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Chapter 1: How should I handle rolling credit card debt into my mortgage?
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. Rachel Cruz, number one best-selling author, co-host of the Smart Money Happy Hour, Ramsey Personality, and my daughter is my co-host today. Open phones at 888-825-5225.
Shane starts this hour in Baltimore. Hi, Shane. Welcome to the Ramsey Show.
Hey, Dave. How you doing?
Better than I deserve. What's up?
All right. So I feel like I know the answer to this question, which I hate, but I wanted to hear from you. Um, so I recently purchased a home from my grandmother who passed. Um, and I knew it was essentially a steal to buy because I was going to get it way lower than it's actually valued at.
So long story short, I have equity in the home, which is awesome, but I've been struggling internally to figure out if I should roll my credit card debt into that home, into the equity of the home. and then pay that off with gazelle intensity. I have $26,000 in debt, credit card debt, and I make $85,000 a year.
You're single?
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Chapter 2: What considerations should I make when drafting a will?
I'm single. What's the answer to your question? You know it.
I know what it is. But it would free up $400 a month for me if I were to roll it. But it's funny, I tell my mom, I'm like, My problem is not the debt. My problem is that I'm not disciplined enough to knock it out. Like, why do I need to consolidate it into my equity?
And that answer is what, Shane?
That, I mean, I feel like I'm getting to a point where... The answer is that I shouldn't do it. I know exactly what I should do. I wanted to make sure it was the right thing to do.
Let's kind of back up for a second. $400 a month is not true. That's $4,800 a year. You're not saving that on $27,000 worth of debt in interest. The only way you're saving $400 a month is if you're going to be in debt longer, which is absolutely not your goal. No, it's not.
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Chapter 3: Is it realistic to build wealth at 70 years old?
Okay. So you're just trying to dumb this down to make it easy, and it's not going to get easy. You know, this is Band-Aid fast off versus Band-Aid slow off, and you get gangrene.
True that.
Gross. Hey, Shane and I are okay, Rachel. You don't have to worry about it. If you don't want in, it's okay.
I just have, like, Google imaging.
oh shana okay so what's the so here's the deal yeah get fired up and lay it out lay out the math and go what is it you make again by the way 85 okay so 27 so you're by yourself you don't have to talk anybody into this you're how old 29 okay one year you really think i can do it in one year i'm positive you can do it in one year I knew you were going to say this. And here's the problem, Shane.
You're going to have no life for a whole year. All you're going to do is work and eat ramen noodles and pay debt. No going out, no eating out, no vacation. Work, work, work, work, work, work, work, and you're done in a year. See, this is only about $2,300 a month, and you're done in one year.
All right.
Shane, what is the debt? I mean, I know it's credit card debt, but was it just life?
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Chapter 4: Should we move in with my in-laws to save money?
It's life over about eight years.
So that's what's going to be hard, Shane, is it's not like this is just a car loan and you made one purchase that puts you in this. These are multiple decisions, you know what I mean, over life. And you're used to living that kind of lifestyle of $26,000 above life. what you've been making. So it's going to feel even more sacrificial in a sense. So just as a heads up.
Here's the thing. If you'll do this, it'll make you a multimillionaire. And here's why it'll make you a multimillionaire. Here's why. Because any time you get ready to be chaotic and sloppy and disorganized and slip back into credit card debt, you will remember the year from hell and you will not let yourself do it.
day but if you wander your butt just kind of lollygagging along out of debt you will wander back in because you but if you have to pay a price i mean if you got the the year from hell in your consciousness and you go crap no i'm not buying that there is no way i'm not going on a month without a budget i remember where that put me before oh
And this is this is it's settled in your brain, settled in your body, settled in your spirit. And that's why I'm telling you to do it. It's not just because it gets you out of debt and it's not just because it's absolutely the highest probability you will win. But what we're doing here is resetting the way you handle money for the rest of your life.
Yeah.
and that's going to make you it's going to make you're only 27 29 gonna make it 10 million dollars i mean i promise you the math says it because you know how to make money and you've not been horrible with money i mean you're not like as bad as like congress or something i mean you're not you know you're not you're not you know you only got 27 000 but it's just sloppy it's like the the enemy of the
intense.
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Chapter 5: What financial advice is given for managing debt?
