Motley Fool Hidden Gems Investing - Motley Fool Money: 07.15.2011

Episode Date: July 15, 2011

Our analysts explain why they're bullish on Adidas and Lumber Liquidators, why they're bearish on Pandora and Tesla, and why they're conflicted over Amazon.com, Chipotle, and a Chinese online dating site.  Plus, financial radio host and best-selling author Dave Ramsey shares his money advice. Learn more about your ad choices. Visit megaphone.fm/adchoices

Chris Hill, and joining me in studio this week from Million Dollar Portfolio, Ron Gross, For Motley Fool Global Gains, Tim Hanson. And for Motley Fool Hidden Gems, Seth Jason. Guys, good to see you as always. Hey, Chris. A little later in the show, we're going to revisit our recent interview with financial radio host and bestselling author Dave Ramsey. Earnings season has officially begun. And on next week's show, we're going to dig into some of the big companies reporting earnings. But this week, we're going to mix things up a little bit and do something we've done a

couple of times on Market Foolery, our daily podcast. By the way, if you haven't already, you got to check out MarketFoolery. Each day, we give you our take on a few of the big business and investing stories in the news. Check it out. It just takes a few seconds to subscribe on iTunes, or you can go to marketfoolery.com. Is that a daily podcast? That's a daily podcast. Right here at The Fool? Right here. Wow. This doesn't feel shameless at all. Exactly. We should talk about this. All right, let's move along. This is a little

something we've done called Yes, No, Maybe So. Each one of the guys comes to the table with three stocks, one that he really likes, one that he really doesn't, and one that he is genuinely and agonizingly conflicted about. We will start things off with the Yes stocks. Ron, what's your Yes stock? My Yes stock is a stock I have mentioned here before. It's Lumberd Liquidators, ticker symbol LL. They are the largest hardwood flooring retailer in the country with about 250 locations. They specialize in hardwood flooring. Now, the stock took a 28% hit in one day last week. I was going to say. Wasn't that after you told us to buy it, Ron?

Yes, it was. But that's not important right now. Thanks, Ron. What's important is that the company came out and they brought down guidance with respect to revenues and profitability. In my opinion, taking almost a third of the market capitalization off of the company in one day is a very strong overreaction to that news. The company is still solidly profitable. And at the current price of $18, you're really assuming there's going to be no improvement in revenues and margins. And I just think that's unreasonable. I think it's a buy here. O' Ron, I have a question. You said they sell flooring?

Hardwood flooring, yes. O' That one's with the name Lumber, right? Well, isn't flooring installed in houses? O' Yes, it did. Okay, so I'm glad you brought that up, Tim. Thanks. So, this is not for the faint of heart. This is certainly a longer-term investment that's going to see volatility both from a consumer perspective, because these are not flooring that are sold to contractors. This is a retail company. So, there's going to be volatility with respect to consumers and with respect to the housing market, so you might have to wait some time

for this to play out. But I think the current price is too good to pass up, and it's too good to wait on with the hope that maybe you could get it cheaper in the future. As much as I make fun of Ron, this is a recommendation over at Hidden Gems, which we also own with real money. From the higher price, unfortunately. We have some others in this space that I've recommended. You don't have to assume the housing market is going to get great from here, but you do have to assume that it doesn't get, you know, into another depression. And you have to be willing to wait. All right, Tim Hanson, what's your yes stock? My yes stock is Adidas. That's ridiculous. Nobody knows what that is. A little sports apparel

company you may have heard of. So obviously, Adidas is based in Germany and has been getting hit hard recently with all this hullabaloo about the European debt situation and the euro declining and these sorts of things. And while Europe is a big market for Adidas and reduced consumer demand, there will be a problem for the company. A weak euro actually benefits the company when it comes to exporting its sporting goods

and sporting apparel to the United States, to Asia, and to Latin America. And then all those profits sort of flow back into Europe and get repatriated, and they actually end up with more euros. So I think it's misguided to think about Adidas as being a European company that deserves to be part of this European contagion.

