Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work, that they love and create actual amazing relationships.
I'm Dave Ramsey, your host, Rachel Cruz, number one best-selling author many times over, Ramsey personality and host of The Rachel Cruz Show.My daughter is my co-host today.Open phones here at 888-825-5225.
You call with your questions about your life.That's what we're here for.The call is free and some say the advice is worth exactly what you pay for it.
So we're glad you're here. Rachel, big day today. Another book launch. The third Rachel Cruze kids book is out. Ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding
And I went with the sharing element, because for our little ones, teaching them to open their hand and share is kind of that first step in generosity.But it concludes my series.
I did one on contentment, gratitude, and this is the final one for generosity.So this is the three kids book series, and the third one is out today.
And they've all been bestsellers.I'm glad for what I have. I'm glad for where I am.That's contentment, right?I'm glad for where I am is gratitude, gratitude, and the first one's contentment.And then this one is generosity.
I'm glad went for when I can share.And it's a three book series.And this was the third, the third one.So it's 1999 at Ramsey solutions.com in the bookstore.
And again, Lauren just continued to, uh, the, these world-class, uh, illustrations make the book.
Yes, Lauren Gallegos is the illustrator for all of them, and she just, I mean, did a fabulous job.So yeah, it's a really sweet book, and it's short.You're welcome, parents.
Yeah, for those of you who do bedtime stories that are nine years long, you don't have that here.
And on each of these books, I always try to add an element for the adults at the end.So just a sweet reminder, right?When it comes to contentment, there's that.
And then this one for gratitude, that joy in life really is the gifts that God has given us from our brothers and our sisters and all of that to understanding that when we give, it is a joy unlike anything else that money can buy.
It's the most fun you'll ever have with money.We had Jimmy Darts on yesterday, who's got the big YouTube channel, giving money away.And we were talking about the power of generosity.
And we teach you guys, as you know, to live like no one else so that later you can live and give.
Like no one else and Lauren even snuck that onto the license plate of one of the cars in there So you'll have to look for the hidden the hidden meanings Easter eggs in there.There's a few little a few little Waldo Where's Waldo?
Yeah, so there it is live like no one else on the license plate Probably need to get one of those for one of our cars.That'd be pretty cool.Oh I never thought of that because, but nobody knows what it means unless they know what it means.
It's just letters on that one.
Yeah, it's nuts.But yeah, anyway, good stuff.So I'm glad when I can share.It's here.It's on sale.Oh, just in time for Christmas.And it's $19.99 at RamseySolutions.com in the store.And of course, you can order it anywhere.
You can order great books as well.
The other two books in the series are only $17.99, so you can pick up all three of them for, what, $50 roughly, and a little over $50, and you'd have a wonderful little set for the grandbabies or for the babies, whatever it is.Good stuff.
And speaking as the grandfather, who has a few grandchildren that might be accused of picking out the longest possible book.Some of those Dr. Seuss books go on for days.And they have a way of finding, this is the one I want to read, Papa Dave.
Translation, I want to stall bedtime as far as I can.And so doesn't work with any of the three of these.These three all get to the point and you go to bed.
Yeah, they're pretty fast and they rhyme.They're very sweet.Great message.But yeah, we get to the point.So you're welcome, parents, for that.
Good stuff.Lorena is with us in Dallas, Texas.Hi Lorena, welcome to the Ramsey Show.
Better than we deserve.What's up in your world?
Good, good.I just have a couple of questions.I'll start off with that.I feel like I cannot move out of my parents' house due to financial struggles that they are having and I'm also having as well.
Okay.So what causes you not to be able to move out because of their financial struggles?Walk me through that.
I need your, they need your rent.
Basically.Yes, sir.And so, um, so I, since I moved back in, I've been trying to get rid of my debt and following the baby steps, but you pay them rent.No, I do not.
Oh, when, why, how would it affect them negatively if you left?
So right now they're in a rental property and their city is actually planning on demolishing the area that they are in.
Is this the house you live in?
How would it affect them negatively if you left?
Because I don't think they could move into a new house without my help.
You're not paying them any rent. That's true, but there's no net loss to them when you leave.It's a net gain.
Yes, that, that is true.Cause whenever they do have to move, eventually their rent, that their pain will be up more than what they're paying right now.
And then you would pay, you would start paying rent.
To help them do that.Okay.
Yeah.So that's why I feel kind of stuck and you got it.
You need to, everybody's got to reset their expectations in this.
They're in an unrealistically low rental rate on a house that's being demolished.
So they cannot rent the same house three streets over.They can't afford it.
So they need to move to a different area.
Yes, sir.So that's why I just feel stuck.I feel like they're looking at me and it's not you.
It's them.They need to move to an area that they can afford to live.They're like grownups and stuff.
Right.Yeah, maybe they need to act like it.But in a family dynamic, I mean, I think Dave's calling out the dysfunction in that, that they're leaning on you to help them in their situation.
Well, or somebody made you feel guilty.I don't know whether you took it on yourself or they did.
Yes, that's what I would say to you, is you have to be able to release that yourself, because that is not your responsibility, even though the dynamic may feel like it is.
And there's always a weird element with adult kids when their parents are in trouble to feel like, they've helped me, they raised me, they gave me a roof over my head growing up, so I, in turn, feel obligated and debted to help them.Is that true?
Yes, no, that's exactly what happened.I had recently moved back, five months ago and since they're not letting me pay any rent, that's why I feel obligated to help them.
Because they gave you that gift.Correct.Right.Well, and that's, and that's a false obligation.
Yeah.That wasn't the deal.
The deal wasn't you move back in and so you're indebted to us for the rest of your life.
That wasn't the deal.You move back in, don't pay us any rent, get yourself straightened up.It's a gift we can give you right now.We can't continue giving you that gift because they're making us move to demolish the house.
And so now we've got to move to an area that's not even what we want to do because we can't afford to live here anymore.
Right, correct.Lorena, how old are you?I'm 26.OK.Yeah, I just want to give you that permission to have that freedom to build your own life.
And what it's going to force you to do as well is to say, oh, crap, I don't have mom and dad as a safety net anymore because it's not good for them.And ultimately, it's not good for me.So I'm going to have to make hard decisions as well.
And that's a tough spot.And I'm sorry.I'm sorry it's all coming to a head because of the situation.But I would look at it as a gift in that way.
You know, five years from now when you guys are all emotionally and financially sustained without leaning on each other, you're going to be better people and better for each other.This is the Ramsey Show.
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Rachel Cruz, Ramsey Personality, is my co-host today.Open phones at 888-825-5225.Jennifer is with us in Phoenix, Arizona.Hi Jennifer, how are you?
Hi, I'm doing well.Thanks for taking my call.
I wanted to see what y'all would do with a pile of money.I'm in Baby Steps 3B and 4. But then I found myself in storm number one, surprise I'm pregnant and- Oh, well congratulations.Thank you.
