Nobody Builds Wealth by Accident

Summary

---

Podcast Summary: The Ramsey Show – "Nobody Builds Wealth by Accident"
Release Date: February 12, 2025
Hosts: Rachel Cruze and Jade Warshaw
Podcast: The Ramsey Show

---

Introduction

In the episode titled "Nobody Builds Wealth by Accident," hosts Rachel Cruze and Jade Warshaw guide listeners through a series of real-life financial dilemmas, offering expert advice on building wealth, managing debt, and navigating complex personal relationships. The episode emphasizes that wealth accumulation is a deliberate process, not a matter of chance, and underscores the importance of financial transparency, disciplined budgeting, and strategic planning.

Caller 1: Jocelyn from Lubbock, Texas

Timestamp: [00:54]

Issue:
Jocelyn shares her struggles with her husband, who has isolated himself financially, leading to marital discord. Despite being together for 26 years with three sons, Jocelyn feels like a single parent managing the household while her husband controls all financial aspects. This lack of transparency culminated during a critical health scare when Jocelyn had to access her husband's laptop to manage bills, revealing his unwillingness to share financial information.

Notable Quote:

"He's like a married bachelor, total checkout. So I don't know what I should do from this point on."
(Timestamp: [02:11])

Advice:
Rachel empathizes with Jocelyn, identifying the issue as a fundamental breakdown in their marital partnership. She advises Jocelyn to regain financial control by demanding full access to their finances or considering more drastic measures if her husband remains uncooperative. Rachel emphasizes the importance of having options and financial independence, stating:

"I would be getting myself in a position for you to get access for the money... you just don't have freedom to make even a decision to leave."
(Timestamp: [05:08])

Caller 2: Isaiah from San Antonio

Timestamp: [11:09]

Issue:
Isaiah, an 18-year-old newlywed, co-owns a home service business with his twin brother. With the recent responsibilities of marriage and moving out, Isaiah contemplates whether to pursue a traditional sales job for more consistent income versus continuing to grow their small, fluctuating business.

Notable Quote:

"She brings home... just recently got a raise, so she makes $17 an hour."
(Timestamp: [13:00])

Advice:
Rachel suggests that Isaiah could maintain the business as a side hustle while securing a steady income through a traditional job. She advises formalizing their business agreements to prevent future conflicts and ensure clear ownership and responsibilities. Jade Warshaw adds that balancing both endeavors can provide financial stability while allowing the business to grow organically.

Caller 3: Shannon from Alaska

Timestamp: [21:31]

Issue:
Shannon is contemplating divorce after her husband’s financial infidelity, leaving her with substantial debt, including IRS and credit cards. She owns the home and wishes to keep her children in their current schools but is unsure how to financially prepare for a divorce.

Notable Quote:

"Once you get divorced, the assets are gonna get split, and I don't want you paying more than your share."
(Timestamp: [22:00])

Advice:
Rachel advises Shannon to prioritize saving for the divorce by halting aggressive debt repayment to prevent incurring additional liabilities. She recommends treating the divorce as a "storm mode" situation, focusing on securing financial stability to ensure a smooth transition. Jared suggests seeking professional guidance to navigate the complexities of asset division and debt management.

Caller 4: Rob from New York City

Timestamp: [33:15]

Issue:
Rob and his wife have achieved millionaire status through disciplined saving and investing. Rob, a police sergeant, and his wife, a high school special ed teacher, discuss their journey to financial independence and how they maintain their wealth.

Notable Quote:

"Just work really hard, have a plan, and live within your means."
(Timestamp: [36:30])

Advice:
Rob emphasizes the importance of hard work, strategic planning, and living below their means. They highlight the effectiveness of the baby steps approach and avoiding debt as key factors in their financial success. Rachel celebrates their achievement, encouraging listeners by showcasing a real-life example of disciplined financial practices leading to wealth accumulation.

Caller 5: Sydney via TikTok

Timestamp: [39:35]

Issue:
Sydney inquires about the merits of consolidating debt if it results in a lower interest rate, particularly concerning student loans.

Notable Quote:

"People get into financial trouble because they just want to protect the kids."
(Timestamp: [40:33])

Advice:
Rachel advises against debt consolidation companies that may exploit individuals by damaging their credit scores or imposing unfavorable terms. Instead, she promotes the debt snowball method for its motivational benefits, allowing individuals to pay off smaller debts first to build momentum. Jade emphasizes personal financial management over external consolidation services.

Caller 6: Joseph from Lafayette

Timestamp: [53:49]

Issue:
Joseph and his fiancée are considering moving out from living at her parents' property into their own home. However, Joseph is concerned about their financial readiness, given their existing debts, and wants to ensure they don't overextend their budget with additional expenses.

Notable Quote:

"If we do this debt is gonna get split, and I don't want you paying more than your share."
(Timestamp: [55:04])

Advice:
Rachel recommends that Joseph and his fiancée prioritize debt repayment to stabilize their finances before committing to new housing expenses. She suggests creating a detailed budget to understand their financial capacity and setting a timeline to eliminate debt within six months, thereby enabling a more secure transition to independent living.

Caller 7: Lisa from Raleigh

Timestamp: [70:12]

Issue:
Lisa and her husband, nearing retirement age, lack substantial retirement savings and do not have a pension or 401(k). Despite owning a mortgage-free home valued at $700,000 and running a business grossing $200,000 in profit, they struggle to save for retirement as earnings are continually reinvested into the business and lifestyle expenses.

Notable Quote:

"How do you have enough income for retirement if you don't have the pension or the 401k?"
(Timestamp: [71:33])

Advice:
Rachel suggests that Lisa and her husband evaluate their budget to allocate funds towards retirement savings. She recommends considering the sale of their business or downsizing their home to free up capital for investments that can support their retirement needs. Jade emphasizes the importance of balancing business reinvestment with personal financial security, advising consultation with a financial professional to explore viable retirement strategies.

Caller 8: Edward from New York City

Timestamp: [75:00]

Issue:
Edward, a 29-year-old single individual, seeks guidance on investing in a rental property in Western Pennsylvania. He owns a current rental property with a looming mortgage and has faced challenges, including a property fire, which has stressed his financial resources.

Notable Quote:

"Properties are not passive income. I learned that the hard way."
(Timestamp: [76:04])

Advice:
Rachel advises Edward to prioritize paying off his existing rental property to eliminate debt before considering new investments. She cautions against managing properties from afar due to the complexities and recommends focusing on primary residence ownership to ensure financial stability. Jade concurs, highlighting the potential pitfalls of overextending financially and the importance of hands-on management in real estate investments.

Conclusion

Throughout the episode, Rachel Cruze and Jade Warshaw underscore the importance of deliberate financial planning, transparency in personal relationships, and disciplined budgeting in building and maintaining wealth. By addressing a variety of financial challenges with empathy and expertise, they provide listeners with actionable strategies to overcome debt, secure financial independence, and make informed decisions that align with their long-term wealth-building goals.

Notable Quotes Summary

• Jocelyn:

  "He's like a married bachelor, total checkout. So I don't know what I should do from this point on."
  (Timestamp: [02:11])

• Isaiah:

  "You don't have freedom to make even a decision to leave."
  (Timestamp: [05:08])

• Rob:

  "Just work really hard, have a plan, and live within your means."
  (Timestamp: [36:30])

• Joseph:

  "We just started, like, I just discovered the Ramsey solutions, like, two, three months ago."
  (Timestamp: [58:58])

• Lisa:

  "How do you have enough income for retirement if you don't have the pension or the 401k?"
  (Timestamp: [71:33])

• Edward:

  "Properties are not passive income. I learned that the hard way."
  (Timestamp: [76:04])

---

This episode reiterates that wealth is a product of intentional choices and consistent financial habits. By leveraging professional advice and adhering to sound financial principles, listeners can navigate their financial journeys with confidence and clarity.

Transcript

[Rachel Cruze]

Foreign live from Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create amazing relationships. I am Rachel Cruze hosting this hour with best selling author and my good friend Jade Warshaw and we are answering your questions. So give us a call at 888 825-5225. We'll be talking about your life, your money, your relationships, your career, all of it, anything and everything. We are here for you. So first off, kicking us off this hour is Jocelyn in Lubbock, Texas. Hi Jocelyn, welcome to the show.

[Jade Warshaw]

Well, for taking my call.

[Rachel Cruze]

How are you doing? We're doing great. How can we help?

[Jade Warshaw]

Well, actually my husband and I have been together for 26 years. We have three sons and he work as a so developer and I'm a stay home mom for 20 years and he handled all the monies and I take care of the kids. So it worked quite well until eight years ago. I kind of expect him to step up for our king son but that didn't happen. So I wasn't happy. And then our marriage turned south. So and then since then I no longer allowed to know the household finance. He gave me a credit card to buy food and necessity for the kid and you know, for the family. But I don't know how much he makes anymore and he doesn't even ask me to sign the tax return filing. So I really don't know what's going on. And I asked him, well, during the COVID he almost died at the hospital and I asked him, you know, the password to pay the bills on his laptop and you know, he refused to do that. And then I had to bring his laptop to the hospital. But then after he got better and he got home and I told him that, you know, I should know our finance and just in case if he goes to the hospital again. And he said, you know, he'll, he said I will figure out after he dies.

[Caller]

Oh my gosh.

[Jade Warshaw]

Yes. So we have been living like a housemaid and I take care of the kids and like a married single mom and he's like a married bachelor, total checkout. So I don't know what I should do from this point on. And you know, this is my only marriage and I have, you know, like, I think this is it for me. But then I don't know how to turn this thing around.

[Caller]

Yeah.

[Rachel Cruze]

Jocelyn, I'm so sorry that. Thank you. How old are your kids?

[Jade Warshaw]

My kid, my oldest one is 18. It's going to be 19. And then and I have twins. They are going to be 16.

[Rachel Cruze]

Okay.

[Jade Warshaw]

So I mean they are probably getting out of the house soon.

[Rachel Cruze]

But I mean, like, I mean, I mean at that point, at this point, Jocelyn, from the information you've given us, to me, this is way more of a marriage issue. I think the effect and the symptom is that he's isolated himself with the money, which is a problem in and of itself, but it is, it is a symptom of what's going on from the root of your marriage. And so like you said, which I, which I would agree, the context clues you've given us is exactly right. You don't have a marriage. Right? I mean like this is not a relationship where there's a partnership and there's two people doing life together. You guys have two completely different lives is what it feels like. And you just happen to live under the same roof.

[Jade Warshaw]

Well, the problem is I'm the only person live in this country. So I think he see that as I have no support system. So that may be the reason why he can take advantage of my situation. And I have nowhere to go. I mean, and I have been, you know, being a stay home mom for 20 years.

[Caller]

Do you have.

[Jade Warshaw]

I do.

