Chapter 1: What is discussed at the start of this section?
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You jump in and we will talk about your life and your money. Heather is with us in Nashville. Hi, Heather. How are you? I'm good. How are you? Better than I deserve. What's up? Well, first of all, thank you so much for taking my call. Sure. My husband and I are in, oh, sorry, we're in way over our heads. And so I'm just looking for some help. We are about $1.3 million in debt.
That's with two businesses, a house loan, a car loan, credit cards, and back taxes. Okay. Pretty scary. How old are you guys? We're both 28. How long have you been married? Six years. Okay. All right, cool. So how much do you owe on your home? About $48,000. Okay, and what's it worth? It's, from last we had evaluated, it's about $250. Okay. So what do you owe on your cars? $17. Okay.
This is starting to scare me. And what do you owe in taxes? $30,000. Good. Okay. I'm a little less scared than I was a minute ago, and that means we have a whole bunch of business debt. Yes. Yeah, like $1.2 million worth. Yes. What in the world? On what? Well, so we got into business. My husband was fired from his job.
Chapter 2: How much debt do the callers have?
What is it? Four years ago and found all jobs, but was never able to find like stable full time work. But we ended up starting like a summer camp in 2022, but built that with credit card debt. And then to, it's going to sound really stupid, I know, to make that stable, we bought, it wasn't a business sale, it was an asset sale. We bought basically another business's assets for the 1.2.
Oh, so the one business, not the summer camp. The summer camp has how much credit card debt? That's the one that's got about, it's still got about like $15,000 out of the credit card debt. Okay, I didn't get credit cards earlier. I just got cars and house earlier. Okay, so the credit card debt totals how much? It's about $19,000, so $4,000. So you have one business that's the problem. Yes. Okay.
And you were able to secure a loan as unemployed people with a summer camp for $1.2 million. But why? Who? Who is dumb enough to make this loan? Well, I mean, the summer camp was doing extremely well. No, but the loan was not on the camp, was it? No, sir. You don't own the land on the camp, do you? No, sir. Okay.
So basically you're renting a piece of ground in the summer, running a camp on it, and you make what kind of income on that? That makes about $200,000 a year. Okay. All right. And the business that you purchased, what was the assets? It's rentals. It's event rentals. So it's like staging and lights and audiovisual and inflatables and all that kind of stuff. All the fun stuff for the camp? Yes.
Okay. And you borrowed $1.2 million. Who loans you $1.2 million for that? The SBA. I bet they did. I bet they did. Is the camp still operational? Yes, ma'am. We still do that every year. Is there a way that you can add things for the other seasons to earn quadruple the amount, right? Yeah, I mean, that's what we've been trying to do.
It's just we've, I mean, y'all know that we've hit a point in the economy where people are trying to figure out other solutions for fun stuff or childcare, you know, so they're trying not to spend as much. So we kind of are stuck with the businesses that everybody's trying to avoid. Mm-hmm.
Not really true, but in the situation as you are in, being so overwhelmed, I can see how you could start to think that. Because when nothing goes right, nothing goes right. When life looks like a country song, it just looks like a country song. Lots of people still renting kids' stuff all over the place. The economy's quite booming in some areas. So, no, the economics at your house suck.
And so, I'm so sorry, honey. It's so scary. So scary. Okay, is there any possibility of selling the last business that you bought for anywhere near what you owe on it? No, sir, no. How do you know? Because the more it was like the layers of an onion, the more we peeled back, the more we found the deception. That you had overpaid? Yes. Okay. By how much? By like $400,000. Mm-hmm. Okay. Okay.
How much does this cost you every month to pay the minimums on this? For the business? Mm-hmm. We're operating at a cost of $50,000 a month. Mm-hmm. And you're not making that? I mean, some months we are. Some months we are. But it's both of our businesses are very seasonal. Okay. I don't know. Here's the first thing.
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Chapter 3: What led to the callers' financial situation?
okay lots of people have gone broke that's the worst case scenario so i want you to sit down tonight and accept that emotionally and look at each other and hold hands and say we got this together no matter what this is because i don't right now see how you're getting out of this but here's an idea okay okay i would sell it for whatever you can get for it if you can get 800 000 for it take it
Okay. And go to the SBA and do a short sale. Hire an attorney and tell the SBA, you get nothing, honey, if you don't take this 800. Because I'm walking and you're going to own a blow-up inflatable. Okay. And the SBA is not in the inflatable business. And so you go to the bank and you say, we're going to do a short sale on this business because we got screwed.
