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- [00:05]
A
Brought to you by the everydollar app start budgeting for free today from the headquarters of ramsey solutions it's the ramsey show where we help people build wealth do work that they love and create actual amazing relationships rachel cruz ramsey personality number one best selling author and co host of the smart money happy hour hit on ramsey network my daughter is my co host today open phones at triple eight eight two five five two two five jim is in connecticut hi jim how are you hey how's it going better than i deserve what's up.
- [00:50]
B
So i have a question i've been listening for some time now and i've had i haven't heard this question answered so basically we have about ninety about ninety thousand dollars in student debt and we have the money to pay it off good but my question is so i have a friend that's in real estate and he basically is telling me to get into real estate with that money rather than paying off my student debt so essentially like you know putting down twenty percent on maybe two three maybe four properties for example using that money to cash flow the payment on the student loan and then obviously build equity and wealth for whatever our kids for the family whatever yeah what do.
- [01:40]
A
You think about that well i did something similar in my twenties and i went broke so i'm not a fan i think your friend doesn't know what he's talking about i now i now own several hundred million dollars worth of real estate but i did not do it the way you're talking about i paid cash for it as i went a little bit at a time and it's gone way up in value while i've owned it so the problem to break the theory down is debt equals risk more debt equals more risk debt equals reduced cash flow in real estate because you got to pay the payments more debt equals no cash flow in real estate so when you have a tenant that pays you just a little bit more than the house payment because you only put down a little bit on the house when you add up all of the repairs and the vacancies and the tenants that don't pay which happens occasionally when you add all of that together you are actually losing money on a leveraged piece of real estate like you're describing and so unless you're going to feed these three houses to the tune of about five hundred bucks a month each average about six thousand dollars a year each with the numbers you're giving me you're not going to be able to keep them and so they do not become a blessing then and the idea that they're going to cash flow and pay off the student loans it's actually mathematically not going to happen and again i'm sixty five years old i started doing real estate in nineteen seventy eight when i was eighteen so i didn't just invent this and.
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C
Get on tiktok well i was going to say that real estate to your point earlier is a major part of your wealth today so it's not that it's against real estate you're not sitting there saying oh my gosh it's a terrible investment the idea of real estate is terrible but the way at which you do it is really important and and i think the hard thing is too jim you know a lot of people set up these scenarios and you know for some people it's like okay yeah maybe it could kind of work out but it that means everything has to be perfect everything from the market the tenant the house you could get in this stuff and you tear down a wall and there's mold you can't put a tenant in for twelve months until you do x y and z and you've bought it i mean like it just there are so many factors to it that it never works out perfectly it just doesn't because there's just too many things up in the air and so so i would i would.
- [04:20]
A
Pay off your student loans yes yeah.
- [04:23]
B
Yeah because essentially the way he was explaining it's kind of like you know hey you paid off your student loans you know congratulations pound the back here's your paper that you paid it off rather than like oh hey you bought whatever say one property for example you know like no that's no that's like a bigger you know good job in.
- [04:41]
A
A sense yeah in a sense you said okay in the world of finance we have a thing called opportunity cost when you take your ninety thousand dollars and you do one thing with it you lose the opportunity of doing the other thing with it okay and so the way to look at that is kind of do a little reverse engineering let's pretend you didn't have student loans wow that feel good would you go borrow ninety thousand dollars to put down payments on houses no yeah that's why.
- [05:15]
B
I knew you would yeah which is.
- [05:17]
A
Exactly what you're proposing if you look at the balance sheet of what you're proposing so the data tells us that people most often build wealth not doing your friend's plan instead paying off your student loans using the increased cash flow and the increased freedom to start saving paying off everything being one hundred percent debt free and then let's let's pile up a little cash and get our first property with cash and then get our second property with cash and when you get about the fourth or fifth one now you've got real cash flow coming because there's no payments yeah what's.
- [05:51]
C
Funny is even from a net worth perspective goes way up well that well his friend's way it goes way down because you're borrowing on a two hundred thousand dollars house and you have ninety thousand dollars of student loan debt you know i'm saying you keep putting yourself deeper in the hole even from just a net worth persp if you're just looking at the math too yeah and jim always too remember this an excel sheet a formula is never going to factor in the emotion of peace and when you don't owe anyone anything even a student loan there is a level of peace there from an emotional spiritual perspective that is not calculated in an excel file and i'm telling you when people become debt free they pay off their houses even in an extreme sense when people stand on debt free you know the debt free stage here and they're completely debt free their house and everything they literally have no payments they never look back and say i so regretted that i wish i still had all this debt and i was living.
- [06:44]
A
How i was living i missed out on the opportunity to be highly leveraged.
- [06:47]
C
And stressed out right i mean like there there is so there's a level of peace there that i think is really important to solve for and when you're just running and gunning and trying to do this whole thing to look good on a quote unquote balance sheet and what you have to say for yourself i would swap peace every time you're going to have time jim to be able to do this you're going to i believe you will have time to save up go buy your first fixer upper and get in the real estate game that's great when you do it all with cash it's gonna just take longer and there's way more delayed gratification but what that equals is a level of peace and sleep at night versus just that that risk factor that's.
- [07:21]
A
So real full disclosure rachel knows what she's talking about that's what her husband does winston's in the real estate business.
- [07:27]
C
Well and he does flips but with.
- [07:28]
A
Cash he buys property and he does it with cash and he runs my portfolio as well and we do it with cash and you know and it.
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C
Didn'T start off i mean like you know the first couple it was like a condo the first one was a.
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A
Little one bedroom condo and it was pretty stinky pretty stinky little condo and that was your first property but what's.
- [07:48]
C
Crazy is you know you put the money and you go in and work it you fix it and then again he's in more of the not made money yeah and he's not in the whole business but but even some of these flips and i've told you this i'm like you know one or two of them if the market kind of slows down for about four or five weeks and you're holding on we don't think much about it his friends that kind of do the same thing that do have payments to the bank they're like god when is this market going to pick up and there's a level of stress there and i'm like i don't know there's just something to be said about not worrying you're fine you're.
- [08:15]
A
Fine you want to lose money in real estate become a motivated seller that's the best way you lose money in real estate.
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B
Sam.
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D
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A
Martin'S in los angeles hey martin how are.
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B
You i'm doing great thanks so much for taking my call sure how can we help so i've come into a you know i've got a fair amount of debt and but i'm also you know there's some good things going on i've you know i've got a job where i'm making really good money and a lot of room for upward mobility and so far my performance at the new job has been pretty fantastic so you know i think there's a lot to to look at positively about the future but the weight of the debt is really it's really hitting me so i make about i've got this job recently i make about two hundred thousand.
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A year cool what are you doing.
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B
I'M in sales good for you what are you selling i sell medical devices.
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Great good job good position well done.
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B
And how much debt you got so i have about twenty thousand in student loans twenty thousand in credit card debt which i used to help pay for school because i got hit pretty hard during COVID.
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A
How much you owe on your car.
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B
About thirty but i get an eight hundred nine hundred a month stipend for it doesn't matter you get.
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A
That whether you have a payment or not yeah yeah yeah and so what other debt twenty twenty thirty what else.
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B
That is that's it what'd you make.
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Last year before you had this job.
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B
What'D you make so i made one hundred fifty the year before that i made eighty five so i've gotten promoted twice in the last few years so.
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A
If you could live on eighty five you could be debt free in a.
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B
Year i didn't have the car payment back then i didn't i didn't have the the credit card payment then if.
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A
You could live on eighty five you could be debt free in a year.
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B
Okay all right i mean really here's.
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A
The thing two hundred minus eighty five is one hundred fifteen yeah and you only have seventy thousand dollars in debt.
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B
Okay is that right yeah i think with taxes and i'm putting about twelve percent into a four hundred one k stop stop doing the four hundred one.
- [12:55]
A
K temporarily till you get this dadgum mess you made cleaned up okay completely focus on clearing the debt when i picked up the phone martin i heard amazing amounts of stress in your voice you were sighing breathing hard all kinds of anxiety indications in your verbal patterns when you started talking about the debt when you talked about the job you started lighting up again and your voice pattern changed okay and you said if i could i'm drowning the words you were using i'm drowning in this debt and so i want you to react to this debt like your life depends on clearing it because if you could make two hundred thousand dollars a year and you had no payments you can be wealthy sir okay but if you hang around with stupid car payments stupid credit cards and stupid student loans and you keep them around like they're a freaking pet and you try to ease your way out of this with the kind of money you're making and try to work some kind of thing where you scam the system you're still going to have that stress in your voice.
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C
Okay get it martin what makes you think you can't if you if if last year you were doing eighty five.
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What'S the hesitation it's not that so.
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B
Much i've i've put you know i put a fair amount of debt on in the last year and i mean just you know see the purchases and things like that right but it's it's not so much that i can it's more just kind of trying to figure out like what do you think is feasible like what just understanding like what would you do you know i'm new to this you know like yeah so.
- [14:41]
A
If you're making two hundred and you stopped your four hundred one k contributions what would your take home pay be.
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C
Per month.
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B
Probably around ten a month.
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C
Yeah how much is your rent or.
- [14:56]
B
Mortgage rent is three three thousand that's the really tough one and that's something that's not like it's it's not like it's crazy yeah it's thirty percent of.
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A
Your take home something's wrong martin two hundred minus one hundred and twenty ten a month is one hundred and twenty you don't have eighty thousand dollars worth of withholding.
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B
It'S isn't it isn't it about fifty thousand withholding at that point.
- [15:23]
A
Well fifty not one hundred twenty federal.
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B
And then you have another twenty twenty ish and now you got state california.
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A
California maxes out their rich people taxes fifteen percent okay because they're trying to run off all the rich wait fifteen percent yeah california has a rich people tax of fifteen percent of your income.
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C
I thought it'd be more than that.
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A
No that's it that's more than any other that's more than any other two states put together but yeah but that's.
- [15:52]
C
Addition to your i mean so it's.
- [15:54]
A
Yeah and then and then you're what then you've got your federal but your federal is not even going to be fifty thousand in this case so you you know you need to get really get above your numbers here and start working them through so i mean he's.
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C
Debt free in a year what thirty percent federal for him no at two.
- [16:11]
A
Hundred it would be thirty percent bracket but it's not thirty percent that's the.
- [16:14]
C
Whole thing that's right it's a marginal income tax i know i know yeah.
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A
Yeah the bracket is not the amount.
- [16:19]
B
I know i know i mean so it's about twenty six percent is what.
- [16:24]
C
No of the above the bracket yeah.
- [16:26]
A
Including california yeah yeah yes it is believe me so yeah the because these are incremental marginal tax brackets they're not taxed at the tax bracket so that's the point so anyway you need to get into this and figure it out and sit down and go i'm going to be on beans and rice rice and beans i'm going to stop the stupid purchases three grand worth of rent for a single guy that's broke i don't know man i may be looking at that too and so but for sure in la for sure i'm going to work my butt off and i'm going to do nothing but work that's all i'm going to do no vacations no buying crap you are broke quit acting like you're rich you're not rich you're broke act like it and pay down this debt and be done with it because you reach over and knock off all those credit cards in two or three months which you could do you probably do it in about four months actually three months something like that then you're free to knock out that student loan and then reach over and knock that car out think about how your what your budget looks like when you don't have any of those payments anymore this is where you've got to go to and so what the plan is is stop everything temporarily and attack the debt listing your debts smallest to largest pay minimum payments on everything but the little one and attack the little one with a vengeance and please god don't figure out a way you can't do it figure out a way you can do it that's the point and so stop your four hundred one k temporarily stop your vacations stop your happy hours stop all this junk you're spending money on unplug stupid amazon and go get out of debt and then when you're free you're gonna make a lot of money and you'll be able to stack cash really quick cause you'll be used to living on less than you make and that changes everything you're resetting the wires in your brain yeah and.