[Caller]

Do you have friends? Do you have anybody here outside of family that you rely, that you can trust?

[Jade Warshaw]

I can talk to anybody, but if they are good listener, but not really, you know, practically could be helpful, you know, like in the deep situation. But I have a lot of friends I could talk to. I mean they listen to my problem and they understand.

[Caller]

So you're not alone. But if you not alone, have you voiced this? I mean, aside from like Covid situations where it's really, you know, stressed or extreme. Have you had this conversation with him, brought it up, not in the midst of an argument and just said, hey, here's the way I'm feeling. Have you done that? And what's been the response?

[Jade Warshaw]

If. So here's the thing. A lot of the time he's very calm and soft, like quiet. Like if he can counter all the problems, he'll be quiet. Like, you know, basically it's, it's his way that I have to learn to adapt, which I'm very flexible and adaptable. But a lot of time it's like this is the way and I mean maybe he's willing to share the information of the finance he was able to give me.

[Caller]

Well, because clearly not because you don't have it. So he's not.

[Rachel Cruze]

And my worry is that he has a level of control and power over you, Jocelyn, that is so scary and unhealthy where you have no options or choices. So I think one of the best things you can do is put yourself in a position where you have options and choices. And so where that starts from a tactical standpoint is money. Because like you said, like I, I'm a stay at home mom. I, I don't have, I don't have money. And so it starts to be very, very hard lines for me of you either give me full access to our money or there's going to be a more intense step of something else. Absolutely. And I think, Jocelyn, I mean, and again, this is, this is your decision. And I always. These calls, I feel like a lot of weight and responsibility because we'll get off with you here in about three minutes, Jocelyn. And you're gonna have to make these decisions. Right. So what I like what I am sensing and laying out for you. This is life changing. And I want to just be careful of how I even like coat this. But, but I would be setting myself up possibly for a new life. People stay in marriages where they're unhappy, but it's one thing to be unhappy in a marriage. Uh, you know, you go through the, you go through the ranks, you do what you can. It's another to, to have no power or control over your own life.

[Caller]

Yeah.

[Rachel Cruze]

Where they've taken that from you. And I feel like that's what he's done. Where you don't have freedom to make even a decision to leave at this point because you have no access to money or information beyond that. So yeah, I would be getting myself in a position for you to, to get access for the money, not only just to heal the marriage, which I hope helps, but it just doesn't it to me it's seems like there's less hope of that turning around and probably more of a reality of you realizing, oh my gosh, I have one life to live. And unless he's not, unless he's willing to do intense work in therapy and us walk through this together, which I would pray that would be the best, that's the best outcome. But if he, would he ever do that? Would he ever go through not, not a. Not for money, but for your marriage. A marriage, intensive therapy, any practice. He's really what.

[Jade Warshaw]

He's very passive in life. So it's either I am the one who is being the, you know, the lead and plan for everything for the household or nothing get done.

[Rachel Cruze]

Well, if you planned it and said I have a therapist and I Want to go every Tuesday for the next nine months with you at 3:00 every Tuesday. Would he go?

[Jade Warshaw]

Yeah.

[Rachel Cruze]

Okay, that. I mean that.

[Jade Warshaw]

I don't know if I want that either.

[Caller]

Why?

[Jade Warshaw]

I don't know. Because it's, it's. To me, I have so much accumulation of the grief, anger, or, you know, like, it, it. I don't know.

[Caller]

I mean, it's a lot. Listen, what you're saying is. I, I think I get what you're saying. Like you don't want to open the can of worms, right? Like, there's a lot there. And the truth is, when you do go through therapy, it creates. It's almost like it creates more work for you to do, more to work through. It's not just like a quick fix, right. It's going to create more and more.

[Jade Warshaw]

The work is on me. So it's like constantly. So that's what the majority the problem is.

[Rachel Cruze]

Yeah. So, I mean, if I were you, Justin, you. You need somebody, I think a professional in your corner and go get individual work for you. Because like you said, you're harboring and holding a lot in life towards him, which makes complete sense. Why? And then I think over time, it's going to get more and more clear of what you need to do, either pressing more into the marriage or not. But I would be making some hard lines to at least have access to the money. You, you, you have to have that in my head. I mean, that, that, that needs to be your first step.

[Caller]

Have you gotten one of those texts recently claiming to be the USPS with some sketchy link to update your address? It's annoying and a little terrifying, and you probably think to yourself, I should do something about this, but where do? Well, as your nerdy friend who does the research for you, I found the solution. They're called Delete Me. And here's the reason they come in the clutch. The Internet is packed with data brokers, which are these shady companies whose sole purpose is to collect your personal info and sell it for a profit. Enter DeleteMe. Delete me swoops in, finds your info on these sites, and removes it on your behalf. They even send you a report with all the details. And so far, for me personally, they have reviewed 27,000 listings, removed my info from 240 data brokers, and, and save me 66 hours in the process. I trust DeleteMe to help protect my family. And I trust them to help you too. You're gonna get fewer spam texts, fewer phishing emails, and fewer creepy Robocalls and Deleteme also makes a great gift for other people in your life that you care about. Individual plans start at just $9 a month, so take an easy step to protect yourself and your loved ones today. And as a Ramsey fan, you'll get an extra 20% off any of their plans. At JoinDeleteMe.com/Ramsey, that's JoinDeleteMe.comRamsey.

[Rachel Cruze]

Well, tax season is right around the corner, and one of the best things that you can do for your finances is to get a good tax pro in your corner that you can trust. This is one of the areas of money that can be very confusing. And so making sure you do it right the first time is important. So having somebody that you know is able to help you is really, really key. And so, yeah, there these tax pros are going to really help you figure out the best moves for your situation, especially if it's a little confusing if you have a small business, if you've had major changes this year, if you've moved, had kids, got married, you know, all the things. So go to ramseysolutions.com taxpro to find CPAs and enrolled agents that have been vetted by the Ramsey team. Again, that's ramseysolutions.com taxpro. Next is. Is this Isaiah? Yeah, from San Antonio. Hey, welcome to the show.

[Jade Warshaw]

Thank you so much for taking my call.

[Rachel Cruze]

Absolutely. Thanks for calling in. How can we help?

[Jade Warshaw]

Awesome. So basically I'm 18, and I got married this year in January, and I'm super young. I own a home service business with my actual. My twin brother. So we're both 18, and we've been running this for about a year and a half. And I just want to know if I should maybe look at getting a traditional job because there is an opportunity for right now to make more money.

[Caller]

Sorry, I didn't mean to cut you off. I thought you were finished. Keep going.

[Jade Warshaw]

All good? Yeah. So I just want to know if maybe looking at getting a traditional job would be a better idea just for consistent income. I also moved out this year, so maybe well late last year, so basically this year, but all kind of happened at the same time. So I have a lot more responsibility, a lot more bills. And I just want to know if maybe getting a traditional job, specifically something in sales where I'm something I'm already really proficient at, where I have the opportunity, you know, to make a lot of money. I just want to know if maybe that is a better avenue to take than continuing to grow this business, especially with the you know, inconsistencies that can often come with small businesses, maybe.

[Caller]

I mean, let's. What are you making right now, and what are you guys projecting?

[Jade Warshaw]

So right now I make anywhere between like five to 700, sometimes on a good week, $1,000 a week. And, you know, it's not a lot. We pretty much. We split most of the income down the middle, me and my brother. And, you know, we leave some for, you know, bills and leads and, you know, all the overhead that we have for our business, which is pretty minor.

[Caller]

But you. You personally. You personally take home as your pay somewhere between 2,000 and $4,000 a month, is what you're saying?

[Jade Warshaw]

Yes, ma'am. Yeah.

[Caller]

Okay.

[Jade Warshaw]

And it fluctuates very heavily.

[Caller]

Okay, but it fluctuates between the two and 4,000?

[Jade Warshaw]

Yes, ma'am. Yeah, I would say.

[Caller]

How long have you guys been doing that?

[Jade Warshaw]

About a year and a half now.

[Caller]

Okay, and what are the other options? You said, should I get a better job in sales? Do you have, like, ideas of what that might look like or has someone offered you something?

[Jade Warshaw]

Yeah, so I. I got an offer, like, a while back for car sales position. And then I've also done my own research and looked into different sales positions from companies that are kind of similar, honestly, to what I've been doing already, like, selling. So, like, you know, roofing and, you know, stuff like that.

[Rachel Cruze]

Yeah. Does. Does your wife work?

[Jade Warshaw]

Yes, ma'am. Yeah, she does.

[Rachel Cruze]

What does she bring home?

[Jade Warshaw]

She brings home. So she makes. She just recently got a raise, so she makes 17 an hour and she works full time, so.

[Rachel Cruze]

Okay. Per month, what would you say she's gonna bring home?

[Jade Warshaw]

I would say I, like. I don't know, maybe like, $2,000 max.

[Rachel Cruze]

How much?

[Caller]

Go ahead, Rachel.

[Rachel Cruze]

For your household, for you guys, as you said, you have a lot more responsibility because you've moved out. You guys are on your own. How much does it take to run your household per month? Have you guys done a detailed budget?

[Jade Warshaw]

Yeah, so we don't have a super detailed budget. We've. We've only really been home from, like, our honeymoon for, like, three weeks. But, you know, it's roughly, you know, the bills for, like, you know, rent and utilities and pretty much everything that we have to pay. The company that we live under is around $2,000 a month. And then, you know, obviously gas and everything else is probably a couple hundred dollars a month. And we know groceries is roughly at least $100 a week, something like that.

[Rachel Cruze]

So I think. What would. What would be driving this, for me, this decision is number one, knowing and doing a detailed budget. And before you get off the phone, we will hook you up with some stuff for you. Gu down as newlyweds and figure this out because you know, you. If so, what would drive me, number one is making sure that I, we can cover everything we need from food, utilities, transportation, all of that. And do you guys have any debt?

[Jade Warshaw]

No ma'am, neither of us have any debt.

[Caller]

Okay, great.

[Rachel Cruze]

Yeah. So just knowing, hey, this is what we need to live off of. Can we live off of this with me doing this small business and you and your wife working? And, and if this is a small business, the other caveat is is this where you want to be long term? Like if you looked up in five years, do you want this business to grow? Is this what you want to do? Is this what you enjoy?

[Jade Warshaw]

Yes. Yeah, so I do enjoy what I do. Like you know, obviously the home services itself, like the pressure washing and window washing is not really like my preferred. Like I don't think anyone really like loves, loves that. I mean some people do. But you know, running a business, I do enjoy it, especially with my brother. Yeah, you know, we have a good time and we, we work hard. But you know, I also wouldn't mind, you know, doing something else job. It's always been something that's been in my life.

