“I’m $147k In Debt And Only Make $1,500 A Month”

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Speaker 2 And we'll be talking about your life, your money, career, relationships, anything and everything. We are here for you.
So let's start off in Boston with Miguel. Hi, welcome to the show.

Speaker 3 Hey, how's it going?

Speaker 2 We're doing well. How can we help today?

Speaker 3 So today I wanted to ask, so I have a business and

Speaker 3 I'm contemplating on what I should do next because I'm also $147,000 in debt, and that's including credit cards, student loans, and a car payment. Okay.

Speaker 3 So I want to know if I should sell a business for what I think I get value for and then start fresh and use that lump sum of money to attack the debt.

Speaker 4 What kind of business are you in?

Speaker 3 It's a printing business, so merchandise.

Speaker 4 What would cause you to sell the business versus using profit from the business to pay down the debt?

Speaker 3 I think it's just because I'll collect a lump sum of money and like the business right now is kind of

Speaker 3 fluctuating. It's up and down.

Speaker 3 And I'm also alone in it, so it's a lot of my time.

Speaker 3 Where I feel like if I could change the...

Speaker 2 If you didn't have debt, Miguel, would you stay in this business?

Speaker 2 Or would you still want to?

Speaker 2 Yeah.

Speaker 3 You would stay in the business. I'll potentially stay in the business.
Yeah.

Speaker 2 Okay.

Speaker 2 Yeah, because I look at this as, I mean, because I mean, well, how much would you sell it for? How much could you get out of it?

Speaker 2 Minus all of your liabilities and everything.

Speaker 3 About 30 grand.

Speaker 2 How much are you making off of it every year? How much are you bringing home?

Speaker 3 So this is actually like my first year in it.

Speaker 3 So I'd know at the end of the year, but roughly after everything, about $1,500 a month.

Speaker 4 $1,500 a a month. And is this what you do full-time or is this kind of like a side business?

Speaker 3 It's full-time.

Speaker 4 Well, I don't know that I would sell it, but I would not have this being my full-time job right now because of what it's generating. It feels like

Speaker 2 how are you guys living? Is your wife work?

Speaker 3 No, I'm single.

Speaker 2 You're single. How are you living off of $1,500 a month?

Speaker 3 Just making it happen, honestly.

Speaker 4 But what's your rent, though? Like real numbers?

Speaker 3 I pay studio, it's about $8.50.

Speaker 4 What else?

Speaker 3 Car?

Speaker 3 Car, yeah, $4.50. And then $450.

Speaker 4 Okay.

Speaker 3 Yeah.

Speaker 4 And then utilities, I guess that's put in with the rent. And then just you're scrapping on food.
No insurance. Yeah.

Speaker 4 Do you have insurance?

Speaker 3 Health insurance?

Speaker 3 My car is. No, no, no, no health insurance.

Speaker 4 Yeah. So

Speaker 4 you're not on a living wage right now.

Speaker 4 And so while I think it's cool to have a printing business,

Speaker 4 it eats like a part-time side hustle when we look at the income that it's bringing. So I would be looking, as you're working this, I'd be looking for a full-time job.

Speaker 4 What are your skills? What have you done in the past before you did this business?

Speaker 3 I tend to just hop out of school and then save money and then started this business.

Speaker 2 Yeah. How many hours a week?

Speaker 3 I've never really.

Speaker 2 How many hours a week are you putting into this?

Speaker 3 A lot. It's probably like 50, 60.
Yeah, yeah, yeah.

Speaker 2 Okay, so if you did, do you have a buyer out there? Like when you say sell the business, I mean, what's that?

Speaker 2 Have you looked into that option? Is there a realistic option?

Speaker 3 Yeah, I have yeah, I have a few options. And that's when I mean the business, I just mean like the equipment and everything.
Yeah.

Speaker 2 Oh, I hear what you're saying. Not necessarily.

Speaker 4 Yeah, okay, yeah. Because that's where the debt is, right? What did you invest in to do this business?

Speaker 3 Like, what equipment do you have?

Speaker 3 Oh, I have like DTG printer, heat presses,

Speaker 3 and a couple other machines.

Speaker 3 You know what?

Speaker 4 I'll tell you.

Speaker 4 You haven't been doing the business long, so I don't want to say that there's no future in it.

Speaker 4 But how much of this debt is business debt? Like how much of it came from the business?

Speaker 3 About eight grand.

Speaker 4 Okay, that's not bad. Of the 147, that's only eight.

Speaker 4 I'm inclined for you to continue.

Speaker 4 What I want to know is what's the minimal amount of hours that you can put in it to keep the 1500

Speaker 4 so that you can search for something else. Is there any feasible way to do that?

Speaker 3 Yeah, it's possible. That's also another plan I've been thinking of because I have a location in a premier like downtown area.
So I was thinking of just getting rid of the space,

Speaker 3 trying to find something smaller, and then kind of just work on based off orders I get. Yeah, I do.

Speaker 2 Do you have consistent clients that you're reprinting for?

Speaker 3 Or I don't want it done? For the most part.

Speaker 3 A little bit of both, but I do have, I've picked up a few clients that are picking up, you know, monkeys.

Speaker 2 Yeah.

Speaker 2 And is most of the hours hours when you're saying I'm working 50 hours on this is it most of it in the actual physical printing that you're having to do or is it trying to find new clients and marketing and thinking of creative ways to get your name out there

Speaker 2 a little bit of both but mainly the the printing process like printing and being in there okay okay yeah so I'm with Jade I mean Miguel if you have all the equipment and it is bringing in 1500 obviously that's not that's not sustainable long term for you to live like that obviously you know that that, or you probably won't be calling this show.

Speaker 2 So it's November. A part of me would give it another six months while doing something else.
Like you need to go wait tables. I mean, you could make more money doing that.
I mean, something, right?

Speaker 2 You need to go be doing something.

Speaker 2 And if you can keep this on the side and actually get some clients out, you could. I don't know.
And if you,

Speaker 2 yes, grow it.

Speaker 2 And then maybe that be your full time, or you just have these clients and you start making $3,000 a month while also still working to get out of all the credit, all the debt that you talked about at the beginning of this call.

Speaker 2 So I almost would be tempted just to hold tight for like maybe six months. Give yourself a time period, though, to say, okay, don't go into any more debt in it,

Speaker 2 but to say, can I pick up any more steam in this business in the next six to nine months? And if you can't, then sure, sell the equipment and then that will give you some money.

Speaker 2 But we just see this, Jade and I both, I think,

Speaker 2 as a great side hustle for right now. Why don't you go get a full-time job somewhere else?

Speaker 4 The fact that you've started generating money so quickly from it, I think, is good.

Speaker 4 And you have made an investment in some equipment, and it feels like worth it to try to play that out a little longer. But I like what Rachel said on putting a timeline on it.

Speaker 2 So I would do that, Miguel.

Speaker 2 Or just throwing this out there, kind of the other side of the coin is if you hate it and you're not enjoying it, but I think you are liking it in some degree because you said you'd still stay in if you didn't have debt

Speaker 2 is to, yeah, find something just full-time, sell the stuff, and you start a whole new life where you're not feeling like you have to carry a business, right?

Speaker 2 Because it does, it's a lot of strain and mental calories to do that.

Speaker 2 So I don't know, kind of two different options, but either way, you've got to get a second job either way.

Speaker 3 Agree, agree. Rich, yeah.

Speaker 4 I hope that helps. I know that sometimes when we just tell people, cut your expenses and get a job.
And I know it feels tough, but truly, that is, that is the remedy.

Speaker 4 You don't have expenses to cut your bare bones as it is. So the next line of defense is getting more income.
That's how it works.

Speaker 2 Yeah. And Ken Coleman has a a book, Find the Book, I'm sorry, Find the Work You're Wired to Do.
And we'll send that to you because there's a great,

Speaker 2 it's not a quiz, assessment, at the best.

Speaker 2 Yeah, to kind of figure out maybe this will help kind of narrow some possible career paths for you, too, Miguel, that you can just kind of brainstorm and think.

Speaker 2 So, hold on the line, Christian's gonna pick up.

Speaker 1 Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John.

Speaker 1 Why don't people want to take care of their family? They think they're going to die or something.

Speaker 5 Well, I used to be one of those guys, I didn't even think about it.

Speaker 6 And one of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids.

Speaker 5 And I immediately went and got term life insurance.

Speaker 1 That's a gut punch.

Speaker 6 And oh, you're telling me, and for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.
Me too. They don't know what to do next.
Me, too.

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Speaker 2 Up next, we have Cody in Roanoke, Virginia. Hi, Cody.
Welcome to the show.

Speaker 3 Hey.

Speaker 2 Hi, how are you doing?

Speaker 3 I'm hanging in there.

Speaker 2 Well, good. We are too.
How can we help today?

Speaker 3 Well, so I got a little bit of a financial problem as well as marriage problem.

Speaker 3 And

Speaker 3 it's becoming a strain more so, you know, with the marriage because of the financial problem.

Speaker 3 I have

Speaker 3 we recently had gotten married about five years ago. My wife and I have had three kids in the last five years.

Speaker 3 And my youngest kid,

Speaker 3 he was put in the ICU. And

Speaker 3 long story short, we have a bunch of medical debt. It's about $35,000 worth.
And I just can't keep up. I just recently, in the last couple of years, we've been on Medicaid, but

Speaker 3 I just recently got a raise working, which is good. But it's like

Speaker 3 the more income I come in, the more my wife likes to spend.

Speaker 3 I'm the saver. I like to say no and, you know, get bills paid.
We currently have been taking care of some of the medical bills by credit card, which recently I figured out was a no-no. Yeah.

Speaker 3 So I have seven grand left in medical debt. We have

Speaker 4 the 35, you only have seven left? No, no, no.

Speaker 3 No, sorry. I have $7,000 of credit card debt.
Got it. And I still have the medical debt.
Got it. Okay.

Speaker 3 Because we have the three kids, we had to purchase, well, we didn't have to. I guess we could have just kept going, but my wife wanted to purchase a bigger vehicle for traveling and stuff.

Speaker 4 What would you spend on that?

Speaker 3 That was about $50,000. Oh, yeah, you're right.
You didn't have to spend that.

Speaker 4 Okay.

Speaker 3 Yeah.

Speaker 3 Long story short is that we messed up when we bought the car, and now it's kind of a paycheck-to-paycheck repetitive thing.

Speaker 4 When did you get the $50,000 vehicle? How long have you had it?

Speaker 3 It's been about a year. Okay, shoot.

Speaker 2 Okay, so when you talk to her, Cody, about this,

Speaker 2 how do those conversations go? Are you showing her numbers?

Speaker 3 Are you telling her that she's spending too much?

Speaker 2 Yeah, what's the.

Speaker 3 It originally came up because I noticed that our savings account was going backwards.

Speaker 3 And

Speaker 3 instead of paying

Speaker 3 month-to-month.

Speaker 3 I mean, I do share funding there. Can you do that going down the road? We can just

Speaker 3 Cody.

Speaker 3 Sorry, sorry. Can you hear me? Yeah, I can hear you.

Speaker 4 How much was in the savings account to start? And how much has it dwindled down to?

Speaker 3 So originally we had about 20 grand in savings when we switched

Speaker 3 to

Speaker 3 because we had sold a house and we had a bunch of money invested into the house and we got a bunch of money back to pay off some debt.

Speaker 3 Well, we went into the house and had money left over. We had 20 grand in savings.
Got it. And what she dwindled to.
I was having two, I've got it down to like $5,000 now. 5,000.
Okay.

Speaker 2 And was she using any of this, Cody, for

Speaker 3 everyday expenses? Like

Speaker 2 the grocery store? Like, where is she spending it?

Speaker 3 So most of it has been when I get a budget because I do all the money because she stays at home and takes care of the kids Because if we tried to put four kids through daycare, then it would just take an entire paycheck or two almost.

Speaker 3 So the biggest thing is

Speaker 3 how do it's going through like she's buying clothes for the girls or

Speaker 3 and I can't get her to stop.

Speaker 4 Well, let's let's let's I feel like you're

Speaker 4 I feel like you're laying out the problem. I want to get into some real numbers so we can see exactly what what you're describing looks like.
How much money are you bringing home every month?

Speaker 3 I'm, I'm bringing home from, so I got two jobs. I just started recently a landscaping business, which my main job, I'm bringing in about $5,000 a month.

Speaker 3 And that's, you know, what I'm actually bringing home,

Speaker 3 not

Speaker 3 after taxes. And then

Speaker 3 plus my side business, if I get a job or two and I only have time to do that on the weekends,

Speaker 3 Roughly two grand at most. Okay.
Probably.

Speaker 4 And give me an idea because you said you're a numbers guy. What are you for your, because I thought you said three kids, but then you said four.
Is it four kids?

Speaker 3 No, my oldest. Yes.
Okay. So my oldest, I have four kids.
I have three with my wife currently.

Speaker 4 Understood. So for, give me an idea of what you have on the budget to spend on groceries.

Speaker 3 For yourself. Our budget right now is roughly about $1,200 a month on groceries by the time I go to the grocery.

Speaker 3 I can't, I can't, I've tried to limit it, and it just seems like every time I try to limit it, it's not.

Speaker 4 Well, that feels right.

Speaker 2 That feels right.

Speaker 4 Give me an example of a budget item that she's gone kind of ballistic on so we can get an idea.

Speaker 4 Is this $50? Is this $500?

Speaker 3 No, so right now we have our joint checking, which is what I feed the money to her through,

Speaker 3 is like if I tell her $100, it ends up being $150.

Speaker 2 Okay, Cody, you're not her dad. Okay, so everything that you're saying in this call so far, not saying that she's out of bounds.