It's actually a very global company. It gets fewer than 50% of its revenues from Europe, and it's growing very rapidly in emerging markets where things like soccer and basketball remain pretty popular. What's the ticker symbol? It's on the pink sheet. It's a liquid pink sheet, but it's an ADR. It's A-D-D-Y-Y. Seth, your yes stock. That took so long.

I don't know if I can remember what it was. Oh, yeah. I talked about it before on the radio show. Still down in the dumps, but some interesting news. Enernoc, ticker E-N-O-C. This is a company that provides demand response services. Basically, it bundles together customers, you could call them. It goes out and it goes to supermarkets, other types of big, large businesses, factories.

And those factories agree to have some equipment installed, and they agreed to have their lights dimmed or their refrigeration turned down or something like that in response to a demand event from an electrical utility or grid. So in other words, oh, no, we're running out of electricity. We might have a blackout. We might have a brownout, something like that. They get on the horn. They say, Enernoc, we need this much energy. Enernoc contacts through its operations center all these businesses, reduces their demand on the grid, and things smooth out.

This stock creates or the company earns a little bit of cash flow right now, but this is a long-term play on the idea that you can't just keep building new power plants. That's too expensive, and that the data that Enernoc is gathering, which is a lot, is a competitive advantage. Now, the stock is still languishing near 52-week lows. Could be near all-time lows because it hasn't been around that long, I believe, in the future. And it's also expanding overseas. They just bought the largest demand response operator, I believe it was, and this was in Australia.

And so I think that this looks good going forward, and the regulatory environment looks good. It looks like the U.S. government is really interested in seeing this kind of a response rather than the old-school utility response, which is just simply to build more power plants. All right, let's move to the no stocks. And I know there are plenty of stocks out there. Well, we got haters in here, too. You guys are not fans of. But one way I like to think about it is, this is a stock that if a perfect stranger told you they were interested in, you'd say, look, it's none of my business. But don't go near this stock.

No Adidas for you, you'd say. Ron, what do you got? For me, it's a company that recently went public called Pandora Media, ticker symbol P, which is the internet radio company. Went public at 16, stock shot to 26. Now we're down, it's about $19 per share, which equates to a $3 billion market cap. Company's growing extremely fast from a user perspective. They have almost 100 million registered users right now. However, the company's not profitable, and actually may not be profitable, at least through their current fiscal year and perhaps beyond. Stock's trading for 15 times sales.

that's in contrast to something like Amazon, which is three-time sales, or CBS, which is one-time sales, even SiriusXM Radio, three-time sales. It's not reasonably priced. Now, if the growth continues, it could catch up to its valuation, but that's not a bet I'd be willing to make with my capital. Well, they have to figure out how they're going to actually make profits, right? Well, it's, again, one of these advertising-based companies. The revenue model is largely advertising-based. Oh, like everything else? It's not every company in the world can be advertising-based.

Every internet-based company now has to be. The smaller portion has come from subscriptions, which is a fine model. But again, everything can't be advertising-based in this world. Tim? Mine is not actually a stock, but an ETF, which is cheating a little bit, but I'll say that I actually get this question a lot from people. And it goes something like, you know, I'm really interested in investing in China, but I don't want to take the risk of buying a single company,

so how about I just buy that ETF? And that ETF they're talking about is the China 25 Index, or FXI. There is not something on the equity markets in the United States that you should steer farther away from than the FXI. And the reason for that is that about 60% of the FXI assets are in Chinese banks. Two big problems with the Chinese banks. One, over the past few years, they've made ridiculous amounts of loans, which they seem to have no idea whether or not they're good or not.

And then two, amid all of these fraud allegations and fraud exposures in China, it's come to light that Chinese banks have been actively lying to auditors about bank company balances that are supposedly being held at their banks. But other than that? But other than that, as long as you don't worry about the rampant dishonesty and the perverse incentives governing the system, these banks are fine. And the fact that as an American, even if you held the equity, you have no real claim of any kind. You have no recourse, yeah.

