“My Financial Advisor Told Us To Take Out A HELOC For A Tax Write-Off”

27:53And so my question is, yeah, where's the rest of it going? Oh, let me tell you. Yeah. Food, schooling, daycare, insurances, utilities, transportation. We do have a couple of medical bills and then we support, this is very minimal, but we do support our families back home. And that helps them a little bit. But if we add all that up, honestly, we're always on the red. and we're trying to minimize as much as we can. How much are you paying for the families? It's like a couple hundred dollars, three to four hundred dollars a month. Three to four hundred, okay. And how much is the kid's school? It's about$1 ,300 a month.

28:37Okay, okay. Yeah. Is that daycare? Daycare, about$800 a month. Well, what's the$1 ,300? Is that private school? Yes. Yes, and we are grateful to get financial aid, but that's sort of the balance. How old are the children that are in private school? Five and three. May I push on something? Rachel, I'll kind of walk you through what to do here, but I'll just quickly say I think you have to have a conversation about the two kids, five and three, being in private school to the tune of$1 ,300 a month. Private school is still going to— No,$1 ,300 a year. Oh, a year. A year. I didn't catch that. So that's significantly less than...

29:20Okay, never mind. I thought it was$1 ,300 a month. So it's just like a few hundred dollars. I mean, yeah, so it's not a ton. All right, Rachel. Oh, I'm sorry. I'm sorry. $1 ,300 a month. That's correct. I'm so sorry. It's$1 ,300 a month. So you're right. I don't want to bog down on this. I want to give it to Rachel here, but I'm going to challenge you that private school will always be there and they really don't need it that much as much as you need$1 ,300 a month back in this thing called a budget, which you aren't doing. but we just found$1 ,300 that you desperately need. Rachel, I'll hand that one to you.

29:51That's just my opinion. Yeah. And you know, there's going to be seasons and there has to be some changes, some significant changes, right? Because if there's not, you guys will keep in the cycle of where you've been. And so I think that is the hard reality is that you want to be able to do everything, but you mathematically can't, right? You guys keep running into that. You can't keep doing everything. And so you're either going to get behind on bills. You're going to get behind on a mortgage. You're going to get behind on things. And I'm scared you're going to get behind on the wrong items. And so I think you guys are going to have to have a really, really hard conversation.

30:28And it's not forever, not forever. But for the next two to three years, our lifestyle has to change. And you guys really are at the point where even$400 or$500 makes a significant difference. and so to be able to say okay what are the things that if we that are not necessity food shelter utilities transportation that's it we have to be paying for daycare there's no other option school there's another option to your point that doesn't have to be private school like what are the things that we don't have to have to literally survive yeah and i'm curious what that number is and that's gonna hurt that's gonna hurt when you see that number and to think oh my gosh if we eliminate these things that we want to do that are good things, but we can't afford it.

31:09Just for the sake of time, two things I want to give her. I want to give her a session with one of our coaches and free every dollar for a year. Let's get those things in play and you can dig out of this. Yes.

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32:33all right let's go to Antoine in Austin Texas Antoine how can we help today So I just wanted to question, like, if it's worth getting a loan for school. So this is like the scenario that I'm going to go ahead and tell you right now. So my parents want me to go to this local school that's a lot cheaper, the financial aid. They pay me around$1 ,000 to go to the school because of the financial aid. And then the school that I want to go to, it's a ministry school. And it's been what I want to do and I feel like I'm called to do. And it's ministry itself. And that school I do have to pay around$2 ,000 a semester.

33:12Okay. Well,$2 ,000 a semester is not bad. I mean, that's over like five months. You could go and make that in a month doing a side hustle. Yeah. Yeah, you could cash flow it. And they were talking to me, and they're just like really like bribing me with basically a good amount of stuff just to stay with that school because they think that that school is so good. And I just, I don't really see the hype in it. And it doesn't teach what I'm wanting to actually learn. They think that, I guess in a sense, they're different believers as I am. And they don't think that getting a ministry degree is like a real thing.

33:51Like they don't think that it's like a legit thing to do as a career. Right. Okay. So yeah, it is a legit thing for sure. I do think it is going usually it is on the lower ends of a salary perspective. So they may be looking and thinking, Antoine, go get a business degree and maybe go into ministry, you know, part time and volunteer and go create a life financially that's bigger. And then I hear you saying, no, this is kind of this is what I want to do. I'd rather go down this route, which, again, is not a bad route. I would caution you to not just say, okay, well, if I'm going to do this ministry and it's$2 ,000 a semester, I'm going to have to borrow money and all the things.

34:39But if you cash flow it through and get the degree you want, the ministry degree, I mean, I guess is this specific school, is it like a very specific type of ministry? or or um it's a it's like theology um christian ministries okay it's uh it's in a sense it's a lot better for me to uh do because it's one of the cheapest schools out there because it's online so i'd be at the comfort of my own home this local school that i'm currently going to i'm currently going to right now and it's just i'm not learning what i would actually learn in ministry itself because it's not a ministry class that they have here sure are you so you're wanting to be a pass that you have to have a I think this is so clear cut this is very simple do you feel called to this or not?

35:28yes or no? yes and if you don't do this do you think that you will sense a holy and I'm using that word on purpose a holy disrest that you will regret that spiritually?

35:46in a sense I don't believe so I feel like it's like when you're called to something like that, that you don't, you don't burn out. That's what I'm getting at. I'm saying, if you don't, you misunderstood me. If you don't do this, if you don't answer the call, do you believe that you'll suffer disrest?

36:05Meaning I've lost you altogether. Let me put it another way. Do you feel called? You said yes. And I think that if you don't do this, that your soul won't be whole. That's what I think. And I also, yeah, you're with me now. And I also think that you'll resent your parents if you don't do this and if you bow to their wishes and their pressure. Yeah, and I don't have a problem with it because it's a very reasonable situation. Now, we do get calls from people that want to go be missionaries and they want to go get a$60 ,000 a year degree from a private Christian college. And you're like, that makes absolutely no sense.

36:45but two thousand dollars a semester you're like yeah you again you can do that waiting tables in a month yeah so you could you don't have to go into debt for it no not at all and you shouldn't or ask them for help especially given this situation yeah well they said they well they weren't going to help me at all if i go to this school right kind of sucks because i mean but i mean at the same time like they in a sense they think the main reason as well is that they think and I'm not going to, like, stick through it. And I've, like, in a sense, when it came to church, like, I'm trying to get, like, more involved and more involved.

37:18And that's what I've been doing. Like, I've been going to school and just trying to be, like, as most involved as I possibly can. And, well, in a sense, I proved them wrong with several things. They think, like, when I went to go get, like, baptized, they thought, okay, no, like, I don't think you should do it, like, right then and there. Like, this is barely a new thing. And in a sense, they made me wait until I was 18, which wasn't that long it took about like half a year yeah they're just yeah they're cautious they're cautious and maybe in their background spiritually they got burned a few places you know what you mean and so they're just like whoa just you know so that's that's fine your parents but you don't have to do what they say now there's a there's a there's a tension there for some people but how old are you antoine i'm 18 18 okay all right so how long's the school sorry ken yeah How long is the school?

38:08It's four years. It's four years. Okay. Yeah, so I would make a plan to cash flow it. And again, this is not a school or a degree that's going to put you in a really narrow place theologically, right? No. You can use it anywhere. Okay, perfect. I think that's another thing. I would have a red flag because there are some of these, you know, where it's a very specific niche within Christianity even, and you can't really use it a lot of places. So I think the broad sense is helpful. I think it's great. Yeah. I want to finish this point because I do hear your heart. And your parents are very influential, as they should be.

38:49And you're 18 years of age. And parents do things like this all the time. I'm not immune to it. Rachel's not immune to it. where a parent's fear turns into what they think is practical advice and it's not practical advice. It's them projecting their fear. I think that's what's going on. So Antoine, you got to honor them that I think they want the best for you. And I just think they're human beings who have fear. And I just wanted to make that point because I think it's important when you go through this and we're giving you advice to go, yeah, go do this, go cashflow. Don't worry about what mom and dad say on this because you believe you're called to this.

39:27And then this is just part of growing up. So it's tough. I just wanted to acknowledge the tension. Because I think we have a large audience that are going, what do you say? And I'm not saying it's going to be easy, but I do think the choice is simple. And I would rather disappoint them early so I don't resent them later. So tough stuff there. Let's go to Trent in Tulsa, Oklahoma. Trent, how can we help? Hello. My wife and I are both 35 years old, and the only outstanding debt we have is our mortgage, which is going to be paid off next year. After we pay off our mortgage, we were thinking to build up a 529 with a couple hundred thousand in it for our daughter and or a career emergency.

