The Ramsey Show - App - Building an Investment Portfolio That Performs (Hour 3)

Episode Date: March 22, 2019

The show about you

🎵 Live from the headquarters of Ramsey Solutions Broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Roxanna is with us in Chicago. Hi, Roxanna. How are you?

Hi, I'm doing well, thanks. How are you? Better than I deserve. What's up? I'm just a little bit nervous, sorry. I was reaching out because I'm newly married. My husband has an ex-wife, and I knew that well, obviously, going into this. And he pays a significant amount of alimony, which we've worked around.

We've kind of built our life around that, so it's fine, and God willing he's able to continue working and pay that. We recently found out from an attorney that they're considering looking at my income as part of the equation for determining how much of alimony he should pay. How would that be? That's not even logical. Well, that was my thought. And I would have really thought about this before and had something put in place prior to getting married.

But apparently the judge was, because he's remarried now, they're looking at my income, which I bought my own home. I make six figures. I have a daughter of my own that's going off to college in a couple years. So naturally I'm concerned about them considering my income when determining how much alimony he should pay. I'm sorry. I'm not an attorney, but that's ludicrous.

I agree. That is even a possibility. I know. Well, I know that just generally generally speaking the alimony laws or spousal support laws are very vague it's not like child support where it's a clear-cut equation it's really at the judge's discretion um so in this case translation you need a better attorney yeah pretty much um so what she's recommending is that I get a post-nuptial agreement, which is not what we wanted.

We just want to be whole and have everything together, one account, and she's now advising that we get separate accounts, we keep everything separate, no assets together. I think you need a new attorney. Okay. Because I think these people need to be pounded. I'm serious. I mean, that is the most absurd thing I've heard in I don't know when.

That your income has any... Because the whole legal concept, the theory behind alimony is that he is paying her a portion of his income that she helped him create by being married and doing domestic duties and thereby making less than she would have made in the open market. And so she gave up part of her life, and he pays her for that. And the marriage was usually very long for alimony. How long were they married? Oh, goodness, 25 years. And how long is this alimony. How long were they married? Oh, goodness, 25 years.

And how long is this alimony supposed to continue? Well, it's going to go on until he retires pretty much, and then he'll have to go back for a modification, at which point they can then also look at my income to say, well, if you had someone else taking care of you, then you can continue to pay, even though they'll look at retirement and all that good stuff. But there has to be a significant... So there is no cutoff on this alimony? No.

Yeah, his attorney sucks. I mean, alimony is a valid concept, and it is a valid legal concept. But when you sign up for something in perpetuation for life and how long did you say they were married they were married i believe 20 27 years long time yeah that's still very young still that i mean and what kind of income does he have um his income is his base is 210 per year annually and then he has like a 70 and what do you make i make about 120 000 a year um and i have about a 15 annual bonus as well so well i mean you may have to do a post-nup because you live in ill, and obviously there's some crazy butt stuff happens in Illinois.

But in a normal court system, this wouldn't even be considered. And I really think you may need to look at another attorney. Okay. Because I really think you've got a really weak attorney. Okay. Sometimes in situations like this, you need an attorney that is so mean that you don't even like them and that's that's what it because i really i would like for this lady to receive some money from her ex-husband your husband but but what is outlined here is ludicrous a you had nothing to do with the marriage so she should have no access to any of your income

or your assets under any circumstances that's just ludicrous um it it defeats any kind of legal theory that backs up alimony and so how a judge could get there other than your attorney got their butt whipped in front of the judge because they were incompetent or weak. And sometimes what you need is an attorney who knows how to bloody somebody's nose, who knows how to reach over and tag them in the eye, just pop them one. And it doesn't sound like this one's won anything. Your husband's just getting the snot beat out of him, and now you're in line for that. I don't hesitate to fire an attorney. I don't.

If I can't get one that can't seem to get the job done, we'll get somebody else. And that is their job. Part of their job is to know how to fight in these situations. And if you don't know how to fight, then you don't need to be in that ring. And the reason I bring all that up is just the the absurdity of the whole concept of they have access to your stuff you may have to because of the world you live in in chicago i don't know i'm not an expert on that but and i guess i would if you had to and you just live live your life uh otherwise but uh but you may have to structure stuff to keep her hands off of it.

