Transcript of Don’t Let Others Control Your Future

Brought to you by the EveryDollar app. Start budgeting for free today.

Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union studio, this is The Ramsey Show. I'm George Campbell, joined by the Rachel Cruze, and we're taking your calls at 888-825-1111. Jump in. We'll talk about your life and your money. Kurt is going to kick us off in Minneapolis. What's going on, Kurt?

Hey, I've got a question for you people regarding purchasing of new vehicles. As you know, manufacturers sometimes offer up 0% financing for 48 months, sometimes longer, whatever. And in our particular case, we're looking at purchasing a new vehicle in the future here. And are wondering if it's wise to take that 0% financing or to withdraw the cash and pay full for that vehicle in cash. And for context, we have no debt. Our vehicles are paid for and we hang on to them for a number of years. And so I just wanted to hear what your thoughts are on something like that.

Yeah, it's a good question, Kurt.

Well, the—

The short answer is no, we would recommend still paying cash for your cars. And it's for a couple of reasons. Yeah, the 0% financing can feel like a great deal, right? Because part of us avoiding debt is paying that interest on top of something that's going down in value, right? And in this specific situation, you know, it seems like you can skirt around the math. But the problem is, if anything happens, between when you get the loan and you pay it off, at any level, what all the fine print is and all the fees and all the back interest that could build up is there. So there's a risk associated with it there. But then there's also the side of debt that we just see this progression moving forward with your money when you own something outright and you don't owe, even if there's not interest, it's still this emotional tie to something that you have. It's not fully yours. And so you're still making payments. You're still kind of living in that rearview mirror mindset financially versus just being done with it. And, you know, we just talked to a lot of people who have built wealth, um, who are Baby Steps millionaires and beyond, right?

And they, they don't ask these kind of questions usually. Like, really, you know, if you're, if you're going after wealth, you're not sitting there splitting hairs between interest rates and all of that. You just kind of simply ask, can we afford, can we afford the car or not? So if you have the money for it, Kurt, yeah, I would just cash it out and be done with it. Be done with the purchase instead of kind of tiptoeing around and trying to play this mathematical game because debt, sometimes the toll on us is not always about math.

Mm-hmm.

What kind of car is this?

Well, don't know yet. We're not, I'm not brand loyal or anything like that. So, you know, it'll be a mid-sized SUV of some kind, probably to replace one that we have, which is a 2015. Um, that we've, you know, had for a number of years and again, paid off and all that. And, and so we just, you know, thinking of what we're doing here in the future, you know, we're both retired, retired early, both retired.

Way to go. What's your net worth?

Um, probably $2.5 million.

Oh, incredible.

Good for you guys.

And you've got a ton of cash just sitting there in savings, ready to go for a car purchase like this?

Not a ton of cash. That brings a little bit of a twist into this. We have cash sitting available for expenses and things like that. However, if we get the cash, we would have to sell some investments, which then is a tax— potential tax issue with us too. So we have to look at that as well.

Yeah, that's one factor to look into depending on what bucket you're taking from, whether it's cash, taxable brokerage, or traditional account, Roth. And so the other, the other piece to think about with this, Kurt, is that 0% is not free. There's no such thing as a free lunch and the house always wins. You've heard those 2 things?

Yeah, that's why I don't go to Vegas.

Exactly. And that's why I don't go to car dealerships, because number one, you almost never qualify. So they will push this 0%, but only the top, top-tier credit folks will get that. And it's not really free because the manufacturer builds that 0% cost into the car. So you're paying full price, MSRP, zero discounts, no rebates. And so you're actually kind of getting screwed on the purchase price while feeling like you got a deal at 0%.

Sure. I guess I didn't think of that angle.

Yeah. When I went to the dealership, I said, hey, here's how much I have in cash to buy this car. Here's the check. And so that's exactly what I went in going with. And they ended up working with me to get that price lower. And so that alone saved me way more than any 0% financing deal would. And so I don't want you to give up your buying power and negotiating power all for their fine print of 0%, which is Very short terms only. So you're not going to make that much of a spread, even if you hung onto that money. So I would just go, if you're not comfortable using that amount of cash to buy a car, it's probably too much car for you guys emotionally.

Yep. Got it.

So that's a good way to think about it too. But I think you're on the right track here. I just don't want you to get— you've done so well to be completely debt-free, $2.5 million net worth.

Yeah.

Just go buy the car.

It's not worth the brain calories.

Yeah, well, that's a good way to look at it. Um, we've been blessed and, and worked hard over the years, invested well, had a lot of dumb luck. I always, you know, reference that. How'd you do it? Well, we had some dumb luck, and I really did.

On top of your diligence. Sometimes they go hand in hand.

On top of our diligence. Yep.

The harder I work, the luckier I get.

Really had dumb luck with Roth IRAs. Actually worked out really well for us. Wow.

That's not dumb luck. That is, uh, it's being pretty strategic.

The, the, the dumb luck was when those first came out, I was working and we had a chief financial officer that talked about Roths and was kind of poo-pooing them. And I didn't really like the guy. So I thought, well, if I don't like you, I'm going to do the opposite. So I started investing heavily in Roths, as did my wife. So obviously, as you people know, when you do that, then you take that, you take that income.

Well done.

Tax-free. And then that of course reduces your taxable income. So you can do some other things, just some other advantages there. So, you know, we take a blend, we take a blend of qualified and unqualified accounts for our income and live comfortably and are able enough, you know, comfortably enough to still do things with our adult kids and take them on trips, you know, once a year or so. And mom and dad foot the bill for that. Although we do require that they buy dinner one night.

Hey.

Well, hey, you're living the dream, Kurt. That's a lot of people.

Yeah, you've done really well.

That's on their list that they always say. They're like, I just wanna be able to do X, Y, and Z. And we hear that all the time. I wanna be able to take my family on a trip with the grandkids and all of it. And so, yeah, you're living the dream, Kurt. Well done. And I'm gonna say maybe some luck in there, but also maybe some awareness of other people's character and you would choose to do the opposite of their advice, which I would say is not dumb luck. I think that's pretty wise on your part.

That's true. And a good reminder for our car buying parameters, Number one, always pay cash. Number two, make sure the total value of all things wheels and motors in your life adds up to no more than half of your annual income. So if you make $100 grand, no more than $50 grand tied up with those things. And then the last part of this is don't buy a new car unless you are a net worth millionaire, because the depreciation on that thing, you can't take that hit unless you've got a sizable net worth to stomach it. And luckily, Kurt is in that spot. He's retired.

Yeah.

$2.5 million net worth. He has the cash to do it. And so this might be the first brand new car they ever buy, and it's worth it.

Yes. Okay, so tell me this, George, because you said you showed up with the check.

Yes.

Jade has an opposite approach. She does not tell them that she's paying with cash.

Oh, I didn't do it upfront, but eventually they do ask.

Oh, okay.

Yeah, yeah, they will ask, yes. But sometimes we have found if you actually lead with that, they sometimes are a stickler because they know they're not going to make as much money off of you because they make so much more when you actually finance.

They backseat finance you.

Yeah, when you finance the vehicle, that's when The car dealer makes more.

I've even heard where they'll charge you more. They'll say, well, that online price was only if you were financing.

Yes, yes, yes.

And then I go, okay, I'm gonna take my business elsewhere.

That's right, that's right.

Yeah, yeah, yeah.

So sometimes being strategic about how you're even gonna pay toward the beginning of kind of the negotiation and the looking on the lots, something to think about.

The thing that I always land is the out-the-door price. That's the word you wanna say. Land the out-the-door price before you ever talk about payment. And you don't have to lie, but you can just say, Oh, well, once we figure out the out-the-door price, we can talk about payment.

How we're going to pay for it. Yep.

Exactly. That's it. It's that simple. And it's that difficult because those dealerships, man, they're trained to sell. They are trained to get you to finance. And if you're not going in strong with the willpower to walk away, they'll sway you. You will lose.

Yes, they'll sway you for sure.

All right. Let's go out to Michaela in San Diego up next. What's going on, Michaela?

Hi, how are you guys?

Doing great. How can we help?

Um, I am so excited to talk to you guys. I have a question. How do we prepare and plan a 6-month emergency fund for our family when our situation financially is constantly changing?

What's changing about it?

Well, we are military. Um, so our BAH— I, I talked to, uh, Ramsey online and They're like, you need to have your BAH in there. Well, the thing is that adjusts by rank and adjusts by location. So, we're up for 3 moves. And because of that, it's about a $20,000 difference between each location of how much we'd have to have saved up. Is there a way we can not shortcut it, but like, I hate to have $20,000 just sitting there because, well, we're going to be over here in like another year. So, you know what I mean? Yeah.

How often are you guys, you said you're up for, how long is the renewal for?

Um, we will be moving 3 times in the next year and a half.

Okay.

So it'll constantly be changing and then we're settled for about 3 years total.

Okay. Okay. Yeah. Cuz the purchase of the emergency funds obviously is to cover anything major that's happening in that 3 to 6 months. It's a, It varies. So if you guys have 6 months, right, maybe there's a season where you go down to 3, because you know you're gonna be moving in 4 months somewhere else, right? Like, I mean, so, so I would be comfortable with that. I think within that range, and it's, again, it's really there to protect the big stuff, the, an unexpected, you know, medical events, a job loss, right? And I would assume you guys are pretty job secure where you are. Would you agree?

We're pretty, yeah. Yeah, we're, we're pretty job secure. Um, the issue what we're having, I guess, with the crux of the whole question is, for our family living here in San Diego, because our housing takes care of everything for us, our personal emergency fund, including our out-of-pocket deductible for insurance, is about $14,000. But if we include our housing allowance, which is what online is telling us to do, it's about $55,000. So do you see, like— And then it increases as we move or might decrease dramatically as we move. So is there a way to account for that fluctuation? Because I hate to have money just sitting there. I hate to say this, but I don't want you to think it's sitting there really doing nothing.

This is an insurance plan, and so it's not an investment. It's okay if it's not in the market. We always recommend a high-yield savings account. That way at least it's growing, you know, the rate of inflation around 3%, but you're not letting it just fester in a savings account making zero either. And so don't think of it as I'm just wasting this money, it's sitting in this account. That's money that's helping you sleep better at night.

You're staring at me, George.

Yeah, so what would just make you feel good? If you said this amount of money's in there, regardless if you need that much.

My gut says about $40,000 because that would cover where we eventually want to settle down. So if something were to happen, he loses his position, he loses the job in the Navy, we would have enough rent to cover 6 months in the desired location. Perfect.

How much do you have now?

But I just didn't know, like, can we just stop that there? Well, we thought we were done with Baby Step 3 and then we consulted the AI and they're like, no, you need BAH. So we have about $14,000 in there right now. So by the end of next year, or yeah, by the end of next year, it'll be completely fully funded and then some.

Great. I would just lean towards that higher number and not fluctuate every time there's a move. We can take it down, we can take it up. Just leave the $40 grand in there and it's okay if it's making 3% and it's letting you sleep better at night and you're not worried about what the next move is gonna entail. And what if, what if? I would just let it sit there. No one's ever regretted having too much. It's when they don't have enough that's a problem.

And honestly, you know, a lot of people's problem is they look up, they do their emergency funds, They go on with the Baby Steps and then they look back and they actually, this happened to Winston and I, we were like, oh gosh, we probably should, we should, we should fill that a little bit more because our life has gone up. Right. And so, um, almost, you know, having that $40,000 for you guys, that feels like a high emergency fund.

Yeah. I mean, 6 months depending on your level of income.

Isn't it really high?

That's, you know, $6,000 or $7,000 in expenses times 6 months will get you there.

Yeah.

That's not outrageous for today's world.

And in San Diego.

In West Coast.

Yep.

Yep.

Some people are going, man, I wish my expenses were $6,000 a month. And if you don't have debt, that also helps out a ton.

Yes. But all that to say, you guys could have this funded and then who knows what life looks like. And in 5 years you may not even have to fill it up because you guys have just set it there and let it be. So yeah, I think with the amount of change that occurs with you guys, especially, I think you said in the next year or 2, I think just good to have that buffer. And then if something comes up and you need to use it, it's there.

That's right. And again, it's, it's an insurance plan in that you're transferring the risk. So now you're, you're not having to carry that. The emergency fund is carrying that for you. And another type of life insurance we talk about is life insurance, which you're transferring a different risk of your income. And people fall into 2 camps on this one, Rachel, the ones who make a plan to protect their family or the ones who just fingers crossed hopes everything will work out. And that's not a strategy. And chances are, if you're watching this show right now, you're the kind of person who wants to make a plan, who wants to love their family well. So when you get married, you have kids, your money decisions aren't just about you anymore. Your income helps keep the lights on, pay the mortgage, and put food on the table. And if something happens to you, you gotta wonder, is my family protected or are they gonna be in a lurch?

