Transcript of Why Car Payments Are Keeping Americans in the Middle Class

Welcome to the Ramsey Show, where we help you win in your life. We want you to win with your money, win in your work, and win in your relationships. I'm Ken Coleman. Jade Warshaw is alongside, and we're here for you. The phone number is 888-825-522. That's 888-825-5225. All right, let's get it started with Taylor in Los Angeles. Taylor, how can we help?

Hi, guys. Thanks for taking my call. How are you?

Good. How are you?

Good. Thanks. So pretty much some backstory. My husband and I have about $105,000 in debt between credit cards, cars, and student loans. Right now, he makes $8,400 a month, and we're breaking even between rent bills and whatever. My question is, I've been doing here for three years off and on, and I've been doing it consistently for the past four months now, and I'm just barely breaking even. I feel like I'm not seeing a It's not a profit. My question is, would you advise getting a different job, a full-time job, where I'm bringing in more income? Because I finished the total money makeover, and I feel like my mindset has changed about money. I feel like I I need to bring in more income in order to make a debt in our debt, but I don't want to quit what I went to school for. You know what I mean?

Well, maybe it's not a matter of quitting it. Maybe it's just a matter of adding to until you're making the money that you want to make. Because I think you know the answer to this. Yeah, you do need to be making money. You can only go so long, breaking even. If the situation were reversed, let's pretend that you had a 9:00 to 5:00 job that you were making money and you said, I'm going to go over here and do hair on the side, how will I know when it's time for me to do this full-time? What would we tell you?

When you're making more money or when you're making as much as what you're making at your full-time job?

Exactly.

Okay.

How does she play this?

Well, I agree with you. I think we look at a number that we're trying to make. What's a I'm assuming that when you called in today, you've got an idea of the budget, the way you're talking about it. What's the number? Let's take a take home number after taxes, that if you were to bring in that right now, that that seems, A, realistic, and B, it would really help How do you help on the margin here so we can accomplish what we need to accomplish and knock this debt out.

I would like to help out and knock out the debt. Between $2,200 and $2,500 a month. Would be very helpful. Okay.

All right. What are you making right now in your current job, what you went to school for?

I went to school for hair. Like I said, after rent… Oh, that's right. I'm sorry. No, you're okay. After rent and product and stuff like that, I mean, maybe I'm making $200 a week.

Yeah. So let's figure out where the issue lies. Is the problem that where your studio is, is too expensive, or is the problem you don't have enough clients, or is the problem a combination of three things? Where you are, it's too expensive, you don't have enough clients, and you aren't charging enough.

Probably a combination of those three, yeah. Because we moved to a new area. So the past four months, I've been starting from square one as far as clients. I feel discouraged because now that I read the book, I'm like, Okay, I want to go, go, go.

But I feel like I'm not going anywhere. With that in mind, then- Yeah. Well, first of all, that's a low-margin business. I'm going to say amen to what Jade said earlier, which is we can come back to doing the hair, but right now, we want to get really intense. I'm circling that number of $2,200 to $2,500. The way I would come about it as I'd go, How can I help add that amount of money? What does that look like? So you start playing it out. Okay, so if I get a job making $20 an hour at Walmart. I'm just throwing that out there. I'm not telling you, Taylor, that's where you're going to go. But I'm just saying, you start to look at the possibilities. You don't have a degree in certain things. You go, Okay, what can I do for the most amount of money per hour? I'm just taking an hourly job, all right? But you know what? You might be able to maybe get an office manager job or an administrative assistant job. You start looking at that and you go, Okay, what must be true for me to bring home that $2,200 or $2,500?

That's where I would start, because that's where the ideation comes from. You begin to say, Okay, I can go over here. I can do this. I can do this. I wouldn't overcomplicate it. This just about a paycheck right now in order to get into the debt snowball and knock it out. Then once we get through where we want to be, now we can start to dial back, and we get back to building your business over time, and then you do well. But that's the advice I would give you, because that's what I would do if I were in your shoes. I'd do whatever it takes to bring home that extra money.

Absolutely. Can I just dig a little bit deeper, just because I'm curious? So your husband's making a little over $100,000 a year. What's your rent or mortgage situation? How much are you paying a month?

Right now, we're paying three grand in rent for our home.

Okay. Then you said the car. Tell me about the car, because I'm looking for other ways that I can clear up some breathing room for you.

Yes. I mean, we both have car payments. His truck payment is $600 a month, and mine is $400 a month. Okay.

What do you owe on them?

My car, I own 14,000, and I think his truck, we owe 20.

What's his truck worth? If you were to sell it today, private sale, if you had to guess.

I'm not too familiar with the truck prices, but I think he said around 50 or maybe 45. I'm not 100% sure.

I would be looking at these cars very seriously because of what you say is true, and I know that you're just taking a shot in the dark here. But if it It's true that he owes 20, but it's worth 40. Do you know what that means? That means that if you sell that car, you're going to have a $20,000 spread of profit, which means you could get into a cash car for $20,000 and no longer be paying $600 a month. That's huge.

By the way, just to plug that in, Taylor, what that now means is that $600 comes off of the $2,200 you said you need to make. Now all of a sudden, we don't have to make as much. That's why that's such a huge play there.

And the same thing could be true with yours. I would say coming off of this call, if you were to have homework, it would be, first off, I'm digging into these cars because that could be a pile of money sitting right there in front of your nose. So I dig into both of those cars, get your husband on board. And then after that, yeah, doing Ken's homework and saying, Okay, what can I do? What's the job that I can get? This is not the be all, end all. It's just to make that money. And I think that you're going to find a lot more money quicker than you thought if you guys are willing to make some sacrifices with these vehicles. Okay. Awesome. Fair enough?

Yes. Thank you guys so much for your advice. I really appreciate you taking my call.

Yeah. I love her spirit of what can we do? I think that when anybody comes into the show for the first time, maybe some of you are listening or watching for the first time today. One of the themes that you're going to hear from no matter who's hosting on any given day is that we're always going to recommend the shortest distance to getting out of debt. That's baby step two. Baby Step 2. Baby Step 1 is $1,000. We're going to say, What do we got to do? We sell stuff, we go babysit, we do We're to get $1,000. That's baby step one. Baby step two, smallest debt, largest debts, knock them out. We're always going to say the shortest, the shortest route, and that is intensity is what I'm getting at. It's for a season, and in this case, Taylor is really willing to do that. I love that. They jump in together. You've done this with your hubs, and you guys paid almost half a million dollars off. The relationship strengthens when everybody's going, we're going to both go all in and do everything we can.

That's right, Ken.

So thanks for the call, Taylor. We believe you guys are going to do this We're thrilled for you. Don't move. More Ramsey show coming up.

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Welcome back to The Ramsey Show. I'm Ken Coleman, and Jade Warshaw is alongside. She takes my cool factor up, multiple levels. As I was reminded by somebody in the lobby.

I do my best skin.

Listen, I need all the help I can get, and I appreciate it. Hey, the phone number is 888-825-5225. Jade and I are here for you. I want to coach you up. Jade will lead on the money stuff, and I'll help you on the income side of things. How about that? I love it. That is how we get this thing right and work these baby steps so that you truly live like no one else. All right, we're going to Anchorage, Alaska, and Robert is joining us there. Robert, how can we help today?

Hey, guys. Thanks for taking my call. I recently sold a small business that I've been building for six years and in Getting about 2.2 million before tax. Nice.

