Don’t Trade Peace for Payments

26:06And all of a sudden you're a bajillionaire and it just never works like that in reality. And the reality is Jade's right. These are, these don't go up in value the same as a single family home. They tend to be in rougher areas and I don't want you biting off more than you can chew just so that you're quote unquote, they pay the mortgage. Now, if I were in your shoes, I would follow the blueprint of the gentleman that called earlier. I'd say, okay, the primary point here is you need a place to live. So what if you bought something that had two or three bedrooms that you could afford? I'm not saying the$70 ,000 is going to get you there just yet, but this is just as a dreaming.

26:38What if I bought something that was two or three bedrooms? And I know a couple of guys, these are people who are reputable that would rent a room. And even if they don't rent it, I can still afford it. But this is an opportunity for me to just kind of get my feet wet and what it feels like to own something of my own, what it feels like to collect rent. Do you see what I'm saying? What it feels like to fix something that's broken in the house. And then later on, if you save up cash because you've got people paying you, once you pay off that mortgage, because it's going to be, you know, nothing crazy, you know, as modest as possible, then maybe you can start saving up for another piece of real estate.

27:14Right. And we're kind of doing this slowly in a way that is serving you. And you're also able to learn from the situation that you're creating. You're not just jumping, you know, 10 toes in on something you've completely never done before with a triplex in a neighborhood of town that you're having a hard time finding great renters. You see what I'm saying? Yeah. Yeah. So if you want truly passive income, an index fund will do that. But if you're telling me you love real estate and you want to get into it, you want to become a landlord, that's a different story. So if you're going to do this, then make sure that this works without the tenant there, that this payment is no more than a quarter of your take-home pay, 15-year fixed-rate mortgage.

27:52And before you do any of that, you're paying off the car today. You're setting aside an emergency fund for yourself, three to six months of expenses. For you, that might be$30 ,000. Now you're left with$30 ,000 for your down payment. And now we can continue saving for the next year and start looking. And look for a house that you'd actually want before you just go looking for an investment slash a place to lay your head. I wouldn't try to combine the two at this stage of your life. Okay. Are you going to get married anytime soon? Not yet. No, probably another two years or so. No. Okay. That's something to think about.

28:28If this is a long-term decision, you know, nice gal comes your way. I don't know that she wants to live there. She might have her own idea of what her single family home or whatever townhome looks like. And so I would just tread with caution with an uncle saying, dude, you got to do this. I made so much money. It's always an uncle or a brother-in-law. So you're doing great. Like all things considered, to be your age and have that much in cash and now debt-free after this call is over because you're about to pay off that car loan, you're doing so good. So I would stay on the path and I would avoid TikTok real estate videos.

29:03And that's what's going to get served up to you now after we talked about this. That's right. That's so true. And I just want to say this because, you know, I don't want anybody to walk around, you know, with a bad taste in their mouth like Jade and George, they don't like real estate. We do like real estate. And I particularly think that when you're a guy like this or a lady, you're young, you're unattached, you don't have kids. That is the time where you can try things, where you can do things that you maybe wouldn't be able to do, you know, 10 years of marriage. And I don't want to have roommates in the house at 10 years.

29:35You know what I'm saying? So he's in a phase where he can play a little bit if he does it the right way. and I think that if he does this, it's a fair way to kind of get into maybe, do I like renting? Would I want to live near? Because here's the thing, if you don't want to live upstairs from your boy, like your friend, you certainly aren't going to want to be duplex neighbors with Trevor, you know, who you've never met before. So like, I think that's just a really great way for him to dip his toe in and see. And to not leave him hanging, I'm going to give you a free ticket, Julian, to our Investing Essentials virtual event next week.

30:09and night one, the second part of night one is all about real estate investing. And Dave goes through, here's all the different categories. Here's all the ways to do it. Here's all the formulas you need to make sure that you're making a wise decision. Because this is the biggest decision you've made so far in your life. So we don't want to jump into it just because we see one. It might not be a deal. It might be way overpriced and you can't get a tenant to rent there for what you want for it. And now all of a sudden it's not paying your mortgage. And then you need to sell it. And now you're messed up because maybe you didn't get a good deal.

30:38and now maybe you're not even getting what you sold it for. So hang on the line. Christian's going to pick up. We'll make sure we get you a virtual ticket to that event. And the rest of you can join us, ramsysolutions.com slash events. We're pumped for it.

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32:07So here's your plan. Contact Churchill. Know your numbers. And then when you find the perfect house, you're ready. Go to churchillmortgage.com slash Ramsey offer for a special offer only for Ramsey fans. That's churchillmortgage.com slash Ramsey offer. Or click the link in the description.

32:36All right, our Ramsey Show Question of the Day is brought to you by Why Refi. Missed private student loan payments can leave you feeling like your financial goals are on hold. Why Refi helps borrowers explore low fixed rate refinancing options that fit your budget so you can move forward with a plan. Visit whyrefi.com slash Ramsey. Remember, it may not be available in all states. Today's question comes from Olivia in New Mexico. My husband and I have experience in both residential and commercial property management, as well as in real estate. Instead of contributing to our IRA and Roth, can we purchase investment properties and consider paying off those mortgages as part of our 15 % towards retirement?

33:16Or is the baby step four rules specifically that your 15 % for retirement, the only cash that goes into an investment account? That's a unique question. I don't know if I've gotten that directly. Well, here's the deal. Dave Ramsey loves real estate. He's got a whole lot of it. And it's sort of accidentally a huge part of his net worth comparatively to his investments because of how well he did at the time he bought it. So he has both. He always recommends diversifying. And so because of that, I'm going to do both. I'm going to invest in the IRA, the Roth, do 15 % there. And any extra money outside of that, you guys could use to purchase that next investment property in cash.

33:55But paying off the mortgage does not count as part of your 15%. Even though you're building equity, it's a part of your wealth building journey, we want to make sure that we're investing for the future in a lot of different ways. And real estate income can be a great source of income in retirement. But I would love for you to have a nest egg on top of that too, especially because of the tax advantages. Yeah. So both and. I like that answer. I concur. All righty then. Kimberly is in St. Louis, Missouri. Hey, Kimberly, you're up next. Yeah, what's up? I'm so excited. You have no idea what this means to me.

34:29Like I have listened to this show for years. Well, we're honored. Yeah, we are. How can we help? Hopefully I don't screw this experience up for you. I know. I'm very nervous now. Well, I hope not. I mean, I'm in a very good, I'm in a wonderful place because of you all. So thank you for that. That's awesome. I love it. My question is, is it ever okay to have like more than your annual salary in wheels and motors and toys? I lost my mother a little over a year ago, and we have always driven like no one else so that someday maybe we could drive like no one else. And she always said when she passed away, she wanted my husband to have a new truck.

35:09Well, we waited a year, and we finally did it. But now I feel guilty because we have so much money tied up in motors and wheels. How much did you spend on the truck? $75 ,000. In cash. Yes. And what do you guys earn? We earn about$130 a year. Yeah, but we have a lot of other things. What does everything add up to with wheels and motors? $181 ,000. So you guys like toys. You're going to have to go down that list because we want to inquiring minds. Dark curiosity. Are there boats, four-wheelers, RVs? Well, part of it, a big$45 ,000 of it is a tractor, which was also basically part of our inheritance from her.

35:56So you guys didn't buy that. Let's just count the stuff that you guys paid for. No. So minus the$45 ,000 is all we get to take off. Okay, so$145 ,000. Okay. $135 ,000 or so is what you guys are. Yeah, but it's really all. I mean, we have seven cars. Why? My husband is a car collector, I guess. No, he's an addict. Well, they're like town and country minivans that we bought years ago that he just keeps driving. You know, he's driving a 2013 town and country minivan with 300 ,000 miles on it. That's an odd choice. So what about the other six cars? My vehicle's worth about$25 ,000. Okay. Yours is reasonable.

36:41We'll keep that one. Yes. We have the work van, which is only worth$1 ,200. Okay. We have another minivan that we use when we travel that's worth maybe$6. We don't need that. He has a very old truck that he uses on the farm that's worth maybe$1 ,000. Okay. And then our daughter, who is in college at the moment, we own her car, and it's worth about$15, I would say. Okay. That still feels like a far cry from your— $130. Yeah. You've got yours at$25. His truck's at$75. That's already$100 right there. Yeah. Yeah, that's$100. Okay. Where are you guys at in the baby steps? Do you have any debt? No, we have no debt.

37:21We've been debt-free for quite a while. And I think what happened is our net worth changed quite a bit overnight when we lost my mother. So that was a big change for us. How much did you inherit? We inherited the total of the estate was$2.1 million. Wow. And so what's your net worth today as it stands? $3.1. Fantastic. Wow, what a legacy. Yeah, she did do good. I mean, we were just at Baby Step Millionaires when she passed away. But, I mean, all but about$40 ,000 of that was tied up in retirement in our home. So it wasn't like we had a lot of money at our disposal. And your mortgage is paid off today?

