If You Don’t Deal With the Core Issue You’ll Always Struggle With Money
2024-04-01 01:55:02
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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual, amazing relationships. Ken Coleman, Ramsey personality, number one, best-selling author of the book Paycheck to Purpose, and he is our guy that helps you develop in your whole area of your work, where you can get, be a better person and make more money. He's here helping us today, so you got questions about jobs, careers, all that kind of junk? Well, hey, we're ready, and we'll even talk to you about whatever it is you want to talk about. That's what we're here for.
The phone number is 888-825-5225.
. Mindy is in beautiful Portland, Maine, to start off this hour. Love your city, Mindy. How are you? I'm well, how are you?
Better than I deserve. Sirius, just walk down to the dock and get some fresh lobster any time you dadgum, want.
It's amazing, yep. How can we help today? So, my husband is a firefighter, and I'm kind of young, but is actually can retire at this time. He's not going to be 50 until this summer, but he has put his time in. So, they are starting a program at the fire station where it's a retire-rehire, so he will start to, so he'll stay basically doing his job, but he'll start to get his pension plus his salary.
In talking to him, we've been working the baby steps for the last, oh gosh, almost 10 years, I guess, and we are debt-free, and he's saying he wants to put his pension straight into retirement, but we still have $112,000 on the house, so we still have a mortgage, and so I'm kind of wanted to talk to you about, is that really the right place? And the other background, I just think that's important to know, is I have a chronic heart condition, so I'm in my mid-40s. I was born with it, and it's something that I probably won't be able to, you know, really work for a long, long time. I'm not eligible for term life insurance because of it, and about a year ago, year and a half ago, I had a big medical event, and it really made me weigh my life of, I want to do more before I can't, so I'm hoping in the next, you know, five years, maybe ten, that our mortgage will be gone, and I'll be able to go down in hours of my job. I do love my job, but that's not it.
No, it's just a matter of the.
strain, yeah. Well, good question. So you sound like you've been listening a little bit, and you know some of the things we talk about, but not the whole.
thing, based on what you're saying. I think I do, but I think he's off on this one.
Well, he's off because you know the answer, then. You're setting him up for a fall because you know the answer. The answer is we're going to tell you to work the baby steps, and it sounds like you're debt-free with an emergency fund, not counting your house, right? That is correct, yeah. Which puts you at baby steps four, five, and six, and you're putting 15% away for retirement already of your household income?
Yes, we are, both of us. Okay, if your income goes up because of retire, rehire, then you would raise the 15% up to be 15% of your new income, but you would not put his entire new retirement back into retirement. We would continue with baby steps four, five, six. Kids grown and gone,
do you need to save anything for kids college? No, we have an 11-year-old, so we.
are working. Okay, so kids college needs to be addressed, and beyond that, we pay on the house, which is your goal. So you already knew you won the argument with.
us. Yeah, but you know what? I didn't actually think of it as a new income, because I was just kind of thinking it very separate. So this is actually really.
helpful. No, he got a raise. Yeah, that's all it is. I mean, he goes out on retirement, he starts getting his retirement, and he goes back to work for the same pay because they need help. That's why they're doing this.
They don't want him to leave. Mm-hmm. They're short of help, right? That's correct. Yeah, it's really hard to...
And they're afraid he's just going to retire and not come back. They need him, so they're allowing him to retire and then come back, and that's a very cool thing for y'all, because, dadgum, that's probably a sweet income. Mm-hmm. So what will your household income be after retire-rehire?
So he also does some.
side hustles, because he's a firefighter and doesn't work, you know, and he works.
but.
. That's why he's scared of work, is he? Yeah, good. No, not at all, not at all.
Probably works too much. I would say we would probably be in the high 200s, low.
300s. And your mortgage is how much?
$112,000.
. Okay, so you guys just need to sit down and say, what would it look like to pay off the mortgage in 14 months or 12?
months? Yeah. It's $10,000 a month, you can do that. Totally can do that, and then we'll call and.
then scream at you. Yeah, exactly. And you can scream and then you can take less hours and, you know, enjoy... It's only your early 12 months from your goal of being able to chill a little bit with your condition, right? Yeah.
If you frame it up that way, maybe he's a little.
. Because after that, you're at baby step 7, and then all you've got left to do is enjoy life, be generous, and invest. And so he can go to investing a whole bunch of stuff after you knock this mortgage out, but he's.
only 12 months from that goal. And I'm curious, what's his pension in relation.
to your take-home?
So, I actually am the one that my hourly salary is probably.
What do you do?
I'm a nurse program manager. I help with heart attack.
patients in the state of Maine. Oh, wow. So, again, the question still remains the same. I just want you to run these numbers out. What's your take-home?
compared to his pension? Yeah, how much of a raise is he going to get to offset the?
fact you don't work as much? So, his pension will probably be about... I don't know exactly, but let's say $50,000, and I make about $100,000.. Okay. So, if you quit,
cold, and he got a $50,000. raise, the household's only down $50,000, and you do that after the mortgage is gone, that's a very doable thing, is what Ken's asking. That's right. That's where you were going, right? Yeah, because I want you to.
get to that place of enjoyment, because you now can. Yeah. And I want you to be able to cast that vision to him. Hey, we're still going to be great on retirement. We're still fine with our baby steps.
We've completed them. We've got a paid-for house, and I've got a better health situation. Or, Mindy, the weird.
thing happens when you don't have to work anymore, it's easier to work. Yeah, that's right. And so, you know, maybe you're putting in 60 hours, and you can go to actually 40, or 35, or 30, and make a really nice living, and you don't have to be there. So, all of a sudden, it changes how you walk in the building, and the stress, you know, the stress... Because what's your...
She's such a hard thing, and she works in a hard area. It's very missional, isn't it? Yeah, there you go. So, I mean, but it's stressful. Yeah.
And so, yeah, I'm gonna guess and say you probably won't want to quit cold. You'll probably, you probably enjoy enough of your work to do some of it, and the fact that they probably need you, like they need him. You guys have picked two great careers. You're gonna be multi-millionaires, and, you know, you will have enjoyed your life through the process, and served your community, both of you, firefighter and nurse. Yeah.
These are, these are acts of service, both of them. I love that. retiree hire, man. Whoo! Stacks of cash.
Strong, strong, strong. I love it, love it, love it. for you guys. This is the Ramsey Show.
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Well, a big week around Ramsey Publishing over here. Two books going on pre-sale. Rachel launched a number one best-selling children's book in the fall. I'm glad for what I have. The follow-up book, she's going to do a There you go.
Is I'm Glad for Where I Am. You'll be content with home. And the other one's content with what you have. Only this one's about gratitude. The other one's about contentment.
And fabulous illustrations. Award-winning illustrator. Just really great. I read these to my grandkids this weekend. I had different ones at different times for Easter.
And the oldest ones, of course, don't let me read to them. But the little one just, Papa Dave, give me a book! So there you go. Papa Dave will read to you. Because I tell you what makes you smart.
When people read to you when you're little. So I read all the time I get. Anytime I can. So there you go. And increasing the intelligence of that next generation.
So they never live in my basement. And that's what we're trying to do. But yeah, there you go. That one's coming out the 16th of the month of April. And it's on presale.
now. I'm glad for where I am. And Ken Coleman's got a new one coming out. This is a different kind of book. Find the work you're wired to do.
Now he's done two number one bestsellers before. This one is more of a. how to take the assessment book. That's right. Or how to interpret the assessment.
That's right. The.
assessment and this short book together. The Get Clear Assessment. The Get Clear Career Assessment. That's right. So, essentially, you get the assessment and then this book picks you up with your results.