- [18:19]
C
It is a rewiring because i think our natural tendency always is to be moving forward meaning like bigger better you start with the starter house you get the bigger like like our life you know you get promotions everything that we're used to is gradually increasing in life and when you do this and you actually pause your life and go backwards in lifestyle it kind of mess it it'll mess with you because you're not used to that right the celebration of moving forward always oh i got a bigger job he's getting paid twice as much you know as he used to and it should feel like oh well i should have twice as of a better life not with this not when you have debt and so there is a rewiring and what feels like going backwards and that natural tendency is not to like it i don't want to go backwards i should be moving forwards but when you're doing it so on purpose it's and time goes fast too that's my other thing it feels like christmas is about to be here and i feel like we just had christmas right like you you think about how fast this time goes it's gonna go quick it's not forever it's literally for a snapshot of a moment in time that you're gonna do this and it sets up your whole trajectory going forward with your finances switching banks can be a hassle and i totally get that but when winston and i opened up our fairwinds account we were shocked by how quick and easy it was it just took a few minutes online we didn't have to block off an entire afternoon or track down paperwork and the next day we got a personal call from a fairwind specialist just checking in i couldn't believe it when i answered my phone and i was talking to them i was like y' all are the nicest people now if you're working hard to save money get out of debt and build a future you should have a bank that supports that not fights it that's why i recommend fairwinds they created these smart checking and savings bundles specifically for ramsey fans plus they have a great app and you have access to over thirty three thousand fee free atm's and more than five thousand shared credit union branches across the country so you can have access and withdraw your money just like you're used to no matter where you live don't settle for a bank that slows down your progress make sure you choose one that helps build you up and helps you win with money visit fairwinds dot org ramsey and open your smart bundle today fairwinds dot org ramsey fairwinds dot org.
- [21:22]
A
Ramsey fairwinds is federally insured by the ncua if you're tired of living paycheck to paycheck feeling like a rat in a wheel feeling like you can't get ahead join one of our free every dollar trainings there are new trainings every week this month and they're all hosted by one of the ramsey personalities jade or george or rachel rachel when will you be doing the next one you.
- [21:52]
C
Know i think next week george was on today actually during lunch he was.
- [21:56]
A
Doing his so perfect we're going to show you how to stick to a budget and you find thousands of dollars of margin using every dollar this gets you out of debt and helps you to start building wealth we show you how to do it and you've got a live q and a you can ask any question you want during the whole thing it's the free that i mentioned is free every dollar training sign up at ramseysolutions dot com webinar jim and sarah are in michigan hi guys.
- [22:22]
B
How are you pretty well mister ramsey thank you for taking our call we're anxious to talk to you sir our.
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A
Honor how can we help well we've.
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B
Been married for forty years and we've gone through a lot of finances successfully we've managed to save a substantial lot of money and about three years ago i acquired a thirty foot sailboat and it cost roughly six thousand dollars a year to own and operate what did.
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A
You pay for the thirty foot sailboat.
- [22:59]
B
Well my neighbor gave it to me or i should say jesus gave it to me free to be more accurate.
- [23:06]
A
He gave you a thirty foot sailboat.
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E
Free jesus did yes we have three sailboats given to us for free three.
- [23:14]
A
Okay you currently own only one no we own three you currently own three sailboats jesus three free sailboats and and you said you said you piled up a substantial hey jim you said you'd piled up a substantial amount of money what cheryl's net worth not that much.
- [23:35]
B
About three point seven million.
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C
Sarah not that much she said not that much that's pretty good sarah.
- [23:46]
E
Well i listen to you every day for two hours and we could do better okay so.
- [23:53]
A
What are the three sailboats worth.
- [23:57]
E
The cars all together the cars and the.
- [23:59]
A
Sailboats no i asked what the sailboats.
- [24:01]
E
Are worth the sailboats altogether are worth seven thousand dollars and we have a camper worth five hundred dollars okay so.
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A
A thirty foot sailboat is worth two thousand of the seven or three thousand of the seven jim does that sound right to you five thousand okay so you got two junkers and one good one okay so you have a five thousand dollars sailboat but you want to spend six thousand dollars a year to keep a five thousand dollars thing alive i'm confused i am too no jim jim we already figured out what you want to do sarah jim why do you want to spend six thousand to keep something that's five thousand alive well.
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B
That'S just the normal cost of marinas yeah marina swift and then launching and recovery in the spring and fall yeah and you know minor incidental it's not.
- [24:58]
A
That much but i kind of expected that when you said you were spending six thousand on it that'd be worth.
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B
Thirty thousand or something well you know it's worth what you can get on and on a good day but you know it could easily be worth.
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F
Five.
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E
Thousand dollars five thousand and we spent.
- [25:16]
A
Wait a minute there's a bit of a discrepancy here boys and girls yes y' all are fun well you know.
- [25:21]
B
With old sailboats it's what you can get for it on no really jim.
- [25:25]
A
The stinking thing has a market value seriously the range of value is not between five and thirty it's one or.
- [25:32]
B
The other you know that thousand dollars.
- [25:35]
A
Where did you get that number sarah you sound so sure the insurance what.
- [25:40]
B
The the insurance insurance does not determine.
- [25:44]
E
Value okay then i'm wrong okay it is between five and twelve thousand dollars possibly but if you put a sign.
- [25:52]
A
On it you might sell it for.
- [25:53]
E
Twelve thousand no you can't sell it it's so bad people can't give them.
- [25:59]
A
Away well they did to you that's.
- [26:03]
E
The problem.
- [26:05]
B
Yes sir and so far.
- [26:08]
E
He spent thirty thousand dollars and thirty seven thirty seven and eighty six cents on a boat that people give to you thirty over thirty thousand dollars you've.
- [26:19]
A
Had it five years.
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B
About three this is my third summer with it and.
- [26:25]
E
He spent thirty thousand dollars and thirty.
- [26:27]
C
Seven but we're talking like five i.
- [26:30]
A
Don'T know okay bucks a month there's two issues here okay i don't know jim we're not going to make sarah happy okay sarah's not going to be happy with a sailboat sarah's not happy with seven we know that we know that sarah's not going to be happy with a sailboat so then the question is sarah if you take the value of the sailboat and what you spend on it and you burn it in the middle of the floor does it change your life when you have three point seven million dollars if you take six thousand dollars and throw it out the window as you drive along the interstate no it does not change your life so this is not a deal breaker you're not going to be poor on food stamps because of jim's sailboat sarah you're fine you can afford to do this it's not a but jim you probably do need to think about i mean we're sit are you still sitting on the other two boats as.
- [27:29]
B
Well yes i i can only count one other sailboat except for a model sailboat in the living room no no.
- [27:37]
F
No we have another boat another boat.
- [27:39]
B
Oh another boat but not a sailboat.
- [27:41]
F
Well yes we have another boat oh.
- [27:43]
B
You mean the rowboat yeah oh yes sir we have a twelve foot aluminum boat yeah that's true okay and a.
- [27:49]
A
Camper yeah okay and all right and so other than mess with jim sarah.
- [27:57]
E
What are your hobbies well actually to be honest with you i'd actually like a kitchen sink oh because hey jim.
- [28:07]
A
It'S going to cost you a kitchen sink jim remodel the whole freaking kitchen as your trade out yeah all right you two cheapskates are made for each other y' all are fun i love y' all you're great listen three point seven million dollars if it's growing at ten percent is growing at a rate of three hundred seventy thousand dollars a year and we're having a discussion here about an aluminum fourteen foot rowboat and a kitchen sink y' all yeah you need to back up about three notches pan your camera back and start enjoying some of this money now being tight and smart is what got you here but now you need to enjoy some of it and if sarah if six thousand dollars makes jim happy it's six thousand dollars you can afford it okay and jim if getting rid of the aluminum rowboat and the camper and the odd sailboat makes her happy get rid of them and remodel her kitchen too you guys can afford to do all of that but don't major in minors it's stealing your piece okay yeah well.
- [29:17]
B
When she says remodel we have a three year old home and a triple okay all i'm saying is buy her a sink all i'm saying is she wants me to tear that out and go down and get her a commercial sink like you find in the good.
- [29:33]
A
Mcdonald'S and i don't want you to do it i want you to pay somebody to do it.
- [29:39]
B
Well they're good.
- [29:40]
E
They'Re high grade steel they're high grade.
- [29:43]
A
Steel yeah like kind of like an aluminum boat it's high grade use the.
- [29:47]
C
Aluminum from the aluminum boat make you a sink we're gonna recycle two birds.
- [29:53]
A
With one stone hey guys well listen you're stepping over dollars you're stepping over dollars trying to pick up nickels and it's stealing your fun it's stealing your fun so there's stuff that my wife buys that i do not understand but she gets joy from it and what i do what i do get joy from is her getting joy there's stuff that i buy that she has absolutely she thinks it's stupid when i buy it but she doesn't hassle me about it because we have the money and i get joy from it and she wants to see me get joy so let's major in you guys giving each other some joy starting going forward here.
- [30:32]
C
Okay you knew it's a funny call when he's like we've been married forty years and she's like forty one forty.
- [30:37]
A
One we ain't got any money we're broke it's only three point seven million.
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C
We didn't do good we didn't do good they were funny y' all are.
- [30:46]
A
Great that was so fun oh my gosh hey give each other some grace and love and to the tune of about thirty thousand bucks each and just go blow some money on your forty one year marriage what a wonderful thing to do it won't you won't even know it happened you'll still have three point seven million.
- [31:24]
B
Foreign.
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G
This show is sponsored by better help all right listen these days it feels like there is so much advice related to mental health and wellness and what you should be eating and what you should be doing it is insanity there's so much noise noise noise everywhere especially when we're scrolling and all this noise on the internet and on social media can lead to information overload so it can be a struggle to know what's real and what are some things you should actually try in your home here's the truth using trusted resources and talking to a live therapist can help you break through all this noise and get you to where you want to be in your personal life in your relationships and your mental and emotional health if you're thinking about starting therapy contact my friends at better help betterhelp is one hundred percent online therapy which means it's convenient and affordable and it's super easy to get started just fill out a short online survey and you get matched with a licensed therapist and as the largest online therapy provider in the world betterhelp can provide access to mental health professionals with a wide variety of expertise betterhelp is rated four point nine out of five stars based on over one point seven million reviews in the app store they are for real so talk it out with better help visit betterhelp dot com ramsey to get ten percent off your first month that's betterhelp h dash e dash l dash p dot com ramsey.
- [33:07]
E
That.
- [33:07]
A
Was the most fun i've had in.
- [33:08]
C
A while what that call those two.
- [33:11]
A
Were a hoot they were funny if y' all want to call up and argue on the air in front of like millions of people we would have.
- [33:18]
C
You anytime yeah we had a we had a segment for a little while with the person it's called settle the debate oh yeah people would call in and do yeah but they were they.
- [33:25]
A
Were very entertaining they were fun man i mean just going to dinner with those two would be a hoot arguing about what you're ordering it's like that's too expensive don't get the cheaper chicken don't do that i love it jenna is in san antonio hi jenna hi.