And with the ETF, you're even farther removed from reality. It's just something to totally steer clear of. So you're saying the two reasons to stay away from this is that it's China and it's banks. Yes. China bank. If anybody comes at you with any sort of China banking proposal, just walk the other direction. Just walk away. Just go back in time and think about Irish banking maybe or Portuguese banking or Greek banking.

Italian banking, Greek banking. American banking even. Seth, what's your no stock? Tesla. Tesla Motors. They make a good looking car. They make a nice-looking car. They're not going to be making that Roadster for so much longer, according to some reports, although they may bring out a new model. But that's part of the problem, to my mind, is that they made a splash with this electric sports car.

And I think that's the root of the media's fascination with the company. And so if they're not selling a lot of those, and they may not be selling a lot of those, they may not sell any in the next near-term period, then what's left? Well, what's left is this $60,000 design, I guess, or prototype or in-process car that is going to compete with what? I mean, some small companies like Ford, GM, Chrysler, Toyota, Honda, all of whom have vastly superior resources, arguably superior engineering. And the more I look at Tesla, the more I just don't see any technology that is all that big of an advantage. And so, I mean, the company's surviving kind of on promised guaranteed loans from the U.S. government. And I just don't see him competing in the long term. Still kind of a media darling.

I think the company's gone in five to eight years. I mean, for a blueprint of this, I would say look at BYD, which was that much ballyhooed Buffett investment in the electric car in China. And to his credit, Buffett got him low enough that I think he's probably break-even right now. But people who followed him in, I mean, at one point that thing was up 200%, 300%. I mean, they've just been crushed because at the end of the day, this whole electronic electric car sector, I mean, it doesn't make a whole lot of sense given the present technology. And that's actually something that I read recently. There was a report from, you know, it was an engineering report, and it said basically there are no problems that are insurmountable to get existing gasoline engines up into the 40, 50 mile per gallon range, that this would take a lot of spending and some investment,

but that we can meet future, even very aggressive future goals on mileage with existing technology and gasoline engines. Yeah, I mean, the clean diesel is already there. Yeah. And that's on the market already. There's a huge problem with battery power right now. They really haven't expanded battery capacity or charging to any great degree in a long time. So essentially, I mean, a Tesla Roadster or a Tesla or a sedan

is a bunch of laptop batteries hooked together. And that's exactly what's in stock. Sounds awesome. Yeah. Well, I mean, think about the company you were just talking about, Enernoc, whose job is demand response. I mean, so if there's a huge opportunity for someone to manage electricity demand, does it make a whole lot of sense to drop thousands and thousands of electric cars

onto the grid at the same time? I mean, yeah, they can charge overnight and do some other things, and there's some arguments there, but just from a big-picture macro perspective, we have an electricity shortage issue. Do we want more things running on electricity? I don't know. I don't know. The economics just don't make a lot of sense.

And the ticker symbol for Tesla Motors? It's a TSLA, I believe. All right. We will dip into the Fool mailbag and wrap up with our Maybe So stocks right after this. This is Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here in the studio with Seth Jason, Tim Hansen, and Ron Gross as we play a round of Yes, No, Maybe So. And it's time for my favorite part, which is the Maybe So part.

because, frankly, these are the stocks that the guys are agonizing over. They are genuinely conflicted. Ron Gross, I will start with you. What is your maybe-so stock? So my conflict is your enjoyment? Is that where we're going with this? Yes, I take pleasure from your pain. All right, great.

Well, my stock is Amazon.com, ticker AMZN. I'm a longtime shareholder, so don't you say anything bad about it. Well, I wish I was, too, quite frankly. So I love Amazon, right? I love it both as a consumer and as an analyst. The company does a fantastic job of offering great merchandise, great prices. They really have amazing customer service as well. Strong revenue growth, produces a ton of cash flow, $3 billion the last 12 months. Problem is, is the price you got to pay right now to be

an owner, 50 times cash flow. The predictability of those cash flows are just a little tough for me. They do have a lot of avenues of growth going forward, but I can't say for certain whether they're going to hit that growth. So, what are a couple of the potential avenues of growth that they've got? The things that pop into mind most are cloud computing, which could really be huge for them, media distribution, whether it's music, movies, TV, and they could even go traditional social media like Twitter or Facebook, that kind of thing. So, love the company, don't love the stock price, would love to be an owner one day. All right. Tim Hanson, your maybe-so stock?

