Your Bank Account Shouldn’t Define You

20:57And you can add your Ramsey BeWeird debit card to Apple Pay and tap to check out. See, a lot of banks leverage convenience to make it easier to go into debt, but Fairwinds offers convenience to help you stay in control. It's a huge difference. That's banking that actually supports the baby steps instead of working against them. So if you want to bank someplace that's both faster and wiser, check out Fairwinds. Go to fairwinds.org slash Ramsey. That's fairwinds.org slash Ramsey. insured by the NCUA.

21:39If you have a simple tax situation, you haven't had any major life changes or big investments, check out Ramsey Smart Tax. It's affordable, it keeps filing simple, plus it has built-in support in case you need a little help. and filing early, which, I mean, it's no real early anymore. It's upon us. But you'll get the best deal and you get that tax stress off your shoulders. So as soon as you get all your tax documents, go to ramsaysolutions.com slash smart tax and file today. You're not too late, but soon you will be. Get it done. All right, Dan is in Kansas City up next. What's going on, Dan?

22:12Hey. How can I help? I just have some money that a couple years ago I put in with a family member who had some investment stuff that he was doing. And it's not a huge part of like my savings or anything, but it's just a little bit. And I guess it wasn't really worked out in the initial agreement, like what his cut of the money was going to be as he managed the investments. And so we're working on that now. And what was mentioned to me was like a two and 20 structure with like a 10 % hurdle. So like we get the first 10 % and then anything above that, like he would get a 20%. but then somebody else mentioned the 25%.

22:52And to me, that's a 25 % number. Is he a financial advisor or is this some back alley deal? He's just a family member who talked to some finance people and worked out some investment thing, and he's been doing that and making pretty good money. Dude, this is sketchy all around.

23:08Rachel Cruze:What kind of investment is it? Is it in the market, like index funds or mutual funds? Yes, it's based on the S &P 500 for the most part. Dude, this is highway robbery. The standard in the industry is around a 1 % AUM fee. That's assets under management. Sometimes it's one and a quarter, maybe upwards of two in a crazy scenario. And he wants 10%. But 20 %? Yeah, that's just anything above 10%. But, like, anything above the 10%, like, if we make over 10 % profit on the year, he gets 25 % of anything over that. As you should, though. Does he work for an actual, like, registered investment advisor, like an actual firm?

23:46No. You keep saying, like, well, he's got some guys, like, he's like a middleman, and he's— I would get your money away from this guy ASAP. Who's this family member? Is it an actual, like, a cousin, a brother? Yeah, a brother-in-law. If he's not, like, running it through anybody else, he's handled it all himself, but it's just something that he— Okay, so he's a DIY investor, and he's just offering his services to you for a steep fee. I mean, we haven't really agreed on the fee yet. That's kind of— What happens if he loses all your money? I lose that money, but it's not a huge part of my life savings.

24:20How much are we talking? How much have you given him so far? It's only$10 ,000.

24:25Rachel Cruze:Okay, so what I would probably do, Dan, when did you give him this money to invest? About two and a half years ago. Okay. How old is he? 40. And does he do this regularly? Like, is this like a side? He had been working on it with his own money for a while before he opened it up to anybody else. And again, is he using a Fidelity or a Vanguard? Does he have a brokerage? Yeah, it's through a brokerage. I think it's E-Trade maybe. Okay, so basically it's something you could be doing because he's not really moving money around, is he? He just picked an investment and put it in. But you'd be better off just doing this with an actual professional who's licensed.

25:11Right, okay. So how much money did you originally put in two and a half years ago? I put 10 grand in two and a half years ago. It's up to like 15 grand now. Okay. I was going to say, I was like, if it's still at 10 grand, this guy needs to go to prison. I mean, the market has done really well the last few years.

25:28Rachel Cruze:Yeah. So number one, I would untangle this whole deal. It's just, you know, the whole money, family, minutia, it's not, it just never really ends up good. So I would just say, hey, bro, I just want our relationship to be clear of any level of entanglement when it comes to money. I just I'm starting not to feel great about it. You've done nothing wrong. I freely chose to do this. But I've been, you know, reading some books, doing some stuff. And I just think, are you married? Yes. Yeah. You know, me and, you know, my wife, we've been looking at our entire financial picture. And so we're going to kind of consolidate some stuff, move things around.

26:07Rachel Cruze:so I probably will just cash out with you and move on. That's what I would do and not even worry about it. But if you feel like you can't do that and all of it, then I would charge him what the average market rate is if you had an investment professional look at that, which is 1%. Or just say, hey, my wife and I, we decided we're going to work with an actual financial advisor at XYZ Firm, and we're going to move our money over there. Yep. And if he gets real upset, that's a good clue that this was a bad idea to begin with. Okay. but I'm glad you are at least up right now. Hurdles and 20 % is crazy.

26:42Usually this call ends with, and all the money's gone and I can't get in touch with him.

26:47Rachel Cruze:Now that would be weird. Would that not be crazy, Dan, if you went and told him that? It sounds like he likes this stuff and he does DIY and he came up with some deal that was like, all right, I'll make a little bit of money to manage this for you. I don't even know if this is legal. This sounds crazy. I think it's kind of set up like an investment club type thing. So it's mostly fine. Like, I have input into it, but yeah. Well, why don't you just do it, Dan? Well, I don't know exactly what it is. Like, I don't know how to do whatever it is he's doing. He's not just putting it in a stock and leaving it.

27:17He's doing, like, some covered call type stuff, I think. Oh, boy. Okay. There's some more risk here. I personally, I would jump on RamseySolutions.com, click on SmartVestor Pro, and you'll sleep better at night knowing that all this money can disappear. Because here's the thing. Well, that and don't— You could lose it all, and you have no stake in the game. You can't come after him.

27:36Rachel Cruze:Yeah, and the fact you can't explain what he's doing, never put your money in something you don't understand. So you've got to figure out what he's doing. Okay. Just for your own sake, Dan, don't give someone$10 ,000 and be like, I don't really understand what he's doing, but he kind of knows what he's doing. You don't even know if you know what he's doing. Did he make any promises? Was he like, hey, man, I'll double your money? No, no, nothing like that. I mean, he gave up, like, yeah, he just said it was doing pretty well for him, and he'd been making, I don't remember what the percentage was that he said at the time, but it was a decent amount.

28:06And I was like, okay. Like, I'm not going to put all my money there, but I have some I can put there. Sure. It's fine. Yeah. Well, at least you're not too late. Hopefully we talked you off the ledge to get out of this weird situation. And it's always a family member. That's the part that I'm glad at least it wasn't a whole life insurance thing where he's like, he said he's managing my money. And it's really just a life insurance salesperson who works at Northwestern who sucked you into this deal. Totally.

28:29Rachel Cruze:Yeah. Yeah, it could be totally fine, Dan. We may be being dramatic. But from the relational aspect, I would not, yeah, I just wouldn't commingle money and family. I'd rather be a stranger I can yell at. You just put it in an index fund and you'll probably be getting, I would think, the same returns as what he's doing, honestly. All right. Jack is in Lexington up next. What's going on, Jack? You there? Jack? We were so close to talking to Jack. All right. All right. It was a good effort. Let's go to Joe and Raleigh instead. What's going on, Joe? Hey, guys. How are you doing? Good. How can we help?

29:07I have a quick, well, kind of quick question. First of all, thanks for taking the call. I just graduated school. I'm from Indiana, moved down to North Carolina. I have about$65 ,000 in student debt. I got my master's, my MBA, and then I have about$7 ,000 in a car. My work actually kind of, we have car allowance that I kind of get paid for. I'm getting married in two months, and my fiancee, we're very blessed. She has had money put aside for her. It's about$120 ,000, and it's going to be our money. We're going to combine our finances. We've talked about what to best do with that money as soon as we get married and combine our finances.

29:52Part of me thinks, yes, we should just use that money and wipe out all the debt that would now be ours once we're married. but also being a good man I am. I feel like I don't want to just take her money and do that but it will become our money if that makes sense. And yeah, we could use it on, I could use some of it and then pay the rest off on my own but I feel like you guys would probably just say just use it but it's been set aside for a while. Her dad and grandparents blessed her with that. So yeah, curious to hear what you guys think. Absolutely. Use it and set yourself up. I mean, this money was created for, you know, for her to get a leg up in her financial future.

30:33And now she's got you. It's a wealth multiplier. So, yes, it feels like you're taking a step back temporarily and it stinks because you're like, man, this was – I mean, half her money is gone now that was set aside for her. But you're just setting yourselves up. This is a great foundation to go off of. So, absolutely, I would do it. And you would do the same if she was in your shoes. And so it is your money, y 'all's money, our money.

30:54Rachel Cruze:Yeah, and you're not using all of it. I mean, you're using a good bit of it. You have like 50K left. I was going to say, yeah, 48 ,000 left. which could be the, you know, starter or the fully funded emergency funds, right? Part of that could be there and then some of it for a down payment for a home and you guys keep moving along. So the goal is to get to wealth as quick as possible and getting debt out of the picture helps you get there fast.

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32:47open phones at 888-825-5225 Spencer is in Hollywood, Florida up next. Spencer, welcome to the Ramsey Show Hello, thanks for having me Sure, how can Rachel and I help? I was just calling because me and my fiance I'm age 25, but me and my fiance are looking to get married in August, but I have a dilemma with her and her mom. Her mom wants to stay with us, but her and her mom doesn't have a good relationship, really, that's happening. And we're kind of in between on what we should do. She doesn't want to abandon her mom and leave her because she's a single mom with two other little sisters, and we're just having that, I guess you could say that guilt of not bringing her along with us.

33:40Rachel Cruze:Okay, so the mother-in-law is asking to move in with you all once you get married? Yes, that's correct. Okay. And she has two other daughters? Yes, and the thing is, she has her aunt that lives in Jacksonville. She's in the Navy, but that's not really, like, I guess you could say a designated area she wants to live at. Okay, why does she need her oldest daughter? Is it financial? Is it that she helps take care of the two little ones? Like, what is her primary motivation to live with you all? I think it's the combination of all the things you said, plus more, I guess, for like, I guess you could say more comfortability.

