Getting Your House In Order Is The First Step To Financial Success

Summary

The Ramsey Show: Getting Your House In Order Is The First Step To Financial Success

Release Date: February 4, 2025

In this insightful episode of The Ramsey Show, hosted by Ken Coleman and George Campbell, the hosts delve deep into the foundational steps necessary for achieving financial success. The episode centers around the theme, "Getting Your House In Order Is The First Step To Financial Success," emphasizing the importance of managing personal finances, addressing debt, and making informed investment decisions. Throughout the show, Ken and George engage with callers facing various financial challenges, offering practical advice aligned with Dave Ramsey's principles.

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1. Randall's Alaskan Car Accident and Insurance Dilemma

Timestamp: 00:14 - 06:01

The episode kicks off with Randall from Homer, Alaska, sharing a harrowing experience: "I just wrecked my father-in-law's car by hitting a moose up here" [00:50]. Randall explains that moose collisions are a regular occurrence in his area, even noting a roadside sign that tracks such incidents. After the accident, Randall breaks the moose's leg, leading authorities to euthanize it—highlighting the harsh realities of living in Alaska's wilderness.

The crux of Randall's issue revolves around insurance complications. He mentions, "the insurance came back with a $10,000 payout. It's a lot higher than expected. But I don't know who that money should go to" [02:27]. Randall holds the car title and maintains the insurance, leading to confusion over rightful ownership of the insurance payout. Ken points out the legal complexities: "Legally it's your car now" [03:37], emphasizing that Randall is responsible for the payout even though the vehicle belonged to his father-in-law.

Key Insights:

• Importance of clear agreements when managing family assets.
• Legal responsibilities tied to asset ownership.
• Potential for strained relationships due to financial misunderstandings.

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2. Randall's Parents' Foreclosure and Financial Responsibility

Timestamp: 12:32 - 19:36

In a subsequent call, Randall addresses the impending foreclosure of his parents' house. He contemplates buying out their mortgage to provide stability: "One, it's a decent investment opportunity and second off, I think it would be easier twofold" [13:19]. Despite having significant savings and no major debts, Randall's father-in-law disputes the arrangement, asserting ownership despite the title being in Randall's name.

George Campbell raises concerns about the long-term implications: "He's going to buy you a car that you're going to have to maintain and own" [05:28]. The discussion underscores the risks of mixing family relationships with financial agreements, highlighting potential for future entitlements and resentment.

Advice Offered:

• Consider personal relationships and potential conflicts before making financial decisions involving family.
• Explore legal avenues to clarify ownership and financial responsibilities.
• Weigh the benefits of maintaining family harmony against financial obligations.

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3. Chris's Inheritance and Debt Management

Timestamp: 20:45 - 27:08

Chris from Richmond, Virginia, calls in about receiving a substantial inheritance totaling approximately $1.2 million from property sales. With minimal debt and a healthy annual income, Chris seeks guidance on whether to pay off his remaining mortgage or invest the money for future growth.

George advises a balanced approach: "The first order of business is take a deep breath... store that money in a high yield savings account" [22:19]. Ken emphasizes the importance of a long-term investment strategy, suggesting diversification and ensuring retirement funds are adequately funded.

Key Recommendations:

• Pause and assess financial decisions before making significant changes.
• Prioritize debt repayment for peace of mind and financial stability.
• Consult with financial advisors to optimize investment strategies and retirement planning.

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4. Kristen's Rental Portfolio vs. Stock Investments

Timestamp: 52:54 - 59:00

Kristen from Billings, Montana, presents a scenario where she has a significant rental property portfolio worth approximately $5 million with outstanding mortgages totaling $420,000. She faces a disagreement with her husband over whether to cash out her $506,000 stock portfolio to pay off the mortgages early.

George Campbell highlights the importance of evaluating the entire financial picture: "With a $5 million portfolio, cashing out might not be necessary" [55:38]. Ken concurs, pointing out the substantial equity in real estate and the potential for continued growth. The discussion pivots to finding a middle ground, suggesting incremental mortgage payoffs while maintaining investments.

Advice Offered:

• Assess total net worth and not just individual assets when making financial decisions.
• Consider the benefits of reducing debt versus maintaining diversified investments.
• Explore strategies like partial payoffs to balance financial security with investment growth.

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5. Michaela's Divorce, Child Support, and Loan Issues

Timestamp: 43:09 - 50:37

Michaela from Raleigh, North Carolina, shares her struggles with an ex-husband who battles alcoholism and fails to fulfill child support obligations. She describes the complications arising from a joint truck loan and the ex-husband's reluctance to refinance or settle the debt.

George emphasizes setting strong boundaries: "You need to be a great dad to your daughter, but you also need to protect your financial future" [47:31]. Ken advises legal action to enforce the child support decree and address the truck loan, ensuring Michaela is not financially tethered to her ex-husband.

Key Takeaways:

• The importance of legal enforcement for child support and shared debts.
• Setting boundaries to prevent financial mismanagement by ex-partners.
• Prioritizing the well-being and financial stability of oneself and one's children.

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6. Joseph's Physical Therapy Career and Debt Management

Timestamp: 69:05 - 84:20

Joseph from Dallas, Texas, discusses his dissatisfaction with his current salary as a physical therapist. Despite expectations of earning $85,000, he currently makes $73,000 due to lower patient volumes. With substantial student loan debt totaling $247,000, Joseph seeks advice on whether to stay in his position or seek higher-paying opportunities.

George and Ken advocate for aggressively tackling debt by seeking higher income avenues: "You need to be making six figures in order to pay this off" [72:25]. They suggest leveraging relationships, finding better-paying jobs, and possibly engaging in side hustles to accelerate debt repayment.

Recommendations:

• Pursue higher-paying job opportunities to increase income.
• Utilize debt snowball methods to systematically eliminate debts.
• Consider additional income streams to boost repayment efforts and reduce financial strain.

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7. Levi's Graduate School Finances and Upcoming Child

Timestamp: 77:29 - 84:20

Levi from Las Vegas, Nevada, and his wife are preparing to enter graduate school while expecting their first child. With anticipated expenses of $100,000 and a reduction in income due to Levi leaving his job, they seek guidance on managing finances during this transition.

George and Ken advise reassessing their plans to ensure financial stability. George suggests possibly delaying one of the graduate programs to maintain income streams, while Ken emphasizes prioritizing the baby's care over immediate career advancements.

Key Insights:

• Importance of maintaining income during significant life changes.
• Balancing educational aspirations with financial responsibilities.
• Prioritizing family needs to ensure long-term financial and personal well-being.

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8. Nerdy Segment: Understanding Mortgage Refinancing

Timestamp: 64:35 - 69:00

In the "Nerdy Talk" segment, George Campbell breaks down the complexities of mortgage refinancing. He explains that refinancing involves replacing an existing mortgage with a new one to achieve benefits such as lower interest rates, reduced loan terms, eliminating PMI, or switching from an adjustable to a fixed-rate mortgage.

George outlines six essential steps for refinancing:

1. Crunch the Numbers: Ensure refinancing will save more money than it costs.
2. Shop Around: Compare interest rates from various lenders.
3. Choose a Lender: Select a reputable lender and inquire about closing costs and fees.
4. Lock in the Rate: Secure the new mortgage rate.
5. Underwriting Process: Complete the necessary financial evaluations.
6. Close on the New Mortgage: Finalize the refinancing.

Notable Quote: "Refinancing is only a good idea if you plan to stay put long enough to save money." [68:12]

Advice Offered:

• Carefully evaluate the financial benefits versus the costs of refinancing.
• Stay informed about mortgage terms and conditions to make educated decisions.
• Utilize trusted financial resources and advisors to guide the process.

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Conclusion and Final Thoughts

Throughout the episode, Ken Coleman and George Campbell provide actionable advice tailored to each caller's unique financial situation. The overarching message emphasizes the necessity of getting one's financial house in order—managing debt, making informed investment choices, and ensuring financial stability before pursuing further investments or life changes.

Key Takeaways:

• Clear communication and legal agreements are crucial in managing family and financial relationships.
• Prioritizing debt repayment can lead to long-term financial freedom and stability.
• Diversifying investments while managing debt ensures a balanced approach to wealth building.
• Seeking professional advice and utilizing trusted financial resources can significantly impact financial success.

By addressing real-life financial dilemmas and offering practical solutions, this episode reinforces the importance of foundational financial management as the first step towards lasting financial success.

Transcript

[Randall]

Foreign.

[Ken Coleman]

This is the Ramsey show where we help you win in your life. Specifically win with your money, win in your profession, and win with your relationships. Excited to be with my pal, George Campbell. I'm Ken Coleman, and we're here for you today, America. The phone number is, I.S.R.I. 882-55-2225. Triple 882-55-2225. Let's start it off with Randall in Homer, Alaska. And Randall, we're here for you today. What's going on?

[Randall]

Hey, Ken. Hey, George. Thanks for taking my call.

[Ken Coleman]

What's up?

[Randall]

Yeah, so unfortunately, I just wrecked. Wrecked my father in law's car by hitting a moose up here.

[Ken Coleman]

Oh, no. So much going on in that sentence.

[George Campbell]

Is that like a Tuesday in Alaska? Like, how often does this happen?

[Randall]

We literally have a sign on the side of the road that has a number counter saying how many times the moose has been hit.

[Ken Coleman]

Right.

[Randall]

Wow. You know, I. I have added a number to that.

[Ken Coleman]

Okay. And did you kill the moose?

[Randall]

I broke its leg. And then the cops had to come, you know, put it down. Unfortunately, that's how it goes up here.

[Ken Coleman]

Terrible. All right.

[Randall]

It's the last frontier, that's for sure.

[Ken Coleman]

Hey, I got to tell you, George, you may not know this about me, but back when I was in my early 20s, I worked on a senate race in Alaska and spent a summer campaigning in Alaska.

[George Campbell]

I did not know that.

[Ken Coleman]

And so you would see moose at nighttime just chewing on people's trees in their front yard like we see deer.

[George Campbell]

Are they a real nuisance over there, Randall?

[Ken Coleman]

Oh, yeah, they.

[Randall]

They really are. Actually, I had. I had four of them in my front yard the other day, and somebody else hit one of them and totaled their car. So it happens on a regular occurrence.

[Ken Coleman]

Well, we're very sorry about that. And I gotta tell you. Does the father in law know yet? Are we the first?

[Randall]

Yes.

[Ken Coleman]

Boy, he.

[Randall]

He knows, he knows. But it's insurance that's making things tricky.

[Ken Coleman]

So tell me about this. What's happened?

[George Campbell]

What's the deal with insurance?

[Randall]

This isn't the first car I total of his, but it was his car that he owned. I know. I'm a terrible son in law.

[Ken Coleman]

Maybe you should stop driving his cars.

[George Campbell]

Let's start with a common denominator here. I'm not even blaming the moose anymore.