38:05Yes, our mortgage is paid off. It's been paid off for about four years. So you're worth – just the invested portfolio is$3.1 million? Did I understand that correctly? There is like one point, including our home, there's like$1.6 million in real estate. Because I'm also thinking about, you know, when the day comes that you retire, I don't know how old you guys are, but I'm also thinking about what you would draw off of that nest egg. I'm kind of fudging a little bit and maybe thinking through some of that as well. And how old are you two? We're 55. Okay. What's the goal for retirement? um we would love to retire now but obviously that's i mean our financial planner says it is somewhat possible because we inherited like a one million dollar taxable portfolio um so you could use that as a bridge account you're saying until you would access retirement right but the caveat to this and part of the reason i think i feel guilty for the truck is we have a daughter who's in her senior year of undergraduate which is all paid for she had a full ride scholarship good i'm just gonna say this though i'm just gonna say this though because I think it's, I think it is what it is.

39:16You don't feel good about the truck. And even though this person who you love so much said, I would love for your husband to have a truck. She didn't say you had to pay 75 ,000 for it. She just said it would be nice for him to have a new truck. Right. Correct. So for that reason, for those two reasons, I'm going, we implied 75 ,000, you guys implied that. And you have said these principles matter to us and now we're feeling it. And because of that, I think that you're inclined to do something about that. What would it look like for him to go, I maybe don't have a$75 ,000 truck, but I sell this and I get a$40 ,000 truck and now I have this nice chunk of income to go towards my child's education, right?

40:00I think there's something there that might give you a little bit more peace, but also, you know, preserve the memory of your loved one. Do you see what I'm saying? And also give you guys peace at night. Yeah, and I think that's kind of why I hem-haw about it, and I'm like, you know, Dave, I always have heard him say, you know, if you put this money on the table and it's on fire, would it affect you? Ultimately, no. I don't know because you're saying it will. You just laid out some beautiful ways that it is affecting you. Yeah, I mean, I guess mentally, emotionally affecting me. Well, the fact that it's affecting you is worth bringing up to him going, hey, what can we do to solve this?

40:36Well, one solution is we sell all these dang cars sitting out in the yard looking like a junkyard, and he downgrades to a$40 ,000 truck. You keep your$25 ,000 car, not because it's in the Ramsey parameter. Now you've been absolved of your sins, but because it's not a part of your value system. Yeah. Yeah. And so it's more about that than anything else. He didn't drive for that truck. You know, I kind of, I guess I sort of pushed him like, this is something my mom was very adamant about. I mean, she always, all the time said, I want you to do this. What was the heart behind that though? I'm sorry, what was that?

41:12What was the heart behind her wanting him to have a new truck? Because I feel like he grew up very poor as a child and we've been together for 40 years. So he is basically her kid. I was an only child and I think he had always we have always driven junk older vehicles gave cars he still does it sounds like it does and she just said that boy needs a really I want him to have and she did say I want him to have a really nice and a$40 ,000 truck is a really nice truck so she didn't say he needs a brand new$75 ,000 truck just something that isn't a piece of junk and we went to the furthest part of the spectrum yeah to go all right let's go to the dealership and hand over a nice big fat check yeah listen if you if you were to keep this truck if you were to keep everything exactly the same your world is not going to implode but since you called and since you really do seem to be bothered by a purchase that you made it sounds like you have a little bit of buyer's remorse it's living in your head rent free i think it's time to evict the truck and move to something a little bit more reasonable and you'll sleep better at night absolutely

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43:36well welcome back to the ramsey show in the fair winds credit union studio we're headed right back to the phone lines because we have timothy who's in newark new jersey on the line hey timothy how can we help out today hey guys how's it going thank you so much for taking my call big fan of the show um moral question for you guys i bought a two-family home with my sister quite some time ago and unfortunately i had to take legal action to sue to get out of the property my question is we don't really speak anymore and we were super close growing up would you guys take any action to try and mend that relationship or leave it alone kind of as it is why did you have to sue her what how did it even get to that point um so my sister and i bought a two-family house that we both lived in together and rented out another side and i wanted to get married and start a family and didn't exactly want to be responsible for being a landlord anymore, doing the credit checks, fixing everything that was wrong with the house.

44:35I bought my own single family house, relatively close in the same general area. And we had conversations about me trying to get out of the house, didn't want to be responsible for it anymore. And she refused to sell it, either put it on the market or buy me out of it. Was it because she was living there or she needed the income from the tenant? She was still living there. So it was another daughter, side by side. She was living in one side, renting at the other side and collecting rent. And she told me that she either couldn't afford to move out, didn't want to, wasn't overly. And you guys had no agreement about what it would look like to force the sale or to when and if we're going to sell.

45:10Oh, we did. When we first bought the house, again, it's a brother and sister. So it was more of a verbal agreement that we're only going to stay here for a couple of years until we figure out what we're going to do with our life. We bought it super young. I was 24 at the time. She was 26. So just kind of buying our first house, figuring out how things were going. Sure. This was going to be temporary. The plan was for both of us to eventually either move out, sell it or rent it out and start our own lives and our own family. So the communication was terrible. So far it's been, well, we had a verbal agreement.

45:37It was a couple of years. Eventually we were going to. And so that's all part of the chaos. How many years did it last? We lived in that house together for about five years. Okay. So that feels like it suffices for let's try this for a couple of years. And you took her to court. obviously she hasn't spoken to you in a year now about a year and you want to remedy the relationship uh i do is that the goal again do you have any way to even get in touch with her or she like blocked you no contact there's no way to even have a conversation so i'm the i'm the younger sibling so that's my older sibling i don't exactly know how to approach it there's no blocking i don't believe so but once attorneys got involved everything went just through attorneys so I don't even know how it would go about it.

46:27But you guys live near each other? We're in the same general area, a couple towns away from each other. Like, could you send a text and say, hey, would you be willing to meet up and get coffee next week? You think she'd even respond? I don't think that she would. Okay. What if you just, I mean, you could try a couple of things. You could try writing a letter or sending an email. You could try calling her and just cold calling her. You could try leaving a message. Like there's so many things that I think you could do. And I think of everything. Let me ask you this. I don't think so, but do you owe her any apologies or this is simply, I want to find a way to repair our relationship.

47:14Is there like an apology owed or no? Yeah, if anything there is, and I'm sure that most people on my side of the argument would say this, if anything there's an apology that's owed by her to me, I'm the more understanding of the sibling. She's very stubborn and way more intellectually smart than I am. So when she thinks she's right on the point, takes it full bore. I actually gave up a lot of things in the sale of this house. I didn't collect rent for the two years that I owned that house. I wasn't living there. I let her keep it all. I let her do a mortgage assumption. So she kept the great rate that we had on that house when we first bought it.

47:45I didn't make her, you know, list it on the market. I actually took less money after we got all the appraisals back for the house. So if there's any way that owed an apology, I feel like it would be me. But it's still one of the only family members that I have left. So I would like to have a relationship with her. And my first son was just born six months ago. And I would like for him to know his basically only family. So I don't know if this is, that's kind of the catalyst of it. Is that now the dust settles, got past him finally sleeping through the night and have had some time to actually think and breathe.

48:13And I would like him to know who his aunt is. But how do you mend a relationship with somebody when you're the one that owed an apology? Yeah, maybe you are. But I think that what you're saying outweighs that. Right. This is the only family I have. I have a baby in this world and he should know his aunt. Right. All those things outweigh who owes who an apology, I think, at this point. So I would kind of come hat in hand and I would say, I'm so sorry this happened to us. We set out to try to do something and it created this rift between us. And I hate that. I love you. You're my sister. I want you to know my family.

48:53I really hope that you would consider, I would love to repair a relationship with you. It's going to be hard for anyone to turn that down. the extra layer that i don't think that she would be willing to is that she's also an attorney and was representing herself through this entire ordeal so i think there's an extra layer of cynicism on her end because she was she didn't have the filter that you had correct okay and you technically won the legal outcome i i did she assumed the mortgage i got paid half the equity that was in the house which i mean that's a whole separate idea i don't know what to do but yes i Well, you can only do what you can do.

49:33You can't force her to be open to this, but what you can do is start just planting the seed and be persistent, but also, you know, reasonable. You don't need to be knocking at her door like, answer, we got to talk. But I would just say, hey, I miss my sister. I want my sister back. I know what happened, happened. That's water under the bridge. I just want to be a part of your life. I don't want us to not have a relationship over something that happened a year ago on a business transaction gone wrong. You can also ask her to quantify it and say, what would you need? What must be true for us to have a relationship?

50:04What would you need from me for us to be able to move forward? Maybe she feels like she's owed an apology because sometimes everybody perceives things differently. And I'm not saying, I honestly can't judge who's right or who's wrong on this. And for me, it doesn't matter. But if she perceives that she's owed an apology, sometimes, listen, if you're married, you know this. Sometimes you just have to apologize even though it wasn't on you. I apologize to my wife every day. Come on, man. Just to sort of cover the sins of the day. When you get out of bed, I'm sorry. And then you just go on with your day.

50:33But you see what I'm saying, Timothy? There could be something there. If you know, if you happen to know where she feels she's owed an apology, even if you're like, man, I'm right. Like I did it. It could be worth it to say, I'm sorry for X, Y, Z. It could be worth it. And if not, if you truly don't know, just ask her, what would it take? I really want to know what it would take to be back in your life. I miss you. I love you. We've got X amount of years history. We're the only family we have. Gosh, I would love to make this right this year. Just please let me know what I need to do. And she sounds like a tough nut to crack, but you can try.