40:07So the idea is that my wife and I's career field feels a bit unstable right now. So if we ever get laid off, we want to be able to use that 529 to send me or my wife back to school to build new skills. And if we never use it, then we want it to go to our daughter when she starts college. Is this a viable plan? And so what risk do you see? I would say it's a viable plan for your daughter. We espouse that. What careers are you in that you guys feel like you're really on thin ice? So my wife is in tech. She's like a data analyst, and I would be an untenured professor. Yeah, yours is a little bit more sketchy than hers.

40:48I think, you know, she can upskill in the tech space without going back to school. So I'm just going to push back against the thought that this 529 is either for our daughter or for my wife or for me if we need to get more skills down the line. And I think in your particular careers to pivot, I don't think another degree is the answer. I really don't. Could be, but I'll give you a quick litmus test on that. Is a degree the only way to do what you want to do or is it the best way to do what you want to do? If that's the case, then you could use it. But don't just make that assumption, especially for her in the technology space where upskilling now is not going to require any kind of degree.

41:26There's going to be boot camps. There's going to be classes, courses. Google just announced a whole other array, Rachel, of a six-month program where you're going to see more and more big companies over the next few years start to train the people that they want. You as a professor? Who knows? Yeah. Now, I would say for 529s, it's an investment. So you're wanting to sit there for at least five years. And you guys are probably going to want to go back sooner than that. So I would just cash flow your wives, set your daughter up for the 529. And then if you guys needed it for you guys, I would just cash flow it.

42:17Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah, and that's why you've always said that having term life insurance from Xander is essential because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance.

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44:07Welcome back to The Ramsey Show, coming to you from the Fairwinds Credit Union Studio. Alongside Rachel Cruz, I'm Ken Coleman. So excited to be with you today, and we want to coach you up. 888-825-5225. Antoinette is joining us now in Fort Worth, Texas. Antoinette, how can we help? Well, I'm going to be 62 next month, and I don't have anything to say for retirement. And I want to become a first-time homeowner. And I don't know if that's stupid and ridiculous or if it's possible. Well, I don't think it's stupid or ridiculous. Let's focus on the possible part. Give us a picture of your financial situation, given that you have zero retirement or very little retirement.

44:50I have no retirement, and I have no money for a down payment. So I would have to go USDA or SESPA, something with a zero down. And so that would make my payments even higher. No, you don't have to do that. You don't have to do that. Do you have any debt? Yes, I have some, but not unmanageable. and I'm getting it paid off really quick. Okay, how much debt do you have? I think Credit Karma said I had about$8 ,000 or something like that. I just paid off$600 worth of two of my accounts in the last month. Is the 8 ,000 credit cards or personal loans? What is it? Let's see. I paid off the personal loan, and one of them is my car, and the rest of them are credit cards.

45:36So I've got, I think, four credit cards. How much is in your car? How do you owe on your car? Oh, gosh, I can't remember. I'm really bad with money. I mean, numbers. And so I just know that I just got it two months ago, and I had to trade in my other car because it was a 2019. It was convertible, and it didn't convert anymore. And mechanically, it was found, but everything else on it was falling apart. So I had to get rid of it, and I was upside down on it. because last year it was worth$17 ,000, and then this year it was worth$5 ,000. And so I was real upside down on it, and so I owe more. I had to get a minivan because I'm so popular.

46:16I can't have a little convertible. So I owe more on my minivan than really I should. Wow. And did you roll over the negative equity on the convertible? Yes. Into the minivan. Okay, so how much do you owe on the minivan? I don't know. You don't know. Antoinette, you signed a loan. You don't know how much the total is. That's right. All right, all right. And she had to go to Credit Karma on the other thing. So one of our problems, Antoinette, is you don't have a firm grasp of your numbers. Yeah, she already said she's bad with them, but it's not a case. I can't remember numbers. Oh, but it's not about that.

46:58It's about do you have a file in your house somewhere where we get the car information? Yes, but I'm a truck driver, so my house is like 2 ,000 miles away. Why do you need a minivan if you're driving a truck all the time? I go home sometimes. And you're popular, so you and the ladies are hopping in the minivan. Okay, all right, I'm trying to catch up here. Okay. Because I'm trying to figure out, honestly, if we can sell the minivan. What year is the minivan? What year? Well, I had to go for a, let's see here, a 2023, I think. Okay. You had to. And with the negative, I mean, this could be$30 ,000,$40 ,000.

47:40I mean, so, okay, so Antoinette, I want to paint you a picture. Yesterday on the show, we had a truck driver, Christopher. He paid off all of his debt, and he has hundreds, I mean, tens of thousands of dollars. I mean, he's just absolutely killing it. And he's a truck driver. He was telling us he had a Subaru, brand new, ended up selling it, had some, you know, had to take out a small loan because it had gone down and he was upside down a little bit. Bought an$8 ,000 Lexus. The Lexus gets hit. He gets a check from the insurance company for$9 ,000. He ends up buying a$2 ,000 car, takes the rest of that and throws it at the debt, right?

48:20So there's a way to do this. And even someone in your industry, we literally just talked to him. He did his debt free scream yesterday. Here's the thing. Okay, so the excuse that I am bad with numbers can't be an excuse anymore. Okay, you are an adult. You are smart. You are capable. And we have to get this under control. So the first thing I need you to do when we hang up is I need you to call the dealership or the credit, wherever you got the loan for the van. I want you to pull up the credit card again and know exactly, exactly which credit cards are out there and know exactly what you owe on them and companies.

48:56I want you to write a list down and then take your phone and take a picture of it. So you have it documented. Even if you're out and about, you have it documented. And then the plan is going to be, home ownership is going to be down the line, okay, for you. But I think the goal here is to get yourself out of debt. And Antoinette, you're more than likely going to have to sell the minivan, okay? And you're going to get a beater$2 ,000 car because I want you to be out of this debt so that you can start saving for retirement. I don't want you driving, you know, have to be a truck driver for the rest of your life.

49:28I want you to be able to have a great retirement. And that's not going to be possible with the habits that you've been in, not only just financially, actually, but the way you're going about it and your attitude about it. You've got to make the turn and it's going to be difficult and hard, but you need to get as much facts in front of you as possible because you don't know what you don't know. Are you an independent contractor? In other words, work for yourself or do you work for a company? I'm a company driver. I'm not kidding about having a bad memory and I update all of my bills every other month.

50:03I have a piece of paper that tells me I keep it on a book. I look at every one of them. I see how much interest they're charging me. I see how much my balance is and then I uh I tally up my total debt I also look at credit karma a few times a week I just have a bad memory and if had I known that you were going to be asking me this question I would have had this stuff you called a money show my friend you know what I mean and so we're trying to help we really are and so my I know you are my encouragement to you is that when there when there is something a big big missing piece and the car loan is that for me right now that I need to I need you to know what it is because I may need you to make a really quick decision to sell it because you know how much the payment is each month yes the payment is uh nine hundred and ninety five dollars okay almost a thousand dollars how much money do you get paid once a month per month, what are you making?

51:03Probably about $7 ,500. Okay. And let me do a quick follow-up, Antoinette, because I didn't hear you. That's my fault. Did you say you're independent? And the reason I'm asking this, did you say you're independent? No, she works for a company. Okay, do they have a 401k or some type of retirement program that you can be contributing to? Yes, but I don't, because what's the point of that at my age? Because you have nothing. so we can run these numbers but i mean for the baby steps as we teach them is a thousand dollars in savings just for basic emergencies baby step two is to pay off your debt smallest to largest that's why rachel leaned in there we want to get the debt out of your life because we just learned that that could save us 900 bucks a month that could be a thousand dollars that could be going towards retirement and and so why would i want a two thousand dollar beater card she's going to break down all the time well a two thousand dollar beater card doesn't always break down all the time you can ask christopher yesterday he literally had a picture of his and it runs great it's and i'm talking to a person who's super popular your own words have the ladies pick you up when you're not in the truck i want to get all of my family together and take some places i hear your heart and i don't want a lamborghini i'm going there yeah i don't need to argue i want to dunk a basketball uh but just some things are not going to happen because i'm five foot eight and can't jump.

52:19You know, if I want to retire with dignity, I've got to start saving money and I can't save money if I'm in debt. Hey, Antoine, I want you to keep listening to The Ramsey Show for real. I want you to listen every single day for the next six months. Make that be your goal. Just as you're driving, listen to this show because I want this knowledge to soak in and this way of thinking and the way of life when it comes to money.

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54:18I got to say, even though she got a little upset at us, I love Antonette. I love her spirit. And I think what I want to touch on real quick, Rachel, is I got her frustration. I felt it. And that's what it's like when you wake up like she did one day, 61, no retirement, no house. And it feels as though she's at the base of a mountain that's impossible to climb. However, we know, and as you pointed out, in talking to a truck driver just recently on this show, it is possible. But the frustration is real. And I guess the thing is, it's like, hey, this is going to be hard. There's going to be some tradeoffs.

