Wealth Is a Slow Game, Don’t Rush the Process
2024-06-17 01:58:22
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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. The call is free, and some say the advice is worth exactly what you pay for it. The phone number is 888-825-5225.. Thanks for hanging out with us, America. Number one best-selling author, Ramsey Personality, and YouTube.
extraordinaire star George Camel would be my co-host today as we take your questions about your life and your money. 888-825-5225.. Lisa's in Colorado Springs to start this hour. Hi, Lisa. How are you?
I'm good. How are you doing?
Better than I deserve. What's up?
Good. I am in a marriage. I'm a year in, and it was a high-risk marriage. We're not doing so well right now, but about a year and a half ago was when I first started investing in my 401k. through my work.
I have about only $10,000 saved up. I'm concerned, being 45 years old, that I guess I don't know where to go from here on how to make sure that I am going to be okay come that age, that I am ready to retire. I know I have a long haul ahead of me, but my husband is not super interested in a 401k. He only has about $20,000 in an older 401k. We don't have our finances combined currently.
right now, just due to it's been a very rough year, so we didn't combine.
right off the bat, like we intended to. Let's stop a second, okay? How y'all doing?
We're not doing well. Okay. Are you seeing someone to help you with this?
We are. We've been in counseling for pretty much the whole year.
What is a high-risk marriage? I don't know what that is. I thought they all were.
Well, we've both been married.
. I'm at risk of dying at all times, I'm just saying.
No, we have.
. I have grown children. He has very young children, one with special needs, with Down syndrome, and so that, going into it, we were advised that the percentages of things not working out were already pretty high, not in our favor. Well, that's a way to put a blessing over.
a marriage. You guys are... Is there like a marriage statistician that laid this out for you?
It was a premarital counselor. Okay.
Well, I guess he or she was just trying to warn you that these are extra stressors that some people don't have to face, but I don't know if I'm going to allow that to be a curse. that's spoken.
over my life either. Right, right. And moving into the marriage, we thought, okay, we know, this is what we have to work on, but right out of the mirror...
What's the trajectory right now? Are we going to work through this? Are we going to make it? Or are you giving up hope?
Not giving up hope. I mean, we did file a couple months ago. We took it off the table. That's not what we want. It would be my second divorce, his third.
So it's definitely not something that we are taking lightly, and we want to try everything before that's an option.
So your question is whether to combine your stuff now, in the middle of this storm. Right. No, I would not. No, I wouldn't. That adds one more stressor.
Okay. Okay. But as a rule of, and I said in the middle of the storm, the other thing is, you can't live sustainably in a storm forever.
So the hurricane, the tornado, whatever metaphor we want to use on this is going to leave at some point, and it needs to leave at some point, because you're going to drive yourself nuts. You don't want to live exactly like this for five years. Agreed? Agreed. Okay.
So something's going to give. We're either going to get better or we're going to get out. Okay. At some point, I'm not saying today, but as soon as we reach the point that we're getting better, then we need to say, all right, we're going to make the hard decision to go one more step, and that's combine everything, because we don't see the numbers tell us, the data tells us, we don't see people succeeding financially or relationally that keep all their stuff separate. It's just a roommate then, and you haven't promised that I'm never going anywhere.
And so I don't really give a crap about your 401k or whether he's putting money in a 401k right now. What I care about is can you guys get knitted together in this relationship? And if you can get knitted together, and now you are one and you start breathing in the same rhythm, and now we're starting to look distant into the future and we can see us together in that future, then we combine the stuff because it'll help you on the financial front and on the relational front. But right now it's just going to add stress, because you've got all this suspicion and worry, and I don't know if we're going to make it. And I would keep it separate, but I'd also keep it, if you want to keep it separate, it's fine.
But also then keep it all on the table, so everybody knows everything. You don't have any hidden accounts. He doesn't have any hidden.
accounts. And I believe he does. And that's part of the problem too, is not knowing what exactly he brings in. We have a super high mortgage. I mean, just.
there's a lot of things. It doesn't.
absolve you of communicating about money. So I don't want you to conflate the two. You still have to talk about money openly. It sounds like that hasn't happened. He's still unwilling to do that.
Is the nature of the issues largely financial, or is it just a piece of it?
Oh, that's just a piece. Honesty, transparency, and loyalty are our issue really at hand, but the finances, you know, I don't want to combine. He does. So. that causes just another element to this is, hey, we're not acting as a married couple because you won't join finances with me.
But I have quite a bit of hesitation to do that for different reasons. And, you know,
so it's just compounded. Yeah, circle back with your, next time the two of you are in front of your counselor together, circle back with that, because here's the deal. Honesty, transparency, loyalty are all essential to win in any relationship, certainly a marriage relationship. And until you have that, you can't combine, because your hope of making it forward is very low. Unless one of you just wants to assume doormat position, which is really toxic and unhealthy, codependent crap.
Okay. But yeah, if you're going to go forward, you need to get those things cleared up. And, by the way, I'll just be the old guy that knows nothing about therapy except having been through it because Sharon tried to kill me. I mean, I tried to, I mean, we almost, yeah, it was bad and a long time ago, but yeah. So, but honesty, transparency, and loyalty have nothing to do with grown children or special needs children.
Those don't cause honesty, transparency, communication, and loyalty problems. They expose them like money. It doesn't cause those things, but it exposes the problems. And so, you know, the high-risk marriage thing has to do with those things. Um, and if you don't get those solved, I'll give you a high probability of, you know, either going crazy or getting out.
So, you know, that's where, and you know, I don't know, I don't know what the timeframe is, but you don't need to go on ad infinitum, forever and ever with.
this. It's not, it's not a plan. Constant counseling for years.
Yeah. Like five years later, we're still having this exact same narrative, this exact same routine. No, thank you. Life goes on. You move to the next thing.
I don't want you to end your marriage. I want it to work out, but, um, I'm with you. You keep them separate until you have honesty, transparency, communication, loyalty, whatever those key words were you dropped, that are pretty serious bomb words. So yeah, you got to get that cleared up. Uh, because that's, that's part of what combining the stuff forces you to do, actually, but I wouldn't do it in this case until you get some new foundation first.
This is a Ramsey show.
I've been doing this show for over 30 years. And some of the saddest calls I've taken are from situations that are completely preventable. Yeah. And what's so hard is I feel like one of those, especially the ones that I'm like, Oh, it's terrible air. People that call in and their spouse has passed away suddenly and they don't have life insurance.
When you have to think through, how am I going to pay my bills next week? Yeah. In the middle of all that grief. Like it's just, it is, it's terrible. It's a life insurance is the one thing, especially as a mom with three little kids, that I'm like so big on for people to get because it's inexpensive.
Xander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Xander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You've got to say it out loud and you've got to say, I'm going to say, I love you to my family by taking care of them and taking the time to put this stuff in place to cost us stinking pizza.
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Welcome back to the Ramsey show. I'm Dave Ramsey, your host. We appreciate you joining us. George Camel, Ramsey personality, is my co-host today. Phil is with us in Detroit, Michigan.
Hey, Phil, welcome to the Ramsey show. Thank you for having me, gentlemen. Sure. What's.
up? So I started a business about two years ago and it's doing quite well, and I'm just trying to decide what I should do with the wealth that I'm amassing, especially because I plan on living a fairly humble life over the next 10 years and just kind of seeing what I can do with that.
Good for you. That sounds cool. So what kind of money are you making?