51:12But the key is you go first, you put the ball in her court. Yeah. And at least then you'll sleep better at night knowing that you made the attempt. And whether it's reciprocated and there's some healing, that's not in your control, unfortunately. And at the very least, I mean, who can resist a picture of a cute baby? That does help. That's a very good point. But my other concern would be how do you even find it to forgive somebody when they put themselves between you and your new family? Now there's the part. That's the other part that I'm wrestling with. That's the part. And I think that— Your own bitterness and resentment.

51:43Uh-huh. That can get in the way for sure. I think that you may need to deal with that, Timothy, before you come to her. Otherwise, you guys are going to start arguing. It's just going to come out eventually. Uh-huh. and it's going to close the door once again. So get with the counselor, make sure you work through your side of this and that you're truly okay, and then extend the invitation so that you know that on your side is water under the bridge.

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53:38well guys if you're sick and tired of working so hard but having nothing to show for it let me tell you something if i were you i would be sick of that because normal is broke and we work too hard out here george to feel like you know you go to work nine to five and and you make your money and you pay your bills. And it's like to do all that, to give your time, to give your sleep, to give your effort. And at the end of the day, it's still just treading water. It's just never enough. I just worked all week just to satisfy bills and payments to lenders. It's terrible. There's got to be a better way.

54:12There's got to be a better way. And we found it. We found that when folks start budgeting, it is like their whole world opens up. The skies and the seas part. Yes. You can see the light. You can actually see where your money's going. And most people are shocked to find like, oh my gosh, I had no idea. I know for us, when we started budgeting, it was kind of a scary time because we realized, all right, no wonder we're going into credit card debt. We're in the red every single month. But even having that realization, so at least you know what the problem is so you can start to fix it. And other people have realizations where it's like, oh, gosh, I had no idea we were spending that on going out to eat.

54:50I had no idea that we were spending that on groceries. And just having that insight. And I had no idea how much margin we could have with a few simple tweaks just by paying attention. I mean, I did a media hit the other day, and we were just talking about ways to find margin. And, I mean, it really is simple things. Most folks don't realize how much they're paying every month in subscriptions. but when you get into every dollar, which happens to be our budgeting app, when you get into every dollar and it makes you go line by line to fill in everything, that's when you start to go, okay, I've got Hulu, I've got Netflix, I've got Disney, I've got Paramount Plus, right?

55:23And surely you can cut one of those, you know, that's when you start tracking and you start looking and going, oh my gosh, we've gone out to eat or we've door dashed in three or four times this week. If you just got like 10 % in each category, that could be a thousand bucks you free up. Absolutely. And I mean, that's true. I mean, most folks, I've been here for four years and it's shocking to me how many people tell me they feel like they got a raise simply because they started budgeting. And so, I mean, I would suggest it. When you guys hear us take calls and we help people and we send them every dollar, we're sending them that because every dollar is the basis of everything we teach.

56:00Having that budgeting tool, that's not only there to help you do a budget, but it's also reinforcing the plan that we teach. Guys, it's the most important thing that you're going to do when you start working this plan. So make sure that you download it. You can start it for free. It's in the App Store. It's on Google Play. Please get a copy because that, a copy? Wow, you're aging yourself now. Man, I know. I just turned into - Be kind, please rewind as well while we're at it. It's an app. And my point is go ahead and go download it because it's gonna change your life if you let it. All right, Justin is in Baton Rouge, Louisiana.

56:32What's up, Justin? Hey, how y 'all doing today? Excellent. on it yeah thanks for taking my call so basically uh i'll be 40 this year and honestly i never really considered retirement most of my life uh i've always believed and i mean i still do that jesus will return soon but of course i don't know that i don't know when that will be so if it happens to be 30 or 40 years from now i don't want to be 60 years old 70 years old climbing around addicts so once we started listening to y 'all this year we did decide to open up over like about two weeks ago we decided to open up a roth ira and we just went ahead and maxed it out so we just went ahead and put 7500 in there okay since we haven't since we haven't done anything retirement what's that yeah zero to 60 real fast i love it yeah and then me and my wife we we talked about opening up now she's 31 so we talked about opening up her one but we haven't done that yet because i know i mean i'm assuming it won't let me put any more than 7500 in there since that's the max well you each can have one basically right yeah so that's what we were thinking about doing was just opening up her one also but the main reason for my call is whenever i open it up i I just put the whole 7 ,500 into the S &P 500 because we hear y 'all talk about that one a lot.

57:58And then after we did that, we were thinking, okay, well, y 'all also mentioned about putting it across four different types of investments. But I know so little about retirement or investments that I'm not sure what the best resource is to find out what mutual funds we should put our money in. And how do I determine what the four different groups are? I know one of them was international, and then the other three I don't really remember. One was aggressive growth. I guess it was like a long-term growth. Yeah, there's aggressive growth, growth and income, growth, and then you've got your international.

58:33So let's talk through this. I love that you're asking this question because a lot of people out there, it is confusing. And there is a level of financial literacy needed to make sure that you understand what you're investing in and not just do it because Jade or George or Dave said to. And so the S &P 500 is the top 500 U.S. companies by market cap. And so those would be large cap companies. So those would fall into this sort of growth and income category. They're pretty stable. They're huge. They're like a cruise ship. Then you get into the growth category, which is going to be more of your mid-cap companies.

59:05So what you're missing out on right now are the other three categories of funds, mid-cap, small cap, and international. So you can do far worse than the S &P 500. You can become a millionaire, multimillionaire, just by investing in the S &P 500. What we're recommending is diversifying even further than those 500 companies by saying, hey, we're going to not just get the large ones, but those little ones, the medium-sized ones, the international ones, so that over the course of time, it's all going to balance out. And you might get some great growth off the small ones over the long haul, some great growth off of international when the US markets are down, and you'll be better off in the long run.

59:40But either way, you're doing a good thing. You're not investing in a single stock or crypto. So nothing wrong with what you got going on right now. And I'll gift you a ticket to our investing essentials event because what we actually do, Justin, Dave and I are going to look at sample mutual funds in a 401k and help you understand how to go about using the process of elimination to find the four that makes sense. And we do it in two minutes. So Dave, we literally did the rehearsal yesterday and Dave went, well, you could have done that and still had time to go eat lunch. It doesn't need to take three hours of Googling and researching different funds.

1:00:12You're looking at a few key pieces like long-term return, the expense ratio, the type of fund. And so we know, hey, if it's a bond fund, we don't want a bond fund. If it's a target date fund, we don't want that. So now you've already ruled out half the funds in your IRA or 401k. But the IRAs, you have options to the moon because you can choose any investment under the sun, which can be more overwhelming. Now, the one thing I was looking at them, I'm sorry, no, no, no, you go ahead. I was just saying, whenever I was, we opened it with Charles Schwab and whenever I looked at it, I searched for the S and P 500.

1:00:47And then I just looked at the market and I literally, it could have been Chinese to me. I literally had no idea what I was looking at other than just looking at the trends of them, but I would be scared to death to put my money in something that I didn't understand and had no idea what it, what it was going to do, which I know you can't necessarily predict that. But after listening to y 'all and hearing about the S &P 500, that's what we were like, okay, well, we feel comfortable putting our money in that. But then we would still want to, if I've only got about 20 years of investment, 20, 25 years to do that for me, I would want to spread it across all four of them to the best of my knowledge, where it's going to be the best return on investment.

1:01:27Well, the good news is I think you're going to feel a lot better about select knowing how to select those funds after the event. And if you still feel like, Hey, I need a little bit more help. You can get with a smart Vester pro and they'll help you understand it. And they'll make sure that they're guiding you in the way that we teach around here, the Ramsey way. Um, so I would definitely make sure to hit up that event. And again, if you still have questions, get a, get a smart Vester. But the one thing I I think that might tweak is, you know, we always teach over here 15 % of your gross income.

1:01:57So kind of just landing at, I'm just going to max out a Roth. There might be more ways that you can invest. So I would challenge you to say, okay, well, what's 15 % of my gross income? And can I invest that every single month? But the good news is, even if we just plugged in the work that you've done, the 7 ,500 that you've already invested, and let's say that next year you did the same thing, but you just split it month by month, right? We've got the calculator up right now if you're watching on YouTube or Spotify. You can actually see Jade's using the calculator live to walk through this. So, again, I'll just go through it real quick.

1:02:31The$7 ,500 you've already invested for this year, but let's say next year you start breaking it out every single month,$625 a month. And let's say you do this until age 65 at 11%, which you would hope to make that even just in an index fund. I mean, if we calculate that, that's over$1.1 million for you and your family. If you do nothing else. That's just your account. If you do nothing else, you never get a raise. You never invest more than that. And so I want to encourage you that you're doing great. You're doing better than you think. And you don't need to be a prodigy investor to have wealth.

1:03:00You just need to invest consistently into the right things and not overthink it and jump in and out.