[Randall]

I think you guys might be right. But this instance, it was a little tricky because two years ago he bought the car because he was gonna come up and visit me, the wife and the kids. And he used it for two weeks, and he hasn't been back in the last two years. And so he told us we could drive the car as long as I maintain it and I, you know, pay insurance on it.

[Ken Coleman]

All right.

[Randall]

But we, we put the car, entitled it under my name and registered it in my name because I'm up here in the state and if, if anything were to happen, I were to handle it. And so I have this insurance policy, and I expected this clunky $3,500 car to only get like a $3,000 payout. But for whatever reason, the insurance came back with a $10,000 payout. It's a lot higher than expected. But I don't know who that money should go to. I kind of want the money, but it's kind of my father in law's car. But at the same time, I'm the title holder and I'm the insurance policy.

[Ken Coleman]

Holder, which makes you. Yeah, you. This is sticky, but I mean, legally it's your car.

[Randall]

That's what.

[Ken Coleman]

Because he signed the title of it.

[George Campbell]

What was the agreement when you guys made this? Was it, hey, I'm going to pay you this much money eventually?

[Ken Coleman]

Or what it was.

[Randall]

If I pay the insurance and maintain the vehicle, I can drive it. And then we just kind of laughed and went on with our way. We didn't really communicate it about it.

[Ken Coleman]

Well, wait a second. At some point he had to sign the title over to you?

[Randall]

Well, when he bought the vehicle, he never signed it over into his name. We just went to the DMV and signed it into my name.

[George Campbell]

He paid for it in full?

[Randall]

Yes.

[George Campbell]

What did he pay for it?

[Randall]

3,500 bucks.

[George Campbell]

Okay.

[Ken Coleman]

All right. So what's the conversation been with him now? Because I appreciate all this detail.

[George Campbell]

Was this alone? Was it? Did he say, hey, I'm going to need this money back, but you're going to pay the insurance? It'll be in your name?

[Ken Coleman]

No, it was just a.

[George Campbell]

Essentially a gift.

[Randall]

Unfortunately, he's not much of a communicator. He never said that it was ours and it was a gift, but he said we can use it. We've used it like it's ours, and we've used it for two years and he's used it for two weeks.

[Ken Coleman]

Yeah, but what is he saying now? We've established how this all happened. What is he saying now?

[Randall]

Yeah, now he is saying that he's the owner of the vehicle and if I wanted a payout, then I should have bought the vehicle. But that's actually the scenario. I tried posing to him is let Me just buy the vehicle from you right now. And this was before I knew what the insurance payout was. Let me just buy it from you and make it.

[George Campbell]

He is not entitled to the payout. If you want to give him the 3500 bucks that he put into it, that's fine and let that be off your conscience. But I'm not going to give him a check for 10 grand while you're out of the car. You're going to be back in the situation again. He's going to buy you a car that you're going to have to maintain and own. Yet he has these weird purse strings attached. I don't like this.

[Randall]

Let me, let me ruffle your feathers some more, George. He started contacting. He started contacting the insurance agencies so that he could get updates and try to get the total amount disclosed to him behind my back. And he's the type that will, you know, cut off ties.

[George Campbell]

Don't they have to like, verify identity? How does he even have access to talk to your insurance folks?

[Randall]

I'm. I'm not 100% sure, but the insurance has been sending him emails and, you know, discussing this policy with him. So I don't even know if this is kosher.

[Ken Coleman]

Well, first of all, this is a. All right, this is a relationship mess right and there. But I got to tell you, I'm very excited. George is ruffled. I'm fired up. And I'll tell you why. I always wanted to be one of those judges on tv, you know what I mean? When people come in and it's Judge Ken, and this is a Judge Ken kind of dream scenario to try to figure out because you've got on one hand, George, the father in law does buy the car with his money in. And I'm going to make this up. And in natural law, that's his car, but.

[Randall]

Correct.

[Ken Coleman]

He goes to the DMV and he let's literally lets Randall sign the title as though it's his. So legally, under the real law, it's Randall's car now father in law wants the money. He sees a little windfall. This is my car. I'm letting you take care of it. He was the best of both worlds. I'm a good father in law. I got my daughter, sweet daughter. It's like you buying a car for me as loser husband down the road.

[George Campbell]

Oh, gosh, I don't want to think about that.

[Ken Coleman]

But Randall, you aren't a loser at all. I don't think. Just kidding, Randall. So, so now you've Got the situation where he does his favor for you guys but he wants you to handle the insurance. Now he wants the money. This is manipulative in every sense of the word. And Randall, this is a problem. But I'm bringing all this up and kind of laying it out here because you have one response. This is not your car. Legally you let me use it. He's going to say, yeah, but you know what? I did and I bought it and blah blah, blah, blah, blah. And so you're going to have to come down to not what is right in the grand sense of the word, but what is right for your relationship going forward, unfortunately. And I think there's got to be a meeting in the middle, George, in order to make Thanksgiving.

[George Campbell]

That's where I think the compromise is. I'm going to give him the money he paid in that gets him out of this. Don't care what he feels like he's deserved. I agree. That's what I would do. Randall, how's your wife going to be ugly? What does Randall's wife think about this, Rand?

[Ken Coleman]

What is your wife talk to him?

[Randall]

She. She's too much like her father. And I told her she's not allowed to talk to her parents right now until I figure it out because she might make the situation worse.

[Ken Coleman]

You told her she's not allowed to talk to her parents?

[George Campbell]

Yeah.

[Ken Coleman]

This is a soap opera until we figure it out. No, you don't tell your wife she's not allowed to talk to her parents.

[Randall]

Well, I meant, I meant about the, about the situation. I'm not going to refuse her from FaceTiming with Grandma.

[Ken Coleman]

Well, that's kind of you kind.

[George Campbell]

We said our piece.

[Ken Coleman]

This is the Ramsey show.

[George Campbell]

You know, one of the first things.

[Randall]

I discovered working in the financial world.

[Ken Coleman]

Is how absolutely devastating it is when.

[George Campbell]

The breadwinner of a family dies and.

[Ken Coleman]

There'S too little life insurance or none at all.

[George Campbell]

Grieving families are suddenly left behind, scrambling to pay bills and trying to make ends meet.

[Ken Coleman]

I also discovered that there are a lot of rip offs in the life.

[Randall]

Insurance world like that whole life crap.

[George Campbell]

Posing as an investment opportunity.

[Ken Coleman]

What you need is level term life.

[Randall]

Insurance, usually 10 to 12 times your.

[George Campbell]

Income, which is the smartest, most affordable.

[Ken Coleman]

Way to protect your family.

[George Campbell]

The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company.

[Ken Coleman]

This is exactly what my friend Jeff.

[Randall]

Zander and his team at Zander Insurance are all about.

[George Campbell]

They shop the term life companies to.

[Ken Coleman]

Find you the best options and they've been around for over 95 years, so you know they'll be there when you need them.

[Randall]

Zander is the real deal, and that's.

[George Campbell]

Why they've handled all my personal insurance for over 25 years.

[Randall]

I trust them and you can, too.

[George Campbell]

Visit Zander.com for instant online quotes or.

[Ken Coleman]

For a more personal touch, give them.

[George Campbell]

A call at 800-356-4282.

[Ken Coleman]

Welcome back to the Ramsey show alongside George Campbell. I'm Ken Coleman and George, we were just talking about during the break. I'm very excited. Been working on a new show format for some time and it's now out. It's called Front Row Seat.

[George Campbell]

So pumped for you.

[Ken Coleman]

And this is a conversation show for those that have been around a long time. If you've been in your 30s or 40s, 50s, you'd know the show inside the actor studio. And you also know MTV Unplugged. It's got that feel.

[George Campbell]

Legendary. It's intimate.

[Ken Coleman]

Intimate. We have an audience of 12 to 15 people that surround me and a guest. And we have a deep dive conversation designed to help you get better personally, to move up professionally and to lead effectively. And so that's what the show is all about. And so we're often running on YouTube and wherever you get your podcasts so you can check it out. New episodes every Tuesday, again on YouTube. It looks fantastic. The team did such a great job. Incredible. You've seen the set. I have nothing to do with that at all.

[George Campbell]

No credit to you there. The content is also amazing. So it's, you know, front to back, soup to nuts. This thing is back to my reason.

[Ken Coleman]

When I joined Ramsey 10 years ago, I was an interview specialist and for years hosted the Entre leadership podcast before I handed it off to you.

[George Campbell]

That's why I first saw you, Ken, what, 13 years ago now?

[Ken Coleman]

Fourteen years ago at a leadership event. Yeah.

[George Campbell]

And you. I've always said Ken is the best interviewer maybe on the face of the earth. I don't know.

[Ken Coleman]

You're being a little too kind. That's too, too, too kind. But I appreciate it. But anyway, it's called Front Row Seat. Check it out on YouTube.

[George Campbell]

Some great guests you got that have already launched that are coming up.

[Ken Coleman]

Oh, we got some big, big names coming. We got. We launched with Nikki Haley, former presidential candidate.

[George Campbell]

Oh, yeah.

[Ken Coleman]

And that was interesting. Not political conversation. Don't worry. Those of you who immediately got your ackles. Oh, she did this and she said that. Look, when was the last time you sat down with somebody that you agreed with on everything. You didn't, you haven't. So we like to have conversations across the board designed again to help you get better that mean you're bringing a better version of work so you can move up. And for those that are moving up, you're going to lead at some point. So it's for professional development and growth. So check it out.

[George Campbell]

Subscribe.

[Ken Coleman]

Oh yeah, go subscribe on YouTube and podcast. Front row seat with Ken Coleman. All right, let's get to the phone. Steve is in Richmond, Virginia. My old stomping grounds. George, Steve, how can we help?

[Randall]

Hey guys, thanks for taking the phone call today.

[Ken Coleman]

Sure. What's up?

[Randall]

So found out in the last week or so that my parents house is in the process of getting foreclosed on. And my question is, should I buy the mortgage out and find out some rental agreement for them to continue living there? I just think it would be easier twofold. One, it's a decent investment opportunity and second off, I think it's an easier process as they're aging to stay in the house they've been in for 30 years almost and not worry about moving and trying to find a place and everything else. They're comfortable where they're at.

[Ken Coleman]

Well, what's going on with them financially to where their house is about to be foreclosed on?

[Randall]

So that's, that's another story I'm trying to unravel. I will say my dad has been plagued with identity fraud for the last three or four years. I mean, it's like he'll get a debit card in the mail and then within three or four days he's got, you know, charges from California and Colorado and Mexico and everything else. So something, something's weird going on. I know. You know, my sister had a boyfriend living in the house with them and then they, you know, allegedly he had hacked the system and put a virus in it. I don't know. I'm working with some specialty companies trying to figure out if that's what's happening or, I don't know, they're just not making, haven't made the best financial choices in their lives. And they're getting, you know, they're both turning 65 this year so they can start collecting Social Security, which isn't much money, but it's something.