This past year, the second year in business, I took home about $190,000. this year. I'm projected at doing about $250,000, but it's just kind of climbing more and more, so it very well could be.
higher than that. Good for you. Well done, sir. And obviously the most money you ever made in your life?
By far. I started working four years ago. I graduated. I'm a physician. Oh good.
Oh yeah,
you're rocking it. Well, good. Well, all those dreams are coming true on the financial side anyway.
Yes, sir. Very good. So what's your question? So I'm trying to decide what I should do with the money that I'm amassing and I'm kind of between, I already have my loans paid off, all of that. I'm trying to decide, and I see it in three categories, paying off my home that's not a forever home, going into more into retirement, and then, really, the biggest option that I'm trying to weigh out is buying a commercial building.
Okay. Well, all three are good things. The only.
question is the order, right? Yes, sir. And what would we do? We would follow the baby steps,
right? Yeah. So are you investing currently? Yes, sir. I'm actually on a Roth IRA, as much as possible, and all the money I'm amassing is going into an individual brokerage account that I'm.
making about 10% on right now. Okay. So let's say you're investing 15%. That's baby step four.
Are you doing anything other than just your Roths? I'm setting up a simple IRA through the business.
that I'll be matching out and maxing out as much as possible for myself and my wife, who also is an.
employee of the business. Okay. That's good. So we want to get you to 15% of your income going into retirement, not brokerage. Okay.
Okay. That's step one. That's the first thing you do. Because you said three things, retirement, pay off the condo and buy a building, right? I don't even.
know if it's worth paying off the condo. since it's not a forever home. It doesn't matter,
honey. There's not a forever home except heaven. You're going to move. Yes, sir. When you move, they're going to give you a check.
Yeah. So it doesn't matter. Yeah. So how big is the condo? and?
when are you going to sell it? It's a little 1,600 square foot. I have thrown around the idea of keeping it and just renting it out as a rental afterwards. But, like I've heard many times on your show, that's not a truly passive income. So I don't even know if that's worth the headache of it.
Well, you told us your goal was to own commercial space, not to be a landlord. So I'd want you aiming at that goal. And if that means we're going to have a paid for condo and the rest of the money we're going to get in a commercial space, and when we can upgrade to a home, we do that.
What do you own in your condo? About $160,000.. I put a down payment on it starting last year.
Okay. First and foremost, you are an above average doctor. Most doctors suck at money. And you have avoided dockitis, which is graduating from school, buying a house you can't afford and two BMWs that you can't afford, while you have $280 million in student loan debt. That's a typical doctor.
Okay. They suck at money. They're like stereotypes. They're like athletes and artists. I mean, it's crazy.
Now, some of them don't, but I'm just saying that's the stereotype. And they don't even make the top five in the millionaire category, the people that become millionaires. So you're way above average. because you're thinking about this. You're actually, you said, I'm going to live humbly.
You're living in a tiny little condo. You're awesome. You're. in order to achieve bigger goals. You're willing to put off more delayed pleasure.
Again, you delayed pleasure to get through med school, to achieve a big goal, way to go. Now you're talking about doing it in the financial realm. You're way ahead. So let me just give you, like star, star, star, star, five stars across the board. You are killing it.
I'm proud of you. Now, having said that, you asked the question. So we're going to teach you the fastest, right way to build wealth that I used, George used, and that we've taught tens of millions of people to do. We use a thing called the baby steps. We want you to have an emergency fund of three to six months of expenses.
We want you to have, then we want you to be putting 15% of your income into retirement. If you're not going to stay in that condo longer than six months, let's just go ahead and get it on the market and talk about selling it and buying a house that we want. Then the next step is going to be pay off the house. If you are going to stay in the condo, let's just pay off the condo. Then, and only then, do we start saving up for longer, bigger investments.
That's after baby step seven, which baby step seven is everything's paid off, a hundred percent debt-free, and you're putting money into retirement at the tune of at least 15%, going in. Above that, then go buy some commercial buildings for cash. They're awesome. I've got a.
bunch of them. What's it going to cost?
I was looking at possibly around a million dollars, and I've, yeah, for the commercial building. Cool. You can put your practice in it or you just want to buy one? Yes, sir. I would be moving my business into it to then start a different business that I would be renting from, and then I would also attend.
Yeah. Yeah. That's not a bad.
plan at all, but it's not necessary for your practice to grow. It's just a nice benefit. I'm sitting in the building, we own a hundred percent of, paid for, and our operation runs from this campus. It's a large commercial building, obviously.
That's after you get the condo paid off or wherever you're living, paid off, and that's after you're a hundred percent debt-free, and that's after you have money going into retirement and have an emergency fund. That's when I do the commercial building. This could be years down the line. Not really, because he's.
making bank. Once you start increasing this thing, you can put 200, 300 grand away each year. It.
becomes a 340.
. You can start putting 15% away today into different retirements. He's got the Simples. He's got the Roths. You can probably get it to 15% there today, and then you go from 250 to 350 to 450, and you keep living in a 1,600 square foot condo.
You pay it off in like a year and a half. It's gone, and then you can start moving towards a commercial building or you can move up in-house, depending on which one your wife wants. That was the honest answer. Whoops, I just said that out loud. Happy wife, happy life.
Well, when you started Ramsey Solutions,
you didn't just go buy a commercial property at the beginning. No, I didn't buy anything for 10 years. So you were leasing, renting a space until you could pay cash. I think you bought the.
building that we were in at the time. But we were there five years with a lease, with an option, first. But we weren't making the money he's making either. I mean, I wasn't making that kind of money then. But eventually we were, but I'm saying that's when we bought that building, because we got to baby step seven and we were stacking cash.
And we moved at the speed of cash,
which is still a shock to everyone, that we even do that around here. And they're like, Dave's, lying. I bet they, and like, no, I don't know how, you got to show them the financial.
records, Dave. They need proof. Yeah. I mean, people are, isn't it funny? So here's the thing.
You'll love this one. Okay. So we've got a very nice home, a wee bit expensive. And this, um, I'm going to try to be nice. I can tell you're trying to be kind.
This person.
told a friend of ours that it's impossible to own a home like that. That's paid for. And I'm like, why is it impossible? You just have, you either have the money or you don't, I mean, it's possible. You can say it's unlikely.
You can say, you don't think Ramsey makes that much and he's lying. So he borrowed to buy that house. But here's the thing. in every state in the United States. If you get a mortgage, do you know what they do?
They record it at the courthouse. It's public record record. Do you not think some of these left-wing rags that hate me would have already pulled up the public records and announced that Dave Ramsey is a complete fraud if I didn't have mortgages on everything? Because it would take about, I mean, anybody's ever done a title search, anybody in the real estate business, anyone who's ever bought a piece of real estate in America, knows how to do it. I mean, you walk into the thing and go, hey, pull up and see if Dave Ramsey or any of these entities that I know that he has got a part of has any mortgages listed.
It takes about, I don't know, with a computer, 45 or 50 seconds. So out of all the lies, that feels like a pretty stupid- That's just the dumb one. I mean, I get the guy over at the mall that sells timeshares and says, oh, Ramsey buys a timeshare from us every so often over here. He's a liar.
My favorite- Because you can't prove that one. Someone said you financed like a washer dryer because there was another guy named David Ramsey that- I got an extended warranty. That's what it.
was. It's just hilarious. These people just, but yeah, no, we don't have any mortgages.