[Rachel Cruze]

I didn't know if there was something you were doing that was a passion and you were like, this is what I want to do for the foreseeable future. But if it's kind of like a, it's fine and it's fun to run a business and you can make more.

[Caller]

Somewhere else, I mean, why not do both? It feels like from what you described, especially based on the pay and the, the like sometimey nature of it, it feels like it could be more of a hobby side hustle as it grows, if it continues to grow and maybe you continue to do it. But why can't you do this job while you do another job? Like is this like you've got a book of business? Is it something that your brother takes on more of the load and you take on a smaller load so you still got, I don't know, a thousand bucks coming in a month, but you're still doing another full time job?

[Jade Warshaw]

Yeah, that actually I've never even thought of that. And that's a really good thought. Just because he already like, he almost takes a more lead role in the business anyway just with his, I don't know, he just, he just always has he's just been more kind of hands on always than me. And so I. I've actually never thought of that. You know, almost me just taking more of a. A back seat and just doing it as a part timer. Side hustle, you know?

[Caller]

Yeah. Yeah, I. I like that idea because at least you have some stability. It's almost like you can keep doing this until you land the thing that you want to do, and then you can pull back on that. But it still serves as a really great side hustle because you guys are just getting started and there's a lot in front of you. So being able to stack up cash and kind of just like get the wheels going, I think is going to be good. Um, and I like what Rachel said about really deciding long term what that looks like, like what your wife wants to do. Is there school at. Or any sort of training in the future that you might need to pay for. So really stacking up money in this phase is also really good.

[Rachel Cruze]

Yeah. And this is. This is jumping a little bit ahead, but something to think about because the business is small, so you guys may not. But just know small business, especially when there's a partnership and especially between brothers, if this thing starts to scale and you guys start doing this long term, I would have some very formal documentation write up, even sitting down with like a business lawyer to make sure that the terms and everything, ownership, stock, I mean, anything that you guys in the future, if this starts to become bigger and more long term that you. You really want to think about. Because sadly, I think people get into this, you know, small business with a friend or with a sibling, and it all is great and fun and then it starts to grow and then we just see anything with money or business. When you're with someone close, the more communication, the more that you lay out ahead of time, the less messy it gets down the road. Because I just don't want this to hurt a relationship down the road that if he feels like you're not doing as much, but he's doing it all, but yet you still have 50% ownership. But like, you know what I mean? Like, just talking through all the agreements and all the situations.

[Jade Warshaw]

Exactly what you're talking about. Like, me and my brother were twins, so we have a very close relationship. But there's even times where this has put a lot of strain on our relationship just because there's a. It's. Especially since we both have bills, we both have responsibilities. There's a lot kind of in the balance.

[Rachel Cruze]

Yeah. And Isaiah, it may be one of these things, you look up and you're like, hey, he can take it and own it and he. And you can get paid out. And then you work for him. Work for him for a season two.

[Caller]

That feels better to me already.

[Jade Warshaw]

Yeah. Because I'm going to be honest, before, like, he started it initially himself, before I ever joined him and, you know, quit the job I had and came and started working with him and before I ever joined him, he was making a lot more than he's making now, which is sad to admit that. But yeah, you know, a year and a half we've really grown, you know, we've just like blown it out of the park and we're like so happy and so.

[Rachel Cruze]

For sure. Yeah, sorry I have to cut you off. We're going to a break. But yeah, I would have that conversation with him and maybe there's a sense that he owns it and you work for him making some extra money. This is the Ramsey Show. There's a time in your life and did the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner. You can rely on Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership. Wisely, Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent, manageable part of your monthly budget. Plus, when your home is paid off, that was your largest expense. Now it's extra money in your pocket and an asset towards turning you into a baby steps millionaire. So get started on the American dream of homeownership [e-mail] that's churchillmortgage.com this is.

[Jade Warshaw]

A paid advertisement in MLS ID 1591.

[Rachel Cruze]

And mlsconsumeraccess.org Equal Housing Lender, 1749 Mallory Lane, Suite 100, Brentwood, Tennessee, 37027. Today's question of the day comes from why refi? Why refi refinances your private student loans and builds a custom loan based on your ability to pay. Now you guys have private student loans that's different than federal student loans like Sallie Mae. So learn how you can customize and refinance your loan and all your options and a lump sum payoff option that you can qualify for for after 24 months. So go to y refi.com Ramsey that's the letter y, r, e, f y.com Ramsey not be available in all states.

[Caller]

All right, today's question comes from Shannon in Alaska. She says, how do I save up for a divorce when I'm in debt? I separated from my husband of eight years after he committed multiple incidents of financial infidelity. I've since increased my income to a hundred thousand, which was what we brought in combined when he could work. The problem is that we have tons of debt, including money owed to the IRS and credit cards. The house is in my name only, and I don't want to move our kids out due to their current schools. Do I treat saving for a divorce as a sinking fund, or should I pull from my retirement so I don't have to spend more time in this marriage? That's a really good question. The good news is you are making money like, you're making a good living, not just for a married couple, but for a single person. So that's a good part of it. It sounds like you're spending a lot of the income on, like, whittling away at the debt, if. If I understood that correctly. So I would pause that. I would pause whittling away at the debt, because the truth is, once you get divorced, it's gonna get. The assets are gonna get split. The debt's gonna get split, and I don't want you paying more than your share at this point. Plus, you've got to pay for the divorce. So, yeah, right now, I treat this like storm mode. And I would stop and I would save up, and I'd really kind of put my feelers out there and find out, like, how much is this gonna cost me? How much can I save up for it? And it doesn't say whether or not they're separated. Oh, she does say I separated. Okay. So I would kind of take my time and make sure I have the money, because it sounds like you're in your own life at this point. The paperwork just hasn't been done. And so rather than go deeper into debt. Yeah, I'd save up for it and pay as you go. It's not like you have to have the entire, you know, lump sum all at once.

[Rachel Cruze]

Yeah. And especially depending on who you hire to help you with it, if they want to retainer or whatnot. So I would say that. And depending on the states. I mean, divorces, depending on the state have different clauses. And, you know, it depends really state by state, but usually with the assets. Yeah, it'll be split, including the Debt. And so what that looks like with. From keeping kids like you taking the house, meaning less assets, you have to make sure the debt is all paid. But keeping the kids in school, all of that. And we get that call. A lot of people that are. Have taken on. We got. I got this call with John Deloney last week and you know, she took the house to keep the kids in and she can't afford the mortgage anymore. So. So there is, there's a lot. There's a lot. Money is just one factor of a divorce when a marriage ends. And it's just horrible and terrible for everyone around, but making sure, Shannon, that, yeah, you're setting yourself up well and that especially in something like this, that the emotions don't drive all of this because that's where some people get into financial trouble is they just, they want to protect the kids, which makes total sense. And if you can, absolutely. Um, but also I want to make sure that you're doing logical things to set you up well where you will have more peace and less stress when it comes to money after the, the smoke clears with this. But I'm so sorry you're going through that, Shannon. That's just, that's. That's so difficult. Up next, we have Aaron from San Francisco from the Bay Area. Hi, Aaron. Welcome to the show.

[Jade Warshaw]

Hey, thank you so much for having me on. It's a pleasure to speak with you.

[Rachel Cruze]

Absolutely. How can we help?

[Jade Warshaw]

Well, I'll do my best to be brief and succinct here, but essentially my wife and I have been presented with an opportunity by my in laws, her parents, to take over a business that they've built very successfully. And the caveat to it that is making us a little uncomfortable is that they're offering half of the business to us, half to her brother, where they would essentially gift us half of the value of the business, which has no debt. We would owe them back for the other half, but we'd be in partnership with her brother. Now, we love her parents, love her brother. As a family, there's no real issues, but we both come from family businesses that we've seen just create a lot of turmoil and a lot of pain kind of in both of our families. And so when we got married, we swore that we would never go into any type of family business. It would never be something that we really pursue. And then this opportunity came up and we want to, we want to be wise. We've worked really hard to get out of debt, have been longtime listeners and adherence to, you know, to Ramsey's baby steps. And so we just feel like, man, are we going backwards by jumping and going into a. Yeah.

[Rachel Cruze]

So I have a question. Her parents. Yeah, it's their business. And let me make sure I understand the terms correctly. Are they, are you, are they needing you to buy them out basically for them to retire or are they gifting you all the business? Like are they basically going to put you guys as, as owners?

[Jade Warshaw]

Yeah, they're, they're essentially gifting us half the business and then we would owe them back for the other half of what it's worth, almost as if it was a kind of an early inheritance, essentially. They want to, you know, my, my mother in law has expressed, I, you guys are good kids, you work hard. I'd like to help you out before I die. And I think they're looking for a.

[Rachel Cruze]

Way to, to do that. So they, Are they owning. So Aaron, are they owning half? And then you all and the brother have half, so you basically have like a third.

[Caller]

A third?

[Rachel Cruze]

Yeah. Or is it that the brother has the other half and you all have the other half?

[Jade Warshaw]

Yeah. So we would owe mom and dad back for 50 of the appraised value of the business and then my brother in law would own a quarter. My wife and I would own a quarter.

[Rachel Cruze]

Okay, so you and the brother together have to, you guys owe together 50. So you're 25 and he's 25. How much is that?

[Jade Warshaw]

Yes, ma'am, that, that's correct.

[Rachel Cruze]

How much will that be about?

[Jade Warshaw]

Yeah, It'd be about 4 million that we would owe back and then they would be gifting about 4 million.

[Caller]

So your cut of that's 2 million, you and your wife's cut, correct? Okay.

[Jade Warshaw]

Yes, ma'am. If we decided to sell the day that the, that the deal went through, which, which they've expressed. If that's what you guys decide to do and you want to stick a for sale sign on the ground the second the ink stride and that, that's your prerogative.

[Caller]

But, but if you didn't, if you didn't like, what's the projection on being out of debt? Like have you run the numbers to see. Okay, if we did this.

[Rachel Cruze]

Yeah. What's your cash position now, you and your wife?

[Jade Warshaw]

So not $2 million, that's for sure. Not whatsoever. I mean we were doing, you know, I think okay, but you know, just maybe a couple hundred thousand.

[Rachel Cruze]

But not, I think honestly the cleanest way that I see going forward would be would the parents consider just selling the business and then giving you guys, part of the inheritance early in life where there doesn't have to be this ownership loop that happens.

[Jade Warshaw]

Yeah, yeah, that's another. That's kind of another piece of the conversation that we're looking at, but it looks like they're leaning more towards because it's a family of business owners. I think they like the idea of giving us an opportunity to grow a business.

[Caller]

But do you like that business? Is it your passion as a person or your wife's?

[Jade Warshaw]

No, you know, truthfully, no, I wouldn't say that it's a passion, but we're passionate about the opportunity.

[Caller]

Well, what kind of business is it? What is it?