Absolutely amazing. Open phones at 888-825-5225. Lee is on Twitter. Dave, I'm currently in the debt snowball. Deferred comp is offered to me. Is it better to invest in deferred comp now or wait until my debts are gone? Never do any investing when you're in the debt snowball. You always temporarily stop all investing when you're in the debt snowball you always temporarily stop all

investing when you're in baby step two you stop all saving when you're in baby step two temporarily until you get your debts knocked out when the debts are knocked out and you don't have any debts except your house before you start your long-term investing and i would do 401ks and roth iras before i did deferred comp but before you start any of that build your emergency fund of three to six months of expenses megan when is it okay to budget fund money i hear it's not okay on baby step two but we're so burnt, my husband wants to quit the plan to start enjoying life. Call the whambulance. Listen, you're going to have to pay a price to win.

I'm burnt out. It's hard to be burnt out. You're never really on fire. Seriously, get fired up. It requires a price to win. You can budget fund money whenever you want, but that's been your problem all along. You've whined and said, I deserve it. I worked so hard.

Oh, give me a break. We all do. This is the Dave Ramsey Show. There's nothing smart about smartphones if your wireless plan is blowing your budget each month. Pure Talk USA offers smarter wireless with unlimited plans starting as low as $20 per month. You never pay data overage fees and we never turn off your data. No contracts, no hidden fees.

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We teach you to live like no one else so that later you can live and give like no one else. We teach you to pay a price to win, to sacrifice, to work extra, to live on nothing, so that later you're in a position to enjoy. In Baby Steps 4, 5, 6, and certainly 7, you're investing, you're being generous,

and you're enjoying some of your money. When you're in Baby Steps 1 through 3, you're not on vacation. You're not going out to eat. You don some of your money. When you're in baby steps one through three, you're not on vacation. You're not going out to eat. You don't have fun money. Life's not fun. You're cleaning up all the stupid fun you had that you couldn't pay for before. That's what you're doing.

And so one through three is hardcore. It's game on. But when you bust through baby step three and you've got your emergency fund in place and you're debt free, that's when people start saving up to buy a house or they start going on vacation again or the occasional out to eat it's all in the budget and it's all built in but you're enjoying some of your money you're investing some of your money and and you usually increase your generosity in baby steps four five six and for sure in seven same kind of a thing so we want to well you So what we've always done is celebrated everybody busting it through Baby Steps one through three, but we're going to start spending some time with the

everyday millionaires and the people that are on their way to their everyday millionaire destination that are in Baby Steps four, five, and six. We're going to say, hey, we're going to celebrate you guys while you're building wealth and while you're enjoying some of your money because you've kind of reached that next level. You know what I'm saying? You've lived like no one else. Now you're living and giving like no one else. And one of the ways we're doing that is something we've never done before, and it's a lot of

fun. It's taken off very, very fast. We have announced that next March, one year from now, we are going on the first ever Live Like No One Else cruise. Yay! Yeah, and this is no cheapo cruise. This is like a luxury, nice cruise. We're going to Turks and Caicos and Puerto Rico and St. Thomas and the Bahamas. And this is not on one of the cheap lines. This is on Holland America, which is one of the nice lines.

The first thing they brought me a proposal on this stuff, and I'm like, I'm not riding on that boat. I mean, we've been on 30, 40, 50 cruises, Sharon and I have in our life. And so we've seen the good and the bad. And this is a brand new boat. It's called the New Staten Dom. And it's with Holland America. We took down the entire ship. It's all going to be us.

