Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and build actual amazing relationships. I am your host, Jade warshaw. I am joined by my buddy, my friend, Dr. John Deloney. He's also written a couple of really awesome books. We're going to be taking your calls all hour about your wife, your money. Feel free to give us a call. The number is triple 825-5225 and we will chop it up with you. Hey, let's get right into it. We've got Elsa in Detroit, Michigan. What's going on, Elsa?

Hi, there.

Hi. How are you?

I'm here. How's your day?

My day is going good, but I want to know what's behind your.

Yes, yes, I'm fine. I'm here. I'm just wanting to get some advice from you guys.

Okay. Tell us about it.

Well, I've been a stripper for ten years, and I now know better. I know the dangers and how bad it is to work there. I've realized how unstable that world is, and I'm 29, so I just want out. But it's me, my financial goals right now, and I have some debt to pay off. And I have a dilemma. I just don't know if it's worth me staying there to pay everything that I owe or just get out and find a normal career, find normal job right now. And then, little by little, go on to move on to something better. Go on to my university dream.

Is it true what you said, that you kind of made it seem like only your debt is keeping you in that lifestyle? Is that true? Because you just laid out that the back half of that was this beautiful scenario that didn't involve the dangers and lifestyle that you laid out at the beginning of the conversation. Yeah.

That's the only thing that's keeping me, really. Yeah, it is.

How much is it?

Let's see. It's about 12,000 medical bills, and then it's about another 12,000 just credit card debt. And then I have 18,000 left in my car.

Okay.

Where do you live?

Detroit, Michigan.

Do you have a home? Do you have an apartment?

Yes, I have an apartment. I live by myself. It's just my dog and I. And I've never really been the typical dancer that has three or four girls living with her or has a pimp. No, I've been smart in that aspect, but I've become friends with girls that have that lifestyle, and it's just been dangerous for me. And I don't know if it's worth me staying there.

I think that's your answer.

No.

Yeah, that's your answer. You said, it's dangerous. What I was waiting to hear from you was, I want to get out of this, but I can't because of. And then maybe there being some danger to you, like bodily danger to you because of the people that you're associated with. I was waiting to hear something along those lines. But truly, truly, truly, Elsa, if you're telling me that the only reason is because of this debt, then I want you to know that when you told me those numbers, I didn't break a sweat. My heart rate didn't increase at all. We take hundreds of calls a week, thousands of calls. Over time, millions of people have called this number. And when you told me that debt, I was like, oh, okay, Elsa can do like, she's capable, she's confident, she's smart. There was no part of me, based on anything that you said, that would make me say, she can't go out and get to your that. Get that education, get a job, and go and work in a profession that doesn't cause you to take off your clothes or do things illegally. There was no part of me that thought, I don't know.

For Elsa, I only had confidence in you.

Well, thank you. It's just so hard to have confidence in oneself whenever you've been there. Since you were 18, 1819 years old, and you were told, many years, like, you're only here to please men. You're not worth it. You're not good enough. You're not this, you're not that. And then you don't have a mom or dad to tell you any different. It's hard to believe that I can make it by myself in the real world with a normal career. It's so hard.

Where are your parents?

Well, my dad passed away when I was three, and my mom, she's just not in my life.

Okay. Do you have anyone else counting on this money, or just you?

What was that?

Do you have anybody else counting on this money? Or is it just you?

No, just myself. It's just me and my dog and that's it.

If you were to give me a number, how much money do you need a month to make your minimum debt payments, to make your rent and to get some food for you and your dog?

Well, my rent is 1800 plus food. I don't know. I spend 120 a week, I guess.

Okay.

I don't know, I guess 3000.

It's not crazy.

No, that's not crazy at all.

You called us. Okay. So here's my promise to you. All of us, every one of us finds ourself at some season in our life, in the dark. And we don't know which way is up. We've done something that we don't think we can come back from. We found ourselves in a job that we can't quit. We have found ourselves ten years into something that has compromised who we are. And yet, we don't see a path out. And there's nobody that we can see that has a light at the end of any tunnel anywhere. And then you call us. And what Jade and I are telling you right now is we haven't been in your particular situation, but we've been in our own dark rooms. And we reach out and call somebody that we trust, and they say, you can't see it yet, but I promise there's a path out. And that means the first step you take is going to have to be a scary one because you won't see where you're stepping. You're just going to have to trust Jade. You have to trust me. And you have to trust that millions of people before you have walked this path.

It's going to be scary. Are you in?

Yes, of course.

So what does it look like for you? Let's say you come off this phone call today and you say, you know what, John and Jade, I'm going to take that first step and I'm going to leave this profession behind and find a different profession. What does that look like for you? What's the first step to you saying, I'm not stripping anymore? Is it walking into the club and just saying, I quit? Is it as easy as that? Tell me a little bit more about that.

That's so hard to match, to just not go back to that club anymore. It's so hard because I have everything written down here in my whiteboard and I'm seeing these numbers go down little by little.

Yeah, but you know what else is going down and down and down and down? Your sense of self. Your sense of who you are. Your sense of purpose. Your sense of your own ability to breathe. To be okay with who you see in the mirror. And that's way more important right now than a dollar amount. Hang on the line here. We're going to hold you over because we want to continue this conversation with you. I'm really proud of your bravery and your vulnerability. We're going to figure this out, okay? Hang on the line, guys.

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You're listening to the Ramsay show. I'm Jade Warshaw. Next to me is Dr. John Deloney. And first segment, we had a caller on from Detroit, Michigan, Elsa. She was explaining her situation to us. Right now, she's in this stripping industry, and she's making a lot of money doing that. She's got $42,000 of debt, and she's not sure that she's ready to leave that profession in order to kind of pursue that life that she's always dreamed of, going to school, getting a, quote, normal job, and getting into a lifestyle that's not full of danger and scary things. So we've got her on the line. And Elsa, did I get that right? We're kind of just trying to figure out what's your next step.

Cool.

So, you know, John and I, we had a couple minutes to just talk on the break, and we were thinking, for you, it's not as easy as just walking into a club and saying, that's it, I quit. Right. It sounds like you've got some feelings tied up in this. This is your community. It's the only thing you've known since you're 18. Right? So it's not just that easy.

Elsa, do you have a bunch of people in your life telling you you're crazy, the money's too good. You're an idiot. You're whining about nothing.

Yes, actually, just a month ago, the manager. You're crazy for wanting to leave this industry. Why don't you just take two days off? Because I worked 40 days straight. I was so focused on this one credit card that I owed about $9,000, and I brought it down to, like, $500. In those 40 days, how much debt.

Did you start with? Can I just ask that? What did you start with?

It's just credit cards that I moved. I used to work in New York and then Vegas.

So it's like, you pay it down and run it up again. Pay it down, run it up.

Would always. I kind of always did. What can I just ask?

What are you making? Like, what do you make on an average week? What do you make an average month?

Maybe 3000. A good month, maybe 45 to 5000 in a slow week.

Listen, I'm going to say this, and I don't mean anything by it. That's all right. It's fine. But you could easily go out and get another job to replace that. I feel like there's an erroneous part of your thinking that's like, man, this money's so good, there's no way I could make that on the outside. And I'm just sitting here telling you, like, yes, you can easily, John.

Yeah. I'm going to ask this almost the same way I would ask somebody who's ready to stop drinking. Because here's what this is going to cost you, Elsa. It's going to cost you everything you've known since you were 18. It's going to cost you a bunch of parasitic, awful people who are basically pseudo family, but they're not. They're leeches or predators. It's going to cost you all of it. And it's going to change your day to day. It's going to change. You have to get up and you're going to have to go to a regular job, and you're going to have to interact with quote unquote regular people in the light. And you're going to have to learn to not feel socially anxious about that. And it's going to take some time and some practice, and it's going to be uncomfortable. And if you do it, you're going to wake up in eight months and you're going to easily be making. You're going to be working a couple of jobs, but you're going to easily be making $4,000 over the course of a month. And you're going to start to accumulate something that you have never had, and that is dignity and self worth and a pride in yourself.

Is that worth it? Because if you're not ready for that, that's okay. We love you. We'll still be your friend. We'll hook you up with FPU. But none of this changes. And you know how this ends, right?

Well, yeah. It's taking a toll on me.

I know it is.

I'm having nightmares.

I know it is. Are you done?

I'm just so scared.

Are you done? If you're done, we'll help you out. We'll give you everything we got.

I want to leave this trip club.

Okay.

Just as much as I want to breathe, I want to go to bed early and be in bed at seven or eight.

Let's make it happen. Listen, we're going to give you three, four or five steps, whatever steps it is, little by little that you can take today and make changes today and throughout the rest of next week. I think this is going to, the physical effort that it's going to take is going to be a lot less than the mental effort, right? Because to John's point, like you said, this is all you've known. But physically, for you to say, okay, I quit or tonight I'm going and I am applying for every job I can think of. I don't care if it's Kroger grocery store. I don't care if it's McDonald's. I don't care if it's Amazon stocking shelves. Whatever it is, you apply for it and take the first job you get and then you can always upgrade later. Take the first job you get out. I think that's step one.

John, I want you to have two jobs by the end of this week. Will you commit to that?

I will look for two jobs.

You look for 50 jobs, you're going to accept two of them. And you're going to start at seven or eight in the morning and you're going to get done about 06:00 at seven at night. And then you're going to go home and you're going to play with your dog and you're going to go for walks and nobody's going to chase you. And then you're going to go to bed and you're going to practice going to bed because you have never done that, not in your entire adult life. Have you gone home and just watched a TV show and gone to bed? Right?

I just crashed. And I crashed for 1213 hours. I'm just so exhausted. I hate wearing those heels.

I hate wear running shoes like I'm wearing right now. They're amazing.

When you get off the phone, you're signing up for Uber and you're signing up for Instacart. You have an $18,000 car. That's thing one. And then I want you to go down the street to two, three different grocery stores. Apply, get the job. Just like that? Just like that. There's nothing now you can't go, well, where should I apply? What should I do? I just gave you five options.

So I should get a normal job even though it's going to take me longer to pay this.

It's not going to take you that much longer. Girl, you told me you were making $3,000 a month. You're not scrooge McDuck on that, all right? I want you to stop saying that. That's like, this pinnacle. It's not. And I'm not saying that to be ugly. I'm just telling you the fact that.

A ton of money.

That's not a ton of money. That's what people make when they call our show and we tell them, you need to make more money. That's what that is. And so I'm not going to subscribe to that with you. You were just doing okay. And you're about to do a lot better. You're about to do so much better. And I know that you said earlier, no one has told you that you're worth anything. But let John and I be the first to tell you, man, you're worth so much. You can do so much. You're just so valuable, and there's so much talent inside of you, and you have so much to offer. We see it and we hear it. Just talking to you. We truly do.