[Ken Coleman]

George, I was already nervous, I was already nervous about you just buying a house. We would run the numbers and George will walk you through that as to, because this is like buying another house. So that's that you're going to lose.

[George Campbell]

Money on because your tenants are broke.

[Ken Coleman]

And I don't think they could pay you rent. This is a disaster waiting to happen for you. So far, the disaster has evaded you, Right?

[Randall]

So I can say I've been very blessed. You know, we. My husband and I don't have any debt other than a small auto loan that I just had to buy and wasn't part of our investment portfolio. So we would be able to pay cash for the remaining balance of the house, which is about $120,000. The house is worth about 350 to 380. It's in a decent neighborhood where I grew up.

[George Campbell]

So what price.

[Ken Coleman]

Do you have no mortgage right now, or do you. I'm trying to figure out, George, do you have a mortgage? Because you said you were blessed, and I didn't hear. Amazing blessing in the form of crazy numbers that would set you up to buy this house.

[Randall]

Oh, no, I don't. We don't have any debt except for an auto loan mortgage we had. We have another investment property that's paid off. Our annual income is about 350,000 a year.

[Ken Coleman]

Okay, now we're getting some numbers.

[George Campbell]

All right, and you're saying you could afford to pay cash for this property?

[Randall]

Yes.

[George Campbell]

And buy it before they go into foreclosure?

[Randall]

Hopefully.

[George Campbell]

What could you buy?

[Randall]

I'm not sure what stage they're at. My dad just sent me the payoff letter, and like I said, it's about 113 left on the house. And then, you know, late fees and taxes and all this other stuff they rolled into the payoffs. 120.

[George Campbell]

But they're not going to sell it to you for 120. Why would they sell a $380,000 house for 120?

[Randall]

No, actually, both of them are very on board with doing this.

[George Campbell]

They don't have money. They need the equity in the house. What are they going to do? Because now you own the house.

[Ken Coleman]

They're gonna live for free is what's gonna happen, Steve. They can't afford to pay rent.

[Randall]

They have. It's a lot, but there is.

[Ken Coleman]

Yeah, my.

[Randall]

My grandma passed away two years ago, and they got some money from her. And the issue is they maybe could pay off the house with that, but then they have nothing to pay live on. So I'm like, well, if I pay the house off, you have enough money to pay your electric bill, your insurance, and everything else, along with the.

[Ken Coleman]

For how long?

[Randall]

I mean, they should have about $80,000. So, yeah, I would hope they could live on that first Social Security and, you know, odds and ends, jobs and my dad.

[George Campbell]

Let's play this through. Let's say they continue financial misbehavior and blow through the 80 grand that you left alone. And now they're broke, living off Social Security, barely enough to feed themselves. Are you okay not taking any rent and just floating their bills for the rest of their life?

[Randall]

I'm okay with not taking any rent.

[George Campbell]

Okay. Just know that you're not going to evict your own parents if bush comes to shove. And so I would rather just not get involved and say, hey, mom and dad, let's find you a place that you can afford to rent with the money that you do have. I don't want to artificially prop up their life because that's going to turn into entitlement on one side where they just go, well, Steve is a nice guy. He's going to cover our expenses forever. And so anytime we need something, we're just going to go to Steve. It's now bank of Steve.

[Ken Coleman]

Yeah.

[George Campbell]

Or it's resentment, more financial misbehavior. You resent them, you want them out. You regret getting into this, and now you're stuck in a conundrum because now you're the landlord, Right. So when they don't take care of the house, it's on you to fix it all. And so if you're saying you're financially able to do that and willing to for your parents, I got no problem with that. Just know that what you're getting into and it's. Don't couch it as well, this is an investment. I agree.

[Randall]

Sure.

[George Campbell]

You'll get it one day.

[Ken Coleman]

That's right. And on paper, George is right, Steve, I mean, this is a good investment for you. You're a good son. But I'm afraid it is going to turn into. Because you bailed them out on this, you're going to bail them out on other stuff. The bigger issue needs to be, I'll bail. Like, if. Okay, I'll just say this, George. Steve, if I'm you, and I was wanting to do this, I wouldn't do it unless they allowed me. That's you. To get into their finances and once and for all put some type of protections in place so the fraud's not happening all the time. He's just being careless at best, if what you're describing is happening all the time. So I would at least put some protections in there for you to say, this has got to stop. I'll buy the house. It's an investment for Me, you'll live rent free until the day you die. Fine, but that's it. And on top of that, I got to know that this isn't going to happen anymore. Because I think George is right. I'm afraid bank of Steve is like. I think that's a reality. And I don't think you want that, do you?

[Randall]

No.

[George Campbell]

I'd rather you help them sell this thing and help them downsize into a place with cash. And you stay out of it and teach them how. How to manage the money they do have coming in. That's the better scenario. To help them live an independent life where they're not reaching into your perch strings.

[Ken Coleman]

This could really ruin your life.

[George Campbell]

I'll just say this. I've never seen something like this work out great for all parties involved.

[Ken Coleman]

Well, he's trying. Steve's a good person, good son. But he's trying to fix a situation he can't fix. And that's what I'm concerned about. It messes his life up. But, hey, we've spoken. Quick break. We'll be right back. This is the Ramsey Show.

[George Campbell]

Taking care of your health doesn't have to cost a fortune. That's why field of greens is in my house.

[Randall]

Field of greens is made from fruits and veggies selected by doctors to support.

[George Campbell]

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[Randall]

Fieldofgreens.Com Ramsey promo code Ramsey fieldofgreens.

[Ken Coleman]

Alongside George Camel. I'm Ken Coleman. You've joined the Ramsey show where we help you win with your money, win in your work, and win in your relationships. Triple 882-552-5888 825-5225 is the phone number. Let's go to Chris in San Francisco, California. Chris, how can we help today?

[Randall]

Yeah, hey, guys, thanks for taking my call.

[George Campbell]

I am coming into some inheritance.

[Randall]

I've already gotten some. Right now I have about $400,000. This next week, I get another about $300,000. And then there's somewhere around 500 to 700 more coming down the line. Wow. Yeah. So yay for me. But I don't really have a good plan of what to do with the money. My only debt right now is my primary residence, about 70,000 on a pretty good loan. It's only like 2.25%, so it's really not costing us a whole lot So I haven't paid that off yet, but I'm wondering one, if I should pay that off with this next round of inheritance that comes in and then kind of what else to do with the money.

[George Campbell]

All right. Who passed away?

[Randall]

Parents.

[George Campbell]

Wow. Was this recent.

[Randall]

This last year? My mom. Yeah. Thank you. It's all essentially coming from property sales, so multiple properties that'll.

[George Campbell]

Have you looked into any tax implications of the inheritance, as far as I.

[Randall]

Understand from our accountant that was helping us before my mom even passed away, that there is. We're not getting like taxed on any of. On any of it, which is very surprising to me.

[George Campbell]

But yeah, that's a good place to start there. And then, you know, the, the first order of business is take a deep breath. This is a lot of money. And we don't. We want to, you know, manage it wisely and steward it wisely. And most people, you don't. You're not the type. But most people would go, who windfall time to go get some toys, give some money, buy this, buy that. And just pausing for six months and just storing that money in a high yield savings account. Just let it sit for a little bit before you make any decisions is wise. And then filtering it through the baby steps. Your house sounds like it's next if that's your only debt remaining. And I know it's a low interest, but I don't think we're worried about interest rates at this point of our life. You're about to have so much wealth, you're going to free up a mortgage payment that you can now use to invest. And so it's going to be a wash. But the peace of mind will be totally worth getting rid of that debt, regardless of the interest rate.

[Randall]

Yeah. And we, you know, before the money.

[George Campbell]

My wife and I, we, we have.

[Randall]

A pretty good income. We're pretty comfortable. Our first house, we made like almost 300,000 on. And when we moved, we got set up pretty comfortably with only having the. Excuse me, the home loan.

[George Campbell]

So what's your current net worth?

[Randall]

Well, I guess with the house and that, somewhere over a little over a million right now. And that's again, I don't.

[George Campbell]

Next week a house closes, and that's.

[Randall]

Somewhere around 300,000 that comes in. Maybe even like 325.

[George Campbell]

Awesome. So you guys are already millionaires. So this is, you know, this is a lot of money. You're doubling your net worth overnight, essentially. And so now, now we go, okay, what does the future look like? As we want to build wealth and Leave an inheritance to our children. And what kind of life do we want to set up for ourselves? You know, what does retirement look like one day? And what kind of work do we really want to do now that money's not an issue. And so there's a, there's a lot of life changes that could be happening. Are you, both of you working right now?

[Randall]

Yeah.

[George Campbell]

Okay. Do you guys have kids?

[Randall]

Yeah, two.

[George Campbell]

Okay, awesome. So, you know, looking at this from a high level perspective, we want to go, all right, we got a primary home paid for. We, let's make sure that our retirements are fully funded. We're maxing out retirements now. We're gonna go the kids, college. Let's fund that. Let's put a portion of this in a 529 plan. Then it becomes, do we wanna invest in real estate or just mutual funds? And how do we look at giving? Let's increase that. Let's increase our spending a little bit as well and enjoy some of this money. So a good way to look at it is just not getting a flat tire where you're hoarding all of it in savings or you, you gave it all away, or you spent it all and didn't save any of it. And so it's a good way to just filter it through, giving, saving, and spending goals.

[Ken Coleman]

Yeah, yeah, I, I don't disagree. I, I think having a long term plan, sitting with somebody and now you guys actually have money. A lot of young couples, we would say as soon as you get out of debt and you begin to move into baby step three, then 40. Okay, you sit down as you begin to invest every month. What's that? Long term play. You guys are there. So this is, let's get this money working for you, like George said. And man, how exciting, what a blessing this is for you. I mean, you guys should be very, very wealthy by the time you're 60.

[George Campbell]

Very.

[Randall]

I hope so.

[George Campbell]

How old are you now?

[Randall]

44.

[Ken Coleman]

Okay. I thought, you know what, I'll be honest with you. I thought you were a little younger than that. He sounds all right. He sounds like in the early 20s, mid-20s.

[George Campbell]

Yeah. He's about your age.

[Ken Coleman]

Yeah, I'm a little older.

[George Campbell]

I'm being generous to Ken, but.

[Ken Coleman]

Yeah, you're being very kind. But Chris, still, you're still going to be very wealthy, you know what I mean? By investing this and getting this working for you now.

[George Campbell]

So, so it just leapfrogs any goals you had and probably time to reassess and get a team of experts on Your side. If you don't already have a good financial advisor, jump on Ramsey Solutions.com. same for a tax pro. You mentioned an accountant. If you like working with them, that's great. An estate attorney would be wise at this point. Maybe a real estate expert if you want to get into real estate and then make sure that you have the right coverage now because you've a bigger target on your back if something were to happen. So I would reassess all of your insurance coverage. You definitely need an umbrella insurance if you don't already have that. And our friends at Xander can help out with all of that to make sure that you are maxed to the gills on your home insurance, your auto insurance. I would get all of the liability coverage way.

