Financial Wisdom Matters More Than Financial Timing

23:51Dr. John Delony:And I don't know what to do anymore. I can't keep living like this. When you say you can't keep living like this, what is the this? Is it you can't keep living like this, the reality that you're 65 and you're staring down the barrel of another 20 or 30 years and you don't have anything saved? Y 'all got nothing? and that reality you can't keep living like? Or is your husband being ugly and abusive? No. Things are so tight. He's not being ugly and abusive, but I can't stand the stress of not knowing for one day or the next how long we're going to make it. Okay. So the Social Security, his and yours added together, is not covering your bills, is not giving you all any margin?

24:36Dr. John Delony:Well, I get$13.51 a month. Okay. He gets$811. $811? $811? Yep. That's it? That's it. Was he not working for a long time? He is a musician, and he worked for cash for most of his life. Okay, so you guys are bringing in a little over$2 ,100, and that's it? That's it. Do you rent? Do you have a mortgage? We live in a paid-for house. It's kind of an unusual situation. It's a house that is in a trust for me from my father's estate. We pay the insurance on it. You pay insurance and taxes, and you got food, and do you have a car, car insurance, gas, all of that? We have two cars that are paid for. They're 22 years old.

25:42All right. Let me get into the nitty gritty of this, okay? I'm going to take an alternative route, okay? Paint me a picture of what happens. Let's say George and I are like, yes, file for divorce today. And you get off the phone and you call a local attorney. You give them$5 ,000 and they file for divorce today. then you've been married long enough the judge forces you to sell this house you'll split it in half and you're you've take whatever the amount of money is divided by two and you're holding that and that's all you have for the rest of your life unless there's something else in this trust and now you're living off 1300 and you got 1300 bucks coming in will that give you the peace that you're looking for

26:31Dr. John Delony:um well let me backtrack just a little bit i've already talked to an attorney okay and when i had my will done and because i wanted to make sure that my husband didn't get anything in my will and um they ain't much to get i mean like you're saying the house me that my house because it's in trust is not community property. In the state of Texas, anything in a trust from a will is not community property. What's the house worth? So we couldn't—between$350 ,000 and$400 ,000. Okay. So that's by far your—that's really your only asset at this point. The cars are not worth much, and you've got nothing in savings or retirement.

27:17Dr. John Delony:Right. Trust the legal advice. But even then, there's still this new life. Let's say there's a new chapter where you're solo living in this house. It's paid for, but now you only get your income. Is that the reality? I can make it. I've already been putting this to paper for six months. So why are you calling us, Gail? You've already left your marriage. Like you're already out. Well, I didn't know if it was ill-advised to do that or if it was morally wrong for me to do that because I never intended to, you know, I thought it was going to be forever. I got you. The heartbreak of that's there, I'm not going to outsource my morality to you.

28:00I can't be the one that gives you permission to make this life-altering decision because I'm convinced there's other things going on here that you're not telling me about, which is completely fine and I get it. not wanting to put all the dirty laundry out on public. I get that. But you have to look in the mirror and say, I am making this decision. I do think there is a till death do us part for sickness and in health for rich and poor. And I also think fidelity is bigger than being a person of fidelity. Cheating, if you will, does not just happen if you sleep with somebody else. I think being a person of fidelity inside of a marriage, you can cheat on your spouse with a golf course.

28:44You can cheat on your spouse by just sitting on the couch and not participating in the necessary lifeblood of a home. And that's how I feel I've been treated. But you have to own that decision. I'm not going to give you that.

28:59Dr. John Delony:Okay. What I want to tell you is you have left your marriage. You just haven't put it on paper yet. If you want to sit down with your with your husband and say, here's where we are. Here's what I'm about to do. If you want to rebuild something for the back half of the fourth quarter of our life, here's the clear path towards rebuilding trust with me. Here's what I need from you. But what you've told me is it's not financial because you can make it on your$1 ,350. There's something in the alchemy here where seeing him sitting on the couch collecting his$800 is bringing you to a point where I am going to end this marriage.

29:37So that tells me there's other things going on here that's not financial. It's not wondering what's coming next. You got to pay for a house. You got to pay for cars. Like there's something else here and he deserves, I believe, for you to be very clear and direct with him and respectful and honorable, like treat him with dignity and respect. But here is the thing or here's the things that have been going on for 20 years, been going on for the last year that I am at the doorway to walk out of here. Or more realistically, you're about to be out of here because I'm staying in this house because it's mine and it's in a trust and it's protected and you can't have any of it.

30:15And he will probably say, I'll see you in court and they can duke it out there.

30:22Dr. John Delony:Okay. Because what's he going to do? He's going to be a 67-year-old man homeless getting$800 a month. Right. If it's your way of forcing him back to work, have that conversation with him. That's what I've tried to do. I've tried to tell him that, you know, you can't live on$800 a month. And, you know, there's no way you'll survive. And, I mean, we both have life insurance. Mine is only$50 ,000 because I wasn't insurable. Yeah, but that's after. That's for after. It doesn't solve any of our problems while we're alive. And that's what we're trying to help you do. So your decision to end this marriage solves one problem of one giant problem.

31:09Dr. John Delony:And that's what we really want to help you solve for what happens for the next 5, 10, 15 years, not just this year. Whatever your decision moving forward, be very clear-eyed about what happens next.

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32:57Dr. John Delony:Joanna is in Edmonton, Canada. What's going on, Joanna? How can we help today? Hi there. Thanks for taking my call. I am just wondering if we are in BabySip 2, wondering if we should be paying or selling off our paid vehicles to help pay down this debt. Okay. Tell us more. How much debt do you guys have total? 193. $3 ,000. All right. That's all consumer debt. That's not any mortgages? No, the mortgages aren't included. All right. And what's your household income? $380. Fantastic. All right. What are the cars worth? The truck is worth$40. The car, I'm going to say, is worth$30. And then we have two Harley Davidsons, and they're each about$15.

33:47Okay.

33:47Dr. John Delony:And those are all paid for? Yes, they are. Wow. So what makes up the$193 in debt? Well, we have$35 ,000 in credit card. We have loans. Just personal loans? Yeah, well, just loans. Like we have a solar loan and we have a line of credit. And we have a couple loans just for we had had some dental work done and stuff like that, so medical. Okay. And then the big one in there is the boat. Oh, a boat. What's left on the boat? Yeah. $100 ,000. And what's this boat worth? About$130 ,000. Hey. God almighty, Joanna, sell the boat. Sell the boat before the cars you need. You need cars. You don't need a boat.

34:38Why aren't you guys willing to sell the boat? You didn't even mention the boat.

34:45Dr. John Delony:Well, because it's at our cottage, and that's what we love to do when we're at the cottage. Oh, so you have multiple properties. To be honest. Okay. Yes, we have two properties. Joanna, you sound like somebody who makes a bunch of money. You and your partner make a lot of money. And y 'all don't like saying no to each other. You're very improv. Yes, and. We don't get a lot of... I was just thinking while you were talking. George told somebody to sell their horse one time and he still hasn't, like, still That thing has a soul. The boat just has a motor. So I'm hesitant to tell Harley people to sell their two paid-for Harleys.

35:23I'm actually more scared to tell someone to sell a Harley. Yeah, I mean, because that's a lifestyle. Those guys can beat me up. But I don't know a lot of Harley lifestyle boaters with a$150 ,000 boat. Like, you gotta pick a sub-genre, Joanna, and go with it, right?

35:39Dr. John Delony:Yeah, and this is the thing, though. See, we don't ride the Harleys very much anymore because our lifestyle has changed. Then sell them today. Okay. So here's the thing. If you sold the boat and sold the Harleys, that's$130 ,000 plus$30 ,000. It's$160 ,000 of your$193 ,000 paid off. And you make$380 ,000, so by Christmas you'll be debt-free with three easy steps. That's true. So that's option one. Or you sell the cars and you only have the Harleys to get around in, which is probably not ideal in Canada. and now you still need to go buy new cars which i'm guessing for your lifestyle is going to be a hard pill to swallow to go buy a five thousand dollar car yeah you can't drive an 86 used camry up to your cottage to get in your 150 000 boat right like like the flip of this is y 'all make 380 grand if you sold this boat which you love i dude i love being out on the water i totally get it and you sold these motorcycles and then y 'all buckle down for four or five months with this great salary y 'all make and you're completely debt free then you get to decide do we want to stay boat people and if you do awesome y 'all make 380 grand within one calendar year you'll have saved up enough cash if that's where you want to like direct your your your spending power we're not saying never own a boat again yeah dave has a couple of boats and they're more expensive than my house they're awesome right and he does these i don't know he's almost killed me and george on multiple times like i love being out on the water but it comes in an order right you just have to decide if we want if we want to be free people or we want to be boat people more true how much do you guys have in savings uh we have just our one thousand dollars uh emergency fund and then we have$10 ,000.

37:29Dr. John Delony:You got$10 ,000. Okay. So here's my question. Where is the$380 ,000 going if we're still taking on lines of credit and payments? Where's that money going? Well, so those debts have been for a while. They've been a long time there. And that's why we weren't getting anywhere so we got on your program. Which we've actually since January paid off$46 ,000. Way to go. I think pretty good. So take your monthly bills plus your minimum payments. How much is that per month if you guys buckle down? We actually owe about$16 ,000 a month. $16 ,000 a month is your burn right now. Yeah, it's because we have two homes.

