The Ramsey Show - App - Building Extraordinary Wealth for Your Future (Hour 2)

Episode Date: October 2, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, 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 home. Taken the place of the BMW as the status symbol of choice. Yeah, whatever I'm supposed to say there. I've only said it like eight million times, and I can't get through it. That's the status symbol of choice. Yeah, whatever I'm supposed to say there. I've only said it like 8 million times, and I can't get through it. That's hilarious. Yeah, people always think we have the intro prerecorded. Well, that right there is freaking proof it's not.

The phone number here is 888-825-5225. That's 888-825-8255. Terry starts us off this hour in Sacramento. Hi, Terry. How are you? Hi, Dave. I'm doing very well. And just to let you know, I do adore my BMW.

Actually, it's a 2000, but I still adore it. So it keeps us debt-free. There you go. If it's paid for, it's all good with me. How can I help? Exactly. Okay, so my husband and I, we have a house that we've owned for 20 years. It was our first family home, and we have turned it into a rental and has been for the last 15 years. And so our monthly mortgage is about $850 per month, and we are in the process of looking for new tenants. And we have narrowed it down to three of our top picks.

But they, unfortunately, all of their credit scores are in the low 600s, and they do have little marks on their credit, such as bankruptcy due to divorce or medical bills and collections. And one of our prospective tenants actually just has a credit card debt that they're slowly paying down. But all three of them have actually gone through Financial Peace University and have certificates that they've all forwarded me, and they have their emergency funds, and they have a verified income. So I am wondering, is that show of determination good enough to rent to them, even though they have a checkered credit history passed?

Yeah, I rent to people with checkered pasts all the time. Okay. All I'm worried about is their future. Okay. And to the extent that their past is an indicator of their future, you don't rent to them if they've got an ugly past. Right, right. But a lot of us have done stupid stuff in the past.

The question is, are we still on that road? Exactly. And how do they turn it around? And in this case, all three of them are at least making some level of effort to learn how to handle money and not be in the mess anymore thus financial peace university certificates that's pretty cool never thought about making them go through fpu maybe i should do that exactly well no it's really interesting though because they all volunteered that information on their applications and they're all very proud of

it um well the point is i'm going to interview them and what i'm trying to figure out is two things is there anything in their past that's going to come up and tackle them like if they got an outstanding judgment that's getting ready to seize all of their income and they wouldn't be able to pay the rent or something like that is there something in the past that's looming that even though they've changed, it's going to still tackle them from behind, okay? So that's thing one I'm going to try to ascertain. And then thing two is, and I think it's just an interview process, and we many times, I've never required Financial Peace University,

and it occurs to me how stupid that is. I should have done it. But we many times have asked them for a budget. Okay. That's an indicator of how they can pay. If they're FPU grads, they're doing a budget. And let's see, you know, we are looking at their income to rent ratio. And, you know, if one of these guys has.

And so what is the guideline for the income to rent? What's the percentage? Well, what we tell folks in FPU is to not take out anything more than a fourth of your take-home pay, right? Gotcha. Now, can they survive at more than that? Yeah, they can survive at more than that. And, again, I want to hear the story around the income. You know, they just started the job, and, you know, maybe their income is going to be going up dramatically in the next two years. Right.

And so I have the prospective tenants. On the low end, I have a $6,500 per month verified income. And then I have on the high end, $12,000 verified income. And so I am kind of leaning towards the higher income with no pets versus the lower income just for our security. Yeah. I mean, and again, that's if they don't have an $800 car payment or something. I've got to know what else is in the mix, the whole story. But all things being equal, yeah, that's the direction.

I want to see that they've got the room, the ability, and they're not going to be tackled from behind. And then you just talking to them and ascertaining, have they really learned their lesson and have they really turned the corner and they're heading back the other way? I don't really give a rip if they filed bankruptcy two years ago at that point. Because if they've changed their life, they've changed their life. You know, I'm fine with that. All I'm concerned about is can you and will you and are you prone to pay the freaking rent that's what i'm concerned about you know exactly exactly no i really appreciate that and i just thought that it was so ironic that that was all on their applications and i said you know

what i'm gonna call dave because he's gonna know that's neat so all of you people that are trying to get a rental house if you want to sell your landlord, be sure and wave that FPU certificate in front of them. That's pretty cool. I like that. A whole new marketing plan for me. There you go. There you go. Well, you're welcome.