Speaker 2 She could be out of bounds because she spends more than what y'all are making. You can't do that mathematically and be a grown-up, right? That's how you live life in debt.
And we don't want that.

Speaker 2 But I mean, you just said, like, well, she stays home with the kids and I do the money. I put the money in the account that feeds her.

Speaker 2 I mean, it's a very separate, even though maybe technically it's together. Emotionally and plan-wise, you guys are on two different tracks.
And when you tell her,

Speaker 2 this is how much you have to spend on groceries to me, that's a red flag in your, your marriage and communication.

Speaker 2 And so you, you, you need, I wish you had said, or the, the goal, I should say this, the goal is for you to say, we planned on spending $1,200 a month and that was our plan.

Speaker 2 And so what, well, I think the first step you, you have to do is to get her to sit down at the table with you and you guys look at numbers and together you guys create a budget, Cody, because I'll be honest too, you know, I'm sure there's some wrong in there that she has, but also she is seeing expenses every single day and knowing the reality of what things cost because she's the one buying them and you don't.

Speaker 2 I get, I'm not saying that she's justified in it, but you actually may learn something in sitting down with her and hearing what she has to say to say, oh, wow, I didn't realize that sports uniforms cost, you know, 30 bucks a kid.

Speaker 2 And so now we're spending a hundred bucks, you know, in one, you know, swipe because we needed uniforms and that pisses me off because how do we spend them hundreds?

Speaker 2 You know, you may actually see some reality as well. But she also, if there's any entitlement in her end or any like, oh, well, I don't know.

Speaker 2 I just, I just have to buy the girls and if it's that attitude either, she has to grow up and mature.

Speaker 2 So you both need to sit down and you need to come to her and say, you have, you, you don't need to say, well, you're spending too much. You, you, you, you.

Speaker 2 Cody, you need to tell her, I'm freaking out over here. Like I am to this point where I feel so disconnected.
I feel so fearful.

Speaker 2 I feel so protective of the money because I feel like we are not on the same page. So will you you please sit down for me, right? Like you make it really about you

Speaker 2 and what you want for the outcome to be, which is you guys be on the same page and for this not to take your marriage because it does, Cody. You're exactly right.
Because

Speaker 2 I do think people cannot get on the same page.

Speaker 2 And so I would beg you to say that that is, that's one of the best things that you can do because out of that budget meeting, I think she's going to have a lot to say.

Speaker 2 I think you're going to have a lot to say.

Speaker 2 And to be able to actually discuss it together, not these one-off conversations. Does that make sense?

Speaker 3 Yeah, so we actually recently, I've been,

Speaker 3 well, I almost make her, I mean, it's, it's kind of like feels forceful sometimes because I'll sit down after the kids go to sleep and we're all sitting and I'll go over the budget numbers and stuff with her.

Speaker 3 And,

Speaker 3 but like here recently, I've done it more so to where she's aware. of, you know,

Speaker 3 saying

Speaker 3 how much is there.

Speaker 4 There's a reason that this is off-putting for her. Um, and you got to get to the bottom of what that is.

Speaker 4 There, there's something there, whether it's something that has nothing to do with you, possibly. How did she grow up? What were the relationships she was in before?

Speaker 4 Maybe, I don't know, we didn't get to talk about it, but did she have a career before and she's used to kind of contributing in that way? And now she's not. There's something behind this.

Speaker 4 It's not just, well, she won't stick to the budget. It's never that.
There's always something beneath.

Speaker 4 And you've got to be a professional detective to figure out what that is instead of just saying, well, she won't do it and I've got to make her do it.

Speaker 1 Everywhere you turn this time of year, someone's telling you to swipe a card now and pay later. But that mindset always leads straight to debt and post-holiday stress.

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Speaker 2 Well, it's that time of year, and in a few weeks, we're going to be doing the special giving edition of the Ramsey Show.

Speaker 2 We do it every holiday season, and it's one of our favorites because I think it does highlights humanity.

Speaker 2 It kind of gives you faith into like the things that people are doing day in and day out for other people that are not highlighted or not seen.

Speaker 2 We like to highlight and show you all how incredible it is.

Speaker 2 So, whether maybe you've tipped a waitress $100 or bought Thanksgiving dinner for a family that couldn't afford something or afford the food, food, maybe bought someone a car. It could be something,

Speaker 2 anything where you have been generous or maybe you've been on the receiving end of it, we want to hear from you. So if you will go to ramseysolutions.com/slash ask

Speaker 2 and put giving in the subject line and just give us a little blurb of your story and what it is. And you may be, yeah, selected to be on our giving show that we do annually again.

Speaker 2 So that is coming up on December 18th. So start sending your stories today so we can celebrate living like no one else.
So later you can live and give like no one else.

Speaker 2 All right, let's go to Beto in Atlanta. Hey, Beto, welcome to the show.
Hi, how are you? We're doing well. How can we help today?

Speaker 3 All right, so I just bought my first car. I'm 17 years old.
I work full-time at an MMA gym. And the finances that came with the car kind of are kicking me in the ass.
Yeah.

Speaker 3 It's my first car, and I don't really have another option.

Speaker 4 What'd you get?

Speaker 3 I got a 2012 Honda Accord.

Speaker 4 Okay, so what's the big deal? What's it cost you?

Speaker 3 So the total is eight grand

Speaker 3 for the car. Okay.
My friend owns it, owned it, and he told me I can pay him $400 a month. Okay.
That's fine. I make roughly $850 bi-weekly.

Speaker 2 Okay.

Speaker 3 And

Speaker 3 the part that's getting me is the insurance. My insurance for just liability a month because of my age is about $700.

Speaker 3 And

Speaker 3 having to pay all of that on my own, buying a used car, I also have to pay a title tax because we switched it over to my mother's name. And that's about another $700.

Speaker 4 A month? No, just in one time.

Speaker 3 Just in one third. Okay.
I was like, what?

Speaker 3 Okay, keep going. But I have to get it all done at once, which is kind of the hard part.
And

Speaker 3 I have one two little repairs that are going to cost me a total of $350 before I can get a tag.

Speaker 3 What would happen?

Speaker 4 So you haven't done it yet. You haven't done this deal yet.

Speaker 4 How are you getting around now?

Speaker 3 So I did buy the car. Oh, you did buy it? I did have an operating permit from Georgia without a tag for 30 days.

Speaker 3 But once that runs out, I'm going to be stuck without a tag and not being able to drive the car until I pay.

Speaker 4 Well, you haven't done the title exchange, the title transfer yet, right?

Speaker 3 I have.

Speaker 4 Dang it.

Speaker 4 Okay. Because what I was going to suggest to you is to not buy this car and just work your job because you were getting around somehow before this.

Speaker 4 Keep doing that and save up four grand and get a beater.

Speaker 4 Yeah.

Speaker 4 Is there any way to go backwards on this deal?

Speaker 3 Because

Speaker 3 I don't think so.

Speaker 4 Okay.

Speaker 4 Second round then is

Speaker 4 you, tell me how old you are again, 22? I'm 17. 17.

Speaker 2 Man.

Speaker 2 Are you in high school?

Speaker 3 No, I work full-time. You work full-time? Okay.

Speaker 2 And how much are you making? Oh, bi-weekly, you said.

Speaker 4 $1,300 a month.

Speaker 3 How are you?

Speaker 3 $8.50 every two weeks. Okay.

Speaker 4 Are you living alone or are you living with parents?

Speaker 3 I live with my mother, but I try to contribute where I can. I'm really independent financially.

Speaker 4 If you are working full-time, I just wonder, because you said full-time hours at an MMA gym.

Speaker 4 I wonder if there's something that you could find full-time that will give you a little bit more money to give you some breathing room on this while you can get it paid off.

Speaker 3 I applied to an orthopedic clinic of a friend that I know, and I'm supposed to start in about two weeks.

Speaker 3 What will that be? Starting off at 20 an hour. Okay.

Speaker 3 And 40 hours a week?

Speaker 3 8 a.m. to 5 p.m.
Monday through Friday.

Speaker 4 Okay. So that's going to be better for you?

Speaker 3 For sure.

Speaker 2 Are you able to go to this gym at night when you're done at 5 p.m.?

Speaker 3 Yes.

Speaker 2 Go and work at night.

Speaker 3 Okay.

Speaker 2 So you could go work from like 5 to 7, 5 to 8 at the gym and get like an additional three hours a day?

Speaker 3 Not necessarily. Because my hours from the gym are either 9 a.m.
to about 1.30 or 4 p.m. to 9 o'clock.

Speaker 3 Okay. And if I get out of the other job at 5, the only time I have left would be those few hours.
Yeah.

Speaker 3 And that would leave me no time to train, which is why I got the job at the MMA gym in the first place.

Speaker 4 Well,

Speaker 4 what if you continue to train at the MMA gym just because you like training, but you got a different part-time, like a different side hustle job to bring in the 1700?

Speaker 4 So you did the full-time gig at the orthopedist office, and then maybe you drive some Uber because you got a car now. Or not Uber, but like, you know, Instacart, DoorDash, that kind of thing.

Speaker 4 And then, yeah, you just work out at the place you like working out at.

Speaker 3 That makes complete sense.

Speaker 3 I have one more question on starting my own business. I was actually going to start my own business soon about car detailing.
Okay.

Speaker 3 But I wanted to know whether I should try to pull the trigger now or whether I should try to pull the trigger after I get everything with my car done and pay off.

Speaker 4 I mean, what's it cost? You don't have any money.

Speaker 3 I have about $1,000 saved up that I have, like, in case my car, like, engine messes up or anything, like an emergency, emergency. And you need that.
I haven't been planning on touching. Yeah.

Speaker 3 I haven't been planning on touching it.

Speaker 2 Yeah, so it would just for the car detail, you'll probably need some equipment, right, to be able to. So that would be saving up and paying for that.
So I would just price out beta what,

Speaker 2 if you talk to some people in the area that do it, how much they haven't invested in it, how many clients they have, how long the job takes, run some numbers because you may, I don't, I'm not sure what the numbers are.

Speaker 2 So, you may find out, you may find out, oh my gosh, this is pretty incredible. I only have to put 500 bucks in and I'm making thousands a month.

Speaker 2 That's worth pausing, paying off the car to get that built up, to start that, because it's going to bring in more income.

Speaker 2 Or you talk to people and you're like, oh, crap, that steamer and this and this to really do it is going to be thousands. And you're only really making X amount.

Speaker 2 Like, whatever the numbers end up being,

Speaker 2 you probably can make that call. You have an amazing work ethic.
It's very incredible.

Speaker 2 And I just want you, you know, steering your financial decisions to help you, not harm you. And debt will always set you up

Speaker 2 in the negative. It always will, financially, emotionally, your stress, everything.

Speaker 2 And I think you're kind of getting a glimpse of that, but I'm kind of glad you're getting a taste of it at $8,000 for a stupid car loan versus a $40,000 business loan that you're probably going to want to do when you're 25 because you're very entrepreneurial, right?

Speaker 2 So just remembering to stay away from debt all together, all together. And you're a smart, hardworking guy.
And I think you're going to do fantastic.

Speaker 2 So yeah, the car dealership or the car detailing stuff, again, I would price it out, kind of figure out.

Speaker 2 And if it feels like, okay, that's a good investment that's going to, that's going to bring me a significant more money than these other two things combined.

Speaker 4 And it's something you can start small on. You don't have to start with every piece of it.
It can really, you can build into that.

Speaker 3 Yep, for sure.

Speaker 2 Yep, that. And then starting to, yeah, get this, get this car paid off.
And it's going to, it's going to feel like an uphill battle with this insurance. When you turn 18, does it go back down?

Speaker 2 I'm sure it does.

Speaker 3 I'm not quite sure because I asked one of my friends who works with insurance, and he said not usually. And if it does, it's minimal, which I would appreciate anyway.
Yeah.

Speaker 3 About $700 a month for liability is the only thing that's killing me. The $400 a month for the car, I understand that.

Speaker 4 Right, right, right. Totally.

Speaker 2 Yeah, it's the insurance.

Speaker 2 Where did you get the insurance? Did you price out different companies or did you just pull a quote from one?

Speaker 3 So I started with like Daiko or something, and they started me off at almost $1,000 for just liability because of my age. And then I went to a few places.

Speaker 3 I went to this mom and pop shop for insurance down the road for me, and they quoted me Lois at 700 months.

Speaker 4 Okay. Yeah.
I would keep shopping that just to see.

Speaker 4 And yeah, when you turn 18, you should see a little bit of relief. And also when the vehicle is completely paid off, you should see a little bit of relief.

Speaker 4 It's not going to be a lot, but it'll be something. Yeah.

Speaker 2 Gosh. Well, Beto, I hate that you're in this situation because I hear the stress and the regret already.

Speaker 2 But I really do think with putting some of these jobs kind of together, making some more money and really being focused right now, like I think you're going to get out of head on it.

Speaker 2 But I think it's a good lesson to learn. I hate to say it.
It's not fun, but you're feeling the weight of debt. And that's what debt does.

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Speaker 2 Well, there's some things that no one tells you about money, and those are the emotions around it. And Jay, that's what you wrote your whole new book on.

Speaker 4 That is right. What no one tells you about money.
Yeah,

Speaker 2 it's powerful. I think

Speaker 2 not only your story, but I think putting to words how people are feeling during this process, whether it's getting out of debt, especially. But this, it's a whole journey, right?

Speaker 2 This money journey is very real and it's very emotional.

Speaker 2 But also, it feels like you are sitting across from a friend who's been through the journey and you give such great words to, again, how people are feeling and thinking. Thank you.

Speaker 4 Yeah, I wanted to give practical steps because a lot of times, like you say the word emotion and it's all like in the clouds. And the book is very, very practical.