- [33:43]
E
Guys thank you so much for taking my call sure i was calling because i'm looking for some guidance so a little backstory my dad sold us or me and my older brother our childhood home back in twenty twenty one and like the stipulation was that he could still live on the property and not have to pay like rent or utilities and we my older brother and i rent out the house and we make about three thousand four hundred dollars a month in profit off the rent and my dad right now he's single parent growing up and everything so he didn't say for retirement he lives off social security and he says money is tight right now and he reached out to us and asked if we could give him four hundred dollars from the profit of their rent each month and and my older brother was like sure one hundred percent and i just like did not feel good about it i was like i think we need to look at your finances first like figure out why money is tight and then like draw some boundaries so it's not like every year like oh i need five hundred six hundred and it add up and everything and i recognize like none of this money is coming out of my own pocket it's like purely just profit and i don't know if i sound like a brat as a child by not just giving it to him and so i'm just looking for guidance.
- [34:51]
A
On that he sold you the house.
- [34:55]
E
Yeah so we did a so he sold it to or we did a parent to child transfer and all he wanted was fifty thousand and then we took over the rest of the mortgage but like me and my brother are on title and loan like it's legally.
- [35:10]
A
Our house yeah and so what was at the time that the mortgage plus fifty thousand at the time this happened was how much.
- [35:20]
E
Four hundred fifty thousand.
- [35:22]
A
So he had a mortgage of four hundred and you gave him fifty thousand cash.
- [35:27]
E
Well we did a cash out refinance so we gave him fifty thousand.
- [35:30]
A
From that oh okay and so the two of you have a four hundred fifty thousand dollars mortgage now and at the time that he sold you the house for four hundred fifty thousand what was the home worth.
- [35:45]
E
Like one point.
- [35:45]
A
Three okay okay so and now he doesn't have any money.
- [35:54]
E
He says yeah money is tight but i mean he.
- [35:57]
A
Doesn'T have any money he had fifty thousand bucks and that was many years ago and he's gone through that and he lives on the property humbly.
- [36:10]
E
Yes.
- [36:10]
A
After he gave you a half a million dollars he's not very wise he shouldn't have given you that money he shouldn't have given you this house i know i mean not i mean his first obligation is to pay his own bills his second obligation or his second the only after you're paying your bills and have a plan for your bills do you start giving stuff away.
- [36:35]
E
Yes i think he had that plan i think things i'm not sure that's why i wanted to look at his finances but i look at it because the house is worth a lot of money then i feel like i don't it.
- [36:47]
A
Was worth a lot of money when he gave it to you mm they gave you a million dollar house for half a million yes yeah and yeah but and yet he ran out of money so the whole thing he's a single dad he hasn't saved for retirement's bull crap because he would have had a half a million dollars in the account living off of that and not been calling you if he had just simply sold this house.
- [37:16]
E
Correct and he's told us that he regrets it yeah hindsight is twenty twenty but dumb yeah.
- [37:24]
A
And so i assume he has absolutely no other money that you know of it's not like he's got a million dollars in the bank from something else.
- [37:32]
E
No i think he has some things i don't know because i haven't looked at his finances and so i was like hey if we give you this dollar four hundred a month like let's sit down look at your finances see where where money is going because you don't have a car seventy three and.
- [37:48]
A
How is his health great he looks.
- [37:52]
E
Like he's fifty five okay all right.
- [37:56]
C
And he's retired not working jenna correct.
- [38:01]
A
Yeah you don't have an obligation at all morally ethically spiritually anything but if someone had given me a half a million dollar gift and in return they're asking for two hundred dollars because four hundred two hundred of it's yours two hundred of it's your brother's i would i wouldn't think anything about giving them two hundred dollars.
- [38:30]
E
So you wouldn't do.
- [38:31]
A
It i would do it oh okay i don't think it would be a problem at all i mean he gave you a half a million dollars he stupidly gave you a half a million dollars that he shouldn't have done then he wouldn't be having this trouble yes so i don't know what was going on in there in your well i'm.
- [38:51]
C
Curious jenna why four hundred for him to your point wanting just to look i'm just curious dollar four hundred you know does that change well what like.
- [39:00]
A
Probably living on social security living in the shed out back so it sounds like.
- [39:07]
E
Right yeah i'm not sure that's why i was like i didn't know if i was in the right to ask him like to well i mean.
- [39:14]
A
Not not to ask him to justify you doing this but just to make sure he's okay he might need eight.
- [39:22]
B
Hundred.
- [39:25]
E
I'M just worried my biggest worry is that he is giving it is going to give it to my little brother because my little brother just is doesn't do anything and so that's a.
- [39:35]
A
Fair that's new information that you never brought up until now sorry that's okay but now i mean so i think you can address that with your dad dad i want to make sure you're okay i'm happy to do this but i'm not happy to give my little brother money because he sits on his butt and if you're going to give it to him no i'm not going to do it and if you'll let me look at your stuff with you and make sure you're okay i want to make sure you're okay you gave us this wonderful gift all these years ago ago and little brother got cut out of that gift by the way didn't he.
- [40:11]
E
On paper yes but my dad is now coming back and saying that hey you need to split the house three ways no no i was like he wasn't respond or financially responsible at the time of the sale so that's why he wasn't included yeah no.
- [40:27]
A
We'Re not redoing the deal i've been i've been dealing with this house and now i'm dealing with you no the deal's done but again you see how haphazard this whole thing was when y' all did this deal it shouldn't have happened it was a bad deal for your dad and he didn't think it through well and now he's trying to come back and slide the brother in and now he's trying to come back and slide four hundred bucks out because he should have never done this in the first place he didn't have the half a million dollars to give away he was too broke to be giving away half a million dollar gifts okay and so now yeah i would be concerned that he's okay because his judgment's bad we've established that i want to make sure he's okay i want loving acting yeah i'm happy to do this to help you dad yeah make sure and i'm not going to put the little brother on the deed period that's.
- [41:24]
C
Done and the money's not going to the little brother but if all is said and he says no it's not this is for me to this then.
- [41:29]
A
I will take care of him y i mean he gave you a half million dollars you give him two hundred dollars zippy it doesn't matter i mean yeah i would do that definitely do that but step back two notches and y' all as a family learn your lessons from all the ridiculous things that have been done wrong in this whole thing so and now i'm really worried about you and your older brother being partners in this thing and now little brother decides he's going to go into orbit about this yeah this is this is this is not clear it's not good so bad deal all the way around bad deal man so but jenna.
- [42:12]
C
I don't think you're being a brat for having these questions you asked that at the beginning and i think you're having some like critical thinking yeah you've.
- [42:19]
A
Got some concerns that are valid yeah and i would look into those concerns but i want to do it through the lens of love i love my dad and he was generous to me and i want to make sure he's okay not of oh i'm not going to give him two hundred bucks that is bratty if you're going to do that but but you know if if he's going to give it to the little brother and the little brother's buying weed with it no we're not doing that i'm with you on that hold on folks don't panic buying a home in today's market doesn't have to be complicated but it does take more than hope and a quick internet search to get the right home one that will be a blessing and not a burden you need a trusted mortgage partner who will listen and serve you not push more debt you need the professionals at churchill mortgage i've personally recommended churchill for over thirty years and they're the only mortgage company that's ramsey trusted churchill stands out because they operate the ramsey way with transparency integrity and a commitment to doing what's right for the customer not what's profitable for themselves churchill aligns with ramsey's values by focusing on education responsible mortgage lending and helping people make smart long term decisions that enable them to build lasting wealth go to churchillmortgage dot com today to begin a better mortgage experience churchill mortgage dot com this is a paid advertisement in mls id fifteen ninety one in mlsconsumeraccess dot org equal housing lender welcome back to the ramsey show rachel cruz ramsey personality my daughter bestselling author is my co host open phones at triple eight eight two five five two two five emily is in maryland hi emily welcome to the ramsey.
- [44:31]
E
Show hi so my question revolves so a little background about me my husband and i are both accountants and we make about ten k take home pay right now after we put in about ten percent of our earnings into four hundred one k and you know insurance.
- [44:55]
A
And everything and how much is the four hundred one k and the insurance a month.
- [45:01]
E
I don't know exactly but for me for my husband i don't know but for me i take home about forty eight forty five yeah but.
- [45:10]
A
Your take home pay real take home pay as you know is not after insurance and four hundred one k real take home pay is after taxes.
- [45:21]
E
Right so this is after taxes like this.
- [45:23]
A
Is it's after taxes and after four hundred one k and after health insurance yes yeah so what i'm trying to ascertain is what your real take home pay is okay go ahead right yeah.
- [45:33]
E
This is the paycheck that we get so the dilemma we have right now is that we have we are living in our house right now which we bought about ten years ago foreclosed property needed a lot of work done but we bought it because it was cheap and over the years we have so i've always tried to live below our means and we have no debt we have savings we have an emergency fund so we're kind of on the step where now it was time to pay off our home but recently i was working at a school where my kids were going for free it was a private school but both my kids have learning issues and so we had to take them out of the private school and now they're in the public school in our local neighborhood which are not that great the dilemma we have right now is that we want to move to a better school district but obviously the house prices everything that we're looking at is really going to put us in a position where we're going to end up living paycheck to paycheck and what so like we we don't know whether we should make that move or not because our house is more than enough for us we're living comfortably in it it's only the schools that are we're not happy with.
- [46:50]
A
Yeah well i mean i don't know the math yet but if your statement is true that you're going to be broke because you made the move and paycheck to paycheck with no margin that obviously means you can't afford it if that statement's true so but you might be an accountant who's super tight so i don't know the it sounds like that your after tax take home pay would probably be around twelve thousand or a little bit more per month not counting in more four hundred one k if you took added four hundred one k and health insurance back in i think that's going to add a couple thousand dollars a month to your take home pay does that sound right.
- [47:37]
E
Yeah i think we'd be around eleven k i think you'd.
- [47:40]
A
Be around twelve k i don't think you're doing all that for five hundred bucks a month what's your household income well no i know you're not you told me your household income okay so no you're you're you're not that's not five hundred bucks so unless you're not putting much in your four hundred one k.
- [47:56]
E
I know that i put about twelve percent and my husband puts about ten percent so i don't really know what that comes out to be i haven't looked at it in a while.
- [48:05]
A
Because well the average would be eleven percent between the two but let's just call it ten percent and you make one hundred thousand dollars a year that's ten thousand dollars a month or ten thousand dollars eleven thousand dollars so four hundred one alone is one thousand dollars a month plus health insurance is going to be another one thousand dollars a month so yeah i'm right it's twelve.
- [48:23]
E
Thousand okay something like that yeah i guess i guess but what we get in hand right now is about ten k and i know okay so what i'm what i'm i'm trying to say is that if the mortgage comes out to be like between three five hundred to four thousand which is what the houses we're looking at right now if.
- [48:44]
A
You put that on a fifteen year fix that's going to be about a fourth of your real estate take home pay that's going to three k would be for a fourth would be about your max.
- [48:57]
C
Could you find something for three k emily in that area.
- [49:02]
E
So we have about four hundred k equity in our house our house and what we're looking at is obviously to upgrade i know that that's kind of going.
- [49:11]
C
Above our well don't upgrade to go paycheck to paycheck can you getting can you get a smaller house in the nicer area just to get the kids in the school.
- [49:21]
E
We can but long term i feel like it wouldn't be a good move because we wouldn't be able to you know have the same kind of equity in that house or like be able to sell it because we do want to have like just.
- [49:34]
C
This so emily okay so it's a values conversation at this point because as you're saying you're going to live paycheck to paycheck if you make this move because you're already assuming you're going to upgrade houses to get a bigger house than what you guys are currently and.