And with all the other things you mentioned there, I'll go ahead and tell you, we have a no pets policy. I've got two wonderful dogs that I love as much as I love anything. But, I mean, there's a rule when you're landlording that's a ten thousand dollar cat because that's what it's going to devalue your house because you can't get cat pee out of a house you just got to burn the house i mean it's just it's just smells and um dogs the same way and so i love puppies and i'm not a cat guy i'm a dog guy but um doesn't matter i mean we have a no pet policy uh if and you hate animals no i don't hate animals i hate what you people that don't control your animals and let them do to my house that's what i hate

and so that's why i have a no pet pet policy because sometimes stupid people have pets that's what it amounts to and you know no no uh you know that's it period well you don't understand yeah i do understand i've been doing this a long long time i bought a lot of houses in my life and man i'll tell you what and it'll it'll ruin you on this stuff so no pets not negotiable i'd rather have the house sit empty no pets and yeah you got to be able to pay the bill and yeah you better plan on paying the bill and you're going to find us to be the nicest kindest sweetest landlord you've ever had to fix everything instantaneously because we're not broke something's broken we fix it we want you to be happy and we leave you alone we

check the house once a quarter we walk through it to make sure that you have no pets and to make sure you're not changing your harley oil in my living room and stuff like that we check it we do physical inspections we collect the rent and we have very low tolerance for misbehavior of of somebody in a property and because it's just it's not about being kind and sweet it's about you're tearing up my stuff and you, you know, you're dadgum. I'm supposed to be a manager, a steward of that house. God owns it, and I'm running it for him. And so you've got to take care of it. I take care of my house, by the way, the one I live in.

And, you know, something breaks over there, I fix it too. And I don't, you know, let things, even though I i have two dogs i don't let them destroy the house um the shih tzu would he actually thinks he's the king of the world but he's not big enough to do a lot of damage he can get drop kicked at any point but you know that's not gonna happen this is the d Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable affordable biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian

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chministries.org. In the lobby of Ramsey Solutions, Justin and Sarah are with us. Hey, guys, how are you? Wonderful, Dave. Thank you. Hi, Dave. We're great. Welcome, welcome. Where do you guys live?

We are from Folsom, California, right outside of Sacramento. Very cool. Nice area. Yes. Very nice. Well, welcome. Where do you guys live? We are from Folsom, California, right outside of Sacramento. Very cool. Nice area. Yes. Very nice. Well, welcome. Good to have you all the way over here in Tennessee. And all the way here to do your debt-free scream.

That's correct. I love it. How much have you guys paid off? Paid off $220,000 in 2.5 years. Love it. Good for you. Very cool. And your range of income during that time?

From about $220,000 to $240,000. Okay. Making good money. What do you guys do for a living? I'm a peace officer. And I'm in community relations for an aerospace company. Great. Well done, you two.

Very cool. So what kind of debt is this $220,000 that's gone? Our house. It was our house. You paid off your house in California? Yesia yes wow you're looking at weird people i'm looking at weird people you're like paid for house did you ever imagine you have your house paid off for as young as you are how old are you two i'm 46 and justin's 47 paid for house boom just like that and all because of you i didn't pay any of it you inspired us i just made

you think you could do it so you went and did it wow that's cool well tell me this story two and a half years ago what happened well dave about two and a half years i started listening to your show i listened to their podcasts on the radio at home and i became very obsessed with it actually i talked to everybody i could whether it it was friends, relatives, coworkers. She's shaking her head, yes. And I did become a little obsessed, don't you think? Yeah, Dave. Actually, the term I coined at some point in this process was, honey, I think you need

to go to Dave Ramsey rehab. Detox. I love it. Well, there's worse things to get addicted to, I guess. Absolutely. I'm so proud of us. So he got a little bit overboard, and Sarah's like, okay, just come on. But how quickly did you get involved, Sarah?