Speaker 4 The same way we give you, you know, seven baby steps to plan for your money.

Speaker 2 I'm giving you tactical things to get and deal with those those emotions it's not just you're gonna feel sad it's no right how do we work through it give me the information jade i need steps and they're there yeah and some of the resolve too because your emotions aren't the end all be all to your point there's something you can do to take that to continue so that's right um i love it so exciting so you can pre-order now for 24.99 And you can get over $100 in free bonus items, including the audiobook, which I appreciate so much.

Speaker 2 The early access to the e-book, an exclusive video with your financial checkup with you, Jade, and an exclusive three-week online book club and live Q ⁇ A with Jade Warshaw.

Speaker 2 So you can go to ramseysolutions.com slash store to pre-order it. If you're watching on YouTube or podcasts, we'll leave a link below.
But again, the book is titled, What No One Tells You About Money.

Speaker 2 All right, let's go to Ian in Hartford, Connecticut. Hi, Ian.
Welcome to the show.

Speaker 2 Hey, thanks for taking my call. Yes, absolutely.
How can we help today?

Speaker 2 So I'm in a pretty interesting, pretty blessed situation here.

Speaker 3 I'm a 20-year-old engineering student, and I started doing affiliate marketing on TikTok shop like a year ago, and I've gotten pretty good at it. And last October, I did $180,000 in sales.
Good,

Speaker 3 Ian. Holy crap.
They returned about $23,000 in profit.

Speaker 3 But I realized I, you know. Through this time, I kind of realized I hate engineering and I don't really want to do that.

Speaker 3 So I definitely don't want to do that for for a job, but I have a pretty interesting opportunity to sail around the world on a semester at sea next semester. Oh, yes.

Speaker 3 I had friends do this.

Speaker 3 Yeah, I was just kind of wondering if I should take the time off and do the semester at sea, enjoy my youth, or if I should continue to scale because honestly, I think I could get to the point where I'm doing $1,000 to $2,000 days.

Speaker 3 Wow.

Speaker 4 Is there a way to do both?

Speaker 3 No, unfortunately, I wouldn't have Wi-Fi on the ship, and then also I wouldn't be able to receive packages

Speaker 2 to like fulfill orders and that kind of thing. If you did pause it for five months, does that change the business drastically, or can you just pick it right back up?

Speaker 3 The business has kind of built that momentum, so it'd be pretty hard to just, it wouldn't necessarily be hard because I'm pretty skilled at it, but

Speaker 3 I would definitely like it would take some time to build back up. Sure.

Speaker 4 I love, I mean, I'll tell you straight up. I I worked at C for a long time right out of college, and I loved it.
It was the best time of my life. I wouldn't trade it for anything.

Speaker 4 Um, I've been to so many countries, it's, it's, it is quite the experience. So, part of me just wants you to have that life.
I know you're 20 years old.

Speaker 2 I feel like you have your whole life to earn money, even though you're earning crazy money right now. There's something about there's a yeah, a specific time in life that you can just never get back.

Speaker 2 And there are experience points in life that are so good for you too, as a person. Yes.
To do all of it and to enjoy. There's a part of me too, where I'm like, man, you're 20 years old.

Speaker 2 You're obviously skilled at understanding how things work. And to be, I mean, not only just have an engineering degree, but let alone kind of some sales and understanding marketing.

Speaker 2 I mean, you know, you didn't just fall into this. You learned it.
And so you're a smart guy. So I'm not worried about your earning potential later in life.

Speaker 2 Yeah. So there's something about just doing a semester at CIGO, have fun.
You know, you're 20 years old. I don't know.
I, I'm an experienced person, though. So there's a part of me that, yeah.

Speaker 2 Are you? Do you have friends going?

Speaker 3 Yeah, one of my best friends would be going with me.

Speaker 2 Okay. And you want to go?

Speaker 3 Yeah, I think I want to go.

Speaker 3 But at the same time, I'm also kind of worried about setting up my future. And like, I want to get into real estate in the future and kind of have that be my main thing.
So

Speaker 2 you're not going to do, you're going to do real estate in the next four months.

Speaker 3 How's the

Speaker 4 semester at C being paid for?

Speaker 3 So actually, I get a full-ride scholarship pretty much.

Speaker 4 Man,

Speaker 4 I'm telling you, like,

Speaker 4 you're going to have to convince me not to go.

Speaker 4 Because

Speaker 4 all that stuff's going to be waiting for you. And I agree with Rachel.
You're smart. I'm not too concerned about what you'll do.
This is a kind of one of those.

Speaker 4 I don't want to say once-in-a-lifetime, but it is kind of like a once-in-a-lifetime. For sure.
Yeah.

Speaker 2 You know? To be able to go and travel for five months around around the world, and it's paid for, yes, you absolutely.

Speaker 2 I know, I think you're 20 years old, and I think you need to just relax and enjoy. I so wonder what other person I wonder if we may have may and Jade may be the only person out of the show.

Speaker 4 Ken would show that Ken would tell them to do it.

Speaker 2 Ken would, Ken would say to go to Taylor Swift concert, too. So that's right, Ken would be a yes.
Uh, George would probably be a no. I feel like George would be too practical.

Speaker 4 I am, and let me just Dave, who knows, throw up the

Speaker 4 yes, but let me just say, like, percentage-wise, I am a 100% yes. I'm not like a 70, 30.

Speaker 2 Jade says do it, even 100%.

Speaker 3 What's your ratio?

Speaker 2 My percentage is,

Speaker 2 I'm going to go 95. Wow.
Maybe just like a tad less than Jade, but again, from a percentage standpoint, basically we're the same.

Speaker 4 That's good. Kelly, what's yours?

Speaker 4 I'm 100% yesterday.

Speaker 3 197.

Speaker 2 Okay, is there anyone in the audience? We have an audience out here. Anyone in the audience, everyone's giving a thumbs up? Would you do a semester at C?

Speaker 3 Oh,

Speaker 2 wait there's one guy uh-oh maybe one guy in a gray shirt i don't know i don't know he's a little iffy

Speaker 2 okay we got a lot of yeses ian yeah i'm thinking you i think you need to go and thank you when you stop in paris oh

Speaker 2 enjoy it because i've never been so give the eiffel tower a wave for rachel eat a whole baguette just in the streets a whole loaf of bread with no regrets yeah go enjoy ian go enjoy your time as a 20-year-old with no responsibilities and again it's incredible that you built up that thing i mean now again if you were um

Speaker 2 34 with the two kids

Speaker 4 i know affiliate marketing is not going anywhere like it's the wave of the future and of the now you're gonna do great you're gonna do great all right let's go to sonia in orlando florida hi sonia welcome to the show Hey, thank you for taking my call.

Speaker 3 How are you today?

Speaker 2 We're doing great.

Speaker 3 How can we help you?

Speaker 3 Awesome. Well, I'm planning on retiring soon

Speaker 3 and using money that I have in my Fidelity account.

Speaker 3 I'll have to use that for about a year before my Social Security will kick in as a supplement.

Speaker 3 I have five properties, including the one that I live in.

Speaker 3 And I want to know if it makes sense for me to sell one of my rental properties to pay off, which is free and clear.

Speaker 3 oh wow to pay off to yes um to pay all of my properties are free and clear except the one i live in oh yeah and the one my brother lives in that i purchased after my mom passed okay bought her um reverse mortgage um are those two in are those two in addition to the five or they're part of the five I have a total of five, including the one I live in.

Speaker 2 If you sold one of the investment properties to pay off your primary home, would you officially pay off your primary home?

Speaker 3 Would it

Speaker 4 pay it off free clear?

Speaker 2 And then would you have some additional money left over?

Speaker 3 I have money saved up not only in my fidelity account, but I also have money in my bank account. How much do you have total?

Speaker 3 Total, I have in

Speaker 3 my bank account, I have $130,000. Okay.

Speaker 3 So,

Speaker 3 and in retirement, I have about a half a million dollars.

Speaker 2 Good for you, Sonia.

Speaker 4 Okay. And what's the real estate total?

Speaker 3 I'm sorry, what was the question?

Speaker 4 What's your real estate total?

Speaker 3 My real estate total is

Speaker 3 I have

Speaker 3 I have $1.3 million.

Speaker 3 Okay.

Speaker 2 Okay. In all the real estate.
God, Sonia, you

Speaker 2 are a baby steps millionaire. Incredible.

Speaker 2 So yes, in a heartbeat, I I would sell one of the properties to pay off your Prime Minister and be completely debt-free and be living off your investments and the other rentals that you know, if there's income coming in from those.

Speaker 2 But

Speaker 2 you've done a fabulous job, Sonia. A fabulous job.
And your next step, yeah, is just to become completely debt-free and then live and give like no one else.

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Speaker 2 Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Rachel Cruz with Jade Warshaw, and we're going to Gabrielle in Los Angeles, California.
Hi, Gabrielle. Welcome to the show.

Speaker 3 Hello, Jade. Hello, Rachel.
It's Gabriel.

Speaker 2 Sorry. Oh, Gabriel, gosh, I'm sorry.
My bad. Thank you, Gabriel, for the

Speaker 2 fix. How can we help?

Speaker 3 All right. I was calling on behalf of my mom.
She's 72. She's a widow who never remarried.
Currently, she's retired. She's active in her church, and she has a home that's almost paid off.

Speaker 3 It doesn't include taxes and insurance, but lately she's been asking me for money. It started off small, but it's starting to escalate.

Speaker 3 How can I help her protect her being independent, but also set up her finances wisely for the future without becoming dependent on me or my siblings?

Speaker 2 Yeah, for sure. How old are you?

Speaker 2 I'm 40. You're 40, okay.
And her house is almost paid off.

Speaker 2 Is she still working?

Speaker 3 She's not.

Speaker 2 Okay, so she's retired.

Speaker 2 Do you have any idea numbers of what's in her retirement?

Speaker 3 She's currently receiving, oh, as far as her retirement savings, she does, I believe she's exhausted them. So she's currently, the only income coming in is Social Security.

Speaker 4 Do you know what that is?

Speaker 3 I believe it was like $1,100, $1,300 possibly. Oh, wow.

Speaker 4 And do you know?

Speaker 3 Depending on the bare minimum.

Speaker 4 Do you know what her mortgage is and what she has left on the mortgage in full?

Speaker 3 So the mortgage currently outstanding balance is around $100K. Okay.
And then the mortgage payment is around, I'd say, $1,450.

Speaker 3 Oh, gosh. Okay.
Well, yeah.

Speaker 2 So how is she paying for everything?

Speaker 3 Right now, I have my oldest sister who's living with her, and I believe they're splitting the cost of the mortgage. Okay.

Speaker 2 So they're half and half. Okay.
So it's that's 700. And then everything else, I mean, is she able to pay for, is your sister splitting other bills, you know, like electricity, water, all of that?

Speaker 3 Yeah. So from what I understand is that my other siblings, she approaches each sibling individually and

Speaker 3 for help,

Speaker 3 whether it's covering a bill or a few dollars here and there. Yeah.

Speaker 4 And she's for real needs. It's not for, yeah.

Speaker 3 Is she able-bodied to go to work?

Speaker 2 Is she able to work?

Speaker 3 She is able-bodied. However, she hasn't worked in some time.

Speaker 2 Yeah, that's so hard. I mean, the reality is she either,

Speaker 2 I mean, if she has no, if she has no money and all she's getting is Social Security, it's not enough, to your point, when taxes are due for property tax.

Speaker 2 I mean, once she pays off the house, you know, she's going to have to pay for property tax and all that.

Speaker 4 What's the home worth? I'm just curious. If she were to sell it, if she were to sell it, what would it be worth?

Speaker 3 Conservatively, probably about $1.1 million. It's a five-bedroom, three-bath.

Speaker 3 As far as

Speaker 3 her renting out the rooms, that's also been thrown around. But I hate that for her.
Does it require

Speaker 3 me involving myself? Yeah.

Speaker 3 I'm just wondering about.

Speaker 3 Is there like a, go ahead, Jordan?

Speaker 4 I'm just wondering, because my head is that she's 72, she's still fairly young, and she's in in good health. She could live till 92, right? So in my mind, I

Speaker 4 as

Speaker 4 in my mind, I look at $1 million that she stands to take away from this and I go, okay, we can throw a decent amount and invest it and start that fund going.

Speaker 4 And then maybe she can buy a condo for, you know, $250 or $300. I mean, you're in Los Angeles.
I don't know what's there, what's possible. Can she buy something that's very small just for her?

Speaker 4 And then your sister goes and does her own thing. Because I'm also thinking, what happens if the sister moves out and gets married or moves on in life, right? So there's a lot of variables here.

Speaker 4 I'd love for her to get some hands on that money, get some of it invested and get some of it in a smaller, modest living space for her.

Speaker 3 Yeah, I think that's that's what I envision for her. I just don't know where to start.
I think

Speaker 3 if I do get the ball rolling, I'm seeing it through start to finish.

Speaker 3 So where would I start?

Speaker 4 Well, I would start with, is everybody in Los Angeles, like your whole family, or do you have family that lives in less expensive areas of the country?

Speaker 3 No, we're all basically based out of the Los Angeles area.

Speaker 2 Have you looked at or would you know price ranges of, again, a very modest one-bedroom condo that she could purchase?

Speaker 3 One-bedroom, one-bath condo, purchase outright

Speaker 3 possibly in the area,

Speaker 3 like around oh, outskirts. Well, yeah, because she's got to be able to afford it.
400.

Speaker 2 400, okay. Okay.

Speaker 4 So then she could invest 500,

Speaker 4 you know.

Speaker 2 Yeah.

Speaker 2 I'm not mad at that. And get that ball rolling.