And if you need to borrow some of our self belief for a minute, go for it.

Borrow it.

But listen. Yes, go get two jobs tomorrow, or start this afternoon, but start tomorrow. And the moment you sign on job number two, I'll start tomorrow. You make a commitment, I will never walk back from that club again, ever. I'm going to block the people on my phone. I am out. I am out. I am out. If I have to change apartments, I'm going to change apartments. I am out. And there's going to be a season of loneliness. You can go get involved in a local group. You can hang out with people at your new job. You can go to a local church. You can figure that part out. But we're going to start cold turkey. We're out. I'm out. I'm out. I'm out.

And we're going to give you all the tools you need. We're going to give you a budgeting tool to help you budget your money. We're going to set you up with coaching. We're going to give you Ken Coleman's career assessment so you can figure out what your path is toward doing what you truly want to do career wise. We're going to make sure, like on our end, we're going to make sure you have everything.

I'll talk to you separately on my show about how to get into a college that you want to get into. Okay, we're going to walk with you. We'll hook you up with a financial coach so they can walk you through your budget. You think $3,000 a month is a lot of money? It's not.

No. I said I make 2000. $3,000 a week.

6000. $8,000 a month. Yeah. That's a good salary.

That's a good salary. But looking at what your lifestyle is, A, it's not necessary, it's not sustainable.

And b, I'm not living a fancy lifestyle.

I know.

I'm actually frugal.

Whether I make my point that I'm making to you, Elsa, is you don't need that much money a month. You told me your rent is eighteen hundred dollars a month. You've got $42,000 of debt right now. An average income is going to be just fine for you. That's why I was saying if you can get $4,000 a month, I'm happy for you. You're making steps in the right direction. Direction. And then that income is going to go up and up and up. And right now that money's going somewhere. It's being piddled away on debt and bad decisions because you haven't known how to manage that money. We'll teach you how to manage your money and you can make less money go further when you know the correct way to manage it. And we're going to help you with that.

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You're listening to the Ramsay show. I am Jade Warshaw, joined by your other host for the day, Dr. John Deloney. And we're here to talk about your life and your money. So if you have a question, if you want to talk about budgeting, you want to talk about why your spouse never sticks to the budget, if you want to talk about student loans or paying for college, whatever it is, give us a call. The number is triple 8825-5225 and we'll help you out. That's what we do here at Ramsay solutions. We're really just existing to help you with your life and your money. And that goes through a lot of different aspects, whether it's your mental health, your well being, your career. It spans all these different areas. And because of that, we're offering a really cool live event coming up here in May. It's the total money makeover weekend. And a lot of you are probably familiar with the book total money makeover. It's kind of what started all of this. It's a process to get your life and your money together. And it works through the series of baby steps. It's what we teach on every single day, day in and day out here at Ramsey Solutions.

And we're doing an event surrounding that. It's a total money makeover weekend. It's going to be here in Nashville or Franklin. Here at our headquarters, Ramsay Solutions, we have a really cool event center. It's up on a hill. It's beautiful. It's brand new. And that's where the event is going to be. It's May 10 and 11th, so you can come up there. It's one weekend, and you're going to get a crash course on all of the things that you hear us teach about. And it's going to be all the personalities spanning all of those different areas of your life and your money. So it's going to be myself, Dr. John Deloney, Ken Coleman, of course, Rachel Cruz, George Campbell, Dave Ramsey. The goat himself will obviously be there. And I'm really excited about this event because it really doesn't matter where you're at in your money journey. You could be at baby step one or baby step seven or not. Really sure if you want to dip your toe into the water yet. This event is for you. There's going to be so much information. If you've ever been to a Ramsey event before, this one is about to blow it out of the water.

Totally different. We're just taking a completely new take on things. It's going to be really cool. So don't wait to get your tickets. Our platinum plus tickets are already sold out. Whenever I say platinum plus, I feel like a rapper. In the 2000s, whenever the platinum plus tickets are sold out. But you can still get platinum or VIP if you get them now. So get your tickets. You can get them@ramsaysolutions.com events. Do it today. I'm excited, John.

Bling, bling, bling, bling. Every time I come around your city.

John, just when I thought I could have no more respect for you, you go and do something like that.

Pinky ring. Cost of outfitty. Let's go out to Leah in Los Angeles. What's up, Leah?

Hello. Hi, Jaden. Dr. John.

What up?

Taking my call? Well, I'm calling with a question. I am trying to find out if it makes financial sense for me to put off buying a house or maybe not buy one at all.

Why?

Because you live in Los Angeles and they're a billion dollars.

Listen, I just want to know. She might make $5 million a year. I don't know. Let's hear it.

Okay, so a little background. I'm 45, happily divorced, no kids. It took a long time, but I made it to baby step number four. That means all credit cards, car payments, all paid for. All right, thanks. I now max out my 401K every year. I have an emergency fund for about six months.

Good job. Thank you.

But that said, it doesn't translate to much. My 401K is only about 250,000. My emergency fund is around 40,000 sitting in a high yield savings account.

Okay.

I am never, ever remarrying. And I don't plan to have kids. So I'm just saving for.

Hey, listen, just real quick. Jade and I will both commit to coming to your wedding within 24 months. That type of, like, I guarantee it, you will be married in 24 months. And we're going to do our best to be there. All right, keep going, keep going.

Okay, so 250 in retirement, 40,000 saved. All your debts gone. That's not good enough for you? Tell us more.

Yeah. Well, I think conventional wisdom says it's a waste, obviously, to spend money on rent instead of paying for a mortgage. But I travel extensively for work. I don't know when or where I'm going to eventually settle down. So it seems to me like maybe it's better to keep stocking away money instead of trying to put down, like, a mortgage payment.

Let's break up that way of thinking, it's not so much that rent throwing money away. People think of rent as throwing money away or it's a waste. And that's not true, obviously. If you'renting until you can buy, it's just you buying time. Like you're buying the ability to buy a house the right way. Right. That's what you're doing when you're renting. It's not you throwing money away. But on the other side of that, I kind of want to make you understand that when you are renting, for most of us, myself, John, everybody, for most of us, the biggest line item on our budget is where we live, right? Whether it's a mortgage or it's a rent, it's housing is the biggest line item. And as long as you're renting, that line item is not stable. It has the ability to fluctuate, it has the ability to change. And in most cases, it's just going to go up. Up.

And how old did you say you were, Leah?

45.

45. Here's what I want for 70 year old Leah. No house payment. And so when you think about stability, you think about risk as you get older. And I can imagine coming out of a divorce, I could feel it in your bones. You're playing catch up in your mind and you're playing I will never be dependent again in your mind. So if you play that game all the way to the X factor, all the way out, don't be reliant on a landlord, like Jade said, who's going to make your rent go up and down at their whim or whatever.

At that point, you are throwing money away.

If you were my sister, I would tell you the greatest gift you can give yourself right now. And you're already well ahead of the game in terms of your finances, by the way, if you keep that 250 invested properly, then it will double every seven years. So it'll be $500,000, be half a million dollars when you are 52. When you're 59, it's going to be a million dollars. When you are 66, it's going to be $2 million. You see what I'm saying? So you're better than you think you are. What I want you to think through, though, is what age do I want to be when nobody's going to tell me, you know what? Your rent just doubled. I don't want that to be part of your equation. But also, Jade, I want to honor the fact that you don't know where you want to live yet, do you, Leah?

No, and honestly, just from seeing my parents and my in laws like what they have to do to maintain their homes just seems like way more work than it's worth. I understand.

Get a patio home.

Yeah.

Get a condo.

Yeah. I think you're coming up with excuses. I mean, don't get me wrong, home ownership definitely does have something that comes with it. Right? But you don't have to have this giant, expansive yard. You don't have to have water features and hedges that are cut into animal figures. You can keep this very simple. You can have a condo, you can have a place that's got an hoa. And there's something to be said about that. And yeah, if something happens with AC, you're know, if something happens and you get a water leak, you're responsible. But I think you can handle, Leah, especially at the expense of having a paid for living situation.

Jay, do you think maybe because I'm thinking about this in terms of debt, like 30 years of debt, that's what it sounds like to me.

It's not debt, it's an investment. Let me say this, because this is not just you, Leah, this is a lot of people listening. We talk about investing a lot, right? We talk about baby step four, five and six, and you're investing in your 401K. But don't forget, real estate is an investment, guys. It is not the same as debt. Real estate is a forced savings account. When you pay your payment, it is not going down a black hole. It is going towards equity. It is another form of a savings account. And the great thing about it is the interest that it pays is great. When property values go up, that's your interest making payments towards you. So it is an investment. It is not throwing money down the drain. Now, to your point, you have to treat it like the ocean, like you need to have a know, fear and respect of it. Because there is a situation where if you buy a home in the wrong way, it is a burden and it is not a blessing. Right. And so if you do choose to do it, Leah, I want you to make sure that you're following our parameters so that it is a great investment, it is peaceful for you, it is something that you enjoy having.

And like John said, that something that you will eventually own. And to add to that, most people, when we look at most millionaires, Leah, their portfolio is between three areas. It's their home, which is usually one of the biggest portions. It's their 401K, their retirement investments, and just their cash sitting around. And so home ownership is key. 67% of millionaires that we've surveyed. And we've done the biggest survey of millionaires ever. 67% of them own their homes. It's a big component to this. So I don't want you to be afraid of it. I just want you to have the information going in to where you're getting a home payment. It's no more than 25% of your take home. All in on a 15 year fixed rate. If you do that, you're going to be sitting pretty. This is the Ramsay show.

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People, what's going on? You're listening to the Ramsay show. I'm your host, Jade Warshaw. I am joined by Dr. John Deloney. We're taking your calls all afternoon long. Really? So you can give us a call. The number is triple 8825-5225 and we'll be here to help you talk through whatever it is that you're going through. It could be something with your spouse. It could be something with your family. Whatever it is, money touches all these areas of our lives. So make sure that you are giving us a call so we can help you through it. We've got Jessica, who's in Chicago, Illinois. What's going on, Jessica?

Hi. How are you?

I'm doing good. How are you?

I am happy but terrified. I'm going to tell you why.

Okay, let's hear it.

So we just found out that we're pregnant with baby number two.

Oh, yeah.

All right.

