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Chapter 1: What is discussed at the start of this section?
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. Ken Coleman, Ramsey personality, number one best-selling author of the book Paycheck to Purpose, and host of The Ken Coleman Show is my co-host today.
As we answer your questions about your life and your money, as a reminder, Ken's show is all about career and all about job and all about finding work that you're passionate about, good about, and creative about. Yeah, so he can help you with all that too while we're here. Again, phone number 888-825-5225. James starts this hour in Canada. Hi, James. How are you?
I'm doing very well. Better than I deserve.
How are you, Dave? Better than I deserve, sir. What's up?
This is an honor to talk to you. I am such a fan of the show.
Well, I'm honored to talk to you. How can we help?
I just have a quick question. Me and my wife are planning to get out of debt as soon as possible. And I just have a question that's been lingering on my mind. I have some investments, about $5,000 Canadian, in some ETFs. And I'm just wondering if I should sell my investments to pay off debt.
Okay. What kind of debt have you got?
I have a line of credit that's about... $19,000. We also have some credit card debt and a car loan as well.
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Chapter 2: What should I do with my investments to pay off debt?
This place sucks, and that's what you call the great regret. And by the way, what Dave's talking about, folks, we're talking about millions of workers here. Millions. Millions who said, I wish I had stayed at my previous company. This is not like a little trend. This was a major wave of people. And again, we were trying to game the system and get the quick fix.
And you realize, oh, I would have been better off staying where I am. I'd be happier, more fulfilled. And that affects my anxiety, depression, which affects my sleep, my physical life, my relationship life with my wife, my kids. If I'm dragging all that crap from work home with me and I didn't get that much of a behavior change.
And to this point, if you took a 15% raise to try to pay off credit card debt or to pay off, well, I can live more. And you just kept spending. And by the way, Dave, that's what we've seen right now in our economy. We just got the latest reports out. The GDP is up because the consumers in America are spending like Congress. And credit card debt is going up with it.
And we've got to take control of our spending, take control of our habits, and getting out of debt, back to this call, and not just chasing the next big thing. It's the discipline to say, I'm going to change my life, change the way I act, and those are going to guide my decisions, not the next big, quick fix to feel like I just gained the system. You've got to change who you are.
More money to get in a worse place wears off in about 20 minutes. Really fast. Yeah, you get a career hangover from that one.
Yeah, and then you try to drown it out with credit card debt. Ouch.
Funny how that works. Not James, though. James is going to pay down his credit card debt.
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Chapter 3: How can I make better financial decisions regarding debt?
James is a good man. With an ETF. This is The Ramsey Show. Ken Coleman, Ramsey Personality, is my co-host. Open phones at 888-825-5225. Jaden is in Portland, Oregon. Hi, Jaden. How are you? Pretty good, Dave. How are you doing? Better than I deserve. What's up?
So my income has drastically increased in this last year, and I'm trying to find out if I should buy a house soon with 3.5% down or if I should wait and put down the 20%. Okay.
Tell me your story. What's happening?
Um, so while I was just working regular jobs, I'm not making too much money a year. And then I got offered a job where now I make 120 grand a year. I'm only 19 years old. Um, I was living in my van, this job, I do have housing. Um, but I have a fiance at home who's still living in the van with our pops.
So that's why I'm kind of trying to figure out if I should put down three and a half percent, get her out of the van, or if I should wait and put down 20%.
Okay. So you go from a van to housing is furnished, but they won't let your fiance stay there.
Um, no, cause, um, I, uh, kind of, I can't talk about what I do too much, but I just work with individuals, um, that, uh, just need some extra help. So I'm away from home for two weeks at a time. So I'm with another person in the room and they can't come along with me.
I see. Okay. Um,
Why is renting not an option in this? You've given us two extremes, I feel like. You're going from a van to buying your first house. Congratulations on the income, but why is renting on your own not a part of this equation?
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Chapter 4: What are the implications of selling assets to pay off debt?
That's why they put them on fire truck.
I didn't know that.
Nobody mess with a fire truck because they're mean. I didn't know that. But that was the only mean dog I've ever owned. But I didn't own it long. I never heard that story. Jaden, this is going to be you telling this story someday. Only you're going to look as dumb as I look, or you're going to get rid of the dog and go get an apartment, son, and put your fiancée in there.
