George Camel (2:27)

Okay, well, before we get to the finances, how's your marriage doing?

Caller Female (2:33)

It's really difficult. You know, I feel like I came into the marriage like a huge Dave Ramsey fan. I didn't have any debt and I thought we were really aligned. And you know, honestly, I had three babies in a five year period and I really just kind of took my eyes off of what the finances were and I just completely trusted him to Deal with it. And I feel like that was my mistake.

Caller Male (2:57)

Mm.

George Camel (2:57)

Are you guys going through counseling right now?

Caller Female (3:00)

We've.

Caller Female (3:01)

We've gone to counseling twice. And, you know, he wasn't super engaged the last time that we went. The counselor started saying some kind of hard things, and, you know, he felt like he was being really blamed for all the problems. And he later admitted to me that he intentionally sabotaged it. And, yeah, like, we've had conversations about going back to counseling, but I've kind of put that in his court, and he hasn't taken any action on that.

Caller Male (3:28)

Hmm.

George Camel (3:28)

It sounds like he's not ready to accept responsibility for how he has destroyed this family.

Caller Female (3:36)

Yeah.

Caller Female (3:36)

You know, he'll admit that he made mistakes, but he doesn't seem to view it with the same level of gravity that I do.

George Camel (3:44)

Yeah, there's mistakes, and then there's three quarters of a million dollars in debt behind your wife's back to try to get rich quick. So. Okay. Neither here nor there.

Jade (3:54)

Let's talk numbers. So you're talking about selling this house. I mean, did you file chapter seven or chap. Chapter 13?

Caller Female (4:01)

So we're currently under a chapter 13. Our plan was dismissed, or. I'm sorry, what? It is potentially going to be dismissed

Jade (4:10)

to sell the house.

Caller Female (4:12)

Yeah, well, we tried to move to a Chapter seven because my husband lost his job in February. But now we're in this weird situation where we have about $30,000 in cash, and our attorney told us, don't convert to a Chapter 7 until you spend down that money.

Jade (4:28)

When? Oh.

George Camel (4:29)

Cause they'll take that money.

Caller Female (4:31)

Yes.

Jade (4:32)

So if you want. If you're thinking of selling the home, let's talk about the equity and what you think you're going to do with that money. Because obviously, to your point, the court has to approve you selling the house if you're still in chapter 13. But what's your plan? So you've got the $274,000 HELOC. What else do you owe on the house? And what's it worth?

Caller Female (4:54)

We owe an additional 455.

Jade (4:58)

Okay.

Caller Female (4:58)

On the house, and we could sell the house for around 950k.

Jade (5:04)

Interesting. Okay, so. And then what would you. I mean, would you just turn around and take that money and pay off all the remaining debt, or is. What's your plan here?

Caller Female (5:14)

So our thought is, if we end up getting the Chapter seven, we would take that money and we would really. I mean, we probably have to move to a renting situation and then just use that money to live for A period of time, because my husband's not working right now.

Jade (5:30)

Okay. Okay. My question, why in the beginning wouldn't you have just. Would you have not just done that? Why would, why not just sell the house, take whatever, you know, $200,000 of equity and just clear out as much of this debt as possible and then pay off the 150? Why not just do that?

Caller Female (5:50)

Well, the houses in this neighborhood have appreciated so much that we wouldn't be able to move back here now. And we really just wanted to try and provide some stability the kids and keep them in the same school district.

Jade (6:02)

Right. But yeah, with, with the bankruptcy, you just lose so much control and.

Caller Female (6:07)

Right.

Jade (6:07)

You also, there's a redemption that you kind of want to feel, which is getting yourself in a mess and then getting yourself out of it. I mean, I guess it's neither here nor there. You're locked in at this point, or

Caller Female (6:20)

are you asking if I'm locked in? Well, if the case is dismissed, then we will have. We won't be able to refile for another 120 days.

Jade (6:30)

So if you don't have to be locked into this bankruptcy, I don't know that I would be. Because you've got equity to really handle more than half of the debt here, and then you're on the hook for 150. What's you guys income?

Caller Female (6:44)

I'm making about 125k. When he was working, he was in the 150 to 200 range.

Jade (6:51)

Yeah. Plus you've got the 30,000 cash. I mean, George, what do you think?

George Camel (6:55)

Because I'm looking at, let's say you sold for 950 and you cleared the HELOC and your mortgage. Right. That leaves you with about $200,000. Maybe now we have 200 grand to play with. We can pay off the 100 grand in credit card debt. And now we're down to the business debt and we still have 100 grand. So at the end of all of this, you could have 150 grand in business debt as your only thing to deal with while you rent for a while to clean the mess up.

Jade (7:20)

Well, you could also actually be more like 130 because you've got 30,000 cash,

George Camel (7:24)

use some of the savings to knock out some of the business debt, and now you got 130k to clean up, hopefully making. Is he going to be working soon? What's the progress on that?

Caller Female (7:34)

Well, because we're trying to move to the chapter seven. He hasn't really been applying for jobs.

George Camel (7:40)

Goodness gracious.

Jade (7:41)

And see That's. And that. That's where I'm concerned. Because life doesn't stop. Like, this is not the get out of jail free card that says, okay, we're done. This is all cleared up. We don't have to work anymore. We get to stay in the same neighborhood. Nothing changes. This needs to change. You. This should change everything. This business of we're just going to file bankruptcy and he's not going to go to work. And this will let us live in the same neighborhood and act like everything's hunky dory. That's just not reality.

George Camel (8:09)

I'm not going to do this for the school district. At this point, these kids will be lucky to have two parents who are healthy and present. That should be the focus right now. School we can deal with later. You guys make great money, and you will be for the future. I'm not concerned about you getting into another home that you love. Right now. We got to clean up a mess.

Jade (8:27)

Yes. And you want to know what? I'm going to say this.

Caller Male (8:30)

And.

Jade (8:30)

And it might be controversial, but it's okay for kids to feel the weight of mistakes that happen in life. It's okay because they're part of the family unit, and they'll see the family unit go through some rocky times, and then they'll see the family unit get their foot and get solid footing again. And that's good. That builds resilience. That helps them see what life is actually like. And so trying to shield them from every bump in the. You don't need to do that, and you don't have to feel the weight of that, because that's not life.

George Camel (9:15)

George Camel. Here, Let me give you three signs. It's time to stop hoping your debt problem goes away and actually take action to fix it. If you've defaulted on a debt, if collectors are calling nonstop, or if you're facing a lawsuit or think one's coming, you don't just have a debt problem anymore. You've got a legal problem. And that's why I tell people about Guardian Litigation Group. Because here's the thing. If you're behind on your bills, doing more of the same is not going to fix it. You need a different plan. And Guardian Litigation isn't just another debt relief company making promises they can't keep. They're an actual law firm. And from day one, you get an attorney who represents you. So when collectors start pushing, you're not guessing. You've got someone in your corner who knows how to respond when your debt problems escalate. Into legal problems. So don't wait for it to get worse. Go to guardianlit.com Ramsey right away. That's guardianlit.com Ramsey Attorney Advertising Results may vary and no specific outcome is guaranteed.

Jade (10:18)

Back to the phone lines where we have Stephen in Chattanooga, Tennessee. What's going on, Steven? How can we help today?

Caller Male (10:26)

Steve? My name is Stephen, and me and my wife are 40 weeks pregnant. And our HOA has come up with an assessment, and it's about $14,000, and they've given it to us for. They're giving us 30 days to come up with the money and didn't know how we could come up with that or what we should do in the situation.

Jade (10:49)

Oh, my gosh.

George Camel (10:51)

What's the assessment for?

Caller Male (10:54)

The assessment is for exterior work on our building, and it's also for a new roof on our condo building.

George Camel (11:05)

Was this new information?

Caller Male (11:08)

They came out with it back in January. Roughly. We're looking to do this, and then we found out a couple months ago that one of the AC units on the roof was not working, and so they paused the initial assessment. So we didn't know when it would continue until about a week ago. So we kind of had to stop and pay the assessment for the new AC unit. And then now we have to pay the assessment for the exterior work in the new roof.

George Camel (11:43)

Have you Talked to the HOA yet?

Caller Male (11:46)

Not yet.

George Camel (11:47)

Okay. I would. I think many HOAs would be willing to extend this out a little bit, See if they'll extend it to 6 to 12 months if you ask in writing. Get everything in writing. Not just. Well, I. Talk to somebody on the phone and let them know your situation and see if they're willing to play ball. I'm not saying that's your. Your way out of this thing, but if we can buy some time, that would be great because this baby's about to pop. Yeah.

Jade (12:09)

Have you been to any of the homeowners association meetings? Is anybody else kind of out of sorts about this? Maybe there's something that you guys can rally together and just say, hey, we all need time.

Caller Male (12:23)

Yeah, some. Some people are trying to sell and get out of the building. Some people are okay with it because they know it's going to raise their property value.

George Camel (12:32)

Well, either way, they're not getting out of the assessment. If they sell, they'll just have to pay that out of the proceeds. So that's not a good solution. How much money do you guys have right now? Liquid?

Caller Male (12:44)

We have about four grand in the bank. And my wife is also 40 weeks pregnant. So, yeah, right.

Jade (12:50)

You need that money.

George Camel (12:50)

We need to hang on to that because we don't know what could happen. So once mom and baby are home safe, now, we have a much more clear plan about what we can do with this money. But I think first things first, you need to talk to the hoa. Write them an email or a letter getting some clarity on this and asking for an extension.

Jade (13:08)

Yeah, that looks to be a very reasonable thing and a very normal thing to ask for.

Caller Male (13:15)

Okay.

George Camel (13:16)

But the truth is the HOA just wasn't properly funded. Money was poorly managed. They knew this was coming, and they chose to just make it a special assessment versus, you know, increasing dues way back when in order to save up for this. But this is. It's just part of HOA life.

Jade (13:32)

It's part of home ownership. And we say all the time that owning a home is not cheap. Like, there. There are costs that go along with it. But I 100% would do what George said. I would send the letter and I would make it clear. I'd give a reasonable reason and say, hey, my wife is 40 weeks pregnant. We have medical bills coming due. We want to stay on top of those. We intend to pay this. It's not you trying to get out of paying it or, you know, trying to fight it as much as it is just saying, hey, just need a little bit more time. That's reasonable. Most people don't have 14,000 dol dollars just sitting around unless you've been walking the baby steps.

George Camel (14:02)

That's why I go, like, very few people in your neighborhood are going to be able to afford that.

Jade (14:05)

Exactly. And. And I think there probably is some power in everybody kind of getting together and saying as. As one. One band, one sound. Remember that?

George Camel (14:13)

Oh, yeah, from Drumline. Good reference.

Jade (14:16)

Yeah.

George Camel (14:16)

I don't think about Drumline often, but I never do.

Jade (14:19)

It just came up now. All right. Caroline is in Columbia, South Carolina. Hey, Caroline, how can we help?

Caller Female (14:27)

Hi. I mean, my fiance are getting married later this year, and I am just wondering how aggressive do I need to be with investing? We've gotten out of all of our debt. I went to school on scholarship, so I have no student loans, and he has no. Any type of debt. And I'm just curious, since we're both 21, I'm just curious what it looks like moving forward and being as wise as we possibly can.

Jade (14:52)

I love that.

George Camel (14:52)

So just general advice for newlyweds.

Caller Female (14:56)

Yeah, but, like, more like with investing and, like, trying to, you know, get wealthy. Not necessarily quick, but just preparing for

George Camel (15:04)

you want to be intentional? Well, time is on your side at 21. So here's the math on this, because I think this will really encourage you. At 20 years old, the power of a dollar, it turns into 73x. That's at 65 years old. So 20 to 65, every dollar you invest is really worth $73. But when you're 55 and you invest that dollar, it's only worth about $4 at 65. So you see, there is a big hockey stick going the opposite direction over time where you don't have time for compound growth to do its thing where your money makes more money, and that new pile of money makes a little more money when you're invested wisely into, you know, a mutual fund, a giant grouping of stocks. And we're all rooting for the revenue to go up, the share price to go your wealth. So I would definitely be. That would be a goal of mine. I would make it the singular goal, because you guys probably also want to become homeowners or go on a honeymoon or take vacations and upgrade the car.

Jade (15:59)

Do you have any money saved?

Caller Female (16:02)

I have about $5,000 saved cash, and then I also have, like 6,500 already invested in, like, a Roth IRA account.

Jade (16:10)

Okay.

Caller Female (16:11)

He does not have much savings at all. But, yeah, you know, the.

Jade (16:17)

The best thing to set yourself up for investing is to make sure that you can set that money and forget it and never have to pull it out again and just let it continue to grow and grow and compound, like George said. And the way to do that is to make sure that you've got adequate liquid savings. And so I would suggest bumping up your $5,000 to six months of expenses. Three to six months of expenses. How much do you think that that would be in your case?

Caller Female (16:43)

I'm not totally sure. We haven't quite found a place to live yet. But once I do like I do plan on getting that done right before. Okay, get married and move in.

Jade (16:53)

So that'd be. When do you get married, by the way?

Caller Female (16:55)

October 1st of this year.

Jade (16:57)

Okay, so that'd be. Thing one is figuring out, okay, what's it gonna cost for us to live once we're married? And then thing two, I would say, is from there we can decide, okay, we're gonna invest. If there's no debt between the two of you, you've got the three, six months of expenses. Now you can say, okay, bab is what we teach. 15% of your gross income, combined income going towards retirement. And usually that's through an employee sponsored account, like a 401k, a Roth IRA. If you don't have access to a 401k, do both of you have that access?

Caller Female (17:30)

I do.

Caller Female (17:31)

He does not.

Jade (17:33)

Okay, what kind of work does he do?

Caller Female (17:35)

He's in construction full time. He's with a smaller company, so they don't offer any type of insurance or retirement benefits.

Jade (17:44)

Okay.

Caller Female (17:45)

I will be starting my job in the hospital in June. And so they do offer all of those things.

Jade (17:49)

Okay, great. Then he can put earned income into, you know, a Roth ira. What do you know how much you guys will be earning together?

Caller Female (17:56)

Together we'll make around 95.

Jade (17:58)

Excellent, excellent, excellent. So the goal would be. Yeah, 15% of that every single month. Pack that away and honestly, you're off to an incredible start. George, do you. Are you looking at numbers on that?