Yes. So my question is, we are in the baby step two right now. And I know you say to usually pause and go into stork mode. What happened was when I called insurance, they just said, we're going to put you back on pregnancy Medicaid, which usually means everything is covered and free. But after a traumatic birth with our first daughter, I kind of want to go with a midwife and a home birth. Now, the minimum, because nothing's going to be covered through insurance, would be 5200. And I'm like, well, do we just use the insurance and have a hospital birth? Because that chunk of money would be pretty big towards her debt.

Snowball.

Or do we put aside for the birthing experience that we want?

What was a traumatic birth the first time around?

Well, I've actually had two births. My first one was I have an open adoption with my first daughter, and I actually hemorrhaged to the point where I was almost bleeding out. About four days after the second one, I had a subchorionic hemorrhage, which is where you bleed while they are in utero. And it was just so painful and so intense. It was nothing like my first birth, which was actually pretty okay.

What will a home birth solve? Because you've got two hemorrhaging. And the reason I'm asking this level specifics is people at the office make fun of me. I'm all about homeopathic, everything, and fight the man. I got my own gardens and all that stuff. But if this is something that is part of your values and what you all want to do, great, knock your lights out. It's just going to come at a cost. If you're doing it to try to avoid some sort of malpractice issue that you ran into the first few times, then that's another issue. And it doesn't sound like you're solving sounds like the first issue and you're trying to make it okay by saying, well, it was bad these other times, so we're going to do this one instead of just saying, this is what we want to do this time.

Well, it does more align with our values. It's one of those. If I would have known then what I know now, I would have loved to home birth all of my babies with a midwife. So you grow up, you change. It is realigning more with our values to go through a midwife and have the baby at home.

Listen, I'm with it. The whole point of stork mode is that you save up for whatever cost the baby could accrue. And so if you can pay for this in cash, for a lot of people, the 5200, that would be likened to their deductible, if they hit their deductible. So at any cost, most people are going to have to pay that much. You mentioned Medicaid. Can you tell me more about that?

Yeah. So I've been on the state pregnancy Medicaid for both of my previous pregnancies, and everything has always been covered. I've never received.

Is that due to lower income?

It was due to lack of income from my first two. We went through marketplace this year and me and my husband did not qualify, but our daughter did qualify for the Medicaid. And when I called, just, they didn't even ask me questions. They looked at our marketplace and they're like, oh, we'll just put you back on the pregnancy Medicaid.

Okay. Look further into that, because if you don't qualify and you take it, you're going to have to pay at the end of the year anyway. You're going to have to pay them. If you take the money and you don't need the money, it's going to be back on your tax bill and it's going to be back. They're not going to just let you take it if you don't need it, if your income outweighs it.

But you and your husband don't have a job with insurance.

No. They don't offer insurance through his job? No.

Okay.

And then I'm a 1099.

Okay. In either case, if you decide to do this, make sure you're paying cash for it. Like I said before, that's the whole point of stork mode, is to save up for baby. And it's your prerogative how you want to birth the baby. Yeah. I mean, that's my take on.

It's just going to come at a cost and you're going to decide our values in situation A, B or C is going to come at a cost of X, Y and Z. And I think where Jade, where people get frustrated is we really only want to eat organic foods, or we really only want to do home births, or we really don't want to go to a traditional doctor. We want to go to a homeopathic doctor. But my insurance doesn't cover it. It's going to cost this. Okay. That's a choice.

Yeah.

It's just going to cost X, Y and Z. It's going to take you a year longer to get out of debt. If that's your values, it won't matter at all. Right. But your values are your values are your values.

I agree. I mean, all of this is about trading. You're trading one thing for another. And in some cases, it's trading what you want now for being in debt a little bit longer, honestly. So let's go to the phone lines. Thank you for the call, Jessica. That was a good one. Let's go talk to Heather in Atlanta, Georgia. What's going on, Heather, thank you so.

Much for taking my call. I was wondering if I should sell one of my rental properties to pay off a pretty chunky IRS debt that I have.

Tell me about the rental.

I would sell my child to get rid of the IRS off my back. What do you owe?

At this point, it's down to 47. I started with 150 and have just been throwing money, throwing money, throwing money at it. And we've got it down to 47.

And if you sell it, what will it bring?

If I sell the property.

We have a few. My concern is if I sell it, one of them, they all have substantial equity. Now, my thought is kind of backstory, is we started giving these rental properties to help find either a, supplement future retirement with rental income, or B, sell them and have a paid for retirement.

Home in the future. Listen, here's where I stand on this. I mean, obviously, you bought these properties long before you found Ramsay, I'm guessing. But I am not going to have rental properties paid off while I live in a home with a mortgage. That just doesn't make sense to me. If anybody's going to feel the peace of living in a mortgage free home, it's going to be me. That's the way I feel. So how many rentals do you have? And then tell me about your primary residence.

I have a primary. We have a second home, and then we have four rental properties.

Okay, so primary, second home, and four rental properties. Tell me about your primary residence.

Our primary is on a 15 year. The rate is 2.125.

Just tell me what you owe, and tell me what you owe on it.

Okay. I owe about 180.

Okay, cool. Now tell me about your second house. What do you owe on it?

Sunday, probably about 180.

About 180? Okay, now let's go through real quick. Sorry, I'm in a rush. I want to make sure we get before the time hits. So, rental property number one, you owe 47K. What would it bring if you sold it?

That was the IRS debt.

Oh, that's the IRs debt. Okay, then tell me about rental property number one. What do you owe?

So the first one, I owe about 190.

You owe 190. And if you sold it, what would it bring?

I would gross probably $100,000.

Okay.

And then I got to pay taxes on that.

Sure.

So my thought is I'd probably net 50,000.

Okay. Now tell me the same thing about rental property number two.

Okay. The second one, I owe roughly about 390.

Here's the thing. At the end of the day, I'd hate to cut you off, but we're up against it. At the end of the day, you are going to have to sell some of these off. I would be willing to part with whatever I have to do to be completely debt free from the IRS and be completely mortgage debt free. You've got too much money and too much equity laying around to be owing money on a primary residence and to be owing money to the IRS. The whole idea here is that you own these properties outright. I would even sell a property, a rental property, so that I can own the other rental properties outright. You see what I'm saying? So the key is to clear the debt and own it outright. 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 amazing relationships. I am your host for the day, Jade Warshaw. Your other host for the day is Dr. John Deloney. Host of the Dr. John Deloney show, author of building a non anxious Life.

Number one bestselling author. Let me add that, John. You know, I got to get your accolades straight. It's too many. I can't count.

I prefer just Jade's friend. That's the best one.

Shut up. Come on, John. Take those accolades. I'm going to put them out there. All right. We're taking calls about your life and your money. So give us a call. The number is triple 8825-5225 and we'll chop it up with you. We got Brendan in Virginia Beach, Virginia. What's going on, Brendan?

Hey, guys. How are you doing?

Doing good. How are you?

I'm doing good.

What's going on?

I'll cut right to the chase. So my wife and I, we're living at my wife's parents place right now, rent free. We have a high yield savings account. We've been fortunate to save up 60,000 in it.

Cool.

I have 8000 in student loan debt. My wife has 30,000. I made the decision with her that we're not going to pay that off fully because we want to save up for a house because we also have a baby on the way that's due end of June. So we want to get out of here at some point and just buy, like, a smaller, cheaper house and just have as big of a down payment as possible.

I'm disagreeing with much of this, I'm having some disagreeable moments.

That's why I called. Should we just let that continue to be there, that student loan debt, and then just save up for a huge down payment on a smaller, cheaper house?

Here's where I agree with you. I agree with you that I don't want you with the in laws when baby comes. I feel like that's just. It's probably already starting to get uncomfortable, and I feel like adding a baby to the mix could make it even more. Am I right?

Yeah, it's like that and a little bit of a blessing just because it's like, they love the kid. And I'll help, but.

But you guys got to get out of there. I mean, I get it. So I'm with you on that. However, here's where our paths go in different truly, truly, truly. Believe, Brendan, that it's not going to be a blessing for you to get into a home while you still have debt and other financial obligations that require your income around. Does that make sense? You've done a great job saving up 60,000. And to your own, the way you sound, it kind of sounds like it's like we saved up this money. It's enough to get us something that'll get us out of our parents house. And I really don't think that buying a house should feel like that, necessarily. So I'm wondering, if it were me, I'd wonder what it looks like to say. Okay, let's look at some places where we can rent. If being around family is important, let's see if we can find something that's affordable, in our range, around our parents, where we can rent that still allows us to make headway on our debt. And then I would want to pay off that debt fully. Now, I don't want to hurt your feelings in this way, but I'm about to hurt them.

Go for it. Yeah.

All right. The 60,000 that you have saved and earmarked for a place, technically, you owe that to the student loan companies, and technically, that's their money.

Don't hold their money, dude. Pay them up.

I know it hurts. It hurt me when I wanted to say it. I felt that feeling in your stomach where you're like, I don't know if it was a burrito. I felt that in my stomach because you saved up that money and you thought it was for a house.

But imagine you were with your buddy, and you all were on a double date, and he looked at you with that big, wide eyed, like, oh, no, and he didn't have money for his wife. And you paid for his dinner. And he's like, I got you. I'll pay back. And it was like $200. It was a nice dinner. And then you were at his house and you saw an envelope with, like $400 of cash in it. You're like, what is this? You owe me $200. And he's like, no, I'm saving to get us something. You would think, yeah, bro, that's my money.

Give me my money.

Same thing you told somebody, hey, if you help me go to college, I'll pay you back.

Yeah.

And they're like, all right, we got you. And that money is sitting on your counter. And you're like, no, this money is for us.

It's tough.

Yeah, it definitely hurts. I mean, I like the big number in the savings account, and I like thinking about the mortgage being very cheap. That's kind of what my wife and.

I were debating, and it will be. You're going to get to that point. You're going to get there. But we're proposing a path that gets you there in a safer way, less risk. Because here's the thing. You've got to be reasonable on both sides of the equation. It's got to be balanced reasoning. Right? Because you're saying, man, I love the security, $60,000. If you love security that much, then you will love a debt free life. You know what? Love it. Does that make sense? Or if you are risk averse, if you're like, I don't like taking risks, Jade, then I'm like, well, then you definitely don't like having debt around. So you've got to let that way of thinking, it's got to work on both sides of the.

Yeah, that's. Yeah, that's.

Know, I realized that you called in and I blew up your entire plan. And I feel a slight bit of sadness about that. But ultimately, I'm happy for you because I think it's truly going to put you on the best path again, less risk. You're going to be able to pay off this debt quickly. I mean, you're going to pay off all of it with the $60,000. You'll be debt free tomorrow if you want to be. Yeah, that's crazy. And then you'll still have some money that you can call. So I'm assuming that you know the baby steps, but in case you don't, the $1,000 saved is number one. You'll have that. Then you pay off all the consumer debt that's baby step two. You can knock that out tomorrow. Then baby step three is you save up three to six months of expenses, which, technically, you'll have just about after you've paid off the debt. That's what will be left. Then you save up for the down payment. So you will have knocked out three baby steps in one fill swoop. And now it's like, okay, we're going to rent a place. We're going to save.