Way to go. Yeah, thanks. What business was it?

It was a media business, like streamable assets. Great. Good for you. I've been I've been building it since I was 18. I'm 26 now.

Good for you. How about that?

Yeah. How do you feel? I feel excited, but also really scared because my income is going to be gone. My monthly income from this, and I need to invest this money properly in order to replace it.

What were you paying yourself? I'm curious.

I was paying myself $10,000 a month for me and my little family.

Okay.

Why did you How did you sell it?

I sold it because the deal was a higher value than I was currently making, and I just wanted to get more into physical asset creation than digital asset creation.

The reason I asked that is because my next question is, what were you or what are you thinking that your next move is? I understand you're calling about the investment piece, and we're going to get Jay to jump in on that in a second, but I'm curious, are you thinking about another business, going to work for somebody else? You're thinking about taking six months, twelve months? Where's your head at right now as far as new income?

I guess I'm a creative person, and things pop up, and I need to be able to quickly move on ideas that I have. The issue is that I took this deal thinking it was going to be a capital gains tax, and I recently moved to a new tax term, and they're saying it's going to be ordinary income. So it's actually much less money than I originally intended taking this deal.

What will it amount to?

I think it's going to slim all the way down to 1.4 million. Okay.

Yeah, that's a little disappointing.

Yeah, it's really disappointing. So originally, I was going to have 1.8 out of this, and I could just put this in index funds, as I've learned from the Dave Ramsey show, is just moderate investments that are not super high risk, high reward, and just live off of a small percentage for my family. But now I can't do that. I need to do something else.

Yeah, and I don't know that I would. How old are you? Twenty-six. Twenty-six? I'm just going to tell you Jade's point of view and Ken, chime in. If I woke up in your shoes and I saw myself getting $1.4 million, I would say to myself, Okay, I have this wonderful nest egg started so that when the time comes and I do want to retire, I will be able to. But I don't think the day is at 26. I think if you start pulling the growth off of this now, I think it's going to stunt you in many ways because you're 26, you're just getting started. If you had this idea, there's probably way more ideas in you that will earn you money. I would see this as I'm like, Okay, this was a great windfall that we had. I'm going to put it over here. It's going to grow and multiply. At the time, I'm 40. If I want to step back and go, Okay, whatever I'm doing, I'm going to do it part-time, or I'm working for a different cause. Now, it's not really a money-driven thing. Fine. But I don't think that day is today.

Yeah, I agree. In fact, here's what I would do, because Jay is going to give you any investment advice you want on this. But I would take the 120 that you've been paying yourself. If you've been paying yourself 10 a month, I take the 120 out of the one four, and I'd put that in a savings account. Because you've got a transition, and I wouldn't rely on that. I'm with you. I would just put it over there and All right, let me get out and hustle a little bit. Maybe I take a month, whatever. I'd celebrate.

I'd go do something real nice with the wife, the missus, and the kiddos.

Really nice. If you got kiddos, really nice and celebrate. I'd take 120, and I'd put that. This is above and beyond your emergency fund. I would just put it over there just until we get rolling, and then I'd invest the rest. I would not even try to draw off of that for your income.

Yeah, because we didn't ask you, what baby step are you on?

I have no debt. I paid off my house throughout this business. Wow.

So your baby step seven?

Yeah, we own our $100,000 house outright. Good. We own every car outright. Fantastic. Yeah. But the issue is that now our income's gone. We're just sitting on this lump sum of money.

But your income is not gone. I want you to reframe that. We just said we're going to take 120, which would let's say that's your income for the next twelve months. That takes you a whole year. I mean, you've earned that. You sold the company that you started with your own two hands. I take the 120. That's my guaranteed income. I don't miss a beat for the next twelve months. Invest the rest because you're already in Baby Step 7, and get after it. Start doing some creative stuff. Start doing some fun stuff.

Okay. That's really helpful. Thank you, guys.

Yeah, you're welcome. Hey, I'm proud of you. You've done something really cool. The good The good news is I can tell you guys are frugal people. You're not... You know what I'm saying? Super smart. If you've done all of these baby steps by 26, you guys know how to live on less than you make. My guess is that you're going to come up with something to do next. You might live on 70 for a while or until you get it back up. But I'm with Ken all the way. Congratulations. That's all I have to say.

Thank you. Do you have an investment pro that you have and you're working with beyond the tax Yeah.

And I think because I'm 26, I just assumed this investment would make at least seven %. And the more I talk with my pros, they're like, You should be way more moderate about what this is going to do.

I don't know about that. Hey, I want you to get with a smart Vesta Pro. Ramsey, we have a team of people that we vet, and they do things the Ramsey way. And so A Smart Vesta Pro is going to help you invest this money the right way for you. We say all the time, you should be looking for an annualized rate of return around 10% at the least.

That would make my life.

Yeah, it will. It's not crazy. Ken? No. It's not crazy. I know what my stuff makes, and so it's not crazy.

No, that's historic. That's not Jade's opinion. You just look that up and look how it does. But again, let me just say this. It won't make your life, Robert. This is a nice windfall wealth for you. Jade's absolutely right. You're only 26. Now, if you invest this, and you invest it well the way we teach- You're different. This money sitting still is going to do awesome things for you over the next 30, 40 years.

A lump sum doubles every seven years.

That lump sum is going to be great for you, but it's going to change your life down the road, not right now. This is a long-term play, 10% with that money getting started, you're going to do fine. You're going to keep making You're an entrepreneurial guy. You said it yourself. The wind blows on you the right way, and there's a new idea. To Jade's point, you've already proven an otherworldly discipline for a 26-year-old dude in America. I mean, you're way, way, way ahead of most 26-year-olds.

100 %. Yeah, you're a freak of nature. You're a unicorn. Let's just say it.

I just stay really paranoid, I guess, about like, Oh, I'm just going to… That's why we're so frugal. I think it's like a paranoia that we're going to lose it all or something.

You're not. You're not going to lose it all. You're not going to lose it all.

Go celebrate. Ken and I will give you some ideas. I love Europe this time of year.

Look at Jade. She knows how to spend other people's money about as well as anybody I've ever met. France? Yeah.

Practice your French.

Yeah. What does your wife always wanted to do? Because you got the money to do it. Go to it.

Go to New Zealand and see where they filmed Lord of the Rings.

Wow. Look at you. You're a virtual postcard today. It's like I'm flipping through postcards. Vacation Ideas by Jade. Yeah. I love that.

Enjoy it.

There you go. All right, we got to take a quick break. We'll be right back. This is The Ramsey Show.

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Welcome back to The Ramsey Show. I'm Ken Coleman, and Jade Warshaw is joining me here in the studio here of The Ramsey Show. So excited that you're with us. 888-825-5225 is the phone number. 888-825-5225. If you got questions about income, feeling stuck, feeling a little stale, and want to make some moves, I'll coach you on that. Got your money problems, Jade's got you on that, and we combine as well. Let's go to Jennifer, who's in Jackson, Mississippi. Jennifer, how can we help today?

Yes, I just have a real quick question. I have a son who is 17 about to turn 18, and my credit score is 830, and husband's is like 780. We want to start him off on the right track of having a good credit, much like we do. I was just wondering if there was a particular credit card or how you all would maybe suggest Helping him get and obtain a good credit score as well.

Okay.