So here's what it does. in short, questions. Teach you to speak. I can't speak, but I can write. No, it's, it's answering who you are, why you are wired that way, what you want to do professionally, and how you get there.
So that's what this is going to deliver for you. There's awareness. So you walk away with great clarity on direction. Confidence that you can actually do it. And then how do I tactically get there?
And so it's a combination of the assessment and this short book is me essentially guiding you, coaching you with your results. And there's nothing like it in the marketplace, because it's not a personality profile, as you know. No, it's not. There's enough of those out there. This is how am I wired?
What do I do? well? What do I enjoy doing? And then what motivates me? And this is the key, by the way, to winning professionally, so that you win financially.
96% of millionaires. according to the largest study on millionaires ever done by Ramsey Solutions, 96% said they enjoyed their work. And that's essentially, if you want to boil it down to a money audience, that's what this product does. Well, I.
mean, what's the work that I would enjoy? You very seldom prosper at something long-term. It's not sustainable. if you hate your job. That's right.
And so if you hate your job or you hate the place you work and you're confused, I want to do something different. I don't know what to do. I got to get out of. here is all I know. That's right.
Whatever here is. Right. It could be a whole new career path. It could be a whole new job. It could just be doing the same thing you do, but not with toxic jerks.
It could be. all of that can be revealed when you take the Get Clear Assessment. That's exactly right. And this new book, Find the Work You're Wired to Do, will help you analyze the findings of the Get Clear Assessment. I took it.
It was very interesting when it was in beta. That's right. When we were doing it, just to see if it exposed who Dave really is. And it did. Yeah.
It did. And I like these kinds of things. I, like, you, know, know thyself. Yeah. This is, let me tell.
you what this is. In a day and age where people want results fast, this gives it to you. And it really does answer those questions. Who am I? And we're talking about the world of work.
What makes you really good? By the way, if you know what makes you really good at what you do, it's gonna help you convince other people who are gonna hire you and, by the way, pay you really well. So, building wealth, the secret to wealth is, in the professional side of it, is knowing your.
unique role. Where do I fit? So the deal is, the Get Clear Assessment has been available on our website for quite a while. Almost a hundred thousand people have taken it already. We've sold it to that many folks already.
And you can buy it today. Or you can buy this book in pre-sale. It comes with the Get Clear Assessment. in pre-sale. You also get the audio book and the e-book of.
this as well with the pre-sale. So you get those two assets. Yeah, when you do.
pre-sale on all our stuff, that's what we do. And so that book actually comes out the 7th of May. We'll ship it to you, a street date on it. It'll be in Amazon and Target and all those places during that time, starting then. And Rachel's book is 4.16, so just a couple of weeks away.
Two new books coming out by Ramsey.
Publishing. Hey, I do want to say this really fast. If you're looking for a graduation gift for the high school grad or the college grad, I would just point out, this is something really practical that the high school grad and college grad in about 15 minutes of the assessment and no more than an hour and a half of reading that book. That's how quick it is. It's a short read.
There it is.
I'm going to hold it upside down. There we go. Dave is auditioning to be the new Vanna White. Yeah, and he's flunking horribly. Yeah, on so many fronts.
But there we go. Open phones here at 888-825-5225.. Melissa is in Ann Arbor. Hi, Melissa, how are you?
Hi, Dave, I'm good. How are you? Thank you for taking my call. Sure, how can we help?
I'm calling because kind of a long story of how we got here, but the long and short of it is we have some debt, part of it student loan, part of it's consumer debt. But our rent has gone up, you know, like 18% in the last two years. And we got offered to, my folks have a basement apartment, and in order to mutually help us and help them to try to better prepare for future, save up stuff, help them, pay stuff down, they offered to let us move in and, you know, split bills with them. And I'm just kind of trying to, we're going to talk it out together, obviously, but kind of trying to see what your take is on that.
How old are you?
My husband and I are 36.
How many children?
No children.
What do y'all do for a living?
We have multiple jobs, actually. My primary job is a medical coder. I also have a small business. I have a contracted job through our church. And my husband is a warehouse supply clerk and also has a small business.
Okay. I am not opposed to families jumping in together, and that includes a grown child quote, moving back home, which would be you. Um, I, what I don't want you to do, and I don't want them to do, is I don't want you to use that move to mask the real problems. Okay. And so I'll just be, can I be real, straight with you for a minute?
Absolutely. Your real problem is not 18% increase in rent. It revealed the fact that you both have weak careers.
Am I wrong?
Um, not necessarily. I've, I've spent, um, I have a degree in a certification in my field and it's taken me about 12 years to work my way up in the hospital to get where I am.
Um, so, uh, I, I pulled the, after, um, taxes and insurance is about, uh, around.
70,000, and that's working four jobs to each.
I guess if you count the church.
So that's, that's what I'm worried about. Okay. You guys are working. You're, y'all are like a hamster in a wheel, man. Y'all go, you ain't afraid of work.
Y'all work hard and a lot.
How much debt do you have?
Um, right now. I originally gave them about 79,000 on the phone, but I forgot about this, about 3,900 for, um, that we're paying to a relative for a vehicle at zero interest.
Yeah.
So what are you? 83,000.. Is that what I'm hearing?
Yeah.
That's a part of the problem too.
So if you go home, make it a plan to pass through there on the way to prosperity, not land there, because the world is mean and rent went up and I can't make it out there.
And Dave, I'm also concerned about the boundary of safety net, not a hammock.
and don't get guilted into helping them with their bills. Cause I heard that too. So there needs to be a boundary there. You guys aren't doing them a favor.
Right. Um, well, that was what they, they had said was that, um, uh, you know, this would be primarily to, cause I'm an only child, so I want to live near them anyway, because, you know, as they age, um, so we only live like 10 minutes away from them as it is.
That's good. I want you to help them. I want you to be a good daughter, and I don't mind you going through there on your way to prosperity, but make sure you're addressing your core issues, and I don't think you are because you didn't like what I said. I might be wrong, but you ought to look at that. This is the Ramsey show.
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Ken Coleman, Ramsey personality is my cohost today. Thanks for hanging out with us. Hey guys. Uh, thank you. We appreciate you.
Uh, the number of you that are out there and the number of you that are talking about the show as a parent, uh, because we keep showing up in number one, two, three, four, five slot on Apple. out of all the 2 million Apple podcasts. We're one of the top five, almost every day, every week, oftentimes number one. And so we bounce around with Mr. Joe Rogan, which is an honor to be mentioned, in the same sentence with him.
And, uh, certainly, all the different murder mysteries that NPR puts out, they're all over the place. And so we, uh, we bounce around with those.
Have you ever listened to one of those? I gave one of them a shot and I, it's not my genre.
Now we've got, we got members of our family, including my wife, that are okay. And Blake Thompson to our senior producer here. He's way into that stuff. But anyway, if there's other stuff out there, if you don't want them, but we're, thank you, thank you. And thank you for the numbers.
Our numbers on YouTube and on our radio stations are just in Sirius, XM. All those platforms are just through the roof, and it's all because of you guys. Thank you. If you want to help us, we can use the help. still.
We really can leave a nice five-star review, click the share button or click a link, cut a link out and send it to somebody. say, listen to this, whether it, whether it, whether it's, uh, you know, subscribe, follow anytime you do any of those things, it bumps those algorithms on those platforms around and pushes our show to the front and makes it offered to more people who've never heard of it before. And it's our only marketing plan. So you're it. Um, we don't own a, like a football stadium or anything like, uh, so, uh, it's just us, and so us and you, it's me and you baby against the world.