What a fun life you get to lead. I know, but it's just,
I'm always amazed how dumb people are, that you would say something like that, because all you got to do is go down to the stupid courthouse. and this left-wing rag we have in Nashville used to be a newspaper. Now it's a little pamphlet called the Tennessean. It would have already run a negative story about me. It's run negative stories about everything else.
Ain't got that kind of dirt.
You know, that would be big dirt on Dave Ramsey. I mean, he has mortgages. That'd be pretty much the end of my career. This is the Ramsey Show.
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George Camel, Ramsey Personality, is my co-host. Open phones at 888-825-5225.. David is in Kansas City. Hi, David. Welcome to the Ramsey Show.
Hello.
Hi, what's up?
Well, I am a divorced man. I'm 69.. I have a relationship with a widow who's 68.. She's in another state. We're talking and we like to get together, but I'm trying to be a righteous, godly man.
I don't want to just live together. I want to get married. But if I get married to her, then she will lose her pension from her deceased husband, which is quite substantial.
So what I was thinking is just having a church wedding, doing everything the same, except not filing for a state license. So I just wanted your thoughts on that.
What is the nature of the pension? I'm confused why she loses it if she remarries. That sounds more like alimony than a pension.
No, no. Her husband was a police officer for the state of New Jersey, which they have very, very generous pensions. And so it's between $3,000 and $4,000 a month. And she would lose that if she remarries. And what most people do in these situations is they just live together.
They don't even think about it. But I can't do that. It's a deal breaker for me. I would want to have some kind of ceremonies. I'm trying to be a righteous man, trying to do the right thing.
But this woman has been through a lot. She's lost her mother, her sister, and her husband within the span of three years. And she's been insecure most of her life. And she finally has financial security. And so for me to come and say, hey, well, we're going to get married.
What is your net worth?
Well, I'm a chiropractor, so I make about $90,000 a year. But I get some social security too. My net worth is not much. $20,000 right now. I don't have anything saved.
I lost everything a couple of years ago through divorce.
Yep. Okay. And how long have you been seeing this, lady?
Just that. we've been talking for several months.
Okay. Have you met her?
Oh, yeah. Okay. Yeah. That's what you said, talking. I don't know if you're talking on the.
phone or.
. Like long distance.
No, I saw her last year. I saw her. We met and we talked. And she's an old... Years ago, was a girlfriend in high school.
So I know her from back then. I know all about her from back.
then. Okay. All right.
Well, it's a difficult one. I'm not going to argue with you there. I'm with you, though. There's no question. I'm not living with someone I'm not married to.
I can't do that as a person of faith, okay, as a Christian. My book tells me not to do that. I don't do what. the things the book tells me not to do, because they don't prosper me and they're not good for the people in my life and people around me, and so forth. So I just try to...
Even though it doesn't make sense, sometimes I just do what the book says. And so I'm not doing that. I'm not like a Pharisee. It just worked good for me. So I'm a follower of the book.
Well, there's a lot of people that do do that. They just live together.
Yeah, I know. I know. They do. And it seems like it's okay, but you and I know that there's other issues. So then, the only question, if you go to the church wedding and you don't file with the state, is just.
it's no longer a theological or doctrinal or religious question. You've solved that. The only question on the table is you are intentionally lying. It's an integrity issue.
just to keep this in place. And that's also a potential deal breaker. I've got to work through that in my head. if I'm in your shoes. I'm not saying you're doing that, but this is basically a maneuver to manipulate and not tell these people you're married.
And you are married. And so that's deception. There's no question about that. And there's good reasons for it here,
but it is that. It gets back to who instituted marriage. Was marriage instituted by the?
government or was it instituted by.
. No, it doesn't. You and I know when you go get married, you're married. And you know that the state of New Jersey did not want this pension going to her when she remarried, and you're not telling them is what you're doing. And so I've just got to work through that.
I'm not accusing you of something bad here, but I can't get.
. I'm 63, so you and I could be in the same boat someday. I'm not today, but I'm trying to relate and think through.
Well, I'm not trying to gain.
. The other thing is, I would investigate if there are.
any things that you can file with the pension board for individual exceptions,
like the particular nature of.
. I did hire an attorney. Yeah, I did hire an attorney. I looked into it and they said, there's nothing much you can do. And it's just kind of crazy to me because the state is actually promoting a fornication lifestyle.
It's okay. It's okay.
Well, they do with a lot of things. I mean, they do with a lot of things. They do with the tax code. They do with a lot of other things. So that's not new.
That doesn't change your stance or my stance. We have to do our thing, regardless of what the stupid state does. There's a lot of things that are legal that aren't right. Well, that's what I'm saying. If I'm doing this right,
in my eyes, before and on behalf of.
. Okay, then I'm just talking it through with you.
You're more than welcome to do whatever you want to do. I'm not saying you're a bad guy. I'm just talking it through with you. If I'm in your shoes, I've got to work through the fact that I am intentionally deceiving the state. And is that okay?
And I'll give you a parallel example in my life. is that I hate, so much so that just talking about it right now, my heart rate is changing. I hate the federal income tax. It is absolutely immoral, out of control, pitiful. The money that I send to the federal government makes me want to throw up every time I think about it.
I hate it. It's pitiful how bad they run this country. And they keep milking me even more, taking my money at the point of a gun. I hate it. But you know what?
I pay a hundred percent to the penny that I owe. I take every legal regulation loophole they allow me to take, and I'm a student of it. And I hire people with expensive checks that are students of it so that can give them as little as possible with a hundred percent of integrity.
But I hate it. Did I mention that I hate it? Did I bring that up? And so, you know, but it's not about them. It's about me.
Am I doing the right thing? So if I'm in your shoes, I've got to get, I'm not going to accept your lawyer's answer. I'm going to get with these people. I'm going to talk to the governor. Crap, call the governor, talk to him.
I mean, whoever runs the police commission in the state of New Jersey and say, look, this guy died on the job and you're denying his widow the right to move forward with her life with this. It's ridiculous. You're asking her to shack up at 69 years old, like she's some kind of 19 year old that can't keep their pants on. This is ridiculous. And you guys need to give us an exception on this.
I'm going to bust them if I'm you. And I understand why they do it, by the way, but to keep the widows from being a target later with the juicy pension. But I'm not saying he's.
targeting her at all. If they get married, you know, he makes $90,000. that would effectively replace her income as long as they're married, but it still puts her at a precarious situation.
She's not going to do that. She's been through hell and this money means a lot to her. And so I understand the predicament and I'm not unsympathetic to it, but you asked, and so I've got to tell you, the way we answer questions on the show is what would we do if we woke up in your shoes, right? I mean, put your shoes on, walk in them. I hope I'm not ever in those shoes.
Those are difficult shoes. But the first thing I got to solve is, for the doctrinal part, the faith issue. You've solved for that one. Now it's done. And then I'll fight the bureaucracy after that.
That's like a couple of kids getting married in their twenties or something. And they want to have a big, fabulous wedding, but they want to go ahead and get married. They want to go and live together now. So they get, they go to the church and they get married. And then, six or eight months later, they have a wedding for all their friends.
And that's okay. Cause they're married. That's, that's, you know, financially, legally, uh, spiritually, all in line. It's a, you know, that it's in that kind of same bucket for me as far as that goes, but I don't care if you register it with the state, but I do care about deception in my life. I don't want to be the guy that's doing that.
This is the Ramsey show.
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No discipline seems pleasant at the time, but it yields a harvest of righteousness.