It's going to be all the Ramsey personalities, Christy Wright, Rachel Cruz, Ken Coleman, Anthony O'Neill, Dave Ramsey. We're going to be there cruising with you, baby. I say Chris Hogan. All the Ramsey personalities are going to be there. Called a couple of my friends up. They're going to go jeff foxworthy's coming he's going to do some stuff that'll be a lot of fun uh stephen curtis chapman who's a grammy award winning you know christian music icon is going to come and do some shows for us and man it's got my pastor darren whitehead of our church is going to come they're going to do devos in the morning and

man it's going to be an absolute blast. And if you've never been down this stretch of the Caribbean, Turks and Caicos is pretty stinking incredible. You know, Puerto Rico, St. Thomas, this is a good itinerary. It's solid. So if you're in Baby Steps 1 through 3, we are not telling you to come. But this is for you to aim at. And if you're in Baby Steps 4, 5, 6, 7, this is yours. for you to aim at and if you're in baby steps four

five six seven this is yours and obviously you're going to pay cash for it obviously now we're not going to run run around checking and asking your baby step and all that stuff but use some sense we're not being hypocritical i already saw on twitter dave ramsey is having a cruise now how hypocritical and oxymoronic is that? As if everything Dave Ramsey is about is being cheap. No, moron. It's not about being cheap. It's about being cheap so you never have to be again. That's what we meant, you moron.

Some people on Twitter, you just expose how stupid you are. You know? Just unbelievable. So, no, I mean, it's not inconsistent. I live a nice life. I want you to live a nice life, but I want you to pay a price to get there. I don't want you to live an artificial life, which is a borrowed money life. That's where you're faking it.

That's what that amounts to. So this is consistent with what we teach. It fits in with my advice. It's not hypocritical. It's not weird. It's actually going to be stinking incredible. And here's the problem. We announced it yesterday.

We have room for 2,400 people. In one day, we've already sold 500. In one day. You put down a deposit for $250, you can hold your room, right? In one day, we did that. So I'm not saying this thing's going to sell out completely this weekend, but it could. That's how bizarre this is. So apparently we're a little overdue to try this idea.

So it kind of sounds fun, though. We're going to have a lot of cool people. It's going to be a great lineup. We've got, oh, Manette Chauhan is going to be there, too. She's um oh uh manette uh shohan is going to be there too she's a food channel chef a celebrity chef james beard chef she's going to be there doing some cooking demonstrations and teachings and so forth she owns a couple restaurants here in nashville she's big time big time celebrity chef and uh become a friend of ours she's wonderful too so you know we're just going to have a little bit of everything on there it's just going to be

fun it's a way to celebrate and you don't have to come i mean we're just going to have a little bit of everything on there. It's just going to be fun. It's a way to celebrate. And you don't have to come. I mean, we're going to do little events and little talks and seminars and stuff, but you don't have to come to any of it. You can just go on the cruise and enjoy it if you want. Or you can come to some of it or not come to the other. I don't care. Just come here Foxworthy, and that's all. That may be all I go to.

He's great. This will be fun. It's going to be a blast. All right, go to RamseyCruise.com. RamseyCruise.com. Or, of course, you can check out DaveRamsey.com, and you can find the stuff there. We've got the entire ship. It's just going to be us, guys.

Just going to be our tribe there. And it's a great lineup of people that are going to be there to teach you, to entertain you, to hang with you, and all that kind of stuff. So, again, great itinerary and great ship. This is not the slouch. This is the good stuff. So, you know, once you get spoiled, you just get spoiled, right? So, Ken Coleman's going to be there, and of course one of the things he'll be talking about is his new book, The Proximity Principle,

The Proven Strategy That Will Lead You to the Career You Love. The book is on pre-order right now, and you can get it for only $19.99 and over $20 in free bonus items. The Proximity Principle e-book version is going to come to you, and a video lesson from Ken

called Discover What You Were Born to Do. That's the $20 in free bonus items that you get by pre-ordering. Proximity Principle is where it's at. This helps you get yourself in a position to be in the job that you love, to be in the place that you love. And he's a proven career expert. He's got his Ramsey Personality Show on SiriusXM, a big podcast that people are listening to by the millions. So check the Proximity Principle out at KenColeman.com or DaveRamsey.com

or call Customer Care Ramsey Concierge at 888-22-PEACE, 888-227-3223. Adam is with us in San Fran. Hi, Adam. Welcome to the Dave Ramsey Show. Hey, David. How are you? Thank you for the opportunity to talk to you. Sure.

