Is It Ever Too Late To Build Wealth?

[0] from the headquarters of Ramsey Solutions.

[1] It's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

[2] Thank you for being with us, America.

[3] Rachel Cruz, Ramsey Personality, is my co -host today.

[4] Number one bestselling author and my daughter, the phone number here, is AAA 825 -5 -2 -2 -25.

[5] That's AAA 825 -5 -2 -2 -5.

[6] Redshaw, we're going to dive in with the question of the day.

[7] You want to take it?

[8] Yes.

[9] So today's question comes from Randy in Virginia.

[10] I'm having my first baby next month, and my parents want to move to my town to see the baby more often.

[11] They want to buy a house, but would have to sell theirs first to make it happen and are too lazy to go to apply for a loan.

[12] Oh, man, I thought I would just buy them a house and then they could be my renters.

[13] I currently have $50 ,000 left on a $200.

[14] Don't laugh.

[15] $250 ,000 mortgage.

[16] of my current home they are in their 70s so if they bought the home they would pass they would pay less taxes and claim homestead would it be smarter for them to buy the home themselves or is it okay for me to buy it and make them my renters this is just the this is just easiest so they can sell their house and slowly move into the new one new house new city stress free because my dad has a ton of stuff oh man Randy okay first and foremost love the, love the heart and the idea that you want to help your parents, but no, Randy, no, you buying a home for them to be your renters, not a good plan.

[17] And then on top of that, you don't have the money for it.

[18] I mean, you'd be taking out a second mortgage.

[19] So absolutely not.

[20] I think that you can invest in some plane tickets for them, if they want to come see the baby a few times a year, or they can come just stay at your house.

[21] But if they want to move home, their home, full time, and live in a new city, that needs to be on their time.

[22] Yeah, they need, they're like grown -ups and stuff.

[23] And so they need to do their own deal.

[24] Besides that, dude, you never rent to someone in the second paragraph, when in the first paragraph you called them lazy.

[25] So true.

[26] It's just a basic concept here as a landlord.

[27] Let me help you with that, okay?

[28] So if your first description is lazy and the next description is renter, this is on you.

[29] So no, no, they need to handle this.

[30] It's sweet that they want to come be with a grandbaby.

[31] I completely get that.

[32] If I don't know how great grandkids are going to be, I'd have been nicer to their parents.

[33] I completely get this.

[34] I understand.

[35] I agree with the move.

[36] So mom and dad put their house up for sale.

[37] When it sells, they can make the move and buy a house in your city.

[38] That's how like normal people do it and stuff.

[39] and that's what they need to do.

[40] So, and if they get to your city with a pocket full of money from the sale of their house and can't find a home right away, they can rent from someone else.

[41] Please keep the grandparents at an arm's -length transaction.

[42] Don't let the grandparents be your renters.

[43] That was just so much that can go wrong with that.

[44] And the sad thing is it all will happen.

[45] It'll all go wrong.

[46] Hey, folks, with debt payments and now with inflation stealing more and more of your paycheck, we know a lot of you feel like you're drowning and you're scared of death and you won't have enough to take care of your family and, oh, God, it's scary out there.

[47] I don't know what I'm going to do.

[48] Or you're at the point where you say, I'm just so sick of this.

[49] If you're ready, if you say I've had it, you are ready.

[50] We can help you.

[51] Over 10 million people have been through Financial Peace University.

[52] It's our nine lesson course.

[53] It'll teach you how to beat debt and build.

[54] wealth it's everything you wish you'd learned about money because your number one wealth building tools your income when you get rid of your debt you now have control of the thing that'll make you wealthy and if you go through financial peace university we will show you how to get in control how to be on the same page with your spouse it's very hard it's tough it's a boot camp for money if you want easy you're not going to find something that works so anything that's worth doing you pay a price to do there's a certain amount of pain in transformation and that's what has to occur here financial peace university ramsysolutions dot com slash fp u check it out ramsysolutions dot com slash fp u rachel we can take that family discussion even a step further and we would do financial peace university um and that is don't loan anyone money particularly family or friends don't co -sign for people you know don't you know every time you do these transactions outside of your particular household you set yourself up um the grandmother that called here and had co -signed for her grandson's pickup truck it's getting repoed you know and uh because he had to have a pickup, and his dad wouldn't sign it, so the grandmother did.

[55] Yeah, and I think that, you know, with this conversation, there's the risk of it going bad, which in a lot of cases it does, which causes even more conflict.

[56] But even, you know, I talk to people like, well, you know, my uncle co -signed my car, and I paid it off every month, and it's great, and I paid it off, and it's fine.

[57] But even within that, even if mathematically it works, relationally, it changes.

[58] It's weird.

[59] It changes the relationship.

[60] So from a financial level, a relational level, all the way down, it's just not wise.

[61] It just changes so much.

[62] And it's strange.

[63] It just, I mean, we had, I guess it was a call.

[64] Was it a caller or someone I was talking to?

[65] And they had loaned a friend $10 ,000 because they needed help.

[66] And we went back in the conversation, talked about how if you have the ability just to give it without strings attached to help someone, if that's what you feel called to do, then you do it.

[67] But the whole idea of loaning that they're going to pay.

[68] back.

[69] And then the kids showed up for a big dinner that they were all having with new iPads.

[70] And the couple that loaned the money was like, they have two new iPads.

[71] They owe us $10 ,000.

[72] And then you start, you start nitpicking every, I mean, it just you can't help it.

[73] And so, again, all the above people are not in too much trouble.

[74] Yeah.

[75] It's just like, man. If your kids have new iPads, you're not in too much trouble.

[76] I get that.

[77] Yeah.

[78] So it's just, it changes, it changes the relationship.

[79] And then if it goes bad and it goes south, then it really can damage relationships.

[80] So keeping them separate is it's the smart thing.

[81] Or it's a gift, right?

[82] And you want to make sure that you're not enabling if there is a gift, that it is a blessing and it's helpful.

[83] Generosity is completely different than a banking transaction.

[84] Yes, yes.

[85] And when the borrower is slave to the lender, and when you eat dinner with your father -in -law, your mother -in -law, your son -in -law, and you owe the money, Thanksgiving dinner tastes different when you eat with your master rather than when you eat with your in -laws.

[86] because it oh, well, they're nice.

[87] I don't, it's a spiritual principle.

[88] You cannot get away from it.

[89] The law of gravity is the law of gravity.

[90] I mean, you can have a nice master and still be a slave.

[91] I mean, that's hypothetically.

[92] But I mean, you know what I'm saying.

[93] I mean, that's the, it doesn't have to be harsh.

[94] It doesn't have to be out of control.

[95] It doesn't have to be rage involved to change the tone.

[96] Right.

[97] To change the air in the room.

[98] It changes everything.

[99] So I have to be careful with this stuff, folks.

[100] Be careful with this.

[101] It's not to be mean to somebody.

[102] It's actually to be nice.

[103] No is a no will set you free.

[104] It's a good word.

[105] It's a powerful word.

[106] This is The Ramsey Show.

[107] So here's a quick math refresher.

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[113] That's net suite .com slash Ramsey.

[114] Regal Cruz, number one bestselling author, Ramsey Personality, and my daughter is my co -host today here on the Ramsey Show.

[115] Open phones at AAA 825 -5 -2 -2 -25.

[116] Mark's in Kansas City.

[117] Hey, Mark, welcome to the Ramsey Show.

[118] Thank you both.

[119] Appreciate it.

[120] I'll get right to it.

[121] Okay.

[122] I've been, I think what you call dumb.

[123] about five years ago, five years ago, I co -signed on a mortgage from my ex -wife, and yep, she was my ex -wife at the time.

[124] Fast forward a couple years, I've learned that she owes the IRS over 100 grand, and they've since filed a lien on her property probably in the last year and a half to two years.

[125] So somehow she manages a little check -to -check, and the kids are going to start falling off from child support, and I don't know how she's going to make it, and what implications it has for me in this whole scenario.

[126] Wow.

[127] Yeah.

[128] You're right, dude.

[129] You stepped in it.

[130] Oh, man, I'm sorry.

[131] Okay, first I have to know what story could possibly be told to you to make you cosine for your ex -wife, because by definition, she's X. you're not going to make me tell you this I just the three kids and the the violin was playing in the background I think and maybe caught me at a weak moment sweet Mark you know I'd heard of Randy but I wasn't maybe you thought you were doing good you thought you were doing good for your you're trying to help your children and she's the mother of your children okay we'll try to cut you some slack here I appreciate it.

[132] We'll still put the action in the dumb column.

[133] I agree with your opening statement.

[134] All right.

[135] Anyway, now we're there.

[136] What do we do?

[137] No sense in throwing all the, everybody under the bus.

[138] Let's just keep rolling.

[139] What do?

[140] What do we do?

[141] What do we do?

[142] Okay, she cannot refinance and get you off because she has an IRS lien.

[143] Unless you can get the IRS to subordinate, and with it being such a large lien, there's a possibility they would subordinate.

[144] She would have to qualify for the mortgage on her own, and the IRS would have to agree to subordinate, meaning they agree to stay in second position and put a new mortgage in front of them instead of the old one.

[145] I've gotten them to do that in negotiations.

[146] It's rather lengthy, but she's got to qualify, and that doesn't sound like she can.

[147] Not a chance.

[148] Now, selling the house is very, very difficult.

[149] However, the first mortgage is how much?

[150] $4 .60.

[151] What's the house worth?

[152] I think at best 850 When do the kids age out of child support?

[153] Over the next three years How much money do you have?

[154] 1 .6.

[155] Half of that's in retirement.

[156] Okay.

[157] When I do something stupid and it costs me money, I call it stupid tax.

[158] Oh, boy, I've heard this before.

[159] So I think you're getting ready to write a stupid text check at some point in this equation.

[160] Now, sooner rather than later, later, rather than sooner, depending on when the kids age out and all that kind of stuff.

[161] But let's pretend they aged out, and there's no more need for you to have violins in the background in terms of her having this house.

[162] I would walk over and say, I will give you $10 ,000 if you'll sell your house.

[163] and then she sells the house she has enough equity to pay off the IRS and she gets rid of the mortgage that has you on it and then she goes and gets her another house with the equity she gets her to me too that's great she gets rid of you you get rid of her this was the original intent of the whole thing until you stepped in it um yeah and you wouldn't push her to sell the house now because of the kids she could but i think it's going to be a harder sale and plus you her to do it you did this partly to give your kids a better place to live and they're not aged out but out yet, right?

[164] That's correct.

[165] So, I mean, if you do it today, you're putting the kids in the street, too.

[166] Correct.

[167] But she could make the move today.

[168] I don't know what mindset she's in, but I'll tell you what she's probably got.

[169] She got an IRS breathing down her neck.

[170] She's got a house that she's wondering how she's going to be able to afford when child support drops off.

[171] She's worried about this stuff deep down, not on top of, not on top like you are, but even she feels it in the tenseness across her shoulder blades.

[172] because she's human.

[173] We all can see the truck coming towards our car, right?

[174] Yes.

[175] And so she sees that, and she does not know how to get out.

[176] Have y 'all had any conversations about it, Mark?

[177] You and her?

[178] Very little.

[179] We haven't been the greatest communicators.

[180] That probably surprises you, but no, but not very much.

[181] Okay.

[182] Well, part of that is, she's buried under stress, and it's got part of your name on it.

[183] Yeah.

[184] So, you know, I would just sit down if you can have a, conversation if it's possible and just say hey here's an idea and i'll help you one last time if you sell the house you get rid of me and the irs and you've got enough equity to go get you another house you can either do that now or you can do it later and i'll write a check to help you do this because it gets me off the mortgage because it's worth 10 grand or 20 grand if you got 1 .6 to get rid of this contingent liability this cosine liability because if this thing goes belly up, she's going to get foreclosed on and you're going to get to ride with her because you can't stop the foreclosure because you can't, you can't force the sale of the house.