George Camel (18:10)

Yeah. So that you know, 15% of your 95,000. That's 14,250 bucks going towards these tax advantaged retirement accounts. So we always teach match beats Roth, beats traditional. So what that means is if you have a match through the hospital, let's take that first because it's 100% return on every dollar you put in. Then if you have a Roth option like our Roth 401K or Roth IRA, let's fund that. And if we still haven't hit 15%, then we can go to the traditional option. If you have a traditional 401k, so it just gets filtered through that. And he can still open a Roth IRA and invest just like you have. If he has earned Inc. He doesn't need to have a retirement account through his employer. And you guys will be off to the races at 21. If you guys just stay out of debt. Keep the emergency fund. Jay just crunched the numbers for you using our investment calculator. Tell her what she's won.

Jade (18:57)

Yeah, at. At age 21. This is just. If you did this till retirement age 59 and a half or 60, you said you currently have 6400 in there. 6500. This is you contributing 15 every single month at an annualized rate of return between 10 to 11%. That's $9.5 million, Caroline.

Caller Female (19:16)

Holy moly.

Jade (19:17)

And so that just shows the power of starting young, to George's point. Starting young when you're ready. Right. You've got everything, you know, squared away. You've paid off your debt like you guys have done. You've saved up your three to six months like you guys have done. This is amazing.

George Camel (19:30)

You are the poster Child for this is what life can be like when you don't graduate with a giant pile of debt and a car payment and credit card debt because you were told you have to build credit, which is the stupidest advice you could give to an 18 year old. So keep, keep doing what you're doing. Stay out of debt, don't rob your retirement. Get on the same page, align on your money values and your goals and you guys are going to be baby steps millionaires and homeowners in no time.

Sponsor Ad (DeleteMe, CHM, etc.) (20:05)

Hey you guys, did you know that there are thousands of data brokers whose entire business is collecting and selling personal information? Things like your home address, your phone number and even your relatives names. You guys, that is just crazy. But that is why I use Delete me. Because those companies pull information from public records, social media and all kinds of other places. Then suddenly all that information shows up on random websites. And removing it yourself means going site by site, filling out forms and hoping they actually take it down. It takes hours and then it can even pop up somewhere else again. But, but Delete me's team of privacy experts removes your personal information from hundreds of those data broker sites and within a week you'll get a report showing what they have found and what they have removed. And they keep scanning and cleaning up your data year round. So take back control of your Privacy. Go to JoinDeleteMe.com Ramsey and get 20% off your annual plan. That's JoinDeleteMe.com Ramsey.

Jade (21:24)

All right, big announcement. George, it's May and you know what that means.

George Camel (21:29)

The Ramsey cash giveaway is here.

Jade (21:31)

That's right. That's right. I thought you were going to hit me with it's going to be May. And that would make me.

George Camel (21:35)

Well, at first that was like big announcement, it's May. And I was like, oh, there's an em dash. It's a pause. A pregnant pause if you will.

Jade (21:41)

Pregnant pause. Well, he's right. It is Ramsey cash giveaway. And because of that, you can enter every single day from May 1st to May 31st for one grand prize of $10,000. Plus there's gonna be one week we one weekly winner of a $500 prize and you can enter daily to increase your chances of winning. Plus be sure to check out our sale going on right now. You can kick off summer with books and assessments for just 12. Go to ramseysolutions.com giveaway now. Winter, no purchase necessary to win. I love that for you guys. All right, Derek is in San Antonio, Texas. How can we help?

Caller Male (22:20)

Derek yes, ma'. Am. First of all, thank you for answering my call. The question I have is something that's really been bothering me a lot of causing a lot of stress in my life to the point where I just been sick for the last few months and I just want to make sure I'm making the right decision. My wife and I both retired former military, we both retired, receive a pension, there's some disability benefits in there and I got lucky. God put me in a good place. I got a follow on job in the civilian world. And our current income right now is currently 275,000 a year. Our home income, the situation is about buying a new house. So we currently live in a home that we, you know, we moved into when we PCs here. We never thought it was going to be a forever home, but we thought it was a nice home that we moved into and then we decided to get out of the Air Force. And it's not a million dollar mansion or anything, but it's a nice two bedroom home, two story. And it's definitely better than anything I ever grew up with my, in my lifetime.

Jade (23:22)

Okay.

Caller Male (23:23)

My wife wants to move to a one story but it is almost $800,000 which currently has a mortgage of about 4, 500amonth, which is currently 25% of our current income, which, which I think is. Okay. Yeah, but, but I plan on retiring officially because I mean between deployments, I mean, you name it, overseas, PTSD and everything else, I really wanted to you know, retire and start focusing on my family, my grandkids in the next 15 years.

Jade (23:53)

15 years. Okay.

Caller Male (23:55)

And that's going to cut our income in half to about 150, which turns that now mortgage, which is a 30 year mortgage and I know it shouldn't be a 30 year mortgage, but I know it's going to turn that mortgage into you know, 40, basically 50% of our pay.

Jade (24:08)

Yes.

Caller Male (24:09)

And I know we're not going to be able to afford that. And that's only if based on the current world that we live in, this job keeps me and everything stays functional because there's cuts that I see every day, especially in the world of tech and AI such as people getting cut daily. I'm afraid that if we make this purchase that she really wants to make that we can afford right now that if anything happens it's going to ruin us. It's going to ruin us because we've never, she's never ever experienced a financial bind. You know, she grew up with a lot of great things. I grew up poor. So I know what it's like, and I can deal with it, but I know she's. It's going to just. It's going to tear us apart.

Jade (24:43)

Dude, you're.

Caller Male (24:44)

You're supposed to do this.

Jade (24:45)

I 100% sympathize with what you're saying. There's something to be said for. You've worked really hard. You've. You have a really great income. And it feels like, yeah, I want to live at the income that I'm earning money. But then those fears creep in and it's like, what if everything goes south? And then if that's the case, we're really in a bind. And so I kind of want to normalize that because that's true for everybody. I mean, if I lost my job tomorrow, George, or if you lost your

George Camel (25:14)

job, we'd all be tomorrow. Now we have an emergency fund.

Jade (25:16)

Yeah.

George Camel (25:17)

But it's not like we could just never work again and be fine.

Jade (25:20)

Right. So that points to the. What George just said points to the other side of this, which is your bigger fear is, is that if you were to lose a job or you were. That you would never be able to get one to replace it. And that's the part that I kind of would want to camp out on mentally, if I were you. Because we. All. That's all of our lives is we could lose our job. And even with an emergency fund, it's three to six months, you know, six months of expenses. So you have six months to find a new gig. So you're saying that that would be impossible for you.

Caller Male (25:48)

Yeah, so what I'm saying is that. So is that it wouldn't be impossible I could find another job. But so the. So the issue is that the house that we live in right now, we only owe 130k. So I. And with our total savings and investments and IRAs that we have right now, we have over 300 saved up right now. Okay, so. So with 300k saved up right now, that's what we have just set. That's for retirement. That's what we have set aside for retirement over. You know, 324 is the exact number.

Jade (26:18)

Okay.

Caller Male (26:19)

The house that we live in now, the plan that we were looking at, and I'm sure a lot of people probably tell you this, is that my current mortgage is only eleven hundred dollars a month.

Jade (26:27)

Love that for you.

Caller Male (26:28)

And, and then with. But with the current market, I could easily rent it out for twice that and allow that renter to pay for it itself, while I just Focus on the new house, which I don't think is, which I don't know is a good idea.

Jade (26:41)

I probably wouldn't do that. I think what it sounds like to me is this is just a meeting in the middle. Because the truth is, yeah, I don't want you to get an $800,000 house on a 30 year mortgage. I want you to get a house that you can afford on a 15 year mortgage that, that lands you at 25% of your income. So I do think 800,000 sounds like too much house for you guys right now. Maybe you could get closer to 600,000. Right. So I think that there's a place where you can meet that your wife is going to feel good about the upgrade and that you're going to feel good about. Okay, this is not so huge of a piece of my world that I feel anxiety about it. Maybe you get something that's instead of 25%, maybe it's 15% or you know, 20% and it makes you just feel a little better at night. Because here's the thing, you said this is a 15 year play. If you have a 15 year mortgage, do you want to know what you're debt free in 15 years. And most of the people who follow the Ramsey plan are debt free a lot faster. It's more like a 7 to 10 year deal.

George Camel (27:41)

So your game plan is to retire in 15 years? If everything goes to plan, yes. Okay.

Caller Male (27:46)

Yes, sir.

George Camel (27:47)

Then I think that's, that's the play is you get to retire once this mortgage is paid off. That kind of gives you a great carrot to dangle, doesn't it?

Caller Male (27:55)

Yes.

George Camel (27:56)

So if it's 10 years from now, boom, you got to retire five years earlier. And so I love the idea of setting a goal where she's not having to settle and you're not having to stretch. Instead you both are aligned, going, all right, great. We might need to wait a year to build more equity, knock out this mortgage, which you guys could knock out 130 grand mortgage pretty quick, making 275 with no debt.

Caller Male (28:16)

Right, right.

George Camel (28:18)

Have you been putting extra toward it?

Caller Male (28:20)

Yes. So I doubled down on it and that was worried, you know, so I just pay off this house that I'm in now. Yeah, triple down and then triple down. Pay this one off and then you

George Camel (28:30)

have all the equity. So when you go to sell, and here's what I did, you roll over that 100% equity right into the new house.

Jade (28:37)

And do you have any other cash laying around? Not retirement, but just Liquid.

Caller Male (28:42)

Yes. We have about 100k just sitting between our savings accounts.

Jade (28:46)

Okay.

George Camel (28:46)

And I'm sure that's a big cushion.

Jade (28:48)

That's a big cushion. I'm sure probably 50 or 60 would be fine for you to feel good about having six months of expenses. So there's another 40 there that you could put with that and add that to that down payment.

George Camel (28:59)

Yeah, the more you can put down, the lower that mortgage is going to be. And if it's on a 15 year and it's a comfortable payment, you're going to be able to throw extra at it and knock it out. What we've seen is average about seven years. If you follow our plan to get rid of that mortgage.

Jade (29:12)

Does that, does that give you a little bit more peace?

Caller Male (29:15)

It does. I just got to talk to her about it now.

George Camel (29:17)

Well, once you get starry eyed about a home, it's party's over, man. I mean once you're zillow doom scrolling, you're like, this is the house, babe. This is the one. It checks off all of our boxes. That's a realtor's dream. They're like, oh, we got them. You know what I mean? It's like going to a dealership. Be like, that's the car I want. You don't want to do that. You want to go in with walkaway power going, we don't need this house. It's a good house. You kind of want to be nonchalant about it.

Jade (29:40)

You do. I mean, Derek, when you called and you said you've made yourself sick about this, do you think tonight you'll be able to have a good night's sleep?

Caller Male (29:47)

I think so. I think, I think so. I feel I still love better.

Jade (29:50)

Good, good.

George Camel (29:50)

You deserve that.

Caller Male (29:51)

I really appreciate it and thank you

George Camel (29:52)

for your sacrifice and service to both of you.

Jade (29:54)

Yeah, absolutely. You know what Derek is talking about? I totally understand. And some of the best advice I got was just to like, no matter how well you do, no matter how well you ear, just like if you can keep your expenses low, it just does give you a peace of mind that more flexible, you're more flexible. And, and if something did happen, it, it is, it does help you sleep at night. Like I could totally understand what Derek was saying, but then there's a side of it that you don't want it to creep into like irrational fear and

George Camel (30:23)

just kind of like just got a scarcity mindset. Glass half empty, it's all going to come crashing down. I'm like, dude, you got, you're debt free. With 100k in savings, she'll make 2 savings. 75. Even if you go down to 150, that's still double the average household income.

Jade (30:36)

Right?

George Camel (30:36)

If you can't make that work, we got bigger fish to fry.

Jade (30:38)

You got bigger fish. And, and you know what? The worst that it's like play out. The worst that could happen. The worst that could happen is you sell your house and you downgrade.

George Camel (30:45)

Now we might sell the house. Yes, I can live with that.

Jade (30:48)

Yes, I can live with that too.

Caller Male (30:59)

Foreign.

BetterHelp Ad (31:17)

This show is sponsored by Better Help May is mental health awareness month. And according to the National Institute of Mental Health, more than one in five US adults experience mental illness every year. Nearly half of those folks never get any kind of help. And these aren't just statistics. These are real people who are hurting and struggling. They may be you. And we're living in this non stop noise, the screen comparison, constant notifications. It's our whole world and our bodies are always on high alert. We're communicating more than ever and people are communicating with us, but we're super disconnected. We're more anxious, we're more lonely, we're overwhelmed and we just don't know where to go. And that stress shows up in our relationships, in our sleep, in our health, in the middle of our chest. We were never meant to carry all of this stuff in our our life alone and talking to someone can help. And that's where better help comes in. Betterhelp is an online therapy platform that matches you with a licensed therapist based on your goals and preferences. Their therapists are fully licensed in the United States and they follow a strict code of conduct. You can message your therapist and schedule sessions right in the platform and if it's not the right fit, you can switch anytime at no additional cost. Cut through all the noise. Don't do this alone. Go to betterhelp.com Ramsey to get 10% off your first month. That's BetterHelp. H E L p.com.

Jade (32:49)

All right, George, let's go back to the phone lines. We have Jonah who's in Cleveland, Ohio. What's up, Jonah? How can we help today?

Caller Male (32:57)

Hi, my Morgan Stanley advisor wants me to get a low limit credit card. I was wondering how I should respond to that. That.

George Camel (33:05)

What's their reasoning?

Caller Male (33:08)

I mean, just for reasons of building credit to get a car and a home and just the standard reasons.

Jade (33:15)

Do you agree with him?

Caller Male (33:18)

I'm on the fence. I've never had a credit card and I've been doing fine so far. So I'm just wondering what you guys think.

George Camel (33:26)

Well, you tell me this. The Morgan Stanley advisor exists to help you build wealth, correct?

Caller Male (33:31)

Yes.

George Camel (33:32)

Now tell me this. Them telling you to get credit to get a car loan which goes down in value while you pay interest on it, how does that help you build wealth?

Caller Male (33:43)

I'm not sure. I mean, always buying something is not going to make you more wealthy.

George Camel (33:47)

Let's play this out then. Would you not question the advice of said financial advisor and whether or not you should continue working with them? If you guys have different values and operate by a different set of principles.

Caller Male (34:01)

Right, right. I mean, this is where I'm confused and looking for guidance.