How can I help? Here's my portfolio. Right now it's broken up. It's a total of about $4 million, and you're looking at an index fund, which is about 80-20. 80% equity is 20% bonds. And that in itself is about $2 million or a little over. I have $700,000 in equity built up in the house right now that we live in. And $550,000 in a 401k.

And I have an investment property that is paid off and worth about $540,000. What do you owe on your home? About $600,000, maybe a little less. And what's your household income? And it's just under $500,000, maybe a little less. And what's your household income? It's just under $500,000. Way to go. And that's where all this money came from is your earning and your saving?

You're correct, yes. You're not a trust fund baby. You're not a trust fund baby. You didn't inherit the money. No. I wish I was, but I'm not. I don't wish you was. You have $4 million, man. You're killing it.

So what's your question right quick? And my question is that my financial advisor, I'm trying to get a goal to get to the equities at $3.2 million on the indexes. So if my household expenses are about $10,000 a month, which is $120,000 a year, that if he's saying that if it gets to about $3.2 million in the indexes, that I can withdraw about six, you know, to the point where I want to retire 6% a year. And then I would be able to do that without eroding my principal because the indexes, historically, this particular index is averaging about a little over 9% historically per year. Hold on. We'll talk about it when we come back from the break. We couldn't get to the question.

This is the Dave Ramsey Show. Okay, Adam's got $4 million. He makes $500,000 a year. He's got $2 million in an index fund. He's trying to get $3.2 because his advisor says he needs to live off of 6% because the index has been making 9%. Is that a fair summary of what you told me so far? That's correct. I save about 38% of my gross income a year. You're a beast, man.

You're killing it. Congratulations. Very well done. Thank you. Very well done. So your question overall is what? I was questioning about that 6%. Do you feel that given the market of the index that's typically averaging about 9.5% historically, that when it comes to reaching $3.2 million, that I would be able to, you know,

if my expenses are $10,000 a month, $120,000 a year, and if it reached $3.2 million in the index, I could live off that to 6% and not erode my principal. Well, not only not erode it, but it would continue to grow by 3%. Correct. Okay. Is that what you're saying? Yeah. So do you agree with the advisor on that?

Well, I mean, the concept I agree with. The concept is withdraw 3% to 4 percent less than your investments are producing so that your investments are at least growing at the rate of inflation. That's the point. And so if you can do that now, would I want to have my I don't I do not have my portfolio stacked like yours is stacked. But, dude dude you've done very well so if this is making you comfortable there's no issue with that my particular set of mutual funds and i've got probably i don't know i have to look back but it's 15 or 20 million in mutual funds something like that and um my particular mutual funds i have uh i probably

got three or four million million in index funds. The rest of it is in funds that are outperforming the indexes in most years, but on average are outperforming. And they're usually beating the indexes, you know, 2 to 3, 4%. So I don't know where he got an index that was only making 9% or what track record he's using. I mean, if it only made 9%, you know, in the last, say, 20 years, well, that'd be okay. My mix, the S&P has made about 7% in the last 20 years, a year. 7.12 is the S&P average.

But in the last 30 years, it's averaged 10.89. And in the last 40 years, it's averaged 10.89 and in the last 40 years it's averaged 11.81 that's the s&p okay so my particular 20 yeah my particular 80 percent do what now he's looking at it on the basis of an 80 percent equities 20 percent why why would you be in bonds well it's you know but you're getting some kind of hedge of you know i guess not being 100 in equities yeah but yeah i you know i i don't have any money in bonds and especially right now because bonds have an inverse relationship with interest rates uh as interest rates go up bond prices go down and interest rates have been increasing for the last three years slightly.

And they continue to rise. So your bond portfolio is eroding. So I don't have any money in bonds. They're almost as volatile as equities, and they underperform equities. So I disagree with that. I disagree with that theory. But overall, you know, you've got a balanced portfolio. You're not doing anything that's stupid. You know, you're not doing anything that's high risk.