- [49:46]
A
The reason you're getting a bigger house is not for your kids yeah so.
- [49:48]
C
There'S a value system conversation of do i my val am i going to do what i have to do for the kids that's number one and we'll figure out the math and live somewhere smaller because that's our value that's our number one value or is it we want to have a place where our family can grow in a home and get x y and z you know type of house and if that's the value then go there but one has to trump the other for the math you can't do both and it sounds like the kids are the number one emily right and so for now i would as a mom with three kids i get that like you want them in a in a great space where they're gonna thrive and it's awesome and if that means we have to move to a smaller house we have to move to a smaller house and then in maybe five or six years we can upgrade right i mean you can your income's gonna go up over time but if you need to make the move it sounds like you can't do.
- [50:31]
A
Both yeah don't strap yourself to buy a bigger house that you want and blame it on the kids that's not fair so if you want to buy a house for the kids move over in the school district and it's going.
- [50:43]
C
To be a nicer area so it's going to be a smaller home right.
- [50:48]
A
And it's going to go up in.
- [50:48]
C
Value yeah so the equity you're not.
- [50:51]
A
Going to lose equity you're going to increase your equity because you're in a.
- [50:54]
C
Better area yeah maybe an older smaller home but it's in a better area for the kids and we did this.
- [51:00]
A
For the kiddos and that's the situation but the formula that we use the reason i was poking around on your stuff your take home pay so hard is a fourth of your take home pay on a fifteen year fixed is what we suggest because that gives you room where you are not living paycheck to paycheck you've got margin in there to save for christmas save for the next car save for a trip you've got margin in there and you can start putting fifteen percent of your income into retirement at that point but if you go over twenty five percent of your real take home pay and you're calling take home pay i'm talking about when i say take home pay we're talking about only taxes coming out and you've got at least two thousand dollars in non tax things coming out of your checks so you're dealing with about a twelve thousand dollars take home pay the way we're defining it after taxes maybe a little bit more which would mean one fourth of that which is three thousand dollars and that's what we would recommend on a fifteen year fixed rate and fifteen year fixed rates just went down a tiny bit this week just a little bit not much but just a little bit so that's how we get at it but the thing you've got to do rachel's right is you have to separate these discussions and keep it very clear what the primary goal is what's the primary value we're trying to solve for.
- [52:30]
B
Sam.
- [53:05]
A
If you want to win with money you got to make good choices and that includes where you shop for groceries which is why i'm excited about aldi you'll find everything you need at aldi from the same high quality meat and seafood you find behind the butcher counter to fresh organic fruits and vegetables delivered to stores daily aldi proves low prices don't mean low quality no gimmicks no membership fees just real savings listen a family of four can save nearly four thousand dollars a year shopping at aldi that's real money back in your pocket so stop paying more and start shopping at aldi for the lowest prices of any national grocery chain find a store near you today at aldi us that's a l d i us savings based on regional analysis of aldi versus select competitors prices may vary by location product availability and the market our question of the day is sponsored by wide you didn't take out private student loans hoping to default but life happened why refi won't shame you they'll help you explore a real plan to get back on track head to yrefi dot com ramsey and you can find out more that's the letter y r e f y dot com ramsey not in all states today's question.
- [54:42]
C
Comes from ashley in colorado we are the parents of three young kids and have a youtube channel which has been monetized for just over a year right now the funds are sitting in the bank in our names we'd like to know how to grow that money wisely but also keep some liquid our plan is not to give them any access to it until each of them reaches the age of twenty five we are longtime listeners and really value your guidance should we leave it all in the bank or invest some of it or all of it this is the we've had this kind of question i've had it three or four times in the last few months about monetizing on the internet accounts and stuff it's like really.
- [55:25]
A
Well we don't know what it is you can monetize on youtube and it's a small amount of money or it could be a million dollars and so i don't know what we're dealing with here so the best antidote to money screwing up your kids is for you to not have screwed up your kids money does not screw up kids money reveals that your kids are already screwed up and so you can't put it in a you can't keep it away from them long enough for them to not be screwed up twenty five is not a magic number and so i'm going to teach them responsibility generosity i'm going to teach them wise spending i'm going to teach them saving i'm going to teach them work ethic to age appropriately we don't know how old the children are she says young kids i don't know what that means and so but age appropriately so that when this money does come to their hands they see it as what it is a responsibility not that they are a four year old who hit the lottery and so and you turn them into a trust fund baby of some kind so having said all of that i'm going to be really really i'm going to spend ninety percent of my calorie burn on this on making sure the kids are okay first and foremost then we can talk about the technicality of the investment okay the only way you keep it away from them until age twenty five is if you put it in a trust if it's in anything else it goes to them at age twenty one and you can't stop it unless it's in a trust so you're going to have to go see an estate.
- [57:06]
C
Planning oh and it sounds like it sounds like the funds are in our names which makes me sound like the.
- [57:10]
A
Parents name yeah well it has to be in your name because a kid can't you can't put a child can't do a contract and so you open a bank account for a kid it's an utma uniform transfer to minors act and that means that it's in the parent's name or it's in the kid's name but the parent is the custodian.
- [57:27]
C
Yeah but i don't know if the kids are getting paid for the youtube channel do you know what i mean it could just be the parents getting.
- [57:30]
A
Paid i don't know okay that could be that would solve it that would solve it you give it to them whenever you want it if it's your money if it's your money legally if it's not their money legally or morally for that matter so anyway what would i do with it i would make sure that some of it was available for their first car and that they add some to that and so that's the part that's liquid i would make sure there's some money available for fun a small amount of some kind and again we don't know how old these kids are and how this is going to unfold but this is what we did with rachel and denise and daniel and so and then the the rest of it i probably gonna sit down with smartvestor pro and get some money going into mutual funds again if you're talking about fifteen or twenty thousand dollars here it's irrelevant you're spending way too much effort to worry about it if you're talking about a million dollars or somewhere in fifty thousand dollars or something like that then it becomes relevant and youtube channels can monetize at all kinds of levels we have a youtube channel we know and so i know exactly what we make on our youtube channel so the on the monetization portion of it anyway but so the you know i remember the first time i met someone remember shay carl yeah that's the first guy i ever met who had monetized a million dollars on youtube that was twitter was new that's how long ago that was so long time ago but and they had a family channel at the time the kids and the family were all on there and their youtube channel that blew up and but i and when i found out he was making a million dollars on youtube i passed out because as far as i knew it was cat chasing lasers everywhere but anyways so it could be.
- [59:17]
C
And i'm gonna say this and i don't know it so i even hate to like say it out loud but there i think there are some laws in some states happening for child creators that they have to be paid because a lot of these families are doing family things and the kids are part of the monetization and stuff so make.
- [59:32]
A
Like that whole duggar's mess yeah i.
- [59:34]
C
Don'T know how much of how big of a deal you guys are on it but that's starting to become i'm.
- [59:41]
A
Fine with them giving them the money at some point i just want to make sure that the kid is able to care yes totally obviously if you raise a kid and they're a heroin addict and you give them a million dollars you're gonna kill them because they're gonna overdose and so they're gonna go buy a lot of heroin and so you got to you know you have to build the character into the individual that's the best way to leave an inheritance and to handle something like this where the kid becomes so the problem like in the old days it wouldn't have been youtube it would have been a hollywood child star right you know that made all this money and then what happens you know the parents abscond with the money immorally or the child is just so dysfunctional because of the way they're treated in the spotlight that they're not capable of handling the money when they become an adult and so that's what we got to guard against are those kinds of things i don't sense anything in here about ashley taking.
- [60:39]
C
Possession no i don't think so she's.
- [60:42]
A
Trying to figure out how to bless.
- [60:43]
C
Her kids yeah absolutely for sure there's.
- [60:46]
A
Nothing in this that even between the lines or the way the words are.
- [60:48]
C
Formed no it just made me think family youtube channel just read an article recently talking about child monetization and how children now are gonna you know anyways.
- [60:56]
A
That'S a yeah well i mean the duggars that whole thing on that and you know they were the parents kept all the money and the kids resent that and that came out in not only the documentary but we've met some of them and they're they're not happy about it so that that's the kind of thing so that that's very real if your kids are a prop in your reality show you know that's an that's a thing so anyway the character.
- [61:23]
C
The kid number one and then number.
- [61:24]
A
Two yeah and you know guys the book that rachel and i wrote is rachel's first bestseller and she and i did it together first number one and it was smart money smart kids teaching your kids how to handle money and the beautiful thing about using it is it's not really about the money it's about you're teaching you're using money as a a methodology to teach character to teach generosity to living with an open hand that other people are important the axis of the world doesn't run through the top of your little head and so you know to teach work ethic and yeah you will brush your teeth so you have some later you will you know you will do this chore and not just because you're going to get paid but just because i said so because you're going to leave my home knowing how to work that way you stay gone when you leave and so that kind of thing is loving your kids well and it goes back to what andy andrews used to say and it's one of my favorite andy andrews quotes i'm not trying to raise great kids i'm trying to raise kids that become great adults and it's a different skill set we're trying to raise kids not kids that look like little stepford children and they are weird because they act like they're thirty two years old and they're four i don't need that i want a four year old to act like they're four but i do want to raise them in such a way that when they are twenty four they're a person of substance a person of poise a person of integrity a person who knows how to work and how to save and how to give and if you do all of that then some of this other stuff is not going to matter etcetera yeah.
- [63:06]
C
It'Ll work itself out it will work.
- [63:08]
A
You can't mess it up then yeah yeah you can leave them a million dollars at eighteen you can leave them a million dollars at twenty five you could dole it out gradually you could put it in a trust you cannot put it in a trust you could do all kinds of stuff and so but yeah as far as the investment part of it if it is a substantial sum i would sit down with a smartvestor pro click at ramseysolutions dot com click on smartvestor you'll find the people in your area that we have vetted and that we love and that have the heart of a teacher and they're going to give you advice that sounds ridiculously ramsey sarah is in ohio hi sarah how are you you good how are you better than i deserve what's up.
- [64:30]
F
I was wondering if you guys had another suggestion to help me clear my credit report of a car a credit card that was opened by my husband before he decided to take his own life i'm so sorry he last thank you last summer and into the fall he started to accrue a lot of credit car unbeknownst to me i did not know about any of this until about a week before he passed away and then after his death i found out about a credit card that he had opened in my name only and charged roughly close to twelve thousand dollars worth of stuff to it when i received the first invoice in the mail i reported it as fraud because i didn't know and through their investigation is how i found out that he opened it in my name still fraud and it's because yes because he made two payments to the credit card out of our joint checking account and because it has my name on it they denied it as fraud they lose.
- [65:39]
A
They lose no it is fraud period.
- [65:43]
F
I went a step further asking for the application and things like that and the transactions yeah they provided those to.
- [65:50]
A
Me which company is chase baby figures okay yeah they're scum they're scum lastly.
- [65:59]
F
I filed a police report yes because he used his phone number his email and his mother's maiden name on that application because he did not know mine right so i've been denied twice and the police report is the last thing i just sent in last week yeah after this i really don't know what else to do to get this off.
- [66:20]
B
To that's my credit report okay i.
- [66:23]
A
Got you we can handle it i'm sorry oh my gosh so it was he he you said he committed suicide in december yeah so how long were y' all married huh just two years oh wow been a long two years and yes it was so he was struggling it sounds like he was struggling with some mental illness obviously of some.
- [66:48]
F
Kind yeah yep that's what i'm i'm gathering after the fact as well was.
- [66:53]
A
He being treated for any of it.
- [66:55]
B
That you know of no he was.