George Camel (34:06)

Well, the truth is, 99% of financial advisors out there are going to be telling you the same thing. You got to get credit if you want to survive in this world, you got to build. Everyone has a car payment, it's fine. Just make it a reasonable one. All of that, get a home as soon as you can, no matter what, because it's awesome to build equity. This is the kind of stuff that we hear all the time. And the truth is, not all financial advisors are created equal. So you want to find one that aligns with your values and principles, which it sounds like are, I'm debt free, I want to stay debt free. I want to build wealth with peace and simplicity. And not by playing some game. Would you. Is that I'm projecting. But you tell me what your principles and values are.

Caller Male (34:45)

That's exactly right. I'm just concerned about if I get to the time when I need credit, will that affect me?

Jade (34:51)

So let's talk about that, because that's what you're asking, Jonah, is something that probably lots of people are wondering about even while they're listening right now, which is, don't I need credit, George and Jade, to operate in this world. And the honest to God truth is, you do not. So, George, let's tackle the three. I'm gonna go with three main areas where people think that they need credit. First one is, well, what if I want an apartment? Aren't they gonna check my credit score for me to get an apartment? And the answer is some places yes, but many places, no, it's not necessary at all.

George Camel (35:22)

What they're checking for is delinquency, a bad credit score, no credit score. And I've done this multiple times. No credit score, renting apartments.

Jade (35:30)

Yes.

George Camel (35:30)

They just go, okay, well, it might be a slightly higher deposit.

Jade (35:33)

That's right. Same here. Okay, the next one is, what about a car? How am I ever supposed to buy a car in this world, George and Jade, if I don't have a credit score, and over here I'm gonna tell you, and we're gonna break down how to do it in a minute. But we buy cars in cash here. And I know that that probably made Jonah, you might have clutched your pearls or somebody listening clutch theirs.

George Camel (35:52)

But you can't do that in today's world. Cars are $50,000. Well, don't buy a $50,000 car, you dingus.

Jade (35:58)

No, what you do. Two paths to doing this. One is, let's say I have a car note now. I just aggressively pay off the car note that I have now. And when the time comes, in the meantime, after I've paid off the car, I'm putting aside a little bit of money, extra and extra. And when I'm ready to trade the car in, I take whatever value is from the trade in. Or if maybe I sell it, you know, private sale, I add my saved money to it and I'm able to upgrade. Now this is a stair, a slight stair step up. Maybe I had a $10,000 car and I go up to a 14, 000 car, or I had a 10,000, I go up to a $16,000 car. Right. We're not $80,000, you know, Escalade right out of the gate. Do you see what I'm saying? This is a very slow and methodical way. Yes. And, and the value is you get to drive a new to you vehicle that's paid for and you have your cash to invest, you know, and build wealth. Now, the third thing, George, and this is the big one, how the heck am I supposed to buy a house in this world, George, without a credit score?

George Camel (36:55)

This one's hilarious to me because everybody who has opinions about it has never done it without a score.

Jade (36:59)

That's right.

George Camel (37:00)

So let me be the guy who's done it, Jorge.

Jade (37:02)

George and I have done it.

George Camel (37:03)

Yeah. It's called manual underwriting or a no score loan. And a lender will look at your actual financial picture, your tax returns, 12 months of rental, history of on time payments, other alternative trade lines like your utility bills, your cell phone bills to then grant you the loan. That's it.

Jade (37:20)

That's it.

George Camel (37:20)

And so and Churchill Mortgage has been a partner of ours for decades now. And they specialize in these types of loans. And so it's very possible to live without a credit score. In fact, fact, I've been living without a credit card for 13 years now.

Jade (37:32)

Same.

George Camel (37:32)

And I can count on Maybe half a finger. How many times it was. It, like, was more difficult to live my life.

Jade (37:38)

There was one time that I was renting a car, and because I didn't have. It was like, your return ticket.

George Camel (37:44)

You need a return ticket.

Jade (37:45)

Yeah. To the same city.

George Camel (37:47)

They think you're gonna apparently never come back with that car if you don't have a return ticket.

Jade (37:50)

And that was the only time. And I mean, we got around it somehow. I don't remember what I did, but. But that literally was the only time I have not had a. My credit score disappeared in 2015, and then it came back when we got a mortgage, but I've never utilized it. I've never needed it for anything since then, Jonah. And so that's.

George Camel (38:10)

Are you convinced? Are you going to, number one, not get a credit card? Number two, switch financial advisors.

Caller Male (38:16)

So my only other question is, what if I could guarantee covering the costs on the low limit every year?

Jade (38:22)

If you could figure that out, we wouldn't have a show. So tell us how you're going to guarantee.

George Camel (38:28)

And even then, here's the truth. You're going to spend more than you would have. Would you agree you're going to spend more of someone else's money that you get to pay back later versus your money coming out of your account now?

Caller Male (38:39)

Well, I would just not spend it at all if it ever became a problem.

George Camel (38:43)

Well, then it's too late, isn't it, once it's a problem. We have $1.3 trillion in credit card debt as a nation and $0 in debit card debt last time I checked.

Jade (38:53)

And, and honestly, if you're. If your thought is like, I'm just going to get this credit card, but I'm never going to spend it, it's not going to help your credit in the way that you think it is. A credit score measures all of your dealings with debt. So in order to have an optimal credit score, you have to borrow a lot of money. Frequently, it has to be revolving. So it's measuring things like how long have you had the credit? How much of your available credit are you using, how you know, what's your total amount of. Of credit? What's your total amount of debt? Like, it's looking at all of that as a full picture. So if you're thinking, oh, I'll just kind of like, dip my toe and just kind of like, wet my beak in the water, it's not going to work. You're going to get pulled into it because every month it's going to say, Here are some things that you can do to build your credit. And the next thing you know, you're going to say, well, I'll just put my gas on there, or I'll just put my groceries on there.

George Camel (39:42)

And even if you play it perfectly, all you've really done is make it through the maze, which you're going to have to keep doing. Have you heard of Sisyphus? The guy who pushed the rock up the hill in Greek mythology? And he had to do it every single day.

Jade (39:53)

We're going deep.

George Camel (39:54)

That's life on Even Navigating the Credit Score game. So here's the deal, Jonah. I'm going to send you a copy of my book, Breaking Free from Broke, because I wrote the credit card chapter exactly for a guy in your shoes who goes, I don't want to play this game, but I think it's the only path. And I walk through the eight different credit card archetypes of the perfect spender and the world traveler and the rewards redeemer. And I walk through how to live with a debit card. Sis Fizz is in there. He's an example in that chapter, I believe.

Jade (40:20)

I love that.

George Camel (40:21)

I think it's a great. I like. I like the reference because that's an exhaust. I look at that guy pushing the rock up the Hill with his 16 credit cards, figuring out which one to utilize based on rotating cash back, which, by the way, is for, like, restaurants and entertainment, which is the number one area they know you're gonna overspend on.

Jade (40:37)

That's right.

George Camel (40:37)

But I got 5%, Jade. You tell me that's free money, Jade. I flew home for free, Jay. I don't pay for free.

Jade (40:44)

But you spent double on those Taylor Swift tickets because you knew you were putting it on a credit card.

George Camel (40:49)

But I get an Uber credit, Jade. If I get my Amex.

Jade (40:52)

You made a bigger tip at the restaurant. You got a second drink at the restaurant.

George Camel (40:56)

There's a $700 annual fee for the pleasure of using that card.

Caller Female (40:59)

Wow.

George Camel (41:00)

Oh, but it's thick metal.

Jade (41:01)

It's really cool when people put it down. Have you ever been out to dinner with friends that have credit cards and they. You can tell they have, like, a pride or like a. Oh, yeah, look at this. When they put it down, I actually

George Camel (41:12)

told Fairwinds Credit Union because they have the Ramsey Co branded card. I was like, will you guys make a real thick metal card just to troll the credit cards out there so I can be like, yo, check this out. It's called money.

Jade (41:23)

You want to Know what, what you're saying, though, is the deeper part of this, I think. I mean, we could go all day about problems with credit cards and what tendencies it causes. And, you know, the points are off the backs of single mothers. You know, like we could go on, but at the end of the day, I think it's just an identity thing of who do you want to be? And when you start walking the baby steps and you draw that line in the sand and you just go, you know what? I'm just not a person who borrows money. I am a person who really enjoys spending the hard earned money that I have. I feel confident in handling the money that I've earned. It is enough for me. I don't need to move a little bit over here and spend a little bit over here on this credit card and get the points over. It's just my identity.

George Camel (42:06)

When your rewards can't tempt me, I'm invincible. I have risen above the system. Yes, I'm outside of the matrix and I think that is just a better way to live. It's not that I'm better than you, it's just that my life is more peaceful. So you get to choose and hang online. Jonah, we're going to send you a copy of Breaking Free from Broke, specifically the credit cards chapter. Read that. Send me a message and let me know if you've changed your mind. Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.

EveryDollar Ad (42:49)

You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

George Camel (42:56)

Yeah, and that's why you've always said that having term life insurance from Zander is essential because it protects your family if the worst happens.

EveryDollar Ad (43:04)

Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long term disability insurance.

George Camel (43:20)

Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive but can't work, so it replaces a large part of your income, so the bills still get paid while you get back on your.

EveryDollar Ad (43:34)

Now, if your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it. But if not, Zander can help you find the right plan. Whether you're single or married, it's not optional. If you're going to be out of work for a while, then you need to make sure the money's still showing up.

George Camel (43:52)

And that's why Zander is our go to. They make it super simple to get the right coverage at the best price. No pressure, no upselling.

EveryDollar Ad (43:58)

I've trusted Jeff, Zander and Zander insurance for over 25 years and so has my family.

George Camel (44:04)

So don't wait. It's fast, it's easy, and it could make all the difference. Go to zander.com or call 800-356-4282.

EveryDollar Ad (44:13)

Protect yourself, protect your income, protect your family.

Jade (44:24)

Welcome back to the Ramsey show here in the Fair Winds Credit Union studio. I'm Jade. Next to me is George Camel. We've got Logan on the line from Orlando, Florida. Hey, Logan, how can we help you today?

Caller Male (44:37)

Hey. So I was wondering. My grandmother has a property and she's going to sell it, and she gave me an opportunity to get it for less than it's worth. And I'm $50,000 in car, Deb. I live at home right now, so I don't have many bills.

George Camel (44:59)

You got a car payment?

Caller Male (45:01)

Yeah. Other than that?

George Camel (45:02)

Yeah.

Jade (45:02)

Okay, so that's the only debt? Just the $50,000 car payment. Is there anything else? Student loans, credit cards, personal loans, anything like that?

Caller Female (45:10)

Nothing.

Jade (45:11)

How much money do you have saved?

Caller Male (45:14)

About $20,000.

Jade (45:17)

Okay.

George Camel (45:17)

And how much do you make?

Caller Male (45:20)

Including side jobs and my actual job, it's around 90.

Jade (45:26)

All right.

George Camel (45:27)

You're making 90. All right. And what's this deal with Grandma? Why is she willing to give you a deal? Where's she going?

Caller Male (45:34)

I guess just because she loves her grandson. I don't know. Just she. She likes the property. It's 10 acres. Grandpa died, so it's just too much for her to take care of. And she doesn't necessarily want to get rid of it, but it's just too much for her. So I think she'd give me a deal just to kind of not fully get rid of it.

Jade (45:55)

You think she would or she told you she would?

Caller Male (45:57)

No, she. Yeah, she will tell me. I'm just saying I think that's the reasoning.

Jade (46:01)

Okay, tell me what the market value is and what type of deal she's giving you. Tell me the real numbers.

Caller Male (46:08)

So I would get it for 350,000, and it's probably worth 5 to 600,000.

Jade (46:16)

Wow. Okay. And do you like the house? Do you love it?

Caller Male (46:21)

Oh, I love it. You know, it's got a warm place in my heart.

George Camel (46:25)

Sentimental value that's sweet.

Caller Female (46:27)

Right.

George Camel (46:28)

But if this wasn't grandma's house, it was just on the market, Would it be something you'd be, like, on the

Caller Male (46:32)

market for this price? For this price, I would jump right on it.

Jade (46:37)

So here's the thing. You're not there yet. You're not ready financially to buy it for a couple of different reasons. How urgent is this? Or is this a deal that can stick around for maybe the. The next 12 to 18 months?

Caller Male (46:50)

Well, I know she's ready to be done with the maintenance and everything, so I don't think it's necessarily like she's ready to move tomorrow, but I think she's. She's ready. She might be able to hold off for the next 12 months because you've got.

Jade (47:08)

You've got a couple of things that you. Some ducks you need to get in a row. Number one, we've got to either pay off this car, get it sold, because we don't want to go into homeownership while we're still in debt, because then it makes it very, very tight, and

George Camel (47:21)

this thing is over half your income, so it needs to be gone. What is this thing? What kind of vehicle?

Caller Male (47:27)

It's a Jeep gladiator.

George Camel (47:29)

And how old are you?

Caller Male (47:31)

I'm 22.

George Camel (47:32)

And it's brand new.

Caller Male (47:35)

I bought it. Brand new? Yes.

George Camel (47:36)

What's it worth today if you went and sold it?

Caller Male (47:40)

So I went to the dealer yesterday to see what they would give me. They told me they'd give me 31 for it.

George Camel (47:45)

Well, the dealer's the worst place to sell a car known to man. So let's not go there because they're trying to make a profit.

Caller Male (47:51)

Just so. Yeah, So I looked up just ones that people are selling around me, and they're going for around 34, so it's not too much.

George Camel (48:03)

Do you roll over, negative equity? How are you so underwater?

Caller Male (48:06)

I did. I did. I bought a truck during COVID Okay, well, here's the.

George Camel (48:12)

Here's how to get out of this thing. Let's say you sold it for 34. That means that you are 16 grand underwater. Luckily, you got 20 grand sitting there in savings, so that'll cover the amount you're underwater, leaving with a few grand to get you a beater car for now, to get you from A to B.

Caller Male (48:28)

Right. Okay.

George Camel (48:29)

Now what's your payment and insurance,

Caller Male (48:34)

man? My payment is 850, but. But I'm paying 300 a week because I was just trying to get it down. So I've been paying 300 a week. And it's 850.

Caller Female (48:46)

And

Caller Male (48:49)

I pay my dad, like he doesn't really charge me for insurance, but every once in a while I'll give him like 4 or 500 bucks just to.