You're well diversified. You're making money. You make a great income, and you've done a great job with it. And if your concept is simply, if your question is should you withdraw less than what your investments are producing, hopefully you've got investments that are large enough that you can produce. My goal is for mine to produce 12%. In the last 40 years, they produced 13.04%. And that's a 40-year track record.

Now, of the funds that I am in, and I have not been in all of those funds for 40 years. I'm saying that's the 40-year track record of the funds that I am in. And I have not been in all of those funds for 40 years. I'm saying that's the 40-year track record of the funds that I am in. And so if my portfolio makes 12% and I leave four in there, I can live off of eight, you know. And my CPA also advised not to pay off my equity completely at the house because that's really the only write-off I have based on my income. Well, that's asinine. That's absurd.

Okay, here's why. All right, $600,000 at what interest rate? $3.25. What? $3.25. Oh, $3.25. I thought you said $8. I was about to have a conniption fit.

No, sorry. That's okay. So $0.0325, $600K, andion fit. No, sorry. That's okay. So 0.0325600K. And you're itemizing, I'm assuming, right? Yes. Okay. Even into where you would be with your income. Okay.

So you have a $19,000 interest expense. Okay. And you're in a 30% tax bracket, 32% tax bracket, right? Mm-hmm. Okay. So $19,000 you paid to the bank, and what that gave you was a deduction, which saved you $6,200 in taxes. Okay.

So your CPA said to give the bank $20,000 to keep from paying the government $6,000. That's dumb-butt advice. Gotcha. You don't trade a dollar for a quarter and call that smart. There's no equation that makes that work. So, no, I disagree. But, you know, so I would have a goal of knocking the house out fairly quickly, and you can decide when you want to do that in this process.

I want you to be debt-free as quick as you can be, because I see tons of correlation between that and winning with money. But, dude, you're winning with money. So there's not anything you're doing here that's causing you failure, obviously. You're winning, right? Right. So all you and I are discussing are some of the finer points, the polishing of the rock. Correct. I think you can do a little better on your portfolio. I probably wouldn the polishing of the rock. Correct.

That's all. I think you can do a little better on your portfolio. I probably wouldn't be in the bonds. I think you can do better than straight indexes. You don't have to move it all there. And I know I don't want to trade $19,000 for $6,000, but those are fine points. Overall, man, you got $4 million.

You're 40 years old. Touchdown. Way to go. Congratulations. You're a hero. You did it. Ha to go. Congratulations. You're a hero. You did it. You know, no stress here. It's just a game, man.

It's just a game. Now, you got rid of all the I can't pay my light bill stuff a long time ago. You got rid of I don't know if I can afford a vacation a long time ago. You have lived like no one else, and now you're in a position to live and give like no one else. And it's just a game then. You're just seeing how much you can stack up to help other people with and to change your family tree and to give yourself more enjoyment. And that's really all this stuff is for, is the generosity piece and the stability piece and the inheritance and legacy piece.

And that's all it's good for. Congratulations, sir. Thank you for being a listener. Open phones at 888-825-5225. Brandi is in Oklahoma. Hi, Brandi. How are you? Hi, Dave. How are you? being a listener. Open phones at 888-825-5225. Brandi is in Oklahoma. Hi, Brandi. How are you? Hi, Dave.

How are you? I'm great. Good. So I had a little bit of a question. My father actually just passed away last month. I'm sorry. What happened? Thank you.

It was a car accident. Hmm. It was a car accident. So he left me right around $175,000. Wow. And I have about $105,000 in debt. Wow. So I was kind of seeking your advice a little bit on maybe what to do with the rest of it. How old are you? I'm 30.

Wow. Are you married? Yes. Okay. No children. Are you and your husband already working to get out of debt before this happened? Yes, actually. We've kind of been struggling to get past level one. It seems like we've been on step one for probably two years. He owns his own business, so it's really hard sometimes. Are you broke or are you undisciplined? We live on a very tight budget. Are you broke or are you undisciplined? Broke.