Maybe so is a Chinese online dating website called Jiayuan.com. What could be wrong with that? With an awesome ticker symbol. The ticker symbol is D-A-T-E. And innocently made our analyst, Sean Sun, sign up and pretend to be Sean from Beijing to see how it's going. Did you really? Oh, yeah. He hasn't gotten many hits yet, but he didn't put up a picture.

Really? He should wear shoes if he's going to go out on dates. That's true. So the reason to like this is because it's a big market opportunity. Obviously, there's a lot of pressure in China for kids to get married, but also a lot of pressure to succeed at their jobs. So they don't exactly have a lot of time to go out. And there's not really a bar scene in China anyway to go out to. So it makes meeting singles very difficult.

And secondarily, Jiayuan, unlike many, many Internet companies in China or anywhere, has actually figured out how to make money from its users rather than just advertising. And they have a system whereby you buy virtual stamps and like virtual virtual bouquets that you send to people you're interested in or you put the stamps on the message you want to send. And so this is, you know, think about the gross margins on virtual goods. They're fantastic. The reason I'm a little conflicted about it is because at its core, the license to run this sort of business in China resides in a Shanghai subsidiary that the company doesn't actually own. And they don't disclose who owns it. So it's a virtual holding company? Well, so in order to be a matchmaker in China, you need to have like a social welfare license.

And they only give social welfare licenses to nonprofits. And obviously, if you're making money, you're not a nonprofit. They never stopped Ikea, right? So they have an agreement in place with someone who they don't disclose who lets them use their license to make money, which seems to me to be, I don't know, non-sustainable in some ways. Yeah, but look at all those other Chinese companies with weird undisclosed holdings.

And that is exactly what Jaiwen.com argued does. Look at everybody else. They're doing it too. We're fine. I don't know. Relative things always make me uneasy. All right. Seth Jason?

Would we be just better off going to China and starting the bar scene? Can we do that? That'd be fun. Let's do that. That'd be a lot more fun. If we lose our money that way, we had some fun. And if we bring over craft beer, huge opportunity. No craft beer in China.

Not a huge appetite for it yet. Well, we don't want to run afoul of any SEC regulations, but I think all our listeners should get in touch with us and maybe we put a little idea together here. Yeah, let's not get afoul of SEC. Okay, forget that. Never mind. What's your maybe-so stock?

Chipotle, right? We have it on hold. I own a pile of it. Thought of selling it at various times, but because we have some very good and very strict compliance rules here at The Motley Fool, I never was able to sell at the times when I thought, oh, it looks kind of expensive, and we didn't really want to sell it in hidden gems because we didn't own a lot, and it's the kind of company we thought could just keep growing and growing and growing, and when we have those kinds of companies, we never want to sell the whole pile.

And if, you know, this was a hundred-some dollars a share, maybe when Ron and those guys over at MDP sold it. How dare you? How dare you? And now it's $320 a share. But the company is one of the most profitable in terms of operating profits and restaurants. It's a delicious company. And they're starting this new concept.

And the first one of them is going to be an Asian concept called Shop House. It sounds like a great concept. It'll be opening in Washington, D.C. I can't remember exactly when, but I know I think most of us are probably going to make a field trip up there to check it out. We can expense that, right? We should be able to, yeah. And I think they're going to do well with that because if you think about fast food in the U.S. and fast Asian food, there may be a local place you like that's pretty good. But sort of the nationwide chain concepts of Asian fast food tend to be sort of like the greasy panda bear, you know, Chinese stuff that you see in a food court that just makes, just nauseates me to think about.

And I believe Chipotle, when they talk about their edge not just being the food or the natural ingredients, but the way they empower their staff to make decisions and to move quickly. Managers can move up, be managing stores. And I think those are all pretty good competitive advantages. So Chipotle looks really expensive, but it may be one of those companies you just have to keep holding because it does have a genuinely different way that it's doing things. And we may just still be early in the growth curve. And the ticker symbol?