[Ken Coleman]

That's a great call. I love that. I would call our friends at Xander. I know Jeff personally. Guy's been around forever. Friend of Dave's. They'll take very good care of you. That's why we recommend them. That's very smart.

[George Campbell]

Yeah. As you gather and build wealth, you also need to protect the wealth that you're building. And that's where all of the different insurance products come into play. The right ones, not the crappy ones. And that's where our friends at Xander will steal. You love that correctly.

[Ken Coleman]

All right, let's go to St. Paul, Minneapolis area. McKenna is there. McKenna, how can we help?

[Randall]

Hi. Thank you for taking my call. Sure.

[Ken Coleman]

What's up?

[Randall]

So my husband and I have completed Baby Step 3 last fall. We've been kind of cash flowing to weddings we've been going to since then and investing in retirement. And at the end of this month, we're going to get ready to start thinking about our next home. We have a mortgage on a townhome currently. So my question would be, at the end of this month we're going to start shelling out some money into a savings account. We just don't really know if that's like a money market account, a high yield, or if that is investing in the market. If we're not planning on moving for another five years, if that's enough time to like ride out the market.

[George Campbell]

Yeah, five years would be the minimum for me to be investing in the market versus a shorter term goal where you have your money parked in a high yield savings account because you increase your chances of making money versus losing it. You know, when you start to extend the time frames out. The bigger question is why not just pay extra on your mortgage and then sell the property, roll all the equity over to the next House.

[Randall]

That's sort of the thing that we were thinking of. What's the town amortization schedule? And it was. So it's about worth probably 265 to 270. We have 239 remaining on it. And according to, like, an amortization, it would be about seven years to pay it off.

[George Campbell]

Okay, well, I'll tell you what my wife and I did. We got a townhome at the time. It was 300,000. The loan was, I think, 165. And we just aggressively attacked that, and we got it paid off and rolled 100% of the equity into our next home. And we just kept doing that. And so I would encourage you to do the same to create a for savings plan. Because when you don't, here's what will happen. You'll call back and say, hey, we're thinking about keeping this town home as a rental and taking on an even bigger mortgage for the next home with very little down. That's the temptation that happens when you don't just force the savings plan into the mortgage. So that's the way I would do it. Ken, I feel like you feel like.

[Ken Coleman]

You'Ve taken that call before because you went into a head voice there.

[George Campbell]

Oh, wow. You didn't realize that you did an.

[Ken Coleman]

Impersonation of what that call might be.

[George Campbell]

Yeah.

[Ken Coleman]

You're a little whiny. A little whiny.

[George Campbell]

They love the idea of keeping it as the rental. That's always the move.

[Ken Coleman]

I know. I'm telling you, you had a little disdain in that.

[George Campbell]

I just think there's a time and place for it.

[Ken Coleman]

I think you're right, by the way.

[George Campbell]

Taking on two mortgages.

[Ken Coleman]

I think you're right.

[George Campbell]

Hey. Yeah. Yeah.

[Ken Coleman]

I just like how you went there. I think you've had that call one too many times. It gives you a little indigestion.

[George Campbell]

It lives rent free in my head. You don't like it, I want to evict it.

[Ken Coleman]

Is that. Do you cover that in your book Breaking Free from Broken?

[George Campbell]

Thank you.

[Ken Coleman]

Get it. Wherever books are sold, this is the Ramsey Show.

[George Campbell]

Okay, here's the hard truth.

[Ken Coleman]

Your investment dollars could be winding up.

[George Campbell]

In the pockets of companies that hold.

[Ken Coleman]

Positions you don't agree with. People are unknowingly putting money into tech.

[George Campbell]

Giants and household brands that don't match up with their core values.

[Ken Coleman]

But here's good news.

[George Campbell]

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[Ken Coleman]

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[George Campbell]

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[Ken Coleman]

Welcome back to the Ramsey show alongside George Campbell. I'm Ken Coleman. Excited to have you with us. Triple 882-55-5225 is the phone number. George and I are here for you. The Ramsey Show Question of the Day is brought to you by why refi why refi refinances defaulted private student loans? These are different than federal student loans. And why refi refinances those defaulted private student loans and builds a custom loan based on your ability to pay? So if you want to kick your private student loan debt out of your life by going to yrefi.com Ramsey that's a good idea. That's the letter Y r e f y.com Ramsey it may not be available in all states.

[George Campbell]

Today's question comes from Hayden in Washington, dc. When purchasing term life policy, the monthly premiums are affordable. However, while still paying off debt with gazelle like intensity, it seems that those premiums should be used to get out of debt faster. Any advice on, quote, adding a monthly cost in the form of a premium while also trying to get out of debt quickly? Yes, lots of advice here. Namely, this is not an added cost. This is insurance and this protects you as you get out of debt. It protects you as you build wealth. So the same would go for your health insurance. We would never tell someone to forego health insurance and auto insurance and homeowners insurance to get out of debt faster. These are prerequisites to life as an adult. You need a will, you need term life, you need auto, you need home, you need health. All of these things are requirements and therefore, here's what you do. You get the term life policy through Zander. Let's say it's $240 per year. You can set up a sinking fund line item in your budget of $20 per month that gets added in there so that by month 12 you have $240 saved, ready to pay that yearly premium. If that's how you pay, that's How I do it for my family. And that's how I would recommend you do this as well. And I don't see insurance. I used to be very negative about insurance, Ken, when I was younger and go, oh my gosh, I got to pay the insurance premium. Now when I see that life insurance premium come through in particular, oh yeah, I just go, peace. Thank God, thank God that my wife is going to be okay.

[Ken Coleman]

Because you got two special ladies in your life.

[George Campbell]

Yes.

[Ken Coleman]

And that's peace of mind. I remember the same thing. I remember every time I paid it or every time I would, you know, if I got a better rate. I was just. It wasn't about the money. It was about. I know that if something happens to me, Stacy and the kiddos are going to be provided for. And that's what this is all about.

[George Campbell]

Yeah. And if you want proof of how important this is, go listen to some of the Ramsey show calls where a spouse passes away without life insurance. Now they're really an alert trying to pay off debt, losing that income. And so that's the goal of term life, to replace your income if something should happen to you for the people that you love. You want 10 to 12 times your income in that policy. 15 or 20 year term policy should do it because if you follow the Ramsey plan, you'll be self insured by then. A paid for house you've been investing for 20 years. Your family's going to be okay at that point, but in the meantime you need to transfer that risk to the insurance company. And Zander is the folks we trust for all of those. So go to Zander.com and get that done and start your everydollar budget and add it as a line item and thank me later.

[Ken Coleman]

I agree. The everydollar budget right there will help you see. Oh, all right. I can move money from somewhere else, but that is a non negotiable. By the way, you can get everydollar in the app store or Google play or the link in our show Notes, Notes. Clifton is up in Raleigh, North Carolina. Clifton, how can we help?

[Randall]

Hey guys. First, thanks for taking my call. Sure. Been listening you guys for about a year now and me and my wife are completely on board with this. We paid off about $230,000 in debt so far.

[Ken Coleman]

Wow. Congratulations. That is no joke. How long has it taken to pay off 230,000?

[Randall]

18 months. Wow.

[Ken Coleman]

What did you find gold? You said you strike oil?

[Randall]

No, no, no. My. My uncle retired from the family owned business and passed ownership to me. It's A business that's been in business since 1965. And we do really well. And I've managed, just because I'm younger and can work harder, I've managed to triple the revenue from the last few years that he was getting in.

[Ken Coleman]

Congratulations.

[Randall]

Yeah, it's going really well. And my wife's a dnp, so she makes really good money too.

[Ken Coleman]

Oh, wow.

[Randall]

And we live fairly cruelly, so you.

[Ken Coleman]

Guys are just crushing it on all fronts.

[Randall]

Right. But that does not get rid of the anxiety and stress I have with the debt that I have left.

[Ken Coleman]

Yeah.

[Randall]

Which is the reason for my call. We have. We built a house two years ago. I'm not really concerned about that. We sold our old house and built this one on a property. We bought the business, though. I. As soon as I took over the business, I reformed as an llc, got the S election so that I'm not taxed so heavily and I pay myself a salary from that business, which of course is taxed as personal income. There was a loan that my uncle made to me, basically gave me the business, but I had to buy the complete inventory. And he was very, very nice to me and gave me that on a seven year loan at 2.5% interest. And I've paid that down to about 240,000 is what I have left out on it. And five years left to pay on it. So this is my question, though. I'm paying myself a salary, so I get that every week. The rest of the money, because we're an S, taxed as an S, is being kept in the business as retained earnings. And it's pretty significant that the business, I think retained earnings this year alone was close to 200 in retained earnings. And this is the question. I'm concerned about just taking all of that money and paying the debt at once because then I'm kind of missing that safety that a business needs for a few months of operating expenses that things before. I'm kind of paranoid, right. Because I've had the business for two years and I'm concerned that at any moment work could dry up and I owe all this money. Right.

[George Campbell]

Well, you got five years. Do you have any other debt?

[Randall]

No, we. We've. We. That other debt I told you I paid for. We cut up our credit cards as soon as we started listening to you. We cut up our credit cards. We have no car notes. The only thing we have.

[Ken Coleman]

All right.

[Randall]

Is the 2, 4 and the business debt.

[George Campbell]

Okay.

[Ken Coleman]

All right. So, Clifton, question I have for you. So what are your quarters? Are you on A traditional first quarter, second quarter or what? When is your first quarter done as.

[Randall]

Far as like for tax purposes?

[Ken Coleman]

No, just in your business, like with your books, like your profits.

[Randall]

Business. Business starts January 1st each year.

[Ken Coleman]

So of that retained earnings, it's currently two hundred and forty some thousand dollars. How often do you put money into that? Is it every month?

[Randall]

I put all of the business money into that except for what I pay myself.

[Ken Coleman]

I know business expense, but I'm saying, do you do that on a monthly basis, a quarterly or annually?

[Randall]

No, no, it's. It's done. It's. Well, I guess you could say it's. It's done daily. And maybe I'm not understanding the question, but.

[Ken Coleman]

Okay, so here's my point.

[Randall]

They go to a savings account for retained earnings. Yeah.

[Ken Coleman]

So let me.

[Randall]

Each month.

[Ken Coleman]

Okay, here's what I was asking it. One way I've confused you. Let me come at this. What I would do if I were you, George, push back on this. But you've got $240,000 roughly in retained earnings. You don't want to empty it just to pay off the debt at once. And I agree with George, you got five years. But I think where I was trying to go with this is what if you. Right now, starting today, the 240 or whatever it is, you've got to retain earnings? What if every month or every day or every week, as you're putting those in, I. From this point forward, I would put it all towards the debt. So in other words, or let me say this, if the amount, like what is a year's worth of operating expenses for you? Total expenses, what's a year's worth?