Yeah, that's right. And we really recommend people getting 10 to 12 times their annual income, usually with a 15 or 20-year term. And again, you're thinking, you know, if you have kids at home, you know, if your mortgage is paid off and all of that, eventually you can get to a point in your financial journey where you become self-insured. But until that point, which usually takes people a good bit to get to feel safe there.

That's why that 15 or 20 years is there.

Is exactly right. So by the time it expires, hopefully if you're following the Ramsey Plan, you'll be self-insured. And so Winston and I have term life. You and Whitney, I know, have term life.

Both of us.

And especially you guys, if you're younger, it is inexpensive. It is something that I think is one of the biggest regrets if you don't get it and something happens. And we've taken those calls, which is just, it's devastating. But what we love is Zander Insurance 'cause they're an independent broker. So they're gonna shop all different companies to really get you the best rate. So if you want an instant quote in just minutes, go to zander.com or you can call 800-356-4282 and get your family protected with term life insurance. It's a really important step, you guys. So again, zander.com.

Let's go out to Alicia in Asheville up next. What's going on, Alicia?

Hey guys, how are you doing?

We're doing great. What's going on with you?

Good. So I'm calling, um, about 2 months ago I found out that my husband racked up probably about $87,000 in credit card and personal loan debt. Um, oh wow, he was day trading with Robinhood and I just found out about it.

Oh, how'd you find out?

Sorry, Alicia.

Oh, so I— we were planning a trip to Disney World, and, you know, we've had our finances separate. I know that's bad now, um, since I've been watching the show. Um, I've had a gut feeling about, um— I just had a gut feeling that something was off. I asked him, like, what can you pay? What can you do to contribute to the trip? And he was just kind of, I don't know, he was kind of dismissive. And so I finally asked him like, what's going on? There's some red flags here. And then I found out about all of the debt. I have all, um, the logins to all of his accounts now. And so I found the debt.

Um, so he eventually told you once you started saying, hey, what's really going on here? He said, hey, I've been using this app Robinhood. I've been day trading and I racked up all this debt. Did he tell you the exact amounts?

Nope. He— at first it was $45,000, and then when I got on his Credit Karma, I found all the accounts and I went through his spending, and it finally came out to the total amount.

The $87,000 is just the debt, so he spent far more than that, but he's just in the hole by $87,000 at this point across personal loans and credit cards is how he did it?

Yeah, yes, and he Depleted his previous 401 at his previous employer, and he's taken about $18,000 from his current employer. Um, so he's having to pay that back.

Took it from—

so he's robbed 2 401s, his old one and then his current one.

Okay. Okay.

So where is he at right now in this?

He's gotten a second job. Um, I am the high earner here, so It's very difficult. I've tried to look for work, but I can't compete with, you know, it's hard for me to find a job. I'm a pharmacist and I'm in retail at a clinic, so I can't go out to my CVS or Walgreens and get another job.

Well, I don't know that income is the number one solution right now. I'm more worried about his gambling addiction that he hasn't called out yet.

Yes. Yes. So he's in counseling for that right now. Um, we— he has separate counseling. We have counseling together, and I also have counseling. So we've already started that. Um, I'm watching his accounts. Um, he just told me basically that he got in over his head and he just was trying to pull himself out, and it just kept getting worse and worse. Yeah.

And there's probably a reality to that for sure that I We see that a lot. And then what George said is true. Like when we see, and it is, it's the number one addiction by like a hundredfold, um, is now gambling online. It's this kind of stuff.

Yeah.

And so he is, you know, sadly, you know, walked right into a trap that so many, so many people are dealing with. And it's very, um, it's such a, it's such a sneaky addiction because like what you just said is what we hear all the time is, Well, just gimme one more chance and I can make more.

It'll be different this time.

Yes.

And I'll come out.

Yes. And so you see it and you see the spiral happen. And so, yeah. So for you guys, I think keeping your accounts separate, are they still separate?

Mm-hmm.

Good.

Yeah.

Oh yes. Which I would recommend at this point. And really you guys figuring out a roadmap to rebuild trust together, cuz the redemption, Yeah. On the positive side of all of this is after his awareness of what's going on within him, uh, you know, getting even in, in, in GA, you know what I mean? Like, like whatever, whatever tools he needs in life to really, um, overpower this is gonna be so big. And, and the pos— you know, the, the redemptive side is that he does get control of this. And you guys then eventually do merge everything and you become one with your money. You get out of this debt and you guys run off into the sunset together. And do you know what I mean? And it, and it, and it works.

Yeah.

But until you have some really serious, uh, changes in him, um, I would, I would still keep it separate. And I'm curious, how, how much do you make? 'Cause you said you are the high earner.

Um, I make $150K.

Okay.

And, um, he makes probably $42K.

Okay.

Where is his money going right now? Where is it depositing into?

All of his loans into one account. He, I mean, he has probably $600 left over from his earnings. I'm paying all the bills right now, which I used to have a lot more money left over. Now I don't. And so I'm trying to navigate how what debt I pay off first because I've got a lot of student loan debt.

How much debt do you guys have total? So he has $87,000 right there. What else is there?

Probably about $511,000. We have our home is $225,000.

Oh, that counts though.

And then I have student loans. Um, I have student loans of like $156,000, but I do work for a nonprofit, so I am on the public To get my loans repaid off.

How far are you into the process?

I'm only 3 years, so I still have another 7 years to go.

That scares me a little bit.

I know.

We're hanging on to a lot of hope on the other end.

My main question too is like, what do I do? Do I start throwing money at that, or do I hope for forgiveness and start with another debt?

No, I mean, I I would not hang on to the idea of the student loan forgiveness, 'cause number one, 7 years is a long time and you're changing your career. What people end up doing is not taking a better job. They hold on to a job because they're looking at $200,000 of student loan debt to be repaid. And so, it just limits your options in life. And I mean, personally, I'm like, who knows what the government's gonna do in 7 years, right? I mean, they change their mind, I feel like, on so much.

Right.

And so, to hang your hopes that it actually is gonna happen, That's not where I would put my hope. I'd put my hope in you guys, Alicia. I would. I would put my hope in you guys working your way out of this. And you put, you really put, you know, your future in your hands and it's not being lent out to the government out of all people, right? That they're gonna fix the problem.

Yeah.

And so, I think, so his paycheck is just going straight to his loans to pay off that $87,000 is what you're saying?

Yeah, but those, that's just the minimum payments.

So, so it's okay, it's not really making a dent in the overall. How, how many loans are there? Did he have 14? 14. Okay. And you—

he has about 7 personal loans and 7 credit cards.

Okay.

Have you guys pulled your credit reports?

Um, yes.

Okay. And have you frozen your accounts with all 3 bureaus with those?

Yes. Yes.

Okay. Because the part we need to watch for now is the boundaries to make sure that we don't bump into anything along the way, go into any further debt. And so blocking all access. I'm guessing the Robinhood app is long gone, deleted, account shut down?

Yes.

Okay.

Yes.

Okay. I would definitely attack this with the debt snowball method, and your marriage healing is a huge part of that process. That would be the priority here. And then on top of that, we're going to work together to attack these debts. I don't want you to feel like it's all on you and he's got to pay off all of his debt. I would just make this a big pile and say, we're a team. All of this money's going to go towards debt payoff. That's the goal while covering all the bills. And by the end of this, it might be 3, 4 years from now until you guys are completely debt-free from your consumer debts.

Okay.

Yeah. And Alicia too, I would be, and you probably are with your counselor, which I think is great, but in situations where the spouse is the one that ends up from a tactical level being the thing that kind of cleans up the mess from the other spouse.

Mm-hmm.

You know, resentment can build, you know, which is human, right? I mean, like there, there's a lot of emotions that will go in this process that actually, as you process them and not suppress, but you actually get it out. And, and having a third party like a counselor is such a good place to do all of that, to work through that healing. That's gonna be part of the healing. So I want you to feel all the feels. And you know what I mean? Be as pissed as you need to be because I, it is, it feels like, oh my gosh, this, this is not right. Cuz it's not right.

It's betrayal. I mean, you've lost all trust in him.

Yes.

Yes.

So that's right. So all, like, all of that is so cleansing, honestly, because like what George said, in 3 years, I'm, I'm, I'm praying from the emotional standpoint, you guys are healed from a marriage perspective. And then financially, you know, I think you will get there. It's just gonna be a day by day. fight to do it. But yeah, I hope there's a roadmap, a very clear roadmap for him to rebuild trust with you, because that's what he's going to have to do.

And those actions coming up will be dictating how that's going to go. And if he's not willing to change, that's a separate discussion. But it sounds like—

Sounds like he is, which gives me hope.

He's willing to change. There's actual remorse here. And Rachel, the number one reason young people are always asking me, what's wrong with Robinhood? Why do you guys hate on Robinhood? This is why.

Yes, it is a form of gambling.

The Fidelity and Vanguard account are not going to be pushing trading on you. I literally took a screenshot of this Robinhood ad that showed up on my feed. Bitcoin is moving. Will it finish above or below? Trade the next 15 minutes on Robinhood with 15-minute contracts now in your prediction markets hub. They don't care about your long-term wealth-building plan. They want to take your money now.

Yes.

With urgency, with day trading, with crypto. And it's why I rebuke all things Robinhood. They are not— they don't have your best interests at heart.

No, it's a short-term hit, just like any other, like any other medicator in life. It plays right into all of that, plays right into it, and people walk right in, you guys, and it's not worth it. It is, it is so, so dangerous. So, um, Alicia, call us back if you, if you need anything else, because we're cheering for you guys. I really pray on the other end of this you guys have a such a stronger, more intimate marriage, and financially, that you guys are on the same page and you're working together. Whew, that's so tough. So tough. Well, you know, George, one place though, we nixed Robinhood for sure, but one place that we do trust fully and somewhere that I do, we do put our money is with Fairwinds Credit Union because it's really tough to find a financial institution that is for you. And they want you to win. They want to see even the Ramsey Plan have progress with their customers. And that's one reason we love Fairwinds.

Exactly. And I'm a consumer advocate, I like to think. And so I hate when, you know, banks are charging you all these random fees and you're like, why do they, why are they charging me this? Well, Fairwinds doesn't do these nuisance fees. In fact, they got rid of some after watching my channel. It was some international transaction fees and they're like, let's get rid of that. We don't need any of these fees. Let's help the Ramsey audience win. So they're not gonna push debt products on you. They have 10 different high-yield savings accounts you can open. So you can have different funds for all kinds of things, a no-monthly-fee checking account. And of course I've got my custom Debt Is Normal, Be Weird Fairwinds debit card right here.

Well, I've got my Live Like No One Else. You see this?

Yeah, that's the new one.

This is the new one.

Live Like No One Else. So that way, every time you use this card, you're reminded about the goals. You're reminded about your own values. You're reminded about the endgame. And so Fairwinds can help you do that with their Smart Bundle. Go check it out at fairwinds.org/ramsey. It's insured by the NCUA. Let's go out to James in Fresno up next. James, what's going on?

Hello, thank you for taking my call. I appreciate it very much. Sure. Um, I, uh, got a situation. I'm kind of— I'm in a jam here. Um, I'm, I'm 60 years old and, uh, I don't, um, I don't own a home. I don't have any debt. I started listening to you guys about 6 months ago, which I really enjoy your show. And I— but I did discover that I had to start off with square one in my life. So I started from the basis and I'm trying to save up an emergency fund and I've been doing okay with that and put tithing and religious funds in my life as well. But my question is, do you think I am eligible to retire from my job? And I'm thinking, if I want to buy a home, should it be best that I retire and try to find another job to supplement, to add to my income?

Do you have any retirement coming out of this current job?

Yeah, but I don't have any money saved up. But the job that I'm working for, I work for the state. So I have— I've been working for 27 years, so I have a pension, if that's what you're saying.

Yeah.

But I don't have any money. I don't have anything saved up. Like on the side other than I'm trying to build an emergency fund.

Okay.

I do have a pension that I'm eligible. I'm eligible to get a pension if I do retire.

What would the pension look like if you retired today?

If I retired today, supposedly, and I was going back and forth with, with, with CalPERS, that's what the company is. And they were saying I'll probably bring home maybe a couple hundred dollars more than I make which right now I bring home $7,000. Um, and then I'm supposed to get a 2%, I guess, cost of living raise every 2, uh, every year from there, anywhere from 2 to 4%. Um, I just, you know, I listening to you guys talking about homeownership has really gotten to me. And see, right now I pay, I rent and I pay $2,100 a month. So, uh, I don't know where that— I think that's right in that area, a little bit higher than 1/4 of what I take home. Sure.