[185] The only good news in this whole story is the house has enough equity to take out the IRS.

[186] It needs to be sold for her sake.

[187] And it blesses you in the process.

[188] That's right.

[189] So let's dangle some kind of a carrot that causes that to happen now or when the kids age out, I don't care which, but sooner the better, because I got a feel on this is, it'll be a relief to her if she understands the math.

[190] Whether she is conscious of it or not, she's carrying a load of stress.

[191] Oh, yeah.

[192] And Dr. John Deloney talks about that when we're in debt, this lack of agency, this lack of autonomy, because we're a slave, that she's carrying the way to that.

[193] Well, she's, I mean, he said, and she's living paycheck to paycheck anyways.

[194] Yeah.

[195] Well, and then you You have a lien on the house from the IRS.

[196] I mean, the last thing you want on your list of things to do is to deal with the KGB.

[197] I mean, the IRS, it's just they are not, this is not a creditor you want to have, okay?

[198] No. The penalties, the interest, it's just out of control.

[199] Their power is virtually unlimited.

[200] In this case, I've seen a few times, not often, that they'll actually come in and force the sale of the house to get their money.

[201] To get the money.

[202] And if she doesn't do something with this lien, eventually they'll get around to that.

[203] Now, they're not exactly efficient, but eventually they'll get around to it.

[204] So, but the stress of this is just on everybody.

[205] So here's an interesting thing.

[206] Now, you know, we poked at Mark a little bit.

[207] We also gave him a little bit of a break.

[208] And we kind of laughed with him and at him both in his presence.

[209] So it's all okay, right?

[210] But the, because we've all done stupid stuff.

[211] But the thing is this, there's a couple of things here that you can take away as a money principle.

[212] sometimes doing what it feels like is you're trying to help someone but you're doing it in such an illegitimate way you end up actually hurting the person you're trying to help co -signing does that every time there's actually a proverb in the Bible that says only a fool cosigns for another the contemporary English version says if you co -sign for someone else you're stupid it's in the Bible okay so I mean and so co -signing is an illegitimate way to help someone meaning if you don't have the money for junior to get a car and you co -signed for junior to get a car you are stepping in it for sure when it's your ex -wife you're stepping in it up to your knees you need boots for this wall unbelievable man you know for sure and sometimes when you give someone some money even without a debt or without a co -signing involved, and it's enabling to buy something they can't afford.

[213] The behavior, right, right.

[214] Then you've, you know, well, my daughter needed a house, and I gave her the down payment.

[215] And now she's got a house payment that she can't afford.

[216] How many times does that happen?

[217] Like every week on the show, a well -meaning parent.

[218] So you've got to be careful what you're participating in, because enablers are the nicest people in the world.

[219] They're sweet people that don't know how to.

[220] to say no. And then they enable bad behavior.

[221] And so while you were trying to be a help, you end up being a curse in their life.

[222] With money.

[223] You had dollar signs on it too.

[224] A curse with dollar signs.

[225] Yeah.

[226] And Mark, that's not aimed at you.

[227] That's just aimed at all the things all of us have done like what you did.

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[243] Rachel Cruz, Ramsey Personality, number one bestselling author is my co -host today.

[244] Open phones at AAA 825 -5 -2 -2 -25.

[245] In the lobby of Ramsey Solutions on the debt -free stage, Tim is with us.

[246] Hey, Tim, how are you?

[247] Hi, Dave, this is awesome.

[248] Thank you so much.

[249] Well, it's an honor to have you, sir.

[250] Where do you live?

[251] I live in Cameron Park, California, about 30 minutes east of Sacramento.

[252] Very cool.

[253] Well, welcome to Nashville.

[254] And how much debt have you paid off, sir?

[255] $180 ,500.

[256] Way to go.

[257] And how long did this take you?

[258] seven years three months very good and your range of income during that seven years my take -home pay was 48 ,000 to 68 ,000 dollars cool what do you do for a living I work at a hazardous waste facility basically we take household pains cleaners paints that kind of stuff that's kind of what I do I do it for a local government agency down there yeah cool okay good what kind of debt was your 181 ,000 all mortgage You paid off your house.

[259] Looking at weird people.

[260] I paid for house, zero debt in the entire world.

[261] Totally free.

[262] Way to go, man. Seven years you did that.

[263] Yeah.

[264] And in California.

[265] Most of California are like, this is impossible.

[266] You did it.

[267] Really?

[268] What's this house worth?

[269] About three and a quarter.

[270] Ah, way to go, man. How's that feeling?

[271] I'd have a payment in the world.

[272] Dave, I did it in August.

[273] And, you know, it's so freeing.

[274] You know, you don't owe anybody anything.

[275] I mean, last month my washer broke.

[276] I'm like, oh, look, I'm going to go buy a new washer.

[277] Well, it's be fun to do.

[278] Why not?

[279] So it's like little things you're like, I can do, there's freedom and not having owe anybody money.

[280] It's just amazing.

[281] Yeah.

[282] I love the T -shirt.

[283] Ramen.

[284] Ramsey approved meal every night.

[285] I know.

[286] Good old ramen noodles, right?

[287] Yeah, I decided to have a little fun with it.

[288] Yeah.

[289] Well done.

[290] Well, done.

[291] Okay.

[292] What started you on this journey seven years ago doing this Ramsey stuff?

[293] Well, my story started about 15 years.

[294] ago.

[295] I mean, I had the old my about 15 years ago I had what was known as house fever and what happened for me is that I wanted a house fast, fast, fast, fast.

[296] And so I didn't just do a 30 year loan.

[297] I did a 35 year loan with the first five years being interest only and that was dumb wow.

[298] Dum da dumb dumb dumb dumb dumb.

[299] But you know and it was amazing because right then I switched to a new job And I didn't realize that I didn't really own the house.

[300] The house owned me because I, my, my paycheck was only $2 ,400 a month.

[301] And between my, between my mortgage and my HOA was $1 ,700.

[302] And it was tough.

[303] What was the wake -up call?

[304] You know, I took your class in 2009 and I was so grateful.

[305] But, you know, back in 2008 and 2009, the mortgage is tanked and I just couldn't refinance.

[306] And I'm just like, what am I going to do about this?

[307] So I prayed about it.

[308] And I'm like, you know what, this is what I'm going to do.

[309] I'm just going to, a lot of people in my neighborhoods were just walking away from their houses.

[310] I said, you know what?

[311] I signed up for this deal.

[312] I'm going to keep with it.

[313] But I just wish I could get it refinanced.

[314] So finally in 2015, I looked back at refinancing, was able to refinance to a decent loan.

[315] I said, thank you, God.

[316] I was able to get out of that.

[317] And so once I did, I said, okay, it's game on now.

[318] And I said, I'm going to put everything I got on this darn thing.

[319] Excuse my language, but.

[320] And so basically at that time, my average between the last seven years has been about $4 ,000.

[321] I was putting about $2 ,500 of that on the mortgage.

[322] Yeah.

[323] You want it out.

[324] I want it done.

[325] I just no more.

[326] And for seven years, you just kept chipping away.

[327] Yeah.

[328] Every, every month.

[329] Every month.

[330] What was the hardest part for you?

[331] the hardest part I say for me was just the daily grind yeah of just keeping to the budget writing it down I mean I have this big old huge poster board that's like that big that I looked at every time I went to sleep and it's I don't know if you see it on the screen but it shows I mean $180 ,000 it's not for me wasn't a it was a lot of money for me so but you did it yeah and it was worth it yes oh it's so much more freeing now yeah I have freedom And it's just amazing how that feels.

[332] Great job, Tim.

[333] Thank you so much.

[334] Well done.

[335] You're going to be able to do a lot now that you don't have any payments.

[336] What's your first big thing you're going to do with money now that you don't have any payments?

[337] Well, I paid it off last August.

[338] So I went to Australia with my brother.

[339] That was fun.

[340] There you go.

[341] Ding, ding.

[342] That was a lot of fun.

[343] Paid for perfectly in cash.

[344] And so it took care of that.

[345] That was wonderful.

[346] And then I did this.

[347] And so it's just the freedom that you have of making choices.

[348] And that's just you don't own anybody money.

[349] It's just amazing.

[350] I didn't realize that until I was out, how amazing that is.

[351] Well, it's easy to think about what it'll be like, but your body really even feels different when you're completely free.

[352] It's hard to tell people until they're there.

[353] Yeah.

[354] One last thing I like to mention, one thing I learned through this experience is that for me, I found that the interest you pay on a debt is the price you pay for your own impatience.

[355] There's a cost to wanting something right now, and for me that cost a lot of my money because I was willing to wait and so for those who are listening be patient the less money the less money you give to the bank is more money for you and that's just the simple truth it's a simple formula but it works yeah it really is yeah proud of you man thank you sir who were your biggest cheerleaders out well I had my mom was really a very appreciative of a big cheerleader from me and you know i had the um facebook ramsie group that listened to all the time to give me encouragement and that was so wonderful to have that great group yeah it was wonderful the baby steps group yeah yeah facebook it was just a wonderful group always positive always encouraging and so that was always wonderful very cool well good for you brother congratulations man thank you well done if somebody's listening and maybe this is the first time they've ever heard of this idea.

[356] What do you tell them the secret to getting out of debt is?

[357] The secret for me was writing it plain, writing on paper to pen, and writing it visual.

[358] I, you know, as I said, I had that big poster board that was very visceral to me. And I had to make it a heart thing, not just a money thing.

[359] And so once I did that, it was just a matter of time, not if it's going to happen, when it's going to happen.

[360] What's interesting is, is that, not only you're debt -free, but you've transformed.

[361] Yeah.

[362] And you're a different person because of the process.

[363] Yeah, it's been so amazing.

[364] And the people here have been so wonderful to me. It's been awesome.

[365] Good.

[366] Well, we love having folks visit us here in the lobby, particularly to do a debt -free scream, baby.

[367] Markets and all.

[368] Everything.

[369] Yeah.

[370] So we've got the Live and Give bundle for you, the Total Money Makeover book, the Baby Steps Millionaire book, both number one bestsellers, and, of course, the Financial Peace University.

[371] Membership, if you've done or have read any of those, those are yours to give away as well.

[372] So live and give, enjoy them or give them or however you want to, however you want to enjoy them.

[373] They're there for you to say thank you for coming out here, and we're very, very proud of you.

[374] Well, thank you, sir.

[375] Thank you so much for this.

[376] Very, very well done.

[377] All right, Tim from Sacramento, $181 ,000 paid off in seven years and three months, making 488 to 68.

[378] House in California is paid off.

[379] Shut up.

[380] I love it.

[381] Count it down, Tim.

[382] Let's hear a debt -free scream.

[383] One, two, three.

[384] I'm dead free.

[385] Yeah.

[386] Woo!

[387] That's how you do it, Tim.

[388] Yeah.

[389] I'm free.

[390] What it sounds like when you get free.

[391] When you get the chains off, that's what it sounds like.

[392] Pretty stinking incredible.

[393] It's amazing.

[394] Absolutely amazing.

[395] And I love it.

[396] And he said it, it was like, it's, it's the grind.

[397] It's the everyday choices that you make.

[398] Seven years.

[399] And that's long.

[400] In a culture that can't stay with something for seven minutes without picking up their phone and doom scrolling Instagram.

[401] Oh, and you stay with something, seven years.

[402] Consistently.

[403] Yep.

[404] Seven years.

[405] Pushing through, pushing through, pushing through, pushing through.

[406] And that's dedication.

[407] I mean, because I do hear people talk about debt -free scrims.

[408] I'll see some haters online, like, well, those people, they're making.

[409] half a million dollars a year.

[410] And all of a sudden, I'm like, no, no, they're not.

[411] I mean, like, Tim, 48 to 68.