So, thank you. Thank you for all the help. All right. Jasper is with us in Oregon. Hi Jasper.
Welcome to the Ramsey show.
Hey, thank you. Glad to be on.
Sure. What's up?
Good advice. So, basically, I'm a truck driver. I'm an owner operator. So I kind of hate this job, though, cause I'm always on the road, and to leave and go, like take time off, even for a few days, cost me money. So I want to like, get out of this business.
I've been in it for about two years. How old are you? I wanted to get a, um, I'm 20, uh, 28..
Okay, go ahead. I'm sorry.
Oh, no worries. Um, so my buddy, Chris, he watches your guys's show and he told me, cause I got a new car and normally I never spend. I never want to get a loan, but I did. So I'm about 30,000, $33,000.. I would on it.
It's about $633, like, uh, a month for it. And also it's about 300 and something dollars for insurance.
Um, how bad. do you want to quit your job?
Oh man, I feel like a slave. I hate it.
So stupid car.
I know, but I put like,
I just asked you how bad you want to quit your job. I, now you just told me you don't. Cause you signed up for a $600 payment. You want to know what you're a slave to your slave, the stupid car. That's what you're a slave to.
True. I regretted it as soon as I talked to my, not enough to sell it.
You started, you start crawfishing on me. You lobstered right back into the hole. As soon as I said, sell it.
You back up, didn't you?
How, how would I sell it? How would I go about it?
Okay. Well, let's finish the numbers. You were saying you put how much down?
I put about 15,000 down on it.
Okay. And what's it worth right now? If you sell it, private seller.
Well, I haven't put much miles on it. So I'm guessing probably about 38, 40,000, depending. It does.
What was the sale price when you purchased it?
I was stupid and I got that extra mileage on it. The dealer that tries to sell you. I probably bought it about for about 43,000 when it's.
Cause it has that extra mileage. You mean you've got an extended warranty?
Yeah.
Oh, you can get a notice. And when you cancel that, you'll get most of that back.
So you, so you owe 28 and you think it's worth 38?
I, I think it's probably worth, it's a, it's a, it's a Honda CRV hybrid. So it's pretty popular. I don't know how quick it would sell or for what people would offer me.
Well, it doesn't matter. You're not upside down.
So you pull it up on private sale on Kelly blue book, kbb.
com. You can find out what you could sell it to an individual for you. If you sold it, you're convinced at this moment, you can find out in a few minutes with that analysis. But it sounds like you're going to put some money in your pocket when you sell it. Am I right?
Oh yeah. I would get, I would get my money back.
So you could go buy you a hooptie car and quit your lousy job.
Yeah, I could.
Yeah. Okay. So now let's move on to quitting the lousy job, because that's the only thing standing in your way.
Yeah. Yeah. And the other thing is, is, if I'm a truck driver and I hate my job, okay. I am using all of that amazing amount of time when I'm behind the wheel of that truck, I'm making phone calls, I'm talking to everybody and everybody that they know. And I'm going to land a job while I'm in the cab.
So therefore, I don't have an interruption of income, but we've already solved the first problem. You can sell the car, get it back. You're in the truck most of the time anyway. So I would be landing something, making phone calls, learning. If I got to get a certificate program to move into something else, I'm listening to that while I'm in the truck.
Any idea what you want to do?
So I just want to go back to school. is the issue. Why?
For what?
I, an engineering degree.
Oh, an engineering degree. Cause you want to be an engineer.
Yeah. I, I like energy. If possible, something to do some kind of electrical engineering. I figure I would get a better idea when I go into school.
No, no, no, no. Let me save you a step. I want you to be on the phone and when you're not in the cab and you got some days off, you're hanging out with electrical engineers. It's the number one way to figure out if I want to do something. If I want to go into carpentry, I'm going to spend a day, at least a half day, shadowing a carpenter.
Why? Because, Jasper, I want to know the good, the bad. I want to hear him gripe about it. I want to hear him tell me what he likes. I want to know what he makes.
I want to know how long it took him to make that. The way we figure out if I want to go into electrical engineering is not to go to school for it. You go talk to the professors who have never done it.
That's right.
He, he, he's an electric engineer, except, I mean, he's, he develops like weapon systems. So it's a bit separate from what I would be interested in.
Well, again, I'm all for this. I'm just telling you, don't choose to go to school to figure out. if I want to do something. Hang out with people that are doing it, do research on it. And then your head and heart will either say ding, ding, ding, or, and I'm telling you, I'm saving you time and money, my friend, I think you've got an idea, but let's go get confirmation on.
the best way to get confirmation is hanging around somebody who's doing it.
A lot of people, Jasper, a lot of people, and you're a sharp young guy. So I'm trying to keep you from doing this. I feel like a lot of, a lot of people, a lot of people go to school to hide from life and when my life isn't working and my job, and I hate my job, I'm going to go to school to see if I like. it is code for, I'm going to go over there and hide for a little bit because my life has sucked driving this truck. I don't want you to hide.
I want you to embrace it. I want you to stand on the mountaintop and freaking roar. I want you to step into this, whatever it is, with gusto. I mean, somehow, when you were making the decision to be a truck driver, you didn't realize you were going to be gone all the time. You kind of missed that part and now you hate that part.
So, um, I really would not go to school until you are a thousand percent. Sure. The school is the only way to get to be the thing you want to be. And it's not where you go to discover yourself at 28 years old. All you will discover there is student loan debt.
That's right. So sell the car and begin to put together a process of discovery to see where you need to land, and we'll participate.
I'm going to give you a free copy of this. This is a nice gift I'm giving you. It's the get clear career assessment. Hang on. And Austin, the team will pick up.
We'll get you signed up for that. Take that. And then you can even call Ken back on the Ken Coleman show. If you want to go to Ken Coleman.com, he'll help you with the whole thing. But you gotta, you gotta figure out a very clear, wise adult process of discovering where you go next.
Kids, children go to school to discover themselves. You're not a child anymore. You're like a full grown man and stuff. So you don't have that option anymore. You now need to be wiser than that.
Kids should be too, but you need to be wiser.
That's right. And just to, just to land this, for a lot of you out there that are listening and watching, thinking through this, there's a difference between interested, Dave, and invested. And, and what I'm interested is great, but I gotta know enough about it. to where I go. ding, ding, ding, and the tuning fork inside your chest goes, that I want to do.
And, and that's the difference. Interested. Yeah, that's great. But I'm not going to make a decision until I've tasted enough of it, seen enough of it, heard enough of it to go. I want to invest time and money for the future.
It's a big deal. Go, test it first.
Yeah. Go, sell your car either way. Yeah. This is the Ramsey show.
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Ken Coleman, Ramsey, personality is my cohost. John is with us. John is in Chicago. How are you, John?
I'm doing well. How about you guys?
Better than we deserve. What's up?
So I appreciate you taking the call, but, uh, kind of in a little bit of a blender here, and that's why I'm reaching out. But essentially I got about $76,000 student loans. Um, 63 of that would be private. 13 would be federal. Um, I can give you the interest rates if you want those, but, um, currently making around $45,000 a year.
I graduated from school with a marketing degree. So I'm working at a marketing agency. And, uh, it's going okay. Not necessarily enjoying it as much, kind of doing a half role of sales, half role of internal, uh, optimization for kind of Google ads, campaigns, et cetera. Um, coming to have learned, I do not like the sales aspect of it at all, but.