I've never heard that question on this show before, actually. No? Really? Don't think I have.

I've gotten it a couple of times. Jennifer, when did you start listening?

I just started about a month ago.

Okay, great. That makes sense. Okay, very good. We're happy to have you. Yes. Welcome aboard.

What are you hoping he'll be able to do with that credit score? I just want to learn a little bit more about your intent here.

Well, I just want to know that he is also about to start college. He's a senior in high school now, and so he'll be starting college. I know that he'll need… We bought him his first vehicle, but I know that down the road that he'll need to get a vehicle and possibly be able to have to rent an apartment for college and this, that, and the other. I just want to make sure he has a good enough credit score to be able to get the things that he would need to get, like a vehicle later down the road or maybe an apartment or something like that.

I'll be honest with you. Here's why I don't like credit scores, and here's why I've never focused on one. For all intents and purposes, I don't believe in them at all, because you When you need to have to have debt. You have to interact with debt in order to have a credit score. We also know that when you borrow money, the borrower is slave to the lender. There's this part of the credit score that it doesn't make sense to me because it's all about how you interact with debt, how much debt you have, what types of debt you've had, how long you've had your debt, what percentage of your debt that you're using. Nobody's asking questions about, Can you actually afford the How are you managing the cash that you actually, and the money that is actually yours that is in your bank account? That's why I have an issue with the credit score. What I would love is for you to teach him a way that says, Okay, if you have the money, you can afford it. If you don't have the money, you can't afford it. Now, let's go back to the things you talked about.

He is a very good saver right now. He only works part-time, like two days a week, and he has since this past summer. He's already saved almost $3,000 and has- Love that. He's purchased a $2,000 CD and this, that, and the other. We have taught him, you do your 10% time, then you have some that you put in this much, you put in savings, and this much is your fund money. So he's done that. But what I mostly worry about is once he gets off to college and he has to rent an apartment. I know a lot of apartments look at credit scores. They do. If he doesn't have one, They may be like, Oh, we can't rent to you.

Well, the truth is you're right. A lot of credit card or a lot of apartments do look at your credit history, but a lot of them don't. And the ones that do, if you simply go to them and say, Hey, here's the thing. I know you guys look at credit scores. I have a zero credit score, which means that I don't borrow money because I don't believe in debt. But I also brought a copy of my bank account, and you can see how much money that I have here. So I'm good for the money. I also brought you my pay stubs so you can see how I work. And if you dig deeper and also let them know, Hey, they might charge you a little bit more for first and last month's rent. But the truth is, you may have to do a little bit of due diligence to find people who believe the same things you believe and can actually understand, Hey, I actually have money. Because those apartment complexes are out there. So let's check that one-off the list. And then if we talk about the car, well, I don't know about you, but I'd rather him buy a car in cash and not have payments, then Then put money down and be loaded up with a car payment because now we're teaching him, Hey, if you want a car, you have to pay payments on it, as opposed to teaching him, Hey, if you want a car, let's buy one in cash.

You got $5,000, $3,000 saved in $2,000 in a CD. Once that CD is available, let's buy $5,000 car in cash. Then in a year or two, if you want to upgrade and add $3,000 more with it, now you're driving an $8,000 car. Let's do that so that you can always have your money freed up. Because one of the things we've learned, Jennifer, is the car payment is what keeps middle class, middle class. Most people are walking around here with a $700 a month car payment. And because they have that car payment, it's tough for them to do things like invest for their future. And so I'd love to set him up with the mentality that I keep my biggest wealth building tool, which is my income, at my disposal. I don't give it away in payments every month. And Therefore, if I'm not in debt, I don't need debt, which means I don't need a credit score.

Okay.

It's a new way of thinking. I know that it is because people don't talk about it.

It is. It's scary. It's a scary It's a very new way of thinking, but yes, I see your point.

Tell me the fear.

It's not scary. What are you scary?

It goes beyond the rent. College will only be four years, and then After that, he'll probably want to buy a house. I know it's a lot harder to obtain a house with no credit score and save up for a big- Okay.

Let me break in, and I want my colleague to tell you about that fear. Go ahead, explain it.

What if I told you that's not true? Jennifer, I love this call so much. I'm so glad you're with us because you are every woman USA right now calling in. The truth is credit scores, they benefit from us. They benefit from us being in debt. They make money off that. When you get a credit card, when you sign up for a loan, there's a little thing called interest. And so there's a lot of people making money off of that. And so that's why you don't see on TV people advertising zero credit scores because nobody's making money off of that. And so this whole thing is a product. But the truth is, you can buy a house, it's No harder. You can buy a house with a zero credit score. It's called manual underwriting. It's the same thing like I told you at the apartment complex. All they do, it's literally the same process. But instead of looking at your credit score, they're looking at your actual money. They're going, okay- I've never heard of that. I know, but it's true. That's awesome. Do you want to know that I bought my house with manual underwriting?

I had a zero credit score. That's awesome. Just to clarify, not just for you, but anybody listening, a zero credit score is not the same as a bad credit score. A bad credit score is you haven't done well borrowing money, and so you have a bad credit score or a low credit score. A zero credit score is just as good as a high credit score. It simply means I don't borrow money. If you were to look at my credit report, it would say indeterminable. There are plenty of places. Churchill Mortgage is one that we talk about all the time. They're everywhere in the United States except New York and Alaska, and they do manual underwriting. And literally, all they look at, I'm going to tell you right now, they look for 12 months of trade lines, and that could be you pay your cell phone bill, you pay your utilities, that thing online, or I'm sorry, on time. They look for 12 months of your rental history. If he goes to rent, he just needs to show 12 months, I paid my rent on time. And then they want to see your- I'm not seeing your- I'm sorry.

I just said, Oh.

Okay. And then they want to see what you made over the last year. And they'll ask for your pay stubs just like anything else. And then they go, Okay, great. And if he happens to be self-employed, they might ask them for his tax returns. But that is it. I just want to clear the air for anybody. You're helping so many people right now because a lot of people don't know that this is a thing, and it 100 % is. And once you know that, all of a sudden, it's weird because, Ken, the credit score don't mean a thing, but a chicken wing at that point.

So true. I love what you just said. The zero credit score tells people, This is somebody who's very solid with their money. That's all they care about, is are they going to get paid? When you prove, as Jade really laid out well, that you can pay, and your son's got nothing to worry about. So that fear is natural, Jennifer, but it's because you've never heard what she just laid out. Most people never have. But she's right. Go do your homework on it. Check her on it. I promise you. Fact check me. Oh, yes. It's popular to do these days. Fact check us. I think you like what you see. This is the Ramsey Show.

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Welcome back to The Ramsey Show. Thrilled to have you with us as we talk with you about your life, specifically your money, your work, and your relationships. I'm Ken Coleman, and Jade Warshaw is joining me this hour. The phone number to jump in is 888-825. 888-825-225. That's 888-825-5-2-2-5. Well, we've just launched a brand new tour. Dave Ramsey and Dr. John Deloney are going to hit the road, and they're calling this the Money and Relationships Tour. A little bit different twist maybe on a live event. If you've experienced any of our events before, this could be a little bit different. Very interactive and a lot of fun elements to this where the audience is voting, deciding on content. Of course, they're going to cover money, relationships, and whatever you want to talk about. It's going to be a lot of fun kicking off Louisville on April the 21st, 2025, and then Durham, North Carolina, Atlanta, Georgia, Phoenix, Arizona, Fortworth, Texas, and Kansas City at the end of the tour. So again, kicking off April 21, 2025 in Louisville. If you want to get your tickets, get them at ramseysolutions. Com/tour, ramseysolutions. Com/tour. And if you're tuning in on YouTube or podcast, you can click on the link in the show notes to get the tickets.