[412] And I'm like, and it's just that diligence day in and day out.

[413] And it's proof that anyone can.

[414] Tim is that example.

[415] Anyone who believes that that it is possible and that they can work a plan, they can do it.

[416] And Tim, he's that example.

[417] It's amazing.

[418] I read that tortoise in the hair book a bunch of times.

[419] Every time I read it, the tortoise wins.

[420] This is the Ramsey Show.

[421] Hey, what's up?

[422] Dr. John Deloney here.

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[438] Thank you for joining us, America.

[439] This is The Ramsey Show.

[440] Common Sense for your dollars and cents and for your life.

[441] Rachel Cruz, number one best -selling author of Ramsey Personality is my co -host today.

[442] Marquita is with us in Seattle.

[443] Hey, Markito, welcome to The Ramsey Show.

[444] Hi, Dave.

[445] Hi, Rachel.

[446] Thank you for taking my call.

[447] Sure.

[448] And I need some help.

[449] I need assistance.

[450] I need guidance with how to set up an estate planning on behalf of my mom diagnosed with ALS.

[451] Here is the numbers.

[452] Thank you, Dave.

[453] It's a lot.

[454] It's a huge burden.

[455] I'm sorry.

[456] How old is she?

[457] My mom is turning 73 this month.

[458] in February.

[459] Oh, I'm so sorry.

[460] Okay.

[461] Thank you.

[462] Oh, man. She owns a home.

[463] It's her primary home.

[464] The value is between the land and the house is between 500 ,000 to 750 ,000.

[465] Her income of pension and Social Security is about 33 ,000 or 3 ,500 per month.

[466] Her mortgage, she owes 139 ,000 on her mortgage.

[467] She has $33 ,000.

[468] She owes in $335 in credit card debt.

[469] She has a car that she's leasing, which has a balance of $23 ,000, $23 ,45.

[470] And her total debt is $196 ,59 ,59, $59 ,000.

[471] Including her mortgage, including the credit cards, including the lease.

[472] Yes, sir.

[473] Okay.

[474] And her plan is to keep the house and sell it, keep it in the family.

[475] And I was wondering, how will we go about?

[476] Why would you keep the house in the family?

[477] Those are her wishes.

[478] Oh, no, but why?

[479] Why does it matter?

[480] Is the house family property, or is it just her house?

[481] It's family property, yes.

[482] Been in the family generationally?

[483] No, since her, since I was born into the house, so since she was married.

[484] Her medical bills are expected to be about $250 ,000 for ALF clinic.

[485] And we're wondering about what's the best way to go about this.

[486] Because her wishes is that she would like to keep the house and give it to one of the kids.

[487] I'm so sorry.

[488] So it's myself and two brothers.

[489] Yeah.

[490] Well, when you pass away, what you own stands good for what you owe.

[491] Okay.

[492] So if the family wanted to keep the house, they would have a $140 ,000 mortgage on the house still.

[493] They can pay that mortgage and keep the house, but the clinic bills, the credit card, and the car will all have to be paid.

[494] right so by asking you all to keep the house she's asking you to take on the clinic bills the car bill and the credit card bill because there's no cash around to pay those things correct well as of now I've been I've moved into a sister and if I was to absorb the mortgage payment in the pro in the annual property taxes and her income can absorb the credit card debt and pay that off that's what we were in 10 months and then you've got a car that you've got to deal with and then you've got $250 ,000 in ALS clinic bills to deal with right am I missing something no those are the numbers and those are the facts so you have a harsh diagnosis and a harsh reality that you're going to be walking through in the next whatever 12 to 36 months and um and and and i don't want to be the person that adds another harsh reality to your situation but the house will be sold because you can't pay the you can't pay the bills and so the equity in the home will pay the bills mm -hmm i'm sorry because you listen if you don't pay the clinic they're going to sue the estate and take a lien on the house and force the sale of the house.

[495] And you don't have $250 ,000, and she doesn't either.

[496] And I guess neither are your brothers do, do they?

[497] My brother purchased a home last year, so as of now, no. Even if one of you is sitting on a $250 ,000 cash balance in your personal checking account, I would not suggest you use it to keep this house.

[498] I'm sorry.

[499] I mean, it's, the house is there and we can use it for her final days and make her comfortable.

[500] And there's nothing to keep you from doing that.

[501] That works fine.

[502] And obviously, the more of the credit card debt in the car, you can clean up during that time with her income and you take care of the mortgage.

[503] That's all fine.

[504] Your brothers need to be aware that you're going to be reimbursed for you paying the mortgage bill upon her death out of the proceeds or the sale of the house.

[505] before they get any inheritance.

[506] But basically there is enough to give you all some inheritance after everything's paid, but not much.

[507] Right.

[508] Because her net worth is, her net worth with you add a $250 ,000 medical bill to it is approaching zero.

[509] Got it.

[510] So what sort of trust or estate planning would you recommend?

[511] Just a will.

[512] because there's no you can't hide these things in a trust and keep this from happening okay so just need a good will uh you need to go see an estate planning attorney and they can help you draft a will that uh gives these instructions but and i don't know how to break this to your mom i don't know how to be kind to her with the uh you know especially in this setting but um i i've never participated in things where we didn't tell everybody the whole truth that it turned out well got it and so I mean you could just choose to not tell her and just draw up a will that says that you guys get the house but the answer is when it actually goes to probate court you're going to find out you can't keep the house no matter what the will says because the will does not have the power to do away with all these debts you follow me yes and so you still end up with the equation what you own minus what you owe your net worth is how it works now you guys don't inherit the debt let's pretend that the uh if the medical bills are a million dollars then they're just not going to get paid because there's not enough money in her estate to pay them and you guys do not inherit debt that's good news but you don't inherit assets without paying all the bills that associated with the estate that That makes sense.

[513] I'm so sorry.

[514] Oh, it's so hard.

[515] And I don't want to be the guy telling you all this stuff, but that gets to be my job today, I guess.

[516] Right.

[517] Well, we'll pray for you, darling.

[518] So a revocable, a living trust would not work either.

[519] It won't cause this to go away.

[520] It just is another way to facilitate the exact same answer.

[521] Oh, okay.

[522] Yeah, you can't hide assets in a trust from debt.

[523] You can hide them from people and keep people's hands off of them.

[524] But, and, you know, it's a little bit strong, a little bit more way of a strong arm to ensure an estate wishes go the way you want because it's in trust and you can't, you can't, it's harder to break a trust than it is a will.

[525] But neither one of them are that easy to break, actually, assuming they're drawn up properly.

[526] But still, at the end of the day, the creditors get paid.

[527] There's not an estate planning tool, a living trust, an irrevocable trust, a, There's not an estate planning tool that makes debt go away or the results of the debt and the results of the debt is the person that is owed can collect their money as long as there's something to collect against and so if the house were in the trust the equity in the house it goes to the beneficial interest of an individual however the trust and the beneficial interest can be sued because it's part of the estate so I'm not an attorney You probably, you do need to sit down with one and you need to spend a little bit of money and getting a proper will drawn up to make sure I'm not right.

[528] But I'm afraid you're going to find out I'm right.

[529] I'm sorry.

[530] Wow.

[531] Oh, my goodness.

[532] This puts this hour of the Ramsey Show in the books.

[533] Live from the headquarters of Ramsey Solutions.

[534] It's the Ramsey Show where we help people build wealth, do work that they love.

[535] and create actual amazing relationships.

[536] Rachel Cruz, the one bestselling author, co -host of the Smart Money Happy Hour, Ramsey Personality, and my daughter is my co -host today.

[537] Open phones at AAA 825 -5 -2 -2 -25.

[538] Shane starts this hour in Baltimore.

[539] Hi, Shane, welcome to the Ramsey Show.

[540] Hey, Dave, how you doing?

[541] Better than I deserve.

[542] What's up?

[543] All right, so I feel like I know the answer to this question, which I hate, but I wanted to hear from you.

[544] So I recently purchased a home from my grandmother who passed, and I knew it was essentially a steal to buy because I was going to get it way lower than it's actually valued at.

[545] So long story short, I have equity in the home, which is awesome.

[546] But I've been struggling internally to figure out if I should roll my credit card debt into that home, into the equity of the home, and then pay that off with gazelle intensity.

[547] I have $26 ,000 in debt, credit card debt, and I make $85 a year.

[548] You're single?

[549] I'm single.

[550] What's the answer to your question?

[551] You know it.

[552] I know what it is.

[553] But it would free up $400 a month for me if I were to roll it.

[554] But it's funny, I tell my mom, my problem is not the debt.

[555] My problem is that I'm not disciplined enough to.

[556] knock it out like why do I need to consolidate it into my into my equity so and that answer is what Shane that I mean I feel like I'm getting to a point where I really the answer is that I shouldn't do it I know I know exactly what I should do I just I wanted to make sure it was the right thing to do the thing that scares me let's kind of back up for a second okay $400 a month is not true okay that's $4 ,800 a year year, you're not saving that on $27 ,000 worth of debt in interest.

[557] The only way you're saving $400 a month is if you're going to be in debt longer.

[558] Gotcha.

[559] Which is absolutely not your goal.

[560] No, it's not.

[561] Okay.

[562] So you're just trying to dumb this down to make it easy, and it's not going to get easy.

[563] You know, this is Band -Aid fast -off versus Band -Aid slow off, and you get gangrene.

[564] True that.

[565] Gross.

[566] Hey, Shane and I are okay, Rachel.

[567] You don't have to worry about it.

[568] If you don't want it in, it's okay.

[569] Just have like Google imaging.

[570] Oh, Shane.

[571] Okay, so what's the...

[572] So here's the deal.

[573] Get fired up and lay it out, lay out the math and go, what is it you make again, by the way?

[574] 85.

[575] Okay.

[576] So 27.

[577] So you're by yourself.

[578] You don't have to talk anybody into this.

[579] You're how old?

[580] 29.

[581] Okay.

[582] One year.

[583] You really think I can do it in one year?

[584] I'm positive.

[585] You can do it in one year.

[586] Gosh, I knew you were going to see this.

[587] And here's the problem, Shane.

[588] You're going to have no life for a whole year.

[589] All you're going to do is work and eat ramen noodles and pay debt.

[590] No going out.

[591] No eating out.

[592] No vacation.

[593] Work, work, work, work, work.

[594] And you're done.

[595] year.

[596] See, this is only about $2 ,300 a month.

[597] And you're done in one year.

[598] All right.

[599] Shane, what's the, what is the debt?

[600] I mean, I know it's credit card debt, but what was it just on, was it just life?

[601] Was it life over about eight years?

[602] So that's what's going to be hard, Shane, is it's not like this is just a car loan and you made one purchase that put you in this.

[603] These are multiple decisions.

[604] You know what I mean?

[605] Over life and you're, and you're used to living that kind of lifestyle of $26 ,000 above what you've been making.

[606] So it's going to feel even more sacrificial in a sense.

[607] So just as a heads up.

[608] Here's the thing.

[609] If you'll do this, it'll make you a multimillionaire.

[610] And here's why it'll make you a multimillionaire.

[611] Here's why.

[612] Because anytime you get ready to be chaotic and sloppy and disorganized and slip back into credit card debt, you will remember the year from hell, and you will not let yourself do it.

[613] Dang.

[614] But if you wander your butt, just kind of lollygagging along out of debt, you will wander back in.

[615] But if you have to pay a price, I mean, if you got the year from hell in your consciousness, and you go, crap, no, I'm not buying that.

[616] There is no way.

[617] I'm not going to a month without a budget.

[618] I remember where that put me before.

[619] and this is this is it's settled in your brain it's settled in your body it's settled in your spirit and that's why I'm telling you to do it it's not just because it gets you out of debt and it's not just because it's absolutely the highest probability you will win but what we're doing here is are resetting the way you handle money for the rest of your life yeah and that's going to make you it's going to make you're only 27 it's going to make it 20 million dollars I mean, I promise you, the math says it, because you know how to make money, and you've not been horrible with money.