CMG. All right. Seth Jason, Tim Hansen, Ron Gross. Guys, thanks for being here. Thank you, Chris. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. And speaking of stocks, if you want our take on the stocks you're interested in,

you've got to get The Motley Fool's new mobile app. You can download it for free. Just go to app.fool.com. You get stock market commentary from our senior analysts. You also get Motley Fool money and Market Foolery, our daily podcast. Coming up, a conversation with best-selling author and financial radio host, Dave Ramsey. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. My guest this week is the author of three New York Times best-selling books and the host of The Dave Ramsey Show,

which is heard every week on more than 450 radio stations by more than 4.5 million listeners. Dave Ramsey, welcome to Motley Fool Money. Well, thanks, Chris. It's an honor to be on here, man. This is cool. It is an honor to have you on because our show, like yours, is on a lot of radio stations if you back out like 420 or so. So it's just, if you use some creative Wall Street accounting and you just sort of back

it out, we're on roughly the same number of radio stations. Well, we still securitize and sell it to a hedge fund, though. Exactly. Now, I want to talk about your radio show, but first I want to go back to earlier in your career. By your mid-20s, you had a net worth of more than a million dollars. How did you do it, and what happened? Well, stupidity. It was a house of cards.

I started from nothing, and I started buying and selling real estate. And this was back in the early 80s, you know, before there was people on cable TV telling you how to buy real estate. And I grew up in the real estate business, so I was flipping houses before they even called it that. And we had started from nothing and ended up with about $4 million worth of real estate, a little over $3 million in debt, in translation, a million-dollar net worth. But it was all in real estate, and it was go, go, go, buy, buy, buy, buy, leverage to the eyeballs. And so it sounds very impressive, but it was pretty stupid the way I did it, truthfully. And you ended up having to declare bankruptcy, didn't you?

Yeah, that's the stupid part. You know, that's where we had borrowed so much money, and then the bank got sold to another bank, and some guy in another city freaks out because a kid 26 years old owes him a million and a half, and they call our loans, and we spent the next two and a half years of our life losing everything we owned trying to pay our bills. And so we had, you know, a meteoric rise and a meteoric crash and learned a lot in that process. When you do something with that kind of intensity and that kind of result, even if it's of size, of scale like that, there's always some very valuable lessons that are literally seared into your soul. So what was the turning point for you in terms of turning your finances around? Well, I've got all these letters and licenses and degrees after my name that says I'm supposed to know something about money.

And there I sat broke and bankrupt and couldn't feed my kids. And so I kind of had this revelation that maybe some of the things I had learned were wrong. Maybe. And possibly this plan isn't going to work. Kind of that Dr. Phil moment. How's it working for you? And so I really went on a quest spiritually, emotionally, academically, intellectually to determine how money, personal finance really works. And I started talking to old rich people.

I'd been young and rich. I didn't want his opinion. people that had made money and kept it. And I found a completely different spirit on them, a completely different mindset. And I found this disturbing thing called common sense. Which, as the old saying goes, is actually not all that common. Exactly. You're listening to Motley Fool Money.

We're talking with Dave Ramsey, host of The Dave Ramsey Show, heard coast to coast on 450 radio stations. Dave, what is, in your opinion, the single biggest mistake that people make when it comes to their personal finances? Not paying attention. They're not, as Stephen Covey says in the old book, Seven Habits of Highly Effective People, the number one habit is to be proactive, to happen two things. If you will listen to Ramsey, listen to Orman, listen to the fools, and not concentrate on the nuances of little tiny things where we might bump heads or something, but instead just be

learning and growing and thinking about money, you'll win. The average millionaire can't tell you who got thrown off the island, but a bunch of broke people can. Now, do you think the whole notion of paying attention to your money, because it seems like money, for all of the information we have at our fingertips, money is still kind of a taboo subject. It's kind of right up there with sex in terms of taboos. We're not really supposed to talk about it all that much. I know in my house growing up, we didn't really talk about money. Is that one of the challenges that people have to overcome? It is. And, you know, it's kind of like when you're growing up, your parents didn't talk about sex or money. You didn't think they had either. And it turns out they had