Oh, very early on. I didn't really have a choice. Your voice was on the iPhone in the bathroom as I'm getting ready every day. So it was, you know, I was in full bore and I'm just, Justin was the driving force, but it was really easy to get on board. So you guys looked at it and together in all seriousness, other than the overdoing the Dave Ramsey part, you looked at it together and said, hey, if we really rolled up our sleeves, we could pay off this house. That's it. You kind of had an aha moment, huh? Yep, and we're a good team.

We balance ideas off each other, and we always came to the same conclusion as to what we were going to do, and here we are. Now you don't have a payment in the world. Nothing. And the grass does feel better when you walk on it. I'm telling you, that's not an exaggeration. It's a great metaphor, but it's also the truth.

Yeah. Very cool. Very cool. So how long have you two been married? 11 years. Have you ever been debt-free while you were married? No. This is it.

Just recently. Will you ever go back? Absolutely not. It's too good to be free. It's amazing. I love it. And Dave, my favorite part of our story and our journey is we have an almost 17-year-old daughter. And the term that we've heard over and over is more is caught than taught.

And just seeing how true that is with our daughter, it's such an amazing thing to see. And she literally is a senior in high school and preaching your program to her peers. And this is just going to continue on and on and on. Wow. So the family tree has changed. Yes. Without a doubt. Not just with the money part, but with the lessons learned. Yeah.

Well done, you guys. Thank you. What do you tell people the key to getting out of debt is? Well, I think it's planning, having a plan, communicating with your spouse, and being real strategic with your money. When we, whether it's shopping for groceries, we go to the discount grocery places, whether it's going out, if we're going to go out to eat, we're looking for coupons, groupons, some sort of deal when we go out to eat.

Pretty much every time we go out to a meal, we share an entree. That's like every single time. So things like that. I'm not a big shopper, so all my clothes come from discount stores. I never buy anything unless it's on sale. That's just how...

And I don't see that changing ever. It can change if you want it to. I mean, you don't have any payments. No, but it's just how, and I don't see that changing ever. It can change if you want it to. I mean, you don't have any payments. No, but it's just in my DNA. I go straight to the sale rack. Yeah, well, that's Sharon. She always tells me how much money she saved me, which means it cost me something. But nowadays we can afford it.

It's not a big deal. If you live like no one else later, you can live and give like no one else. And you guys are in that position. So did you have people thought you were crazy detractors or did you have uh more cheerleaders uh we definitely had all cheerleaders around us and no negative comments through the whole journey and um we love seeing you know our friends are so supportive our family it's just been wonderful wow so they're they were cheering you on right to the finish line. Yep. Very cool.

So the Sacramento radio station is who you listen to us on? Correct. 650. Yeah, great station. Yep. I was just with those guys the other day. They're great, great folks. And occasionally the podcast as well.

And that was it? That's all you did? Just listen to the show? And of course the book. Oh, the Total Money Maker book. Okay. And we also have Rachel's book, too. Smart Money, Smart Kids.

Oh, there we go. Okay. Very cool also have Rachel's book, too, Smart Money, Smart Kids. Oh, there we go. Okay. Very cool. Well, congratulations. Now, you've also got Chris Hogan's book, Retire Inspired. And I remind you to always be listening to his podcast, Retire Inspired Podcast. That'll give you the next chapter, because you're going to be multimillionaires. You really are.

I mean, you're sitting on a ton of real estate paid for at this stage, and no payments in the world. Very well done. Very well done. Very well done. All right. Justin and Sarah, Sacramento, California area. $220,000 paid off. That's their house and everything. Did it in two and a half years, making $220,000 to $240,000.

