The Ramsey Show - App - A Lawn Mower Upgrade Is Not Called an Emergency! (Hour 1)

Episode Date: July 3, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is done, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It is a free call at 888-825-5225. That's 888-825-5225. Bruce is on the line in Kansas City. Hi, Bruce. Welcome to the Dave Ramsey Show. Hi, good day, Dave. Thanks for having me on. Sure. How can I help? Well, I'm a grandfather.

Our oldest grandson is going to be going to high school. I listen to your show religiously, really, and a lot of the student debt has got me concerned that at the end of his college career, he's going to be strapped for the rest of his life with debt. So we're trying to figure out a strategy to get him involved, get his folks involved, plotting a correct course at this early age, be free of debt, been through financial peace, read your book. His mother and father have been through financial peace. But it's just putting all the pieces together to make it work. Okay. Well, good for you.

That's pretty cool. I'm Papa Dave myself, and so we don't have any up at that age. Our oldest one's five as far as grandbabies go, but I appreciate that. So Mom and Dad have been through FPU. You've been through Financial Peace University as well. That means everybody's willing to talk about this, and you're not really butting in. They're actually wanting your input, right? Well, I mean, they all know that we've got 529 college accounts for the kids set up and

things like that. Oh, you do? They're involved in that way. So there's some money set up. How much is in the accounts? Oh, about $3,000 to $4,000. Okay. So not so much.

Okay. No, not so much. We need to probably load that up if we can between mom and dad and you guys to the extent you can do that to help them. That's great. Well, what I'll do is, one is I'll send you a book for the youngster.

It's called The Graduate's Survival Guide. The Five Mistakes You Can't Afford to Make in College. Obviously, student loan debt is one of those. I'll send you a copy for him for the high schooler. It's written by Rachel Cruz and Anthony O'Neill, Ramsey personalities and bestseller. But there's four or five things you can do if you want to avoid debt and you're going to college and you don't have any or don't have much money. The biggest thing, number one thing thing by far and it really trumps

all the others is college choice where he chooses to go to school will affect his finances for the rest of his life uh and it is if you don't have a lot of money choosing to go to a super expensive school is straight up stupid because there's no roi on it there's no proof that where you go to school causes you to be successful there is not any research that says that there's a lot of snobs that believe it but it doesn't really turn out that way out here in the real world so uh going to an in-state state school or in-state tuition is usually your best bet price-wise. If he can get scholarships or something, that's fine. I don't care where he goes.

I'm not against those other schools. You just can't afford to pay $50,000 or $60,000 a year when he can go in your state for $10,000 a year. And so you pick, and that's how much difference there is. It's bizarre how expensive some of these places are. So college selection is number one, and a subcategory of that is it doesn't hurt anything to do the first year or even two at the local community college for $2,000 a year and get your basics out of the way. You want to do careful planning and make sure they are going to transfer to your field of

study and to the university that you intend to go to. But I went to MTSU, Middle Tennessee State University, my first year of college, and I transferred to the University of Tennessee for the following three years. Back in those days, MTSU was one-third the cost, and I stayed at home and drove back and forth. And you know what I tell people, which is the truth? I graduated from the University of Tennessee. My degree is from the University of Tennessee.

However, one year of that study was not there. I don't have to bring that up, and I'm not ashamed of MTSU, but you see my point. You don't have to go, oh, and I'm not ashamed of MTSU, but you see my point. You don't have to go, oh, I did two years of community college, and then I got my degree at Kansas. Well, you get your degree at Kansas is what your answer is, right? And so nobody gives a rip where you did your first two years of core stuff. So college cost is the big one. The second one is go ahead and just tell Junior plan on working while he's in school

and not minimum wage flopping whoppers. Okay, you can't make any money flopping whoppers. You've got to go get something where you're making $15, $20 an hour, part-time, self-employed, whatever. I don't care if you're cutting grass, blowing leaves, walking dogs, or babysitting, but you can make $15, $20 an hour in the college world out there if you'll watch what you're doing and not just accept some no-brain, minimum-wage job.

