You Control Your Own Path Forward. What’s Your Next Step?

Summary

The Ramsey Show: You Control Your Own Path Forward. What’s Your Next Step?

Host: Ken Coleman
Co-Host: Jade Warshaw
Episode Theme: Empowering listeners to take control of their financial futures through strategic planning and disciplined execution of financial principles.

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1. Navigating Emotional Responses Post-Election

Ken Coleman opens the episode addressing the emotional aftermath of a significant political event, acknowledging that listeners may feel a spectrum of emotions—ranging from elation to despair—depending on the election outcome. He emphasizes the importance of maintaining composure and focusing on personal financial freedom.

Ken Coleman [00:57]: "If your side won last night, be classy. If your side lost last night, be hopeful."

Jade Warshaw concurs, highlighting the value of maintaining integrity and optimism regardless of external outcomes.

Jade Warshaw [03:19]: "It's an opportunity for both sides to just be magnanimous and be a good winner and a good loser."

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2. Financial Fundamentals: The Baby Steps

Ken and Jade delve into the foundational Baby Steps framework designed to guide individuals toward financial freedom. They reiterate that these principles remain steadfast irrespective of external circumstances, such as political changes.

Ken Coleman emphasizes personal control over one's finances and life decisions:

Ken Coleman [03:38]: "You can control the things that happen in your house and ultimately your life."

Jade Warshaw breaks down the Baby Steps:

• Baby Step 1: Save a $1,000 emergency fund.
• Baby Step 2: Pay off all debt using the debt snowball method.
• Baby Step 3: Build a 3-6 month emergency fund.
• Baby Step 4: Start investing 15% of household income into Roth IRAs and pre-tax retirement.
• Baby Step 5: Save for your children's college fund.
• Baby Step 6: Pay off your home early.
• Baby Step 7: Live and give generously.

Jade Warshaw [04:15]: "Baby step one, you still need a thousand dollars saved. If you don't have it, get it... Baby step five, now you're saving for your kids' college."

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3. Real-World Application: Caller Stories and Expert Advice

The show features several callers seeking personalized financial advice. Ken and Jade provide tailored strategies, reinforcing the Baby Steps framework while addressing unique financial challenges.

a. Real Estate Debt Management (Des Moines, Iowa)

Caller: Corey
Situation: Corey, an investor with $1.1 million in real estate debt, seeks advice on reducing his debt burden.

Advice: Jade recommends liquidating underperforming properties to pay down debt, starting with those that offer the most financial benefit. She emphasizes prioritizing personal property to alleviate stress and restructure remaining investments for better cash flow.

Jade Warshaw [13:19]: "Let's sell off the first property, we clear the consumer debt, we sell off the next property, and we keep... clearing all of this $1.1 million of debt."

Ken underscores the importance of following a structured plan without self-blame.

Ken Coleman [19:35]: "Don't fall prey to that. Just follow the plan. Before you know it, shoulders are going to go back even further."

b. Retirement Planning for Small Business Owners (Greenville, South Carolina)

Caller: Stephanie
Situation: A small business owner seeking guidance on implementing a 401(k) or SIMPLE IRA plan for her team.

Advice: Jade advises consulting with a tax professional to evaluate the best retirement plan options tailored to the business's financial capacity and employee benefits. Ken reinforces the importance of selecting a plan that benefits both the employer and employees.

Ken Coleman [23:09]: "A tax pro, somebody who works with businesses... you've got to get a solution that's good for both."

c. Home Purchase vs. Renting While Building Savings (Richmond, Virginia)

Caller: Jennifer
Situation: Jennifer is contemplating purchasing land and building a mortgage-free home versus renting for a year to save more funds.

Advice: Jade encourages detailed budgeting to ensure all costs are accounted for and supports Jennifer's decision to rent, given her low monthly expenses and strategic plan to flip properties for additional savings.

Jade Warshaw [28:12]: "I think the best way to buy a home is cash... No one would fault you if you ended up having a $30,000 mortgage."

Ken commends Jennifer's disciplined approach and patience.

Ken Coleman [28:48]: "I love it. I love that you have $2,500 set aside in a separate account that you don't mess with."

d. Navigating Bankruptcy and Debt Recovery (Detroit, Michigan)

Caller: Aaron
Situation: Aaron has filed for Chapter 7 bankruptcy with $43,000 in debt, seeking strategies to rebuild his finances.

Advice: Jade advises focusing on saving and avoiding the repeat of past debt-inducing behaviors. Ken and Jade emphasize the importance of tracking expenses meticulously and rebuilding a solid financial foundation post-bankruptcy.

Jade Warshaw [49:13]: "We cannot, and I can't stress this enough, we cannot do the same actions that caused this."

e. Managing Shared Family Assets (Vancouver, Washington)

Caller: Amy
Situation: Amy and her siblings own a jointly inherited property, with one sibling occupying it without contributing rent or upkeep.

Advice: Jade suggests majority decision-making to resolve the issue, potentially selling the property to eliminate conflict. Ken agrees, recommending decisive action to prevent ongoing financial and relational strain.

Ken Coleman [72:03]: "I would get out quickly. It's not worth spending a bunch with a lawyer... selling this thing, and avoid all the tension."

f. Stock Investments vs. Mortgage Payoff (Phoenix, Arizona)

Caller: Trent
Situation: Trent considers liquidating stock investments to pay down his mortgage and manage rental properties.

Advice: Jade advises against liquidating retirement accounts due to penalties, recommending instead to sell underperforming rentals to reduce debt while maintaining investments for long-term growth.

Jade Warshaw [79:13]: "I wouldn't liquidate the Roth IRA because you're going to have a penalty... If you wanted to, sell the rental that's worth $430k and put that toward the house."

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4. Empowerment Through Strategic Planning

Throughout the episode, Ken and Jade reinforce the message that financial control lies within the individual's hands. They advocate for proactive planning, disciplined execution of Baby Steps, and seeking professional advice when necessary.

Ken Coleman [03:48]: "What can you do to make your life better?"

Jade Warshaw [75:05]: "I would pause it. This is something we would call a storm. So you're in storm mode."

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5. Notable Quotes and Insights

• Ken Coleman [05:04]: "Then things start to get good. You start to feel a lot better."
• Jade Warshaw [16:05]: "I'd rather you have three properties that you're not in debt and you feel good about having them."
• Ken Coleman [39:05]: "You wouldn't have done this even if you're earning more."
• Jade Warshaw [44:35]: "I am trying to build an analogy here for the listeners."

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6. Conclusion: Taking Control of Your Financial Destiny

Ken and Jade conclude the episode by reiterating the importance of taking actionable steps toward financial freedom, regardless of external circumstances. They encourage listeners to stay committed to their financial plans, adapt strategies as needed, and remain hopeful and disciplined in their journey toward wealth building.

Ken Coleman [74:48]: "By the way, real quick reminder... Go to the Ramsey Network app and you can do that by just clicking the link in the show notes and get to the app and that's where you get the rest of today's show for free."

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Final Thoughts:
This episode of The Ramsey Show serves as a comprehensive guide for listeners aiming to regain control over their financial lives. Through practical advice, real-world examples, and a steadfast adherence to proven financial principles, Ken Coleman and Jade Warshaw empower individuals to navigate their unique financial landscapes with confidence and clarity.

Transcript

[Ken Coleman]

Hey, guys, this Christmas, we're giving away cash. So enter the Ramsey $5,000 Christmas cash giveaway.

[Jade Warshaw]

For your chance to win big this holiday season, go to Ramsaysolutions.com giveaway to enter now.

[Ken Coleman]

Welcome to the Ramsey Show, America. This is where we help you win your money, win in your work, and win with your relationships. The phone number to jump in today is triple 882-55-5225, alongside the fantastic Jade Warshaw. I'm Ken Coleman, and we're here for you today. And speaking of today, if I might speak to a very large and diverse audience for just a moment.

[Jade Warshaw]

Come on, Ken.

[Ken Coleman]

Because it's the morning after, and the reality is Jade is all morning and even late last night, I have been receiving texts and communicating with friends who are deliriously happy with the results. I have also been communicating with friends who are devastatingly sad. And I think it's important for this large audience to sit for that with. Sit with that for just a moment and understand that's okay. And that's normal, to have those emotions. That is what makes a free society free is the opportunity to express with great passion, also show up and vote. And the reality is it matters a great bit. And we know that. So I was thinking of four words, Jade, to challenge our audience and encourage our audience. If your side won last night, be classy. If your side lost last night, be hopeful. And if I could take those last two words, be hopeful and challenge both sides of the aisle today. Be hopeful, but be careful what you're hopeful in. I want you to be hopeful in you and your free will and your ability to achieve why you come to the show. And here's what you come to the show for freedom. You come for freedom in your finances so that you can create the life that you want to create, that you can spend money on, the things you want to spend on. You can solve the problems that you must solve problems in your life when they arise. You come to this show because you want to have an opportunity to climb the ladder, to make more money, to be able to do those things, to make the difference in the world through work that you desire to make. And you come to the show because relationships are hard, and you want healthy relationships because if we don't have a healthy relationship, we have nothing. And so that's why you're here, and that's why we are here, is to help you get that freedom, Jay. So I want to give it to you.

[Jade Warshaw]

That's why I voted for you. Ken.

[Ken Coleman]

I add your thoughts because you understand this, the situation as well.

[Jade Warshaw]

Okay. I mean, well put. Well, Ken, you were created for this moment. Very well put. I think it's an example. It's an opportunity for both sides to just be magnanimous and be a good winner and a good loser, if that's whatever.

[Ken Coleman]

Begin today to focus on what you can do.

[Jade Warshaw]

Yes.

[Ken Coleman]

Which is what we preach here. What can you do to make your life better? And to that end, we want to hit on some of the fundamentals here because we believe that no matter who's in the White House.

[Jade Warshaw]

Yeah.

[Ken Coleman]

You can control the things that happen in your house and ultimately your life.

[Jade Warshaw]

Jade, listen, truthfully, the blueprint doesn't change regardless of who's in office. The good news is that what we teach is kind of based on principle, and principles don't change. And so the baby steps don't change. And so just a reminder, especially for those who are maybe new to our show, or maybe you just need to brush up because you've been freaking out in your mind a little bit.

[Ken Coleman]

Let's just.