That's a Bible verse. The way we say it around here is if you live like no one else, later, you can live and give like no one else. You're going to pay a price to win.
Or you're going to pay a price by living in mediocre. You're either going to go through some crap and deny yourself some things in order to get to where you want to go, or you're just going to live in mediocrity. There is a price to be paid either way, a life of mediocrity or the life of a champion, because you paid a price to win the game.
You did the workouts, you did the runs, you did the film study, and then you go win the game. And so the way we say that is live like no one else, pay a price so that later you can live and give like no one else, drive a car like no one else, all your friends making fun of you, and then, when you buy a car that's worth more than they are, you can say, how do you like me now?
And then you drive, whatever the flip you want to drive, because you've got some money, because you didn't spend it all on a car when you was a broke person, trying to look like you're not a broke person, right? Delayed gratification versus instinct gratification. It's the hallmark of people who are emotionally mature, the ability to delay pleasure.
In other words, you be a grown-up, and I'm not talking about chronologically, you can be a grown-up at eight years old if you know how to delay pleasure. That's a hallmark of emotional maturity. Most people don't have it. That's why you stand out in a wonderful way when you have it. People that can delay pleasure, they can stay away from the donuts.
I've been working on that one, and it's hard for me, but I like donuts, and I haven't.
had one in a while. You look good. Thank you. You do, too. The camera adds 10 pounds, so don't.
go off of that. So do vacations, but not this one. It was hiking the whole freaking time. But anyway, so all of that to say, we live like no one else, so later you can live like no one else. In 2020, we decided we were going to...
In 2019, we launched this wonderful cruise that was going to happen in March of 2020, called the Live Like No One, Else Cruise, and we're going to take folks that are on baby step four, meaning you're out of debt, everything but the house, and you have your emergency fund in place, you've paid a price to win. If you're baby step four and beyond, you're investing, you're paying off your house and beyond, then you go on the Live Like No One, Else Cruise. It's a mile marker, right? And so we've got the Holland America, one of their top ships, fabulous ship. We've got some of the top people from Nashville, like Stephen Curtis Chapman, multiple Grammy winner, 67 Dove Awards.
He's going to be with us, one of our good friends. We've got other comedians and things with us that are... It's going to be a blast, all the Ramsey personalities, and we're going to do events, Ramsey events on the ship all week long, and we're going to be with you, all of us, including me, including Sharon, all seven days, and it is a fabulous... This is not the Walmart on the Seas cruise. This is the nice cruise, okay?
I don't go on those boats, all right? This is the nice one. I don't want to do it. if we're going to go half butt, right? So if you're going to live like no one else, you need to live like no one else.
So if you're baby step four and beyond, we're doing the cruise again, because obviously we didn't get to do it during the Fauci pandemic. So now we've got to go and we had to start everything over. So we launched the thing for sale. We're going in March of 2025, and it's going to be a celebration of you, because you've lived like no one else. So that's where you are.
If you're baby step four, you're doing that, all right? Live like no one else. cruise. It is, at this point, it's 72% sold out. There are like three suites left and some really nice rooms left.
And so, because there's not any dumpy rooms on this particular ship, it's almost brand new. It's a fabulous, fabulous ship. So all in America's top flight. So anyway, this is going to be a blast March 22 through 29, 2025..
The pit stops are amazing too. Turks and Caicos, St. Thomas, Puerto Rico, the Bahamas. We're going to have fun time just with those excursions there. Maybe we'll go snorkeling with Dave.
Is that an option? Is that an upgrade package?
Yeah. Swimming with Shamu. Yeah, that's it.
That's it. No, I don't have that one on there that I know of. But anyway, we're going to be hanging out with y'all all week. It's going to be fun. You'll get bored with it, but it'll be okay.
And what's cool is that right now, if you book it, there's a deposit. So $600 locks in your room, and then you pay the rest as we get closer to the cruise. So if that's something you're like, well, I haven't budgeted for this. Well, if you're in baby step four and beyond, you've got the wiggle room, put the deposit down and then join us.
Yeah. Yeah. You got time to do it. And you better, and I got much time, because it's selling out really, really fast.
Yeah. We're on pace to sell out by the time the summer's over.
Yeah. Oh, well, or sooner. Yeah. I talked to him this morning. I think probably, what is this, June?
We need to be done in June, probably. But anyway, yeah. So if you guys want to come, we would love to have you to live like no one else cruise. Be sure and check it out. Karen is in Irvine, California.
Hi, Karen. Welcome to Ramsey Show.
Hi, how are you?
Better than I deserve. What's up?
Okay. Well, thank you. I saw you at my church probably 12 years ago, and you really left an impression on me. So thank you for that.
Are you at Mariner's?
How did you know?
Well, you're in Irvine. So, I mean, I've spoken there like three times.
There's no stranger over there.
Yeah. It's a great church. We love the place. Okay. I'm sorry.
Anyway, how can I help?
Thank you. Well, I just went through a really hellacious divorce. after five years. I settled out and kind of all the chips are falling. And even though I got what most people will call a decent settlement, because the cost of living is so ridiculous, here, I can't afford to buy anything.
So I am renting a small house, a fraction of what I used to live in, a fraction of the size. But I am paying just through the nose, and I'm paying actually more than I make.
How is that possible? For rent. Are you going into debt every month?
No, I'm not right now.
So you're able to float it right now, but it's unsustainable.
Well, exactly. Yeah. I mean, I can tell you kind of what I have in the bank and what I have coming in.
What did you get out of the divorce? How much have you got?
Okay. So we sold a house. So in a bank, in a high-yield savings account. right now, I have about $1.3 million from that house. that is just sitting there.
And I'm just trying to figure out what to do with it. But I figure, okay, we'll put that away in a corner. I really don't want to touch it. And then I'm getting some alimony, slash, spousal support, but it's only for six months. And that's $15,000 a month.
And it will drop drastically. I mean, I could end up with getting nothing. And then for my personal income, I started working after being a stay-at-home mom for 20 years. And I only bring home about a little over about 5,600 a month after tax.
And what's your rent?
I paid off my car. I paid off all my credit card debt from the divorce. So I don't have a lot of debt, but I'm just trying to be smart. And it just feels like in this area, it's an uphill battle. I'm a single mom.
I'm still raising kids. So I feel like I can't really move out of this area.
How many kids have you got?
I have three. So I have two still living with me. One's 17 and one is 14..
And I'm a full-time mom. No shared custody or anything like that.
Right. So there's no child support?
There is child support, but it may not last. Kind of dealing with an addict and he just doesn't have a way to pay me.
Okay. But he's paying you $15,000 a month right now?
Yes. So that is coming out of the proceeds that he got out of the house. And then, yeah, that'll be reassessed in November.
Gotcha. So you have a 17-year-old and a what?
14-year-old.
Okay. I'm sorry. You've been through hell, girl. That's heartbreaking.
Yeah. It's not a good situation. I'm trying to make the best out of it, but...
Here's the thing, okay? You're very wise in that, even in all of your pain, you're starting to see that this math doesn't add up.
Right.
Okay. How much is your rent again?
$8,000 a month. And no, I am not living high on the hog. I'm living very basic.
Yeah. But you're in Irvine and you're in one of the most expensive real estate markets in the world.
And so.
Yeah. It almost feels illegal.
Here's the thing. I'm sorry that your husband was an addict and I'm sorry he left his children in a lurch, but they can't live in Irvine anymore. You don't have the money.