34:24And she really takes on like all the responsibilities when I'm thinking about it. Your wife does? Yes, correct. I was looking for her mom and everything. I guess that's like, I guess, if she leaves, that's like, I guess, you know, a gap that she has to fill as a single mom. And what's the relational side? You said there's a bad relationship. Who's it between? Well, when I say, like, bad relationship, it's like, I guess, like, you could say, like, hot and cold. Like, it'd be like, I guess you could say one day, like, they're getting along and the next day, I guess. You're bringing some drama into the house by inviting her in is what you're saying.

35:05Yeah. I guess my standpoint, I'm in the middle of it, so I don't want to play on both sides. I respect both of them. I kind of gave her ideas like saying you can love your mom for a distance and maybe going to Jacksonville is not a bad idea. But at the same time, I never lived with her mom. So I'm saying, like, maybe it won't be a bad idea if she comes with us for a little bit. The little bit turns into a long bit. And the long bit turns into, well, this is where we live now, and it's a generational house. And that's fine if everybody agrees to it, but it sounds like you and your fiancé are both like, this is not it.

35:46This is not the life we pictured. Yeah, I mean, I guess with me, I don't mind. But for her, you know, she's the one that— Spencer, you don't mind?

35:57Rachel Cruze:You really don't mind? Your mother-in-law, you guys opening the fridge together and the two little kids running around with your new wife. You don't mind? Oh, not really when you say it like that. There we go. It's okay to admit you do not want this. It doesn't mean you're a bad person. It doesn't mean you don't love her. But there's a reason people get married. They'll leave and cleave. There's a sense of independence that we're creating a new life for us together, not dragging everyone along with us and funding their life as well. Yeah, and the guilt trips your mother-in-law will give to her daughter because it sounds like the enmeshment of their relationship is super deep and there's not clear boundaries.

36:39Rachel Cruze:And your fiancé has basically become, in a way, another parent to your mom, to her mom. You know what I mean? It's like the roles have flipped and that's not— Not healthy. It's not, yeah, it's not the way the progression's supposed to be. And I know life isn't perfect and there's messiness and things happen. Absolutely. And I'm not saying you abandon her mom or anything, but it is not wrong for you both to say, hi, we are both in our mid-20s. We're going to choose to start a life together, choose to start our own nuclear family, and we're choosing to do life together. And now I'm leaving the home mom.

37:14Rachel Cruze:And that's not crazy, right? And she may have a hard situation, and you guys can choose how much you want to help in that if you want to. But there's no responsibility there. She's the daughter, right? Her mom is in charge of her own life. And so when she depends and is so dependent and codependent on her daughter, that's not good. And so if your fiance decides, yes, I don't want my mom moving in with us, I think it's not only a wise move, but it's going to be a really hard conversation. Because when you put boundaries up with someone who's not used to boundaries or new boundaries, it's going to piss her off.

37:54Rachel Cruze:Like it's going to be really hard. It's going to be really hurtful. And she can do it in a really kind way, but she can't control how her mom's going to respond. But that is going to be messy, messy. But that doesn't mean just because it's hard doesn't mean it's not right. And this needs to be between her and her mom. So that you don't need this triangulation where now it's like you're in the middle going, oh, what do you want to do? You be the tiebreaker. You don't want that. Now, you support your wife in setting up the boundaries, but you don't need to get in the middle of it either. Correct.

38:22Yeah, that's why I just listen to what she tells me. I give my advice to her, but I stay out the mix. And when I come over, it's like, that's not the right. Can I be honest, Spencer? I think she wants you to take a stand. I don't think she wants you to be Switzerland. Yeah. She wants you to bow up and say, you know what? This isn't okay. And I support you in you stopping this before it gets out of hand. and then go, hey, we're not going to leave you on the street. We want to come up with a plan to make sure that you're covered, that the kids are okay, but that doesn't mean you're going to move in with us.

38:53There's other options, right? If you guys weren't getting married, what would she do? Yeah, so I guess the plan was she's supposed to move to Jacksonville with her other sister. I guess that's the plan.

39:05Rachel Cruze:It's great. Keep the plan. It's a great plan. Love that plan. We love the plan. You should be so supportive of that plan. You should cover the moving costs for her to get to Jacksonville. That's how much you love this plan. You see where we're going with this? Yes. I need you to steer the ship. What's your hesitation, Spencer? What's causing you to not just be like, yes, absolutely? I mean, I guess the only hesitation is really, I guess what she tells me, I guess it's always like mixed emotions, I guess you could say. That's fair. One day is something different, and the next day is something else.

39:44And one day is like you're saying, like, you know, I feel bad for my mom, and she did stuff for me. And, like, you know, like, okay, what if they had, like, that idea, what if we did get a house and she came? But then it's an idea that I would say, oh, about, like, okay, one year turns into many years, and that's not something you want. And is she working full-time? Yes. Okay. And I think her mom just got out of actually surgery, knee surgery. So she's been out of work. Well, she still has her job, but she's been out of work for about a month now. Okay. Yeah.

40:24Rachel Cruze:And you guys can be helpful, right? We're not saying you just like abandon a relationship by any means. But commingling your whole lives together, that's a totally different step. And she doesn't need to feel good about her mom taking care of her. That's why you choose to be a mom. You take care of your kids. Like, that's what you do. They don't owe—they're not indebted to you because you took care of your kids. Yeah, that's selfish, too. I'm going to have a kid so that they can take care of me in my old age of 42. How old is she? At least in her 40s. Okay. Yeah, she's not elderly. If this was someone who's like, hey, they need care, this is different.

41:00This is a barely a middle-aged woman who can work full-time. And, yes, it's a hard life to be a single mom with two young kids. but it's not impossible. We hear calls all the time. And so she needs to figure out how to be independent because that's what's actually best for her.

41:15Rachel Cruze:Yes. Okay. So you're actually doing this out of love, not out of spite. And I think you need to convince yourself of that. Spencer, you need to take an energy, a five-hour energy shot before you... Boom. Get a little aggressive in there, you know? Sometimes I'll slap myself in the face just to wake up and go, all right, get in the game, bud. Let's do this. You got this, Spencer. Oh, well, I'm... I'm hoping the best for you guys in setting up this boundary conversation. Call us back if you need us, Spencer. And call us back if you do let her move in and then it's two years later and you can't get her out and she's not paying any of the bills and it's chaos in your house.

41:49We'll also try to help you then.

41:51Rachel Cruze:We will. It's just going to be less fun. We'll always do. This is the preventative medicine. I know. Versus the emergency surgery. We need to evict my mother-in-law and her two siblings. I know. Right, right. That's a nightmare scenario. I know. And what if you guys want to move? And she's like, well, no, we need to stay here. My job is here. I can't afford. So you guys are really locking yourselves in with some handcuffs if you do this on top of the drama and the stress. I wouldn't be doing that as a newlywed couple. If you've been married 30 years and she's elderly and needs care and you decide to take her in, that's different.

42:20But you're going to create a zoo that you did not sign up for.

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43:17Rachel Cruze:And that margin gives you breathing room when you're working the baby steps and trying to steward your money well. And right now, CHM's offering new members a 50 % credit towards their first month of membership. Get started at chministries.org slash budget and use promo code Ramsey. That's chministries.org slash budget and promo code Ramsey.

43:46Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm George Camel, joined by bestselling author Rachel Cruz, and we're taking your calls at 888-825-5225. Mike is in Philadelphia up next. What's going on, Mike? How can we help today? How are you? We're doing great. What ails you? Very good. So, all right, so I have been pulling my hair out the past couple days about a new truck. That's how Dave Ramsey ended up like that, man. Be careful. Pull that hair out. It doesn't come back.

44:18Rachel Cruze:Just real stress. I'm close to it. I'm fully gray. You know, I used to have a nice piece of brown going. Now I'm all gray about it. That's life. Listen, my car, I've had it on the road for years now without a car payment. I love it. I'm the 1 % of the world who doesn't have a car payment, I like to say. And now, unfortunately, the car is on the lift at my buddy's shop on life support. Was this a big surprise or was it like, yeah, it kind of was getting there? No, it wasn't a surprise. I think this thing was coming, but I was in denial. So, you know, Infiniti with 250-something on it. I get oil changes left and right, premium gas, but I take care of it.

45:10And I was really hoping to squeeze just a couple of more, you know, miles out of this thing before I had to make the jump to a new car. But, of course, here we are. You know, life springs us out here. So I have one of two ways to go. I spent all day yesterday on the Toyota Tundra lot looking at the Tundras and seeing how ridiculously expensive they are versus going to my buddy's shop right now, throwing the whole tax return nut on the repairs and driving off and just hoping to squeeze just a couple more miles out of old Barry is his name.

45:47Rachel Cruze:Old Barry? So, old Barry. Strong man. Oh, man. Love a Barry. He's been good. Barry's are always good. Barry's been, yeah. Barry has been fantastic to me, and I think he's still got some life left. Okay. Although the friends and family are like, listen, no. Well, we don't listen to them. We don't need to listen to them. Okay, so Mike, how much money do you have to buy a Tundra? So I have, I would say about six days up. Six thousand? Yes, correct. I'm planning on selling 35 down on it. 3 ,500? Yes, correct. Down. I thought we were an anti-payment. I thought we were a one percenter of not having it.

46:29The word down is in our vocabulary.

46:32Rachel Cruze:Uh-oh. I know. I think Barry's going to feel disappointed in you, Mike. What's the repair cost? So Barry all in right now is$2 ,300, and then now I just got surprised with a new part plus$800, so whatever that is. $3 ,100. Okay. So what's the car worth after you do all this? Listen, we're at 215-something thousand miles. I don't know. I don't know. I mean, is it worth$6 ,000? What kind of car is Barry? It's a 2010 Infinity M35. Okay, yeah. Mike, do you listen to the show a lot? Do you listen to the Ramsey show a lot? No, no. I actually just started following the whole group pretty recently. Oh, okay, okay.

47:24Maybe at the end of last year, give or take. You were the 1 % without a car payment before you knew us.