- [66:57]
A
Not okay so we don't have any.
- [66:59]
F
Father also committed suicide so i think this is a long history of within.
- [67:04]
E
His family oh sarah i'm so sorry.
- [67:07]
F
Wow all right raising his daughter and she wants to stay with me she does not want to go home with her mom and the court system is allowing that i have not yet to open the estate and i know that's going to be an even bigger thing to tackle to be honest with you i've had i've called multiple people and i have not even received a call back i have some local lawyers to help me tackle that i was waiting past the six months so that all that credit card those creditors.
- [67:40]
B
Would go.
- [67:41]
A
Away no that doesn't that doesn't work they still can file a claim against the estate because you've not handled the estate yet and so so what is the rest of the situation.
- [67:56]
F
My home is in mine my home is in my name but we purchased another home while we were married and actually in the same neighborhood and we were going to do an airbnb with it and we did do that for a short amount of time and we currently have a renter in it now the home is in his name financially it is deeded to a business name that he started out up last fall.
- [68:23]
E
That'S the.
- [68:23]
F
Estate essentially what's that homework because.
- [68:29]
B
Online.
- [68:30]
F
It states roughly four hundred fifty and.
- [68:33]
A
What is owed on it three hundred twenty okay so just for cleanliness sake and to help you we can help you with the first thing to start with i'll come back to that but it's not going to help ultimately because it's going to land back on him so when anyone passes away in any state what you own as an individual what he anything he had any ownership in any assets stands good for any debts that he is responsible for okay and so the equity in that house is going to stand good for the debts that he has run up okay and and that includes the debt that after we fix this identity theft and it's off of your name and it goes back on his name this twelve thousand dollars with chase is going to get paid out of the equity of that house okay even though you are not personally liable so all we're doing is moving the shell the p under a different shell okay okay but so it's not going away is my point because he's got one hundred thousand dollars in equity over there and how much debt did he have.
- [69:51]
F
From what i could tell on credit card debt he was pushing one hundred thousand dollars one of his cars was taken back like the bank came and got it and.
- [70:05]
A
So that's anything else jointly with you or at all any other assets bank accounts investments anything there was some bank.
- [70:15]
F
Accounts yeah joint checking and savings yeah but there's not a lot of money in there at all and we did own a truck together a twenty twenty five gmc truck i was able able to get that title put in my name by providing the death certificate and then i was able to sell that back to the dealership but i took a seventeen thousand dollars hit on that okay but i had to get it out of my name because i couldn't afford the payment on it i understand so i had to i had to dump that quickly my credit score last year was an eight hundred forty two.
- [70:50]
E
Before all of this happened and it's a six hundred twenty today yeah that's.
- [70:54]
A
Okay that's okay we don't need a credit score all we need is a.
- [70:56]
F
Life yep i agree and i have my home and my car is paid for so i don't need my credit but it's definitely hard to look so.
- [71:04]
A
It sounds like when you liquidate anything that's got his name on might come close to covering the debts that had his name on it but you're not going to benefit anything you're not going to have any net of anything it doesn't sound like what you're describing to right but you need to do it anyway because otherwise they're going to come after the stuff that has both your names on it so you've got to get the estate cleaned up or those bank accounts and checking accounts that had both names on them and they may come back after that truck transaction because that was technically his okay even though you didn't benefit you lost money but that had your name on it too.
- [71:45]
E
Right yes financially yeah i was the.
- [71:48]
F
Main buyer he was the co buyer.
- [71:50]
A
Yeah so you know they won't come back after you because you lost money you make money but your bank accounts and that title to that house over there they're going to eventually come after all that and you're better off to be proactive to get a a probate attorney and you're gonna spend a few thousand dollars to work this through to get that all done now back to your other thing we've endorsed a company called zander insurance for identity theft protection for i don't know twenty years since before identity theft was even a thing and now it's definitely a thing and when someone has their identity theft and something occur their identity is stolen or the unique thing about this protection is is they assign a counselor to you a coach to you that goes and cleans it up for you okay you did not have that protection when this happened but you know someone who can get it done for you and that's rachel i'm kidding it's both of us all right so we're going to put you on hold and kelly's going to connect you with xander and occasionally as a favor for someone in a specially hard situation they will take something even and run it run it through the system and take care of it for you even though you did not have the coverage at the time okay okay can't but can't really buy home insurance after the fire okay right but but we're gonna we're gonna do that anyway and so we'll take care of that and they'll take this case and run it down just because i don't like chase and that'll help help so but the but the point is i want you to clearly understand we're really not getting getting rid of it we're just putting it over into his estate so it's going to come up again when you clean up his estate okay all.
- [73:40]
F
Right well i appreciate it all right.
- [73:41]
A
You hang on and kelly's going to pick up and we'll try to help you get through this kiddo hey kelly also set her up with a ramsey coach as our gift she's a widow we're to take care of her okay now buying real estate selling real estate trying to get a new place a lot of drama out there right now and when there's drama there's one thing you need to depend on and that's facts and facts are generally not your hyped up friend who has an opinion about socialism no let's just find out what was really going on what's really happening what the real prices are what the real interest rates are and let's try to get those straight up if you want to know what that is just go to ramseysolutions dot com market or click the link in the show notes if you're listening on podcast or on youtube dallas is in louisville hey dallas what's up hey guys davis i'm sorry hey davis i'm sorry not a.
- [75:14]
B
Problem buddy starting off with my question quickly here i'm a divorce dad of two just got through the divorce i'm just trying to figure out what kind of route i should take to build my retirement and future for my two children currently have zero in retirement.
- [75:30]
A
Wow hard times i'm sorry yeah okay what.
- [75:34]
B
Do you make i've been a stay at home dad for the last four and a half years as my wife ran a successful business business i just got back in the workforce in june doing self from self employment remodeling that i did before i was retired i make we're currently about four to five a month before i was retired i was making about eighty grand a year.
- [75:53]
A
Okay so you're going to be able to get it back up to one hundred now okay exactly all right and so you're making one hundred grand a year you're thirty eight years old how.
- [76:01]
B
Much debt do you have zero consumer debt my truck's paid off i am only purchasing a house which i just did for me and my two kids kids and i'll have about forty thousand left in my bank after i put a two hundred and eighty down payment down on my on my new house.
- [76:16]
A
Way to go nice okay thanks and so the finances and the divorce were in pretty good shape yeah we were.
- [76:25]
B
Fine we came to an agreement we kept it admissible as we could obviously mostly for the children and we're settled on that and signed and now it's just me moving forward and so now.
- [76:34]
A
My yeah but i mean before the divorce y' all weren't broke is what i'm saying that's good no no no.
- [76:38]
B
No my wife made a about twenty five per month yeah okay cool all.
- [76:45]
A
Right so you got a good head start here you got a house you got a good income you know make sure you got the emergency fund in place you don't have any debt so that takes you right to baby step four which is fifteen percent of your income going into retirement and that'd be fifteen thousand dollars a year going into four hundred one ks and roth iras and if you're running your own business you could call it a simple four hundred one k or a simple ira which is a four hundred one four hundred one k for a small business you can do a lot of stuff and you could easily get fifteen thousand dollars into good mutual funds a year and if you do that from thirty eight to sixty eight you're going to have millions and millions of dollars okay.
- [77:26]
B
That works i do also be getting approximately eighty thousand dollars in a couple months from my father and i was just seeing what i should do with that money i guess throwing it into a roth or something as well i'm.
- [77:37]
A
Probably going to pay the house down i want to get the house paid off off while you're putting fifteen percent of your income away how much do.
- [77:43]
C
You owe on the house davis it'll.
- [77:45]
B
Be about one hundred thirty thousand oh.
- [77:48]
A
Wow that's great and you're getting how.
- [77:50]
B
Much from your dad about eighty thousand what's that from he's got a settlement from his mother in a nursing home that they basically gave the wrong medicine and seemed to have got her wow.
- [78:03]
A
Oh my gosh okay so he's distributing.
- [78:06]
B
It to her grandkids yeah he's distributed to me he already gave my sister up front for their property a year or two ago and he wanted to even us out yeah so so that.
- [78:17]
A
Means you only owe fifty thousand dollars.
- [78:18]
B
On your house now yeah that's true.
- [78:21]
A
Yeah you get that thing you get that thing paid off boom now you got a big chunk of change to throw towards investments with no house payment right so yeah throw throw the eighty at the house and then get knock that other fifty out as quick as you can too and let's be clear and no debt stay away from debt and be investing and be generous and you're going to be in great shape man you're going to do fine as far as setting all that stuff up with your roth iras and everything just click on smartvestor proamseysolutions dot com yeah.
- [78:51]
C
And above that once once the house is paid off that's the baby step seven where you continue to build wealth and be generous so you can go above that fifteen percent at retirement and max out some of the stuff if you can i mean if you can max out your your roth every year and put some money into a four hundred one k or that simple four hundred one k simple ira yeah guys.
- [79:11]
A
I'Ll forget sometimes y' all are listening to us do this and you forget how this math works so we paid off our house many thousands of years ago it feels like and it was fifteen hundred bucks a month and i was paying about two thousand five hundred down on it and then i got a chunk and i took it out okay so i took the fifteen hundred i rounded up to two thousand five hundred and i put two thousand five hundred a month automatically coming out of my checking account into a mutual fund and i kept it a separate mutual fund i just want to see how fast a house payment became a million dollars it was unbelievable how fast that was a million dollars it was just a few years i looked up and i went paying yourself a house payment really is a lot of money it's a lot of money and so when you get that house paid off and.
- [79:54]
C
That'S when you were turning around like you're talking about that was forever ago.
- [79:58]
A
That'S thousands of years ago so now it's like there were dinosaurs in the.
- [80:01]
C
Backyard yeah yeah so remember that it's more expensive these days so even if you get your house paid off now think about how much more money well.
- [80:08]
A
I mean yeah that was only twenty five hundred you know that was a big house for twenty five hundred back then but that's when you could buy a house for a box of strawberries.
- [80:15]
C
I know you traded two oranges two.
- [80:17]
A
Oranges and you could get a free boomers you boomers you don't know how life really works but you had a.
- [80:24]
C
Great housing market oh geez.
- [80:29]
A
Seen the.
- [80:30]
C
Income it's my poke should have seen.
- [80:31]
A
The always rudy's in chicago hey rudy.
- [80:35]
B
What'S up hey dave and rachel thank you so much for having me on sure how can we help well we just want to say we're huge fans started a few months ago and i also want to mention my seven year old also a huge fan who has memorized the baby steps and will recite them to anyone willing to listen.
- [80:53]
A
Oh no oh no rudy i don't even.
- [80:56]
C
Know my kids can so that's that's.
- [80:58]
B
Impressive it's pretty funny but so my question i guess to begin so we're basing full gazelle intensity and on step two but we plan to be on steps four and five in about six months good and so my questions revolve around my wife who's a stay at home mother so my questions are once we're done paying off debt should we be investing more than fifteen percent of our household income to account for the fact that she's not building her own.
- [81:29]
A
Retirement no she has rights to your.
- [81:32]
B
Retirement gotcha and also so with that do you recommend setting up like a spousal ira yeah but not because she.