[Jade Warshaw]

It's like a real estate company, essentially.

[Caller]

Okay, so what, you're sorry? Oh, no, I'm just. I mean, what you said is really profound to me because what, you're interested. You're interested basically in the money, but you're not interested in the work, like the type of work that it is. And I, I mean, I get it, but I don't think that that would be a good reason to. I feel like that's the recipe for disaster as you get into this. It's not what you love, it's not what you're passionate about. The business suffers, you feel some type of way because you're having to carry this thing that you didn't really want. Right. You just cared about. Well, yeah, it feels nice to have the stake. Like there's a possibility to really have a lot of money long term. But I like Rachel's plan A to sell it.

[Rachel Cruze]

Well, so Erin, there's. There's one. You know, there's a way that this all works perfectly and everyone's great. That's just a very small percentage of all the things that can go wrong. And when you start adding the layers of complexity from the parents still have 50% ownership, you have 25%. There's a brother that has 25%. It's in an industry you don't know and you owe on top of that. You're having to pay your way out of it over time and again, people do this and it works, but it's such a small percentage of nothing going wrong from a financial or a relational aspect. And so you know what I would do? It would be unfair for your wife to be cut out of a deal from an inheritance standpoint where the brother somehow gets it all because he wants to take on the debt. So there need you guys, I mean, honestly, with this amount, because we're talking about a six million dollar deal here. So I would sit down with a family business estate planner and start kind of walking through. I want multiple options for you and your wife, Erin, where there's a level of fairness within the family, but also you have multiple options of what you guys can do versus just A and B. It's too big of a conversation to limit it to 2 because I think there's other ways around this. And I would. And I would get a professional involved from a family business standpoint, an estate planner. Sorry, Aaron, I know that wasn't cut and dry, but I hope that helps.

[Jade Warshaw]

You shouldn't own a gun you're not willing to shoot in moments of self defense. A burner launcher lets you protect yourself.

[Rachel Cruze]

In a non lethal way.

[Jade Warshaw]

That's exactly why burner launchers were created. Everyone from parents and nurses to pastors.

[Caller]

And even special forces veterans rely on.

[Jade Warshaw]

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.

[Caller]

Chemical irritant projectile that can disable a threat from up to 60ft away. 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 in all 50 states with no permits required. And because they're not firearms, they can be shipped directly to your door. Plus, Ramsay Fans can get 10% off an exclusive bundle which includes a burner.

[Jade Warshaw]

Pistol, CO2 cartridges and ammo. And other burner products like safety alarms.

[Caller]

Defense sprays and body armor are also 10% off. For our listeners, just go to Burna.com.

[Jade Warshaw]

Dave to to learn more. That's B Y R N A.com Dave.

[Rachel Cruze]

Welcome back to the Ramsey Show. I'm Rachel Cruz hosting today with Jade Warshaw. And on this show we talk about living like no one else. So later you can live and give like no one else. And so this whole journey, when it comes to your money and us talking about this so often, you know, there's a season of sacrifice of getting out of debt and saving up cash. You know, 40% of Americans can't cover a $400 emergency in cash. So even getting above that step, right, I mean like there's like these small wins along the baby steps. And then you get to a point where you actually start to get to build wealth. And within that you change your family tree. You have options and choices with your life. You get to be unbelievably generous and you know, that starts, that's the second half of this journey. So we always like to highlight some stories of people that have accomplish the first part and as they move into that second part or living in the second part of living and giving like no one else, always get to talk to them and share their story with you all. And so we have Rob from New York City on the line and he is a baby steps millionaire. Thanks for the call, Rob.

[Jade Warshaw]

Hey, how's it going?

[Rachel Cruze]

Doing great. Okay, so tell us your net worth.

[Jade Warshaw]

Right now it's about 1.1 million.

[Rachel Cruze]

Okay, and what does that consist of?

[Jade Warshaw]

So we have about my wife and I combined about 480 in our retirement accounts and then 520 equity in our home. We have about $80,000 in paid for vehicles, $10,000 emergency fund and about 20,000 miscellaneous investments.

[Rachel Cruze]

Amazing. Okay, so for your income, what was the worst year from an income standpoint that you guys made? And what's been the best year?

[Jade Warshaw]

I mean when I first started my career full time, probably about 50,000 income and now it's 150. And then my wife probably started around 30 and is now 90.

[Rachel Cruze]

Okay, awesome.

[Caller]

How old are you guys?

[Jade Warshaw]

I'm 33. My wife's 35.

[Caller]

Wow, way to go.

[Rachel Cruze]

Well done. Was any of this money inherited?

[Jade Warshaw]

Ironically, we actually just were gifted $50,000, but that was after we hit our millionaire.

[Caller]

Okay.

[Rachel Cruze]

Yep. So the inheritance did not equate or help in that sense advance it. And what do you guys do? What do you and your wife do?

[Jade Warshaw]

I'm a police sergeant for a small city and my wife is a high school special ed teacher.

[Rachel Cruze]

Wow. Both just public servants.

[Caller]

Yeah.

[Rachel Cruze]

Police and teacher.

[Caller]

Yeah.

[Rachel Cruze]

Rob, you guys are literally, you're part like when we do our millionaire studies, the one, the recent one that came out, teacher was in the top five of millionaires. And so. Yeah, and you guys, I mean that, that's it. Did you guys go to school? I guess she did, obviously for teaching. What's your, what's your. Do you have any higher ed?

[Jade Warshaw]

Yeah, so I actually, I don't, I don't need any college degree for my career, but I do have an associates and I am going back online. My job is paying for it, but.

[Rachel Cruze]

Okay.

[Jade Warshaw]

And then my wife has a master's. Obviously, as you can imagine.

[Rachel Cruze]

Yes.

[Caller]

You guys are pretty young. I mean to accomplish this is a major accomplishment. So my guess is you've avoided debt or did you have a big amount of debt to pay off? Tell us about that.

[Jade Warshaw]

No, I mean I made some Dumb purchases early on. I bought a new truck and a new motorcycle when I first started my career. But I quickly paid it off and then just saved and saved prior to buying a home. Wow, that.

[Caller]

Clearly that paid off. Like that, that way of life of getting out and staying out of debt paid off.

[Rachel Cruze]

Wow, that's amazing. Okay, so what do you tell someone? Because you guys are in your early 30s, which again is so impressive because I think that there's, you know, it's, it's, it's hard out there. And a lot of people feel this tension of either the paycheck to paycheck cycle, they feel inflation when you go grocery shopping. Like life feels expensive and just keeping up for some people just feels hopeless and they're just trying to get traction. And they look at you guys as like, oh my gosh, I could never imagine, you know, being at that state. So what, what encouragement do you have for people out there of kind of the American dream, that it's still this ability that you get to make choices in your life. And you know, from a timeline perspective, it may be different for everyone, but what would you tell someone out there that wants to be you guys in the next 10 years?

[Jade Warshaw]

Just work really hard, have a plan and live within your means.

[Caller]

That's all there is to it.

[Rachel Cruze]

And that's the secret.

[Caller]

Yeah. I mean, truly though, like we say all the time, it's so true. It's a simple concept. The work is hard, but it's simple to talk about doing, which I so.

[Rachel Cruze]

Appreciate it because again, I think there's so much, especially on social media and everything. It's like this, this attention grab of what can I do today to get me something different tomorrow, where I just make tons of money. Like, it's like this, this quick approach, but it really does come back to this common sense way of living of below your means. Know what you're doing, pay attention, stay away from debt. And it's incredible what you can do.

[Caller]

Well, I love this example. They're 33 and 35 years old. They started out making 50 to 150. I mean, for each of them, nobody is making 300, you know what I'm saying? Like, and they're not in their 60s or even in their 50s. And so I really do think this is a great example of how if you just avoid debt and whatever debt you have, you pay it off as quickly as possible. And then it's just, all right, we're stacking, we're maxing out our 401ks, we're maxing out our IRAs.

[Rachel Cruze]

Yep.

[Caller]

I mean, yeah.

[Rachel Cruze]

So, Rob, my last question for you is when we, when we talk about building wealth, it is not just to like accumulate dollars in an account. Right. There's so much of our world and society that there's like such a PR and this like ego driven thing of like, what's my net worth? Right. But doing it so that you're able to be generous and have margin to do things. So what has living life in this way, in a common sense way with money that you guys have succeeded and are baby steps millionaires. What's the pro of it? What would you say is the advantage besides just having money?

[Jade Warshaw]

I mean, really just having that financial security. We have two kids and one on the way, so just never having to worry about food and paying utilities, that's, that's just big for us. We work just as hard as we do now with a really good income as we did when we didn't have a good income. So no matter what our net worth is, we just stay focused and keep working hard. Owning a home is insanely expensive, especially in New York. So you know, people out there that questioning renting. You have no idea how expensive it gets until you start having to replace things yourself.

[Caller]

I know, that's right.

[Rachel Cruze]

Yeah.

[Jade Warshaw]

Paying insane electric bills. So it's not easy, but you have to just keep working hard and stay focused.

[Rachel Cruze]

Yeah. So good. So great. Well, Rob, we really appreciate you. Yep. Calling and sharing your story. I always think it's encouraging and helpful just to hear from, you know, from real life people that are doing it. So thank you, Rob, for your time. I appreciate it.

[Caller]

It's also, I feel like, I feel like that call really cut through a lot of the stigmas, even the, the home purchasing part of it where it's like there was a lady that called in a couple of days ago and she's like, we're, you know, we're, we're millionaires. Including our house. But my husband says we shouldn't include our house. You know, that kind of thing. I'm like, just because you're. Even if your home's not paid off yet, if you still have the equity, like that's still counting towards this. So it's like.

[Rachel Cruze]

Yeah, I mean, it's still value.

[Caller]

Yeah, it's still value in assets. And so I just love their story. Really good.

[Rachel Cruze]

Yep. So good. All right, from TikTok. Jade, are you ready?

[Caller]

Yeah.

[Rachel Cruze]

We'll take to action from Sydney.

[Caller]

Okay.

[Rachel Cruze]

She's asking, is it worth consolidating Debt, if the interest rate is lower, I would not consolidate.

[Caller]

I don't know if she's talking about student loans or just in general.

[Rachel Cruze]

No, she didn't say we can make the caveat with student loans, but yeah, with student loans.

[Caller]

Even on that, sometimes I'm on the fence because let's say you have. Let's say you have a total of $70,000 of debt, but it's broken up into little bits and pieces. On the one hand, if you're working a debt snowball like, that can be so motivating to say, okay, like, I just knocked out the $5,000 one and now I'm doing the $7,000 one. But when it's a big chunk, even though it's a lower interest rate, sometimes that can be very, very overwhelming. So part of me. It's kind of like your personality type on that. But for student loans, I will tell you, I tend to be one of the people that's like, hey, if you can go quicker and be motivated, the interest rate might not matter as much in the end. Because I know for Sam and I, our last student loan was a $91,000.