38:10Dr. John Delony:Got it. And how much are you actually taking home every month? $35 ,000? No, we're taking home what he brings home, about$20 ,000. $20 ,000. Okay, because$380 ,000, that's$31 ,000 gross, and you're saying you bring home$20 ,000. Are you guys doing any investing right now? No, we paused that because of the program. Okay. I got it for retirement. Wait, you only bring home 20 and you make... Oh, I guess Canada takes 60 % of what you make. But let's do the math here, right? You bring home 20, your bills are 16. That leaves you with four if you're lucky to attack your smallest debt, right? So we're going to do 193 divided by four.

38:50It's going to take you four years at this rate if you just use the margin you have, making 380.

38:56Dr. John Delony:That is soul crushing. Or you can do it in four months. It is. Yeah. So you decide. If you're willing to sacrifice for four years to just stay on this plan and knock it out, you can. I personally wouldn't. Making 380, you should be done with this thing so much faster. And the boat is the thing standing in your way of freedom. Yeah. So I'm on board to do this. This is my idea. But my husband is a little bit hesitant. And why is he hesitant? Does he not feel the weight of this like you do? He does, but I kind of drive it more. So he's in agreement and we're doing the steps. But I think to sell the boat is going to be a hard sell.

39:39Dr. John Delony:Although if I put it in perspective the way you just did, it might be different. Where I find couples are successful is if one of them is honest about the thing beneath the thing. Because the boat will turn into a weird proxy war. Oh, we're just going to go to the cottage and sit on the bank and stare at each other. Like, what about this? What about our grandkids? Like, it becomes this whole other thing. If you sit down and say, I want us to be a free household. I want us to be free. I don't want the government to own us. I don't want the, they already take 60 % of our paycheck. I don't want creditors to own us.

40:13I want us to be in charge of our destiny. The nerd word of it, the psychology word is agency. I want us to be agents of our future. And we can get a boat within a year. I also think y 'all can contract your burn rate quite a bit too. 16 grand a month over two properties. Y 'all are living pretty large at both places, right?

40:35Dr. John Delony:Yeah, probably, I'd say. So for six months, for a year, y 'all could contract those expenses quite a bit and say, what if, instead of saying, here's what everything we want to do adds up to, which is 16, what if y 'all had an exercise? And this could be super fun. It could be full of laughter and poking at each other and making jokes, cracking jokes with each other. But say, let's pretend all we had was$9 ,000 a month. Can we figure that out across two properties? I bet y 'all could. And then suddenly material, like$6 ,000 just comes out of the ether or$7 ,000 just appears, right? So think about it this way.

41:13Dr. John Delony:the actual mathematics if you sold the boat sold the harleys that gives you 160 grand in cash to throw with them 193 now we're down to 33 grand so now for four months let's say by christmas we're going to throw eight grand a month at these remaining debts until they're gone can you imagine how different christmas is going to feel that's the picture to paint with him and you know the old quote the two best days of owning a boat or the day you buy it and the day you sell it. And I think he's not realizing how free he's going to feel when he sells that boat. And you're not going to a summer cottage in Canada in the Christmas anyway, right?

41:52You can't drive a boat across... Well, we can't drive a boat, no. You can't drive a boat across eight feet thick of ice, right? Can you rent a boat for three months? Yeah, can you rent a boat?

42:05Dr. John Delony:Probably. I've never thought of that idea, actually. There's a program here in Nashville where you basically pay a monthly fee and every week you can go over and pick the boat you want. You want a speed boat that weekend? You want a pontoon boat that weekend? A couple hundred bucks a month. You want a fishing boat? Yeah, and they service the boat. They fill it up with gas. They take all the headaches of boat ownership away from you. And there's probably somebody who lives right near you who's also broke with a boat who had rented for you for a couple hundred bucks. And y 'all would have the time of your life and have no maintenance.

42:33It'd be amazing.

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44:10Dr. John Delony:Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm George Camel here with Dr. John Deloney. We're taking your calls at 888-825-5225. Austin is in Orlando up next. What's going on, Austin? Hey, guys. Thanks for taking my call. Can you hear me okay? Yeah. We got you, man. What's up? Awesome. Well, it's an absolute pleasure to be speaking with you guys today. So I appreciate you having me on the show. So I'll try to keep it brief. I want to honor you guys' time. The question I have is mostly a relationship question, but there's some finances involved. Basically, my wife and I, we bought a home down here in Florida about four months ago, and that was about the same time that we discovered you guys' baby steps.

44:53Dr. John Delony:I'm active duty. I'm in the military. She works from home, and we've been working pretty hard to cut down the amount of debt that we have. my mom and other family and friends. It's kind of funny. Like when you buy a house down in Florida, suddenly you have more friends and family than you thought you did. Very similar to national. Hey, long time, no talk. Yeah, yeah, yeah. Right, right. And so my wife, she's so much more understanding, I think, and graceful than I am about this. But my mom basically has joked around and been like, because she's obviously working through debt and stuff that she has.

45:28Dr. John Delony:but she's always been like, well, I'm, I'm just going to die with debt. Uh, I'm not really worried about paying off my debt. I'll just come down there and live with you guys. And at first I was like, Oh, that's really funny. But, um, but now she's like being kind of serious about it. And my wife, um, she has told me, you know, like we've talked about it a lot and she's been like, I think maybe, you know, you should be a little more understanding and it's not going to be that bad if she did want to end up living with us. We have a two and a half year old little girl at home and I guess I'm trying to figure out my question is, am I being not understanding enough?

46:04Am I being too stubborn or hard-headed by not being open to this sort of thing? No, not at all. I want you to be honest with yourself and here's what I mean by that. There's the money part and there's the debt part, right? But you know, this is your mom, you've been with her longer than your wife has, you know what her moving in would mean for the temperature and the electricity and the angst and the whatever else in your household. The vibes. Yeah, as George and the young kids say, the vibes of the household, right? So you know, some people will let their mom move in and it would be the greatest thing ever because they would dote on your two-year-old.

46:45You and your wife would have date nights whenever you're home. It would be awesome. And also there's mothers and fathers who would move in and they would think that you're seven again. And they're going to tell you what you're going to do and when you're going to do it and why aren't you doing it like this? Or your job is to take care of them and cook for them and provide for every one of their needs. While they continue to be irresponsible with any number of things. So you know the true, here's the total cost. Financially, yes. Relationally, the impact on your marriage. And so you know the full picture there.

47:20So be honest with yourself about that. And the other thing I think that's kind of haunting you that you can just cut to the chase, I would, I would, next time your mom's in town, I would take her out for coffee and say, mom, are you officially asking to move in with us?

47:34Dr. John Delony:Yeah. Because right now there's a lot of ambiguity and you're starting to create stories about what she means and what she says and how she's saying it. Just cut to the chase. Yeah. I think that, I think that's a really good approach. And I thought about that. But the other thing I think I get kind of like worried about is I don't want my mom to die with debt, and she's very comfortable with that sort of thing. And I know at the same time, because my wife and I are on the same page about this, like it's not our responsibility or obligation to make sure that all her debts and stuff are squared away and paid for.

48:07Dr. John Delony:But that's what we're working towards in our personal life right now, and I think that she has seen how we're doing with that sort of thing. we've had the ability to pay off over a hundred thousand dollars of debt in the last um year which felt really awesome and and i think that you know she's kind of like well if i if i move in with you guys you know i won't have a mortgage and i'll just die with my debt and it'll be fine and i don't want that for her and my wife doesn't want that for her so i guess that was kind of the crux of like my question today is like if she doesn't care then you can't impose that value system on her yeah and you can't care more than she does about it you don't need to take on that burden.

48:45Dr. John Delony:Because the truth is, I hope she doesn't die with the debt. And if she does, you don't need to carry that. That's not your fault. She hasn't invited you into that conversation. Right. And she's so like, she's not even, my mom has this tendency to like age herself. She's not even like elderly. She's like 55. Yeah. But is she working full time? She is. Yeah. She, she's been a nurse my entire life. God bless her. Like she's been doing it forever. And And she is at the point now where she is a nurse practitioner, but she kind of like works from home type of thing and does telehealth. And she has a great income, but she's also not really doing a lot about her debt situation.

49:25Dr. John Delony:And so I'm trying to remove myself from being super worried about that all the time because it's not my situation. But our relationship has gotten better over the years, and I obviously don't want that for her. So I guess it's just a matter of having the conversation with her than it sounds like. Yeah, well, where I've seen this go really awry is when adult kids try to lecture their aging parents on any number of topics, especially about sex and especially about money. Like parents don't want to hear that from their kid. But I've seen people be successful, and I'm going to be honest, it's a more limited success.

50:01By you sit down and say, Mom, are you asking to move in? And if it's true, you and your wife have talked it through. if you were to say, we would love you to move in, but we have a picture of what that would look like. And here's the reality of our home. We have a two-year-old, and so we need some help with some childcare and some support. And we don't also have the money or the support or the time or whatever to get childcare for our kid because you're going to need a quiet place to work from home. Think through the logistics of that when you have that conversation. And then be honest with your mom in that same conversation.

50:35Mom, I have to tell you, like almost like you're a person who just came to faith except you just came to this this new freedom in in finance right which is me and my wife have dedicated the last year and a half of our life to not owing anybody any money because we want to be free we paid off 100 grand if you um and you can tell her i'm worried about your future because you don't have any retirement that i know of and if you want some skills or some tools the ones that we're using i would love to sit down and walk you through what we've done to change our life. And what you're doing there is you're giving her permission as a 55-year-old, which can be hard, right?