- [81:42]
A
Needs her own retirement because she's got rights to your retirement ask anybody who had a four hundred one k with a half million in it and got a divorce course okay understood yeah so that she's she's in good shape she's fine but yeah i've done spousal iras every year just because it was a good way to keep the government's hand off of money right yeah absolutely yeah so yeah do do roth iras for sure in both your names and and as a part of your fifteen percent and then you know but i would max it at fifteen let's get the house paid off and then let's load up like we were just talking about before we picked up this call yep and you can do backdoor i can still do a roth ira because i can do backdoor roths regardless of your income basically the roth the right to do a tradition a regular roth ira goes away when your household income is up over two hundred k and so obviously mine is over that so but for me but what you can do is open an after tax traditional ira not a pre tax an after tax traditional ira and roll it to a roth thirty seconds later and i do that every year for sharon and me.
- [82:55]
C
And the spousal ira i don't think many people realize that that's even an option that's true yeah there's a state.
- [83:02]
A
Home my wife does not have an earned income but i have an earned income in excess of both ira lease limits and so i can fund my wife's ira or in the case the wife is the working one the fund the husband's be the one it works both ways but the if you're you know my wife has not had an.
- [83:22]
C
Earned income and you don't have to make a certain amount to qualify for.
- [83:25]
A
The spousal you don't have to make anything yeah to qualify for the spouse.
- [83:29]
C
No i'm saying the spouse that's working.
- [83:30]
A
Though yeah you have to make more than the two iras of it combined than the amount you're putting in which is not i mean you got to make sixteen sixteen thousand dollars a year you know right but or whatever it is but yeah it's nothing but you gotta have an earned income in excess of both of them but that's all wow wow.
- [84:14]
C
Hey guys rachel cruz here with a big announcement the ramsey show live is going on tour this is your chance to no longer just listen on your daily commute but be in the room where life change happens we're removing the wall between caller and audience so you can take part in money confessions hot takes and more plus you'll hear live callers get answers to their pressing questions i'll be in chicago on september thirtieth alongside george hamill and ken coleman then george jade warshaw and doctor john deloney will be in orlando on october second tickets start at dollar thirty nine and are limited to just three hundred seats in each city so don't wait especially if you want one of the fifty vip tickets that includes a meet and greetings greet the best seats in the house and more it'll be a night full of hope community and the kind of energy you can only get in person get your tickets today at ramseysolutions dot com the ramsey show live or just click the link in the show notes.
- [85:23]
A
Welcome back to the ramsey show rachel cruz number one best selling author my daughter is my co host open phones at eight hundred and eighty eight eight hundred and twenty five five two two five samantha's in north carolina hi samantha how are you i'm.
- [85:37]
E
Good how are you thank you both for having me on sure how can we help i appreciate it so i'm fifty seven i'm a single mom and have been for about fifteen years when i got out of school my mom and dad didn't have a huge great financial education they're both teachers and i always knew that i would make sure that i kind of did the right things when i got older so i had jobs from the time i was fourteen and when i got through law school when i was twenty one or twenty two i started to kind of immediately invest in my four hundred one k and have done that for twenty thirty years the problem is circumstances happened and became a single mom and ended up with two daughters who basically i ended up putting them through college and part of grad school and long story short used up most of my income in my retirement to get them through obviously i realized that wasn't the best call at the time they're just both amazing kids incredibly hard workers what did.
- [86:50]
A
You how much did you spend on.
- [86:52]
E
Their education honey between college and grad school and they took out loans in grad school i probably at least three hundred from my four hundred one k and then of course how much throughout about three hundred thousand.
- [87:13]
A
Okay.
- [87:16]
E
So and.
- [87:17]
A
You paid all the taxes and the penalties on all that obviously.
- [87:21]
E
Yeah and.
- [87:22]
C
I know do you have debt samantha with it now you said you took.
- [87:26]
E
Out some loans yeah i have about sixty five thousand left to pay off obviously fully aware this is probably not the best way to approach it at.
- [87:35]
A
The time that would be an understatement i know yeah a they went to a college they couldn't afford and b you should have never used your four hundred one k ever to send a kid to college there's not a circumstance on the planet that that makes sense but you're there now okay all right so what do you make you said you said law school that's encouraging what.
- [87:56]
E
Do you make i now make about one hundred thousand a year why you've.
- [88:02]
A
Been practicing law for years.
- [88:05]
E
I have i kind of took a different path and ended up at a firm where i was able to kind of juggle the raising the girls and and okay.
- [88:18]
A
But can you now they're gone and they have degrees and they're on their.
- [88:21]
E
Own right yeah yeah just recently yep.
- [88:25]
A
Yeah good they need i mean good good financially they it's time for these kids they kind of got it it's time for you to quit feeding them for sure so now can you now can you go make two hundred you.
- [88:39]
C
Kind of need to yeah what do you have left samantha in the four.
- [88:42]
E
Hundred one k anything about eighty thousand so my my question that i was trying to get to and fully aware of all this no excuse other than the fact that things happen quickly and something that their dad kind of dropped out at a time when you made.
- [89:03]
A
An emotional decision i understand yeah i did i understand okay i don't regret it what is your question then my.
- [89:10]
E
Question is i'm fifty seven trying you know i probably have what ten years to try and make up some something and i recently came across the ramsey program and took financial pc last year and it's fantastic wish i had taken it twenty years ago right but it is what it is i know better now okay that's good so my question is one of your kind of general thoughts is that you shouldn't until you pay off with the baby steps that you shouldn't invest at all until you pay off the debt which i understand but my question is if it takes me like say a year to get the debt paid off at this point when i'm this time wise still mathematically.
- [89:56]
A
We'Re not going to make another emotional decision okay i know you're scared i know you're scared and this thing's this retirement thing's bearing down on you and it's causing you to have incredible regrets for the things that have happened in the past but all of that aside the fastest way mathematically for you to get a good nest egg is first get rid of the sixty five thousand and make sure you have no debt and you're living on a detailed budget and anything we can do to increase your income to accelerate both of these things the debt removal and the rebuilding of the nest egg is absolutely vital and so if i'm you it's time for you to go make some money and you've been putting everybody else first for a very very long time and you you now have no choice in the matter matter you have to put.
- [90:43]
E
Samantha first yeah yeah no i appreciate it and and just to clarify these two girls are not there you know we're talking incredibly hard working i didn't.
- [90:56]
A
Question their character honey yeah this question where they went to school and where they got the money but that's all in the past you know i'm not gonna beat you up anymore that's not that's not what we're here for we're here to move into the future so the future is is the future is you go make as much money as you can make and if you change law firms to go make two hundred.
- [91:15]
C
I kind of love your girls to step up and take on the sixty.
- [91:17]
B
Five yeah hello yeah well they're just.
- [91:21]
C
I mean one is they're so great.
- [91:24]
E
No they're they're great they're just one is literally just graduated from columbia and she's in a doctorate program and so she's paying it's a fully funded program and she's paying all her bills now and the other one is actually having to have an interview at nato and so they're they're that's awesome i just.
- [91:42]
C
Think i know i hear you and i don't question that it just would be nice if they stepped in they don't have to legally because your name's.
- [91:48]
A
On the on the loan nor do they have to morally because it wasn't the deal you made but it would be cool if they go make three hundred thousand dollars a year if they reach over and take care of this loan so they're single mother doesn't have to retire on elderly no they're they're.
- [92:02]
E
That'S that's a non issue these they're both great kids but they're just literally getting on their feet so you know.
- [92:08]
C
And that's okay so samantha yeah so between now hey between in the next ten years though for real working as hard as you can upping the income getting the sixty five paid off and then what's your housing situation do you own a home.
- [92:23]
E
No no okay i did i did in the divorce long.
- [92:26]
C
Story but no that's fine so that.
- [92:28]
A
Would be how long ago were you.
- [92:30]
E
Divorced relevant probably about fifteen years okay but there's there's a whole lot of issues that i wouldn't want to that's.
- [92:39]
A
Fine that's fine it's all good but.
- [92:41]
E
But put in a situation where i did the best i thought for the.
- [92:44]
C
Girls yes okay so moving forward though again yeah getting that debt paid off and then and then yeah and you.
- [92:50]
A
Got to get you got to get a home that you get paid off a little one bedroom condo something that you get paid for and so forth so okay she loves her kids and single mom warrior princess doing the best.
- [93:06]
C
She could oh yeah it's i mean.
- [93:07]
A
That let not to pick on her okay but to say if you're out there in that situation you have to make decisions based on facts not feelings and i'm going to take care of my children at any cost is a feeling those kids could have gone to state schools not columbia they could have worked while they were in school they could have gone and got scholarships they had a mother that was a single mom and there would have been no dad and no three hundred thousand dollars cash out okay and the kids would.
- [93:39]
C
Have been fine and still great character.
- [93:40]
A
And still great kids i mean seriously still great kids buying and selling a home is a big deal and you want an expert in your corner fighting for you to get the right deal at the right price that's why we only recommend ramsey trusted real estate agents they're handpicked pros who know their stuff listen to your needs and have your back from the first call all the way to closing day to find a ramsey trusted agent near you visit ramseysolutions dot com agent ramseysolutions dot com agent are you staying on track with the baby steps do you know how take a quick quiz for free and check your progress and we will give you a personalized plan to get you on track simply head to the show notes and click the link titled are you on track with the baby steps and complete the free quiz and we will give you a personalized plan rebecca's in texas hi rebecca hey dave how are you better than i deserve how can.
- [95:17]
F
We help well i am in a pretty interesting situation and kind of sad as well earlier this year a.
- [95:32]
B
I.
- [95:32]
F
Guess a boyfriend at the time of two years was ready to take the next step and he wanted to move to my state and and he ended up purchasing a ranch which is kind of like my dream property for about a million dollars paid cash put me on the deed and prior to that i said you know i don't feel comfortable doing this unless i am unless we are married at that point he was like nope we're going to get married a venue was booked a ring was purchased and we move forward he moves in for about three weeks and then tries to almost trick me into signing the deed and of the house into a trust while he's like planning his exit and he left so which.
- [96:30]
A
Emotional issues he paid cash he did of a million dollars for a property yep and put your name on the deed yes sir and then he took off yes sir wild so i don't understand how he profits from this it almost sounds like he was trying to scam is he just flighty or what.
- [96:54]
F
I think he has some i think he wants he liked the idea of this oh and i think broke your heart wow broke my heart i'm left to manage the whole twenty acres on my own and six animals it's not.
- [97:12]
A
Your house.
- [97:15]
F
It'S not my house well.
- [97:16]
A
He it's his million dollars right yeah.
- [97:20]
F
But i'm on the deed so technically i am fifty percent owner and my home i rented it out and i have tenants in there through the end of may.
- [97:33]
A
Oh my gosh okay is.
- [97:39]
C
He asking for the property back at all like are you guys gonna sell.
- [97:42]
F
He tried to like i said like when he was planning his exit before i put all the pieces together he said oh someone's gonna contact you you know to put the house in a trust to protect you in case something happens how long has he been gone.
- [98:00]
B
Six weeks okay okay all right wow.
- [98:05]
F
Okay i am trying to figure out what my goal should be in this situation should i say okay let's list the property but before it's listed obviously have it worked out and i i mean my life flipped upside down has.
- [98:25]
A
He been in contact with you since he left left.
- [98:30]
F
We we spoke once and that's when it was basically like this is over we're not doing this.
- [98:36]
C
It'S so interesting it's usually him calling us rebecca being like crap i bought a ranch with my fiance who i'm not who i'm not with anymore what do i do for my million dollars.
- [98:45]
A
You'Re sitting there on a half a million dollar windfall because this guy's loopy.
- [98:50]
F
Yes so do i buy him out do i take the you know i obviously will work with attorneys to have the paperwork drawn up so the property is listed and there's an offer we have a plan in place as far as you do so at the last minute well we would that would be my goal if we lift it would be to have everything written out there's.