So go ahead and jump on that. All right, to the phones we go. Zack is in Salt Lake City. Zack, how can we help?

Hey, how are you all doing?

Good. How are you?

Good. Hey, thanks for taking my call. My main question is, I'm a recent college graduate. I graduated less than a year ago. I just started working full-time. My long-term goal is to go to law school, but I'm just really not sure how to financially plan for that and plan for my financial future as a whole.

Are you familiar with the amount of law schools that will give a full ride based on LSAT scores? You're familiar with this? Anybody ever How would you share that with you?

I've been a little bit of research. I hear mixed things where the ones that are maybe more willing to give out better scholarships for a wider range of LSAT scores or ones where it's harder to a job out of law schools because they're lower ranked. I feel like in some of those ways, I don't know where to weigh out the pros and cons versus a cheaper law school or one where I get a scholarship versus one where there's a higher promise of a better job or an easier process of finding a job outside of law school.

Okay, well, I'm glad you're familiar with what I'm talking about because this is the advice I give every time I get this call, and I'm getting this call several times, and I've said it with Dave on the air. I'll say it with Jade on the air.

If it were me- Sounds controversial. Are you going to say something controversial, Ken?

You may think it's controversial. I don't think it is. Let me just get comfortable. All right. I would go to the school where I could get the full ride, and I don't care if it's got a big name brand or not, because that's what you're hearing. You're hearing people say things like, Well, the more prestigious, the more sizzle factor that the law school has, the greater chance you have of getting placed in a firm. I think that's garbage. It's just like people saying, You can't get a house without a credit score. These are all popular ideas that no one's really shown the light of accuracy on. I'm here to tell you my opinion, I don't think anybody cares what law school you went to. If you go to a smaller law school that doesn't have the sizzle factor, and you get a full ride, or most of it paid for because of a great LSAT score. By the way, that's happening all over the country. It's very available. The reason they do that is because they're competing with the Vanderbilt law schools or the Ivy League law schools that have all the name brand stuff.

But I'm here to tell you, the same people that make J. Crew, they make Old Navy. Okay. We got to get to a point where we start really looking into this and we go, A law degree is a law degree. Your ability to practice law is the same whether you come out of a fancy school or a smaller school. Is there some competitive advantage that can be proven? If you go to an Ivy League school and they've got all kinds of connections into big firms, yes. But do you know what the competition factor is there? You're competing with everybody else in your class. What I'm here to tell you, Zack, is if you want to practice law, law, and you don't want to go into debt, then I would do what I just said. I'd brush up on my LSAT. I'd take it 10 times if I had to because I can cash flow that. Then I'm going to get a full ride, or pretty close to a full ride to a small law school, and I'm going to get trained on the law, and then I'm going to bust it, and I'm going to get an opportunity to go out and be the lawyer that I want to be, and I'm not encumbered with any of the debt that all these other big-shot guys that you think went to.

They got all this debt, and they're stressed out of their mind. That's what I would do because I can tell you, anybody you ever represent will never ask you where you went to law school. Is that controversial, Jade?

That's a good point.

It wasn't as bad as I thought it was going to be. I guess I know you better than I thought.

I don't even know what any of that means. What did you think of this?

I was going to say? I don't know. You were setting your sofa a cliffhanger.

No, I'm just saying go to a law school- Yeah, I agree. With an LSET score that wants you, and they're going to pay for your law school, and you have zero debt.

Yeah, and you can keep taking the test.

Take the LSET 60 times.

What's the cost to take it?

I want to say it's around $200. Oh, yeah.

I don't know if you can take it 60 times. I made that part up.

Yeah, but you're saying prep and knock it out of the park so you can get- That's what I would do.

There's just no reason to go into debt to then in a scramble with everybody else in your class. You go to Harvard law, and they're all competing for the same firms.

Were you thinking about Ivy League?

No, I just made that up.

I was mainly... There's a school, it's a local here in Utah. It's probably my top school. I think it turns number 22 in the nation. It's pretty good. Tuition every year is about $15,000. I'd come out, if I didn't cash flow, and it would be about $45,000 in debt on top of any other living expenses, depending on how much I'm working stuff. I know that's way less than a lot of other law schools.

Okay, now, here's the other thing. Here's the other thing. Law school is going to be there. So go make the $45,000 in cash flow.

Yeah, why not?

Yeah.

How long would it take you How would you put that away?

That's the other thing is I'm not 100% sure what that looks like. Currently, in my job right now, I make about 52,000. I try to save as much as I can, trying to get out of debt in terms of paying off my car. So I'm hoping within by next spring, I can be up to the $70,000 range. I don't know. Sometimes you worry about the time frame of when you age out of these things in terms of starting too late in your career with some of these things. Yeah, that's up to you.

How old are you now?

I'm 26. Okay.

First of all, you're going to be ready to fund law school in two years, two and a half years max, if you get after it. So you're not too old. You got all There's these things in your head that I think this is conventional wisdom telling you, Zack, it's okay. Get alone. I mean, that's the conventional wisdom. It makes so much sense.

You said something that I found to be revealing. You said, Right now, I'm working to pay off my car note, which lets me know you don't like being in debt. If you don't like having a car note, I can guarantee you're not going to like having $45,000 of student loans. That was just a little light into your soul on that one. But hey, let me just tell you, my brother, we both went to college together, and then he and served a couple of tours in Iraq and came back and did social work for a while. Then he decided, I want to help people even more. He became a lawyer, and he went to night school and did it. He was in his mid-30s. Then by the time he turned 40, he became a judge. It's not too late to decide- That's pretty amazing. What you want to do. There's ways to do it to where you're not going in debt for it. Just a little story time there. Yeah.

Zack, the point is there's no reason our minds that you should take out loans to go to law school. You just don't need it. That's our verdict. I'm going to steal light. I think you need your own show, Judge Jade. See how excited you just got? I could see you. I would love to. I could see you in your own version of a Judge, Judy.

I'd be presiding.

You'd have a loud collar. Remember how she had the little polite white? Felt like a tea cup collar.

I'm going to put spikes on mine.

Yours would have some personality.

I would love that. That would be so fun.

You coming in in your big black robe and you sachet behind the- No, I want a purple robe.

I want a gospel robe.

I wasn't going to go there, but I like that even more. It's your show. But tell me you wouldn't love I would love it.

People coming in with their little- We need a segment on this show where you wear that robe and people call in with their- And I get to preside.

And you make financial judgments.

The judge is in. The judge has presided. I like that.

We'll keep brainstorming that amazing idea. Are you the Bayliff? I would love to be the Bayliff. That's funny. I'd look like Barney Fife, the old-school Bayliff. Oh, boy. That would be a lot of fun. I think people would watch that. Hey, fun hour. We'll keep concepting the show. We'll be back before you know it. This is the Ramsey Show.

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Welcome to the Ramsey Show, where we help you win in your life, win in your money, win in your work, and win in your That's our aim. We're so excited that you're with us. The phone number for you to jump in because it is your show. Ask questions so we can coach you to get you where you want to be. 888-825-5225. 888-825-5225. Alongside the incomparable, the fabulous Jade Warshaw, I am just simply Ken Coyland.