51:11It can be hard to say, I don't know how to do a thing. And it can feel extra hard to look at your kid and say, I don't know how to do a thing, but you're doing it well. Will you teach me? There's just a, I don't want to say it's a shame barrier, but you get what I'm saying? It just feels weird. Maybe if one of your officers called you in and was like, hey, you have a great marriage. Can you teach me how to talk to my wife? Like that would be an awkward thing, right? So there's a, like a reverse power differential here. So you bridging it and saying, I got a new toolkit a year ago and these tools are helping us build something amazing.

51:45I would love to share these tools with you if you're interested. And then beyond that, you can't force her to want to be a part of it. All you and your wife can do is say, as for our house, here's the values of our house. And one other thing I would add is pre-plan a separation conversation. And what I mean by that is have a conversation for what if this goes sideways? Because I don't want to lose my mom and I don't want to lose a roommate and at the same time lose a mom. If we get to a place where it's not working out or it's uncomfortable or your job is not jiving with our kid's nap schedule, let's have a conversation for how do we stay connected and have a great relationship and not be roommates down the road if we get there.

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54:24Dr. John Delony:Isaac is up next in Little Rock, Arkansas. What's going on, Isaac? How can we help today? Hi, Dr. John. Hi, George. This is really awesome. I guess I've never really figured to talk to you guys. So my question is, I'm an automotive technician. Right now I make around$100 ,000 projected for this year. Wow. And I'm looking to move it into the journeyman electrician field. But my hang-up is I have a wife and two younger children. My wife and I are 22 and 23, and we have an almost 4-year-old and a 1-year-old. Why do you want to change? um mostly just i guess it's very hot here in arkansas so we don't have ac in the shop so it definitely makes it miserable i guess working in a shop um and also it's just i want to move into a career field that can project more and i would love to be a business owner one of these days and starting a business in the automotive field is definitely more difficult i feel like than starting your own independent business as an electrician do you feel like that or do you know that?

55:28Dr. John Delony:I know that. I have a lot of family members that are business owners. We have a family member who has a friend who owns his own electrician company who he started with his own van and just kind of went over, went from house to house, helping people out until he grew his into like a multi-million dollar business. And I know there's just a lot of overhead with opening an automotive shop with tools, equipment, and all that. So when somebody tells like, here's what I want to direct you towards being fully honest about why you want to make this change. And here's what I mean. I'm in Tennessee and I grew up in Texas.

56:07You're in Arkansas. So we're in the same region-ish, right? The guys who just came in and replaced my air conditioning unit, the HVAC guys, and then the electricians, it was probably 120 degrees up in my attic, maybe 130. yeah like and if you want to be an electrician and work out on all those data centers that are popping up all over texas and arkansas um it is hot outside and when it's not hot outside you get those wicked cold burn cold winters right all that to say is if you're going to be in the trades you're probably going to deal with extremes when it comes to weather right so trying to escape cheap automotive because it's too hot.

56:51That's a guy who wants to get a new job and is trying to scratch and claw for reasons. Instead of just saying, what I really want to do is be a business owner. I want to make a jillion dollars and I want to have a bunch of employees and help them take care of their families. And here's a path towards that. And that path is going to require sacrifice. Otherwise, you're going to get into another job and it's going to be hot there. You're going to get into another job and it's going to be hot there.

57:15Dr. John Delony:In that case, you'd go get a desk job in a corporate building if you really wanted to get out of the elements. Right. And so the other thing I'd recommend you do is don't talk to a relative who's got a friend. See if you can go have coffee with the guy who actually owns that business. Because he'll do two things. He'll tell you about the beauty of it and the fun of it. And he'll also take all the shine off of it and say, here's the scratch and claw you're signing up for. Because building a multi-million dollar electrician business is a freaking grind. And then the question is, what about all these other dudes who run their own electrician business who aren't making multiple millions?

57:57Dr. John Delony:That's also a possibility. So don't get too starry-eyed of the grass is greener on the other side. But I love the idea, if you're really into becoming an electrician, that's a great goal to have long-term. But it sounds like you guys have some priorities right now of paying off some debt. Yeah, so I've always been driven to the electrical field of the trades and stuff like that. I went into automotive mostly just because that's kind of what I learned. But my wife and I have$4 ,200 that we owe to my parents for help purchasing our house, and we owe around$11 ,000 in credit card debt. But I negotiated one of those down to$3 ,000 from$6 ,000 for a settlement.

58:37Dr. John Delony:So, yeah, and then I guess the biggest hang-up is we moved to Arkansas, and we have no family or no friends here at all. when we moved here, so we have not a great community outside of maybe our church community, and our house is around$2 ,500 just for the mortgage loan a month, so it's definitely a huge chunk over that 25%. What's your actual take-home pay? My take-home pay is, it varies because I'm on billed hours, so anywhere I make around$1 ,600 to$1 ,900 a week. Okay, so we're talking$6 ,400 a month on a bad month? Yeah, I would say so. So it's about 40 % of your take-home pay, maybe a little less if you have a good month.

59:23Dr. John Delony:So that's not great. You need to be making more money. And I think going the electrician route, there's going to be a long period of time where you're going to get a pay cut. Yeah, it looks around, I'll be taking half the pay until I get out of that apprenticeship field, and then I'll go up to like$100 ,000 again, and then more from there after like five to six years of being in the field. Is that four years? Is that five years? How long is an apprenticeship? Four to five years in Arkansas. But you wouldn't want to live in Arkansas, and you need to sell your house because you couldn't afford to keep your house with a 50 % pay cut, and you all want to be around family.

1:00:01Dr. John Delony:Yeah, that's my hang-up. Well, I guess it would be more just like my wife being at home with kids She's a stay-at-home mom, so whether or not she would be able to handle being at home while I'm going to night classes and doing the apprenticeship and everything, too. What does she say about it when you talk to her about it? She really wants me to pursue that, but it's very difficult right now because we want to get all of our debt paid off and save up to the six months before we even think about moving a career or anything like that. I think that's super, super wise. Very wise. And the good news is you are so young.

1:00:37Dr. John Delony:You've got so much time. And I don't want you to ever feel like, man, I don't have time. Like, I'm 22. I want to do this by the time I'm 25. It's okay if you become an electrician at 30. You still got a good 30-year career ahead of you running a business. Especially if you have$200 ,000 in the bank that y 'all can draw down while you're taking this big pay cut. Yeah, can you imagine if you had a buffer and cushion to where you could do this with peace instead of desperation? And like George said, man, we sound like two old men. I get that. But my first year of marriage, my wife and I were in a different city.

1:01:11And after 18 months, I realized, oh, my wife is completely alone here with no community. And so we moved. And I had to start a new career at a new gig. It ended up being the greatest thing that ever happened to me. and then one time we bought a house and I realized we realized this is too much house for us and we sold it within 11 months I had to take a check to closing because I still hadn't covered the realtor fees with appreciation on the house all here's what I'm telling you that it's okay to recognize we made a mistake or we got in over our heads or we need to make a huge change so that when we're 30 when we're 40 when we're 50 we can have the life we want what's not a good idea is to A, just jump ship with nothing.

1:01:51So you're wise to get your debts paid off and get a big chunk of cash in the bank. And you're also wise to not chase sunk cost. Well, we already moved here. So let's just keep dumping money in this house we can't afford. And we already did this. So like pull the ripcord if you need to pull the ripcord, man. Move back to where you're around family if you can get an apprenticeship there.

1:02:11Dr. John Delony:And I would just rent there. Yeah, and rent. Sell your house, rent for a while until you know here's my stable income as an electrician. and then you can do this whole thing over with a whole lot of peace. And right now, you guys aren't in too much of a lurch. You can pay this debt off pretty quick if you get after it. How long would it take you to pay it off making$100K? So right now, with the settlement, I agreed on it. It's going to be$500 a month for six months. So January is what I kind of just tried to urgent that. We're on Baby Step 2, so I have$1 ,000 saved up right now, and I have$500 in the account for the first payment.

1:02:45Dr. John Delony:um so but you have you have other debts too what do you owe mom and dad yeah you owe 14 grand total or it's down to six you have 10 grand total how quick do you can pay off 10 grand um i would hope within the next year that's a long time you make 100 grand yeah it's it's a lot of lifestyle living that i'm trying to go through our budget and try and figure out where our money's going because I feel like it's kind of just disappearing and we're not really watching it as wisely as we should be. Yeah, you don't need, like, it's not a six-month, like, spelunking expedition. It's a long evening with you and your spouse, you and your wife sitting down in front of a budget.

1:03:25Like, and you don't need Claude to dig through the, like... And we know 40 % is the mortgage, so now there's only 60 % to figure out. Yeah, and now we're sitting down and just doing the math. Diapers, formula, gas, food. Do we have to buy organic foods? We can't go out to eat for a while because we owe money, right? So it's not this big, long PhD thesis. It's just sitting down and saying, here's how much money we have. Here's where we can contract our expenses. And let's get on a budget together.

1:04:10Thank you.