Speaker 2 And then, again, if she's able to not pull from those investments and maybe for just three years work somewhere just to pay just the rent, you know, just mortgage. I'm sorry, not mortgage.

Speaker 2 Hopefully it's paid for. Yeah.
Taxes. Taxes, you know, lights, water, food,

Speaker 2 and just not touch that money as long as possible and let it grow and then live off of that because it's either going to be that

Speaker 4 or

Speaker 2 you guys as grown kid adults all have to say, okay, mom's not going to be able to afford this long term. Are we going to be willing to support her in it?

Speaker 2 So that would have to be a conversation that you guys have.

Speaker 4 Will she sell? Do you, I mean, if you imagine yourself bringing this up to her, what does that look like?

Speaker 3 The last time that I brought up the conversation to her, it was emotional. Yeah,

Speaker 3 for me, it's pretty straightforward. I mean, the way that we're talking right now is the way that I talk with her.

Speaker 3 And,

Speaker 3 you know, she's open to it.

Speaker 3 But again, she kind of pushes the

Speaker 3 work onto me. So,

Speaker 3 and so do my siblings.

Speaker 2 And what do they kind of look to you, your sisters, too, to say, like, what do you think?

Speaker 3 No, they don't have an opinion as far as what she should do.

Speaker 3 They feel that, you know, it's our home that we grew up in and that she should hold on to it. And she's only got such and such ways to go.
Listen,

Speaker 4 there's no getting around the fact that this is emotional. Like I'm telling people all the time, that plays such a factor in how we manage the money.

Speaker 4 But if we look at the numbers, the math is not emotional. She doesn't have any money.
She doesn't have anything. And she's healthy.

Speaker 4 She has a lot of years years ahead of her, so she's got to get to the point where the comfort, the discomfort of staying the same is more uncomfortable than changing, right?

Speaker 4 And that's gonna you're start, she's gonna start to feel the cracks in that when you guys stop supplying the money, if that makes sense.

Speaker 4 The more that you guys, and it's your choice, but the more that you say, okay, we'll float it, we'll float it, we'll float it. Just know that it'll float through the reaction for the next 20 years.

Speaker 4 Yeah, so you guys have to kind of get on the same page of saying, we can talk to her about this, but if she doesn't do it, we have to allow her to feel it.

Speaker 4 Because when she feels it is when she's going to realize, okay, I have a difficult choice to make. And just try to support her as much as you can.
And it is emotional. It is tough.

Speaker 4 It's your family home. There's nothing comfortable about that.
But the solution often lies outside the comfort zone. So.

Speaker 3 So it sounds like my next steps might be like two part, right? It's kind of initiating that conversation with my mom about selling the home, possibly.

Speaker 3 And then as far as with my siblings, it's having that conversation. If we're going to do this, we need to stop enabling her and giving her money essentially.

Speaker 2 Yeah, absolutely.

Speaker 2 Yeah, I mean, that's what I would do. And even pull some options.
You can even get in touch with one of our

Speaker 2 real estate pros. Yeah.
Just to look for the area, like what's in the areas of

Speaker 2 where you guys are, just different options condo-wise. And, you know, there could be one a mile down so she doesn't have to move major locations, right?

Speaker 2 Maybe it's just the actual home itself, but run some numbers and kind of get some more facts around it. But yeah, this is this is difficult.

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Speaker 2 All right, let's go to Alex in Grand Rapids, Michigan. Hey, Alex, welcome to the show.

Speaker 3 Hi there. Thanks so much for taking my call.
Absolutely. So I am.
I'm 28 and debt-free.

Speaker 3 I'm looking to buy a tiny house to put on my parents' property without a credit score now and a tiny house technically not qualifying for a mortgage how do i go about getting a loan for it

Speaker 3 well

Speaker 4 let's talk about the loan process and then we'll talk about the tiny house on your parents' property so with the loan process if you have no credit score you're just going to have to find a place that does manual underwriting for that now we would recommend churchill mortgage um there are companies that do that and you just have to check and make sure they'll do it in your area.

Speaker 4 But it's the same process. You're just going to have to show different trade lines.
You're going to have to show your pay subs. You're going to have to show proof of income.

Speaker 4 If you work for yourself, you're going to have to show your tax returns, that sort of thing. But for the most part, the process is the same.

Speaker 2 But how much, but you're saying it doesn't qualify for a mortgage because it's a tiny house?

Speaker 3 Correct. Yeah.
So if it's under 400 square feet, I'm looking at 150 square feet. It doesn't qualify for a mortgage.

Speaker 4 What's the cost of it?

Speaker 3 I'm looking at about 40 to 50,000.

Speaker 2 Oh, well, save up and pay for it, Alex.

Speaker 2 I'm sorry? Save up and pay for it.

Speaker 3 It's like a car.

Speaker 3 Right now, I only have about $10,000.

Speaker 2 Okay, then just wait a little bit. Yeah.
So just be putting some money aside, two, three thousand a month, and just work your way up. And in probably, you know, 12, 18 months, then you can do it.

Speaker 4 Can I ask the long-term strategy on this?

Speaker 3 Alex? Yeah.

Speaker 3 So I have autism, and I can't really live independently.

Speaker 3 So it's pseudo-independent being on my parents' property. Got you.
Got you. Okay.

Speaker 4 What are you doing for work?

Speaker 3 I coordinate volunteers for hospice. Cool.

Speaker 2 And are your parents involved at all, Alex, in this process? Would they be able to help you?

Speaker 3 Not financially, no, but they've been a great support. Okay, okay, great.

Speaker 4 How long did it take you to save up the 10,000?

Speaker 3 I just finished, I got debt-free in February and then saved up. like $6,000 for my emergency to six-month emergency fund.
And it's so, I don't know, the last six months. Okay.

Speaker 4 Yeah, I'm with Rachel. Just keep saving for this.
It seems like you've thought through the best way for you to live. And I like that you've thought through that.

Speaker 4 I don't think you need to go into debt for this. And for anybody who is listening to my zero score spiel, that's for

Speaker 4 that are trying to do a full mortgage on zero credit score. But yeah, save up for it.
I like the 40 to 50,000. Just understand that you,

Speaker 4 that this is yours. Like the resale on this virtually doesn't exist because it's on your parents' property and this is money that you'll likely never get back.

Speaker 4 So understanding that is important, I'd say. Yep.

Speaker 2 Yeah. So running the, yeah, I mean, so it will, um, are you able to pick up extra work, Alex?

Speaker 3 Yeah, I'm looking for a second part-time job. Okay, good for you.
You sound incredible.

Speaker 2 I mean, the fact, I mean, you're very ambitious. You're very well-spoken.
You know what you want. You've been doing the baby steps.
You became debt-free. You got your fully funded emergency fund.

Speaker 2 I mean, you're literally doing it all. The only thing that's going to suck is like the next probably three years of saving for this.
You know what I mean?

Speaker 2 You just look at it like, you know, and people want to save up for a car. They want to save up for a college education, right? And these numbers, these are big numbers.

Speaker 2 I'm definitely not downplaying that. It's just, so it's going to just take you longer to do it.

Speaker 2 And even though I guess technically, you know, I guess you could Ramsey very, you know, go through it to say, well, but a mortgage is the one type of debt.

Speaker 2 And this is for a house because got to figure out a way to do it.

Speaker 2 But the fact that it's, but the fact that there is no resale, because the one reason we do say a mortgage, not only is because it is the most expensive thing that you're ever going to purchase as a home, but also homes go up in value over time.

Speaker 2 And this is more like a car, in a sense, where it's going to go down in value. And so getting into debt, even a personal loan for this, financially would not be wise.

Speaker 2 So it really would be you putting money aside. And I mean, I don't know about the market in tiny homes.
Is Is there a, can you, can't you, can you buy or buy used ones? Can you buy a used one?

Speaker 4 Yeah, that's what I'm looking at.

Speaker 3 I'm looking at them on like Facebook Marketplace. Okay, okay.

Speaker 2 And so maybe you could even, Alex,

Speaker 2 I don't know, because for some people, they may want it off their property. There may be some urgency to get one off.
So maybe you could even negotiate with them and say, hey, if I have cash,

Speaker 2 you know, what's the lowest? You wouldn't be able to do that today because you don't have that amount.

Speaker 2 But when you're getting closer to that in, you know, three years or something, I mean, you may be able to negotiate

Speaker 2 for a lower price. Yeah, absolutely, Alex.
Yep. Thanks for the call.

Speaker 2 And again, I think, yeah, I just wouldn't do that.

Speaker 3 I wouldn't go the debt route.

Speaker 4 I wouldn't either. And because you never know, especially if you're already buying it used,

Speaker 4 what type of resale would be on maybe selling it in the future?

Speaker 3 Yeah.

Speaker 2 Absolutely. All right, let's go to Elijah in Salt Lake City.
Hi, Elijah. Welcome to the show.

Speaker 3 Hey, how's it going? I just have a question. I am 22 years old um i'm currently going to college right now

Speaker 3 um i'm almost done with my bachelor's degree i have only about a year left um i'm only about 14 000 in student loan debt so almost done but yeah that's my only debt no credit card debt nothing no car loan nothing like that

Speaker 3 And I guess my question is, well, I'm looking to go into law enforcement after

Speaker 3 I graduate. I guess my question is, is it worth it to stay for a master's degree if I get an actual like pay incentive for the rest of my career?

Speaker 3 Or if I should just, once I get my bachelor's degree, take that pay incentive and just start working.

Speaker 3 Well, what would it cost you to get your master's?

Speaker 4 How would you pay for it?

Speaker 3 So that one would be it would be loans, but it would be for a total of that master's degree, I've been doing my research, about $18,000 for the college that I'd be going to.

Speaker 2 And what's the difference in job that you would get if you just went into the police department with a bachelor's versus a master's?

Speaker 3 Yeah, so if I went in with a bachelor's degree, I'd be getting a 3% pay incentive for the rest of my career if I went in with a master's degree I'd be getting a 5% pay incentive so I guess my question is it would take a long time to repay that like get that money worth yeah that extra two percent every year but I do really enjoy college I do want to get married before I leave college and I you know enjoy my hobbies so I just don't know if it's if it makes financial sense to get a master's degree not on debt

Speaker 4 not on debt but I'm wondering if there's a way that you can cash flow it are you are you working at all and my next question is do you have to do it right away or can you work on it later while you're in law enforcement and still get the five percent bump

Speaker 3 yeah you you can still get the five percent bump i've just heard from a lot of people that you know it's really hard once you're starting this full-time job to go back yeah i mean how much how much are you getting paid like your first year that you're working so yeah first year if um with a bachelor's degree would be about uh

Speaker 3 90k okay and then with a master's degree if i came in first year it would be about 95.

Speaker 2 Okay. So that's my thing is that the percentage-wise is not big, Elijah.
I mean, we're talking maybe a $4,000 difference, and you could do that in two months with a side gig. You know what I mean?

Speaker 2 Like, so there's a part of me, and I know, I mean, I have friends in law enforcement, and they even move around, they get up to detective, or they, you know, move around within it. Yeah.

Speaker 2 Um, that can change your pay over time as well. So, um,

Speaker 2 yeah, I think if you had the money and you wanted to do it, I, I don't think, I, I mean, I don't think I would stop you. But also,

Speaker 2 since you don't have the money, it's kind of that's a no-go for me personally.

Speaker 3 Okay, yeah, so you would just you would okay, so you wouldn't be okay with you know taking out student loans for a master's degree.

Speaker 2 No, okay, no, yeah, I'd get this paid off, and

Speaker 2 um, man, I wish we had a Ramsey dating app because I feel like we get a lot of calls of some ladies that are always single, Elijah, and they're always looking for a man, and we could have pointed them your way.

Speaker 3 I know, I know.

Speaker 2 No, I

Speaker 2 appreciate the uh

Speaker 2 proactiveness of love.

Speaker 4 I do. I do.

Speaker 2 Because I do think that's great.

Speaker 2 I am for getting married young.

Speaker 4 And what do you say? That is true. Like, when you're in college, there's people right there to choose from.
Once you get out in the world, it's like, I got to work.

Speaker 3 I got to go out

Speaker 4 after hours.

Speaker 4 It's exhausting.

Speaker 3 You know, it's absolutely exhausting.

Speaker 4 I got to go to an event, get dressed up. College, it's like you got your pick right there.

Speaker 2 Got them right there. Oh, Elijah, yeah.
I hope that helps.

Speaker 2 So, yeah, if there's not the the cash, but to Jade's point, if you're able to somehow cash float, or even if you get into a situation where they help pay for half of it, I don't know,

Speaker 2 you know, your work, that would be incredible too. So I hope that helps.
And yeah, good luck.

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Speaker 2 So over on the debt-free stage, we have Christopher.

Speaker 3 Welcome, Christopher.

Speaker 7 Thank you, Rachel. It's so nice to be here.

Speaker 2 I'm glad you're here. We have a lobby full of people.
And always, when we see someone standing on the stage with the headphones, we know. We know that you've been

Speaker 3 on a debt-free journey.

Speaker 2 That's right, Christopher. Okay, so where are you from?

Speaker 7 I currently live in East Providence, Rhode Island.

Speaker 3 Okay, wonderful.

Speaker 2 All right, so how much debt have you paid off?

Speaker 7 $63,563.

Speaker 2 Oh, my gosh, to the T. What kind of debt was it?

Speaker 7 Mostly, it was actually $50,050, credit card debt and car debt.

Speaker 2 Okay, credit cards and cars. How long did it take?

Speaker 7 11 months.

Speaker 3 Wow, you were pedal to the business.

Speaker 2 How much were you making during that time?

Speaker 7 I went from $72,000 to about $80,000, but with overtime, I'm set to close out at about $110,000 this year.

Speaker 3 Oh, my God.

Speaker 7 Wow, I was working a lot.

