids and

single mom, warrior princess, doing the best she could.

Oh, yeah.

It's, I mean, I.

Not to pick on her, okay, but to say, if you're out there in that situation, you have to make decisions based on facts, not feelings.

And I'm going to take care of my children at any cost is a feeling.

Those kids could have gone to state schools, not Columbia.

They could have worked while they were in school.

They could have gone and got scholarships.

They had a mother that was a single mom

and there would have been no dad and no $300,000 cash out.

Okay, and the kids would have been fine.

And still great character.

And still great kids.

I mean, seriously.

Still great kids.

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Rebecca's in Texas.

Hi, Rebecca.

Hey, Dave, how are you?

Better than I deserve.

How can we help?

Well, I am in a pretty interesting situation

and kind of sad as well.

Earlier this year,

I guess a boyfriend at the time of two years was ready to take the next step and

he

wanted to move to my state and

he ended up purchasing a ranch, which is kind of like my dream property, for about a million dollars, paid cash, put me on the deed.

And prior to that, I said, you know, I don't feel comfortable doing this

unless we are married.

At that point, he was like, nope, we're going to get married.

A venue was booked.

A ring was purchased.

And we move forward.

He moves in for about three weeks and then

tries to

almost trick me into signing the deed of the house into a trust while he's like planning his exit.

And he left.

So,

which

whole other set of emotional issues.

He paid cash

of a million dollars for a property

and put your name on the deed.

Yes, sir.

And then he took off.

Yes, sir.

Wild.

So I don't understand how he profits from this.

It almost sounds like he was trying to scam.

Is he just flighty or what?

I think he has some, I think he wants that.

You liked the idea of this.

Oh.

And I think

broke my heart.

I'm left to manage the whole 20 acres on my own and six animals.

It's not your house.

It's not my house.

Well, he, it's his million dollars, right?

Yeah, but I'm on the deed.

So technically, I am 50% owner.

And my home,

I rented it out.

And

I have tenants in there through the end of May.

Oh my gosh.

Okay.

Was he asking for the property back at all?

Like, are you guys going to sell?

He tried to, like I said, like when he was planning his exit, before I put all the pieces together, he said, oh, someone's going to contact you, you know, to put the house in a trust to protect you in case something happens.

How long has he been gone?

Six weeks.

Okay.

All right.

Wow.

Okay.

So I am trying to figure out what my goal should be in this situation.

Should I

say, okay, let's list the property?

But before it's listed, obviously, have it worked out.

And I mean, my life flipped upside down.

Has he been in contact with you?

Since he left?

We spoke once, and that's when it was basically like, this is over.

We're not doing this.

It's so interesting.

It's usually him calling us, Rebecca, being like, crap, I bought a ranch with my fiancé

who I'm not with anymore.

What do I do for my million dollars?

It's good.

You're sitting there on a half a million dollar windfall because this guy's loopy.

Yes.

So do I buy him out?

That's what I take him out.

Do I take the, you know, I obviously will work with attorneys to have the paperwork drawn up.

so the property is listed and there's an offer we have um

a plan in place as far as you do so at the last minute well we would that would be my goal if we list it would be to have everything written out so there's no question i think this guy's an absolute

i mean the the the story you've told me he's an absolute crazy man um and weird and and uh everything else

very sad i'm very sad about that yeah and it's been a lot

of great though rebecca

And yet, if I'm in your shoes, I don't feel entitled to $500,000 of his money.

I don't feel that way.

Like I questioned that,

but I quit a job.

I uprooted my entire life.

And this gesture that he made

was to show his level of commitment and his seriousness for the relationship.

So what were you making at your job?

About a hundred.

Can you go back?

I cannot go back there, no.

Okay, what were you doing?

I work in private aviation

on the kind of operations side.

Okay, all right.

Well, obviously, you're going to have to get a career going forward.

I do have a job.

I do.

I did get another job.

Thank you.

What do you make?

$100.

You're making $100.

Okay.

So other than the time off in between that you did not benefit from, how long were you out of work?

A couple months.

Three months.

But this current job is not as stable as a company as my previous one, which makes me so your point is you've been damaged by this fraud

and so financially, and so it would be ethical to receive something for that.

I don't know.

I think that's right.

I think, you know,

it costs you a good job.