Storm number two, five weeks later, I suffered a major medical event, found out I have an underlying condition that will put me at risk for more major medical events.
And we can't really address the problem for a year or two until baby gets here and we can do a lot of testing and investigate it.
So I had been saving a bunch of money for a house, but it had been sitting in a high yield savings account, but those rates are declining.
So would you guys leave it in high yield savings or would you move it into like a brokerage account to maximize the yield?Cause I feel like that goal is now three to five years down the road.
How much money in your emergency fund and how much money in this fund we're talking about?
My emergency fund is $50,000.It's 12 months.
And this money, this money is how much?
My house fund is currently at $150,000.Okay.
So you have $200,000.So this medical procedure, what's the financial dent that this might make?
That's a million dollar question.Literally a million dollar question.I don't know.
Well, you have health insurance.
And I have very good health insurance, but I'm also out of work and currently on unprotected leave because of everything going on.So all of that, what do you make change?I make 140 a year.
What's your husband make?
Uh, I don't have one of those.Okay.
All right.Um, and so you're unprotected, you're not making any money.You don't have an income right now.
Um, that is not a true statement.I had a bunch of sick time and vacation time.
I thought you said unprotected leave.I thought you meant your own family leave act with no pay.Okay.So again,
What you've got to ascertain, not from a fear base, but just some actual analysis is, is this a $50,000 problem you're facing or a $200,000 problem out of pocket with your health insurance, with your potential loss of income that'll be unpaid once you run out of these other things?
And I kind of think you've got a lot of savings here.
So I shouldn't tell you about my brokerage fund or my thinking fund.
You are a savings maniac, girl.I love it.How much is in the brokerage account and how much is in the sinking fund?
The brokerage fund is $80,000.And the sinking fund is $30,000.
Okay.All right.So now we have $310,000 to weather this.I think you're okay.Breathe, right?
Well, I think, I think the, the scary thing, Jennifer, is you don't have a lot of answers and you won't have a lot of answers.So after the baby comes, correct. Absolutely.With the health situation.
So I, I, I'm a no, there's no panic to do anything with this money.I would just keep everything.We would tell you to pause everything anyway, since you are pregnant, there's nothing else to like majorly do.
And I would wait till baby comes, you're good, run some tests.And if, and if you're in the same position,
in 18 months financially you're okay and then you can make some big you know decisions but I think you can take a portion of this and put it in a brokerage account.Would you tell her to go get a house right now?Dave's kind of smirking.
I would sit where I am and just you could throw it in a high yield savings and it doesn't matter what you do with this money for 18 months but you weren't going to put this brokerage account down as the down payment on your house were you?
No that was a retirement fund.
That's not a retirement fund it's a brokerage account.
Well where I worked previously they didn't offer.
How much do you have in your 401k super saver?Okay come on. When this is over and you take your 3B $150k, add the brokerage account to it for your down payment on the house.I want you to put $230k down on the house when this is over.
Right now I don't want you to do anything.I just want you to lean into the security that you've built for yourself.You are a master saver.You're an amazing saver, but you're taking it too far.
But for today, it's OK that it's too far until you get past this storm.So when you get past this storm though, buy the house.Yeah, buy the house and put all this money towards a stinking house.You know, seriously.
After the realization of the medical expenses and the lost income.
Yeah, whatever's left out of the brokerage account, out of the $150.But a 12-month emergency fund, no.Stop that.
you know plus a brokerage account just because I didn't have a retirement before but I got a half million over here you're in good you're fine you're gonna be so rich it's unbelievable you can't keep yourself from saving money. You're amazing.
So yeah, your challenge, Jennifer, is going to be resting in the peace of what you've created.I mean, that's it.So lower the stress.Enjoy this pregnancy.Breathe.Just like Dave was saying, you're good.You are good.Don't make big moves right now.
Have the baby.But between now and baby, you are secure and great.
Let's get the medical thing in your rearview mirror.And then let's get the savings trim back down to where it should be. that's that's what I would do if I woke up in your shoes.Zach is in Charleston, South Carolina.Hi Zach, how are you?
I'm doing alright.Thank y'all for taking my call.Sure, what's up?
So basically I was in a car accident not too long ago and the guy totaled my car and the settlement check is about $6,000 and I still have $4,200 or $4,500 left over on the car so I was wondering if I should
pay off the car and then basically just wait till I can get another car or get another car and then like slowly chip off the debt.
You can't.They're not going to give you the check unless you give them the title for the total car and you're not going to get the title for the total car unless you pay the loan off.That's a lien on the car.
Well, they already, I already gave them the title and they gave me, they're sending me the check today.
So I bet it's net of the payoff.They probably sent the payoff to the bank. Oh, okay.Cause you got a lean on the car title.Right, right, right.Yeah.
And unless you did something that was not a lean on the car title, but either way, let's pretend that, that I'm, that I'm wrong on this for some reason under South Carolina law and I'm missing something.Then when you get the check pay off the debt.
And then you've got like a thousand bucks left or whatever it is, 1500 bucks left to go buy a beater car.
And that's what I would do if I woke up.
Do you have any money saved?Zach, do you have like an extra thousand somewhere?
No, I'm very new to all this.
Okay, no, you're great.Yeah, yeah, yeah.Yeah, the goal would be to get to buy a car in cash.
And let me challenge you, Zach, so we're in Nashville, and on Sunday, for whatever reason, maybe it's because I knew you were calling in, Zach, and the Lord spoke to my heart, but I literally Googled $5,000 cars in Nashville.
Because we get this call a lot, and people are like, well, I can't get a $5,000 car. And I looked up and I'm like, oh my, I mean, you just can scroll and scroll and they're not terrible looking cars.
I mean, you know, they may be like 10 years old or something, but I'm just saying you have $15,000.I would save up another 2000 and you can, and you can get what you can get a 2,500, 1,500, 1,500.I'm sorry.That's what I meant.
1,500, but you can get a $3,000 car and they're out there.
They are out there.What was your old car payment?
My old car payment was like $400.
Okay, so I would save $500 a month after I buy my beater car so that I can move up in car in six months because I don't want to drive this piece of crap for very long.Right.Okay.
Yeah, $500 for six months is another $3,000 and $500 for another six months is another $3,000. This is how you get rich.You don't pay people car payments.You buy things with cash and don't have payments.That's the goal.You're new to this stuff.
That's the bottom line of what we teach, brother.Proud of you.Thanks for asking the question.This is the Ramsey Show.
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That's N-O-K-Box dot com slash Ramsey. If you want to listen in to everything we do around here, you can do it on the Ramsey Network app.Download it.It's completely free.And including the last hour of this show every day.
And you can jump in and catch the video and the audio and whatever else.You can search it.There's all kinds of good stuff.And you can ask questions on the Ramsey Network app.This one is from Todd.
Yes.Todd asks, should I consider converting my employer match each year in my 401k to Roth dollars and pay the taxes now?I'm 31 years old and wondering if converting the match each year will benefit our financial future in retirement.Yes.Yes.