This is not to shame Shane, but $26,000 in credit card debt from just life, though. It's going to be a shift, Shane. You've got to hear that, but it needs to happen.
It wasn't like this explosion of stupidity. It was gradual. Like you said, that's the truth. The danger of that is the enemy of excellence is not horrible. The enemy of excellence is okay.
Complacency.
This is good enough. You know, and we used to say this redneck saying, I don't know if they say this kind of stuff anymore, close enough for government work. Have you ever heard that one? Close enough for government work. Nope. Which means half but do your job. Okay. That's what it means in the neighborhood I grew up in. And so, you know, it's mediocrity. Yeah.
You know, and so and, you know, Shane, you're fighting what all of America is fighting, right?
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Chapter 6: How can we effectively budget for financial security?
This slip into mediocrity. And you've got the ability here to completely change that. And the cool thing is you already knew every bit of it before you called here. Now all you got to do is go do it. I'm proud of you, man. Proud of you. It's great, Shane. I can't wait to do your debt-free scream with you in a year when you hate the old Shane so bad that you will never go back to him again.
And you were breaking up with him, never going back with him. And so we're going to be organized, diligent, have money budgeted for fun, money budgeted for luxuries. And we're going to go become very wealthy and outrageously generous. And that's in your future. You could be a millionaire in 10 years. You really can be from where you're sitting right now.
You're in really – mainly because of headspace. Your headspace is excellent.
As long as the gangrene doesn't get them. Rip that Band-Aid off, Shane. So gross.
Watch out for the amputation.
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Chapter 7: What are the implications of leaving assets to my spouse versus my children?
This is The Ramsey Show. Every team that wins has a good offense and a good defense. Money's the same way. Offense is you get out of debt, you invest, and you're generous. Defense is insurance. You need good insurance. You need to protect your finances from the big emergencies. There's 10 kinds of insurance coverage you might need based on what your life looks like today.
And we built a tool called the Coverage Checkup, which shows you the types you need to add, the junk you need to drop, and the adjustments you need to make. And we'll even rank your coverage list by importance, email it to you, and connect you to a Ramsey-trusted insurance provider to help you get this new plan in place fast. None of it costs you a dime.
Matter of fact, you're probably going to save some money as a result. Go to RamseySolutions.com slash checkup. Completely free. RamseySolutions.com slash checkup. Do not let emergencies sneak up on you. Russ is with us in South Bend. Hi, Russ. Welcome to the Ramsey Show.
Hi.
Chapter 8: What steps can I take to improve my financial situation?
Thanks so much. Dave, we are a young married couple in our early 70s, and we're financially free. And at this stage of life, we've got about $80,000 in cash. We've gone through Financial Peace University and designated the emergency fund out of that. But my question is twofold. What's the best thing to do with that money? Obviously, sitting in the bank is probably not the best thing to do.
The second question is, is the goal of wealth realistic at this stage in our lives?
We have to define wealth, extreme wealth, unless you make really, really good money. No, because time is not on your side. But can we build a nice nest egg, a plump one? Sure. Sure. And, of course, that depends on a whole host of other factors and variables that you can control, some of, and some of you can affect. But, yeah. So...
But, I mean, $60,000 invested in good mutual funds, if it averages 10%, would double every seven years. So it would be if you don't add anything to it. So it would be, you know, if you're 70, when you're 77, it would be 120. And if you're 84, it would be 240, give or take. But, I mean, that's pretty close. Okay. And that's if you don't add anything to it. Now, of course, you've got income.
You've got other things going on. But, you know, a quarter million dollars as a plump little nest egg in your early 80s is certainly better than a whole host of people. Absolutely. And, you know, the neighborhood I grew up in, we called that rich, but it's probably not really rich.
No, that's great. So mutual funds would be the way to go in your opinion.
If you're going to leave your hands off of it. Yeah. If you can leave your hands off of it, you have an emergency fund in addition and, uh, you have income to live on.
Yeah, we both, uh, we, we pull in about 60 grand a year, uh, about 30 a piece. Uh, at this stage, I've got a financial stream from my old insurance business. I live on residuals and occasional referrals. Uh, she also is on social security and, uh, She's working at an accounting firm, and she does a little part-time work for that.
So this is semi-retirement for us, and there is a strict income streams for both of us along that amount of money.
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