Clifton
Appearances
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
Hey, guys. First, thanks for taking my call. Been listening to you guys for about a year now, and me and my wife are completely on board with this. We paid off about $230,000 in debt so far. Wow. Congratulations.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
No, no, no. My uncle retired from the family-owned business and passed ownership to me. It's a business that's been in business since 1965, and we do really well, and I've managed, just because I'm younger and can work harder, I've managed to triple the revenue from the last few years that he was getting in. Wow.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
Incredible. Yeah, it's going really well. And my wife's a DNP, so she makes really good money, too. Oh, wow. And we live fairly crudely.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
Right, but that does not get rid of the anxiety and stress I have with the debt that I have left, which is the reason for my call. We built a house two years ago. I'm not really concerned about that. We sold our old house and built this one on a property we bought. The business, though, as soon as I took over the business, I reformed as an LLC, got the S-election.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
So that I'm not taxed so heavily and I pay myself a salary from that business, which of course is taxed as personal income. There was a loan that my uncle made to me, basically gave me the business, but I had to buy the complete inventory. And he was very, very nice to me and gave me that on a seven year loan at two and a half percent interest.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
Um, and, and, uh, I've paid that down to about 240,000 is what I have left out on it and five years left to pay on it. Um, so this is my question though. Um, uh, I'm paying myself a salary. So I get that every week. The rest of the money, because we're an S, taxed as an S, is being kept in the business as retained earnings.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
And it's pretty significant that the business, I think, retained earnings this year alone was close to 200 in retained earnings.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
And this is the question I'm concerned about, just taking all of that money and paying the debt at once because then I'm kind of missing that safety that a business needs for a few months of operating expenses that things before. I'm kind of paranoid, right? Because I've had the business for two years and I'm concerned that at any moment work could dry up and I owe all this money, right?
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
No. The other debt I told you I paid for, we cut up our credit cards as soon as we started listening to you. We cut up our credit cards. We have no car notes. The only thing we have is the mortgage and the business debt.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
As far as like for tax purposes?
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
Business starts January 1st each year.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
I put all of the business money into that except for what I pay myself. I know.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
No. No, it's done. Well, I guess you could say it's done daily. I'm not understanding the question. Okay, so here's my point. They go to a savings account for retained earnings. Yeah, so let me— Those are paid each month.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
Probably $500,000. Okay. That costs a good sold and everything.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
I pay myself, well, between me and my wife, it's right at $200,000.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
I think so. Well, okay. My wife has a very small part of the debt we've paid off already with student loans from when she went back to school to get her doctorate. And I think I have $21,000 left to pay on that, but it'll be paid within 30 to 60 days.
The Ramsey Show
Getting Your House In Order Is The First Step To Financial Success
That's my question. There's a difference here between personal expenses. I can begin taking the margin that we have in our personal budget and applying it to the debt I own the business to.