Yes, yes, yes, yes, yes, yes.You ought to do it.And pay the taxes, of course, out of your pocket when you do that.Especially, Todd, if you're out of debt,
If it's going to be a large amount of money out of your pocket because of this, you may not want to do it for a while.Just let it build up and you can go back and do it all at once.You can do it anytime you want.
You let it build up for four or five years and then do it all at once at that time.I do mine every year because my company that I own is required to match my, because I'm an employee of the company I own, which is weird.
I get a 401k with a company match, and the match is required to be in traditional, and I roll it to Roth at this time of year every year, and that creates that amount of money to be taxed on, but then I'm never taxed on the growth after that, nor are my heirs, because inheriting a Roth IRA is not anywhere near the problem that inheriting a taxable traditional IRA is.
And so it even helps later on with your estate planning. Because I don't have a single thing right now in my name or my wife's name that's not Roth.I have rolled everything to Roth and paid all the taxes in it.
So I'll have no required minimum distributions either at 72 and a half when other people will.So that's an interesting part of the equation.But yeah, yes, definitely, especially if it doesn't affect your get out of debt plan.
Now if it's taking money out of your pocket that you need to use to pay off your car, no, let's wait a year or two and do it later after you get free.Do you have to do it all at once? You can do it every year at one time.
The match for that year, you can do it.
No, I know.But if you had a full one and you were converting a lump sum, could you divide the lump sum into half and just convert half of it to half of it?Take it at a time.
So if you had $100,000 in traditional and you wanted to roll it, but you didn't want all the taxes in one year, you could do $50,000 and then next year do $50,000 if you want to do that kind of thing.
And so you can let it build up if you're still getting out of debt and then go back and fix it later.
I mean, you're only 31, so if you fixed it at 36, you're still going to have all the benefits of it growing tax-free for years and years and years and years and years.Gus is in Boston!Hey, Gus, how are you?Hey, Dave, I'm good.How are you?
Better than I deserve.What's up?
So I was working a well-paying job, $100,000 a year, and I got laid off.I've been looking for work, something similar, something paying about the same for the past few months, but no luck.I haven't gotten any interviews at all.
I believe that it's just the current market conditions.There's been lots of layoffs.This is in the biotechnology sector, by the way.
Um, and so right now I'm debating going back and getting a master's degree because I think it would make me more qualified, more likely to land one of these high paying jobs again.
However, I think that I would need to either cash out a brokerage account that I've been saving for a house eventually, um, or take on debt to pay for this.Now I have no debt otherwise, not even a credit card. I've been listening to you for years.
And so I guess I'm really nervous at the idea of either cashing out this brokerage account, which I'm making gains on, or taking out debt to get another degree.Are you married?
What have you been living on while you've been laid off for six months or three months?
So I have an emergency fund, fully funded six months, but also I've been collecting unemployment.
Okay.And you're living on the unemployment. Yes.Cause you're not touched the emergency fund.I can tell by talking to you.Yeah, no.Yeah.Okay.How much longer does that run?
So unemployment will go through the end of February and then I'll have six months on the emergency fund.But as you know, I don't want to touch that unless it's a true emergency.
Gus, what's the line of thinking that this degree is the thing that will get you in the job if you haven't had interviews anyways?Is it on the applications, like what you're seeing?You're like, oh, I need that advanced degree for sure?
Or is this just a, it's going to look better in general, and you think that's going to help you?
So, um, previously my title was senior research associate, um, and I got that with a year and a half experience and a bachelor's degree.Now I'm seeing for the same titles, largely same responsibilities.
Um, all of the postings are saying bachelors or masters.
And then, um, I got a free trial, a LinkedIn premium, and it's been telling me that, you know, there's 60 plus applicants all with master's degrees who are applying to these same jobs with the same title.
So I'm concerned that because a lot of biotechs went bankrupt this year, the market's been flooded with high quality applicants.
Gotcha. So what did you, what was your day job?What did it look like?What did you do as a research researcher?
Um, so it was, uh, operating, uh, automated liquid handling systems, you know, like pipetting, um, working in a lab, lab coat, goggles, gloves, the whole deal.Um, and so specifically it's a next generation sequencing.
So it's all sort of furthering research objectives of these large pharmaceutical companies.
Yeah, I did.Yeah, I'm just trying to.What I'm looking for, and the reason I paused is, what I'm looking for is how that is applicable beyond just the narrowness of this field.Something else, yeah.
Because the other thing is that we're starting to see some early signs of the economy getting a jump start. And so by first quarter of next year, I think the job market may look considerably different than it looks today.
That's an opinion from your perspective.What I don't know is the world that you're in and what the lab coat goggles and the Bunsen burner, how that applies to other industries other than the specific one you were in.
I'm not sure that a master's degree gets you a job.Let's say for instance that 30% of the players in that nuanced area are now out of business.
A master's degree doesn't necessarily get you in the door on the remaining 70% because the job market shrunk so dadgum much. that what does get you in the door is Ken Coleman's proximity principle.
You know somebody that knows somebody there, that they'll at least give you a look, and your one and a half years of experience actually doing the sequencing and actually doing the research is far superior, if I'm the employer, to someone that got a sheepskin, got a master's degree.
Yeah, so now I'm at three years experience.
The three years experience is far superior to a master's degree.I don't want someone that was taught to do it by a college professor.I love someone who's actually done it, like for three freaking years.
I think your experience is superior to their master's degree is what I'm saying. But you haven't just gotten your foot in the right door to where someone will actually talk to you and will respect that three years.
But within that nuanced world, the number of people walking around with a master's degree and three years experience is fairly low. You might have a bunch of kids coming out of school with a master's and no experience, and I think you got them beat.
I think you're holding a straight flush here.So yeah, I'm going to work Ken Coleman's system, and I'm going to work some other jobs, and I'm going to start expanding my idea.
Maybe I don't want to be doing this three years from now, five years from now.Maybe I want to apply these skill sets in some other areas of Research in the lab, but not necessarily this nuanced area.
I want to broaden the the scope of my search and How applicable are these skills in other labs and in other situations?Even petroleum or something way off the grid.I mean, where is it that there's a lab?I don't know
And I'm going to try to get in those labs, because lab experience is lab experience.I understand petroleum would be different than gene sequencing.I get that.
But I still, you would know more about going into any lab of any kind than I would, because I've never been in one as an employee. So that's, you know, I think you've got some broadening, number one.
Number two, I'm going to send you Ken Coleman's book, The Proximity Principle, and I want you to use that to get in touch with people that you know that know people that know people that get your resume looked at.
Because I think you've got a trump card here.This is the Ramsey Show. I've been doing this show for over 30 years and some of the saddest calls I've taken are from situations that are completely preventable.
Yeah.And what's so hard is I feel like one of those, especially the ones that I'm like, Oh, it's terrible air.People that call in and their spouse has passed away suddenly and they don't have life insurance.
