Real Estate the Ramsey Way - My Financial Advisor Doesn't Want Me To Buy A House

Episode Date: April 7, 2025

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Dave Ramsey here and welcome to another episode of Real Estate, the Ramsey Way, where you'll learn how to make smart home decisions, avoid costly mistakes, and navigate homeownership with confidence. We've got Chuck in Pittsburgh, Pennsylvania. Chuck, what's up? Hi, Jade Maraciel. Thanks for taking my call. I have a question about purchasing a house. I'm 68 years old. I plan on, in married, I plan on retiring before a year end. And we followed all your Ramsey principles, and my wife and I have accumulated a nest egg a little over $4 million. Nice. Wow. Yeah, we met with a financial advisor just to see what they might be able to do to help us plan retirement. And we had our money up on the whiteboard, and I had mentioned that my wife and I were planning on pulling a million dollars out of retirement to pay cash for a house.

and they told me that I would be making a mistake doing that, and I ask why, and they said that because you would be on Medicare, and your Medicare payments would go from 200 a month to 700 a month. I've always lived my life debt-free, and they were trying to convince me to take a mortgage out to pay for the house. Of course they were. I was curious to see what your opinion was. Chuck, I think your gut is correct on what you guys would want to do. I think that's exactly what you would do. And yeah, and a financial advisor for different reasons is going to maybe steer you in that direction. One, that, you know, they look at the spread usually and they're like, well, if you keep this in, you know, in good mutual funds, you know, you could make, you know, 10 to 12 percent versus a mortgage right now is 6 percent. So you could be making a 6 percent spread mathematically, yada, yada. Some do it because they want to keep your money

and they're making money off of your money and they don't want to see that go. But for some financial planners, debt is definitely a normalcy and it is seen as a tool. And that is why there are a lot of them that we do not agree with wholeheartedly, which is probably the ones you're talking to.

Because the Ramsey Way is different and it is weird. It doesn't mathematically maybe make sense to a financial planner, but they're not calculating peace of mind, Chuck, you know, when you are retired with $3 million sitting in investments and you got a paid for house. Like, to me, that's living the dream because there's zero risk in it.

And so I would, I would, yeah, check out SmartVestor Pros. You can find one in your area if you go to Ramsey Solutions.com and sit down. There are ones that have been embedded by us and that we, you know, recommend. And I hope this one wasn't one of those. Well, no, and actually my gut was what you just told. me and this morning I put my information in for an ELP and I had a response from five people within an hour within an hour. I love it.

And emails, yes. Good. Well, I would sit down with them. Good, yeah. And go interview, you know, two or three of them and get a gut check on how you're feeling about them. Because I think to your financial planner, you want to enjoy and like trust them as a person, right? And I think a personality match is a big part of it too.

Like it's someone that, yes, you want them to have the knowledge to be a, you want them to have the knowledge to be able to help and discern your situation the Ramsey way. But you also want to enjoy them and have that level of rapport. And so meeting with a couple of them, I think, is good. And Chuck, well done. Can we just applaud you? I mean, that is like unbelievable. You've literally done it all.

I'm like, you're at the pinnacle. Yeah, it's amazing. Excellent. Very, very good. Thanks for the call and very well done. Today's question comes from Antonio in Washington, D.C. He says I'm 26, finally graduated as an electrical engineer, and I'm about to start working in 2025, so I'm trying to plan out what happens in the next year.

One of those concerns is leaving my parents home and finding my own place. Good for you. My worry, however, is that I am not sure if I should do this by renting or by buying a space. I know the consensus is never rent, but I see it as a stepping stone of sorts, a place of your own while not being able to comfortably purchase a property yet. Very smart. This is considering the mortgage, the maintenance, taxes, etc. My idea is to rent for one to three years while I build my career and income streams

and then consider buying a small property to call home. Is this the correct way of thinking or are there things I'm not thinking of? Antonio, I think you hit the nail on the head. You're a smart dude. He thinks he's the crazy one. In reality, everyone else is crazy for telling you that renting is a waste of money. You should need to buy, buy, buy, buy, buy, buy. Full and sync on this one.

I know. Thank you, George, for the setup. He's spoken like a true electrical engineer. He's like, I don't know. The mathematics, they're not computing. You're like, you're right, Antonio. You don't need to buy a house just because you're out of mom and dads. Rent for a while.

Get out of debt. Get the emergency fund in place. Get a nice, healthy down payment. And then once you feel ready, financially and emotionally, go ahead and buy a small property to call home, as he says. Very good. And here's the other thing. You don't know what's going to happen with relationships in the meantime.

You might get married. and she decides, I hate this little house that you bought. Uh-oh. That's what happens. So I think it's wise to wait and see a little bit as, you know, there's nothing wrong with buying a house at 29 instead of 26 or even 35 instead of 30. Well, the good news is we've got a real estate home base for him waiting on him when he's ready and it's waiting on you too. If you're thinking about pulling the trigger on a home, we've got a wonderful real estate home base. You can find it at Ramsey Solutions.com slash real estate.

They can actually help you if you're buying or selling whatever you're really. estate needs are. It's a nice little hub there that has everything you're looking for. That's right, including, you know, there's tools, resources, calculators, articles. But I also did a course, Jade. Yeah. For first time homebuyers. Tell me more. Check that out. Well, there's, I walk through, you know, little, little quick videos to help you understand what it's going to take, what all the pieces of the process are. Oh, I love a video. It's the course I which I had before I bought my first home. I love a video. It's different when you hear somebody saying it versus trying to read it. I don't know why when it comes to things that have those that many details. Oh yeah. And our team did a great job,

making it visual, making it clear, helping you understand all the, what the heck is escrow? What's going on there? We break it down for you. Go to ramsysolutions.com slash real estate to get access to all of those resources. You probably made it funny too. We tried. There was a men and black reference that I'm very proud of in that, including VHS tapes. So, you know, I've got to make it fun. If I'm involved, I want a pigeon hole myself as a guy who cannot be boring. Good job. That's what I try to do. Thank you.