both, you know. And so I think it is. And I think the other thing that happens is so many of us I always tell audiences, if you've made mistakes with money, that makes you over 12. And so, so many people have made mistakes with money, and they seem to think everyone else doesn't. And so there's a tremendous amount of shame and guilt around the subject of money. And then there's these twerps who run around ripping people off, and so there's cynicism. So you've got these three big negative barriers, cynicism, shame, guilt. And you don't want to talk about it because you don't want to look foolish, or you don't want to get sucked into something where somebody rips you off.

and so it just causes people to really draw back into their own self and they don't have enough information then to win so how do you how do you break the ice with someone how do you talk about it in a way because you know there are some people um some of our listeners some of your listeners who probably have a pretty good handle on their personal finances but maybe there's someone in their life in their family a good friend or something like that that they think might be struggling. What's a way to break the ice and actually talk about it? Well, remember that they feel guilty or ashamed about having made mistakes. And so a real good place to meet them is right there. Instead of coming in and saying how smart you are and wagging your finger and how

dumb they are, why don't you talk about all the times that you made mistakes? And then they look at you and go, but yeah, you've got money. Yeah, I know, but I overcome the mistakes. I overcame mistakes i used to never do a budget i used to never have an emergency fund i didn't even couldn't even spell roth you know and and but i here's what i did and and but i've done all kinds of dumb things too and so don't be don't let the dumb things freeze you and paralyze you and gosh if i could ever help you in any way i would and if you'll just go in there and be comfortable enough in your own skin that you don't have to impress the people in your life and instead just love them where they are they'll start asking you questions about money and you can start answering

them then. You're listening to Motley Fool Money, talking with best-selling author and radio show host Dave Ramsey. Dave, looking at America over the last couple of years in the wake of the financial crisis, do you think that we're becoming more responsible in terms of managing our money, or is it sort of back to business and credit card debt as usual? well it's this last crash was the emotional great depression for some people meaning that i remember my grandfather from the great depression when we would go to his house when we were taking something apart we had to pull the nails out of a board straighten them out and throw them into a coffee can he learned his lessons and he was emotionally changed by the great depression

this was obviously not the great depression it was a deep recession which is a lot of difference so it was 82 and i was around then too so i'm not impressed but but but this is the first time a whole bunch of 36 year olds have ever stubbed their toe they've ever been in this kind of environment and so it's changed the way they view things and for some of them they learned their lessons and have become more fiscally conservative in terms of you know now i'm gonna have an emergency fund. Yeah, I'm getting rid of the stupid credit card debt. And then there are some people that will never learn their lesson, and they're just going to go right back to it. Now, we talked about how you managed and mismanaged your money earlier in your life.

What about now? How do you invest your money now? Do you still invest in real estate at all? I do. I love real estate, particularly right now. I think it's on sale. I think we're at Kmart and the blue light's on. And I'm buying it. I bought more real estate in last year and I bought in 10 years. Cause I just think it's a, this is awesome. And I'm going to look like a genius in a decade. Um, and of course, but I pay cash, I don't borrow money. So I just, you know, that, that limits me on how much I can buy and what I can buy. I was looking at a deal the other day that was outside my realm and I just, I still wanted it, but I'm not doing it. So, uh, and then I buy mutual funds, you know, I'm just a boring guy.

What has been the biggest shift in the way that you think about money? from earlier i i quit looking for the magic beans i quit looking for that one thing you know that that that deal and as i've met with wealthy people for two decades now doing this and literally thousands of millionaires and you guys have to i'm amazed at how simple their lives are i always thought it was going to be so sophisticated and so multi-layered with some kind of weirded out estate planning tools or something that i wouldn't be able to grasp and you know there is some of that that you need to do and understand but most of the people that i know that have 10 million dollars or more are very simplistic in their lives and in their

investing they don't have a whole bunch of things they do they don't have some kind of weird corner on something that no one else knows about they're just the tortoise they're not the hare and every Every time I read the book, the tortoise beats the hare. Coming up, more with Dave Ramsey, plus a round of Buy, Sell, or Hold. This is Motley Fool Money. We're in the money. We're in the money. We've got a lot of what it takes.