[620] I mean, you're not like as bad as like Congress or something.

[621] I mean, you're not, you know, you're not, you're not ridiculous, you know, you only got $27 ,000.

[622] But it's just sloppy.

[623] It's like the enemy of the, it's pretty intense.

[624] That's not to shame, Shane, but like $26 ,000 in credit card debt from just life, though.

[625] Like, it's going to be a shift, Shane.

[626] Like you've got to hear that, but it needs to happen.

[627] Like you said, it wasn't like a. this explosion of stupidity, it was gradual.

[628] You know, like you said, that's the truth.

[629] And so the danger of that is, is the enemy of excellence is not horrible.

[630] The enemy of excellence is okay.

[631] Complacency, yep.

[632] It's, oh, this is good enough.

[633] You know, and we used to say this redneck saying, I don't know if they say this kind of stuff anymore, close enough for government work.

[634] Have you ever heard that one?

[635] Close enough for government work.

[636] Nope.

[637] Which means half but do your job, okay?

[638] That's what it means in the neighborhood I grew up in.

[639] And so, you know, it's mediocrity, you know, and so, and, you know, Shane, you're fighting what all of America is fighting, this slip into mediocrity.

[640] And you've got the ability here to completely change that.

[641] And the cool thing is you already knew every bit of it before you called here.

[642] Now all you got to do is go do it.

[643] I'm proud of you, man. It's great, Shane.

[644] I can't wait to do your debt -free scream with you in a year when you hate the old Shane so bad that you will never go back to him.

[645] And we're breaking up with him, never going back with him.

[646] And so we're going to be organized, diligent, have money budgeted for fun, money budgeted for luxuries, and we're going to go become very wealthy and outrageously generous.

[647] And that's in your future.

[648] You could be a millionaire in 10 years.

[649] You really can be from where you're sitting right now.

[650] Now, you're in really, mainly because of headspace, your headspace is excellent.

[651] As long as the gangrene doesn't get them.

[652] Rip that band -aid off, Shane.

[653] So gross.

[654] Watch out for the amputation.

[655] This is the Ramsey show.

[656] Every team that wins has a good offense and a good defense.

[657] Money's the same way.

[658] Offenses, you get out of debt, you invest, and you're generous.

[659] Defense is insurance.

[660] You need good insurance.

[661] You need to protect your finances from the big emergencies.

[662] There's 10 kinds of insurance coverage you might need based on what your life looks like today.

[663] And we built a tool called the coverage checkup, which shows you the types you need to add, the junk you need to drop, and the adjustments you need to make.

[664] and we'll even rank your coverage list by importance.

[665] Email it to you and connect you to a Ramsey trusted insurance provider to help you get this new plan in place fast.

[666] None of it costs you a dime.

[667] As a matter of fact, you're probably going to save some money as a result.

[668] Go to Ramsey Solutions .com slash checkup completely free.

[669] Ramsey Solutions .com slash checkup.

[670] Do not let emergencies sneak up on you.

[671] Russ is with us in South Bend.

[672] Hi, Russ.

[673] Welcome to the Ramsey Show.

[674] Hi, thanks so much.

[675] Dave, we are a young married couple in our early 70s, and we're financially free.

[676] And at this stage of life, we've got about $80 ,000 in cash.

[677] We've gone through Financial Peace University and designated the emergency fund out of that.

[678] But my question is twofold.

[679] What's the best thing to do with that money?

[680] Obviously sitting in the bank is probably not the best thing to do.

[681] The second question is, is the goal of wealth realistic at this stage in our lives?

[682] We have to define wealth, extreme wealth, unless you make really, really good money.

[683] No, because time is not on your side.

[684] But can we build a nice nest egg, a plump one?

[685] Sure.

[686] Sure.

[687] And, of course, that depends on a whole host of other factors and variables that you can control.

[688] some of and some of you can affect but yeah um so but i mean 60 000 invested in good mutual funds if it averages 10 % would double every seven years so it'd be if you don't add anything to it so it would be you know and you know if you're 70 it would when you're 77 it would be 120 and if you're 84 it'd be 240 give or take but i mean that's pretty close and that's if you don't have anything to it now of course you've got income you've got other things going on but you know a quarter million dollars uh as a plump little nest egg in your early 80s is certainly better than a whole host of people absolutely and you know neighborhood i grew up in we called that rich but It's probably not really rich, but yeah.

[689] No, that's great.

[690] So mutual funds would be the way to go in your opinion.

[691] If you're going to leave your hands off of it, yeah, if you can leave your hands off of it, you have an emergency fund in addition, and you have income to live on?

[692] Yeah, we both, we pull in about 60 grand a year, about 30 apiece.

[693] At this stage, I've got a financial stream from my old insurance business.

[694] I live on residuals and occasional referrals.

[695] She also is on Social Security, and she's working at an accounting firm, and she does a little part -time work for that.

[696] So this is a semi -retirement for us, and there is income streams for both of us along that amount of money.

[697] Good, perfect.

[698] Excellent.

[699] Well done.

[700] Yeah, I mean, so you're secure, and so we can allow this money to grow.

[701] We might even be able to add a little bit to it as we go.

[702] along if you wanted to there's no no panic here it's not like the the house is on fire but you've done it I mean you set yourself up to where you should be able to prosper with that it's great for us yeah absolutely Ashley's with us Ashley's in Los Angeles hi Ashley how are you hi thank you so much for taking my call huge fan thank you my question is my husband and I are on baby step six we have about 400 $150 ,000 left on our mortgage, just under a million dollars in equity.

[703] And my husband would like to take about the, about $150 ,000 that we have in our savings to possibly invest that in real estate and in investments.

[704] And so in my opinion is that we should, we're $450 ,000 to completely being debt -free, that we could should continue to chip away at that mortgage payment rather than invest now.

[705] So we just aren't sure where to go from here.

[706] Yeah, it's a good question, Ashley.

[707] I mean, it's one that I feel like a lot of people are asking these days.

[708] This comes up a lot that I see.

[709] So, yeah, I'm more of your line of thinking.

[710] I would throw that money at your primary home, pay it off, and then make it a goal for you guys to buy.

[711] an investment property, which may be tough in Los Angeles to do it with cash, but that's how we recommend doing it.

[712] Right.

[713] How much do you guys make a year?

[714] So combined income is just about $225 ,000.

[715] Okay.

[716] And he, go ahead.

[717] Well, what do you guys do for a living?

[718] So I'm in real estate, so that's why I love taking the commission checks and throwing them at our mortgage and just pretty much living off of his income, which he's in law enforcement.

[719] What does he make of the two?

[720] 50 um about 150 to 175 okay so if you throw a hundred a year at this plus the 150 you're done in three years okay how old are you all 38 yeah so you're a whole 41 years old uh you own a house at that point that's worth a million and a half to two million dollars and um it's completely paid for and you make 250 thousand dollars a year that sets you up to build a lot of wealth in the future and if you go put $150 ,000 down on a $6 ,000 or $700 ,000 rental property, it'll barely cash flow, barely cash flow.

[721] Right.

[722] And so there's no blessing there.

[723] So the answer to the question is not real estate or what can you do or that.

[724] The answer, the lens to look at it is, okay, what gets us when we're 50 to the highest net worth Which method?

[725] Which method?

[726] And I can promise you the method that does that is paying off your mortgage first and then paying cash for your first rental property.

[727] And you can do all of that before you're 50.

[728] Yeah, because there's still this myth out there, Ashley, with real estate and investment real estate.

[729] I see it everywhere.

[730] It's just like, it feels higher than it has in a long time of people wanting to get in and do stuff.

[731] Because there's kind of this mentality of like, oh my gosh, how great.

[732] it's kind of fun and like we have this other property and we get rental income and it feels like this cool thing to do but in reality it's a it's a side business i mean you're going to be dealing with tenants and on top of that the money never ends up being what people think it is with the headache and everything like what what you guys end up after fixing stuff in the house paying the mortgage because you're taking mortgage out on it if the rent isn't paid i mean there's just so much that goes into it that's not as glamorous as it seems.

[733] And it's great.

[734] We love real estate.

[735] We are a real estate family.

[736] My husband does real estate.

[737] Dad, Dave, loves real estate.

[738] So it's not that we're against it.

[739] In fact, it's a wonderful thing, but you want to do it the right way.

[740] Because if you go in about, if you go, if you go, if you go into it, like you guys are thinking, it's, it doesn't end up being as wonderful and great as an Instagram real makes it out to be that you see all the time.

[741] Yeah, for real.

[742] Nothing ends up as great as an Instagram real in reality so uh but yeah the the uh you know you're dealing folks with a someone who doesn't know anything about real estate when they say things like well the tenant will pay the bill that means you've never had a tenant that's what that means that means that you've never had a hot water heater go out the same month that the tenant moved out and broke the contract and you don't even know where they are they just left oh and this was in a nice not a junkie house and they trashed it the same month so I'm putting in heat and air I'm having to paint it because these morons spray painted the wall for some reason they decided to do this as they broke the contract and left and disappeared in the middle the night and I got no payment coming in I got a lot of money going out this is landlording this is landlording right here now can you make money net net of all of that yeah because you put a tenant back in you're going to get rent and you don't have any payments, if you don't have any payments, but if you got put down $150 ,000, you have lost your heinie under the thing I just described.

[743] You'll look back there and it's gone.

[744] This is the Ramsey Show.

[745] Retro Cruz, Ramsey personality is my co -host.

[746] Teresa is in Little Rock, Arkansas.

[747] Hi, Teresa, how are you?

[748] Just fine and you?

[749] Better than I deserve.

[750] What's up?

[751] Well, I am knocking on the door of 61.

[752] I have no retirement money saved up whatsoever.

[753] I've been working the baby steps.

[754] I've got my little $1 ,000.

[755] And hopefully Social Security will still be there when I retired 67.

[756] My question is, even though I'm in the baby steps two, my company matches 4%.

[757] And I'm just wondering if I should go ahead and be putting that 4 % into my 401k, even though I'm still in Baby Step 2.

[758] So you're 61 and have no money?

[759] None.

[760] What do you make?

[761] I bring home roughly $67 ,000.

[762] What is your debt?

[763] A little over $69 ,000.

[764] On what?

[765] Student loan is 11.

[766] I have a car loan.

[767] of 18.

[768] I have a personal loan of 12 and then I guess you could say another personal loan of 26 on a tractor.

[769] Why do you have a tractor?

[770] Well, we're country folks.

[771] Oh, wait.

[772] Where's your husband?

[773] My husband is 75.

[774] He's drawing Social Security.

[775] He is basically disabled I guess you could say he has COPD and emphysema he's had three back surgeries so he don't need to be on a tractor no I'm I used the tractor not anymore broke people don't have 26 ,000 dollar tractors well I have tried everything I can to try and sell this thing other than just letting it go back and letting them sell it for whatever they can sell it for And then paying the difference Tractors are selling right now What kind of tractor is this?

[776] It's a cabota That tractor will sell Well You haven't tried to sell this tractor Well when people say that they go buy a brand new And for the same price of what my payoff on it is Well your payoff is a personal loan It's not a track Does it have an actual lien on the tractor?

[777] Yes Okay With who?

[778] Who do you owe?

[779] Cabota uh yes okay well i would go to the credit union borrow the five thousand dollars worth a difference and get this tractor sold and you need to sell your car too you guys are in emergency mode girl you don't buy a 26 ,000 our tractor when you're broke well this was two years ago before i discovered dave friends see this past march okay all right what is your land what's your land worth um probably about three four thousand your land is worth three thousand dollars yeah we we we bought it back in nine acre no for the whole seven acres you're a 26 thousand dollar tractor for a four thousand dollar piece of land well we hunt and I use it to clear deer leases in our hunting area and food plots.