And

my home that I had.

Well, no, you own the home still.

Right.

You'll get it back in May,

you know, and you will have rented it.

You will have made money on it during that time.

So I don't mind tagging him for $100,000 or something.

I just don't

know how you've been harmed much more than $100,000 unless you want to just be punitive, which honestly is probably okay.

This guy kind of deserves it.

I'm kind of with you.

I mean, I'm vacillating while I'm talking to you.

You hear me?

So I'm not sure.

This is weird, as you know.

And you're not the the weird one so

yeah

okay I don't want to

I want to be made whole financially plus a little if I'm you past that this is dirty money for me

right I got and I don't want to live on this farm this ranch right that's that's got bad juju all over it

right

if I'm you I'm just I'm just yeah I don't I'm trying to put myself in your shoes.

Yeah, get me out of there.

I don't want to, I don't want to walk away.

Legally, you're entitled to half a million legally, right?

If her name's on the deed, yeah.

There's nothing this twerk can do about it.

He's stepped in it.

But the question is, what do you feel right about, right?

From just like a moral perspective.

And that's the thing made whole, plus a little bit more of what you're saying.

Do you have an ability to contact him?

Yeah, I would have your attorney contact him and say,

I will sign a deed to you for $200,000 or whatever the number is.

And then I would go get an apartment and sell off the animals and get out of this, get away from this whole thing.

And then

go back to your house in May when the tax move out.

I would just get away from the whole thing.

Anything that keeps me in this story is disturbing.

I want to get out of this story.

It's a bad story.

Emotionally, that's probably the best.

No, I mean, just generally.

I think it's probably financially.

Because it's just, it's

you're distracted by evil stuff.

Did y'all date long term, Rebecca, for two years?

For two years long term?

Mm-hmm.

Long distance.

But it was a bit of a roller coaster, long distance.

And this was like the, okay, he's going, he, he wants to commit.

He wants to take the next step.

He, he's ready.

Yeah, there's almost a level of like mourning this life that kind of whipped up really quickly for you.

You know what I mean?

Like, I mean, I know you guys were in a relationship for two years, but him moving, buying a ranch, you moved, you quit your job.

I mean, you had a whirlwind within 90 days of this life that was ahead of you, and then it's gone as quickly as it came, is what it feels like.

So there's, yeah, some whiplash for sure.

There's a whiplash penalty I'm willing that he should pay.

I'm fine with that.

And anything that he actually costs you, which is probably

100 grand give or take, and then a whiplash penalty or whatever you want to put on it.

And I'll sign the deed for that.

It sounds like he's got money.

He's got a couple, a couple mil.

Yeah, so he could write you a $200,000 check or whatever the number is you've got in mind, and you just sign the deed and we're done.

Get the animals sold off so they're not hurt because he's not going to come back and feed them.

You got to make sure they're gone, right?

And so,

and I would put this whole thing way in the rearview mirror.

If you were my daughter, that's what I'd tell you to do.

Sucks.

Sorry, Rebecca.

That's awful.

We've all done dumb things with money.

I've done them with zeros on the end.

One of the biggest mistakes I see people make with money is not having a plan for it.

You got to have a plan.

You got to be intentional and you need to get a budget.

You have to tell your money where to go so you're not wondering where it went.

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Don't let that happen.

You're done making that mistake.

Go download Every Dollar for free in the App Store or Google Play today.

August is National Make a Will Month.

Like we needed a month to do that, but there you go.

Why do people not make a will?

Well, number one reason is procrastination.

43% of adults without a will say they just haven't gotten around to it.

Perfectionism is number two.

Writing a will involves big decisions and dealing with your family.

That's not perfectionism.

That's avoidance.

I don't want to deal with that.

I don't want to deal with that.

Or her or him.

Thinking you need a certain amount of assets before you get a will.

No, you don't.

You just need to be 18 and care that the government doesn't conduct your affairs for you, like where your children go if you die.

A belief that everything automatically goes to family.

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It goes to the lawyers.

Sons, uncertainty about the process.

Many people say they just don't know how or where to start.

Wheels can be confusing, but our team is here to help.

You can take our wheels quiz to find out if a simple online wheel is right for you at ramseysolutions.com/slash wheels quiz.

Andrew's in Columbia, Missouri.