[Jade Warshaw]

Let's bring it back for a second like this. All right? So baby step one, you still need a thousand dollars saved. If you don't have it, get it. It's going to make you sleep better at night. You're going to be ahead of 56% of Americans if you get out and get that thousand dollars saved. Baby step two, let's start focusing on our debt. The lowest possible rung of that ladder is just to decide that you're not going to borrow any money anymore. And so let's not make the problem worse. Maybe you don't feel like you're in a situation to start paying it off, but at the very least, you can say, well, I'm not going to borrow anymore. Okay. And then once you move past that step, start paying it off using the debt snowball. And then baby step three, let's start saving up some savings. Three to six months is what we recommend. That's a fully funded emergency fund. And let me tell you something, Ken, when you have that, then. Then things start to get good. You start to feel a lot better.

[Ken Coleman]

That's that margin that, by the way, that's where that emotion of freedom pops in with that emergency fund, doesn't it?

[Jade Warshaw]

It does, because you kind of go, no matter what hits, I can. I feel prepared.

[Ken Coleman]

Yeah.

[Jade Warshaw]

Right. And so you have that preparedness. And then baby step four, let's start investing. You know, you start investing for the future. This is preparing you for a time when maybe you won't work because that time will hit all of us eventually. So we're investing 15%.

[Caller]

All right.

[Ken Coleman]

Hey, I got to jump in because you're the queen of this. What I want you to give a real example. Maybe get your investment calculated. I didn't prep you for it.

[Jade Warshaw]

That's all right.

[Ken Coleman]

Let's come get your calculator. Because I'm a set of scenario. Because I want people to get this when what Jade's talking about is let's say you're in your early 20s. Jade, I'm going to give you a scenario. So take somebody early 20s, maybe they're fresh out of college right now. First job, first presidential election. Let's make it real. And they're going, what does this mean? You know what I mean?

[Jade Warshaw]

Yeah.

[Ken Coleman]

And you go, come on, just pay attention to the baby steps right now. And they got a good job. And let's say that they have no debt or they're thinking, okay, if I follow what Jade says, I'm going to start entering. I'm going to start putting some money in. You create your own scenario of what baby step four really looks like for every American. You. You take it away.

[Jade Warshaw]

Okay? So let's pretend, I mean, set me up better than that king, because I don't know exactly where you're going.

[Ken Coleman]

I'm sorry. So let's say, let's say we've got a 27 year old.

[Jade Warshaw]

Okay. So I'll put 27 in the calculator.

[Ken Coleman]

All right?

[Jade Warshaw]

Okay.

[Ken Coleman]

And let's say that they can put that they're in baby step four.

[Jade Warshaw]

Okay.

[Ken Coleman]

Or that they see, what would it look like in baby step four? Let's put it that way. You're not there, but you go, okay, what if I could put away, let's say 15% on a salary of. I'm going to make this up. Let's say we're going to put away two grand a month.

[Jade Warshaw]

Two grand. That's a lot.

[Ken Coleman]

Go th. I told you, you're the queen. Let's 1,000 bucks.

[Jade Warshaw]

Let's do 500.

[Ken Coleman]

See, this is why I defer to you. You're the queen.

[Jade Warshaw]

Well, let, let me, let me see what I'm going to base it on. I'm going to base it on the average salary, which is 67,000.

[Ken Coleman]

You like what you're doing?

[Jade Warshaw]

And then I'm going to say 15% of that, which, because we take it off the GROSS, which is 10,000, and then I'm going to divide that by 12 months. I love it. And that's going to be $837. So we'll do that.

[Ken Coleman]

There you go. And to be fair, I, I, I threw this on her, but that's okay. You see where we're going. I want people to not just hear that. I want them to see what you're about to do.

[Jade Warshaw]

The idea is that you've not had anything in retirement up until this point, you know, and so you say, okay, I'm going to start doing that. And lo and behold, you retire with $4.1 million.

[Ken Coleman]

Okay, there it is. That's all I wanted.

[Jade Warshaw]

Yeah. So the dream is, the dream is alive and well.

[Ken Coleman]

All right, keep going. Baby step five. I'm sorry I interrupted your rhythm, but I like that.

[Jade Warshaw]

I like that people need to see that the dream is free. The hustle is sold separately. You got to do the work.

[Caller]

All.

[Jade Warshaw]

All right, Baby step five. Now you're saving for your kids college and you're getting them into education, which is good. Baby step six, let's pay off that. Home early, Ken.

[Ken Coleman]

Wow. That's a game changer when that happens.

[Jade Warshaw]

Yeah. And by the way, we have a really cool stage here at Ramsey Solutions. It's the debt free stage. And people come in and they, they tell us when they become debt free and they scream with, you know, just that intensity. And half the time they've also paid off their mortgage as well.

[Ken Coleman]

So true.

[Jade Warshaw]

And so this happens every day. And then baby step seven is living and giving like no one else. This is us prioritizing generosity because it's such a foundation of everything we teach here. Usually your why lives in baby step seven.

[Ken Coleman]

Come on. So here's what we want. Jay did a masterful job of laying out the fundamentals that lead to financial freedom. There's more. Our team has put together a great blog post. It's in the show notes. And here's what's going to encourage you emotionally. It's going to encourage you that no matter how you're feeling about who's going to be in the White House, you can take all that stress and worry and put it into steps to actually take control of your life. And we are here for you five days a week, cheering you on. Go get the blog. It's a deeper dive from what Jay just did, and it's going to really equip you, not just encourage you. Go get it in the show notes. However you take in the show. All right, quick break. We'll be right back with more of the Ramsey Show. This show is sponsored by BetterHelp this month is all about gratitude. And most of us have people in our lives that we're grateful for. One of those people, for me, is the wonderful Marilyn Fanon. She gave me a chance. She taught me poise and professionalism and she challenged me. But there's one person that we often don't take time to thank. Ourselves. We don't always acknowledge that we're barely surviving or that we're moving forward or that we're working towards a better life and better relationships. And in a world where everything seems to have gone bonkers, it's not always easy to be grateful. So here's my reminder to thank the people in your life, including you. And sometimes to do that, we need some professional help. We need to talk to someone trained to help us discover true gratitude for ourselves and others, especially in the holiday season. That's why I recommend BetterHelp. BetterHelp is 100% online therapy and you can talk with your therapist at just about anywhere so it's convenient for your schedule. You just fill out a short online survey to get matched with a licensed therapist and you can switch therapists at any time for no extra cost. This season, let the gratitude flow with BetterHelp. Visit betterhelp.com Deloney to get 10% off your first month. That's BetterHelp. Help. H E L p.com/Deloney alongside Jade Warshaw. I'm Ken Coleman. So excited you're here with us on the Ramsey show, helping you win with your money, win in your work and win with your relationships. That's our aim. And we'd love to coach you today. Triple 882-55-5225. Also big news. It's like Dave is like the financial Santa guy, loves Christmas. You know this about him.

[Jade Warshaw]

Dave Kringle.

[Ken Coleman]

Yeah. He gets a bad rap about being tough on callers. The guy's just a big jolly giver, you know. And to look at this, 50 days of Christmas. Wow. Is that not enough, Dave? 30 days, not enough.

[Jade Warshaw]

No.

[Ken Coleman]

We got to go. 50 days of Christmas, that's a lot. That's the big Christmas sale and it's happening now. Whether you're shopping for yourself or you're looking for that gift that keeps on giving. Allah Christmas vacation. Those of you if you know, you know you can get up to 30% on our best selling products. That is including monies, not a math problem. Tell them about that. Jade, you know, that's about, that's your.

[Jade Warshaw]

If you're caught up, if you, if it's your mentality That's a problem. If you're always we ain't got no money, I don't have a way to get ahead. This is the book for you.

[Ken Coleman]

I love it. I love this. That we ain't got no money. A lot of people are going when I say that, they're like, that's what's.

[Jade Warshaw]

In people's brain all the time. I ain't got it.

[Ken Coleman]

So that's, it's a great book from Jade. And then the get clear assessment, this is for that person who's going, I want to figure out what I want to be doing with my professional life or I'm stuck. Any sense of doubt or lack of confidence around your work and your money. This get clear assessment, it's about 18 minutes. Going to change your life, give you self awareness, which is a superpower. You can get both of those products and so many [e-mail] store ramsaysolutions.com store for those of you on YouTube and podcasts, you don't have to remember any of that. You know why? Because James Childs and his beloved show notes. These show notes are chock full. It's like Christmas under the tree. Just go to the show notes. Lots of good stuff there. Ramsaysolutions.com giveaway is another location. And this is also in the show notes because this is our five thousand dollar cash giveaway.

[Jade Warshaw]

Okay, show me the money.

[Ken Coleman]

We're giving away 500 a week.

[Jade Warshaw]

Wow.

[Ken Coleman]

That's Dave's money gone. Just giving it away.

[Jade Warshaw]

Wow.

[Ken Coleman]

And there's a grand prize of $5,000. You can enter to win daily. And again, the show notes. Best place to go. Ramsaysolutions.com all right, Corey's going to start us off in Des Moines, Iowa. Corey, how can we help today?

[Caller]

Hey, Ken. Hi, Jay. Thank you for so much for taking my call.

[Ken Coleman]

You bet.

[Caller]

So I started out, I don't know how far back I should go. I buy and sell real estate not as an agent but as an investor. Got pulled in many years ago with the opm, other people's money, borrowing and taking out helocs and all. Sounded great. Buying a lot of properties and it has all caught up with me.

[Jade Warshaw]

Oh, no.

[Caller]

Yeah.

[Jade Warshaw]

What does that mean? Tell us what's happening currently.

[Caller]

Well, I'm currently sitting with all my monthly expenses, sitting at about, well, total debts, about 1.1 million right now.

[Ken Coleman]

Oh, hello. My goodness, where are my tums?

[Jade Warshaw]

Okay, well, hopefully these are worth something.

[Caller]

That a lot of my properties are bundled. It's not like every single Property is its own mortgage. They're bundled. So I've got 480,000 in one mortgage, 199 in another. Got a HELOC at 189,000. Okay. Another mortgage, 173. They add up very, very, very quickly.

[Jade Warshaw]

So if we can I just ask you just a crazy question.

[Caller]

Yeah.

[Jade Warshaw]

If you were to sell, I don't know how many you have, but if you were to sell them, would you clear the million with their equity?