[780] Yeah, I told you I was a country girl.

[781] Not criticizing country.

[782] I love country.

[783] I was over bush hogging last weekend on my farm.

[784] So I got that.

[785] Just because it's therapy.

[786] But, yeah, but okay.

[787] I admit it was a stupid purchase.

[788] Yeah, yeah, it is.

[789] You know, spur of the moment purchase.

[790] Yeah.

[791] It gives you joy, but not as much joy as being.

[792] as being broke is stealing from you.

[793] Right.

[794] Yeah.

[795] And you're starting to look up and go, I need something to eat other than social insecurity when I get to 66, 67.

[796] So, yeah.

[797] If I'm in your mode, I am so scared, I'm going crazy and I'm selling tractor.

[798] I'm selling car.

[799] I'm going to get a $2 ,000 car.

[800] I'm going to work like a crazy person.

[801] Are you leasing the land?

[802] Did you say deer hunting lease?

[803] Are you leasing it out to people?

[804] No. No. It's land that other people are.

[805] that has given us permission to hunt.

[806] We're not having that physically pay for a lease.

[807] Oh, you don't have to pay a lease, but you're not receiving any lease money on your seven acres.

[808] No. Okay.

[809] All right.

[810] That's what I was trying to get to.

[811] Okay.

[812] You have seven acres and literally the only value of it is $4 ,000 or $5 ,000?

[813] Yes.

[814] This is $500 an acre.

[815] Is it mountain land or something?

[816] No, it's just, it's in between a bunch of air.

[817] that, and nobody, I mean, it's paid for.

[818] I know, I know, but it's just hard for me to imagine land that's that cheap.

[819] $500 an acre land in Arkansas.

[820] I mean, you must be piping sunlight in there.

[821] Okay.

[822] We are.

[823] All right.

[824] We are.

[825] All right.

[826] I got you, girl.

[827] Only God knows where we're at.

[828] I love it.

[829] I kind of think I'm going to like, I think that I've got a feeling it's beautiful.

[830] I really do.

[831] But anyway, okay, so, all right.

[832] Um, yeah, let's get rid of the car, sell and tractor.

[833] Get rid of the car.

[834] Get rid of the truck.

[835] What's the student loan?

[836] Teresa, why do you have a $11 ,000 student loan?

[837] I've been paying on it since 1999 and did not take advantage of paying the last three years.

[838] Okay.

[839] Okay.

[840] So you've got to get in high gear mode because if you'll get this mess cleaned off, you can, you'll have plenty of money to save and invest.

[841] But you've got some.

[842] me payments coming out you ain't got any room in your budget to invest and that's why we tell people to clean their debt before they take advantage of the match short short answer don't i want you debt free in a year by selling everything in sight i want your husband afraid he's going to be sold next okay and uh and uh and uh you know and every deer in the area needs to be afraid you're going to sell him because you're going to shoot him and put him on something and sell him i mean oh my gosh you're unbelievable you've got to scratch up every dollar you can clean everything up and and knock this out as fast as you possibly can because you don't have any money to invest you don't have room in your budget with what you described to me so uh and you've you got you know as you said you got six years so we've got we got to make we got to make hey while the sun shines and you got to get with it and um and teresa it's going to be it's going to be extremely uncomfortable just know that going in because it's going to be really uncomfortable being 82 and have zero money a hundred percent and a rusty track but you're you know what I mean but I'm like after decades of living a certain way untangling that is much more difficult I think than when you're living some some way for five years and you're you know I mean you're taking a life Teresa and you're turning on its head I mean you're going to be doing some really newer ways of thinking that are going to feel very uncomfortable but keep pressing through even though it's hard and every time Every time you do something smart, every time you do something smart, I want you to say, I'm doing this because I'm a country girl.

[843] I don't want you doing anything else dumb and say, I'm doing this because I'm a country girl.

[844] Quit blaming dumb stuff on country girl.

[845] Blame smart stuff on country girl because country girls do smart stuff.

[846] And, you know, this is what you're about to do.

[847] You're about to do some really difficult things.

[848] And people in your life are going to think you've lost your dadgum mind.

[849] But what you're doing is you're trying to secure a reasonable, last, three decades, two decades of your life, you know?

[850] And that's very important to fight for.

[851] Very important to fight for.

[852] And it's possible, Teresa.

[853] We've talked to people.

[854] It's getable.

[855] Five years down from where you are.

[856] And it's a completely different situation.

[857] So you do.

[858] It's never too late.

[859] We always get that question.

[860] Is it too late?

[861] It's not too late.

[862] For me, you know.

[863] Not too late.

[864] But you're trading a $26 ,000 tractor for $150 ,000 in your retirement.

[865] You're trading an $18 ,000 car for another $100 ,000.

[866] thousand dollars in your retirement you could have a quarter of a million dollars set aside with match if you'll get your butt out of debt now by the time you hit 67 68 years old you can get there if not maybe maybe 200 maybe not 200 maybe not 250 but you can get to where you don't have this sense of being broken then if you want to go buy a six thousand dollar tractor to play with out of your 200 thousand dollars and your 70 fine go do that but otherwise don't no no no no No, no. And blame all smart things on being a country girl.

[867] Don't blame dumb things on being a country girl.

[868] This is the Ramsey show.

[869] Rachel Cruz, Ramsey personality.

[870] Taylor Swift song quota is my co -host today.

[871] You giggled all the way through it, and nobody knew what you said.

[872] I had a dream.

[873] My daughter -in -law kills me for the money.

[874] She thinks I left them in the will, is it?

[875] And then they all have the reading, and they realize, you know, they're not in it.

[876] And then the last line is, they're all screaming.

[877] She's laughing up at us from.

[878] Hell.

[879] Can I say it that?

[880] Yes.

[881] Oh, I guess.

[882] We don't get fined for hell.

[883] I don't know.

[884] I mean, the far as I know.

[885] Remember when you thought asinine was a cuss word?

[886] Well, there's that.

[887] Michelle is in Rochester, New York.

[888] Hey, Michelle, how are you?

[889] Hi, thanks for taking my call.

[890] Sure.

[891] What's up?

[892] So my husband and I are trying to decide if we should move in with our mother -in -law.

[893] We are going to be seniors in college.

[894] We are We've been married two years now.

[895] And there's two main reasons why we would move.

[896] The first is we would save money, probably.

[897] We'd still pay her rent, but we'd probably save $400 months.

[898] And the second reason is because she's a single mom and her son is moving out to get married.

[899] So now she'll be in the house alone, and she doesn't like to be alone.

[900] Is her son your husband, the one that's getting married?

[901] No. What?

[902] it's my husband's twin brother oh okay yeah so michelle a reason to move in with an in -law under the um motivation because she doesn't like to be alone that starts to really entangle a relationship because it sounds like you're being kind but it actually ends up being extremely dysfunctional that she's depending it upon you guys to fill.

[903] If the only way she's not alone is her grown children stay home with her, that's dysfunctional.

[904] I'll just say it that way.

[905] Yeah.

[906] I'm sorry.

[907] It's a normal thing to cry when your grown kids leave and cheer 20 minutes later.

[908] It's a normal thing to do that.

[909] You do both, okay?

[910] And to just cry, and I don't want to be, she needs to have a life outside of her children.

[911] Okay.

[912] Okay.

[913] I will say she is very self -sufficient.

[914] She still works full time.

[915] No, she's not.

[916] Not emotionally.

[917] It's not that she, I mean, it was just sort of an idea that was brought up, and we would only live with her for a year, and she knows that.

[918] And she also, like, I don't know, it's, I guess in the situation, it's hard to describe, but I'm not as much concerned about, her like if because we've talked about not moving in and she would just go on with life it's not like a necessitated thing yeah I think it's going to be better for y 'all and her emotionally and relationally that's not a psychologist or a therapist speaking or a pastor speaking that's just an old man telling you okay you do whatever you want to do and do you guys is there a reason you know you said you're going to save four hundred dollars but there are juniors in college you said right uh we'll be seniors this year coming up But the twin brother and his new wife aren't staying.

[919] Well, they're living in the new wife's in -law apartment with her parents.

[920] So they sort of have their own situation.

[921] We had just talked about it because it was our last year of college.

[922] It might be nice to save money and take some of the strain off of ourselves.

[923] If you want to do it, it's fine.

[924] It's the way you presented it sounded weird.

[925] Okay.

[926] Sorry.

[927] So I guess you didn't.

[928] It's not that it sounded weird.

[929] It just that our answer changes or my, I'll say my answer is more cautious for you, Michelle, because of the end of that.

[930] It's not that we're doing this for a financial goal because some people do that, right?

[931] I mean, we talk to people a lot.

[932] They're like, hey, we're going to make this move because we have this goal and then we're going to be out.

[933] There's a date.

[934] It's very specific.

[935] All of that.

[936] I'm not completely against that.

[937] It was the last part when you said, and because she doesn't like.

[938] to be alone.

[939] That's where my flag went up just for you, Michelle, like woman to woman.

[940] It goes up for her.

[941] It goes up for your husband, too.

[942] Yeah.

[943] That's what's weird.

[944] I mean, that is weird.

[945] So if that part wasn't the end of it, though, and if your only question was, hey, it's our last year of college and we're able to save some money if we do this, you know, what do you guys think about that?

[946] If that was it, I would say.

[947] And you're all in.

[948] Yeah, and I would say, I mean, yeah, if that's what you guys choose to do, but I would have an end date.

[949] I would not.

[950] be living with my in -laws over in a long extended period of time as young newlyweds.

[951] I don't think that, I think you guys figuring out life, just you guys together, is really healthy.

[952] I would prefer that you didn't.

[953] I think you guys just figuring out life together is great.

[954] But if you wanted to and had an end date and all of that, it could be an option.

[955] It won't like destroy, but it's that end, that other part of the question that I'm like, oh.

[956] Just don't, you know, what I heard was just codependence.

[957] and I don't, I wouldn't, I don't recommend that for anybody, you know, if, uh, because there's not an end, there's not an end of that, that needy, that neediness is not something that needs to be fed. It needs to be healed.

[958] And that's, that's, that's all I was saying just from, again, that's just old man talking.

[959] So it's not, there's no professional quote guidance there.

[960] You, you call this and ask our opinion.

[961] So, and I don't think she's a bad lady.

[962] I think she's just normal, it's normal.

[963] It's got two twin boys of the last two, leave and and she's a single mom and they've been her world and that's a normal grieving of that but it's also a release that and you know she doesn't have a choice she's got to move on with the next chapter of her life and you guys can't run over there every time she's lonely yeah that's that's yeah okay anyway I set our peace be careful be careful be careful Janice is with us Janice is in Charlotte North Carolina hi Janice how are you hi Janice how are you hi scared to death why what are you scared of well i'm going to be 63 in a couple of weeks i have no retirement um i'm still working um made some very poor decisions with money over the my life um um raised up in a christian home but the only scripture i remember about money was the one that says don't store up for yourselves um things that would you know be poor yeah I got you I remember that script yeah and I never I never really learned money management for my parents they were poor and before I run tight on time how can we help you hon well I just I've got $300 in my emergency phone so far and I want to get started I just I'm afraid I don't what do I make I bring home about 3 ,000 a month Mm -hmm.

[964] Good.

[965] All right.

[966] And you have no money.

[967] How much debt do you have?

[968] I have a $20 ,000 car.

[969] I have a $10 ,000 credit card, $4 ,000 credit card, a $1 ,200 credit card, and a $3 ,000 personal loan at the bank.

[970] Yeah.

[971] Well, there's reasonable reasons to be scared, not terrorized, but scared, because this is an unhealthy situation.