George Camel (48:59)

Okay, you know, we can easily say it's a thousand bucks plus for this payment, plus insurance and all that. So that's what you would free up to. Then start saving up an emergency fund followed by a down payment. Because if you really want this house and grandma's willing to wait, then I would act like this is urgent and I would get rid of the stupid car that's going down in value when you're telling me that you want to be a homeowner.

Jade (49:22)

And let me give you some real numbers. And this is not intended to bust your bubble. This is just intended to give you a dose of reality. Because what you're seeing right now is a deal. And you're only seeing the deal, but you're not seeing the reality of what can I actually afford? Because you're right for somebody to sell you something that was worth maybe 5 or 600 for 350, that is a deal. But there's no such a such thing if you can't afford it either way. Okay, so the real numbers on this and, and I'm just using our Ramsey Solutions mortgage calculator I put in, let's say she sells you the thing for $350,000. And let's say it's on a 15 year fixed rate mortgage because that's what we suggest around here. And right now I'm seeing that the weekly aver year fixed rate mortgage is about 5.64%. So I put that in here. You would need to put about 54% down in order to get this thing close to 25% of your take home pay, which is where we like your mortgage payment to sit. 25%. And that's everything. That's HOA, taxes, insurance. We want no more than 25% of your take home.

George Camel (50:25)

So you're talking like 180 grand down.

Jade (50:27)

190.

Caller Male (50:28)

Yeah.

Jade (50:29)

And it's still tight for you. That puts you at around 1800amonth. And honestly I'd like you to be closer to 1500amonth. Month. So that's me being your, your, your buddy here and telling you the truth. That even with you going balls to the wall like George said, and selling the car and doing all those things which you need to do anyway, by the way, you still have a journey ahead of you. Right? And we don't want you to be like Icarus flying too close to the sun on this thing.

George Camel (50:53)

That's right. You know, and just because the offer is generous doesn't mean that this is a good deal that you can afford.

Jade (50:59)

That's right.

Caller Male (51:00)

Right. So what should I be at for a car payment?

George Camel (51:04)

Zero.

Caller Male (51:05)

If. Okay, so if I get rid of my truck, I pay the negative equity off and I buy a beater, right. For, for however long and then just stick it out with the beater.

George Camel (51:19)

Stick it out with the beater while then saving up paying yourself that car payment of 500 to 1000 bucks a month. Well now you got 12 grand more at the end of 12 months to then upgrade and carry car. So you sell the beater, take that profit and apply it along with your 12. Now you've got a $16,000 car. And the key is you don't want anything with wheels and motors to add up to more than half your income, your sustainable income. So don't include the side jobs that you may drop. What is your actual full time income? Let's say it's 70 grand. Well then we want no more than 35 grand tied up with things in wheels and motors.

Jade (51:51)

Do you understand why, Logan, why we're

George Camel (51:54)

saying all this, why we have these parameters?

Jade (51:58)

Tell us, tell us in your words why you're doing all this so we know you understand.

Caller Male (52:03)

Well, I'm thinking just so I'm not paycheck to paycheck living and I'm out of debt before I go into a mortgage.

Jade (52:13)

That's a big part of it. But the other part of it is what George is telling you to do with this vehicle. That's a long term mindset. The mindset is I never, I never go into debt for cars again. I'm always going to use this method of saving up and upgrading for cash. And the reason for doing that is over time you're going to have so much money at your disposal to be able to actually build wealth. We've said it before, George, and I'll say it again, really. The divide between being middle class and being actually wealthy is the car payment. That car payment, 700 bucks a month, 800 bucks. Many of you are over a thousand. If you took that money and put it back into your pocket, maybe not all of it because you're stacking money for the next car, right? But even 6 or $700 additionally to be invested, investing regularly, that is the ticket, that is the unlock to building wealth.

EveryDollar Ad (53:12)

When you've worked hard to buy a car the right way, you paid Cash with no payments hanging over your head. The last thing you want is to worry about it every time you drive. That's why we trust Christian Brothers Automotive as the official auto repair partner of the Ramsey Show. See, most people don't stress about their car because it's older. They stress about it because they don't know what's happening under the hood or trust the people that are working on it. But Christian Brothers Automotive uses digital vehicle inspections. You can actually see what your technician sees and know what's urgent and what can wait. Plus, Christian Brothers stands behind their work with their nice difference warranty. Three years or 36,000 miles, whichever benefits you more. So if you want real peace of mind with the car you worked hard to own, go to cbac.com Ramsey use the promo code Ramsey and you'll save 10% off your visit up to $250. Cbac.com Ramsey C store for details Foreign.

Jade (54:32)

We've got Stacy who is joining us from Salt Lake City, Utah. Stacy, how can we help out today?

Caller Female (54:40)

Hi Jay George, thank you for taking the time to chat with me. I am wondering if it's at all wide to give my mother in law a certain amount of money every month just so that we don't keep having her approach us every month to give us money. Kind of basically just getting ahead of knowing that she'll need money and just making it that she has it already and kind of avoiding that situation of being asked.

Jade (55:07)

Oh boy. So.

George Camel (55:08)

So we're going to direct deposit to her account just to avoid her having to talk to you.

Jade (55:13)

You.

Caller Female (55:15)

Well yeah, like. Yeah, like not that I, I know it's stressful for both of us I would assume at least where.

Jade (55:25)

What's her attitude about it?

Caller Female (55:28)

She. I mean she doesn't act entitled to it by any means. She has six adult children, five of which all have the same job. They're all in the same trade. Most of them make above 100k a year. So like everyone's able to help her. She doesn't have the legal ability to work in the country so she does live with my brother in law. He has, he owns a home and she lives in. So she doesn't have a car payment, she doesn't have a housing payment or anything. She does have a teenager dependent.

George Camel (56:02)

How long has she been in the states?

Caller Female (56:06)

She was 17, I think and she

George Camel (56:09)

hasn't been able to work that whole entire time.

Caller Female (56:12)

I know she did part of that time and then I think there's just been some.

George Camel (56:17)

I'm just confused who's been floating her lifestyle and income this whole time for decades.

Caller Female (56:23)

Her children.

George Camel (56:25)

And has that. Has that changed now that you guys are fronting more of it?

Caller Female (56:30)

I. I think it shifted my. She lived with my husband for better part of a decade before I met him, and then he moved in with her other son when he bought a house.

George Camel (56:44)

Okay.

Caller Female (56:44)

She kind of just.

George Camel (56:45)

So what is the current situation for how much each sibling's giving? Like, what is her monthly income that you guys are supporting her with?

Caller Female (56:54)

I'm not aware of anyone else giving her, like, basically an allowance every month. She has been asking us for money consistently for about five months. Month is about $800 every time.

George Camel (57:06)

What is she using this money for?

Caller Female (57:09)

It's medical bills is big ones, which we were aware of because she had, like, medication. Like, it's not just like, oh, I need it for.

George Camel (57:17)

Does she have health insurance on her own?

Caller Female (57:20)

She does. She has Medicare.

George Camel (57:22)

Okay.

Caller Female (57:24)

Medication was a little different.

Jade (57:26)

How old is she?

Caller Female (57:27)

I think he's 56.

Jade (57:28)

56. And has she. Has she, to your knowledge, has she tried to get the correct visas to be able to work or try to appeal that or whatever it is? Has she been working on that or did she just give up on. I mean, I'm not going to pretend to be an expert in that area, but I. I'm just curious.

Caller Female (57:47)

Yeah, she has. We're actually working on it right now.

Jade (57:50)

Okay.

Caller Female (57:50)

Um. It sounds like it's just kind of something that takes a little longer than we had hoped.

Jade (57:57)

Okay.

George Camel (57:57)

It doesn't sound like there's much urgency on her part. I mean, she's got bank of Stacy, so it's like, why do I have any urgency to go work when I don't have any bills and someone provides my income?

Caller Female (58:06)

I. I'm a little worried about that. Yeah.

Jade (58:08)

I wonder, do you have the money sometimes, Stacy, like, how are you guys doing?

Caller Female (58:14)

Yeah, we make great money. I have an income and so is my husband. Together, where you take about 13,000 home net.

Jade (58:21)

Okay. And you guys don't have any debt?

Caller Female (58:24)

We have a little bit. We just paid down a ton. So we have like $11,000 of consumer debt left.

Jade (58:30)

Okay.

Caller Female (58:31)

So I'll be gone in next two months, and then we have a $488,000 mortgage still.

Jade (58:36)

488.

Caller Female (58:37)

80.

Jade (58:39)

And do you guys have any cash saved, like liquid funds?

Caller Female (58:43)

We do.

Caller Female (58:44)

We have 14,000 in high yield right now, and then we'll be getting tax refunds soon as well.

Jade (58:51)

Okay.

Caller Female (58:51)

Yeah, 14.

Caller Female (58:53)

So I know we can afford to, I guess.

Jade (58:56)

You could. You could be in a better situation. I will say that. I mean, the walls are not caving in on you, but I definitely would. If you are going to put yourself in a situation where you're contributing to this monthly, and that's fine. If you decide to do that, you've then got to get very diligent about making sure that this is not at a detriment to you by being very intentional about what you guys have going on. And, I mean, anybody who calls the show, I'm going to say, hey, you got to get on the baby steps. And I think for you guys, guys, paying off that $11,000 of debt and doing that today because you've got the money there, right?

George Camel (59:32)

Which leaves you with three grand, which is the reality of your situation, is you have three grand to your name, okay? So it feels good because you make a great income, but it is disappearing through a giant mortgage, supporting mom, whatever else shows up. And so I think you guys could do a better job of not making sure this money doesn't slip through your fingertips. And I think your husband needs to be aligned here. Is he wanting to continue to support mom? And at a certain level.

Caller Female (59:56)

Level. We just talked about it today, actually, because another situation came up. Which one calling, he says, and I brought up, like, it doesn't seem fair if she's asking us for the entire amount that she needs every month because she does have three other adult children.

Jade (60:12)

And what's the entire amount?

Caller Female (60:13)

My husband. I mean, right now it's another 800 for, I think, the last four months. Yeah, 800.

Jade (60:21)

That's the total amount that she needs.

Caller Male (60:22)

Needs, right.

Caller Female (60:24)

Yeah.

Jade (60:25)

And you guys have been giving her, what, four or two or you've been giving her the entire 800 this month or this?

Caller Female (60:33)

Today we did decide on 200 so that other siblings will help the last three months. We've given her the entire amount each time.

Jade (60:41)

So it sounds like. It sounds like there's a couple of things. It sounds like the. The six adult siblings need to get in a room or get. Get on a zoom call and say, okay, okay, here's the deal. Like, mom is going to need this money for the foreseeable future until his visa business gets worked out. We need to set a plan so that we are not all scrambling every month to decide and putting her in this position and her putting herself in

George Camel (61:05)

this position, like, and she needs to be clear on what these new guardrails and boundaries are, because if not, it's just going to become a. Well, I can get More out of them this month. No, instead go, hey, we're going to support you for, for 18 months and by then you need to be getting a job. And then once you're retired, we can figure that out later on in life. But she could live another 40 years.

Jade (61:25)

This is a long time and she's not sustainable. And I think that's the bigger part of this is somebody, and I'm not saying it's you because you're the in law here, but somebody whose blood needs to be looking at this and going, okay, why can't she work? What is the visa that she needs that she can work? What do we need to do? Is it is and is anybody on top of this like it's their full time job? Because the truth of the matter is, is of these six adults, you might know what they earn because you know their trade, but you don't know their financial situation. And $200 or $300 a month for some people might feel like, okay, we can swing that. Or for, for other families might feel like, hey, especially if they're, let's pretend they have debt and they're trying to pay their debt off. Right. So I want to set the expectation that all these siblings may not contribute you and you can't be salty with them if they don't because it truly is their choice and we don't know what's going on with their money.

Caller Female (62:20)

Yeah, that's. Yeah, that's fair, you know. Yeah, that's kind of how I was feeling today when I was like, why is it always us every month? But you're right, like because, because you

George Camel (62:29)

guys are willing and you've done it. And therefore who's she going to come back to? The hand that feeds her.

Caller Male (62:34)

Yeah.

George Camel (62:35)

So that's. There lies the problem. And I'm not mad about being generous, but when it becomes expected forever, that's not really generosity anymore. And therefore you guys need to be more involved with her finances because if she blows this or she is going into debt, well then this is just a never ending money pit. So you guys need to be working on, hey, here's your budget. Here's how much is going to go towards bills, you know, to help support whatever the household. Here's how much goes through insurance. Here's how much is fun money. And she needs to be on a budget if you're going to be handing her this check every month.

Jade (63:06)

What's her country of origin in Mexico. Okay, where do you guys live? Sally City. Okay. I was just thinking, like, I don't know. This is crazy. But I was like, oh, I wonder if she lived closer, if she could cross the border and work and then come. Like if she lived like, you know, Southern California. I don't know. I, my brain was trying to solve for the here and now, but I that, that opens a whole can of worms.

George Camel (63:31)

But anyway, I would just get clarity. I think we need to have a come to Jesus conversation with just the siblings. Siblings, you don't need to be involved. That's it's up to them to figure out. And then your husband comes back to you to go, hey, what do you think about this situation? We all pitch in 200 bucks a month for the next 12 months and then we see where we're at and re reevaluate.

Jade (63:50)

Yep, yep.

Sponsor Ad (DeleteMe, CHM, etc.) (64:25)

Buying a home is one of the biggest financial decisions you'll ever make. But too many people base the decision on opinions or what the market is doing that week.

EveryDollar Ad (64:34)

Churchill Mortgage has been our trusted partner for over 30 years because they do things the Ramsey way. A lot of people think buying a home starts with going to a bunch of open houses. But if you're buying a home the right way, you start with a budget and a trusted guide like Churchill. Before you even think about house shopping, Churchill will show you the real numbers, not what a bank will approve. Buying before being ready is how people end up house poor and stressed out.

Sponsor Ad (DeleteMe, CHM, etc.) (65:03)

Churchill will tell you the truth and they won't push you into more house than you need. And once you understand what you can actually afford, you can move forward with clarity and confidence.

EveryDollar Ad (65:14)

So if you're ready to buy a home, choose the right guide and stick to a plan. Go to ChurchillMortgage.com and get started.

George Camel (65:20)

That's ChurchillMortgage.com this is a paid advertisement in MLS. Id 1591nmlsconsumeraccess.org equal housing lender.