When you have to think through, how am I going to pay my bills?How am I going to eat next week?Yeah, in the middle of all that grief, like it's just, it is, it's terrible.
So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive.Zander is the place that Winston and I actually get all of our life insurance.
And it doesn't cost much, because Zander shops among a gazillion different companies.It doesn't cost much.You just have to admit that someday you're not going to be here.
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That's 800-356-4282, or go to zander.com. I'm Dave Ramsey, your host.Thank you for joining us, America.Rachel Cruz, Ramsey Personality, is my co-host, number one best-selling author, and the new book is out.The new children's book came out today.
That means a set of three is now available.I'm glad when I can share. There it is, Teaching Kids Generosity, the last of the three.So contentment, gratitude, and generosity are the messages of the three books.
This is the third in the trilogy and the final book.They're all available at ramsaysolutions.com starting today.Great Christmas presents.Elisa is with us, or Alissa rather, in Jacksonville, Florida.Hi Alissa, how are you?
Hi Dave, hi Rachel, how are you guys?
So I was wondering how much a mortgage rate should decrease before it's worth refinancing.
Well, that's a weird question is how long are you going to, are you going to break even on the savings before you get rid of the mortgage is the way you look at it.So here's how you do the math.Okay.What is your current loan balance? 256.
Okay, and so if you save 1% a year, you save $2,500.If you save 2% a year, you save $5,000.Does that sound right?Yes.Okay, so if your closing cost is $10,000 to refinance, I'll just make up a number, okay?
Then how quick do you get your closing costs back with the savings that you have from a lower interest rate.
And so if you're saving 2% in your case, you're saving about $5,000 a year, you would recoup a $10,000 closing cost in two years, and everything after two years, you're going to make money.That's gravy on the biscuit after two years.
So you divide the actual dollars saved with the lower interest rate into the closing costs and that gives you the break-even point and that should be less than three years.Typically people say two years.
You need to break even on the closing costs in about two years.So a lot of times it takes a one and a half to a two percent savings for it to make sense.
The average mortgage rate right now is adjustable after 10 years.When does the 10 years come up?Until 2033.
Okay, so you got a little time to ride the market and again when the market is, what's your current interest rate?Okay, and so you know you're not going to get a 2% savings right now.
And you're probably not even going to get a 1% savings today.You might, but depending on how you structure the loan, whatever.But that doesn't count points.We're not paying points to create a false thing.
But the bottom line is the interest, the refinance saves you money on interest. And that gives you the money to pay back the closing costs and you need for those closing costs to be paid back in two to three years for it to make sense.
And that's how you run the actual calculation on it.And you'll have that happen long before your adjustable rate kicks in in 2033.
I was going to say, in that many years, who knows what the interest rates are going to look like.
So who knows?I mean, but the average mortgage folks out there across the span of my 40 years of being around real estate and in the real estate business, the average mortgage stays on the books only five and a half years.
either due to refinance or sale of the property.And so you really don't keep a 30-year mortgage 30 years in reality.So very often, I mean a few people do.I'm talking about the average.
And so you certainly don't want something where the break-even on your refinance is 10 years in a world where the average mortgage has gone in five and a half.So that's bad.
Of course, also you would include in that, if I'm paying aggressively on the mortgage, how quickly will it be paid off?Am I going to have it paid off before I break even?That's another thing you would have to look at.
So, but we're just, you're trying to look at the actual dollars saved as a result of the lower interest rate versus the actual dollars in closing costs, and that gives you your break-even analysis from an accounting perspective, and that'll help you make the decision very, very quickly.
The good news is, Rachel, that that's now a thing again.That rates have softened a little bit.They're not up.They're not way up.They're not way down.But there's a lot of optimism out there and a lot of people starting to look at this.
And four months ago, no one was even talking about that.They were just frozen during the headlights.
And it's just fascinating the way real estate shakes out, because we were even talking on one of my shoots, the Rachel Cruze Show shoot yesterday, that, you know, in 2021-2022, people were afraid it was a bubble and everything was going to pop, because of how quickly prices rose and increased.
And now they've just stayed there, which has made the market tough, right, to get in.What you had to have in 2017 looks so much different than what you have to have today.So it is difficult.
But if you go to ramsaysolutions.com slash real estate, that's kind of our real estate home base, if you will.And we have So much information because we know this is a big topic for people.
So this is everything from talking about Agents to your first time home buying or if you're looking to move what the market's doing.
There's articles Podcasts are so much there So if you have interest on real estate and more what Ramsey has to say you can go to Ramsey solutions comm slash real estate and check it out check it out there Matthew's in Omaha.
Hi Matthew.Welcome to the Ramsey show
Hi.Um, so I'm looking to, um, basically minimize the taxes my parents are paying in retirement on their, um, IRAs that they're taking distributions out of.Um, and that's basically my question.
Can't.You can't.No.Required minimum distributions are taxable.You can't get out of them.
So we're not in required minimum distribution yet.So my dad's 66 and my mom's 61.Why are they drawing on it? how are they growing on it?
Why are they drawing on it?They need the money.
Um, I mean, they're drawing on it basically for, um, you know, just like they want a deck.So they want to put a deck on, uh, the back of their house.So they're thinking about drawing on their retirement fund.
They're still making about 140 K a year plus around 20,000 dividends.Um, so, and they've also got a, uh, we've got five real estate properties. with about, um, they're making about 60,000 a year.
I think they're pulling $200,000 a year income.They can't figure out what about deck.
Yeah.So they're trying to put about an $80,000 deck on the, on the house, the residential house.And, um, I'm sorry.Nice deck.Oh yeah.It will be a very nice deck.Uh, it's going to have a covering and, uh, it'll be pretty nice.
So, but yeah, so there, there, They're looking to do that, but it's kind of, they were thinking about pulling $100,000 out, $100,000 out on the house.How much do they have in retirement?
In their portfolio, they have about 2.2 million, and then they have about a million dollars worth of real estate that it makes rent, and then they have about a million dollar residential house.
I think they've got this figured out.I don't think they need you or me.I think they've got the money, and when you pull money out of a traditional IRA, and you've got two million dollars in there, and you pull money out, It's going to be taxable.
There's not a hack on that, man.There's no hack.It's just taxable, period.That's the problem with the traditional instead of the Roth.
That's why we want to move as many people towards Roth as we can, because when they get up here, if it was in a Roth, it'd be a no-brainer.There'd be no taxes on it.
Is there any time to pull money out of retirement?If you're still working, you're at retirement age, you can do it without penalty.Is there ever a time you'd say, yeah, yeah, use your retirement for that?
They can do it without penalty. And they can pull this hundred grand out of there and it's 2.2 million.They can afford it.
But he's wanting to not pay taxes on it.
You can't pay taxes on it.