You're listening to Motley Fool Money. Our guest is Dave Ramsey, bestselling author and host of The Dave Ramsey Show, heard on radio stations all across America. All right, Dave, it's time to tap some of that personal finance expertise of yours. I want to spot you up with a few different areas of personal finance and just sort of get one or two tips on what we should be doing. Let's start with a tip for buying a house. Make sure you're out of debt, have an emergency fund in place, and have a good strong down payment. I love a 20% down at least because it avoids PMI, and never buy a house where your payment

is more than a fourth of your take-home pay on a 15-year fixed. Where do you come down on leasing a car versus buying a car? Tom Stanley, in his book, The Stop Acting Rich, has discovered that 87% of millionaires have never leased a car, so why would you? Works for me. One tip for creating a will. do it 78 of americans die without a will that is so rude 78 is that bizarre that's that's a lot of people left behind with a mess a bunch of hillbillies fighting over mama's china one tip

for and this is obviously a huge problem for many americans one tip for paying off your credit card debt the first step to getting out of debt is quit borrowing more plastic surgery get the scissors out chop the puppies up draw a line in the sand and say that's it we're grandmother we don't buy anything unless we can pay for it if you'll start there then the other stuff for getting out of debt will work and where do you come down on term life insurance versus whole life insurance A term life insurance, completely. I don't do any investing inside of a life insurance policy. Never seen one where the numbers work.

One question that we get here, Robert Brokamp, who's our retirement expert here at The Motley Fool, the question he gets a lot is about people who are trying to decide between saving for their kids' college education and saving for retirement. where do you come down uh on that challenge for people what's your advice for people on in that situation having done literally hundreds of thousands of budgets if you get rid of all your debt except your home you can do both people that ask that question are people that still have a 500 car payment and they're choosing between their kids college and a car payment they don't want to they don't want to frame the question that way but mathematically that's where it'll

come down if you actually could put me in a corner and and and create this bizarre circumstance where you really did have to choose between the two i'll choose retirement over college because a hundred percent of the time you're going to retire and not everyone goes to college and how by the way while kids are in college they can work that's not child abuse what a novel idea working while you're in college yes see i see why i'm not popular right there that just throws it You're listening to Motley Fool Money. My guest is Dave Ramsey, bestselling author and radio show host. Let's talk about your radio show for a couple of minutes. What is the most common question that you get? I get a lot of relationship and money questions. And I guess that's just

because that's what we've become known for. And so husbands and wives that are not able to get on the same page. I don't get a lot of the technical questions about investing and those kinds of things. If I do, I generally get behind that question and go into their life somewhere and find out what's going on that's causing that question before I answer it. Now, you've been doing this show for years. You're on hundreds of stations across America. What is the strangest question you've ever gotten? And you don't have to choose just one. You can pick a couple if you want. Oh man. One of the ones that I just, I absolutely, we had to go to commercial break because I lost

it was this guy who wanted to put a pay phone in his house because he could then make, he could make his calls for free. He saw that episode of the Brady Bunch too? I guess. I'm like, dude, who's putting the money in? Dude, who's taking the money out? Who's paying for the phone line? And he's just, he still couldn't get it. And I said, if you don't pay for the phone line, there's going to be an air gap. I just started laughing so hard. I lost it. I had to go to commercial. I couldn't breathe. Now, the big news over in England this week is obviously the royal wedding of William and Kate. Personally, I'm not too worried about the prince's financials, but what advice do you have for couples who are just starting out in terms of how they can manage