We're getting the benefit of being out on our own. We're getting the security of having no rent. And now it's kind of like, right now, you've kind of got a foot on your neck. That's like, you got to get a house. You got to get a mortgage. And it's making you go quickly and make these decisions. But now you have something really luxurious, which is time. And you can just take your time and save. Take your time and pick a spot. Not just have to go with whatever is there. Does that make sense? I kind of like that.

Yeah, it makes sense. I see where you're coming from. I guess that low mortgage number, especially during this time of high interest rates, was the thing that was keeping me from doing it and getting excited about. It's like, if I have 60 now, I could have 80 in, like, two, three months, and then that's half of a small, cheap house.

That is true. But again, with no debt, you're going to save up that money even faster, and the time is going to pass. If you saved 60 before, you can save it again, and you will.

Are you married, Brendan?

Yeah, I'm married. My wife and I have our first child on the way, end of June.

How much of this. Oh, just a pressure. Do you feel in your home? Like, we got to get a house. Got to get a house. We're about to start a family. We got to get a house.

It's not really that. I guess it's more. So I'm thinking of, like, I have that equity in the house, cheap rate for the house, for the mortgage. That's cheaper than rent, probably. If we get something small and crappy. That's kind of where I was coming from.

I don't want to think of small and crappy for my new, young family. I want to think of freedom first. I want to be free and nimble, and then I want to do things on a firm foundation, man, not small and crappy. Let that be for your high school gym physique, not your mortgage for your new family.

Pay me what you owe me. Don't act like you forgot. This is the Ramsey show. You are listening to the Ramsey show. I am Jade Warshot. Next to me is number one bestselling author, host of the Dr. John Deloney show, the man himself, Dr. John Deloney. We're taking your calls all afternoon long. The number is triple 8825 a 5225. We're here to help you with your life and your money. That is what we do. If you didn't know it, sometimes you just see us. There's two giant buildings here full of genius type people who devote their lives to making sure you have all the resources that you need to finally take control of your money for good. And so when you hear us say things like, we're going to walk along with you, or we're going to help you do it, we truly mean we're going to help you, it's really crazy. I mean, these buildings, number one, they're giant. Number two, they're paid for in cash. And number three, they're full of people, like I said, who are just so good at what they do. We've got financial coaches and people who make apps, like every dollar, and book publishers who published your books, John and my quick read, it's just really a really cool system that's going on here.

So just know that when you talk to us, you're talking also to a clan of people who are cheering for you and want only the best for you. So just putting that out there. The Ramsay show question of the day comes from Kenneth in Georgia.

All right, Kenneth asks, I borrowed $35,000 from my father, but only repaid 7500 because of my expensive lifestyle. What? You only repaid $7,500 because you're a person who lacks integrity. But we'll go from there.

That's crazy.

When he updated his will before he passed, he deducted the remaining $27,500 owed from my portion of the estate. I need the rest of my inheritance money. I live in a semi expensive neighborhood, and I am not in good health. What should I do? Number one, you picked the wrong two people to write into, brother.

I did? I'm sorry.

You need to move. You need to get over yourself, and you need to go to your local church and ask for forgiveness from both.

Entitlement.

My God almighty. Good for your dad for deducting this amount of money that you didn't pay him back because you lacked character and integrity, not because of your expensive lifestyle, but because you chose to live expensively over. You chose over your word that you gave your dad, and he deducted it from his estate. Good for him. That was part of the agreement. You didn't pay it back, so he did the next right thing. He shouldn't have loan you the money in the first place, but he did. You live in a semi expensive neighborhood. Move. You can't afford your neighborhood. Move. That is not your money. Don't refer to it as your money ever again. It's not yours. It goes to whoever else he designated it to. Why? Because it's his money, not yours. And I'm going to say something's going to get me in trouble, so I'm going to be quiet. What do you think, Jade?

I say go for.

I'm just. I hate this entitlement. I hate this. That's mine. I hate this. I can't stand all of this. It's nonsense, nonsense, nonsense, nonsense. As though my choice to drive a fancy car and live in a big house overrides math and it overrides character and overrides integrity. And more importantly, it overrides my relationship with my dad. You know what the most important thing is? That I got expensive lifestyle. Shut up. Shut up.

Debt never matters to people until it's debt that's owed to them.

And it's not debt. It's not debt.

That's the thing. But I'm saying, for him, it's easy to look at this 30. For Kenneth, it's easy to look at this $35,000 that he borrowed and go, I don't need to pay that right away. It's no big deal. I'm only going to pay 7500 of it. But if the tables were turned and someone owed him $35,000, he'd want the money today.

Well, let's be real clear about this. My dad deducted the remaining balance owed from my portion of the estate. This is not your estate. This is your dad's estate. And it's his prerogative to dole it out however he wants to. He could give you a fish tank and a hammer and a high five, and that's what would be yours. You, because you're an entitled brat, looked at how much he owed you, probably tripled it. And then you spent that money in your mind. And then when it didn't come to you in the form of a check, you threw a little temper tantrum and you said, well, I want my money. It's not yours. It's not yours. He could leave all of his money to your brother or to your sister, which is what I hope he did. And look at you. And say you were not a son that honored your word. And so I'm going to choose to spend my inheritance. I'm going to choose to divvy up my estate in a different way. He's allowed to do that because it's his money, not yours. Never was yours, never will be yours. So stop referring to it as your portion of the estate, as your inheritance money.

It's not case closed. If you can't afford to live in your semi expensive neighborhood and you're not in good health, then you need to move. You need to get on the exchange and try to get some health insurance. You need to figure out something else to do. But sitting around complaining about money that's not yours and that never will be yours, legally or otherwise, is a waste of your time and energy. And I'll be quiet.

Standing ovation. Good job. That's my second Rihanna reference in a very short period of time. That was good, John.

A couple of Rihanna references just to balance the world back out.

That was good. Okay, you're right.

It was. If you've been around me, I don't get off John. I don't get mad about hardly anything. I never do. In fact, I get too much criticism for not getting fired up about stuff enough.

I can see this bothers you.

I like it because this is our country. The government owes me. My professor owes me an a. No, it didn't. You didn't do a work. You didn't do a work. I pay this whole attitude. Yeah, shut your mouth. Be quiet. I had a conversation with my son. He's 14. He's going to be leaving middle school ahead of high school. And so we're starting to have more poignant. We've been having breakfast together once a week for years, and we're starting to move into more of a poignant, hey, here's kind of my thoughts on alcohol as you get into high school. Here's my thoughts on sex. We talk about sex all the time in my house, as you can imagine. But here's some more specific things I'm going to start being more specific about. Like, you know, I believe in know Jesus. Important to know. My faith's important to me. Here's what that looks like. And here's my seasons of doubt. And here's my seasons when I walk to, it's more intentional.

Yeah, real talk.

And we're talking about his grades recently. And he said, but I've been working so hard. And I said, I know, but you are entering into a season of life that for the rest of your life. Effort doesn't matter as much as the outcome, and we have to see it in front of us. And this attitude of, you just give me mine, because I can choose. I can do what I want. And the effort, it's not real. And this kind of nonsense is breaking up families. It's breaking up culture, it's breaking up communities, and it's insane. It's insane. Can Kenneth be upset that his brother and sister got more money than him? Sure, be mad. That's fine. But move on with your life.

Yeah, move on.

Move on with your life. You don't get to just live in an expensive area and be like, that's what I wanted. No, dude, no.

Yeah, that's a really good point. Be mad and move on. And don't let it steal your joy or steal your peace, because what he's listed here, it's nobody else's problem. It sucks that he's not in good health, but that's not his dad's, you know? And so there is something to that. John, I'm here for a rant. Anytime. Anytime you deliver one, I'll take it. Let's see. We got Francine in Los Angeles. I don't know if we have time for it. She says, should I pay off my car loan or sell it and buy a cheaper car? Oh, I want to know about it. We might hold you on. Tell me about it, Francine.

Hello. So thank you so much for taking my call. I currently have a used car. I am a Ramsey relapser is what I like to call. I went through the process, and I was gazelle intense. I did everything I needed to do, but I had a specific goal in mind, which was to basically quit my job and have enough money to move away. I did that, decided it wasn't the best thing for me. And then I came back into my original field, moved back to the United States from Portugal, and I kind of fell back into my old ways. So I currently have a used 2019 Mercedes, and it fit the image, if you will. I'm putting my air quotes up.

Okay, what do you owe on it?

Dollars upside down.

Nine k upside down.

Okay, 23,000 is.

Hey, hold on the line. Hold on the line. We got to go to a break, but I'm going to come back and let's figure out what to do with this car. We'll help you out. This is the Ramsay show. You're listening to the Ramsay show. We've got Francine on the line from Los Angeles, California. She's trying to decide if she should sell her car, what she should do. She's trying to get a cheaper car. She's trying to get out of debt. She backslid from the Ramsay plan a couple of years back, and now she's trying to get herself back on the good foot. Francine, did I get it right?

You did. Absolutely.

Awesome. So you told me right now you've got this 2019 vehicle. You owe 23,000 on it, but you're 9000 upside down, which is definitely worth noting. This is your only vehicle?

It is.

Can you tell me how much other debt you have?

I actually was about $15,000 in debt, and I ended up paying that off in about three weeks.

That's awesome.

So this is my last bit of debt to tackle on top of a house that I'm trying to pay off eventually.

Okay. Are you currently making extra payments to the house or are you just making the mortgage payment?

So the mortgage payment, which includes the tax, is about 1800 and I'm paying 2000. I don't live in that house because I got a job in southern California, and that house is in northern California. So I'm allowing my friends to rent it, basically, and I'm paying the difference. So I'm giving them a discount on the rent because I had to move pretty quickly.

And then you're someplace else paying full rent.

Paying full rent. But my intention is, when this lease is up, to move from a two bedroom because I don't need two bedrooms down to a one bedroom. And that'll save me an additional thousand dollars a month.

But you're never going back to southern California, right?

Not when I'm done with this. The northern California house is kind of like what I envision to be my forever home. And that was my other question, if I could fit it in.