47:29Rachel Cruze:Well, you called a show that helps people get out of debt, not into debt. Trust me, I'm aware. And that's, you know, but I have heard the rare stories where, you know, they're like, yeah, sure. Why not? You know, you have this, this and that going on. Why not? Oh, yes. We do tell people to buy cars. Yes. New cars when they have the money to buy them. So people will call in and they're like, listen, I got 600 grand in a high yield savings account. and I want a new Tundra, then we'd be like, Mike, go get you a new Tundra. If you have a net worth over a million dollars, go buy a nice car. Mike, you're kind of broke, you know?

48:09Rachel Cruze:And can I be honest, Mike? You got six grand in Barry to your name. You and Barry in six grand. You don't need to be walking around on a Tundra lot, Mike. Yeah. You'll be a Tundra guy one day, but... Right now, it's champagne taste on a beer budget, my friend. Yeah, no, we can't. No, no, no. Do you know how much a Tundra, you know how much a payment's going to be, Mike? I bet it's, what, 900, close to a green, 1 ,000? 1 ,200? 3 ,500 down is a drop in the bucket for a brand new Tundra. Hey, do your math. Mike is new. So show. You want like a car loan payment calculator? Yes. So listen, Mike, this is what your car payment would cost you, as Barry's sitting there on life support.

48:47Rachel Cruze:But he's got another life. Okay, what's the price of the car? How much would a new Tundra be? I know you know. No, no. Well, we don't need that. Just say like, just say. I do need to know. Oh, you're doing the loan. Oh, I was going to do investment. If he invested. Sorry, George. She's just yelling at me over here. Mike, give me a break. Will you pull up the investment calculator? Oh, got it. Okay, I see where you're going with this now. Yeah, this is where I'm going. So Mike, if you went and got a new Tundra, okay, and you were like everyone else in the world, and you put away, how much do you think a payment is?

49:16Rachel Cruze:Probably. Can we call it 900? 1100? How much do you think? Yeah, let's call it about 9, 950. All right, 950. How old are you? 950. How old are you, Mike? 36. 36. 36. Let's go to 62. So let's say you're like everyone else, Mike. You go, you get this new Tundra, and you pay a car payment, and you do it over the next, you know, five years. Then you're done with it. The Tundra is five years old. You're done with the payments, but you're like, you know, I want the new Tundra. You didn't save anything in the meantime. I want the 2030 Tundra. So then you go get a new one, and you stay in a cycle of car payments because that's what ends up happening.

49:50Rachel Cruze:so if you if you paid a car payment every month now until you're 62 that's your life versus if you keep barry alive you start saving up and you pay cash for your cars and you invested a car payment you paid yourself that car payment how much money would he have at 62 you'd have 1.4 million dollars of that you only put in less than 300 grand compound growth did the heavy lifting so or you could spend 50 grand on a car that was worth 40 that's now worth 16 and be paying payments six years later correct now let me ask you this uh you know the option to lease to buy you know brings that oh no that's even worse mike who sold you on that idea the guy at the dealership the tundra guy just wondering right right right you know i i had a feeling But I figured, listen, it's worth a shot to call in and just see what, you know, I know, and especially me, like I've been paying my debt down like crazy.

50:51How much debt do you have? And I'm almost getting ready to do that debt-free scream. Debt-free scream? Okay, yes! Don't ruin this moment.

50:59Rachel Cruze:You're going in the right direction. Keep moving, Mike. Couldn't come at a worse time. One foot in front of the other. But you know what, Mike? You have the money. You have the six grand. So you're able to fix Barry. cover the repair you still got three grand then yes then how much could you save up every month once you're completely debt free how much could you save in a car fund well uh let's see could i through so you know my emergency fund is back up after this payment the emergency fund is back up and replenished um yep i mean i could could you put away a thousand bucks a month two thousand bucks a month what are we talking yeah yeah yeah i mean because i don't have a i don't have rent or a mortgage.

51:36And what's your income? So that's$85 ,000. You make$85 ,000 a year. So you could buy up to a$40 ,000 car if that was your only thing with wheels and motors on it. With cash. With cash. And you just told me you could save$2 ,000 a month? Yeah. That's$24 ,000 a year?

51:51Rachel Cruze:Yeah. At the end of it, yeah. Think about it. In one year you could have a$24 ,000 car. And if I were you, Mike, I'd go find a$24 ,000 Tundra a year from now that's used that someone else said, I'm done with that. I want the fancier newer one. 100%. That's the right way to go if you want to build wealth, Mike. But if you want to look good and feel good for just three seconds, you go get that new car with a big old payment. But man, I don't want to see future Mike regret that.

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53:57Chantal is in Sarasota, Florida up next. Welcome to the show, Chantal. How can we help? Hey, so my question is, I am a new mom and I had a baby about seven weeks ago. Congrats. And my question is, oh, thank you. My question is, does it make financial sense at this point, really strongly considering transitioning from full-time working, relatively well-paying medical job to a stay-at-home mom with losing all benefits and all those kinds of things from my current employer. Also, while considering my husband's employment kind of decreasing grossly year over year, I'm just kind of lost at what to do at this point.

54:47What does he do? Medical sales. And the sales just aren't coming through? Well, it's a very seasonal area where we live in Florida. So, you know, most of the year, you know, relatively busy, but in the summer months definitely drops off quite a bit. So kind of over the last two years, kind of bring home has been decreasing just based on volume.

55:14Rachel Cruze:Overall. Okay. What was he making and what is he making now? I would say the range between$400 ,000 and$600 ,000. Oh, wow. That's great. Well, that's a healthy range. Yeah, we're a little on the lower end. Yeah, a little on the lower end, kind of on the trajectory for this year. Okay. Does he see volume picking up next year to get back to that half a million or$600 ,000? Probably not until 2027 when more hospitals kind of open in the area. So next year, though? Next year. Yeah, probably in the latter half of next year, I would say. Yeah. Does your lifestyle support you guys living on$400 ,000 a year?

55:59I mean, he has two kids from a previous marriage, so there's three kids total now. And I have been the one carrying like the health insurance and all of those kinds of things up to this point.

56:14Rachel Cruze:His company doesn't provide that? That's not a benefit? uh no because he's an independent contractor um and a navy veteran so he gets all his um care through the va okay and family's not included in that no it's not okay do you actually know your total household expenses in a given month um it is mortgage is probably 2100 ish in that range and we owe maybe about$240 ,000 on a house. Okay. You know, then just like your regular electricity. But would you say you got to spend$10 ,000 a month to keep the household running? Between all of the things, that's probably generous. Is that child support included?

57:03There's no child support. Okay. Well, I'm doing math here going$10 ,000 a month is$120 ,000 a year in take-home pay. So even if you made$250 ,000, you'd still be able to cover all of your household bills easily on his income alone. Yeah. Now, the part to factor in is getting Marketplace Health Insurance, which you can check out our friends at HealthTrustFinancial at RamseySolutions.com. And they can search for you to find out what it's going to really cost. It might be$3 ,000 a month you've got to budget for to cover health insurance for now.

57:35Rachel Cruze:But I think you guys can afford that. but even if your bills are 13 grand if you're making four hundred thousand dollars in a bad year you're gonna be okay yeah i mean and i think the biggest thing for me is transitioning from my contribution to all of that which last year i brought in about 250 um to going from all of that to zero um now is that 250 feels like you know like i'm not doing my part you know as a partner. Well, the hardest part about staying home, Chantal, is disassociating your work identity from your human identity as a mom. And that part is legitimately hard because this is all you've known.

58:18You've worked really hard to build this career, haven't you? Yeah. So yeah, invested all this, you know, master's degree for the last 13 years, been working my butt off. Yeah. And it got you here. It got you to an amazing life. And it's, I think what you're gonna have to do is grieve that over time and go man I work really hard for this and it's not the right next thing for me right do you have this new baby now and so that's your new thing that you were contributing to as well as the household and that I think that has so much nobility and merit to it even if it doesn't come with a big paycheck 100 % I say that as someone who's my wife stays at home and had an amazing nine-year career here at rams he was at the top of her game and dropped it all to be at home.

59:02And it was a really hard decision for her emotionally, but it wasn't hard financially because we set ourselves up. And you guys have done the same with this amazing income you have. Yeah. I think the other portion of that is, you know, I have been working towards, you know, obviously investing in retirement, 401k, rough IRA, trying to set ourselves up, you know, for some point that we'd be able to transition. So, you know, I'm going to lose all of that, too, as far as like corporate contribution. Sure. But you'll roll over any retirement stuff you have. You can roll that over to an IRA. It'll continue to grow.

59:36Rachel Cruze:And you can do a spousal Roth IRA. You guys may have to do the backdoor considering how much you make. I do have one question, Chantel, then I want to get back to what you were saying. Is the$250 you're contributing part of the$400 or he's making$400? He's making$400. Okay, good. I wanted to make sure our math was right. Okay, perfect. Yeah, you guys are, if you don't build wealth making$400 ,000 a year, you really screwed it up. You don't have a financial problem until you have an identity problem is what it is. And the hard thing is, is so much of the applause of our world today, the scorecard at which we place our worth is our income, what people see, success, positions.

1:00:16Rachel Cruze:Status. Like all of that is what is applauded in our world today, which is really sad because a lot of that ends up being empty. Now, if you can flip that and say, hey, that is not who I am. This is a skill set that, you know, was God given and I've worked hard at it. And that's a great part of me. But that is not that's not who I am. It's maybe a part of me, but it's not my full identity. And so taking that apart, I think, is so important. And for you and your husband to sit down and I would love him to affirm this in you that this is our household income. Like, yes, you are contributing to it, but regardless of who makes the money, when it hits that checking account, we are in charge of it together.

1:00:59Rachel Cruze:Like you have as much say still into the money, even if you're not bringing it in. That's a healthy perspective. And it's going to be hard for you because you are very intelligent. You're very hardworking. And I'll be honest, too. I mean, I felt this way when I went on maternity leave, even. You might go a little stir crazy. You might be like, oh, my gosh, I've been making peanut butter and jelly sandwiches for so long. or I'm nursing or I'm washing burp cloths constantly and swaddle blankets. There's a monotony to a new world that you've entered into. And so if you have to find a little outlet to kind of like find that part of you that is so gifted, that's great too.