Speaker 4 You were kicking it.

Speaker 2 Yeah, I was living on nothing. You just cut everything.

Speaker 7 That was it. I actually, I even sold the car.
It was a brand new 2024. I was a little upside down, so I did the one thing you say is okay with debt.
Yeah.

Speaker 3 Let alone pay.

Speaker 4 And so it's not a myth.

Speaker 3 It actually works.

Speaker 7 It worked out. It was tough.
I ended up buying an 05 Lexus for about $6,000.

Speaker 3 Wow.

Speaker 7 And then a few months later, someone drove into it on my street.

Speaker 4 Oh, shoot.

Speaker 2 Oh, look at that. That's good.

Speaker 4 That's class. How much were you upside down?

Speaker 7 I was upside down about $4,000, $5,000.

Speaker 4 You are the poster child or poster man adult of what we teach. I love hearing it.

Speaker 7 Oh, thank you. So when that one got hit, I actually got about $8,000 from the insurance company.
And I was like,

Speaker 7 how cheap of a car can I get? So I bought another car for $2,000.

Speaker 7 Put the rest of it towards my credit cards.

Speaker 3 Stop it. Look at this.

Speaker 3 Christopher.

Speaker 7 And I said, you know what? That's what I'm driving right now.

Speaker 3 Let's keep working. It works.

Speaker 2 Oh my gosh.

Speaker 4 A $2,000 car. How many miles on it?

Speaker 3 $125,000.

Speaker 2 Man-oh, man. And was it okay?

Speaker 3 It runs great.

Speaker 2 Runs great.

Speaker 7 Manual transmission. It'll never die.

Speaker 4 Let's go. Let's go.
Let's go.

Speaker 2 I wish you could be in the passenger seat of every 25-year-old guy in America. I just be like, well, y'all are always in the passenger seat.

Speaker 7 That's how I learned. I'm actually a truck driver, and I was listening to the Ramsey show 12 hours a day, five or six days a week.

Speaker 3 That's how you do it.

Speaker 7 And there were so many little pieces that were put together that made me realize this whole debt thing is really ridiculous. Why am I doing this to myself?

Speaker 5 Yes. So, yeah.

Speaker 7 Wow. I'm glad y'all do what you do.

Speaker 4 You don't regret a thing.

Speaker 7 Not one bit.

Speaker 2 So amazing. Okay, so 11 months ago, yeah, what was it for you? What that you said, okay, I'm done.
I'm going to just completely change everything I've been doing. I have a brand new car.

Speaker 2 I have some credit card debt, and I'm going to just, I'm going to change it. Yeah.

Speaker 7 Well, like I said, I've listened constantly. There were two things that stuck out in my mind.

Speaker 7 I've been working 70 hours a week plus since I was 18 years old. Oh, wow.
I heard Dr. John Deloney say one time, very exasperated, you know, working 70 hours a week isn't sustainable.

Speaker 7 Baby steps one through three are meant to be intense. After that, fourth, five, and six are supposed to be intentional.
I was like, maybe that's why I feel so burnt out.

Speaker 7 70 hours a week for 16 years, it's a lot. Yeah.
So I said, you know what? That's the time.

Speaker 7 And between Dave saying, the only reason, the only thing a credit score does for you is show how well you play Kissy Face with the bank. I was like, yeah, I've been playing that for a long time.

Speaker 7 Maybe I should stop doing that. So it was time to just get it done.

Speaker 4 What was the hardest part? I want to know, like, it's one thing to hear it.

Speaker 4 And then when you start doing it and you feel like the discomfort of it, what was the main like emotion that was holding you back?

Speaker 7 I would say swallowing my pride.

Speaker 7 Like I said, I've been working very hard my whole life and to have to get rid of a brand new car that really enjoyed it.

Speaker 3 And that was your gift to yourself. Yeah,

Speaker 7 I just didn't need it. It wasn't a necessity.
I hear everyone say on here, oh, I had to go buy a new car. No, you didn't.

Speaker 7 Save up for a couple of weeks, buy a clunker like that one. Man, you need to be behind this desk.

Speaker 3 Sound good. Let me know.

Speaker 2 Christopher, for real, though,

Speaker 2 I think that's a great point. The ego hates going backwards.
Absolutely.

Speaker 2 So it does, it takes a level of humility to say, what I was presenting to the world, what I'm going to present actually, from a mathematical standpoint, is better, but

Speaker 2 from a a presentation image perspective, it looks less. Right.
And so the ego doesn't like it. Absolutely.
It's very, very difficult.

Speaker 2 And so the fact that people that do it, you know, are serious and I'll think a level of maturity and humility that's really, really amazing. Okay, so have you turned down the hours of working 70?

Speaker 7 I have so far. I'm planning on picking it back up probably in March.
I don't like driving in the snow. I'm sorry.
So I figure now that I'm out of debt, I don't need to work 70 hours a week anymore.

Speaker 7 Let's bring it down to 40 or 50.

Speaker 3 Yes.

Speaker 7 In the summertime, I'll make some more money. And I'm still working on baby step three.
Once baby step four comes, I'll be good.

Speaker 4 Yeah, and you can upgrade from the $2,000 car.

Speaker 3 Absolutely.

Speaker 2 Yes. Make some changes.
Wow. Okay.
Have you been able to feel a difference since you had a huge difference?

Speaker 7 A couple of years ago, I found out I had a panic disorder, so I have a little bit of anxiety. I think most of it was from my debt.
Wow. At that time, before I found the Ramsey show,

Speaker 7 I had a house that was $400,000. So it was a lot that I had that just I didn't need.
I ended up selling the house long before I found found the Ramsey show.

Speaker 7 Now it's just, I feel the weight lifted off my chest and I can just breathe. I sleep better at night.

Speaker 4 Simplicity.

Speaker 7 That's it.

Speaker 2 That's incredible. Absolutely incredible.
Did you have some cheerleaders in your corner, Jeremy?

Speaker 7 My parents, Bob and Simone,

Speaker 7 all my friends up north, all my friends down here. I used to live in Clarksville for a while.
Oh, yeah. So I'm here visiting them and I figured, hey, come do a debt-free screen.
Amazing.

Speaker 7 Yeah, at one point, I had 42 credit cards. Holy snow.
I was playing that game, building that credit score.

Speaker 3 Stop wow.

Speaker 7 Because you know, I've heard Dave say it many times. Why do you get a credit card to build your credit score? Why do you build your credit score to get more debt?

Speaker 7 Why do you get more debt to build your credit score? So I was like, that's just foolish. I'm done.
Done. I closed every single account.

Speaker 7 I had a balance on five. One was around $3,800.
One was $4,000.

Speaker 7 The last three were about $8,000, give or take a few hundred. From that point, I went to the avalanche method because they were so close.

Speaker 3 I was like, I'll pay off the one that's at 28%.

Speaker 7 Sorry. These two have zero.
We'll save a little bit. Sure.

Speaker 4 Fine. So once you save the three to six months, what are you going to do to celebrate? Because you, my friend, deserve celebration.

Speaker 7 I am going to continue saving to upgrade that hunk of junk.

Speaker 4 And what do you got your eye on?

Speaker 7 You know, the car I sold was a 2024 Subaru cross-trek. My rental that I got here is an Outback.
a Subaru Outback, and it's a lot more spacious. I kind of like that.

Speaker 7 So probably something like that or a Forester.

Speaker 3 Anything like that. An SUV with all-wheel drive.

Speaker 4 Yes, because you live in the snow. Yeah.

Speaker 3 Yeah, exactly. Okay, so great.

Speaker 2 Okay. So I'm going back to the 40, was it 42? 42, yep.
Okay, credit cards. What was the one that you were like, you could not wait to close out? You were like, I just discover.
Discover.

Speaker 7 I took that and I went snip, snip.

Speaker 4 Oh, my gosh. Wow.

Speaker 3 So great.

Speaker 2 You're a rock star. Christopher, well done.
Well done. Okay, what would you say to someone? who is listening? Maybe they're a Christopher.

Speaker 2 Maybe they've just found the show and they're thinking, what, like, gosh, I do have credit cards. I have car loans.

Speaker 2 What would you say to them if they feel like there's no way I could, I could do that?

Speaker 7 I would say, just do it. What do you have to lose? Only your debt.
You're just going to lose your debt. That's the worst case scenario.
If you stop going into debt, you'll be good. Try your hardest.

Speaker 7 It's going to be hard. Harder for some, you know, easier for others.
And just keep doing it. If you keep pushing and keep pushing, struggle now so you can have a better life later.

Speaker 2 Yes.

Speaker 4 Talk about, talk quickly about the adaptation.

Speaker 4 You took your car down to the dealership and got rid of it that's right how quickly did you adapt like how quickly did you turn that corner from oh woe is me to i'm fine with this two thousand dollar car pretty quickly i was i was upset like

Speaker 7 kind of a little bit but i was my first car was a 95 uh chevy pickup truck and i loved it So I like older vehicles. It's just now things are so new, they're safer.
There's better features.

Speaker 7 So you like the new stuff too. At least with that 05 or 07 rather, I can fix anything on it.
Wow,

Speaker 7 I don't need to take it to a mechanic. If something goes wrong, I just take it apart, replace apart, and that's the point.

Speaker 2 You can figure it out. That's right.

Speaker 3 Figure it out. Wow.

Speaker 2 Well, Christopher, you've made our day. Absolutely.
You've made it my day. I mean, no, for real.

Speaker 2 You are the reason we do this. That's right.

Speaker 3 And you're living proof that it happens. You know what I mean?

Speaker 2 And yeah, so whether, yeah, single, married, male, female, whoever you are out there,

Speaker 2 it's proof that you just can say, if I just believe that I can do it and I start making changes, I can. That's right.

Speaker 3 Just do it. I can do it.
Incredible. All right.
You ready, Christopher?

Speaker 2 I am. All right.
So we got Christopher from Rhode Island. He paid off $63,563

Speaker 2 in 11 months, making $72 to $80,000

Speaker 2 with $110,000 a year. All right, Christopher, let's hear your debt-free scream.

Speaker 7 Three, two, one.

Speaker 3 I'm debt-free.

Speaker 4 Oh, ladies and gentlemen,

Speaker 2 that's how it's done. That is how it's done.

Speaker 4 The poster man.

Speaker 2 Today's question of the day is sponsored by Why ReFi.

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Speaker 2 They build custom fixed rate plans based on what you can actually afford. So learn more at yrefi.com slash Ramsey.
That's the letter Y, R-E-F-Y dot com slash Ramsey. Not available in all states.

Speaker 4 Alrighty, today's question comes from Layla in Maine. She says, When my boyfriend sold his house and moved into mine, we agreed that he can buy into my house after a few years, which is now.

Speaker 4 We plan on getting married at some point, but we're in no rush. He's giving me $75,000 to be part owner of the house.
What should I do with this money?

Speaker 4 I already have an emergency fund, and my only debt is $220,000 on a mortgage, which will now be only half of my debt, and about $5,000 on a 2% interest car loan.

Speaker 4 Should I put it all into a mutual fund, load up my IRA or some mix of the two?

Speaker 4 I'm struggling, Layla, because you're asking one question, but I need to answer a different question than the one you're asking.

Speaker 4 I would give,

Speaker 4 I would do one of two things.

Speaker 4 A, here's my problem with the whole thing is the fact that you're not married in this house and you're exchanging money in a way and property in a way that married people do.

Speaker 4 And really not even the way that married people do.

Speaker 4 It's all messed up. But because you're not married, there's no protections here for you.
And the more that you co-mingle money into this, it's just going to make it more of a messy process.

Speaker 4 If for some reason, this doesn't go down the path of marriage like you think, because to your own point, there's not even a rush to get married. So this is getting very messy very fast.

Speaker 4 If I were in your shoes today, and I know this is not the question you asked, but Rachel, if I were her, I would not accept money until we get married.

Speaker 4 And if he wants to pay rent or pay something for living in your house, because essentially that's what's happening, he's got to be okay with that because there doesn't need to be a level of commitment by buying into a house if there's not a commitment to the relationship.

Speaker 2 Yes. Well, and I'm assuming if he's going to be giving her this amount of money, does he want to be on the title, like be part owner even legally?

Speaker 2 And that means you're then sharing a legal rights of a home with someone you're not married to.

Speaker 2 And as quickly as he says, I love you today, is as quick as you could fall out of love, he falls out of love. And again, because you're not married, there's zero protection.

Speaker 2 He could just walk out the door.

Speaker 2 But now you guys are going to have to refinance a house to get his name off of it because you meet someone else and want to get married to this other person and got your ex-boyfriend on it.

Speaker 2 It just turns into a mess. So, no, I mean, I wouldn't accept it.
I'm with you, Jade.

Speaker 2 Because, again, I'm assuming by accepting this amount of money, he's going to want legal ownership of the home to be put on some, you know, on the title. So, so, yeah, it's a it's a no for me.

Speaker 2 And yeah, I mean, the fact you guys are living together and

Speaker 2 before marriage, which is becoming more and more common,

Speaker 2 and if he wants to pay you rent and you guys have a roommate-type

Speaker 3 relationship too, you can do that.

Speaker 2 It just gets really messy really fast.

Speaker 2 And from a relational level, I will tell you, studies are coming out more and more as well to show that actually divorce rates are much lower if you don't live together before.

Speaker 3 That's right.

Speaker 4 That's right.

Speaker 2 And the quality of marriage and the quality of relationship and everything is different.

Speaker 2 When you're not just playing house and then deciding to finally commit, you actually go through the stages, which is more old school, but it's showing more and more from a relational standpoint.

Speaker 2 It's more stable. So, and again, that's not what you asked, Layla, but I'm with Jade.
I wouldn't, I wouldn't accept it.