Well, let me go back first off, because where I see a problem, I'm just going to call it out. First off, the goal right now is to pay off your debt. All right. So you paying extra, even if it's $200 towards a mortgage to try to pay it off quicker. Right now, we need to focus on the smallest debt at hand, baby. Step two is paying off all of your debt except your mortgage. So I'd stop making extra payment on the mortgage and put all that money towards this car. To answer your first question, I would not sell this car that you're upside down on. I would pay it off. You've paid off 15,000 already. You can pay off another 23,000. It's going to be painful, but it's your only vehicle. You need a vehicle. And so that's thing one. Before we go further in, can you tell me what your income is every month, what you bring home?

It's 215 is my yearly, so I can bring home. Take home is about $10,000.

Okay, great. So, yeah, 100%. The car that you have, although I don't subscribe to going into debt for cars, it's within our realm of keeping the car. You're going to be able to pay it off in under two years. It's not more than 50% of your yearly income. So for that reason, I'd keep the car. Plus, you're way upside down, so keep it paid off quickly. Now, let's talk about this house, because I understand it sounds like you have a dream wrapped up in this, but I would never recommend keeping a house in an area that I don't live in and that I don't know exactly when I'm going to be back. It'd be one thing if you're like, hey, I had to go do this thing for six months. I'm going to be right back. But we don't know when you're going to be back. And you're letting people live in it at cost. You're not even making money on it, and you're turning around and paying rent someplace else. It's just a lot of money going down the toilet.

Okay. I always thought, because I'll never be able to buy back into that area, that's what's making me hold on to it, because I got it at a great price.

But you're never going back to that area.

Okay. All right.

I mean, are you?

You know what? When I did my Ramsay math, I can pay that house off probably in about three years after I'm done with the car. Basically, that's my last thing.

It's still long term rental. It's still a long term rental, though. Paying it off is great. And I love that you have that aspiration. Don't lose that. Keep that aspiration. But I don't want you to keep a property out of fear that you'll never be able to buy something else that cheap. Because the fact is, life gets more like, the prices of things go up as time goes on. We rarely see the prices of things go down. Like, they go up incrementally. And lately, of course, it's been big increments, but they go up, and hopefully, wages start to rise and go up with it. Right? That's what you're hoping for. So don't let the fear of something becoming more expensive make you think, I'll never be able to afford it again, because these things do have a way of balancing out. Obviously, it's always going to be, you can only buy what you can afford, but it balances out. Does that make sense? I don't want you to say, oh, I'm never going to be able to have a house. You may not ever be able to buy a house that cheap, but you'll still be able to buy a house.

Does that make sense? Like, my grandparents bought houses for $30,000. I'll probably never be able to do that. It doesn't exist anymore, but I can still buy a house within a price range that works with my budget. Does that make sense?

Okay, so sell it, invest the money, and then eventually pay cash for a different house after I have enough for it.

Yes, sell it, take some of the money, pay off all of your debt, keep the rest in a high yield savings account, let it accrue interest. I probably wouldn't invest it. The only way I would invest it is if you think your horizon is beyond five years. And if that was the case, yeah, just drop it in an index fund. Let it gain what it's going to gain. But if you think that your horizon is less than five years, just keep it in a high yield savings account. Right now they're like, 5%, and that's pretty freaking awesome.

Okay, fair enough.

Awesome. Thank you so much for the call. That was a good one. Let's go to Michael, who's in Baltimore, Maryland. What's going on, Michael, hello.

Thanks for taking my call.

How can we help?

Hi.

So a little bit of backstory. I kind of jumped into this thing headfirst with getting my debts paid off. I don't have a lot, but we had somewhere around 25,000, and it was just cars and a small credit card. So I ended up selling my car and using that to start snowballing. And we figured out basically that by June, we'll have my wife's car paid off and this credit card gone.

Okay, that's great.

0% credit card. So I feel like I'm making good steps forward, and then I'm going to, at some point here, grab a cheap car for cash.

Okay.

Just so we have the second vehicle.

So we're up against the clock. Get right to your question, brother. Right up against the clock here.

Yes. So my question is saving for the. Is there a better way to figure out the best way to save for the six months emergency fund.

A better way to figure out how to save. Like, you want to increase the rate, you want to save it faster. Is that right?

Yeah, because when I did the original, based on the snowball, it looks like four years.

The only way to impact the equation is with dollars. That's the only way. There's not a magic button that you push. If you want to go faster, you've got to find more dollars. Yeah, that's side hustling or that's cutting back your lifestyle. That's the only way to make it go faster.

How does a six month emergency fund take four years to save up?

Well, my wife's looking at me funny about that. Same question. Just when we are looking at the initial snowball that we seem to be starting. Find more money.

Forget the snowball. How much does it take you all to live every month?

Expenses. What I'm looking at from what we did in the app is 7500.

So 7500 is a basic take all.

Your debts off the table, though. Like, if you're not making any debt payments and you're just got a mortgage, your food.

Yeah. That's not including the debt payments.

The minimum, you got to keep that in mind.

So $35,000. It's going to take you four years to save up 35 grand?

No, when I was looking at it, I was figuring somewhere around 60.

Okay, 60,000.

Yeah.

Okay, tell me what it. Before, real quick, real quick.

Out of all of the things, tell.

Me what it takes. Tell me what you bring home every month. And tell me what you bring home every month after taxes.

10,000.

Okay, now tell me of that 10,000. What does it take to make your household run? And this is not including extra debt payments. It should be 7000, 507,500. So if you do that bills and spending, and you do that three months, bare bones, that's not $60,000, right? That's somewhere around $28,000.

For three months.

For three months, yeah. So I think that maybe start there and then see where you go, and then if you want to build it up to six months. There's a couple of factors that would make me decide between three or six months. And of course, it depends on job stability, if both of you are working or not, whether you're healthy or not, and you can think through that, but remember, you always have room to bring your income up. And if you can do that, you should do it. This is the Ramsey show. Hey, guys. Are you ready for the secret to help you reach those money goals that you've been dreaming about. It's simple. You got to get on a budget. With our budgeting app, everydollar, you'll get intentional with your money and build the habits that will make those dreams a reality. And we'll be with you every step of the way from your first budget to that retirement home on the beach. Download every dollar for free on the App Store or Google Play. Remember today, download every dollar for free on the App Store or Google Play. Today you are listening to the Ramsey show.

I am your host, Jade Warshaw. Next to me is Dr. John Deloney. We're hosting all afternoon long. Gives a call. The number is triple 8825-5225 hey, I want to announce a brand new event that's coming up. I personally am very excited about this. It's Dave Ramsay's investing essentials. At this event, Dave is going to do a deep dive into investing. I know you all want to know how he's getting these rates of return that he's always talking about. And so for the first time ever, he's sharing his personal playbook on investing, including how he buys real estate. So this is a two night virtual event. It's going to be May 21 and 22nd. And the great thing about it is it's online, so you can watch it at home in your pajamas, eat some popcorn. Investing is something that you guys want to hear more from. You've asked us and we are delivering. This is your moment at this event. We're going to talk about the basics, and then we'll deep dive into the specific things like mutual funds and real estate. You're going to learn how to maximize your 401K, how to do your mutual funds.

Dave is going to tell you guys his personal strategy for real estate investing, which is, I feel like that's gold right there. He's going to tell you which investing trends to follow, which ones to avoid. Guys, this right here. Trust and believe. I'm going to be watching it. I'm going to watch it for my durham self. Tickets start at $199. I think that is an amazing value. Visit ramsaysolutions.com events to get your tickets today. Man, that's exciting. Love it. People have been asking about something like that for a long time.

I'm just annoyed because the cool part about working with Dave, besides, he's just like a fun guy to hang out with is, hey, Dave, should I buy this? And he's like, well, here's why I would or wouldn't. And I'm like, yeah, I got the inside track. Yeah, and now everybody's going to have the inside track. It's kind of. I don't know.

Yeah.

I thought it was some secret. Not anymore.

Secrets of the rich. All right. Yeah, definitely sign up for that. It's going to be a good one. Did I tell him where to go for it? Ramsaysolutions.com slash events to get your tickets today. All right, let's go to tracy, who's in Joseph, Oregon. What's going on, Tracy?

Hi. I'm just super stoked to be able to talk to you both. Bless you guys.

I'm excited to talk to you, too.

Yeah. I started listening to you guys about a year and a half ago and just thoroughly enjoyed listening and applied the principles to our personal life. My husband and I. I wished I would have known these principles back in 2018 when my husband and I and our daughter and her husband bought a chocolate coffee shop in a little, cute little town in Joseph, Oregon.

Okay.

We have lots of people coming through in the know, the tourist season.

Yeah.

But we ended up getting ourselves into some deep debt.

I was going to say a lot of people come through, but not.

We need help.

Not enough people.

Who's in on the deal? Tell us who it is. It's you and your husband.

So it's my husband and I and our daughter and her husband. So we're all four owners in this.

Okay.

So I'll just give you a quick breakdown of our debt. We bought from the owners at the time. They carried the loan. The remaining business loan right now is $131,000.

Okay.

We also took a private. We have an uncle that was able to give a private loan for the building. We bought a building and did a major remodel, but we are in debt to that.

So the remodel, how much is that?

$77,000. Yeah, I'm just going through. And then the other. So we have different businesses within this big building. So we were able then COVID hit and we were in debt. We'd put a whole ton of stuff to remodel on credit cards, which is stupid. A lot of this is stupid.

That's part of the two and 177, right?

Yes.

Okay.

The SBA loans, though, is where we just like, oh, that's where you went town.

How much are the SBA loans?

Because of the 280,000 in SBA loans. So we have a total debt of 688,362.

Okay.

We gross the chocolate coffee shop called Arrowhead chocolate grosses. Last year, they grossed 603,000. The building, because we're able to gross 603,000.

What's net profit?

So the net profit was only about $9,000.

What's your draw? Are you paying yourselves a lot of money?

Yeah. Well, this is the thing. Let me finish giving you this other. So then the building itself, we were able, because we rent out various office spaces and went up a huge building. We grew 60,000 on that. But at the end of the story, so the rent only showed up $728. That was a gain, right?

Wait, you're only netting $728 out of renting out all of this business space?

Yes, at the end of the year. Whatever.

Something's wrong. I know.

Our payroll cost to keep all these employees going to run this. This last year was 185,000. Cost of goods has gone up in the past year. My daughter's the one that does all these numbers. I'm just the one that called, said I'm going to call anybody.

Listen, these guys listen.

So we need help.

Yeah, you do. There's a lot of problems here. Number one, you have to stop taking on debt. Number two.

Oh, absolutely.