[Rachel Cruze]

I was going to ask how much. I knew it was your largest one.

[Caller]

And it was one chunk. And I was, like, shook. I was just like, no, I don't.

[Rachel Cruze]

Want to do it. I don't.

[Caller]

But. So that's probably the reason that I would take that approach. Obviously, mathematically speaking, you would say, yeah, if you can get a lower interest rate, like, do that. But these consolidation companies, like, when we talk about, like, debt consolidation, the ones you see at midnight, Yep, those are the worst. I would never pay someone to do for me what I can do for myself, which is basically ask for a lower payment or get yourself on a payment plan. Those are all things you can do on your own. You don't need to pay somebody a lump sum. You don't need to tank your credit in order to get a deal. Right. Like all of those things. So I would not use one of those, like, late night credit consolidation situations.

[Rachel Cruze]

Yeah, yeah. And I think it is. It's a question we always get. And it always goes back to. It's more than just math.

[Caller]

Yes, right.

[Rachel Cruze]

From a mathematical standpoint, sure. But also from the motivational standpoint, totally different. And you actually get out faster with better motivation. Right. So. So great. Well, Jade, thanks for the great hour. Thanks to all the guys in the booth, and thank you, America. We'll be back.

[Jade Warshaw]

Taking care of your health doesn't have.

[Caller]

To cost a fortune.

[Rachel Cruze]

That's why field of greens is in my house. Field of greens is made from fruits.

[Jade Warshaw]

And veggies selected by doctors to support.

[Rachel Cruze]

Your heart, liver, kidneys and metabolism. And here's the best part.

[Jade Warshaw]

They're so confident your doctor will notice.

[Rachel Cruze]

Your improved health, they offer a money.

[Jade Warshaw]

Back guarantee, no questions asked.

[Rachel Cruze]

Try today and get 15% off at.

[Jade Warshaw]

Fieldofgreens.Com Ramsey promo code Ramsey fieldofgreens.com Ramsey.

[Rachel Cruze]

Live from Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create amazing relationships. I am Rachel Cruze hosting this hour with best selling author and my good friend Jade Warshaw. And we are answering, answering your questions about life and money and relationships, career, anything and everything. So give us a call at 888-825-5225. And we will be taking your calls this hour. Up first, we have Maya in Atlanta, Georgia. Hi, Maya. Welcome to the show.

[Jade Warshaw]

Hi. Thank you so much. Can you hear me?

[Rachel Cruze]

Yes, we can. How can we help you today, Maya?

[Jade Warshaw]

I am terrified, to be honest. I'm expecting my first child soon.

[Rachel Cruze]

Congratulations.

[Jade Warshaw]

Thank you. I am in a very big hole. I'm considering filing bankruptcy just because that's kind of what's been recommended to me by a couple friends. But I'm just more so looking for guidance because I don't really know where to start or what to do or if that's even the best option for my situation.

[Caller]

Yeah. Well, tell us more. How much debt are you in?

[Jade Warshaw]

A little over 200,000.

[Caller]

Oh, wow. And what kind of debt is that?

[Jade Warshaw]

So it's kind of a mix. About 25,000 of it is strictly credit cards. 14,000 is from student loans and then the remainder is pretty much delinquent like previous bills that I am behind on or kind of got charged off or auto loans. I.

[Caller]

Tell us about the auto loans.

[Jade Warshaw]

Okay. So I had a car rental business that started last year, but it's pretty much a failed business at this point because I'm not really making any revenue. And I've considered and tried multiple times selling the vehicles and, you know, trying to trade them in.

[Caller]

How many?

[Jade Warshaw]

But no one. There's five different ones.

[Caller]

Can you tell, can you go through and tell us the, the story on each of them, like what you owe on it and what it's worth?

[Jade Warshaw]

Yes. So there's five different ones I can put up if you give me one second. Sure.

[Caller]

So what were you doing, like Turo or something?

[Jade Warshaw]

Yes.

[Caller]

Okay. And so my guess is you pulled debt on all of these vehicles with the intent to rent them, and they're. You ran up the miles on them, so probably they depreciated very quickly, but you just weren't making the spread that you thought you would. Is that what.

[Jade Warshaw]

Right. One of the vehicles actually started out as a personal vehicle, but then I eventually, of course, used it for the business side of things once I resigned from my. My previous job.

[Caller]

Got it. Okay. Okay, so that makes sense because before when you said, Hey, 25, 000 credit cards, 14, 000 student loans. The rest is in like, other stuff, I'm like, gosh, that's like $160,000. In other. Okay, it makes sense now that it's cars. Do you have that info? If not, we can move on to the next thing.

[Jade Warshaw]

I do have all of the cars and how much is owed on each one, but as far as the value of them, I kind of got the information a little while back. So it's not as up to date.

[Caller]

Okay, well, as. As much as we can go through them and kind of give you some insight. So the first car. Let's call it car number one. What you.

[Jade Warshaw]

Okay.

[Caller]

What do you owe on it?

[Jade Warshaw]

The first one I owe 24, 000.

[Caller]

And what do you think it'd be worth? Private sale.

[Jade Warshaw]

What I've tried or what I got last information on was about 20, 000.

[Caller]

Okay, and how long ago was that information?

[Jade Warshaw]

Probably about three to four months ago. And this is for all of them. About three to four months ago.

[Caller]

Okay, so one is 20. Your $4,000 upside down. Okay, not as bad as I thought. What's the next one?

[Jade Warshaw]

The second one is about 28,000. Is. What's 28,000. Seven is what's owed on it. Do you want me to keep going on the other one?

[Caller]

You said you owe 28,000 and you.

[Rachel Cruze]

Could get 28 from it.

[Jade Warshaw]

As far as that one's worth, it's probably a couple months ago. It was around 25 is what it was worth.

[Caller]

Okay, what about car number three?

[Jade Warshaw]

Number three is 37,005.

[Caller]

Okay.

[Jade Warshaw]

What I was told it was worth is about maybe 33ish and some change.

[Caller]

And just for clarity, what did you go to like a carmax type place? Where'd you get that information?

[Jade Warshaw]

Correct, that's where I got them all previously appraised.

[Caller]

Okay, that's good to know. The good news is what I want to encourage you, like before we even get through the list. The good news is carmax value is like the. Probably the lowest value you would get for them if you sold these private sale, you might actually break even.

[Rachel Cruze]

Yeah. Yep.

[Caller]

So keep going. Let's hear number four. Number five real quick and then Rachel and I will give you our advice.

[Jade Warshaw]

Okay. Number four is about 40,000 that's owed on it. And I. That's the one. I really don't know what it's worth, but if I'm guessing, It's probably about 5,000 upside down, but I'm not 100% sure.

[Caller]

Okay. And then the final one.

[Jade Warshaw]

The final one is 42,002 is what's owed. And the last time I got it appraised, it was about 6,000 upside down.

[Caller]

Okay.

[Rachel Cruze]

Okay.

[Caller]

Okay. So the good news is I really think for sure the first three, if you sold on private sale, you could probably break even or get really, really close. But I think if I were in your shoes, and I'm not saying this, this is not a sexist comment by any means, but I'd be getting with whoever I know that has a little bit more cojones in this area and like more expertise. Like I'd be calling it my dad and brother. Be like, help me sell these cars when these app. Yeah.

[Rachel Cruze]

Because I just added this up. That's $171,000 in cars.

[Caller]

Yeah.

[Rachel Cruze]

And if in worst case scenario, you're probably 15, $16,000 upside down. So this, this, I mean, I, I would be making. I would say I'm getting these. I'm getting rid of these in the next two weeks.

[Caller]

Yeah.

[Rachel Cruze]

I mean like I would be putting them everywhere, all over the Internet, anywhere I could. I have some great cars and I'm selling them. Get them out of my life because that frees up. I mean, I can't imagine the car payments you're paying every month on these. Maya. I mean, like that's. Yeah. I mean I. That would be my number one. And so there is a lot of hope in that situation that 100%. Yeah. The majority of all of these. I mean. Yeah. You could be.

[Caller]

Have you tried to sell them and not had luck? Is that what's holding you back?

[Jade Warshaw]

Yeah. They're also a few of them are like extremely tired to the point where they're kind of out for repossession. So it's like I'm trying to get rid of them.

[Caller]

So they're back payments.

[Rachel Cruze]

Okay.

[Caller]

Okay.

[Jade Warshaw]

Yeah.

[Caller]

Okay.

[Rachel Cruze]

Which would make me get that. And I would. Took less to get them out quicker so that it doesn't. They don't get repoed because then you have nothing to offset the debt. So even if you have to take less, I would. I mean, this is more of a desperate situation because of what you're in. You know, Maya, it's kind of like, you know, with, you know, with people that are behind on their mortgage, and it's like you'd rather sell it quickly than get foreclosed on. I mean, it's kind of the same equivalent.

[Caller]

So the hard thing, though, is you've got to be able to give them the title. So how are you going to close the gap from the one, do you know what I'm saying? If you take less, how are you going to close the gap so that you can actually sell it free and clear? Do you have any money anywhere saved?

[Jade Warshaw]

I only have, as of today, probably about $1,000 to my name.

[Caller]

Okay, so what I would do then with that thousand dollars, because one breaking loose on one of these is going to help you avalanche through all of them. So the one that you was the least upside down was number two. The one that you owed 28,000 on that was worth 25. If you can just really quickly get 3,000 bucks saved and just focus on that one, you even clearing one of these immediately is going to rock your world. Y. You know, Absolutely. And so that's what I'd focus on. And then after that, they're going to go like dominoes because it's going to clear up that payment. You're not going to feel the stress of it. And so focus on one at a time. But there's a lot of hope here, like Rachel said.

[Rachel Cruze]

Yep. For sure. And what you can do to make money between now and when baby comes is going to be as helpful as possible, too.

[Caller]

That's right. That's right.

[Rachel Cruze]

Some extra money, Maya, if you stay on the line, Christian's going to pick up and we're going to get you with a financial coach to even walk with you through some of this, because there's a lot here. And with a baby coming, I know it's just life difficult, so hopefully that helps. Thanks for the call.

[Jade Warshaw]

Statistics show that half of Americans don't have enough life insurance or they don't.

[Rachel Cruze]

Have any at all.

[Caller]

I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something.

[Rachel Cruze]

Well, I used to be one of those guys.

[Caller]

I didn't even think about it.

[Jade Warshaw]

And one of my buddies said, hey.

[Caller]

The only reason to not have life.

[Jade Warshaw]

Insurance is if you hate your wife and kids.

[Rachel Cruze]

And I immediately went and got term life insurance.