1:04:13Dr. John Delony:As a dad of young kids, I'm starting to think a lot more about the world they're growing up in and how I'll help them make sense of it as they get older. And that's why I like World Watch, a video news service for preteens and teens. Because one thing I know for sure, if you don't teach your kids how to understand the world, somebody else will. And these days that could be TikTok, YouTube, Instagram influencers, or whoever happens to show up in their social media feed. Worldwatch's 10-minute videos help young people understand what's happening in the world through a Christian worldview, without all the outrage, negativity, and noise that is everywhere these days.

1:04:46Dr. John Delony:The reporting is factual, engaging, and designed specifically for pre-teens and teens. And Worldwatch creates opportunities for something every family needs more of, meaningful conversations. Instead of just reacting to headlines, kids learn how to think about what's happening in the world, and parents get a chance to keep those conversations going at home. Because when my kids are old enough, I want them informed, not overwhelmed. And right now, you can get a 30-day free trial. Just go to worldwatch.news slash ramsey or use promo code ramsey to get started. That's worldwatch.news slash ramsey.

1:05:36Dr. John Delony:Our question of the day is brought to you by WhyRefi. When past due private student loans keep pulling you backwards, it's hard to focus on what's ahead. WhyRefi helps borrowers with low fixed rate refinancing options that fit your budget so you can focus on the future again. Visit WhyRefi.com slash Ramsey. May not be available in all states. All right. Today's question comes from Todd in Nevada. Todd writes, I've recently become aware of betting sites like Kalshi and Polymarket where you can wager on the outcome of real-world events such as elections, celebrity engagements, sports, etc. What is the Ramsey stance on this type of betting?

1:06:12Dr. John Delony:Oh, boy. The Ramsey stance on gambling via dopamine-based apps that involve stealing your money. I give you my take on it. I don't know the big Ramsey stances. If you're going to do anything like this, ideally don't. But if you are going to do it, do it with fun money. after you're already out of debt investing for the future, and this is basically you're like a fun hobby. As Dave writes it, Dave says, if you can light that money on fire in the middle of your living room and it might break your heart, but it doesn't change the trajectory of your month or your year or your life, then it's like any other expense.

1:06:50I don't need another guitar, but I kind of want one. If I want to take that guitar money and go to Vegas and set a blackjack table, it's an experience. It's fun. but um so that's kind of the the overall stance on any sort of these kind of things i i do not have an app on my phone i don't participate in these things especially like polymarket because these things have become so rigged was it trump announced the other day he's going to start selling early access to his truth social so you can know what he's about to post and begin to

1:07:22Dr. John Delony:like i i just did you hear the story about the the white house teleprompter operator no he knew exactly what was going to be in Trump's speeches. And so he started betting and he made over a hundred grand because he knew what was going to be in the speech. There's too many. The thing about betting on a sports event ideally is there's performance enhancing drug testing. And of course we know I'm an Astros fan. We know sports teams cheat, right? But there's supposed to be built in restrictions so that the outcome is what the outcome is. When it comes to polymarket stuff, man, it's so, there's too many actors in too many different places that can influence or have early insights, et cetera.

1:08:00So, dude, I stay away from all that stuff. I just don't participate.

1:08:03Dr. John Delony:Here's my honest, and I'm pretty brutal on this. I think it's a financial cancer on society. This entire thing of, it's really a byproduct of what has been coined financial nihilism, which is people don't believe in the system anymore to such a point where they want to go to the riskiest investment possible, riskiest bets possible because they don't feel like they can retire the traditional way like their parents did. So that's what we're seeing is a movement of young people flock towards these sports betting apps, whatever it is, whether it's Call Sheep, Polymarket, FanDuel, BetMGM, they're just trying to get a little bit of dopamine and the chance of getting rich is what's keeping them coming back.

1:08:41And I would, that's an interesting take, man. I haven't heard the phrase financial nihilism, although I hear the sentiment all the time, right? Just they feel like the game is rigged. It is rigged and people are frustrated.

1:08:53Dr. John Delony:So just YOLO it. I get it. If I got 50 bucks, why invest it into the stock market? I'd rather just go on Polymarket, have a good time. Well, not my psychological take because there's a lot of some of the smartest neuroscientists and psychological social scientists who participate in helping making some of these apps as addictive as possible, as hard to get off of, all that. And as difficult to make money on as possible. There's a science behind all this. But I also think there's a broader concern, a broader cancer in our culture, if you will, and that is we don't do anything as a culture. People go home and they just stay there.

1:09:37And so there's a sense of we have a culture of zombies who are dead in their own skin, and the most exciting thing happens on a TV show. That's the most exciting thing in their life. The most exciting thing that could happen is somebody's sports team, think about that. We're gonna pay some other guys to wear the jersey of the town I'm in and y 'all play the game for me and y 'all decide whether I have a good week or not. I love sports, but it's this outsourcing of you go play for me instead of going down the street to a local softball league and getting invested and being overdramatic about you're cheating and this guy always, right?

1:10:13So there's something about backing up and saying, if feeling alive to you is happening in the darkness of your own living room, in the glow of a screen, that is a huge signal that you have created a life for yourself that has no life to it. And so turning the lights on in your own living room and asking, what brings me life? Like what brings me excitement? It's why you and I went down the street a couple years ago and we're like, let's just go do a stand-up comedy night. We were so nervous backstage. We were scared. We worked on our stuff, but it brought life to me. I talked about it for days afterwards.

1:10:51I was like, oh, I should have done this. It brought life to me. And we made friends doing it. We were in the green room with other men and women who were trying to do this too. It's the reason we go hiking. It's the reason we go fishing. It's the reason why I love hunting. Where are things in my life where I can inject life into them and get excited about real things in the real world and not be captured by this other thing? It's like a hack to inject life into your lifeless body here. And man, if you're finding that this is the only thing that brings you joy and life, man, that is a... You've built a terrible life.

1:11:30Yeah, it's a ringing bell in your life to back up and say, dude, you get one ride on this one. You get one ride.

1:11:36Dr. John Delony:I can tell a lot about how your life is going based on your iPhone home screen. There you go. So if you've got all the betting apps on there, I'm like, man, this guy, he's struggling. Yeah, go join a bowling league. Go join a local soccer. RIP Ken Coleman, go join a pickleball league for God's sake. Ken didn't die, by the way. Ken's alive. He's just not our coworker anymore. It makes me sad. His empty desk is between me and George, and I still get sad sometimes. But like, go create a life worth living is what I want to say. Beautifully said. Hope that answered your question, Todd, in Nevada. Nevada.

1:12:09Dr. John Delony:Sorry. Don't come at me, guys. All right. Marianne's in Lansing, Michigan up next. Marianne, I apologize for our rambling. Thank you for taking my call. I appreciate it. I am going to be getting married at the end of August this year, and I'm calling just to make sure that I'm making a wise choice. We're going back and forth deciding if we need to rent versus buy. Now, renting for about six months after we get married will give us more flexibility to choose the right house. My future husband wants to initially buy after we get married because he wants to see about building equity in a home. And I just want to see if renting is a possibility just to make sure that we are in the right area before we buy a house.

1:12:58Dr. John Delony:Okay, well here's the checklist before you buy a home, especially as you're going to get married. Number one, we always recommend renting for a while because you're already combining your lives. There's already a lot of pressure there and newness. We don't need to add the stress of home ownership onto that. So renting for a while is great. Number two, are you guys completely debt-free? He just has a car payment. He has just$2 ,000 left on it. Okay, how much do you guys have in savings?

1:13:29Dr. John Delony:Savings total would be$80 ,000. Okay, and what's that earmarked for? I'm not sure. Okay, I'm just shocked he still has his car payment. Is it your$80 ,000 or it's his$80 ,000? It's mine. Okay. And he has nothing? No, he has something. I have to see the specific amount. He last time was$50 ,000. Why does he have a car payment still? He was trying to pay it off slowly. He just got it. So that's why. Okay. I think you guys need some financial alignment. That's another huge piece of this whole puzzle. Before you guys get married, we need to make sure that our values are the same, because otherwise you're going to have some fun, newlywed financial arguments.

1:14:24Dr. John Delony:And they're not fun. And this is just like a little surface level on, should we rent or should we buy right now? But you guys need to decide, are we going to be people who live consumer debt-free, who have an emergency fund, who have a strong down payment? Because this whole thing of I'm going to build equity with 0 % down and most of the money is going toward the lender on the front half of the loan. So renting is not a sin. It's not throwing away money. You're buying yourself patience until you can get to a place where you have some financial stability and do this out of a place of strength, not just out of, well, I want to build equity.

1:14:55Dr. John Delony:And I was told once you're married, you should own a home. You win, Marianne. Y 'all should rent for a while.

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1:16:48Dr. John Delony:We wish we could get to every call and question here on the show. So if you have a money question and you want an answer for your situation, we've got you. Head over to our website and use Ask Ramsey. It's our free AI tool that's built and trained on proven Ramsey principles. You'll get an answer the same way we would answer it here right on the show. Probably even better if we're going to be honest. So ask your question today at RamseySolutions.com. We'll click the link in the description if you're listening on podcast or YouTube. Ben is in Boston up next. Ben, welcome to the show. Hey, guys.

1:17:16Dr. John Delony:Thank you so much for having me. I've listened to you all for so long, so it's pretty surreal to be talking with you all right here. Well, thank you. It's an honor for us as well. How can we help today? So I wanted to ask, right now, I'm lucky and I'm really blessed to make a very good salary. I also have a very high cost of living in the Boston area. Boston's not cheap. We're high expensive. We also have two small kids, one on the way. And while I've listened to you all for a while, pretty recently became serious about, you know what, I want to pay off my debts. I want to really, as you all say, start the process of living like no one else.