But, um, so you're saying you could leave your job, still get that $7,000+ a month, go work somewhere else, and that'll help you bolster the emergency fund and save up for a house?

Yeah. You know, and I've been praying about it, man, because like I said, what's on paper, what I see is totally different. And this is what I'm hearing from other people in the same situation that's retired. They said, hey, if you retire, you know, they're telling me this, but I'm, Type of person I need to go down and check it out for sure.

Oh yeah. Let's cross those T's and dot the I's. Not just one person told me.

Supposedly one of the last of the few that's at a 3.0 at 50 and be able to retire with 100% medical. Because right now they changed it about 2013 where now if you work, uh, you have to, you know, it's 2.5 and you have to do 30 years. Well, I'm grandfathered in at 3.0 at 20 years. So technically I could have retired at 51 or whatever.

But so if you keep working, is there any benefit to the pension?

That's the question I've been trying to figure out. I keep thinking that because of the 3%, that, and then whatever additional raises the state throws at me, throws at us right now, you would say the economy is not the best, but at the same time, everything is calculated as we get raises. And, and, uh, I suppose You know, I mean, that would be part of my homework. Promotions or anything.

Yeah. Figure out if you're going to get more pension as you stay longer. Because the goal right now is how do we fill up the emergency fund as fast as possible and save up for a house as fast as possible? And I hope there's a job on the other side of this, but what if it's hard to find a job that, you know, making decent money like you were doing?

Exactly. Exactly. And then I'm not the type of person listening to you guys for— I'm into this cash paying thing. So that's like, if I can't get it, I, you know, and if you look at my numbers now, it's just like, Like I said, it's me and my wife. My children are grown. They got their degrees, and thank God for that. I've been blessed to live here for a while, but you know—

Do you like the job? Would you keep working it without money being a factor, or would you be like, hey, I'm ready to be done?

Let's put it this way. I'm in a good position to where, I mean, it's— yeah, I like what I do. I would, but when you look at I could probably work somewhere. I'm in California, so I don't know. Even if I took the base and set minimum wage and I did full-time, I can at least bring home $2,000 more on top of what I'm doing.

Here's what I would do. I would just go apply.

I don't like to add stuff in until it's like there. You know what I mean?

Well, I would just start applying for jobs. And if you get a great one, that's sort of your ticket to go, all right, I'm out. I know I have a guaranteed pension of over $7,000, plus I have this new great income. But I wouldn't— I would get the boat close to the dock first.

Yes, 100%. But man, if you could go replace that and bring in $14,000 where he's at, that emergency fund gets filled up. And then, you know, you go find a condo for $300,000, probably in Fresno. The— I think the median home price in that area is like $450,000. So you think, you know, finding just a great one-bedroom, if that's what you need, or a two-bedroom, just to be a homeowner, get your foot in the door, right? I mean, after a year of savings, you could have an amazing— like, if you $7,000 away a month for a down payment.

Keep your expenses low and just sock away $8,000, $9,000.

Yeah, in 10 months you'll have, you know, $70,000 for a down payment, which will be great, you know. So I do think that, um, that pension's amazing. So if there was a way to get that and then be working on top of it just, just till maybe 65, 66, like another, you know, 5, 6 years, you can make massive progress to be able to do that.

I love it. Thanks for the call. I know, uh, James, you're a newer listener. And so if any of you are new around here, one thing to know is that we answer every money question through the framework of the 7 Baby Steps. So we're talking getting out of debt, getting the emergency fund in place before you invest. So if you're not familiar with the Baby Steps, check them out at the link below in the description. That'll help you follow along. Let's go out to George in Dallas, Texas up next. George, welcome to the show.

Hey, guys, again, thanks for taking my call.

Sure, what's your question?

I am an international student. I graduate in December. I do not yet have OPT, and I have student loan debts from a private lender, and I was wondering if I should pause payments, which I have already right now, continue to defer until I graduate, or if I should start making payments so that I don't need as much interest when I do graduate. In December.

So you graduate in a few months, and do you— and you have enough that I guess this semester has been paid for already, is that right?

Yeah, semester is covered right now.

Okay, perfect. And your student loan total is— will be what when you graduate?

$70,000.

$70,000. Okay. What's your degree in?

Cybersecurity.

Oh, good for you.

Master's.

Okay. And will you be, um, When you're looking at job, the job market on average, do you know probably what your entry-level job in that field will be?

Yeah, entry-level will probably be around $80,000 to $90,000.

Okay.

But the thing is, I am an international student and 2 things need to happen at the same time for me to get a job.

Okay.

Which is OPT and then get a job that's willing to use my OPT for allowing me to work.

So it's going to be more difficult for you.

Very likely at the moment.

Yeah.

Yeah. Well, the problem with these private student loans is that the interest is adding up every day, even though they're in deferment. Have you checked in on the fine print on that?

Yes, it is.

Yeah. So that's my fear. If you just let these hang out and go, well, they're not requiring a payment, you're going to wake up and the $70,000 is going to turn into $80,000. And so if you have income right now and you can throw some Or even make the minimum payments, that's going to help keep the interest at bay. So what is your current income, if anything?

I'm only working on campus, which I make $15 an hour, and I'm only allowed to work 20 hours a week. So every month it's around $1,200, $1,100 if I don't work as much.

And what are your expenses every month?

My expenses are covered by my siblings.

Okay, good. So that is— that money you earn, is that money you could be throwing at the debts?

No, the only money I could throw at the debt is $1,200 a month.

Yeah.

So do you have more upcoming payments for the next semesters?

No, this is my last semester.

Yeah, he's done in December.

Perfect. So if you're done, then I would just start chunking money at that.

Yeah, I would start now because unlike federal loans, obviously, where nothing really starts until you graduate, these private student loans, yeah, just what George is saying, they're continuing. So any money you can throw at it, Do you know how much the interest payment is a month? Have you looked into it?

I think it's maybe $600 right now.

Okay. So yeah, so I mean, I would be, that would be my minimum, what I would do just to be paying the interest to keep it there. But yeah, anything that you can throw at it today to answer your question is what we would do.

Especially when you know you have income coming in, because I don't know if there's going to be a gap between once you graduate, you're not working on campus and you have a job. So I would use the money you know you have coming in to at least attack the interest plus some of the principal. And that way you have less of a mountain to climb once you do graduate. Best of luck there, man. That's a tough one.

Well, if you are watching the show and doing your best to budget and work the Baby Steps, every major expense people are looking at, and healthcare, George, is one of those biggest ones that a lot of people pay for. And so that's one reason we recommend Christian Healthcare Ministries because CHM is not insurance. It's a health cost-sharing ministry, and that means that members pay each other's medical bills, and they have been serving Christians since 1981, and their program started just $115 a month. And it does matter because if you are paying more than you need for healthcare, that money could be going towards paying off debt or investing or giving or spending or anything in your life, just that freed-up margin.

That's huge. I just saw a video, actually. It was a primary care doctor who said their insurance, because she's self-employed, was like $40,000 a year.

Oh my gosh.

And so because of that, they switched over to one of these health cost-sharing ministries to lighten that load. So this can be a great option for a lot of people out there. So, uh, and here's something really cool. They're not raising their prices this year, which is huge in the healthcare world right now. If you know what's going on, you get to choose your own healthcare provider, no network limits. And right now, new members can receive a 50% credit toward their first month of membership. Go to chministries.org/budget. Use promo code Ramsey. All right, let's get back to the phones. Leah awaits in Grand Rapids. What's going on, Leah?

Hi, I'll make this short and sweet. I'll just read my question. Um, I'm a little nervous, so—

Take your time.

Oh, you're doing great, Leah. You're doing great.

My husband and I are separated, and I want to work on the relationship, but he says he'll only work on things if I sign a postnup. Um, we already have a prenup. I think this is insulting, indicates he's not really committed. I need some guidance.

What's the conditions of this? What is he wanting out of this?

Well, um, he wants the business to be completely separate. We have a— we're self-employed, we have a construction business.

So you're both in business together?

So yes, um, both— we're both on the LLC and we have joint accounts. Yes, but, um, his separate property started the business.

So he started the business, and so he's wanting full ownership of that?

Well, the business started after we were married, but his separate property went into starting the business.

Okay, so one of his assets was used to start the business. And so he's saying, does he just want that asset or does he want the whole business as part of the postnup?

The whole business.

Did something happen in the business that was part of the separation that, um, no, that he doesn't trust you for some reason?

No.

So he just, he just wants it in order to get back with you, right?

That's a very odd bargaining chip.

He thinks that it protects his life insurance because the business, you know, has had losses and gains over the years, and that initial investment has, you know, we never— we don't know where that initial investment is now.

How much was it? Do you remember?

The initial investment was about $1 million.

Okay, and how much is the business worth today?

About 3 and a half.

Well, that makes no sense.

You said the business was started after you guys were married, and you've been contributing every step of the way?

Um, not, not physically working, but, um, I do the books and—

Okay, I would call that a contribution.

Yeah.

Do you guys have kids?

Yes. Yeah.

And are you home with them most of the time and doing the books?

Yes.

Yeah. So I see this business as an asset in the marriage. And I mean, and even the way we talk about prenups to people that, you know, if there's a prenup and there's, cuz there's a big difference in, you know, a financial standing with each other, you know, even the one we kind of all lean toward, I think, is that, you know, whatever you bring into the marriage is yours if something were to happen. But everything you build from that point on, after you say I do, then is considered commingled.

Yeah.

It, it's, it's a, it's a marital joint. joint, right, at that point. And so this business would be that. So signing something away that gives you nothing at the end of this, Leah, I—

That feels wildly unfair.

What other assets do you guys have besides this business? How much money do you guys have?

So the majority of, the majority of the assets are all in—

In the business.

In the business. Yeah. It's not cash.

It's So it leaves you with nothing, essentially.

Yeah. What caused the separation in the first place?

Um, verbal and emotional abuse.

I'm assuming from his end to you?

Yes.

And what's causing you to want to go back?

Um, the children.

How old are the kids?

Um, we've got 2 And 7 and 10.

Um, Leah, are you seeing a good counselor or therapist through this process?

Yes. Okay.

And what is she saying?

Um, she's saying that I need to look towards the future and the taking care of the children.

Yeah. Yeah, his language already with you guys getting back together feels very wrong, which would put him in that category of what abuse feels like. It's a power move.

This is another manipulation tactic right here.

Yes.

Is dangling this thing over you.

And we, I mean, I can't even imagine being in your position with these kids and how badly you want what you thought you were building a life towards and you want that life back. But I mean, I've heard our friend Dr. John Delony talk about all the time that the reality you're in now, there's a true moment you just have to grieve of what you wanted is not. And for your safety, Leah, and for the wellbeing of you as a whole human being, doesn't feel like you can live a great life with a man who is an abuser, and he doesn't sound like he's willing to change.

Yeah, I don't think him getting this business fixes your marriage. That's my big hang-up.

If anything, it's a bigger red flag to me. It's one thing if he's just overly remorseful and is like, I will do anything to get you back, and you know what I mean? But the fact that he's already thrown a postnup, which I don't really even heard of, um, and when— and the only asset that you guys have in your livelihood, that he's not even willing to give you that. Um, I think he's— I think he's telling you something without actually saying it.

Okay.

Have you talked to your own family law attorney?

Um, not much. A little bit, yes.

And it's yours personally, not his?

Correct.

Okay.

I would find out what this business is actually worth and what your legal claim to it already is, independent of what he's offering. I don't want you to rush into this trying to save the marriage and then it still doesn't work out and you have nothing. That's a very scary proposition.

Yeah.

And I would want to know if you go the opposite direction, Leah, and you end up filing for divorce from this man, what your legal standing is with this business to create a life for you. Because I don't think none of us can— I can't in good faith sit behind this microphone and tell you to walk back into a marriage with a man that treats you like that. You can't do that. It's not worth it. And, and the— and the— and I understand for the kids' sake, but it actually creates a worse environment and setting them up to show a picture of what they should expect in marriage. And you know that that is not what they should expect. You want better for your kids.

Yes.

Yeah.

So I, I'm, I'm so sorry. I just can't in good faith tell you to go forward with that. I just can't. And, and how heartbreaking that is. And I know I can say that and then We move on and you have to live with the repercussions of it. But I think you in 5 years are in a much healthier, better spot than living under the roof with a man who's abusive. You just can't. There's no alternative to that.

And those kids are, they can see it. They know what's going on in the house. Even at 2, 7, and 10, they're emotionally taking this all in. And so for your own sake, Leah, I would go to safety. I would talk to the lawyer. And it doesn't sound like on the other side of this postnup is this beautiful, perfect marriage all of a sudden. I've just never seen it work that way. And based on everything you said, he hasn't changed. That's the scariest part. So we're wishing you the best.