Jade (65:37)

Well George, we love hearing people's stories about how they're winning with money and specifically with every dollar. And we have this encouraging review about EveryDollar, our budgeting app. The fan said this. They said this app allows me to keep my budget and goals organized. I love the projection on when we will be debt free and my estimated net worth and it gives you something to work towards and gives you a light at the end of the tunnel. That's great to hear. I love that. So true. And everydollars got a lot of really cool changes coming up. Really good things happen when you're intentional with your money. You can live like no one else so that later you can live and give like no one else. So start every dollar for free today in the App Store or Google Play. Okay. Rebecca is joining us from Orlando, Florida. Rebecca, how can George and I help too today?

Caller Female (66:23)

Hey, thanks for taking my call.

Jade (66:25)

Yes, ma'. Am.

Caller Female (66:26)

Hey, so my husband and I are. We're just starting the baby steps. We're working on paying off debt. We have about $50,000 in debt, some student loans, some credit card, and our household income is around 135. So we're 32, and we're kind of behind on the game. We haven't started investing or saving towards retirement. And we have two young boys and we're contemplating having a third. We would love for them to be close to age who were thinking about getting to the Megan this year. And I think it's important to know I'm a 1099 contractor, so I wouldn't be getting paid for maternity leave if we chose to have a third. And with three littles even contemplating would it make sense for me to stay at home? And so my question is, is it wise to kind of say all done to having more babies for the sake of where we're at currently, financially, I

Jade (67:19)

don't think that's the case. But I do think that it would behoove you both to really put real numbers on paper and create a timeline to see what's actually possible within the parameters that you guys say you want this to fall into. Right. You get the values of saying, okay, if I have a third child, do I want to stay at home? And if so, what's that going to cost, you know? And let's run out the real numbers before we just take this thing off the table because I'm a fan of families. I love families and I love. I love mamas being able to have as many babies as they want to and making a way to afford that. So where you are right now, you're 32 years old, you've got the $50,000 of debt. Is there any money saved up anywhere?

Caller Female (68:06)

Yeah. So in our savings, we probably have eight or so thousand.

Jade (68:11)

Say that again, please.

Caller Female (68:13)

We probably have about $8,000 saved, regular savings account.

Jade (68:18)

Okay, 8K saved. And you guys are bringing in what, 8,000amonth? Is that. Is that about right?

Caller Female (68:24)

Yeah, more or less.

George Camel (68:25)

Okay. How much can you throw at your debt every month after all of your bills are paid?

Caller Female (68:33)

So one of our sons has some medical stuff that kind of eats up a little bit of our margin, but I'd say it's safe to say probably like 6 or $700 if we're. If we're tight.

George Camel (68:47)

So your bills are costing you about over seven grand right now per month.

Caller Female (68:54)

I mean, I think if we're.

Jade (68:56)

What's your mortgage payment?

Caller Female (68:58)

So we're renting. It's $2,600 a month.

Jade (69:02)

Rebecca, speak directly into your phone. Tell us again, what's your. What's your rent payment?

Caller Female (69:06)

Oh, I'm so sorry.

Jade (69:07)

That's okay.

Caller Female (69:07)

I said our mortgage or our rent payment is $2500.

Jade (69:11)

2500. Okay.

Caller Female (69:13)

Yes. Can you hear me okay?

Jade (69:15)

Yes. Yes, ma'. Am. 25's a little over, so there's a little bit there that's eating into there. What else majorly is going on? That is because your kids are not in daycare right now, or are they?

Caller Female (69:28)

Right? No, we don't have to pay for childcare. Thankfully, we have some family help. And so right now we have our. Just the student loan payments, which is about 500amonth. I don't have all the numbers right in front of me, but we have. Yeah, I feel like. And you know, it obviously could be a budgeting thing too, but I feel like.

Jade (69:52)

I think it is. I think that there's some intentionality that we can really, really tighten up. Are you guys using every dollar?

Caller Female (70:00)

We just got Financial Peace University and downloaded the app, so we haven't started. We haven't started it structurally yet.

Jade (70:08)

Okay. I think that's going to be an

George Camel (70:10)

unlock to find out that you can live on way less and carve out way more margin. Because here's the. Here's why I was asking. If you can throw, let's say, two grand a month at the debt, you're done in two years. If you can throw more at it, you're done even faster. And so what I'm trying to do is get you guys debt free as soon as possible with an emergency fund. Not that you have to wait for that to have the next basis. But if you're saying, hey, my goal is to stay home potentially. Well, if you can't make the current income work, how are we going to make less income work?

Jade (70:38)

Right.

George Camel (70:39)

So we've got to figure this out. If it's true that you really want to have this kid, if that's the priority, then we need to make sacrifices to make that a reality.

Jade (70:46)

Yeah. How much of the 135 is coming from your income?

Caller Female (70:51)

Yeah. So we have 65. I'm sorry, 60 is coming from me. I work part time right now. And then 75 from my husband. Yeah.

Jade (71:02)

So yeah, I mean you're not wrong. Right now it's cutting it in half. So the main things that I think we feel it. Go ahead.

Caller Female (71:11)

I was just going to say, you know, I feel like if we already have a third, we would just be looking at how do we make this work. But now that we're kind of in this decision period, it, we don't want to be unwise and impulsive.

Jade (71:21)

You know, the biggest, the biggest area where I see it playing out in a potentially very stressful way is your cost of, of housing. So right now you're paying 2,500. It's more than 25% of your take home. And if you go down to 4,500

George Camel (71:37)

take home pay, for example.

Jade (71:39)

Exactly. That's when you're going to be really strapped. It's gonna be, I mean, darn near possible to accomplish anything like that.

George Camel (71:47)

So there's another sacrifice. We need to change where we live if we want to make this a reality. So that's where I go. You can go to a fake budget tonight just using his income just to see where things would fall. And even you can go, okay, let's say we're debt free. Let's take out those debt payments. It's still going to be tight. And really here's how much house we can afford. Then you can start to map out, you know, what is realistic for your situation now.

Jade (72:11)

Right now your current kids, you're not paying for childcare. What changes so drastically when the third one comes that you'll no longer have access to that.

Caller Female (72:23)

Sure. So my in laws and then my mom and said that come and watch the boys. And so they're in their 70s and we're just thinking with a third it may be a lot for them. My kids right now are seven months old and two.

Jade (72:39)

Well, with the debt paid off, if you put one in daycare, you might be able to swing that and continue to work. So you keep the two with the family members and then decide which one would go to daycare. And without debt payments, you know, you freed up $500 in student loans, who knows how much from the credit cards. Right. And now maybe you can swing that. And by then. How old's your oldest?

Caller Female (73:03)

He's two. He tries tfd.

Jade (73:06)

Okay, so kindergarten for you is going to be kind of like the, the unlock moment when one of them can go off to school. Right. So I do think that this is possible. I think you've just got to get creative on what it Looks like and get so, so intentional. Now, before you're pregnant, now is the time where you guys are working, working day and night. Like Michael Jackson said, all the money. Right. Because you guys need to pay off this debt so quickly. You need to start saving for three to six months of expenses and potentially a down payment down the line.

Caller Male (73:36)

Right, thanks. Okay.

Caller Female (73:38)

You know that, that is helpful. Yeah. Because I just feel like the third changes a lot in terms of my income and that's just how we, you know, our lifestyle.

Jade (73:48)

Absolutely.

George Camel (73:49)

That's the thing. If you want to be a stay at home mom with three kids, your lifestyle is going to look very different and you might need to live further out where rent is 1500 instead of 2,500. And so there's just trade offs all the way around. But you'll have the most flexibility and options. If you become debt free and you have the emergency fund and hopefully your husband has a ceiling, you know, a bigger ceiling for his income, he can start making more, then life will get a little more comfortable. But right now the saving grace is these parents and in laws who are willing to watch the babies. Imagine they had daycare to cover in the midst of this budget. Absolutely.

Jade (74:22)

Oh, it'd be tough. But what I really love about her calling in is this idea of like family planning, like thinking, thinking about what you want to do, laying out the numbers, laying out a timeline and making a plan and not just kind of going into it blindly because like I said, I love babies, I love families. But. But there are things that we can do to make that a better situation for all involved.

George Camel (74:46)

I always love people. Like it was a huge surprise. I'm like, well, I don't know if you were in science class, but shouldn't be a whole lot of surprises there. You're not Mary in the Bible here.

Jade (74:56)

I mean sometimes it happens. George, like slips past the goalie, you know what I'm saying? Just accidents happen.

Caller Male (75:05)

It.

Sponsor Ad (DeleteMe, CHM, etc.) (75:31)

Hey guys. Healthcare is one of the biggest stress points in your budget. It's confusing and most of the time it feels completely out of your control. But there is a better way to handle it. Christian Healthcare ministries isn't health insurance. It's a health cost sharing ministry where Christians share each other's medical bills. And it's not a new idea. Thm has been around since 1981. It's predictable and proven and they've shared over $13 billion in medical bills for their members. Plus you get more flexibility. There are no network restrictions and you don't have to wait for Open enrollment. Now let's Talk about how CHM helps your budget because programs start at just $115 a month and many families save hundreds of dollars a month compared to traditional options. So if you are tired of feeling stuck, check out Christian Healthcare Ministries. Right now, CHM is offering new members a 50% credit towards their first month of membership. Go to CHMinistries.org budget and use promo code RAMSEY. That's CHMinistries.org budget and Use promo code Ramsey.

Jade (76:52)

All right, we've got John, who's in New York City, Florida. Is there a New York City, Florida? I don't think that's right. Where are you at, John?

Caller Male (77:01)

New York City, New York.

Jade (77:03)

That's what I thought. I was like, one of these is correct, the other one is not. Well, we're glad to have you. How can we help you today?

Caller Male (77:11)

Thank you so much for having me. I really appreciate it. My wife and I purchased a short term rental in October of 2024. And at the advice of a tax strategist that we hired and we're bleeding 2500 to three grand a month in this short term rental.

Jade (77:30)

Okay.

Caller Male (77:32)

And I own a business, my wife's a full time nurse and we get taxed heavily. Obviously the business does. And that's why I enlisted with a tax strategist to understand, you know, options, you know, as far as building generational wealth and how to do that. And that's when we got into the short term rental. And yeah, we got bonus depreciation. So that was nice. We, you know, we were able to write off the federal taxes and stuff, but bleeding 2,500 or three grand a month is not, it doesn't leave a very good taste in my mouth.

Jade (77:58)

Of course not.

George Camel (77:59)

You might as well pay that to the government in taxes at that point, if you're just going to bleed it, you're either giving it to a lender or to the irs. Pick your poison.

Caller Male (78:07)

Correct? Correct. So my real main question is, you know what? I'm really. It's hard for me to trust people now because of how this leaves us, how it tastes in my mouth. And I just need really good direction. What do we do with our money to help build generational wealth to find properties of cash flow? What should my next steps be? Something this year, but I'm nervous. We own a print company.

George Camel (78:33)

Okay. Where did the real estate come into play? Because these are two different goals of I want to build wealth, but also I want to be a real estate guru and leverage a bunch of debt.

Caller Male (78:43)

Correct. The real estate came into play because of the taxes. We were getting heavily taxed.

George Camel (78:49)

Would you agree that getting into real estate just for tax purposes is not a good idea?

Caller Male (78:58)

My wife's right here.

George Camel (78:59)

She said, true, you're losing 36 grand a year because of the tax strategist saying, dude, you want to save on taxes, Just leverage an Airbnb. It'll be great.

Jade (79:07)

Well, I think you thought you were going to build wealth, too. I think you thought you were going to use that as a wealth building vehicle as well, not just a tax shelter.

Caller Male (79:14)

The goal obviously is wealth building for generational wealth.

Jade (79:18)

What went south? What went south with the short term? Was it the low location? Did you not get the rents you thought you were gonna like? What happened?

Caller Male (79:25)

Well, I think it's our prop, in all honesty, I think it's our property manager. So our Realtor is also our property manager. And when I met with him, I'm pretty upfront. I said, you know, listen, I said, I just need to know what our worst case scenario might be with this property. And he said, your worst case scenario is you're gonna be at a thousand dollars a month. I said, good, let's go. We're good. That, that sold.

Jade (79:42)

So you knew that from the jump?

Caller Male (79:45)

Oh, yeah.

George Camel (79:46)

Okay.

Caller Male (79:47)

And I was fine with a thousand. I knew it wasn't going to cash flow well, but I also was using the benefits of were going to save on taxes and then also building generational wealth and making this kind of a yearly thing we wanted to do.

Jade (80:00)

So it just nothing was looking good.

George Camel (80:03)

So what would this property sell for property management company?

Caller Male (80:07)

A million 35 it's worth, according to Zillow, a million 65. We also own a home. Our own, our personal residence. We bought that for 820. It's about 965.

George Camel (80:21)

What's left on that mortgage?

Caller Male (80:23)

That one? 6. 6 17. Okay.

George Camel (80:25)

And what's the mortgage on the short term rental?

Caller Male (80:28)

That's about 820.

George Camel (80:30)

Okay. So you got, let's call it 150 grand in equity on the short term rental you could get out.

Caller Male (80:37)

Correct.

George Camel (80:37)

What other debt do you have?

Caller Male (80:38)

Again, Obviously I got to pay. We did do a loan where there's a prepayment penalty. So we got a five year prepayment penalty, which goes down every year.

Caller Female (80:46)

Year.

Caller Male (80:47)

So we'd have to eat that, obviously.

George Camel (80:49)

What kind of loan is this?

Caller Male (80:50)

Something Is it called a DSCR loan?

George Camel (80:54)

Okay. What other debt do you guys have outside of the two mortgages?

Caller Male (80:58)

Truly? My wife's got a car. It's about 600amonth. Business pays my car. We have zero percent credit cards that aren't due till next year. Total about 37 between both of us. 37K.

George Camel (81:12)

You are a credit card company's dream.

Caller Male (81:13)

Dream. I'm sorry.

George Camel (81:15)

You're a credit card company's dream.

Caller Male (81:17)

I know.

George Camel (81:19)

Because guess what's going to happen when you can't pony up 37 grand out of nowhere to pay the balance.

Caller Male (81:24)

Well now that's. Let me give you the full, full picture. I have 160 sitting in the bank, so. And my wife has. You have anything? I think she's maybe 10 grand, my wife, but between both of us, 170.

Jade (81:36)

Okay, I'm on.

Caller Male (81:38)

I already know. I know it's going to pay off that 0% credit.

