It's Not a Math Problem, It's a Me Problem
2024-04-18 01:55:41
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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. Jade Walshall, Ramsey Personality, is my co-host. Open phones at 888-825-5225, that's 888-825-5225.. We're glad you guys are with us. We're here to help you.
Jade is a Ramsey Personality and best-selling author of the book, Money's Not a Math Problem. It's one of our Ramsey Quick Reads, which means it is 74 pages long. Is that right? Yeah, look at that. Pretty close.
That's pretty good. 70 close. It is 74 pages long. Look at that. My memory's impeccable.
Steel trap.
That's it. That's it. Hey, thanks for being with us, guys. We're glad we can serve you. We want you to be here and, gosh, help you move to the next level in whatever you're doing.
All right, Rochelle is in Houston, Texas. Hi, Rochelle. Welcome to the Ramsey Show.
Hi. Hi, Dave. Hi, Jade. Thanks for taking my call.
Sure. What's up?
I just wanted to get Dave's input on a situation. So, my husband and I, we have four kids. We're a blended family. I have a daughter. He has a son, and then we have two boys together.
His father died, and he inherited some land from him. It's family land. And so, when we are talking about inheritance for our children, he wants, and understandably so, the land to go to be split between the three boys, because he wants to keep it in his bloodline. And so, I am fine with that, but where we disagree is on how to do inheritance for my daughter. He thinks the land should be not even taken into consideration when we do inheritance.
So, monetary value, et cetera, shouldn't matter.
And so, what we're kind of looking at is actually selling our current home and then using the money that we make to move to that land and then build on it, in which case we would live out the rest of our days there and put our money into it. And I think that that also should be taken into consideration. But he thinks that the boys should get the land split between them, and then whatever else inheritance we have left should be split equally between all four kids. And so, I just kind of wanted your opinion on that.
Wow.
Does it occur to him how hurtful it is when he says that?
I don't think so.
If you said, that's hurtful, you're a butt.
I haven't said that. I try to talk very nicely to him. I know.
But that's what my wife would have said, I'm just thinking.
And it is, it's very sentimental to him, you know, his dad is his best friend.
Yeah, yeah, yeah. And Cinderella has to go, the stepchild has to go and mop the floors, while the three other ones go to the ball.
I lost you.
Are you there?
Yeah, you cut out. I don't know what happened. Sorry.
That's okay. But, like I said, I don't mind them getting the land. That's totally fine. It's family land.
How much land is involved?
It's only about 33 acres right now. It was his grandmother's land. She sold it. And then his dad bought back this portion and was in mourning of it, surrounding it. And so my husband wants to buy back the remainder as well, if we can.
The what? The remainders? How much on top of the 33??
I don't know how much more there is that he would want to buy.
What is your personal income and what is his income?
He makes about 65 and I make about 55 right now, but we both increase pretty regularly every year.
How old are you guys?
36.
Okay.
Right.
Well, I don't know that our opinion really matters here, because Bubba's made his mind up.
Yeah.
I just kind of wanted to know if I was in the.
. No, I think that probably what you've got is a situation where you need to sit down with your pastor, marriage counselor, or somebody like that.
It is a thing to require some thought, but after just listening to you.
. So here's what I've got, okay? You make half the money in the house, approximately. You guys are going to be married and living there probably 40 years, so more than three quarters of your life, his life, is going to be spent doing things together here. Mm-hmm.
Mm-hmm. And including your daughter, and so I'm just calling BS. I think these four kids should be treated equally, because your connection to it. Because he's wanting you to use your income and help him buy a house on land. he doesn't want to leave to your daughter.
Mm-hmm. After 40 years.
How old are the kids?
My daughter's 14, my stepson's 13,, and then our twins are two.
Yeah. What a wedge.
Yeah.
Yeah. Yeah. And that's thing one. Thing two is people and relationships trump stuff.
This kid is more important than this piece of land. And he's her daddy now.
And she lives with y'all, right?
Yes, she does currently, yes. Yeah.
His relationship to her is more important than 33 freaking acres in Texas.
Okay. I just don't. ... I would give him about a 20% part of the right answer here, and about 80% wrong, so he loses.
I feel like a different scenario would be. you guys were 55 years old. It was your second marriage, and the kids are grown. That feels different. Yeah, different.
That's a completely different situation with saying, hey. ...
But you're contributing the vast majority. ... You're contributing half with the sale of the house, and the building of the house, and your income for 40 years from age 35 to age 75, right? You're contributing half all the way through there, and so how your daughter doesn't get into that half is ridiculous.
Okay.
From a math standpoint, from a philosophical or spiritual standpoint, it's just a stupid piece of dirt. I don't really care where it came from. I mean, I've got some dirt that I own, that I really love, and I'd like to see my kids and grandkids playing on it. My great-grandkids, my great-great-great-grandkids, when I'm looking at them from heaven, I'd love to see them playing on that and enjoying that dirt, but I don't want it to form their life, and I don't want them to value that dirt over relationships.
Yeah. Yes. Yes, sir. Yeah.
I just .
. So I don't buy off on the sentimental crap. I got some hand tools from my dad, okay? That's sentimental, okay? They're ancient antique hand tools, right?
And so those are sentimental, but I'm certainly not going to let a wrench and a hammer stand between me and a kid that I'm raising.
That's how I put this. I agree. That's the bucket I put this in.
I agree. I agree wholeheartedly.
So if the stepkid wants the hammer, it's okay.
That's fine.
Give the other one the wrench. It's just stuff. Yeah. And I just ... I don't want to ...
So I don't think he's thinking this through. I don't think he's a butt. He's acting ... But it was kind of fun to say that, but ...
I kind of do. In this moment.
Yeah. I don't think he's a hurtful person. Like. ...
Sure, sure.
I think that's what he's doing, okay?
He's not thought of it from all angles.