Sorry, Leah. I'm so sorry. Hey, it's Rachel Cruze. I don't know about y'all, but I can build something up in my head until it feels way harder than it really is. I'll convince myself it's going to take forever, be super complicated, or cost fortune. Then I finally sit down to do it, and I wonder why I waited so long. Making a will might be one of those things for you. That's why I love Mama Bear Legal Forms. They've taken something that can feel overwhelming and made it so simple. Their online wills are designed by attorneys and tailored for your state. And while you're on the Mama Bear website, it'll walk you through the whole process step by step so you feel confident that you're doing it right rights, and that your loved ones will be taken care of. Plus, making your will with Mama Bear only takes about 20 minutes, so don't make a mountain out of a molehill. Go to mamabearlegalforms.com and use promo code Ramsey to save 20% on your will. That 20% off is exclusive to Ramsey fans only. mamabearlegalforms.com with promo code Ramsey. Hey, what's up guys? It's Jade Warshaw.

Now I know a little something about saving money.

While my husband and I were paying off over $460,000 in debt, we over every expense in our budget to find ways to cut back. Nothing got a free pass, including our phones. And you need to be doing the same thing. And now with Boost Mobile, one of the easiest places for you to save money is your phone bill. Their unlimited plan is just $25 a month, forever. With a price that nice, why would you ever go back to your old carrier? And with Boost Mobile, there's no contracts, no hidden fees, and no surprises, which makes this A no-brainer when it comes to saving money.

Best part?

You can keep your phone and your number when you switch, so it's not like you're making some huge lifestyle change. Listen, you need a phone, but you don't need to be overpaying every month.

So whether you're paying off debt or building wealth, or you just want to keep more of your money in your pocket, this is a win.

Go to boostmobile.com/ramsey and make the switch today. That's boostmobile.com/ramsey. $25 forever requires customers to remain active on Boost Mobile Unlimited Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Campbell here with Rachel Cruze, taking your calls at 888-825-5225. We want to hear from you guys, so jump in the comments on YouTube, Spotify, wherever you're listening. Tell us what connected with you about today's show, a call you enjoyed, some feedback, how you would've taken it. We want to hear it all. So jump in the comments. We love to see you guys jump in there. Katie is up next. Katie, how can we help?

Hi, um, I just had a question. Um, I am part of an S corporation that's family owned. Um, I own only about 5% of it. However, um, my uncle embezzled millions, um, from it. He, um, sold one farm back in, I believe, '21, um, for $5.2 million and another farm for $7.8 million. He then, unbeknownst to us, did not pay the capital gains taxes on it, which created a massive tax liability for my family to the tune of about $90,000. In addition to that, he also bankrupted my own business and therefore slashed our income by two-thirds. So we are having a heck of a time trying to pay our mortgage, pay—

I'm sorry.

Just general expenses. Um, we have 2 small kids and just need some guidance on what to do and where we go from here.

Oh my gosh. So the, the $13 million of property that he sold, where did that money go?

He embezzled it into an LLC that he set up, a full-member LLC that we didn't— we, we recently found out about this within the past year.

Is he in jail?

Trying to make that point? No, not yet. We have a lawsuit out, but it's so slow. And people really just don't— it doesn't— yeah, it just seems to never move.

Is there a real chance you get any of this money back?

I have strong suspicions that it's offshore somewhere.

So you're saying this is not coming back into our bank account anytime soon?

No.

Yeah.

Oh my gosh, Katie, that's horrible. How many family members were part of the business?

So my mom is at like 42%, I believe. I have 5%. My brother has 5%. And then my uncle had an equal share as my mom, and he was the one managing the business. He's the one who did all this. And we kind of ran it off of trust because he's our uncle.

What kind of business is this?

Yeah. It's real estate, land management kind of stuff, a lot of farmland.

Okay. And is there any chance he can continue to embezzle funds from this business?

Um, no, not currently. He pretty much drained everything we had.

Okay. That's what I'm wondering. What is your 5% worth at this point?

Not much. Uh, probably nothing.

Is that what you were dependent upon, that 5% to live off of?

No. Um, I, my husband and I both have decent jobs.

Um, and That's separate from the business?

Uh, yes, we have, we've since gotten other jobs. Yeah.

Okay, so how much do you guys make a year now?

My husband makes about $80,000 and I make about $48,000.

Okay. Um, and you said you're having a hard time paying your mortgage?

Yes, I was with the business that he bankrupted in addition to our family company. Um, I was making about $6,500 a month. Um, and, uh, you know, that more than paid our mortgage and stuff like that.

So you can't pay your mortgage from the $128,000 you guys bring in?

Um, our mortgage is about $4,300. Um, so it's, it's really, really tight.

And that's your primary home?

Um, so that's primary and taxes included.

Okay.

And home water insurance as well. Yeah.

Oh goodness. And who's, who's going to pay the 90 grand to the IRS? Is there a payment plan there?

That's, that's what we're fighting. So we have an agent and she has been hopefully deemed as uncollectible, um, right now. And so that'll get up, get them off our backs for 2 years. However, our passports are suspended and they have a federal lien on our home. Um, we have tried to sell our house, um, and now they've placed a lien. And so we can't, uh, we can't really sell anymore.

So the only way to remove the lien is to pay the taxes?

Yeah, as of right now, yeah.

Goodness gracious. Does anyone in your family have money at this point?

Not really, no. It was all wrapped up in that business. By our estimates, he's embezzled $10 to $15 million.

Okay. Well, it sounds like there wasn't a lot of wise financial moves happening outside of that, I mean, in their personal accounts.

No.

There was no retained earnings in the business? He took that?

Yes, he drained all, all of its assets.

I'm just trying to figure out, let's say you guys decided to pay the $90 grand in taxes to remove all these liens, free yourselves up, and then try to recoup it later.

Yeah.

Because I don't know what you're gonna do if you can't pay the mortgage. They can still foreclose on you.

Yeah, I'm wondering, right, Katie, have you talked to a good realtor? Like, if you didn't have the lien on the property, do you know how quickly you could sell it?

Well, we tried before the lien was placed on our home, like last fall, winter-ish time. We tried to sell our home for about $620,000 and then dropped the price eventually all the way down to like $580,000 or something like that.

Mm-hmm.

We owe about $440,000 on it. And we were obviously just going to go try to find something a lot more affordable.

Yeah.

And it just, it wasn't selling. It just would not sell no matter what we did.

'Cause I'm just wondering if you could go take out—

It's like cute and clean, you know what I mean?

Like it's something like that. Well, and it's been a year and, you know, there's more, yeah, there's more inventory probably than there was even last year. So that may not—

There's 58% more sellers than buyers right now. And the ones that want to buy can't afford it at the rates and home prices. So it's causing a little bit of a standstill right now. in the market. But my person— I mean, if I was in your shoes, that's how I answer things. I would try to get out of this IRS debt to free up the lien so that you can even make a move.

If you could get a personal loan, even— I don't know how, if your credit's shot because of everything, but I don't know if there's a personal loan to go get for $90,000.

I mean, and you shouldn't be paying it. I mean, I think it should be your— if your mom owns 42% of the business and would get that if anything was recouped, you may want to split it differently.

Okay.

And maybe she's in a better financial place than you guys.

I don't know. Yeah. Because if, because you owe $90,000 because of your 5%, is that true? Is that right?

Yes.

She owes— Your share alone.

Like over $500,000.

Oh my gosh.

So she's not in a great position either. Yeah.

Woo.

Well, I hope the, uh, the attorneys can get this guy and fight it and at least make it uncollectible. Even if you can't recoup.

Yeah.

That would solve some of this. But the other factor you can control is your income. So if you can go out, I mean, clearly you have great skills and talents. If you can go from making $48,000 to $80,000, now we're at $160,000. We can afford the mortgage for the foreseeable future.

Right, right.

That would be the one thing in your lever you can pull right now.

Yeah, my husband and I just got serving jobs as well that we can, you know, hopefully supplement and get out of some of this.

But, oh, Katie, I'm so sorry.

I mean, This is such a crazy story.

I mean, that's insane.

Yeah, yeah, yeah. Well, he completely— yeah, I mean, just screwed everybody in the process. I mean, my prayer is that they get him and that the court somehow—

the money is accessible.

I know that would be the best case scenario, but oh, Katie, I'm so sorry.

Yeah, I mean, family business, not always.

If anything, getting a good attorney on your side. Yeah, see if it's uncollectible. I mean, if you can get that off, but But man, I would want the IRS out ASAP if nothing really moves in 6 months, even if that's through a personal loan.

That's stopping everything else from happening. Let's go out to Ashley up next in Fort Worth, Texas. Ashley, welcome to The Ramsey Show.

Hi, I am so excited to have the two of you for my question today. My husband and I, we love Smart Money Happy Hour so much.

Wow, nice!

So I'm so excited to have the two of you guys for today. Yeah, so I'm 31, my husband's 32. We're on Baby Steps 4, 5, and 6, and we are on track to pay our mortgage off in 2028.

Awesome.

Yeah, we're super excited. My husband makes about $175K and he gets about a $75,000 bonus at Christmas, and I make $70,000. Our kids are 6, 4, and 3, and we're going to be bringing them on our very first Disney World trip in January. Oh, the best. Yeah, we're excited. I've really been budgeting and planning everything out. And so with flights, hotels, park passes, meals, we're planning on it being probably about a $12,000 trip all in. And so my question is, I know that Disney can really get out of hand just with all the toys and just things that I know that kids are going to want to buy when we get there. And our thought to get ahead of that is to give them kind of each a little budget. So like $100 to maybe $200 each of spending money that they can spend on whatever they want when we're at Disney to keep it reasonable. But am I going to be a totally lame mom if I put my kids on a budget at Disney World?

No.

For $200 for them to spend, I was like, that's nicer than probably what I let my kids spend at Disney.

You're taking them to Disney World.

No, you're not a lame mom at all.

If they have any entitlement at Disney World, been like, Mom, but you didn't let us go on an unlimited shopping spree, that's insane. Then you've created a monster.

No, I was gonna say, if anything, you just have like one yes a day that they get to, you know, pick one thing. They get one yes. What do you want your yes on? You know, I mean, that's, that's, that's about as much as I would—

I would have done a shopping spree before the trip and go, hey, you can spend $100, $200 to get the merch beforehand. We'll bring it into the park. But once we're in there, we're not buying a thing. We'll feed you, but that's it. Or maybe we get one souvenir at the end of the trip that's under $100. And then they know ahead of time. The key is the boundaries ahead of time. It's when they're surprised that they throw the fit.

That's right. Yeah. And you know, when you do this with your kids, my parents did this all the time for us that we had to like spend our own money. And when Once the money was gone, it's gone. Because what that did is it really does set you up as an adult. When that becomes how you spend money as a kid, Ashley, you're actually setting them up to live life on a budget. And that's not lame at all. You're actually raising very responsible kids. And so when they get their first paycheck, you know, they'll hopefully be downloading EveryDollar, which is our budget app, right? And it's the way you live your life is you have categories and you know where your money's going and you're in control of it. And, um, and when you can start to learn that as a little kid, and especially in a fun, magical place like Disney out of all places, uh, yes, yes and amen. So no, I think you are a wonderful, wonderful parent for, uh, doing this. And you're a great parent even if you didn't take 'em to Disney, right? Because it's so beyond, beyond this trip.

But I think that that is a—

You're not a lame mom, Ashley. In fact, no, only people who are cool moms question if they're a lame mom. You know what I mean? The lame moms aren't thinking.

I appreciate that.

So you're an awesome mom, and I'm taking my kids to Disney for the first time this year, Ashley. So I'll report back any tips and tricks as my 3-year-old has a meltdown when she can't buy the Minnie Mouse ears.

Yeah.

I'll eat my words and say, dang it, Ashley was right.

Ashley was right. No, but if you do want to, um, start budgeting though, that's— I mean, EveryDollar is it. And for trips out, you know, that you have in the future, and this is for anyone listening, Start a sinking fund in EveryDollar. Start preparing for it so you can be like Ashley. You know, when you look up and you're like, oh yeah, we got $12,000 for this trip and we're gonna budget, you know, $150 a day for the kids to spend. Like, you have it all earmarked. And that is part of having control and being able to spend and have that permission to spend emotionally, which is awesome. So yeah, you guys can check out EveryDollar for free. You can download it in the App Store or Google Play, because whether it's a vacation or your monthly, expenses, knowing and having a plan for your money, that is, that is not lame. No, I like that.

Right, George?

That's cool.