[Caller]

Potentially. And I have already started that. Which brings me to another one of my questions. I did get the EveryDollar app and have everything in that. Still struggling on how to figure it out 100%. That would probably be another call for another day. But I am showing with my current budget, I've got. Because I have sold. I've sold a couple of them.

[Jade Warshaw]

How many do you have total?

[Caller]

22 units total.

[Jade Warshaw]

Wow.

[Caller]

Okay. 22 units total. Some of them are sold on contract, just waiting to be cashed out on one I just did fully sell. Put that money out. I sold another one on contract, had about 50,000 down payment on that one with a good cash flow every month on that one.

[Jade Warshaw]

Listen, you're going in the right direction. The solution here is the debt, which is what you opened with, is what's causing you anxiety, and rightfully so. $1.1 million is a bag. That's a lot of money. Okay. And so it makes sense that that's weighing on your chest or in your shoulders or in your gut, wherever it is that you're feeling that on a day to day basis. And the solution here is, let's offload it. Luckily you have a bunch of assets that you can sell and sell for more than what you paid for. Right. That's the whole point. And so what I would do if I were you is I'd go through these 22 units and I'd figure out what's going to give me the most bang for my buck when I sell it. And are there any of them that are cash flowing well that I can keep and, you know, kind of continue to do this, but from now on, I'm paying cash for my properties. And so you had this kind of dream, it sounds like, of being, you know, some sort of real estate mogul and you just went about it the wrong way, you know, And I think that it's not too late to go in reverse and. Right. Get this thing right side up, Ken.

[Caller]

That's exactly what I was hoping for. Get some of them sold and maybe I can end up with three or four of them that's fully paid for.

[Jade Warshaw]

And let's just caveat, that is far more successful. I'd rather you have three properties that you're not in debt and you feel good about having them. That is far more of a place of success than being able to say, I've got 22 properties, but you're carrying all this debt and stress attached to it.

[Caller]

So where I'm at right now is my account in the every dollar shows. I have left a budget $21,000, which is great, great to have that, that cushion right there. But I do have that $180,000, $189,000 HELOC. I do not have a first mortgage on my home. So I've just got the HELOC on it. What my plan is, and correct me if I'm wrong here, what my plan is is it's a heloc. It's just an interest only payment. I'm not making any interest, any principal payments or not at all. I haven't been for several years.

[Ken Coleman]

But of all.

[Jade Warshaw]

Yeah, but of all the properties here, I'm going to emancipate your personal property first. Like that's the one that needs to be paid off free and clear so that you can live without stress. And then everything else is being sold for parts. Like, all right, this one, it doesn't cash flow very well. I can get 80,000 for it. I'm selling it. This one, you know, it does. Okay, but I hate the location. I'm going to sell that, I'm going to make 120 off of it. Right. And that you're going through the order of priority. Your home is the most important home. And then everything else is on the block, the chopping block, that is.

[Caller]

So you don't think it's a good idea to just put that into a regular mortgage?

[Jade Warshaw]

I mean, in this case, no, because you're going to sell a property and you're going to have the cash to pay it off immediately. So at that point, the interest rate, the mortgage, you're not going to have a mortgage on your house.

[Caller]

Gotcha. Because the steps I've been using was to pay off some of the credit cards and stuff like that.

[Jade Warshaw]

Well, how much other debt do you have? We didn't talk about that. Tell me more.

[Caller]

We didn't. Yeah, the. Let me just do a little check here. Just in the property debt is a million. So the other 200,000. The other 200,000 is like the credit cards, the vehicles.

[Jade Warshaw]

Okay, so here's the order you're going to go and can jump in at any point. The first property that you sell, let's pretend you clear 200,000, you're going to pay off this debt, and you're going to keep a thousand bucks aside for emergencies. By the way, do you have any money saved anywhere?

[Caller]

Yes, I do. I've got. I've got an emergency. It's not a thousand, it's 2500. Because I've got so many properties.

[Jade Warshaw]

Fine. I'm not. I'm not concerned about that right now.

[Caller]

That's.

[Jade Warshaw]

I'm not going to take you to task.

[Caller]

I've got $2,500 that aside in a separate account that I don't mess with.

[Jade Warshaw]

So we sell off the first property, we clear the consumer debt, we sell off the next property, we keep three to six months of expenses, we sell the next property, and we clear our house. And then we clear. Then we pay off. We sell enough properties to clear all of this $1.1 million of debt. And I think you have it out of these 22 units, if you've done it anywhere close to right.

[Ken Coleman]

Follow the plan. The debt snowball. Let's give him a copy of. Excuse me. Total money makeover. Yeah, just follow the process read. That's classic. She's laid it out for you, but. Yeah. The thing I was going to add is I like his attitude.

[Jade Warshaw]

Yeah.

[Ken Coleman]

What could hinder somebody from getting out of this mess is feeling like they're just idiots. And they're not. They're. They're normal. This kind of stuff happens. And he admitted it. I think his mindset is good. Yeah, he's not beating himself up, Corey. Don't fall prey to that. Just follow the plan. Before you know it, Shoulder's going to go back even further. Heads up. And you know that you're walking out of this. Great advice, Jade. All right, quick break. We'll be right back with more of the Ramsey Show.

[Dave Ramsey]

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[Ken Coleman]

The Ramsey show continues alongside Jade Warshaw. I'm Ken Coleman. Triple 882-55-5225 is the phone number. We'd love to take your calls. Jade's our money specialist today, and I'm the work and leadership guy today helping you in those areas. We're both going to tag team on these financial and relationship issues as well because they're all tied together. Greenville, South Carolina, is where we go next. Stephanie. Stephanie is joining us there. Stephanie, how can we help today?

[Caller]

Hi. Thank you for having me. Ken and Jade.

[Ken Coleman]

You bet. What's happening?

[Caller]

I am reaching out to ask a question about. I own a business and I'm trying to implement a 401k or a simple IRA plan. And I'm wanting to know the best things to look at, what to look for, what are the pros and cons. Just some direction with this.

[Jade Warshaw]

Okay. What kind of business is it? And, you know, is it just you or do you have employees? Tell me more. I do.

[Caller]

I have a team of seven that includes my husband and I. The business was started in 2016. It's for pest and wildlife control. We are mainly, as far as income is concerned, wildlife is about 80% of our income and pest is about 20%. We added that on about two years ago, but yes, seven, 17 members total.

[Jade Warshaw]

Okay. If I were you, there's a couple of different routes you could go, and I don't want to lead you astray. I think that it all depends on how much, like what the max contributions are, how much the business is going to match that versus the what you what the employer puts in or what the employee puts in. I'm sorry. And so for that reason, I'd probably work with a, I'd work with your bookkeeper or I'd work with a, somebody who's going to be able to give you better tax information than I would. I could tell you kind of on a basis if you're kind of more of a solopreneur what you might do. But with this, I'd want to. I'd want somebody to really look at the numbers and Tell me what's going to work best for me tax wise and investment wise for me and my employees.

[Ken Coleman]

Yeah, I think, Stephanie, neither one of us are great experts on this, but I think we can tell you what to do beyond what Jade said. And I think again, a tax pro, somebody who works with businesses. So you can get tax pro [e-mail] in your area. Go talk to a few. They want to specialize obviously in small businesses and how they help with some of this stuff. They may have some insight into this investment pros as well. And then you know what I would be doing? I would also be talking to small business owners. Do you happen to know of two or three people top of your mind right now that run companies around the same size as yours in your area?

[Caller]

I do. I've talked to several people about this. Y'all are actually one of my last phone calls.

[Ken Coleman]

Oh, good.

[Caller]

I went down the road to implement a 401k. And when I walked into my bookkeeper to just kind of talk to or my CPA who does my bookkeeping as well, she immediately said, you need to go with a simple IRA. Now, this year we've experienced about 150% growth.

[Ken Coleman]

Good for you.

[Jade Warshaw]

That's awesome.

[Caller]

I guess my only concern. Yeah, it's been. I mean, it really has been amazing. But making a good decision. I guess maybe I'm viewing a 401 or a simple IRA as a little more limiting than a 401k.

[Ken Coleman]

In what way?

[Caller]

So just looking in the way of like a 401k, you get vested. There's matching in both programs, but you have to match with a simple.

[Jade Warshaw]

That's right.

[Caller]

You don't have to. The opt in happens with the 401k. Some of those styles of the plan make more sense to me with the 401k. And that was the road I was going down.

[Jade Warshaw]

Why did she say simple?

[Caller]

She said simple because she said, why are you going to pay the fees of a 401k? Just put the money into your people's plan. That was.

[Jade Warshaw]

That was.

[Ken Coleman]

And see, I like.

[Jade Warshaw]

I like that too.

[Ken Coleman]

I was going to give you a formula to go get answers on this. What's best for the business, what's best for the people that you've hired? And I think that that's your. I always try to take complexity and I simplify it. And I go, if I'm looking at all this, I'm going to have a simple piece of paper and I'm going to draw a line down like, okay, which one of these plans is best for this business and which one of these plans is best for the employees? And we want to try to find a solution that is good for both.

[Jade Warshaw]

Yeah. I mean, that's the rubric, if she's right in the math is that what is such as whatever you're paying in fees is pretty much comparable to what you'd be paying in a match. Yeah. It'd be better for the money to go to your team members.

[Ken Coleman]

That's what you want to get to. What's good for both.

[Caller]

Okay.

[Ken Coleman]

And if we can get best for both, great. But if there's a give and take, we want to, we want to land that way because you got a great heart for your people. I love what you're trying to do. And by the way, I just want to give Stephanie a shout out real quick. This is awesome to talk to a small business owner. This is a female small business owner taking care of the critters.

[Jade Warshaw]

Yeah. Very, very growing.

[Ken Coleman]

150%. That's awesome. So, yay, Stephanie. Can we give her some love? I mean, that's really awesome. She's providing jobs. This is the American dream. Yeah, that right there. She's a small business owner solving a real problem. And so I love that. Good stuff. All right, next, let's go to Richmond, Virginia, Virginia rather. And Jennifer is there. Jennifer, how can we help?

[Caller]

Yes, thank you. My situation is I have 275,000 dol to buy land, build a house and everything, furnishings, everything. That's all I have. And it's cash. I'm not going to have a mortgage. And it's proving difficult to budget for that. I'm wondering if I should rent for a year. And what I do for a living is I buy real estate. I improve it and sell it and do that for a year with the cash that I have to try to build up a little bit more for my ultimate home.