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt free. Love it. Love it. Very well done, you guys. Man, that's absolutely awesome. Very fun stuff. Our question of the day comes from blinds.com. You do not need a second mortgage to make your home over you can get brand new custom blinds without paying custom prices from blinds.com always put in the promo code ramsey and you'll see the best possible deal out there these guys are a great company blinds.com shelby's in illinois is it a good idea to pay for the coverage offered by the gas company

and the phone company to cover the lines that run from my house to the street. If something were to happen, we are not in a financial position to cover any repairs. No, I would not pay for that, and I would get in a financial position to cover the repairs. It's called your emergency fund. So you need to work your way out of debt, like we teach, and that's baby step two, paying off everything but the house using the debt snowball. And then from there, once that's done, once you're out of debt, everything but the house, then we're going to build your emergency fund of three to six months of expenses. I do not have any insurance on the things that run to my street on my houses, not on any of them. And if something breaks, I will just pay somebody to come out there and dig it up and fix it. It's that simple.

How would I do that? Well, I would use an emergency fund. How did I get an emergency fund? I didn't give people like this money, so I had more money. Now, are you taking a risk in the meantime? Yeah, I mean, something could happen between now and the time you build it up, but the point is get your financial act together, and the weird thing is it causes you to end up with more money.

See, here's what's cool. You ever hear the term the rich get richer, the poor get poorer? Well, there's several reasons for that. And it's not oppression and capitalism is evil. That's not it. Rich get richer, poor get poorer, because by and large, poor people who do rich people stuff with money become rich people over time. Rich people who do rich people stuff with money stay rich people. Rich people who do poor people stuff with money become poor people.

In other words, it's a behavior thing. It's a set of habits, a set of values, a set of choices. That's part of it. The other part is this. When you do get your head above water and you get Murphy out in the street, Sally Mae has been evicted, you have more margin in your life. And the weird thing is when you have more margin in your life, you make more money. Let me give you an example.

When you have your emergency fund in place, you can raise the deductibles on your insurance safely. What happens to the premiums? It goes down. You cannot pay for gotcha insurance like these little, you know, sewer line insurance or some such crap. It's unbelievable. No, you don't sewer line insurance or some such crap. It's unbelievable. No, you don't put your money on stuff like that.

You self-insure through these kinds of things. And the weird thing is emergencies quit happening as soon as you get an emergency fund. Isn't that weird? This is the Dave Ramsey Show. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans

since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated. And Zander will be there as your guide every step of the way. Visit Zander.com or call 800-356-4282. You need to get this taken care of. I can give you the advice and I can tell you where to go, but it's really up to you

to take that important step to get your family protected. That's Zander.com or 800-356-4282. We're doubling up this hour in the lobby of Ramsey Solutions. Randy and Jennifer are with us. Hey, guys, where do you all live? Hey, Dave. We're from South Haven, Mississippi, really close to Memphis, Tennessee. Absolutely. Well, welcome to Nashville.

And here to do your debt-free screen. Oh, yeah. Yes, finally. How much have you paid off? $144,000. Yay. And how long did this take? 39 months. Good for you. And your range of income? $100,000 to about $108 four thousand. Yay. And how long did this take? Thirty nine months.

Good for you. And your range of income? One hundred to about one oh eight. Good. And what do you guys do for a living? I'm a truck driver for UPS. And I'm a high school English teacher. Okay.

Very cool. Good for you guys. Fun. Fun. So what kind of debt's the one forty four? Well, we paid off his car, my student loans, which were very large, and also our house. Wow, your house and everything. That's two houses in a row.

What's this house worth? It's about 105, not quite as large as the last one. Okay, all right. Yeah, I think that I'd ask them off air. I didn't ask them on air. And their house, California house, was about 600 and something thousand. But hey, you know what? You're not paying any house payments.

You're not paying any payments at all. Life is good. That is true. That's pretty stinking amazing. Your house is paid for, and your next-door neighbor's is not. So there you go. How old are you two? I'm 31.

And I'm 35. So you're 15, 16 years behind that other couple, too. So very well done, you guys. You got plenty of time. This is awesome. What happened 39 months ago that put you on this trek? Well, so before Jennifer and I got married, I was debt-free except for the house, but then I went and did something really stupid.