Hi, Andrew.

How are you?

Good.

How are you doing, Dave?

Better than I deserve.

What's up?

So, I own a pool cleaning, repair, and resurface company here in Columbia.

I am in a partnership with another guy.

We started the business about three summers ago.

I had previous experience with a pool company here, one of the bigger ones here, and I decided to branch off, you know, do my own thing.

Started pretty small.

So me and my partner, we started doing power washing, window washing jobs,

pool cleanings, you know, we didn't have too many clients, probably about 10 to 15.

You know, fast forward to the

second year.

At the time, so I had I I technically I didn't.

Okay.

And now you've learned that partnerships are the only ship that won't sail?

Correct.

That's correct.

I'm guessing you you two guys did not do anything like go to a lawyer and have a partnership agreement drawn up.

Initially, no.

That happened later on, and it was pretty much too late by

the time we did make one.

Why was it too late?

What's happened?

So basically,

we started sub last year, we started subcontracting for this

the pool resurface company that we actually bought.

My partner,

it was owned by one of his uncles.

His uncles was higher up there.

Made good money.

Anyways, last year though, I got connected with one of the my old managers that I actually worked with at the old pool store I worked at.

And I said, hey, what do you think about coming over here?

I'll pay you decent

and we'll

basically

start taking

a lot of the clients that that pool company that I used to work for has.

So I probably took half of their commercial neighborhood pools plus, I don't know, 10 residential.

And commercial ones have to be done three times a week.

So those come after 60 visits a week, plus repairs.

Anyways,

when

we were, when, anyways, I had that, that happened last year as we were doing the pool resurfacing.

So I got connected with that.

At the time,

that business, basically, after we got done subcontracting for them, they said, hey, what do you guys think about buying this?

You know, obviously it was connected with my partner's family, so he was all about it.

He wanted to do it, all this.

And I said, hey, I was like, how about we just buy the equipment and we slowly build?

He disagreed with me,

and I eventually just gave in because I, you know, I was like, well, maybe this will work out.

So I gave in.

You know, and I was nervous about all of it.

So, anyways, fast forward now to this year, you know, pool, I'm basically running the pool repair and pool cleaning side.

And,

you know, for example, last month we brought in about 49,000 revenue.

The Coat Your Pool side, he is supposed to be running.

And he, he's done probably two jobs in the past three months and has brought in, you know, we haven't profited anything from it.

Why?

Yeah, we're basically,

he's, he, I confronted him about it.

I said, hey, we need to push this harder.

We need to do this.

And he basically, he has, he has a kid with his girlfriend, and he basically, every time I bring it up and say, Hey, we need to do this, we need to make more money.

We're losing money right now, actually.

He just says, You wouldn't understand.

You don't have a child at home, and things just get awkward after that.

And, you know,

so what does a partnership say about dissolving a partnership, about dissolving it?

You have the agreement, right?

Yeah, so our agreement's very vague, unfortunately.

I have actually

talked to it.

Did you go into debt to buy this crappy business that this crappy guy's guy's running?

Yeah, so the business

was

$260,000.

They basically said, hey,

we won't charge you any interest.

Basically, a five-year plan.

You'll pay $4,000 a month.

We'll do all your marketing, get all your jobs the first year.

And when I heard that, I was just like, initially, I was like, oh, I don't want to do this.

I expressed it to him multiple times.

I said, this is dangerous.

We're going to, I think you're going to.

But you did it,

but you did it.

Okay.

You're correct.

And so you didn't walk away, even though you knew you were supposed to walk away.

So

the prudent see danger and seek refuge.

The simple see danger, move forward and pay a penalty.

And I've been simple and move forward and pay a penalty.

So how are we going to get out of this?

You owe these people $260,000.

It's his uncle.

Will his uncle let you off and let him have, just give him that part of the business.

You take the other part?

So the deal with the business is that we can give the business back at any time, and

we can keep the money we made, and that is that.

We can just give it back, and there's no more debt.

Problem is, he doesn't, you know, partner doesn't want to do that, but he's also not working.

No, that's not, no, no, no, no, no, no, no, no, no, no, no, no.

I want you to call the people back and say, I'm going to give you my portion back.

And then deed

your partner's portion to him.

Let him have that business, and you go run your other business.

Right.

Right.