54:55Yes. And they're going to be painful. Yeah. It's about choices. We have to make choices. And, you know, we talk to people that are on baby steps four, five, and six. They've gotten out of debt in their emergency fund, and they had to make a choice to work extra. They have to make a choice to cut expenses. in order to put extra money to pay off debt. They had to make choices, really hard choices. But the outcome of what they were doing was worth it. And so I think that is it. There has to be this level of reality of to say, the outcome that I want, and in her case, whether it's a home, whether it's retirement, these sacrifices that I have to make in order to get what I want are worth it.

55:36And, you know, Ken, I think there are some people in life, they're not worth it for them, you know? And, you know, they live their life the way they want to live their life. But it is about choices. We have to make choices. Everyone does. You know, we don't have an infinite amount of get to do whatever we want all the time. Yeah. And that is, that's difficult. So true. Hey, folks, in a few weeks, we're going to be doing our annual special giving edition of The Ramsey Show. What do we do? If you're not aware of this, it's really fun. We ask you all, and we're asking you now to share stories with us about how you have given generously, or maybe you've been the benefactor of somebody really giving generously.

56:12And whether that's maybe a surprise tip or maybe you bought Thanksgiving dinner for somebody, this is just about celebrating generosity. And we get so many great stories every year, whether again, you've been on the receiving end of an unbelievable gift, or you've been blessed by giving to others. That's what we're looking for. And we'd like to hear those stories so we could feature them on the show. Go to RamseySolutions.com slash ask, RamseySolutions.com slash ask, and put giving in the subject line and share your story. We do this every year at Christmas time, and it's really, really special.

56:49And that's coming up on December 18th. So those of you who are regular listeners or love the special type shows, mark your calendar because we're going to celebrate living like no one else. You can give like no one else. Speaking of giving, Rachel, this is where Santa Dave, I think he's out of control and I may have to have a meeting with him. The Black Friday deals, which we're already offering. Do you realize this now? How great they are. But now everybody's doing Black Friday deals before Black Friday. Yeah, yeah, yeah, 100%. And I'm irritated about it. And we're on the train, people. We're on the train.

57:22And I'm not happy about it. All right. But it is what it is. You should be happy. You know why? $12 for best-selling hardcovers. $12, question for humans. $6.99 for audiobooks and e-books. $15 for our assessments and more. I mean, Dave, you're getting the farm away. Just deals on deals on deals. I'm not going to win that battle, folks. But you win. RamseySolutions.com slash store. RamseySolutions.com slash store. That's where you get all the great deals. All right, let's go to Greenville, South Carolina. Nicole is waiting. Nicole, how can we help? Yes, I am very nervous about a change that's coming to us and how to raise my children through this.

58:07My husband is just selling a partial of his business, a little less than 50 percent. and he's getting a large sum of money just before the end of the year, which leads to another question of do we have to scramble to figure out exactly where to place this before the end of the year comes? Okay, what is a substantial amount of money? What does that mean? Six million. Okay. Hello. That's great. But, Nicole, you sound like someone gave you a bill for$6 million. Well, I know, because I don't want to act like I got the lottery for$6 million. No, no. But, my goodness, I hope, I hope that maybe you get yourself a light blue box, you know, with some jewelry.

58:59Come on, Nicole. Let's go. Get a little something from Nicole. I want to get that out of the way, all right? That's the best advice you're going to hear on this call. Oh, my gosh. Nicole, seriously. Hey, congratulations. you and your husband yeah this is a pretty cool deal and i just don't want to fly by that yeah now you got the perfect person today to no i'm serious she's very very gracious and very humble but i think you are really perfect to talk about she doesn't want this to change their life the kids life and all this i think you have tremendous insight on on a couple things so get to that but first talk about the end of the year scramble yeah i mean you guys you guys will have to pay taxes on it and so i understand you know that's going to happen and i know we want to give part of that as well sure but i'm like you know there my husband's went and talked to someone and he's like well you know my he he plans to go back within the next couple of weeks you know once he gets i guess more of the contract in hand it's like you know obviously he's like well i'm not going to get you know that that investor pro or he's like well you know oh okay they're like you know here's your free service but i'm there i'm not going to tell you everything you need to know right who's saying that um well someone that my husband had found to get advice from okay a business tax pro on advice like this i guess okay okay so i'm so confused necessarily one of like Dave Ramsey's show.

1:00:34No, it doesn't sound like it. I have spoken. Yeah. Well, and I mean, I have spoken to one of those before in the past. Yes. Okay. But then this all went down and I'm like, well, I can't really make these changes right now and getting my husband involved because he's having to deal with this mess. And I mean, not mess, but like he's got a lot of this on his shoulders. And okay. So what I would do, I wouldn't do anything. I wouldn't do anything. I think there's a lot of heightened emotion. There's a lot of fog. It's a lot of decision making. don't do anything. Okay. Just know in the back of your mind, you're going to have to pay taxes on this.

1:01:07So just, that's the only thing I want you to think about. So Nicole, that's the only thing I want you to think about. Okay. So just breathe. Okay. So nothing big has to change. I would interview and find a great tax pro in your corner to make sure that everything is buttoned up. I would do that. And we have some wonderful people, you know, that are affiliated with Ramsey. If you go to Ramsey solutions.com, you can, you know, interview one of them or find your own. I don't care. But nothing sketchy, nothing weird. Don't tell me. Whatever that language was, I was weird. That's different than an investment.

1:01:39Yes. Yeah. Yeah. Yeah. So you're now now a financial planner will be able to talk to you about taxes as well. But I would want to make sure that you have a great CPA that's saying, hey, here's exactly what you need to do and file because we don't want to mess this up. Then I would go sit down with a SmartFest or Pro and to say, hey, here is this amount of money. And before that, though, I would want you and your husband to sit down and say, OK, what what are the things that we want out of this? Meaning the generosity portion. Let's talk through that. What does that look like? How do we want to do that?

1:02:11What are some things? Cause you probably don't want to give, you know, 10 % all to one thing. It'd probably be good to get a couple of things. And just to say what, you know, as a family, how can we give out of this? I want you to look at, do you guys have a mortgage or any debt? We, we have like 175 on our house. Okay. And then really all the other debt is like vehicles with the business. We purchased the business property, you know, about seven years ago. I mean, but very minimal debt. I would be, sure. So I would write a check, pay everything off. And then I do want you to remember that money magnifies who you are.

1:02:50And so the way you guys have dealt with money before the$6 million, it's going to be amplified. And do you like how you guys have handled money? You've dabbled in the debt stuff, all of it. And my fear is that the six million kind of creates this. Oh, gosh, we could get into this real estate thing. We could do this. And it's going to be taken up really quick if you guys aren't careful. So I would I would make it a value statement of no debt. We're going to get completely out of debt. And then we're going to look at our retirement and say, OK, what do we need to put away for it to have, you know, a wonderful, which is going to be fabulous retirement?

1:03:22And then what percentage are we going to spend? So to your point, Ken, I would not change anything with the kids. I think they need to be working, doing chores. they need to believe nothing has changed. There's no benefit to knowing that you guys changed. Maybe you go on a nicer vacation and that's all they know. But I wouldn't change much with the kids. Go ahead and fund their college. Like use this money well and have fun with it. You guys. Jury. Earmark some. Get you some jury. Upgrade the cards. I'm telling you. Do some stuff that yeah you guys enjoy. But remember you give it, you save it, you spend it.

1:03:51Regardless of the amount that's the three things you want to do.

1:03:59Thank you.

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1:05:42Today's question is sponsored by our friends at Y-Refi. Hey, if you've tried everything to fix your defaulted private student loans and nothing's worked, Y-Refi can help. They build custom fixed rate plans based on what you can actually afford. Learn more at Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. It's not available in all states. Today's question comes from Kelsey in Texas. We are debt-free except for our mortgage, and my husband's income is not enough to help get our home paid off. He is a musician, and he dabbles in real estate. The musician world that he loves does not bring in any substantial income, and I earn$35 ,000 a year.

1:06:27This year, he estimates that he will earn a total of$32 ,000 a year. How should I communicate with him about the lack of income? I understand this is his passion, his life, and a part of who he is, but we are really struggling. Okay, Kelsey, this is hard. So I want to acknowledge that you're his wife, and you're going to come to him, and you're rightfully going to say, hey, 85K, which I bring home, plus your 32, which you're estimating, is just not enough for where we could be, where we should be, where we need to be. And let's lay that out. Let's make a numbers case. Say, hey, we need more money.