And age-appropriate. I mean, the 3-year-old has no concept of money, so they're not gonna know, well, I have $200 to spend. The 6-year-old might have a little bit more awareness. The 4-year-old's probably somewhere in between. And so I would just make it reasonable. But I think letting them know ahead of time, hey guys, we're gonna buy all the fun stuff before we go to the park, and make that its own adventure.

You know what? It's funny. I did 2 trips with the kids to Disney, Winston and I did. And one trip, well, one trip Winston was with us and we, not cuz of him, but just in general, we like, I was just, I refused to spend on, I mean, I would spend on snacks, but I, I bought all the stuff beforehand. I was like, no, we're not buying all these bubble wands. And like, no, no, no, no. I said no the whole trip and they were fine. Uh, fast forward, I go with one of my friends, Christy Wright, who used to be here.

That's right.

And she brought her daughter. I brought my 2 and we just went for like 2 nights. We went for like a really fast trip with the girls. This was like a, this was a few years ago. And Christie's a yes mom. She's like, oh, Rachel. Oh my gosh. Just say yes. Just say yes. Just say yes. So that trip I did, I was a little bit more like, okay, if you want the bubble wand, you were the cool mom. You get the bubble wands. You want the extra pair? I, I did. We spent some money on the extras, but can I tell you, those kids don't even remember that we bought that stuff. And that was probably 3 years ago. So like, they're at the end of the day, they're really not going to remember. They may keep, keep one stuffed animal.

Yeah.

They might throw a fit in the moment.

But they'll figure it out through all the purging and stuff. But if you set it up ahead of time, we told our kids, we're like, we're not buying you all this stuff. I remember on that first trip and they didn't really ask and I don't know, it just wasn't, it wasn't a thing. And then when you buy it for 'em, it's still not a thing a few years later. It's all just crap thrown away.

Oh, I got a bubble wand when I was at Disney without my daughter. I was like, let me buy her something. So I found, I found the cheapest—

Oh, I thought you meant for you. I'm like, George is walking around Magic Kingdom with his bubble wand.

But I found a clearance section bubble wand at Disney, which that exists. And it was like $5. And I'm so glad that I only spent $5 cuz it broke within 2 days when I got home.

I know, I know.

Yeah.

This is why we shop clearance for the toys.

The memories are usually not in the things people remember them.

That's right.

If your business is making 7 figures or more, you should be proud of that. But that growth probably brought a mess with it— systems that don't talk to each other. It's impossible to track down your numbers because they're scattered everywhere. That's a visibility problem, and NetSuite has solved that problem for more than 44,000 businesses like yours. NetSuite brings financials, inventory, CRM, and more into one place. And their AI tool, NetSuite Next, builds AI into everything, automating busywork like forecasting demand and chasing down overdue accounts. It's not complicated to use— you just ask it questions like you're talking to a person. And you're not starting from scratch because NetSuite is built on leading practices from thousands of businesses preloaded and ready to go. Ramsey Solutions switched to NetSuite years ago. It helped us know our numbers, and we've never looked back. If your revenue is at least 7 figures, try NetSuite Next for free at netsuite.com/ramsey. That's netsuite.com/ramsey, or click the link in the description. If you're already enrolled in a Medicare plan, you might think there's nothing else to do. You're good to go.

Wrong.

The fact is Medicare premiums, networks, prescription coverage, and benefits can all change even if your health doesn't. So doing nothing could cost you hundreds or even thousands of dollars a year. With annual enrollment time coming soon, you need to talk to Chapter right away. Chapter is the only Ramsey-trusted Medicare advisor, and they save Ramsey fans an average of $1,100 a year. They explain your options simply and help make the smartest decision for your situation. And whether they find you a better plan or confirm you're already in the right one, Chapter's services don't cost you a thing. Medicare annual enrollment runs October 15th through December 7th. So review your plan with Chapter now and avoid expensive mistakes later. To talk to the unbiased Medicare experts at Chapter, go to askchapter.org/ramsey or click the link in the description. That's askchapter.org/ramsey.

Up next, we've got Kay in Colorado Springs. Kay, welcome to the show.

Hi, good afternoon. Thanks for taking my call today.

Absolutely. How can Rachel and I help?

I'm, I'm new to the Baby Steps but not to saving, and I can already hear Dave respond to my question saying stupid, stupid, Stupid, stupid, stupid. But in my 20s, I invested in a whole life insurance plan.

Stupid, stupid, stupid. No, I'm just kidding. I'm kidding.

It's okay. It's okay. Well, so I lost my dad when I was 16, and it felt like the responsible thing to do in my 20s because I saw life insurance plans not pay out, and it felt like, oh, this is the kind that will. But I'm $46K paid in right now, and it's worth about $30,000. And I just started listening to you guys really at the beginning of this maternity leave. So, thank you for giving me something to listen to. And I'm thinking I should cash out of the life insurance plan because it's about a $558 per month premium. And I think that $558 can go way further if I invest it. And I think that the advice from you guys—

Absolutely.

Okay. And I just don't know what to do with that $30,000. I have about $127,000 I have $99,000 in consumer debt. I guess $28,000 is a car and then $99,000 is a land loan with an ARM. I just don't know if I should pay off the car or if I should pay into the land loan.

What's the car worth?

Probably, it's probably a wash. I think the car is about $28,000 to $30,000 and then the loan on it is $28,000.

Okay. And what's your household income?

Um, we're, we're doing really well. We're at about $460,000.

Amazing.

Wow.

Great job.

So either way, all this debt could get paid off within 12 months.

Probably.

Yeah.

Okay. And if you take that $30K, you can knock out the car loan today.

Immediately.

Yep. Do you guys have savings as well?

So that's where I think we're doing not as well. Um, so we, we have savings, retirement savings, but we don't have a lot of cash savings where we put everything into Roth IRAs, 401s, TSP accounts. But my cash savings is only about probably $30,000.

Okay. So we'll call that a light emergency fund.

Yeah. And then total net worth is about $1.3 million.

Amazing.

Great job.

Because I'm wondering where this amazing income is going every month. If you're taking home like, I don't know, $30K every month?

I think, I think a lot of it is Easy button. We have 2 young kids and we just decide to eat out. And I think we really need to, A, cut down on eating out, and B, actually start budgeting because we haven't had to budget because we have the good income. And so—

Can you pretend like you make $10,000 a month?

I, I think we need to.

And then throw $20,000 at the ARM land loan and knock it out in a couple months? That'd be a pretty fun idea.

Yeah.

Yeah. Because $10,000 is still a pretty good life. I don't know what your mortgage is, what your expenses are, but if you can just pretend like you've got $10,000 and immediately transfer the other ones, the other money to the debt, you'll have this knocked out by spring. Everything. So the car is gone today. The land loan's gone by spring. Now we're completely debt-free with tons of money in the bank, with tons of margin, and we've learned how to live on $10,000 a month, which is the best part.

Well, and you kind of combing through already your expenses, even with this whole life insurance policy and being like, okay, where could this $5,000 fit? You know what I mean? Like, you're doing the right steps to look through all of this and just ask yourself, do we need this? Can we move this around? Yeah, and if you just do that in a few of these categories, like what you're saying, and tighten up, and it won't feel great because you're going to feel like you make $10,000 versus making $30,000 a month, right? You're going to feel a difference, but that's okay for a few months, you know, just to get through it and be done. Man, that's powerful.

How old are you, Uh, I'm 36 and my husband is 48, so we have a little bit of an age gap.

Okay, okay. And you've been paying in about $558 a month to this account since you were 18?

Uh, no, since mid-20s, like 26.

Okay, so the last 10 years probably. Okay, okay. But, but even that, you've only come out— it's only worth $46,000.

You said you've paid in $46,000, right? And you've, you've $30,000 in cash value.

And the cash value. Yeah.

Yeah, the cash out.

Okay. So here's the crazy part about whole life, just to run those numbers. So if you put that $558 and you just contributed that monthly for 10 years, instead of this whole life policy, you'd have $121,000 sitting in that account, in that brokerage account or investment account versus this. That's why it is such a, it has such a terrible rate of return. when people pair insurance and investments. So, um, but the beautiful thing is that even if you just said, hey, for the next 30 years, we're going to just put that money in investments instead of paying this whole life insurance, that's $1.5 million in 30 years. So—

Hot diggity dang. That's pretty cool.

Yep. So it's pretty, it's pretty wild where that money can go. So I think it's just a great— and you already knew that, but I think just for people listening, when you actually run numbers of what you're putting your money into, it's It is good to double-check where else your money could be growing.

And if anyone is trying to push you into one of these cash value permanent whole life policies, just run. Just run far away. They don't like you. In fact, they hate you if they sell you one of these policies. And the sad part is it's usually close, like family, family friends that push you. And so you trust them. You go, well, they said it's a great thing to get.

Yeah. Or Kay looks up and she's like, oh my gosh, my dad died and I was a teenager and didn't have insurance. I need life insurance, right? And you run to to whichever thing you see first, which is understandable in her case, for sure. But just make sure that you're there. And a good call.

Always make sure you have term life insurance in place before you cancel the whole life policy. So we got ours through Zander. I know Rachel's family has theirs through Zander. So you can jump on zander.com, get 10 to 12 times your annual income, 15 to 20-year term should do the trick, and you'll be in far better shape. Invest the difference than you would've paid with that whole life policy, and you will thank us later. That's right.

Okay, well done though on all that you guys are doing. You got a great income.

You guys have a great future.

It's great.

Yeah, it's hard to feel bad for you guys. You're crushing it. You're making half a million dollars. You're about to be debt-free by spring. I like this plan. Way to go. All right, B is in New York City up next. B, welcome to the show.

Hi, thank you guys so much for having me on.

Sure.

So I just wanna give a little backstory. So I'm 35, and last year I was running a daycare business. I did that for 9 years, and due to hospitalization, I've been out of work since May of 2025. So I've been relying on family for the last year and a half, and I'm currently being sued by a debt collector. And so I have to give them an answer by next month. I tried to call them to see if I could work out some type of payment plan, but what they're asking for, I don't think I can feasibly— I don't have any income at the moment, and I don't think family is really able to help me. I called a lawyer, and they were suggesting that I file bankruptcy. But I'm not really sure as to what to do, and I have other debts on top of that as well.

How much, how much is your debt total, everything?

Um, it's a little over $37,000, so I'll say $38,000.

And what debt specifically is this one that's going to court? How much is it?

Um, so this is $5,800.

Okay. And what is your What are your plans for working in the future? When will you get another job?

I've been applying over the last year, but I only got one interview that didn't work out. And so far I'm really not hearing back. I've been updating resumes, sending in things, but nothing so far.

What kind of work have you been applying for?

Um, everything.

Target, Walmart.

It, it, I really want to do some type of office or clerical or administration type of work. Um, but I'm not getting anything.

Is that because you don't have like resume experience for those things?

But not for Target.

Well, for the clerical administrative work, if you're trying to— if that's where you're trying to get to.

Yeah, I mean, with daycare I was already doing like administration and paperwork, so I feel like I have the skills. And I did go to school for animation, so I know computers, and so it's not I'm not— I don't have like any technical issues, but I don't know, I'm just not getting anything. I don't know if it's a resume issue. I've been updating it, but—

Well, usually just hearing anything, putting your, your resume into a, you know, black hole on a website doesn't always— have you gone in person to some places?

To some places, but usually it's like, oh, they've already hired, or oh hey, can you apply online? I'm like, yeah, I've done So, but the ball hasn't been going in any direction.

So how have you been paying bills? Like, how did you pay bills last month?

Um, I haven't been, but outside of necessities, family's been helping me with that. But I just don't have the money right now to pay any bill.

Okay. And, and like going and—

I've sold some stuff besides that. I've sold things like I've sold all of my daycare equipment, all of the daycare toys, all of that type of stuff.

But even like a restaurant, like waiting tables or driving Uber or Instacart, anything?

Yeah, I don't have a car right now, but like I said, I have been going into places.

Are you in New York City proper?

No, I'm in New Jersey.

Okay, but you can take public transportation?

Yes.

Okay, I'm just wondering, for the— in the meantime, there's about to be a lot of seasonal work happening in retail, and there's so much turnover there that if you just show up every day you'll be promoted within a couple months. So I would keep hitting on that, and then the end goal is to get into that administrative, you know, work and hopefully scale up from there. Because the goal right now is income. It's hard to pay off any debt with a debt collector if you don't have the income coming in. But I would not file for bankruptcy. I would definitely respond and not just let it sit.

Okay.

And respond and say, hey, I don't have a job right now. Can we negotiate a payment plan, a settlement? And over time, what you're gonna find is they're gonna have to to make do with less. So instead of $6,800, you might be able to settle for $2,000 once you actually have that money as a lump sum. So that's your goal right now is just work, stack cash so you can get these debt collectors off your back. Then you can attack the rest of your debts with the debt snowball.