money together for the first time? Well, money's the number one cause of divorce. Money fights, money problems money stress it's the number one thing and if it's the number one thing you got to really concentrate on it and the dreaded b word the written budget when you can agree on your spending monthly that means you've agreed on your savings goals it means you've agreed on your dreams even in some cases identified common fears you create a level of communication cooperation unity through working together uh the preacher says and now you are one that that nothing else will do a lot of marriage counselors use a household budget as a technique to push couples together and to make them learn to compromise and to give and take together and and so that

dreaded b word as a part of your pre-marriage counseling you you should learn to do a budget together uh this daughter of mine that's getting ready to get married one of the ways he got his blessing from us was they agreed to go through our class. And it's not just because it's our class. They need to learn how to handle money. They need to be on the same page. Even if they're going to disagree with Dave, that's fine, but they need to do it together. You're listening to Motley Fool Money. My guest is bestselling author and radio show host Dave Ramsey. All right, Dave, time to wrap up with a round of buy, sell, or hold. Let's start with buy, sell, or hold Credit cards that give you frequent flyer miles.

Oh, so. Come on, they're frequent flyer miles. 78% of them aren't redeemed according to Consumer Reports. And Delta last year published that only 14% of their requested uses of them were fulfilled. All right. The GSA has recommended eliminating this buy, sell, or hold the future of the paper $1 bill. Hold? I don't care.

So you're fine if we keep it? You're fine if we go to dollar coins? I don't use coins much anymore. Do you? I mean, breaking the dollar down, a tip jar gets them most of the time. You just want to go to an all-debit card system, don't you? No, no. I carry cash, but I usually use dollar bills.

I probably still need a dollar bill, I guess. I don't know. I hadn't thought about it. You caught me flat-footed. you have skills that at least some of your listeners may not know about. Buy, sell, or hold Dave Ramsey's water skiing. Buy, I'm 50 years old and I still barefoot. You barefoot water ski?

Yeah. Is that just how you learned and you never stopped? No, no. It's an X game, man. It's brutal. is let me ask just because you know again you've been married for a long time is is that one of those activities that you do that your wife just sort of shakes your head at or if she could wave a magic wand maybe you wouldn't be doing it well it is 40 miles an hour and you do feel like you

hit concrete when you fall so yeah she probably does shake her head however uh she would have to admit that i did get her up last year on barefoot so uh you know she can't shake her head too much She's not addicted to it like my son and I are, though. That's impressive. And finally, it's coming out in September, but it's never too early for me to shamelessly promote something. Buy, Sell, or Hold, Dave Ramsey's next book. I am so thrilled with this Entree Leadership material, how we've grown our business from a card table in my living room over the last 20 years. And all the mistakes we've made, it's really funny.

So, obviously, I'm just really loving this. It's going to be a fun book. And this is, I mean, this is different. I mean, your other books have really been very sort of practical guides to dealing with money. This is a little bit of a departure for you. Yeah, a practical guide on how to run a business, how to grow a business, how to start a business. He is a best-selling author. He is one of the most popular radio shows in America.

He is the one and only Dave Ramsey. Dave, thanks so much for being here. Well, Chris, it's an honor to be with you. Thank you. This was very fun. We've just got a minute or so left. wanted to share one email we got from Rachel Shasha in Los Angeles. She writes, Hey guys, I just want to first say I love your show. Sometimes I'll listen while working out

or walking my dog and I'll get weird looks when I laugh out loud, which happens quite regularly. Anyway, you mentioned a couple of weeks ago how the Winklevoss twins dropped their Facebook lawsuit. Thought I'd point out the latest in case you wanted to update listeners. And she included this story about how the Winklevii have initiated a new lawsuit in federal court in Boston. And I think the Winklevii are pretty much never going to give up that ghost. But anyway, Rachel, thanks for the note. And people in Los Angeles, don't make weird looks at Rachel. She's just listening to the show.

She's just enjoying it. She's out there being fit and walking her dog. Anyway, drop us an email, radio at fool.com. We always want to hear from you. That's radio at fool.com. Thanks to our guest this week, Dave Ramsey. That's it for this edition of Motley Fool Money. Our engineer is Steve Broido.

Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.