Starting to cross my mind. I should probably start looking for probably better jobs, because there isn't really a lot of room to grow. And after asking for some help and training, my bosses haven't really given me that time to do that. So kind of the situation there. Um, but essentially I got a, I'm just going to lay it all out.
Sorry for rambling here, but got a, got a car that I bought off my grandma. Um, it's got 135,000 miles. It's kind of reaching the end of its life. So it's currently in the shop today. I actually had a flat tire.
What kind of car?
It is a 2005 vehicle Sabre.
Okay. Start, um, flat tire is not the end of a car's life. It's the end of the tires. Yeah. 135,000 miles on a car is not that much today.
No. So they usually reach the end of their life somewhere around 335,000.. But, um, um, and grandma took better care of that car than you have. So she, you're probably in pretty good shape. So what do you make?
So I make around $45,000 a year right now.
And you just got out of college with a four-year degree in marketing.
Correct.
In Chicago.
So I'm living, I'm an hour outside of Chicago. I'm in Indiana, but, uh, halfway hour drive around the lake.
Yeah. And you've been out of school. How long?
I graduated in 2022.
. Um, I played golf in college, and so I gave professional golf a shot.
And how long have you been in this job?
I've been in this job for about nine months.
Okay.
Yeah. It's entry-level. I'm guessing a small marketing agency. Is that true?
Correct. Yep. About 10 employees.
So that's part of the issue. Uh, I'm just going to address really quick the income, cause I can do it in 20 seconds. Uh, you need, as a young guy, unless you're married and you're anchored with kids and all that, you need to be looking at a much bigger market. And I'm talking about a city where the marketing agencies are bigger and there's room for growth. And there's a good chance you might get about a 10 to $15,000 bump, uh, just by simply working at a larger agency, uh, in a bigger market, I think small-town Indiana is not the place to grow a marketing career.
No, I agree with you there.
Yeah. So that, that, I think, you know, addressing the income side of the equation, yeah, you're not making much for, for a mark for your marketing degree. Overall. No. Um, you know, if you were, if you told me you were making 75,000, I would tell you, quit your whining and go to work, but I'm, but I'm tending to agree with you right now, because I think some of the lack of attention you're getting is also symptomatic of the fact you're in a very small firm and they're just stepping and fetching, trying to make payroll on Friday, bless their hearts.
That's right.
Yes. Yeah, I agree with you there.
So I don't think they're, I don't think they're bad guys. They're just not large enough to have the income to pay you much, or to be very sophisticated in their leadership development tracks.
Yeah. And so I, I know, I'm, and I've learned all throughout college and growing up from family, friends, and everyone to always, you know, start working away at your 401k early, so no, you got it.
You get, you're, you're right now, you're. whoever told you that's wrong. You got to get this debt gone. But so what I would have you do is get up, you know, talk about your income side of the equation. We call it the shovel to hole ratio.
You have a $45,000 shovel. You have a whole, uh, you know, it's like 80 grand, 70 grand. Right. So, you know, that, that's, that's a pretty big ratio. So I would do what Ken's talking about.
Let's talk, talk about changing jobs, getting our income up. If it means a move, so what go? do it go. It's an adventure that nothing is forever. So go, give it a run, go, make some stinking money and don't do anything.
Don't buy a car on payments. for God's sakes. Drive that Buick until it lays down and dies, not as a flat tire. And then, then let's get, let's get rid of this $80,000.. So let's pretend you were making 80 K and you lived on 40, you'd be debt-free in two years.
And if you lived on a 20, which is beans and rice and you worked a side job, then you'd be out of debt in like one year.
Wow. Okay.
John, I'm going to shoot you straight, uh, rough math. What do you have to do to be able to put three grand a month away at debt? And that's going to get you right at the two year mark on the 76,000.. It's going to get you. that's quick math, but that's realistic, right?
What do you have to do as a young guy who's single, to be able to put three grand a month towards the debt? That's 36 K a year. And you're basically there two years, three words, three words.
with one of them, hyphenated. No more happy hour. That's a, that's it. You'll be, you'll be, you'll be working. now, John, you'll be working.
We're going to clean up this dadgum mess. Cause. when you don't have any debt, then you build an emergency fund, then you buy you a better car. And then we start looking around to see how we can start our 401k and build the adventure that is called your life. You're a sharp young guy.
You got a lot, a lot of upside, my friend, a lot of upside, and we're here to help you. Thank you for calling in. Nick is with us in Connecticut. Hi, Nick. Welcome to the Ramsey show.
Well, thanks a lot. I appreciate you taking the call, guys. I've been a long time listener. Sure.
How can we help?
Oh, well, just quick question. I just, um, sold my house about a week or so ago and there were income, property rather, and I'm renting right now in a different state, moved here for a job. And within the past couple of hours, I just paid approximately a hundred thousand dollars of debt off.
Good for you. That's fun. Wow. From your, from your equity in the sale of the income property.
It was this all the equity plus. I've been working like a dog the last year.
So just so you wrote a check. Are you debt free?
No, not yet.
Oh, how much debt have you got left?
I knew my wife has a total of about $110,000 student loans left. I have about 80 of that. My wife has around 30 of it.
But you cleared off a hundred more than that today. So you were 210 before. Wow. That's gotta feel like you, like you lost a bunch of weight or something.
I feel pretty great about it, but that's what I want to keep the feeling. And I just wanted to pick your brains about, you know, I've been living in the new area for about a year and a half and we've been renting, and rent is extremely high in this region. Um, and since we're going to kind of get it, we're looking into possibly getting another house. And I am a veteran. I have the VA loans and the rent would be equivalent to what I would pay for a VA loan pretty much right now.
But here's the thing is, I don't have the down payment for it. And so my question was, would I, should I rather, or would I be better off paying off the student loans?
Yes.
And okay.
You, you've been listening a long time. You knew what I was going to say. Uh, yeah, but I've never told somebody to buy a house who had $110,000 worth of student loan debt in 32 years. Yeah. Ever.
I just haven't. And so I don't want you to know. And it's not about the monthly rent today. It's about what is better for you 10 years from today and buying a house. When you're a broke person, you have to buy an extra bedroom for Sally Mae, for God's sakes.
And so, no, you can't do this. You got to stay clean. I know rent's high rent as cheaply as you possibly can. Cause rent is throwing money away for the short term to be able to win in the longterm. It's a price we pay to win longterm.
And so I want you to just rent as cheaply as you can. I want you to get out of debt as fast as you can, work as many jobs as you can, spend as little money as you can and get out of debt as fast as you can. So that you can buy a house as fast as you can without any debt. When you're debt free and you have your emergency fund, then I would save up my down payment and I would buy a house. I would not do it.
I know. I mean, you just spent all your equity money paying off debt. So you're trying to get out of debt. If you were, if you're that Jones in the buy a house, you could have stayed in debt, all that debt and turn around, use that a hundred thousand bucks to buy a house. and you knew that wasn't the right thing to do, you knew, but you should pay it on debt, but now it leaves.
you broke no money and still got 110 to go. So that just keep plowing, man. You're doing the right thing. Don't quit. You knew what I was going to say.
You said, I've been listening long time. listener. I heard you when you came on the air. And so you knew exactly what Ken and I were going to tell you.
So you're telling me there was a chance, no chance, none.
This is the Ramsey show.
Live from the headquarters of Ramsey solutions. It's the Ramsey show where we help people build wealth, do work that they love and create actual, amazing relationships. Ken Coleman, Ramsey personality, host of the Ken Coleman show and author of the number one bestseller paycheck to purpose. And another one called proximity principle. He's my co-host today.
Open phones at triple eight. Eight to five, five, two, two, five. Dallas starts this hour off with Pat. Hi, Pat. How are you?