There's not a hack for that dude.It's just taxable period.And there's not a, there's not an offset on it.If there's an offset, you know, um, you know, interesting. So I'm probably personally not going to do that if I'm in their situation.
I'm going to budget for the deck.They can afford it.It's not going to kill them.It's not bankrupting them.But they don't want to pay the taxes on this.It's an ouchie.I hate taxes.I don't pay the taxes on it either.It's an ouchie.
So I'm going to find another way out of $60,000 worth of real estate income and $140,000 to get the rest of this paid.It's that simple.That's going to be my plan. That puts a sour of the Ramsey Show in the books.
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do work that they love, and create actual amazing relationships.Rachel Cruz, Ramsey personality, is my co-host today.My daughter and number one best-selling author.And the new book, the new children's book, I'm Glad When I Can Share, is out today.
So be sure you check it out at RamseySolutions.com.That's the third of the children's books.That trilogy makes a great Christmas present.So be sure and check it out. I am Dave Ramsey, your host.Don is with us, and Don is in Alaska.Hi, Don.
How are you?I'm doing good, sir.How are you?Better than I deserve.What's up?
I have a gold-dredging operation that I'm part of, and I can expect to gain just about 24 to 35 ounces of gold this upcoming season. The operation is paid solely in the metal that we collect, and no cash or payroll is given.
And I'm kind of curious on what would be the best way of selling that gold or capitalizing on that gold, because with the current gold price, that would be right around from the very worst that we could do.
On averages speaking, I could get around about $50,000 or so of the current gold price.
So that's your pay for a year?
Not for a year.It's a three-month operation. in January to April.
But it's your pay for your job?
For the hours go, yeah.It's more of a Kind of a partnership that is a job necessarily.
Okay.All right.So some guys are going out dredging gold You're gonna get your cut.Yeah, and it's 50 grand.It's 50 grand Well, you may know more about actually liquidating the the raw gold than I would know But what I would do is liquidate it.
I'm gonna turn it into money Okay.I'm not, I'm not holding it as an investment.I'm going to turn it into money and use that money to achieve my particular financial goals, which around here we would call baby steps.
Yeah.And I already have, uh, the 25,000 in, in, uh, uh, for, uh, what emergency fund.Sorry.Good.Um, I was just kind of curious.Are you debt free?I am debt free right now.
You own your house free and clear.
I don't have a house, I currently live in employee housing with my current employer in Dutch Harbor.And I would like to eventually get to the point where I'd have a duplex or a triplex or something of that nature.
But current gold prices, or sorry, the property prices where I call home is a little bit more than I'd be able to save up for, in my opinion.
Well, what would a duplex cost?
The current one I'm looking at right now is about $4.99.Okay.All right.
So take a few years of saving up to do that.What else do you do other than this?
I'm a commercial diver.I dive for gold and I also, I worked for a company up here.
Yeah.So what's your income on that annually?
Okay.So your income, your household income, so to speak, you is 50 and 60.So 110, does that sound right?
And you're a single guy with all your housing paid for, so you can save a ton of this and just start throwing it in good mutual funds and use those mutual funds to pay cash for a duplex later.So the danger of your situation is that
You and your buddies, your employers, are all very familiar with touching and owning and transacting in raw gold, because it's just part of your culture where you are, right?It's like everywhere. It's all around you.
And so the danger of that psychologically is it causes you to kind of normalize that where it's not normal anywhere else to do that, but it is right there in your world.
And if it normalizes, it caused you not to look at it through the lens of an investment.Instead, it's just kind of part of your life.And so I'm going to step back and look at it as an investment and say, I don't want to do this as an investment.
I would rather have my money in good mutual funds and let the volatility of the gold world not affect a young single diver in Alaska.I want you to make a bunch of money and end up with a bunch of it, instead of rolling the dice.
And when you're playing with metals like gold, you're rolling the dice.You see what I'm saying?
Yeah, it's definitely a gamble.That's what I mean. We're only, since it's 90% pure, it's not the kind of stuff you go buy at Costco necessarily.It's 90% gold, 70% silver.
It's a little bit different than what you go and liquidate at a jeweler or go and... Yeah, so how do you sell the raw gold?
I don't know how to do that.How do you do it?
So, there's a few different ways.The first way that a lot of people do, there's a company up here called GCR.I think I got that right.They'll take a small cut of it and they'll refine it.
They'll give you a 50% check right off the bat and then a couple weeks later after everything is said and done, they give you a check of it, but that check is about 10% less than the actual value of it.So that digs in a little bit to it.
Uh, the other way that I've been doing it, um, I will either go to a, uh, somebody who wants to sell like a truck or something and I'll buy the truck with the metal.Um, I did that and that was pretty fun going off.Uh, got my, uh, vehicle, um,
And the last way is some people, especially those folks that do the Bering Sea Gold show, they will do what's called pay dirt bags.
They take a little bit of gold, they take a handful of dirt and put it in a bag and sell it to people that think they want to be all cool and fun and be a prospector for a day.
And that's one way I was kind of wondering if it would be smart to do that kind of thing.
That's a business move.You're starting another business now.I'm not doing that.I'm just looking for a way.The first way sounds the most logical to me is you're giving up a cut to turn it into money.It's that simple.
And the only question I would have is there someone down in the lower 48 that you can jump on a plane that does the same thing that company does but gives you a better cut. Like, because they're up there, are they leaning into this?
In certain cases, yes.I mean, New York's kind of one of the big places, but that's quite a large plane ticket to get over there, and that'd be cutting into the amount that you get back.But roughly, the GCR is kind of the one that you want to go with.
Really, it's anywhere, depending on the purity.That sounds the easiest, too. five to ten percent.
Yeah your option is you got a pile of rocks in the corner or you go JCR and give up ten percent and turn it into cash.And so I'm gonna turn it into cash.I'm gonna turn it into cash.
I like that and I'm not getting in the dirtbag business that's a different thing.Now it's a tourist thing and you have a new business and it's a business move.
We're starting a small business in order to liquidate this stuff and so that's probably not the way I'm going either.How interesting.
I know, well I was going to say.
First time I've gotten that call in 32 years.
He actually finds the gold.
Yeah, never got the cold water deep diver in Alaska dredging gold call.Now, Mike Rowe actually knows those guys, and so he's up there all the time.He's been out on those boats.Yeah, that's a different thing.Interesting.
Fun way to make some good money, too.50 grand.
Yeah, pretty cool.Honored to have you in our audience.Very neat what you're doing, Donna.Very adventurous.This is the Ramsey Show. Hey you guys, I'm not a fan of the big banks and you probably already know which ones I mean.
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Hey guys, it's Rachel Cruz.And guess what?It's my favorite time of year.The lights, the music, the decorations.I mean, I love it all.And as a natural spender like myself, it's really easy to overspend.
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Might not be in all states.
Today's question comes from Jamie in Minnesota.She said, my husband and I are 51 and 53.We're debt free and have three cars that are fully paid for with a household income of $150,000.