[Jade Warshaw]

That's a gut punch.

[Rachel Cruze]

For decades, Dave, I've sat across people.

[Jade Warshaw]

Who'Ve lost a spouse, they've lost somebody important to them.

[Caller]

Me too.

[Jade Warshaw]

They don't know what to do next.

[Rachel Cruze]

You're gonna have a crisis here.

[Jade Warshaw]

You know, you got two options.

[Rachel Cruze]

While you're sitting and talking to a.

[Jade Warshaw]

Young widow, she's concerned about how she's.

[Rachel Cruze]

Gonna invest all this money properly and.

[Jade Warshaw]

Not mess this up, or she's concerned.

[Caller]

How she's gonna eat tomorrow.

[Jade Warshaw]

That's exactly these are the two options.

[Rachel Cruze]

It's saying, I love you to your family.

[Jade Warshaw]

Term life insurance, Jeff Zander and the team at Zander Insurance makes it easy and affordable.

[Caller]

I've used them personally for 25 years. They're the only people I trust.

[Jade Warshaw]

Go to Zander.com or call 800-356-4282.

[Caller]

People ask me all the time, George, what's your number one money saving hack? 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 when 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.

[Rachel Cruze]

When it comes to your insurance, bundling, home and auto is usually a great. A great start to saving some money. And our Ramsey trusted pros actually will shop the market for you and compare insurance quotes so that you don't have to. Your pro will compare pricing discounts and bundle deals for you with no extra costs. So that will save you a ton of time and money, which is great. And when you work with an agent, that's what they do for you. And our Ramsey trusted pros, they're interviewed, they're vetted, and they're coached to make sure that they are market experts and have your best interest at heart. So to get connected with an insurance pro, that again, is going to help you shop insurance the right way, make sure to check them [e-mail] bundle because that's one of the easiest ways that you're going to be able to save money on insurance and the cost when it comes to bundling your policies. So to get a pro in your corner and to check out the pricing, go to ramseysolutions.com bundle or click the link in the description. If you're watching on YouTube or listening in podcast on podcast, not in it. I guess you could be in a podcast on a podcast.

[Caller]

There you go.

[Rachel Cruze]

All right, next we have Joseph in Lafayette. Hi, Joseph. Welcome to the show.

[Jade Warshaw]

Hello. Thank you for having me.

[Rachel Cruze]

Absolutely. How can we help?

[Jade Warshaw]

Okay, well, my fiance and I, well, I should say my fiance wants to move. We currently live at her own, her parents property in a back house while we're paying off our debt. And when we get taxes in, she'd like to pay off one of the loans but then move. And I like, from all the numbers I've touched, it's like I'm trying to not break her heart, but tell her that we might need to stay longer until we pay off all of our debts before we add another bill expense.

[Rachel Cruze]

Yeah. Why does she want to move?

[Jade Warshaw]

It's always we're getting a bit older just to get away from, you know, parents. Nothing wrong with parents. It's just something we want to move to a bigger place for the kids.

[Rachel Cruze]

Okay. So it's more out of a desire, not a necessity. It's not like something is going awry relationally. And it's like, we gotta get out of here for the health of our family. There's not an urgency to it necessarily. It's just a deep desire of like, I wanna be on my own.

[Jade Warshaw]

Yes, ma'am.

[Rachel Cruze]

Okay, perfect. So how much, how much extra do you guys have a month? If you were to try to say, okay, yeah, here's what we would probably rent for. Have you guys put that into a budget just to see what that looks like?

[Jade Warshaw]

Ping. I have paying off the loans still. Like, if we were to move instead of paying off the loans, I'd be like negative 350.

[Rachel Cruze]

Okay.

[Jade Warshaw]

Every month.

[Caller]

How much are the loans?

[Jade Warshaw]

I've got three loans that all average about $2500.

[Caller]

2500. Okay. Okay.

[Jade Warshaw]

Yes.

[Caller]

And what's the. What are you paying right now to live in this other property that your parents have?

[Rachel Cruze]

Are you there?

[Jade Warshaw]

Yes.

[Rachel Cruze]

Okay. How much, how much are you guys paying? Do you. Are you paying anything? Are they letting you live there for free?

[Jade Warshaw]

Pretty much free. I just pay the electric bill.

[Rachel Cruze]

How much do you make a year, Joseph? You and your wife combined?

[Jade Warshaw]

My wife's a stay at home mom. And this year I made 44,000.

[Rachel Cruze]

44,000. Okay, because I was gonna say, I mean you have eight grand of debt. It's not.

[Caller]

Yeah, well, were you paying off other debt before this? And this is just what's left or.

[Jade Warshaw]

This is what's left.

[Caller]

Okay, that makes more sense.

[Rachel Cruze]

Okay, sorry.

[Caller]

Okay, so when do you think, like based off of the progress you've been making, how quickly can you have this 7,500 paid off?

[Jade Warshaw]

I mean, I could pay off one loan and that, that loan, that's 400amonth that I can put towards other loans. It's like paying off one, but it's time to the heart of variable. So it's like a pay off the biggest and then pay off the other ones.

[Caller]

Well, you want to move smallest to largest. Like that's the way that we would teach you to do it. But even doing that, how quickly do you think you'd be through the whole.

[Jade Warshaw]

7,500 within the next six months?

[Caller]

Six months. Okay. Yeah. So that gives you adequate time to start doing your research and seeing what it would look like to rent. Like Rachel said, you're throwing it in a budget. You're kind of running the numbers and getting used to what that idea would feel like. And by the time this debt is gone, it's going to be, you know, you packing up that.

[Rachel Cruze]

Yeah. I mean, how many, how many kids do you guys have?

[Jade Warshaw]

Three.

[Rachel Cruze]

How many?

[Jade Warshaw]

Three.

[Rachel Cruze]

Three. Okay. Because Joseph, I would say, what do you do for a career?

[Jade Warshaw]

Warehouse management.

[Rachel Cruze]

Okay. Because 44 grand, you know, with a family of five.

[Caller]

Before taxes.

[Rachel Cruze]

Before taxes. You know, I mean. Yeah, you guys are running on a tight ship. And so to just, I mean, I'm gonna say as the kids get older and as you guys start looking. Cause eventually, yes, the goal is to own your own place one day, you know, there it's. It's either gonna take. Oh, it's gonna take longer. Right. With. On a $44,000 salary.

[Jade Warshaw]

Yeah.

[Rachel Cruze]

Or if she decides to pick up some work and do something from home to bring in, I mean even a thousand bucks a month or something to help kind of speed this up as well. I mean, I think that's what's always, you know, difficult in a situation is, you know, we are all for stay at home moms. Like that is not a slam against her. I mean, I think that that is incredible. Absolutely incredible. But when you make one choice there, then other choices, you know, so she has to understand, too, that there's a reality of what you guys make every year and what you bring in a month, and there's a reality of what you can afford. So either if, you know, and I don't want you working 80 hours a week to be able to own a home. Right. I mean, like, there's a reality, too, to your time and enjoyment of life. But. But that's a. That's a reality she needs to realize. So even though I know she doesn't like being there, there. There's a math issue here, too.

[Caller]

How old are the kids?

[Jade Warshaw]

Six, seven and two.

[Caller]

So is she doing the homeschool thing or are they. Are two of them already in kindergarten.

[Jade Warshaw]

And.

[Rachel Cruze]

Yeah, homeschool. Okay. Yeah. Yeah. Which is great. So I think that, you know, and you guys do a budget together. I mean, I'm assuming she sees all these numbers.

[Jade Warshaw]

We just started, like, I just discovered the Ramsey solutions, like, two, three months ago.

[Rachel Cruze]

Oh, awesome. Well, you guys made great progress. Well done. That's awesome.

[Jade Warshaw]

Thank you.

[Rachel Cruze]

So. And how old are you guys? You may have said this.

[Jade Warshaw]

I am 24. She is 25.

[Rachel Cruze]

Okay. Okay. Well. And the positive thing is, too, Joseph, I mean, if, you know, if this was the case and you guys were in your late 30s. 30s or something, I'd be like, okay, we gotta. We gotta keep moving. But you're young in a sense that, you know, you will only be moving up.

[Caller]

Yeah.

[Rachel Cruze]

In income from, you know, every year, you'll. You should progressively be making more. And. And that's the positive. So it may not happen as fast as she may want it. But also, they're, you know, I would make it a goal, though, to at least get out. I understand what she's saying. And become, you know, your own crew somewhere and renting. But buying a home and all of that, it may just take a little bit longer.

[Caller]

Yeah, that's true. That's true.

[Jade Warshaw]

Yeah, I understand that. And, like, I hope she does, too. It's just. I don't want to break her heart because she was like, we need to move. We need to move.

[Rachel Cruze]

Well, you're not breaking her heart. Math is breaking her heart because she's not living in reality. She could be sad about it. And that's. That's appropriate too, right? Where it's like, oh, my gosh, I want to be gone, out of here. And this sucks, and I hate it. But you know what? Grownups, we. We all do things that we don't we don't like. But, but I would say again, hear me say we are pro being on your own. Even if you were a single guy, Joseph, and you were 24, like hey Joseph, how can you get out of your parents house? Right. So for the time being you guys are on a plan and have an end date as well. This would help her too when you actually look because you said we can be done in six months and you know, it's, it's February, so what is that? August ish or so. And make it a plan to say okay, by September 30th we are renting a new spot. October 1st we'll be paying rent for a new spot. Right. And you guys together need to be a timeline and have that end date because that's going to help her if it's this just like forever we're going to try, we'll see. That ambiguity, I feel like stresses people out and I understand that in her case. So have a plan and then you guys. Yeah, rent. And then again, I don't know. There's a reality too for her to realize. I mean, you guys are in a great spot, a situation to pay off this debt fast versus having to pay 800 in rent somewhere in Lafayette. So that's what I would do.

[Caller]

Yeah.

[Rachel Cruze]

What do you think, Jade?

[Caller]

I, I think you're right. You know, I like, I love when moms want to stay at home. I think it's a great idea. I love the idea of homeschooling. But there's two really, like you said, facing the reality of a financial situation. And like I've said many times on this show, a dream deferred is not a dream denied. Just because you say, hey, in this season I'm not getting, you know, I'm not able to have my cake and eat it too. So in this season I've got to work hard and then once I get our ourselves in a better situation, then I can do those things. I can stay at home, I can do the homeschooling. So I think that there's a little bit of sacrificing to when that needs to take place here.

[Rachel Cruze]

Yes. Or you're sacrificing by choosing to, to be home and homeschooling, which again is great. But then you're sacrificing homeownership down the road.

[Caller]

That's also true. And yeah.