[972] situation and you're and you're recognizing I have to address it and so I would let that if fear tells me to not touch a hot stove or get out of the road of cars coming that's good fear yeah and it's I don't want it to be debilitating fear fear that keeps you up at night causes you have to take anxiety medicine that's not what I'm talking about but I mean fear tells you to get out of the road you getting ready to get hit by car that's good fear so and that's kind of where you are you got a mess and you're going I got to deal with this so what we'll do is we'll help you, okay?

[973] We'll walk with you.

[974] It's not going to be easy.

[975] You're going to get your income up.

[976] You're probably going to sell this car, and you're going to do some difficult things.

[977] But we'll show you how in Financial Peace University.

[978] It's our nine -week class.

[979] You'll have people around you that are holding you accountable and encouraging you because you're scared, and you need some encouragement.

[980] We'll gift that to you, Janice, so stay on the line.

[981] Oh, yeah, we're not going to charge you for it.

[982] We'll pick up and do that for you.

[983] Be completely.

[984] free for you.

[985] And the thing is this, be afraid enough to do something, but not so afraid that you're frozen.

[986] So get out of the road.

[987] Don't freeze in the headlights.

[988] And we'll walk you out of the road and get you to the sidewalk and then walk you to uptown.

[989] And the good thing about this, too, Janus, is that there's going to be a lot of quick progress in this that you're going to see.

[990] And because of all these debts, there's a lot of them.

[991] So it feels overwhelming even as you listed it.

[992] but you're going to start with the debt snowball you're going to start knocking this stuff out and it's going to take some years you know it's a marathon it's not a sprint but continuing to make those decisions day in and day out you're going to see progress Janice you really will probably for the first time in your life actually get traction the right way hold on we'll help you 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.

[993] Rachel Cruz, Ramsey Personality, number one, bestselling author.

[994] My daughter is my co -host today.

[995] The phone number here is AAA -8 -25 -5 -2 -2 -25.

[996] Kennedy is with us in Indianapolis to start off this particular hour.

[997] Hi, Kennedy.

[998] How are you?

[999] Hi, Dave.

[1000] How are you?

[1001] Better than we deserve.

[1002] What's up?

[1003] Hey, so I was calling because I have a son.

[1004] He's four and a half, and his dad and I are no one together, but I'm in a great marriage now, and we are actually on baby step two.

[1005] We're working with steps.

[1006] And my son's dad, he's not very good with money.

[1007] You know, we built a house together.

[1008] I wasn't on it, obviously, but we built a house together, and he picked out everything that was super expensive.

[1009] He went and he bought a brand -new cheap when he had kind of a beater.

[1010] He lives to, like, impress people, and he's not a bad dad.

[1011] We're on good terms, but he's just really bad with money.

[1012] And I'm trying to work with my son now on chores and saving money and making money.

[1013] and I'm worried that his dad is going to show him habits like going out to eat all the time and buying every single thing.

[1014] And it's just kind of going to reverse what I do here at home.

[1015] Can you help with that?

[1016] Yeah, I mean, this can be a tough one.

[1017] The good news is, though, Kennedy, I mean, your son's five, which is great, right?

[1018] I mean, they're young and, yes, impressionable, but you can start doing things with him that's not going to completely unravel just because he sees his dad.

[1019] And I think parents, and I have to even realize this even with my kids, so much of what they learn is what they're watching.

[1020] And so more is caught than taught.

[1021] And you only have the power to control what goes on in your house.

[1022] You don't have the power to control what's going on in your husband's house.

[1023] And so I think the older he gets, the more conversations you guys can have around money.

[1024] But right now where you're at, the fact that he's five, I think instilling these small habits.

[1025] And again, Kennedy, I, we have have a five -year -old at home.

[1026] We do this stuff.

[1027] I teach it every day.

[1028] And we still probably aren't as intentional as we should be with our kids.

[1029] Right.

[1030] So like there's a lot of grace in this.

[1031] It's okay.

[1032] They're still young.

[1033] But I think, you know, slowly, but surely that consistency over time of what he's going to see from you, that's what you can control.

[1034] And so that's what I would focus my energy on.

[1035] And again, I'm sure as he gets older, there's going to be more questions.

[1036] And I think you have those conversations with respect for his dad and still honoring him, but also telling the truth of hey here's what common sense looks like when it comes to money here's how to hear our habits to have to set you up to win right because I think it was Meg Meeker that said we don't raise kids just to be good kids we raise them to be good adults and so I love Meg yeah it's kind of having that long -term mindset is helpful too but now Meg would tell you first and foremost never trash his dad to him absolutely not that's never ever going to happen but then sometimes the way I can find my answer on some of of these things is if I take it to an extreme, it tells me how to handle it.

[1037] Let's take it, let's take a different thing instead of money.

[1038] Let's just make up something kind of weird or wild to see how we would handle that.

[1039] Let's say his dad drops the F -bomb every other word.

[1040] He does actually.

[1041] Who knew?

[1042] And we don't do that at our house.

[1043] No, we don't.

[1044] Okay.

[1045] So how do we handle that?

[1046] Well, we don't trash dad.

[1047] And we can't control what dad does with his mouth.

[1048] over at the other place but we can only control it when you're with me and in this house we don't speak that way we have more class than that we're not trash okay uh you know we have we have a sense of decorum we have a sense of nobility in our home and we don't we don't speak using those types of words uh they're called vulgar we don't teach a four year old that but i mean this is what's going through your mind right And so you go, well, I can't control that.

[1049] But all I can control is what we do here.

[1050] And so your interaction with him is we don't do that when you're here.

[1051] And we don't, we don't do that here.

[1052] And so we don't, when we're here, we work and we do our chores.

[1053] When we're here, we're generous with our money.

[1054] When we're here, we save our money.

[1055] When we're here, we make wise purchase decisions with our money as coached by our mom.

[1056] And then that's all you can do.

[1057] now what will happen at the end of the story is this okay common sense and love and proper truth does win out in these things but it takes time so when he's 26 and he did something stupid with money he's going to know what stupid looks like because it was described to him by you and so he's going to go gosh i really can't model my life after my dad my mom's plot process works I need to gravitate back to that.

[1058] And I'm going to probably go to my mom.

[1059] Yeah.

[1060] And if I need financial advice, I don't go to my dad who's broke.

[1061] I'm going to go to my mom who taught me this stuff the whole time growing up.

[1062] But he'll go through the phase like all kids do where first year, you know, somewhere around 14 years old, my mama is stupid gland kicks in, right?

[1063] And then it takes until about 30 or 25 or whatever for it to grow back, right?

[1064] And then suddenly at some point in their 20s or.

[1065] or whatever, you're a genius again, and you're going to go through that regardless of whether you're together or whether you're apart.

[1066] So, you know, that's going to happen here.

[1067] It's not going to be a perfect path, and there's not anything you can do to protect him from bad money habits or vulgar mouths when they exist with your ex.

[1068] Because the truth is, too, Kennedy, you know, you could have been in a marriage raising him and doing everything possible to teach him to be wise with money.

[1069] And then at the end of the day, when they go off on their own, suddenly their adults that have to make their own decisions too and you know we're getting even that second generation of ramsieites so like that that kids that grew up listening to dave on the show make very sure you talk about what you and your current husband are doing to the four -year -old in age -appropriate ways so they see the model and you coach him on his personal behavior so he sees the model and then it'll work out it's going to be okay but there's no ironclad protection when you've got you know when he's going to get exposed to the virus on the other side.

[1070] So, you know, it's just like the mouth thing.

[1071] It's the same thing.

[1072] And so you're, you just got a bad model over there.

[1073] And that's, that's, you know, but you can't fix your ex -husband.

[1074] That's why he's your ex.

[1075] So, and you can't control him.

[1076] That's why he's your ex.

[1077] But even with parents, too, what I was saying earlier was, you know, even if you do, and about any, any area of parenting, right?

[1078] Oh, there's no guarantee.

[1079] Yeah, right.

[1080] All you can do is give it your best shot.

[1081] That's right.

[1082] So that's what I would say, too, Kennedy, is like, give yourself some grace.

[1083] Yeah.

[1084] Do what you can in your household.

[1085] And then at the end of the day, launching them into the world, it's like, okay.

[1086] If you model it, more's caught than taught, and you teach it, you've done all you can do.

[1087] That's your best shot.

[1088] And it works out more times than not.

[1089] So that's why we do it.

[1090] That's why we do it.

[1091] Hang on.

[1092] We're going to send you a copy of Smart Money, Smart Kids that Rachel and I did together, teaching your children how to be smart with money so that when they grow up, they have a brain.

[1093] And what's hard in those situations is like the Disney Dad thing, too.

[1094] When they go to Dad's, when they go to Mom or Dad's House, that's the Spender.

[1095] And it's like, oh, we're going to have all this fun.

[1096] And to a kid, it's like, oh, this is way more fun.

[1097] And that's a hard pill to swallow, too, when you're the parents.

[1098] I'm the only grown -up in this equation.

[1099] I know.

[1100] You're doing great, Kennedy.

[1101] Yeah, you're going to, it's going to work out.

[1102] Hang on.

[1103] Austin's going to pick up.

[1104] We'll send you a copy of Smart Money, Smart Kids.

[1105] It was the first number one bestseller Rachel had.

[1106] And the first one I, and the only book I've ever done with her.

[1107] There's a number one, because it's the only book we ever did to get to show.

[1108] This is the Ramsey Show.

[1109] Rachel Cruz, Ramsey Personality, number one bestselling author, and co -host, if you haven't checked it out with George Camel, Smart Money Happy Hour is one of the biggest hits on Ramsey Network right now.

[1110] So on the Ramsey Networks, it's a great podcast, a lot of fun in the afternoon.

[1111] These two cut up and carry on.

[1112] George is the king of Snark, and you'll like hanging out with the two of them.

[1113] Smart Money Happy Hour.

[1114] Be sure and do that.

[1115] When it comes to this show, we need your help.

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[1126] We'd love to have that.

[1127] Thank you.

[1128] It's a big help on the old algorithms on the internet, pushes the show forward.

[1129] Other people get to learn about it and all of that kind of stuff.

[1130] And of course, you can share the show, share the link, click the share button on however it is you're consuming it, whether it's Spotify or Apple, whatever it is.

[1131] Oh, and by the way, you could share which talk radio station you're listening to.

[1132] That would work, too.

[1133] Or maybe you're a YouTuber.

[1134] I don't care.

[1135] No, maybe I'm the YouTuber.

[1136] You're the watcher on YouTube.

[1137] I'm just a YouTuber now, Rachel.

[1138] That's kind of like Deloney.

[1139] I'm down to that now.

[1140] Open phones here, AAA 825 -2 -2 -25.

[1141] Jonathan's in Washington, D .C. Hey, Jonathan, how are you?

[1142] Hi, sir.

[1143] Thank you so much for taking my call.

[1144] Rachel, it's a pleasure to speak with you.

[1145] Thank you, Jonathan.

[1146] How can we help?

[1147] Yeah, so I'm in a bit of a predicament.

[1148] In January, I moved my family up from central Virginia to the southern Maryland outside of D .C. For a fantastic job that God just kind of seemed to fall into my laps.

[1149] And then two weeks ago, I was laid off.

[1150] Oh, gosh.

[1151] That sucks.

[1152] We went from, yes.

[1153] So we have now gone from making more money than I thought I would make in my life to literally only getting the disability I claimed from the Air Force.

[1154] And so we are on Baby Step 2 trying to work down our debt.

[1155] As soon as I lost my job, we started contacting all our creditors and explaining the situation and everything's been great.

[1156] Everyone's been very accommodating, which was, thank God, because I was not expecting that.

[1157] with the exception of today, my wife's credit card company basically said, we're not going to lower your monthly payment unless you go through a consolidation loan.

[1158] And so they connected her with an organization called Navicorp, not familiar with them.

[1159] Don't know anything about them.