[Jade Warshaw]

Well, yeah. How much do you need?

[Caller]

Well, you know, it's land is so hard to find and so expensive. So I would be more comfortable at 375.

[Jade Warshaw]

Okay. And you've run out the numbers? Because what I want, I want to make sure we're fully and with detail, counting the cost of this so that you don't enter in and realize, oh, gosh, I don't have enough money. And now I am kind of considering debt when that's not what you said you wanted to begin with. So I really want you working out the numbers to go. Okay, if I spend X on this Land, what can I then spend on the build and is that enough to get me what I say I want? Plus furnishings. Right. So we're doing a detailed. Right in many ways, just a detailed budget on this. That's directly for this home build.

[Caller]

Right. The tricky part is I'm not tied to any specific area. So I'm looking in four different states just for something available. Inventory is very low right now for raw land that's decent.

[Ken Coleman]

Are you operating with cash, Jennifer? When you say I'm going to rent for a year and I've got to buy some more properties and flip them and then create more cash, are you doing that with cash?

[Caller]

Yes, I am. I'm in my early 60s, debt free. My monthly expenses are 1,500amonth.

[Ken Coleman]

I love it. That's all I wanted to know. Yeah, I like that strategy. You have such a low burn rate and you're debt free and I love that you're going to be patient, flip a few more properties, stack some bigger cash, get the house I want that I've earned. Come on, Jennifer. I'm totally fine with renting in this situation.

[Jade Warshaw]

And listen, what I want you to do is we have a really great real estate home base that could probably help you out when it comes to finding the land that you're looking for. So if you go to Ramsey Solutions.com real estate, they're probably going to be able to get in there and help you find the tract of land that you're looking for.

[Ken Coleman]

Yeah.

[Jade Warshaw]

So, okay.

[Caller]

Yeah, I've averaged 75k take home over the past 7 years. So it would take me, you know, a little over a year to get what I need. But then of course expenses are going to go up too, probably.

[Jade Warshaw]

So they are. And I do think that you have to balance that carefully and just hear me say I think the best way to buy a home is cash. That's great. A lot of people can't do that. But no one would fault you, Jennifer, if you ended up having a thirty thousand dollar mortgage or a seventy thousand dollars mortgage. I just want to give you that piece of this that if you don't want to wait another two years, you'd be all right.

[Ken Coleman]

You wouldn't yell at her?

[Jade Warshaw]

I wouldn't yell at her.

[Caller]

I also thought about buying the land and just parking an RV on that. And that way I'm not spending money on rent.

[Jade Warshaw]

That's where I. And that's where we drift away. That's where you and I drift away on ideals. Only because the goal for you Right now is to save up money. And with the rv, you are having something that's depreciating. And I'd hate for you to tie even more money up in that. I mean, obviously it's your life. And if you're the RV type, you know, buy something very, very used and very, very inexpensive. But I tend to like the idea of you renting a little bit better.

[Ken Coleman]

Yeah, there you go.

[Jade Warshaw]

All right.

[Ken Coleman]

Jennifer, love that call boy. She's making things happen.

[Jade Warshaw]

Yeah.

[Ken Coleman]

60 years old, debt free, got her own little real estate empire.

[Jade Warshaw]

Would you do the RV or the rent?

[Ken Coleman]

You know, I was thinking if it's a nice piece of land that I'm, that I'm going to do. So I might put a Airstream. No. A cool little shelter that could be multi use. Live in that for a little while, then it makes the property better. This is the Ramsey Show.

[Dave Ramsey]

Mortgage rates have dropped. So if you're thinking about buying a home in the next year, contact your local Churchill mortgage team right now. If you wait, more people will be in the market competing for the same homes and potentially driving up prices. Churchill will help you do the math to be sure your budget is correct, making your home a blessing and helping you build lasting wealth. Learn [e-mail] Churchillmortgage.com this is a paid advertisement in MLS.

[Ken Coleman]

Id 1591NMLsconsumerAccess.org Equal Housing Lender, 1749 Mallory Lane, Suite 100, Brentwood, TN 37027. Welcome back to the Ramsey show alongside Jade Warshaw. I'm Ken Coleman. Phone number is, Iple 882-55-5225. To get coached up. The Ramsey show question of the day is brought to you by our friends at why Refi. Why Refi? Refinance is defaulted private student loans that other places won't touch and gives you a low fixed rate loan built just for you. Charisse K. She took advantage of this and lowered her payment from $2,000 to $680 a month with why Refi? So you need to go to why refi.com Ramsey today day if that's you and you can learn more there. That's the letter Y r e f y.com Ramsey. It may not be available in all states.

[Jade Warshaw]

Alrighty. Today's question comes from Andy in Delaware. My fiance had a lot of debt related to a prior divorce. She's currently living with her parents and her parents used a little cash and 10 credit cards to pay off her debt. So now she owes them. Close to $75,000. I know legally most of this is not in my fiance's name, but morally, we owe it together when we get married. I didn't agree with how her mom put this debt on credit cards. And it doesn't sound like they are paying much more than the minimums right now. My plan is to take out a personal loan after we get married to pay off her parents in full so I have control over the debt completely. This would drop down the interest significantly. We could then attack it with both of our incomes to pay it off as quickly as we can. Would this work or is there a better plan? Okay, so just to clarify, there was a divorce, she had debt, her parents said, we'll take care of it, but we're doing it with credit cards. And you're like, no, when we get married, we're going to take out a personal loan and clear it. I don't necessarily like that method. I like that you're saying, hey, after we get married, then we'll tackle it together. That is right. So green check on that. I would not do the loan. The truth is, you're only on the hook for the 75,000. You're not necessarily on the hook for any interest that is accrued because of their method of paying for this. That part is on them because they chose that route. They chose that card with that interest rate. Unless there's a conversation that I don't know about, in my mind, I'd be like, I owe you $75,000, Ken.

[Ken Coleman]

I couldn't agree more. It's a lot easier. They. They've already. They've already assumed this debt for her. This is not something that she put on them. They did this. I would pay the parents directly. And I agree with Jade. I wouldn't worry about the interest. That's their problem. I think they'll be thrilled that you guys are serious about paying it off. And I think it's a lot easier to pay them off now. I would only say the caveat to that is you both need to agree, you and your fiance, that we aren't skipping this. We're going to treat this like it is a private loan. Like our credit would be affected, like they'd come after us with collections. All of the things that people that loan money put in place as some sense of accountability. And I think that's the key. Or else this could create tension. And I don't think that's the case here. I think. I think. I think this is like, we want to get this out. I Love the urgency, love the character and the integrity here. But I agree with Jade 100%. Pay the parents directly.

[Jade Warshaw]

Here's the problem I do foresee is that he, he's already noticing, hey, her mom put this on credit cards. It. And this is him speculating. It doesn't seem like she's making payments, so. Or he says something there where they're paying the minimums. Yeah, they're paying minimums. So I do foresee a problem of down the line them saying, well, we did this, but it's. The balance has grown. So I do think you need to have some sort of really, really clear conversation about how interest is handled.

[Ken Coleman]

Yeah.

[Jade Warshaw]

And how that part is not pertaining to you.

[Ken Coleman]

And, and records, records, records, records, records. I would treat every payment that's sent to the parents, however you choose to do it. I would have that in a journal, a financial record. Your bank would easily give you that. I would do that so that it is tracked.

[Jade Warshaw]

Yes.

[Ken Coleman]

If you have the conversation that Jade is recommending. And I agree because again, they could do something dumb with all that 75,000 and not pay off the credit card. But at that point and ain't my problem.

[Jade Warshaw]

And let it be known, when Ken and I talk about you having this conversation, we really mean your, your wife, not you. You need to stay far from this conversation and let her speak for both of you because otherwise this could get grisly.

[Ken Coleman]

Let's go to Detroit, Michigan, where Nick awaits. Nick, how can we help?

[Caller]

Hey, Ken and Jade, thank you for taking my call. I had a question about having dual employment. Reason being was we have three boys, seven, six and three. So we're in that messy middle and I wanted to give my wife the opportunity to be a stay at home mom. She was a nurse to begin with and then once we had our third child, I just said might as well stay at home. We can survive with my income. Now that she took advantage of her or she took advantage by herself, going through her master's to get nurse practitioner and she just completed the program and.

[Jade Warshaw]

You told her to stay home.

[Caller]

Yeah, hold on. I did.

[Jade Warshaw]

Okay, so can you go ahead?

[Ken Coleman]

Yeah, keep going. Yeah, keep going. Get to our question.

[Caller]

Yep. Okay, so my. I work for fire department and I make about 110,000 and then I also have a family business where I make about 100,000 as well. Obviously the fire is pension and then the family business is just straight salary. There is a simple IRA that I can contribute to. My question is, now that she has her nurse practitioner license and we have no student debt. Am I crazy to leave my fire department employee employment and give up my pension opportunity and allow her income to supplement my loss and, you know, obviously strive to make more at the family business, or do I just grind it out with both employments if I can manage it?

[Ken Coleman]

All right, so how much is she going to. Excuse me? How much is she going to make as a nurse practitioner?

[Caller]

I would, I would hope about 140.

[Ken Coleman]

Okay, so 140. And the family business, that where you're making 100 right now, do you own that or are you working for another family member?

[Caller]

For my dad.

[Ken Coleman]

Okay, and, and is that what you want to do long term? Let's go 15, 20 years from now. Do you want to be a fireman and be in the business or do you just want to be running that business or not in it at all?

[Caller]

No. And so that's the unique part is in about five years, I had the opportunity to leave the fire department under a full pension or I'm able to be, I can pull out from the pension.

[Ken Coleman]

I know, but I'm not, I'm not focusing on that. I'm asking, do you want to be long term owner or involved in the family business? Yes or no?

[Caller]

Yes. Yes.

[Ken Coleman]

I mean, that's the dream. That's what you want, right?

[Caller]

Yes.

[Ken Coleman]

Okay, so what would benefit you leaving the fire department right now? Forget the pension. I know you're all hung up on the pension. I don't really care about the pension. I'm not minimizing the pension. But we don't make decisions based on pensions. Okay, so my question is, if you leave the fire department, that's a certain block of hours every week and you just focused on the business, would that allow you to do more and get paid more in the family business?

[Caller]

Yeah, there would have to be a.