Speaker 4 Yeah, and therefore, I'm not going to answer the question you asked.

Speaker 3 It's all love, Layla.

Speaker 4 It's all love.

Speaker 2 All right, let's go to Jay in Atlanta, Georgia. Hi, Jay.
Welcome.

Speaker 3 Hey,

Speaker 3 hello, Miss Jade and Miss Rachel.

Speaker 2 Well, hello, Mr. Jay.
How can we help today?

Speaker 3 Yes, I just had a question about investing in Roth versus the traditional 401k

Speaker 3 and only because, like, from my experience,

Speaker 3 I invested in a 401k that

Speaker 3 for about a year, and it was about like $1,200 in there a couple of months ago. But also, I had ended up losing my job, so I just went ahead and sold it.
and I got back half.

Speaker 3 So I was trying to see what was

Speaker 2 the difference.

Speaker 2 so normally yes okay so what we would normally say is if you leave a job you want to roll over your 401k just to a traditional ira so you're keeping the investments you're just moving it out of the company's 401k um versus i basically what yeah what you did is you just sold it yeah and if it and if the market was kind of low at the time you know you may not have gotten you know fully what it was and probably paid some taxes and all of it so yeah because it was retirement funds yes yeah so um yeah you did get hard hit hard with some penalties.

Speaker 2 So our rule of thumb with investing is, did your 401k at your previous employer, did it have a match built in?

Speaker 3 Yes, it had about a 4% match.

Speaker 2 4% match. Okay, perfect.
Do you have a new job now with a 401k currently?

Speaker 3 Yes.

Speaker 3 I have a

Speaker 3 new job, and they actually match up to 30%.

Speaker 3 Wow. Gosh.
That's great.

Speaker 2 Okay, perfect.

Speaker 4 And is this one a Roth? You asked about Roth versus traditional. Is it a Roth 401k on this one?

Speaker 4 I think so.

Speaker 4 That's another thing. I'm not really sure the difference.

Speaker 3 And, you know, I just picked one. Yeah.

Speaker 4 If you have the choice,

Speaker 4 if they're telling you you have the choice and I would ask, I would make sure to get with HR and ask that question.

Speaker 4 I would select a Roth option because in that way, you're paying the taxes on the money now so that when you go to retire,

Speaker 4 it's all tax-free growth, which is great for you. So I would always select that.

Speaker 4 And if not, the traditional is fine and you can, you know, get the match on that. The biggest question is if you're ready to be investing yet at this point.

Speaker 4 So can you tell us a little bit about like, do you have any debt? Do you own or rent your house?

Speaker 3 Tell us about that.

Speaker 3 Yeah, so I rent right now. My rent is about $700.

Speaker 3 And other than that, I have child support. That's about $400.
That can vary.

Speaker 3 And then my student loan repayment is about sixty dollars a month uh I put a extra sixty with it so it's about one twenty what's the whole

Speaker 4 what's the whole lump of debt

Speaker 3 uh I just um I will so I found you guys about a year ago and I paid some stuff off so I just got about nine point seven K left okay

Speaker 3 I started at 22 okay way to go nice anything else credit cards or cars oh yes my groceries are about 200. And so,

Speaker 3 yeah, that's it.

Speaker 4 No credit cards, no car note?

Speaker 3 No, I did open up a credit card last year, and then I found you guys a month later and closed it. Look at that.

Speaker 2 Do you have any money saved, Jade?

Speaker 3 Jay?

Speaker 3 Yes, I have about 2.5 saved.

Speaker 3 The only thing is that's earmarked for a car right now.

Speaker 3 I work for a company, and we get company vehicles, so that comes out of my my check. But so I'm saving that $2.5 to just get another car right now.

Speaker 4 Oh, because you've only been driving the company car.

Speaker 3 Right. For

Speaker 3 a year and a half.

Speaker 2 Okay. Yeah.

Speaker 2 So what I would probably do, Jay, is just pause all retirement and work to throw as much money at this $9,700 that you have left in debt and then start working to bump up that emergency funds.

Speaker 2 You know, you have $2,500 in it. I know it's earmarked for a car,

Speaker 2 but I would just, I would get three months. And you don't have a ton of expenses month to month, which is great.
So you could be on the three-month side. That could be your baby step three.

Speaker 2 And then we can start looking at retirement, which will be 15% of your income into retirement. So like Jade said at the beginning of the call, the Roth.
This is a picture I have.

Speaker 2 This is my dad's teaching from the old, old FTU.

Speaker 2 But it's the little coats. Do you remember this? He had like different jars, like one was a IRA, one was a 401k, and then there's like a little coat that he put over each one.

Speaker 2 He was like, the coat is the Roth. So if you, so, so if your investment has a Roth around it, that means you have funded those retirement accounts after you've paid taxes on your income.

Speaker 2 So you pay all your taxes and then after tax income then goes into those. Now, if it's before tax, then again, that money is coming out before you pay taxes on your income.

Speaker 2 And because of that, the government has to tax you on that. because they did not tax you earlier on your income.
And then they tax you on all the growth.

Speaker 2 And if you know anything about compound interest, your investments will grow, grow, grow. So, Roth is amazing.

Speaker 2 Not everyone offers a Roth 401k, but if they offer it, like Jade said, take it and open up a Roth IRA and be putting 15% of your income into that.

Speaker 2 But that won't probably be for another two years, Jay, or a year and a half after you pay off this debt and get a fully funded emergency fund.

Speaker 2 But I'm so glad that you like you picked up the show and you actually are making progress. You paid off so much debt already, Jay.
So just keep at it. You're doing incredible.

Speaker 2 Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Rachel Cruz with Jade Warshaw, and we are taking your calls at 888-825-5225.

Speaker 2 And up next, we have Les in Greenville, South Carolina. Hi, Les.
Welcome to the show.

Speaker 3 Hi. Hi, what a pleasure to speak with you.

Speaker 2 Oh, well, thanks for calling in, Les. How can we help today?

Speaker 3 My question is: is there any rule of thumb or percentage of how much of our assets we could have tied up in our home

Speaker 3 versus cash. Our current situation is

Speaker 3 I'm 72. My wife is 69.

Speaker 3 We still have income from our business of

Speaker 3 300,000 a year, but that will slowly curtail as we enter more of a semi-retirement mode.

Speaker 3 But we're currently

Speaker 3 2.5 million

Speaker 3 net worth,

Speaker 3 two million cash, half million in the home.

Speaker 3 We were looking at a potential purchase or upgrading or wouldn't this be nice in a home? We're a little bit spoiled. We've had two occasions where we've lived on the water on a lake.

Speaker 3 In our town, we have a small

Speaker 3 they call it a mountain, but it it it's a small mountain

Speaker 3 that is overlooking,

Speaker 3 yeah,

Speaker 3 but it it has a limited number of

Speaker 3 home sites.

Speaker 3 It's quite old.

Speaker 3 A lot of the homes are quite old up there, of about 120, overlooking the city with mountain ranges in the west.

Speaker 4 So you're wanting to upgrade? Upgrade from the 500,000

Speaker 3 or second home. Second or upgrade? No, no.
It would be primary primary home. Okay.

Speaker 4 What's it going to cost to get that house on the big hill?

Speaker 3 Well,

Speaker 3 if it doesn't stay within $1 million or $1.1, then the deal's off

Speaker 3 the table.

Speaker 3 But then that would be a shift of we'd have a million in the house and one and a half million in cash.

Speaker 4 How long will you continue to draw the $300,000? And how quickly do you think it'll, like, what will be the rate of deplenishment?

Speaker 3 I would

Speaker 3 based on my predict projections

Speaker 3 it it won't completely end

Speaker 3 but I projected that in

Speaker 3 five it'd be five years before we'd even have to start drawing off of any interest or anything in our investments.

Speaker 4 Oh, five years. Okay, that's great.
And in the meantime, will you continue to invest from the 300,000? Please say yes.

Speaker 3 Oh, heavens, yes.

Speaker 3 Here's a brief background story.

Speaker 3 After

Speaker 3 bankruptcy and foreclosure at age 57, my wife's 54, we walked into a financial piece university class, nothing to our name, $320,000 in debt.

Speaker 3 Exactly 10 years, almost to the day. We said,

Speaker 3 well,

Speaker 3 when Dave showed us the path, we said, we're committing to this. We're doing this.
Almost 10 years exactly. Wow.

Speaker 3 We hit the first million. The next five years, the second million.
We're on track that the third million would be in three years.

Speaker 2 Yes.

Speaker 3 Unbelievable. So,

Speaker 2 gosh, Les. Well done, you guys.
That's incredible. Absolutely incredible.
Yeah. So I am.

Speaker 3 Do you guys have grateful to you folks?

Speaker 2 Oh, well, no, less. I mean, you're the one that did it.
I mean, seriously. And would you say 20 years ago?

Speaker 3 It'd be 16.

Speaker 2 16 years ago.

Speaker 3 Okay. Yeah.
Incredible.

Speaker 2 Yeah.

Speaker 2 So I think from the rough math, yeah, if you guys are able to, you know, be able to get this 300,000, and I know you have to live on some of it, but yeah, in four years, that could easily become another million to throw in.

Speaker 2 So I think if you guys guys keep it around that million dollar mark from just the rough math of even if you just didn't even add the other million, but you had the 2 million, you know, and if you're living off 6% or whatever it may be, I think you're, yeah, you're going to be, you guys will be totally fine.

Speaker 2 Do you have a good financial planner?

Speaker 3 Yes, I kind of hesitate because I've been kicking around just doing it myself.

Speaker 3 Sure, yes.

Speaker 2 No, that's fair. Yeah, yeah.

Speaker 2 So I think, yeah, I think sitting down and kind of running out all the numbers with someone, because if you're 72 and in good health, I mean, you could live another 20 years.

Speaker 2 But I think, Jay, did you.

Speaker 4 Yeah, I was just looking through it. I mean, you should be putting away at least $3,750 a month.
Does that feel about right for you?

Speaker 3 Yeah, currently. Or more.

Speaker 3 We're putting away $150,000 a year. Okay, great.

Speaker 4 And so you have to consider, yeah, lump sum is going to double every seven years. So let's say, like you said, it's at least five years that you'll continue to get that $300,000 income.

Speaker 3 So we all know it's going to incrementally reduce.

Speaker 4 Reduce. Okay.

Speaker 3 But

Speaker 4 what's it cost to run your household? You've got a lot of margin, correct?

Speaker 3 Right. Current,

Speaker 3 current to run the household is $7,000, but

Speaker 3 at this point,

Speaker 3 $2,800 of that a month is designated to vacations.

Speaker 3 Yeah, exactly. So you've got plenty of margin.
Not, yeah.

Speaker 4 My point is you should do this. That's my point is you're going to have plenty of money.

Speaker 4 You guys have done well. You've got a great income.
It's going to dwindle, but it's still going to be a really great income for the next five years, even as it continues to slowly go down.

Speaker 4 I'm okay with the you're doubling in house.

Speaker 4 And I'm okay with it, Rachel.

Speaker 2 Yeah, I mean, I think the million, you have 500,000 in your primary home now. It's just pulling out another 500,000 to upgrade to a million-dollar home.

Speaker 2 And then you guys will have that 2 million in cash. Yeah.
And then you'll be putting some money away continually. And then I think from there, yeah, I mean, I think you've got a great nest egg.

Speaker 2 And

Speaker 2 yeah, I think you'd be totally fine.

Speaker 2 But again, I think running all scenarios with somebody who's looking at the market, looking at rates, looking at how aggressive your funds are,

Speaker 2 how not aggressive they're putting. I mean, whatever that you're invested in, I would be running some long-term numbers

Speaker 2 because, you know, there is the percentage of what you want to withdraw that makes sense from a... historical perspective of what the market makes, right?

Speaker 2 So like, of course, one year, you know, or last year was like 23% or something crazy.

Speaker 4 It was crazy. Yes.

Speaker 2 It was wild.

Speaker 2 And then some years it's going to do 8%, right? So to be able to find that happy medium, and I know people have different percentages of their opinion.

Speaker 2 Financial planners will be more conservative, which is great.

Speaker 3 I think Dave's is a little aggressive. What he says that you can pull out, he's like, it's fine.

Speaker 2 The market's right by

Speaker 2 running those long numbers long term for you and your wife over the next, you know, map out 20 years and just see what it brings you. But yeah,

Speaker 2 you should be totally fine, Les. I think you're being very conservative.

Speaker 2 And again, it's not this percentage, but the fact that everything's paid off too, because that is one thing we think about going into retirement, having a paid-off

Speaker 2 house is a huge, huge upside to when you start actually pulling some money from retirement of how much you actually need to pull when you don't have to pull a mortgage or rent.

Speaker 2 Like, man, that saves you a ton.

Speaker 2 So, Les, well done. You and your sweet wife, I mean, 16 years ago, decided to change the game on what you guys do with your money.

Speaker 2 And it just proves that money is a long-term marathon, you guys, but it works. If you do the right stuff over and over again, it works.

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Speaker 2 All right, let's go to Kim in Salt Lake City. Hi, Kim.
Welcome to the show.

Speaker 2 Hi, thanks for having me. Yes, absolutely.
How can we help today?

Speaker 2 I'm

Speaker 2 left a single mom

Speaker 3 unemployed after a divorce, after 26 years of marriage.

Speaker 3 Sadly, I thought I'd be over it in two years, but it doesn't happen always that easy, I guess, for some people. So

Speaker 3 I'm at the stage where it's time

Speaker 3 that my divorce decree claims I need to either

Speaker 3 get

Speaker 3 my home in my own name

Speaker 3 or sell it okay

Speaker 3 I have all the equity I took that as alimony because I didn't want to disrupt I had seven children living at home at the time with the divorce

Speaker 3 and I have two. I rented my basement immediately, like the week my divorce was final.