1:07:08And here's how I've come up with this number. I'm not pulling it from the sky. And I'm making this up to answer the question. But if you determined that we needed an additional$75 ,000 to knock out debt, catch up on investments, all of these things, then we present that number. And all of this is non-emotional. This is just, hey, I'm digging in the numbers. I know you love music And I don't want you to give it up This is how we lead Rachel Do not want you to give up music However, dabbling in real estate Can we go from dabbling to all in And keep the music going at night Keep the music, find a gig here and there Don't give up on the music But the music is not the focus It is an outlet It's creative, keeps his soul alive It's a good thing.

1:07:58Yeah. But for this season, we got to go all in on something. And since we're dabbling in real estate, if one goes from dabbling to really focusing, you can win. And I would have him go talk to my friends at the Buffini and company. Brian Buffini is the number one real estate trainer in the world. And I do everything Brian tells you to do. And you'll crush it. So this is a tough conversation, but we have to lead with real numbers, vision. You don't have to give up your dream and your creative outlet, but I need your help. And we have got to lock arms and go at this. Now, that's the male perspective.

1:08:37Yeah. What would you change? What would you add to the messaging there? So I think if I'm in this situation as the wife, I'm looking to say, okay, we have these goals out there that ultimately lead to a life that I'm longing for. I want the house paid off. I don't want to have to worry about that. I want to know that we're going to be taken care of in retirement. You know, there are these benchmarks that I would feel safe and good to know that we are at least on track of hitting. And the fact that we're nowhere near it makes me fearful, and I don't like that. And so that's me. But us as a team, I want us heading towards the benchmarks together.

1:09:16and if I feel like I have to be dragging you the whole way, that's not a fun marriage. You know what I mean? Like that's not fun. And so there's something along the lines of starting with what is going on inside of, you know, inside of you, Kelsey. And then also the team aspect of marriage more and more. I don't know if it's because we've just hosted this show and we get so many relationship calls, but there is a game changer in the health of your marriage and the peace of your marriage when you are a team on these kind of things. And money is one of the big components, right? They say in-laws, raising kids, sex, religion, money.

1:09:53Like it is. And when you are aligned on these things, again, you're going to be different in them. I'm a spender. You're a saver. You may be more chill, not as goal-oriented. Like we're all going to still be ourselves in it, but we at least are heading in the same direction. When you're fighting against those directions constantly, that's exhausting, you know? And so I think the team aspect more and more for me for marriages, I think is as big. Great advice, by the way. So let alone just the career path, it's more I want us to be on the same page of where we're going financially. And how do we get there?

1:10:21And that may mean sacrifices on one side or the other. But at least we're heading in that direction. That's right. And you don't have to give up the fun, creative dream or outlet. You just keep it where it's supposed to be for this time. Yes, yes. Which this is just a side thing that we mess around only when we have time. That's the key on those deals. We're not giving it up. All right, let's go to Armando in Los Angeles. us. Armando, how can we help today? Hi, thank you for having me on the call. I just want to say I love your guys' show. So I want to preface this with saying this is a conversation me and my mom have been having for a bit now, and we're kind of trying to decide, and we figured, you know, you guys are probably the best people to ask.

1:11:01So I'm trying to decide basically between whether staying at my full-time job where I'm a manager at a gym, I make about$4 ,000 a month after tax with bonuses or going to my passion, which is starting my window cleaning business. That's currently producing about$3 ,000 a month. And I only do that on the weekends. So I'm at a point where I personally feel like I could start generating more doing if I had more than a weekend to, you know, during the week to produce more. Well, let me jump in. Let's jump in right there. Are you already getting calls and leads? In other words, people are going, hey, Armando, I'd love for you to come clean my windows, and you're having to push them out a few weekends just because of time.

1:11:49Is that already happening? Yeah, I've had that a few times already. We're actually, and that's without even, we're just getting the website and everything set up this month. I've only had the business for about 10 months. Where are you getting your leads? A lot of them are referrals and door-to-door. Bro, first of all, let me just say, you will not lose. I love that your answer is referrals. That means you're doing a good job for people. And door to door, that means you hustle and you're not afraid to know. Armando, that right there is the success formula for entrepreneurs. So I love that. Do you have any personal debt?

1:12:26I have no debt. I am debt free. All right. And then we call savings in a business retained earnings in your business account. And I'm assuming you have one. Yes or no? I do not. So you're just taking the money you're making from the window cleaning and running it through your personal finances? I just put it in a savings account. Oh, okay. Good. Yeah, and just in a big account, currently saved up because I paid off a bunch of debt recently. So I now have$8 ,500 saved up. Okay, so you have$8 ,500. Now, is that in the savings account that's just the window cleaning business or is that a combination savings?

1:13:04Combination savings, spending money to kind of go and play around with. I always keep in my checkings about$1 ,000. That's great. But here's the deal. So, you know, we teach a three - to six-month emergency fund after we pay off debt. Do you have a – so your three - to six-month expenses is what? What's three months? Yeah, I only – three months really is only about – I believe it's$4 ,000. My expenses right now are only$1 ,200 a month. I am very blessed, very blessed to not have to pay rent. So I want to move quickly, but I want to get Rachel in real quick. What would you think is a good amount on the emergency fund, just personally?

1:13:45Yeah, I mean, where you're at right now, I mean, maybe... $5 ,000? Five, yeah. I was going to say not that much. It may change if your living situation changes, but for now that. So Armando, I'm going to recommend that you get a separate savings account for the window cleaning business. And for this example, I'm going to call it window cleaning, Armando's window cleaning. OK, you need a separate bank account for that, because my advice to everybody in this question, which is, when do I know that it's OK to leave my full time job to go into my side hustle? And I want to see six to 12 months. I'm pretty conservative.

1:14:20I'd like to see six to 12 months of your salary saved in window cleaning bank account. All right. So that's just me. And the reason is, is because when you leave that full-time job, I don't want you thinking about the next six to 12 months of a payday. You got low, low cost of living now anyway, but that's my advice. And when you get that number saved up, whatever that number is, and let's just say it's 25 ,000 and you've got a pipeline stacked up, then I would say, see you later to my full-time job. I'd like to see you have six to 12 months expenses in the window cleaning company saved and then make the move.

1:15:02Rachel, I... Congrats, though. Armando, that's awesome. Thoughts on that real quick? Final word? I think that's safe. I think it's awesome. And I think you'll get there faster than what you expect. That's right. And you're going to kill it in the window cleaning world. Great job. Thanks for the call.

1:15:38We'll be right back.

1:15:54I got a meeting with the team and I said, show me all the, just take me in the thing. Give me a tour. And it's amazing. It's literally like a digital version of us on the show for those who call in. The first 15 minutes of answering the questions that the team provides you in this app, they're going to help you find thousands of dollars immediately in savings. We're seeing this in an average of people who use it. You can start every dollar for free by going to the App Store or Google Play. Tons of advanced features, not just budgeting. Now, that's amazing. But the fact that you've got a digital coach, mentor, accountability partner, whatever you want to call it, all those facets are in there.

1:16:35Fantastic. So you've got to go check it out. And give it a whirl. It's free. And I'm going to tell you, you're going to love it. Donna is up next in West Virginia. Donna, how can we help? Hi, Ken and Rachel. I love all the personalities, but, Ken, I'm really glad you're there today. I love the way you spin a tail. You really make me chuckle. And I love your story from a few weeks ago about the welfare chicken. I grew up on a farm and can relate to that. Thank you. Yes. Thank you. The welfare chicken. I hope you didn't get in trouble for telling them to sell the chicken. I think I was on there with you during that.

1:17:09I did not get in trouble. And I had forgotten about that, Donna. So thank you. That's really fun. Thank you. You're a sweet lady. By the way, I have to ask, where in West Virginia are you? Oh, geez. Romney? You know that town? I think I've heard of it. Do you know Point Pleasant by any chance? Oh, that's way far away. We're in the panhandle between Winchester, Virginia and Cumberland, Maryland. Yes, yes, yes, yes. Okay. I was born in that little teeny town of Point Pleasant, West Virginia. Oh, Point Pleasant? Okay, I know where it is. I've been there. Well, I've got to tell you, not many people have.

1:17:40It's across the state. Yeah, that's right. It's across the state. All right, Donna. Okay. My sister from another mister here in West Virginia. How can we help today? Well, I'm 69 and my husband is almost 71. And we started our careers in the 70s. And at that time, people were saying, oh, you're so lucky you have a pension, you'll have Social Security, you don't have to worry about retirement. So we didn't. And we're doing fine now with our pension and our Social Security, but we haven't saved a lot of money. And we had to put my mother in a nursing home last year, an extended care nursing home, and it really scared me and shocked me at the cost per month for that stay.

