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Chapter 1: What is the main topic discussed in this episode?
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, host of The Ken Coleman Show and author of the number one bestselling book, From Paycheck to Purpose, is my co-host today.
As we answer your questions about your life and your money, thanks for hanging out with us. 888-825-5225 is the number. That's 888-825-5225. North Dakota starts off this hour. Samuel is with us.
Chapter 2: What are the pros and cons of selling a modular home?
Hey, Samuel, how are you? Hey, pretty good. Good. How can we help?
Hey, real quick. I've been married three years, and we had just bought in a modular home in our, I guess it would be second year of marriage. And modular home, mobile home, however people call it. Anyways, the lot rent keeps raising up, and we're wondering if we should just sell it or what we should do with it. And the other thing that I wanted to mention is that we're expecting our second child.
And so that kind of throws it into the mess of the stuff as well. So just getting some insight as far as what I should do next.
Good for you. Cool. How old are you?
24.
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Chapter 3: Should you pay off student loans or save for a house first?
What's your household income, sir?
So 52 for myself, and then me and my wife would be about 64. Okay, good.
All right. Well, the premise is this. There's nothing on fire. There's no emergency here. But 10 years from today, owning a mobile home that goes down in value is not a good plan. They go down in value. You know that.
Yes.
Yes. Okay. And so instead, I would rather be living in something that goes up in value. And so that's why mobile homes are not a good purchase. Simply, it's a car you sleep in. It goes down in value. So you've got to decide then, you know, since it's not a good long-term plan, when is the most opportune time to move out of that and what are the steps? It might be that you sell it.
And it may take you a little while to clean up. You may be upside down on it.
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Chapter 4: How much should I be investing in my future?
You may owe more on it than it's worth, do you?
Sorry, what was the question?
Do you owe more on it than it's worth?
No, I do not.
Okay, what is it worth?
The next storehouse is about the same layout as our layout, and it sold for $50, and we owe about $40 on it right now.
Okay. So hopefully you could get 50 and walk away with 10. That would be amazing. And then what would we do? Are you out of debt except for that?
Um, we just have one car loan.
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Chapter 5: Is going back to school for a nurse practitioner worth it?
Okay. I'd clean up the car loan. I'd build an emergency fund and I'd rent for a year to two years while I saved up a down payment to buy my first home. That is a stick built wood or whatever home that's going up in value. And if it takes you from 24 to 26 to make that transition and one move, that's not a bad thing. Your other options sit there and let this thing go down in value.
And you're going to look up and it's going to be worth 30 and you owe 35. And then you're going to look up and it's going to be worth 10 and you owe 25. That's where it's headed long-term agreed.
agreed yes that's not a long-term plan so okay but again there's this month next month i don't care the next month i don't care somewhere in there uh when's the baby due in february okay so if you're going to do it you should do it immediately or you should do it after the baby okay if you could get a buyer now and move into a rental with ten thousand dollars in your pocket or how much you owe in the car
9,000. You have any money in savings? Yes, I do. How much?
Seven.
Perfect. Good. Okay. So if we sell this and we put 10 in our pocket, that's 17. Pay off the car. Now we've got eight in savings and no debt, and we're renting when the baby comes. That sounds a pretty good move.
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Chapter 6: What steps should I take to build an emergency fund?
Now then we start saving like crazy above our emergency fund for a down payment on a home, and that might take you a year or two years. But that's what lots of couples do. Yeah. Yeah. But what you're having to do is change direction because you got to get off at the next exit because you realize you're heading the wrong way on the interstate.
And the first step is to get off the exit, go under, then get back on going the other way. And that's what we're doing. We're stopping and heading back, and then we'll see how long it takes us to get back up to speed.
Yeah, Samuel, I don't know what's keeping you from doing this. You didn't say there was anything, but I'm telling you I would do it now. The baby on the way, I'd do it immediately, get the transition underway. One transaction takes care of all of your debt, and now you're changing your season. You're getting a nice apartment. You're going to rent. I just love this move now. I wouldn't wait.
I really wouldn't, especially since you've got a unit next to you that just sold for $50.
Chapter 7: How can I balance paying off debt and saving for a house?
I'd be moving on that.
Yeah. Put this one on the market for $52 tomorrow. And now, again, if it doesn't sell yet and it gets up to Christmas and it hasn't sold and she's got a baby coming in February, take it off the market. Wait till after the baby comes. Do it this time next year. You know, do it next summer. That's fine. I'm good with that.
Again, there's no emergency here, but we need to be making steps because what happens is people put – they kick the can on down the road and they put off taking the steps to move in the right direction, and that will get you absolutely burned. So I've got a friend that is a mobile home manufacturer, and he's like, would you quit being so hard on us?
And I'm like, well, you know, because they really make some very nice – Yeah. Mobile homes now. I mean, it's not like it's not like but but, you know, I don't care if you call it a modular home or you call it a mobile home or you call it a trailer. It goes down in value if you can walk up to it and perceive that it was built in a factory.
So, you know, if the home was brought in on a truck, baby, you're going to have trouble.
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Chapter 8: What financial strategies can help me achieve my goals?
Okay. With the thing going up in value because the marketplace doesn't that the marketplace does not treat that as a value increasing situation. Well, I know one that sold for. Yeah. Well, the reason it sold for that was the land under it went up. It was sitting on five acres, and the five acres went up faster than the mobile home went down. And that's why they got appreciation on it.
So if it had a regular house sitting on it, they'd have made even more. So mobile homes go down in value. Not a good thing to do. Don't buy one. Don't buy one. And I'm not mad at you if you're in the mobile home industry, but you sell something that goes down in value. Don't buy one. No. Buy a house or rent until you can buy a house that goes up in value.
It's the problem with the tiny house movement. We've yet to see that the things are going to appreciate. It's a novelty, a gimmick. And until it's got a proven track record of appreciating, going up in value, appreciating, I'm not doing it. This is The Ramsey Show. Ken Coleman, Ramsey Personality, is my co-host today. Thank you for joining us, America. Open phones at 888-825-5225.
Andrew is in New Mexico. Hey, Andrew, welcome to The Ramsey Show. Hi, how are you guys? Better than we deserve. What's up?
So my partner and I are looking to buy a home in the near future, and I was just wondering what the balance between how much I should be investing, how much I should put towards my student loans, and then how much I should put towards increasing the down payment on the house.
Good question. Okay. Well, what we teach folks is the shortest distance between where you are and wealth and stability with your money without a bunch of risk is first to clear debt because your most powerful wealth building tool is your income.
then have a good solid emergency fund, then save up a down payment for a home, and then you would start, or while you're saving up for the down payment for the home or after either one, one of those two, you would start saving for retirement. So that sounds like this. Pay off the student loan first. Build an emergency fund of three to six months of expenses second.
That's baby step three, we call it. then you would go from there and either go to baby step four, which is 15% of your income, or we call saving for a home because it's a temporary step, baby step three B. So you could stop all retirement, not start retirement and save aggressively for a home, or you could put some in retirement and save some towards a home at that point.
So that's how we teach to do it. And we've taught tens of millions of people to do that. And it works beautifully. It's not necessarily popular because everybody wants to go buy a house, but you need to get rid of these student loans because they're not going anywhere until you get rid of them. And so that's your first goal is to get your life back from Sallie Mae.
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