1:01:36Rachel Cruze:But honestly, embracing the season you're in, it's going to go so fast. And I know everyone says that. And I even hate to say because I rolled my eyes every time people said it, but it does. I'm like, it just, it flies. It flies. And so your contribution, if you're wanting to stay home and that's where you feel like your spirit, your soul is pulling you, listen to that. Listen to that. Okay? Yeah. Because it is. They're only so little for so long. Yes. And it's going to be exhausting. You can get a job again one day if you miss it. Yes. That's the good news. You're so talented. And you're going to be tired.

1:02:06Rachel Cruze:Like, it's a different kind of tired. I think it's more tiring to be home. A hundred percent. I could not trade places. With adults, you know, and having adult conversation like we are now. So yeah, you'll miss some elements of your work life for sure. But if there's ways you can still have yourself fulfilled in those things, whatever that looks like is great too. So man, but I would say, listen, listen to your heart and be home with that baby if that's where you're being pulled. I much appreciate your help. Yep, absolutely. Good luck with the transition. Congratulations. I know seven weeks in, I'm surprised you're able to call in coherently.

1:02:43Oh man. That's the most impressive part.

1:02:45Rachel Cruze:It's exhausting. So tiring. So tiring. It is. Those baby years. They're beautiful, but they're exhausting. I'm in it. I got an infant now. I got a toddler. And I get home and I'm like, I thought I was at work. Now I'm at work. That was a joy ride compared to what's going on over here. I know. And I know parents are all different seasons, but it does get better and better. I know. Like our season right now. I roll my eyes, but it's true. I know, but right now I'm like, it's perfect for us. Like a five to 11 year old. I'm like, stay right here. Y 'all are so fun. Don't grow. Don't grow. Don't become dramatic teenagers.

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1:05:27Rachel Cruze:Today's question comes from Toby in Missouri. I'm 25 years old and self-employed with an average salary of$100 ,000 a year. I have a net worth of$400 ,000 and my fiance will be out of school and getting a job within a year, starting out at$95 ,000 a year. I have saved$200 ,000 to put down on a house for a down payment. Should I buy my dream home for$450 ,000 in the best neighborhood in town or a house that costs$200 ,000 in an okay neighborhood knowing that we want to move into another neighborhood in the next couple of years? We have no student loans or car payments and we'll be getting married later this year.

1:06:06Ooh, okay. A lot of variables here. It's like a little riddle. A lot of timing.

1:06:11Rachel Cruze:I'm going big. Yeah. Well, I'm wondering, can you wait to buy the house until you're married? Oh, for sure. Why the urgency right now to get the, I would get the$450 ,000 house, but I would wait until you're married. Yep. Because then you know that you know that you know both incomes are there. Because what if, God forbid, maybe the wedding gets pushed and you're stuck with a mortgage payment that's a little tight for your$100 ,000 income, which is amazing. But you take on a$250 ,000 mortgage, I don't know what the payment's going to be compared to your take-home pay. That's right. Yes, I would assume that after you get married, you guys will be making$200 ,000.

1:06:46Rachel Cruze:You put, and maybe rent for one year, right? Before you jump into the new neighborhood. And save an extra 50, 7 ,500, right? To add to the down payment. And if you put 250, 300 down on a 450. Oh my goodness. Beautiful. The options you have will be amazing. You'll pay off the mortgage fast. And then fast forward, let's say your fiance wants to stay home one day. And we just took a call about that. Just like that, yep. Guess what? It's a no brainer. You're like, yeah, our mortgage is a thousand bucks a month. or it's paid off, no brainer to do this. Or you jump in right now with that mortgage that's a fixed payment and it gets tight if she decides to stay home.

1:07:25That's the kind of stuff you need to think about with a home. It's a long-term decision. So I would wait. I think renting is wise for six to 12 months, then jump on it and get that dream home, my friend. That's a great question. He's in a good place.

1:07:38Rachel Cruze:Yes, because we do, I mean, if you guys didn't have like a, you know, a big goal of like, oh, we want to be here and a$200 ,000 house was sufficient, and you're like, no, this is perfect, this is what we're wanting, then that's great. But if you know you're going to be moving up and home in three years, then I wouldn't stare-step in. You don't want to be jumping in and out of homes within a three-year span. Because you have the money. Yeah, it's expensive. There's realtor fees. There's closing costs. It's a hassle to move. You want home appreciation to actually have some foothold here, and that's going to take at least three, four, five years, similar to the stock market.

1:08:13Because in a given year, the home price could actually dip for a little bit. And so I think you're doing it the right way, Toby. I would just be patient and wait until you're married to pull the trigger on the home. That's awesome. All right, Patrick is down the street here in Nashville, Tennessee. What's going on, Patrick? Hey, how are you all doing today? Great. How can we help? Great. So I'm 26 years old, and I just landed a job straight out of college with my degree. I make about$73 ,000 a year. I don't have any credit card debt. I do owe on a vehicle, and I've got about$63 -$4 ,000 saved in a CD account and in savings.

1:08:53And my CD account is about to renew here in the next month, and I'm really just wanting to know, is there somewhere else I can put my money to really let it grow, and then how can I start to utilize these savings for the future? Great questions. You're doing really good at 26. What is left on your debt? What's the balance? So I only owe$25 ,000, just shy of$26 ,000 on a vehicle. Only? That's a lot of money where I came from. It is. It is. And I'm more than willing to pay it off, and I'm comfortable paying it off right here, right now. Do it. Do it while you're on the phone with us. Prove it. I've been putting it in the works, but I just want to know.

1:09:40I've got a considerable amount of money left over, and I just really want to be able to put it to work, especially since the job I'm in is a good salary, and it's only going to increase throughout the years. Great. Are you doing any investing right now through a retirement plan? I'm not, and I want to start. Okay. So let me run you through some napkin math here to help you. You got$63 in CD and savings. I would not renew that CD. I would get out of that and just park it in high-yield savings. You're going to use$26 of that to pay off your car loan, right? Yes. So that brings you down to$37 ,000.

1:10:19Now we need an emergency fund, unless you have other savings outside of this, but you need three to six months of expenses saved up in an emergency fund. You can park that in the high-yield savings. How much would that be for you? I think for six months, it'd probably be about$24 ,000. Great. So we're going to take 24 out of the 37, which leaves you with$13 ,000. That's really the number we're working with. And now think about it. You've got an amazing financial foundation. No payments, six months of expenses saved up,$13 ,000 to now invest. And what I would do first is just fund a Roth IRA for the year.

1:10:53That's$7 ,500 right there. Are you tracking with me on what that is? You know, I'm new. I've heard Roth IRA, but I'm not going to lie. I'm not familiar with it. No, it's all good. I'll give you a quick explainer. So an IRA is just an individual retirement arrangement. It's just an account that's outside of an employer where you can invest money with some tax advantages. And so there's traditional IRA, which means you're going to get some tax benefit now, but you'll pay taxes later when you withdraw it. On the growth. On the growth. And the Roth version says, hey, what if you use your after-tax money, essentially your take-home pay, to fund it, but then you don't pay taxes to Uncle Sam ever again.

1:11:35And so I love that tax-free growth the rest of your life. I mean, you're a young guy. That's some amazing opportunities. So funding that for the year, the maximum is$7 ,500 for 2026. So you can open up a Roth IRA, fund$7 ,500, and you'll still have some money left over, which is incredible. And then beyond that, you've got to think about what are my future financial goals? Do I need to upgrade the car? Do I need to save up for a home down payment? And so you want to think about short-term goals, high-yield savings, long-term goals. Let's invest it.

1:12:06Rachel Cruze:Yeah. And Patrick, at that point, you know, we have what's called the seven baby steps. So it's a$1 ,000 emergency fund, get completely debt-free, everything but the house, and then a three to six-month emergency fund. So you've done all of that because of the savings that you've done so well, stockpiling that cash. and then baby steps four five and six is what you're going to move forward with and baby step four is funding 15 of your income into retirement so that roth ira would be included in that 15 so from now on patrick you need to be investing 15 of your income into retirement so that's about eleven thousand dollars for you yep eleven thousand dollars a year okay needs to be going in an investment so roth ira would be included in that does your employer have a 401k um i'm still fairly new and i'm figuring all those numbers out i do know that we have a pension after if your age and your year served equal a certain amount okay guaranteed so if there is an option for any kind of retirement within your company then you know that would be great it's any kind of investment so sometimes there's a match as well to where they go hey if you put in three percent we're going to also match three percent so you doubled your money 100 percent 100 % return, just like that.

1:13:20So that's the first place to go. And then beyond that, like I talked about the Roth options, that's after-tax money, but it grows, and you can withdraw it without taxes again. And then beyond that, if you run out, you can go to traditional options as well. And I'll walk you through this, Patrick, in my book, Breaking Free from Broke, I'll send you a copy. There's a chapter called Wealth is Patience, and you, my friend, have all the time in the world to be patient. You're a young man who's doing great.

1:13:43Rachel Cruze:Yeah, you're on the right track, Patrick. So just remember, stay out of debt, invest in the long-term CDs. Percentage-wise, you're getting what? What do you think of CDs right now? Probably upwards close to four, but not quite. Okay, okay. Better than I was thinking. But yeah, you're going to get better returns investing your money in the market. But again, doing it wisely. And George, in his book, will walk you step-by-step by that. So make sure to read that when that comes to you, Patrick. Can we do some quid pro quo, Patrick? Can you promise me you'll pay off the car if I send you the book?

1:14:14Absolutely. I'm planning to do it. and I knew that was going to be the first thing they were going to tell me. Yes. Well, dude, how much is the payment on that thing? What's the car payment? It's about$513. You just became$6 ,000 a year richer. You just got a raise just like that, Patrick. Man, I'm happy for you. Hang on the line. We'll send you a copy of Breaking Free from Broke. Enjoy.