Jade (81:40)

How much? Okay, well great. How much? What's the total amount of your wife's vehicle? Not the monthly payment, the total amount.

Caller Male (81:50)

Total amount. It's a lease.

Jade (81:51)

Oh, it's a lease. And what about you?

Caller Male (81:55)

My car's paid through the business. It's 524amonth. It's a super outback.

Jade (81:59)

How much is the debt though? What's the total debt?

Caller Male (82:03)

I owe? It's. It'll be done at the end of this year and then I release another car.

Jade (82:07)

What's the total debt? Debt. Don't be scared.

Caller Male (82:11)

I apologize.

Jade (82:12)

Don't be sc.

Caller Male (82:14)

So what's 524 times what's the amount

Jade (82:17)

that you owe on your car? How much do you owe?

Caller Male (82:20)

Okay, yeah, it's. We got. We owe on my car is going to be three grand.

Jade (82:26)

That's it? That's all you have left?

Caller Male (82:28)

Yeah, because it's a lease, so it's 3,000.

Jade (82:31)

Oh, yours is a lease too. Okay. So.

George Camel (82:33)

Goodness gracious. These are the nicest cars known to man. Man, what are you guys driving? 600 bucks a month for a lease.

Jade (82:40)

When's the lease? When's the lease up?

Caller Male (82:44)

The end of the year. We're both. We're both the end of the year.

Jade (82:47)

Okay. And are you planning on buying them out or what do you. What are you thinking here?

Caller Male (82:52)

I don't know. To be totally honest, I haven't thought about it.

Jade (82:53)

Okay, so we're gonna help. We're gonna help you think through that. What I want you to take away right now, John, is you're kind of like a happy go lucky guy and, and you're fun to talk to, but I'm concerned about your situation greatly. You got a lot going on. And the good thing is I think a Couple of moves could get you on just a couple of small tweaks could get you on really, really solid footing. But you'll have to agree with George and I that you're in a dire situation in order to actually do this. Because I feel like you kind of think it's not that bad.

George Camel (83:24)

You guys have out earned your stupidity for a long time and you can continue doing that. I just think you will. You vehemently disagree with everything we're going to throw at you, so I don't even want to waste the time. But I'll tell you what I would do. I would sell the short term rental, walk away with whatever money you can get, take your 160, pay off all of your consumer debt, and then anything remaining, it becomes emergency fund plus paying down the mortgage.

Caller Male (83:48)

Gotcha. But leveraging the debt, paying down our

George Camel (83:51)

primary residence, paying down everything, pay down all of the consumer debt first. First get an emergency fund. Focus on paying off your primary mortgage. Right now you're just trying to accumulate stuff and assets and car leases. And we're trying to simplify your life to where you get to keep what you take home, regardless of how much you pay in taxes. I'd rather you pay what you owe in taxes and not have all the stress in your life and go, that sucks. I had to pay the IRS more than I thought. But it's a nothing burger if you had no debt.

Caller Male (84:17)

You figured me out perfectly. Because I, I, my wife's gonna tell you, I, I do stress out a lot about it.

Jade (84:23)

It's very stressful. It's stressful for me just to listen to it. So I can only imagine how you feel, you know, when you lay your head on your pillow at night. But think about what George just said. You got $170,000 cash. Okay. We pay off the credit cards. That leaves us with around 130 or so. You decide whether or not you're going to buy out these leases. Do you know what the buyout is for each of them?

Caller Male (84:44)

I don't, I think it's around 20, 25 maybe. For each, if I'm speaking correctly, for each.

George Camel (84:49)

Would you guys want to keep those cars?

Jade (84:50)

Cars?

Caller Male (84:52)

I'd have to convince my wife, but I, I don't care.

Jade (84:56)

Okay, let's say you did if that

Caller Male (84:57)

you want to keep your car. She doesn't care.

Jade (85:00)

Okay, so let's say you spend 40,000 and you buy out these leases. Now you're at 90. You've got $90,000 sitting there after you've gotten out of These leases, after you've paid off some credit card debt, is there anything else that we need to know of that needs to be paid off?

Caller Male (85:16)

No, I just gave you all the, all that we have. That's it.

Jade (85:18)

Okay, so now you've got some actual cash, you sell the short term rental because did I hear you say you bought it for 1.3 and it's worth 1.6.

Caller Male (85:26)

No, no, a million 35.

Caller Female (85:28)

And it's.

Caller Male (85:29)

According to Brazil, it's worth a million 65 now.

Jade (85:31)

Okay, a million.

George Camel (85:32)

Okay, so you'll probably take a little loss on that, but you'll gain three grand back in your life from not bleeding. And so that's where I'm going. This is worth it. Don't have the sun cost fallacy. Yeah, it sounded like you didn't want to sell this Airbnb though, this short term rental.

Caller Male (85:45)

I mean, I'll be honest with you, I do love the house. I wish, you know, my wife and I would love to be in Florida one day. I'd love to be in the house. But, but if it's, if it's going to cause me stress every day, I'd rather do the smart thing than be, than the, the future, you know, goal thing.

Jade (85:58)

And let's, let's, let's talk about the why behind it because I think you had, I like what you were thinking about, which is what are ways that I can build wealth for my family. I think that that's something that we all need to be doing as, as parents and as spouses. But the way to do that, we did the largest study of millionaires and the large. The best way to do that is to have a debt free lifestyle, a budgeted lifestyle, a lifestyle that values having the right insurances, saving for emergencies. Right. And then investing in your 401k regularly. That's how millionaires are built. They invest in their 401k regularly. Well, welcome to the Ramsey show here in the Fair Ones Credit Union studio. Again, I'm Jade, if you're just joining us. And we have George Camel taking calls from Brandy, who's in Huntsville, Alabama. Brandi, you are on the line. How can George and I help you today?

Caller Female (87:03)

Hi guys. I have an interesting situation for you that we need help with. My husband and I have been married 10 years, but when we got married, we had a backyard wedding. It was a like a $3,500 wedding. It was just close family friends and we did not buy wedding rings. So had said if we make it to 10 years, we would have Our honeymoon and buy wedding rings on our 10th anniversary. And that is coming up.

Caller Female (87:30)

So we.

Caller Female (87:32)

And there's. There's more story to that, of course. Like, I mean, he proposed four times. It's me. I bring the George to the relationship. And he's all fun.

George Camel (87:40)

You're the funny daddy.

Caller Female (87:42)

I am the frugal one, I guess.

Caller Male (87:44)

And he's more of a free spirit.

George Camel (87:46)

You said no to his proposal, like, three other times?

Caller Female (87:50)

No, I laughed hysterically the first time. And then the second time I was like, I'm really not good at being married. I mean, we've been married, like I said, 10 years. That's like an Olympic gold medal for me.

George Camel (88:00)

So he deserves a medal for persistence. The guy just kept getting rejected time after time. Wow, that's brutal.

Caller Female (88:09)

He is really amazing. He is a great spouse. And, I mean, we've made it right? So far, so.

Jade (88:14)

And we have.

George Camel (88:14)

You both seem surprised, which I find entertaining. Entertaining. We both can't believe we're here.

Jade (88:19)

Okay, well, congrats on the 10 years. And I love the idea of finally, you know, getting rings and having a ceremony, but there's probably a catch here. So tell me, what is it?

Caller Female (88:30)

Well, we're trying to buy rings and go on a honeymoon. We're not gonna have a ceremony. We've already done that.

Jade (88:35)

Okay, so rings and honey.

Caller Female (88:38)

Yes. And we are in the middle of baby step two. We've paid off $63,000 worth of debt as of yesterday within the last 12 months.

Caller Female (88:47)

Go.

Caller Male (88:47)

We. Right.

Caller Female (88:48)

And we have 49,000 to go. So we were expecting to come see you guys for our debt free screen next spring.

Jade (88:55)

Okay.

Caller Female (88:55)

And we want to delay by a month because my entire paycheck, like, my base salary, I own my own business. He works for the state. But my entire base salary goes to paying debt every month. So I get my paycheck and then I give it to other people. And it hurts my feelings. Right. So I am super motivated to get finished. But we both feel that we need a break in order to celebrate this milestone for us.

Jade (89:15)

And it only sets you back by one month, Is that what you're saying?

Caller Female (89:18)

Saying, yeah.

Caller Female (89:19)

It would pause the baby steps by one month, so. And we don't. We don't know budgets. We haven't been shopping for rings because I'm terrified to go in there. I think I'm going to have sticker shock.

Jade (89:28)

And so then I don't think you know how much it's going to set you back because you don't know the numbers. Right.

Caller Female (89:33)

Well, we were thinking around a thousand dollars on rings total, and then we would spend around 3200 on a trip. And we wanted to kind of set the budget at what we normally would pay towards the debt. A month, which is about 4,000.

Caller Female (89:44)

Yeah, between four and five.

Jade (89:46)

Okay.

George Camel (89:47)

And you're saying if you continue this path, you could be debt free in what, nine or 10 months?

Caller Female (89:53)

Probably around 12. Because I work in education field, so I am home. We have six children. I'm home with our youngest children and there are many of them, but I'm home with them in the summer. So I don't have as much income in the summer. And we plan for that because I own my own business. It's not a huge loss, but we don't have as much of a margin during those two.

George Camel (90:12)

Got it.

Jade (90:13)

Understood. I'm gonna tell you. And again, this could be controversial, but I think that I would do this. It's a one month setback and it's a milestone of 10 years. And it's actually funny that you're calling in because I called into the Ramsey show long before I worked here with the same question. Sam and I had paid off a major portion of our debt. You've paid off more than half. I think we had paid off more than half of our. And we wanted to do a 10 year anniversary and it was gonna set us back a couple of months, but we did it and Dave said that he would do it and we told him the budget. And so I will now tell you the same thing because I think it's a really important thing and I think it's one of those things that comes around obviously every 10 years and this is your 10 year mark. I think the budget is reasonable and I like the fact that it's almost only a month long thing. It's, it's potentially only sets you back a month. And what I actually think will end up happening is if you wanted to kick it into high gear after this, you could probably make up the time by picking up, you know, cutting back here and there, picking up side hustles, who knows? You'll, you know, if, if friends and family find out about this, you might get some monetary gifts, I don't know. But I think things can happen that you really don't even have to sacrifice the month.

Caller Female (91:32)

Okay. Yeah.

Caller Female (91:33)

And I am, I have a business that's doing very well. It's growing as time goes along, so it will increase over time. And also he's getting promotions at his job, so we know that it will go up eventually. That may take a while. Right. But we really want to pause and celebrate.

Jade (91:48)

So you got married in the courthouse. No rings.

Caller Female (91:53)

We had a backyard ceremony at our house and it was beautiful. We have a creek in the backyard. It was a beautiful ceremony, but it was just close friends and family.

George Camel (92:03)

So you guys have anything on your fingers right now?

Caller Female (92:06)

No, we don't.

George Camel (92:07)

You couldn't have got a silicone band off Amazon for like $10?

Caller Female (92:11)

Well, he wears, he, I think he wears a silicone band and he has another band that he really likes. I feel bad. I mean, it took me two years to change my name. Maybe I have a little bit of a commitment problem. But I really, I love him. We, our marriage is great and I think it's time for me to put a ringer up.

Jade (92:25)

You want to know it? Okay, I'm going to go one deeper for you. And now this is your life. Do a you want. I almost. And I'll just be honest. I feel if I feel the money is better spent and this is just me in comparison to the baby steps, I feel like the ring would be the thing that I'd want to spend more money on. Because you've never had one versus the honeymoon. That's just me. What do I know? George, what do you think? What do you think about the whole thing? You may not agree with me.

George Camel (92:51)

Well, again, Brandi, you told, you told me ahead of time. I'm the fuddy duddy, frugal guy and I love to dangle the carrot. I want to earn it. You know, I want to eat my vegetables before I get dessert. And so personally, I'm going to go, you know what? We're already in our 11th year of marriage. We're going to celebrate before we're done with year 11. And that will put some onus on me to put some urgency on this and bust it to get this knocked out as fast as possible so that I can enjoy this.

Jade (93:15)

Wait, it's not going to happen at the ten year point is you're already past ten years.

Caller Female (93:19)

No, we will be ten years. I'm coming up in the fall and I wanted to wait till after the debt was paid. So next summer. And he's like, absolutely not. We had an agreement.

Jade (93:27)

Well, wait a second, wait a second, wait a minute. I'm gonna roll mine back a little bit because I thought that the whole point was we're doing it on the 10 year anniversary, but this is not on the 10 year anniversary. You're not doing it on the 10

Caller Female (93:39)

year at the 10 year anniversary. We were. That was when we plan on doing the ring and going on the trip.

Jade (93:44)

Right.

George Camel (93:45)

Can I be honest, Brandi? Here's what bothers me. You guys have been quote unquote planning this for 10 years and yet made zero actions to get us here. You know what I mean? Like what happened over 10 years where you guys went. Yeah, we said that, but we don't really believe it. And now all of a sudden it's an emergency. That's a good point. You know what I mean?

Jade (94:02)

What happened?

Caller Female (94:03)

Well, it's not an emergency. We did take our, our savings that we put back for it and put it on our debt.

George Camel (94:07)

But why aren't you in a better place financially than you were 10 years ago when you guys were broke?

Jade (94:13)

Oh, well, you probably weren't thinking about it.

Caller Female (94:15)

Better place.

Jade (94:16)

Or were you? I'm sorry, were you thinking about this 10 years ago? Probably not. Or were you?

Caller Female (94:23)

Yeah, we agreed to do it when we got married. That was what we said at the time.

George Camel (94:26)

Oh, that's what I'm.

Caller Female (94:27)

It was an agreement.

George Camel (94:28)

If I had a 10 year horizon to plan for this thing I knew was coming, I would make sure I was going to get there. And so that's where I'm trying to figure out where you guys went backwards. Got into 100 plus thousand dollars consumer debt, which you guys are crushing it. I'm really proud of you. I'm not trying to knock you, I'm just trying to get to the mindset to make sure we've actually changed. Changed our behavior. That got us here.

Jade (94:47)

George makes an interesting point. Listen, I will say this. If you told me it's a once in a lifetime thing, it's 10 years and you were doing it on the 10 year anniversary. I'm like, yes, 10 years. But if you're telling me we're doing it on a 10 year anniversary and the plan was already do it to do it at year 11. It takes the cachet. It's got no cachet at that point.