But I just don't think he's thinking through the message he's sending to this teenage girl. And I don't like that message. This is the Ramsey Show.
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Jade Walshaw, Ramsey personality, best-selling author, is my co-host. today. Brooklyn is with us in Indianapolis. Hi, Brooklyn. Welcome to the Ramsey Show.
Hi. Thank you for taking my call.
Sure. What's up?
So my situation, we are currently renting one of my parents' properties. We're getting a discount on the rent.
I'm sorry, you're renting what?
We're renting from my parents. We're getting a discount on rent.
They own a rental house that you're living in?
Yeah.
Okay. And so you have cheap rent. Okay, cool.
Yeah. Yeah. And we have no debt. Our emergency fund is funded. My question is, we also purchased a rental in November.
We owe $65,000 on it. We could sell it for $80,000 or $90,000, and we could possibly pay it off by July of next year. But we're also really itching to buy a few acres and build. So we just wanted your opinion on whether we should sell it, keep it, or what you think.
What stops you from moving into it and it being your home, instead of you renting and then renting another? That just feels backwards.
I know. Have you thought about that too? And yet, that's our problem is, we do think that we may have done it backwards. Yeah.
I think so too. It doesn't make sense to be in a renter's position and then buy a house for someone else to rent. I think you're trying to get ahead too quickly. Does that make sense?
No. I agree. That's why we're... Once we sat down and we thought about it, we're like, we probably shouldn't have done that. It's only 600 square feet.
And we have two kids. So that would be really... Yeah.
Okay. So it won't fit you. So sell it. What happens if you sell it?
Yeah. Sell it and use it towards your building project.
Okay. That's what we were leaning towards. Yeah. We just wanted to... We do have...
We're concerned about the capital gains on it.
There's not going to be hardly any. How long have you owned it?
Six months. We bought it in November.
Okay. And how much has it gone up in value since you bought it?
We bought it at 70 and our.
. I just talked to our realtor yesterday. He said we could probably get anywhere from like 80, 85, 90..
Well, your capital gains inside of one year won't be capital gains. It'll be ordinary income. So it'll be at your tax rate. If you make $10,000, it costs you $2,500 in taxes.
Okay.
Whoopee.
I got you. So you're going to sell it? Okay.
Yeah. A small price to pay to get on the right side of this equation.
Yeah. It's not a big deal. So it's not like, it's not like capital gains taxes. No, I mean, it's 2,000 bucks and it's not even 2,000 bucks because it's actually... After fees.
Well, it's after all the fees and any improvements you've done to the property are added onto your basis, and then any depreciation you've done, if you depreciated it in this calendar year for taxes, that comes off the basis. So you've got what we call an adjusted basis and then the sale price minus, expenses minus. the adjusted basis is how you calculate the gain. And in this case, the gain will be taxed because it's under one year at ordinary income rather than at capital gains. And my guess is that your ordinary income is probably, you know, you may, your tax rate might be 25% and capital gains is 15%.
So the difference is probably like $300 or $400, it's not a big deal. Now we could say if it was $30,000 or $40,000 difference between the 15% capital gains rate, because it was a lot of money, okay, then we could say, wait until the one year mark to actually have the closing.
That makes sense.
Which makes you qualify for the 15% rather than the higher. So, like in my case, I'm taxed at about 40% and my capital gains rate is 20%. And so, because I might make over 400K. But still that's the difference of 20% and 20% on $200,000 would cause me to wait to close it until the one year mark. And so you would stop and think that through.
But for a couple of hundred bucks here or there, or $1,000 or $2,000 total tax issue, I'm not going to worry about it. You just need to do the right thing. And Brooklyn, I think here's the thing. I think you guys know. now, down inside of you, before you called that that was the right thing to do.
You kind of told us that. Oh, yeah. You kind of telegraphed the answer, right? And I'm going to warn you and say, you probably knew before you bought this, that you probably had that moment where you paused and went, is this really the right order? And oh no, we're going to buy rental property.
and you just plowed right ahead. Listen to that still small voice. Listen to that tightness in your chest and across the back of your shoulder blades. that's telling you not to do something. When you don't have peace about a major decision, that's God telling you not to move forward.
And most of us can go, you know what, I knew I shouldn't have done, but I did it anyway. I mean, I could tell you a thousand things I've done like that. And you just got to stop and listen to that and go, no, I know I'm not. And even though all these other voices saying do it, do it, do it on TikTok, I'm still not going to do it.
That's good.
And yeah, listen to that. Listen to that. It saves you a lot of money. Matthew's in Orlando, Florida. Hi, Matthew.
How are you?
Hey, Dave. How are you today?
Better than we deserve. How can we help?
Hey, so, my wife and I, we have a net worth together of $1.
5 million.
Phenomenal.
And we have no debt.
Way to go.
Yeah, that's great. And I have a business I own. I do car hauling here in Florida. And I'm looking to upgrade my truck and trailer. Both of what I have are pretty old.
My question is, is it okay to mix our personal money and business money? I just started this two months ago, and it's kind of...
You started this two months ago, and you bought a junk truck?
I bought a 20-year-old truck, but it's, I mean, it's reliable. It's just really old.
Two months ago.
Yeah.
Yeah. I mean, why didn't you think about that before you bought the truck?
It was kind of a, I guess it was an emotional decision when I bought the truck.
What was the emotion?
I guess it's more like a sentimental thing about it. I wanted a truck with a manual transmission. They don't make them these days at all. But I wanted a truck with a reliable engine. That was kind of like all this crazy emission stuff.
So it doesn't have any of that sort of equipment on it.
And what, now you're realizing? this doesn't work for you?
So the nostalgia doesn't work in the real world?
Well, it's not that the truck has any problems. It's just...
Okay. So here's the deal. Yes, you can do whatever you want. You got a million and a half dollars. You can go buy another truck.