[Rachel Cruze]

And that's, and that's the thing, right? You guys have just have to look at the math and the values of your family. Joseph. And that's what you want to drive you, but math has to be a reality that we have to live in, that we can't just want something and it just happened. That's, that's not being a grown up either. So I hope that helps. Joseph but you guys are killing it. I mean, you guys have made so much progress already. So keep up the great work.

[Caller]

This show is sponsored by Better Help. You've probably heard people talk about different kinds of flags and friendships and romantic relationships.

[Jade Warshaw]

Red flags, green flags, beige flags. Listen, it can be helpful to look.

[Caller]

For patterns or unsafe behaviors in potential relationships.

[Jade Warshaw]

But all those labels can distract from what's really important.

[Rachel Cruze]

Your values and whether you and your.

[Caller]

Potential partner are willing to wake up every day and choose to honor each other's values.

[Rachel Cruze]

And look, I know it can be tough sometimes to even know what's important.

[Caller]

To you in a relationship.

[Jade Warshaw]

Therapy can help you figure out what.

[Caller]

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.

[Jade Warshaw]

To get started, just fill out a.

[Rachel Cruze]

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.

[Jade Warshaw]

Friendship, or working on yourself, do it.

[Caller]

With help from Better Help.

[Jade Warshaw]

Visit betterhelp.com DeLoney to get 10% off your first month.

[Caller]

That's BetterHelp.

[Jade Warshaw]

H E L p.com DeLoney I still.

[Caller]

Remember 10 years ago, 23 years old, I was frustrated, anxious and flat broke. I had followed all the ways that toxic money culture had led me down from well meaning parents and misguided guidance counselors. And it left me with a pile of debt. But I'm telling you, it doesn't have to stay that way. Over a decade, I went from broke to millionaire and I break it all down. In my new book, Breaking Free From Broke. I'm going to show you just how toxic this money system is and how you can break free from credit scores and credit cards and student loans and auto loans and investing traps and finally live a life that you're not exhausted by a life with more margin, more options, and more peace. If you want to check out the book, go to ramseysolutions.com store to get your copy of Breaking Free from broke. That's Ramsey Solutions.com store.

[Rachel Cruze]

Every quarter, our research team sends out a survey to listeners of this show, but also just the general public. Just to get a pulse on what's going on when it comes to personal finance in America. And our Q4 results are in. And they've taken everything, all the data people. They're so good at it.

[Caller]

They are good at it, and they.

[Rachel Cruze]

Figure out all this stuff. But we have some highlights from the study which we just think. We think are interesting.

[Caller]

So very interesting.

[Rachel Cruze]

So the first one is that saving money was the top New Year's resolution for Americans. Saving money.

[Caller]

Yeah, I get that piece.

[Rachel Cruze]

Huh.

[Caller]

I can understand that. Okay. 37% of Americans said their personal finances will get better during the second Trump presidency. Listen, I think that's. We saw that at the polls, obviously.

[Rachel Cruze]

For sure. 37%. One in four U.S. adults plan to use their tax refund to treat themselves, whether it's travel, clothes, eating out, or something more. Which caveat, y'all? If you're in debt and you don't have savings, use your tax refund for that stuff.

[Caller]

Yeah.

[Rachel Cruze]

When you get it and adjust it so you don't get a big refund.

[Caller]

I know, right? That's so funny to me. That's that Disney money right there. Okay, I love this one. Grocery shopping was the number one category where Americans said they're likely to overspend, which we've been telling you guys that for years.

[Rachel Cruze]

That's us.

[Caller]

Food is the budget buster. Right.

[Rachel Cruze]

At a Costco run two weeks ago. I don't even want to tell you, it was terrible. Absolutely terrible. I thought, oh, my gosh, if I spent this on clothes, I would.

[Caller]

I already know what it is because it's the same at our house.

[Rachel Cruze]

So that is so bad. Nearly 6 in 10American adults said weekly meal planning is an essential task. But 44 wish they did it better. Well, 6 out of 10, 60. That's pretty good. Because back to this grocery thing. Eating out food in general. Yeah. Is always a budget buster. So grocery shopping, for sure. But if you don't plan for it, you end up going to a restaurant, getting to go. I mean, it just ends up being like the catch all, where you end up spending more doing that.

[Caller]

Yeah. But it's like, I mean, when I look at that, it's like eating. Eating your vegetables. Like, we all know. Like, yeah, I'm supposed to eat broccoli. Like, I should probably eat Brussels sprouts. But we don't do it. You know what I mean?

[Rachel Cruze]

But meal planning. Do you. Hi. This is like. It's a love language to me. I love it. I feel in control. I'm like, I know exactly. Tonight we have spaghetti and meatballs.

[Caller]

Yes.

[Rachel Cruze]

Yesterday we had chili. We plan out exactly what we're going to eat every night. It feels good. I think I'm like it. Feel in control.

[Caller]

I think if you have Rachel, those go to meals, the ones that are easy, the ones you know your family likes. It does make meal planning easier. I think it's the folks who are like, I hate cooking.

[Rachel Cruze]

Yep.

[Caller]

I'm bad at cooking. I don't know what to, like, really struggle.

[Rachel Cruze]

That's fair. That's fair.

[Caller]

All right, so this one is a heavy hitter. It says American said the ideal interest rate for them to consider buying a home in the next 12 months is 4.5%. Keep in mind that right now at 6.13 or something like that.

[Rachel Cruze]

Yep, absolutely. Okay. 45% of Gen Z and millennials said that if the government increased the child tax credits, it would be a big or moderate impact on their decision to have a child or additional children. That's 45%.

[Caller]

That's a lot.

[Rachel Cruze]

And we're gonna have a kid or not. Depends on the tax credits.

[Caller]

I. I mean, don't get me wrong, like, Rachel, we're always talking about considering finances and family planning, but I feel like that's definitely next level. All right. About half of Americans have given money to a person in need or a charitable cause in the last three months. I think that's great. Prioritizing generosity. I think no matter where you are in the baby steps, if you do that, like, there's nothing wrong with that. That's a wonderful thing.

[Rachel Cruze]

Gives us some humanity. That makes me feel good about people. All right, 30. The last one, 33% of Americans said that it's acceptable to borrow money from the person you're dating to pay a bill.

[Caller]

Let me tell you something, Rachel. Let me just tell you something, Rachel. If I'm dating. Listen, if I'm dating Leroy and he slides into my text like, roy, can you.

[Rachel Cruze]

Leroy says, jane, Roy, I need. I need extra 300 bucks to cover the car payment this month. I do think it's different between guys and girls.

[Caller]

Oh.

[Rachel Cruze]

If a girl comes.

[Caller]

It shouldn't be. It shouldn't be.

[Rachel Cruze]

It feels different.

[Caller]

It does. It does.

[Rachel Cruze]

It's way less attractive for a guy to come to a girl for some reason for money.

[Caller]

Can you spot me a few singles for my utility bill? No, I can't.

[Rachel Cruze]

Sorry. Leroy. Leroy. Budget. What are you doing? Unbelievable. Boy. Well, I'll go back to one, though, Jade, with buying a home, and they want to, you know, have the interest rate Drop, which again makes sense if it's around 6.1% right now and they want a 4.5, almost a 2% drop. Yeah, it does. It saves you a ton of money in the long run. But let me tell you guys, get in the game if you haven't already. Like if you have the ability to buy a house, meaning you are out of debt, you have an emergency fund, you have at least 5% down and your, you know, your payments, you know, no more than 25% of your take home pay on a 15 year fix. Like all the parameters are there. Don't sit and wait on an interest rate because you can always refinance later. But we do, we, you don't have control over that. But getting in the market as soon as possible I really think is a good bet. Because Jade, as we've seen it, that the housing market, it's not shooting up. Prices are not shooting up like they were, you know, three years ago, but they steadily are still increasing. That's right, a small percentage. So it's just going to get more and more expensive. So if you have the ability to get in, go ahead and get in. The earlier the better. And again, I want you to be financially ready before you do so. But if you have any questions around housing, go to ramseysolutions.com real estate and we have so much information on there, you guys, because again, buying a house is a big part of your financial plan and we want you to be set up well with the information, with the people around you to be able to make that as smooth as possible. All right, up next we have Lisa in Raleigh. Hi, Lisa, welcome to the show.

[Jade Warshaw]

Thank you, Rachel. Rachel, my husband and I are 64. We'll be turning 65 at the end of the year. So of course we're thinking about retirement and that kind of panics me a lot. I feel that we did not plan very well and it came very fast. We do not have a pension. I took my 401k to pay off some debt. But we do own a home with no mortgage of 700,000 and I do own a business that is grossing 1.3.

[Rachel Cruze]

Million a month or I'm sorry, a year.

[Jade Warshaw]

A year.

[Rachel Cruze]

A year. And what do you take home from that? If it's grossing, what's it, what's the.

[Jade Warshaw]

Profit of about, about 200.

[Rachel Cruze]

Good for you. Great job.

[Jade Warshaw]

I, I know, but we just find it very hard to save money and money is always going back into business. And of course we like to live a nice lifestyle too. As well, but, so my question is, how do you have enough income for retirement if you don't have the pension or the 401k? Would it be wise to sell the house at some point, end the business and then invest that and live off the income?

[Rachel Cruze]

Do you guys, Are you married, Lisa?

[Jade Warshaw]

Yeah. So married 40 years.

[Rachel Cruze]

Okay. Oh, congratulations. Do you guys have any retirement, any Roth IRAs, any 401ks, any mutual funds, anything?

[Jade Warshaw]

I know, I took it. We, you know, you'll, you'll love this. We paid off our kids college with that, so no.

[Rachel Cruze]

Okay.

[Caller]

And does the business you guys run together? So your husband doesn't have a separate income?

[Jade Warshaw]

He, he takes Social Security. He doesn't take a salary from the business, so he takes 2000. 2000amonth. Social Security.

[Caller]

And just to, to clarify for me, you said the net profit from the business was 200,000, but it sounded like that's not necessarily what you take home because you were investing a lot back into the business. Did I hear that right?

[Jade Warshaw]

Well, I would, I would say 200,000.

[Caller]

Is what you're taking home, but of course.

[Rachel Cruze]

And that's, and that's what you guys make a year total household. Because he's not working. So are you guys living off of 200?

[Jade Warshaw]

Yes.

[Rachel Cruze]

Okay. What are you doing? Where's the 200 going exactly?

[Jade Warshaw]

Well, we do, we do help as parents, and that's about 2,000amonth. They're 92 years old and they have round the clock care.

[Rachel Cruze]

Okay.

[Jade Warshaw]

And so we do help with that. We do have two car loans.

[Caller]

Oh, okay. How much are Those?

[Jade Warshaw]

Those are two cars, 400 each.