And working any job, B, you know what I mean? Like, I mean, this is, I mean, 2, 3 jobs, working weekends, doing what you can, because you really have an uphill battle to climb here. And it's all income. I mean, at this point, So that you're not, you know, waiting on family to take care of you at that point. What a gift that they've been able to step in. But after a year of this, we gotta be finding something to do and then slowly working your way into an actual career for the second half of your life.

That's the key to all of this. And if you wanna connect with our friends at Guardian Litigation, this is the kind of stuff they specialize in. Don't go to these, you know, debt settlement places. This is a nationwide law firm that helps with these collection issues, and they can fight for you on their behalf with a real attorney. Um, so reach out to them. You can go to guardianlit.com/ramsey to get in touch with them, and I, I tell them George sent you. All right, let's go out to Kira in Denver, Colorado. Did I say that right, Kira?

You sure did. Hey.

How you doing?

I'm good. How are you guys?

Doing great.

We're doing great. How can we help today?

Good. So glad to talk to you. You guys are going to hate this question so much, but I genuinely, I feel like I genuinely want your perspective. So I have been leasing a vehicle since, uh, well, about 3 years now. The lease term is almost to an end. It's a 2024 Subaru Impreza, and the payment is pretty low. It's like $300 a month. So as this lease term is coming to an end, I'm honestly having a hard time understanding. And I have been listening to your show for a long time, so I know The debt, it's always worth paying off debt, but I'm having a hard time understanding why leasing another vehicle would be a bad idea.

Oh, this is George's favorite question.

I just love a good car lease question.

This is for you.

Please help me.

Okay. How about I'll— I want you to explain to me what you love about it, because here's what's happening right now. You told me it's a low payment. Do you know why it's a low payment comparatively to a car loan?

I guess I don't, but—

It's because you don't have any collateral. You own nothing. You are just renting a car from them very expensively, and you are prepaying the biggest piece of the depreciation on behalf of the dealership.

Right. That makes total sense. Here's where I'm a little bit hung up. First, for the term of the lease, I don't pay for oil changes. I don't pay for car maintenance. I don't pay for new tires. I don't pay for any of And I do have some money in savings. So, in theory, I could just go buy a vehicle in cash, but I just have worked so hard for that savings account and it would completely drain it. So, here I am saving $300 a month, which seems fine, but that doesn't seem like enough savings a month to rebuild the savings account that I'm about to wipe out.

How much do you have in savings?

Right now it's about $14,000. By the time the lease term is up, I'm guessing it would probably be about $18,000.

Do you have any other consumer debts?

I don't. Well, I have a student loan and there's like $7,000 left on it. So again, it's like that payment's so low, is it worth wiping out that entire balance?

Well, at this point you should go around collecting low-payment debts. It sounds like that's the plan. If I can get the payment low enough, it's a good deal.

And that's my fear, Carol, is hard to wipe out my savings account because it's like I—

but that's what I want you to feel is the pain at purchase of, wow, this is a lot of money I'm letting go of. And you have worked hard to build up your savings, and I think you work too hard to give these dealerships and lenders your money for the rest of your life on these contracts that are built to screw you over.

And it's kind of a misnomer to think that you do have, you know, $14,000 because technically you don't. You owe $7,000. So really, the feeling that you have, you know, an upside over here is kind of false because there is money owed over here. So really, your net worth is not what it feels like when you're looking at your savings. It's kind of this like, it's like a fogged mirror where it feels one way, but the reality, when you look at the numbers, you're carrying—

Debt.

all that risk, you know, the risk of the, you know, the student loan, the $7,000, you have debt over on the other side. And so, um, you really don't have, you really don't have $14,000. You really technically have $7,000 to your name.

Right. Yeah, I guess that makes sense. I did, I have a salaried full-time job and I did pick up a little side hustle. I wait tables on Saturday nights. It's really fun. I enjoy it. It helps me build up that savings account a little bit more. Yeah. The point of that was really so that my family and I could travel a little bit more because I feel like, you know, we're in a position, we're not in debt, we pay the bills, we're living comfortably, but that, that felt like it was missing. We just didn't have enough money to really travel the way I wanted to. So I got this waitressing job. And so, but now it's like, should I, do I pay off, do I just buy a car in cash and have no travel savings?

Have you ever done that?

To kind of build back up?

No.

Can you try it? Would you be willing to, as an experiment to the audience listening, would you be willing to try out buying a car in cash? And paying for your own oil change. I promise you, you can afford it.

If you promise me it's worth it.

Promise you what?

You promise me it's— if you promise me it's worth it.

Well, listen, I can't control what car you buy. I— here's what I do. I get a pre-purchase inspection and I get a vehicle history report from a company like Bumper so that you know you're not buying a lemon. So that's gonna give you a lot of peace of mind. And then all you do, that $300 that you were budgeting for a lease payment, you can now budget for car maintenance and repairs. And look at that, you've created your own little bank account over here where you're not robbing savings when it comes time for oil or new tires. And now you actually own the thing, and there's no buyout, there's no wear and tear fees, there's no disposition fee, there's no extra mileage fee you have to worry about. You can drive the thing like it's yours because it is.

And then you just build up that savings account for travel. You just build it back up over time.

Exactly. Just separate everything. Earmark my emergency funds over here, here, travels over here, car maintenance and repair over here. Instead of saying, well, this is just one giant pile of savings and I'm robbing it to do this thing over here. That's where you're getting tricked at.

Right. Okay.

And can I tell you this? The interest rate on these things, because they don't have to be disclosed, is enormous. They run around 14% when you actually do the math, but they don't have to tell you that because it's a lease contract and not a loan.

And that's really how they get you, cuz the payment feels so low.

So here's my last, here's my last thing, Kira. Why do you think the Why do you think dealerships want to push you into a lease so badly? Do you think it's because it benefits you the most?

They're making so much money.

Who are they making the money from?

Me.

Now, how are you both winning in this scenario? How are they making a bunch of money and you're also winning?

I'm just so sad to see that vacation savings fund go away.

Me too.

But I'll do it. I'll do it.

I am also sad for you, but the good news is you're about to pay off those student loans today. Okay, because you told me we're debt-free. Well, let's make you actually debt-free by paying off those student loans with the money you have in savings. We'll rebuild for travel over time, and I promise you your family's going to be okay.

Kira, how old are you?

Okay, uh, I am 39.

You're 39? So great. Well, yeah, let's just say for the rest of your life you just leased for the fun of it, okay? For the next like 40 years. And instead of that, versus if you had just invested that, even $300, which I know you It doesn't feel like a lot, but when you actually let your money work for you versus working for the car dealer, you would have $2.5 million sitting in that account.

Okay.

Versus what, 10 leased cars through your lifetime? So, got it. It's a mindset of saying, I'm gonna use my income to help me and my family versus helping everybody else, right? These banks and car dealers and all of it. So it's just, it's a different, it's a different mindset. But the thing is, your mindset is so normal. That's literally how people live. They live with, oh, well, it's just, you know, a $1,000 credit card bill every month. It's just a $300 lease. It's just a little bit of a student loan. We got a personal loan cuz over here, and it's not that much. And you just kind of live your life little payment by little payment. But over the scope of your life, if you don't change your habits, that's what it's costing you to live that way.

Mm-hmm.

And so, right, one small change literally makes you a multimillionaire.

That's it.

Yeah.

So start asking this question.

So helpful. Thank you guys.

Ask this question instead of how much down, how much a month, which is broke people talk. Just ask how much total cost. And if you can't afford it in full and you're willing to part with that money, that's your body telling you this is a bad decision.

Yep. We were meeting people at the break and a sweet lady said that her parents grew up in the Great Depression and she said, we were told from the very beginning, if you don't have the money, you don't buy it. And it was It's just simple. And I was like, I know! We've made careers now with that one simple phrase, you know?

I'll leave you with the Arabic version. Mama Camel says this.

What'd she say?

Al-jamil bil ish, uma an di ish. It means the camel costs 1 penny and I don't have a penny. You know, it's just 1 penny, get the camel, borrow it. I don't have a penny.

I don't have it.

If you don't have the money, you just don't buy it.

She doesn't say that.

It's an Arabic saying.

Okay.

I can't make this up. That's too wild to believe. I need you to weave that into every single show from now on that you're on. I think we need a little Arabic phrase in the day.

Say it one more time.

Oh, we love it.

Al-jamil, I'm gonna say this wrong, I'm sorry, he's gonna be like, he didn't say it right. That's as good as it gets, folks.

We love when George talks another language.

You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage to protect your biggest assets. I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted Providers have been coached and to serve you like we would. Find what you need at ramseysolutions.com/insurance. Listen guys, I've heard just about every excuse for why folks think they can't get ahead with money. So let's go ahead and settle this right now. You get the final say on what happens with your money. That's why you have to start telling your money where to go so you can stop wondering where it went. So if you're gonna start winning with money, you have to get on a budget. And the easiest way to get started it and stick to it is with the EveryDollar budget app. It'll help you make a plan for every single dollar coming in and every single dollar going out every single month. And guess what? It's free. So no excuses. Download EveryDollar in the App Store or Google Play today.

You know, Rachel, as we get callers that hit Baby Step 7 or even Baby Step 4, 5, 6, one of the things that's the hardest is to let your foot off the gas and remember what it was like to enjoy life.

And celebrate.

And to go on vacation.

Yes.

And it's one of the reasons we came up with this crazy idea of the Ramsey Cruise, the Live Like No One Else Cruise.

That's right. Because there's two ends of the spectrum, you guys. You live like no one else so later you can live and give like no one else. And part of living like no one else is having a paid-for vacation, right? That you pay for yourself because you're debt-free, you have your emergency fund, you're in a place to go and enjoy life again. responsibly, if you will. And why not be irresponsible on a cruise with us?

It's the most fun, because what I love about a cruise— and this was my first real cruise, the last Ramsey cruise we did— is that you just walk around and everything is there. Everything's covered. You're like, oh, the food's there, the entertainment is there, I already paid the taxes, the tips. You can just enjoy yourself.

And the ship is so nice.

It was a real— I probably spoiled myself by making this my first cruise.

The spa was fantastic. The restaurants are amazing. The cool bar setups and the coffee shops, like all of it, it is spectacular, you guys. It is such a fun vacation and it's a fun week and we want you to come spend it with us.

That's right, March 14th through the 21st, 2027. Dave Ramsey, all of us personalities, and about 2,500 of your closest, newest Ramsey friends will be there on the ship. All-inclusive pricing starts at about $2,100 per passenger. That includes it all— cabin, food, entertainment, taxes, tips. Click the link in the show notes or go to ramseysolutions.com/events to book your cabin and join us. Carrie is in Washington, DC up next. Carrie, welcome to the show.

Hi, good afternoon. It's so nice to speak with you.

You as well. What's going on?

Thank you. Yes, so my father-in-law is 72 years old and he lives— he owns his home in Florida and he is relocating to Virginia near my husband and I. And he is buying a house about 15 minutes away from us with cash, and he wants to add my husband to the deed of the new home. We know that this is not a good idea, but we need help explaining to him why it is not a good idea.

Oh boy. What is his reason?

Yeah, what does he want to do it?

I think he believes that it's going to be easier when he passes away if my husband's already partial owner of the house.

Why are you not involved?

Because it's not my father.

Ah, so he's like, well, I'll give it to my son. Okay, well, here's the main issue that hopefully— now, I don't know if he's a man of logic But part of this is a huge tax liability. When you put your kid or whoever on the deed of your property while you're alive, that is considered a gift by the IRS. So the tax basis— so let's say he— I don't know how much he's gonna buy this house for.

The new one?

Or the new one?

Yeah, we'll say like $350,000.

Okay, so he buys it at $350,000, and then he— let's say he passes away, I don't know, 20 years from now, and the house is worth $700,000.

Mm-hmm.

Well, your husband is gonna owe the taxes on that house because it was a gift. And so when he sells that property, there's gonna be a huge tax liability versus dad just letting his son inherit the house because now there's a stepped-up tax basis. So whatever the market value of that house is when your father-in-law passes now becomes the value that your husband is gonna pay taxes on. So if he inherits it and it's worth $700 grand, He could sell it 6 months later with no tax liability.

Okay.

So that's the problem is he's entangling their financial lives together at the wrong time.

Yeah. And he can put it, you know, in the will, even do a trust and, you know, get through probate, you know, without it. I mean, like there's some ways to get around it for it to pass, quote unquote, easily to your husband without having to do that. And without having to pay taxes on $350,000.

Okay, so, so just adding it into his will, would that be the easiest way?

That's the simplest.