[Randall]

Probably 500,000. Okay, so George, that cost of goods sold and everything.

[Ken Coleman]

Okay, my point is, you got a good chunk. Leave the big chunk in. But now instead of adding to the chunk, George, I'm saying he should start now. The retained earnings don't go to the account, they go straight to the debt.

[George Campbell]

I like that. What's your household income that you're taking home?

[Randall]

I pay myself. Well, between me and my wife, it's right at 200.

[George Campbell]

Okay, so based on the 200 and you paying off 230 in 18 months, is there a similar trajectory? Could you pay off the 240 in less than 18 months?

[Randall]

I think so. Well, okay, My wife has a very small part of the debt we've paid off already was student loans from when she went back to school to get her doctorate. And I think I have 21,000 left to pay on that but it'll be paid within.

[Ken Coleman]

Yeah, but that's personal. Could you. The question is on this business.

[Randall]

That's my question. Like there's a difference here between personal expenses. Like I can begin taking the margin that we have in our personal budget and applying it to the business too.

[George Campbell]

Yeah, exactly. Plus, like Ken saying, with your future profits coming in, instead of adding to the giant pile you have, let's also.

[Ken Coleman]

Add that to, for instance, George, if he could put $20,000 a month towards the equipment line.

[George Campbell]

Oh yeah, that's one year. Speed this thing up.

[Ken Coleman]

He pays it off any year.

[George Campbell]

It's done.

[Ken Coleman]

That's the idea.

[George Campbell]

Just put all of your debts in the debt snowball. It's all tied to your name. So there is no business debt versus personal debt. You're just going to snowball this thing and be done in a year, year and a half.

[Ken Coleman]

Good call. Good hour. George Campbell, this is the Ramsey Show. What does the future hold for business?

[George Campbell]

Ask nine experts and you'll get 10 different answers. Economic growth or a recession.

[Ken Coleman]

Business taxes will go up or down. AI will help us work or it will replace us all.

[George Campbell]

But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future proofed themselves with NetSuite by Oracle. The number one cloud enterprise resource planning system.

[Ken Coleman]

Ramsey Solutions uses NetSuite and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities with one unified business management suite. There's only one source of truth for.

[George Campbell]

The visibility and control of. You need to make quick decisions.

[Ken Coleman]

NetSuite's real time insights and forecasting help.

[George Campbell]

You see into the future with actionable data.

[Ken Coleman]

And when you're closing the books in.

[George Campbell]

Days, not weeks, you can spend less time looking backward and more time focusing on what's next.

[Ken Coleman]

And speaking of what's Next, download the CFO's guide to AI and machine learning.

[George Campbell]

At netsuite.com Ramsey it's free at netsuite.com.

[Ken Coleman]

Ramsey this is the Ramsey show where we help you win in your life, win with your money, win in your profession, and win with your relationships alongside the snappy attired and also witty brained George Campbell.

[George Campbell]

You're too kind.

[Ken Coleman]

I'm Ken Coleman. I got to give you two compliments.

[George Campbell]

All I keep thinking of is he used the word magnanimous earlier and I can't stop thinking about it. Such a great word.

[Ken Coleman]

It's a fun word. We should have a word of the hour.

[George Campbell]

Maybe you would love that.

[Ken Coleman]

Maybe we'll. We'll kick that around in a program meeting, probably.

[George Campbell]

We'll educate some viewers.

[Ken Coleman]

Yeah, we'll do that. But nonetheless, we're here together for you. I'm Ken Coleman. He is George Camel. George will coach up on the money, what to do with it. I'm going to coach you up how to make more money. How about that? Make more money, keep more money. Those would be our names, if that.

[George Campbell]

Would help me through the baby steps.

[Ken Coleman]

I think it will. So let's get started, shall we? George? Seattle, Washington, is where we go. Michaela is there. Michaela, how can George and I help today?

[Randall]

Hi, I. It seems kind of silly and I'll try to keep this short, but I'm a pretty long winded talker.

[Ken Coleman]

I know that. I am, too.

[Randall]

My ex and I. I'm 28. We got married when I was 24. You know, we did all the right things. We got married, we bought a house, we got the toys to go along with it. We had a daughter, and he's really struggled with alcoholism. And because of her safety, I ultimately decided to leave. He does not pay child support. In our divorce. I said, you know, 200 bucks a month, I'll take care of it. You know, at that point, I had been doing it by myself for so long that I was like, you know, it really doesn't matter. My main thought at that time was I tried to give him, I think, more grace than he probably should. I wanted him to be able to get back on his feet. He was living with his mom. And, you know, the truck that we had bought was $30,000. We got a loan, put five down. He owed 25 or we owned 20 or owed 25. And I just got a statement from them, and this has been a couple years now, that there is still $25,000 left. And so what happens is he doesn't make any payments. They threaten to take it. He makes a big payment, you know, to give him off his back. And I talked to the lender and said, you know, what can I do? And they're basically saying nothing unless he refinances, which he has no interest in doing. So between the truck getting behind and then, like, he doesn't pay child support, I think he's paid it once. Last December, he paid me the $200.

[George Campbell]

Who told him it was.

[Randall]

Well, so our. We don't have it enforced. I haven't, like, gone through the child support division. We just put it on paper in our divorce. But I Can make the call today to do it. The courts actually said his child support would be about 800, but again, yeah.

[George Campbell]

I was gonna say it sounds low.

[Randall]

Like, keep the truck payment current and, you know, we'll kind of go from there.

[Ken Coleman]

Because the truck is in your name as well.

[Randall]

Yeah. And so I'm just kind of wondering, like, if there's anything I can do to kind of get off that and if I should call and get the child support just taken out. My fear is whenever I've brought this up to him, he kind of withdraws and stops taking our daughter. And I just. I know it's not my responsibility to keep their relationship good, but I do feel, you know, an obligation because she's so young to at least buy some time for her to make the choice on how their relationship progresses. She's two.

[Ken Coleman]

Yeah. Is he stable? Like, is he stable now at least and from an employment and living on his own, or is he still with Mama?

[Randall]

No, he's still with Mom. And he's actually never taken me off of the joint account we had, so I don't use it, but I can see it. I imagine there's some cash coming through that I don't see because I've never seen a payment to his mom. I've never seen any sort of large withdrawal from the account. I mean, it's literally all. I'm sorry, it's alcohol. It's $30 at gas stations here and there, the occasional gas stop.

[Ken Coleman]

Does he have a job?

[Randall]

$100 at Walmart, you know. Yeah. Yeah, he has a job. And from what I can say, he gets about $800 a week through that job.

[Ken Coleman]

What is his job?

[Randall]

But he doesn't help. I think he's working construction now, doing concrete. And he just. I mean, he doesn't. He doesn't do daycare. He doesn't. He sees her on Monday and Wednesdays for a couple hours, and then he sees her. He gets her for an overnight on Friday.

[Ken Coleman]

And if he were to be paying you, if he were being. Sorry to interrupt, but if he were to pay you $200 a month, would it make that much difference to you?

[Randall]

Well, that's why I'm kind of, like, torn, because I'm working through the baby steps on my own to just try to get ahead. I've got two credit cards that. I mean, my Debt's less than 5,000. My car I paid off when older. House. Like, I'm doing okay unless I'm kind of like, is it even worth ruffling the feathers but at the same time, I'm like, it's been, you know, a year and a half, and you haven't done anything, and you're flaking on taking her all the time. So if you're not gonna. At least.

[George Campbell]

Michaela, you're the sweetest person I've ever talked to. You have spent your whole life trying to avoid feathers getting ruffled.

[Ken Coleman]

You're very kind.

[George Campbell]

At some point, you can't let people walk all over you like this.

[Ken Coleman]

What's that? Say that part again?

[Randall]

He's a good. He's a good friend to his friends. He's a good. You know, but he's just not a good partner, and he's not been a great dad up until.

[George Campbell]

You can be a great drinking buddy and be a terrible husband.

[Randall]

Yes.

[Ken Coleman]

Well, I would say this.

[Randall]

Yeah. And that's kind of.

[Ken Coleman]

If I were. If you were my sister, and that's how I'm gonna react to this. If you were my sister, I would be saying, I would be putting up strong boundary because my concern is the alcoholism and the time. Like, my number one concern is not the $200. I'll get to that in a second. My number one concern, if you were my sister, would be, that's my niece. That's your daughter. And. And I don't like her. With an alcoholic father, I don't care how nice and sweet he is and how many stuffed animals he buys. There needs to be a boundary there. And he.

[Randall]

He needs.

[Ken Coleman]

He needs to hit rock bottom. And as long as he's staying with mom and he gets to see your daughter, he's not hitting rock bottom. So I would be dealing with that. If it were just the $200, I would say forget it, because it's not worth the fight, and I'm not sure it is. And I'm still on that note of it's $2,400 a year. Sure. It'd be great for you to get it to George's point. He owes it. But George, I'm more concerned about the. The alcoholism, the custody, and I might use the $200. I might go to the court and go, I need some help with this. And you let him know. Give him some fair warning. Hey, listen.

[Randall]

Yeah, I'm very transparent with him. I, like, I sent him a long message last week. I said, here's kind of where I'm at. Like, I need you to think about this because we can't continue what we're doing.

[Ken Coleman]

Did he respond?

[Randall]

I do have solace. Yeah, he just. He just Kind of says, okay, you know, I'll see what I can do, but I know nothing will come. I have comfort when he. Because he's living with his mom and I know her mom and we have an okay relationship. So my daughter's at least safe while she's there, because.

[George Campbell]

Right.

[Randall]

They're there, you know, so I'm like, I have. Part of me is like, don't move out of your house.

[Ken Coleman]

Well, then I wouldn't mess around. I mean, George, what do you think?

[George Campbell]

I just feel like. Did you go through the courts for this? Was there a decree?

[Randall]

Yes. So everything was actually finalized this month on the 18th.

[George Campbell]

So why did the judge not finalize and say, hey, he's got to refinance, sell or pay this car off and force it as part of the deal?

[Randall]

So they did. So on paper, it does say that he is responsible for that because, I mean, I gave him. Literally, I gave him.

[George Campbell]

He's responsible for what?

[Randall]

For the truck loan. But the lender is saying, well, you signed the loan, so you're not off the hook.

[George Campbell]

Well, they need to force the decree. Would then force a refinance in order to get your name off of it. And so you need to go. It's not going to be fun. You got to go back to the courts and say, here's everything on paper. Which, by the way, is now the law of what he has to do.

[Ken Coleman]

And he's not doing it.

[George Campbell]

And as long as you keep letting him not do it, he's going to keep not doing it. And so I'm. I would not have as much grace as you. I'm going to fight this on behalf of my own family and my own financial future.

