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Chapter 1: What is the main focus of this episode?
Live from Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by number one bestselling author and all-around good guy, Dr. John Deloney. Taking your calls at 888-825-5225. Jump in. We'll talk about your life, your money, and try to help you take the right next step.
Jason's going to kick us off in Cincinnati. Jason, how can we help?
Chapter 2: How can I help a family member with debt issues?
Yeah, so my mother was advised by a lawyer to stop paying some of her debts. My adult sister moved in with her about three years ago, and they've kind of accumulated since then a decent amount of debt, and a lot of it is in my mother's name. And the lawyer told her just to stop making payments on it and just let it go. Why was she working with a lawyer?
I don't necessarily know that she was working with a lawyer. I think she just called a lawyer to ask for advice. No lawyer would do that. That's kind of what I felt.
That didn't pass my smell test. I would question who she got in contact with and what their actual credentials are, but this sounds like a debt relief company. That's the only people who would tell you, hey, stop paying on your debt, give me the payment instead, and we'll resolve this on the back end when you tank your financial life and we'll try to settle it. Was that the intention, you think?
No, I don't think so because they didn't follow it up with anything like that. I mean, that's why I told her. I said, Mom, it just sounds to me like they just didn't want the business and just was a quick way for them to get off the call, in my opinion.
Yeah, but they won't give you legal advice to just get off the phone like that. Like they've got a fiduciary interest, a licensed attorney to do what's best for you. And that's why they're not just going to rip off like, yeah, quit paying it. We'll talk to you later. They're not going to do that because it may put your mom in a situation like she's in now, which is pretty dire. Yeah.
How bad is the debt?
I would say probably all in all, it's about $30,000.
Okay. And then what is your sister's involvement in all of this?
So she was recently divorced, kind of really left in not such a great place, and she's had several different jobs, some that were high-paying, some that were not. She's in one right now that's not very high-paying.
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Chapter 3: What are the challenges of starting a new business?
And do you know your mother's income?
I want to say my mom brings about maybe $1,500 a month from her pension and Social Security. Combined? Roughly. I think. I think, yeah.
Wow. Yeah, there's no way they're even staying in this house. Is the house paid for? Are they renting?
The house is paid for by my family who left it in a trust to them. The only thing that they have to pay for for the house is $400 a month for the HOA fees.
I'm not sure they can even afford that, plus insurance and taxes.
They're struggling. And eating? They are struggling, too. Correct.
And car insurance and gas? I mean, I don't see a way out unless we increase the income. And I don't know how mom's going to survive with or without your sister living there. It's clearly not helping to have your sister there. But even if your sister left, I don't see a world where mom pays off $30,000 in debt making $1,500 a month barely making it.
Yes.
Will they listen to you? If you went and sat down with them and said, hey, I want to get an honest, true, what is reality picture financially? I want you all to both pull your credit reports. Will they hear you on that? Are they drowning enough to where they're willing to accept help? Or are you just concerned and they don't really care what you have to say?
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Chapter 4: How did Jawanda pay off $86,000 in debt?
And at this point, we've put pretty much everything we have into it, and it has the potential, but we're just trying to figure out some more ways to bring money into the business to try to increase that to make ends meet.
What kind of business?
It's an indoor baseball training facility.
Okay, and you said you've sunk everything into it. What does that mean?
Pretty much. We started completely debt-free. We pulled an SBA loan, ended up being about $325,000. We had a very large chunk of money in the bank when we started. Part of that was going towards our security deposit. The other we kept was about $40,000 in the bank. Now we're to the point where we have about $30,000 in credit card debt.
We've used my husband's 401k, and our entire savings is put into it as well. There were some factors that came up that we weren't really expecting for, and that money ended up going towards the business.
Was the business ever profitable to where you weren't needing to go into debt for it?
Well, I mean... Well, we're not really behind yet on the business. I mean, the money that we spent on credit cards and stuff was actually to get the business open and started. We've brought in about $52,000 since we opened December, like mid-December.
um so it's making money but i mean our lease payment's 30 000 a month so we're not making enough yeah you're not making money dang what's what your lease payment is 30 grand yeah what is your um thousand square feet what's your what's your debt overhead what have y'all uh what have y'all taken well we
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Chapter 5: Should I leave my corporate job for vocational ministry?
Yeah, when we did our projections for the business in order to qualify for the SBA loan, we had to have an entire, I mean, I had to have stacks of paperwork detailing exactly what's in our area, exactly how many kids, exactly how many teams. I don't have it sitting in front of me right now, but we do have all that detailed out. My husband's been coaching for years.
He actually has a lot of personal relationships with high schools, the leagues, everything. So he's reaching out to all those people as well.
Okay, but here's the thing. If he is, there may become a moment that you all realize you're over your head and it's not going to work. My hope here is that there's 100% more people that y'all haven't reached out to yet.
Right.
Then you've got a shot.
If there's not what, what does that look like as far as exiting a business is not profitable.
You need to sell all the assets you can on the equipment, get out of the lease with as little damage as possible, and then go get full-time jobs, both making six figures and clean up the debt of the failed business. Yeah.
And maybe, maybe reach out to softball teams too. And so you have softball, like if there's an equally large softball market in your area too, maybe that's a chance. Um, But yeah, otherwise you're selling assets and you're just going to go beg to the owner of this building. Hopefully your lease isn't a five-year lease or something. But yeah, this is in a really gnarly way.
We all need to sit down with a whiteboard and be very honest about how much you owe.
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