Yeah, it's the— yeah, that would be the simplest. It'll go through probate and all of that, so there will be a little bit of cost, but nothing like $350,000 of taxes on that.

You can also look into something called transfer on death, TOD. Uh, this varies by state, but you can sometimes add a TOD so that way it transfers outside of Okay, that's something to look into.

Is that something he would be able to do when he is purchasing this new home, or is that something he can do afterwards?

He could do it after he, after he purchases it. You can add that. So I would talk to a good, you know, estate planning attorney to figure out the state laws in Virginia and what all that entails. But the one thing he doesn't want to do is add him to the deed while he's alive. That is definitely the worst-case scenario.

Okay.

Okay, okay, perfect.

Good luck.

Great question, Carrie. Thanks for calling in.

Thank you. Absolutely.

And even a good estate planning attorney, just getting on a call with him and dad, walking him through all this with a third-party expert versus his daughter-in-law, that might help too.

Yeah, for sure. And, you know, a lot of these attorneys are pretty great. You know, something like this is pretty simple. They do this stuff all the time and they can get the documents ready for you. You can do DocuSign and it's done. Like, it doesn't have to, it's not a big complicated process for them.

You can knock it out on a Thursday afternoon. All right, Linda is in Milwaukee up next. Linda, welcome to the show.

Hi, thank you. Excited to be on the call.

Absolutely.

How can we help?

Well, I am 52. I'm single, empty nester. My son went to the Air Force a couple years ago, and I don't have any major debt as far as credit cards, student loans, car debt, nothing like that. I own my primary home and I own a duplex. Both have equity, and, but I'm not sure if I should sell the duplex because I have a HELOC loan. The duplex is paying for the HELOC loan, so I'm not like receiving any money from the duplex.

It's just a wash.

There's cash flow. Yeah. I mean, there's a good cash flow, but everything washes because, and the HELOC is at like $55,000. So, I feel like if I got rid of the duplex, I would get rid of the anxiety of owning all that debt. Yeah. Wow. But I'm 52. I only have like $250,000 in my 401 and I don't have any savings really. So, I'm nervous because I'm 52. So, I don't— I'm in this like pickle. Do I invest the next several years and pay off off the HELOC, or do I sell it all? And my primary home, I only owe like $130,000 left. It's worth like $350,000. My duplex, I owe like $175,000 and it's worth like $300,000.

Plus you have the $55,000 HELOC.

Yeah, I got the HELOC, which is killing me, but that's the only debt I have, just real estate Okay.

So you could really walk away from that duplex probably with like $60,000 after it's all said and done.

Depending on capital gains, um, what I'm gonna owe for that.

What'd you pay for it? And because it's only worth $300,000, you said?

Yeah, I mean, I originally paid $130,000.

Yeah, so you shouldn't have capital gains.

I took out a— well, What?

Because you, you'll be exempt for $250,000 in capital gains.

For an investment property?

Oh, for the investment property.

Yeah, she'll pay for that.

Yeah, yeah. So after taxes, net fees from a realtor, what do you think you walk away with after paying off the mortgage plus the HELOC?

Everything with the investment property, selling that, I'll walk away after capital gains, what I assume, maybe Paying off the HELOC, maybe $20,000, $26,000.

Okay. How much do you have in savings now?

Nothing really.

So you just will become debt-free except your primary mortgage and have $26,000 in the bank?

Yeah.

That sounds pretty good to me.

$450,000 in 401. You think so?

And you got $300,000 in retirement though, you said, right?

$250,000.

$250,000 in retirement.

And you'll continue to invest. I mean, you're 52, not 70. So I wanna tell you, you have time.

No, I know.

Because the invest— that investment, if you didn't even touch it, it could double in the next 7 years. So at 59, it's $500,000. At 66, it could be $1 million, and you're gonna add to it.

So the question really is though, do I sell that duplex even if it's got a great cash flow coming in? You know, it's like bringing in $1,000 a month cash flow.

Well, the problem is you don't have enough margin to knock out the HELOC and have this thing really cash flow for you. Right now it's a wash, which means you're probably closer to losing money than making it because of all the other expenses.

Potentially. But I get the tax cut, you know, each year too, so I'm worried about that.

Well, I'd rather set you up for retirement in a way that you are walking into that thing debt-free versus trying to tax cut your way and write off your way into it while carrying this debt? Because I don't see a way you're gonna pay off all of this debt by the time you're 60 with the current cash flow you have. What's your current income?

About $100,000.

Okay, good.

So think about if you had— if you were making $100K with no debt but your mortgage, how much could you then invest?

Can you repeat that?

How much could you invest out of your $100,000 income if you didn't have this duplex mortgage and the heat Well, that depends on my spend.

Um, you know, I'm 52 trying to be 32, so there's a lot of investment there. But I'm— I joke with that, but I could probably, I don't know, $1,000 a month. Yeah.

Okay, that gets you close to 15%. 15% would be $15,000.

So I was thinking, if you did— if you, if you could walk away and put that money from the duplex And I think you may be walking away more than $26,000. I could be wrong, but let's just say at the end of all of it, after you throw some more money in these investments, let's say all said and done, by the time you sell it, you have now $300,000 in your retirement. Okay? Just in investments.

Mm-hmm.

And then if you go for the next 10 years and put in $1,500 a month, you'll have $1.2 million in 10 years.

$1,500.

A month.

A month.

Invested. Yeah. Which is probably what I would do just to catch up. Because you don't have it. I mean, $300,000 is amazing. Like you did a great job, but I think your money could be working harder somewhere else than trying to get like a tax break here, HELOC payment here. You know what I mean? And then you're having to keep tenants in it and all that upkeep.

Yeah.

And you even said the stress of holding that debt, which is more on your investment property than your primary home, because you owe $175,000 on it. So like just being, just kind of simplifying your life, Linda, from this point on and for the next 10 years, just be throwing stuff in investments. And I think you're gonna end up being great at $1.2 million in 10 years.

Well, that's great, 'cause I tried to work these numbers. That's why I called and I could not grasp it.

Yeah, so if you just go into our investment calculator at ramseysolutions.com, I just typed in current investments. I put $300,000. I was probably being a little generous there, but it's your $250,000 saved, some money from the Stoop flex. And then monthly contribution, $1,500 a month for 10 years. Rate of return, I put, I put 11% in, which could be aggressive depending on the market. It's been pretty great the last couple years, so we'll see what it does. Um, but yeah, it'll be, it'll be well over a million.

Okay, okay.

And that's if you just retire at 62. You might decide, all right, I'm gonna go to 65 and build a little bit more of a nest egg. And the longer you work, the more time give it, the more you'll end up having in retirement. And you'll get a better picture for what your income stream looks like there between Social Security and your nest egg. But way to go. I would clear the decks and just simplify my life at this point and get rid of that. All right, let's go out to Mike in Baltimore up next. What's going on, Mike?

Um, basically I am looking into buying a house. I'm 28, um, and I have a good amount saved up. And I went house touring recently and I ran into a house my realtor called a piggyback house where Basically, there's multiple— instead of it just being houses right next to each other, it's like in front and behind. I want to— I didn't see that many people talk about it online, so I'm a longtime listener. I wanted to call in and get your opinions on that, if they're a decent choice for me to choose for my first home. It's like 3 floors. It's like in Annapolis, Maryland. And yeah, that was my question for the most part. And there's a lot of HOA fees as well. It went up from $80 I think the original seller got— it was $80 originally for HOA, and now it's $315, which is something that I'm sort of worried about. I'm trying to stay away from condominiums because I heard the HOAs are a big worry. So I'm trying to—

Well, the same thing would apply for townhomes with a higher HOA fee because more is being covered for that townhome than a single-family home. So you're gonna find higher HOA fees across the board for any condos or townhomes.

homes.

But the bigger question is, why this specific piggyback townhouse idea? Is that because you can get a tenant in the other side?

Uh, no, I just wanted the one individual unit because I just wanted to get my own, uh, my own spot.

Okay, so it's just the way the development is. It's the way the development's set up. Exactly.

And I'm like, this is sort of interesting to me. And it also looks like in the back instead of the front, so I'm like, oh, This is sort of new to me.

Well, how much is it?

The house is $329,000, but one recently sold for $315,000. So I'd like to see if I could say the recent price has sold sooner or for less than that. And how much do you have saved? I have $87K saved right now.

Awesome. And you have no debt? And that's aside from your emergency fund. The $87K is just down payment fund?

Oh no, $87K is all in. I also have a gift from my parents because I've been investing, or I've been giving money to them on a monthly basis. And, uh, they plan to give it once I choose to invest in a home. They plan to give me the gift back. Um, but they also don't want me to rely on that. But, uh, that would be approximately like $40K or so. So that's, that's cool.

Yeah. Because I, yeah, it just, it just kind of sounds like, um, I mean, I'm not familiar with piggyback townhouses is what it's called.

I've heard of this.

But I guess it's just kind of a quirky development. So I think as long as it's not so odd that you could resell it in the future, you know what I mean? I wouldn't buy something that's so weird that no one would ever want it.

Yeah.

I would look at the appreciation over the last decade compared to other areas, and that'll give you a pretty good idea if this is gonna be a worthy long-term purchase.

But it's about half of the median price there in Annapolis, Maryland, because we're seeing median listing price is $635,000 according to—

That's expensive.

Yeah.

So what you got was half of it, which granted it's a smaller home, I know, kind of more like a townhome feel.

My first 2 homes were townhomes, Mike. So I'm not anti-townhome by any means.

No.

I think it can be great, but you want to make sure you're making a purchase in a neighborhood that's going to appreciate. Things like good school zones, all of that will affect your resale value if you're looking at this like a long-term play. So how much do you make every month? What's your after-tax monthly income?

After tax, it's approximately $4.2K. I have a lot of deductions in my, my pension and my 401.

If we remove those out, just after, just your federal, state taxes, all of that, without any investing, healthcare premiums, what would it amount to every Ah, honestly, I'm sorry, I don't really know per month, but my salary is like a little bit over $91K.

I don't know how much it is monthly without it.

Because our parameter is about a quarter of your take-home pay going towards that mortgage. That includes principal, interest, taxes, homeowner's insurance, HOA. And right now on a 15-year fixed, it's looking like your payment would be— if you put $100K down on a house that's $315 grand, your payment would be a little over $2,500 Yeah, yeah, I will. Does that sound about right?

I have, uh, yeah, yeah, it is. I have, um, I have talked to some lenders too. It's approximately $20,000. I think it is. I think you're right. I think it might be $24,000. I'm also trying to align it with some, uh, with some grants too, which is why I'm not like rushing, but I'm trying to talk to lenders and see what I can do for first-time homeowning and stuff.

I would— okay, just make sure you're— I would stick to a conventional loan here. A lot of these FHA loans and first-time homeowners, they, they have a lot of restrictions and red tape, and it sounds great on paper until you get into it. And on top of that, other fees. So I would tread lightly. I mean, I think you're close. You got a great solid start, $87K saved plus your parents' $40K. If you can put $100K down and make the payment work right now, you're— it sounds like you could bring home about $5,000 a month. So that's my fear.

I believe so.

If this is $2,500 out of $5,000 a month, Yeah, that makes sense.

Yeah, I'm planning on also renting out this to my friends too, like own some rooms if, uh, if that works. One or two. This is a 3-floor townhouse. The only thing with this, how it looked is not like how a regular townhouse— that's the reason why I called in. I'm like, I don't really see much information about this around. So I was like, let me see, uh, you got the 10 yen?

That's my fear is that if it's so odd that not a lot of people would be wanting that kind of house, that just could hurt you in the future.

Yeah, that would be my only thing. If the development is kind of quirky and weird and it would be hard to sell, that'd be my only caution. And again, making sure that that payment is still not half of your take-home pay, because we don't want that either. So unless your income is going to go up, I wouldn't make this purchase just for that reason Yeah, and I wouldn't either depend on other people helping pay the mortgage either. I would have that be a bonus, right? That it's still, you know, around a fourth of your take-home pay. And then if you do have—

Without any extra income.

That's right. But if you do have some extra money coming in from roommates, that's just kind of the cherry on top.

Great question.

You've heard from me and the Ramsey Personalities for years, but nothing beats actually getting together in person. That's why we created the Live Like No One Else Cruise. For 7 days, For 7 days, we're vacationing with you and 2,500 Ramsey people in the Western Caribbean with live shows, us, new content, us, and more. If you're on Baby Step 4 or beyond, come spend the week with us next March. Choose your cabin at ramseysolutions.com/events or click the link in the show notes.

Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. Let's go to Alex in Miami up next. Alex, what's going on? What's going on?