1:17:55Dr. John Delony:But we – so right now I do have enough funds to pay off my debts other than my mortgage. Awesome. Something I've been excited about. The issue is I've heard pretty credibly that my – where I work is going to be downsizing soon. in that it seems like in the next three, four, maybe up to six months, I'm going to be losing my job. And from my research, I do think my next job will involve a real substantial pay cut, most likely. What kind of field are you in? I'm in the legal field. Okay. Are you licensed in the legal field or are you legal adjacent? I am. I'm an attorney. I work in a pretty specialized area, a cross-action area.

1:18:40Sure.

1:18:41Dr. John Delony:And I've been in my current role for going on 10 years now. I've worked my way up there, become pretty senior. And also, I've worked my way up to kind of know what's around the corner. Sure. Which does seem like we're going to be, yeah, it does seem like it's a very, best case scenario, looking at a big pay cut. I mean, right now, I'm making about$375 a year. All in, my wife is making about$65. From my research, unless if I really want to change things up, different field of law, completely different work-life balance, everything else, it seems like we'll probably be going down to like$175,$200.

1:19:15Which is still, don't get me wrong, on paper it's a good salary.

1:19:20Dr. John Delony:We have high expenses. It's a different lifestyle. It's a different lifestyle. You don't have to apologize, but it's a 50 % pay cut overall, so that's a big deal. So how much debt do you have? But I just think in terms of how much debt, and this is all based on savings, I could pay this off now, but it wouldn't leave me with much. Okay. I've got about 85 in student loans. My wife has maybe 30 in student loans, have 20 on a no-interest credit card, about 10 to 15 on my car. And there's maybe a few other little ones. But, I mean, all lines in savings right now, I've got like 180 in savings with my wife.

1:19:59Dr. John Delony:We have 180 in savings. And what was that year for? It was, at first it was an emergency fund. It kind of grew. I was going to invest it a little more. We do have high expenses. We have two kids and other on the way. And so, I mean, daycare alone is like right now in the$4 ,000 a month range, which is pretty typical. For one child? For two kids. For two. Okay. I was like, whew, man, I'm from Boston. I'm shocked by that. Okay, so$4 ,000 a month,$2 ,000 for each kid makes more sense. So if you paid off all the debt, would you have like 30K left in the emergency fund? I would. And we do have, again, we have some investments as well.

1:20:37Dr. John Delony:We have somewhere around the$100 ,000 range of investments. So we paid it all off. We'd have some money. We would not be, I wouldn't be worried about where are we going to eat the next month. But with this pay cut and such, part of me is like, maybe I should take a pause, wait to see where things shake out, when they shake out. Maybe I'm wrong about my research and what the options are here. Well, my fear is it's always going to be looming. so you'll never pay off the debt. And if you do, now you're stuck with all these debts and the layoff. So if I'm in your shoes, the best thing you could do is pay off all the debt today, you're left with$30 ,000, and then just stack money with all those freed up payments for the next three to six months.

1:21:13Dr. John Delony:Now we're back to$60 ,000 to$80 ,000 to$100 ,000 with no debt. That puts you in a way better situation. You're trading an unknown future. I'm going to have a pile of cash to cover all of these payments. and the expensive lifestyle that we have for, I'm going to have no payments. So if, if my house gets hit, I'm going to, I'm not going to owe anybody anything. Right. And worst case scenario, my wife has to pause her job and stay at home with the kids so we can, cause she's making 60, but after taxes and after, you know, driving back and forth and parking and all that. Actually, we, we bought net out from the$4 ,000.

1:21:58We like, y 'all have to make some significant, ask some bigger lifestyle questions. But I like the idea of heading into a storm, knowing everything, everything is shored up, not having a whole bunch of shovels to dig out all the gravel if, if a storm comes. And the other thing I haven't heard you talk about, dude, if, if I got word, George and I are, I mean, we're, we're brought into a lot of leadership conversations here. If I got word that I'm going to be out of a job that Ramsey decided we're going to close down shows in six months, you better believe, man, I'm going to be all hitting the street, talking to everyone I know, trying to ask, hey, what does your studio do?

1:22:39What does your agency do? Do y 'all have this? I would want to take agency into my own hands as much as possible, not just sit and hope it all happens. If you're making 375, you might be a partner and you may be a part of equity split and all that but you know what else you are you're a real good lawyer

1:22:57Dr. John Delony:you know i i appreciate that and i think that all makes sense to me i will say when i send my debt i do not include my mortgage we still have a uh a good amount of money left on the mortgage and obviously right now we're not thinking of selling the house or anything like that hopefully it doesn't come to that but i do agree i mean if we can get rid of all the shovels but the mortgage it simplifies things for sure and i'm yeah i thought that's what you all would say but wanted The question is, are you going to do it, Ben? People want to know. What's he going to do after this call? Have we been convincing enough in five minutes to make you make this six-figure move?

1:23:33Dr. John Delony:Honestly, I was bleeding that way, but then I was just a little worried. You know what? I should talk to some people from Ramsey. That's a classic lawyer answer. He didn't even answer. It was a yes or no question, Your Honor. You didn't answer, and you made me feel good. That means you're a great lawyer. We're going to pay it off. We're going to pay it off this week. Yes. Okay, so I want to paint you a picture. Okay, Ben? You ready? Let's do it. This time tomorrow, except for your mortgage, you and your wife owe nobody anything in the world. And you have$30 ,000 in cash. Right? And you make$375 ,000.

1:24:07Together with your wife, you'll make a little over$400 ,000 a year. I mean,$400 ,000. You and her shake hands and say, for the next three months, six months, we are going to contract our spending as much as possible. We're going to find joy in each other. She's pregnant also, right? Is that what you said? Yeah, we've got another one coming in September. So we're going to circle the wagons on our house. We're going to catch up on some shows. We're going to go on walks in these super hot, but sometimes super cool Boston winters. You're going to start spending time with the kids at a park. Y 'all are going to just circle the wagons on your spending for a season.

1:24:41And you're going to stack cash maniacally.

1:24:44Dr. John Delony:So if you can bring, you guys bring home like 25K a month right now?

1:24:51Dr. John Delony:So, after we take your out taxes, the 401k contribution, stuff like that, it's a little bit under that. But yeah, not far from that. Okay, so let's say you could live on 10, even with daycare and the mortgage, without any debt payments. Could you live on 10k? It would be a little bit higher than that. So, if there's no daycare, sure. But if there is, there's no higher than that. Okay, split the difference. You take half of your take-home pay and just shove it in savings for the next six months. Yep. And if you do get laid off, are you going to get some sort of severance?

1:25:23Dr. John Delony:Usually the answer is yes, but I think things are pretty unclear. So I don't want to cut on that, just in case. So I'm just trying to paint you a positive future here, that you wake up in six months. So you wake up January 1 of 27. You have$110 ,000,$150 ,000 in the bank. You don't owe anybody anything except for your house. You have a new third kid. They're healthy. They're awesome. and your boss calls you in and says, sorry, man, you kind of heard the words, but you're on the list. And so here's X number of dollars. Here's three months severance for you to go, whatever. And you've already put in the work.

1:25:58You got back in the associations. You started going to the, to the monthly, um, the, the, the Boston legal association meetings. You started shaking hands. You started calling old friends from law school and you have a new job already lined up brother. like I'm talking a complete 180 from the world y 'all are living and you are free free free that to me is a positive vision I would really latch on to

1:26:42Dr. John Delony:Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm George Camel here with Dr. John Deloney, and we're taking your calls at 888-825-5225. Cheyenne is in Dallas, Texas. What's going on, Cheyenne? I'm good. How about you guys? Doing great. What's your question? Oh, so I have around$600 ,000 worth of Pokemon cards. I buy and sell them. I have$300 ,000 in my personal collection. I don't know if I should sell all of them or if I should hold on to them as viable in business. Wow. How old are you? I'm 18. How long have you been doing this? I think since I was like 10. So you are buying new packs or are you buying cards and flipping them and holding on to them and they go up in value?

1:27:32Dr. John Delony:How did this all work out? Yeah, I was buying cards, flipping them, holding them. Wow. So how much have you spent to get here? Probably around like$150 ,000,$150 ,000. Wow. Are you working? Where'd you come up with this money? What are you talking about, George? This is work. I mean, where'd you get$150 ,000? No, it was slow when I started, right? So now I'm making like$60 ,000 a month buying and selling the cards. That is wild. So you said you have$300 ,000 in your personal collection, but you've got$600 ,000 holding. Tell me about the other$300 ,000. So I go to card shows, and I have a table, and I sell the cards to other people.

1:28:16Dr. John Delony:And that's how you could—you're saying you could make$300 ,000 if you offloaded all of these at the card shows? I could make—for my personal collection, if I was to start all, I could make like$280 ,000. So when you say personal, what's the other ones? The other ones are the ones I'm already selling. Oh, so you're already selling half of them, essentially. Yeah. And you don't want to sell the other half? No, but I don't know if it makes sense because I'm in college right now. So when the smoke clears on all of this, if you sold your personal collection today, you called one of your broker buddies and they just wrote you a check for$280 ,000.