I had about $25,000 saved up up and I wanted a car. So instead of paying the full amount, I put 4,000 down on it and decided I was going to pay it off really quick. And I was quadrupling up on payments and then I looked up about three months later and I said, this is really stupid. So I just went ahead and paid off the principal balance. And I started listening to your show and uh you inspired me to uh start working on the house so then i let jennifer i started doing that and i let jennifer know what i was doing and uh inspired her to or or uh encouraged her to um how long have y'all been married student loans uh three years a little over three years okay so when you guys got married then it was game on on the student yes okay It was, yes. Okay. The student loans were crushing.

Yes. They were bad. How much was Sally Mae? $56,000. Okay. I was one of those that did not know what they wanted to do, so I just kept changing my major, and, oh, I'll just put it on student loans. And the interest was not pleasant. It was about 7%.

And so every time we would throw money at it, it just didn't seem to go anywhere. It just looked at you. It did. So you had to throw a lot of money at it and kill it. Yes. My paycheck every month we sent to it and we just lived on Randy's income. Okay. And so when you guys were dating, were you discussing

all of this, I guess, ahead of time? Yes. Yes. He had to accept that I had student loans before he married me he was getting into well he had a big car payment so that's okay well congratulations you two what do you tell people the key to getting out of debt is newly married couple dating couple getting ready to get married they're facing a mountain of student loans what do they need to do uh well uh since you mentioned our marriage, we didn't go all out on the marriage. We had it at his grandmother's house. Oh, the wedding.

Yeah, the wedding. And it was simple. We didn't want anything huge. We knew we were in for the long haul with the actual marriage. So the wedding, we kept it simple. In our marriage, with our buying, we kept everything kind of minimalistic. If it broke, we fixed it instead of went and bought another one. You know, just trying not to be too materialistic.

We didn't need to buy a lot of clothes or anything like that. Okay. So that's the big thing. Keep your costs down. And that's what allowed you to do this. What other points do you have for getting out of debt? Well, definitely, you know, we live in the age of excuses. You know, everybody has an excuse for something. And I got a lot of them. I agree with you. Yeah. Just, you know, don't make any excuses. We've heard a million times,

you know, oh, oh well if we made your income we could get out of debt or if we didn't have kids we could get out of debt but really anybody can do it i mean people do it of all stripes on here yeah very cool yeah that's good that's a good point no excuses just get after it you're gonna hey that's your deal so do your deal you know whatever your deal is do it that's what was dealt with you excellent good job you guys very well done we've got a copy of chris hogan's book for you as well retire inspired number one bestseller and keep keep tuned into his podcast retire inspired and that'll keep you on the track to now becoming millionaires and outrageously generous along the way okay thank you thank you well done you two randy and jennifer from memphis 144 000 paid off in 39 months that's their house and everything baby

100 to 108 000 income count it down let's hear a debt-free scream three two one we're debt free! Here you go, you guys! Woo-hoo! Excellent job. Well done, well done. Jacob is with us, also from the Memphis area. Hi, Jacob. How are you? Hey, Dave.

I'm great. How are you? Better than I deserve. What's up? My fiance and I were just looking for some guidance on some things. So we don't have very much debt. We've got about $12,200 on a car that's worth about $9,000. She's got $2,600 in student loan debt, and then we have our house.

We bring home between $4,000 and $4,200 a month. She's not really satisfied with her job career path, and she's done the majority of her coursework to get an associate's and wanted to see about where that would fit into the steps. Because she makes $10.72 an hour right now part-time, but she gets 40 hours a week with some benefits. And the programs that she's looking at is a radiology tech, which would take her about two years to get done, and the estimated salary would be around 58 a year.

A lab technician would take about a year to get done with her current, the stuff that would transfer, and she'd be making $38,000 after that. Or an HR specialist would take her about three years, which that's kind of the last choice of hers to get done. So, you know, we don't have that much debt, and I just didn't know where we should focus on first. Well, the first thing is I hear a wide variety of job selections here or course fields of study. She's moving towards the RAD Tech as her number one. It's a really good program here in the local area. So if you're working out there, be proud. Yeah, you know what? I kind of think I hear that you guys are analyzing her career

only on the short-term income. Well, she's thinking long-term. Right now she works in HR, and she really enjoys it. What does she want to be doing 10 years from now, aside from income? Well, aside from income, she likes working with people, and she was really excited about the RAD Tech because we did a site visit or kind of an orientation type thing, and she really enjoyed the teachers and the facilities

and the idea of working with people in that way. So of the three, I think that would be the best long-term for her. Okay, and that's a two-year program, did you say? Yes, sir. And what does it cost? It would be around $19,000, but that's including the remaining work that she would have to get for her associates as well as the actual coursework for the degree. Okay.