Thank you for taking my call, guys. I got to give you guys a little background about myself. 16 years ago, I became a convicted felon and that kind of cost me like $40,000 in restitution. Since then, I've been able to pay it all back. But also between that time, I've been trying to speak to my siblings and my mother about group economics in order for us to prepare for her retirement. I would say around 2014 to 2020, I think the mortgage interest rates were kind of Her interest rate was around 7.8%, and I think we could have got around like 4-point-something. I'm not 100% sure, but I think we missed out on $60,000 that could have went directly towards my mother's retirement or towards the house principal. And lately I've been speaking to my mother about preparing because she's now 65 and she's ignoring me. And when I speak to my siblings as well, they are also ignoring me. And I think I've accomplished enough in my life where I feel like, you know what, my opinion should matter. And at this point, I kind of want to just give up and just like live my life on my own and just put everyone to the side because no one's planning at all, man.

And planning for your mom specifically is what you're talking about, correct?

Exactly.

Yep. Oh man, Alex, welcome to family, you know. They just don't listen when you want them to.

That dysfunction doesn't discriminate.

I know.

I don't know your relationship with them prior to this, but it sounds like it was already kind of estranged.

With my sister, definitely. My older brother, he just passed. He had cancer last year. And like the way, like, the family as a whole has been progressing, I'm honestly— I honestly don't know what to do Besides of just being an independent individual and just moving on. And whatever happens with my mother when she's 80, because she obviously doesn't want to plan, that's on her. And however, however everyone feels about it, that will be on them as well.

I mean, I, I hate to be that bleak, Alex, but that's what ends up happening. Uh, and we talked to a lot of people that are in a, you know, a position of yours saying, hey, Hey, I'm trying to like wave the flag here and say, guys, we gotta, we gotta make some plans cuz, you know, she's not getting any younger and we wanna make sure she's taken care of. And the hard thing is, Alex, you cannot force anyone to do anything. And so your attempt, your attempt was so good. And, and then at the end of the day, you kind of do have to come to peace in terms with you can't force people and, you know, to do something. And I think I think that's— I mean, I lived so much of my life really believing if I could just say it this way or phrase it this way or get certain people in the room, then the light bulb will come on, you know, of what you're looking at and seeing and you want everyone else to see it. And when they don't, it's like you're just hitting your head against a wall over and over and over again.

And so I think there's a level of coming to terms with you can't control people, you can only control you and your humility in it to say, hey, my mom, cuz the siblings probably are not gonna, you know, budge much, but I probably would let her know one more time, hey mom, I love you and I want to make sure that you are taken care of and everything that you're wanting in this life. And, and, and this is morbid, but it's true. And when you pass away, um, that your wishes are shown through of what you want, what you're, what you've, what you're going to leave. leave to be distributed the way you want. And I want to make sure there's a will in place, right? Like, I want to see these things for you, Mom, and I'm happy to sit down with you today to do that. Or if there's a time in the—

My major issue is here is that because I became a convicted felon and I had problems in my past, no one trusts anything that I say.

Okay, so there's that.

And that's at the root of your frustration, is this resentment. You're going, hey, I changed, I'm doing well with money now, and no one wants to to me, but the picture they have in their head is, well, why would I listen to this guy's genius financial advice? And so that's the hardest part about you creating this new chapter for yourself, is realizing these people may not ever understand. They might— may not ever ask you for advice, and you need to be okay with that and not give— I, I don't even personally give unsolicited financial advice, Alex, to my own family. I've played this game and it doesn't work out. I just get angry.

My mother cannot read or write. Like, it's, it's, it's very dysfunctional. Like, my mother My mother doesn't have like an elementary education. So like for her to go on forward in life without— like she'll ask me to read letters for her. Like, what if I'm out of the picture? Who's here with you?

Yeah.

I'm trying to figure all of this out and I'm trying to like scream. I did not scream at the top of my lungs, but trying to explain it logically. And everyone seems to want to wash their hands.

Yeah.

My eldest brother, everything seems to have gotten worse. Me and my sister don't even speak anymore. And I'm upset because she decided to plan it with her husband, who she's known for a year, and not her own siblings. And I'm, I'm really like, okay, I should just vanish at this point.

Alex, you're hanging on to a lot of anger, man. And I understand, and a lot of it is reasonable. You feel like, man, I've changed my life. I want to help my family. I'm trying to do a good thing. thing and it's all backfiring and no one cares. And I want you to release that, which is a really hard thing to do. That's going to take some time, probably some counseling, but there's a lot that you want to get out there that is just stuck and there's nowhere to put it. And so what you need to do is live your life and create this new chapter, maybe new friend group, and kind of create your own family at this point, because clearly they have opted out of this relationship. You've done everything you can and you've realized the hardest way that you can't change people. You can't make them take the advice. So the best thing you can do is just use your energy where it's actually going to be fruitful, which is your own life and people that you can help.

And finding your worth and your value, Alex, um, sadly will not be coming from your family because they're not valuing you, which is really hurtful when it comes from your own family. And so yeah, there'll probably be some, some grief to walk through of what you thought this was gonna be with them, um, in this second chapter of your life as a changed man. Um, but I think the work is having to release that, what George is saying, which is so sad. It is so sad. But—

And you know what's coming too. That's the hard part.

And you're worth it though, just for you. That when you said, I feel like I should just vanish. No, I don't think you need to vanish. Maybe from a family standpoint, yeah, your input may not be needed anymore cuz they're not gonna listen. Um, but finding who you're created to be, Alex, in this next chapter of your life and the good that you can do on this earth, that's what I would chase. And that you are always there for them. And there may be a day that they circle back, but you cannot force them to do something that they're not willing to do or have a conversation they're not willing to have.

Man.

Well, we wish we could get to every call and question here on the show. So if you have a money question, you want an answer for your situation, head over to our website and use Ask Ramsey. It's our free AI tool that is built and trained on proven Ramsey principles. You'll get an answer the same way we'd answer it right here on the show. You can go back and forth, have a conversation, save the questions. It's really incredible. So ask your question today, ramseysolutions.com, or click the link in the description if you're on podcast or YouTube. Jeff is in Orlando up next. Jeff, welcome to the show.

Well, Thank you. Um, I was calling basically to see— I'm trying to decide. I've never invested before. I don't even know nothing about investing, so I don't know if investing would be the best or to continue to keep throwing extra money towards my mortgage on a house I just bought. Uh, I bought it a year ago and then I just refinanced it a couple months ago.

Okay, great. Do you have any consumer debt, Jeff?

Um, no, I have no debt. Credit cards, car, all paid off.

Wonderful. Do you have money saved just in an emergency Um, about 3, 3 and a half months worth. Oh, good. Okay. Amazing. And how much do you make a year?

Uh, I am on a disability pension that doesn't get any raises. So this is why I'm so concerned about my future. And I'm also on Social Security disability because of an accident that I had.

Okay. So how much money do you have coming in a month?

Um, uh, we, we net between me and my wife about $7,200 to $7,500 depending on her bonus for Okay, that's great.

Um, and you guys have nothing saved in retirement at this point? How old are you guys?

No, I'm 48 and my wife is about to be 46.

Okay. Um, well, what we teach is investing 15% of your income into retirement, and then anything above that then be throwing at the house. Do you guys have kids?

Uh, they're, they're grown.

I—

okay, my daughter's in college and my son's 26.

Okay, great. So yeah, so I mean, I would be throwing, um, yep, some of this money, maybe like $900 a month, uh, into an investment account. And so you guys could open up a, a Roth IRA is a great place to start for both of you. You can—

We did just do that. I'm sorry.

Oh, good. Okay, so you can fund send, um, $7,500 each into that account, which is great. So $15,000 could be going into, um, into that account. And so you— so that'll take up most of that monthly investment that you'll be making into it. And then if you guys have anything extra, since you're not— is your wife working?

Yeah, she works. And that's why I forgot about the Roth. She just, uh, they just offered her Um, they'll match up to 50% and up to 5% with an IRA Roth. So she maxed that out.

Is that like a 401? Because an IRA would be outside of an employer.

Uh, I guess it's a 401. I mean, it says IRA Roth through the job, and like I said, they match 50% up to 5%, which was also confusing to me. I did not quite understand that wording, but I was like, well, just max out the 5%.

Yeah, because if you get that 5%, basically they're saying, hey, we'll give you another 2.5%.

Yeah.

So that's a great start because that's free money pretty instantly. And if you guys do that, we can crunch the numbers for you using our calculator. If you— let's say you maxed out those 2 Roth IRAs per year, just an example, that's $15,000 a year, that's $1,250 a month. You said you're 48 and 46, so can we take it to 66? Is that fair?

Yeah.

If you do that for 20 years, even starting from nothing, we'll show you how much this could turn into. And if you're watching on Spotify or YouTube, we'll throw this up on the screen.

Yeah, if you have nothing currently invested, but per month that it's about, yeah, $1,250 going into all these accounts for 20 years, uh, it'll be about $1 million, Jeff.

Good Lord. But I mean, it seems like, I mean, $1,200 seems like a That's an awful lot though. Like, how do you afford to live? That's the problem.

Well, you have $7,500 coming in, so the goal now is how do we live on what's left after investing? Because $7,500 is your take-home pay, is that right?

Yeah, roughly. Usually it's about $7,200. It depends on my wife's bonus from work. Sometimes it's about $7,500, but usually it's about $7,200.

So even if that came out of your net income right there, $6,300, it would still leave you with about $5,700 to live, and that would cover all Yeah. What's your mortgage?

Uh, it's $1,681 a month.

Okay.

Before taxes and insurance. With taxes and insurance, I'm about $2,000. Uh, with taxes and insurance, I add another $420, so about $2,100.

Okay. That's fairly reasonable. It's a little less than a third of your take-home pay right there. So you should still have margin left over, and this is where you and your wife just need to sit down and make a budget each month and Hey, our priorities are let's cover all the bills, the 4 walls, food, shelter, utilities, transportation. Investing has to be a priority because we need to make up for lost time. And so you're wondering, man, that sounds like a lot of money. It is, but once you get the muscle memory of that's just money's gone, we're gonna learn, we're gonna pretend like we live off $5,700 a month, your life will change because 20 years from now you're gonna look up and have a million bucks instead of nothing.

You're right.

Thanks very much. This has given me some more to think about and figure out what to do. Now, would it be like, for investing-wise, as my cousin told me, you know, since I don't know much about it, just do like a simple S&P, like through Vanguard or something like that?

That's not a bad plan. I mean, we recommend 4 types of mutual funds, and when you look at an S&P 500, it essentially is a mutual fund. It's, you know, many, many companies, 500 of the top American companies, and it's weighted, so the larger companies have more of a weight than the smaller ones. But what you'll find is that the average rate on all of those is gonna be 10 to 12%.

Okay.

And so the S&P 500 is a great starting point. We recommend having even more diversification because those are large-cap companies. So think the biggest companies, over $10 billion. Well, then you also want some of the mid-cap companies and the small-cap companies because they can also see some great growth over time. And then international is the last one that we want to diversify across so that if the US market takes a dip, the international one can help bolster it. So those are the 4 types.

I never knew that.

And I'm going to send you our investing guide. You can go to ramseysolutions.com/guide. I believe that's the link. I'm going to double-check it for you, but there's a free investing guide. If you read through that, it's going to be like a little masterclass on investing. Even if you've never invested a dime, it's going to help you.

Well, thank you very much. I appreciate it. Absolutely.

Yeah, absolutely. And for Jeff and anyone listening, when you get to this point of investing, Mm-hmm. You can even sit down with a SmartVester Pro. If you go to ramseysolutions.com, you can find a few in your area and, you know, talk to them and make a plan, because they're going to be able to really map out the next 20, 30, 40 years, depending on how old you are, of what you need to do. And they really follow our principles and our steps, because all of what you were just saying, George, is so important. The diversification of it all, And, you know, when you start a little later, which is not bad 'cause he's starting, you wanna be that much more intentional to make sure you have enough for retirement.

Yeah, there's less margin for error at that point.

That's right.

You have to make sure that money has to go to investing and has to go to the right places to help it grow over time. 'Cause compound growth is doing the heavy lifting on that million bucks.

Well, yeah.

He didn't actually invest a million.

No, he would've put in $300,000 and the growth is $782,000. So—

That's wild.

Double the growth. Yep, it's all in the growth. So the sooner you start, the better.

That pile of money made some money, that new pile of money made some money, and so over time that really balloons into something incredible. All right, Rachel, that was fun. We had a good time. Our scripture of the day, Luke 12:15: And he went on to say to them all, watch out and guard yourselves from every kind of greed, because your true life is not made up of the things you own, no matter how rich you may be. Albert Einstein said, not everything that can be counted counts, and not everything that counts can be counted. Simmer on that one for a little bit. You'll get it.

Love it.

That puts this hour of The Ramsey Show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.