[Ken Coleman]

If I were ever governor of a state, one of the first things I do is a deadbeat dad policy. And I put them to hard work, hard labor, until they shaped up. This is the Ramsey Show. This show is sponsored by BetterHelp.

[George Campbell]

You've probably heard people talk about different.

[Ken Coleman]

Kinds of flags in friendships and romantic relationships. Red flags, green flags, beige flags. Listen, it can be helpful to look for patterns or unsafe behaviors in potential relationships. But all those labels can distract from what's really important. Your values. And whether you and your potential partner are willing to wake up every day and choose to honor each other's values.

[George Campbell]

And look, I know it can be.

[Ken Coleman]

Tough sometimes to even know what's important to you in a relationship. Therapy can help you figure out what your values actually are and decide your boundaries and your non negotiables. And if you're Thinking about starting therapy? Try BetterHelp. BetterHelp is 100% online therapy that works with your schedule. To get started, just fill out a short online survey to get matched with a licensed therapist. If it's not the right fit, you can switch therapists at any time for no extra cost. So whether you're dating, married, building a friendship, or working on yourself, do it with help from BetterHelp. Visit betterhelp.com DeLoney to get 10% off your first month. That's BetterHelp.

[George Campbell]

H-E-L-P.com DeLoney okay, picture this. You sit down to do your taxes, but instead of stressing out, you're actually ahead of the game and filing with an affordable software that makes your computer shoot confetti when you're done. Okay, not that last part, but Ramsey SmartTax does make filing easy and doesn't make your bank account cry. Ramsey SmartTax is a hundred percent accurate software that's honest about its pricing and is backed by a company who's been in the business for over 50 years. So go to ramseysolutions.com smarttax to take advantage of early bird pricing and stress free filing. That's ramseysolutions.com smarttax.

[Ken Coleman]

Welcome to the Ramsey Show. I'm Ken Coleman. George Campbell is alongside. Glad you are with us. 888-825-5225 is the phone number to jump in. Kristen is up in Billings, Montana. Kristen, how can we help?

[Randall]

Hi, thank you for taking my call. My husband and I have a slight disagreement. I have most of what our income is is rental houses and in 2023 we purchased four new houses. That puts us up to 24 and we've already paid one of them off. We still have three outstanding mortgages and the total for all of them combined is right about 420,000. And I have a stock portfolio that has $506,000 in it. His idea is that we go cash it out right now and go to pay off the mortgages. I'm like, no, that's kind of my, that was my plan for retirement in case everything else went south. The way things are setting up, we're scheduled to have all three of these other mortgages paid off by the mid of 2028. And I don't see what would be the point of cashing out all of my stock portfolio to pay them off now if we're literally going to have them paid off in the next couple of years.

[George Campbell]

Well, I don't think anyone's in the wrong Here I don't think anything is on fire. I do think we might need to get to the motive and heart behind it and then we can look at math and go, okay, what mathematically should and would happen? We pay off the mortgages, we free up those payments which we can now invest. Right. So there's one side of also reduces your risk, gives you more peace. We don't know what the next three years hold. I hope it's all sunshine and rainbows. The world is a wild place. Right. We don't know what's going to happen with the tenants and all of that. And so it's going to give you a little more piece less risk. On the other side you have the stock portfolio. Is this your entire nest egg?

[Randall]

For the most part, it's literally that is mine. Aside from I only work 26 hours a week doing home health care. And so then I also manage our 24 rentals. But so I only have 7,000 in a 401k of my own. And then he has 22,000 in his 401k. But other than that, that's really.

[George Campbell]

Is this stock portfolio non retirement, just in a taxable brokerage account. And what is it invested in?

[Randall]

It's in a combination of mutual funds, independent stocks as well. I've had it managed by the same gentleman for the last 20. I'm 41 and he's managed it and he gets somewhere between a 13, 14% every year return even when the market took a crash in 2023.

[George Campbell]

Okay, so you trust this person knows what he's doing?

[Randall]

Yes.

[George Campbell]

Okay.

[Randall]

And I just, I don't know if it would be worth pulling it out to take because we bring in on if you average how we always have one or two tenants who is either late or misses a month. But we bring in about 21 and a half thousand every month on so it's not like if we were to have to worry about there's enough to cover.

[George Campbell]

What are the total mortgage payments that you're making right now?

[Randall]

The three of them combined, the minimums would be 3,800. We're putting 10,000amonth on the other one on one of the three.

[George Campbell]

If you take 3,800amonth and invest it instead, you're going to be okay from 41 to 60. Right. Do you see his point? I'm just trying to. I'm playing devil's advocate to show you the other side. On top of the interest savings of not paying interest on these mortgages for the next three years, having them Paid for. So again, I don't think there's anything wrong with following your plan and going, hey, I'm going to just. We're going to pay these off in the next three years. I think it's a great plan to have a fully paid off rental portfolio. You guys have done really well. Nothing is on fire. Nothing's going to put you in crazy risk. But I can see his point, and I don't think it's as bad as you think. I know you want a nest egg portfolio. The rental properties are part of your nest egg. You have 24 paid for rental properties. If you need money, you know where to get it. Either from the cash flow or you can sell one if worse comes to worse.

[Ken Coleman]

What's the total worth? Did you get that number?

[George Campbell]

What is the total? All 24. What are they? What's the value?

[Randall]

Well, our market here has been absolutely nuts. So I have the tax valuation is 4.2 million.

[Ken Coleman]

I don't want the tax valuation. What? Like if you were to sell all 24 today, a modest projection on what you could get for them.

[George Campbell]

Not a fire sale, but you get market value.

[Ken Coleman]

What is the worth of all 24?

[Randall]

Roughly, I would say it's probably closer to 5 million.

[Ken Coleman]

Okay, see, that's the point George is making. I was kind of waiting to go, who cares about the 22,000 over here and the 24 there? Like the 5 million is the number and you can cash out of those at any time and invest that. You know, I mean, that's just a whole different ball game. So I could see both sides as well. I really can't.

[George Campbell]

So is there a compromise where maybe we go, all right, once every year I'm going to cash out enough to pay off one mortgage, split the difference.

[Randall]

That would be entirely doable.

[Ken Coleman]

There we go.

[George Campbell]

I think that makes him feel a little better and it does reduce your risk. It causes you guys to make a little more progress than you would have and it causes you to slowly deplete this portfolio. And remember, you're going to free up a payment that you can now invest on your own volition, as you please.

[Ken Coleman]

That's right.

[George Campbell]

And so either way, this is a good problem to have. You guys are doing really well.

[Ken Coleman]

No, we're not wringing our hands for you guys. You guys are in really good shape.

[George Campbell]

I am the least worried about this. But I do think just some compromise would get you guys to an agreement and cause you to move forward. Because this is living in your head rent free right now. It doesn't need to.

[Ken Coleman]

That's good. Thanks.

[George Campbell]

For properties to manage.

[Ken Coleman]

Yeah, absolutely. Way to go, Kristen.

[George Campbell]

That's incredible.

[Ken Coleman]

5 million portfolio. Yeah. 5 million.

[George Campbell]

40 years old.

[Ken Coleman]

You know, she's right. She's talking about that area of Montana is going bananas. People wanting to get out there. You and I should have seen that craze.

[George Campbell]

Should have done it.

[Ken Coleman]

We should have been out there and we would. You and I. Could you imagine when our big cowboy.

[George Campbell]

Hats living off the fat of the land.

[Ken Coleman]

Yeah.

[George Campbell]

It's always been a dream of mine.

[Ken Coleman]

Yeah. Yeah. I see one of us having a blister and the other a splinter.

[George Campbell]

You know what really bothers me? Never see a cowboy with glasses on. What's going on?

[Ken Coleman]

You know what? You make a very good point.

[George Campbell]

They all have 2020 vision out there.

[Ken Coleman]

I'm trying to think of the last major movie or television show that had cowboys in it where they were wearing glasses.

[George Campbell]

Who said that you can't be a cool, manly cowboy and have vision impairment.

[Ken Coleman]

I'll tell you what I'm thinking. I'm thinking Jason Priestley's character, he's from 90210. You don't even know that show.

[George Campbell]

You're dating yourself.

[Ken Coleman]

He had a character in Tombstone and his character wore glasses, but he was a wimpy guy.

[George Campbell]

There you go. This is what I'm saying.

[Ken Coleman]

So I'm with you.

[George Campbell]

I'm done with it.

[Ken Coleman]

You know what Hollywood needs to cast a cowboy with some glasses.

[George Campbell]

And I'm available. You know, America's ready for it.

[Ken Coleman]

You think so?

[George Campbell]

Yeah.

[Ken Coleman]

A Middle Eastern cowboy with glasses.

[George Campbell]

Hey, they call me the Costco cowboy, so I'm already halfway there.

[Ken Coleman]

Who is they?

[George Campbell]

The people.

[Ken Coleman]

Is this a thing as one person got in your DMs one time and called you the Costco cowboy?

[George Campbell]

The amount of times people send me just Kirkland signature related content would blow your mind, Ken.

[Ken Coleman]

Well, you've made a big deal out of it.

[George Campbell]

That's my fault. That is on me.

[Ken Coleman]

So there it is.

[George Campbell]

I love it. Can we get to a social question?

[Ken Coleman]

Do you have yours?

[George Campbell]

I've got them ready.

[Ken Coleman]

I was looking for one, actually, as we were talking about you being a cowboy.

[George Campbell]

Oh, this is a great one for you.

[Ken Coleman]

Go for it.

[George Campbell]

Johnny from TikTok. Johnny, during what point in the baby steps is it best to start a business? What say you?

[Ken Coleman]

Baby step at what? During what point? 4.

[George Campbell]

That's when you're debt free with an emergency fund.

[Ken Coleman]

Yeah, we've got an emergency fund. And now we're. We're able to we have enough margin to to do baby step four, which then tells me, all right, I've got enough margin to start something on the side. Now the quite the way the question was worded, it says when is it best? Is that correct?

[George Campbell]

During what point is it best?

[Ken Coleman]

Is it best? That's ideal.

[George Campbell]

Ideal is you got the financial foundation.

[Ken Coleman]

I'm not gonna get mad at somebody if they are able to start a side hustle, for instance, with very little cash capital outlay and it helps pay off debt. In other words, you know, I've talked about this as people have started trash can washing businesses, a lawn mowing bit. So it's okay if it's that to help us get through the baby steps faster. But something that's like, I want to try to live on this and this is my future. I don't like you trying to do that during baby step two and three.

[George Campbell]

And the more the startup costs, the more we say, hey, you need to wait until you are debt free with an emergency fund, my friend.

[Ken Coleman]

So baby step four is when it's time to start going, okay, what could this look like? Good question though. John from Johnny. From Johnny Tick Tock. You got.

[George Campbell]

They also call me Johnny TikTok.

[Ken Coleman]

They call you that?

[George Campbell]

Yeah, nickname from high school I like.