1:28:54Let's do$300 ,000 for easy math. Plus what you already have contracted to sell. You as an 18-year-old, if you did all of this, this time next week, and of course, dude, I don't know how the trade goes and how they move money around, but let's just pretend it was cut and dry. This time next week, how much money would you have in your checking account?

1:29:17Around like – exactly, around like$600 ,000.

1:29:22Dr. John Delony:$600 ,000 at 18? Yeah. Wow. Well, what's your sort of end goal here? Like, what do you want to be doing at 23? I want to eventually start my own business. Doing what? In the card world or something else? Yeah. So this is it. Like, you're obsessive about this. This is your passion. If you could snap your fingers, you would be a full-time trading cards. Yes. Okay. Well, is it a viable investment? No. This is speculative. And so you could see, let's say, obviously Pokemon is holding strong right now, but we don't know what two years from now where things will be. If there'll be a 50 % crash overnight one day, we just don't know.

1:30:10Dr. John Delony:That's not going to happen in the stock market. There's a true sort of speculative supply-demand issue right now with Pokemon cards that does not exist in the stock market. Or if there was a major stock market correction and I've got to take my money to keep my home afloat, I'm going to not use disposable income or borrowed income. Or if there's a contraction, a credit contraction like happened in 08 and 09, I'm not going to borrow money to buy cards on speculative value. But if this is what you want to do – I don't know, man. You've got$600 ,000 and you're an 18-year-old. Why are you in college?

1:30:47If this is what you want to do, you're clearly good at this is what I'm saying.

1:30:51Dr. John Delony:It's because my parents wanted me to go to college, and I have practically a full ride right now. Okay. What are you studying in college? I'm doing business. Okay. The reason I made this call is because I think my whole portfolio of cards went down 20 % in the past two weeks. So it got me a little nervous to see what I should do in the situation. Well, and that's why, like, if let's take cards off the table, let's say you're a plumber. Being a plumber and owning a plumbing business is a great job. I would not buy plumbing tools for investing purposes. I wouldn't buy a bunch of tools and put them in my closet and say, I want to sell these one day so I can pay for my medical care when I'm 70.

1:31:37And so when George says this isn't a good retirement vehicle, that's exactly right because it's too speculative. At the end of the day, I have to sell a card to somebody who will give me an exchange of value for this thing that on its face, it's a piece of cardboard. It has no value in and of itself other than what you'll pay me for it versus oil I can put into a million different products, right?

1:31:59Dr. John Delony:So this makes it even more risky than a single stock, because at least that's a company that's producing things, that's creating revenue that has shareholders involved. So that's a very different ballgame than what you're talking about, which is more alike to crypto than anything else. Now, it's physical, so there's a little more, you can actually see it, hang on to it, and people are, like you're saying, there's entire conventions around this now. so I'm not saying that a year from now it's going to go down to zero dollars what I am saying is at 18 you got enough things to be anxious about so if I'm you I'm going to offload this invest all of that money and I just did the math for you 600 grand you just let it ride for 20 years never add another dime put it into an index fund you could have 5 million dollars sitting in there by 38 years old without ever losing sleep over it and being as good as you are could you not restart this game from scratch?

1:32:52Yeah.

1:32:52Dr. John Delony:If I gave you five grand and said, hey, go turn this into a Pokemon empire, a year or two from now, could you have a hundred grand? Probably more. Take me up on the challenge. And here's two things I want you to think through. Number one, I've got, I was an obsessive baseball card collector as a kid. I don't know where most of them are at this point, but I kept several because you know what the value of those cards are? I have no idea. They mean something to me, right i have memories attached to them nolan ryan is one of my favorites like so i've got some of those cards so if you've got some of the cards in your personal collection that mean something to you great keep those man that's awesome um and you have you started this thing what did you start this thing when you were 10 11 12 you were started this speculative business in what may look back on history as one of the most extraordinary wealth runs of human history.

1:33:48And so the reason I'm telling you that is part of being a business owner is riding out tough seasons. And so there are months when my books sell great, and there's months when my books don't sell great. That's part of being an author. And so I have to look at a long time horizon, especially when it comes to the valuables and collectibles, they're going to go up and down over time. And if gas prices go to $4 or$5 a gallon, then people are going to have less disposable income to buy cards with, right? So part of that is because you're 18 and you're starting this business and now you're starting to be like, oh, I'm playing with grown-up money.

1:34:25This is real money, dude. And I don't have the long-term track record of being a business owner of dealing with what happens when 20 % of my clients say, hey, we have other expenses because there's a recession or there's I got other expenses that just popped up. And so part of this is as a business owner is you've got to be comfortable with the ups and downs, which is why retained earnings are important and keeping cash is important, all that. But like as a business, you clearly know what you're doing. And there's card dealers and collectible dealers all over the planet. That's awesome. But I would not use this for a retirement vehicle.

1:34:58Dr. John Delony:Collectibles, no matter what it is, cards, coins, sneakers, it can be fun, but it is not a substitute for real investments. Correct. Where there's no cash flow, there's no diversification, and that's leaving you exposed and you're starting to feel a little bit of that anxiety. And for that reason, keep it up as a hobby, keep making money while you can, but I would not have so much stock in this.

1:35:31Dr. John Delony:You should not feel uncertain about investing, and you don't have to. That's why we created Investing Essentials, a two-night virtual event where George Camel and I walk you through my playbook for investing and wealth planning. We'll simplify everything from 401ks and mutual funds to passing on wealth so you can invest with confidence. Tickets start at$199. Get yours today at RamseySolutions.com slash events or click the link in the show notes.

1:36:20Dr. John Delony:Katie is in Idaho Falls up next. Katie, welcome to the Ramsey Show. Hi. Hey. How can John and I help? So I'm kind of in this spot because my husband and I have been looking for about a year and a half to buy a home. But we've been renting for the last five years. And our rent has went from when we started, when we first got married, it was$1 ,200. And now we're sitting at$1 ,500. And they're expected to raise the rent to$1 ,900. and so I already know based on our income that we can't afford$1 ,900 a month and we've already cut like practically everything you know that we can cut and so we found a mobile home for sale and they want$120 ,000 for it and I just don't know if like that's a good idea or not because every house that we've looked into an investor has either bought in it And right before we got into contract or, you know, we only got pre-approved for$200 ,000 and that's kind of, we don't want to spend$200 ,000 because then we're shooting ourselves in the foot because, you know, that means, you know, you're paying like, you know,$19 ,000 or$2 ,000 a month and we can't afford that.

1:37:42Dr. John Delony:What do you guys make a month? We make about roughly like$2 ,500. What do y 'all do for a living? We're in the tree industry. tell me about it so we do line clearing and um my husband works a long long hours and then i stay home and kind of take care of all the all the things that need to be taken care of at home for like just like the finances and the home kind of stuff so collectively both of you working in this business you guys make about 30 ,000 a year and he's working 50 60 hour weeks so he works like he works the 410 schedule with overtime as well so sometimes it's 50 hours and sometimes it's 48 hours a week and then we do like a lot of side jobs because we've been trying really hard to like get our business going but we've been having a hard time because in idaho there's like so many tree companies and so everybody all goes and bids out together and so it makes it difficult let me say this like i want you to hear me say this stinks because your husband is a guy who's working his butt off you're working your butt off and y 'all are really working hard towards the thing to build a thing, this business.

1:39:12And so I want you to hear me say that stinks because the story that you and I were told growing up is if you find the thing that you like to do and you find the thing that you're good at and you work really hard at it, the rest of your life will just work out. And so you and I got a bad story. And so hear me say, I want to applaud your husband's hustle. If he was here, I'd give him a hug, man. Cause I love to hear young men who are out there crushing it and trying and working, not scared of hard work that will do anything, anytime, working on weekends. I love that. And I love to hear a supportive spouse who's trying to co-build this business with him.

1:39:48I love it. The reality I'll have in front of you.

1:39:51Dr. John Delony:We work seven days a week. Yeah, yeah. Hold on. The reality I'll have in front of you is you could both go get a job at Starbucks and y 'all be making more money per year. And so the dream y 'all have is a good dream. It's just not working out financially. You'll have a math problem. And so at some point you'll have to decide we're going to be folks who love this idea of this business. We like being with 500 other tree companies, all competing, all driving the cost of tree services down into the basement. We love that. And there's really not a way for us to distinguish ourselves. So that means we love this enough.

1:40:34Like if you're a songwriter or you're a standup comic, we love this thing so much that we're willing to have this other life, which is we have to change apartments every six months because when the rent goes up, we can't afford it. We got to go somewhere else. Or y 'all have to look in the mirror and say, we gave it our best shot. We are hard workers. Let's take our work ethic and our dreams and our desires and put them in another direction that's going to reward us more financially. Because y 'all have a math problem in front of you. So it's technically two incomes because he does this like Friday through Sunday, his own business.

1:41:08But then he works for a power company.

1:41:10Dr. John Delony:But those jobs aren't making y 'all enough money to live. But that's still$2 ,500 a month total between everything? No. Like we have side stuff every now and then. Like we'll go into a job and it'll be like one job for two hours. But every now and then is not consistent income. So we can't count that. We need stable, consistent income. So the problem truly is not rent. Yes, it stinks that they're moving the rents. The problem is your income hasn't moved in five years and you guys are on the poverty level. But our income has – we started – when we first started this job, we were making about$13 an hour.