Okay? There's a couple things from a business standpoint you need to think about. Anytime you're buying equipment for a business or buying things for a business, they are an expense. Right. And they lower the return, the profit of the business.
Agreed?
Agreed, yes.
And so what we teach entrepreneurs and small business people in Entree Leadership, I'll be with 3,000 of them in Dallas next week at our Entree Leadership Summit. What we teach them is to buy the least expensive equipment that will, quote, get the job done, unquote. Now let's define get the job done. Get the job done involves a layer of reliability. Get the job done means they literally have to get the cars from one point to another.
in this case. It has to be able to actually pull the trailer. Get the job done, if you're going to be in the truck,
5, 10 hours or 5 or 8 hours a day for 5 days a week, involves a level of comfort. So you end up in the chiropractor's office. Okay?
I'd also think it involves a level of time, like how long can you use it? and it's in working order.
Yeah. I mean, how much life has it got left in it? So then that tells you that in the early stages of a business, you do not buy new equipment. So you are wise to buy used equipment. Now, have you proven the business model out?
Are you making money?
I have managed to make money in my first two months somehow, yes.
Doesn't sound real convincing. Managed somehow are not words I like.
That's like barely by the skin of your teeth got through. So, you know, I'm going to keep the old truck until I get this business cooking. When it gets cooking, it justifies moving up in the quality of vehicle, but even then, probably not a brand new one.
And then the business can pay for it. Yeah.
You can organically out of the cash flows. She's right. Buy the truck. That's what I would do. It's what I do.
This is the Ramsey Show.
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Jade Walshall, Ramsey, Personality, bestselling author, is my co-host today. Well, exciting news, guys. We relaunched or launched yesterday the Live Like No One Else cruise. Yeah, baby. We're going on Holland America.
We've got the whole ship, one of the top brands out there. This is not the Walmart on the seas. This is the good ship. This is the good ship. lollipop here.
I mean, Holland America is the good stuff, baby.
Yeah, the Walmart brand, we won't call them by name.
We won't name it, but you know what it is, okay? And so, anyway, yeah, hey, this is a lot of fun. We had booked this, and our sale date was March 23, 2020..
Aye.
Yeah, when the Fauci pandemic shut down the seas. Nothing happened on the seas. And so we had to cancel the seas, and we didn't get to go on the seas. And so it was rather painful. Everyone got their money back.
Thank God no one went broke doing all this thing. But anyway, so now, all these years later, we are announcing today that on March 22nd, through the 29th, 2025, about a year from now, we will sail to Turks and Caicos, St. Thomas, San Juan, the Bahamas. I'll be on the ship with my wife, Sharon, the whole week. Jade will be with us the whole week.
Of course, all of the Ramsey personalities, Dr. John Deloney, Ken Coleman, Rachel Cruz, George Camel, all of us will be there all week. We're going to be doing events on the ship. We'll be some of the entertaining. They'll have some of the little dancing people there, too.
Oh, will they? The little dancing people. That's what I used to do. You know about these cruise dancing people.
Doing the can-can, yeah. That's it. They're doing more than that.
They'll have their actual talent, but we're bringing our own, too. Man, we've got some friends coming with us. Stephen Curtis Chapman, three-time Grammy award-winning 69 Doves and an all-around good guy. Stephen and I have been friends for a long time. World-renowned Christian artist will be with us.
Manit Chauhan from the Food Channel, Iron Chef winner. Fabulous chef. Again, a friend locally here in the Nashville area. She owns a whole series of restaurants and has done events with us before. She'll be teaching you to cook there on the ship.
It's going to be a lot of fun. Dina Carter. Remember Strawberry Wine? Strawberry Wine. There we go.
See? I knew I couldn't do that, but I knew I could cue you. You can count on me, Dave. There you go.
You can count on me.
So there we go. Dina's going to be with us. Tons more. We've got. some of the Nashville songwriters will be with us.
Comedians, illusionists, all kinds of people hanging out. It's going to be all of us and you. Now, you do not come on the Live Like No One Else cruise unless you're on Baby Step 4 or beyond. Because one through three, you're getting out of debt and you're not going on vacation and you're not eating out and you're gazelle in tents cleaning up stuff. And we don't want you to come.
We're not hypocrites. This is a celebration. So you've become debt-free. This is the ultimate debt-free scream in the Caribbean, baby. Awesome.
Yeah. So here's the problem. It's selling out. It's only been on the market one day and it's selling out. I mean, we melted the internet.
The poor cruise people, they're like, you shut us down. Your people slammed our website. That's awesome. So it is not sold out, but the VIP upgrades are sold out already. And there's just a few of the suites left.
So if you want a suite, you better jump on right this second and do it. Ramseysolutions.com slash cruise. It's March 22nd through the 29th, 2025. We're going to celebrate together a lot of on-board special events, with all of us, hanging out with all of you. We're going to be on the ship together for seven days, man.
It's going to be a blast. And our whole team is pumped about this.
They're really excited. they got me to do it again because after that faulty pandemic thing, I was scarred and wounded. I bet. And didn't ever want to be near a cruise ever again. But anyway, I'm doing it, and I'm excited about it, and it's going to be fun.
And here we go, baby. Here we go. We got quite a lineup. There's some, really, I mean, the famous people are coming. It's pretty cool.
So get your tickets now. Get the reservations done now. I know it's a year away, but if you want, I mean, cabin selections like anything else, the better ones go first, right?
You want one with a window, so don't wait.
Yeah, and all that stuff. And if you want a suite, there's just a handful left. Again, the VIP upgrades are already gone. But the suites are there. That was some VIP stuff we were doing on the boat and are going to do.
So. I don't think you call them a boat. Sharon always says don't call it a boat.
Yeah, you got to call it a ship. Boats. Ships carry boats.