1:03:21you

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1:04:52All righty. So, George, you know, that call that we just took with Justin, it really does bring up a bigger teaching point that I think it's important to hit, which is a lot of folks feel like it's too late to start investing. But we just saw with Justin, hey, even if you're 40, You know, yes, he's going to invest$625 a month, but he still has the potential to be a millionaire. $1.1 million is what our calculator showed. But there is a benefit that if you can really capture what it is that we teach, the earlier the better, right? I mean, obviously, the quicker that you can start taking advantage of compound growth, the better for everybody.

1:05:31So let's rewind in the words of share. Let's turn back time. I love it. What if Justin had started at 21 years old? Right. So 21, no debt, maybe already have just a thousand dollars in investments, just like he had. He, you know, had seventy five hundred. But now you've got forty six years for this money to grow. Right. You've got a much longer time frame and it's not going to cost you as much of your own personal money to build the same one point one. In this case, one point eight million dollars of growth. So it's pretty incredible. You want to crunch the numbers live? Yeah, I'll crunch the numbers live.

1:06:05So again, I really love this calculator and I would suggest it for anybody. It doesn't matter what your age is, but it's really great to kind of get on there and just play around with your life. So let's pretend there's already a thousand dollars of growth. Maybe it was a money that your grandma gave you, whatever. You got a thousand dollars there. So let's start there. Now, if you're 21 years old and you just say, you know, I'm going to put around a hundred dollars in here. That's$1 ,200 a year. I mean, that's nothing. We can all find that. We spend that on subscriptions every month. exactly or door dash we're gonna have it grow for 46 years because this person is gonna retire 67 yeah to 67 years old and again i'm gonna keep it at 11 percent that's a fair i mean if you go and just look at an average annualized rate of return for s &p 500 you'll see that 11 is a fair rate of return and if i calculate that oh my gosh 1.823 million let's point out something way more interesting pull that back up on the screen yeah the actual contributions made to get to 1.8 $56 ,000.

1:07:06That's bananas. But if we go back in, let me go back and put back Justin's numbers in. So he had, we'll start with a thousand and we'll put in 625. And then we'll say he only had 20 years. Yep. I mean, 25, he was 40 years old. That's right. 25 years to grow. If we calculate that, he's at a million, but look what he put in. $188 ,000 was his contributions. The rest is compound growth. And that's what we found in our millionaire study. Their retirement accounts wasn't a million dollars they put into it. That's right. Most of that 80 to 90 % of your nest egg in retirement will likely be compound growth.

1:07:45Absolutely. So it's up to you to do the first 10 to 20, but the more time you have, the better because every dollar goes a whole lot further when you're young. And so this is not a knock on those who are older and don't have anything saved is just to show you that we better get on it. And there's no time like the present because waiting till tomorrow is worse. Yeah. And so we've even got a chart that kind of shows you at the different ages. And if you're watching and you can see this, go ahead and screenshot it because it's so helpful. You know, what you, if you're age 20, what you put in, if you're age 25, what you can put in.

1:08:14And now this chart is, you know, using a 10 % rate of return, but so it's 1 % off. And this is how to become a millionaire at every age. So by 67, what does it take to go from age 20 to age 67? 80 bucks a month. Now, if you wait till 25 to get started, takes 130 bucks a month. You wait till 30 years old, takes over 200, so on and so forth. And then you get to 45 years old. If you have nothing saved and you want to have a million dollars in that nest egg by 67, you need to contribute a thousand dollars a month to get there. So it just shows you, man, if I had done this 20 years ago, I could have just invested 80 bucks to get there.

1:08:49It would have been easy work. And if you are 40 or you are getting a later start, it's still possible. The chart still shows you it's possible. You just got to have a little bit more cash to put in the kitty. So guys, if you're interested in this, again, go ahead and pull up our free investment calculator. It's so helpful. I'll drop a link for that in the show notes, whether you're listening on podcast or on YouTube, it'll be there for you. So that's super fun. I find it to be motivating, George, me, myself. I just like to see it. Especially if you've got younger kids at home, teenagers, you show them the power of that.

1:09:21Now they're going, you know what? I was going to go waste it on more clothes at the mall, but I'd rather open a Roth IRA because I'm working part time. I want to see that money grow for me instead of see it disappear. And that's what I did when I was 18. Every paycheck was gone. Usually at the place I worked. I worked with Urban Outfitters. How many more skinny jeans did I really need? I did that. I worked at a New York and company. Yes. But I had a nice wardrobe. Oh yeah. You're looking good. All those clothes are gone now. I'm broke, but I sure look good in Oh, man. I know it. Well, download the calculator or just use the calculator.

1:09:56It's really, really going to help you. All right. Let's go back to the phone lines where we have James in Charlotte, North Carolina. Hey, James, how can George and I help out today? Hi there. Yeah. My question for today is when my work has become kind of exceedingly stressful, but I feel like I've saved a lot of money. Is it crazy to take like a 70 % reduction in my salary to do like a barista style approach to find a little more purpose in life and just kind of get some sleep back, some anxiety down and find purposeful work as opposed to, you know, being a, you know, 224 K kind of breadwinner for, for me and my wife.

1:10:42is my question. Well, I would love to separate this. I would love to separate the dollars that you're making from this. And I'd love to separate the assumption that whatever you do will earn you less money, right? And get to the clear point, which is you just don't like your job. And you want to be doing something else. We don't know what that is. It could end up being something very lucrative for you. Is that fair? Yeah, I mean, I've been an engineering manager at a few companies and it's always been stressful. I've been very at work to live. Um, and I'd be looking to maybe do something like a physical therapy assistant where I'm, you know, helping people find mobility or, you know, get parts of their life back.

1:11:25I have a little bit of my own personal history there. Okay. So you do have an interest that you have something that you're, you're targeting on. Yeah. Well, how does that affect you guys? I mean, what's, I got to believe that making$224 ,000 a year for quite some time, you've got a good financial footing? Yeah. So my wife and I have about$1.3 million invested between like 401ks and a little bit in Roth IRAs. We weren't very smart about that when we were young. And then a lot in just a brokerage account, probably about$800 ,000 there. What about your home? Do you have a mortgage? We're about half paid off.

1:12:06So we have$225 ,000 left on the mortgage on a$450 ,000 house. I think we got for$400 ,000-ish. What would that do for you guys? Let's pretend tomorrow you found a job in physical therapy. Suddenly you're making, I don't know, what does that pay,$90 ,000? $65 ,000,$70 ,000,$80 ,000? What is it? Around$70 ,000. So now you're making$70 ,000 instead of$224 ,000. Where does that put your mortgage in this situation? as far as monthly payment? Yeah, so my wife has around like 80K in salary and that pretty darn close to covers like our full living expenses. And she has the option to like work summer semesters, which she doesn't really do right now.

1:12:53So we would get to the point where we have like pretty negligible like cost of living. detraction. You'd be at$150 ,000? Between the two of you? Oh, no, no, sorry. I was just giving my salary. My wife makes an additional $70 ,000 or$80 ,000. Yeah, so you guys want to make$150 ,000 household income is what it would go down to. Our household income is around$300 ,000. No, no, no. If you were to take the job in physical therapy and make$70 ,000 and then she keeps making the$80 ,000. Oh, yes, yes. I just wanted to make sure we were following you on that. Because that's what we're talking about here, is we're going down from this household income making over$300 down to$150.

1:13:33What is the mortgage? Can you just tell us what it is every month? $1 ,800, I think. Oh, okay. All right, so you need to bring in$7 ,200 to make this make sense, and you guys currently would bring that in even if your income went down. Yeah. So this sounds doable, and you got that taxable brokerage account to kind of fund any schooling or if there's a gap. You can kind of buy yourself some time because you guys have done this really well. but I would just make it a goal to still invest 15 % retire with dignity and not just go well I make 60 grand for the rest of my life but I'm happy I think you can get back up to making a six-figure income and doing what you love yeah you're obviously a really smart guy and I do think don't hear me say what you do work you have to do work that matters to you you're doing this for the rest of your life but gosh maybe one day you'll own the coffee shop

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1:16:08Well, guys, I want to tell you that your feedback really, really helps us. If you listen to the show and you take the time to leave a nice comment, if you take the time to share it with someone else, if you take the time to just, you know, when you're at work and you're chopping it up with your friends and you just mentioned the Ramsey show, that does a lot for us. And not only does it do a lot for us, but it does a lot for other folks as well because the message that's on the other end of this is hope and life change. And there's so many people out there, George, who think that it's impossible to get ahead, who think that, you know, the American dream is dead, who think they can never pay off their debt.

1:16:41There's just a lot of hopeless folks walking around. And when they get ahold of this message, it really does have the potential to change their life. I'm one of those people. I know you're one of those people. So don't think that it doesn't matter when you mention the show. It really, really does. So keep doing what you're doing. Plant that seed. You never know. Yes. Plant that seed. I love that. Alrighty then. Let's go talk to someone else who is experiencing the same hope that you'll be sharing. Abby, who's in Los Angeles, California. Hey, Abby, how can George and I help today? Hi, how are you?