1:41:48And now we're at$21 an hour. I know, but you're not hearing what we're saying, Katie. Like when you see all the progress and how you've moved, that's awesome. You're still running into a math problem every month. And inflation over the last five years. But we're not in debt. That's great. That's great. But y 'all are about to not have a place to live because y 'all can't afford$1900 a month rent.

1:42:14Dr. John Delony:And if you go buy a manufactured home, here's what happens. The loan payment stays the same while the value of that home starts tanking, which means you're probably underwater on this thing within six months trying to sell it to somebody who probably doesn't exist. Because they're just going to go out and buy a new home if they want one. You're going to have a$120 ,000 payment on something worth$60 ,000. My question is, because we keep looking at this mobile home. We've been looking at it for a while. And then there was another house that had land with it, and we were really excited about it. um and it was only like it was 175 ,000 and when we went and we met with like the officer like the lender whatever you want to call it he had said oh you get pre-approved for 200 ,000 but you don't have to use it all and I was like oh okay because I didn't really understand all that stuff so when I asked him I was like so what's what's the better you know what what's a better thing you could do?

1:43:18Dr. John Delony:And then looking into the mobile home, it was like, oh, well, that's only$1 ,025, but you get a whole acre of land with it. I'm just telling you, please don't buy a mobile home. It would be like buying a truck with a payment of$1 ,000 a month thinking it was a good idea. And the truck will go down in value over time. And you're going to have a real hard time selling it. And you guys can't afford a$150 ,000 home. How much do you have in savings? I have about, like, so between all of our savings, we have about$17 ,000. Great. So we're going to call that your emergency fund. Well, I also have an emergency fund of$3 ,000.

1:44:00Dr. John Delony:$3 ,000? Yeah. Okay. You guys need way more than that for your emergency fund. At least$10 ,000 minimum is your emergency fund. If you want to, beyond that, start saving for the down payment, that's great. But like you said in the beginning, hey, we're trying to cut. We can't cut any further. You're right. The other lever we need to start pulling now is making more because you can't spend much less than you are. And that's where you guys need to reevaluate this business, reevaluate the jobs, reevaluate where you live. If there's not a lot keeping you here, can you move to an area that is cheaper to live with a better job that is more stable?

1:44:31And here's the reality. Your husband is one chainsaw swing away from hurting his back and being out for three months. Like there's a risk reward to these jobs. And y 'all need a big emergency fund. He is one stepping off sideways off the back of a log and twisting his ankle and he can't go up for three weeks. And y 'all lose all that income. Like so it's a very precarious. And so I hope you hear me and George. This is serious. Y 'all are in a precarious situation right here. So that 20 grand, that's your emergency fund. Never touch that. And now y 'all are saving up.

1:45:07Dr. John Delony:and even if you guys both were making$20 an hour, 40 hours a week, that's over 80 grand a year. That's a huge pay raise if you guys can separate this business out and go, we're both going to go our separate ways and get our own jobs making over$20 an hour. That would change your life and give you the margin to start stacking cash to buy a traditional single family home versus a manufactured home. And that's the problem. A manufactured home rarely goes up in value. In fact, it doesn't. The land may go in value, which makes you think this was a good deal, but you're still stuck underwater on this thing.

1:45:39Dr. John Delony:So please, please, please, we're begging you not to do this. It is not the solution.

1:46:11Dr. John Delony:You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, check out the SmartVestor program. SmartVestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals, your pro will take the time to explain your options, so you never have to invest in anything you don't understand. Head to RamseySolutions.com slash SmartVestor to get connected. Ramsey Solutions is a paid, non-client promoter of participating pros.

1:46:48Learn more at RamseySolutions.com slash SmartVestor.

1:47:05Dr. John Delony:Buying or selling your home is high stakes because one bad deal could cost you tens of thousands of dollars. You don't want to overpay for your next house or sell your current home for less than it's worth. And that's why Ramsey Trusted connects you with vetted real estate agents who have the experience to guide you step by step to make smart decisions, not expensive mistakes. Connecting is easy. Just compare agent profiles, interview your top choices and pick the right one for you. You can find a local Ramsey-trusted agent for free at RamseySolutions.com slash agent, or click the link in the description if you're listening on YouTube or podcast.

1:47:38Dr. John Delony:Robin is in Fort Worth, Texas, up next. Robin, welcome to the show. Thank you. Hi, John. Hi, George. Thank you for having me. Absolutely. My husband is 55. His name is Steve. I'm 41. We just hit Baby Step 7 last year. Awesome. The house paid off completely debt-free. But right after life handed us one heck of a Murphy, Steve was diagnosed with early onset dementia. Oh, God, I'm so sorry. And because of our ages, we have a multi-decade timeline to protect. And I need to know how to structure our wealth so that his care costs don't completely drain our retirement before I'm ready to use it. Wow.

1:48:18There's a lot here. My initial answer is I don't know if that's possible. okay um that's a sheesh that's a mess that's a mess i'm so sorry um what's the state of your finances right now like y 'all hit baby step seven what does that what does that mean practically

1:48:42Dr. John Delony:we are we're like 24 000 away from being millionaires thankfully um but when i say like what is yeah what does that mean do you have like a 700 000 house you're about to pay off or Or do you all have$600 ,000 in cash, right? Well, I will say not all of it. I mean, it's not all liquid. Our house is like$250 ,000. Okay, okay. We've got retirement and stuff, and it's$630 ,000. Okay, excellent. And you're working full-time? I'm working full-time. Okay, and is he still working? He is not. He's on long-term disability. Okay. Okay. And did you guys have any long-term disability insurance? We did. So he's actually taking home 80 % of his full pay.

1:49:32Dr. John Delony:That's fantastic. Excellent. You did a great job there. Was that through his employer that he had that set up? Yes. Incredible. Okay. So how much is that? So he's taking home about$41 ,000 a year. Okay. Great. So a little under$4 ,000 coming in there. And then how much are you bringing home? I'm$102 ,000 a year, and those numbers are gross. They're not net. Okay. Well, you guys have a great income and you're completely debt-free, which sets you up to sort of create this slush fund for anything medical that comes up, especially while he's pre-Medicare, because he's got 10 years until then. Yeah.

1:50:10Dr. John Delony:So that's really what you're trying to figure out, is what does care look like? There's a lot of questions we don't know of what this progression is going to look like, what the ongoing care is. So the best thing you can do is just get as much facts as you can and then know here's what could happen a month from now, a year from now, two years from now, and be socking away that money to kind of protect yourselves to not use the emergency fund. so we have been investing about thirty four thousand dollars between the two of us and my roth 401k and ira and his spousal roth ira should we change our investment and just stack up money like a storm mode until we know i mean i don't i don't know what the future holds nobody knows what the good news is we know that the long-term disability income will be there yeah and so the big question is, at what point would you have to step down or away from work in order to help care for him?

1:51:07Dr. John Delony:Or what would that look like? I would at least have that conversation so that you know, hey, two years from now, there's a chance that he might need more intensive care. Am I going to do that? Or should I keep working? And we get private care for him. That's the kind of math you're going to need to grapple with. And dementia, the more that, I mean, it's being studied all over the world right now, but the more studies that come out, dementia is now not a singular thing. It's kind of like saying somebody's got cancer, and the next question is, well, what kind? So have they given you any sort of prognosis based on the type of dementia he has, other than its early onset.

1:51:47It came much sooner than is quote-unquote normal, right? Do they give you any kind of prognosis for in two years, in three years, in seven years, or is this quick? Do they give you any sort of prognosis here?

1:52:03Dr. John Delony:It's vascular, but because of his age, there's really no timeline. Okay. The average timeline is five years, but that's estimating everybody in all ages. Right, and that might be 80. if the vast majority of that pool sample is 80 or 90 year olds, they're going to have other complicating factors there. So, wow, what a mess. I like the idea, George, and tell me if I'm wrong. I like the idea. And we rarely, we don't usually say this on the show of splitting the difference of you continuing to invest because you you're, you're 41. You, you statistically speaking, you're not even halfway home yet. Right.

1:52:39Right. And so you've got to begin thinking about life after Steve, life after you're able to make six figures. And at the same time, you are going to have acute expenses that are going to like predictably expand over time with extra care. Do you need to have a quarter time nurse living with you or coming in during the day? Is he going to go to a care facility? Like so there's going to be that reality where you're going to need additional cash more than you normally would. Right. Yeah.

1:53:10Dr. John Delony:Do you know if his long-term disability is taxable income or if it's tax-free? It depends on how the premium was paid. Oh, wonderful. Okay, so that's like net income, which definitely helps the numbers here. Do you currently have a financial advisor that you guys are working with? No, not yet. Okay, I would definitely contact them because here's what they can do is map out all of the variables that you guys have. Here are the Social Security survivor benefits that you will have additional to any retirement that you have. All of these things will give you a clear picture. Here's all the insurance options we have to help with his care.

1:53:47Dr. John Delony:And once you map all of that out, I think you guys will sleep better at night knowing that there is less variables than there were before. That's the most you can do. You guys have done such a great job preparing for a storm because you're completely debt-free with a solid income and you had the right insurances in place. So I want to let you know you are doing so much better than most people in your situation because of the hard work you both did. And, Robert, can I recommend – how recent is this diagnosis? It's just a little over a year. I mean the diagnosis is this month, but it's been a year.

1:54:22Okay.