[Caller]

But what do you owe on them at least? Okay, so you're paying $800 a month in leased cars, $2,000 to parents. So I think what you guys really need is to get on a budget and we'll give you an every dollar budget. But that's going to help you see where all the money is going. And when you see that, you're going to have this moment of oh my goodness. And that's going to give you the opportunity to reshift your priorities, you and your husband, and saying we might not be able to afford some of the things that we're doing specifically.

[Rachel Cruze]

And we're going to be able to retire soon either, Lisa, unless you have a plan to sell the business, you guys could downsize and put some of that money in investments. But my fear is, Lisa, your habits haven't changed when you do that, and you guys will blow through that money. So I would sit down with an investment professional, a trusted pro, and really look at this retirement. If you hold in the line, Christian will pick up and we'll direct you where to go. Thanks so much for the call, Lisa.

[Caller]

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 Smart Tax does make filing easy and doesn't make your bank account cry. Ramsey SmartTax is 100% 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.

[Rachel Cruze]

If you're wondering if you are staying on track with the baby steps, make sure to check out our quick quiz, check your progress and receive a personalized plan just for you. So go down and click the link in the show notes. Are you on track with the baby steps? And complete the quiz and I'll just give you a quick snapshot of, of where you are financially. All right, up next, we have Edward in New York City. Hi, Edward. Welcome to the show.

[Jade Warshaw]

Hi. Thank you so much for taking the call.

[Rachel Cruze]

Absolutely. How can we help?

[Jade Warshaw]

Yeah, so I'm looking to, I have an opportunity to invest in a house in a small city in western Pennsylvania. It's a rental and I've never bought. Just to give you a little background, if you don't mind about my finances. I'm 29, I'm single. My retirement has about 85,000 in it. I have about 85,000 in cash, brokerage account in stocks and stuff like that is about 40. I pull in about 4400 for my day job a month.

[Rachel Cruze]

Okay.

[Jade Warshaw]

And then, and then I have a property of my own rental property that I own and I do have a mortgage on that.

[Rachel Cruze]

How much is that, the mortgage?

[Jade Warshaw]

About 83, 000.

[Rachel Cruze]

Okay.

[Jade Warshaw]

It's valued around like 175, 200.

[Rachel Cruze]

Okay, great. And where, where are you living?

[Jade Warshaw]

I think you guys are. What's that?

[Rachel Cruze]

Where are you living right now?

[Jade Warshaw]

Yeah, So I actually, I had another apartment and I was fixing it up and then I actually sold it. I was going to rent it out so I moved back home to my parents. Okay.

[Rachel Cruze]

So what's that property? Oh, you sold it? You sold it?

[Jade Warshaw]

Yeah, I sold it.

[Rachel Cruze]

Okay. Where's the proceeds to that?

[Jade Warshaw]

Yeah, that's like. I'm just holding that in cash right now in my brokerage.

[Caller]

Is that the 40,000?

[Jade Warshaw]

Yeah, got it.

[Caller]

Okay, interesting. Okay.

[Rachel Cruze]

And. And the question is another property?

[Jade Warshaw]

Yeah. I have a third opportunity that a friend gave me also. I think if, if you guys don't, I think you'll laugh at this. My rental property actually burned down.

[Caller]

Oh, no, I wouldn't.

[Jade Warshaw]

Yeah, no. Properties are not passive income. I learned that the hard way.

[Caller]

Yeah, Got you.

[Rachel Cruze]

Amen, Edward. Say it. Say it louder for the people in the back, as they'd say.

[Caller]

So when you tell.

[Jade Warshaw]

Anyway, so I have an opportunity to buy a small house for $44,000 cash. It has a tenant in there. They pay about 9, 6, 7, 5amonth. The taxes and the insurance, I was told, are about 150amonth.

[Rachel Cruze]

Okay, here. Can I pause for just a second? Let me, let me get a little bit more. So the one that burnt down, what's the status on that?

[Jade Warshaw]

It's being rebuilt. It's a townhouse.

[Rachel Cruze]

Okay.

[Jade Warshaw]

And I'm, I'm the president of the HOA board, so I'm closely aligned with, you know, the construction process and everything like that.

[Rachel Cruze]

So when it's, when it's built out, are you planning on keeping it as a rental or are you going to sell it?

[Jade Warshaw]

I'm going to rent it. Yep.

[Rachel Cruze]

You're going to rent it and keep it. Okay. I mean, I think my next goal for you, Edward, is a. Is a home for yourself, is a primary residence.

[Jade Warshaw]

Yeah, I'm going to. I'll be moving in with my girlfriend this summer, and we're probably going to rent.

[Rachel Cruze]

Okay.

[Jade Warshaw]

So.

[Rachel Cruze]

Well, again, I mean, I would be putting my. I, My next financial goal. Because you don't have any debt. Correct.

[Jade Warshaw]

Other than the mortgage, no consumer debt.

[Rachel Cruze]

You have an emergency fund in place. You have this rental. I mean, again, from a, From a goal of getting yourself. Not trying to play. Play some game with the real estate market, but just truly trying to get you in the best position at word financially is going to be owning a primary residence and paying it off as quickly as possible. And then beyond that is kind of when we, when we factor in looking into real estate as an investment, because it is a great investment, but also doing it in the right order, I think, is key. It brings, I think, more stability and peace to you.

[Caller]

So can I clarify, Can I clarify? The first rental that you were talking about, that you have somebody in there, did you say that you owe 83, 000 on it. And it's worth 175.

[Jade Warshaw]

Yeah, that's the one that burned down. Yeah.

[Caller]

Okay, but if you, and it's where you live, like it's in your area.

[Jade Warshaw]

Yeah.

[Caller]

So my question is, you told me, you said you have 85 in cash, then you've got 40, 000 in a brokerage. Why wouldn't you. Now don't get me wrong, I don't think you should do the deal in Pennsylvania. You're nowhere near there. But why wouldn't you pay off the, the one that you plan to think about that daily. Yeah.

[Rachel Cruze]

And live in that townhouse, Be completely debt free then. Yeah. Then you can look and say, okay, is there another rental I want to do?

[Caller]

I would not do 40.

[Rachel Cruze]

You know, how far is, how, how far is this from Pennsylvania?

[Jade Warshaw]

Oh, it's far. It's. It's on the western border.

[Caller]

Yeah.

[Rachel Cruze]

I mean, I wouldn't, Edward. I mean, I think that's going to be exhausting and it's not going to be. I mean it's not a ton. So I think you could save that money.

[Jade Warshaw]

Yeah, I would only make, I would only make maybe 450, 500amonth.

[Caller]

Yeah. It's not one of the profit. Yeah. So we crossed that one off the list. You pay off the one that you have for 85, 000, now you've got a paid for rental and then you've got another $40,000 to start putting towards a down payment on.

[Rachel Cruze]

Yeah. Would you. What? Would you live in that townhome?

[Jade Warshaw]

My girlfriend won't. Why? She doesn't like it. But I mean, with some good convincing and showing their financials, I might be able to convince her. But.

[Rachel Cruze]

Yeah, because, I mean, I'm going to be honest, Edward, I mean, you're putting to a degree your financial, not your financial future. It sounds so dramatic, but your decisions about your finances in the hands of a girlfriend, not your wife, not someone that. You know what I mean? So, so there is Just, just remember that. I mean, because honestly, Edward, if you thought about it, just play out a scenario, what Jade said was brilliant, that paid off. What if you lived in there, you had no rent, right. Like. Like nothing. And you're making. How much are you making a month? Just 40.

[Caller]

400.

[Rachel Cruze]

Yeah.

[Caller]

Yeah.

[Rachel Cruze]

So you're making that, you live off that and put some in investments, put some away, have a goal for a property, like run some numbers out of what life could look like. Because when you don't have a mortgage, Edward, that is the largest expense in Somebody's line item of a budget. I mean it is your living expenses is always your home. Whether rent or a mortgage is always the highest. And if you can eliminate that and you have, you have absolutely no debt, no debt at all, then you can say, yeah, maybe I'm going to sell this town home in two years because it's going to be worth 250, 100% and then I'm going to go get some, you know what I mean? And I can step up in house the way people step up in a car. You have the ability to do this kind of from a home perspective. And just because the girlfriend doesn't like it. I mean, I just, I wouldn't, I wouldn't put a lot of stock in that honestly. And I don't know.

[Jade Warshaw]

And you know, just, just to end off. I totally agree, honestly, that's the wise decision. But you know, if I was a seasoned investor, let's say I was like 20 years older and I had a large portfolio even then, would you think that investing in out of state properties is a bad move?

[Rachel Cruze]

Yeah, we, we always say no to that because of the headache, the hassle. You don't have eyes on it. You end up honestly paying a property manager most of the time.

[Jade Warshaw]

Yeah, that's what I was going to.

[Rachel Cruze]

Do it and it, yep. And then it just eats into the profit and, and for the most part you're not getting a lot out. And as you, you'll see with real estate for most people, you're either making money on a flip, buying it low, selling it high, making the spread. And you have to know what you're doing if you're doing that and, or you're buying property and you make, you make your money at the table, right. When you're buying the property, that's usually where you're going to make the money. And then you, you don't make a ton of money off the rents. Like that's not what's going to make you rich. It's the value of the property increasing and selling it eventually and taking the equity.

[Caller]

Right.

[Rachel Cruze]

That's where you're really going to win. So having a, having a rent is not, that's not the mindset I go into. It's either I have this and I'm holding it and I'm going to make the money off the equity, off of the value of the property long term, or I buy a crappy, you know, $44,000 property that you can see. And if you're into it, Edward, and you're like, yeah, I mean, I could get some subs in there, we could fix it up, and I could sell it for 25. You make some cash that way. Right, but that's. That's. That's a whole other. Do I. Yeah.

[Caller]

He said that's not happening.

[Rachel Cruze]

Oh, that's happening. Yeah. Yeah. So that's. Those are the two ways I see a little house.

[Jade Warshaw]

It's not.

[Rachel Cruze]

Okay. Yeah, that's the way I see the. The investment on real estate. It's either doing it with cash and you get some short term gain from a. From a flip, which again, know what you're doing if you're doing that, what you're getting yourself into, or when you're doing it, it's more for the long game of the equity.

[Jade Warshaw]

Yeah, you know, I was. I was gonna. I put a loan. Mortgage in or, I'm sorry, an application and buy a house near me. It was severely damaged, and everyone is. I got outbid by a bunch of cash offers, and it went over asking and, like, I can't even compete in this market.

[Rachel Cruze]

Yeah. Yeah. And let me encourage you, too, you know, like, in 10 years, maybe this is a game you end up playing, but maybe you just invest for now, you know, build up some money that way and then taking that and. And doing some real estate later down the road. It doesn't have to be today, but. But you're doing great, Edward. I mean, you're. You're in a great spot. Jay, thanks for a great hour. Thanks to all the guys in the booth. And thank you, America. This is the Rams show.