1:17:13I'm wondering if I should get rid of my 2014 Honda Elantra and get a new car. I love this question. What are we thinking? What are we going to get? Right. So I was thinking on getting like a basic Kia, just like the cheapest car to get. That's like new. I'm thinking of leasing, not like buying. You had me in the first half. saying cheapest you're going you're saying cheapest car and then saying a lease all of these things they're like don't go together newest car that i rent forever so what's behind this i'll tell you my my um thinking behind leasing i'm like god willing that i have like many kids so after a while i'm always going to like upgrade a car to like space wise so that's my thinking of...

1:18:12So you're married? Yes, I'm married. Okay, cool. And you have no kids now, but okay, the future, there will be kids, and you don't want to get a car and then have to switch it out with another car? Yeah, like I don't want to keep on buying and selling and buying and selling and buying. Why? Tell us why you want to do that, because cars, they go down in value. Like, you don't want to keep leasing something that you're overpaying for. You're just prepaying the depreciation. The worst part of it up front. And that's if you don't have any extra damage or extra mileage that you pay fees for. And not to mention you're paying a payment for life, which means that's money you're never going to be able to invest.

1:18:52You're never going to be able to put it towards your goals. You're never going to be able to put that money, Abby, towards your kid's college. Right. So can we give you another path that might get you what you want that's not costing you? yeah we can all agree you deserve a car upgrade you've worked hard yeah the car is 12 years old it's got a lot of miles on it i'm sure you're ready for something new how much cash do you have on hand specifically for this car upgrade so i'll tell you basically i i'm 19 so um my husband's 21 we got married last year um my husband has we share like our money so we have all together savings, I think like$12 ,000 in savings.

1:19:38And then my husband's been investing in retirement and everything since he was 17, maybe 18. So I don't know so much about that, but I know he's been investing. He's also investing in stocks. Basically, he's investing in a lot. So I have$9 ,000 in debt, but it's interest-free and it's not like something I need to pay AACP. It's like from a family friend. Which makes it even more. Let's reframe this because what I'm hearing, I actually really love this call, Abby, and I'm glad that you called us because I think George and I are going to, you're going to look back on this call and you're going to say this was a turning point for me.

1:20:19Because what I hear is a brand new marriage, the potential for a brand new family. You guys are already thinking about family planning. And you're exactly right, Abby. This is the time to start really good habits. Now is the time to start planning for the future, for the life that you see, for the values that you guys have. And so what George and I will suggest today is really going to help undergird that so you can do this with so much security and so much peace and not risk all of those good things. So what I would suggest for you, Abby, truly is our basic baby steps, seven baby steps plan. And it's going to be perfect for you because you already have a major head start.

1:20:56And the fact that you already have some money saved, you don't have a lot of debt, you're going to be able to walk into these seven steps and really just kind of cruise through them. And you're going to be shocked at how quickly you're going to be able to accomplish the things that you want to accomplish. Okay. So that's me setting it up. So the first thing that we teach people is you really just need a thousand dollars, just a quick cushion in your life. You guys have that you have 12 ,000. Okay. So baby step one for us, you've already knocked out a thousand dollars saved, but baby step two is we need to eliminate the consumer debt so that we don't have the risk in our life and so that we have all of our monthly income at our disposal to use towards our goals.

1:21:36So with that in mind, what I would do is of that$12 ,000 saved, I would pay off that$9 ,000 debt that you have today. Absolutely. Because even though it's zero interest, it is a family friend. And every day that you keep that around, it's affecting that relationship. Here we believe that the borrower is slave to the lender. It's biblical. I believe it. I've experienced it being in debt. It changes the relationship in a bad way. Your uncle shouldn't be, or your aunt or your friend should not be your loan officer. And they see you taking a vacation. They find out you got 12K in savings and you still haven't paid them back.

1:22:10It's going to damage this relationship. And if you paid that off today, you still have 3 ,000 left over. You still got money. And now we can save up an emergency fund of three to six months of expenses. And that's baby stuff three. We're going to keep driving this car for another, let's say six months, you'll be there, right? Right. So you're at baby step three, you got 3000 saved to George's point, you save up a little bit more. And now we can start to buy this car. But from there, and those are just the first three you've cruised through. And now, like you said, your husband is already investing.

1:22:41So now he can start investing 15%. That's baby step four. This is you guys starting to build wealth for your family. Baby step five, you've got maybe by then you've got, you know, your first pregnancy underway and you can actually start to put money aside for their kid's college in a 529. And then you can start on a house, buying a house, paying down that mortgage. That's baby step six is putting extra on the mortgage. And this is the way, Abby, that we've seen millions of people start their lives. They go from kind of being frustrated. They go from being disorganized to they go from not having a plan to having a plan and feeling like they have control of their money.

1:23:17They know exactly where they're going. They know exactly what comes next. And these are the people who build wealth quickly and efficiently and with no risk. Right. So also the reason I was thinking about getting a new car, so I do part-time teaching. So with that, I'm carpooling. And that, over the month, I calculated that that would give me$400 a month, which I would be able to, like, pay the monthly. But if you can do that, why not keep what you're driving and just bank that$400 a month? Now you've got$500 ,000 after a year. Yeah. Because here's the problem, Abby. If you want to break out of this mentality, this is how broke people talk.

1:23:55How much down, how much a month. That's all they care about is the payment or the interest rate. Right. The only zero you should be focused on is zero payments so that all of your hard-earned money and your family stays with you. Instead of just going back out to payments every month. Right. So the reason I was thinking about getting a new car is because my car is like slowly but surely, it's like breaking down. My AC is not working and there's some engine issues and acceleration issues. Okay, so put what I said aside, Abby, for a second. Put all that wonderful wealth building talk that I just did.

1:24:26Put that aside for a second and let's just pretend, okay, all Abby wants is a brand new car. Can you at least guarantee me, can we at least save up cash? Can we at least use the$12 ,000 to buy a cash car? Can we at least do that? I don't know. I'm scared of bringing down$12 ,000. Don't be scared. Guess what, Abby? the new car is going to be a used car right after you drive it off the lot. Right. And that one's going to have issues eventually too. That's what happens with cars. And that's why it's even worse to have a payment on that car or rent it expensively. And so I'm just telling you, I can tell that you're not listening to us.

1:24:59We're missing each other right now, but I'm begging you at 19 to not buy a brand new car. It is the number one wealth killer in America today. It's what keeps the middle class, middle class. And if you can avoid this at your amazing young age, you're going to be so wealthy and so smart and be able to be able to to buy anything you want one day instead of looking back from now 10 years going, why did I buy that stupid new car? Yeah, Abby, if you buy this car, I'm guaranteeing you, I am coming from the future and I'm telling you, you're going to look back on this call and you're going to go, I can't believe I didn't listen to them.

1:25:30They gave me fabulous advice. They're 20 years older than me and I didn't listen. We're old people. You're old. Okay, I'll take that.

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1:27:01Welcome back to the Ramsey Show here in the Fairwinds Credit Union Studio, taking calls about your life and your money. Still on it with George Camel. Let's go to Anna, who's in Boston, Massachusetts. Hey, Anna, how can George and I help today? Hi, thank you so much for taking my call. I was wondering, I'm in a situation where I've been married for three years. I have two little kids at home and I'm a stay-at-home mom. And I thought by now my husband and I would have merged finances already. But every time I bring it up or say that it would really mean a lot to me that we could be a team. He just completely shuts down and ices me out.

1:27:41And officially we're married, but we have no, nothing else that's joint. No, I'm not even on our house. I'm not on the bank account. I'm not on anything. And I just really don't know what to do. Why, if I were to ask you, why do you think that is? Would you say, oh, he's just really controlling? Or would you say he had a relationship in the past? What would you say is the reason in your estimation that he's icing you out? I think he doesn't control me in any other way. He's really a very sweet person. It's not like a bad, horrible marriage or anything like that. My gut tells me there's obviously something more must be going on.

1:28:25I feel like maybe he's hiding something because I'm the one who's actually quite responsible with money. or I was when I had it. He isn't so much. He's more of the spender. He doesn't save. We don't have an emergency fund. I mean, nothing. We're not doing anything that we should be doing. And before we were married and when I was working, I was attempting to do the baby steps. I was a long way off, but I was trying. And now since then, I haven't been able to do anything. So I just, I have to assume like maybe he has debt that he's hiding. I really don't know, but there's obviously it's a very deep issue to him.

1:29:02I think that's a fair assumption to make. And I think that it's okay for you to feel that way because you know him the best. He's your husband and you're observing his behavior with the money and outside of the money. So that being said, I'm guessing that you have gone to him and said, I don't like the way this feels. It feels like you're hiding something. It feels like we don't trust each other. Have you had that conversation from that point of view? Yeah, I've never said like, I feel like you're hiding something. I try to be, I try not to nag or attack or anything like that. I just tell him, I just really want to be a team member and a partner in our marriage.

1:29:42But if you're honest and say to him, and I'll use some of Dr. John Deloney's language, if you say to him, the story I've been telling myself is that you're hiding something and there's something, there's this huge amount of debt that I don't know about and you're keeping something from me. I don't want to keep telling myself that story if it's not true. Like, can you help? Can you help me? And the other story that I like to tell myself is that we're married and we're a team and teams do things together. That's the one I want to be true, but I'm not seeing evidence of it. Right. And so you're kind of like laying out both, you know, these juxtaposing sides of yourself that are at war and just let them know.