And so, as heartbreaking as it is, the best thing you can do for them is to create a stable environment, and you know you're not in one. And so if $8,000 is the cheapest you can find there, you've got to go somewhere else, kiddo. I'm sorry. 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. Thank you for joining us, America. George Campbell, Ramsey personality, number one, best-selling author, and, of course, big YouTube star and co-host of the YouTube show on Ramsey Networks. It's a big show blowing up the smart money happy hour show that he and Rachel Cruz do together. He's my co-host today, and he knows some stuff about this stuff.
So open phones at 888-825-5225.
. Grace is with us in Philadelphia. Hi, Grace. How are you? I'm good.
Hi, Dave. Hi, George. Hey, what's up?
I appreciate you taking your time. I know you and your team talk a lot about the trends in the real estate market, and my question is, when do you think the obnoxious overbidding?
on houses will stop? Wow. Is that happening in your area in Philly right now?
I mean, I believe so, but yeah, I could tell you personal experiences, but I just feel that I personally put in offers, and I mean, I'm just getting beat 50,000 more than asking price.
Mm-hmm. Well, the simplified answer is that that is caused by more buyers than there is inventory. Anytime. basic economics supply-demand curve says that anytime there are a large number of people chasing a few goods, it drives the price up. Scarcity drives the price up.
Opposite of that would be if there was more houses on the market than there were buyers, then that would be called a buyer's market. This is a seller's market. A buyer's market means that the sellers feel just blessed to have anyone look at their poor little house, because nobody's out looking at houses, and because there's hardly any buyers. In other words, there's 10 buyers for 100 houses. Right now, there's 100 buyers for 10 houses.
You see the difference? And that's the simplified answer, and that's being caused by several things, but one of the things that's driven it of late in the last five years, as much as anything, is all of the migration that has happened, of people changing states because of taxation and archaic, crazy laws, having to do with the Fauci pandemic and all kinds of stuff. People just left California. They left New York, and they're in Tennessee. They're in Georgia.
They're in Florida, and they're in Texas, and the numbers are there to support that. That's not a political statement. It's just a huge change in population shift, and so that's created in those states, in particular, a shortage. Now, you're not in one of those states, but just to say that's exasperated in those states. Then the other thing that's exasperated is if the economy, if builders of single-family homes do not believe in the economy, then they don't build houses because they're afraid they can't sell them, and that's happened hardcore in the last 18 to 24 months, because the real estate market slowed down, and so, builders, the number of new housing starts is way off, and we were already had an inventory shortage, and so now, with not as much new housing coming online as it needs to, now, we've got even more of an inventory shortage, and that's what's driving this is you've got 100 buyers or whatever.
the number is on 10 houses. That's not an exact number, but there's this tremendous oversupply of buyers, and so they're doing stupid stuff like bidding 50,000 bucks over what the appraisal is, which then ends up ultimately changing the appraisal because people do it enough, it becomes a new market value.
Yeah, and that was a follow-up.
question, too. Exactly. I mean, how are these houses, townhomes, getting appraised to this value? that, or just, it's kind of, I don't want to say, made up, but how are the, how is it equaling the overbidding? How are these appraisers saying, you're right, it is over 50,000..
Well,
if you have 10 houses in a row on the market and six of them sell with overbids, you now have a new market value. It's the overbid value, because market value, the definition of it in appraisal class is what a willing buyer gives a willing seller where no duress is involved. Now, we could argue that this is a duress market, but in other words, neither one of them are being cheated and neither one of them have a gun to their head, and so that buyer's willing to pay that seller that, knowing it, and if they do that enough times on that block, voila, you have a new market value, and it's the overbid price. It's not the original value, and so, again, the shortage of housing versus the number of buyers is driving it up. And so, we've got some markets like yours.
I didn't, I was not aware, Philadelphia was that hot, but we've got some markets like yours, where you put a house on the market and you're getting multiple bids over the weekend, even with interest rates almost double what they were two years ago. Yeah. And that's another piece of this, Grace,
is that there's some golden handcuffs out there because people either refinance or bought at crazy low rates, and now they're unwilling to sell that home because they don't want to take on a new mortgage that has double the interest rate, which means there's lower inventory. So, I don't see this thing shifting drastically in the next year. I think when you're ready to buy, you got to buy, and if it means you had to get a competitive bid in with a good real estate pro, then that's what you had to do to get that home. There's not going to be deals out there where you're doing 20,000 under asking price right now. It's not the time to look for a bargain in.
real estate business, that's for sure. No, not at all. I mean, I'm a bargain buyer. I don't buy except in bargains. Dave hasn't bought a lot lately.
And I haven't bought anything in a while. I mean, and I'd kind of like to. I got some cash, I'm sitting on, but I'm not going to pay. I don't pay retail, so it's just like a Ramsey rule. What's your price point, Grace?
Well, I mean, and I've been guilty where I, I mean, to kind of get to be competitive, I've gotten 20,000 over, but I mean, I'm looking around at 300 to 320.
That range goes real fast, especially.
That's the biggest shortage.
Oh, yeah. I was talking to my real estate buddy yesterday and he said, homes under 500,000 in Nashville are going like that.
If I was a home builder in an average city in America right now, I would build all the $500,000 houses I can build, because you could sell everything you built.
Because that's an entry level in some markets. It's a number two, move up in other markets. And it's just, you know, I would build, there's a tremendous inventory shortage. Now, again...
I know this is going to be behind the scenes, but do you think banks are going to, when the appraisal comes back and they're saying, okay, this town home, that was, I mean, for example, I had a 309 townhouse, I bid for 330 and it finally sold for 363.
. So do you think the banks are going to counter offer that thing? I don't think that it's going to be appraised for that high.
Well, they're going to run an appraisal. And if there's no statistical evidence that other townhouses were selling at the 369, then that deal is going to have a problem. Because that bank has got a bunch of regulations on them. They cannot loan more than appraisal. That's what got us in the 2008 debacle.
Gotcha. Was them loaning on bogus appraisals. And so the appraisal industry since 2008 has tightened way up on regulations and the banks are tightened way up. The mortgage companies are tightened way up. So they don't have a lot of wiggle room.
So if somebody made that offer, they have to disclose to the bank they're paying 369.
. But if the appraisal comes back at 320, the bank's going to lend on 320.. They got to have the cash in their pocket for the difference.
Now, Grace, you're going to have to compromise on some things, whether that's location, you know, the home type, how old it is, see past some things that you can renovate. But I don't want you to sit on the sidelines hoping for the market to shift drastically.
It's not going to. Yeah. And I don't really disagree with your word obnoxious. I kind of think it's accurate, but it is based on supply and demand. And especially if you're trying to buy, it's just.
it's distressing. It's harsh out there. Weird. This is the Ramsey Show.
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That's HealthTrustFinancial.
com.
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I mean, wow, Spotify. Thank you. Amazing, guys. Thank you. Thank you.
Thank you. Pretty cool. All right. Open phones at 888-825-5225.. Today's question comes from Sadie in New Hampshire.
She says, I'm being sued by someone who was seriously.
injured in a car accident. that was my fault. I know this process can take years and my insurance company is handling the legal, but I have substantial assets and I didn't have an umbrella policy. My home and my financial assets are at serious risk. I'm a 64-year-old single woman with about a million dollars in retirement funds, 800,000 in non-retirement investments, plus 230,000 in cash in the bank.