Number two, I know that your daughter in law or your daughter may not be. Your daughter may not be, even though she's family, she may not be the best suited person to run your books because your business is crazy. You're in so much debt. Things that you guys went on business ventures thinking that it was going to generate profit, and somebody clearly did not do the business case correctly, because you remodeled and built more business space so that you could rent out the space, and it's netting you $728.

Help me with that.

Crazy.

Help me with that. Let's just talk about that. That means there's $59,200 of what? Debt service light bills.

Well, see, out of that, we have the dots, and Ivy is what the name of the building is. Out of that, we have to pay the building loan to the uncle. We have to pay the.

Didn't none of this was evaluated properly. It was almost like you guys just sat around a table and a campfire and said, wouldn't it be cool if we just bought a building and we could lease out the space to somebody else? And nobody ran the numbers. It was just a family dream. And now you're in it. And because the debt is so heavy. Let me finish. Because the debt is so heavy, it's cutting into any profit that you could have ever had. But because you guys sat there and did math on somebody's kneecap, you guys aren't seeing these numbers for what they are.

Let me ask you, though.

And I get all that.

Why haven't you raised the rent?

Well, we have. We actually did just this month. In April, everybody's going to start paying more.

Okay.

What I'm saying to you is I understand everything you're saying, but we are coming to you going, yeah, when we first bought this business, we went to an accountant and we said, these are the books from this chocolate shop. And do you think this would roll? She looked at it and she goes, yeah, I think it. And then we ended up getting the building remodeled, all this stuff.

That's what I'm saying.

We know we're the worst business owner people, that.

The only way out is to get somebody with more knowledge than you to look at your numbers and go, here's the path forward. You're going to need some business consulting on this because this is beyond daughter's pay grade. Somebody's got to be able to look at this and say, here's the way we need to steer the ship in order to get out of this hole. Or can we even get out of this hole? What would it look like? What's the timeline? What would we have to do? Would we have to raise rents? What needs to take place? We're not going to be able to tell you that on this show because we can't look at everything.

But I don't see a path forward without you selling either the business. If your business only makes $9,000 a year net, your business is failing.

Oh, absolutely.

If your real estate is only generating $700 a year after expenses that can't survive a single leak.

No. And we see it and we realize it, but we're, like, going, okay. So we thought, well, maybe we should sell this business. Well, we can't sell the BusiNess, even CleAr out these SBAs, et cetera.

Right. Well, here's the Thing again. Having somebody coming in and evaluate the business to see if you can sell it, what would it go for? Are you able to sell it? Maybe you make nothing at the end of it, but maybe it's enough to clear the debt.

And in your language, we're the worst business people ever. Just own that we made a mistake and we're going to sell this thing and be done with it. But I don't see much of a path forward.

Yeah, I definitely don't. What I do know is daughter is not the one to make any financial choices moving forward or run the books. That was a tough one. 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. I'm your host, Jade Warshaw. Next to me is number one bestselling author and host of the Dr. John Deloney show, the man himself. We're taking your calls for the next hour. You can call in with whatever it is you want to talk about, relating to your life and your money. That number is easy. It's triple 8825-5225 and the wonderful Christian will pick up and screen your call. Make sure you're not a psychopath so we can talk to you on the air. That's how this thing works. So let's take a call. We've got Lynn in Houston, Texas. What's going on?

What's up, Lynn?

You there, Lynn? I picked up the wrong line. Let me go out of that and go back to Lynn, who is on not line five, but line six.

Hey, Lynn, are you there?

Hello?

There you go. Hey, Lyn. Jade is still learning how to work the phones.

You know, numbers are a difficult topic for me. What's going on? How can we help?

Thank you.

Yes.

So I just have a question for Dave, and my heart is racing. So forgive me here. So my situation is I'm 39 years old, and I just recently lost my husband unexpectedly. And I just kind of want to get some opinions on next steps for me. And just looking at finances and things like that, expenses are about, like, two and a half times my personal income. And I was just curious what Dave's suggestion is on how to allocate life insurance and things like that and as well as, like, 401K.

How recently did your husband pass away, Lynn?

At the end of February.

Oh, my goodness. What was his name?

Paul.

Pretty amazing guy.

Yeah.

I'm so sorry.

I just want to do the right thing and handle things.

Here's the rule of thumb, generally speaking, is if you can, don't do anything for six months. Don't move, don't sell something, don't jump through hoops. Life insurance check will come. Deposit that in a high yield savings account and sit for six months if you can. Not everybody can do that. So walk us through where you are. Do you have money for rent, for mortgage, for food? Or are you going to need this life insurance money to figure out next steps?

I'm good for right now, I think I don't have baby step number two, obviously taken care of. But I do have baby step one, and if I skipped over two, I think I have baby step three just in savings. But I certainly would need to figure out how to handle baby. Step two.

When you're talking about. My initial impulse is to say, pause. Paying off debt and all of that for right this second, unless you're drowning. If you can make minimum payments for six months, can we just do that?

Yes, I can do that.

You're going to get tons of people in your life coming out of the woods wanting a piece of your money, telling you what you need to be doing, and I think you should do that. I want you to tell them all to go fly a kite. What I want you to do, it sounds like you're in a position, not rare position, but not a common position to just be really heartbroken and sad for a while.

Okay.

And that's right. And that's holy. And that's why I got life insurance when I got married. So if something happened to me, my wife isn't running to Walmart on Monday after my passing because she can't pay bills. Right. And you're not in that situation. And so I want you to grieve and miss this guy and figure out what even the sun looks like when it comes up, because everything in your world is different now. Right?

Right. Okay.

Do you have some people in your life that will sit with you when things get real heavy and sideways?

Oh, definitely.

Okay. What about a budget? And it sounds so trivial, but sometimes just little grasps of clarity and sanity give us something to lean on when everything feels like it's upside down. Do you have a budget? Like, do you know what it takes to live every month? And do you know where the bills are and things like that?

So I always pay the bills. Like, I handled paying the bills, but I never really wrote them down until recently to see what that looks like by the month. I just always knew we had some leftover to move the savings and things like that.

Sure.

So just where I am right now to make minimum payments, it's more than my salary will be able to handle, but I have enough in savings to let me get through that six months.

Okay, what's the life insurance total?

I think 250.

Okay, and you said there was also money. Did you say, was it other investments or was it retirement?

401K retirement.

Okay, what's in there? I'm just curious.

I think around 220.

Okay, good. Okay. Yeah, I'm 100% with John. Exactly what he said is right. Six months is just you getting you time, and you've got a great emergency fund sitting there that will be there. I'm with John. I'm not making extra to. I'm really going to look at this on almost like a four walls. I'm going to make sure I'm covering minimum payments, prioritizing four walls, because like you said, even if you wanted to do all of it, you don't have the money to do all of it. And then just being really smart with what I do choose to do. Because most of our budgets comprise of things that are needs and some of them are wants. So maybe I'm pulling back on a few of those wants just so that I can make sure that this emergency fund does last me. And honestly, this is the definition of an emergency. So it's there for you to use. You don't have to feel guilty about that, but it won't last forever. And that's the stark reality of this. And when that life insurance does come, we want you working with a Smartvestor pro to make sure it's being invested properly.

And I would love for you to get to a point to where this life insurance, maybe there's a draw on it that's going to help you get back on your feet. But then you are getting to the point to where you are able to cover the lifestyle with your paycheck, whether that is whatever that looks like. And I'm not going to bog you down with what that might be right now, but you will get to the point where your money is what's keeping your lifestyle afloat. Right. Okay.

And all of this is. I mean, you're three or four weeks out, right?

Yes.

Yeah. This is something that you're going to nod your head to. You may not even remember this conversation in four months. Okay. What I want you to hear us say, with as sober and as clear of thought is you might end up selling the house that you live in. And part of you might think, I'll never sell this house. And part of you may think, I can never go back in that house again. All of that up and down is right, and it's good and it's normal. But what I don't want you doing is going to sell something or going to buy a new car. Let's make sure we have friends and loved ones coming over on a regular basis. We have people who are showing up with meals that you got, some guys from your church that will mow your front lawn. And let's begin to settle in for a few months. Because everything's different now. Everything's different. And then, like Jade said, there will come a time when the sun will come back up and you'll begin to make some decisions on what the future looks like. So sorry for your loss. So, so sorry.

Hang on the line. We're going to send you every dollar so you can begin to track this budget as you figure out what new normal looks like.

Keeping up with the stock market and all the investing opinions out there is exhausting and is probably steering you in the wrong direction. Building wealth shouldn't be this confusing, and it doesn't have to be. On May 21 and 22nd, we're doing a brand new virtual event on the number one topic you've asked to learn more about investing. For two nights, I'll unpack everything from my playbook you need to know about investing. Mutual funds, real estate, 401 ks, all of it. I can't wait to dive into this with you. Plus, you get to submit your own questions for me to answer live. And since it's virtual, you can watch this right from your home. I know investing can be confusing, but you can feel confident that you're investing the best way for your future. Listen, I don't care who you are or how much money you make. It's never too late to start building wealth. Early bird tickets are just 199. Get yours@ramsaysolutions.com investing essentials before the prices go up.

You're listening to the Ramsay show. I am Jade Warshaw. Next to me is Dr. John Deloney. We've been with you for the last couple of hours, taking calls about your life and money. We still have a little more time, so give us a call. The number is triple 8825-5225 we will chop it up. We'll talk about your life and your money. Hey, it's tax season. I didn't have to tell you that. You knew that. Most of us don't like tax season. Let's be honest, because taxes are confusing, right? And if you buy into some of the tax services that are out there, they kind of make you feel like you're never going to get it. Like you'll never be able to understand it. It's over your head, so why should you even try? Or worse, they'll kind of suck you into these offers. That will never help you win. It'll never help you understand. And we honestly, here at Ramsey, we think that you deserve the truth. So here's today's tax truth. Are you ready? A tax refund is not a bonus. It's not, guys. It's not a bonus. It's a refund. It's you getting back money that you overpaid.

It's not them giving you anything. It is certainly not a gift. It's been your money all along, and it's money that you earned, and you've just been giving it to the government to hold with no interest, by the way. And then they give it back to, um. So if you get a big tax refund, a lot of you're like, listen, Jay, that was my trip to like, that was my down payment for a car that I was planning on buying with debt. A lot of you knew what you were going to spend this money on, but I need you to stop. Right? And if you do get a tax refund, remember, just throw it at your baby step. Not a new car. But what you really need to do going forward is adjust your withholding. Yes, it's on your w four form. That's what you need to do. Because your tax withholding is the amount of money that you're estimating that they should take out of your paycheck every time you get paid. That they'll hold that. But if it's too much, that's when you end up with a refund. So we're going to adjust our withholding.