- [99:15]
A
No question i think this guy's an absolute i mean the story you've told me he's an absolute crazy man and weird and everything else i'm very sad.
- [99:26]
F
I'M very sad about that this has been a lot i bet he was.
- [99:29]
A
Great though rebecca and yet if i'm in your shoes i don't feel entitled to five hundred thousand dollars of his.
- [99:37]
F
Money i don't feel that way i feel like i questioned that but i quit a job i uprooted my entire life and this gesture that he made was to show his level of commitment and his seriousness for the relationship so.
- [99:55]
A
What were you making at your job.
- [99:58]
B
About a hundred can you go back.
- [100:01]
F
I cannot go back there no okay.
- [100:03]
B
What were you doing i work in.
- [100:07]
F
Private aviation on the kind of operation.
- [100:12]
A
Side okay all right well obviously you're going to have to get a career.
- [100:16]
B
Going forward i do have a job.
- [100:17]
F
I do i did get another job.
- [100:19]
A
Thank you what do you make fully.
- [100:20]
B
What do you mean one hundred you're.
- [100:22]
A
Making one hundred okay other than the time off in between that you did not benefit from how long how long were you out of work a couple months about three months but this current.
- [100:35]
F
Job is not as stable as a company as my previous one which makes.
- [100:39]
A
Me so your point is you've been damaged by this fraud and so financially and so it would be ethical to receive something for that.
- [100:52]
B
I don't know.
- [100:52]
A
I think that's right i think i think you know it costs you he costs you a good job and my.
- [101:00]
F
Home that i had well no you.
- [101:02]
A
Own the home still right you'll get it back in may you know and you will have rented it you would have made money on it during that time so i don't mind tagging him for one hundred grand or something i just don't i don't know how you've been harmed much more than one hundred grand unless you want to just be punitive which honestly is probably okay this guy kind of deserves it but i'm kind of with you i mean i'm vacillating while i'm talking to you you hear me so i'm not sure this is weird and you as you know so and you're not the weird one so yeah okay i don't want to i want to be made whole financially plus a little if i'm you past that this is dirty money for me right i i got and i don't want to live on this farm this ranch right that's that's got bad juju all over it right if i'm you i'm just i'm just yeah i don't i'm trying to put myself in your.
- [102:01]
C
Shoes yeah get me out of there.
- [102:03]
A
Yeah i don't want to i don't.
- [102:04]
C
Want to walk away legally you're entitled to half a million legally right if her name's on the deed nothing this.
- [102:10]
A
Twerp can do about it he stepped.
- [102:12]
C
In it but the question is what do you feel right about right from just like a moral perspective and that's being made whole plus a little bit.
- [102:19]
A
More of what you're saying i would do you have an ability to contact him yeah i would have your attorney contact him and say i will sign a deed to you for two hundred thousand dollars or whatever the number and then i would go get an apartment and sell off the animals and get out of this get away from this.
- [102:40]
C
Whole thing and then go back to your and go back to your house in may when the tents move out.
- [102:45]
A
I would just get away from the whole thing anything that keeps me in this story is disturbing i want to get out of this story it's a.
- [102:54]
F
Bad story emotionally that's probably the best.
- [102:57]
A
No i mean just generally i think it's probably financially because it's just it's it's you're distracted by evil stuff did.
- [103:05]
C
Y' all did y' all date long term rebecca for two years for two.
- [103:08]
E
Years long term long distance but it.
- [103:12]
F
Was a bit of a roller coaster long distance and this was like the okay he's going he he wants to commit he wants to take the next step he he's ready yeah there's almost.
- [103:22]
C
A level of like mourning this life that kind of whipped up really quickly for you you know what i mean like i mean i know you guys were in a relationship for two years but him moving buying a ranch you moved you quit your job i mean you had a whirlwind within ninety days of this life that was ahead of you and then it's gone as quickly as it came is what it feels like so there's yeah some whiplash for.
- [103:43]
A
Sure there's a whiplash penalty i'm willing that he should pay i'm fine with that and anything that he actually cost you which is probably probably one hundred grand give or take and then a whiplash penalty or whatever you want to put on it and i'll sign the deed for that that it sounds like.
- [103:58]
E
He'S got money he's had a couple.
- [104:01]
B
A couple mil yeah so he could.
- [104:03]
A
Write you a two hundred thousand dollars check or whatever the number is you've got in mind and you just sign the deed and we're done get the animals sold off so they're not hurt because he's not going to come back and feed them you got to make sure they're gone right and so and i would put this whole thing way in the rearview mirror if i if you were if you were my daughter that's what i tell you to do.
- [104:23]
C
Sucks sorry rebecca yeah it's awful.
- [104:47]
A
We'Ve all done dumb things with money i've done them with zeros on the end one of the biggest mistakes i see people make with money is not having a plan for it you got to have a plan you got to be intentional and you need to get a budget you have to tell your money where to go so you're not wondering where it went our budgeting app every dollar helps you do just that it's the easiest and fastest way to make a monthly plan for every dollar you've got coming in and going out now's the best time to get started before the ridiculous holiday spending season gets here and sucks you in because you didn't have a plan don't let that happen you're done making that mistake go download every dollar for free in the app store or google play today august is national make a will month like we needed a month to do that but there you go why do people not make a will a will well number one reason is procrastination forty three percent of adults without a will say they just haven't gotten around to it perfectionism is number two writing a will involves big decisions and dealing with your family it's not perfectionism that's avoidance.
- [106:09]
C
I don't.
- [106:09]
A
Want to deal with that i don't want to deal with that or her or him thinking you need a certain amount of assets before you get a will now you you don't you just need to be eighteen and care that the government doesn't conduct your affairs for you like where your children go if you die a belief that everything automatically goes to family it doesn't it goes to the lawyers sons uncertainty about the process many people say they just don't know how or where to start wheels can be confusing but our team is here to help you can take our wheels quiz to find out if a simple online will is right for you at ramseysolutions dot com slash wills quiz andrew's in columbia missouri hi andrew how.
- [106:49]
B
Are you good how are you doing.
- [106:52]
A
Dave better than i deserve what's up.
- [106:56]
B
So i own a pool cleaning repair and resurface company here in columbia i am in a partnership with with another guy we started the business about three summers ago i had previous experience with a pool company here one of the bigger ones here and i decided to branch off you know do my own thing started pretty small so me and my partner we started doing you know power washing window washing jobs pool cleanings you know we didn't have too many clients probably about ten to fifteen you know fast forward to the why did.
- [107:36]
A
You need a part second year.
- [107:40]
B
At the time so i had i i technically i didn't okay and now you've.
- [107:46]
A
Learned that partnerships are the only ship that won't sail correct that's correct i'm guessing you you two guys did not do anything like go to a lawyer and have a partnership agreement drawn up.
- [108:00]
B
Initially no that happened later on and it was pretty much too late but you know by the time we did make one.
- [108:09]
A
Why was it too late.
- [108:10]
B
What sorts happened so basically we started sub last year we started subcontracting for this this the pool resurface company that we actually bought my partner he was it was owned by one of his uncles his uncles was higher up there made good money anyways last year though i got connected with one of the my old managers that i actually worked with at the old school store worked at and i said hey what do you think about coming over here i'll you know pay you decent and we'll you know basically start taking a lot of the clients that that pool company that i used to work for has so i probably took half of their commercial neighborhood pools plus i don't know ten residential and commercial ones have to be done three times a week so those come out to sixty visits a week plus repairs anyways when we were when anyways i had that that happened last year as we were doing the pool resurfacing so i got connected with that at the time that business basically after we got done subcontracting for them they said hey what do you guys think about buying this you know obviously it was connected with my partner's family so he was all about it he wanted to do it all this and i said hey i was like how about we just buy the equipment and we slowly build he disagreed with me and i eventually just gave in because i you know i was like well maybe this will work out so i gave in you know and i was nervous about all of that so anyways fast forward now to this year you know pool i'm basically running the pool repair and pool cleaning side and you know for example last month we brought in about forty nine thousand revenue the coat your pool side he is supposed to be running and he he's done probably two jobs in the past three months and has brought in you know we haven't profited anything from it why.
- [110:17]
A
Has he.
- [110:19]
B
He'S he confronted him about i said hey we need to push this harder we need to do this and he basically he has he has a kid with his girlfriend and he basically every time i bring it up and say hey we need to do this we need to make more money we're losing money right now actually he just says you wouldn't understand you don't have a child at home and things just get awkward after that and you.
- [110:40]
A
Know so what does a partnership say about dissolving a partner about dissolving it you have the agreement right yeah so.
- [110:49]
B
Our agreement's very vague unfortunately i have.
- [110:52]
A
Actually all right what did you did you go into debt to buy this crappy business that yeah crappy guy's running.
- [111:02]
B
Yeah so the business it was two hundred two hundred two hundred sixty thousand they basically said hey we want we won't charge you any interest basically a five year plan you'll pay four thousand dollars a month we'll do all your marketing get all your jobs the first year and when i heard that i was just like initially i was like oh i don't want to do this i expressed it to him multiple times i said this is dangerous we're gonna.
- [111:28]
A
But you did it andrew but you did it okay you're correct and so you didn't walk away even though you knew you were supposed to walk away so the prudent see danger and seek refuge the simple see danger move forward and pay a penalty penalty and i've been simple and move forward and pay a penalty so how are we going to get out of this you owe these people two hundred sixty thousand dollars it's his uncle will he let his uncle let you off and let him have just give him that part of the business you take the other part.
- [111:55]
B
So the deal with the businesses is that we can get the business back at any time and we oh we can keep the money we made and that is that we can just give it back and there's no more debt problem is he doesn't you know partner doesn't want to do that but he's also not working yeah no that's not.
- [112:13]
A
No no no no no no no no no no i want you to call the people back and say i'm going to give you my portion back and then deed his portion your partner's portion to him let him have that business and you go run your other.
- [112:27]
B
Business right right yeah he so i.
- [112:33]
A
Let him sit over there in his own po.
- [112:36]
C
Yeah get away from it andrew if you can you gotta get.
- [112:40]
B
Out of there yeah walk away yeah well what i do right now i really enjoy too so you know you can do the same thing every day.
- [112:48]
A
Just take take your portion of the business he signs off and says this is your portion i'll take you can have the portion that your uncle sold us and you can have the debt and you can have you can make all the money in the world good luck and you just turn my turn this over here loose to me me and i'll take this and we're splitting up and if you don't do that i'm going to hire a lawyer and sue you yeah because you don't work.
- [113:10]
C
So i how old are you guys.
- [113:12]
B
Andrew twenty six i'm i'm twenty four and he is twenty eight like i've.
- [113:19]
A
Done this before yeah okay yeah so rule of thumb is never do a partnership right if you are dumb enough to do a partnership you have to have thorough partnership agreements that deal with when one of the partners is not performing or doing drugs or dies or gets disabled or gets divorced and you don't want to be in a pool business with his girlfriend okay or whatever so all that man you don't have any of that so you're screwed is where you are but if you can go over and sit down with him and go look i'm so pissed off i can't see this isn't working i want you to take this whole thing and i'll take this whole thing and i'll sign over my part to you and you sign over over this part over here to me and if you don't do that i'm going to go get a lawyer and sue you because i'm not going to live like this anymore it's not working for me and you have been too stinking nice to tell people the truth and too nice.
- [114:16]
C
To stand up for yourself andrew of what you know is right or wrong so right let's this is your time.
- [114:22]
A
Where your backbone gets installed okay right.
- [114:27]
B
Yeah yeah so i i have actually.