I also own a home worth about 600,000 with about 425,000 in equity. I've spent my life building a business and financial security and I'm debt-free except for the house, but now I feel like everything is in jeopardy. I also still make a large salary from a business I own. At this point, what can I do to minimize my exposure and potential loss of wealth?
Well, anything you do, I'm not an attorney and I'm certainly not an attorney in New Hampshire. I don't even know one law in New Hampshire except to follow the speed limit. But in general, as a business person, I've learned the legal theory is this, that if you move assets after a lawsuit has been filed in order to avoid people getting those lawsuits, the judge can come back later and undo that move and still give it to them. So, for instance, if you took something and moved it into an LLC or moved it into a trust or something in order to do risk management, it's too late.
They can undo that in most states. Again, I'm not an expert on the law, but I think that's a pretty standard legal business law piece of knowledge. So, I would hire your own attorney that really knows New Hampshire law and ask that question. You have enough assets, you need to spend $10,000 or $20,000 on your own attorney and say, okay, what can we do here? What is at risk?
What is not at risk? Help me assess the potential on this thing. and what is this injury, an injury of this type, do some research, normally have a payout of, and that kind of thing. And so,
a 69-year-old, 64-year-old, single lady does not typically, in most court cases, have all of her personal assets taken from her. That would be highly unusual, but it can be done. It can be done. And it depends, of course, on a lot of things, but how egregious was your mistake in the car accident, in other words, how careless were you? or was this an accident or were you doing something over the top, you know, in the car, that kind of thing, weird.
I don't know. I have no idea, but I'm going to start assessing every one of those things. In most cases, the $1 million you have in retirement funds is not accessible to a lawsuit. Your 401ks, they can't get them, okay, and your Roth IRAs, they can't get them in most cases. So, but the rest of the stuff, which is several million dollars that you've laid out here, is probably, you're probably right, it probably is exposed, and I'm just going to start investigating what I can do to protect it or at least maybe make it difficult, which gives you then the ability to try to negotiate and attempt to do that.
And so, but, you know, you're not in a real strong position, so I'm going to analyze all of my options, and I think you need legal counsel, because I'm not that, and I'm not any good at it, but it's, George, it's the reason that I don't own anything anymore. Nothing is in your name. I don't own anything. My cars are in LLCs. My, all of my properties are in different LLCs, and once we get a certain amount of dollars in an.
LLC, we don't add anymore. Make a new LLC. Yep. Because you don't want too much of a target.
I don't own them, and I don't, there's not, Dave Ramsey doesn't own anything. I'm really pretty poor, actually. Personally. And so, on a personal level. But Sharon.
The actual man. Sharon's fairly well off. Yeah. Hope Sharon doesn't have a car accident. Oh, well, this is a good reminder,
honestly, for everyone listening out there, if your net worth hits half a million or more, it's time to get an umbrella policy. That's good. I was just looking at mine. I got a million dollar umbrella policy once I hit that level. And it costs like 300 bucks.
Yeah, 300 bucks a year, and that, I got underinsured motorist on there, uninsured motorist on there, protection as well, because that stuff can decimate you. And so, you want to transfer that risk over to the insurance.
company for those premiums. Yeah. LLCs, splitting this stuff off, number one. Then, number two, having the right amount of insurance. Just call somebody like Xander Insurance.
It's an insurance broker. Let them shop around and get you a policy. In her case, a million would have gone a long way.
Yeah. And being underinsured on your auto insurance. If you've got a policy, it's 100, 300, 100, instead of 500, 250, 500.. You got to make sure you have enough coverage.
The cheapest, the best, the insurance, there's not many things you can say, that's a good buy. There's really two types of insurance that are really a good buy, and that's long-term disability insurance. When you're an employer buying it as a group for your team, I buy it for our team, but dirty little secret is it doesn't cost much. And the other piece is liability insurance, like an umbrella policy and or upping the liability on your cars and on your home. And then adding to the top of it, an umbrella policy.
I carry a $10 million umbrella, and I.
think it's about $3,500 a year. About 10X, what a million would cost.
It's roughly, it might be four grand. And a great tool for everyone listening,
watching out there, go to ramsysolutions.
com checkup, and we'll do the work for you and show you the areas you might be exposed or underinsured. I just helped a team member do this, Dave, and they saved 80 bucks a month with better auto insurance coverage. Yeah, go shop. You're paying too much. You got to get rid of that company and go talk to our friends at Zander, to the Auto and Ramsey Trusts and Pros.
Go to the PLC, the PNC, on the website for the ELP, the endorsed local providers for property and casualty. And they're all insurance brokers. They don't work for one company. They shop for you and get you the best deal. And these are top rated companies.
On homeowners and you'll save money. Yeah. But you need to keep your liability high, especially when you start building your net worth. And then, once you get to a half million, you're right. You need to pick up a million dollar umbrella.
And then, once you get to 4 million or 5 million, go ahead and pick up a 10 million. It's the best buy in the insurance world. because of what she's facing. It's so sad.
I know. Well, to minimize the potential loss of wealth, I hope your insurance company has a great lawyer that's going to fight for this. Well, they got a lawyer that's equal to the amount they're exposed. Yeah. Well, this happened to me, Dave.
This was over 10 years ago now. I bumped into a lady. I remember this. She ended up suing me months later.
You had a car wreck right in front of the office. It was so embarrassing. The whole office watched George have a car wreck. All of Ramsey's looking out the window,
and I'm just out there in my little Chevy Cobalt, and I'm just going, oh my gosh.
Tearing up other people's stuff with your little Cobalt.
Two fire trucks, an ambulance, two police officers. It looked like a parade out there.
Well, I mean, you were just driving. You were just a reckless person.
I bumped the door, and guess what? A few months later, this lady, I get served. She's suing for like $385,000.. And I'm broke, and I'm on my dad's insurance. So he was exposed too.
They ended up getting $25,000 from my insurance company, which was my limit, and $25,000 from her insurance company. She sued her own insurance company, and she got $50,000 out of the deal. But I didn't pay a cent out of pocket.
And was she really hurt? No.
No. They said, we've never seen as many medical boxes that she sent over. She's a literal ambulance chaser. Oh, really? Not her first rodeo, Dave.
Let's say that. Well, maybe she hit you, George. That's what I was... I got a camera the next day. I was like, I'm going to get a dash cam.
You got a little body cam, because George's body's.
And I increased my insurance coverage the next day. Wow. Never again.
The next day is too late, by the way. That's the point of this whole email. You don't get to go back in time. This is the Ramsey Show.
George Campbell Ramsey personality is my co-host. You're invited, by the way, to join us anytime you're in the Nashville area.
We charge absolutely nothing to sit and watch us do this show, and it's worth every penny. So we want you to come out, and the coffee is free, and it's good coffee, and the homemade cookies are free, and they're really good. Smells kind of like Mama's Kitchen when you come into our building instead of Corporate America, which is Iron Tent, by the way. They do a great job over in the Baker Street Cafe. A little nod to the opener on the show, by the way.
We've got a lobby here full of folks almost every day, Monday through Friday, one to four. We do the show Central Time. A little south of Nashville, in a beautiful town called Franklin, Tennessee. So come out and visit us anytime. We'd love to have you.
In that lobby. on the debt-free stage is Anthony and Shona. Hey, guys. How are you?
Pretty good. We're blessed, man.
Awesome. Awesome. Where do you guys live?
Temple, Florida.