1:54:22Dr. John Delony:We've been waiting for a year for it. I would recommend you getting with a group in your local community. They're in Fort Worth. They're in the Dallas area where you can go once a week, once every two weeks, and sit with a group of spouses who are going through the same thing. You're going to need people who speak your same language, and y 'all can just look at each other and know. You know what I mean? but one of the beyond the finances what I want you to do is to is going to sound nutty but you can only provide care for him with what you have and so it's going to sound counterintuitive but I want you to be in service to yourself first so that you can be of service to him and to what comes next meaning I want you to have a group of people that you can talk to I want you to be serious about your physical health and your emotional health and your relationships so that he can anchor into you in this upcoming season, whether it's two years, whether it's five years or beyond, because it's going to be a journey.

1:55:25And if you don't have any water left in your pitcher, you're going to have no way to fill his glass up. Do you get what I'm saying?

1:55:33Dr. John Delony:I do. Yeah. Blessings to you, man. I hate this. Hate this for you. I hate this for him. Hate this for your whole family. Thank you so much, both of you. I appreciate your guidance. Yeah, check out SmartVestor Pro there in the DFW area. I know there's quite a few of them, and they'll sit down with you, and with the heart of a teacher, they'll walk you through, and you're going to have to become a scholar in this stuff because you're going to be doing it on your own. And by the way, if you haven't moved all the accounts in your name, if you don't have power of attorney, medical power of attorney, financial power of attorney, all those things, you're going to be a sole decision maker on a lot of this on all of this moving forward so getting some people in your corner that can give you good wisdom and counsel is going to be really important for you yeah but to answer your question i would keep investing your 15 anything beyond that starts to go into this sort of care fund and probably a high yield savings account for now and just stack it up and stack it up and stack it up so that we don't burn the emergency fund or our nest egg along the way but we're hoping for the best for you guys

1:56:36Thank you.

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1:58:03Dr. John Delony:Our scripture of the day, Exodus 20, verses 8 and 9. Six days you shall labor and do all your work, but the seventh day is a Sabbath to the Lord your God. Serena Williams said, don't let anyone work harder than you do. You hear that, John? You've already failed. I've been carrying the load today. Carrying it, man. All right, Manny is in Chicago up next. What's going on, Manny? Hey, guys. Thanks for taking my call. I'll try to give a quick summary before I ask the question. I will note that my plumber did give me an update earlier today, so maybe your answer will change. I'm 27. I just recently bought a home.

1:58:42Dr. John Delony:I do have three young kids and a stay-at-home wife, and I'm expecting my fourth child within the next two weeks. Party. Give or take some time. and um since i got into the home uh i did have a savings account that dwindled down a little bit just from some small repairs like a hvac system that needed to be repaired for three thousand um and then small things around the house uh within the last month my sewage drain i think has a crack in it oh no caused my entire home to smell like sewage and now i have like uh drain flies pretty much throughout my home. What did your plumber say? So I had two different plumbers come just to get two different opinions and quotes.

1:59:26Dr. John Delony:One of them said it is a drain pipe that does have a crack. The house that I got was a remodel. Everything was pretty much new, including most of the above-ground plumbing, but the sewage stuff was all the original pipe work. And he said he needed to get a camera scope in there, and he did see where it was and it was under parts of the foundation under the ground are you on a slab yeah so where the pipe is cracked it's part of a slab yeah or it might be right next to it or underneath it um but the main thing is that because i'm having like drain flies and all these these small issues that come along with this i do have a previous employer's 401k that's about 23 grand.

2:00:14Dr. John Delony:I'm in baby step two. My only debt is my, my wife's van. It's about 14 ,000. Um, my actual savings is about 2 ,500 and I have$2 ,000 for a sinking fund for my personal car that may go, um, God knows when, and then a thousand dollar emergency fund. Uh, the only other option that I would have to fund it if I don't use the 401k would try to be to finance it or use money from my in-laws and I'd pay them back with little to no interest. But I just wanted to get your guys' opinion because I know it's shunned upon to take from your 401k, even though I'm not putting anything in there now. Yeah. Let me ask you a few questions about the work.

2:01:00Anytime I've ever had plumbing snaked, they show me the pictures. Have you seen the cracks?

2:01:06Dr. John Delony:Not yet. I'm going to have the second plumber so that's what the first one told me the second plumber is gonna the the main issue is that what they told me today when i was cutting my grass yesterday i did see a puddle of water on one of the corners of my house and my in-law my father-in-law came and he helped dig up some of that corner to kind of see what it was and it ended up being like uh like pretty much poop and stuff backing up and flowing up. So as far as like the urgency goes, I do want to try to get it done just because I'm going to have a newborn. Oh, of course. Dude, you got two guys with kids.

2:01:44Dr. John Delony:We get it. And you got storm on storm on storm right now. Yeah. Well, here's what I want you to think through. If they come out and they say, yeah, it's cracked, and we have to dig up your entire yard from the street to your foundation and completely redo this whole thing. It's all cast iron. it's old or old it's rotted through it's iron it's useless um there could be we can drill a hole in it and pump it completely pump it out for 600 bucks and that will get you two months or three months and then we'll come out here and pump it again and i'll get you three more months and so the temptation is and i totally get it dude both george and i like we both get it is i want to just do all this right now.

2:02:28I need to get it all fixed right this second, whatever. But I always want you to remember, generally in these kinds of situations, unless your house is falling over, there's step one, the perfect option. There's step two, there's step three, there's step four. And so what do I have to do to limp along while I'm still gathering and saving money so I can do this whole thing right? So it's basically what gets us by versus what gets it completely fixed.

2:02:52Dr. John Delony:Right. Yeah. So since I'm not on a septic tank, I'm on my city line. I'm in like the suburbs of Chicago. Sure. Based on what they find when it's dug up. Well, how would you guys go about it then as far as. Well, I mean, there's going to be multiple stages. If two guys come and give you the same issue, if they both snake it and they're both like, yeah, brother, your pipe all the way to the street is screwed up. I'm going to want to call the city and see if they have any investment in this thing too. Is part of this line theirs? I'm also going to then, because then you start phase two, which is, all right, how much is it going to cost for you to fix it?

2:03:30How much is it going to cost for you to fix it? And I'm going to call four other companies out here to see what they would charge. and I'm going to be I'm going to do my due diligence to see how I can get this thing not the cheapest but how I can get it done with the most reputable company done the right way for the

2:03:45Dr. John Delony:best price okay because um they did the plumber that saw the issue today did say not to use like any of the washers dryer shower anything just because of the fact that um poop was coming up from that little corner and the drain was busted. I'm just waiting to get an actual visual on the pipe. Is there somewhere you guys can go temporarily? Yeah, so my in-laws extended their hand for us to stay there for a couple of days. Wonderful. I would definitely do that. I'd call the city, too, and have a city sewage inspector come out and look at it and see. Because if it may be backed all the way down the middle of your street for half a block, and the city's got work to do, yeah.

2:04:29Dr. John Delony:And I would also contact your homeowner's insurance. Have you done that? No. I do have a warranty, but they won't cover it. So I didn't think to contact my homeowner's insurance. The new home that you just bought, why wouldn't the warranty cover that? The company said they don't cover any type of sewage plumbing, only above ground, which didn't make any sense to me. Here's your homeowner. Go find every piece of documentation for that warranty. Go pull up your declarations for your homeowner's insurance, upload it to AI, and see if there's a way that this can be covered. Because your insurance company might say, no, we don't cover that.

2:05:07Dr. John Delony:You might find that you appeal it and go, nope, they're going to cover it now. And they might then cover your displacement to go rent a home somewhere while it gets fixed. And so I don't want you to feel like there's only one option right now. I'm going to fight this thing to offload it as much as I can. It's a part-time job. And if you think of a part-time job that you might earn$10 ,000, you'd probably take that part-time job. This is the same thing. You may save yourself$10 ,000. What did that first plumber quote you to dig up the whole line from your house to the street? He said depending – well, the line is under like six feet of dirt and it's in a crawl space under my basement or under my home in my basement.

2:05:45Dr. John Delony:He said it could be at$6 ,000 to$10 ,000 just depending on how much line is cracked and how far down he has to dig. Okay, so if you think about it, give yourself that exercise too. What does life look like? The numbers you just gave me for your car fund, you've got six grand in your pocket right now. Yeah, between your sinking fund, your savings, and that car repair fund, you've got a good$5 ,500. So within a month, you could have six grand. And so you might not be in as bad shape as you think. What's the car loan is$14 ,000. What is that van worth? uh it's probably worth about the same about 14 15 okay it's a 20 years from honda odyssey and you got you got four kids so you need a van yeah i get that but i was wondering if it's worth 30k and you guys can downgrade and van for now that that could solve some problems too but i definitely would not touch that retirement account i know it's tempting because it feels like old money in your old coat pocket but man that's like taking a loan at 35 interest with the penalties and taxes you're going to pay on that money so it is not worth it and if you just leave that money alone to grow for the next 30 years, it's really a six-figure mistake you're making.

2:06:57Okay. So can I talk to you just dad to dad real quick, husband to husband? Yeah. I promise you this will pass. And it feels like it's all happening. You're having a new kid on the way. You've got in-laws saying you can come live with us. You've got a car that might die. It all feels like it's happening. Let's laser beam on the plumbing issue and get this thing cleaned up and let's celebrate this new kid coming and let's do everything we can to scratch and claw and pay for cash on this deal.

2:07:27Dr. John Delony:And worst, worst, worst case, if the in-laws want to be generous and help you guys cover this for now, go for it. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.