We are debating whether or not we should sell one of our cars worth $50,000 and apply that to our mortgage.We owe about $90,000 on our mortgage and will be paid off in one year if we sell the car versus three years if we do not sell the car.
My husband thinks you should not pay off your house early because we can't deduct the mortgage interest on the tax returns and he's afraid we'll owe the IRS.Last year we paid $3,097.66 in mortgage interest.
Can you provide some feedback on that and what your recommendations are?
Okay, well the mortgage or the tax deduction in general, including mortgage interest, is the biggest piece of mythology in all of personal finance because it requires that people forget how to do sixth grade math.Let me walk you through it.
If, Jamie, if you actually itemize then you can claim your charitable deductions and your mortgage interest rates.By the way, Last year, because the standard deductions are so high, almost no one itemized, including you.
You probably didn't even itemize.So your husband is completely unaware of how this whole thing works because you didn't take a deduction for your mortgage interest unless you itemized.Nine percent of Americans itemize.Ninety-one percent do not.
you do not itemize you do not get a tax deduction for your charitable or for your interest so 91% of the people this doesn't even come up for it with right so that's just dumb not you not you Jamie but when people are saying well I don't lose my you're not taking it anyway you just don't even know how your taxes work you're that gee plug into it all right now
If you do.If you did itemize, then you sent the mortgage company $3,000, $3,097, $3,100, and that reduced your income, your $150,000 income, by $3,000.A tax deduction is not a tax credit.It lowers the amount of income that is taxed.
So the tax savings is not $3,100.The tax savings is $3,100 times your tax rate, which is 32% in your case.And so you saved $1,000 in taxes if you itemized.So here's how this works.Your husband is suggesting
absurdly, that you send the government $3,100 or you send the mortgage company $3,100 to keep from sending the government $1,000.You're trading dollars for quarters.Dumb trade. So always pay off your mortgage.Never keep it for the tax deduction.
If you send somebody $10,000 to keep from sending the government $3,000, by definition that's mathematically stupid. And then I call myself sophisticated because I didn't pay off my mortgage because I had the tax deduction.
But I don't even take the tax deduction because I'm not even one of the people that itemized and I just didn't even know that.That's most people with this opinion around the Thanksgiving table.
They just absolutely do not know how to do math and they don't know the reality of the situation.
worse than that worse than your broke brother-in-law telling you this at Thanksgiving you're silly Dave Ramsey doesn't but worse than him the one that pisses me off to no end are people that do taxes for a living and they tell the small business person or they tell you to not pay off your mortgage
because you'll lose the tax deduction or to run your expenses up on things you don't need to buy you need to spend some money by the end of the year otherwise you're gonna get taxes well that is asinine it's ridiculous you own a hair care place and you spend ten thousand bucks you don't need to spend because your tax preparer is a moron who told you to do that that's dumb
Let me help you.You've got two words for these people that give you that advice.You're fired.
The tax write-off, it's like the Schitt's Creek episode, where he's like, well, just, it's a write-off.And he's like, yeah, but who's writing it off?He's like, I don't know, the write-off people.It just gets written off.
It's like this mystical idea of the tax write-off.
It is like a- It justifies all my stupidity.
Oh, yeah, always.It's like, well, I don't know, it's a tax write-off.
It's a write-off.Well, who's gonna pay for it?I don't know, the write-off people.The write-off people.That's great.I haven't seen that episode.
So listen, if your tax person is telling you to run up your expenses or to not pay off debt because you're getting a tax deduction, they're telling you to trade dollars for quarters.You don't need someone that can't add doing your taxes.
You need new tax people.Go to RamseySolutions.com and get with one of our tax people.They do not make this mistake, believe me.
They would not have a Ramsey trusted sign on their door if they made this mistake because they wouldn't be trusted by me because they don't trust people that can't do math.So there you go. That's what we're doing here.
So guys, whatever you do, don't fall for the tax deduction myth.And the irony of ironies is, all of these people discussing it, 91% don't itemize.
America today that's everybody y'all I mean so because for majority of people you get a better deal if you just take the standard deduction anyways that's what I mean yeah that's why you don't they don't need died you don't need to because yeah tell your stupid actually under the Trump tax code in his last administration he ran the standard deduction way up yeah you get an automatic deduction just because you breathe yep
And your real deductions don't add up to that, so you're better off to take the big one.The breathing deduction from the write-off people.But the standard deduction has changed the game and it's made the tax filings very easy.
And that's probably up to more in the last, what, ten years?
In the last, what, ten years?
Fifteen years ago, if I was talking about this, it would have been 70%.
Because this was a main point back in the day at our live events, back in 2004.This was a big discussion.And now it's not.You don't hear it as much anymore.
Because the standard deduction was raised and the number of people that don't itemize is so few.
It was absurd back then because you're trading dollars for quarters and we used to cover it in the live events in those old arena events.
That's right, that's right.
And it was absurd back then.It's just as absurd now for the same reason, but it's doubly absurd because it really doesn't apply to hardly anybody anymore.And I'll bet you money Jamie doesn't itemize.91% don't.And so it doesn't even come up.
So her husband's arguing a theory that he's not even doing. And then if he was doing it, he's trading dollars for quarters.So don't trade dollars for quarters.Pay off your mortgage.
And the other argument for not paying off the mortgage is I can make more in the market versus what I'm paying in interest.
Yeah, said no millionaires ever.The millionaires that we, the 10,000 millionaires that we studied, none of them, precisely zero, said I became a millionaire by not paying off my house and investing the difference into the market.
None of them say that.It's always broke people that say this stuff. The broke people that don't want to lean in and do the smart, long-term financial plays like getting your home paid off.So yeah, it's asinine, you guys.
The data just does not back it up.The math does not back it up.Pay off your house, people.When you get to baby step six, finish the baby steps and pay it off.And don't deal with tax people that can't add.Please, God.This is the Ramsey Show.
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Plus our 50 days of Christmas deals is on right now.Get up to 30% off bestsellers and life-changing gifts that won't break the holiday budget.Ramsysolutions.com slash store. Rachel Cruz, number one best-selling author.
Ramsey Personality, my daughter, is my co-host today.Feel free to drop by and visit us in the Ramsey headquarters.We do this show from 1 to 4 central time every Monday through Friday and it's free to drop in and watch the show.
We do the show on the glass in the lobby and there's always 50 to 200 folks out here watching the show.There's free chocolate chip homemade cookies, smells like Mama's Kitchen when you walk in here, and free coffee.
So come hang out with us, watch the show, whoever's taping it and doing it that day.It's not taping, it's live, but we're here doing it.
And in the lobby of Ramsey Solutions, when we built this building, we put up the debt-free stage right across from our glass here. And one of our favorite things is to do a debt-free scream on the debt-free stage.
The only thing that is more exciting for us than to do a debt-free scream on the debt-free stage is to do it with a Ramsey Solutions team member.And Brianna Moore is with us.She's one of our team members.Welcome, Brianna.