1:18:23And what my question is today, and I've been having friends tell me, you know, you need to sign your house over to your kids to save it from being taken and all of this. And I know Dave says that you shouldn't do that. I have heard him. I haven't heard him talk a lot about that, but I have heard him say that. And I was just wondering what the pros and cons are to that. And if there's no pros, what can we do or is there something we can do to save our house? Well, let's go back a step. What are we afraid that's going to happen that would even allow us to consider that advice? What are you afraid is going to happen?

1:19:07Oh, for signing your house over? Yeah. Oh, well, there's, I guess, a lot of things. I mean, I've been listening to the show long enough that I know if you have kids, if anything happens to your kids, then that can, if they're in an accident or anything like that. But you're talking about your house. I'm talking about my house. Yes. And your house that my husband and I own. Sure. And you're worried you're going to lose it to who or why? Oh, Medicare. Medicare. I mean, if you can't pay, if you go into a nursing home. Oh, Medicaid is going to look at, they're going to be looking at your, okay, I hear you.

1:19:49Now we're caught up. Sorry, we weren't 100 % sure. And the reason we say that is because a little bit, it feels like you're hiding assets when you just sign it over. I know. So, yeah, not a great, not a great thing because you're basically lying to the government that you don't have an asset when you really do. So, okay, do you have long-term care insurance, Donna? We do, but I got it. It's been probably before I realized the cost. My father-in-law went into just an assistant living and his was about$3 ,500,$4 ,000 a month. So when we got our long-term care, it was very expensive anyway because I have some health issues.

1:20:27So it was high. And ours is only$3 ,000 a month. And then my mom's came up and it was$14 ,500 a month. And I'm like, I was just in shock that it was that expensive. Well, okay, so a couple of things to think about that we don't know yet, because how old are you guys? I'm 69. My husband's 71. So a lot of different things. Number one, you don't know if you guys are going to need a nursing home anyways. Number two, if you did get to a point of a nursing home, you know, there are things you can do. You can sell the house and use that to fund if you need to. um do you there's also what what are you guys doing with your pension and all of that what what do you have coming in uh per month you mean what we have we have uh it's like nine thousand nine hundred and forty two dollars okay so i mean it's it's decent and we did just start two years ago we have started putting some away uh we both bought i bought us and my husband a I'm still working a little bit.

1:21:33Okay. And I made enough money to be able to max out both a Roth for me and a spousal Roth for my husband. I did that when we got one of your pros. Good. Great. And he said to get one. We got him in April. And he said, oh, hurry up and get a Roth before April 15th. For the taxes. Yeah, that's right. So we did that. And then when we finally sat down with him, we had enough money saved to do another one for 2025. five. So what do you have total? What do you guys have total? We have 32 ,000 in Roth right now. And then we were playing around just during the years and we have about 50 that our financial advisor is rolling over, about 50 ,000 that he's rolling over into IRAs now that we're still in with the companies that we retired from.

1:22:28So just below$100 ,000. And then what is your house worth? About$400 ,000. Okay. Yeah, so it would be one of these things. If you guys did get into that situation, whether it's the insurance, some savings, whatever you can put together to get into a nursing home. And I'll be honest on it, it sounds horrible, but there is a stat that once you enter into a nursing home, So on average, there's not that long of a stay usually. Sometimes it is. Sometimes it's not either. So it is kind of one of the last steps that family members will take if they're not able to care for their family member. And so that would be kind of that last step, if you will.

1:23:12So if I was in your shoes, I may ask about upping the long-term care. I'm just curious what other options are out there for you guys. I would be looking at that because that's going to be very helpful type of insurance for you all if the time comes that you need in-house care, nursing home, all of it and you guys also are sitting on a great asset and you know what I mean if something were to happen to either you or your husband and you did get to a point that you guys didn't have the money to cash flow it and yet there was a nursing home that you knew they needed to be in him or yourself there's always the possibility of selling the house and figuring out what to do there.

1:23:50Don, I'm going to give you something. Rachel made a great point. I looked it up. The average length of staying in a nursing home is 485 days. Now, of course, this varies, but averages do play out. So you're looking at about a year, three, four months. So it's horrible. But that's the reality, and we're talking about that. So between the pension and everything, Rachel, you make a very good point. It's not like you've got to fund this crazy amount for five years. You know, so I think you guys are doing everything you can. How much longer do you think you're going to work? As long as I can. I love it.

1:24:29Okay. Do you work full time? No, no. I do occasionally. I'm a teacher, and sometimes I'll take a long-term sub job, and sometimes right now I'm just doing day-to-day. I'll bet the kids love when Donna shows up to be the sub. You seem like a really nice sub. Well, I hope so. I hope they do. They always say they do, but you know. Yeah. Well, that's good. And what about your husband? Is he officially done working or still working? Yes. No, he's officially done. He's a golfer. He's fallen into the golf. I love it. Good for him. Well, at least there's a little bit of a foreshadowing of watching your mom and how expensive it has been for your mom or your dad that you guys can start planning.

1:25:10But if that time comes, how would we be able to cash flow that? So thanks for the call, Donna. Do we know if people can search welfare chickens on Spotify or YouTube and find that rant? Do we know? We don't know. I'm sure you can try. But they can't. Oh, you all missed it. It was really great. Donna said so.

1:25:46Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Alongside Rachel Cruz, I'm Ken Coleman. Thanks for being with us. We're here for you. 888-825-5225 is the phone number. Let's go to Caitlin, who joins us in Charlotte, North Carolina. Caitlin, how can we help? Hi, good afternoon. I'm a recent college graduate from West Virginia University, and I will start paying student loan debt come January. And I want to know what is the best and effective way to go about that. How much student loans do you have? They will be around$26 ,000. And is it multiple loans? Yes. Okay, so what's the smallest amount?

1:26:34The smallest amount, I believe, is about$5 ,000. Okay. All right, so is that the only debt you have? Yes, so it's the only day I have Alright, Rachel Walker through the baby steps Are you working? Yes ma 'am, I work a full time job Great, how much do you make a month? How much do you bring in? About a month Maybe $1500 to$1800 a month A month, okay, what are you doing? I work At a boutique A boutique, okay What kind of boutique? a women's boutique just a locally owned like a spa no like a clothing store women's clothing oh sorry a little slow on that well there's lots of different boutiques there's like boutique hotels fair spas sorry fair none of this matters yeah why do you why i have a question on your income yeah that isn't for a college grad that is way below what your expectations were i'm guessing Yes or no?

1:27:40Yes. So I've had this job for about two years. I worked this job throughout college, and that is the job I'm still currently at. Okay. What did you get your degree in? Business and marketing. So what do you want to do? And I'm not going to put you under pressure here on a show live, but give me a general idea. It doesn't have to be a company and a title, but describe the work that you went to school for that you would love to have if I could just wave my pencil in the air and give it to you. Well, the work I would be interested in is going into law school. Okay. So we went for business and marketing, and we're like, eh, this is not what I want to do, but I'm just going to finish it.

1:28:22And then somewhere along the way we discovered, I want to be a lawyer and a specific type of lawyer? Corporate law, sir. Corporate law. Okay, so a tie-in to the business and marketing. Yes. Okay, what's law school going to cost you? law school is probably going to cost me around probably a hundred thousand dollars and where are you going i have not yet made my decision um but i'll be taking the lsat soon okay great i want to make a quick commercial and i'll hand it to rachel and but you got to get your two things number one you need to get your income up right you should be making you should be making double i don't even care what you're doing yeah at this point you need a target of 40 to 50 000 let's just put it out there.

1:29:06I don't want to limit you to that, but you just need to get out there and find something because more cash, the better. Now, and Rachel will tell you what to do with that cash, but I just want to make a point on the LSAT. Years ago, I interviewed a law school expert on this, and this is a fact, by the way. There are certain schools, you're going to have to do your homework on this, but you can figure it out easily, that based on your LSAT score, Rachel, if you get a high enough LSAT score, they will give you a full ride. And the reason is these aren't the prolific ones. Let me just go ahead and tell you, this isn't Harvard.

1:29:39It's not the big time schools. These are the schools who nobody wants to go to their law school. So therefore they're trying to get people into their law school because they want lawyers out there and they will give full ride. So these are going to be smaller schools, not as well known, but they have legit law schools. And let me just make my pitch on this. Nobody cares where you got your law degree from. And so the trade-off is, Caitlin, you have to pay for the LSAT. And if you need to take the LSAT five times, take it. If we're aiming for and we feel like, the tutors will tell you, we can get you to the score, which gets you a free ride.