Yeah, boats are what you ski behind. There you go. There we go. Catch fish out of. Yeah, that kind of stuff.
All right. So anyway, that's what we're doing. Go to RamseySolutions.com slash cruise. Seriously, if you're Baby Step 4 and beyond, this is your chance. We teach you to live like no one else, so that later you can.
Live like no one else. I'm going to live like no one else.
Cruise. There you go. I'm excited. Laura is with us in Salt Lake City. Hi, Laura.
Welcome to the Ramsey Show.
Hi. Thank you for having me.
Sure. What's up?
Well, my basic question is, is it worth it to move our family to a new estate? They're basically a $13,000 annual raise.
There's more to it.
It kind of sounds like you don't want to already.
That was a big sigh.
Is it worth it? Do I have to? This is off. That's what it sounds like.
That's a good point.
Where would you be moving to?
So we're currently in Utah. We're going to be moving to Missouri, which is where I grew up. So I know the area and I like the area. It's just. we have four kids and we're pretty settled where we are.
What does settled mean? How long have you been there?
Oh, five years, which is actually a long time for us.
Okay. How old are the kiddos?
The oldest one is 15 and the youngest is four.
Okay. What kind of work is it? What type of work are you chasing?
So this is for my husband's work, and he's an arborist. He works on trees.
Got it.
Where in Missouri?
In Columbia.
Okay. What made him look for a job?
Because he thought that basically the top of what he could earn here, and the biggest reason we're looking in that area is because we could sell our home here and make $150,000 to $200,000 on it, and we could buy a house cash over there. We're almost cash.
And owning our home has always been like not having a mortgage has always been one of our goals. How old are you? With our current. Well, I'll be 40 this year, and my husband just turned 40, so we're both 40..
I don't know how it is at your house, but when Rachel Cruz and Denise Whittemore were 15,.
the drama was unbelievable.
Oh, yes. Now my older two are boys, and so, I mean, there's still drama there.
Well, there's not as much, but, yeah, that's true. I mean, those two went to college, and we were left with a teenage son, and we didn't even know he was there.
I mean, so I was just thinking that maybe that was entering into, they don't want to leave, and you're telegraphing what they want.
Yeah. Yeah, that's it. You nailed it. Okay.
Well, that's the way it would have been at my house. I mean, the kids are like, wah, wah, wah. Everything you do, they're like, wah. I mean, Mark Twain said when they turned 13,, put them in a barrel and feed them through a hole, and when they turned 15, plug up the hole. Oh, gosh.
That's how Mark Twain said to handle teenagers.
This is all for $13,000 a year, though.
No, it's for getting their house paid off and going back to where their home is, and the only thing is the kids don't want to go.
That's true. All the adults want to go.
The adults want to go. The kids don't want to go. Am I wrong?
No, you're right.
Okay. You said, when we asked you before how long you'd been there, you said five years, and you said, well, that's a long time for us. Have you guys been moving around a lot? Is that another part of this?
We have moved a lot. So each of our kids have been born in a different state. Why? And we're not military.
Why? Just chasing work?
Yeah, chasing jobs.
Okay. Our kids' feelings got heard, and they had input, but they didn't have a vote. The adults make the decision. We love our kids. We want to know how they feel.
We want to know what they think and hear them out. But at the end of the day, the adults have to make the decision, because the inmates don't run the asylum. So that's how we did stuff, and I think you guys are moving, Laura. Now, one thing you can commit to the kids and to each other is we're not moving again.
You can say that.
We're going to stay. We're making this move so that we don't move again. That's what I would do. This is the Ramsey Show.
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Jade Walshall, Ramsey personality, is my co-host today. David is in Manchester, New Hampshire. Hi, David. How are you?
I have had better days.
Okay. What's up?
My wife passed away a few weeks ago.
Oh, my. Oh, gosh.
I'm going to try and keep it together. I'm sorry.
That's okay. How old was she?
She was just a few days shy of her 60th birthday.
Oh, my. How long were you all married?
33 years.
Wow. What happened to her?
Long story. Lots of health issues. In the end, it was heart problems and cancer kind of combined.
Sorry.
Long road, then. Long road. Yeah. What was her name?
Her name was Lynn.
Lynn. Okay. I'm so sorry, David.
Thank you, sir.
Hard to breathe right now. How can we help you, sir?
Well, I was a long-time listener. Started listening in the late 90s, and we taught FPU together.
We got serious about working the baby steps in about 2006 when we moved up here from Texas. We were debt-free, except for the house when she passed, and our net worth was just shy of a million.
Good for you. Wow.
And now, when I look at those calculations, it just tastes like ash in my mouth.
Why?
Well, all those years of doing things the right way, and then I lose her just before we hit the finish line.
Oh, I see.
I know I shouldn't make big decisions right now, and I'm not.
Good.
But I seem just so much more aware that tomorrow's not guaranteed. And all the things we'd planned to do that now we won't be able to do together, have me mourning not only my wife, but my future. So my question is, how can I balance the desire to try and live my life fully and still be wise?
You know, I spoke at a friend of mine's funeral with another friend of mine the other day, and the other guy speaking is a world-class communicator, and he said something that stuck with me. He said, when a baby is born, or when we do a funeral, all of us stop and readjust our lives to the plumb line. Those events are tuning forks. Ding! And you tune to it, right?
You know what I'm saying?
I said the exact same thing at her funeral the other day.
Oh, wow. Okay. And that's exactly what you're doing. That's what your question is about. And that's not a bad question.
It's a question we all ought to do, but the tragedy that you've gone through recently is just making you very aware of it. We always have this pull between being wise and future-oriented and living in the moment.
Enjoying the moment, enjoying the present, enjoying, why wouldn't I, you know, kind of thing. And so that's why, when I turned 60, I went and jumped out of an airplane. Why wouldn't I? You know? And, well, you might die.