- [114:30]
A
Written you're not gonna do it are.
- [114:31]
B
You no i i have some i have already something written up i'm just.
- [114:37]
A
I don't want to write anything up i'm gonna go sit down have a cup of coffee and go dude you're i'm gonna sign over this whole thing over here to you it's gonna be yours you're gonna sign this whole thing over here to me it's gonna be mine we're not working together anymore this is how this is ending i'm done yeah and you can i didn't want to be in this in the first place i wished i wasn't your tone.
- [114:54]
C
Could be nicer than that i don't know but be done at least in your head have that tone be decisive.
- [115:00]
A
Andrew clear clear and decisive and don't talk about all the stuff in the past and all that all that matters is you're fired that's all that matters sam our scripture of the day is philippians four six do not be anxious about anything but in everything by prayer and supplication with thanksgiving let your requests be known to god teddy roosevelt said complaining about a problem without posing a solution is called whining i like love it all right matt's in colorado springs hey matt what's up hey dave hey.
- [116:14]
B
Rachel how are you today great how can we help yes sir so i've got a debt collector on my back and it's for a relatively small amount and i've heard you talk about debt collectors and their scummy kind of tactics and stuff and i've never experienced this so i was hoping you could help me to make a long story short my wife and i have been married to about a year and a half now we had about thirty eight thousand dollars worth of debt nine months ago we're down to seventeen we're trying to work through baby step two good this she had a credit card i guess that before we got together she had had and when she was twenty i guess she decided she didn't feel like paying it back and here it is and i i didn't know i didn't.
- [116:55]
A
Know it was there what's the balance.
- [116:57]
B
Hanging around it's only twenty three hundred dollars but the first time we've ever been contacted about it they sent us a manila envelope to her older mailing address that had like legal documents like they're going to take us to court over it oh that's never got a phone call text message anything if they.
- [117:14]
A
Were going to take you to court they would have done it a long time ago it's been five years so.
- [117:19]
B
It'S been sold to a debt collector obviously so you know i've called them and i've taken your advice i haven't given them i've given them barely any information about us and i've haggled them and they've told me final offer three times times and the best deal they're willing to cut me at this point is after three hours of haggling with them and seventeen different people have been passed to is sixteen hundred bucks i don't know if it's worth just paying the sixteen hundred but that would be my emergency fund plus we do the og cash folders my wife loves your wallet rachel so we got a wallet full of grocery money and stuff nice so that would be all that money i just don't know if it's worth haggling them some more calling their bluff or or just paying them and moving on.
- [117:57]
C
How much you guys make a.
- [117:57]
B
Year matt i'm a ups driver she's a dental assistant i make between the two of us she just got a raise if i work overtime i'd say we make before tax maybe seventy or i'm sorry ninety five ish between the two of us right now okay all.
- [118:16]
A
Right so is this the next item in your debt snowball well this was.
- [118:21]
B
An unexpected thing that just popped up about two days ago we actually had.
- [118:27]
A
Seventeen conversations in two days well i've.
- [118:31]
B
Got bluetooth headphones and ten hours a day of slinging cardboard that i can argue with somebody all day if i.
- [118:36]
A
Have to so this whole this whole thing stretched out over two whole days.
- [118:42]
B
I mean the first time i guess maybe this makes more sense back in her old mailing address when this all happened was her parents home home back in february someone pulled up to her parents home asking for we didn't know what that was about and they didn't tell our parents any information and then about three days ago someone pulled up and just handed her mother the manila envelope the manila folder but to your.
- [119:02]
C
Point you've only been in contact with them for three days is what yes.
- [119:07]
A
Ma' am yeah let let it sit.
- [119:10]
B
Okay just turn it off the the the paperwork says september i think twelfth or eighteenth and you know and that's when it's supposed to be officially filed with the court that's right fine but i just don't know how serious to.
- [119:22]
A
Take that i wouldn't worry about it.
- [119:25]
B
Okay what what would you recommend i do just keep haggling them until i.
- [119:27]
A
Get a better i would call back when you've got the money to settle it and you know what you can settle it for a thousand dollars today.
- [119:35]
B
Right i i tried i mean i told him i said look i'm doing the i even said i'm doing the dave ramsey plan i don't have a lot of liquid access i got a thousand dollars take my money and they said no that's ridiculous we can only come down twenty five percent and after some lady yelling at me for thirty minutes on the phone she fused she pulled the whole car salesman tactic stop.
- [119:54]
A
Stop okay next time you talk to him if they say something in an inappropriate volume or inappropriate words say if you do that again i'm hanging up okay and then hang up we're not gonna have anybody yelling at me for thirty minutes over two thousand dollars okay.
- [120:13]
B
Just hang up okay that's wind up in a situation where i'm in a.
- [120:17]
A
Courtroom now you're not going to be in a courtroom you're not even gonn go there's no point in going you're going to lose not you but your wife she owes the money open and shut case she loses now you're settling a judgment lien and not a debt whoop deep it doesn't matter it's a five year old debt they're saying they.
- [120:38]
B
Can come at us with all their.
- [120:40]
A
Fees they can come at you with all that if i choose to pay it but until you choose to get a hold of me and you're not going to get it because you don't even know where we are and make sure that her parents don't give out any information if anyone comes to their front door and tell them if they come up on my property again we're going to have them arrested for trespassing.
- [121:00]
B
Okay so so they're really just trying.
- [121:02]
A
To scare me and strong they're trying to piss you off okay if they can get you very afraid or very angry you quit thinking with the proper parts of your brain and you just want to kill them them okay that's.
- [121:17]
B
Why they yell them some more or do you think i just let it.
- [121:20]
A
Let it sit a week let it sit a week yes sir and call them back and say you know i talked to somebody over there they were a moron and i know what you guys paid for this you probably paid about one hundred bucks for this debt and i'm willing to give you one thousand dollars that's all i've got if you want to take that fine if not there's not going to be a lot of discussion here do you want that or not yes or no if you don't speak reasonably we're going to end the conversation end the conversation.
- [121:48]
B
Okay.
- [121:48]
A
Call back the next day and do it again and you're gonna you just it's like training a dog i mean you just have to do it repetitively.
- [121:56]
B
Right yes sir i just my dog's got a shot collar so it's a.
- [122:00]
A
Little there you go that's it that's it just just hit the shot collar and eventually the dog figures out we're not doing that crap right and so you have to train these morons because their training has taught them that if they are unreasonable angry fear based anger based that they can get you thinking with the lizard part of your brain instead of the higher thinking parts of your brain and you do irrational things like give them the money out of your food envelope which we're definitely not gonna do dude but you make ninety five thousand and you do need to get this cleared up sometime between now and christmas so yeah just get hey.
- [122:35]
C
You'Re gonna pay something to get it out and yeah and if you pay.
- [122:38]
A
Sixteen hundred between now and christmas and you've actually got the sixteen hundred by then that's fine you're okay but you.
- [122:43]
C
Don'T need to wipe out your emergency.
- [122:44]
A
Fund for it you're giving this way more attention than they are so just back off just let them sit just let it sit for a week and call them up and if you can have a reasonable conversation fairly short yes or no you want to do this.
- [122:58]
C
Always fascinating that it's been five years yeah and it just now we're going to sue you flip were you before you know so so just remember that yeah i mean is it that it just sits there it gets sold all of it and it just happens to be the file and they grab that file and next is next and they're.
- [123:18]
A
Just working they're just it's a widget on conveyor belt yeah yeah and so.
- [123:22]
C
The time is always so random to.
- [123:23]
A
Me yeah five years later it's crazy yep and you know we know that this can be done we bought ten million dollars worth of bad debt and forgave it all one christmas christmas it was eight thousand accounts each of the one thousand people that work here had eight people to call and say we forgave the debt in the name of jesus and we paid two and a half cents on the dollar for it about ten million dollars worth of debt for two hundred fifty nine thousand okay and it was all accounts just exactly like this and we just called them up and said your debt's forgiven in the name of jesus and some of.
- [123:59]
C
Them were like i don't remember that.
- [124:00]
A
To this point point i didn't know.
- [124:02]
C
How to do so long yeah it's.
- [124:04]
A
Been so long you remember that hospital bill you had from five years ago that was forty two dollars and now it's four hundred eighty six yeah there you go that's it yep that's the whole the whole business good for you.
- [124:14]
C
Matt you and your wife doing this.
- [124:16]
A
And i'm glad you're working through it.
- [124:17]
C
Man i mean yeah y' all are.
- [124:18]
A
Doing the plan let me tell you what you're doing right he's perfect very proactive yeah that's what you're doing right the thing i don't want you to do is fall into the trap of letting them control the narrative and the conversation conversation so give a little more space in between even though you've got the time to sit on the headset and throw boxes don't do it okay let them sit over there and wonder if they're ever going to find your wife because they don't know where she is and we're going to settle this for a thousand dollars and that's going to be a really good deal for them and a really good deal for you and you get it in writing and no electronic access to your checking account or you do not send a debt collector money because you can tell they're lying if their mouth is moving that puts us out of the ramsey show in the books we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace christ jesus.
- [125:36]
D
Up next we are headed out to chicago and orlando for the ramsey show live yep you heard me right we are taking this show to you this is going to be everything you love about the ramsay show except you and get to be a part of it part of what george the ramsey show live okay that's what i'm.
- [125:52]
G
Telling them about ramsey show live in.
- [125:54]
D
Here nope we're doing it on the road you're going to chicago with me and rachel cruz september thirtieth are you.
- [125:59]
G
Free the windy city i like it.
- [126:02]
B
That time of year you know what.
- [126:03]
A
Else i like george i like the.
- [126:05]
D
Deep dish okay maybe we'll have some deep dish you mind if i finish the promo is that okay with you oh yeah okay okay appreciate that questions and answers real conversations and i'm sure a few surprises here and there george.
- [126:17]
C
Are you in here talking about trs.
- [126:19]
D
Life i am jade i'm trying to.
- [126:20]
A
Talk about it nice so that means.
- [126:22]
D
It'S actually happening right it's happening if i could tell the people i think it could actually come to fruition listen.
- [126:27]
F
Just tell me when and where you.
- [126:29]
D
Don'T know okay we're going to orlando you're gonna join doctor john deloney and i october second yes okay great i'm gonna go pack now thanks please please.
- [126:37]
C
Do that go package hey george speaking of packing is this like sweater weather or is it not that cold yet.
- [126:44]
D
In chicago what is happening can i can i please just get to how they buy the tickets geez i thought.
- [126:51]
C
It was a good question okay this.
- [126:53]
D
Is not an arena tour this is a one night only event in chicago and orlando general admission is only thirty nine bucks plus there's a vip experience if you're bougie like that but here's the thing there's only three hundred seats available so get your tickets now at ramseysolutions dot com events hey how come.
- [127:09]
G
You get to go to both cities.
- [127:10]
D
I i just go where they tell me man hey have have you been there the entire time maybe okay and also are you reading a children's book.
- [127:20]
G
I'M expanding my mind george that's how.
- [127:23]
D
We got those phds yeah it's probably.
- [127:25]
A
Where you got that jacket okay see.
- [127:28]
D
You on the road john.
- [127:38]
A
You say.
- [127:39]
B
You'Ll never join the navy that you'd.
- [127:41]
A
Never track storms brewing in the atlantic and skydiving could never be part of your commute you'd never climb mount fuji on a port visit or fly so.
- [127:54]
E
Fast you break the sound barrier joining.
- [127:59]
A
The navy sounds crazy saying never actually is start your journey at navy com america's navy forged by the sea.