[Ken Coleman]

I could combine those and call you the Costco Cowboy. Johnny Tick Tock. This is the Ramsey Show. We'll be right back with more of those dad jokes.

[Randall]

You shouldn't own a gun you're not willing to shoot in moments of self defense.

[George Campbell]

A burner launcher lets you protect yourself in a non lethal way. That's exactly why burner launchers were created.

[Randall]

Everyone from parents and nurses to pastors.

[George Campbell]

And even special forces veterans rely on burner to protect themselves and their families. I own several burners myself. They look like guns, but they're not. They shoot a.68 caliber round, kinetic or chemical irritant projectile that can disable a.

[Ken Coleman]

Threat from up to 60ft away.

[George Campbell]

And they're powered by compressed CO2 cartridges, so they're classified with paintball and airsoft guns, but they're more powerful than those for increased protection. Not to mention, burner launchers are legal.

[Randall]

In all 50 states with no permits required.

[George Campbell]

And because they're not firearms, they can be shipped directly to your door.

[Randall]

Plus, Ramsey Fans can get 10% off.

[George Campbell]

An exclusive bundle which includes a burner pistol, CO2 cartridges and ammo. And other burner products like safety alarms, defense sprays and body armor are also 10% off. For our listeners, just go to Burna.com Dave to learn more.

[Randall]

That's B Y R N A dot com, Dave.

[George Campbell]

People ask me all the time, George, what's your number one money saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the EveryDollar budgeting app a game changer. With EveryDollar, you'll get a clear picture of your spending. And from there, it's easy to see where you can get more intentional cut back and save more money. So how much money are we talking here? Well, the average EveryDollar budgeter frees up $395 in their first budget. That's the hack. And if you ask me, I think you're way above average and you'll save even more. So what are you doing still listening to me? Go download the EveryDollar app for free and start saving more money right now.

[Ken Coleman]

Welcome back to the Ramsey Show. I'm Ken Coleman, and George Camel is joining me this hour. Triple 882-5522-588882-55225. You know, George, before we get to the phones, I thought it might be fun to talk nerdy.

[George Campbell]

You know, I love talking nerdy.

[Ken Coleman]

I mean, you talk nerdy is about as well as anybody I know.

[George Campbell]

Well, you know more big words than anyone I know, so we both relate in that way.

[Ken Coleman]

And so this is a fun little segment where George nerds out on the fine print, if you will, as the former host of the Fine Print. Do you still do those?

[George Campbell]

You don't know. I miss it. We kind of switched it up. When did my YouTube channel, which is a version of doing podcast, but it's the same thing. I want to break down these what are we doing to money concepts. That can feel overwhelming, complicated. I never fully understood it, and I want to break it down quickly for the benefit of the people listening.

[Ken Coleman]

Wait, what is the topic today?

[George Campbell]

Refinancing. Ah, so you've heard of financing. We're talking about re or refinancing coming.

[Ken Coleman]

Back to the table.

[George Campbell]

Booyah.

[Ken Coleman]

Okay.

[George Campbell]

And we're going to specifically focus on refinancing a mortgage. Okay, so if you bought a home when interest rates were high, you may be wondering if refinancing might save you some money now that rates have dropped a little bit. Well, it can, but it also depends. So what is this Mortgage refinancing, very simply, it's when you replace your current mortgage with a new one. Why should you do it? Why do people do this? Well, number one, to get a lower interest rate, alright? So you gotta make sure that refinancing will save you money in the long run, more than it costs you. Number two, people do it to reduce the loan term and become debt free faster. So you go from a 30 year mortgage or an adjustable rate mortgage to a fixed rate 15 year mortgage, for example, and that can get you a lower interest rate, shorter mortgage payoff, get your house paid off sooner, double win. Another reason people do it is to get rid of PMI private mortgage insurance. And that's a, it's a great way to pay less on that monthly payment because you're not paying the lender anymore and it really just protects them in case you foreclose. And lastly, like I mentioned, you're switching the loan type. A lot of people have an adjustable rate mortgage and maybe they want to go to a fixed rate mortgage. That would be a good time to refinance as well to avoid those rate fluctuations. So for everyone out there, here's the questions to ask yourself. How much will my interest rate go down? How much will it save me and what will I pay in closing costs? And closing costs can run about 2 to 6% of the total amount you're borrowing, depending on your situation where you're at all of that. So here's the deal. Simply only refinance if it gives you a lower interest rate and saves you more money than it costs. So an example, if you save 2,500 bucks a year refinancing, but you have 10 grand in closing costs, it will take four years to break even before you start saving money. So refinancing is only a good idea if you plan to stay put long enough to save money. So that's kind of where you got to weigh it and go, right? You know, we do plan on staying here long enough to get the ROI on this. So it's, it's that simple. Here's six steps if you're ready to do this. Crunch the numbers to see if it makes sense financially. Number two, you got to shop around for the best interest rate. Three, you got to choose a lender. Don't forget to ask about those closing costs, the fees, the prepayment penalties, a lot of them will lure you in and go, oh, we're going to give you a great rate. But then they ding you with all these fees on the back end. To make up for it. Don't fall for that one.

[Ken Coleman]

Little bait and switch.

[George Campbell]

You love that term.

[Ken Coleman]

I was looking for it. You helped me out.

[George Campbell]

I got there faster. I'm quick to the draw. You are cowboy camel.

[Ken Coleman]

That's it.

[George Campbell]

And number four, you got to lock in the rate. Five, you'll go through the underwriting process just like you did when you got the original mortgage. And then six, you close on the new mortgage. Good for you. So here's the deal. If you need help, you got questions with this about refinancing, do what I do. Reach out to our Ramsey trusted friends at Churchill Mortgage. They are experts in this. And you can go to ramseysolutions.com mortgage or click the link in the description if you're listening on YouTube or podcast. Quick and painless.

[Ken Coleman]

Ken, this is why I love nerdy. I mean, we all need a little nerdy talk.

[George Campbell]

Some people fell asleep at the wheel. I don't think so in that segment.

[Ken Coleman]

I think you laid it out beautifully.

[George Campbell]

Some people were so riveted.

[Ken Coleman]

Yeah, I loved it. I thought it was very helpful. So there you go. And by the way, he mentioned it very briefly. Got a call back to it. This is why you want to go to George Campbell's YouTube channel. He's got all kinds of really fun. And. And it's just. It's made for you.

[George Campbell]

We break it down.

[Ken Coleman]

Yeah, break it down. You make it fun. You make it palatable.

[George Campbell]

No matter what it is. Yeah, we make it palatable.

[Ken Coleman]

That is true. Joseph is up next in Dallas, Texas. Joseph, how can we help?

[Randall]

Hey, how's it going?

[Ken Coleman]

Good. How are you, sir?

[Randall]

Good. It's just a real privilege to be on the show. It's kind of. Kind of surreal. So thank you very much. I feel very honored. Appreciate it.

[Ken Coleman]

Well, we're honored to talk to you. What can we help with today?

[Randall]

Well, so I just recently started a job about going on six months ago. I do enjoy my job, and my bosses are great. It's a good company. I mean, I think they really do right by their patients. And the trouble I'm having is I am making less than I was expected when I started because I am on a paper visit scale. So my base salary is 73,000. But what I was initially told was on average, if I see a certain amount of patients a week, I would probably get around 85,000. But over my time working here, I haven't been seeing that, unfortunately. And it's not because of. It's not their fault. It's just external factors. Like patient cancellations and such.

[Ken Coleman]

What business are you in?

[Randall]

Oh, so I guess I should have mentioned that. I apologize. I'm a physical therapist.

[Ken Coleman]

Oh, okay. And so if I understood you correctly, the anticipated number of 83,000 that you got excited about when you signed on hasn't been met because you've not seen the amount of patients that they said you would need to see in order to hit that number.

[Randall]

Correct. And.

[Ken Coleman]

And what is it that you think you should be making? Because you let off by going, I'm not making what I should be. So what is that number?

[Randall]

I mean, about 85,000 is what I anticipated making.

[Ken Coleman]

Okay, well, but you anticipated it based on them saying you'll make roughly this if you see this many patients. So what options do you have? Are there other physical therapy businesses that have higher foot traffic?

[Randall]

There certainly are. I chose this particular setting just because I would work with the neuro population. And it was, I liked what the company was about, but for me as well, I'm also just, I have a lot of student loan debt and this, you know, I'm just trying to make sure I make that right decision so.

[Ken Coleman]

Well, the right decision right now. At this point in your career, how old are you?

[Randall]

I'm 27.

[Ken Coleman]

Okay, at this point in your career with a lot of student loan debt and do you have other debt outside of student loans?

[Randall]

I do have a car payment, but that would be it.

[Ken Coleman]

Okay, so what's your total amount of debt?

[Randall]

It's 247,000.

[Ken Coleman]

Okay. The answer is really easy. Yeah, we're not staying at a place because we really like it. We need to make money and you need to make as much as money as you possibly can. This is doable. And George, you've coached a lot of people to do this. But I, you know, if your call is your question was should I stay? Is that what I'm getting at?

[Randall]

Yes. Just because I've only been. I mean, I've been there a short time.

[Ken Coleman]

Doesn't matter. Doesn't matter. Can you get a job right now where you can get a 15, $20,000 bump? You think that's even possible?

[Randall]

Oh, that's, that's definitely possible, my man.

[Ken Coleman]

We get the best paying job possible in order to attack this debt with everything you have.

[George Campbell]

And there's more than one great company in America and so you will find it. But you need to be making six figures in order to pay this off in the foreseeable future, Joseph. And that might mean you get that new job and you take on a Bunch of side hustles and work overtime and, and, and for the next three to four years in order to knock this out. What's the car, what's left on it?

[Randall]

7,000.

[George Campbell]

Okay, so the majority of it was PT school.

[Randall]

Yes, yes, just PT school.

[Ken Coleman]

Do you have any savings?

[Randall]

Yeah, I do have some savings and I did have a sign on both, so I'm trying just not to use that.

[Ken Coleman]

How much savings?

[Randall]

Majority of the savings, 4,000.

[Ken Coleman]

George, tell him what he does.

[George Campbell]

Well, you got a bunch of loans out there, right? Probably 15 to 20 different student loans. You're going to attack that smallest one and free up a little payment. What that's going to do is give you a little light at the end of this tunnel that you're actually going to get out of this thing. So the longer you hang on to all the savings, it's going to give you a false sense of relief because, my friend, there's an avalanche on the other side and we have to start attacking that thing one bite at a time. That's the baby steps. So hang on. I'm going to send you a copy of my book Breaking Free from Broke to give you the step by step plan, give you the motivation to climb out of this thing. And I'm also going to send you Ken's book. Which one should we send him? Ken. What's going to be most helpful to him?

[Ken Coleman]

I think the proximity principle. Because he needs to be leveraging relationships as much as he can to move up the ladder as quickly as he can to be able to take that income and do what you just told him. So hang on. We'll give you the proximity principle as well. All right, quick break. George has to gargle with salt water and then I'll check on him, make sure he's okay. And we'll be back. This is the Ramsey Show.