No, I'm going to die. It might be of this. It might not. But I'm going to, you know, and so I'm going to go do it. I'm going to live, right?
And so, you know, that's the kind of thing you want to do. Now, did I jump out of an airplane without a parachute? No! No. Did I take the class?
And did I learn from the video all the things that could go wrong? And did I make sure all the equipment and the people involved were? Yeah, so I was wise about living my life wide open. I'm using that as a metaphor, not as me being smart or something. But it's a metaphor for the answer to your question, I think.
Is it communicating?
Yeah. That makes a lot of sense. And that's what I'm trying to do. It's just really hard right now.
Well, I mean, you can't breathe right now. It was two weeks ago.
I've been married 43 years. You've been married 33.. Let me just tell you, if Sharon dies before me, I'm useless.
So I can't even breathe thinking about it, and you're actually living it. So, I mean, give yourself a chance to just catch your breath and cry a little. Yeah.
Right now, everything is in extremes. You've just faced the extreme amount of grief. And now in your mind, the idea of living life to the fullest is all the way on another extreme. And I think over time, it'll balance out.
But you're not a guy who's going to live life to the fullest, celebrate the moment, live in the moment to a level of immaturity and burn through a million dollars in four months. You're not that guy.
No.
You don't have that capacity. It's just not who you are. So you're going to be wise. But you're right. You're going to treasure every cup of coffee, every sunrise, every sunset.
You're going to treasure every puppy that you buy. You're going to treasure everything. now. I mean, everything's a little brighter. Everything's a little darker.
And I completely understand that and embrace that. And then, a year from now, when you're doing that thing that you all wanted to do together, just remember, you're really doing it together.
Yeah. Yeah.
That makes sense.
Yeah. I'm so sorry. I just, it's hard to, you can't think your way through where you are. You have to live your way through where you are. It's just, it's hard.
I'm sorry. But the only thing I can promise you is that you will be thinking clearer, and these answers will be readily available to you six months from now. that they're not now. And it's not that it hurts less. It's just that you've learned how to walk your way through it, and it's part of the process of grieving.
And you got good people around you, David?
I do. I've got a great church. And I've got an amazing group of men that have come around me.
Oh, that's so vital. That's so vital.
Such a blessing.
And, yeah, Dr. John Deloney always says this, and I had never heard it before. he came on with us and started talking. He said, grief demands a witness. And that's from one of the researchers and writers that he's familiar with.
He's quoting, I can't remember who the guy was, so I'm quoting Deloney instead. But I think that's true. Grief is not something to be done alone. And so we're honored that you would share yours with us today.
Thank you, sir. I appreciate your wisdom and your insight.
I'm so sorry, David. I'm sorry. Yeah.
So, and you're in my age group, and so I've got people in your situation all around me, in my friend group and so forth. And the only thing I will warn you is that you've done very well financially. And so you're prime pickin'. You need to just be aware that the sharks are going to circle, buddy. They're going to come at you.
It's the weirdest thing.
You're talking about the cougars?
How attractive the 60-year-old man becomes.
Interesting.
Oh, wow. Oh, man. It happens. It happens to ladies as well.
This must be a real thing for you.
Yeah, it's a real thing, believe me. And so, especially when you've done well, like he has financially. So, you're not even thinking about that now, and that's why I'm saying it, because you're not thinking about it. So, you need to just be aware and keep your shields up, brother, for a while. Yeah, wow.
That's tough.
So, there's not, listen. So, here's your options, okay? Spend everything you make and be broke and live completely in the moment like a child. And then, if something like this happens with your spouse, you've lived every moment, but you've also lived stress and anxiety the entire time.
Yeah.
So, it's easy to take a story like that and say, well, that's a reason to not save for the future. That's a reason to not think about there, because you don't ever know if you're actually going to get to live out those HD, high-definition dreams that you laid up, put on the whiteboard with your spouse. Yeah. You don't know if you're going to get to live them out. But if you don't plan to live them out, then you leave every year in between there in angst.
That's true.
And so, it's, you know, he did the best thing he could have done, even though it didn't turn out the way he planned.
That's right.
And he's right. He's having to grieve the future or lean into a new future now that he didn't visualize before. I'm sorry, David. Love you, man. Thank you for calling in.
And if you need some help, you can call us anytime. 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. Jade Washall, Ramsey personality, best-selling author, is my co-host today. And as we kick this hour off, we've also got one of the other Ramsey personalities, Rachel Cruz, on the line with us. She's on the road doing a book signing for her new book, I'm Glad for Where I Am, a great children's book and a great bedtime story. all about gratitude.
Rachel, how's it going in Los Angeles today?
Hey, guys.
Can you hear me?
Yes. Absolutely.
I feel like I'm like a reporter for the news. I'm like out on the streets calling in. But yeah, doing great here in LA. We got in last night here.
We were in Phoenix before that, New York before that.
So we're just on the road. It's been great.
So you had a Phoenix book signing last night. How'd that go? Yes, it was so great.
There were probably, gosh, 50 families or so that came out, a lot of little kids, which was so great.
That's what we want, yeah.
And, yeah, it's always so encouraging being out, because, I mean, literally every person that came up, they had a story, right? And the Ramsey Show was always a part of it. And things, you know, from Deloney and Ken to Jade and George, to you, Dave, you know, everyone's just like rocking it with their money. And it's helped them so much. So it's always fun to hear people's stories, one after the other.
with all these little kids. It was so great.
Yeah, powerful. So tonight in Los, Angeles, the Barnes & Noble at The Grove from 7 to 8 p.m., right?
That's right. Yeah, I'll be there. Same thing. We did this in Phoenix, and it was so fun. So I do like a little story time, read the book, talk to the kids.
Yeah, you got them all right there.
So it's just so fun to hear from them. And then, yeah, line up. And, you know, we took pictures, signed books, did it all. So we'll be there at The Grove from 7 to 8..