[Ken Coleman]

Discussion, but yeah, absolutely, I'd have the discussion. Dad, if I walk away from the fire department and I start off full time and I'm all my energy in here, what's that look like? This is very simple. Stop thinking about the fire pension. Because if you walk away from the pension to make your life better in the now and the next. Nobody cares about the pension.

[Jade Warshaw]

Jade, I want to know where does the stay at home mom who was going to be a nurse practitioner fit into all this? Because that was the thing that made me be like, wait, what, what, what?

[Ken Coleman]

Sounds like she's back in. Right to work.

[Caller]

Yeah, no, and that was the goal. I mean, she just wanted, she, that was her personal goal, was to Become a nurse practitioner and okay. For being a stay at home mom. It gave her the opportunity to just focus on school and nothing else.

[Ken Coleman]

So she's excited. She's excited. And to get back in. And does she have a gig?

[Caller]

She's currently speaking, yeah.

[Jade Warshaw]

Okay, cool. Okay. Okay. Yeah.

[Ken Coleman]

I walk away from the fireman position. There's. You're only in it because of this pension. It's the only evidence you've given us as to why you'd keep doing it. And I just don't think you need to keep doing it. Now, you can if you want to, but if I'm trying to grow in one area, which is for you, as a family business, every second I'm spending in the fire station is taking away from that long term goal. And if your wife makes 110 and she's replacing the fireman salary.

[Jade Warshaw]

Yeah, why not?

[Ken Coleman]

Bingo. This is a no brainer. If it plays out the way that you want it to play out. Maybe wait until she gets the gig.

[Caller]

I'm afraid to pull the trigger.

[Ken Coleman]

Well, don't pull the trigger until she starts making the money and she's in.

[Caller]

No, absolutely.

[Ken Coleman]

Yeah, man. You got this.

[Jade Warshaw]

That's interesting.

[Ken Coleman]

Yeah.

[Jade Warshaw]

Yeah. I was confused in the very beginning, but I also jumped the gun, so that's why I was confused.

[Ken Coleman]

Yeah, you got a little fired up.

[Jade Warshaw]

I know I did.

[Ken Coleman]

I thought that was going a different direction.

[Jade Warshaw]

I did. I did.

[Ken Coleman]

Don't tell me what I can do. Is that what I heard?

[Jade Warshaw]

Yeah. Yeah. I digress.

[Ken Coleman]

She's a strong woman. Hear her roar. Folks, good hour. This is the Ramsey Show.

[Dave Ramsey]

Do you ever feel like you're finally making progress towards your goals only to get quickly distracted by something else in your feed? Well, that's why we created the Ramsey Network app, Your single source for content that keeps you motivated. The Ramsey Network app is designed to keep you laser focused on reaching your goals. Loaded with over 7,000 hours of Ramsey shows, this free app is the best place for uninterrupted content and no distractions. Plus, you can search specific questions to get more personalized content in seconds. So for the day, you need some extra motivation. You'll have proven advice at your fingertips. It's time to get serious about your goals and shut out the distractions for good. Simply search Ramsey Network in the App Store or Google Play. If you're listening on a podcast, just click the link in the show notes to download our free Ramsey Network app today.

[Ken Coleman]

Welcome to the Ramsey show, where we help you win in your life, America. We're Going to help you win with your money, win in your work, and win with your relationships alongside the fabulous, the incomparable Jade Warshaw. I'm just simply Ken. Ken Coleman.

[Jade Warshaw]

You get a last name? Coleman? Yeah.

[Ken Coleman]

There you go. Glad to be with you, my friend. Always fun. How you feeling? How you feeling about the future today?

[Jade Warshaw]

You know what? I am quite hopeful, but I would have been hopeful regardless of who won this election.

[Ken Coleman]

I know know you would have.

[Jade Warshaw]

You know I'm all about that.

[Ken Coleman]

I know. You know why? Because you. You and your hubs paid off almost half a million dollars.

[Jade Warshaw]

Okay.

[Ken Coleman]

In debt. You're a former D1 volleyball player. You are a mom, you're a wife. You're a successful person. You just ran a marathon.

[Jade Warshaw]

Thank you.

[Ken Coleman]

For crying out loud. Why we haven't talked about that enough?

[Jade Warshaw]

I don't know.

[Ken Coleman]

Did you set a PR on that? America wants to know.

[Jade Warshaw]

It was my personal best and my only best. Oh. Only marathon. Oh.

[Ken Coleman]

I thought for some reason that you had run one before.

[Jade Warshaw]

I've done mini house.

[Ken Coleman]

So as of right now, it is a personal record. That's what we will call it. That I was impressed because, folks, I saw her Instagram post on the day of the marathon. I believe it was a Saturday, as I recall.

[Jade Warshaw]

Yeah, it was.

[Ken Coleman]

And you. You posted that. You were, like, laying down. You're like, I ain't doing anything. And I laughed.

[Jade Warshaw]

Listen, I've been. My hair tied up. I was out.

[Ken Coleman]

But Monday morning, I was at my desk. And who comes confidently striding in to her desk?

[Jade Warshaw]

Yeah.

[Ken Coleman]

No limping.

[Jade Warshaw]

Yeah. You want to know why? Because I did the training. I know I trained.

[Ken Coleman]

But I also think you might just be a little bit more blessed athletically and physically. Because I was really in pain after mine. Half marathon. You did a full.

[Jade Warshaw]

I'm trying to.

[Caller]

You didn't.

[Ken Coleman]

Remember I said to you. I was like, are you not sore? And you looked at me like. I was like, no.

[Jade Warshaw]

Ken, I'm trying to build an analogy here for the listeners. Help me build.

[Ken Coleman]

I don't know what it is because I don't know where your head's at.

[Jade Warshaw]

I'm saying that I didn't. The training. I did the steps ahead of time. So when the race day hit. Yeah.

[Ken Coleman]

It didn't wreck your body.

[Jade Warshaw]

Yeah. Regardless of the outcome, I was all right.

[Ken Coleman]

I agree. Well, I'm proud of you. You and Sam both.

[Jade Warshaw]

Do you see my analogy that I'm building here, Ken?

[Ken Coleman]

Yes.

[Jade Warshaw]

Okay.

[Ken Coleman]

You did the training, the baby steps.

[Jade Warshaw]

Yes.

[Ken Coleman]

I'm. I'm with You.

[Jade Warshaw]

Sorry. So when the race, I didn't want.

[Ken Coleman]

To step into your thing. I thought you were going to finish it. I didn't know you were looking for me to, like, jump in on.

[Jade Warshaw]

I wanted you to be like, jade, that was great.

[Ken Coleman]

And I was supposed to dunk it.

[Jade Warshaw]

Yeah.

[Ken Coleman]

I missed it.

[Jade Warshaw]

When the race day came, no matter the outcome, I was prepared.

[Ken Coleman]

You were prepared.

[Jade Warshaw]

And that's you American people.

[Ken Coleman]

You had the emergency.

[Jade Warshaw]

I was trying to make this so it wasn't just you and me rambling.

[Ken Coleman]

Well, I'm proud of you. All right, Aaron is up next right here in the neck of. I don't know what I'm saying. I forgot how to talk. Our neck of the woods, Nashville, Tennessee. Aaron is joining us. Aaron, how can we help?

[Caller]

Yes. First off, great being on the show. Y'all are great.

[Ken Coleman]

Thank you.

[Caller]

But I. I have just filed for Chapter 7 bankruptcy. I was working three jobs. Now I'm down to two, and I'm about to have my car repossessed. Just now got turned on my bills, and I'm really wondering what I should do next.

[Jade Warshaw]

Did you already file? Has it already been approved?

[Caller]

It's been filed.

[Jade Warshaw]

Okay.

[Ken Coleman]

So.

[Caller]

And I should know in the next month or next month when it all gets strong.

[Ken Coleman]

How are you doing real quick? Let's just get a quick check on your head and heart. How you. How you holding up?

[Caller]

I'm doing okay. I've just been working 70 plus hours a week trying to work my way out of it.

[Ken Coleman]

Oh, man.

[Caller]

Okay.

[Ken Coleman]

All right, well, we're going to help. Hang in there. Here's my point. Your life is not over. You know, you can come back from this.

[Jade Warshaw]

So you filed the proceeding. Can you tell me what the timeline is on this?

[Caller]

So I filed about a month and a half ago. I've had the meeting of creditors and they said the next step is after 90 days after it is filed, I should have what, the dismissal of everything.

[Jade Warshaw]

How much was it like? What. What was. How much was in the bankruptcy?

[Caller]

So I had about 43,000 in debt. About 33 of it is going to be dismissed from the bankruptcy.

[Jade Warshaw]

Okay, so that leaves you on the.

[Caller]

Hook for 10, about 11 with student loans. Yes.

[Jade Warshaw]

Oh, yeah. Because. Yeah, student loans are not bankruptable. So, man, tell me what caused you to get in a situation where you'd file bankruptcy over $33,000? Tell me more.

[Caller]

Well, well, I was pending over $1,000 a month between the car payment and insurance. And then I was working a restaurant job at the time that just hit the Flow season started making three or four hundred dollars in a paycheck instead of a thousand plus.

[Jade Warshaw]

Okay.

[Caller]

Where I went for a new job at that point and to get more steady pay.

[Jade Warshaw]

Yeah.

[Caller]

I actually still work at that restaurant on Saturdays only now.

[Jade Warshaw]

Okay, and what do you bring in? What do you bring in every month? Because what I'm getting at here is I want to make sure whatever caused this has been rectified, because otherwise you'll be here again. And I don't think people realize that. I think sometimes they file bankruptcy and they go, okay, I've solved it. But what I found is people who do it a lot of times have done it more than once. And so I want to make sure we solve that at the root. What are you earning every month now?

[Caller]

Right now? I just now got off a training pace, so it should go up, but I'm making about, I'd say four grand a month between the restaurant and the exterminator job now.

[Jade Warshaw]

Okay, and that's more than what you were making before?

[Caller]

I was making more during the high times. It just wasn't steady.

[Jade Warshaw]

Okay. And tell us about your living situation. What's your rent or mortgage?

[Caller]

Rent is 950, utilities included.

[Jade Warshaw]

Okay, good. That's at a good spot. Yeah. I just. I mean, you're in this now. Tell me again, did you say chapter seven or chapter 13? I was.