Ken. Don't do that to yourself.

It's good. I'm telling you, it's We have a lot of fun together, and we're going to help you out. Let's go to Katie in Springfield, Missouri. Katie, how can we help?

Hey, guys. I am typically very frugal and try to be wise with decisions when it comes to money, but I've been going back and forth on this idea of taking my daughter to a Taylor Swift concert. She's 15, and she really likes her, and I do, too. But the frugal side of me is struggling with the price for a three-hour experience. But then on the other shoulder, I've got this Faniolo side that says, Let's make the memories. I just would like to talk through that.

Interesting. Oh, my goodness. I have been involved in another very popular Taylor Swift call. I heard it.

You did? I heard it. My daughter wanted to be Rachel when I called in, I'm sure. She's probably Ramsey.

All right. Well, I tell you what, I'm going to listen along. We got to find out where you're at financially. Yeah. Give us the picture. You guys got any debt?

Just for home.

Okay, just the home? No debt besides the house. Correct. All right. What's the combined income?

It's right at 175,000. Nice.

Okay. How much are the tickets going to cost?

Probably $5,000 and then travel, so probably right under $6,000 for three hours.

Oh, so you have to drive three hours?

The tickets you're getting, are these really- We'll have to drive seven hours, but it's a three-hour experience.

Got you. Seven hours. You're staying overnight in a hotel?

Yes, ma'am. 6k total for this trip. Is this for her birthday or is this just because?

It's just because.

How are you going to buy the tickets? What would be the method of payment?

I would sell some of my employee stock purchase plan.

Okay, interesting. That's your retirement?

That's crazy. No, it's separate from retirement. It's single-stock.

Single-stock. Okay.

I'm going to wait for Judge Jade, but I've already reached my answer.

How much single stocks do you have? I'm just curious.

How much in that? We have about 141,000 in employee stocks and about 50,000 in single stocks. It's about right under 200 in both.

Okay. By the way, are these tickets… I'm asking because I'm completely clueless, Katie. Are these really close? We're looking at 2,500 bucks each, right, for two tickets?

That's a pretty good experience, right?

I wish. Oh, it's not? I wish. It's the fact that it's the last part of her tour, and so they're just really priced high for nosebleeds.

Oh, so those are nosebleeds at 2,500 2,500 a piece?

Wait a second.

That changes my answer, which is why I asked, by the way. Oh, my gosh. Because 2,500 was like, I was thinking that was Artist Circle or something.

Is that what you were thinking? Yes. I want the sweat to hit me for $6,000.

I could do without the sweat. In fact, if I'm paying six grand, I don't want any sweat to hit me.

You don't want T-Swift's sweat to hit you?

No. Just write. No. I don't want anybody's sweat hitting me. Certainly not hers. Okay. All right. I Good to know. I got nothing against the Swift sweat. I'm just saying I don't want to be sweat on for that money.

I'm going to let you know, Katie and Ken, I'm shooketh to my core in a biblical sense that these tickets are $6,000. What do you tell her?

Listen. Give me a specific ruling, please, because she's got the money.

She has the money. I have more questions about your investments than I do about Taylor Swift. But I mean, if you want to go, you can. I I struggle with the seats for the money. That's where my struggle is. It's not on whether or not you can afford to do it. It's the value in it.

Yeah, I'm there.

If I'm being honest, Katie, that's where my struggle is, is the value of the tickets. Not whether or not you can afford to spend $6,000 on a thing. Does that make sense? Yes. You can afford to spend $6,000 on something.

Is that where you were leaning, Katie? Why'd you call us?

Which way were you leading? I can do more. I'm struggling because I just like to be really frugal. But my daughter said, Well, I'm level 16.

Have you guys never done anything like this?

No, not the two of us. No, we haven't.

Did I detect a hint of emotion just then?

Yes, because she said, We're just very frugal. She said, Money is just money. It is emotional because I would love to go with her, but it's like, Oh, my goodness. It's a lot of money.

What is your- I'm going to take… I am ready.

Oh, okay.

I'm going to take a page out of the Stacey Coleman handbook, which is- I'm not aware of this. The Jar of Marbles. Yeah.

Oh, yeah.

I'm going to take a page out of Stacey Coleman, which is the days they go by and you don't get them back is basically the essence here. I think you have an opportunity to make a really cool memory, something you've never done before, and also prove that you can be a cool mom and you can come off the wallet every now and then and you can afford it. Do it.

Boy, am I surprised? I love that. You could knock me over with a feather right now. Really? Yeah. I thought you were coming in hot, but I'm going to say- Because they're so frugal.

This is not a lifestyle for you guys. No. We just go hard in the paint all the time. You have the money. You weren't planning on putting on a credit card. You didn't mention points one time.

She's 15. By the way, it's employee stock. It's not out of a retirement. She said she's going to sell some things.

Do you have 3-6 months of expenses laying around for other things?

Yeah, we have about 30,000 savings. Okay.

I I'm 100% in an agreement with you. For the reasons that life is short, they have the money to do this. It is outrageous. If George were in here, he'd freak out because George can't spend money on anything nice.

But it will be so unforgettable for them.

That's what I'm saying. To me, this is a priceless trip with your daughter. Katie, I also feel like I hear your heart saying, Yes, let's do this, and your brain's going, Hold the phone. You thought, I'll call Ramsey, and we'll get somebody else to talk to my brain. In this case, yes, it's a lot of money. Yes, it's overpriced.

Overpriced.

Completely overpriced.

Painfully overpriced.

But our daughters don't know this. In the case that you can do this, this is about a memory. And one day she'll go, Good grief, I can't believe you did that for me, mom. I think that's why I do this.

Mom, don't complain. If you say, Yes, I'm going to do it, don't be These seats are crazy. Don't just enjoy it. Enjoy it for the experience because in the nosebleed, it... Nosebleed sucks. Let's be honest about that.

I'm going to actually push back on that. I have watched football games in the very top row of NFL Arenas, and you would be surprised. These people know what they're doing. Okay, let's go. I think she's going to enjoy the heck out of it. The energy is going to be amazing. I'm okay with nosebleeds for this. Okay. It will be a good experience, but put aside some extra money for a T-shirt. This is the Ramsey Show.

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Listen, the housing market is crazy. If you've been on the internet, here's the sentiment, Affording a home is impossible and you're doomed to be a renter for the rest of your life. Right? Wrong. George Campbell here. Listen, finding a home you love within your budget is possible, and I'm excited to help you get there with our brand new course, How to Buy a Home You Can Actually Afford. From saving a Down Payment That Fits your Budget to making an offer that sellers can't resist, we'll cover it all. If you're ready to seal the deal on the right home for you, take the course at ramseysolutions. Com/course. That's ramseysolutions. Com/course. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is alongside, and we are together here for you. 888-825-5225. 888-825-5225. Refi, taking your money questions and your income and work-related questions today. It's time for our question of the day brought to you by YReFi. Let me start over. All of a sudden, I forgot how to read, Jade. That's all right. It happens to the best of us. Yeah, it's right. In live, it's always exciting. Hey, we've all made money mistakes. If you've defaulted a private student loan, we're not judging you, but we are saying that there's something you could do about it, and that's contact WhyReFi.