1:14:55We'll be right back.

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1:15:47Rachel Cruze:You know what I was just doing during the break? What are you budgeting? Tracking your transactions? Tracking your transactions. Yep. She practices what she preaches. I really do. Yes. How did it feel? And it feels so good. You got a little dopamine hit? Well, the Costco one hit. And that was - Oh, that one never feels good. That was not fun. But it's in the budget. So it doesn't feel good. Costco, science will study Costco for years to come as to how they convinced everyone to spend hundreds while somehow thinking they saved money. I know. And my kids get locked in on certain snacks. like a, there's like a little protein drink.

1:16:17Rachel Cruze:It's like a little monkey on the front. They're so expensive, but they're$9 off. So I was like, you know. I thought about that. My daughter gets her little like pouches, you know? Yeah. And my wife likes the crunchy, like clean ones. Oh, yes. They're like$2 a pouch. So when she doesn't finish one, I'm like, you're going to finish that pouch. Dad paid good money for that pouch. We're going to put that in the refrigerator and you're going to reuse that pouch. I know. I know. That's life. All right. John is in Virginia Beach up next. What's going on, John? How can we help today? all right well so my wife and i have just finished paying off all of our credit cards nice good job we are moving on to our bigger debts next we have a student loan um a heloc and we also have a car note that we're paying off my question is the student loan is the next largest one and it's her student loan is through the government and it's in forbearance right now until I think 2028.

1:17:14So there's no minimum payment that's required on it right now. Do I start paying on that since it's the next smallest one, or do I go to the next biggest one, which is the truck note, and like paying additional on it? That's a great question. So what's the total balance of the debts? Student loans right at$14 ,000. The truck is right around $20 ,000, and the HELOC's right around$47 ,000. Okay. What's the smallest student loan up next? um so her student loans got all consolidated into one um back under the previous president's administration so it's all wrapped into one payment okay well here's the deal interest is still accruing in forbearance sure so even though they're like hey you don't have to make a payment that balance is ballooning because you're not knocking down the principal at all so i would absolutely treat it like any other debt and just attack that one first at 14 grand how quickly can you knock that one out?

1:18:11Probably in about a year, maybe 16 months at most. Okay. So 12 months from now, you're moving on to the car loan? Correct. All right. And then the HELOC's next. All right. You're on the path. Yeah, I would absolutely knock out that student loan. The problem and the thing I hate about forbearance is it makes people think they are like, whew, I got some relief. Yes. And they look at the balance six months later and it's so much bigger than it was the last time they looked at it. Yeah, that was my concern. Thankfully, Basically, they're low interest. I think it's a 4.5 % interest, which obviously is low, but the interest is still accruing and adding to the balance when I'm not making payments on it.

1:18:47So I just wanted to make sure that that was the right next move. The interest could not be low enough unless it's gone. 0 % with no payment is the only one I'm okay with. So I would knock it out just as aggressively as if it was 40 % interest. That's the spirit that will get you out of this fast and not be a grueling four-year journey. So can you knock the rest out in, let's say, under two years? Probably maybe a little over two at most, but I don't see why not. That's the spirit, John. Well done, y 'all.

1:19:17Rachel Cruze:Well done. And you got the credit cards out. That feels good. Those ones are real icky. Not fun. Hopefully you cut them up. All right. Keegan is in Sioux Falls, South Dakota up next. What's going on, Keegan? Hi. Thank you for taking my call. Sure. What's going on? So I am a full-time law student, and I'm living with my parents while I'm in school. They are supporting me, providing me with food and housing. I'm going to graduate with no student debt, and I'm wondering what I can do to pay my parents back once I graduate. Wow, that's amazing. First of all, way to go, going to law school debt-free.

1:19:57How did you do that, by the way? Because we get a lot of calls of people saying it's impossible. well you know my wife and i are big fans of you guys so we wanted to try and do this debt free so i studied hard for the lsat got a high score and i managed to get a full scholarship whoa wow well done so just be a boy genius like keegan and uh you can avoid as smart as keegan you can do it yeah matt that's incredible okay so did your parents set up any arrangement with you did they talk about any financial aspect of you living with them and them covering food no they are just doing this out of the kindness of their heart they want to support me and they know that this is a goal of mine and so they have no expectation that i pay them back but you just want to i just want to and i don't think they would take just a check from me to say thanks so that's what i was going to say you write dad a check he's going to rip it up i'm guessing right yep but will you still still feel like you did your part in attempting to pay them back?

1:20:55I think that might ease some of my burden, yeah. Well, you know what you're giving them? The flex of saying, oh yeah, my kid's a lawyer. That's what every parent wants, man. You're giving it to them. The check can not touch that. They're just proud of you, aren't they? They are. They're very proud, and I know they don't expect anything, but I thought maybe I'd take them on a vacation or something. That's a fun idea. Yeah, I think that's great. force them into an experience.

1:21:23Rachel Cruze:And you know, sometimes it's hard, Keegan, even, you know, as an adult to accept the generosity of others, it kind of puts you at a, in a, in a humble position. You know what I mean? To have to, yeah, accept that. And so there's something beautiful about that, that your parents had the ability and have set you guys up well and that you guys have been so smart. I mean, it's unbelievable the decisions you guys have made. So, yeah, I think there's for sure ways that you can be creative and, you know, take them on a trip or, you know, whatever that looks like. I think that's great. Or if you like notice around the house, man, that grill could use an upgrade.

1:22:00Once I graduate and I get a job, I'm just going to surprise them with a great grill. You know, so there's things you can still do to be generous.

1:22:07Rachel Cruze:Yeah, and there's stuff like that, too, you know, depending on where they are financially, you know, that as you guys start to build wealth that, you know, it's a beautiful thing to be generous to people that don't expect it or don't feel entitled to it, you know, and so that's part of living like no one else. Later, you get to live and give like no one else and giving to your family is one of those things that you absolutely can do. So, yeah, I'm all about that. I think that's great. I think it comes from a good place in your heart that there's, and there's no, you know, weirdness of feeling like, gosh, I, you know, they're expecting this or they have to, it really is just your, you saying thank you to them.

1:22:43Rachel Cruze:And I think that's beautiful. Yeah. Thank you so much. Absolutely. I'm inspired by this. Thank you for calling. I know. And I feel like paying it forward is one of the best things you can do. You do this for your family. You set them up so that no one in your family tree ever goes into debt. That's a pretty incredible legacy to leave that goes way beyond repaying them an unknown amount. You're like, what does this really cost? I don't know. I'll try to check for five grand and call it good. Yeah, right, right. I don't think they're needing it or expecting it. It sounds like they're in a great spot financially.

1:23:13So they're not put out by you staying there. But it's impressive. The whole story just makes me go, that's how to do it. If there was ever a poster child of it can be done and that's how to do it. And he said, we've been following you guys a long time and we just decided I don't want to leave law school with debt. So what did he do? He found a way. He worked his butt off to get a great LSAT score so that he got a full ride. Is that difficult? Sure. Is he privileged? No, he just worked his butt off. He was smarter than you because he worked harder than you to be smarter than you. That's how it works.

1:23:43Rachel Cruze:I think I probably could work that hard and probably still wouldn't get it. I would love for Rachel. I want Rachel and I to take the LSAT just to see who fails worse. We should just take the SAT or the ACT again. Yeah, honestly, you could give me a common core math problem for a fifth grader and I'd fail it. Listen, it is humbling doing homework with a fifth grader. You're like, oh, man. Even solving for X at this point in my life would add some anxiety. Yeah. When the fractions come in, you're like, oh, man, I got to remember how to do this. It's crazy that we didn't end up using it. Like, I know math teachers out there are really angry with me right now, but who's using the Pythagorean theorem?

1:24:18Rachel Cruze:Well, not that, but we use math every day on this show. We're sitting here. Basic math. Basically dividing by 12 all the time. How much do you make a year? Divided by 12. I've got an investment calculator at RamseySolutions.com at the ready. I know. Take that. Oh, man. We need Dave back here with his financial calculator, the old school one at the desk. Oh, yeah. Back to analog, Dave. Let's go back. He's going to keep that thing alive.

1:25:03Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Camel, joined by Ramsey personality Rachel Cruz, and we're taking your calls at 888-825-5225. Michelle keeps us going in Phoenix. What's going on, Michelle?

1:25:19Rachel Cruze:Hi there. Thank you for having me on the show. I'm excited. Oh, we are too. Don't be nervous. Rachel will guide you through this. Okay. I'm the anxious one.

1:25:32Where do I start? You tell me, what ails you right now? What's the main thing on your mind? Oh, my gosh. Well, my husband and I have made stupid decisions, and we are—I've just turned 58. My husband is going to be 57 in August. How do we overcome our large debt plus our house and the bills that come with that? But we have debt. Okay, so if you just kind of parse out the consumer debt versus your mortgage debt, how much consumer debt do you have? Oh, gosh. Let's see. That's about$10 ,000,$10 ,000,$20 ,000,$40 ,000. Almost$50 ,000. About$48 ,000 roughly. And what's your household income? We have$98 ,800 before tax and insurance.

1:26:22Oh, and also I will have school debt because I'm going to school. I was done going to get my master's and I graduate in a month thinking it was going to help me. I should have done it when I was younger. So that's on top of the 48? Yes. How much more? I think, well, to be honest, I was kind of confused when I looked at the FAFSA. It looked like it was$18 ,000, but then when I looked at my school's website, it said$28 ,000. Oh, boy. Okay. Yeah. Yep. All right. That puts us at a grand total of about$76 ,000 in consumer debt, making 98. Okay. At least now we have facts and figures. That's all we're trying to do right now is sort of get out of the emotion and overwhelm and just go, okay, what's actually the reality of our situation?

1:27:07Right. So break down the other$48 ,000 in debt. A credit card for about$10 ,790. Personal line of credit about$11 ,560. Air conditioners. So we had to buy two air conditioning units for our house last year because they broke in the middle of the summer. and we were at wit's end, didn't know what to do, so we ended up having to get a loan for that, and that's about$25 ,083. Oof. Yeah, and then the school debt. Are either of you able to increase your income in the foreseeable future? To be honest, that's what I was hoping I would be able to do, and I didn't have any luck, and it could be the way I interview, it could be my age, it could be everything wrapped into one.