[1160] You don't need to do that.

[1161] Okay.

[1162] Tell them to bite your ankle.

[1163] Okay.

[1164] Yeah.

[1165] No, they're not in charge.

[1166] They're a stupid credit card company.

[1167] You're in charge.

[1168] so what were you making i was making 88 000 a year at the at the the dream job that you just got laid off yes sir doing what i am a public relations specialist okay what happened how did they screw up so bad they move a family from out of state only to lay them off that's pretty freaking ridiculous sure um what was told to me is that i was not meeting their expectations for quality of work.

[1169] Okay.

[1170] And I can only vouch for myself so much.

[1171] You know, I have a degree to go with it and seven and a half years of experience doing public relations for the Air Force.

[1172] And that's all I know.

[1173] You know, I have my opinion, but I don't think it's worth.

[1174] That doesn't matter now.

[1175] Their opinion counts because they own the place.

[1176] They can do what they want.

[1177] Okay.

[1178] So you're looking.

[1179] How long have you been looking?

[1180] I literally since the day I got laid off.

[1181] No, when was that?

[1182] That was on May 3rd.

[1183] Okay, just a couple weeks ago.

[1184] Yes, sir.

[1185] So how's the hunt?

[1186] How's the hunt?

[1187] It's okay.

[1188] You know, there have been a couple things that have kind of drawn out, but one was in Dallas, Texas, and they would want me there day one, and I don't know if I can move my family halfway across the country having just moved them upward.

[1189] Oh, you can.

[1190] If you're choosing Dallas over D .C., in about 13 seconds, I make that decision.

[1191] And I believe you, and I agree there.

[1192] I just neither my wife and I, through prayer, have felt comfortable with it.

[1193] And so we're just trying to seek God's will as much as we can there.

[1194] And then I've been applying for as many things as I possibly can.

[1195] had an interview this morning, but unfortunately it's sort of a different sort of communication, more of like a dispatcher communicator than telling people what's going on in the world communicator.

[1196] But, yeah, if you know anyone is hiring for a public relations person with 12 years of experience and a college degree.

[1197] Jonathan and Washington, D .C. is looking.

[1198] Okay, so...

[1199] That was a bit selfish.

[1200] I apologize.

[1201] That's okay.

[1202] It's all good.

[1203] How much money you got in the bank?

[1204] We have about $1 ,600 in our credit account, yeah, in our, check -me -own.

[1205] Does your wife work?

[1206] She does not, no. She has gone off work to stay - You got a side hustle going yet?

[1207] I am actually, I was about to throw on a tie and go out to our local warehouse store and apply for an in -person interview.

[1208] Yep, yep, take all you can get right now.

[1209] Just get some money coming in for food.

[1210] Yeah, I was going to say the side hustle.

[1211] And then Jonathan, honestly, and it's not a, you know, long -term thing.

[1212] But I'm like, but the remote workplace is still booming.

[1213] Like, people are still doing so much remote.

[1214] You know, if you can find a company that maybe you're not there long -term, but it at least gets you into a career that you don't have to move your family because you guys aren't comfortable with that right now.

[1215] And then it's kind of settle into something.

[1216] And then maybe in a year you look for something else, you know.

[1217] But finding something quickly, I think, is going to be the key.

[1218] And it may not be your passion.

[1219] It may not be everything that you love.

[1220] It may not be a company you love.

[1221] But you guys got $1 ,600.

[1222] And I'm like, you know, what can you plug into very quickly?

[1223] The side hustle will be that bridge.

[1224] But I mean, I'm thinking about health insurance.

[1225] I mean, there's just a lot.

[1226] There's a lot there.

[1227] And so you want to be able to have something fast.

[1228] And I think because of the urgency, it may not be a thing that you absolutely are passionate about and love.

[1229] But it's getting what you need for.

[1230] your family for the time and then and then maybe that other opportunity comes and yeah and you have the bandwidth to be able to do that how old are you i will be 34 in june okay thank you for your service by the way um let me give you uh something to pray over and think about it would be normal in your situation because you felt like god led you to this and obviously didn't um and so sometimes in my life in my spiritual walk i have confused uh Last night's pizza with the Holy Spirit.

[1231] Or he did, and he's teaching.

[1232] And there's a lesson for Jonathan to learn through this all.

[1233] It could be.

[1234] It could be.

[1235] But it didn't, short term, it doesn't look good, right?

[1236] So sometimes I thought something was God and it wasn't is all I'm saying.

[1237] And so what happens with that and getting fired for something you know you're good at, it shakes your confidence if you're a normal human being.

[1238] At least it did mind when those kinds of things have happened to me. And so, um, uh, I, I would just pray about the Dallas move as to whether, ask God for real clear guidance as to whether that's his spirit that's troubling you or just you're not feeling confident right now.

[1239] And so nothing that looks risky feels okay, nothing that has a high rate of change feels okay because you're at a low point emotionally.

[1240] I'm not saying one way or another.

[1241] I'm not just declaring that that's God.

[1242] I don't know what God's will is for this in you.

[1243] for you but um but i am seeking peace and i want that peace to come from him and from strength not from um avoiding anything that looks like risk after i just got my lights punched out yeah so just just kind of lean into that and and you guys make sure that's what it is because um with everything that's going on i liked the sound of the dallas thing just looking in from the outside.

[1244] Now, I've met you a whole three minutes ago, so I'm not an expert on Jonathan's life or what's good for you.

[1245] Don't misunderstand.

[1246] But out of everything you put in the mix here, that sounded the most fun of anything you brought up.

[1247] And obviously, I mean, I like that city for a lot of different reasons, but for opportunity for you and all kinds of things as far as PR goes.

[1248] DC, the PR stuff is much darker.

[1249] It's much more oriented around politics.

[1250] and social issues and those kinds of things rather than doing PR in a business setting or a ministry setting, not as much of that in D .C. as there is in Dallas.

[1251] So just something to think about.

[1252] And no income tax in Texas.

[1253] So there you go.

[1254] Yeah, there you go.

[1255] Yeah.

[1256] That's fun.

[1257] Yeah.

[1258] I could just go on and on, but I'm going to leave it right there.

[1259] I think Dave.

[1260] We're going to go into the commercial break on time.

[1261] This is the Ramsey Show.

[1262] Rachel Cruz, Ramsey Personality, is my co -host today.

[1263] Thank you for joining us, America.

[1264] Matthew is with us in Jackson, Tennessee.

[1265] Hi, Matthew.

[1266] Welcome to the Ramsey show.

[1267] Hey, Mr. Ramsey.

[1268] Thank you for taking my call.

[1269] Sure.

[1270] What's up?

[1271] Hey, Mr. Ramsey.

[1272] I have a 16 -year -old daughter that's just entered the workforce, and I want to make sure I'm giving her the proper financial advice that I was not given growing up.

[1273] Okay.

[1274] And she's 16?

[1275] Yep, she's 16.

[1276] That's great.

[1277] What is she doing?

[1278] She's a hostess for a restaurant, making about $11 an hour.

[1279] Good for her.

[1280] That's awesome.

[1281] And is she doing this to pay for expenses or car insurance?

[1282] Is there like a big goal for her that she's working for or just to have some spare money?

[1283] She wanted to do something to get out of the house.

[1284] And she also wanted a car, and I said, well, you're going to have to pay car insurance, so you're going to need a job.

[1285] And she got the job.

[1286] She's paying her car insurance.

[1287] And she's starting to, we're starting the baby steps.

[1288] And she's got about, and she's on baby step three.

[1289] She's got about, she had $2 ,000, had an emergency come up.

[1290] And she paid for her own money, her car repairs.

[1291] Wow.

[1292] Yeah, I'm very proud of her.

[1293] Yeah.

[1294] She's ahead of me on the baby steps.

[1295] So I'm very proud of her.

[1296] That's impressive.

[1297] What is, what's her plan after high school?

[1298] we are we've been talking about that she's still unsure on what she wants to do for the rest of her life I said that's fine but we need to have some kind of plan to get general education going yeah yeah okay well that's great well I think you know Matthew one of the things about teaching anybody about money is kind of even going just down to the basics that there are three things that you can do with money you can give it you can save it and you can spend it and we need to be doing all three all the time and especially with with children in the home teaching those three basics is really helpful because that's just going to magnify as she gets older and has a career and earns money and starts a family you know and and life continues on that she needs to know how and what to be generous with and what that looks like what that feels like, how to delay gratification and have savings and knowing to put some savings away, which she has done a really great job at already, and then to spend some and enjoy it and learn some mistakes in that area, right?

[1299] Buying things that you realize, man, I shouldn't have bought that.

[1300] But learning all of that, those three basic principles is a great place to start.

[1301] And so that's one place I would just encourage you.

[1302] And then, you know, even setting her up with a really simple budget.

[1303] There won't be many line items, but for her to be practicing when that paycheck comes in, put some specifics around it on where it's going to go and what it's going to do and give it a name.

[1304] So again, it's kind of just taking what we talk about here on this show and I'd say minimizing it some because it's not going to be the dollar amounts, you know, of a full -time job.

[1305] But still those money habits, putting those in place early is huge.

[1306] And they don't have to be complicated, but it's simple things like that.

[1307] She can start building the wise spending muscle, the generosity muscle, and the saving investing muscle, even though the amounts aren't going to be large.

[1308] They don't need to be.

[1309] It's putting that groove in her brain.

[1310] You know, we're starting to say, this is how life works.

[1311] And so my job as your dad is to make sure that you develop these muscles.

[1312] So when you get the opportunity later to handle a lot more money, you're going to off.

[1313] automatically go to wise spending, good generosity, and good investing and saving.

[1314] And you're always going to be thinking that way, debt avoidance.

[1315] The only other thing I would add to all this from a practical standpoint is I'd go down to make sure there's a checking account opened in her name with your name on it where you have visibility and you look at it with her once a month and teach her how to reconcile that and how to keep a checking account properly operating.

[1316] we did that with all three of ours and we did the save give spend thing with all three of hours and when they went to college they had a set amount per month that was their budget and they were used to living on what they had and they were used to managing their own checking account i did not have drama with all three kids through four years of college each none of them called with financial crises in the middle of college because they had the muscles built to carry these different things.

[1317] And Rachel and I talk about that in the book, Smart Money, Smart Kids.

[1318] It was Rachel's first number one bestseller.

[1319] We did it together when she first joined us here at Ramsey after college.

[1320] And it was her being the daughter part, me being the old man, daddy part.

[1321] But it's teaching kids how to handle money.

[1322] And it's covered in there on an age -appropriate basis.

[1323] And, you know, you're doing a really good dad thing here, Matthew.

[1324] Way to go.

[1325] Yeah, absolutely.

[1326] And Austin will pick up, Matthew.

[1327] We'll give you a copy of that book.

[1328] Smart Money, Smart Kids, because it is a great resource.

[1329] But I think what you're doing right now, honestly, is great.

[1330] And then she's going to have natural questions like we did as kids of questions about taxes later down the road and investments and all of that.

[1331] Like after you get your first paycheck and you realize they keep a lot of it, you learn to vote different.

[1332] It's just good for you, you know.

[1333] It starts forming politics, right?

[1334] No, what happens when that paycheck.

[1335] I don't like socialism.

[1336] I don't like it.

[1337] when I'm the one that's earning.

[1338] You figure that out real quick.

[1339] You don't have to be 80 to figure that out.

[1340] 16 years you get that.

[1341] It's all right there.

[1342] I do remember making a PowerPoint presentation asking for more money every month because I was driving home.

[1343] And I remember being like, I have no, I mean, there's like no gas money.

[1344] I mean, I don't really have much.

[1345] And I think I needed like an extra 50 bucks a month or something.

[1346] And I did a whole presentation.

[1347] Was that in college or high school?

[1348] That was college.

[1349] Really?