That Barnes & Noble at The Grove is a great store. I've done signings there, and it's a wonderful store. They do a good job for a signing. And so any of you in that area, in the Los Angeles area, the Barnes & Noble at The Grove tonight, 7 to 8 p.m. local time, Rachel's book, I'm Glad for Where I Am.
Now, this book is gratitude, right?
Yes. That's a big truck, Pat.
Sorry. That's all right. We're grateful for the cement truck.
That's right. I know. So, yeah, the first book, I'm Glad for What I Have, that came out was contentment. This one is all gratitude. And I was telling the news anchors this morning, when I did Good Day L.A.
that so much of my work, I feel like, you know, even on The Ramsey Show, it's the tactical side of money, right? Like we're talking about saving and investing and all of it. But that emotional side of money, those of you that have listened to Ramsey, too, we talk about this a lot. It is such an important part. And so, whether it's contentment, gratitude, generosity, all of those emotional side is really important for our kids to grasp and for us to grasp.
So, yeah, the book is based on really the foundational principle of being thankful for stuff that you can't buy, that money can't buy, which is our family. It's our home environment and all of that. So teaching the kids that foundation is what I wanted in this book.
So cool. So you're in L.A. It looks like later on you go to Dallas, Atlanta. I want to know, are your kiddos going to make any cameo appearances, Rachel?
Oh, you know?
No. But do you know who is?
That guy. Wow.
Doing my part. He's doing his part. He's on the phone with the guys in the booth there at Ramsey just in case this call drops. I'm going to jump on his phone if this call drops. So we're doing good.
So he came out to L.
A. last night.
He's technical support.
He looks like your bouncer, like your security right there. Yeah.
He's got the glasses, got the L.
A. vibe. This is very good.
We look sketchy. We look sketchy. Yeah, we look good. What did they do?
I love it. All right. Dallas, Saturday, the 20th. Lincoln Park from 1 to 2 p.m. in Atlanta.
Next Friday, a week from tomorrow, April the 27th, at Mansell Crossing in Alfreda. All those are great stores. I've been to every one of them from 1 to 2.. In each case, Rachel will meet with the kiddos, sign books for them, read the book. It's not that long, and so it's a great bedtime story.
And we've already been using it on the old Ramsey kiddos. Papa Dave loves to read to the kiddos. So good stuff. So contentment, gratitude, that's what the first two are. The first one was a children's bestseller.
This one will be a children's bestseller. It just came out this week, and it's available at RamseySolutions.com, or, of course, anywhere great books are sold, like where Rachel's going to be. So, again, Los Angeles tonight at The Grove, from 7 to 8 p.m. Dallas on Saturday, April 20th. The Barnes & Noble at Lincoln Park from 1 to 2 p.m.
in the afternoon. And Atlanta in Alfreda the following Friday, April, the 27th, from 1 to 2 p.m.
Tonight,
the illustrator, Lauren Gallegos, is going to be with me at this book signing. She lives in L.A., and so she's coming. And so you'll get a signature from the author and the illustrator, which is so fun.
I've got to tell you, illustrators sign books better than authors.
I bet.
They have calligraphy. They make little pictures with it every time. And Lauren's precious. She does a great job, and these illustrations are world-class in both these books. It's one of the reasons they've done so well.
The whole process. And it's so important as parents if we can teach our children these skills of character. The skill of the character. You know, godliness with contentment is great gain. Content.
Content. Gratitude. Learn to say please, and thank you and mean it. And this book is all about gratitude, humility. These are skills that cause children, when they become adults, to become very attractive adults.
That's right. To employers, to future spouses, because they're good humans. Oh, yeah. And that's what we're trying to do is raise good humans. Andy Andrews, our good friend, Rachel, always says that we're not trying to raise great kids.
We're trying to raise kids who become great adults.
That's right.
And that's what these skills do. So it's very, very vital. Good stuff, Rachel. Proud of you. Keep it up.
Thank you. And make sure that you keep that bodyguard straight back there. We're kind of worried about him. You look at him.
So good.
Thanks, you guys.
Have fun tonight.
Bye. I love it. Thank you. We will.
We will. Bye.
All right. So, again, tonight, for those of you in Los Angeles, The Grove, Barnes & Noble, from 7 to 8 p.m. Tonight, being Thursday, the 18th of April, whenever you happen to be listening to or watching this. And Dallas, Texas, April the 20th on Saturday at Lincoln Park, from 1 to 2 p.m. Atlanta, Friday.
The April. the 27th, a week from tomorrow, for those of you listening live or watching live. And that's the Barnes & Noble at Manso Crossing, at Alfredo. You can find all this on our website. And, obviously, Rachel's Instagram.
She's going to post every bit of this and then some, because that's what she does. She's the Instagram queen.
I love seeing this.
Her and you with your cooking.
Yes, that's right. Yeah.
You got to follow Jade if you want some cooking. Now, I'm just saying.
That is true. I'm not a chef, but I cook a little bit.
No, you're a cook, is what you are. I pop that open. I'm like, Sharon, I've got to have dinner. now. Jade's over here cooking.
I've got my mouth watering. So, hey, check it out, folks. You can learn all of that at RamseySolutions.com slash store. We'll get you going right here on the Ramsey Show.
Thank you for joining us, America. Jade Walshaw, Ramsey Personality, is my co-host. We appreciate you being here. The phone number is 888-825-5225.. Scott is in Indianapolis.
Hi, Scott. Welcome to the Ramsey Show.
Hi, Jade. Hey, Dave. We're really grateful for your ministry. Thank you very much.
Thank you, sir. How can we help?