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All right. Today's question comes from Hudson in Florida. He says, I'm I'm 26 and married with three kiddos. I've worked for the same company for six years. During that time, we've had a lot of growth, which I played a key role in developing. The company now grosses over 10 million a year, and I've been offered a partnership position with the two current founders. This has been what I've been working towards this whole time that I've been with this company. But now that it's here, I'm second-guessing myself, and I feel like I have imposter syndrome. Do you have any advice for me so that I don't set myself up for failure?

I love the transparency here. Yeah, imposter syndrome is nothing more than doubt. The first thing I would say, Hudson, is that you're not an imposter. Imposters are people who pose as someone else. Typically, this is in an illegal operation. So someone who would try to steal my identity or poses me or poses someone else to do something illegal, that's an imposter, a complete fraud, a complete fake. Then a syndrome is a fancy word for some type of a disease or sickness. You don't have a disease, and you don't have a sickness. What you have, Hudson, is good old fashioned doubt. Doubt only comes to people who are attempting to move forward. All of a sudden, after all these years, you've been offered an opportunity through your hard work. Because, Jake, you know business. You know small business. People don't just come up to somebody and tap them on the shoulder and say, Hey, we'd like you to be a partner. They are giving you, my friend, a good portion of this company and their own equity. They're saying, We're going to split some of our pie for you That is the ultimate endorsement. I would remind you to remind yourself that the doubt you're feeling is because you're taking a major step up, and a step up or a step forward is always connected to the unknowns, and the fear of the unknown is what's creating the doubt.

So what you're really dealing with is you got some fear, you got some doubt, and that's very, very normal. But you've earned this. And so to set yourself up to win, you got to say, Hey, I've earned this. There's going to be some new things. There's going to be some growing pains. But that comes with the territory. And I'm going to do then what I have been doing, and that is learning and growing and becoming better. So this is all mindset stuff. And the doubt, by the way, is very, very natural when we all step into something new. Doubt on the first day of kindergarten, doubt on the first day of high school, doubt the first time Jade goes into a division one volleyball game. Listen, doubt only comes to people who are moving forward, Jade. You know who never experiences doubt? Who? People with their elbow deep in the popcorn in the bleachers. Wow. Because they're just sitting there watching the rest of us.

Comfort zone.

Oh, she should have done this, or he should have done this, and all this garbage. Those are people that are sitting on the bleachers, and They have no doubt. They're quite certain of their opinion and what you should have done. That's very good, Ken. That always kills me. It's like, get off the bleachers.

The peanut gallery.

Yeah. Why don't you put on a pair of shoes?

Then you see what you'll do in that situation. Come on out here.

Let's go. How about you get out on the field or on the court? That's so true. Let's go. You want to compete? Let's see how sure you are, Johnny Rocket, up there in the bleachers with your hot dog and your Diet Coke and your whatever. Kills me. I like to encourage For those people that are dealing with doubt. That tells me that you are moving forward and that you want to move forward. As a result, you're facing some unknowns. That's all that is. You're going to do fine. You're going to do fine. Congratulations. Yeah, my goodness. All right, let's get to Nancy in Los Angeles, California. Nancy, how can we help today?

Hi. Thank you so much for taking my call. Yes. Okay, so I'll just get into it. My question is, how do I, as a Christian, as a believer, how do I in contentment daily while also creating goals and aspiring to goals and aspiring to move forward? Also, if I've heard from the Lord that I'm in a waiting season, what do I do with that? How do I balance all of that? How do I, I guess, wait well? Just for a little bit of context, I'm completely paid off debt earlier this year, March of this year, and really happy about that. Just different moving parts. That's really where I'm stuck.

Can you tell us what you're- Balancing contentment. Tell us what you're waiting on and where the lack of contentment is rearing its head.

Sure. If I'm being honest, I- We prefer that.

What happened?

I really dislike my job. I can't stand going at all. I've heard a few phone calls, and I'm I'm really embarrassed to say that it's been 10 years, almost over 10 years, that I've been at this job. I inherited it. It's a union job. It's very coveted in my area. A lot of people wish they could have this job.

What are the reasons that you do not enjoy the job?

Well, it's not challenging at all. It's not challenging mentally or intellectually. I don't feel like I'm really going anywhere or doing anything moving forward. Then also, it's rough. The people I work with, it's mostly men. I would say I count sometimes. It's like 40 men to two women. It's a blue a dollar job.

Can I tell you something? Yeah. Can I tell you something? I'm going to be really, really honest with you. I love your spirit, but I think you've got this all wrong, and I think you're trying to justify this movement inside of you, this restlessness inside of you. You're trying to justify not acting on it. I think you needed to leave a long time ago. Go, Ken. I don't say that as a criticism. I say that as a coach. You don't need to be content. You need to follow the restlessness in your soul. You aren't being challenged in this. That means you aren't using your God-given ability to the extent that you can. That's why you feel this way. It's okay to go. I'm one or two women in a blue collar room with a bunch of dudes, that doesn't make you discontent. That makes you a living, breathing human being who is aware. Nancy, I'm going to hand it over to my colleague, but I think you need to be leaving. You do not need to be any more content. I think you're now relying on this excuse of contentment to step into the question we just got.

Because what did you think you were going to feel when it was time to go? That's my question. If you weren't going to feel discontented, if you weren't going to feel frustrated and tired and like it's time to go, then what did you think that you were going to feel?

I don't know. I guess since I inherited it, I just have felt like I need to just be grateful and just- I think you have been.

I think you've been grateful in heavy doses. You've done everything you need. It's time to leave.

Yeah, you can be grateful and move on. Just because you don't stick around with something forever doesn't mean you weren't grateful for it. It's like you go to a restaurant, somebody served you a meal, you ate it, you were grateful for it, and you left. You went to your next destination.

It's a good call. Do you know what I'm saying? I was really grateful for seventh grade, but I don't want to stay there. Seventh grade was a good year for me. It was a big year. I may have peaked, but that's a whole nother call. Nancy, do you have a sense... We only got about 40 seconds. So real quick, yes, Your Honor, do you have a sense of what you want to do?

I have a few ideas. I'm in school for herbalism. I'm interested in UX design, graphic design. Okay.

All right, so here, I've got something for you. All right, so hang on the line. Christian, let's get her a copy of Find the Work You're Wired to Do. It comes with the get clear assessment. Nancy, I want you to take the assessment first, then read the book. It's like me coaching you through your results. I think it's going to reveal and confirm some things for you. But hear this from Jade and I, you don't need to be content in a place that you're not supposed to be.

Yeah.

It's time to get a plan together, and eventually we're leaving. We believe in you, Nancy. You're a good, good lady. This is The Ramsey Show.

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The Ramsey Show rolls along from our Nashville area-based headquarters. Thrill that you are with us. I'm Ken Coleman. And Jade Warshaw is alongside. The phone number is 888-825-5225. Let's go to Chris in Sacramento, California. Chris, how can we help today?

Hi, guys. I just want to say thank you for hearing me out. I'm 27, and I'm getting married within the week. I have no debt, sorry, but 65% of my income is going to my house, and we're drowning about negative 20% per month on our utilities and groceries, and we've cut back. I am debating on whether I sell my home, rent my home. I have an opportunity out of the area for a job that I would be able to live rent-free and just trying to figure out life.

Wow. Well, what we know to be true is this 65% mortgage can't continue. We know that's true, right?

Right.