You participated in it because you idiots loaned us the money. And they are idiots. Okay. Anybody that made this loan should be just lined up and shot. Oh, my God. This is ridiculous. Because they've screwed you in the process. So, yeah, I'm going to short sell the business. If you can't short sell it, sign a note for the difference and scratch your way through that $400,000.
making 200 and something and you can bust through these other little debts and pay the stinking irs they're not bankruptable before you pay anybody else you pay the kgb i mean the irs okay they're first on the list so hang on we're gonna set you up with one of our coaches and see if we can get you some better advice than you got here because i'm a little short on time and i had to rush that i'm so sorry
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The rich rules over the poor, and the borrower is slave to the lender. You don't think that's true? You talk to our last caller. She turned on, when I turned on her phone, put her on the air, she started crying. $1.2 million in debt on blow-up jump houses. Wow. And then some of you want to call me up and tell me how that is how you go into business.
Because you have an idea that no one's ever done before, like fried pickles. Well, there's a reason. There's a reason no one's done it before. The more debt you're in, the more risk you take, and the more you understand the slavery aspect. And she's sitting there with some basic income coming in and nowhere near enough to even service the debt, much less everything else.
And she can see the writing on the wall that it's going to – I mean – I don't know if that kid makes it or not. They'll make it, but I don't know if they make it without bankrupting. I hope they can. If they sell it, they claw their way through the $400,000. Making $200,000, they can do that. And they clean up the other $100,000. That's $500,000 in debt making $200,000 plus. You can do that.
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Chapter 4: What advice is given regarding managing debt?
So you're not just closing the books faster, you're making decisions confidently. And when your numbers are right, that takes a lot of pressure off your shoulders. And yeah, switching systems is a big move. But NetSuite's suite success process gets you up and running fast. Go to netsuite.com slash Ramsey for a free product tour and to schedule time with a NetSuite rep.
That's netsuite.com slash Ramsey. Thank you. Our question of the day is brought to you by WhyRefi. Defaulted private student loans don't define you, and they don't have to control your future. WhyRefi helps you start fresh with low fixed rate refinancing made for real people. Go to WhyRefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Not in all states.
Alrighty, today's question comes from Jesse in Texas. They say, I'm 27, make about 100,000 a year. I have 18,000 in student loans, no other debt, and have 25,000 in savings. My old car died and I need to replace it. I'm nervous about draining most of my savings to pay cash for a car because I've seen my parents make big purchases that sent them into decades of struggle.
So I'm wondering if I should get a car loan that's in my budget and pay down excessively over the years, I want to make the choice right. I want to make the right choice. What should I do? Okay, first off, you've got a great income. Yeah, you've got the $18,000 in student loans, no other debt, $25,000 in savings. You have the money to do this in cash, so I would do it.
What I'm really focused on is the part where they're afraid of draining the savings and the part where they're comparing this purchase to something their parents did, I don't know, decades ago that caused ruin in their life. Now, if you paid cash for a car, it did not cause them to struggle for decades. No, going into debt likely did.
It would have been the car payment that caused them to struggle for decades. Yeah. The cycle of always borrowing every time I want something, and I like my savings more than I like... Yeah. That's one of those things you kind of have to play out and ask yourself, like, what's really going on here? Because when I see stuff like this, Dave, this is just fear operating unchecked in the background.
And you don't even know what it's based off of. It's very vague. It's very, I'm afraid I'm going to ruin everything. I'm afraid I'm going to ruin my life. My parents ruined their life. But there's no real clear detail there. And when that's the case, it's very hard to track it down and find out, okay, what's actually going on? So if I were them, I would look at this and say, okay, what is it?
If you're really afraid that your life is going to turn into your parents' life, play it out. What actually did they do? Because what you're probably going to find is what Dave said. They went into debt. And this caused a domino effect of events. And that doesn't have to be the case with you. And then I look at this part where he says, I'm nervous about draining most of my savings to pay cash.