[Caller]

It's chapter seven.

[Jade Warshaw]

Okay. Yeah. So they're just liquidating everything. Yeah. I mean, at this point, you're in it, you're not going to be able to stop it. They're going to give you a payment plan. They're going to take whatever they can sell and sell it and pay down. Pay down this. And then you're going to be on a payment plan basically for the rest. That's not.

[Caller]

No payment plan with Chapter seven. It's just dismissed.

[Jade Warshaw]

Are they giving you a plan for the student loans or you're on your own for that?

[Caller]

I'm on my own with that.

[Jade Warshaw]

Okay. Yeah. So you're 10k in. And so the plan now is let's pay this off as quickly as possible.

[Caller]

The big kicker is the vehicle. Part of the bankruptcy is that I lose the vehicle. And they hadn't taken it yet, but it actually just lost an axle. I was driving it the other day to where it's not usable right now.

[Ken Coleman]

Oh, my.

[Caller]

I do have a work vehicle for the exterminator job.

[Jade Warshaw]

Yeah, but you have to use that only for work, that job.

[Ken Coleman]

Are you going to be able to get to the restaurant I have a.

[Caller]

Guy who lives in my neighborhood that's been giving me a ride there and back when I don't have a ride. It's anywhere from 70 to 100 bucks to Uber there and back.

[Jade Warshaw]

Well, the good News is the 33,000 was dismissed. And so with your $4,000 in a month income, where your rent is right where it should be at around 25% now, you've got margin back. So how quickly can we save up to get something in cash? Because that debt is gone. You. In many ways, you got what you wanted and that debt was cleared. But now it's. It's at the. It's at the expense of you completely rebuilding from scratch. Yeah. So the We. We cannot, and I can't stress this enough, we cannot do the same actions that caused this. So you cannot go into debt for this vehicle. You've got to figure out what that means, is that I'm getting a ride from my buddy until I can save up $3,000 to get the most beater is beater that I can find. Is it I'm ubering? Is it. I'm picking up a third job, whatever that is, you cannot create the same problems that got you into bankruptcy again.

[Ken Coleman]

All right, quick commercial break. Back with more of your calls, America. She's Jade Warshaw. I'm Ken Coleman. You're listening to the Ramsey Show.

[Dave Ramsey]

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[Ken Coleman]

Welcome back to the Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me. The phone number to jump in for you today is 888,255. 225 triple 882-55-2225. Okay, short quiz for you, Jade.

[Jade Warshaw]

All right.

[Ken Coleman]

What is the best way to make the most of your money?

[Jade Warshaw]

Every dollar.

[Ken Coleman]

All right. What is every dollar?

[Jade Warshaw]

Every Dollar is the best budgeting app in the world.

[Ken Coleman]

Nice.

[Jade Warshaw]

Even though I just said it in the rhythm of jaw rule, it's still the best budgeting app there is. We created it here at Ramsey and it truly is. If you're a person who was used to pen and paper, if you're a person who was a spreadsheet person, this covers all of those bases. It gives the simplicity for the pen and paper person, but it also gives the nerd out feeling for the spreadsheet person. And so I think it covers all those bases. And then if you're a couple, it's great because it covers the communication part of it.

[Ken Coleman]

I like it. That's a good break.

[Jade Warshaw]

You know what I'm saying?

[Ken Coleman]

I like that. Download every dollar for free in the App store or Google Play or click the link in our show notes if you are on YouTube or podcast.

[Jade Warshaw]

Yep.

[Ken Coleman]

All right, let's get to Grace in Cleveland, Ohio. Grace, how can we help today?

[Caller]

Hi, you guys. Oh, my gosh. Thank you so much for taking my call.

[Ken Coleman]

You bet.

[Caller]

Okay, so my question for you guys is my husband and I are in baby steps four, five and six. And we know that you're not necessarily supposed to be gazelle intense all the way through steps four, five and six. But we are wondering, since we're such a young age, if there's ever a situation where it is appropriate or makes sense to stay gazelle intense through paying off your mortgage.

[Jade Warshaw]

Yeah, you know, it's funny. We get this question a lot. And I'll tell you what, I Jade's opinion. My opinion is if you were a person like Sam or I who, you know, baby step one, two and three took you an inordinate amount of time. Right. You were doing it for four years or five years or even three. Three years of really being laser focused. You got your head down. You're sacrificing at a deep level. Yes. When it's time to go to baby steps 4 or 5 and 6, you need to chill out. You need to take a chill pill. You need to move intentionally, not with intensity. You deserve, because you deserve to enjoy some of the fruit of your labor. Life is. Life is your life. And it's hard enough. It's hard enough. Like you've, you've done the hard part. Now you get to say, okay, let's enjoy this a little bit. We go on a vacation, we buy a new couch, but we're still being intentional in figuring out the rhythm of when we're going to do extra payments, whether it be to 529 or to the house. Now.

[Caller]

Yeah.

[Jade Warshaw]

If you're a person who you're like, you know what? I kind of just automatically avoided debt and I didn't have much of it. And when we found the baby steps and figured out that there's this idea that you could pay off the mortgage too, we never really had that head down, laser focused time period spent on debt and savings. Then. Yeah, I could see where you could say, you know what? For us, this is kind of our Baby Step 2 vibe for this mortgage. And I'm not mad at that. And I don't think. Do you see what I'm saying? As long as you and your spouse are on the same page and you go, for us, this is, this is the. That moment. I'm not mad at that.

[Ken Coleman]

But what's the root of that question, Grace? Because I think it's interesting that you ask us, can we remain? It's almost like you're looking for permission or maybe your spouse is looking for permission. Tell us what's behind that question.

[Caller]

Yeah, so it took us about a year to get through baby steps 1, 2, and 3. So we did it pretty quickly. We are on a 2 income, household income right now. And we had a surprise baby. He's six months old now. And I would love the opportunity to stay at home with him like my mother did with us. But right now I am the breadwinner of our home. So it's just not possible with our expenses for me to just completely stop working. And I want to be financially responsible for just the Future of our family. But if we have another kid, I would love to be able to stay home. So kind of the root of that is we calculated that we would be about three and a half years out if we are. Gazelle intends to finish the mortgage. So it would take us four and a half years total to get to baby step seven. And then at that point we wouldn't have a mortgage and I'd be able to stay home if we decide to have more kids.

[Ken Coleman]

Well, then of course. Why then if that's. That's all I asked for that you know what the answer is? You were calling us kind of looking for permission.

[Jade Warshaw]

Yeah. This was a question of values.

[Ken Coleman]

You don't need our permission. It's your life. I love how Jade answered it. I agree with what she's saying there. I think in this case you're okay. You don't feel like you're overheated and you've got a really great. Why. And I just think motivation is not an issue for you guys. So, yeah, I'd go as hard as you guys want to go on that.

[Jade Warshaw]

How old are you?

[Caller]

My husband? I'm 27.

[Jade Warshaw]

So you'd be 30 and a half with a paid off mortgage.

[Caller]

Yeah, we'd be on baby steps. Seven at thirty and a half. My husband was like, what's your income? Like, kind of uncapped with what he does. So he was like, I mean, from age 30 to whenever he decides to retire, he's like, I could put more than 15% into my retirement. That points we wouldn't have good a mortgage because we busted our butts.

[Ken Coleman]

Now do you guys have a plan to replace your income with his growth or get close to it?

[Caller]

Yeah. So right now we're at 170,000 between the two of us. I'm 27, he's 28. And his income should definitely easily hit that throughout the course of his career.

[Ken Coleman]

Well, but how soon? So let's just, let's fast forward your timeline. Do you think he could get to a place where he's almost or has replaced your income or surpassed your income by the time you got the house paid off?

[Caller]

Surpass mine? Yes. Surpass both of ours. Total? Probably not. But he also. We both have like, side hustles that we started doing on the side.

[Jade Warshaw]

And we're.

[Caller]

I think we're starting to get a little more intense with them. So we have the opportunity to add an extra two.

[Ken Coleman]

And I may not have asked it well, so. But I heard what you said. He's not in by the time you pay the house off in this timeline, he's not going to be making what the two of you make together. So my follow up question is, and I think I know the answer, will you guys prepare for that and adjust your lifestyle so that doesn't put you under pressure? Because what you don't want is to be jacked and excited about coming home with the babies, but then feeling the pressure of the squeeze. So we want to adjust our lifestyle so that he also doesn't have pressure. Is that going to be the case?

[Caller]

Yeah. So that's a really good question. So we have figured it out that if he kind of continues at his trajectory, when I'm done working, he should be at about 5,500 monthly income. But our expenses are only 2,500amonth. So we should still have like a $3,000 cushion every month.

[Jade Warshaw]

And that's.

[Ken Coleman]

And that's no house, correct?

[Caller]

Yes, that's with no house payment, correct.

[Jade Warshaw]

Okay.

[Ken Coleman]

Yeah, I see. That's the margin. That's all I'm checking you on. And it sounds like you guys got a great plan. Jade, I feel great about this decision. This is maturity and a young couple.

[Caller]

We actually did Financial Peace University. Our church and college had offered it and my husband and I wanted to do it before, before we ever got engaged. And we just think it was the best decision we ever made because we were both very aligned on values and financial literacy and everything. And I just have to say too, before I go off, Jade, you and Rachel are both like my role models. So I'm super excited. I got to talk to you today.

[Jade Warshaw]

You're the role model. You're sitting here, You've done everything that we could possibly hope someone would do. And this is the outcome. You, you have choices and you get to live your life based on your values. To say it like Rachel Cruz, you've created a life that you love and I think that's excellent. So you're the role model and I'd.

[Ken Coleman]

Like you to receive that.

[Jade Warshaw]

Though I receive it definitely my parents.

[Caller]

Because my parents were definitely the thing, not me.

[Ken Coleman]

You and Rachel deserve that, Grace. That's phenomenal. How old are you again?

[Caller]

27.

[Ken Coleman]

27 year old Grace looking up to you and Rachel Cruz. Holy smokes, Grace, you have picked two fabulous role models. I'm blessed to know both of these ladies and you, you are on a great track. So thanks for sharing that. Sometimes, you know, people need to hear that. So how's that feel? Does it make you feel old?

[Jade Warshaw]

Does it make me feel Old?

[Caller]

Yeah.

[Jade Warshaw]

Why? Why do I have to be old, Ken, to be a role model?