And you don't want to do that. You can't afford to. He's got to make a little money. So work never killed anybody. And by the way, students who work 20 hours a week, studies have shown they have a higher GPA, not a lower, because they're working instead of playing beer pong in their off time and it changes their whole setup and it's awesome they ain't got time to get in as much trouble is what it really what it comes down to

the the second thing or the third thing then is the act take the test over and over and take classes on how to take the test. It's a good investment. Spend the money to learn how to take the test. Because the higher a score you get, the more you qualify for scholarships. Live at home if you can. Pick a cheap school. If Junior and Mom and Dad will let you speak, Bruce, as the grandpa into this situation and do those things that I just outlined, he can go to school. $10,000 a year plus room and board.

You can make $1,500 a month delivering pizza four nights a week. Ta-da. $1,500 a month, by the way, is $18,000 a year. Tuition is $10,000 a year. Did we just go to school? I think we just went to school. Okay. So, you know, you just have to think and use your brain.

And, of course, Mom and Dad and even Grandpa need to speak into the field of study. Not do something you hate doing with your life, but do something that actually has some application. This idea that if I follow my passion and I get a degree in left-handed puppetry, everything's going to work out. It's not. It's not. There's no jobs for left-handed puppetry everything's going to work out it's not it's not there's no jobs for left-handed puppetry it's not that's stupid to have a four-year degree in german polka history that's just straight up stupid there's nobody hiring german polka history majors okay so you

got to think about and there's no application even for the knowledge in the marketplace that is broad enough to make a living self-employed. So you just got to think through this. And so think about what you're studying. And yes, you need to have a passion about it. Yes, you need to have a thought about it. Yes, you need to do these things. But it, you know, it can be done, folks. It can be done.

And this idea that this generation is doomed to student loan debt people saying all this crap it's just not true it's all about choices decisions beginning with the end in mind being a grown-up even though you're not yet this This is The Dave Ramsey Show. Most people's money problems come from not paying attention. That's why before I spend a dime of my money on something, I do the research and make sure it's going to live up to what it claims. Recently, I got a great pair of sunglasses from a company called Shady Rays. When you're looking for sunglasses, it feels like your options are limited. Name brand sunglasses cost too much and the cheap knockoffs are ugly and really don't protect your eyes. Discovering Shady Rays is a game changer.

With Shady Rays, you can count on premium sunglasses that protect your eyes and are affordable. They give people the best overall value in sunglasses. They also replace your shades with a brand new pair if you lose or break them from day one of your purchase. And they guarantee your sunglasses for life. Plus, they offer an exclusive for Ramsey Show listeners. Go to ShadyRays.com and use the code RAMSEY for 50% off two or more pairs. That's ShadyRays.com, code RAMSEY. Thank you. Cassandra is with us in Boise. Hi, Cassandra. How are you?

I'm good. How are you, Dave? Better than I deserve. Welcome to the show. How can I help? So, my husband and I, we kind of have an income issue. We're just really not making much. We're kind of almost paycheck to paycheck right now, and he wants to make a better income but also do something that he loves, and he really loves real estate ever since he was in high school, and he wants to start wholesaling houses,

and so I kind of wanted to get your opinion about that and he wants to start wholesaling houses. And so I kind of wanted to get your opinion about that and see if that's a good idea. Yeah. How old is he? He's 27. Okay. All right. And what is his background in real estate?

Well, he doesn't really have much of a background in real estate. We bought a house last year, but she just... You bought a house to live in last year or to flip? Well, we're living in it, but it was kind of a beat-up house that we've kind of fixed up. Okay. Is it for sale? It's not for sale. Okay. So it's your home. Okay. So he's not in the wholesale business. He bought one house and you live in it. Well, yeah, he's thinking about doing wholesaling.