Speaker 3 I put up a wall, rented the basement,

Speaker 3 went, I'm gonna make this happen. And now two years have passed, and I'm trying to figure out how

Speaker 3 I feel like I'm making baby steps,

Speaker 3 but I don't know how to make the big steps, I guess, or the big decisions. Yeah, for sure.

Speaker 2 How much equity is in the house, Kim?

Speaker 3 So So it's an acre

Speaker 3 in horse land,

Speaker 3 and

Speaker 3 property value quoted as $1.4 million. I have to give

Speaker 3 a little off, I'm sure, for the status part of the back acreage.

Speaker 2 Okay, so for $1.4 million, how much do you have left on the loan?

Speaker 3 $450,000. $450,000, okay.

Speaker 2 And how much is the mortgage payment a month?

Speaker 3 I pay $2,880,000.

Speaker 3 Okay.

Speaker 4 How have you been handling that $2,880 with no income?

Speaker 3 A divorce, yeah, so we scheduled,

Speaker 3 we mediated November of 23.

Speaker 3 Divorce was final January

Speaker 3 of 24 so that he could claim us on his taxes, which I just realized. Oh,

Speaker 3 no wonder that's going to affect my

Speaker 3 college, my FAFSA.

Speaker 3 Anyway, right now, but that's a side note. The point is,

Speaker 3 I,

Speaker 3 the minute I had an inkling, he was making decisions different than

Speaker 3 for our family, because he used to have He owns a business that's worth a few million, and I chose to just walk away and take equity in the home so I didn't have to disrupt my children.

Speaker 2 Sure, sure.

Speaker 4 How have you been paying for this mortgage currently? Because

Speaker 4 this has happened and you've been living.

Speaker 3 I've been saving.

Speaker 3 I had about

Speaker 3 $50,000 in savings.

Speaker 4 Okay, so you've just been pulling it out of that.

Speaker 3 Yeah, like somehow $400,000 turned into $40,000, what he could give me at divorce time and I said fine

Speaker 3 so you were you were given 400,000 did I hear that right no we had that in the bank he bought an Aston Martin understood

Speaker 3 under anyway we won't go into that part okay so you've been you had 50,000 in savings and you've been kind of just pulling it out every month to live and now it's gone I have good story yes I sold jet skis I sold my truck because I don't I don't have any debt besides my home.

Speaker 3 Never did. So, but my,

Speaker 3 so I'm living off my truck payment right now. I'm going to accounting school and I'm online.
Okay, good. And I did get student loans.

Speaker 4 When will you be done with accounting school and able to work?

Speaker 3 I have like a year.

Speaker 3 That's the problem. I really think it's a self-esteem issue.

Speaker 3 Well, how do you? He bought my unemployment. Yeah.
I didn't get unemployment. And he, anyway, I'm, it destroyed me.

Speaker 3 I really, I know I'm smart. You are.
I can do it.

Speaker 4 And you can.

Speaker 3 And I figured out how to do all the accounting for his business for him.

Speaker 3 And I was just a stay-at-home mom, and I could have gotten the alimony of a stay-at-home mom. But then, oh, wait, when you work for your,

Speaker 3 for four years,

Speaker 3 you're an able-bodied worker.

Speaker 3 So, whoops. Yeah.

Speaker 4 I want you, have you been in any counseling, Kim? Yes, yes. Okay.
I want you to continue with that because you're right.

Speaker 2 This is huge. Yeah.
And Kim, are your kids all in school?

Speaker 2 Well,

Speaker 3 yes. Okay, so you're true.

Speaker 2 Yeah, you're younger.

Speaker 3 Okay.

Speaker 2 Perfect. Okay, great.
Because I was going to say, I think it would just be good for you, Kim. To your point about self-esteem, there's something

Speaker 2 about going through the actions after something that's just horrific. I mean, I can't imagine.
I think what you've walked through is so difficult. It's so hard.

Speaker 2 I think it would, I think it would take away anyone's self-esteem. I mean, like, it just, it's horrible.
But I think there's something to be said about getting up in the morning.

Speaker 2 putting on an outfit, going and interacting with other people, and then coming home. And that may even be a receptionist at an accounting firm or something.
You know what I mean?

Speaker 2 Like if there's a way to get your foot in the door just in that industry since you're going to school for it and make some connections, it's going to be really helpful.

Speaker 2 But to do anything, Kim, I mean, honestly, I think it would just be really healthy for you to get out of the house, earn some money, be around people.

Speaker 2 And you're going to have to because you are running out of money.

Speaker 2 So there is the self-esteem issue of that it's good for you to do this and get some wins under your belt, but you also are going to have to do this from a financial standpoint if you want to keep the house.

Speaker 2 Now, that's going to be a big question to figure out if you can sustain this house.

Speaker 2 And so you need to know: okay, a year from now, here's what I have to make full-time as an accountant, starting out to be able to support this mortgage payment, which you're going to need to make.

Speaker 2 I mean, gosh, yeah, I mean, it's basically.

Speaker 3 I little bit put it off because I had a child with anxiety that really struggled. Yeah.
Like

Speaker 3 every day for eighth grade, we ended up doing like we're doing two periods a day.

Speaker 4 But you're okay. Are you in a place now, though? I want to, I know there's a lot that happened then, but I really want to focus on now.

Speaker 3 Exactly.

Speaker 4 And here's why. Let me tell you why.

Speaker 3 Because here's why.

Speaker 4 If you sell this house and you take a million dollars from it, I'm afraid that you'll just burn through that and not work. And I don't want that for you.

Speaker 3 And yeah, that's what I'm afraid to. That's exactly thanks for putting that into words.

Speaker 4 You know, and so that's why I want you to take Rachel's advice. And today, this week, that be your number one priority is I'm going to look for receptionist jobs.

Speaker 4 And if I can't find a receptionist job, I'm going to look for another job answering phones. And if I can't find that, I'm going to pick anything, take anything.

Speaker 3 Or a local church.

Speaker 2 If there's a local church even to go get plugged into and work for them.

Speaker 2 Because Kim, to Jade's point, is so good because Kim goes with Kim.

Speaker 2 And if Kim stays the same and you're staying consistent and you get a million dollars in your lap, you continue to be Kim with a million dollars.

Speaker 2 And right now, we know there's a better version of Kim.

Speaker 2 So if we can get a better version, a healthier version of Kim, and then even you make the call in a year or two to sell the house, well, we have hardworking, up and out of Kim who's, you know what I mean, self-sustaining with a million dollars, which means you're going to be making really clear decisions when it comes to money.

Speaker 2 I think you still are in that fog, which again, I do not fault you for. I think when you walk through a divorce, that grief is horrific.

Speaker 2 And having seven kids that you're still thinking about, I mean, all of it is very, very difficult. So the fact that you're still grieving,

Speaker 2 I would not shame you for that. And I don't think you need to be shamed, you know, shaming yourself.

Speaker 2 I think give yourself the freedom to still feel and experience what you're experiencing, but we also have to start making some moves to create a positivity around us.

Speaker 2 And I think part of that is getting some quick wins.

Speaker 2 And I really do think there's a self-esteem boost when you earn and you do something and there's a cause and effect and you know, I can do this because you can, Kill.

Speaker 2 You really, really can. So we are cheering you on.

Speaker 2 If you'll hold on the line, Christian will pick up and we're going to give you every dollar for a year to help you get this budget crunching when you start earning this income to figure out how to stay on track.

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Speaker 2 Well, it's not every day, Jade. We get two debt-free screams

Speaker 2 in one show. And so, we are so excited that on the stage in the lobby on the debt-free scream stage is Steve and Tanya.
Welcome, you guys.

Speaker 3 Thank you.

Speaker 2 Thanks, Very Joel. Absolutely.
Hey, where are you guys from?

Speaker 8 We are from Piedmont, Alabama, which is about an hour north of Birmingham.

Speaker 2 Okay, so close to Birmingham, Alabama. Yes.
Okay, so how much debt have you guys paid off?

Speaker 10 $279,000.

Speaker 3 Oh, my gosh.

Speaker 2 Okay, and how long did that take you?

Speaker 10 Six years, 10 months, and 27 days.

Speaker 3 27 days, yes.

Speaker 2 And making what kind of income during that time?

Speaker 10 When we started, it was $135,000.

Speaker 10 We finished up at about $252,000.

Speaker 3 Wow, great. Great.

Speaker 2 And what kind of debt was the $249,000?

Speaker 2 Well, we had about $79,000, my. Yes.

Speaker 4 We had about 61 in consumer debt,

Speaker 8 like tractor, truck, a little bit of credit card, and the rest was our house.

Speaker 3 I know it oh! You did!

Speaker 2 Oh, you paid off the house. We did.

Speaker 3 Everything.

Speaker 2 Completely debt-free in six years, you guys.

Speaker 3 Yes.

Speaker 2 Wow. Incredible.
I mean, just below the seven-year mark. You guys did great.
You guys really, yeah. Amazing, you guys.
Congratulations. Thank you.

Speaker 2 Okay, so what happened six years ago to make you think we want to go on this crazy journey and pay off our house?

Speaker 3 Right.

Speaker 10 Well, we actually got married

Speaker 10 seven years ago,

Speaker 10 seven and a half years ago.

Speaker 10 And so we were about to embark upon building this house. And so,

Speaker 10 and we had kind of, I had gone to FPU years ago. I kind of dabbled in the baby steps, but never really was aligned in that marriage and just kind of struggled the whole way through it.

Speaker 10 When we got got together,

Speaker 10 we just committed from day one that this is what we're going to do.

Speaker 3 Oh, yeah. Log stamp.

Speaker 2 She says, we're doing it. Yeah.
We're doing it.

Speaker 8 Okay.

Speaker 2 Oh, so good. Is that when y'all paid it off? Was that the picture of when you did your last mortgage payment? Yeah.

Speaker 3 They throw it back up there.

Speaker 2 So good. Okay.
So

Speaker 2 when you guys got married, you both, did you guys talk about it a lot before

Speaker 2 you guys tied the knot money in general? Because I do feel like people get nervous. And if it's a second marriage, too, right? We hear that a lot.

Speaker 2 That people are like, oh gosh, I don't know if I kind of want to keep it over my stuff over here, his over there. How did you guys work that out?

Speaker 8 Well, it was kind of,

Speaker 8 hey, we're going to do this. We're going to do this together no matter what.

Speaker 4 Yes.

Speaker 8 You know, because I know in my past and in his, you know, we, you know, we weren't on the same page. So we definitely talked about faith, finances,

Speaker 8 family.

Speaker 2 So the three F's.

Speaker 3 The three F's.

Speaker 3 That's what you get.

Speaker 2 I love it. Well done, you you guys.
Okay, so

Speaker 2 what was the hardest part of all of this?

Speaker 10 I think the hardest part is just choosing to live different. You know, everyone around you is doing all the things,

Speaker 10 eating out, you know, doing all the things. Like, we ate out on Tuesday night when tacos were $1.25.
That's the only time we ever ate out. Yeah.
You know, we packed our lunch every day.

Speaker 10 We bought our clothes at thrift stores and on eBay.

Speaker 10 We sold things we didn't use.

Speaker 10 We just chose to live differently.

Speaker 4 Did anybody ask questions? Like, was it obvious to people around you, like, you're doing something different or were you kind of flying under the radar?

Speaker 8 No, I talked about it a lot.

Speaker 8 They were sick of hearing it. I know my grown children were sick of hearing it.
My friends, my coworkers, I mean, I just kept, we kept laser focused, and that's all that I thought about.

Speaker 8 And I'll tell you what really turned it around. We sat and did our written budget.

Speaker 3 We do the old school papers, the written budget.

Speaker 8 And I asked Steve, I said, have you ever really tithed 10%? Like, have you went all in? And he's like, no. And I was like, we're doing it.
And we did it.

Speaker 8 And when I tell you, promotions rolled in and raises.

Speaker 3 And I mean, it just, oh my gosh.

Speaker 2 It just all came together.

Speaker 8 I mean, we were obedient. Yeah.
We were very disciplined. Like you said, we packed our lunch every day.

Speaker 8 And

Speaker 8 yeah,

Speaker 8 I'm so sick of Tupperware.

Speaker 3 Yes, that's right. I know.

Speaker 2 Well, it's funny, I was going to ask you guys because we always talk about baby baby steps one through three is intense, yes, and then four through seven or four through six is kind of you know, we say intentional, but you doesn't sound like you guys let up very much to pay off the house, or do you feel like a lot of that sacrifice was during the consumer debt stage?

Speaker 2 And then did y'all lighten up when you kind of went to work on the house, or were y'all intense the whole way?

Speaker 10 No, we we actually wound up at the end, we were paying $5,500 a month every month on the house.

Speaker 3 Wow,

Speaker 3 everything

Speaker 10 we didn't we didn't didn't let up once once we got I mean once we got

Speaker 4 the savings in place then every spare dollar went to the house went to the house so then I want to ask you the question that I hear all the time which is I mean six and a half years six years is a long time how what how did you stay motivated like what was the thing that kept you going with that I mean five thousand five hundred dollars a month is a lot that's a lot it was little wins it was if we wanted something special we wanted to go out to eat or you know I wanted to buy a new blouse or whatever.

Speaker 8 I sold things.

Speaker 8 People were sick of me on Facebook.

Speaker 4 You're like, I'm going to find the money to do that.

Speaker 2 Sonya's like, there's Sonya again. Sell them something.

Speaker 8 I would buy decor and just flip it.

Speaker 8 But we followed the baby steps.

Speaker 3 I love that.