Hi.Hello, hello.Way to go.Congratulations.Thank you.I can't believe I'm here.
Tell folks what you do here at Ramsey and how long you've been with us.
I've been here for four years, and I do SEO and content marketing for our amazing real estate department.Shout out to real estate.
So our Ramsey-trusted real estate agents all across the nation benefit from your hard work.Yes.And you're doing the content on the website and other things to cause content marketer to cause all that to happen.Yes, sir. Very cool.
Good for you four years.You've been on the team.
All right now we do not this is the one time we don't ask the folks income because You know 30 or 40 of the people standing around 50 the people standing around work with her and that would be a wee bit awkward So we're not gonna do that, but we will ask you this.
How much did you pay off?
And how long did it take?
And what kind of debt was this?
Student loans $164,000 that was the principal and then $40,000 of that was interest.So it was all student loans?
Student loans.What did you get your degree in? digital media management so business four-year business degree yes at a private school in Austin so there you go yeah and you paid for it
Wow oh my gosh how great though okay how long have you been out of school six years okay so you started immediately yes and it took you six years to clean it up yep you leaned in four of those years you've been here yes so does it make it more awkward to work at Ramsey while you're working your debt snowball or easier because I would think all the peer pressure is positive
Yeah, it was definitely easier and more fun, and I felt less shame telling people how much I was paying off.So that was really fun to be like, yeah, it's six figures.
Your co-workers are cheering you on, right?I mean, your team members, right?They're like, yes, yes, yes, yes, yes.Yes.OK.I hope so.Yeah.If not, tell me who they are.I'll deal with it.Yeah. I love it.Very cool.
So incredible.Okay.So what happened six years ago?So you graduate college.
Yeah.So I think it was towards the end of college.I was realizing what I had gotten myself into.I don't think before I went to college, I really understood what, you know, is alone and that you have to pay that back.
Um, and so towards the end of college I knew, okay, it's kind of a non negotiable.I can't live with this debt for the rest of my life.So I knew I was going to have to take,
FPU so I did that as soon as I graduated and I knew I had how did you know to do that my parents informed me of you and your program yeah they're everyday millionaires and teach FPU so they were able to
kind of learn with me at first and become those everyday millionaires and everything too and then we kind of like did it together.
Way to go mom and dad you got to be proud.Very good.So that's some of your other cheerleaders other than your teammates.
But yeah, so after graduation, took FPU, started paying it off and I would actually like cry myself to work because I hated my job and I was doing it basically because I knew that I had to have an income and do something and I was living rent free at home and I would listen.
I'm sorry.I knew I was gonna cry.No, you're great.You're doing great.Okay.
In Houston with my parents.Sorry.
No, you're good.It's been a long journey of doing this.
Six years is a long time.It's a lot.You've been fighting this by yourself, Warrior Princess.Way to go.Proud of you.
Anyway, so I would listen to the Ramsey show on my way to work and cry and listen to the Jeffrey screams and envision myself doing this one day.So it's really cool.And I didn't know I was gonna work here.
How did you end up coming to work here?
Um, y'all found me on LinkedIn and asked me to apply and I did and then y'all gave me the job. Great recruiting team.Shout out to Aisha.
We tracked her down and snagged her out of a miserable job.
Pretty much, yeah.So then the rest of the four years has been here and it's been an amazing journey.Wow.
Okay, so you moved to Nashville.Yes.
And it's a fun... Now wait a minute, you get the call from us and you're working this plan because of us and your mom and dad are FPU graduates and you've been through FPU and we call up out of the blue and say, do you want to join us?
I mean, that had to be weird.
It was it was very much a God thing.Yeah, Jesus.
Yes.Don't call Jesus weird.Yeah.
Oh, my gosh.OK, so I want to know from the moment you so you moved to Nashville and Nashville is a fun city, right?I mean, there's things happening.Stuff is, you know, people are going out.I mean, it's it's an enjoyable town.
So what what was the pressure like or what was the feeling, the sacrifice, like the heart of saying no? to a life, what were the things that you said no to that were really difficult?
Shopping.Yeah, girl.I'm like, I like to look cute and I couldn't for a long time.So shopping, definitely.For six years though, I did have to budget some fun in there because I was just gonna go insane if I didn't.
So I was able to do some very small weekend trips with friends and keep it and control it.
And I just really, the sacrifices were not having any time to myself.I was working up to seven jobs at one point.
So working full time, I have a photography business on the side and then I was doing anywhere from like three to six to seven additional freelance jobs where I had SEO clients on monthly retainer.
And so I was doing that for several years and it was exhausting and miserable.
I was just working non-stop I would work here I have memories of working here getting off at four going downstairs and sitting in the cafe and working for an hour on side jobs going to work out and then going home and working until I went to sleep and I would do that for just like five days in a row.
Just straight all the way grinding it out.
You were making some good money on those side jobs.
Yeah I was making on a low year 15,000 all the way up to like 30,000 a year in side jobs.Amazing.
Which is what helps put a dent in 200K, right, of debt.I mean, yeah, that's what had to be done.
Yeah, the budget was obviously helpful, but I'm already kind of naturally a frugal person.So for me, having that much and being a single income, I just had to get more money.I had to do anything to make more money.
How does it feel to be free?
It feels good.I kind of didn't, I haven't really felt what it feels like to be free.Murphy hit me two weeks after I paid off my debt and I got in a car accident.Somebody hit me and totaled my car.
So I haven't really felt that free cause I've been financially dealing with that too.So I'm like hopefully after today I'll feel really good.
Well it's official.You are.Yes.By the way.Yeah.Congratulations.So proud of you.So your mom and dad, your teammates cheered you on.Anybody else was your cheerleader?
Yeah, my parents, my brother, my sister-in-law, and then all my friends, Annalise and Alyssa specifically, and then all of my awesome teammates and co-workers.
Yeah, very cool.Well done.Congratulations.Thank you.All right, other than getting a job at Ramsey and having us track you down, what is the key to getting out of debt for all those FPU graduates out there listening?
For me, it was making extra income, definitely.And just not, there's no other option but to do it and get out of debt.And no matter how much you have, you can do it.I did it as a single person and I made it happen.
29 that was the other thing I was gonna say I'd paid it off three days before my birthday.That was my goal So I had 30 a little over 30,000 at the beginning of this year and I said, okay I want to do this before I turn 29.
Happy birthday.Well done Love it.I love it.I love it.Well, we're proud of you I know your mom and dad and all your friends are way to go All right, it's Brianna.She paid off $204,000 in six years, four of those years working on this team.
Count it down.Let's hear a debt-free scream.Three, two, one.
Man, she leaned in.She's amazing.That was strong.
This is the Ramsey Show. Well, it's decision time again.Every year during open enrollment, you have the chance to check in on your insurance and make sure it's right for you and your family.