No, I'm a strategy. How are you?
Better than I deserve. What's up?
Um, I was just calling and appreciate you guys taking the ball. Um, I am just wanted to get your take and your opinion. Uh, I listened to a lot of your shows and, uh, snippets here and there and, uh, about shared finances and which is, you know, how I grew up in my, in my life, my parents, you know, one, one bank account, one finance, uh, one checkbook, so to speak. And, um, I am, uh, currently about to, uh, propose to, uh, my soon to be fiance. And we, you know, we have sat down and talked about a lot of the life goals and kind of how we want to raise our kids and how we want to manage our life and everything.
And sometimes we, uh, kind of buttheads on finances and, um, sometimes, I guess I feel I'm, I'm about 11 years older than she is and, um, have worked very hard to get to the point I'm at now. And, uh, I worry about, you know, is there some steps that I should take from, you know, possibly getting a prenuptial agreement to for assets that I have now. And then also a big question on, you know, um, I'm currently building a house and about to move into that. And then if, if we were to pay for that house out of shared finance, but it's in my name, it's kind of felt like muddy waters, something where it ever happened online, or, you know, of course, that's never the goal, but just, um, how to approach that? and, uh, make the best decisions going forward.
What's your net worth?
Uh, probably about 1.
7.
How old are you?
I'm 38.
Okay. Which makes her 27, right?
Uh, yes, sir. Okay. She's about to turn 27..
Right. How long y'all been dating?
Uh, about a year and a half now. Okay. All right.
What's the nature of butting heads over finances discussion?
Um, I guess when I think about kind of, you know, I had bought some property and, uh, held it for a while, and now I'm building this house on it and just, I guess, going forward, should I pay for the house and, or should she help out? She just concerned that it's not in her name, or, you know, yeah, yeah.
Not a whole lot.
Uh, we have different thought processes on, you know, vehicles and I'm, I'm more of a, I've had a couple of cars in my lifetime and she likes to lease cars and kind of do things that way. Um, I've always kind of been more over the, I'll, I'll drive a car for seven, eight, nine, 10 years or, or something before I change, make a change.
Okay. Um, well, here's what I want you to get to the bottom of in your pre-marriage counseling or pre-engagement counseling, whichever one you decide to do.
Okay.
Um, the house disagreement is a valid thing to argue about, and we can talk through that in a minute. That's, let's set that to the side for a second. Um, you don't borrow money. You're a cheapskate and you drive a car forever, and she likes new things and nice things, and she doesn't mind going into debt, right?
Okay. Yes, sir. For the most part, she is very good with her money, but no, she's not.
People who lease cars are by definition, not good with their money. It is the most expensive way to operate a vehicle and it's the inability and immaturity to say no to myself. So I go buy whatever the flip I want. Cause I'm an immature child. That's who leases cars.
Okay. Regardless, if you're 53 or you're 27, because you just want to buy something. It is the least down, the least a month and the worst deal to get a new car that you can't afford. So this is who leases cars. So no, she's not good with money, but can we talk through that?
To her defense, she, she just recently purchased one, about a year, like eight months ago, cause I kind of told her, I was like, man, I feel like leasing money is a good way to waste a lot of money, but, so I think she's trying to make good decisions, but now she leases it, or more, no, she bought, she bought her last one and pay cash, but no, no, sir, she has payments. Okay. Okay.
So, I mean, I. I'm resting my case here. So here's the thing. If I will not delay pleasure to win, that is the definition of maturity. So I'm willing to save up and pay cash for things.
I'm willing to drive things longer to get the full value out of them and pay cash for them. Thus, you have a $1.7 million net worth and she's broke. Okay. And that's not to put her down. It's to put her actions down.
All right. And so that is what's concerning me about the marriage, not your 1.7, and not who gets their name on the house. Because the number one cause of divorce in North America today is money fights and money problems. You're not likely to have money problems, but you are very likely to have money fights because either she's a great lady, which we suspect she is. Cause you want to get engaged to her, who has some minor adjustments to be made and needs to learn, understand some things she doesn't understand about money and move along the spectrum a little bit to move into wisdom.
Or she's a freaking princess and you're going to spend the rest of your life trying to keep this woman happy. Yep. She's one of the two.
I think it's, I think it's too, Pat. No, I'm going to tell you why it's not. You called us asking us if you should protect your money, because, deep down in dark crevices of your mind, when you're laying awake at night, you are afraid that she might be a princess. And, and that's the truth. I'm going to, I'm just going to tell you, you don't call an asset.
There's a percentage chance.
I didn't say she was going. I'm saying he's worried that she might be. And to your advice, Dave, Dave's advice is right. I would do premarital counseling to the nth degree and make sure that money are the first whatever sessions, because I think you're worried. And I think you have some justification as to why you're worried.
You guys are on opposite ends of the spectrum on money.
Yeah. So that's what you've got to solve for the sake of your marriage. And no prenup in the world will solve the disagreement. That's right. You got to get on the same page.
You got to get aligned. Okay. And that's, that's your protection. more than a prenup. Let's change the, let's change the discussion and pretend we're at a different place.
Okay. Let's pretend we're four months from now. You guys have been through financial peace university together. It gave you some material, which I'll give you as a potential engagement gift, or whatever we call those things. And so I'll give it to you free.
You two go through that together. You two sit down with a pre marriage counselor and work through this issue. Let's say you get through that and she's solid. She's like, I get it. We're doing this.
Okay. You might look at a prenup more to protect you from her crazy relatives than her at that point, because your net worth is okay. It's not like through the roots. It's not like. you got 10 million, you got one.
And, but the house, if you're going to ask a lady to share your bed, her name ought to be on the deed. Correct. Right. Yeah. She's right about that, but you've got a reason for not putting it on there right now, you got to solve for that reason as a marriage thing, and then put her name on the deed.
And if you want to do a prenup or not, it won't matter on the other stuff. That's what I would do. Hang on. I was going to pick up. We're going to put you through financial peace university.
Ken Coleman, Ramsey, personality. Number one, bestselling author, is my cohost today. Jane's in San Francisco. Hi, Jane. How are you?
Hi, thank you for taking my call. I'm going to make this, try to try to talk real fast. My brother and I are co-conservators of my mom. My mom is in a facility, dad passed in 2020 and I'm interested in buying my dad's home, whether it's right early on to say he had a video of my, of what my dad wanted done with his home. It was a visit to the attorney, to an attorney who said, calm around to mom.
So, in light of this and what he's already tried, I want to protect myself. I've been told I need to see a probate attorney. Somebody else said, you need to see a real estate attorney. Then somebody else said, Oh, no, no, you need to see an estate planning attorney. I'm lost and I need guidance.
When I bought my, you and your brother are arguing about the house. Is that what you're saying?
No, no, not yet.
Okay. So you want to buy the house. Does your, is your brother on board with that?
Yes.
Okay.
Now he is, but he's tried things throughout the past three, three years.
Um, we were supposed to, that's irrelevant to today. If he's on board with you buying the house, will he sign as co-conservator for you to buy the house?
Yes.
Then you sign as the other co-conservator and you buy the house as conservators, your job under the law. And you can ask an attorney, an estate planning attorney, whoever set the conservatorship up can tell you this, but a conservatorship is you have a, the responsibility to act in your mother's best interest. So if, as co-conservators, you decide to sell you this house at half of what it's worth, you would not have acted in her best interest. And that sale could be undone.
Correct.
So you would have to pay market value for the house.
Correct.
Okay. If you pay market value for it and both of the co-conservators, you have power of attorney as a conservator. Do you not?