So really what we're saying is we need $19,000 over the next two years, plus we need about $15,000 to be debt-free over the next two years. Yes. So that's $35,000 over two years. That's $17,500 a year. Mm-hmm. And you make a little over $50,000. Yes.

So it sounds like you can do $17,500 a year to me and be debt-free and pay cash for her school in two years. Okay. You just got to cash flow it. You got to map it out, map the math out. But I may have done something wrong, you know, I was doing that math, but I don't think I did. Yeah, no, that sounds right.

So keep plugging away at the debt snowball in the short term and save up to pay cash for the RAD Tech program? Well, you ought to be able to cash flow the RAD Tech program is i'm saying oh okay you need to look at i mean i i think if she starts now and you figure out okay i got to save this much a month to stay uh uh one semester ahead of my payments right for that you got to get you got to get that part moving and then once that's moving then we start throwing money at the debt and you keep up with your monthly budget basically you save the set amount a month to cover the rad tech once you get it started you're okay and then above that you knock out your debts you're probably looking at some part-time income in addition to

what you're doing now you're both going to be working your butts off it's going to be tough tough two years but i think you can do this and it sounds like it's cash flowable. This is the Dave Ramsey Show. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225. Mary's with us in Providence, Rhode Island. Hi, Mary. How are you? Hi, Dave.

Great. Thanks for taking the call. Sure. What's up? So about a year and a half ago, my husband and I read the Total Money Makeover. We realized we were totally in the red, and we sold our house, moved to a more affordable house, got Baby Step One. We just finished paying off our credit card today, and we still have $9,000 in my student loan.

So I'm a stay-at-home mom. My husband works but does not have retirement, but I have $17,000 in retirement from before when i was working and my husband thinks we should dip into the retirement to pay that 9k but i'm telling him i think now that we don't have credit cards that we can pay it off by christmas by the spring but definitely soon so i wanted to get your thoughts okay well i guess he missed that part when he read the total money makeover because the answer to your question is in that book. It says never cash out retirement unless it's to avoid bankruptcy or foreclosure, and here's why.

What's your household income? We take home about $5,000 every month. That's take home. So $60,000 is your take home, so that means you're probably making $75,000 to $80,000, give or take. Okay? Which puts you in a 25% tax bracket. All right? Now, if you were to cash out the $17,000 out of your savings, out of your retirement,

the government is going to charge you a 10% penalty plus your 25% tax rate. So you're going to get kicked in the teeth to the tune of 35%. So it's kind of like saying, hey, Dave, I want to borrow money at 35% interest to pay off my student loan. Answer would be, eh, no. You see what I'm saying? Perfect.

Yes, I do. Yes, I do. Yes, I do. The good news is you won the argument. The bad news is you both have to read the book again. Thanks so much. Thanks for the call. Rick's with us. Rick's in Fort Lauderdale, Florida.

Hi, Rick. How are you? Good, sir. How are you? Better than I deserve. What's up? I'm just calling about a product I bought a while back called a VUL. Variable Universal Life. Yes. Yes, sir. Yes, sir. And I'm not really

sure what to do with it. I know I'm not a fan of it, but again, even when I talk to my advisor on the ins and outs of it, I still walk away confused and not sure what to do with it. Okay. That's because that is one of the techniques they use to get people to keep it keep them in the dark and feed them manure oh it's a mushroom process you know keep them in the dark feed them manure that's how you grow mushrooms um so uh the deal is this it's a cash value life insurance policy. There are three types. There's whole life, variable universal life, and just variable life. And universal life or variable universal life.