Yeah. Okay. Well, wholesaling is very, very difficult for the uninitiated. It is not a point of entry for most people. There's two ways to do wholesaling. One is to actually buy the real estate and resell it quickly. The other is to tie the property up with an option or a contract to purchase and then sell that position to an investor. For instance, you found $100,000.

It's very difficult. I mean, I did it, but I grew up in the real estate business, and I've owned hundreds of pieces of property, and it's what I did some of after we went broke years ago. I didn't have the credit or the money to buy a house, so I just would tie up one and resell it to another investor. But I knew all the investors in town, and I knew real estate like the back of my hand because I'd grown up in this town doing real estate.

So I have a huge background in it. And so I was able to pull it off, and I made pretty good money. I made like six figures doing it back in the 80s. But it's a very difficult game. But it is something he could do on the side. He wouldn't even have to give up his day job to try it. Would I quit my job and go try to wholesale houses with what you've just outlined for me? Absolutely not.

I don't think I would let him do that. Yeah, but is it okay for him to try to contract for something, and if he doesn't close on it, there's no harm, no financial harm. But he has to find an investor to buy out that position. So he buys a $100,000 house for $75,000, and he tries to get an investor to buy it for $80,000, and he makes the five spread. That's a wholesale flip without actually closing. And if he can pull that off, there's no downside to trying that um i'm just going to warn him

that it is a lot more difficult than some weekend idiot seminar series makes it sound like yeah it's like a real thing that you have to go learn about and do you don't just walk out there and everybody can do this and everybody can buy houses at pennies on the dollar and resell them just pay me 3 500 for my weekend seminar that's horse derves is what that is okay so but if you can get with it if he can get out there and learn it and just try it and again be very careful to not harm someone in the process or get yourself in debt buying houses that you can't do, then I'd be fine with him doing that as a side gig, but he needs to make a living during the day while he's doing that.

Yeah. Okay. There's no downside to trying it, is there? No. No. Okay. I really just want him to do something that he would love and enjoy. Well, I want him to do something he'd love and enjoy, too.

I don't want him to be broke, though. Yeah. His first goal is to feed his family. His second goal is to feel all lovey and enjoyy. Right? Yeah. I don't really give a crap about his passion until the light bill's paid. Once the light bill's paid and the food's on the table for the kiddos,

then I'll worry about your passion. I mean, this is basic Maslow's hierarchy of needs. You take care of safety and security and existence first, and then you live your passion. There's no reason to say you can't live your passion, but, I mean, just putting everybody out to dry because I want to live my passion, that's immaturity. But I think he can try this. I don't think there's any downside if this is what he wants to do. It's what I wanted to do. I went and learned it and did it.

He can learn it and do it, but it is harder than it sounds. And, you know, I would lean into it and learn to do it. Natalia is in Los Angeles. Welcome to the Dave Ramsey Show, Natalia. Hi, Mr. Ramsey. I just had a quick question in regards to life insurance. My husband and I are on steps three and four, kind of at the same time, and here's the reason why.

My husband's getting ready to retire in a couple of years, and we also have two small children, six, four, and a third on the way. And my question for you is whether or not... How old is he? I knew you were going to ask that. He's 53. So he's getting a retire at 55. So he's going to quit working with babies.

So the reason why is he's got 25 years on the job and he's got a pension coming in. Yeah, but he's just going to... I mean, I get he's quitting that job. Is he not going to go on to another career? He is. He's going on to another career. What? I don't know just yet.

But based on his pension, he's going to be, right now we're currently at $116,000 a year. So his pension would bring us to about $93,000 a year. And then he also has a secondary 457B of $250,000. And so my question for you is this. So the pension is essentially able to roll over to me if something were to happen to him. So we can choose whether it's the full amount or if it's a certain percentage. And what would happen is that he would get less based on the full amount or if it's a certain percentage and what would happen is that he would get less based on the full amount throughout his lifetime so do we need life

insurance in that in that case for him i know i need life insurance but i'm i'm specifically looking at costs for him because life insurance is so expensive for us at this point. The point is, does he, do you need money that you're not going to have if he dies? If you need money that the assets and the pension are not going to provide you, you figure out what you're going to need, that the pensions and the retirement accounts are not going to provide you, and you multiply that by about 10, and that's the amount of life insurance you need. It doesn't sound like you need much if you need any at all.