1:30:19And you kind of have the key to this because the ball's in your court. And unless you tell me that none of that's true, and you open up the finances to include your other team member, something's going to have to really change here. And you be the strong one that's got a clear point of view and has a clear set of boundaries on what must be true to move on. And let's see how he responds to that. Yeah, I mean, we have had fights about this and more civil conversations about this and it seems like a pattern where for example I don't have like um a bank we don't have a short shared bank account so if I want to get groceries I have to ask for the debit card and then I have to ask for how much money I can spend.

1:31:04That's crazy Anna. And have you sat down with them and really shared like hey I am scared I'm frustrated I didn't get married so that I could have a daddy I need to ask an allowance for I'm raising our kids this puts me at risk. I don't know anything about our finances. Something were to happen to you. I have no clue where to start. And this is a non-negotiable of our marriage that when we became one, it has to include our money too. I've actually said all of that. And he shuts down? Yeah, he shuts down. Then you need a third party. You need a third party to enter the conversation and go to, because this is a marriage problem at this point.

1:31:39The money is a symptom of something much deeper. and I don't know, I can't say from here that he's, there's, you know, financial infidelity or what he's hiding or if it's just maniacal control, but whatever it is, it's very unhealthy. Yes. And your family, your kids deserve better than that because they're watching. They're watching mom and dad and see how they operate and they're watching mom scared, begging for grocery money. That's not a picture of the marriage that you intended. No, not at all. And so if it's you going to a marriage counselor on your own, Yes, that's a good start. But he's going to need to join at some point.

1:32:13Otherwise, it's him opting out of this relationship. And that's a very good point that George makes. I would definitely go to him and say, we need counseling. And if he won't go, you go on your own. And one of the things that I would want you to talk to with that counselor is, what are some things that I can put in place that will let him know that this is a serious deal breaker for me if it doesn't change? And how do I kind of enforce those in a way that he knows that this is serious? And in the meantime, how do I keep myself safe? and talk about those things and what that strategy is because it is important for you to be able to not just bluff when you have these conversations.

1:32:55There has to be something behind it. Otherwise, he's going to go, no, right? And you're just going to take it and keep doing it, right? So there's got to be a point that you decide, this is my point where I go, I can't go forward unless you pick up the slack here and do your side of things. Okay. Yes, I have tried to for a long time. I've suggested going to a counselor, but he also refuses to do that. I figured that was the case. Man, it takes two to make the thing go around, and he's not doing it. Okay, yeah. And it's because he doesn't want to deal with whatever is being hidden right now, and it needs to come to the light.

1:33:34Yeah, that's what I wanted to ask, what you guys think. I mean, I can tell you. It sounds like something's being hidden. 100%. Listen, I don't know what, but when people are hiding things, it's because they have something to hide. I can tell you that. I don't know what it is. It could. I have no idea. But we've seen things on this show anywhere from gambling to other types of addictions to just to George's point, just purely control. It could truly just be a control freak in a certain area. But it's the bigger thing that I want to caution you on is we just get calls like this a lot, Anna. and women in these situations tend to let this go on far too long.

1:34:16And the way it ends is not good. The longer they let it go on, the worse the ending. And so I really just want to empower you to stand on your two feet and really just have a backbone in the things that you're saying and really take action on the things that George and I are saying because I don't know about you, but I'd want to know sooner than later who this guy is and what he's going to choose when it comes to his family. Yes, it's terrifying. But yes, I know you're right about that. Because a marriage is built on trust and respect, and right now you have neither of those things. Yes. On top of no accountability, no transparency.

1:34:55So I don't care how nice he is in other areas of your life, this marriage is going south, and we need to rectify that. And if he's unwilling to participate in that, that's very telling. And so you need to get help for yourself because you are in a really bad position right now being in the dark. And he basically sees you as a roommate taking care of his kids. Yeah. And I just also want to say it's a form of abuse. Financial abuse is a real thing. So I just want to use that language so you know how serious this is. And please, Anna, call us back if you need anything. We're definitely here to help and we're rooting for you.

1:35:49Hey, guys. Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:36:37The truth is, guys, that buying or selling a home is a major decision. And with so much conflicting housing market news out there, it can be really hard to actually know what's going on. But we're here to help you understand what the market is doing so that you can buy and sell it with confidence. We recommend a 15-year fixed rate mortgage. You've heard us say that over and over. And the truth is, those rates are currently hovering around 6 % right now. But don't wait on a rate that you can't predict. Okay, nobody can predict this. And so we say, go ahead and date the rate and marry the house.

1:37:08Remember, you can always refinance later. And just remember, no matter what the market is doing, only buy when you're financially ready to do so. We want this to be a blessing for you guys, never a burden. Now, also in other news here, median home prices did dip below$429 ,000 last month, which honestly, that's a 2.4 decrease from the previous year. So that's good news, especially if you're ready to buy. One in five listings had a price cut last month. Again, good news. So you do have room, guys, to negotiate on the price repairs and closing costs. Here in Nashville, it's starting to turn into a buyer's market.

1:37:44So that's really nice. Remember, if you want trusted advice on the housing market, weekly mortgage rate updates, or free tools to buy or sell with confidence, go ahead and go to RamseySolutions.com slash market, or you can just click that link in the show notes. Love it, love it, love it. all right guys let's go to crystal who's in atlanta georgia hi crystal you're on the line hi hi hey thanks for taking my call um so i was a stay-at-home mom uh the last year i became a single mom of two my youngest neither of my kids are in school yet um i found a part-time job i also started a business but it is not yet paying me and i lost my job so now i'm out of money and amount of credit and I don't, I mean, I don't even want debt, but I don't know what to do.

1:38:33Wow. Sounds like a lot of life has happened. Yes. How long have you been a single mom? A year. Okay. Is there any kind of alimony or child support involved? I do get child support. There's no alimony. I get a small amount of child support each month. Okay. How much is that? It's$1 ,000. Okay. So currently that's your only income? Yes, for the last two months. What is your rent or mortgage? My rent. We have an apartment. It's about$1 ,300 a month. Oh, wow. So we're already going$300 in on the credit cards just for rent, and we haven't done anything else yet. Yeah. Tell us about the part-time job, and tell us about who's taking care of the kids.

1:39:25So I had a part-time job at a school, a preschool. Okay. And my kids could go there, but then I lost the job. So I also, at the same time, I started to do that. What caused you to lose the job? Because I didn't have child care for my youngest. Okay. My oldest could go there when he was 30. So you physically couldn't go to the job due to child care issues? I could go to the job and my youngest could go there with me. But then she just got too old when she was with me at first. I was baby wearing her and she was super young, but then she was running around and it was just too much. Understood. So the three year old and how old is the oldest?

1:40:13The oldest is he's three. Three. How old is the youngest then? I'm sorry. She's one. One in three. OK. Do you have any family near you? Are you kind of on an island or is there friends and family nearby? I do have a church community that has helped me. They've covered my rent before. Okay. I have some people. What we're looking for, the main key here is you got to be able to work. So childcare is the number one unlock because people just giving you money, that's going to run out real fast and it's going to get old with people really, really fast. But if you can find a situation of childcare, that could really be helpful.

1:40:59If you can look on, maybe look into a group where there's a share, where people are sharing the load, and maybe you take weekends and watch the kids while the other moms go do something else, something like that, if you can find it. But the first thing, so I'd be looking for things like that. But the number one thing is let's start job hunting. Because the thing is, if you can find a full-time job doing the things that you know how to do, you can generate enough income to be able to put them back into daycare and then have some leftover money to actually make your life run. So we got to, uh, did you see what I'm saying?

1:41:35And this isn't forever because once they're, you know, four or five, six, they're going to be in school and that'll free you up even further and relieve that daycare cost.

1:41:46but in the meantime let me separate what i said because i don't want it to be confusing to you you need to find that that big job that's going to give you you know we're looking for something that let's try to make fifty thousand dollars a year sixty thousand dollars a year but in the meantime you're going to have to take something to fill in that gap and that's where it could really be helpful to find some kind of co-op situation with these kids through your church Maybe there's some other moms there. Maybe they offer a mom's day out. Whatever you can do. Maybe there's an older lady at church that you're like, hey, you're retiring.

1:42:18Do you need something to do? Can I pay you what I have just for the season? Right? This is the time to really lean on relationships as much as you can for time, for help with time, not money, if that makes sense. Yeah. Okay. How much debt do you currently have? A credit card's debt, around$20 ,000. Oh, how quickly was that built up?

1:42:50Since I became a single mom, so about a year and a half. Yeah. Okay. See, I don't want you to look up a year from now and be$40 ,000 in credit card debt at 27 % APR and just wonder how you're ever going to climb out of it. So the goal is to stop the bleeding, quit going into debt, cover our four walls. That's what you should be focused on right now is just food, utilities, housing, transportation. Do you have a reliable car? Yes. Okay. I would be asking the church community, asking all of my friends, hey, are there any open roles that you know of? Because full-time work, making salary would really be a blessing right now.