Yeah.

So I let him sit over there in his own poop.

Yeah.

Get away from it, Andrew, if you can.

You got to get out of this.

Yeah.

Walk away.

Yeah.

Well,

what I do right now, I really enjoy, too.

So, you know, you can do the same thing.

Just take, take your portion of the business.

He signs off and says, this is your portion.

You can have the portion that your uncle sold us, and you can have the debt, and you can make all the money in the world.

Good luck.

And you just

turn this over here loose to me and I'll take this.

And we're splitting up.

And if you don't do that, I'm going to hire a lawyer and sue you.

Yeah.

Because you don't work.

How old are you guys, Andrew?

26.

I'm 24 and he is 28.

Like I've done this before.

Yeah.

Okay.

Yeah.

So rule of thumb is never do a partnership.

Right.

If you are dumb enough to do a partnership, you have to have thorough partnership agreements that deal with when one of the partners is not performing or doing drugs or dies or gets disabled or gets divorced and you don't want to be in a pool business with his girlfriend, okay, or whatever.

So all that.

Man, you don't have any of that.

So you're screwed is where you are.

But if you can go over and sit down with him and go, look, I'm so pissed off I can't see.

This isn't working.

I want you to take this whole thing and I'll take this whole thing and I'll sign over my part to you and you sign over this part over here to me.

And if you don't do that, I'm going to go get a lawyer and sue you because I'm not going to live like this anymore.

It's not working for me.

And you have been too stinking nice to tell people the truth

and too nice to stand up for yourself, Andrew, of what you know is right or wrong.

Right.

So, right.

Let's uh, this is your time where your backbone gets uh installed, okay?

Right, yeah,

yeah.

So, I have actually written you're not going to do it, are you?

No,

I have some, I have already something written up.

I'm just I don't want to write anything up.

I'm going to go sit down and have a cup of coffee and go, dude, you're, I'm going to sign over this whole thing over here to you.

It's going to be yours.

You're going to sign this whole thing over here to me.

It's going to be mine.

We're not working together anymore.

This is how this is ending.

I'm done.

Yeah.

And you're going to be.

I didn't want to be in this in the first place.

I wished I wasn't.

Your tone could be nicer than that.

I don't know.

But be done.

At least in your head, have that.

Be decisive.

Be decisive, Andrew.

Clear.

Clear and decisive.

And don't talk about all the stuff in the past and all that.

All that matters is you're fired.

That's all that matters.

Our scripture of the day is Philippians 4, 6.

Do not be anxious about anything, but in everything by prayer and supplication, with thanksgiving, let your request be known to God.

Teddy Roosevelt said complaining about a problem without posing a solution is called whining.

I love it.

All right.

Matt's in Colorado Springs.

Hey, Matt, what's up?

Hey, Dave.

Hey, Rachel.

How are you today?

Great.

How can we help?

Yes, sir.

So

I've got a debt collector on my back, and it's for a relatively small amount.

And I've heard you talk about debt collectors and their scummy kind of tactics and stuff, and I've never experienced this.

So I was hoping you could help me.

To make a long story short, my wife and I have been married about a year and a half now.

We had about $38,000 worth of debt.

Nine months ago, we're down to 17.

We're trying to work through babyset two.

Good.

She had a credit card, I guess, that before we got together, she had had.

And when she was 20, I guess she decided she didn't feel like paying it back.

Here it is.

And

I didn't know it was there.

What's the balance?

Hanging around.

It's only $2,300.

But the first time we've ever been contacted about it, they sent us a manila envelope to her old emailing address that had like legal documents.

Like they're going to take us to court over it.

Oh, that's okay.

We never got a phone call, a text message, anything.

If they were going to take you to court, they would have done it a long time ago.

It's been five years.

So it's been sold to a debt collector, obviously.

So, you know, I've called them and I've taken your advice.

I've given them barely any information about us.

And I've haggled them and they've told me final offer three times.

And the best deal they're willing to cut me at this point is after three hours of haggling with them and 17 different people I've been passed to is $1,600.

Now, I don't know if it's worth just paying the $1,600, but that would be my emergency fund.

Plus, we do the OG cash folders.

My wife loves your wallet, Rachel.

So, we got a wallet full of some grocery money and stuff.

Nice.

So, that would be all that money.