That is the word of the day. Because this is money that you could be putting back into your month to month budget to use for paying off debt, investing or putting towards whatever your baby step is, whatever your goals are. So say it with me. A tax refund is not a bonus. And by the way, I just want to talk about this, since we're talking about taxes, I put on social media basically the same thing, john, that, hey, you need to go in there and adjust your w four, adjust your tax withholding. And somebody said to me, they're like, well, hey, Jade, for me, I'm not good at, what's the big deal? Why can't I just take this money and let them hold it? And then I do have a big chunk of money and I'm going to throw it at my debt. I'm happy to throw it at whatever baby step I'm on. And what I told him, I said, listen, you're loaning that money and there's no interest. You could do the same thing if you wanted to. You could say, hey, all this money that I'm getting back, I'm going to just put it in the HYSA, a high yield savings account, and I'm going to let it sit there, which I've done before, because sometimes when you have a stack of money, you can make a deal on your debt.

But here's the thing. At least with a high yield savings account, you get 5% back. Like, you get 5% interest. So if what you're trying to accomplish is a lump sum of money, do it in a high yield savings account. Still get that money back into your budget. Do it there.

I just went and did this.

Did you?

For the second year in a row, I got a return and I went upstairs and Dr. Debian said, I'm tired of loaning the government my money interest free. Maybe if they spent it better, I would be like, all right, you all can borrow.

Nah, still, no, they don't do a great job. And here's the thing. A lot of people, it's like, we say that and they're still like, but wait, what do I do? What do I do for most people, here's the thing. It's tax time, and most of us have already done our taxes, hopefully. So if nothing has really changed in your situation, like, if you haven't had a baby, you haven't bought a new house, haven't adopted a child, nothing major has changed. You can kind of use this year as a template to go, okay, if I got back $6,000, what's that divided by? Twelve, because there's twelve months. And if you get paid two times a month, divide it by 24, and that's essentially how much money you could be getting back into your paycheck. And then it's as simple as what I would probably do is I'd go right to my tax preparer and say, hey, can you help me real quick? I need to change this on my w four. Can you help me do that? That'd be thing one. Or you could go to HR at your job and they could help you do it.

Or if you say, well, Jade, my situation is going to be very different, then for the next year, I would just do go on irs.com. You could use that calculator, which, I'm not going to lie, I don't like it. Or you could just use a software and do a fake tax return to estimate what it's going to be and then adjust it from there. And I would say, though, as a cautionary tale, if you're a person who's self employed or you're on 1099, or there's a lot of different things going on, definitely make sure you're working with somebody because I don't want you owing a bunch of money. So there's a balance here, and I want you to strike that balance. But at the end of the day, if you haven't already filed your taxes, make sure. You work with a service that you can trust. If they're complicated, you can use our Ramsey trusted pro on your side. That would be good. And if you're comfortable with filing your own taxes, you could just use Ramsey smart tax. I would say that's the way to go. It's got low upfront pricing. There's no hidden fees, there's no agendas except to help you out.

Right. So go to ramsesolutions.com slash tax to see what's best for your situation and get started again. That's tax. Love it. All right, John, speaking of taxes, speaking of money, speaking of all this stuff, I saw this article today and I thought, man, this is crazy. So I'm going to share it with you guys. It says, as the Fed considers interest rate cuts, inflation continues to drive up grocery mean. I don't think I have to say it, John. I think we all know that interest rates are up, inflation is up. We feel it so many places. But one of the places we felt it the most is at the grocery store. Right? It's been crazy times with this inflation. It says, frying eggs and bacon at home might seem like a frugal move, but as the battle against inflation continues, it's still going to cost you. Although let me just say, it's still cheaper to cook at home. Don't let this fool you. Overall, prices rose 3.2% in February on groceries compared to this time last year. However, that's still down from its 40 year peak, which was 9.1 in June of 2022. But grocery bills still have people making hard budget choices.

So here's how much breakfast items costs on average in February of this year compared to recent peaks of five years ago.

So I'm going to go before you get to this. I didn't know this. Food and energy, like gas, natural gas, those are not included in the core inflation rates analyzed by policymakers. So kind of like the employment numbers, those numbers are cooked, and they're baked in a way that make everybody feel really bad or feel really good. But just know, when they say inflation is coming down and you think, why is gas and food continuing to get more expensive? When we talk about how expensive it is to live, we don't include food and gas prices. Those are over here. We're talking about other things. And for most of us, food and gas prices, that's a big chunk of our life, right?

I mean, it's up in the big picture, but it's lower compared to its peak, of course. Yeah, that's kind of the thing to keep in mind percentage wise. Percentage wise, yeah. Which is good. We're going down as we have gone up. So there you go. So let's look at some of these numbers, because I think this is crazy. So, like something like coffee, for instance. Like coffee per pound. In 2020, you could buy a pound of coffee. 425. Then in June of 2022, it was 579, and then in February of 2024, it was $6.09. So it's gone up over a dollar and a half. Sliced bacon, same story. It's gone up almost a dollar from 550 to 656. Eggs.

Bacon's come down.

That's true. It hit a high in February.

Bacon is a food group in the Deloney house. And we sat out 22 because it got out of control.

$7.40 a pound.

That's madhouse.

So it crept up, hit a peak, and then went down a little bit. Still higher than it was. Eggs. Do we really have to talk about it? Folks were buying chickens. It was getting so crazy. So they went up about a dollar and a half over the course of from 2019 to 2024. And white bread, again from 2019 went from a dollar, $28 to $2.01 this year. And here's the thing. You look at this number and you go, wait a minute, Jade. It's a dollar and a half. It's a dollar. Like, what's the big deal? And it seems small, but I don't think anybody here is going to argue that we feel inflation. At the grocery store, nobody would argue and say, yeah, it costs the exact same thing, or a dollar and a half is no big deal. Right? We feel it. It compounds. It's a slow drip. But every time you run your credit card, you're like, dang it, I got ten things. Why is it $50? But we've got to apply that same logical thinking to getting out of debt. A dollar and a half matters, whether it's the imperfection and the uncomfortableness of inflation or it's you finally deciding to get your budget in order, you cut spending.

That same dollar and a half adds up, and in that way, it adds up to savings. So again, we've got to have that balanced, logical thinking. A dollar and a half either matters or it doesn't. And I think with inflation, we've all seen that it matters, so make it matter. On the flip side as well, this is the Ramsey show.

All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates, but when you have the right real estate agent to help you buy and sell the right way. You'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're someone you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you@ramsaysolutions.com. Agent. Ramsaysolutions.com agent.

You're listening to the Ramsay show. We help you with your life and your money. Caveat. There will be work required. You can give us a call. The number is triple 8825-5225 I am Jade. This is John. We'll help you through it. Let's go straight to the phone line where there is Nick in Seattle, Washington. Online five. What's going on, Nick?

Well, Jade and John, thank you so much for taking my call. How are you today?

Doing good. How can we help you out?

Good. I'm a little nervous. I get one shot at this, so I hope I remember everything that's been on my mind for so long.

Well, you listened to Eminem growing up, didn't you? Only get one shot.

That's it. Okay.

So my wife and I always shared the dream of acquiring some legacy property for our kids and our great grandkids.

Hey, Nick, talk directly into the phone for me.

You bet. Can you hear me now?

Now? Much better. Yeah, go for it.

Oh, good. So my wife and I always shared the dream of acquiring some land as legacy property for our kids. So at a very young age, in our early 20s, we started a business from the ground up. We are now in our mid forty s, and we've had about two weeks off in 23 years.

Wow.

And we're exhausted. We're thoroughly exhausted. And we're wondering, we always went by the philosophy, if we work hard now, we can play more later.

And we're wondering if we're finally at.

The point, can we finally play? Is it time to sell the business?

You could do whatever you want. What's the business?

So it's a residential housekeeping business. Last year, it grossed a million dollars. Over the course of the last 23 years, we've paid off our house, and we've been fortunate to acquire four other houses, one of which we run the business out of. So all of the houses are paid for, with the exception of two of them. And we did acquire our legacy property, 70 acres with 100 year old log cabin, which is also paid for. So all in all, we're sitting at about 2.5. And we owe about $400,000 on two of the houses combined.

Have you sat down and thought about what it would cost us? I mean, what you could get to sell your business?

Yes, we did get it valuated. It valuated for about 900 and they said it could valuate for more. But when we first purchased the house that we run the business out of, we did a lot of repairs to it and that's made the sale price go down. So we would have to wait a couple more years for that to be off the record, all of those expenses and it would show the gross income.

A little bit better there. Yeah.

Can you hire a couple of people to take the load off?

So we did. We actually had a manager for about 13 years and she went on maternity leave and decided to become a stay at home mom. And in our line of work, it sounds like you could just hire somebody to just come data entry. But it takes a real intimate knowledge of our clients and our schedule changes by the second. We have fleet vehicles. We're just always putting out fires. So we would prefer to hire from someone within who knows our business and our procedures. But we don't really have anyone that's interested in that lead role at this time. So we feel like we'd be starting over.

Okay. How many years did you say it would take for that other stuff to kind of fall off the book so that it looks more valuable?

Two more years. Last year was our first gross of a million dollars. The two years prior, 22 and 21, are where we put so much money into this new building that it's not reflecting the true value of the business.

So is there a way that you can split the difference in the way of. Listen, going 22 years and only taking two weeks off is not the move. So is there a way that you can create a more balanced work life for yourself and for your family, even.

For just 24 months?

Yeah.

Well, we try. And if we're not interrupted with something from the business, a vital concern or decision making.

Okay, hold on. I challenge you. What's a vital. This sounds like a case of.

Listening. Listen, it's your business. It's your baby. You've grown it. It's become very. You're talking to a fellow business owner. When I left worship entertainment to come here to Ramsey, it was like, you're going to have to pry this from my dead, lifeless fingers. It was hard, right? It's your baby. You've grown it. And so there's part of you that it's hard, but you have to do Christian, when he gets off the phone, give him Dave Ramsey's delegation. Quick read. Because it's really going to help you understand what's important. The things that you must hang on to and the things that you've got to be able to delegate out to other people so that your business can grow or so that you can be a person and ultimately be a better leader and a better dad and a better husband. All of those things. And so I think you've done really well. I just kind of want to reiterate and make sure I understand. You've got six different properties. Right. It's your primary house. Then you've got the acres with the log cabin. And then it sounds like you've got 1234 other properties, one of which you do business out of, is that correct?

That's correct.

Okay. And you only have debt on two of the mortgages out of all of those, right?

Correct.

And it's 400,000.

We've got about 300,000 in the bank.

And you've got 300,000 in the bank. That's not retirement funds, that's just savings.