George Camel (95:06)

I mean, you're not gonna regret it if you do it. And you guys will still become debt free whether it's in may of what, 2020.

Jade (95:11)

May as well wait till 12 years.

George Camel (95:13)

That's what I'm saying. Everything feels arbitrary. Cuz clearly our planning has not gone to plan.

Caller Male (95:19)

I don't.

EveryDollar Ad (95:38)

Hey guys, Dave Ramsey here. Every day on this show we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey, ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, ask Ramsey is here to help. It's fast, simple and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com.

Jade (96:27)

The Ramsey Show Question of the day is brought to you by Wyreave. If your private student loans are in default and you're not sure what to do next, Yrefi can help you explore refinancing with a low fixed rate and a payment plan based on what you can actually afford. Go to yrefi.com Ramsey that's the letter Y, R E F y.com Ramsey Remember, it may not be available in all states.

George Camel (96:50)

Today's question comes from Grace in Nebraska. My husband and I are about to pay off our last debt, which is a credit card card. But I've read that doing this will lower our credit scores a lot. Should we slow down our payoff schedule or knock it out and let our credit score go down? What a, what a hilarious question which just points to the stupidity of the credit score. Number one, the confusion of it.

Jade (97:12)

There's confusion.

George Camel (97:12)

And number two, the if I do the thing I know is financially smart, I will be penalized.

Jade (97:17)

Well, I think people don't realize. Yeah, I don't think they know the truth, George. So enlighten us.

George Camel (97:22)

Well, number one, a credit score is on based based off several factors. They're all weighted differently. How much debt? How long have you had the debt? What's the types of debt, mix of debt, the variety, all of that. Any new debts. And so paying off your debt will not lower your score, especially in the long term. Now, if you closed all the accounts, it might take a dip because they like to see the open accounts, you know, the longer you've had them open, the better and all that. But I would never say slow down your payoff schedule in case your score takes up a hit because whatever hit does happen, it's going to be minimal and it's going to be temporary.

Jade (97:58)

Well, and you have to ask yourself the, the long term question on this is why are you doing this to begin with? Because most of us out here, if we're paying off our debt, we're usually doing it with a greater intention in mind. And over here at Ramsey, the whole thought is you can't solve a problem while simultaneously creating it. So if debt is the problem, if it is the, the barrier to you building wealth, then what we say is okay, then I I no longer borrow money anymore. And so me paying off my debt is essentially equal with me saying, and I no longer care about credit because I no longer am going to borrow money. So they, they're, they're kind of synonymous. So my question to Grace would be, what's the point of paying off the debt if, if you plan on utilizing your credit score in the future, which

George Camel (98:43)

means you would be borrowing on more debt. And by the way, there are a lot of people who don't carry any debt and still have a credit score. They have open credit card accounts and they pay it off every month. I know those people exist because they always tell me how proud of themselves they are for paying off their balance every month and they have an 8:30 credit score and all of that. So Grace, the real question is, what kind of future are you looking for? Are you looking for a future where you keep taking on more debt and trying to pay it off perfectly to appease the credit score of gods, or do you just want to go, you know what, I'm done, we're going to cut up the card, close the account. Six to 12 months later, your credit score will become indeterminable. That's what happened to me. Now if you have a mortgage, your score will stay up there and it'll stay as long as you make on time payments for any debts in your life, your score is going to be fine. It's not going to be, it's not that much better to have an and 790 versus 760.

Jade (99:33)

No, it's. Yeah. And again, who cares? It's not going to stop you from doing any of the things you want to do because you're living a life without debt. And I'll just, let me just say this. When Sam and I were in baby step two and paying off debt, I was a little late to acques the credit card. It took me some time to feel like I could let go of that. But what got me is I hated paying it off every month because we'd spend a little bit on it and then pay it off and spend a little bit. I just got to the point where I was like, I don't like the feeling of this. Even if you're paying it off every month. Month. It just doesn't feel good. It feels like you owe someone money.

George Camel (100:12)

Exactly.

Jade (100:13)

Because you do. Even though you have the money to pay them, you still owe them for 30 days. And I think I just hated the feeling of that.

George Camel (100:19)

And let me tell you, obviously people care about the credit score for A mortgage. That's the big one. That's understandable. But again, we've talked about it on the show. Getting a no score loan, manual underwriting. It's a very real possibility. That and Jade and I have both done it, and they didn't give it to us because we're Ramsey personalities. They gave it to us because. Because we had 12 months of rental history on time payments, tax returns, pay stubs, manually underwrite it.

Jade (100:44)

If it makes you feel better, I did it before I was a Ramsey personality, long before I even worked here.

George Camel (100:48)

So if that makes somebody listen.

Jade (100:50)

Yeah, yeah, that's. I'm still not a big deal. Let's go, Kyle.

George Camel (100:55)

So to answer your question, I would not slow down the payoff schedule. Just become debt free.

Jade (100:58)

Go ahead and do it. And did you tell him it. It usually takes six to 12 months?

George Camel (101:01)

Yes.

Jade (101:02)

Okay. All right, let's go to Kyle, who's in Boston, Massachusetts. I'm sorry about your city Celtics, by the way. What's going on, Kyle?

Caller Male (101:11)

Hey. So you. You guys can hear me fine.

Jade (101:13)

Yeah.

Caller Male (101:15)

Okay. So basically, we bought a house. I'm married, and my parents live with us in the house, and we had a baby, and we want to have more, but it just seems like the house is getting smaller and. And there's just a lot of tension, it feels like in the home. So we want to know if it's possible and if we should look into it more to buy, say, a multi family, like a three or four unit multifamily, and have my parents live in one of the units and rent the rest of them to offset, you know, that other mortgage.

George Camel (102:04)

Where is this codependency coming from? Why can't they go rent their own place? And you guys have your own place.

Caller Male (102:14)

Right? So I'm an only child, and I think what happened was most. 90% of my life was them not doing well with money. And, you know, is that a me problem? No. But in my mind, like, with them living with us, I know their financial situation, and I know they would be, like, borderline homeless, I guess.

Jade (102:42)

But they make enough to rent because you said they'd be renting one of the units from you if you did a multi family.

Caller Male (102:48)

All right, it would not be market as much as the average.

George Camel (102:53)

So basically, you're gonna. It's charity. You're gonna let them rent for a couple hundred bucks, and if the day comes where they can't pay because they have other bills or they have other priorities, they kind of know you're not going to evict. Them and put them on the street.

Jade (103:06)

How old are they?

Caller Male (103:09)

My dad's in his 70s, and my mom is in her 60s.

George Camel (103:13)

Are they both retired? Are they working still?

Caller Male (103:17)

My dad's retired. My mom is going to retire in about a year.

George Camel (103:22)

And that's based on what?

Caller Male (103:25)

Because it's just what. What she had told me.

George Camel (103:28)

Okay. But they don't have the money to actually retire. They're sort of needing you guys to float the gap.

Caller Male (103:35)

Right.

Jade (103:35)

When you say she's in her 60s, is she like 61 or is she like 69? How old is she?

Caller Male (103:41)

She is 65.

Jade (103:45)

Okay. And same with your dad. Is he's 70. 70 or 70?

Caller Female (103:49)

About.

Caller Male (103:51)

He's 75. They're about 10 years apart.

Jade (103:53)

10 years apart. And they don't bring in, like, what's their Social Security? You said, you know, their money. Tell. Tell us more about the money because that'll help us understand how dire this is. Because it might not be as dire as maybe you stepping in and doing as much as you're trying to do.

Caller Male (104:12)

Okay. So for Social Security, I don't. Which will be from. For my dad, I don't really know what I think it's probably maybe 1500 to 2000, something like that a month. I mean, I was so lying to me. I'm not sure. And so they give us. We wanted it to be a thousand. They give us 600amonth towards the house that we're living in now.

Jade (104:42)

What about your mom? What does she make?

Caller Male (104:45)

She probably makes, we guess around maybe a little more than minimum wage.

Jade (104:55)

Okay. Do you know what that looks like monthly for her? I'm sorry, I thought that you knew the numbers. I. I thought I heard you say that you did know the numbers.

George Camel (105:07)

We know that they can only afford 600 bucks a month for rent.

Caller Male (105:11)

I grew up, like, just knowing, like, how they were struggling financially.

Jade (105:16)

And what do you attribute that to? Is it just lack of financial literacy? They. Or they never secured careers? Like, where. What's happening there? Because what I'm seeing is something that seems like it's gone on for quite some time. And I'm just worried that, you know, if you. If you want to put this on your plate and say, this is just something I'm willing to fund, that's your bag, and you're allowed to do that. What I would not do is continue to take on more debt in order to fund that. I think that this is a cart that you've hitched yourself to, and you

George Camel (105:47)

need to get out of mortgage. You need to Refinance on your own. And if you can't qualify, that tells me you guys need to go somewhere you can afford and get them off here. They might need to go to senior HUD housing and that's the reality of the situation. If you can't have them living with you guys,

BetterHelp Ad (106:19)

Hey, summer's rolling in soon. Vacations, camps, all the fun. And if you're already thinking, man, I hope I can afford all this, you can enter right now for a chance to win 10, $10,000 in the Ramsay May cash giveaway. $10,000 that's breathing room. You can fix the car. Say yes to plans, stick to your budget without stress. We're giving away one $10,000 grand prize and weekly $500 prizes. No purchase necessary. Go to ramseysolutions.com giveaway.

Jade (107:03)

So buying or selling your home is a big deal. In case you were wondering and you want an expert in your corner fighting for you to find the best deal for the right price. The Ramsey trusted program is the only way to find a top agent that you can trust who will help make your home a blessing and not a burden. It's easy. Just compare agent profiles, interview them and choose the right one to work. Work with. Find a local Ramsey trusted real estate pro for free@ramseysolutions.com agent or click the link in the description if you are listening on YouTube or podcast. Alrighty then. Jake is in Boston, Massachusetts again. What's going on? Jake? Jake, are you there?

George Camel (107:46)

We lost him. All right, so close.

Jade (107:48)

We can go to someone else. We can go to Tom in Hartford. Connect, Connecticut. Tom, are you there?

Caller Male (107:54)

Hey, how are you doing?

Jade (107:55)

Good. How can we help today?

Caller Male (107:57)

Good, good. So just for context, I'm not sure how much you guys know. A little bit while back about four months ago I decided to exit my previous business. That year we did about 500,000 in total revenue. The reason why I left was just a partnership dynamic primarily for autonomy, control, independence and really just alignment issues. Looking back, I'm about four months into my new endeavor and you know, I'm in a cleaning space now like house cleaning and I'm feeling a good amount of regret and kind of did I make the right choice? Did I not make the right choice and kind of just unsure about things. Looking back at my previous business and they're on track to do, you know, really really well this year. So going to get some guidance and your guys thoughts.

Jade (108:40)

I mean can you go back? Is it something that you could go back to if you wanted to or are we just Crying over spill milk.

Caller Male (108:45)

Yes. Yeah. I mean it's, it might be considered crying over spilled milk. I think that's one of the things that I'm trying to understand. But the biggest is I could go back because they're, they're my current. One of them was just like really one of my best friends and then other business partner was my cousin too, so. And it was just like one of those kind of like missionary businesses, you know, that like I just love to my core and I think with the contrast of my current business, I'm just kind of seeing things, you know, hindsight now.

Jade (109:15)

Why did you, what, what you explained a little bit about why you left, but what was really the straw that broke the camel's back give us a clear example of what was happening.

Caller Male (109:23)

Yeah, absolutely. So I mean there's seasons in the business you're going. Once you're going to lead. From my perspective, with the new season of the business, you start to pick up new responsibilities and you kind of transition into new roles. And so as we started to transition into new roles, I looked at where I was heading and then where my other business partners were heading and they were taking on more ownership responsibilities and I was taking on more employee responsibilities. And so in the long scheme and the long scheme of things, I was like in my mind at that time, like we had that conversation, I was like, oh, heard I'm just going to be an employee for the rest of the time here. Like that's not what I want, want. And so, you know, looking, looking back on things now, that was the primary reason why I left. And of course there's like a whole bunch of other details.

Jade (110:06)

Do you feel like you got too hot headed about it? Like were you too emotional about it? Is that.

Caller Male (110:10)

No, I made that decision. Yeah. Like we, but like eight months before that I started to kind of have the thoughts of like understanding that leaving could be a possibility just kind of based on the trajectory of things. And I started to commit like to be unacceptable with that. And when it, when it became like crystal clear that like most likely my future responsibilities in the business would have just been a employee, it was very clear to me and I was like, okay, yeah, I feel very neutral about it.

George Camel (110:37)

If you go back tomorrow, you're not going to become an owner all of a sudden.

Caller Male (110:42)

Exactly, exactly. So I guess it's, I guess it's more.

George Camel (110:46)

So are you going back for money at that point? Of just like it's more sustainable and I enjoy the work.

Caller Male (110:51)

Yeah. Because I think the mistake that I Made. And I think David Ramsey was just in thinking about it a lot in my mind was I kind of left without a financial plan, like I left without. I'm very lucky. Like I'm in a spot where I don't have any debt, I don't have any, like a good amount of savings. I'm getting an exit paycheck from the business for the equity that I did. I'm not in a bad spot.

George Camel (111:12)

So you'll go back with no equity because you already got it.

Caller Male (111:15)

Yeah, yeah.

Jade (111:16)

How much was the equity?

Caller Male (111:18)

Equity was 50%.

Jade (111:20)

So you got 250. 250,000.

Caller Male (111:23)

No, no, no, no. So yeah, with how we base it, the equity exit was. The whole exit is going to be about 50,000, like payout wise. And then I have, I have savings too that I currently have.

Jade (111:34)

And so I just want to make sure I have this straight in my mind. So the reason you would go back is you miss the work and it would be the employee stuff that you did not want to do before. Now you've decided the thing I did not want to do before, I actually now miss it. Those exact tasks. And I would like to go back and do those exact tasks.

Caller Male (111:53)

You know, I think it's. I think I made a mistake, right? And I think in. When I first made the decision, I wanted ownership responsibilities. But now looking at it in hindsight, like I understand how hard it is to make it in business. Right. Like before I had another person to rely on and another person to cope with and it was so much different, you know.

George Camel (112:12)

And so you're willing to go back

Jade (112:13)

as an employee, not as an owner. You don't want to buy in anymore, you just want to be an employee.

Caller Male (112:17)

No, I think I triple. Like. No, I do. I would want to go back as an owner. So it's like, it is different.