But I go back to your original statement. I think you're doing this wrong. You should stop saving for retirement until you get your emergency fund in place. He's not going to quit working. He's going to quit working at that place. Okay. And he's going to have a $90 place okay and he's going to have a ninety thousand dollar income if he sits on his butt okay he's not going to sit on his butt so my next question to you is

well my next question just flew out of my head i I'm sorry. That's okay. No problem. So here's the thing. Do that. Get your emergency fund in place. Then start piling money on retirement. And the last thing I want you guys to look at is this big, huge pension that he's got. Do you have the ability upon retirement to take neither the payment amount nor the survivor amount and instead take a lump sum and roll it to an IRA. If you do, I might consider doing that and him getting a job

because I think you're going to end up better long-term. Between now and 59 1⁄2, you're going to struggle, but better long-term if you do that. You're going to end up with more money if you can take a lump sum and roll it over. That would be my first choice for you. So it doesn't sound like you need much life insurance, number one. Number two, you need to stop saving for retirement until you get your emergency fund in place. Then start saving for retirement.

Number three, check on the possibility of rolling that as a lump sum. You'll end up with more money and it will probably do away completely with any need for life insurance if you can do that. This is the Dave Ramsey Show. We'll be right back. People all over the country are discovering a faith-based and budget-friendly way of meeting health care costs through Christian Health Care Ministries. Christian Health Care Ministries, or CHM, is a non-profit organization that helps members carry one another's burdens with health care expenses. And they have successfully shared each other's medical bills for nearly 40 years. See if CHM is right for you by visiting chministries.org. CHM is a proud sponsor of Dave Ramsey Live Events. Sarah is in San Francisco. Welcome to the Dave Ramsey Show, Sarah.

Thanks, Dave. Thanks for taking my call. My pleasure. How can I help? Okay, so I just discovered you just about two weeks ago. And my husband and I, we are about $55,000 in debt. And I'm really excited to get started. We're on baby step two.

Good. But my dilemma is around, so my husband and I, we're renters. We've rented for the past seven years, are the owner passed away and, uh, left the house to her grandchildren. So they are selling the house and they want us to buy the house. Um, and the plan was to buy the house, uh, even though we have no down payment and, uh, we're in debt so bad the way that we are. Um, but because we live in Northern California where it's really, really expensive to live,

my husband feels that the house is a good investment because it is, you know, we'd be getting it, what he says is under market value. I don't really know that that is a fact, but he is super handy, so he feels that he'll be able to fix up the house over the time that we're living in it. So my question to you is, is it wise for us to buy a house that I'm not sure we can afford and slow the process of us getting out of debt? I mean, we obviously have to live somewhere, or should we consider moving and renting somewhere else

or moving out to a different location entirely? Most financial questions have at least two answers to them. And one of them feels good today but hurts you long term. One of them feels bad today but causes you to win long term. Does that make sense? Yes. And the people that are wealthy do the one that feels bad today but causes you to win long term. Right.

And that is you're moving. Okay. You can't afford this house. You know you can't afford this house. You told me three times in the conversation you can't afford the house. Your husband wants to fix it up. He doesn't want to go through the pain of moving. He thinks he might smell a deal, but you guys are broke.

Right. You need to go rent something as cheap as you can possibly rent. Increase the length of your commute if you have to. And get your debts paid off and build your emergency fund, and then start building towards a down payment. What's your household income? We'll take home monthly. We take home around $7,000 a month.