1:27:56That's why I thought getting my master's, which is something I wanted to do years ago. But I started and then I stopped back in 21 when my mom got sick. And then I thought, I'm going to finish it and hoping that would help me. So we ended up getting jobs that are hard labor. And for our age, I'm actually kind of, you know, I was kind of embarrassed that I had to go back to a hard labor job, but you got to do what you got to do to pay bills, you know? But I have been there for two and a half years. So I was hoping to grow in that company since I've already been there. Will the MBA help you? Will that give you a raise?

1:28:27Um, not necessarily, not the job I'm in right now, but I was hoping it would help me get promoted. But, uh, the job is kind of, um, it's kind of a different company, uh, how they promote within. Well, if I were you, I'd be going, how can I use this MBA to double my salary so that I can get out of debt before I retire? That's really the goal now is can we get out of this thing in the next three, four, five years, maybe stack up retirement? Do you guys have anything in retirement? Mel, and that's the other thing. That was one of the stupid things we did when we moved from Minnesota to Arizona. We used my husband's retirement and pension at that time, and then we were pretty good, but then we were making dumb decisions.

1:29:06What do you mean you used it for the move? You cashed out? Well, we cashed it out, but we bought a place that was paid for, and then we ended up selling it thinking that would be the way to go, and it wasn't the way to go. We should have kept it because it was paid for. But now you have a mortgage. and now we have a mortgage because we had to have a bigger house this is the whole thing we had to have our daughters and grandbabies live with us it was kind of a michelle the key word in your life you need to get rid of is we had to that is what has caused you to be broke at every turn we had to we had to we had to yeah you have to retire with dignity that's the only have to at this point so everything else is out the window yeah out of the 98 that you guys bring

1:29:45Rachel Cruze:home a year what what what number do you bring home when does what does he bring home uh mine is 40 408 i wrote it down before so i could be ready for the call um and then and then his 54 392 and of course it's all before tax and everything okay and we're not doing 401k okay tell us about the house how much do you owe on the house um what was it 343 658 you owe 340 and how much is it worth um maybe about 500 000 okay what's the payment on that yeah 2270 and what's your take-home pay every month is it close to like five or six grand yeah about that i think total together because I think he pays the insurance.

1:30:37So six, mine's like five, so$1 ,100 per week maybe, give or take. Do you still need this bigger house? Not really, and I've talked to my husband about that, but he's really set in his ways and hard to change, but maybe it will. And he does hard labor at 57? Yeah, we work at the same company. Well, he's going to be set in his ways until he realizes he can't keep this up for 10 years to climb out of this mess. Right. And then he's going to be forced to. So if I'm in your shoes, truthfully, based on what you've told me, I would consider selling the house, clearing all of your debt. That way your income can now be used to fund retirement, and you guys just rent for a while.

1:31:19And if your income goes up and you can own a home again, that's great. Okay. But right now, you're stuck.

1:31:26Rachel Cruze:Yeah, you could clear$150 out of the home. um man i don't know there's a part of me i don't know george that if you could go i mean and it's going to be a different type of lifestyle michelle so i just don't know if how you guys would feel about this but if you could find something a two hundred thousand dollar condo or a hundred i mean if you could get a one i mean i don't even know downgrade pay cash pay cash and then that frees up twenty five hundred a month that you guys could throw at this debt because that's almost half your take-home pay going out to this mortgage alone so you're not going to be able to make headway on your debt.

1:31:59Rachel Cruze:And you guys need to start being creative because you're going to be working for another decade. And if you can't stay in this job, then you guys are going to have to start getting creative and think through where else long term could we be to be making even more money if possible. Obviously, I know that's ideal. There is another thing, too, that we so my mom just passed and we did get a little bit of inheritance from her. So we ended up buying a condo and paid cash for as an investment property. What? And you buried the lead, Michelle. go live in that thing. Forget your renters. Can you go live there?

1:32:32I wouldn't want to, but I mean, you got to do what you got to do sometimes. Yeah. You told me you're willing to do what it takes.

1:32:39Rachel Cruze:How much is that worth? Probably about 150. So either move into it or sell it. Yes. And then you can maybe stay in this home. Yes. The mortgage is still too much for your take-home pay. So it doesn't solve that problem, but at least it clears your debt. True. Yeah. I would say I'd sell the house and I would go move in something smaller and I'd sell that investment property. Michelle, you guys have$78 ,000 in consumer debt and no retirement. No, sell it, pay off this debt, invest the rest and be done. That's your choice. You can try to work until 70 and maybe get out of this thing and still have a mortgage, or you can do it our way and find a path to freedom way sooner.

1:33:20That's what I would be doing if I was in your shoes. I ain't doing hard labor. Look at me.

1:33:27Thank you.

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1:34:34Buying or selling your home is a big deal. And there's a lot of clickbait headlines out there, conflicting data, and it's hard to know what's really happening in the housing market. So we're here to make the latest trends easy to understand. Median home prices stayed steady last month at about$439 ,000. The number of homes for sale hit a million for the third month in a row. So buyers have more options and negotiating power while sellers face more competition. The average 15-year fixed rate dipped to 5.86 % last month. So if you're debt-free, you got a fully funded emergency fund, a solid down payment.

1:35:06Now is still a great time to buy or sell your home. So to learn more about the housing market trends and get free tools to help you buy or sell with confidence, go to ramsaysolutions.com slash market. Or if you're listening on podcast or watching on YouTube, click the link in the show notes. Stephen is in Nashville. Up next, Stephen, welcome to the show. Hi there. Thanks for taking the call. Absolutely. What's going on? So a few years ago, a friend of mine came to me and asked to start a business. It's a landscape service, you know, project-based business. And things have been going well. You know, we've been growing, making money.

1:35:41And then out of the blue said that, you know, he doesn't want to continue the partnership anymore. And we have an operating agreement. So I said, okay, well, we'll go about it the way that the agreement says, get a valuation done. And I kind of did that, whereas he is saying, no, the business isn't worth anything. It's only worth what we own. And I believe that's different based on, you know, the goodwill and the cash flow and the profit that we've made. And we've kind of reached a stalemate at this point. And I don't really know where to go from here as far as how to kind of leverage the situation to kind of get this clean and over with.

1:36:21So does he not want to pay to get a valuation because he thinks it's worth nothing? Is that the deal? No, he doesn't want to pay for the company. He kind of just wants to dissolve it and then start the exact same thing on his own the second that that's done. What does the valuation cost? I mean,$1 ,500 to$2 ,500 depending on... And have you done that already?

1:36:42Rachel Cruze:Have you gotten an evaluation? I've got an informal one, and then I spoke with an SBA lender that's a friend of mine and gave him our tax returns and said, hey, I was trying to buy out my business partner. What would you guys approve on a loan? Because obviously they're not in the business of making bad deals. And they set a valuation of around$775, so making my 50 % share is anywhere from that$350 to$360 range. Yeah, that's a big gap from it's worth nothing to it's worth three quarters of a million dollars. Now, I would not go into debt to buy him out. If you wanted to continue this, you could do some sort of like profit sharing agreement.

1:37:21Rachel Cruze:Yeah, sorry. I'm a little confused. Is he just wanting to leave? He wants out and wants to start his own. He wants me out. Oh, he wants you out. Oh, I'm sorry. He basically wants you to run a solo business. I thought he was going to just leave, and I was like, well, just let him leave and you keep the whole business. Yeah, exactly. What does the operating agreement say if the business, one of the partners want to get out? It says, obviously, get a valuation done. You know, then multiply that by your shares. We're 50-50 owners. and then you can either do it through an SBA or if the operating agreement says a 20 % down and then four quarterly installments for 60 quarters, so basically 15 years, which is kind of egregious, I think.

1:38:02And that puts me at risk in case he defaults and whoever's on the other end of that, I wouldn't imagine that that's a very opposite. Do you guys have any debt in the business currently? Yeah, like equipment and machine loans, probably a little over$100 ,000, I think$120 ,000. Well, I mean, if the agreement says you get a valuation, then I don't see how it's illegal for you to take that out of the business checking account and go get a valuation. What's stopping you from doing that? Sure. That's not the issue. It's that whatever that valuation comes back as, he's going to say, no, it's not worth that.

1:38:43I'm not paying that. why don't you just buy me out and then I'll, there's a two-year non-compete attached to our operating agreement, but. Well, if it's worth nothing, then you don't have to buy him out. Isn't that what he's saying?

1:38:57Rachel Cruze:That's what I'm thinking. I don't understand. Let him, let it be worth nothing and go, all right, there's nothing to give you. And then he can leave and start his own thing, right? Yes. Now the other part of me that comes into it is I picked up my, essentially my life and moved out of Nashville down to, you know, we're kind of in his home turf where he grew up. I'm from Ohio. Football brought me down here. And so I'm in an area that really the only reason I moved down here was because we were running a business that was doing well. And so are you capable of running the business on your own or hiring someone to help?

1:39:32Sure. Yeah, no doubt. I'm definitely capable. But if he's going to turn around and start another company.

1:39:39Rachel Cruze:Well, where do Where do you want to live, Stephen? About, you know, in the Nashville area. We're about an hour and some, you know, an hour and change. Okay. So you would rather live somewhere else. So then why don't you go get new clients elsewhere? I can do that. Obviously, you know, selling the house that I live in now. I got my first child due in a month, not even a month, less than a month. My wife's, you know, we do health insurance through her job here. the logistics of it all are just not great to leave with no form of compensation or buyout in that case. I'm guessing nobody would actually buy your business.

1:40:20I mean, no, probably not in a very desirable location.

1:40:25Rachel Cruze:And that's his argument is that it's not worth. Yeah, he says it's not worth. Obviously, if we sold it to an outside buyer, it would be tough for them to do that now all the contacts that we've built in the last three years if he is still going to continue is he going to poach all the current clients he i mean yeah essentially yes if we were to divide ourselves right now and i start my own company and you start your own company we're going to be competing you know for the same clients he's gonna be okay i started my own thing come come over here sure yeah you you guys need to come to a consensus on what these next steps are.