Jade (112:22)

Why wouldn't you just start your own business in that same area like you've done it before? Why wouldn't, why wouldn't you do it again?

George Camel (112:30)

Because what kind of business is this?

Caller Male (112:33)

It was a sports videography business.

George Camel (112:35)

Okay, so if you started your own business today, what would you do left to your own devices?

Caller Male (112:41)

So I would buy a camera and then I would start filming free social media content for a sports team.

George Camel (112:45)

No, I'm saying. So you'd want to go into sports videography if you could choose any job in the world today or anything, any business.

Caller Male (112:52)

I. So I, I did start another business after that. I started a house. Clean.

George Camel (112:56)

Yeah, but you don't like that. So I'M saying, what do you actually want to do versus well, you're like, going back to your ex because it's comfortable. And I'm like, well, the same reasons you left your ex are the same reasons. Not going to work. You're going to go back. You're going to become resentful as you see them grow the business while your income doesn't grow along with it, while you're dealing with employees, which is not your passion, according to what you told us earlier. So I'm just worried we're going to make the same mistake twice.

Jade (113:18)

Was it a. Was it a friendly exit or was it drama filled?

Caller Male (113:21)

Yeah, yeah, we're. We're totally good. Yeah, like, we're good. Obviously, you know, it's like, you know, serious conversations, but now we're. We're totally good.

Jade (113:28)

How old are you?

Caller Male (113:30)

I'm 25.

Jade (113:31)

Okay. And I just want to play this out. So it sounds. I feel like you're telling me kind of two stories, and I just. It might just be because we're talking and it's just a short period of time, but on the one hand, it kind of sounds like I made a rash decision, I made a bad choice and I want to go to back. Back on it, which we've all made mistakes. We've said things. We. You know, we've all done that, so I can understand that. But then another side of you makes it seem like, no, I. I really put thought into this. This was a long time coming and I finally just pulled the trigger. So.

Caller Male (114:03)

Yeah.

Jade (114:03)

Tell me, which one is it? Was it something that you really spent a long. A lot of time thinking about and you finally pulled the trigger, or was it something that you feel like you had a rash of emotion and you. You kind of spoke too soon and now you regret it? Which one is it?

Caller Male (114:17)

Yeah, so, I mean, I don't. I don't think it's like a. I think it's a mixture of things. I don't know if that answers it correctly.

Jade (114:23)

It doesn't. And I. And that's what I want to get to. I think you have to. I don't think you have clarity, and I don't think you can do anything until you have clarity. I think right now, and this is again, Tom, we've only chatted a few minutes, but it sounds like you went away from this job in whatever capacity. You started your own thing. And it looks like you're looking back like a pillar of salt, and you're seeing things over there popping off and doing really Great. And you're feeling remorse because your current thing has not grown to scale yet. And that's okay. What I don't want you to go is look back at the thing that you said. Nah, that's not for me. And just because it's doing well and doing amazing, suddenly you're questioning. Let me tell you a story. I played college volleyball and I played for two years. Years. And it wasn't. It was a toxic situation for me. And it was time. It was time for me to stop playing. And so the next year, when I was invited back to the team, I said, no, thank you. I'm not going to come back. That year, they won championships and did really amazing. The two years I played, we had two losing seasons. For a moment, I was like, dang it. Like, this is a regret. I made a bad choice, but I made the choice I needed to make for me because I was pursuing music and it was the right choice for me. For me. Even though they were doing amazing. Even though. Do you see what I'm saying? Just because somebody else is doing great doesn't mean you did the wrong choice. And I just think you need to. I'm not saying we're the same, but I am saying there's no.

Caller Male (115:48)

I get it.

Jade (115:48)

Do you know what I mean?

Caller Male (115:49)

Yeah, absolutely. Absolutely.

Jade (115:51)

I don't think you have clarity either way. I just think that you're seeing fruit in each place and you're like, dang it, I want to.

George Camel (115:58)

We can help with the clarity part, Tom. If you hang on the line, we'll send you the get clear career set investment. And that will really show you where your talent is, where your passion is, where the mission that you want to see impact in. All that's going to help you get clarity. And it may be, man, I really just want to. I want to be the boss. That's really the heart of it. No matter what the thing is or it might be sports. And now you go work for someone else doing something, making more with a bigger ceiling. I just don't want you to jump back to the old comfortable thing just because you thought the grass was greener on the other side.

Jade (116:29)

Yeah, this is tough. This is tough.

Sponsor Ad (DeleteMe, CHM, etc.) (116:56)

Hey, guys. Rachel Cruze here. And I love summer. There is more fun on the calendar, more time with your people and way more chances to make memories. But you know what else? There's more of spending. Oh, between the extra groceries and gas and camp fees and family trips, it all starts to add up so fast. And before you know it, money stress starts to steal the fun out of everything. And that is why I love the EveryDollar Button Budget app. Because it helps you plan your money, track your spending and find more margin in your budget so that you can put extra cash towards the goals that matter most. Enjoy your summer without the money stress. Download the EveryDollar app in the App Store or Google Play and start for free today.

Jade (117:52)

Our Ramsey show scripture and quote of the day, Proverbs 18:15 says, the heart of discerning, the heart of discerning acquires knowledge for the ears of the wise. Seek it out. Thomas Sowell said, you don't have to listen to anybody. You can learn everything from your own personal experience. Of course, you will be at least 50 years old by that time. By the time you know what you need to know at 25. Oh, that's deep, Thomas.

George Camel (118:18)

Okay, so it was a negative cell.

Jade (118:19)

It's a negative self.

George Camel (118:20)

It was the tone of, yeah, sure, you don't have to listen to anybody. You could learn on your own in 50 years or you could get wisdom from other people and learn in half the time. Yeah, learn at 25. That's good, Thomas.

Jade (118:30)

I think you could have said that in a cleaner way.

George Camel (118:32)

Well, you know, it's old timey. It's old time to make things more complex.

Jade (118:35)

I know I had to really turn my brain on.

George Camel (118:37)

Go to Mark Twain if you want simple. You want brevity.

Jade (118:39)

That's true. Jake is in Boston, Massachusetts. Jake, you're back. How can we help?

George Camel (118:45)

I am back.

Caller Male (118:46)

Sorry about that.

Jade (118:47)

That's all right.

Caller Male (118:48)

I found you guys recently on social media, so figured I would reach out, I guess. Let me give you some background information before I ask the question that might be helpful.

Jade (118:57)

Sure.

Caller Male (118:58)

So I got 170k in debt. 150 of that is student loans. 20 of it is for my truck. I got 150k saved right now just literally sitting in a bank account doing nothing. And I guess my overarching question is, should I pay off my loans? Call it in one check or over the next few months or so or over the course of a few years, make the minimum payments and really don't even worry about it, really. Just looking for some guidance at the minimum.

Jade (119:33)

I missed what you said you have saved. How much did you say you have saved?

Caller Male (119:37)

150. Cool.

Jade (119:39)

Okay. So the whole amount of the student loans.

Caller Male (119:44)

No, I mean a little bit less.

Jade (119:48)

You tell me what you think the benefit would be to kind of piddling this out and just making minimum payments. Tell me what you think the Good part of that is that way it'll help me craft my answer for you.

Caller Male (120:02)

Sure. I think mainly just being able to keep building the nest egg eventually, you know, buy a home, hopefully soon. And look, I know it's bad to let debt pile up, but you know, I'm 25. I feel like I'm doing all right. The career is on a good track.

George Camel (120:21)

What do you do?

Caller Male (120:23)

I work in sales for, you know, in the fintech space.

George Camel (120:27)

Oh, nice. So how much are you making a year now?

Caller Male (120:30)

I made 220 last year. I should land around like 250 this year if I have all my quotas and everything.

George Camel (120:36)

Way to go. So let's just play out the scenario where you have 150 saved, you knock out your student loans and you got the truck left, you knock that out in a maybe two, three months. Is that realistic?

Caller Male (120:49)

Exactly. Yeah, yeah, that could be a realistic thing.

George Camel (120:51)

Now look where you are. You freed up all of those payments, which if you added up all of the payments for the student loans and the truck. Where are we at per month?

Caller Male (120:58)

Month, Close to like two grand. Call it.

George Camel (121:03)

Okay, so now we freed up two grand on top of our amazing income and we have no debt. Now we can stack up savings real quick for an emergency fund and then be investing 15% of our income.

Jade (121:15)

Yeah, which is pretty wild when I look at that.

George Camel (121:18)

So if you're talking about wealth building a nest egg, your best path is to get out of debt as fast as you can to free up your income, which is your greatest wealth building tool, to then invest from 25 to 65. 40 years of compound growth, making what you're making even at 15% put away, you're going to be a multi, multi, multi, multi millionaire. Nothing else.

Jade (121:36)

I just did some fun math because I love to see the number. I mean you're 25 today. If we did this till 59 and a half, which is when you're likely going to want to get at some of that money. I'm assuming you have zero in, in investments now, but I, I, I have a feeling that's not true. But if you just started putting 15% away, away, that's $15 million at age

George Camel (121:56)

60, 30 million at 66 or 67.

Caller Male (122:03)

Yeah, that's really good.

Jade (122:04)

That's what happens when you have the full power of your, your income. And that's assuming, I mean that's assuming you'll never get a raise. That's assuming you're not, you know what I'm saying, ever investing above 15%, which I'm sure that you will. So all of that to say that I think this is a pretty.

George Camel (122:19)

And then the other side of this is we don't know what life's going to throw at you. You're going to get married, you're going to have a kid. Will it be a job loss, a health scare? And so we're, you're sort of assuming that yeah, I can float these payments just fine. I make great money. You're very successful, especially at your age. And so yeah, you could out earn your stupidity for a while and just hang on to debt. Get more debt if you want, get a bigger truck, nicer car. That's the American way. And we're telling you to swim upstream, do the weird thing which is take that giant chunk of money and pay off the debt and then free up that income for the rest of your life.

Caller Male (122:52)

I think for me it's like, you know, I've saved this over the course of, you know, three, four years and then I would have zero one day, you know, when you wake up. So that, that, well, you have zero.

Jade (123:02)

Now. Let's, let's do real on the balance

George Camel (123:04)

sheet, if you're running a business, you would find that you are in the hole.

Jade (123:07)

Yeah, you're 20,000 in the hole right now. You don't have 150,000.

George Camel (123:12)

Yeah, right. It's assets minus liabilities, what you own minus what you owe. That's your net. And I want to see your net worth as the scoreboard and not what's in a savings account while the interest piles up. Now if you want to give the Navient people some new furniture in their office building, let the executive team take a nice vacation, you can be a part of that if you want to support it. I'd rather see you build wealth instead though.

Jade (123:33)

I think you'll do the right thing with that, Jake. The hard part with money is when you decide I'm going to start doing the math, then you got to start doing the math for better or for worse. Not to say that money is just math. There's more to it. There's the behavior, there's the numbers and there's the emotion. And what Jake is getting at is the emotion of I work so hard,

George Camel (123:51)

feel you're right and you work too hard to have 150 grand sitting around.

Jade (123:55)

Yeah, that's right. And it's going to feel different when you wake up in the morning. And that number that you're used to seeing sitting in your ally or sitting in your fair winds account Is not there.

George Camel (124:03)

You're going to be like, but you're talking 18 months. He could save that back up if he had no payments.

Jade (124:08)

That's right.

George Camel (124:09)

As a single 25 year old.

Jade (124:10)

But what it is, what it's forcing him to do is feel the work weight of his actual debt. As long as that 150,000 is sitting in savings, he doesn't really feel the weight of it. But once he transfers that over and actually pays it off, he's going to go, oh, that was a lot of debt. I did need to get rid of that. And I think that that's a very mature thing to do. A very mature thing to do. To let yourself feel it, if you will. All right, George, do you think we can get to Parker?

George Camel (124:38)

Let's get the park.

Jade (124:38)

Let's do it. All right, Parker on line three. We're up against the clock, my guys, so let us have it.

Caller Male (124:43)

Yes, sir. So me and my wife are now transitioning to single income. She's going to nursing school soon. We have about $11,900 in debt, which is just my car and a credit card. We paid off her car, a credit card, and some of my miscellaneous debt prior to going to single income. And we have around $11,000 in the savings. Trying to figure out how to navigate that debt sooner than later and before she finishes nursing school.

George Camel (125:17)

What's stopping you from just knocking it out? I mean, next month you'll have enough saved up that you could knock out the debt and still have a thousand, two thousand bucks left over, right?

Caller Male (125:26)

Yes. So, I mean, the minimum payment on the card, which I owe 1500 on, is about $40, but it's at 24% interest. And why does the minimum payment Hundred. Well, yeah, correct.

Jade (125:45)

I mean, to your point, it's a super high interest rate. You need to knock that thing out, get it out of your life. Right.

George Camel (125:50)

They'd make the minimum payment a dollar if they could let all the money just pile up in interest.

Caller Male (125:55)

Correct.

George Camel (125:56)

So I would just go, man, if you want to be free and you want to be able to survive on single income, having less payments in your life is better. Would you agree?

Caller Male (126:03)

Yes, sir.

George Camel (126:04)

And you can build up that savings. Savings. How quickly. How much could you put away if you didn't have any of these payments in your life? Plus the margin you have currently with your income, if we.

Caller Male (126:15)

If we probably around like 1500amonth, probably a little bit more.

George Camel (126:24)

Great. So now doing the math, we're going, okay, talking six months, seven months,

Caller Female (126:31)

and

George Camel (126:31)

you're back to where. Where you are, but with no debt. And if you just keep it that way, you'll be able to survive off this income. What is your. What is your income now? As a house?

Caller Male (126:41)

So I make around 60. I'm in the military, so it's around 60.

George Camel (126:49)

Okay, great. So now we can do a budget based on our 60 grand with no payments and make the sacrifices needed so that she can go to nursing school and you can cash flow it. That's a really important part of this. Yeah, it's making sure. Sure we're not going further into debt while trying to pay debt off. That's whack a mole.

Jade (127:04)

Yeah. And. And the thing I want you to just remember, Parker, is wealthy people ask how much. Poor people ask how much per month, and that goes both ways. So if you're so focused on, oh, the monthly payment's only $40. I can do that. You need to be focused on the entire balance of the debt. That's when, again, you feel the weight of it and you feel the need to pay it off, because you do. All right, George, we had a great time hosting. Thanks for hanging out with us, guys. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the prince of peace, Christ Jesus.