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Go to ramsysolutions.com slash health dash coverage. Rachel Cruz, Ramsey Personality, is my co-host today.We tell you around here, if you'll pay a price to win, you get to win.
We say live like no one else, so later you can live and give like no one else.And when you're in Baby Steps 1 and 2 and even 3, where you're finishing the emergency fund and you're paying off all your debt but your house,
you should not go on vacation, you should not go out to eat, you should lean in and knock your dad out as fast as you can but when you get to baby step four you go from intense to intentional and that's when you get to buy that new couch or upgrade your car or go on vacation.
That's why we named The Cruze, the Ramsey Cruze, the Live Like No One Else Cruze, because it's for Baby Step 4 and beyond.It is almost sold out.There's a handful of cabins left for March 22 through 29 in 2025.This is a premium
Caribbean cruise Turks and Caicos Puerto Rico st.Thomas the Bahamas Holland America is one of their newest ships.It is a high stand.I don't listen.I don't go on these cheap cruises Okay, I want I like the nice ones Davis bougie with his travel.
I don't know about G, but I'm not staying in the freakin Holiday Inn anymore.I've worked too hard.So I And I'm not staying in the Holiday Inn on the seas either.So this is a nice ship.It's going to be a lot of fun.
Sharon and I will be on the ship the entire time.All of the Ramsey personalities will be on the ship the entire time.The comedian Trey Kennedy that makes fun of me will be on the ship.That's fun.
World-class chef from the Food Channel Manit Chauhan will be on the ship Dove Award winner Grammy Award winner Stephen Curtis Chapman and Dina Carter both will be on the ship and there's going to be others.It's going to be a wonderful fun
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Don't miss out on this.Open phones at 888-825-5225.John's in Pittsburgh.Hey John, what's up?
Mr. Randy, thanks so much for talking to me.So in a nutshell, our issue is that our home is more expensive than we probably should have gotten.We are living paycheck to paycheck, and quite often the paycheck doesn't even uh, cover for two weeks.
So we are bleeding from our minimal savings and paying, uh, for the things with our credit card and only paying the minimum, uh, ticket.Uh, it is $2,090 a month.
And what's your take home pay?
Take home pays about 65 to 70. 55.No, that's not take on that.That's total.Your take home pay in a month.Sorry.Take home pay in a month is $4,200.Oh yeah.You have to sell the house, John.That's the, that's what we were thinking about doing.
You don't have a choice.Biggest expense.
You're hot.Your house is 50% of your take home pay, hon.You can't do that.That's why you're dying. I mean, you had a, you had a feeling of that, but the arithmetic is screaming that you're starving to death.
So I guess my, my biggest concern with that is if we're not able to, like, if we don't have enough equity in the home to cover clothing costs, John, you can't stay in the house pocket.
You can't stay in the house.
How does that, how does that look?Like, where does that, that money come from?
I guess right now you're putting it right now you're putting on credit cards. Yeah, that's true.Yeah.So I'd rather have $5,000 on a credit card than a mortgage you can't afford.
So what's the math of the, of the mortgage right now, John, what do you guys owe?
Okay.How much is it worth?
Um, I mean, we actually just got it back down to what, uh, what it was worth when we got, it was two 87, five, but some of the closing costs were rolled into the, when did you buy it?It was two, two 93.It was in November of 22.Okay.
Go online at Ramsey solutions.com and get one of our Ramsey trusted real estate agents that are high performers that actually know what the flip they're doing.
Have them come out and look at this and give you a market analysis and tell you what you can do.But you, you've got to find a way out of this thing.It's not sustainable.That's what you already knew.You just needed someone else to say it out loud.
I think you might be right.It's not even close.You're not like on the bubble or anything.You're over in the deep end of the pool.There's no debating.
Now the only thing that could happen is, do you have anything in the near future, in the next six months with your daytime career, your normal career, that looks like you're going to have a huge increase in pay? Second job is not sustainable.
I don't want to sign up for something where I do a second job for 15 years.I'll do a second job for a short period of time to get out of a mess, clean up a mess, right?But you don't want to do that.You're house poor.This house owns you.
You don't own it. I'm so sorry.And it's, um, it's going to be a little embarrassing.Uh, but you guys, you, you got married and everybody yelled at you and said, young couple, go buy a house, go buy a house, go buy a house, go buy a house.
And then we went and found a house we liked.And the idiots at the mortgage company just signed your butt up and they put you in a crack.
Didn't they feel that way?
Do you guys have kids, John?
Uh, well that, that's one of the other things that's costing is we, we kind of have one that we weren't exactly expecting, very thankful for, but we were not expecting.
Is she, is your wife expecting or do you guys already have, do you have the baby?
Oh no, she's, she's, she's been around for a little while.Okay.
How long you guys been married?
Uh, since 2015.It's almost 10 years.
Okay.So you're like 30 years old.
Well, let me tell you a couple things right when I was 28 I was broke and lost everything and I was in a much more severe situation than you're in but it taught me some things about situations with stress in this the number one cause of divorce in North America today is money fights and money problems and money stress and You got that
so your wife is afraid and she may not want to leave this house and you're confused and feel like you did something really dumb and maybe you know maybe it hit maybe you took a hit and your confidence in that that would be normal those things if y'all are having money fights and she's very afraid and you're not as confident as you were before all of this mess you would be normal that would be a normal reaction to your situation okay
What I want you to do is get away from all that.The destabilization of your marriage, your lack of confidence, her being terrified.This house is not worth it.It's just a stupid house.There's a house on every corner in Pittsburgh.I've been there.
They're everywhere.And you'll get you another house that doesn't get you.You'll never do this again.You'll never make this mistake.You got the rest of your life to make other mistakes, but you'll never make this one again, right? It's no fun, is it?
It's not.Is what I was saying true?
everything except for my wife.She's totally on board with getting rid of this place.
Okay.She's like, I want out.
Yeah.Well, it's not fun for her.
And the interesting thing, John is, you know, we, we have a phrase called financial peace.It's one of the books that Dave wrote, but, but that is, it is what we want for people is peace.We want peace.And just like you said, Dave, like, It's a house.
It's just, it's a house.And it's not worth the stress and the anxiety and any level of status of home ownership or like whatever the play is for you, it's not worth it.Your peace is worth so much more than stuff.
And that's true for cars or anything, but it feels magnified because a house, it is big.I mean, it's a $300,000 idea and it's where your family lives.There's emotional attachments.I mean, like all of it.
But get rid of it and go rent somewhere and just breathe for two to three years.
And save some money and get a down payment and then buy something else based on your income at that time.And you don't take out folks more than a house payment, more than a fourth of your take-home pay, not half your take-home pay.
And just because the idiots at the mortgage company will give you the loan does not mean it's a good idea. They will ruin you if you let them, and they'll pinch you if you let them, and they'll make your life miserable if you let them.
They don't care.They don't have a soul.This is The Ramsey Show.
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