1:43:27And have you applied for any assistance in the meantime? I have. Good. okay so i mean these are what george and i have laid out for you i mean this is kind of the basics of trying to get yourself on your feet but you have to be persistent so we're going to give you find the work you're wired to do it's going to have kind of help you get the wheels turning on some of the work that hey these are roles that i could apply for and it's going to help you know what could you be good at what are you passionate about and so we'll gift you that for free uh we'll also gift you every dollar so that you can make sure that the money that you do begin to make, you can start to budget it.

1:44:05And every dollar is going to speak to you with our plan in mind. It's going to teach you how to manage money the way we teach, which is no debt. So all of those things are really, really going to help you. But I cannot stress it any more than this, Crystal. This is a season for you. It's not going to be like this forever. You've got littles right now, and George made an excellent point. When they get school-aged, it's going to be like the parting of the Red Sea and you're finally going to be able to have a little bit of help that you don't have to pay for in the form of them going to public school.

1:44:34And so if you can just hold on a little while longer and just keep pushing, this is probably the hardest season, but it's not going to be like this. So don't give up. Try your best. I mean, make these calls tonight. That's your homework. I mean, tonight and this weekend, you're calling up friends, you're bringing them over to the house and you're saying, here's where I'm at. And if you've ever wanted to know how you can help me. This is how you can help me. I need childcare. I need us to figure this out together and get some friends around you who love you and who will really rally with you. Oh boy.

1:45:05Oh boy. If you're out there and you're in a situation like crystal, we feel for you. Yes. There are going to be seasons where you're like, how am I even going to put food on the table? So it's a good way to just think through this. I got to just cover the four walls. I don't have to do everything right now. I just need to make sure that the rent is covered. I'm current on my bills. I can put some food on the table, basic clothing, put gas in the car, keep it running, and cover the utility so they don't shut off water and electric. Yeah, that's so good, George. And I'll even put this out there.

1:45:32This is for me too. If you're involved in your church, our eyeballs need to be open and we need to be looking around for the folks in our community that look like Crystal, that we can reach out and help, that we can see what they're going through. Because there's no reason that she shouldn't have folks helping her. So that's something that we can all do because we all have crystals in our community. There's probably a crystal that's going to be at church at Sunday. So let's get to them first so they don't have to ask us. Let's keep our eyes and our spirit open for folks like this that we can really help out and be generous with.

1:46:30Our big Investing Essentials event is next Tuesday and Wednesday. Don't miss your chance to be there. Investing isn't difficult, but it's not something you can learn in a 60-second TikTok video. So at this two-night virtual event, George Camel and I will walk you through my playbook for investing and wealth planning. We'll simplify everything from maximizing your 401k to reducing taxes and setting up wills and real estate and much more. Join us next week on September 1st and 2nd. Tickets start at$199. Get yours now at RamseySolutions.com slash events or by clicking the link in the show notes.

1:47:24If you haven't heard, Ask Ramsey is our free AI tool and it's built and trained on proven Ramsey principles. And today we'll break down one of the questions that we received this week, which is a popular one. The question is this, George, do I need an emergency fund when I retire? The short answer is yes. And honestly, it matters even more in retirement, guys. So when you're working a job, when you're working a job loss or an income dip is temporary. In retirement, your income sources are fixed, right? If your Social Security withdrawals or pension. Also, an unexpected expense can force you to pull from investments at the worst possible time.

1:48:03And you don't want to do that. Like if the market is downturned and suddenly, I don't know, you need to fix a major thing in your roof, you don't want to have to pull more out of investments. It's nice to have a nice chunk of cash sitting there that can help you there. So again, even in retirement, the goal is the same as baby step three. You need three to six months of liquid cash for those expenses. Again, in cash, not in the market. So if you're unsure about how much to keep in your emergency fund, go ahead and go to Ask Ramsey. They're there to help. You can do Ask Ramsey and ask your question today for your situation at RamseySolutions.com.

1:48:39All you have to do is just click that link in the description if you're listening on podcast or YouTube. All righty then. Katie's in Houston, Tejas. What's up, Katie? Hi there. I have a question about protecting equity in my house in the event that my boyfriend were to move in with me. Oh, boy. Nothing sounds romantic like in the event. And why would you have to protect your equity? Are you expecting him to contribute to your home in some way? So let me give you a little bit of background so it's not quite as bleak as it sounded by that short question. So we've been talking a lot about what our future might be like together.

1:49:27We've been talking about building a life together, getting a house together. and like in our heart of hearts, I think we would get married and I would sell this house and we would buy a house together. But interest rates are at 7 % and I bought this house at a low interest rate. It has a lot of things that we really like and a lot of things that are good for both of us. And he's expressed interest for his own goals in catching up on retirement savings. So both of us living here would pose a lot of advantages to us. But I'm, of course, concerned. I bought this house. I invested in it. And while I don't think this would happen with him, I would certainly want to protect myself because this was my investment and something I invested in.

1:50:12So I hope that makes a little bit more sense. It does. It's super simple if you go, hey, if you move in, which I don't recommend personally, but if he does it, he's a roommate. So he's not building equity. Yeah. Because what happens when he breaks up? You're going to give him his share? Of half of his rent back? Yeah, it's your house. You don't have to share the ownership and equity of your house with a roommate. Right, but what if we did decide to get married, though? And then this was a practical decision. Well, then it's his house, too. Well, then it's both your house. So if he decides to marry you, well, now the problem's solved because the house is ours.

1:50:46All of the wealth is ours together. Even if that was something that I pre-existed. Yes. I had a house before I married my wife. I didn't say, well, that house isn't yours. That's my money, my equity. I just go, cool, it's ours now. That's the simplest way to do it. Now, you can set up a prenup and all the complicated things saying, hey, all the equity that I built, I get to keep that if something were to happen. You can do whatever you want to do. But the simplest way to go about this is you guys get married. Then he moves in. Then the house is y 'all's house. That's the cleanest way. to the deed and keep paying the mortgage knock that out and the house is yours together but it sounds like that's not in the picture currently well it seems like you guys are getting i think you're mixing your worlds in the pursuit of wealth which is hey what if it was just katie and what's what's his name we can make up a name greg let's let's say katie and greg they're together because they enjoy each other so they're boyfriend and girlfriend love that and and this is not the way I'd live my life, but it's like Katie and Greg want to move in together so they can spend more time to check.

1:51:56Okay, fine. But somewhere along the lines, it also became a way for Katie and Greg to get equity and make money and invest more. And it got woven in with financial goals, but you don't get to do those things and you shouldn't do those things until you're married. Because then you have the legal protections, you have the commitment that undergirds that sort of trust. And so that's why George suggested what he did because it's just cleaner. It's not because I'm a old school, traditional boomer. It's to protect you. And because you have a better chance at a successful marriage and higher chance of building wealth if you guys do it in the right order.

1:52:36And can I be honest, the people who move in together, they call back six years later and they're still not married. And one of you is resentful and it's usually the woman. and I go why aren't you guys married oh you're living okay you've been living together six years and so he has really no reason because he's all the benefits of marriage without the commitment and Katie without the protection so true yeah I mean I gotta believe yeah that's so true you you will take away and not to not to say that you have to leverage these men into marrying you I'm just saying there are certain if everything's special nothing's special right so you're taking away what makes marriage such a special thing that's in a category of its own.

1:53:18Because it's like, well, number one, now we live in the same place. Number two, now we have, you know, probably intimate behaviors that we would have maybe only had a marriage, right? There's nothing there. And now he's getting the benefit of, I don't even have to buy my own house. And do you see what I'm saying? You're going to make this tough for yourself. I think we've lost. I hear you. We've lost Kim. No, she's thinking. No, you haven't lost me. I think my concern is just I listen to your show a lot, and I see so many women who call in at 50 and 60. And they've been, and again, I don't think this would happen to me, but they have found themselves in a really bad situation because they've taken this step, and they haven't secured something for themselves.

1:54:04And that's what we want you to do. No, we're on your side. We're trying to show you that protections would be in place if you guys got married to where you're not going to lose it all. It sounds like unless I understood you correctly, unless I misunderstood you, you're thinking, okay, Greg moves in and if he starts paying rent, you're thinking now he has equity in my house. But he doesn't. If he moves in as your boyfriend and he starts paying rent, he's just a renter. And I would have a cohabitation agreement in place. Yeah, if you guys break up, you own the house, you owe him nothing, truly, legally.

1:54:40Honestly, he's the one that would be in the precarious situation. You would be in the position of strength. But if you guys get married, and he moved in, your house, it would go from being I to a we situation. now if that makes you nervous that's another conversation um and that's something else that we can talk about but truly you are in the position of katie uh of power katie we're just trying to make it to where um it's just clean we just see too much messy on the show and you said you listen a lot so you've heard all the messiness and so we're trying to steer you away from that because i don't want you calling back in two years from now frustrated going i didn't think this could happen.

1:55:22I didn't think it would happen. So I would tread with caution with the plan of we want to combine lives except for the part where we get married. Yeah. How long have you guys been together? Just about three years. Okay. I'm telling you, Katie, George pointed out a big fact, which is, I mean, I would put money on the table if this were a betting game. If you let this cat move in, don't expect a ring any times. Like you might get a ring, but the actual marriage date, you have just punted that down the field and that is going to be another three to five years if ever and you'll be calling us back going well we've been together for 10 years and he's but we broke up and he's saying that I owe him money because he helped redo the bathrooms and he helped remodel the kitchen and all I mean these are the calls that we get so you are give him something leave Leave something on the table that he has to take that next step in order to get.