That takes the weight off of our shoulders to know, Okay, we can't stay here. Then the question is, What do we do next? Because you said you've got an… Now we can start to say, Okay, do we want to do the opportunity that's outside of the area? What does it look like? I think you mentioned renting this house. Now, let's talk about those other options. Is it fair to say that we both agree you can't stay in this house?

Yes. Okay.

Now, let's talk about what do we do with the house. If I were you, I'd sell it.

I'd gross about $150,000. I'd probably net after real estate fees about 135.

I like that. What's wrong with that?

Nothing. It's more it's just my first home. I just put $100,000 into it the last two years, and I was envisioning having my kids here.

Yeah. So there's just the emotional connection to it. How long did you have the property?

Two and a half years. I put about $150,000 down on the house when I bought it. I had a really good management position at a restaurant before, and that's where I'm going to now for the new opportunity. I tried to start my own business, and it didn't work out exactly how I hoped, but I'm recuperating my losses, and I'm just trying to get back on my feet. I'm currently serving at a restaurant right now, and I've been getting by with that. Me and my fiance, our net income together is just... We're not making it.

You're in Sacramento. Why are you guys staying in Sacramento for jobs that sound like you could do them really in any part of the country?

Well, and that's why we're moving. It's just more of a Do we rent the home and make a profit per month, about $100, $200, or do we sell the home, put the entire net into a money market account and make about $400 a month on money market? Let's do the ladder.

Let's do the ladder because if you have the opportunity to rent somewhere out of the area and they're covering the rent, then this is an opportunity for you to start over. Let that money grow, that equity that you're going to get out of the sell of this home. Let it grow over time because the time is going to come when you want to buy again. I I did have a math question on this because I thought I heard you say that you put 150 down on the home. Then I also thought I heard you say that you put 100 into it. Is that right? You put 250 into this home, but you're only coming out with 135. What happened there?

Bad contractor. I got really jacked up by that. I lost probably about $50,000. Maybe more. I'm not a contractor guy. I I was doing my job, and I ended up going underneath the house, and I just solved problems, and I didn't solve problems. Long story short, it cost me a lot more. I was paying the mortgage at the same time as I wasn't living in it. I was, unfortunately, paying double or a way. I see. Yeah. It just really during this down. Then I just paid off all my credit card debt. I had about $17,000 in debt. We're completely debt-free.

That's excellent.

We don't have a car payment. We don't have a car payment. Yeah.

There There's some silver linings here. I think the hardest part is you had a vision for this house, you got taken for a ride, and that sucks. Now, as a result, it's not going to be the house that you raise your family in. But I love that you have other opportunities. I mean, you can get in here on the career side of this to weigh that out. I take advantage of that while you're on the line. Yeah.

Well, Chris, if I heard you right, you've got a really good manager gig you're heading into, so you feel good about this?

Yes, I'm super. It's a nice restaurant, and South Lake Tahoe. It's to the nines. It's like my dream job.

Fantastic. Did you say South Lake Tahoe?

Yes. Oh, man.

That ain't a bad place to work. Okay.

Come on, Chris. It all makes financial sense. With my business, I've had some regrets on that, and I don't want to have my cart in front of the horse.

I love it. You're asking the right questions. Jade gave you great advice. You do not want to be a landlord from long distance. This is time to move on. This is a clean start, and I think it's great for you. You're going into your dream job in one of the nicest places in the United States to live, and you're going to get free of this house, which has just been nothing more than a money pit for you, unfortunately. So, yeah, sell and move on, my friend. Sell and move on. I love that.

Do you want to take another call or can I highlight this for the people? Jump in. Go for it. Hey, I want to highlight this because a lot of times people are like, Why does it have to? We teach that the mortgage shouldn't be any more than 25% I know there's a lot of questions around that, and this is a really great... It's just a cautionary tale of what takes place when you don't heed that advice. Because if you really think about it, if you look at your money as a whole thing, 100% I love that you've got an orange for our listening audience.

She has a little tangerine in her hand.

Yeah, and if you think about it as segments, right?

We got to cut it up in a segment.

It's gone into segments. If you think, okay, if you do, let's pretend like, yeah, I'm taking your advice, 25% Okay, now we got 75 left. Then it's like, okay, if you're a person who values generosity, most of us do. So you give another 10%, now you're at 35. Now you say, okay, well, you've got to invest. Baby, step four, I'm investing 15%. Now, before you know, we're already at 50% of our income, and we haven't even paid our other bills yet. We haven't done childcare yet. We haven't put aside for kids college yet. We haven't taken a vacation. We haven't even done anything yet, and we're already out 50. Imagine what it would feel like if your mortgage was at 40% or 45%. You feel that very, very, very, very, very quickly. So it behooves you.

It's a great word. You know I like a good word.

It does behoove you to think about, Okay, what are my ratios here? And is this sustainable long term? Because 65%, like you said, they're burning 20% every single month.

There ain't enough tangerine left over.

There ain't enough. You got to eat the piff. By the time you do, that is fantastic.

That's why I showed up today for that moment. That was good. Yeah, it's a wonderful illustration. Then I want you to, while we're on this, also why we give him the advice, Don't try to stay. Don't become a landlord. Don't keep that house because you think, Well, I'm going to make 400 bucks a month. I want you to walk through the math, the real math, when people think that that's a good idea.

Well, I think for him, it was more of a sunken cost fallacy. I feel like he thought, Well, I put this much into this property. If I hang on to it for a while and keep dumping effort or whatever it is into it, maybe I'll get it out. For a lot of us, that's what keeps us locked in to something that's just a bad break, and you have to just eat pith and go this. This was a bad break. It wasn't a good investment. I got taken for a ride and walk away. For him, going all the way from Sacramento to South Lake Tahoe, and now you're going to be a long distance landlord.

Trust me. When he rolls in in that moving van to South Lake Tahoe. He's going to be like, I'm not in Sacramento. All right. But that's a difference. He's going to be like, Forget you all. You want to leave all that behind.

Yeah, you want to leave it behind. He had a bad taste in his mouth. I think for him to come out, he He's clearing $135. It's not as much as he should. That's right. But it's still money, and it's going to sit in a high yield for however long until they're ready to buy. I agree. When they buy, they're going to put as much down possible on a 15-year fixed-rate mortgage, hopefully, that they can get paid off quickly. He's already debt-free.

Yeah. The principle of this whole segment is... Do you know what it is? You've been saying it.

Don't eat pith.

There it is. By the way, spell that for people.

I-p-i-t-h. Is that right? I think. I'm going to look it up. I feel like there could be a hidden letter in there.

We did. We got validation, the guys in the booth.

Great. Yeah. Yeah. Think about the ratios of your income. Think about each section like this Clementine I hold in my hand. Oh, it's Clementine.

It's even better.

Mandarin. Love it. That's how we're going to do this.

Make sure it's the right- The object lesson. I feel like we went back to Sesame Street. You laid it out for us. I love it. Good stuff. All right, quick break. She's Jade Warshaw. I'm Ken Coleman. We'll be right back.

Hey, guys. Dave Ramsey here, and I got a big announcement. I'm coming to a city near you live on the Money and Relationships Tour with Dr. John Deloney. This is the most interactive event we've ever done. You get to decide what we talk about. You do not want to miss this. We'll be coming to Louisville, Durham, Atlanta, Phoenix, Fortworth, and Kansas City in April and May of 2025. Get your tickets and more information at ramseysolutions. Com/tourist. Com. Sure.