I mean, we see that all the time, Dave. Why would you? Okay, start with you're driving a piece of crap now. So why do you need a $20,000 car to replace a piece of crap? You don't. So, by the way, when someone says my old car died, I'm an old redneck. I fixed the car. Right. You can fix it or you could spend a little bit more and replace it. You don't have to spend the whole $25,000.
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Chapter 5: What financial secrets should I share with my fiancée?
Okay. Okay, so you said your net worth is close to $20 million. Did I mishear you? Mm-hmm. No, you did not miss her. You said 12 to, I thought I heard you say 12 to 20. He said close to 20. Okay, so I did miss her. You said close to 20. Okay, so let's call it 20 million. What do you make a year? 700-ish thousand. Does she know that? She knows a good amount, yeah. She doesn't know that?
Chapter 6: How can I navigate discussions about wealth and prenups?
No. How long have you been together? Three years. How long have you been engaged? Uh, eight months. So you were, can I, can I ask a clear question for that long of a period of time? That means you were intentionally keeping it from her. There was a point that came, I'm not going to tell her this. Yes and no. And my question for you is why? Uh,
I was in a relationship once where I found out it started because of the money. Yeah, that makes sense. I guess I never wanted to have. Hang on.
Chapter 7: What should I do if my partner is in debt?
We're going to talk about this after the break because it's a good question. I appreciate you calling in. Hang on. The holidays can come with a lot of pressure to spend. Family, friends, secret Santa at the office, all the things. But y'all, this season should be about peace, not payments. That's a big reason why I love Fairwinds Credit Union.
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Chapter 8: How can I approach financial conversations after a loss?
That's fairwinds.org slash Ramsey. Fairwinds is federally insured by the NCUA. We're talking with Brian in Minneapolis. Jade Warshaw is my co-host. Brian has a net worth of around $20 million. He's been engaged for eight months and has not told her yet the amount of his wealth. He makes $700,000 a year and she doesn't know exactly how much.
She knows he has a lot, makes a lot, but that's all and not everything. And that's about how far we got in the conversation. He's asking how to let her know now and to talk to her about a prenup. So let me backtrack for a second. So the reason you've not disclosed this to her is because you had someone before that was after you and you realized they were only after you for your money, right?
Yeah, you can sum it up to that. How do you know this lady's not? She's, I can say, we did have a talk about debt because obviously I'm not a fan of it. And she did at one time have some debt and I... How do you know she's not after your money? Because she never asked for anything. She tried to pay me back, tried to give me money every month when I did that.
And I obviously said, I don't want it, please. Oh, you gave her some money? I did pay off her debt. She had debt, and I did pay it off. How much? And I looked at it, and it looked like $40,000. Okay. So it was some student loans, a car, and she had, unfortunately, a payday loan like you just talked about.
Okay, for someone who's so worried about her not finding out that you have wealth because she might be after you for your money, you sure did write a $40,000 check. Right. That's inconsistent. Yeah. Yeah, I look at that as I've been with her, you know, for years, and if it got chalked up that I got burnt on it, hey, I got burnt on it. How early into the relationship did you pay off her debt?
Two years. Okay. So not early, early. Mm-hmm. No. And I looked at it that if she left me, I... And did she ask? Did she ask? No, she didn't. Okay, you did say that. You didn't offer to pay it back. All right. So, okay, here's the thing. Whew. What makes you, so just the fact that she's never asked you for anything and offered to pay that back makes you think she's not after your money?
Yeah, I just think I would have seen it in the close three years that we've been together. She never came to me for money. So how do you react to this statement? You should have told her before you asked her to marry you. Okay. Because you shouldn't ask someone to marry you that you can't be honest with and transparent with that you don't trust. Okay. So I think the conversation starts with that.
I owe you an apology. We should have talked in detail about our finances before we got engaged. And I didn't do that because I was afraid because of this other person, the way I was treated before. I don't think you're that person. And I didn't know how to handle this, and so I'm sorry. Now I've got to do something that I should have done eight months ago, and that's unpack for you what I have.
Yeah, no, I truly agree. I think that's the way you have the conversation, and you have it. You have 24 hours, my man. Okay. No more dreading this. No more thinking about it. This is cause you can't sleep. You're fretting about this. You're worried about this. Quick question. Then I actually won't see her. We actually, uh, I'm an American and she's a Canadian. So I traveled back and forth.
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