Oh, fun. Welcome to Nashville. All the way to Nashville from Big Tampa to do a debt-free scream. How much have you two paid off?
We've paid off $71,102.
49.
Excellent. How long did that take?
Nine months.
Good for you. And your range of income during that time?
It was about $100,000 to $112,000, just in personal, not including the business.
Okay. Do you make money in the business? Yeah. Okay. What kind of money do you make in the business?
We do about $350,000.
Wow. Very nice. Good for you guys. Well done. So you're killing it, you two.
How old are you two?
33.
Wow. Excellent.
What kind of debt was this $71,000?
So we had taxes, which was $8,921.
50, student loans, which were $28,008.
36, and credit cards, which were $34,172.
63.
Awesomeness. Very cool. So what happened nine months ago, or 12 months ago? that said, we got to change this, and then, nine months later, boom, you're out of debt?
Well, we actually have a very interesting story. So when we first started dating, this was about March of 2020, we were sitting...
Oh, that's good timing.
Yeah, right? We were in his room because we were not living together yet, and he had these floating shelves, and he had your Total Money Makeover book on the shelf. And we were just sitting there, just hanging out, and all of a sudden, the book falls off the shelf. Like, true story, out of nowhere. So we were like...
The spirit of George puts the book off the shelf.
Read this.
Well, we did. We read the entire book in one day.
I would. That would have freaked me out.
I would have put that book away.
It's like a Ouija board.
It was pretty crazy. So we read the entire book in one day. We cut up all of our credit cards. We got rid of his life insurance policy. Wow.
A whole life insurance policy.
Yeah, the whole life. And then we got to work paying off our credit card debt, not any of our other debt. And we were just living life. We were making about $10,000 to $12,000 a month, and things were going great. But we weren't really taking it very seriously, because we didn't pay anything off after the credit card debt.
And then, about a year later, we decided we wanted to move from an apartment to a house, renting. And so then we got right back into a whole bunch of credit card debt. So we had to get furniture, and washer and dryer, and deposits, and all that kind of stuff. So we got into all that credit card debt again. And then we also got married and got into some debt for that.
So fast forward to November of 2022, and we were making about $10,000 to $12,000 a month, but it was off of one client. And we didn't have second jobs. We only had the business. And then they just said, this was like a right before Thanksgiving. So they said, sorry, on December 1st, you're out of here.
We're not giving you any more money.
So in December, we actually had to use all of our wedding money to pay our bills. And then, after that, we started having to put all of our bills on credit cards. So that's how we racked up even more credit card debt. And that was when things kind of snapped for us. We're like, this is never happening to us again.
So we had nothing in place. We had nothing. So we were like, we need to change something. So that's when we started going really hard in the business. And we also both got second jobs.
And here we are.
Did the book fall off the shelf again? But we definitely picked it up. Wait, I remember this. Pay off debt. That's good.
And then you guys just went for it. Because now you had the income to go, all right, we're no more fooling around.
Now, will you go back again?
No. As soon as I knew that I was a problem with the money, and I gave it up to her, we literally got out of debt free. As soon as I gave her all power of handling all finances. So that's my biggest lessons. Let her run everything.
Ah, OK.
All right.
But you got to know what's going on, right? You know that.
We talk every month about all the bills.
I look at it daily.
Yes. I can tell you're the nerd, because you have it down to the penny on the phone. And he's just hanging out, having a good time. Yeah. He's the free spirit.
You guys call it the every dollar budget. I call it the every penny budget. Wow. Because every single, I mean, we run payroll. And we run $4,132.09..
We run exactly down to the penny of what we need. And that's how we do it. Wow.
OK. Never going to be there again. Never. Never again. moment that changes things.
That's right.
Yeah. And if you really won't go back in debt, and you really will not ever live on one client again, then you'll have a great business. And you'll build wealth. And you'll be in great shape. And so, yeah, you learned some harsh lessons there.
So way to go, y'all. I'm proud of you. Thank you. How's it feel to be free?
Feels amazing.
Free. Absolutely.
We really, our big goal is to buy a house. So we don't really feel like there yet. So we're out of debt.
Well, you're making great money. You ought to be able to stack the cash and be able to do that. Tampa's a great market to buy in.
Yeah, we're almost there.
Keep living like you're broke. And a year or two, you'll go, oh my gosh, we have hundreds of thousands of dollars for this down payment.
Actually, for his W-2 job that he got, he had actually gotten a raise about four months into him having the job. But we continued to live on the original amount. And everything from the raise just went towards it.
That's amazing.
That's a big deal. Yeah. Very good. Good job, y'all. Well done.
Well done. What do you tell people? the secret to getting out of debt and staying out of debt is?
So I have two things. So the first thing is, you have to want to get out of debt more than you want the thing, more than you want the coffee, more than you want the nails, the clothes, whatever. And then the second thing is, which this has helped us probably the most, was continue the credit card stacking amount even after you've paid off your credit cards. So by the time we got to the end of our credit cards, our stacking payment was $1,000 a month. So even when we moved into paying off my student loans, we kept that $1,000..
You're talking about your debt, snowball amount? Yeah. Yes. OK. Yes.
Cool.
And then, when we went into saving for our emergency fund, we kept that $1,000.
. And then, now that we're saving up for the house, we kept that $1,000.. So we always, bare minimum, have $1,000 going towards debt or savings. Yeah. So that's really, really been helpful.
Yeah. Once you learn to not need it anymore because you're throwing it on that, then just don't need it ever again. And it turns into serious money. Like someday, when you don't have a house payment anymore and you take that amount, and just that amount, you always pay yourself a house payment. That turns into a million dollars so fast.
It's scary. Yeah. Yeah. We did that when we paid off our first house. And it was like $2,500 a month or something back in those days.
And I just set that up going into a mutual fund. And that turned into a million dollars. so fast. I looked up and I was like, wow.
Savings rate is amazing.
Yeah. Yeah. Pretty cool. Way to go, y'all. Very, very cool.
Very proud of you. Thank you for coming up from Tampa, Florida to do your debt-free scream. Anthony and Shauna, Tampa, Florida. $71,000 paid off in nine months. Making $100,000 all the way up to $350,000..
Count it down. Let's hear a debt-free scream.
Three, two, one. We're debt-free!
Yeah!
We're also going to give them two every dollar premium subscriptions for a whole year that they can use and give away as they save up for this new house.
And they'll love it because they're already using every dollar.
Every penny.
Every penny instead of every dollar. There we go. Well, maybe we have a new subtitle. This is the Ramsey Show.
It's way too easy to put off making a will. And believe me, I've heard every excuse in the book. But not having the time is one excuse we can kick to the curb right now. Because these days, most folks can make a legally binding will on their laptop between loads of laundry. If you're wondering if you can make your will online or if you need a lawyer, we have a quiz to help you figure that out in less than five minutes.
Just go to ramseysolutions.
com slash wills quiz. ramseysolutions.com slash wills quiz.
George Campbell, Ramsey Personality, is my co-host today. Thank you for joining us. So many years ago, we started building a network of real estate agents across America that are high octane, high protein, that sell more houses than just about anybody in the area. And that understand and run their whole thing the way Ramsey talks about. So that when you go to them to list your house or you go to them to buy a home, you're going to recognize the lingo that they use if you spend time on this show.
So they're called Ramsey, Trusted, because they do stuff the way we do, endorsed local providers for your real estate. And so, if you're thinking about buying a house or selling a house, this is the best possible way to do it, especially when you've got a difficult market time. As a seller, there's some unique challenges. right now. You may be in a position, if you price it right, to be fielding multiple offers, depending on the market.