My mom passed away last year, and my two brothers and I inherited the home that my dad, who passed away 10 years ago or so, had. I'm wondering just how to be a good steward of that asset and wondering if an LLC is the best way to manage that going forward. In addition to that, my middle brother is living in the house and will likely leave in a couple years. My wife and I are considering purchasing his portion at that time and had some questions about that, just as far as doing that well.
Okay. If you're going to end up purchasing it and, in the meantime, a relative lives there, I don't think an LLC is necessary.
Okay.
The main reason you would do an LLC is risk management. If a tenant falls off the porch and breaks their face and decides to sue you for $10 million, they have to sue the owner of the property, which is the LLC. You're not the owner. We do LLCs for risk management. There's really no tax benefit to LLC, and it doesn't cause people to get along, who otherwise don't get along.
The three brothers are discussing what we're going to do with this house all the time. Is that what we're doing?
Well, yes, basically. We've done a few renovations to it, and it's in a decent area. My wife and I have wanted to get involved with some property, real estate.
You're thinking of buying it to live in or as a rental?
As a rental. We were wondering about limiting our own liability, not just my brother, but if something happens.
If we're going to keep it as a rental, I would put it into an LLC, at least your ownership portion.
How old is your little brother that's living in it?
He's 53.
Okay. Somehow, I had him in college in my head or something. What in the world? Why has he got to live there for two or three years?
Was he there before your mom passed?
No, but that was something she wanted. He was renting an apartment nearby, and she wanted him to have a home to live in. I helped her with her estate planning, and I'm the executor of her estate. The intent was to give him a place, a home, to live in. He has a daughter who's married now, but eventually will have kids, and he would like to move closer to her when that happens.
He basically stated his intent that it would be a short interim period, maybe a couple years, and then he would likely move to be closer to her.
The other two of you are not receiving rent from him?
We have discussed that, and he is paying rent, but it is part to go into the operational costs of the home. It's like a pile of money that we all contributed to in order to service the home, and that rent is being accounted for in that accounting.
As long as everybody's got their expectations set and we have a game plan.
It occurs to me that you guys could all put this into an LLC, and then the way you purchase the home would simply be to buy the shares from each of your brothers.
Okay, I think that's where we are leaning, based on your real estate experience.
Yeah, that would make sense. In this case, now I'm catching up with what your plan was. I thought he was just going to live there, and then you guys were going to move in it at the start of the conversation. That's why I'm changing my stance here, but I don't own anything anymore. I don't have a single thing in my name.
My cars aren't in my name. I'm a complete poverty case. I own nothing. It's all in some kind of a company, a trust, an LLC, and it's all risk management associated.
We're very, very careful and very direct about that.
If something happens, worst case scenario, you can bankrupt an LLC, and it's just that piece of property.
It doesn't touch anything else.
It's no big deal. Obviously, you don't want to do that, but before you, let somebody take all your other stuff, that's what you'd have to do. Anyway, that's what you're facing. I'd go ahead and drop it into an LLC. now.
I think I would put as much of this in writing, even if it's in letter form, that this is what our intent is. If you guys can go ahead and come to a formula type agreement as to how you're going to price their shares, to buy them out two years from now, and go ahead and put a two-year date on your brother, so that two years isn't five years, because she didn't have children.
Yeah, that was. my main concern, was that timeline. I wondered how fluid it would actually wind up being.
Yeah. It sounds like all of you have a lot of grace for each other, and there's nobody grabbing or anything. You're being very kind and loose with this, and that's good. Also, the best way for that grace to remain is if we all have a clear understanding of what the other one's doing. Okay.
If you just said, I want to write all this up, and then you guys all sign off on it, and here's how I'm going to buy you guys out at the end of two years. Here's how the 53-year-old's going to move at the end of two years. In the meantime, the rent comes in, and it's just piled up there for the three of us to use to update the house and keep the house moving operationally, as you said. All of that makes sense, and there's nothing wrong with any of that. But I have found that even when I'm doing something internally inside the company, I will send out an email, and sometimes I'll copy myself.
Just to have it as a record.
Because I forget what I said.
Yeah.
I got a couple things going on. That's great. I can't remember what all I've done. I've slept since then. I don't want to not keep my word just because I'm stupid and forgot, and that's possible with me.
So I like writing it all down, and that way I remember what I said, you remember what I said, we all said the same thing.
And if it comes to it, you can reference it.
And then I can just pull it up and go, okay, this is what we talked about. Now, if we want to do something different, we can, but this is where we left it. And then you've got a baseline to have a change discussion if you need to, or you've got a baseline for referring back to, you know, I think we probably need to go with what we said. Yeah. And that kind of thing.
So it doesn't have to be mean, but it really helps maintain the quality of these relationships. And, Scott, it sounds like the three of you have a very quality relationship, or at least you and your brother, your one brother. I'm assuming, based on the way the whole conversation went, that all three of you are getting along. And that's good. But I'd lay out the formula now.
What's the price going to be? Or it's going to be, we're going to get an appraisal at that time by a certified appraiser. I'm going to pay for it, and I'm going to pay you guys 80% of appraisal for your share. And that kind of, or whatever the formula is, I don't care. That's not a bad formula, by the way.
Because if you put a house on the market and sell it, and you list it on the market with a real estate agent at appraisal, you very seldom get that number. And so it's negotiated down. And then you have real estate fees, and you have closing costs, and you have other fees. And so you don't usually net more than about 85 cents on the dollar. So somewhere in there, 88, 85, somewhere in that range is where you're usually going to end up.
So then, if they sell to you, that's still approximately what they're going to net. So whatever the formula is, you all lay it out. And I don't care what it is, but it's just really good to lay it out in advance, and nobody's mad later.
Well, yeah. We're on a two-year timeline. It's easy to forget in two years.
Two years goes so fast. I mean, it's blinding. You know, it's –, yeah, I mean, it just – everything moves so quick. And, of course, the older we get, the faster it moves. It just goes, goes, goes, goes, goes, goes, goes, goes.