Good. Okay. So you're making about $110,000, $120,000, right? Yeah, that includes my second job, which, you know, he wants me to quit because I'm driving out. How old are you? So I'm 37. Okay, so you have to ask yourself, what is the answer to this question that causes the 50-year-old version of me to be smiling that the 37-year-old version of me was wise. In other words, if you go buy this house and it chokes you guys and you have to work a part-time job and you stay broke from now until 50,

all because you bought this house, which is what the math is telling me in this conversation, when you're 50, you're going to be pissed at the 37-year-old version of you. Yes. And that's what it is. It's going to put you in the rat's going to put you in the rat and wheel mode where you can't get ahead you can't get traction because you can barely breathe now or you wouldn't even be in this situation right i mean it isn't like you guys went on a mediterranean cruise or something that isn't what's going on here you're just trying to make ends meet in the

freaking san francisco bay area that's tough you know you make good money but you don't make You're just trying to make ends meet in the freaking San Francisco Bay Area. Woo! Right. That's tough. You know, you make good money, but you don't make, you know, you don't make Silicon Valley money, you know. No. So, you know, it's tough. And three kids in that market.

So, can you pull it off and stay in the general area? Yeah. and stay in the general area? Yeah, but I'm going to rent as cheaply as I possibly can, which obviously increases the speed at which you clear the debt and build your emergency fund and build your down payment, and then you buy a home, and the home will be a blessing. I'm afraid this home is a fixer-upper that you can't afford. It sounds like a double curse. Yeah. A, I can't afford it.

That's what I felt. Yeah, A, I can't afford it. B, I need to fix it up. Well, it's what you told me. And I'm going based on what you told me. Now, if the house is worth $800,000 and they're going to sell it to you for $300,000, we might have to have a discussion, but that isn't what I heard. No, I mean, you know, my husband really feels that, you know,

it could be worth, you know, $150,000, $200,000 more than what we're going to get for it down the road if now down the road yes down the road is after he fixed it up you're buying a fixer-upper what's it worth today as is if they put it on the market versus what they're selling it to you for sounds to me like they're selling it to you at market value but oh after we think yeah oh after we fix it up and after we wait three or four years and let you know good california inflation real estate kick me kick the thing up then it'll be worth 150 000 more well no kidding of course it will be you know but today it sounds like they're selling to you for what it's worth today and it's as is condition no bargain i'm out tap out yeah i'm sorry i'm sorry it's inconvenient as crud to do the right thing yes it's hard yeah i don't want

to move i mean i'd rather have a root canal than move and you know telling you to move i'm it's not it's one of the last things i tell people to do. But nothing you've described here said stay. Mm-hmm. I just, you know, I'm concerned because even to rent here is, you know, going to increase our expenses now by, I mean, because we got in on a really good deal. So what we're paying now is really not a lot. You didn't hear me say you have to increase your commute. Yeah. And get that way, the further out of town you get, the lower your rent drops, unless you head towards Napa Valley.

But, I mean, you know, don't head into the Silicon Valley either. But you see what I'm saying? There's an inconvenient place to live where the rent is cheaper. This whole thing is inconvenient, but it is the best five-year plan. It is not the best five-month plan. The next five months are going to suck. Right. So that the next five-year plan. It is not the best five-month plan. The next five months are going to suck. Right. So that the next five years don't.

Yes. You live like no one else so that later you can live and give like no one else. It's hard. I get it. I get it. Hey, thanks for the call. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money ryan

is in erie pennsylvania hey ryan how are you good dave how you doing today better than i deserve what's up hey i was just wondering uh we started the old uh debt snowball here uh me and my wife about two months ago just got married two years ago or a year ago rather and uh got one of the loans paid off working on the second one our tractor just broke down so i'm just kind of need some motivation need some help on what to do to try to get this snowball rolling again a tractor you're a farmer no we just have a uh just to cut the grass oh okay um and so um are you on a farm or you're talking about just your lawn mower just our lawn mower yeah okay how many acres do you mow about two two. Oh, that's pretty substantial.