Okay, so what are we going to do with your income? Here's the thing. If you were winning, if you were doing a good job with money, paying off all this debt would accelerate you. Right. But if it allows you to stay in bad habits, that's not a good move. Right. If it allows him to stay in a career where he can't feed his family, then we've enabled bad decisions with this. So if you guys were able to live on a budget

and you were already making progress yourself and this was just an accelerantant it just moved things forward then i would do that in a heartbeat uh i might have some real soul-searching discussions around there about what we're going to do with our lives so that we don't use this money to pretend like these other issues aren't there your husband's not making any money is what you're telling me this is the dave ramsey show Like these other issues aren't there. Your husband's not making any money is what you're telling me. This is the Dave Ramsey Show. Our scripture of the day, Romans 15, 13, Do nothing out of selfish ambition or vain conceit.

Rather, in humility, value others above yourselves. Jim Rohn says, The challenge of leadership is to be strong, but not rude. Be kind, but not weak. Be bold, but not a bully. Be thoughtful, but not lazy. Be humble, but not timid. Be proud, but not arrogant.

Have humor, but without folly. Good stuff. Our tax-endorsed local providers, our ELPs to to do taxes are very busy right now and if you've ever felt stupid because you couldn't do your taxes didn't understand them me too taxes are complicated and i am so blessed to have people in my life that know how to do them and i i don't do them blindly i want to the basics. I want to understand what's going on, but I sure as the devil don't want to understand every detail, and you don't either. Amy's one of our fans. She had a different experience working with one of our tax ELPs. I've never had someone try to help me understand how taxes work until I worked with her ELP.

There's an expression, if you can't explain it to a fifth grader, you don't understand it well enough, and she helped me understand it. We found our new CPA. Thanks for pointing her to us. Well, just go to DaveRamsey.com and click on ELP for taxes, and the average person using a tax preparer saves $800 on their taxes more than the typical person using one of those software thingies. So there you go. Joy is with us in Phoenix.

Hi, Joy. Welcome to the Dave Ramsey Show. Hi, Dave. I was calling because I have the status symbol of choice. I own my home. I don't have a mortgage. And I'm looking to sell it. The market's really hot right now in Phoenix.

And my house is worth about $300,000. And my cousins came by, and they said that they would like to buy it. However, my cousin's young. He's 25. He just got married. He has a good job, and he's been doing your program. So he doesn't have any debt. He doesn't have a credit card.

He's actually been living at home just saving money and he also got some inheritance money and he said he wants to put 150 000 down but he can't get a mortgage because he has no credit why and um of course he can get a mortgage how long has he been on his job um i think a couple years but he said that there's new laws now because of the house crisis back in 08-09. That you have to have... This is a 25-year-old expert on the laws. No, there's no new laws. There's absolutely not any new laws.

That's just completely bogus. He said he talked to a mortgage company and that you have to have at least one year of paying bills. He doesn't even have any bills. Oh, he still lives at home. well you that's not a new law you've always had to have two years of income and two years of having a life not living in your mommy's basement yeah that's true right yeah so he doesn't have any record of his existence out there you know with utility bills or anything. Yeah, so he needs to go rent a house. Well, so he wants to know if he can rent my house at a discounted rate.

No, no, no. Right? No. And then he can't get half the money back. No, your house is not for rent. Your house is for sale. It's not for rent. It's for sale.

So then he also wants to know, could he do seller financing with me? Okay. No. And why not? Because you weren't trying to sell a house on seller financing. No, I don't want to do that. Right. You don't want to do that.

But it's family, and I feel kind of like, well, maybe I could do this. No. I don't know. You're trying to be helpful to him, but it's putting you in jeopardy. It is. But they have $150,000 to put down. I mean, that's pretty significant. That's good.

So go rent a house. You know. Go rent a house for a year and get yourself stabilized and keep building up cash, and then you'll be able to buy a house, but not yours. Yours is for sale now, and you're going to sell yours for somebody that writes you a check when you buy it. That would be the best thing for me. It's just hard when it's family. Well, it's especially hard when it's family,

which is another reason we're not going to do this. Okay, I'm going to have to give them the bad news that they were going to move in today. You're kidding. No, I rushed to try to get everything ready because they wanted to go ahead and, you know, at least move in while they're working on the process and all that. Well, I mean, if you've done a deal, you've done a deal.