And by the way, go ahead and see the preacher this weekend and get married and get it all done at once. Don't make your decisions based on this. It's not romantic to live in a van. There's nothing romantic about it. The only thing I didn't get to ask him was if the van was... I still got Saturday Night Live skit ringing in my head.
I was going to ask him if down by the river. If he lives by the river, it takes the cake. That would be the end of it.
I would be losing it right now.
With a giant dog.
With a giant dog. Justin's in Charlotte, North Carolina. Hey, Justin, what's up?
Hey, Dave, how are you?
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Chapter 5: What financial decisions should I consider before starting a business?
Okay.
So you have five years of $7,000, so you've got somewhere around $35,000 exposure, right?
Correct.
What's the equipment worth?
It's less than $10,000 worth of equipment. Why do you want it? Because I'm hopeful that I can maybe start it again one day and it would relieve some of the startup costs down the road.
Do you have any money?
I have about $20,000 in personal savings and that's about it. I sunk all of my life savings into the first business.
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Chapter 6: How do I negotiate with my landlord regarding equipment?
If you were going to buy this equipment right now in your situation, used, what would you be willing to pay for it? If you found it on there, let's say you let him have it and the next day you walked into a garage sale and you found this same piece of equipment sitting in someone's basement, what would you buy it for? Or would you buy it tomorrow or would you wait until later?
That's a really great question. The one piece of equipment that I'm hanging on to is the oven because it's an old oven and the old ones are the best because they don't... And you found it in someone's basement tomorrow at a garage sale, what would you pay for it? I would pay probably upwards of $1,000 for it.
$1,000?
Correct.
Okay. All right. So I think you can sit. Number one, the first thing you need to do is with this landlord, you need to sit down in person.
Yes, we are. We're meeting on Wednesday.
Good, good.
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Chapter 7: What should I keep in mind while transitioning careers?
Because you're an honorable person. I think he's not a dishonorable person. As a matter of fact, he's got a lot of mercy. He's just letting you out of $35,000.
He's already got someone lined up that he will charge.
He's letting you out of $35,000. That's not a bad guy. He could have held you to it. For a $1,000 oven, I mean, it's not a bad trade. So at the end of the day, if I have to negotiate away the $1,000 oven in order to get out of a $35,000 exposure, it's gone. He can have the oven.
But I would ask him about it and just say, listen, we've honestly, I think you're an honest guy and you think I'm honest and we just did not have alignment on this one subject before. Would you be willing to sell me the oven, because it's the only piece I'm particularly interested in, at a, you know, at whatever, at salvage price, which is probably $500 or $1,000.
That's the only thing that I care about. And the rest of it is I care about getting out of the lease.
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Chapter 8: How can I balance saving for retirement and starting a business?
Could we work that out?
Yeah, it still just gets me that I've already bought the oven, so I don't want to pay him for it.
You're missing the part where you got out of a $35,000 liability. That probably gets him that the tentative had just decided they weren't going to pay.
Yeah, but he's wanted me out of there since I signed the lease because he can charge double for the people that have already lined up for it.
Okay. You do what you want to do. That's what I would do. I would consider this a blessing. And I would, in a horrible situation with a heartbreak, I'd let him keep the oven or I'd give him $1,000 or $500 for it and get the documents signed to completely relieve you of any liability, LLC or personal, further on this lease so that he can go forward.
Um, I guess if you want to play hardball from a negotiating standpoint, you could, because it sounds like he's chomping at the bit to get you out of there. And you could just say, you know what? I think I'm just going to give you another 600 bucks to stay here a while and make him lose his potential tenant because you keep paying.
If he doesn't, you know, if you won't let me have the oven, I think I'm just going to keep paying the rent because I think the oven's mine. I've got a bill of sale for it. But, you know, honestly, I personally wouldn't do that. I personally would. This is a horrible thing you're going through. It's an emotional thing you're going through. The failure of a business is a crisis of identity.
Anytime I close a major area that we tried here at Ramsey, it's me admitting that I was stupid, and I hate admitting that, yet sometimes I am stupid. But I get the opportunity running a business to admit it occasionally, and it's not fun. It's really not fun. I'm sorry. It really is emotional. I wouldn't screw this whole thing up over a grand. I promise you I wouldn't.
You're going to lose that the first time you meet with an attorney. They charge you $1,000 for driving past their office. Just like it's a drive-by fee. You know, I mean, it's like, yes.
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