I am the main conservator. Yes.
Well, I mean, the two of you together, acting as co-conservators, can sign to move any of our assets around. You're conserving, you're taking care of her assets. Am I missing something? No. Okay.
Then the two of you signed to sell the house. It's in her best interest. She's never going to live there again. She has a pile of money to take care of her from the sale of the house. As long as she gets market value for the house, no one could object to that.
Okay. Because my brother's just pulled some things in the past. with these three years that we've been co-conservators, that I, I just don't trust in anything that he says or does. So that's why I'm wondering what sort of, why do you want to buy the house?
Um, because I live on the third floor and I'm really tired of climbing three flights of stairs. You know, anywhere from eight or nine times a day. So my, and this is a single, uh, family dwelling and I'm kind of ready to leave Silicon Valley. It's really expensive.
Where, where is the house?
Uh, it's up near, on the other side of Sacramento.
Okay. Why this house? Why not just go, buy you a house that you like and forget it?
Um, I, I just sent him a remote.
Yeah. Just cause you're fighting with your brother and you want to win.
No, no, no, no. We're not fighting.
You told me six times. I was trying to screw you. Okay. What's? I don't, I don't know where you're from.
I'm from Tennessee. We call that fighting.
Oh, well, I was here in California. It's just kind of the way people are.
That right there was worth showing up to work today.
Ladies and gentlemen, you don't get that at your mother's 401k meeting. I'm just telling you not.
no, but you have deeper sentimental feelings about this.
You need to go buy a different house, honey. This is just, you're just chasing some kind of emotional rabbit trail here. And if you want to live with, don't want to live on the third floor. So move. Yeah.
That's okay. It's not hard. There's lots of places you can live. So pick out where you want to live and go buy you a house. And then, when your mom needs to sell her house for the good of your mom, then you and your brother sell her house for the good of your mom, there's nothing here that's holding this to you.
You're. you're just chasing some ghost in the past, or something with your brother, or some kind of a thing here, some kind of gyration. Uh, I, I'm assuming there's a will in place that causes us all the assets to be sold upon her death and divvied up between you and your brother. And that's a standard probate process. You're very protected.
You're fine. I think you're good. I think you're going to have a much better quality of life. If you go buy a different house, I don't think this house is going to be a blessing. I don't think the process of getting it is going to be a blessing.
It's going to put you in too many different conflicting conversations that you don't need to be in just to get on, just to get off the third floor. Wouldn't do it. Wouldn't do it. Gray, uh, open phones at triple eight, eight to five, five, two to five. Today's question comes from Jackson in Pennsylvania.
I work for my parents' family business, which is worth over 10 million. I've been working for them since I was 15.. And we've all agreed that I am interested and in position to take over the business one day. So for now I'm in the process of learning and advancing. This is fine, but right now I feel like I'm stuck in my career when I could be making more money at another company doing the same thing.
I currently earn. Only $35,000 a year. Anytime I start doing side hustles to make ends meet, my dad gets frustrated and says he can't give me more responsibility until I'm more committed to the business. How do I balance wanting to make more money now and being content with what I'm making currently, knowing full well, I will be financially set in the future when I own the business? and my friend Jackson, you just about answered your own question there.
Um, you are not stuck professionally. You're stuck emotionally. And because you're a future owner and you're young, you're full of hope and vigor and energy, and I want it now. And I'm much older than you. And I still struggle with wanting everything now.
And I think this is a focus on the now. We win the now so that we can get to the next and you answered your own question. I mean, you have got to get to a point where you go, if I'm the owner one day, uh, and I've got some frustrations, I need to be a big boy, sit down with dad and be a man and talk man to man, owner to employee who is potential owner, and share some of the frustrations. But ultimately I think, uh, this is about learning and advancing and you can't learn and, uh, and, and, and advance and be stuck and be stuck.
And so they're not the same thing.
You're just not stuck professionally. You're set up. Your own question says, uh, I'm going to be financially set in the future. So I'll tell you from my perspective, if I were in your situation and I didn't grow up with that opportunity, you're very blessed. You should be very grateful.
And, my friend, welcome to one of the most difficult things of winning. Every person I've ever had a chance to meet and talk to or interview who was successful, they learned how to deal with the tension between patience and persistence. You got to get up and you got to show up, and you keep getting up and showing up. Eventually you go up, but there is a tension between patience and persistence, and welcome to the game.
I completely agree. And, um, you know, lean in, work harder, but I think it is fair to have a conversation with your dad. One of the rules we teach when we're teaching an entre leadership, and we believe it at Ramsey, we've made it true here, uh, the Ramsey kids, the family members that work inside of our business, get paid market value for their position. No more, no less. So Rachel Cruz has the exact same pay schedule royalty on her book that Ken Coleman does on his book.
Now she might sell more or less books, but she's in the same royalty schedule. And so she doesn't get any leg up. She can get double royalties because she's a Ramsey and she doesn't get half royalties because she's a Ramsey. We don't need slave labor here just because they're in the family. So if you're worth in the marketplace more than 35 for that position, your dad ought to, your, your company ought to pay you market value, not a dime more, but not a dime less.
You got to be paid for the position. You are not for family. You shouldn't be cheated because your family and you shouldn't be overpaid because your family. And then from there you work on the transition, the succession plan, the learning and the processing and the growing. And, um, we've got three Ramseys that work on this team.
All three of them are paid exactly that way. Not a dime more than market value and not a dime less. And that's what they've always been paid. when they came out of college and they were just worth nothing. And it took a little while to get the college knocked off of and make them valuable.
They got paid what we pay a worth nothing just out of college student. And then they get the college knocked off of them. They're worth more and we can pay them more. And that's true of everybody in this team. This is the Ramsey show.
Well, it's national financial literacy month this month. So what are we going to do? Well, we're going to celebrate teachers, teachers of all kinds. The teachers of America love our kids. Well, they work hard.
They're helping to shape the future by making sure our kids get the education they need to succeed with whatever life throws at them. and here at Ramsey. We want to say thank you to our teachers out there. with the teacher appreciation giveaway sponsored by Ramsey education. One teacher will win a $5,000 vacation, plus two additional teachers will each win a $3,000 vacation to wherever they choose.
It's completely free and no purchase necessary. For more information, just go to Ramsey solutions dot com, slash teacher. Ramsey education, of course, is the arm of our company that puts high school curriculum out there on personal finance, called the foundations and personal finance curriculum. It's taught in most of the states. in the United States.
Now, 48% of the high schools in America have taught it at one time or another, and almost 10 million students have been through it. So we continue to have great teachers out there teaching that. We say thank you to you and all of you that enter the classroom at your own risk these days. Thank you for doing that. You get combat pay.
Oh, my gosh. So, hey, a couple of vacations, a $5,000 and two $3,000 vacations are out there. Ramsey solutions dot com. slash teacher. No purchase necessary.
Go and register and spread the word to other teachers that you know that they should register as well. Somebody is going to walk away with those. Grace is in Washington, D.C. Hi, Grace. Welcome to the Ramsey show.
Thank you for taking my call.
Sure. How can I help?
So I purchased a home in 2022.
Right now, I well, I've made a decision to rent the home. I'm currently living with my mom and grandmother. The home needed that will need some repairs. I've put some work into it thus far, but I need about 20 to 25,000 more dollars to complete the repairs to get it rentable.
My question is, why are you not living in it? Well, because I live with my mom and my grandmother, my grandmother's 95, so my mom and I are kind of taking care of her together and then just joint economics. At this point, I've been with my mom for this long and it's kind of just works out this way.