Okay. What's it take to fix your lawnmower? Well, this is the second time we've had it fixed this year already, so I'm starting to think it's like nickel and diamond. Yeah, you ain't got any money, though. So what's it take to fix your lawnmower? I would probably say the guy I called him, he said it'd be anywhere from $200 to $600. And what would it sell for the way it sits?

Probably could get, I would say, like $1,000 to $1,500. Okay. That'd be a range. So what if you sold it and got a $1,500 one that worked? Yeah, that just happened yesterday. But what if you did that? Would that work? I think so.

That's no money out of pocket. You sell it for $1,500, you take $1,500, you buy a tractor that works. You know, it's not, we're not getting you know, we're not getting a John Deere Zero Turn for that. I know that. Right? Yeah. Unless it's an old worn out one. But you see what I'm saying?

You get something to get the dead gum grass cut and that you don't have to, you know, buy a $25 push mower. You can do that and do it, but it just take a while. You do what you got to do right now to not spend money to get out of debt. And upgrading and riding lawnmower is not called an emergency. This is the Dave Ramsey Show. Thank you. Andrew's in West Palm Beach. Welcome to the Dave Ramsey Show, Andrew. Hi, Dave. How are you doing? Better than I deserve. What's up?

So, I have a bit of a two-pronged question here. I'm 20 years old. I'm debt free, baby steps number one already and I'm encouraged but I had some thoughts about a partnership with my cousin for starting up like an internet cafe, a gaming business and I was also thinking about how to fund

that business. Okay. What are you doing now for a living? Right now I work at an IT company. Good. And I'm contracted to go to a law firm every other day. Cool. You're contacted to do what? Contracted to go to a law office, sir, every other day.

I got you. Okay. And what are you being paid? I'm being paid $12 an hour. Okay. good. All right, and so you guys would start this idea on the side while you keep your full-time jobs, right? Well, I don't have a full-time job, but I still go to college. Oh. Yeah, I'm getting more hours as I go. So that was part of my question was maybe I get a second job on the weekend on this business.

What would it take to get the business started? It sounds like it's a digital affair. Why would it take any money other than your sweat? So it's an idea for a gaming cafe. So we'd open like a small storefront and have about maybe 20 to 30 computers. Yes, sir. I thought you meant a digital i thought you meant a digital cafe you're wanting to set up a hard business yes sir brick and mortar yeah

um i'd pass on that till you get out of school that's a heavy that's a heavy investment of time and money neither one of which you have an abundance of right now what are you studying in school? Computer science, sir. Good for you. When will you graduate? December this year with my AA, and then the program I would go to is at the same school,

which is the BAS, about four more years after this December. Four more years? After getting your associates? Yeah, sorry, two more years, I'm sorry. Oh, two more years. Okay, that makes more sense. All right, good. Okay, and why are you pursuing a bachelor in computer science? It's cheaper for me, and I can go straight into the field right after I graduate,

and I'll get a master's eventually, don't worry. I like to think so. I'm not suggesting a master's. I'm wondering if you even need a master's eventually down there, I like to think. I'm not suggesting a master's. I'm wondering if you even need a bachelor's. Are you doing anything? Can you get involved? What is it you want to actually do when you're through? So with the business or my life? No, with your career.

Why are you studying this? Well, personally, I love to work with computers and help people who have problems with the computers and i think it'd be a really great idea and fun idea to be helping people at the same time making a decent or livable wage off of that sir well the more people you'd help the less that have to be just decent or livable it could be awesome i mean um bill Gates helped a whole lot of people. Yes, sir. It worked out well for him. Yeah, absolutely.