Welcome back to The Ramsey Show. Thrill that you're with us. I'm Ken Colman. Jade Warshaw is with me as well. 888-825-5225. Taking your money questions and your work-related or income questions. To that end, the GetClear Assessment, a tool that I was privileged to create a few years ago. It's helped hundreds of thousands of people and just wrote a new book called Find the Work You're Wired to Do. It came out a little earlier this year, and it includes How do I get clear assessments? What does the assessment do? Well, the answer is four really big questions. Who am I? What's my unique wiring? We're talking about in the context of work, why am I wired that way? What do I want to do professionally and how do I get there? That's what these two tools combined do for you. You're going to spend about a third of your life at work. I just believe with everything in my being that you shouldn't spend it just doing something that you're okay at or that you're good at, but you don't enjoy. It doesn't produce a result that motivates you. You can get the book, find the work you're wired to Do, and it comes with the assessment.

To get a clear assessment, you can get it at ramsey solutions. Com/store, ramsey solutions. Com/store, or you can click the link in the description of the show if you're listening via YouTube and podcast. All right, to Susan is where we're going to go. She is in Dallas, Texas. Susan, how can we help?

Hi. I just went through a divorce or finalized it recently. It took a while. I've been a stay-at-home mom during my entire marriage for the past 14 years. Anyway, I got what I consider a pretty good amount of money. I'm just curious. I don't really know what to do I let my ex-husband handle every single bit of finances. I never knew how much money we had or anything. How much are you getting? Well, there's a couple components to it. I got a check for 1.1 million I got a 401k for 715,000. And then $15,000 per month for the next seven years.

How old are you?

I'm 40.

Okay. So you've got a guaranteed income for the next seven years. That's nice. Okay. Great. Tell me your question.

My question My question is, I'm completely debt-free. I also don't own a home because I just got divorced. Okay.

So you need a place to live.

Right. I'm renting right now, which is $3,600 a month, which I feel like is really expensive. It It's also all bills paid. My question, I guess, is I've got $95,000 in a high-yield savings account. I started a Roth IRA. I'm totally… I know nothing about finance, so I've just been trying to learn just in the last month or so. Anyway, my question basically is, A, can I live off of part this money, off of the monthly income, or do I need to get a significant job?

Well, the good news is you do have a monthly income for the next seven years. So you've got some time to reinvent yourself and figure out what you want to do with life. And if I were you, obviously, you don't need $15,000 per month to figure out what do I need, what's a fair budget for me. Maybe it's $7,000 a month, and then you take the rest and you invest it every single month, right? Okay. So that That's thing one. You've been bought time to figure out a career path for you, and I'm going to toss it to Ken in a moment for that. But let's talk about the rest of the income that you have. Just to keep it simple, let's say you invest half of what you're getting every single month for the next seven years, so around seven and a half thousand dollars, and then you've got 1.1 million. That's a check, right?

Yes. I didn't know what to do with that. So I just put it in a money market account because I didn't even know how to deposit that.

Great. I think that's a good place to start. My homework for you is I want you to start learning about investing. I want you to start understanding, okay, I know ex-husband used to do it, but it's now time for you to start learning because the time is going to come where you're going to need to invest this and you're going to want to understand it. You don't want to just hand a check for $1.1 million over to anybody and say, here you handle this. You're going to want to say, Okay, I get it. A great place to start is here. Here at Ramsey, we do teach that investing is a better place for you to build long-term wealth than a money market account or a high-yield savings account, simply because of rate of return. If you invest that money, you'll get a higher compound interest rate of return on that, so it'll grow faster. I would tell you to get hooked up with a SmartFester Pro. They're going to have the heart of a teacher, and they're going to be able to teach you about this. That's the key thing. Tell them, I don't want invest anything yet.

I just want to learn. They're going to ultimately have you invested in a way that's four different types. We're spreading it out. It's not going to be high risk. It's not going to be just in a set of stocks. But I want you to understand that. When the time comes, we are investing that check, but in the meantime, we're getting with a SmartFester Pro to teach us. Then as far as the $715, 401k, yeah, leave it, let it grow. You're probably going to have to do a direct transfer rollover into an IRA. The SmartFester Pro is going to help you do that. Then for you, now it's all about career and what you're going to do with your life because you're super young.

I got a couple of questions on the money first. The 715,000, How old are you?

I'm 40.

Oh, my gosh.

It's going to be so much money.

The 715 that is in the 401k, that is going to be a lot of money. What is that going to be in 30 years? Okay.

Did you tell me you're 40 now? Yes, she's 40. Okay. Let's just say you retire. I don't know. Let's say 65. Does that sound good? Okay. Okay. Let's say you add nothing to it. That right there is going to be $8 million.

Holy cow. Just not touching it. The reason I went to that, Susan, is because on this work thing, this may or may not be a thing now. How old are the kids?

They're 14 and 11. My other thing is, can I buy a house? Yes.

I was going to say that. I was working that.

Which money do I use?

Do I use the check? I would take the 1.1. The check. The 1.1 check is what you need to do. Plus, you already have 95,000 in another savings account. I was going to ask you, what is a modest house in a nice area What is the house price? You know your area for you and the kiddos. What does that look like? What's the money on that?

I mean, right now, there's nothing to buy. I've been looking. There's a nice home for $500,000.

Okay. Let's just use that. Let's just use that as an example, okay? If I'm you, and then I'm going to pay cash for the house, because right now you're paying $3,600 a month in rent. You take just a little bit less than half of the 1.1, and you've got to pay for a house. Now, that monthly budget, which I'm using as the 15,000 you're getting in the settlement, now that 3,600 was coming out of the $15,000, It's not anymore. Right. And your utilities and things are going to be nothing. You still got the two kiddos in school. I would come up with the every dollar budget and budget off of the 15, and I would do some type of an investment strategy based on what a smart investor pro tells you because Jade already proved to you, you don't have to put another penny. I'm not saying not to, but I'm guessing- You'll be fine. I'm guessing their investment strategy is going to be, you're going to diversify some stuff because right now, you are more than fine, Susan. You're going to be very, very wealthy, and based on just the 401k and what it does over time.

For me, if I were you, I would take my time. You just came out of this divorce. You've just settled. I'm fine with you renting for a little bit longer. You're saying the market right now is not a lot on the market. Let's see what happens after this presidential election. The point is, grieve, stay cool. The 3,600, while it's a little expensive, it's not even phasing I would take my time. I'd buy a nice house cash, and now you still have over half a million dollars to invest.

When you invest it, you're probably going to look for something that's non-retirement, something that you can get to sooner, that's in some a Bridge account so that you I can't access it before your- I agree with that.

That should be the advice that you get.

After my seven years.

But for seven years, my goodness. But here's the deal. You're going to have some margin in that monthly as well. That's $180,000 a year for the next seven years. Yeah, you're good. From a standpoint of work, hang on the line. We'll give you the book, Find the Work, your Wire to Do, and the Get Clears, That's of It. But that is a relaxed like, What would I do if I didn't have to work? Which, by the way, you don't have to.

You don't have to. I was just talking purpose.

Yeah. Sorry, we're running out of time, Susan. Hang on the line. We'll get that to you. But thank you for the call. You're going to be in good shape. This is The Ramsey Show. Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom. All right, I'm getting out of here. Enjoy. We'll see you on the app.