1:30:15So that's my commercial. Yeah, it's worth investing, you know, five, six grand. It would be like, honestly, when you think about it. Totally. With tutors and everything. And I don't know what the current LSAT cost is. $100 ,000 degree for free. So that's what you need more money for. Yes. Plus, we got to pay off these loans. So Rachel, tell her how we pay off these loans. And that needs to be your way to law school, Caitlin. I really want you to see that because you're going to be$126 ,000 in debt if you don't. So we want to really work hard to avoid all those student loans. Yeah. So it's getting your income up, Caitlin.

1:30:50So, I mean, I really hate to say it, but I mean, I would probably be looking for another job. I think it was a great thing to get you through college. But now that you're a college grad, you know, you made that investment for a reason. And so now we need to go ROI it and we need to go, you know, get a job, like Ken said, making 40, 50 ,000 a year. And and I would limit all my expenses. I would live on nothing and I would make it a goal to get this paid off in 18 months, 16 months, 14 months, you know. And so I really think you can if you do you have rent. Are you living at home? What's your living status?

1:31:24I live at home with my family Okay, so no rent So I would take full advantage And make a really, really aggressive goal Of getting this paid off And then at the same time be looking at the LSAT stuff And make that also a part-time job So I don't know if it's a I don't know right now if it's a full-time job That you go and find, you know, a receptionist I mean, anything, like just go and Answer phones, I mean, do something Or If you do the boutique during the day And you wait tables at night and you're doing a two-job-a-day kind of thing to double this income. But this income needs to be doubled, Caitlin.

1:31:59You're a college grad, and I think that you have things to offer. And, again, it's kind of back to this college degree conversation that you got your degree for a reason to go and create a career. And so taking that knowledge and going and doing that and upping this income is going to be your number one goal. Because, Caitlin, here's the deal. you are young enough and this debt is small enough that you can pay this off in a year, but you got to make more income to where you're putting two grand a month away. So like Rachel said, what must be true for me to be able to sock two grand,$2 ,500 a month away at the$26 ,000 loan, knock that out and get it out of the way before the interest starts hurting you.

1:32:44Okay. Because I know people that are, that have your amount of loan debt and they're paying it for 15, 20 years because they're never catching up because of the interest payment. So you want to get this out of your life. And I just, I'm telling you, if you trust me and you do your research, you can go to law school for free or for a very reduced amount that you can cash flow. And most people don't know that. And please do that because you're going to just be so much more at peace. So there's your homework assignment. Pretty straightforward, but you got to hustle. Yep. So thanks for the call. You know, Rachel, that is, I love when we get that And I'll be honest, I've not interviewed people in other lanes, but I would almost bet you there's other professional lanes like that, that where certain schools are going, you know, like med schools are going, we want to get people in here.

1:33:33And the sticker price on Vanderbilt, which is in the shadow of our campus here, versus a small school. Totally, yes. And it's an ego play to go to a – It is. If someone's like, hey, where are you going to law school? And it's a – Yeah, Harvard Law. Or you're going to one that no one's ever heard of. You've got to have some humility to it, but you're doing it in a wise way. You know what I mean? And so there's something so smart about it. But it just rarely comes up. Your clients aren't going to go, hey, I've heard rumors that you got your law degree from Greenbrier State. Is that true? I mean, you think about vet school, law school, med school.

1:34:06I bet George Campbell, when he took his dogs into the vet, he didn't say, let me see your degree before. He said, save my dogs. That was all last week. That poor guy. Tanya. That poor guy and his dogs. it's like a soap opera around here folks we don't have time to cover it we'll have him cover it george if he hosts here in the next week

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1:35:43Buying or selling your home is a big deal, folks. And with all the clickbait headlines and all of the social media traps and all of the little hacks and all the things, it can be confusing and a lot of conflicting data. And so we're here, as always, to give you the real real and tell you about the latest trends. So let's just take a quick snapshot. Median home prices have continued to hold steady around$424 ,000. In October, about one in five houses saw a price cut, which means buyers might have more room this winter to negotiate to get a better price. Mortgage rates dipped slightly to 5.49 % in October, giving some buyers breathing room.

1:36:28but rates are unpredictable. The best time to buy is when you're financially ready, not when they drop. So if you'd like to learn more about the housing market trends and get free tools to help you buy or sell with confidence, go to RamseySolutions.com. That's RamseySolutions.com. Or if you're on YouTube or podcast, click the link in the show notes. Nick is up in Detroit, Michigan. Nick, how can we help? Hey, hello, guys. Thanks. I'm grateful for the time, by the way. I appreciate it. Sure. Yeah, so I own a business. I've owned it about 10 years now. I've grown it from grossing maybe like 80K a year to now we're about 1.5 million a year.

1:37:05Congrats. What kind of business? Oh, appreciate it. Well, we are a mortuary transport, so we move the deceased. Oh, is that right? I'm sure you guys get that a lot. Well, no. And so I just think this is interesting. So 10 seconds on this. We're not talking about the hearse. We're talking about to the funeral home from the hospital or from people's home? Yeah, precisely. Yeah, actually, it's everything. The hearse is included. Oh, you do that as well? You do the funeral. It gets rented. Yep. Got it. Okay, fantastic. Yep, and then cold storage, all of it. Oh, wow, wow, wow. Okay, great. So keep going.

1:37:38Yeah, so the issue is, like, growth is awesome. It went well. I was always on top of it, but it maybe was a little too quick. And I know Dave would hate me for it, maybe all you guys would, but I have loans, a lot of them. and so it's about 580 ,000 and so the main question is my goal is to try to pay that off as quick as possible but people that I you know in my room they're very intelligent people don't think that I have the funds like readily available for emergencies to do that and that I shouldn't do that well just give us your picture so so we know you have 580 ,000 dollars in loans just for the business correct correct and what is the monthly payment to service that debt so it's about 18 18 ,000.

1:38:1918 ,000 a month. Okay. And then give me a picture. Well, are you planning, you expect you to do 1.5 million this year, 2025? I am. Yep. And that's top? We were doing 2.2. So we got kind of hit kind of hard. It came down. But yeah, that's definitely sticking around. Okay. So 1.5 top line, that's your gross? Yep. Okay. What kind of retained earnings do you have? Do you have any savings in the business? Yeah. So some of the stats are probably helpful is that it varies from about maybe So you get$110 ,000 to about$150 ,000 a month, and the profits can range from negative$10 ,000 to about positive$30 ,000.

1:38:57That's a snapshot from this year. It's in like pretty average. How many months? Okay, but how many out of the 12 months were you in the negative? Once at negative$2 ,000 and once negative$5 ,000. Okay. And that includes paying it off. Gotcha. And your best month is$30 ,000 profit, actual net profit. And how much are you bringing home? I pay myself like$40 ,000. I'm just trying to build something. Okay. Okay. Yeah, I don't spend money in my personal life or do much, but like a really cool way though, you know. Sure. Yeah. How much, how many people do you have working for you? I got 25 employees.

1:39:38Okay. Because I'm just trying to think where you can be lean on the expenses side because that's the way you're going to be getting, obviously. What's the debt? Vehicles. There's about maybe 200 vehicles. I had to take 200 out for taxes that weren't paid. So that was a big hit. So I'm just paying back payroll taxes. All right. Did we learn our lesson on that? We did. I hired a new CPA. Not that I should be looking at it, too. It's my fault. Right, right, right. That's okay. Not judging, but I just want to make sure that we've now adjusted for that, and we're never going to have that surprise again.

1:40:13So that's good news. Of course. Yep. Well, I think your friends are wrong if they're saying they shouldn't pay it off. Yeah, I only have 50K in reserve, and so their concern was, like, if you have a couple bad months in a row, then you'd be done. And it's not an unwarranted concern, but, you know, five years to two years, it just seems really appealing. To keep? To be debt-free. Oh, oh, oh, yes. I think you can do it. But, again, it's the same advice we give other people, Rachel. We don't tell them to just go. I mean, it's a baby step process, right? We say smallest or largest when we're talking to personal debt.

1:40:49And so in your case, you're just chipping away at it. And so you've got to come up with a business budget, too, that goes, all right, I'm going to have some variable numbers here. It's just the nature of the business. So it's really locking in. Rachel, start to correct me when I get wrong here, but you're looking every month at the books. And when the books are cleared that month, we know, okay, this month we cleared$5 ,000 net. That's after paying you and everybody else. Okay, well, then that's going to change how much we're going to put towards the debt. But then we got a big month of$30 ,000.

1:41:23We can put more. And so it's just being really disciplined and looking each month to do what you can. And as you grow, knock this thing out. Yeah. Is it seasonal, Nick, at all for you? The ups and downs? Not really, no. It's pretty steady. Maybe winter is a little busier, but not enough to be like, you know, season will work. Can I ask a really dumb question? Sure. I understand it's about people dying, but aside from that, what causes it to drop from 2 point whatever million you said, forgive me for forgetting, to 1.5? In my case, it was a client. a client that was I don't know how to say it we work for all the funeral homes we're the counties, the medical examiners colleges, kids of life so a client dropped off correct so are you in the process of replacing them I mean that's the goal I'm sure every business has its challenges but in this industry it's just super slow to change if you have a director of a funeral home they use the service for 30 years Right.