Speaker 8 Just to the T. Yes.
And I was kind of like you, Jade, like I always heard, you know, we ain't got no money. I mean, I was raised, you know, paycheck to paycheck.

Speaker 8 And I literally changed my family tree. And I'm leaving a legacy to, we're leaving a legacy to our children's children.

Speaker 2 Yes, it's incredible.

Speaker 2 That decision to, yeah, to live differently, what you were saying, Steve. I'm like, it's just, it's so powerful, so powerful.

Speaker 2 Okay, so what would you tell a couple that's listening? And maybe they're in your stage of life, right?

Speaker 2 And they are, have they walked a similar story to you guys, and they're thinking, oh gosh, but there's no way. Like, I don't know.
I don't think we can change.

Speaker 2 I don't know if we can do something different.

Speaker 2 What encouragement or motivation would you give them to say, yes, you can do something that is totally different than maybe what you ever done with money, and you could even have a paid-off house

Speaker 10 well for me I mean I I mean I basically started over when I was 55 years old and you know so my message is that it's not too late yes you know yes you can you can turn things around

Speaker 10 you know I was not in a position where I mean where I wanted to be and I mean back to the motivation question I mean my motivation was that I want to retire before I'm 65 yeah yeah yeah it's good and so yeah mine was

Speaker 8 you know, like I said, I just wanted to do something completely different than how I was raised or how my family,

Speaker 8 I wanted to make sure, you know, my children have the things that they needed and they see me as an example and

Speaker 8 also grandchildren.

Speaker 8 And I just, yeah. Yeah, I just refused to stay the same.
That's right.

Speaker 4 So how are you going to celebrate? What's the big thing that you guys are going to do to put a big bow on this?

Speaker 8 Well, when I turned to 50, he took me to Hawaii.

Speaker 8 so we have you know once we were out of debt yeah we we saved and paid cash and um so we've we've done some trips we love to travel um generosity is huge yeah that was us in montana so good um

Speaker 8 where um generosity is huge and just enjoy and travel and

Speaker 2 beautiful you know live like no one else like no one else hope y'all enjoy a nashville night tonight thank you i hope y'all i hope y'all get to celebrate doing the step-free screen because it's incredible and your your story is so inspiring to so many people that, yeah, anyone can do it.

Speaker 2 You know, it's just like if you just got to believe and you got to stay consistent, exactly. Like, that's what I heard too, which is incredible.

Speaker 2 All right, you guys, you ready?

Speaker 2 We got Steve and Tanya from right outside of Birmingham, paid off $279,000, which includes their house.

Speaker 2 And they did it in six years, 10 months, and 27 days, making $135 to $250,000. All right, you guys, count it down.
Let's hear your big debt-free scream.

Speaker 3 Three, two, one.

Speaker 3 We're debt-free.

Speaker 3 Oh my gosh. So good.

Speaker 2 See what I love about that is, you know, they both said they had been married before, second marriages. And there is, and Steve said, you know, I had to start over at 55.

Speaker 2 And there's just something about this redemption that

Speaker 2 you get to, it's a second chance. There is something that I can still change what I've done.
And because of that, still, their grown kids are watching watching them. That's right.

Speaker 2 And then their children's children, you know, just like what Tanya was saying, there's just something beautiful about that legacy that even when hardship happens and occurs, which it has in all of our stories,

Speaker 2 but you can still change something. And that redemption is so beautiful for what they've done.
Such encouragement and so excited for them. Well done, you guys.
Well done.

Speaker 1 It's one of the best times of the year, but it's also the time of year when people let their money get totally out of control. Everywhere you look, it's just buy, buy, buy.

Speaker 1 So you start swiping the credit card and suddenly it's January and you got a mess on your hands.

Speaker 3 Don't let that happen.

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Speaker 1 So, while most people will be starting in January with a taste of regret in their mouth, you'll already be winning. Start every dollar for free by downloading the app today.

Speaker 2 Our scripture of the day comes from Proverbs 14, 23. In all toil, there is profit, but mere talk tends only to poverty.
Ann Lander said, no one, nobody ever drowned in his own sweat.

Speaker 4 Oh, boy.

Speaker 2 Well, what a picture that is, but I guess it's true.

Speaker 4 I guess it's true.

Speaker 2 Work hard, people.

Speaker 3 Work hard.

Speaker 3 The grit is good.

Speaker 2 All right, let's go to Lisa in Charlotte's. Hi, Lisa.
Welcome to the show.

Speaker 2 Thank you. Yes, absolutely.
How can we help today?

Speaker 3 So, my husband and I, we have between our Roth

Speaker 3 IRA and our 401k, he has $535,000 and I have $275,000 plus $200 in a CD. Okay.
And I think we messed up during the pandemic when at the beginning when it took like a big dive, I got nervous because

Speaker 3 I'm on disability right now. I have lupus bad.

Speaker 3 And so we're not contributing to our IRA anymore. And so what we I did is I moved everything.
I kept it in the Roth IRA and mutual funds, but I took it out of the stock market.

Speaker 3 So it's kind of been sitting there earning a little less interest. So I'm wondering if we messed up for retirement or if we should move it back into the stock market at our age or what we should do.

Speaker 4 So the 535 and the 275 are no longer invested?

Speaker 3 They are, but not in the stock market. They're more in a secure.
I put them in the CDs, so four and five-year CDs. So they're earning 4% and 5% interest.

Speaker 2 Yeah.

Speaker 2 Okay, so not to just lay. You know, I'm like said, but did you make a mistake?

Speaker 2 The answer would be yes, because I just want to use this as a teaching example that what you did, you know, it's pretty normal. People do freak out.

Speaker 2 If they start to see a dip in the market, they're like, oh, dear God, and they pull their money out or they put it somewhere somewhere else.

Speaker 2 And what we always say is the only person that gets hurt on a roller coaster ride is the person that jumps off. And essentially, Lisa, you did.
You jumped off because the last few years have been 23%.

Speaker 2 I mean, it's been like, it's been crazy. So it would have been,

Speaker 2 I mean, yeah, yeah, I mean, seven times, you know, what you've been making is what you would have earned. So did you make a mistake?

Speaker 2 I'm going to say yes, because I think long-term investing, you just stay in.

Speaker 2 Whether it goes down and you get freaked out, just stay on the roller coaster because it's going to go up and down it's what the market does but when you pull your money out uh if you pulled it all the way out which i can't tell if quite what you i don't know i don't know exactly how that transfer looks but

Speaker 2 i didn't pull it out where i'm paying taxes on it yes so it's still under the 401k but just on the market yes but what but what's difficult now um is when because i am going to say yes put your money back in you're now going to be buying back in at the top where you would have you know you would have lost lost all those returns.

Speaker 2 So it's not too late.

Speaker 2 You can still get back in, Lisa. So I didn't mean to harp on you, but I did want to make that kind of a teaching point because what you did was very common.
People do that a lot.

Speaker 2 But just not to freak out next time because, you know, you guys did lose out

Speaker 2 on a lot of interest that you could have earned. So what I would do is, yes, I would get back in.
How old are you guys?

Speaker 3 I'm 54 and my husband's 59.

Speaker 2 And 59. Okay.

Speaker 3 Perfect. Yes.
That's what we're worried about is

Speaker 3 retirement. Like we don't want to go back in and then

Speaker 3 worry a little bit about that. But our house is almost

Speaker 3 paid off. So we feel better about that.
But we still owe $168,000 left.

Speaker 2 On your house? Okay, how much do you guys make a year?

Speaker 3 So, again, right now I'm not. So he makes $122,000 and I get about $30,000 with my Social Security.

Speaker 2 Oh, that's right. Okay, perfect.
Okay, that's great. So you guys, it's about $150,000.

Speaker 2 And then, yeah, so I'm just thinking, you know, at 54, 59, I mean, you guys, you know, I mean, it could be another 30 years, 35 years that you guys live, you know, if you're, if you guys are, you know, healthy and doing all the things.

Speaker 2 So that's why you still have a long-term, if you will,

Speaker 2 time to get back in the market that even if it does dip for a little bit, a few years,

Speaker 2 you got, you know, just picture 30 years as an example of what you guys have to kind of ride this out.

Speaker 3 Yeah.

Speaker 4 And if I'm understanding the numbers right, you have a million dollars, right? You had 535, 275, and 200.

Speaker 3 900 our house is worth, and we owe just 168 left at 2.5% interest. So I haven't been paying that much extra on that right now just because our interest is so low.

Speaker 4 Right, but just the CDs alone, the 535, the 275, and the 200, did I get those numbers right?

Speaker 3 Yes, yes.

Speaker 4 Yeah. So if you're saying, hey, today I'm going to plug in a million dollars, that's not bad, right? I mean, of course, keep three to six months out in cash, but you're going to be just fine.

Speaker 3 Okay. Yeah.

Speaker 2 Yeah. And I would, Lisa, I think you're a little hesitant to even get back in the market, but I would.
Because if you think about it, even in your house, you've got to get aggressive on that house.

Speaker 2 They say, even if it's 2.5%, you're making 3% on your CDs. You guys are, you know, you're paying what you're making and you're kind of just, yes, you have a wash right now.

Speaker 2 So, yes, I would be aggressive on paying off the house. And then we just talked to a couple.
We literally just had a debt-free screen that they, you know, they paid theirs off, which is amazing. So

Speaker 2 it can be done. So I would do that.
And then I would, I would even sit down. We have great Smart Vestor Pros there in Charlotte.

Speaker 2 And I would sit down with someone and look to see and tell them about, you know, a little bit of your nerves around the, you feel like it's risky, like you don't want to lose your retirement, you know, these kind of things, because a lot of people can feel that way.

Speaker 2 But what I want you to do is listen to someone that you trust, someone that you likes, you know, find a financial planner that you actually, I think, personally enjoy because I think it's important that you trust them.

Speaker 2 Um, and let them show you some of these numbers and to be able to say, Hey, here's the facts of the track record of the markets. Um, on the on, yeah, with the COVID, I mean, what was the stats?

Speaker 2 We taught on this. Gosh, it's been five years now.
But when it went down, I think it only took nine months to get back to what it was and beyond. You know what I mean?

Speaker 2 So, like, even that was a quick, when you look at these massive, um, you know, 08, 07 was a little bit different, but you look at, you know, things like COVID, September 11th, you look at these major events that do take kind of a dip, but then a lot of them return so quickly that the news doesn't talk about it, that it all gets back up, you know, within a few months.

Speaker 2 So

Speaker 2 I do want you to do some digging and some learning

Speaker 2 when it comes to it, because it is worth it, Lisa.

Speaker 2 You guys still have plenty of years ahead of you that you guys could really be making some gains when it comes to your money versus it just sitting in CDs. I mean, honestly, I think that's one of,

Speaker 2 it'll be a detriment long term.

Speaker 4 And I think if you, I think what will help you with your fear is play it out, not just the way it went down, but play it out in your mind, what would have happened if you hadn't made that error.

Speaker 4 And then you'll see, oh, gosh.

Speaker 2 A juxtaposition.

Speaker 4 Yes. And you'll, I think that'll help with some of the nerves to say, well, everybody who stayed in is actually doing better.

Speaker 3 Ahead. Right.

Speaker 4 So, yep.

Speaker 2 So, yes.

Speaker 3 And then as far as the house goes, you do recommend paying because I have money in a CD. I could, yes.
When that expires, I could just pay the house. I would think since the interest rate was low.

Speaker 3 Okay.

Speaker 4 No, I would do it.

Speaker 3 I do recommend. Yes.

Speaker 4 You got to account for the piece, the piece part of that. You guys are, you know, your husband's about to be in his 60s.

Speaker 4 There's nothing better than having no payments in the world and owning the place where you live in.

Speaker 3 Okay, great.

Speaker 2 Yep, absolutely. Thanks, Lisa, for the call.
We appreciate it. Yeah, there is

Speaker 2 that house portion is

Speaker 2 it's an interesting one because I think every single person we've talked to, Jade, that sounds extreme because we've talked to a lot.

Speaker 2 Yeah, tens of thousands, hundreds of thousands of people that have paid off their home at events or been here on the debt-free stage or contacting us on

Speaker 2 social or something to let us know. I mean, I have not gotten one message or one comment that someone who pays off their house regrets it.

Speaker 4 That's right. No one has ever said, Man, I wish I had my mortgage.

Speaker 2 I wish I still had my mortgage. Oh, I just wish I still had my mortgage.
Because here's the thing, too. You can always go back and get another mortgage if you want to.

Speaker 3 You can go back and borrow on your house

Speaker 2 once it's paid off. So, and from a mathematical standpoint, you know, the game is that people people play that I can make more in the market than what I'm actually, you know, invested in a 2.5%

Speaker 2 interest rate, but I could be making 15% in the market. You know, my gosh, like I have this huge spread.

Speaker 2 But what doesn't, yeah, what you can't calculate, what you can't put in a spreadsheet or a formula is that peace of mind of knowing that my house, I don't owe anyone anything.

Speaker 2 And there's something so powerful about the autonomy of our money. Absolutely.

Speaker 4 And then I think about, I mean, this is just worst case scenario, but I think about the person who doesn't doesn't pay off their house and they go into retirement.

Speaker 4 And suppose you go into retirement in a really down or really low year. Yes.
Now you've got less money in your accounts currently and you've got your mortgage and this whole life of debt to keep up.

Speaker 4 So there are things to think about.

Speaker 2 Absolutely. Such a great point.
But yeah, Lisa, thanks for the call. And I think that's a great, you're a great example of what people are feeling and thinking sometimes.

Speaker 2 And so I really appreciate you calling in. All right, Jade, thanks for a great show.
As always, thanks to our audience that always always comes and visits us.

Speaker 2 We so appreciate you guys there in the lobby. Thanks to everyone in the booth.

Speaker 2 And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.