Other markets are stagnant, sitting,
because people are frozen by these interest rates. Other places were getting multiple bids. It's a weird dynamic. And you can't just assume that anything you saw on the news or Zillow is correct. As a matter of fact, you can pretty much assume both of those things are wrong.
And so you need to get with a professional in your area that's got some experience and doesn't sell three houses a year and got their license last week because they thought it'd be fun. That's just not what we do.
It's a side hustle, Dave.
I go to church with him. He's a nice man. Yeah, but he's dumber than a rock. He's just, it's a good thing he's in church. No, you don't need to, that does not need to be your real estate agent.
No, absolutely not. You get somebody that sells a lot of houses. You know, 50, 300, 200, what are houses a year? These are people that real, because if they're moving that kind of volume, they know what the flip they're doing. Okay.
So these are Ramsey Trusted. Check them out for free at ramseysolutions.com slash agent. If you're getting ready to list a house or look for a house. And, by the way, it is a great time to do either. I love a market like this.
where things are weird. There's opportunity when things are weird. And so, on both sides of this equation, you can make things happen. Janet's, with us in Palm Springs, California. Hi, Janet.
How are you?
Good. How are you?
Better than I deserve. What's up? Sure.
Um, okay. So my question today revolves around the transferring or rolling over a Roth into a traditional 401k within an employer. So my husband's been with this company for over 10 years, and they had previously not offered a Roth option, and they just announced that they would now have that option for them. So we're wondering if it would be best. I know that you do suggest having the cash available to pay the taxes we would have to pay on it.
But does it make sense to keep it within the company, or should he just roll it out of the company altogether?
Does he still work there? He still works there. Yes. You can't, you can't move it out if you still work there.
Okay.
Okay. Now he has two possible, three options here. One is he can keep doing what he's doing, which I don't recommend. Number two, he could make all future contributions be Roth, and there's no taxes caused by that.
Yes, he plans to do that.
Okay. Or he could roll whatever his balance is with that company into a Roth 401k now that it's available, and that will activate taxes on that balance. How much is that current balance?
The current balance is like close to 18k.
$18,000?
Yes, in his traditional 401k with his employer.
Yeah. Do you have any money? Are you guys in debt? What's your situation?
No, we're actually in baby step three B. We found your FDU through our church over a year ago, so we're out of debt. We have paid off cars. We have our fully funded emergency fund, and we just started saving for a house.
You want to use $4,000 of your house money to make this 18 a Roth?
I'm sorry?
Do you want to use $4,000 of your house money to make this 18 into a Roth?
No, we would save up for that.
You can't save up for it. When you roll it to a Roth, it's going to activate taxes of the following year.
Yes, correct.
But Dave is saying there's an opportunity cost. If you're trying to save for a house, it's going to delay that because now you need to take a portion of that money to pay the taxes.
Yes, correct.
So I wouldn't fool with this. I would just make future contributions to the Roth, leave traditional assets.
I would, just because it's only 18k. It's only $4,000..
If it was 180k, you'd have a whole lot more in taxes.
I'd rather pay it sooner than later, where it's larger amounts.
Yeah, I agree. I would move it just because it's small, but you need to understand that, basically, there's $4,000 in taxes that you're activating, and that's going to lower the amount you have for a down payment by $4,000..
So figure out how much that's going to hold you back from buying a house.
We have about $2,000, $2,500 extra a month that we've been throwing at debt and all that stuff, so that will just continue to roll into saving for this. So it would take us about two months to save that $4,000..
Exactly. And you would have been putting that towards a down payment, because you're in 3B, and that's $4,000.. It's not going to be available for a down payment now. That's what I was saying.
Yes.
So, as long as you're willing to do that, and because it's such a small amount, I would. If it was, double this, I probably wouldn't.
Okay.
But if it, you know, it's just, the other thing I like about it, quite honestly, because I'm old and I got so many different accounts from different stages of my life. now, this is very clean and it simplifies your future. Because now you're 100% Roth everywhere, right? And that's going to be very sweet later, instead of this weird little 18,000 account from that's now grown to 200 and it's been 25 years and you're like, oh crap, I've got that thing laying over there now. So I like all of it.
I like the cleanliness of it.
Now I'm curious, Dave, when it comes to an employer match, that sits in the traditional side. So at Ramsey. Yeah. Now, when I'm, when I retire one day, hopefully 40 years from now, from Ramsey, I'll have a traditional side with the match in it. That's true.
So you already kind of have, you know, you've got the different buckets there. If you have an employer match, it's likely going to that traditional side.
Now, in your case, you won't, because you could take that and roll it, because you're a baby step seven millionaire.
So pay the taxes on that.
You can roll that once a year, the employer match into your, into Roth, but the employer can not make the match in Roth. And so you got to pay the taxes on it when you roll it once a year. But in your case, because you're in good financial position, I would do that.
That's generally the time to do it. And her situation, because it was such a small amount in there. Yeah. It's not a deal breaker.
99% of the time, you folks call here and ask us if you're going to roll something to a Roth before everything's paid off, including your house, we're going to tell you no.
You got priorities.
Because you would put the money towards debt instead of toward taxes. That's what we would rather you do. The only reason we're answering her differently, or I'm answering her differently, arguing with George, was the, uh,
She was the exception.
Just a small account.
Very small. We found the exception to the rule.
Wow. It doesn't happen very often around here.
It's something to celebrate. Yeah. I have no hobbies.
Malcolm is in Seattle. Hey, Malcolm, what's up?
Hi, how are you today?
Better than I deserve. How can I help?
I, uh, I'm looking to ask you a question, get a reality check from you. So I started a small business about 60 days ago, and it's been much more successful than we thought. This isn't my primary job, nor am I going to leave my primary job. We buy and sell paintball equipment and we do quite well on it, but it's hard for us to get inventory because there's only a couple of events per year. So I was thinking of doing an equity deal with another person.
He buys the inventory. I sell it. Basically, it's a way to fund the business without taking debt. But I don't know if I'm just being delusional. Is this another form of debt?
No, it's a partnership.
That's what I was thinking, but I just didn't want to be. If you need to look at things.
Yeah, it's a partnership and I think it's probably unhealthy.
Okay.
Um, I think you're probably paying a pretty serious premium on your, out of your profits in order to bring in a partner to do this. Okay. I would suggest that you just grow a little bit slower and grow with your own profits, and, um, you'll make fewer mistakes. And you won't end up with somebody over to the side pissed off at some point because something went sideways on you.
What's the inventory cost?
Um, it's tricky, because every marker, what are we talking about?
A hundred grand or 10 grand?
Uh, like $75,000, six times.
Okay.
Yeah.
Six times a year.
Yes.
Okay. You need to be, what I would do is do about a 10th of that and roll it and just roll up a little each time. You don't have to be king of the mountain on day one, dude, you can be the little guy at the bottom of the mountain at the start. And just don't, don't be on the cover of fast company magazine, be on the cover of slow company magazine, and you'll survive. That's what I would do.
It's what I did, by the way, I grew, that's how I grew this $300 million company. 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. George Camel, Ramsey, personality, number one, bestselling author of breaking free from broke. He is my co-host today. If you want to break free from broker in the right place, he's here to help.
the phone number is 888-825-5225.
. Allison is in little rock. Hi, Allison. Welcome to the Ramsey show.
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