'Should We Buy A House Or Invest In Our Restaurant Business?' The Ramsey Show Weighs In

When deciding between buying a home or investing in a business, financial stability plays a crucial role. That's exactly the dilemma Casey from Lexington, Kentucky, presented on a recent episode of "The Ramsey Show" with hosts George Kamel and Ken Coleman.

Casey and her husband are working through Baby Step 3, which in Dave Ramsey's framework means they're building a fully funded emergency fund of three to six months' worth of expenses. Once they complete this step, they're debating between purchasing a home or putting money into expanding Casey's husband's restaurant business.

Don't Miss:

• If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it?

• Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today.

While the business is already established, Casey explains that her husband currently has partners and wants to eventually open his own restaurant. However, their financial situation raises concerns. Their household income varies significantly, with Casey's husband earning around $35,000 to $40,000 annually before taxes. Additionally, Casey stays home to homeschool their children, meaning their financial situation relies solely on her husband's earnings.

Kamel and Coleman strongly advised against investing in a new business at this stage. The restaurant industry is known for its high risk, and they emphasized the importance of financial stability before taking on even more.

"There is immense risk in starting a restaurant," Kamel cautioned. Coleman reinforced the idea of patience, advising Casey's husband to focus on his current business, learn from his experiences, and ensure financial stability before making a major move. He quoted an old saying: "If you chase two rabbits, you lose them both."

Trending: ‘Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.26/share with a $1000 minimum.

When it comes to homeownership, the hosts initially agreed that buying a home should be the next goal after completing Baby Step 3. They called this "Baby Step 3B" in Ramsey's plan—saving aggressively for a down payment before moving on to investing in retirement.

However, after learning about the couple's income, their concerns about income stability led to a key point: homeownership may not be a wise decision at this stage either. Coleman pointed out that Casey's husband's income isn't high enough to comfortably afford a mortgage, warning that an unexpected downturn in the business could leave them financially vulnerable. "I would not be in any hurry to get in a house at all," he stressed.