I just don't know if it's worth haggling them some more, calling their bluff, or just paying them and moving on.

How much do you guys make a year, Matt?

I'm a a UPS driver.

She's a dental assistant.

I make between the two of us, she just got a raise.

If I work overtime, I'd say we make before tax, maybe

70, or I'm sorry,

95-ish between the two of us right now.

Okay.

All right.

So is this the next item in your debt snowball?

Well, this was an unexpected thing that just popped up about two days ago.

You've had 17 conversations in two days.

Well, I've got Bluetooth headphones and 10 hours a day of slinging cardboard that I can argue with somebody all day if I have to.

So this whole thing stretched out over two whole days.

I mean, the first time, I guess maybe this makes more sense.

Back in her old mailing address when this all happened was her parents' home.

Back in February, someone pulled up to her parents' home asking for her.

We didn't know what that was about, and they didn't tell her parents any information.

And then about three days ago, someone pulled up and just handed her mother the envelope or the manila folder but to your point you've only been in contact with them for three days is what yes ma'am yeah

yes ma'am yeah let let it sit

okay just turn it off the the the the paperwork says september i think 12th or 18th and you know and that's when it's supposed to be officially filed with the court that's fine but i just don't know how serious to take that i wouldn't worry about it

okay what what would you recommend i do just keep haggling them until i get a better

i would call back when you've got the money to settle it.

And, you know, you can settle it for $1,000 today, right?

I tried.

I mean, I told them, I said, look, I even said I'm doing the Dave Ramsey plan.

I don't have a lot of liquid access.

I got $1,000.

Take my money.

And they said, no, that's ridiculous.

We can only come down 25%.

And then after some lady yelling at me for 30 minutes on the phone, she fused that.

She pulled the whole car salesman tactic.

Stop, stop.

Okay, next time you talk to them, if they say something in an inappropriate volume or or inappropriate words, say, if you do that again, I'm hanging up.

Okay.

And then hang up.

We're not going to have anybody yelling at me for 30 minutes over $2,000.

Okay.

Just hang up.

Okay.

That's what I'm saying.

I just want to wind up in a situation where I'm in a courtroom now.

You're not going to be in a courtroom.

You're not even going to go.

There's no point in going.

You're going to lose.

Not you, but your wife.

She owes the money.

Open and shut case.

She loses.

Now you're settling a judgment lien and not a debt.

Whoopty-doopty.

It doesn't matter.

It's a five-year-old debt.

They're saying they can come at us with all their fees.

Yeah, they can

come at you with all that if I choose to pay it, but until you choose to get a hold of me,

you're not going to get it because you don't even know where we are.

And make sure that her parents don't give out any information if anyone comes to their front door and tell them if they come up on my property again, we're going to have them arrested for trespassing.

Okay.

So they're really just trying to scare me and strong on me.

100%.

They're trying to piss you off.

Okay.

If they can get you very afraid or very angry, you quit thinking with the proper parts of your brain and you just want to kill them.

Okay.

That's why they yell.

Do you want to call on them some more or you think I just want to?

No, I would let it sit a week.

Let it sit a week.

Yes, sir.

And call them back and say, you know, I talked to somebody over there.

They were a moron.

And I know what you guys paid for this.

You probably paid about a hundred bucks for this debt.

And I'm willing to give you $1,000.

That's all I've got.

If you want to take that, fine.

If not, there's not going to be a lot of discussion here.

Do you want that or not?

Yes or no?

If you don't speak reasonably, we're going to end the conversation.

End the conversation.

Okay.

Call back the next day and do it again.

It's like training a dog.

I mean, you just have to do it repetitively, right?

Yes, sir.

My dog's got a shot collar, so it's a little bit bit when I'm in the middle.

That's it.

That's it.

Just hit the shot collar, and eventually the dog figures out we're not doing that crap, right?

And so you have to train these morons because their training has taught them that if they are unreasonable, angry, fear-based, anger-based, that they can get you thinking with the lizard part of your brain instead of the higher thinking parts of your brain.

And you do irrational things like give them the money out of your food envelope, which we're definitely not going to do, dude.

But you make $95,000, and you do need to get this cleared up sometime between now and Christmas.

So just get pay, you're going to pay something to get it out.