But I'm not, you know, but would I do that deal? No, I wouldn't do that deal. I don't think it's a good deal for you. I don't think it's the right deal for him. I wouldn't tell him to do this deal. It's not smart for him either. Y'all are trying to force something here. Jason's in Washington, D.C.

Hi, Jason. Welcome to the Dave Ramsey Show. Hey, Dave. Good to talk to you, finally. You too. How can I help? Yeah, well, me and my wife are kind of in a pickle here. I'm around about 80,000 in in debt just starting the baby steps.

And right now we're living with our father because he's a little sickly so the big house we get to reduce rent. But right now he's contemplating on basically between selling the house or having us kind of take over it.

But right now we're way too deep in debt and we're just starting to try and climb out of things. But he's not sure he has much time left. So we're trying to see if we should continue with the baby steps, try and pay off the debt, or stop the parent off and try and find somewhere else to start living for us. Well, I mean, there's nothing preventing you from living there and taking care of him and working on your baby steps.

You don't need to buy the house. If he needs to sell the house and move, then he's making decisions about who's going to care for him, right? You're not. Yeah. He's moving away from you. You're not moving away from him, right? Yeah. Well, he's basically thinking about that because the rent is kind of high,

and if we were to go somewhere else and leave him with the big three-bedroom house and he's not going to be able to take care of it, then he'll just basically just waste the house instead of passing along with his family. But we're kind of helping him out, and at the same time, helping him pay the rent and help keep the house up. As long as that deal works, that's fine, but that does not mean you need to buy the house. Okay. You're not in a position to buy a house right now.

Yeah. You're getting a bargain on the rent, and it's helping you get out of debt, and you're helping him because you're taking care of him while he's sick. This is working for everybody. You buying a house when you're broke does not work for you. That's what we're not going to do. And so that's the whole thing.

Brandon's in California. Hi, Brandon. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for taking my call. Sure. What's up? Question around flying first class, business class versus coach.

A little bit about me, background, mid-30s, no debt, six-figure income, and have a lot of friends who are kind of in similar situations. And a lot of them scoff at the idea of having to fly coach or economy, especially when you're going overseas to Europe or something. And I just personally can't see the cost-benefit of the price difference on the ticket, but I wanted to know your thoughts on is it okay to make that financial decision if you've got all your ducks in a row financially, or do you have any thoughts around coach versus first-class airfare? Yeah.

Well, it's like a lot of other things that are luxury items or expensive items. They're only luxury or expensive when they're a high ratio to your income. And so if it takes your breath away because it pinches your pocketbook, well, that says you shouldn't be doing it. If it takes your breath away just because you've emotionally never done anything that expensive, well, then that just means you may be growing. Okay, so I'll give you an example. Okay, I was talking about a guy yesterday on the air that has a net worth of over a billion dollars that's a thousand million and he just bought a four hundred thousand dollar car now i can't in the i grew up in a neighborhood i can't get my head around emotionally a four hundred thousand000 car. I'm not making a moral judgment. I'm just saying I am sitting in the chair I'm sitting in.

That makes me go, wow. But when you actually look at the ratios of that, I mean, that's like a guy with a million dollars buying a $400 car. So it's, you know, the point is, can he can he do that sure he can do that he could buy one of those a week right yep i mean it's a non-ratio so if you can do this and it mathematically is is not relevant and the only thing is just the emotional part then maybe the emotional part is just there's three

things you can do with money. You can give it, you can enjoy it, and you can invest it. And you should always be doing all three. At our stage of life, with our level of wealth, if I'm flying to Europe, I'm flying first class. But I'm worth, you know, several hundred million dollars. So it's not relevant. So you've got to just decide, does it fit in your world?

That's all. That puts us out of the Dave Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. On Pandora and Spotify. For all the ways to watch and listen, check out our showcase at DaveRamsey.com slash show.