[Ken Coleman]

Oh, boy. There, I just stepped right. America, this is a classic male error here. I was trying to be nice. I just was showing you some honor and then I go and ruin it.

[Jade Warshaw]

I'm an elder.

[Ken Coleman]

I'm asking you if you feel old. She's 27. I'm not going to reveal how old you are.

[Jade Warshaw]

I'm 40. I feel. I feel this is the reason I came here.

[Ken Coleman]

There we go. Good. You deflected that really quick and I wanted you to receive that because that's a big deal for someone that sharp to call in and trust you with advice but then say that nice thing. So that's very nice. Do you feel old after Pickle Ball tonight? I will. At this very moment. I feel very fresh. I didn't get a lot of sleep last night.

[Jade Warshaw]

How late did you stay up? I stayed up. I tried to watch till the very end. I stayed up till about 1:30.

[Ken Coleman]

Well, you know, for the audience who doesn't know me, I'm used to, in a very, very long ago life, used to work in politics. And so I'm just an observer now. Like, I'm a junkie. I watch both sides. I. I just take it all in. I'm very quiet and sit there. Yeah, I'll go high or low. I just kind of like watching the game. And so I will tell you, I got home at 2:45am last night.

[Jade Warshaw]

Okay, that's nice.

[Ken Coleman]

And had one too many cigars. So voice is cracking on me a little bit today.

[Jade Warshaw]

All right. I'm a little jealous. I had popcorn, no cigars. Next time, include Sam and I.

[Ken Coleman]

All right, we'll do it. Quick break. We'll be right back. This is the Ramsey Show.

[Dave Ramsey]

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[Ken Coleman]

Solutions is a paid non client promoter of participating pros. Learn [e-mail] SmartVestor welcome back to the Ramsey Show, America alongside Jade Warshaw and Ken Coleman. The phone number for you to jump in, we'd love to Coach up today is 888-882-5. Amy joins us now in Vancouver. Amy, how can we help today?

[Caller]

Hi. My question is about a shared asset I have with my other adult sibling. So the asset is actually in Texas and it was given to all of us by my parents and it was, it's definitely been a blessing and it's getting to the point where there wasn't really a long term plan put in place. So it's starting to feel less like a blessing and more of a point of conflict. So me and all my siblings have lived there. It's a house and all me and all my siblings have, our names are on it and we have all lived there at some point while paying rent. Except my brother is now, he's been in the house for about six years and he hasn't paid rent and he's currently on leave with the military. And I tried to reach out to make a plan before he left and he didn't respond to anything. So I'm wondering how to navigate this asset and keep it a blessing while preserving our relationships.

[Ken Coleman]

How many siblings total?

[Caller]

There's four of us.

[Ken Coleman]

And how did he get this deal? How did he just start living in when everybody else has lived in it and paid rent? I'm presuming you guys have rented it to other people as well. Is that true?

[Caller]

I think we've rented it to one other family.

[Ken Coleman]

How did he get away with living rent free for six years?

[Caller]

So it was kind of like on your integrity. There was an account set up and you put a certain amount in that account every month and he decided he didn't want to use that same account. He wanted to do his own thing, which we're like, that's fine. You know, you can pay rent.

[Jade Warshaw]

How you, what is the rent? What is it?

[Caller]

It's $250 a month.

[Ken Coleman]

Oh, my gosh, this is a joke. And so he's not been paying it, Not. Not once. What do the other siblings think about this?

[Caller]

So they think, like, we would. We don't know how to resolve it. The communication is not great. They kind of want to be like, well, yeah, we'd like to talk about. They've kind of written it off as, like, oh, like, we're just never going to see money from that. It's just never going to. Nothing's going to change.

[Jade Warshaw]

How. How do you arrive at the 250? Is that, like an arbitrary amount or is that maintenance? What is that?

[Caller]

So that was set up, like, over a decade ago. Like a long time ago, Nate. And it was. It was with the purpose of, like, oh, this is affordable, so we can live in it and save money so we can, you know, kind of get ahead. It doesn't include, like, utilities or anything like that.

[Ken Coleman]

So all four of you are on the deed?

[Caller]

Yes.

[Jade Warshaw]

What's it worth, the asset?

[Caller]

Probably 200,000 at the. On the bottom side, the low side.

[Ken Coleman]

And there's no debt on it, right?

[Caller]

No, no.

[Ken Coleman]

So do the other three siblings. I'm sorry, there's four of you, so the other two, plus you, are they all wanting to get out of this as well?

[Jade Warshaw]

Are you there?

[Caller]

I'm sorry, I couldn't hear the end of that question. Okay, I'm here.

[Ken Coleman]

I'm asking. Do the other siblings. Are they in agreement with you about they want to get out, or are you the only one thinking, going, how do I get out of this?

[Caller]

No, the other siblings were all in agreement.

[Jade Warshaw]

Okay.

[Ken Coleman]

Okay. Well, that helps.

[Jade Warshaw]

Majority rules.

[Ken Coleman]

So I'm gonna. I don't know. So I want to say something, but I'll first say I don't know. I've never experienced this before. So I would be seeking counsel, actual legal counsel on this, on what your options are when you've got four people on a deed, three want to get out. I just don't know enough legal on that. But I would say this. However this goes down, it's time for three of you to stop letting him bully you. This guy's a. This guy's a bully. And I know it's your brother. I'm just telling you like it is. He's not returning your calls. He's just acting like a school ground, like on the playground. Bully. I'm not going to talk to you. I'm giving you the silent treatment. I'm creating all this tension, and I'm not playing ball. I'm just creating all this. And I'm daring you. He's daring you guys to do something. And I think he's doing it because he knows you're not willing to do anything about it. And I think that's the only little thing I wanted to put in there, because I think however you resolve this, Jade, I'll get out of the way if you've got a point on this, but I think whatever needs to happen, he needs to realize the gig is up.

[Jade Warshaw]

Yeah.

[Ken Coleman]

I think you've long outstage your welcome. You've taken advantage of us. It's over.

[Jade Warshaw]

Yeah. So just for clarity for me, so you guys, the plan was when you live in the house, you put the $250 in the account and that split amongst the other three siblings, right?

[Caller]

No. So that that amount goes just towards repairs, like. Oh, something like breaks. You have money in the account to pay for it.

[Jade Warshaw]

And so while he's been living in the house, if something broke, what happened?

[Caller]

I'm not sure.

[Jade Warshaw]

So.

[Caller]

Well, he. There are things broken, and they're just not fixed.

[Jade Warshaw]

So he just didn't take care of the place while he was there either.

[Caller]

Right.

[Jade Warshaw]

Oh, wow. Okay. So, yeah, I mean, the majority rules here. If you have to get a judge to force this, I don't think it would be that difficult. Difficult to do it. We could talk about the idea of him buying you guys out, but I don't think that's gonna happen. It's just not gonna happen. So, yeah, you might have to sit down. All of you guys sit down and try to make it light. But for me, the fact that you're calling, it's no longer light. So you can try to keep that a light conversation, but I think the longer you let this go on, the worse it gets. So to Ken's point, Yeah, I think you guys get together, somebody talk to a judge, and say, how do we force this? Because we're ready to sell it. We've kept it this long, he's not paying rent. And the truth is, I kind of like the fact that he doesn't owe each of you, because, I mean, if you guys are splitting this money, truly, he'd owe each of you $6,000. But he doesn't since he's not even taking care of the place. Although who knows if that'll affect the resale value. But I'd get out of it immediately.

[Ken Coleman]

I would, too. Because if you look at this split, let's say they sell it for 200, it's less than 50 grand each.

[Jade Warshaw]

Yeah.

[Ken Coleman]

It's just not enough money to be dealing with all this garbage, so. Amy, I'm with you. I think your instincts are right. Let's get out of this thing. No messing around. It's not worth spending a bunch with a lawyer to the judge thing. Whatever. I think Jade's right. Let's clean, efficient, force his hand. We're selling this thing, and we avoid all the tension. And then Thanksgiving and Christmas takes care of itself. But, yeah, I'd get out quick. I really would. That's an unfortunate situation. I mean, when you get and see. That's it. Okay, so I'm sitting here, and I didn't ask.

[Jade Warshaw]

Okay.

[Ken Coleman]

I've already put on hold. But, like, I didn't ask. I guess I should have. If mom and dad are still alive, I got the picture. They aren't around.

[Jade Warshaw]

I got the feeling they're not around.

[Ken Coleman]

But I just. And for that reason, I just. I sat there and I went, note to self. If Stacy and I want to bless our three kids, I need to bless them individually, not try to do a. Hey, we're gonna do this asset and work the three of you into it. I just sit there and I went.

[Jade Warshaw]

Note to self, cash money.

[Ken Coleman]

And individually.

[Jade Warshaw]

Yes.

[Ken Coleman]

You're not in it together. Yeah, I'm blessing you this way. I'm blessing you this way. This way. And it's not this, like, joint thing where this is. It's just what. I don't see what the value is in that.

[Jade Warshaw]

It was probably the family home is my guess. And I think in. They probably had the option to sell it early on, but they weren't ready to part with it yet. And so it probably just became. Listen, I am adding all sorts of story to this that I don't know are true, so I'm sorry if that's not true.

[Ken Coleman]

But you agree, right, to give four kids a house? All right, you guys, here you go.

[Jade Warshaw]

Yeah.

[Ken Coleman]

Even if there's not a problem, it just feels like it's easy for a problem to exist because then you have four different people, have four different views of life.

[Jade Warshaw]

Yeah.

[Ken Coleman]

Money.

[Jade Warshaw]

It's like when you get a gift card to a restaurant you don't really like. You're happy for the gift card, but now you're forced to eat at Applebee's.

[Ken Coleman]

Oh, geez. You just went there. A shot across the bow.

[Jade Warshaw]

I'm just saying, eating good in the neighborhood.

[Ken Coleman]

I mean, there's a lot of people that like an Applebee's. Hey, note to self. Team. No Applebee's gift cards for Jade. That would not go over well.

[Jade Warshaw]

Yeah, where would one.

[Ken Coleman]

Where would one get you a gift card, too?

[Jade Warshaw]

I'm with you asking for a friend Visa gift card.

[Ken Coleman]

No, no, I want to know. I'm putting you on the spot. 20 seconds. If I'm gonna get you Stacy and I'm gonna get you and Sam a gift card to a restaurant where you want. Where do you want to go?