You used to live in the house, though.
I did it. No, I have not lived in the house.
You've never lived in the house.
I've never lived in the house.
Yeah. So now I have, like I said, I'm need about 20 to 25..
So you live with your mom because you don't have any money, but you bought a rental house.
No, no, no. I bought the house. I'm paying the mortgage on the house.
I know you bought a rental house.
Yeah. Yeah.
But you live with your mom for economic reasons.
I didn't have a plan of what the house. I really stumbled upon it. Got it within 30 days. And then it was just like, OK, you secured the property. Now what's next?
Yeah. So I kind of grappled with what to do. So I had to move in or not. Sell it.
Sell it. You're too broke to be a landlord. You don't have any money. You live with your mother.
OK, but I could live in the house if I chose to.
Yeah, but you don't choose to because you have economic problems.
I wouldn't say I have economic problems.
That's what you did say.
My goal is to rent the property to make money, because D.
C. is a really hot market. I am comfortably living with mom, paying the mortgage, getting things done there, and plan to rent the house. that will pay for the mortgage. And I can save.
Maybe I'm misunderstanding. Let me let me back up on time, OK? Because maybe I'm missing something. I thought you told me you lived with your mother for economic reasons, meaning you don't have the money to live in the house.
OK, that's not correct.
Because what were you saying when you said economic reasons?
Well, because I've been here and I've just been able to save while with my mom.
That's not an economic reason. That's just I want it. OK. Yeah. What do you make a year?
What do you make a year?
I make ninety six thousand a year.
OK. All right. And so you don't have the twenty five thousand and you make ninety six thousand a year. And how long has the house been sitting empty?
Coming up on two years in June. Why? But all this time I've been making repairs, I'm repairing, I'm doing repairs on the home, so I have a few more thousand dollars needed to make those final repairs and get it rented.
Is, are you saying it's in it's uninhabitable, habitable, meaning that you can't get anybody in there until all this is done? The twenty to twenty five.
Well, I needed maybe about ten thousand to make it habitable. The house was habitable when I bought it. It just needed cosmetic update. The biggest blow was I needed to put it in the new HVAC system. That was the biggest blow thus far.
But other than that, it's cosmetic. The reason for the delay, to keep it short, I'm working with a contractor who was working with me, so I'm working with his schedule and it's it's kind of like just a slow process.
Yeah. What do you do for a living?
I work in disability rights.
OK. I've been buying and selling real estate since I was 18 years old and I'm sixty three. I own several hundred million dollars worth. I love real estate. Real estate is not a magic silver bullet to make you OK financially.
And you have bet a ton of your emotional life and too much of your financial life on this one rental property. And it still has sat there empty for two years.
You suck at this.
You've got to get better at being a landlord and managing the project. Let me tell you, if I had that house, I don't. I'm not working on any contractor schedule. They freaking work for me. They're working on my schedule.
You better get the dadgum thing finished because I want rent. I'm not sitting here paying payments on a stupid thing for two years and collecting no rent because some contractor can't get out of his freaking pickup truck because he's hung over. Come on. This is stupid. You got to get this thing finished.
And so you've got to increase your landlording and project management skills, or you shouldn't be in the business. I really think you should sell this house. I really do, because I don't think it's as big a blessing to you as you think it is.
OK. I really think that. And then take the pile of money that you get from it and decide what you, where you want to be 10 years from now and where you want to be living 10 years from now, and what kind of life you want to build. But I would never tell someone, as their financial coach, to go buy a rental property while they're living with their mom.
So what if I decide to move into the property? Because that's, that's on the table as well.
OK, then fix it up and move into it and have a life. But get that done now. Not two years from now. When you do that immediately. So what is the house payment?
The house. payment is 36 a month.
Thirty six hundred dollars a month for two years. How are you not just screaming?
Because I'm, I'm, I'm comfortable. I mean, I'm able to pay the bills. Exactly.
So here's the thing of this house.
It's not going to make you the money you think it's going to make. You know, what? do you think you could? Let's, by the way, you don't have the money to actually fix it up. That's why you called.
You don't have the money to actually fix it. Twenty to twenty five thousand, correct?
Correct. But you're right. And I think even with this extra point, you're still going to be right. I was really calling to ask about pulling from a previous employer for one K. I have 48..
That's an easy.
That's an easier answer. OK, I don't have to get that one. I think I can actually convince you of. OK, so let's try this. If you pull money out of a 401k early, before you're fifty, nine and a half, you get charged a 10 percent penalty plus your tax rate.
Your tax rate is 30 percent at ninety six thousand. And so you're going to get taxed. Thirty plus ten is 40 percent of the money is going to go to the government in taxes and penalties. If you cash it out, never use a 401k for something like this. It's like calling and saying, Dave, I want to borrow money at 40 percent interest to finish the house remodel that I've been working on for two years for a house I don't live in.
No, absolutely not. Please, for your sake, not because I'm trying to be mean to you, because I don't think, because not because I think you're an inept person. I don't think you're an inept person. I don't think you're good at this. This landlording and rehabbing stuff, you've proven it.
Your track record is horrible. And so, for your sake, sell this house. And when you get ready to buy something later, buy something that you can just move in and that you're going to live there and you're going to build a sustainable life for grace. That grace looks up 20 years from today and says, gosh, I'm really glad I bought a house. It's been a great place to live.
I've made some money on it. I've been able to manage the cash flow on it. But I mean, you're sitting over there with mama and grandma doing nothing. Please don't borrow money at 40 percent interest. Please sell this house for grace's sake.
Not going to affect me at all. This is the Ramsey show.
Ken Coleman, Ramsey personality, is my co-host, open phones at 888-825-5225.
. You jump in. We'll talk about your life and your money. Mike is in Los Angeles. Hey, Mike, welcome to the Ramsey show.
Thank you so much for having me, Mr. Ramsey. How's it going?
Better than I deserve. What's up?
Um, well, my wife and I have been doing, uh, we're, we're okay. Uh, I think so. Anyways. Um, you've got about 200 and savings. Um, our house is value that probably around 850, 875..
We owe 400 on it. Um, we have a business. We work for ourselves, uh, as a contractor. And we recently inherited, um, some money as well as some property and looking for some direction on where to go with the property. Um, it's a multifamily property, um, across the country, in New York, as well as, uh, several mortgage notes each month.
And we're not sure if we should liquidate the mortgages, sell the, sell the building and move closer to home. Um, that's, that's kind of where we're at.
Wow. What do you make an optional home?
Um, it varied between one, 50 to 300.
Okay, cool. What, what, uh, who passed away?
Uh, father-in-law.
Okay. All right. How long ago?
Nine months ago.
Okay. All right. I'm sorry.
Uh, so, um, he obviously was a real estate guy.
Yeah.
And, uh, so he has mortgage notes that he had taken back on property owner financed, and so he's, was receiving payments. That's what you mean?
Yes.
Okay. And, um, what's the total face value of those?
It's about two, 20.
. Okay. Well, it would be about three, 40, and then we've got some pricing to sell them all.
Okay. So the discounted value is, is the actual market value is two 20, if you sell them, but the face is three 40.. Yeah.
It comes in about, yeah. And it comes in about 2,500 a month, and it just seems like we'd be able to probably do something a little bit more, but we're not living off of that money. Anyway, we'll just go with right in the savings and we're not touching it. Like, gosh, well, in 10 or 15 years, when he's fully mature, we'd be able to do a lot more with the lump sum today.
Yeah. The, um, the apartment complex, what's it worth?
Uh, 1.
4.