Okay, so here's the reason I'm poking around on this. I'm not suggesting you change direction. I'm just asking questions because I know that a lot of the guys and gals on our IT team, and we have several hundred people here working in IT, in programming, in building apps, and working in Java, working in Ruby, working in architecture, doing IT support, helping people keep their boxes running. I dropped mine, and they had to come fix the headphone jack on it this morning, all that kind of stuff, right? And so having all these guys on the team,

almost none of them have a four-year computer science degree. Most of them have certifications in Microsoft or Ruby or Java or whatever, and they've built up experience in those areas of programming, okay? And that kind of thing. So it depends on what you want to do as to whether you actually need a four-year computer science degree in order to do it. So I want you to investigate that a little bit further to start with. Number two, I think in the technology field, you could start something in the digital realm very cheaply without doing brick and mortar. Right.

And that would make you more money with less investment quicker. Yes, sir. One thing I do have right now is just on the side, I have like three Craigslist ads in the area, and I service computers to people's homes. Ding, ding. That's like $50 an hour. Ding, ding. That's good. And how much an hour?

$50 an hour, sir. Look at you. Yeah, you get many of those. You could drop that $12 an hour gig an hour, sir. Look at you. Yeah, you get many of those. You could drop that $12 an hour gig. Yes, sir. Yeah, that's what I would do is I would expand that instead of do the investment in the click and mortar. Someday you may come back around and do the click and mortar, depending on what the industry does in the next five years when you're 25 and you're starting to reach out and do some of your longer term goals. The second thing I i would or the last thing i would add to the conversation is i would avoid

partnerships the only ship that won't sail is a partnership they end badly almost all the time working with small businesses the number of partnerships that we have worked with that are 10 years old or older is almost zero except for law offices and medical offices docs and lawyers do a different kind of partnerships when they go together and they usually last but two you know two guys cousin and two cousins starting up something almost never makes it and it oftentimes ends badly so if you want to work with your cousin fine if he wants to open the store and give you a percentage of the profits for working there and running it for him that's okay but you don't own it or vice versa i don't mind you participating off the bottom line

as if as if you're a partner or him participating off the bottom line but i don't want you to get married to your cousin yeah me either there's just so much wrong with that metaphor hey thanks for calling open phones at 888-825-5225 david is in dover delaware hi david how are you hi dave how are you? Hi, Dave. How are you? Better than I deserve. What's up? So, my wife and I are on baby step four, five, and six. And we are in the process of discussing if we should continue to renting. Our rent is about $1,050 a month, which is good value for what we have. Continue to do that and save up to buy a house with cash, which would take between approximately five and seven years to do that. Or if we should take a year, save up down payment and do a 15-year fixed rate.

Well, neither one of those are outside of our plan. This is the only advice you ever get on the Dave Ramsey Show that I am okay with you doing, but I will never do. I will never borrow money. I do not borrow money for any reason ever in any circumstance ever again. I'm done. The borrower is a slave to the lender. I'm not going back in debt ever. And so I love your 100% down plan.

I think it's awesome. But I don't yell at people for taking out, as you obviously know, a 15-year fixed rate where the payment is no more than a fourth of your take-home pay, and then you get about the business of paying that off as soon as you possibly can. And you need to pay it off in between 7 and 10 years so that you're on the track with the same data points as the everyday millionaire study shows us that millionaires are doing.

So that's what you're facing. Either one of those are inside of our plan. The reason the zero down plan works so well is between now and the time you buy a house, you have a huge pile of cash building and building and building, which gives you lots of options. When you do buy a house 100% down, I said zero down. When you do buy a house with a hundred percent down uh then you've got all kinds of options because for the rest of your life you now have no house payment and if you just invest every month what would have been a house payment you're going to be so stinking rich

it's going to be unbelievable so it is the shortest path to wealth but it is so countercultural it is so painful to watch everybody else buy a house, and houses going up in value during that time. It's tough. And Delaware is a, you know, Dover is an expensive market. So, I mean, you're sitting there. So, I think, if I were in your shoes, what would I do?

I don't borrow money. But I don't yell at people for that other route. So, I'm okay with you doing either one. I appreciate you calling in. Open phones at 888-825-5225. That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer,

Billy Daniel, our associate producer, and phone screener. We'll be back. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.