1:42:32Unless there's a reason to change. Yeah, you got to really - So, unfortunately, I just kind of be there. Yeah. I just be ready. Yeah, it's so relational. I get creative other ways. Okay. All right. I was just curious about that. So, I mean, this is a - Rachel, thoughts on that? I mean, this is just a - And I was just trying to run some quick math, yeah. Do you think there's like 50 ,000 in the bank as far as like maybe like that just being the reserve amount? Is that comfortable, you would think, with 50 ,000 payroll a month? I would probably do three months. Three months, yeah. I would do three months.

1:43:00150 ,000. I mean, so for me to say about that much, that might be a year or two, right? That's correct. Right. So I would probably lower that. But that would be first. Yeah, because I always think, too, if you guys, because if you're being aggressive on the debt and you have two bad months and you only have one left, you could pause the aggression on the debt, stockpile some money, pause that for about three months to pile up some money, and then press play back on getting out of debt. But, yeah, I mean, I would have a goal to try to do all of this. And, gosh, I mean, if you stayed focused. I can be focused.

1:43:29Yeah. I mean, give yourself two years. I don't know. What you can do to be very aggressive. You know your business. Right. If you have a bang-up year, like just phenomenal growth or just a great year,$2 million a year. At this point, any growth is majorly profit. So majority profit, I'm at that line, right? So after you get the three months of retained earnings in there to be able to cover payroll, every nickel of the operation, what do you think you could put away in a year towards debt? Towards debt? Yeah, I mean, I don't think two years is out of the question. I think that could be done. I mean, if I'm paying$18 ,000 right now in that debt and I have some months where I'm making$10 ,000 or$20 ,000, yeah, of course, I could be doing$30 ,000.

1:44:11I think you're going to feel – listen, that's the point. You're going to love not having any debt on this business. Can you imagine just for a second not having$18 ,000 a month going out to service that debt? Yeah, that's why I feel like sometimes I'm like, oh, man, my business is not doing well. But I'm like, no, it's healthy. It just needs to come through. It just needs to make it through this moment. Yeah, I would probably make a two-year goal and just say, you know what I mean? And especially if you lowered what you have, that's going to throw a big chunk at it, which is really great, and get the IRS debt paid off first, the$200 that you had the IRS, and then everything else, yeah, start chipping away at it.

1:44:50But I think if you stay focused and diligent, Nick, honestly, I think you're going to see a lot of progress and throwing that extra at it, yeah, I think it's great. You know, business is business. I don't know. I guess we need Nick's business. Everybody's dying. It's horrible. I'm trying not to make any jokes. It's a very serious topic, but it's just like I wanted to know what was affecting his business. He's like, well, it's a little busier in the winter. I'm like, oh, boy.

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1:46:21all right uh it's time for a uh fun fun call here with steven who is a baby steps millionaires in Minnesota. Let's bring him on here. Stephen, how are you today? I'm just fine and dandy. I'll bet you are, sir. As a Baby Steps millionaire, you don't have a whole lot of gripes, do you? Not too much. All right. I could gripe and whine, but nobody's going to listen to me anyway. You know what, Stephen? I appreciate that because for a second I thought you were going to give me a few and I thought, oh, I opened up a can of worms here. But hey, we are so excited to talk to you. Tell us how old you are, Stephen.

1:46:58I'm 72. 72. Okay. And what is your net worth? Net worth is around 4.7 million. 4.7 million. What is that made up of? Multiple things. Land. I'm a farmer, retired farmer. I call it unemployed. No, retired. Land. I've invested in some apartment complexes, IRAs, stocks. Yeah, that's awesome. From an income perspective, Stephen, what was the lowest you've ever made in your life?

1:47:44the lowest i've ever made probably lost about 20 or 30 000 oh a negative okay that's good a negative that's one of the problems with farming is it doesn't always it's not always profitable sure you can have a real bad year yeah um what was the best year you ever had The best year I've ever had, probably between$250 ,000. Great. Well done. Again, it all depends on crop yields and market prices. What was your specialty? Was it crops? It raised corn and soybeans, and I also raised hogs later on. I started out with a cow herd. Nice. Very nice. You did a little bit of everything. All right. Now, a question we love to ask our babysat millionaires is, did you inherit any of the $4.7 million?

1:48:44Yes, I did. I inherited probably about$800 ,000 in land from my dad when he passed away. Okay. Which was about, I'm thinking about 18 years ago. Okay. All right. But you made$4 million on your own. It's very impressive. Yeah, between me and my wife, yeah. Yes, yes, yeah, yeah, as a family. Can't forget her. That's awesome. Now, was she active in the business, the farming business? She was actually a registered nurse. Oh, okay, gotcha. And to put it bluntly, she probably worked to support my farming habit. That's a good lady. That's awesome. Okay, do you have a degree? Yes, I do. I have a degree in animal science.

1:49:31Nice. And what was your GPA?

1:49:382.004. Yes. Hey, that's my kind of guy right there. I'm not even sure. I sniffed 2.0, Rachel, in college. Squeaked out. I was probably in that range. Yes. Well, my college years, I had an elbow problem that went from the table to my mouth. it uh got into i've always claimed that i've only been drunk once in my life it just lasted five and a half years you you like the beer did you steven a little too much well that explains he enjoyed his college he did and you know what he got through 2.0 uh and now he's lived to tell about it i appreciate the honesty the honesty is good you're a hero all across america i'm sure fantastic stuff all right the other thing is it did take me 17 and a half years to get that degree that's right oh really taking classes here and there all over the place and getting married and having kids just wow stuck it out yeah you know i've never heard of the 17 and a half year plan um that's really fun not not much of a plan no not at all but you've done well Okay, so do you drive brand new cars?

1:50:55No, not very often. I did buy my wife the last car I bought. I actually bought her a new one. Good. What kind of car? It's a Kia Sorento. Oh, great. The Kias. And did you pay cash? Yes. Okay. We've been paying cash for our vehicles for a long time. one of the things that we have done is my dad was very good about teaching me some different things about finance that line up with the financial peace program one of the things that he taught me was is that if you borrow money it's easy to borrow money but it's a bugger to pay it back well said but even in in spite of that he also said don't use your own money use somebody else's well that doesn't make sense no it doesn't i was gonna say not sure that aligns with the show but you just wanted to tell us what he said anyway which is great all right so is there any advice you would give to uh to your 25 year old self or 25 year olds that are uh maybe drinking a little too hard in college right now and they want to win financially, what would you tell them?

1:52:18Just keep working. My wife and I both, it's, I mean, you guys always preach the best way to get out of debt and get wealth is to work hard and increase your income. Even though my wife is a registered nurse, I mean, she worked multiple jobs. She's got her own little sewing business where she digitizes designs, which she actually sells over the Internet all over the world. And then she sews them out for people, too. And she played organ at the church. She actually taught college. Oh, my gosh. Two different colleges, taught nursing programs at two different colleges for a while. Wow. Well-rounded lady.

1:53:08yeah i kind of out kicked my coverage with her how long have you guys been married well you'd have to ask her she's listening in but uh she'll tell you 51 but i say 50 good years okay i feel like there's a couple days here a couple days there where it wasn't it was usually my fault now okay now i'm catching up i'm gonna use that one myself Stephen if you don't mind that's good so she would say I like that 50 though congratulations 51 that's amazing that's amazing that's awesome yeah actually we've been uh we were high school sweethearts so I've been hanging around with that woman for almost 55 years 56 years oh my gosh bless her okay what marriage advice do you have Stephen being married 50 years what would you say to someone that's newlywed?

1:53:55Love this. Maintain communication. Keep talking to each other. That's the important thing. And I mean, that's one of the biggest things in our finances too, is that we're always talking to each other. Just constantly letting each other know where we're at, what we need, what we want. Can we do this? Can we do not do that? And be willing to be honest and sometimes say, no, we can't do that. Yeah, yeah. And be on the same page with it. Yeah. Love that. That's great, Stephen. Well, Stephen, thank you so much for sharing your Baby Steps Millionaire story. It's always fun, Rachel, to walk through the journey of these folks, you know, whether they be 41, 51, 61, 71.