1:41:04Otherwise, this is going to be a bloodbath. Exactly. And there's debt time to it.

1:41:08Rachel Cruze:Now, the debt part is the risk. Whose name is the debt in? Yeah. It's in the LLC, you know, so we each have 50 % of it. Okay, so if he leaves the business, he's still liable for the debt. Yes. Has he thought through that? Unless I were to say, unless I were to, well, no, he doesn't want to leave the business. He's not going to leave the business. He wants to get me out of the business. He wants to start his own. Yeah. And you don't want to do this anymore, right? I do, but I'm not going to do it by myself down here. And he can't afford to buy you out to do this solo. I mean, he could. He's saying that he won't, though.

1:41:50Rachel Cruze:Yeah. That's what I'm so confused about. Okay. Well, Stephen, so you've got a couple of options. Either you guys just dissolve the business, you start your own thing, he starts his, you sell the assets, pay off the debt and just say what a bad deal that was. You go your way, I go mine. And you got to outperform him in your new gig, you know what I mean? To get it competition wise, because you're not willing to move. I just asked you in the middle of the call and you're like, well, I got a baby on the way, a house, my wife. So you're not moving. You're stuck regardless of the business. So you either are going to do this business or do a business like this, or you got to go find a different job, or you go move and do this business if you feel like the competition is too much.

1:42:34I would move if, you know, we each took six-figure salaries last year, and essentially nothing's going to change for my partner. Whether we dissolve or he buys me out, he's still going to continue like business as usual. And so without me in the picture, there goes a six-figure rate. So I'm figuring if I could be compensated somehow for, you know, giving you the other 50 % of this company debt.

1:42:57Rachel Cruze:Yes, but Stephen, it doesn't make sense. If he wants out, if he wants the business by himself, then yes, then he needs to write you a check. I 100 % agree. And if he's not willing to write you a check, then you can say, I'm not leaving the business. Then he has to decide he's out and he may go start his own thing and then yeah, you got competition in the area, but it is what it is. Yeah, but I still have the infrastructure and everything of our business, correct? Yeah, yeah. So you got to say good luck, bud. Game on. Yeah. And then you can. Yeah, that's kind of what I was thinking that it was going to end on is, well, if you're not going to buy me out, then we're going to continue to be partners.

1:43:35100%. This is a classic. We can do this the hard way or the easy way. But the debt tied to it is a whole other thing you guys got to figure out. Yeah, you got to make sure that you guys form a new agreement saying, hey, we're staying in this thing until the debts are paid, and then here's how it's going to get divvied up. I think maybe you rip up the current one and draw a new one up that makes sense for both of you because the current one is not really working.

1:43:56Rachel Cruze:A ship that does not sail, partnership. Nailed it. That's a hard thing to do. And it ruins the friendship. It does. On top of it all.

1:44:27Hey, guys. Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:45:14Welcome back to The Ramsey Show. I'm George Camel here with Rachel Cruz. And in the third chair, We've added a special guest. We've got Matt Clark, President and Chief Operating Officer at Churchill Mortgage. You've heard of Churchill because they've been our trusted mortgage partner for more than 30 years now. And Matt has over two decades of experience at Churchill. He's got some deep industry knowledge. So we wanted to bring him on to help explain to our audience what the heck is going on in the housing market. When are the rates going to magically come down, Matt? Where is your crystal ball?

1:45:43Well, if I had a crystal ball and I knew where rates were going to go, I wouldn't be here right now. I think that's the biggest question for us. You'd be on an island somewhere. You'd be on an island somewhere. Oh, man. Oh, it's so hard.

1:45:53Rachel Cruze:Rates are just unstable right now. With everything that's going on in the geopolitical climate, with the war in Iran, with oil prices, I mean, rates are very sensitive to those things. And so it's really hard to tell what rates are going to do. They're quite unstable. Rates are kind of like trust. They get worse really fast, and it takes a long time for them to come back down and get better. And so I just think right now people just need to recognize that they got to be patient. And there's no way to really predict what rates are going to do. Yeah. Would you say you're pretty confident? They'll probably, like, would we ever see in our lifetime the, like, 2 % again?

1:46:31Rachel Cruze:Like, do you think that's probably from the past, would you assume? Ever is a long time. Yeah. But I'm not banking on them coming down to the 2 % again. Yes, to what it was. Yeah. Do you find that there's some golden handcuffs out there with people that are hanging on to their 3 % rate and so they're never going to move now? They're like, well, now I'm stuck here. This is my starter home and now it's the forever home. Yeah, I do. I think we call that rate locked, that people are afraid to let go of that rate. And at the end of the day, I think if they can afford and they want to buy a house right now, even though their rate may go up, if it fits their budget, it may not be a bad idea.

1:47:06Yeah, absolutely. Well, speaking of budget, first-time homebuyers, that's the most frustrated population out there because they're going, dude, how do I step into this jump rope going 90 miles an hour? I'm going to get hurt. What do you say to them when it comes to rates moving around, how much that affects their mortgage payment? I would tell them to focus much less on the rates moving around and much more on, is their budget ready for them to be a homeowner? And as soon as they feel like their budget is ready for them to be a homeowner, to jump in. I want to talk about pre-approval. It's something we don't talk about a lot on the show, but it's one of those things where you go through the process and you're like, I didn't understand I needed to do this.

1:47:46So talk about pre-approval. It's an important part of it, yeah. And Churchill has something special called Certified Homebuyer. We do. I mean, when I think about pre-approvals, I think there are really three different types of quote-unquote approvals that a lender can give you. They have a phone call with you and collect some general information and tell you, yeah, I can approve you for X amount. And that's a a pre-qualification. And they take that piece of paper and they bring it to their real estate agent and that agent presents that when they make an offer on a home. And quite frankly, it's not really worth a whole lot because it's not gone through any evaluation.

1:48:21We most likely haven't collected a lot of documentation. Then there's your standard pre-approval where you collect some information, you run credit, you see what the financials are, you look at income statements, You look at W-2s and you make a high-level credit assumption based on some automated models and we send you out with a pre-approval. And then there's what we do at Churchill, which is what we call a certified homebuyer. And with a certified homebuyer program, we actually fully underwrite your credit and send you off with a fully credited approved approval, which allows you to really shop with confidence.

1:49:00and we put on top of that a rate secured program where we lock you in for an extended period of time, 90 days, so that it takes the uncertainty of that approval away because you know if interest rates go up, you're already protected. You get to keep that lower rate. You get to keep that lower rate. And if they go down, we just lock you in when you find a house at the market rate, so you get the best of both worlds. That's impressive. And on top of that, we throw on a$10 ,000 guarantee to the seller so that if you present an offer to a seller with a certified home buyer, we guarantee that seller that your credit is good.

1:49:36The only thing that could go wrong there is appraisal or title work. And if something happens, we pay the seller 10 grand. Wow. So just to back up that process. That's impressive. So on a spectrum, let me recap this. You have the, this person might be good for the money. You have, they're probably good for the money with the standard pre-approval, and then you have the, they are definitely good for the money with the certified home buyer program.

1:49:57Rachel Cruze:And you're able to go into that. So, you know, we have a lot of new listeners to the show. I feel like even most of our callers, they're like, I've just gone to you guys. So people that are looking to get into the market, but they're doing the baby steps. So they're working their way out of debt. They now have an emergency fund, and then they have some money for a down payment. Okay. At that point, you know, their credit score may be tanking as we speak and or it's undetermined if it's been long enough, right? They don't have a credit score. So that is one thing that's a little different with Ramsey that we say, yes, you can still get a house without a credit score.

1:50:29Rachel Cruze:And we always recommend you guys because you guys are always the place that we say to go to because not everyone can do it. Not everyone will do it. But what does that look like to get a mortgage without a credit score? First, I want to make sure people hear this clearly. Getting a mortgage without a credit score does not mean credit score doesn't matter if you have one. Yes. It doesn't bypass your current score. It doesn't bypass a bad score. Yeah, your score will get forward. Yes, that's right. If you have one. So the tanking one, not good. You can't really buy them. Yeah. The tanking one is a challenge.

1:50:56But when you come to us with no credit score or what's called an indeterminable score, we look at trade lines. We look at your ability to pay your bills. And so you have to have more than just living in mom and dad's basement and not paying any bills on your own. You actually have to have some sort of established history of taking care of your financial responsibilities. things like cell phone bills and other utility bills or other types of monthly payments that we can use to create an alternate credit profile and move you forward on a no score loan. And that's on top of 12 months of rental payment history.

1:51:35Because a lot of people say, well, I live with mom and dad. We never had an agreement about it. And you guys go, well, we don't know that you can pay a housing bill on time. 12 months of housing payments, part of that process as well. is in that.

1:51:45Rachel Cruze:So yeah, so that's the important part, but it can be done, which I think is - Yeah, I mean, I've done it. I know that that's not saying much because everyone goes, well, it was easy for you to say, no, I got out of debt, didn't have a credit score, and you guys are the specialists in no score loans. I imagine you've probably done more no score loans in the modern world than any mortgage lender out there. More in the modern world than anyone ever. And we do it better. I talk to real estate agents, they go, you can't do that. And I go, yeah, I can. Yeah, I can. Have you not heard of Churchill Mortgage?

1:52:10Where have you been? Watch me. Oh, my goodness. Well, I do want to hit on closing costs because a lot of people, we talk about the down payment so much, but then people forget that there's other costs associated. So what should people expect to pay when it comes to closing costs in general? This can vary widely. Yeah, closing costs consist of a lot of different things. One, there are lender fees. Every lender has their own administrative fees, processing fees, underwriting fees. Then you have things that are going to be consistent across the industry. You're going to have to pay for an appraisal.

1:52:40You're going to have to pay for title insurance. You're going to have to pay for credit report fees. There are state taxes and tax transfer fees that you have to pay for. And so when you think about rate and you think about getting to the closing table, there's a lot of things that will impact what you have to bring to the table in your closing costs. The key is getting that transparently put in front of you early on so you're not surprised at the end. And you can get those estimates from your loan officer and say, hey, help me understand all of the things I'm going to be paying for so that I'm ready.