[Jade Warshaw]

And it has to be national so people know it. Okay.

[Ken Coleman]

Come on.

[Jade Warshaw]

I don't know. Jay Alexander's.

[Ken Coleman]

All right.

[Jade Warshaw]

Do you guys have that? Yeah.

[Ken Coleman]

Do you guys. You live here, too?

[Jade Warshaw]

I'm not gonna lie.

[Ken Coleman]

Do you guys have that?

[Jade Warshaw]

Can call me.

[Ken Coleman]

Are you aware you live in middle Tennessee as well?

[Jade Warshaw]

I wanted to say Red Lobster.

[Ken Coleman]

I don't mind that at all. I love a good lobster. All right, quick break. This is the Ramsey show.

[Dave Ramsey]

Folks. The Ramsey Christmas cash giveaway is here and you could win big. We're giving away $500 prizes each week and one grand prize of $5,000. Enter daily for your chance to win at RamseySolutions.com giveaway. It's that easy. Plus, our 50 Days of Christmas deals is on right now. Get 30% off bestsellers and life changing gifts that won't break the holiday budget. Ramsaysolutions.com store.

[Ken Coleman]

Welcome back to the Ramsey show alongside Jade Warshaw. I'm Ken Coleman. Thanks for being here, America. We're here for you. 888-825-5225. Before we get to the phones, quick question from the Ramsey Network app. This is from Jared. I started following your program about five months ago and paid off two out of five credit cards. I lost my job two weeks ago but was given a severance package. Should I continue attacking my debt or pause until I gain employment again? I'm actively looking and have been interviewing. Good question. Very practical.

[Jade Warshaw]

Yeah. I mean, 100%. I would pause it. This is something we would call a storm. So you're in storm mode. So I love that you're working the baby steps. I love that you were just starting to get some momentum there. But let's pause it for a second, get a job under our belt, and then we can push play once things normalize.

[Ken Coleman]

Yeah. By the way, real quick reminder, if you are listening via your favorite podcast app or you're watching via YouTube, this is the last segment of the show that you'll hear. Unless you go over to the Ramsey Network app and you can do that by just clicking the link in the show notes and get to the app and that's where you get the rest of the show for free. Of course, those of you listening via radio, of course we continue on, so just be aware of that programming note. Trent joins us now in Wilmington, North Carolina. Trent, how can we help today?

[Caller]

How you guys doing?

[Ken Coleman]

Good. How are you, sir?

[Caller]

Doing well, doing well.

[Ken Coleman]

What's going on? How can we help?

[Caller]

So I got some money in the stock market and so does my wife and I was wondering if I should take that money out to pay off some of this house debt. I have a couple rental properties and a primary house. One of the, one of the rental houses is completely paid off and the Next one has 180,000 I owe on it. And then of course I just bought my primary residence a few weeks ago.

[Jade Warshaw]

Okay, so you've got a paid off rental. A rental where you owe 180 and what, what is that one worth it? If you were just to sell, I'm.

[Caller]

Just curious, it's probably worth about 430.

[Jade Warshaw]

Nice. And then your primary house, what's the mortgage on that?

[Caller]

It's about 3,000amonth.

[Jade Warshaw]

No, what do you owe like the big.

[Caller]

Sorry. That's okay. I owe about 500 on it.

[Jade Warshaw]

Okay. Okay. And tell us about these stocks. Is it single stocks?

[Caller]

There is. Mine's in index mutual fund and I have 260 in mine. And then my wife has an inherited Roth IRA and she's got 360 in hers.

[Jade Warshaw]

Wow. Okay, so the Roth IRA, I. Is she required to take any distribution of that or not yet?

[Caller]

Yes, she has to take out, I believe it's like right at 500amonth. Okay.

[Jade Warshaw]

She's required to take 500amonth and you're talking about liquidating that. You said there's 360 in that?

[Caller]

Yeah. I didn't know if I should pay off that second rental with, you know, some of my money that's in the stock and maybe some of hers or should I just keep it all in there and just keep letting it grow as is? I just, yeah, I have a passion for rentals and stuff like that, so I'd like to get back into that.

[Jade Warshaw]

But I wouldn't liquidate the Roth IRA because you're going to have a penalty, I believe if you do. Now the mutual index fund, it's. That's, that's non retirement. It's just a brokerage account.

[Caller]

Correct.

[Jade Warshaw]

Okay. And how much did you say again? Tell me again.

[Caller]

260.

[Jade Warshaw]

Okay. That one, if you wanted to. Do you have any Other consumer debt?

[Caller]

No.

[Jade Warshaw]

Okay, so no consumer debt. Do you have any other retirement funds?

[Caller]

Just that one rental that's paid off.

[Jade Warshaw]

That's part of your retirement. You think?

[Caller]

Yeah.

[Jade Warshaw]

And what's that worth right now?

[Caller]

It's worth like 230 around there.

[Jade Warshaw]

Okay. And how old are you?

[Caller]

37. Sorry, I'll be 38 in a week or so.

[Jade Warshaw]

Listen, I just grilled you. I understand that. Yeah. I wouldn't touch this. You don't have any other retirement. If I were going to do anything, I would liquidate the other paid for rental in order to do this, to clear some of this out. I, or I would keep the paid for rental and I'd liquidate the one that's worth 430 and get that and put that 250 or whatever you gain from that onto the house. That's what I do. That way it keeps you with the paid off rental that you're hoping will continue to add value. And then when you're ready, you sell it for lots and lots of money one day. And you're paying off half of your house by selling this other one that you had debt on anyway.

[Caller]

You're saying liquidate, sell the one that's, that I owe 180 on and pay down my current house? Is that what you're saying?

[Jade Warshaw]

That's what I do.

[Caller]

Okay. Okay.

[Jade Warshaw]

Because I, I don't want to keep around a rental that I've got debt on at the expense of me living in a paid off house. And I, I think that this, if this mutual fund that you have, for all intents and purposes, I'm treating that as a retirement account. And from now on I would. Unless you're self employed. I would be trying to invest in my 401k at work. I'd be looking at a Roth IRA instead of just a brokerage account.

[Caller]

Okay.

[Jade Warshaw]

Yeah.

[Caller]

I am self employed.

[Jade Warshaw]

Okay. Yeah. And even setting up something like a, an individual 401k, something where you're getting more benefit than just this brokerage account, it's, it's not a bad place to start. But even Roth iras is good for you, so that's just a side note. But yeah, in your case, let's get rid of that rental and start knocking out this house.

[Caller]

Okay. Okay. Sounds great. Too easy.

[Jade Warshaw]

Yeah.

[Ken Coleman]

There you go. You know, if it ain't broke, don't fix it. I got nothing to add over here. I was gonna say, I concur.

[Jade Warshaw]

Yeah.

[Ken Coleman]

There's a lot there. Thought you did a great job.

[Jade Warshaw]

Thank you. Thank you, Ken. I'm sorry.

[Ken Coleman]

America doesn't need to hear any more on that. You nailed it.

[Jade Warshaw]

Thank you. Yeah.

[Ken Coleman]

There you go. Nicholas is up in Phoenix, Arizona. Nicholas, how can we help?

[Caller]

Hey, guys, thanks for taking my call.

[Ken Coleman]

You bet. What's happening?

[Caller]

So, I've got a health insurance question for you guys. Me and my wife, we've got. Yeah, we've got our open enrollment coming up this Friday, and we're trying to decide between an hsa, which I know you guys are a big fan of, or a ppo. The one factor that's making this difficult is we have a baby due our son in February. So we kind of have, like, a known hospital expense going into this whatever account or whatever insurance we choose. But we kind of got burned this past year with a ppo. And I just checked yesterday with the low deductible between my entire family, we've only spent a hundred dollars towards it with like 5,000 in premium. So I'm just trying to decide whether or not, you know, with the baby on the way. That's so complicated. Or you guys still recommend the hsa.

[Jade Warshaw]

I love an HSA because of the savings component to it. And there is a part of this where, you know you're having a baby, you know that you're going to hit the deductible possibly. I mean, there's a good chance. And so there's part of that where I like the known. If you've done the PPO and it didn't work out for you and you know that you've kind of. It's burned you, then this might be a good opportunity to switch lanes.

[Caller]

Yeah, we. So we did the. For our daughter, for our first child, we had. We were on a PPO plan, and it seemed to help out there because between the. Before, like, all the appointments going up to that and then the labor and the delivery, we hit that deductible pretty quickly. And so the actual hospital bill was only about 800 bucks. But because it's at the beginning of the year, I kind of feel we're going to run up our deductible either way. Yeah, the. I guess I can give you guys some more details on the numbers. Our deductible for the PPO would be 4600 for the family, 23 per individual. And then for the HSA, it'd be 4600 per individual and 9800 for the family. So we're basically for sure going to hit the PPO deductible and then be paying 30% coinsurance. After that, and then on the HSA, after we hit the deductible. Deductible, it's 25% coinsurance. So a little bit more coverage after we hit that high deductible.

[Jade Warshaw]

I like having nothing crazy. I like having the lower. The higher coinsurance. Because like you said, even after you hit the deductible, if there's any other costs, you're still on the hook for a percentage of that. And so I'd want to be on the hook for the lower percent. What's the out of pocket max?

[Caller]

Out of pocket max? Yeah. So the out of pocket max for the PPO is 13, 800. And then for the HSA, it's 12,800.

[Jade Warshaw]

I like that better. And that is that first individual or. That was family.

[Caller]

That's for family.

[Ken Coleman]

Individual.

[Jade Warshaw]

Are you healthy? Are you healthy?

[Caller]

Yeah. My wife's 23. I'm 24. She's had two beautiful pregnancies so far.

[Jade Warshaw]

I'm making this choice based on her, and I'd probably go with the hsa. It's got the lower out of pocket max, and it's got the better co insurance. So for that reason, I'm out.

[Ken Coleman]

Judge Jade, folks. She does it well. Good hour. This is the Ramsey Show. Hey, you're still here. What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right?

[Jade Warshaw]

All you gotta do to finish the.

[Ken Coleman]

Episode is search Ramsey Network in the app store, Google Play store, or just click the link in the show notes to download the app for free. Yep, you heard me right. For free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom. All right, I'm getting out of here.

[Caller]

Enjoy.

[Ken Coleman]

We'll see you on the app.