[George Campbell]

Hey, guys, George Camel here. Do you ever feel like insurance companies only care about your money and not what you actually need? Well, there's a better way. When you go to Ramsey's Insurance Resource Hub, you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life insurance, health insurance, identity theft, prot, and more. And when you're ready to get the coverage you need, you can connect with a Ramsey trusted insurance pro who will only get you what you need at the best price. Go to ramseysolutions.com insurance ramseysolutions.com insurance.

[Ken Coleman]

Welcome back to the Ramsey show alongside George Camel. I'm Ken Coleman. 888-255-225 is the phone number to jump in. Oh, boy. I. George, I was looking the other day at the calendar and I thought I got to get with my tax pro.

[George Campbell]

You were dreading it.

[Ken Coleman]

Not dreading it, but I just. The very word of tax gives me little anxiety. It's a what I like to call a TUMS moment.

[George Campbell]

Meanwhile, I just scanned some. Some tax files for my upcoming appointment at the printer, and I was stoked.

[Ken Coleman]

Yeah. Stacy is. Is gathering all of our documents and I am Stacy.

[George Campbell]

And this is.

[Ken Coleman]

We will meet with our tax pro. And anyway, nonetheless, hey, it's coming around the corner. And one of the best things you can do is to have a good tax pro in your corner. And again, I'm telling you, I'm gonna say hi to David. He's local, he listens. So he'll hear this two days from now, and I'll get an email from him. David, Stacy and I love you. We appreciate you, sir. He takes good care of us. He's our tax pro. I'm not kidding around. I sleep very, very well at night knowing David is.

[George Campbell]

David's got it.

[Ken Coleman]

The job. And so they help you. He helps us. I mean, he helps us think about so many different angles, deductions, life changes. Oh, he's the deduction king. He's amazing. Go to ramseysolutions.com taxpro to find a CPA and enrolled agents that have been vetted by our team at Ramsey. It's ramseysolutions.com taxpro. Do you do your own.

[George Campbell]

No, I've got a tax pro. Because again, it's one of the. It's like getting.

[Ken Coleman]

You don't do a shout out for your tax pro. Well, I love my tax pro more than you love your tax.

[George Campbell]

Here's the thing. I don't want other people find them. And now they're.

[Ken Coleman]

I just did a first name, only I still don't.

[George Campbell]

I got trust issues. They have a very unique name.

[Ken Coleman]

All right. Can't give whoever George's tax pro is. I tried. I tried. He's not willing to give me some love.

[George Campbell]

Once you got a good one, you don't give it up. But you can find a trusted one in your area that's right. @ramseysolutions.com taxpro. And here's the deal. Our tax pros aren't going to be like, have you ever thought about getting a G wagon to write it off as a business? No, no. They're not going to give thought about.

[Ken Coleman]

Getting a G wagon.

[George Campbell]

Tax advice for some write off.

[Ken Coleman]

Do you think I would look good driving a G wagon?

[George Campbell]

Would you look good?

[Ken Coleman]

Yeah.

[George Campbell]

Who doesn't look good, you know?

[Ken Coleman]

Well, I don't know. I mean some people shouldn't probably drive a G wagon.

[George Campbell]

Yeah, I did see a pink cyber truck the other day and I thought, wow, it could get uglier. I didn't think.

[Ken Coleman]

I've not seen those.

[George Campbell]

That had to be like some kind of Mary Kay situ. I don't know what was happening with that pink cyber truck. George, it's a dark time.

[Ken Coleman]

You won't shout out your tax pro, but you'll give Mary Kay some love.

[George Campbell]

That wasn't love, I'll tell you that much. You know me.

[Ken Coleman]

Oh, we're having fun folks. What are you waiting on? Levi's up in Las Vegas. Viva Las Vegas. Levi, how can we help?

[Randall]

Hey, Ken. Hey George. Thanks so much for taking my call.

[Ken Coleman]

Sure.

[Randall]

So I'm getting ready for about $100,000 in expenses at the same time that I'm going to be losing my income. My wife and I are getting ready for graduate school. We're both going to be starting grad school this year. I'm going to get a doctorate in physical therapy and she'll be getting her master's in dietetics administration. And I mean eventually we'd love to start a business together where we can kind of help people improve their health through diet and exercise. So we've known this has been coming for a long time. We've been married for four years and we've been preparing since the moment we knew that we wanted to start this career.

[Ken Coleman]

And so if I'm understanding, let me jump in real quick just for us and then the folks following along at home. So that's with you both going full time to grad school. That's why we're losing the hundred thousand dollar income.

[Randall]

Yeah, so. Well, I also my current job, I take care of a kid with autism and he graduates in May. So it just happens to work out really nice that I don't. There's no more need for my job. So I lose my job and then the next two weeks later I start school.

[George Campbell]

But what was your plan to cover living expenses while you both were in grad school?

[Randall]

So we've been saving a lot of money. We've been blessed in so many different ways. So we have about $70,000 in high yield savings account. We're closing another investment account that's got about $30,000 in it and we're going to transfer that money into our high yield savings account. And then we've got about 20,000 in another investment account and about 20,000 in cash between our savings and checking accounts.

[George Campbell]

Okay, so you have 140 that you will have liquid you need to cover. You use 100 to cover grad school for both of you, Is that what you were saying?

[Randall]

So my grad school will cost 90,000 and hers will cost 20,000. But her family has graciously offered to pay for her tuition.

[George Campbell]

Wow.

[Ken Coleman]

Okay, good for her.

[George Campbell]

So you're gonna.

[Randall]

Amazing.

[George Campbell]

You'll have 40 grand left over after grad school's covered and you got a baby on the way. So let's keep a big portion of that saved up as an emergency fund. Do you guys have any debt?

[Randall]

Yeah. No, we have zero debt. We own a house and we've got three bedrooms and we rent out two of the bedrooms to friends and they pay 550amonth. And so really, after taking all our living expenses and our rental income, we only have to pay about 12,000 a year for our housing expenses.

[George Campbell]

Wow, okay. And you guys are living pretty frugally, it sounds like. That's good. So we've got most of this figured out. What's the question?

[Randall]

So my big question is we want to be good parents. We didn't think that we'd be able to have a child. And now the due date is the week after my wife is supposed to start graduate school. And so I'm worried that the money that we do have won't quite stretch far enough through grad school. And I'm also worried about how can we buy time with our child. We don't necessarily want to do daycare or anything like that, but how long is your program? Three years.

[George Campbell]

So you won't be working for three years.

[Randall]

So I'll be out of a job for three years and my wife will not be able to work for the first year or program is accelerated. But we're also.

[Ken Coleman]

How is that? You don't have the money. You do not have the money right now to make it. You know that, right? For three years. So I'll tell you what I would do. I'm going to throw this at George because he's crunching the numbers over here. If it were me, I would. I would have your. Your wife continue to work and have.

[George Campbell]

Her pause grad school.

[Ken Coleman]

Have her pause grad school? Her two year program. Oh, well, I didn't ask. Hers is a lot less money and we know that. How long is it it's one year. I would push hers and knock yours out so that you guys can again have some income coming in. I know she's going to have the baby, but.

[George Campbell]

And what about health insurance?

[Randall]

Yeah, health insurance will be covered through my graduate school.

[Ken Coleman]

Okay.

[Randall]

I would for me not having a job, George.

[Ken Coleman]

Do you?

[George Campbell]

I, I just think we're trying to do a lot at once.

[Ken Coleman]

I almost want to push his back another year.

[George Campbell]

Yeah. What's the game plan if you're not working for three years? She's going to keep working. She's going to take a maternity leave for a few months, I imagine and then she planning back to work. Because you said you want to also have time with the baby if she's.

[Ken Coleman]

Not in grad school. If we do the plan that I'm suggesting where we wait for her to go to grad school after you're finished, but she has the baby, what kind of income does she bring in?

[Randall]

So if she doesn't go to grad school right now she's making well under 20,000 this year. She made less than 10,000 this year.

[Ken Coleman]

That's not even real money. It's like a part time babysitting job.

[Randall]

Yeah, she's still, she's a full time student and president of lots of clubs at our university. But if she gets her master's degree, then she could potentially be earning.

[Ken Coleman]

You guys are going to starve. You called us and asked us what we thought. We don't think you got enough money to do this. So I would delay either her and she goes and gets a 40, $50,000 job at minimum to be able to, to make up the difference. And that means somebody's watching the baby while she's working. I mean, you guys got to figure this out or if I were you.

[George Campbell]

Can'T be a full time mom at home with the baby and full time at work pursuing this dream.

[Ken Coleman]

You may have to push your grad degree off two years. You go get a good job, push it off a couple years, have baby.

[George Campbell]

I would have a come to Jesus, reassess conversation with your wife tonight and go, hey, listen, we both had these dreams. They'll happen one day. Right now we got to delay one of these dreams so that we can eat and provide a home for this baby.

[Ken Coleman]

I'm with you, George and Levi. I'm talking like I'm old enough to be your dad. So here you go.

[George Campbell]

Plenty old enough.

[Ken Coleman]

Thank you, George. I would. The baby is the number one dream right now.

[Randall]

Yeah.

[Ken Coleman]

And you've done very well to Put that money away and to stay. You are not hurting your professional. Listen to me, Levi. You are not hurting your professional chances and your potential by delaying this a year or two. Okay, let's get the wife out of school. Part time job or full time, Mama. And you're working full time. We keep stacking cash. Please take your time on this. Don't rush this. George, thoughts on that final word?

[George Campbell]

No, I'm with Papa Ken over here.

[Ken Coleman]

Thank you.

[George Campbell]

This is the best thing for you and your family and the careers if they need to take a back seat. For now, I'm okay with that.

[Ken Coleman]

Yeah, that education will still be there. Trust me. All right, George. Good hour, good stuff. Appreciate all of you for listening. Thanks to our crew for keeping us on the air. This is the Ramsey show. The right questions are the key to unlock personal and professional potential. That means if you're not where you want to be, you are not asking the right questions. I'm Ken Coleman and this is what my new show, Front Row Seat is all about. Over my career, I've had the distinct privilege to interview successful people from all walks of life and to coach over 10,000 professionals who wanted more. What sets successful people apart is a never ending desire to learn and grow. Each week I'll be joined by industry leaders and world class experts to have a conversation about how to get better, move up and and lead well in work and life. But the best part of this show is you get to be a part of the conversation. Live in studio, we'll have a group of professionals just like you who have the power to ask questions and steer the discussion in real time. It's an opportunity to get real answers to real questions like how to make the right decisions, have hard conversations, live a balanced life and discover your next steps to growth. Join us every Tuesday for conversations that are guaranteed to surprise, challenge and inspire you. Check out Front row Seat wherever you get your podcasts.