That's the plan. So, yeah, that's – but, yeah, just lay it out. And, yes, an LLC would be an excellent vehicle. The three of you own equal shares in it, and you're able to buy out the other two shares. And you actually can probably quit claim deeded into the LLC, and you won't have any registration costs, hardly.
And then, when you buy the shares on the LLC, there is no registration cost, because it's not a Register of Deeds issue. So it's going to save you on that, too. Make sure you guys keep good, strong insurance on this property as well. This is the Ramsey Show.
Jane Walsh Shaw, bestselling author of the book Money's Not a Math Problem, one of our, Ramsey Quick, Reads, a whole 74 pages. You can read it in one setting, and you're going to learn some stuff about money and yourself when you read it. She's a Ramsey personality. She's my co-host today. Our question of the day comes from Barry in Indiana.
Yeah, Barry says, I'm hoping for some validation on a decision we have made regarding flipping Baby Steps 5 and 6.
. We completed Baby Steps 1 through 4, and we have 95,000 parked in CDs. Instead of saving for college, we currently pay $5,000 a month on a 4.85% mortgage, where the monthly payment is about $2,500.. If we stay on track, the mortgage will be paid off in four years. Once the house is paid off, we plan to use the extra 6K that we have been putting on the mortgage to cash flow college.
What are your thoughts on this plan?
What are you doing with $95,000 in CDs?
I underlined it. I don't know. It sounds like they already made the decision, but I mean, I'll give them that.
That's not even Baby Step 5 and 6.
. That's just too much in cash. Facts.
I mean, he never says.
You flipped Baby Step 3.
Yeah. Yeah, that's a lot of money. There's a lot here.
Yeah.
Go ahead.
No, you're fine. Have at it.
I mean, my thing is the Baby Steps are in order for a reason. In 4, 5, and 6, you can do them simultaneously, but you do them in order simultaneously. So if you're going to prioritize one over the other, you prioritize it in order. Does that make sense? So you don't skip 4 to do 5..
You don't skip 6 to do 4.
. You do 4. And then, if you have money left over, you do 5., And then, if you have money, you do 6.. And if 5 doesn't apply to you because you don't have kids, then you skip it. Does that make sense?
So my thought is.
And you have an emergency fund of 3 to 6 months of expenses, which is not 95 freaking thousand dollars. So you take some of that and throw it at that mortgage.
That's right. And my thought is, I think there's a lot of ambiguity around Baby Step 5.. It's like, how much do I do? How often do I have to do it? And I think that that's something that you guys can sit and decide because it sounds like...
I'm fine if you put $50 a month in Baby Step 5.
Me too. That's what I'm saying. It's not to say that you have to stop putting extra to the mortgage. Just put a little something, because this is a 4-year plan. Who knows what's going to happen over 4 years?
And I want to have something put aside for them. The only reason I might...
And it's not to say that you wouldn't put it aside. It's just where you put it. Like if this is a less than 5-year, less than 4-year deal till college.
We don't have his mortgage balance. By the time I drain most of that 95 down to 3 to 6 months of expenses, it might be a 3-year plan.
That's true.
And so $50 a month going into the kid's college for 3 years while you lean heavy on the mortgage is perfectly fine.
Barry, I've been doing this for 30 years and I don't flip baby steps.
Yeah, don't do it. Just put something aside.
There's no reason to.
Dave, you can correct me on this, but if their kid is 16, I'm not putting it in a 529.
. I'm just throwing it in a HYSA. Let it sit.
Yeah, it doesn't matter.
The interesting thing here is that he didn't just try to flip 5 and 6.
. He's also sitting on 95K.
I see.
You're just kind of making up your own deal here, Barry. That's what we're saying. This stuff works if you work it. I mean, we've taught 10 million people to do this, literally. Actually, more, but that's a minimum.
And so that's what we recommend. The point of $50 is just you're building the muscle. You're making an intellectual, not a big mathematical, but you're making an intellectual, spiritual, muscle-building. moment. It says, I'm doing college.
And then I can move on. For instance, let's pretend you've got a two-year-old. Right. $50 a month for three years, and then you do it, and you pile it on. Yeah.
He doesn't say how old the kids are or when they're going.
We plan to use the extra 5K we've been putting in the mortgage to cash flow college. It kind of indicates you've got teenagers, but maybe. But either way, I think you're going to accomplish exactly the same thing you want to accomplish if you put $50 towards this. And especially if you use the vast majority of that $95 and take it down to three to six months of expenses. Because you do not have – you've got too much in cash.
Yeah. And the fact that it's sitting in a CD is somewhat laughable. Aaron is with us in Richmond, Virginia. Hi, Aaron. How are you?
Good. Thanks for having my call.
Sure. What's up?
All right. So we are – my wife and I are in Baby Step 2.. We've just driven in and found you, which is fantastic. However, it has occurred to us that we hit tax season and we had to pay this year. And we're worried about stopping our investments because we're going to have to pay probably three times more next year in taxes.
So I'm really wondering what's the justification of not paying ourselves first and investing, and, more so, paying the government and losing out on some of that money, even though we'll have more to go towards Baby Step 2.
How much are you putting in your 401K?
I have a 6% and a 6% match.
The match doesn't count for taxes. How much are you putting in the 401Ks in cash?
About $540 a month.
So $6,000 a year.
Yes, sir.
And what's your household income?
$131,000.
Okay. So this saves you $2,000 in taxes.
Okay.
Right?
Yep.
Yeah. It does. Okay. And how much debt do you have?
About $120,000.
On what?
We have $12,000 on credit cards, $50,000 on student loans, and $16,000 on vehicles.
Okay.
So, I'm trying to keep from being a smart ankle.
So you've got $120,000 in consumer debt. You've been spending more than you make on credit cards, and now suddenly you're worried about tax planning.
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