1:56:20You're worth that. And if you're worried because he's bad with money, that's a legitimate red flag that you need to address. I hope we gave you enough homework to do. I think we did. It's a lot to think about. It is. She's having an existential crisis now. It is a lot to think about because sometimes I think people can think that what we're teaching is simply because of, you know, just a belief system. But it really is. It is a clean way to do life. it's a clean way to value yourself it's a clean way to value your money it's a clean way to protect yourself there's more to it than just a personal value system so hopefully you realize that katie we love you we're pulling for you

1:57:16Dave Ramsey here. For more than 30 years, I've been talking to folks on the air, and I can tell you that most people are broke. Not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job, because when you do that, something changes. You stop guessing. You stop worrying. You stop stressing. Our EveryDollar budgeting app will show you how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck. Keep hoping things will change without making a change.

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1:58:15All right. Our scripture and quote of the day for the Ramsey show, Psalm 8410. Better is one day in your courts than a thousand elsewhere. I would rather be a doorkeeper in the house of my God than dwell in the tents of the wicked. I know that's right. I like that. Alexander Graham Bell said this, when one door closes, another opens, but we often look so regretfully upon the closed door that we don't see the one that has opened up for us. Man, And that's a real talk right there, Graham. Alex. Alexander Bell Graham. Alexander Graham Bell. Yeah, you know me. Yeah. Oh, wow. All right. We went there.

1:58:54Now we're going to go to Oklahoma City where Sarah is on the line. What's up, Sarah? How you doing? Hey, good. Good to talk to you guys. Thank you. You too. How can we help? I'll make it quick. My husband and I, I'm 44. He's 49. We've started kind of late on our wealth building journey. We were overseas after we got married for five years. So we've been hustling for about 13 years. I'm graduating from grad school next year. So I'll start working then. We have four kids. But we need to know how we are doing. So one of us, who I won't mention the name, but can relax and learn to have a little fun.

1:59:35but also how we can move forward since our income will change pretty significantly next year. Well, I think you're in good hands. I feel like, George, this is your bag right here. That's right. I'm a recovering tightwad, so maybe I can help out. I'm going to let you go. Yeah, I'm going to let you fly. Okay, so there's some competing goals here. You're trying to finish school. We're trying to get set up for retirement. We also want to live along the way. Is that what you're wondering? How do we balance this all? Yes. We don't want to retire broke. We also want to go on a vacation in the next decade.

2:00:05Exactly. Okay. I love it. How much debt do you guys currently have? How much debt? Yeah. We only have our house and then my student debt. Our house, we owe about$90 ,000, and my student debt is about$30 ,000 right now. That'll go up a little bit next semester, but then that's it. Okay. What's the household income? It's about$80 ,000. Well, his growth last year was 112. His net was 84. It's around 7 ,000 a month when you average it all. Okay. Take home, yeah, 84. Great. What will yours be when you're done with grad school? I'm not sure yet. I'm getting a counseling degree, a master's in counseling, so it will depend on where I work and how much I work.

2:00:51What's an average? What's your goal? I'm not going to make below 65, and it could be upwards of 80. Yeah, probably around there, I hope. Yeah. Okay. So you said you're going to have to go into a little more debt. Is there a way to cash flow that instead of going further into debt? Potentially, but I think he doesn't want to pull it out of savings. There's the answer. Ooh, what do you have in savings? Well, we have$35 ,000. Of liquid cash? Yes. Yes. Okay. So$35 ,000, and what does it cost per semester for grad school? Next semester it will cost me about$6 ,000 or so, I think. So if you cash flow it, you're down to$29 ,000 in savings.

2:01:41Yes. Which you still have$30 ,000 in debt. Is he doing any investing right now, or either of you? He has his 401K that gets invested. I don't believe he has any extra aside from that. Okay. So it sounds like you guys are just misaligned on the goals and what you guys want to do financially. What does he want to do? There's probably some accuracy there. Is he like, I want to keep saving and put more in retirement? Basically, yes. I think his main frustration is like, we don't get to save enough. And I'm like, well, we have four people. We're living very frugally. Do you know what you have thus far?

2:02:22Like, do you have any money in retirement at all? He has$124 ,000 in his 401k. Okay. So I want to crunch some numbers on just what it looks like to continue to invest. Let's pretend for a moment that there's not the$30 ,000 of student loan debt just because I want to see what these numbers are. But I'm seeing a world where with the$35 ,000 of savings, you have a couple of choices. You can either turn around and pay these student loans off that are existing and drop that down. and then you could probably cash flow the$6 ,000 per semester on his income,$7 ,000 a month. I got to believe believing that your mortgage is in the right place.

2:03:03And then from there, once you have that done, if you continue to invest just off of his income, I got to believe you're there at retirement with no problem. Do you see how I did that? So think about this future. Sure. You guys use your savings to cash flow school, then pay off your 30 grand in student loan debt. And then whatever's left becomes your emergency fund. Keep saving that up until you have three to six months of expenses. Now for the rest of your working careers, you can invest 15 % of that$175 ,000 to$200 ,000 income. Right. You're going to be okay in retirement at that point. And you're still going to be able to go on vacation.

2:03:42So we just need to do a few things in order. The next year is still going to be sacrifice. but then beyond that you can really budget for all the things you want to do. Right. So you would pay off the student loan instead of, okay, because I think my thought was if I take my income from most of my first year, we'll pay it off and then we still have the 35 just in case we needed it for something. No, the reason I wouldn't do that is because these student loans, number one, they're going to draw interest at some point and we don't even want to get there. And yeah, so they're unsubsidized. And then the other problem here is the longer you keep this around, it's like a pet.

2:04:21You just get comfortable with it. And the time is going to need to come for you to go, you know what, enough of this. This is ridiculous. We need to change our life here. And so that's why I would go ahead and do that. So you pay it off. You have$5 ,000 left in savings. Now, you know, you could keep that there if you wanted to continue to build up that three to six months. But I believe on his income, you guys can cash flow$6 ,000 a semester. On$7 ,000 a month, you 100 % can cash flow college. I believe that that's possible. And then from then on, once you get out of school, well, now you guys are making$182 ,000 a year.

2:04:57And now we can crank back into a full-fledged, I'm going to say a full-fledged 15 % of investing. That's eating your vegetables right there. So now we ate the vegetables, we can have a little dessert. We can set money aside for the vacation or the car upgrade, whatever it may be in a budget. But it sounds like you guys have not made a budget together since being married, where you guys both are looking at this thing and we agree, this is the game plan. We have. It just has been very variable over the years. And so sometimes it's like, okay, well, we need to survive. So let's do this right now.

2:05:29And it's been - It's based on emotion. It's based on how we feel that month, right? Right. Not always. But sometimes it's it's it's what we need to do to pay the rent or to buy the house or something on the car needs fixed because both our cars are very old. And that's where that budget is. You guys say, all right, what's coming up? Right. We know we have that car repair. Let's set the money aside and the car maintenance repair fund. Let's make sure we're investing 15 percent. Let's make sure we have two hundred dollars a month going to the vacation fund. If you guys can agree on all of that, then he's going to be good with the fun parts if it's laid out clearly in the budget.

2:06:07And it's not a surprise of you going, hey, I thought we don't go on vacation. We really need to go on vacation. All he's seeing is dollar bills fly away. So that budget is going to be your source of truth. And I think it will help you guys compromise and come up with a game plan that works to where you know you're going to build wealth for the future and you know you're going to enjoy your life now. But the next year, we got some homework. We got to clean up the debt, avoid going into more debt, get the emergency fund, which means he needs to pause investing. I don't think I can convince him to do that on this call, but that would be the game plan to follow the baby steps that millions have followed.

2:06:40And if he does that, it'll still work out. I mean, if you plug it into the calculator, I love this thing. If you plug it into our investing calculator, you've got$124 ,000 there now. Once you're out of grad school and the smoke clears on all of this and you have your full income to invest, If you're investing$2 ,275 a month, which is 15 % of your gross income once you start working, you've got another 15 years for that to grow until age 65. Gosh, I mean, that's almost$1.7 million. And you're 60 and he's 65? Yeah. That's not bad. That's not bad at all. And in that time, you went back to school, you got your degree.

2:07:16In that time, you paid off all of your debt. You've got three to six months of expenses. You're going on vacation. That's a great life. Income doesn't go up at all for 15 years straight. Exactly. Which we know is not going to be the case. Exactly. That's without the employer match, which I'm sure he gets. Yeah. You know, the theme for the calls today, George, I feel like is a lot of people wanting to do a lot of things at the exact same time. And it just doesn't work out like that. You have to prioritize and put things in the order that they are best suited to be done so you can actually accomplish things.

2:07:46One thing at a time. Focused intensity over time will do the trick. Now remember guys, there's ultimately only one way to find financial peace and that's to walk daily with the prince of peace, Christ Jesus.