And if you pay $1,600 between now and Christmas and you've actually got the $1,600 by then, that's fine.

You're okay.

But you don't need to wipe out your emergency fund for it.

You're giving this way more attention than they are.

So just back off.

Just let them sit.

Just let it sit for a week and call them up.

And if you can have a reasonable conversation, fairly short, yes or no, you want to do this.

Always fascinating that it's been five years.

Yeah.

And it just.

No, we're going to sue you.

Yeah.

No, and it just randomly sits.

Where were you before?

Yeah.

So just remember that.

Yeah.

I mean, is it that?

It just sits there, it gets sold, all of it, and it just happens to be the file.

And they grab that file, and next is next.

They're just working.

It's a widget on the sentiment conveyor belt.

Yeah.

Yeah.

And so the time is always so random to me.

Yeah.

Five years later.

It's crazy.

Yep.

And, you know, we know that this can be done.

We bought $10 million worth of bad debt and forgave it all one Christmas.

It was 8,000 accounts.

Each of the 1,000 people that work here had eight people to call and say we forgave the debt in the name of Jesus.

And we paid two and a half cents on the dollar for it.

I bought $10 million worth of debt for $259,000.

Okay.

And so, and it was all accounts just exactly like this.

And we just called them up and said, your debt's forgiven in the name of Jesus.

And some of them were like, I don't remember that to this point.

It's been so long.

Yeah, it's been so long.

You remember that hospital bill you had from five years ago that was $42 and now it's $486?

Yeah.

There you go.

That's it.

Yep.

That's the whole business.

But good for you, Matt.

You and your wife doing this.

I'm glad you're working through it.

I mean, yeah, y'all are doing the plan.

Let me tell you what you're doing right.

He's very proactive.

Yeah.

That's what you're doing right.

The thing I don't want you to do is fall into the trap of letting them control the narrative and the conversation.

So give a little more space in between.

Even though you've got the time to sit on the headset and throw boxes, don't do it.

Let them sit over there and wonder if they're ever going to find your wife because they don't know where she is.

And we're going to settle this for $1,000.

And that's going to be a really good deal for them and a really good deal for you.

And you get it in writing.

And no electronic access to your checking account or you do not send a debt collector money because you can tell they're lying if their mouth is moving.

That puts us hour of the Ramsey Show in the books.

We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

Up next, we are headed out to Chicago and Orlando for the Ramsey Show Live.

Yep, you heard me right.

We are taking this show to you.

This is going to be everything you love about the Ramsey Show, except you get to be a part of it.

Part of what, George?

The Ramsey Show Live.

Okay, that's what I'm telling them about.

Ramsey Show Live in here?

Nope, we're doing it on the road.

You're going to Chicago with me and Rachel Cruz September 30th.

Are you free?

The windy city.

I like it that time of year.

You know what else I like, George?

I like the deep dish.

Oh, okay.

Maybe we'll have some deep dish.

You mind if I finish the promo?

Is that okay with you?

Okay.

Okay.

Appreciate that.

Questions and answers, real conversations, and I'm sure a few surprises here and there.

George, are you in here talking about TRS Live?

I am, Jade.

I'm trying to talk about it.

Nice.

So that means it's actually happening, right?

It's happening.

If I could tell the people, I think it could actually come to fruition.

Listen, just tell me when and where.

You don't know?

Okay, we're going to Orlando.

You're going to join Dr.

John Delonee and I October 2nd.

Yes.

Okay, great.

I'm going to go pack now.

Thanks.

Please, please do that.

Go.

Pack.

Hey, George, speaking of packing, is this like sweater weather or is it not that cold yet in Chicago?

What is happening?

Can I please just get to how they buy the tickets?

Geez, I thought it was a good question.

Okay.

This is not an arena tour.

This is a one-night only event in Chicago and Orlando.

General admission is only 39 bucks.

Plus, there's a VIP experience if you're bougie like that.

But here's the thing: there's only 300 seats available.

So get your tickets now at ramseysolutions.com/slash events.

Hey, how come you get to go to both cities?

I just go where they tell me, man.

Hey, have you been there the entire time?

Maybe.

Okay, and also, are you reading a children's book?

I'm expanding my mind, George.

That's how we got those PhDs.

Yeah, that's probably where you got that jacket.

Okay.

See you on the road, John.