1:53:12Yep. Condo fees, HOA fees, all of those things end up surprising people at the end, which creates problems for them not having the amount of cash to come to closing with.

1:53:21Rachel Cruze:To be able to do it all. Yeah. So the full pictures is so key. So someone that is entering into the market for the first time, they may feel kind of intimidated and they're like, oh my gosh, am I ready? Can I do this? Like, what are a couple of tips you have? We'll say for first-time home buyers and maybe people that haven't, you know, maybe they do, they locked in the 2 % and they're like, we're never going to move. And they're like, okay, actually we're going to look for another house. And, but it's been decades since they bought something new. What are a couple of things that you're like, okay, this would be good from your seats, you're like, these are things that you probably need to do.

1:53:51Rachel Cruze:Well, one, talk to somebody who's going to be patient with you and ask you the right questions. Find out what you're trying to accomplish and where you are. I remember so well when I bought my first house, 23 years old, I had a child, another one on the way. I was desperate to buy a house. I found a realtor. They put me in touch with a loan officer they had a relationship with. And all I wanted to do was tell me how much I could buy. And I ended up not knowing anything. And so I let my anxiety cause me to make a bad decision and bought a house that was more than I could afford with a mortgage at a rate that I knew nothing about other than they told me I could afford it.

1:54:30Get the facts. Ask the questions. That's good. Mal, thank you for being here. If you guys are ready to start your home buying process, the Ramsey way, Churchill Mortgage can help. They're the folks we trust. And they have a special offer for you. $500 off your home appraisal credit at closing. Only at churchillemortgage.com slash Ramsey offer. go check it out thanks again Matt thank you guys

1:54:49Rachel Cruze:thanks for being here

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1:56:14Our scripture of the day, Ecclesiastes 5.10. He who loves money will not be satisfied with money, nor he who loves wealth with his income. This also is vanity. Chris Rock said, wealth is not about having a lot of money. It's about having a lot of options. Well said.

1:56:32Rachel Cruze:Yes, I agree with that. Both Solomon and Chris Rock bringing the heat. Love it. All right. Charlie is in Phoenix up next. What's going on, Charlie? Hi. Thanks for taking my call. I appreciate it. Sure. So I've been retired for about six or seven years. I'm 67 and retired about 60. And we're currently worth about$2.4 million. Awesome. And annuities and IRAs, Roth IRAs in our house and emergency fund about our high yield savings about$300 ,000 and emergency fund about$50 ,000. But so my call is that and we were debt free. And in Social Security, we make about$56 ,000 in Social Security a year. Okay.

1:57:25Between my wife and I. And we have our annuity that pays about$25 ,000 a year, which we haven't even started taking yet, but that's what the current balance would be, I mean, the current flow would be. And then also on the side, I officiate high school and college sports and make about$25 ,000 to$30 ,000 doing that. Wow. Nice. That's an impressive side hustle. Yeah. Yeah, so we have these assets, but I'm still – I'm more collecting than I am spending. That's my problem here. You want to start decumulating instead of accumulating. I can't seem to let go. And it's like my wife and I took a road trip just a week or so ago, and I hooked up for like five additional volleyball games.

1:58:21It's one of the sports I ref, so I could pay for it, even though I could pay for it. Gotcha.

1:58:27Rachel Cruze:Yes. So it doesn't represent reality. It's just you're stuck in your scarcity loop right now. Yeah. Yeah, that is hard. And I'm just wondering, what's a good way to try to change that? But, you know, like my wife says, well, I say, I need something. You just go out and buy it. And I was like, well, I got to go get a gig before I can buy it so I can pay for it. Did you grow up with money? I know. Are you the first one in your family to be a millionaire and be at this place? Me and one of my other brothers, he's probably worth about$4 million probably. My other two brothers and sisters probably are not close.

1:59:07Rachel Cruze:Okay. So you guys have all done pretty well. do you guys have a great financial advisor that you meet with maybe yearly to look at everything? I have a Dave Ramsey approved person and he just retired. So he transferred me to another guy. So I have, I just got with him at the beginning of this year. And so I just talked to him a couple weeks ago and I told him I wanted to get together and talk about taking cash out. Just like we went on a cruise last year and I go, okay, I got to do all these gigs before I can go and pay for it. Right, right, right. Well, I think the idea of you working and still having a passion for something is just good for you as a human being, right?

1:59:49Rachel Cruze:I still think there's like, you know, you still have this thing on the side. A reason to get up and shower is helpful. Yeah, that's great. So there's kind of the two ends of the spectrum here that you got to think about. One is just the facts. That's why I asked about the financial advisor because sometimes when you actually see the numbers and say, okay, we can spend X amount extra per year because you're bringing home probably around what, eight, nine grand a month between your reffing, you know, those games and the pension and everything coming in. And so anything above that, you know, what could we in a safe way spend extra?

2:00:24Rachel Cruze:And you can look at that number and say, okay, great. And if you want to continue to spend that, that's fine. But what I would say though, is I would, this is the emotional side. So you have the tactical, you have the plan of what you can spend. And then what I would say is you don't have to spend all of it, but you need to be spending something extra every month, Charlie, because with money, you're, you need to be giving some, um, you've done your savings. Yes, that's great. Yeah. So you do. Yeah. You're giving, you're saving and spending. Those are the three things that you need to be doing with money and they all need to be balanced.

2:00:57Rachel Cruze:and the spending is what's off for you. And so you kind of almost have to rebuild this habit of letting go of some money and not having this tight control that you have because it's wild because on one end of the spectrum, money can be such an idol for people that worship it and they spend it. And there's like the vanity side, right? Of just the scripture you just read, George. But then on the other end, it almost becomes an idol because it has so much control over us out of this fear that something's gonna happen and I'm not gonna be okay. And that fear, it's not rational, right? You got$2.4 million sitting there.

2:01:32Rachel Cruze:And so we don't want to be unwise with that, but there needs to be some freedom in your life, Charlie. And right now, the equation of the freedom to me is letting go of some and spending and enjoying it. And so is there's things that you can do that are fun with you and your wife? And you're like, hey, or I don't know if you have grown kids or grandkids, but find something meaningful. I'm not saying you have to go buy a bunch of crap and just like have a bunch of stuff. But if there's things you can do to enhance your life or to make things easier, if you guys need someone to come clean the house once a week.

2:02:06Buying your time back is one of the best ways to spend your money. Buying experiences with people you love. Dr. Arthur Brooks says one of the best things you can do with your money. So we do have three kids and 17 grandkids.

2:02:17Rachel Cruze:Oh, wow. How fun. There's some reasons to spend money. What a full life. That's great. Well, when they become fourth graders, we take them on a 3 ,000-mile road trip. Oh, that's fun. Yes, yes. We have one coming up this year. The destination is Yellowstone. We go to White River Raptor. We're going rodeos. Oh, I love it. I love it. We're traveling camp. But, yeah, and so I just got to, my wife tells me that I just need to get out of that mode of saving. I had to go from a saver to a spender. Yes. And it's been a hard transition, even though when she wants to do something, I'll go, okay, I'll go get a couple gigs and pay for it.

2:02:56Rachel Cruze:Right, right. What if you just cut the side hustle for six months and said, I'm not going to do it and I'm going to spend money? Would that free you? And that's a hard thing because I'm in a leadership role on one of the side gigs. Oh, they need you now. Like, hey, man, you're running this show. And you enjoy it, right, Charlie, in general? Well, this is my 50th year officiating wrestling. Whoa, that might be a world record. That's amazing. That's impressive. I don't know about that, which I appreciate your advice. And, you know, I do listen to you quite often. You talk about side gigs and delivering and stuff like that.

2:03:32I would encourage you to tell people to look into officiating wrestling or officiating in general because I do make 30 to 50, 60 bucks an hour doing that.

2:03:42Rachel Cruze:Oh, that is good. Is it wrestling? Is that what you said? I do mostly wrestling. That's what I have 50 years and 25 in volleyball. Okay. And I played baseball at one time also. Wow. That's awesome. Good for you. Well, I would have a little dream date with your wife and, you know, buy the apps, buy the desserts, the stuff that makes you feel guilty and do it without guilt. And then have a little dream date where you go, hey, if we were to spend X amount of money this year, where would we divvy it all out? And then put it in the budget and go, hey, we decided, remember we pre-decided that we're going to send the money over here and we're going to buy this thing here.

2:04:14We're going to go on that trip here. We're going to do it. So you sort of force yourself to flex that muscle, and eventually you'll feel less guilty writing those checks and swiping that card and all of that.

2:04:23Rachel Cruze:Yeah, because it's all about balance at this point. And you guys have done a fantastic job, Charlie. I mean, unbelievable. What careers did you and your wife have to accumulate$2.4 million of that worth? My wife was a stay-at-home mom until our youngest went to, I think it was high school. So she did 16 years as a dental assistant. Yeah. And then I was, I don't have a college degree or anything, but I was a computer engineer for IBM, IBM mainframe engineer for like 30 years. Okay. That's awesome. Good for you. That's amazing. Absolutely amazing. And one thing to do with that SmartVestor Pro, Charlie, that I think will be helpful is they can walk you through your current withdrawal rate of, hey, you're spending$50 ,000 a year out of this much of your nest egg.

2:05:12That's a 1 % spend. You can go up to 3%, 4%, 5 % without ever running out of money. And they can show you the actual dollar amount of, hey, you could up it to 2 % or 2.5 % or 3 % or 4%, which is$100 ,000 and still never run out of money. I think some of those facts from a trusted investment advisor will free you to go, oh, you know what? We can loosen up. I don't have to take on nine more gigs. I can do it because I want to, not because I feel like I need punishment.

2:05:41Rachel Cruze:That I need to. That's right. That's right. Well, well done, Charlie. You guys are a success story. Absolutely amazing. Good problem to have. That puts this hour of The Ramsey Show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:05:58Thank you.