Yeah. We have no retirement, actually. We thought the investment properties would become our retirement, and as we got older, we would sell them to our kids to also help them get into a house.

I think that's good. But I do want you to be balanced in the way that you've also got money in the exchange as well. I want you to have a more balanced portfolio in that way. So I would be doing what we say to do, which is still finding a way to invest 15% of what you take as income, so that you're building that other nest egg as well. This 300,000 that's in cash might be a good place to start. That's personal savings. Right. That's not considered business reserves.

Some of it's about half and half.

Okay, well, I'd keep the business reserves, business reserves, because that's going to be part of your valuation when that time comes to sell it. And then your 150 again, just like I would teach personally with your personal money, the baby steps, make sure you're setting aside whatever is your three to six months of expenses. And then there's part of this that's very business. And then part of this is like, your debt is your debt, and so you have to treat the debt. That's your debt as such. Right. The $400,000 on those mortgages, you kind of have to treat it in that way. And so until the time comes that this business sells and you're able to pay things off, I would still do your personal baby steps with your personal money and make sure that's handled properly. And then when the time comes to sell, you've got a nice windfall situation going. And I would definitely use whatever money of that to pay off what's remaining on these mortgages. And then you're completely free. You're still putting away some of that into invested exchange funds, mutual funds, not just real estate. Yeah.

Correct. Yeah. We're not really sure where else to invest. We've been too busy to ever really get that far.

Yeah. I mean, I would do what I tell everybody to do. Number one, with your amount of money, I'd work with a smart vestor pro. And then, number two, it's the same as everybody else. You and your wife, it's earned income. You're investing into Roth IRas. You're setting up some sort of simple 401K or some sort of to get as much of this money invested as possible. And again, working with the Smartvestor pro is going to help you see your options, because you still have two years left as a business owner. And my guess is there's, I mean, a significant amount of money that you could be putting away for that. And then, yeah, you're going to be sitting pretty, dude.

Here's the big deal, Nick. If you want to sell the business, sell a business. But don't plan on being 43, 44, 45 years old and doing nothing. You got to have a next plane.

And we're busy people and we're very frugal people, so we're not afraid to work or hopefully even develop on that property that we've. How fast time's gone. We're going to lose that opportunity.

No, you're right, and I get it. But some of this is like what Jade was saying. You guys decide to not take vacations and you say, if we don't, then this is going to. It's probably not. There's probably very few. Either we are here to deal with this issue or the whole business goes away. There's probably very few of those. Maybe angry customer, maybe a frustrated car that needs repair or whatever. A fleet vehicle.

Right.

But you all have to decide, you know what? Our marriage, our relationship with our kids, that's more important than this dumb thing. We're going to go on a trip. We're going to go on a vacation. We're going to take a break. We're going to.

So important.

Fill in the blank there. But you can't plan to sell this business and high five each other, take that money and then stare off into space or say, for the next 40 years, we're going to work on the property. You're going to have to have something that requires you to get up every day, that you have purpose, that you go make some money. You use that creative part of your mind. So make that plan before you sell this business, man.

This is the Ramsay show. You're listening to the Ramsay show. I'm Jade Warshaw. He is Dr. John Deloney. Your scripture and quote of the day, Romans 1513. It says, may the God of all hope fill you with all joy and peace as you trust in him. Love that Benjamin Franklin said, the constitution only gives people the right to pursue happiness. You have to catch it for yourself. I know that's right. Ben, you got to run after this thing. It's a pursuit. It's not an entitlement. Love it. All right, let's go to Peachy in Edmonton, Alberta. I like it. I want to say, like, is everything peachy keen? Is everything good? What's going on?

Hi. Oh, my gosh. I'm so excited.

I'm excited.

I'm so excited. I just can't hide it.

Awesome.

Yeah.

I have this question. I'm a stay at home mom, a homeschooling mom, and over the years, we've been doing the Dave Ramsey baby steps, and we're on baby step number six. Nice.

Yeah.

And my thing is, I know I'm very busy with homeschooling and everything, but I can't fight the urge to go and make extra money because I want to get the mortgage paid off quicker. And an idea that I came up. Yeah. So recently, I was looking at renting out our SUV on Turo, but I wasn't sure if that's a good idea or not because we bought brand new. We made the mistake of buying brand new seven years ago because we just couldn't agree on whether we should buy used or not. But anyways, now it's just in my driveway, and because I home, school, we walk everywhere we go, is like walking distance with the kids, and it just sits there. And I'm looking at every day. I'm like, I could make money off of this if I rent it out. And I just wanted to know for where we are right now. Am I pushing things, wanting to bring in this extra income to pay off the mortgage, or should I just relax or should we sell it or should I rent it out?

You have options. So I do want to clarify. I think you know this, but just for listeners, we talk about the first three baby steps being very intense. Right. We're always saying, gazelle, intense, go fast, go as fast as possible. Intense, intense. But then the last ones, baby steps, four, five and six, those are all about being intentional. The intensity goes away and you don't have to go fast, fast. Now it's just about, hey, I'm going to be intentional about paying what I can extra in order to pay this house off or put towards kids college, what have you. And so in your case, you and your husband, it's up to you guys to decide what intentionality feels like. Right? And so for you guys, it might be something as simple as saying, okay, we're going to sell this SUV and whatever it brings. Half of it we're going to buy a cheaper car, and half of it we're going to put towards the mortgage, and we're both happy with that, and that's fine. And that doesn't feel like this major sacrifice. Or you might say, yeah, I've got time. I'm willing to pick up a couple of extra hours doing something, or I'm willing to pick up something that might make us a little bit of money.

And if that looks like something like Turo, fine. Is this your only vehicle?

No, we have two vehicles. So as the years went by, I finally convinced my husband to buy secondhand, and he bought a secondhand vehicle for himself, for work, which is like cheaper on gas and everything. So it's a smaller vehicle, and that's what he uses every day. And he bought it for really cheap.

Peachy. My concern is that, and again, I can be a fun ruiner when it comes to these kind of conversations, is it's easy to look back and go, hey, we just walk everywhere and I think of, yeah, but what if one of those kids falls and breaks their arm? How do you all get.

Yeah, that's the point he's making.

How do you all get.

What if there's an emergency?

Yeah, I don't know enough about Turbo.

He'd have the other car someplace else. It's not like you'd be able to have access to the second vehicle that you have.

No, because he takes that to work every day.

I would just research it because I think, I don't know. I'm not going to sit here and be a Touro expert, but the people that I know that successfully do it. I have a buddy that does it successfully, and he doesn't rent his personal vehicle. He has a dealer's license, and he goes to auctions and he buys cars in cash and fixes them up and rents them out. And it's a business for him and it's a whole thing. So I've never been able to speak to it as a side hustle. I only know it from that side of it where that's like one of his big things that he does. So I would just research it. I got to imagine it's a little bit of a trickle as far as money, because I got to believe that they're taking a big percentage because of insurance purposes.

Yes. It is insured.

Yeah. What do you take off of each? What's the percentage? Split?

Yeah.

To be honest with you, I didn't look into that.

How much do you owe on your mortgage?

We just bought this house two summers ago, so we're still at like 2070.

Around 270,000 left.

Sorry?

270,000.

270,000.

What's your husband bring home?

He brings home about 95,000 a year.

Okay.

Tell me about your kids. How many kids you got?

Two kids.

Two kids? How old?

Six and three.

Okay.

Are you going to home school them all the way through? Are you going to get them through elementary school to middle school? How far?

All the way through.

Okay.

That's the plan.

How old are you?

I'm 39.

38.

I'm turning 39.

So here's some facts. We know that when people walk through the baby steps, most people are able to pay off their mortgage within seven to ten years. Which is amazing, considering that the world tells you it's going to take 30 years on a 30 year conventional rate mortgage. Right? Yeah. That's what the numbers tell us. And that's just by you knowing it, by you being intentional, by you having paid off debt so you have extra money freed up in your normal budget with your normal margin in order to make this happen. So again, it's up to you guys. I would not jump into turo. I'm not saying this to be whatever, but it sounds like you've not done any research on it. It's just kind of like, oh, here's an idea. So I would do that research before you make any decisions. And you might find that there's something that you can do that doesn't diminish the value further of an asset that's already going down in value, like your SUV. You might find something that makes you more money without having that depreciation kick.

This is. This is a full circle conversation. Because Jade and I started off a couple of segments ago, a couple of hours ago, with this very conversation. You guys have made a values choice in your home. We don't want our kids in public schools, and we don't want our kids in private schools. And that's awesome. Whatever. Your values are good for you guys. And all of our values come with a cost. And so what's not going to bring you peace in your home is living by your values and then being obsessively checking your mortgage every day to see if it's any lower.

Yeah.

If you have said, hey, a value is this important to us. So in my house, not owing anybody anything, freedom was the highest value. My kids went to public school because our highest value was, I want the Deloneys to make the best decisions for our family, not what some stupid banker is going to tell me I have to do. That doesn't make us any better or any worse. That was just our value. And in your house, it might be. Our kids will not go to public schools. They will be taught by me, their mom. Great. That's going to mean that you're going to push out how long it takes you to pay off your mortgage. That's okay. But it's being at peace with your value judgment. And sometimes, Jade, we make value judgments at work. When our boss says, you're going to do this, and you say, I can't do that, and it might cost you your job. Right. And that's why we tell you, don't owe anybody any money. Have an emergency fund for that very moment.

Right.

But I think, again, we live in a culture that we want to have our values met, and we don't want to pay the piper on the other end. And when you've got values, then you have to ask yourself, what's your price? Yeah, what's your price?

Well, culture tells us any price is okay. And you can go into debt. And to make it happen, you can.

Have whatever you want, all the time, forever. And there's no accounting for it.

When I was in south Florida, there was this furniture warehouse, and people buy furniture, they go deliver it. And it's the big delivery truck. And the slogan on it said, everybody can live like this. And it's just that whole idea that there's no trade involved. There's no sacrifice. Everybody can live like this. If you want it, you get it. No sacrifice. But life is just not like that. And like you said, john, very eloquently, you get to choose your values. And they come at a price, but you get to choose that. So, thanks for hanging out with us. This is the Ramsey show.

Hey, folks. Dave here. You want to hear even more? Life changing content from Ramsey download the Ramsey Network app so you can catch all your favorite shows all in one place. Like the Ramsey show, smart money, happy hour, and the Dr. John Deloney show. You'll get real talk about life, relationships, money, and your career. Plus, the app lets you browse by topic, like debt, business, or selling your home. Get the content you want whenever and wherever you want to listen. Download the MZ Network app today.