1:54:49Yeah. Whether they, you know. He had some good one-liners in there, Ken. And so did you. May I quote you, Ken? Yes. When we asked what kind of car his wife, he bought his wife a Kia Sorento. And you said, oh, the Kias. They're a family. You know, I hear good things about the Kias. I've never owned one. It literally sounds like a family. I don't know why. I just made Chuckle and made Kelly laugh, too. Oh, the Kias. Well, you know, it's a relatively new car brand in the U.S. I don't know much about it. Quick poll in the audience. Oh, the Toyotas. Thumbs up on the Kias or thumbs down in the audience?

1:55:28Oh, we're getting mixed reviews. No, no, no mix. It's like 90 % thumbs down. Not good. Stephen, you may not have picked a great car for the wife. I don't know. I got to go get consumer reports. Check the Hondas or the Toyotas. We know Hondas and Toyotas have lasted a long time. Oh, the Kias. Oh, the Kias.

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1:56:53our scripture of the day is jeremiah 9 23 this is what the lord says let not the wise boast of their wisdom or the strong boast of their strength or the rich boast of their riches our quote today from thomas soul we all enter the world knowing nothing but by the time we're teenagers we know it all sometimes it's decades later before we know enough to realize how little we know. Oh, that's good. Boy, I'm living that right now. I agree with that. I got a 16, 17, and 20, and you'd think I was a village idiot. Like, I'm surprised dad knows how to get to work and get back home. Is it raining? Is dad out there standing in the middle of the rain?

1:57:32Dad, come on, dad. They just think you are just stupid. Is that it? It's coming. It's coming. I know. You got three. Because they think we are just... Right now, you're heroes. I meant, you are the sun the moon the stars yes yes and then it turns middle school it starts to turn and then full-blown teenager you you've lost your mind you just think it's a miracle mom can dress herself it's unbelievable it's that kind of thing it's just part of it oh my god keeps you humble and then you realize oh they do know something right and then you realize in your own life wow i may not know as much as i thought maybe the world is bigger than what i was even thinking you know that's right you start thinking yeah oh man it's hard to come to work every day and give advice on the radio when you feel like an idiot all the time at home i get i'm in a state of confusion all the time anyway it's part of it folks welcome to parenting teenagers whatever your kids love you we had dinner we had lunch is there love with they can love an idiot i know we had lunch with um some of our team and ty we did in chicago yes he like loves you kids great But, you know, they still think you're stupid.

1:58:36Gary is up next in Austin, Texas. Gary, how can we help? Hey, Ken and Rachel, thanks for taking my call. My wife and I, we've been married. We had our 20-year anniversary back in January, and we realized— Oh, congratulations. Oh, thank you. We should be further along financially than we are. I think we're doing okay, but we could be doing way better. And basically, my debt right now, we have$12 ,000 we owe on one car, and we owe$7 ,000 on our three teenagers orthodontic bills. Oh, yeah. Boy, I've got post-traumatic on that, dude. That's brutal. Yeah, so other than that, we have no other debt. I do have a beneficiary IRA that I got back in 2010 when my grandpa passed away.

1:59:22It had$24 ,000 at the time. I've taken the minimum distribution out every year, and now it's about$70 ,000. Of course, every day with the market right now, it's kind of fluctuating. Sure. Um, but my, my question, and plus my teenagers, we have two cars at home and we're looking to potentially get a third car because they want to go out and work, but it's hard because I have four kids. Well, I also have a four year old, by the way. So we have, it's a crazy dynamic, but, um, my teenagers want to go work, but it's hard because we have to shift the car around because we only have the two and it becomes, cause both my boys now can drive.

1:59:55How old are they? So we want to have a little, maybe five,$8 ,000 in cash to buy a car. So basically my question is, if I took out, say,$20 ,000 or$25 ,000 from that beneficiary IRA, I know I'd have tax implications. But would it be worth it to pay off my orthodontist and my car? So we have two cars owned outright in cash, and then we could potentially buy a third car in cash. And then that way I can move on to the baby steps from there. No, I really wouldn't. I don't think I would unplug that IRA. I mean, I just feel like that's invested. I think there's a part of that that, yeah, you would pay taxes on it for sure.

2:00:32But there's a part of me that wonders, okay, how much money do you guys make? About, it fluctuates it over time, but somewhere around$180 a year. $180 a year? Yeah. Yeah, why don't we live on 90 and do all of this? Yeah, I mean, if I heard— Live on 90 for a year. $7 ,000 in dental,$12 ,000 in a car. Yes? Correct. That's it. That's the only debt. Yes. And whose car is the$12 ,000 on? It's my wife. Well, both cars are ours. Our teenagers primarily use the one car and my wife and I use the other. I have a work vehicle that I can take that I use most of my days for work, but I can't use it when I'm not at work.

2:01:19Yeah, Gary, just cash flow this. I mean, part of the baby steps is a level of changing sacrifice. If you cash out this IRA, nothing in your life has to change. You're just plugging in money and fixing your problems, and you're unplugging something that actually is going to be able to go up in value so quickly over time. Because how much is in the IRA? That particular one is$70 ,000. $70 ,000. Yeah, I don't think I would do it. I would lower lifestyle, Gary. I would live, I would have you guys be on a really, really tight budget for one year and get all this knocked out. So we've been doing the EveryDollar app since our anniversary last January.

2:02:00And we have been making progress at it. I guess my thoughts are I really want to get to, because I'm 43 years old, and I do have two Roth IRAs now. But they're just not as much. I started when I was 18, and I'm just disappointed that it's only worth, mine's only worth$100 ,000. in my life says like$60 ,000. Like, gosh, I thought by this point in my life I'd have more because I haven't been able to contribute as much, or I should say I haven't contributed as much. So basically my thought is if I just took this out, deal with the tax, and then I could start really hitting that 15 % amount to my retirement and kind of loading it earlier.

2:02:38I understand your reasoning. I understand your reasoning. But I'm with Rachel on this, and I would tell you to channel the thought, the emotion you just gave us, which is, gosh, I only have 160 and I wish I had more. And you don't want to touch that because that's working for you. And so I would take that angst, that frustration, and I'd figure out how to make more money. I'd figure out how to sell some stuff. I'd figure out a way for the two high schoolers to get to their jobs in other ways or whatever, whatever, whatever. And I would knock these debts out. $19 ,000 on your income is very, very doable.

2:03:17You know, we're talking about, and you don't have to answer this on the air, but this is the homework assignment. What would need to change or what would you all need to do? I'm talking about you and your wife collectively as a team. What'd you need to do to be able to put$2 ,000 a month towards the$19 ,000? And I just think if you frame it that way, you might be surprised about how doable that is. And now we're doing this in less than a year. Okay. And now you're building the emergency fund. Do you guys have savings at all anywhere else? A little. I mean, I'd say if we have a school account, our kids have been homeschooled.

2:03:58And so we have, it's actually more expensive than, it's not crazy expensive, but it's, you know,$3 ,000 a semester probably we pay for them. So we have money for that. That's really allocated for that. Sure, sure. But anything else in savings? Just$1 ,000. We recently brought it down to$1 ,000 to help pay down the car. Okay, gotcha, gotcha. Here's a crazy thing. Real quick, let's just run through this super fast. The$12 ,000 car, what's it worth if you were to sell it private sale?

2:04:29Probably mid-20s. All right. High 20s. Since we're being uncomfortable, and we're telling you to be uncomfortable, and Rachel's right, let me tell you what I would do. Now, I'm extreme on this, Rachel. you tell me if you think this is too extreme on this one, but I'd sell the car and knock that debt out. What's that monthly payment? The minimum is like just under$400. All right, so here's what happens. If it's worth$22 and you owe$12, if I'm doing the math right, you're going to have somewhere in the$8 ,000 to$10 ,000 range off the sale of that. You go get an$8 ,000 to$10 ,000 car, and it is what it is.

2:05:04We're in a season right now of rebuilding, and you're jump-starting the rest of your life. so we're going to make a sacrifice. What we just did there is we paid for the car, the secondary, we were paying for another car cash, and we just freed up$400 a month. That's what I would do. Is that too extreme? No, not necessarily. Because I know there's only 12 left, and I know that's why, but, you know. Yeah, I mean, you guys can make some moves, Gary, to Ken's point, to get this cleaned up. I mean, you really could. Now you only got$7 ,000 left. Yeah. And$400 extra to put towards that. I mean, if I wanted to get it out of the way quickly, that's what I would do.

2:05:47And not take the easy button and pay taxes. And I don't want to mess with my investments right now at 43 years of age. I don't want to touch that. I need that to be growing. And my other thing is, I'm like, it's$180 ,000 income. I'm like, I think you guys could really do this in a year. I really do. so I think there's something about the discipline which you guys have, you started the thousand dollars and you're throwing the rest of the debt it's amazing but I just don't think, I wouldn't touch IRAs I really wouldn't alright folks, remember there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace Christ Jesus

2:06:34Big Big Big Big Big You