Okay. What's owed on it?
Nothing.
Okay.
All right.
So a good way to help you answer these questions, and I use this with assets. I use it with income. I use it with everything. Anytime something lands in my lap. or might, I ask myself, okay, right now, 1.4 plus 220,000 is 1.6, two.
You with me?
Yeah.
Okay. So if you had a million six cash sitting in the middle of your kitchen table and you and your wife are sitting there looking at it, would you go buy $340,000 worth of notes for two, 20 and an apartment complex in New York? The answer to both questions quickly would be no.
Correct.
Correct.
Now that's called a sunk cost analysis. And, uh, what it does is it makes you critically think only about the future, not about where the stuff came from. The reason you would not go buy those things there is the same reasons you would sell them now is because you don't want to manage something from Los Angeles to New York called rental property. That sounds like a disaster. And what you said, I think I can take two, 20 and do more with it than receiving these payments over the next 15 years.
You were correct on both things. Now, the trick is for you and your wife to have a clear discussion about. this is to talk about, we have $1.62 million sitting in the middle of our kitchen table from your father. What an incredible legacy he left. What an incredible job he did.
How nice is that? How wonderful is that? Now, do we want to go buy an apartment complex with it in New York? And some mortgage notes.
All right. You see how that changes your thinking?
Yeah, yeah, absolutely.
It makes you sell both of these instantly.
Sure.
And, and so I even do this, we used to do this with sellers when I was selling real estate for a living a thousand years ago. So if a guy had a $200,000 house on the market for $200,000 and someone offered him one 90, he'd be going, I don't know if I want to take that or not. And I said, wait a minute, wait a minute. Your house is sold for 190,000.. If you had 190,000 in the middle of this table right now, and you didn't own this house, would you come buy this house for 190??
No. Well, you're getting ready to buy it back. If you counter offer.
If you jack around with this buyer and run him off and you raise the product, try to get that one 90 up, you're buying the house back for one, 90 to five. when you screw around with them, it's the same thing. And so you got to decide, you know, what is it? I want, do I want the money or want the stinking house? And in some cases I look at the thing and I go, well, I like the thing.
I'll keep the thing. Yeah. If I didn't own that for that price, I'd buy it right now. So then, then you should keep that. Right.
So if you're like, man, we're thinking about living in New York and we wanted to manage these rental properties, we're going to pull up roots from California. We're heading out and, um, you know, we're going to live over there and we always wanted to have this. Of course I would buy it again. Then you would keep it.
But long distance landlording multifamily is. that's like getting shot in the head. Don't do it.
This is exactly what it feels like.
Yeah. It's a bad, it's Russian roulette, man. I mean, you're just asking for it.
So second question, where to allocate it? Where are we moving forward with it?
We've, the only debt you have is a mortgage, right? Yeah. I'd pay that off tomorrow. So now we got 1.4 again, right?
And then we also, then we have some cash in savings as well. Okay.
So now you got 1.
4 plus the cash. What are we going to do with that? Well, then, there's only one thing. The only thing left to do is be unbelievably generous, enjoy your money and invest your money. So what do you guys want to invest a million dollars in?
We'd assume real estate.
That's up to you. I don't care. Some people don't need to do real estate. Some people love real estate. I love real estate and I love mutual funds.
That's the only two things. I put money in, but you can do whatever you want to do. It's your money, you know, you, but what do you want? to invest a million dollars because you don't want to leave it sitting in a stinking savings account.
No, of course not.
So you're a hundred percent debt-free. You got 200 in the savings, plus a million, you know, you pay off. the mortgage is 200, but it's about a wash. And so you end up with about a million, six, clear, give or take. You got some expenses on selling the apartment.
Let's call it a million five. So I want to label some percentage of that money, an exact dollar amount, you and your wife discuss it, that we want to be generous in father's name. I want to do something in his name. What did he love? He loved wounded veterans.
I want to, I want to go help one of them furnish their home. A gold star family lost somebody in the military. We're going to go take care of them for a year, whatever. Label some money for generosity, label some money for hungry kids. If that's what he was into.
I mean, what is it that, you know, that kind of is in his honor? Let's be generous with some of this. Let's invest most of it and let's enjoy a chunk of it. What is it? Your wife needs a new car, a trip, a cruise.
I don't know, but some of this money ought to be spent on that. It's a bit extravagant, but you came into a million, six, so you can do a little bit of extravagant. Okay. You just can't do a million dollars worth.
Got it. Yeah. Yeah. And we're, we're pretty frugal. I mean, we shot the salvation.
You've done a good job till you got to here. So yeah, I know that. I think you've done a really good job.
Still working hard. You know, we just look at the numbers.
What does she drive?
Uh, 2016 minivan.
Buy her a car.
Toyota, Toyota, Sienna.
Buy her a car. Yeah. Okay. You're a millionaire. She needs a better car.
Okay. She needs a better car. What trip is? she always wanted to go on, but hardly talks about it anymore. Cause she doesn't think she's ever going to get to go.
Yeah. All right. Start thinking like that. We'll talk about it.
Because I mean, all I'm spending here is less than a hundred grand after we do a bunch of dreaming. And you still got tons of money to do everything else. Yeah.
And a simple decision, Mike, just a little Jewry, little Jewry, you know,
something shiny foot on her finger, you know, what you're doing is just a.
Southern accent. I'm bored. I guess. I don't know the Jewry.
I'm boring him.
No, you answered that one.
Great.
I didn't have anything to add except for buy something sparkly for her and some jewelry. Just small.
Yeah. It's, enjoy this. Yeah. Enjoy, some of the money is big. Be generous with some of the money, invest most of the money.
And that's what you do at baby step seven. You live like no one else. So later you can live and give like no one else, by the way, if you guys are smart with this, the million, he leaves you guys, I'll be worth 30 million. When you retire, this is the Ramsey show.
Live from the headquarters of Ramsey solutions. It's the Ramsey show where we help people build wealth, do work that they love and create actual, amazing relationships. Ken Coleman, Ramsey, personality, number one, bestselling author of the book paycheck to purpose, is my cohost today. Open phones at 888-825-5225.. Today we have launched a companion piece to Ken's get clear career assessment.
Almost a hundred thousand people have taken the assessment and we are launching the presale on a book called find the work you're wired to do. Included with the purchase of the book is the assessment and this book will go on sale. presale today. You'll get the audio book and the ebook with it and you'll get codes for the assessment with each of them. So that's a pretty good deal.
Uh, it's a great bargain actually. Um, it's like $200 worth of stuff for buying a book, but the book comes out actually May 7th and the book goes on sale today, presale Rachel Cruz. Also, we're launching the presale on her new children's book today. It comes out in two weeks, on April, the 16th. I'm glad for where I am.
Absolutely incredible kids books. Um, this is the second in the series. The first one is I'm glad for where I, I'm glad for what I have, which was about contentment. This one's about gratitude, about the gratitude of home. And so for teaching the kiddos, contentment, gratitude, these are excellent things to teach the kiddos.
If you teach the little ones that that's the opposite, opposite of entitlement and it puts them in a completely different position. They're the ones that say thank you and mean it. Please. And mean it. manners comes with gratitude automatically.
And that's why we teach manners at the Ramsey house. Kind of old school. I know, but Hey, you, that's not what we do around our places, man, sir. Yes. Papa, Dave, sir.
This is how we do it. We honor, respect, gratitude, contentment. These are character qualities of people who live quality lives. And so we want to teach the kiddos, all of these things as we go along, be sure and check them out. Ken, I'm excited about this new book.
Find the work you're wired to do.
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