[1350] Where I came home and I was like, I need.

[1351] There's a PowerPoint presentation in college.

[1352] Yeah, we did PowerPoint in college.

[1353] I know, but I just don't remember this.

[1354] Yep.

[1355] It doesn't, if anyone, if anyone of the three would have done it, it would have been you.

[1356] Because it works.

[1357] Yeah.

[1358] That's funny.

[1359] Did it work?

[1360] Did we give you more money?

[1361] Yes, you did.

[1362] And I was like, he is generous.

[1363] You made the sale.

[1364] He is generous.

[1365] It's a marketing presentation.

[1366] Look at him there.

[1367] Yeah, we raised that whole, raised it 50 bucks a month.

[1368] And there your life was changed.

[1369] That is for a college student.

[1370] Yeah.

[1371] Changes a lot.

[1372] It was back when you went to college.

[1373] back when I was there.

[1374] That's true.

[1375] That's true.

[1376] Zach's in Houston.

[1377] Hey, Zach, welcome to the Ramsey Show.

[1378] Hey, Dave, thanks for taking my call.

[1379] A question about investing.

[1380] Okay.

[1381] With interest rates being the way that they are, are CDs a wise investment option for right now, even for short term.

[1382] Well, for short term.

[1383] But short term is not an investment, short term savings.

[1384] Okay.

[1385] Investing is long term.

[1386] And you've got to outpace inflation and taxes, long.

[1387] long term.

[1388] You've got to be north of 10 most of your life investing.

[1389] And CDs aren't north a 10.

[1390] Right.

[1391] Even with a, like, a nine -month CD for 5%.

[1392] I mean, what do you, what is this money for?

[1393] Just general money that's set aside.

[1394] My brother's been whispering in my ear, man, CDs, man, they're going up.

[1395] They're the way to go.

[1396] And way to go for what?

[1397] For getting a return on investing.

[1398] to get rich?

[1399] I think just for short -term is what he's looking at, not long -term.

[1400] Yeah, I mean, the interest rates on CD's high -yields.

[1401] They're not short -term unless you have a short -term goal for them.

[1402] Right.

[1403] So what are you going to use the money for, six months a year when the CD cashes out?

[1404] For my brother's intentions, I have no clue.

[1405] No, you?

[1406] For mine, it's just another way to bring it money, just another way to get some kind of return.

[1407] Okay, it sucks for that.

[1408] Okay.

[1409] We call them certificates of documents.

[1410] depreciation because they don't even keep up with inflation.

[1411] If inflation is running 9 .6 and your CDs paying six or seven, you're losing money.

[1412] You get that, right?

[1413] Yes, sir.

[1414] Totally understand.

[1415] So next time he whispers in your ear, tell him to get a girlfriend.

[1416] Oh, my gosh.

[1417] Oh, my gosh.

[1418] Okay, but I would say CDs, high yields, money markets, all of that are, it is wonderful when you have money in it for short -term savings because...

[1419] It is short -term.

[1420] Yes, that's what I'm saying.

[1421] It's like for an emergency.

[1422] But I'm saying, You want an emergency fund?

[1423] I know, but I'm saying if he's excited about the interest rates today with those accounts, yeah, it is exciting versus what it was five years, you know, four years ago, three years ago.

[1424] It's not exciting.

[1425] Well, it is when I have short -term savings and I'm like, dang.

[1426] You're not making any money.

[1427] Yeah, but it's better than one or two percent than what it was.

[1428] That's why he's probably excited, but for short -term savings.

[1429] It doesn't, it's not a way to build wealth.

[1430] No, no, no, it's not.

[1431] It's a way to park money more wisely.

[1432] I'm excited about the insurance.

[1433] rates today than it was there.

[1434] Park money more wisely, but park it for a short term.

[1435] Like if you're going to buy a house in September and you want to park it until September, fine.

[1436] That'll work.

[1437] Our scripture of the day, 1 Corinthians 3, 12, and 13, if anyone builds on the foundation with gold, silver, costly stones, wood, hay, or straw, each one's work will become obvious.

[1438] The day will disclose it because it will be revealed by fire.

[1439] The fire will test the quality.

[1440] of each one's work.

[1441] Alex Honnold said, no matter the risks we take, we always consider the end to be too soon.

[1442] Even though in life, more than anything else, the quality should be more important than the quantity.

[1443] J .T. is with us in Tupelo, Mississippi.

[1444] Hi, J .T., welcome to the Ramsey Show.

[1445] Hey, Mr. Dave, how are you and Ms. Rachel?

[1446] Better than we deserve, sir.

[1447] How can we help?

[1448] Um, yes.

[1449] So my wife and I, we are actually in the process of a new chapter in our lives.

[1450] Uh, several years ago, we went in and throughout Mexico and Brazil doing mission work and spreading the gospel of Jesus Christ into the streets.

[1451] And, uh, we fell in love with helping people.

[1452] It was something that, um, absolutely changed and shaped our lives in the biggest way possible.

[1453] And God really put on our hearts to do this permanently.

[1454] So, um, Upon arriving back to the United States, we set out and pretty much turned a school bus into a home.

[1455] And so we're going to be taking this bus in and throughout Latin and South America.

[1456] And our goal, or really our mindset, is to be doing this very long term, possibly 10 years, even 20.

[1457] I don't really know.

[1458] But previously, the way we did it was we would just raise money, quit our jobs, leave, do all these things in the streets and then come back, find new jobs, and then repeat the process.

[1459] But doing it this way, we're not really going to be to do that.

[1460] We want to permanently be there.

[1461] And so my question is, in regards to this, we're looking at somewhere around $40 ,000, more or less, a year.

[1462] And that's not a lot, a lot.

[1463] But I think it's more than enough that we will need to do it.

[1464] and we're trying to figure out which direction to take for the amount of, for the support that's coming in as far as like churches and individuals and businesses that are giving to us to support this mission.

[1465] How do I do that?

[1466] Like, is this something I need to do through nonprofit?

[1467] Because it's just my wife and I and my one child.

[1468] So it's not like a big corporation or, you know, nothing big, really.

[1469] but I don't really know how to do it as far as the taxes and stuff goes and at the same time I want the people that are supporting us to have as much benefit as possible as well you know in regards to tax write -offs and stuff like that right well love your heart brother very cool you're a good man and so it is a fairly simple process but it's going to take a little bit of time and a little bit of expense you set up a 501 non -profit and that nonprofit then becomes tax deductible for anyone that donates to it.

[1470] You'll have to find, you know, you'll establish an IRS number, and that'll be associated given to each of your donors that they then conduct, that take the tax right off.

[1471] A non -profit does not mean that no money's coming in.

[1472] It doesn't mean that not enough money is coming in.

[1473] it is a simple accounting entry that shows that the owner of the business is not taking the money home as excess profit.

[1474] It's all it is.

[1475] So my point being this, a nonprofit has to physically be profitable or you go home, meaning you have to bring in more than you take out.

[1476] If you need $40 ,000 and you bring in $30 ,000, you're a nonprofit.

[1477] but you're going out of business right right so nonprofits have to be from a cash standpoint actually profitable so you have to bring in more than goes out but it's an accounting entry with the IRS that shows that the profits are being used for the benefit of the ministry which includes feeding you and your wife and it's not 400 ,000 dollars a year of income for the two of you although that's technically okay it would be suspicious to your donors But it's 40 ,000.

[1478] And, you know, just as a practical thing, Ramsey Family Foundation, we've got friends that do some of the things that you do.

[1479] And there are some of the people that we donate to from time to time.

[1480] And as a donor, from the donor's side, we love seeing that the money's helping people.

[1481] And so just some simple iPhone videos sent back occasionally and a little bit of a report on the finances showing that, you know, You know, you're living on $40 ,000 a year, which even in Latin America is certainly not a living high on the hog, right?

[1482] So, you know, we see where the money's going.

[1483] We see that the people are being helped the results of our donation because we see our donations as investments into those people on the street that you're trying to help, and you're the vehicle by which they get there.

[1484] That's how a donor thinks.

[1485] Okay.

[1486] And if you can keep that donor relationship real clear and have the IRS, and it's a separate.

[1487] bank account, separate from your personal checking, and then you are allowed by the charter of the nonprofit to live out of that, to pay personal expenses out of that, because this is a ministry, it's a mission, your missionaries.

[1488] Okay.

[1489] And that'll be so in regards to like spending money, let's say, because we're trying to be really realistic as well with, I guess, allowing time for ourselves.

[1490] So, for example, let's say we went to a local carnival a couple days out of the month or something to just have like a family day for us to keep things.

[1491] You're not required, you're allowed to live a reasonable life out of this.

[1492] It's not a violation of law or it won't lose your tax status or something like that.

[1493] Where people get into trouble is more of a PR thing than a legal thing when some nonprofit starts buying a property.

[1494] private jet.

[1495] That's when people go, huh?

[1496] You know, that kind of stuff.

[1497] And you're going to the car.

[1498] It's hardly on that thing.

[1499] But that's more of a PR than illegal.

[1500] It's not technically illegal to buy a private jet with a non -profit.

[1501] It's nothing wrong with it.

[1502] But it blows the donor base up and it blows the PR up, right?

[1503] And we've all read those stories, you know, so in a nonprofit settings.

[1504] Because people like me, we don't want to donate to your private jet.

[1505] We want to donate to those people on the street that you're helping.

[1506] And if you take your family of the carnival in the process, we're not going to be angry about that.

[1507] Okay.

[1508] I see.

[1509] So in regards to us doing those types of activities, that's completely normal and legal.

[1510] You would move money from the nonprofit into your personal account as your personal income.

[1511] Missionaries all do that because missionaries all have to eat and have electricity and gas in the bus.

[1512] Right.

[1513] The nonprofit.

[1514] And then at the end of the year, what do I do as far as taxed?

[1515] go in regards to keep in out with how much I move from that account into ours, nothing or?

[1516] Nothing.

[1517] Your mission, you're living on donations.

[1518] Oh, okay.

[1519] I understand.

[1520] Double check with your tax person, and they can help you walk through all of this.

[1521] Matter of fact, if you hit the tax pros on Ramsey Solutions .com, one of those in your area will probably be able to guide you through forming the nonprofit.

[1522] It's really not that difficult.

[1523] It just takes a little bit of time.

[1524] It's not considered income if he takes that.

[1525] Shouldn't be.

[1526] I mean, he's living on donations.

[1527] So, yeah.

[1528] But, you know, again, double check that because I'm wrong half the time on this stuff.

[1529] So tax stuff I'm horrible at.

[1530] But I do know the part about the nonprofit because we formed the Ramsey Family Foundation.

[1531] We've got our own that we use for as a, as a methodology for our family's generosity and philanthropy.

[1532] And so, but so we have a 501c3 that does not take donations.

[1533] from the outside world, we funded ourselves.

[1534] And then that's how we handle the distribution of our giving is through that.

[1535] And your sister, Denise, is the director of that.

[1536] Again, so we kind of got into all of that in detail, even though we're not on the mission field.

[1537] Now, I don't draw an income from that foundation.

[1538] I furnish the income to the foundation, so quite the opposite.

[1539] But that's what you've got to get into and just learn about it.

[1540] But it's really not really that tough.

[1541] There's not, it's not complete rocket science where you can't get your arms around it.

[1542] You'll be able to figure it out and do it.

[1543] Hey, man, we love you.

[1544] Appreciate what you're doing.

[1545] That puts this hour of the Ramsey show in the books.

[1546] We'll be back with you before you know it.

[1547] In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace.

[1548] Christ Jesus.

[1549] Hey, it's Rachel Cruz.

[1550] If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey Way.

[1551] Just go to ramsysolutions .com today to sign up for our newsletter.

[1552] Again, that's ramsysolutions .com to sign up for our weekly newsletter.

[1553] Hey folks, Dave here.

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