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Chapter 1: How can I manage my Parent PLUS loans effectively?
Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studios, it's the Ramsey Show, where we help people build wealth, do work. that they love, and create actual amazing relationships.
Ken Coleman, Ramsey personality, number one best-selling author of the book Paycheck to Purpose, our Ramsey career expert, host of The Ken Coleman Show, is my co-host today. Open phones at 888-825-5225. That's 888-825-5225. Julie is in San Francisco. Hi, Julie. Welcome to The Ramsey Show.
Hi, thank you for taking my call.
Sure, what's up?
Okay, so I bought a home in February of 2022 in Nevada, and I'm actually renting it right now, and it's making double my mortgage payment, which is great. But I also have parent plus loans that total $178,000. My daughter graduated in 2021. She's doing well, but she's getting her master's now, which is totally under her name. But I've got these parent plus loans in my name.
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Chapter 2: What should I consider before buying a house?
How's she paying for her master's?
Yeah, she is.
Oh, she's paying for it.
She's paying for the master's, but I've got the undergrad loans. And then, of course, she's got her own student loans within the undergrad program.
So your question is, do you sell your rental property to clear $178,000 debt? Yeah. What's your household income?
So mine alone, so I live with my fiancé, mine alone is $100,000.
When are you getting married?
I actually took a pay cut. We don't know yet. We're trying to clear all this stuff up.
Okay. What does he make?
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Chapter 3: Is investing in Airbnbs a wise decision for my age?
He makes about $120 plus with the bonuses and stuff. Actually, can I tell you what I used to make? And this is part of another part two question. I used to make $145. So when I moved in with him, I took that pay cut. So we both want to move closer to the city, to the bay, and that will allow me to get a better paying job and get back to where I was before.
You took a pay cut because you changed locations.
Say that again.
You took a pay cut because you changed locations.
Correct.
Okay.
Yep. I'm like two hours away from the base.
So let's pretend for a second. You do not own a house in our pretend world for a second in Nevada.
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Chapter 4: What are the risks involved in managing an Airbnb?
Okay. You have $178,000 in parent plus loans. And I put $200,000 in cash in the middle of your kitchen table.
Okay.
You have two choices. You can buy a rental property in Nevada, or you can pay off the Parent PLUS loan.
I know what you're going to say.
I didn't say anything. I asked you a question. It's a leading question, but I asked you a question. It's kind of obvious, isn't it?
I know.
Yeah.
Sell the house.
When you decided to pay for your daughter's education with borrowed money, you decided to get rid of this house.
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Chapter 5: How does the current real estate market affect Airbnb investments?
Now you're actually having to admit it.
That's what we tossed and turned about last night.
Yeah. It's gone. And you got your life back. For real?
Really? Yeah, you're focusing on the house being gone and that it seems like such a great investment because it's paying you double. You're not focusing on the fact that those loans are gone. That's what you should be celebrating. You're feeling sad about losing the house. You should be happy that you can get out of the debt. Does that make sense?
And the next time someone presents an idea to you to go $178,000 in debt, just smile and say no. Even if it's one of your kids.
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Chapter 6: What strategies can help in budgeting and managing expenses?
especially if it's one of your kids. Right, yeah, even more so. There we go. Eric is with us in Frankfurt, Germany. Hi, Eric. Welcome to the Ramsey Show.
Hey, Dave and Ken. Thank you for taking my call. Sure. How are you all today?
Better than we deserve. What's up?
Love to hear it. So me and my wife, my wife is active duty military, and we have been living in Germany for the past two years, and we will be here for another three years until she retires. Um, we just had our first child in May after a long journey with IVF and are currently a hundred percent debt free.
Chapter 7: How can I prioritize my financial goals effectively?
Wonderful. Yes. Thank you. Thank you. Um, so our plan when she retires is to, uh, move to Dallas and we're trying to figure out how much money we should be looking to spend on the house, uh, when she does retire.
Well, jump on Google and figure out what the median house price in Dallas is. But the median house price nationally right now is a touch under $400K. Okay. And that's median, not average. Average will be slightly lower than that. But in other words, half the houses sell for more than that, half the houses sell for less. That's median. Average will be less.
But, you know, $300,000 to $400,000 is an average home in a typical city in America. But certainly there's neighborhoods in Dallas you can't touch for that, and there's plenty of neighborhoods that are less than that.
Chapter 8: What lessons can be learned from the Babylon Bee's approach to humor?
So, you know, it depends on the neighborhood. There's three things to determine price of real estate, location, location, and location. But, yeah, so I think you start doing some research on the area you're going to be moving to, and that helps you set some goals.
Absolutely. Maybe I should rephrase my question a little bit. So we currently have 200,000 saved. Good. By the time she retires, I'm kind of projecting us to have about half a million to about 550 saved. Good. Would you see anything wrong with us if we were to pay cash for a house, if we were to spend that full amount?
You called Dave Ramsey and asked him if it was okay to pay cash?
I know.
From Germany?
I did.
I'm on the edge of my seat, Dave. What's the answer? What's the answer? I can't wait. Of course you pay cash. Yeah, that's exactly what I would do.
And the reason I would is because now with no house payment and this fabulous ability to manage money and save money, you guys are going to be able to pile up an incredible nest egg, incredible wealth, and be a blessing to your kids, your family, your future family, change your family tree, and many families around you because you're going to be very wealthy. You guys are incredible.
Thank you for serving your country. Congratulations on the new baby. Stack cash. Come back to U.S. after retirement and in a couple of years and pay cash for a nice house and then become very outrageously wealthy and outrageously generous. You guys are amazing. Way to go.
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