And the variable universal sometimes has a mutual fund selection inside of it. Does yours? Yes, it does. Yeah, okay. And so what happens is, though, of course, that you know you're not a fan of it because you've not seen good returns. No, it's about 8% returns, but all the fees built into it, I think, eat up that, if not more. Yeah. Well, and usually if you're in a good mutual fund that's making 10 or 12, you'll net somewhere in the 7 range after fees,

which if you'd have just bought the mutual fund you might have made 10 or 12 in your case you're making eight and their fees are getting you down probably in the four range actually would be my guess usually the fees are going to eat four to five roughly in those things and so instead of buying the mutual fund directly you're buying it through this stupid policy and they're kicking you in the teeth to the tune of another four or five percent that's what it comes down to that's problem number one. Problem number two is the life insurance portion of it is what's called an ART, an annual adjustable term. And the cheapest term insurance you can buy is term insurance for one year based on your age that year.

And then it adjusts up every year as you get older. Okay? That's the cheapest term policy by the year for one year it's not the cheapest way to buy it over 10 years or 20 years okay but you know if you buy it just based on your age this year so you're paying in x number of dollars some of it is going to buy the life insurance and some of it is going to the investment that we've already ascertained is doing poorly. Okay? Less and less every year is going to the investment.

More and more is going to the insurance, because your insurance cost is increasing every year because of the ART. Have you noticed that as well? I have not. Okay. And so what we have always suggested, and I don't sell any of this, I don't give a crap, but here's the math on it. I have found that a 15 to 20 year level term policy locks in and gives you less expensive term insurance. And when you invest the money directly into the mutual fund, you don't have the extra fees and you get a better net of fees return. Does that make sense? It does. Plus, when you die with a VUL, they're going to pay the face

and keep your investment. That's the worst part of it. So it's a horrible plan when you die. But it's just really bad while you're alive, and it gets really worse when you die. So what I would suggest you do is get the proper amount of term insurance in place, and then drop this garbage and do your investing somewhere else. Does that make sense? It does. I think the reason I haven't done that yet is because of the surrender charges. Well, you've already bought that.

I mean, you're just dead. That's just because you got ripped. And this also means you probably need a new financial advisor because I think you have a life insurance salesman that's calling himself a financial advisor. It's certainly possible. That's what it sounds like anyway. It doesn't sound like it.

Most of the people in the mutual fund world don't sell this crap. They just sell mutual funds, and some of them sell term insurance too, but most of them don't sell this crap, because nobody believes in this garbage except the life insurance people. Nobody anymore. Nobody. too but most of them don't sell this crap because nobody believes in this garbage except the life insurance people nobody anymore nobody there's no one in the financial arena in the financial spaces that says buy whole life life insurance or buy cash value insurance of any kind there's no one out there they're just because the math is just so horrible and you've figured that part out but this guy's doing smoke and mirrors and hiding the p under a shell and keeping you confused instead of teaching you because he knows if you ever understood it that you'd drop it, and him too, probably.

So I'm thinking you need a new advisor and you need to get some term insurance in place and you need to drop this garbage. That's what I would do. Thanks for the call, brother. Open phones at 888-825-5225. Just making friends in the insurance business every day here. Car leasing, whole life, life insurance, credit cards and payday lenders. People

that love Dave Ramsey. Not! Oh, and I forgot. Pharasitical Christians. I forgot about that. Yeah, I'm a little too holy for the people that hate Christians and I'm a little too holy for the people that hate Christians, and I'm not Christian enough for some of you Christians. So I'm just stuck in the middle. Stuck out here with regular people.

Go figure. It's working out for me, though. I'm not going to complain. Open phones at 888-825-5225. Kelsey's on Facebook. Is renter's insurance worth it? Yes, and it's mandatory. Don's on Facebook. Is renter's insurance worth it? Yes, and it's mandatory. Don't be walking around without renter's insurance.

For a couple of hundred bucks a year, you can get $20,000 worth of coverage on your contents for theft and fire, roughly, give or take your area. Check it out. You can buy it from a lot of different people. It's not that expensive. Just go to dayramsey.com. Click on our insurance ELPs. They'll help you. It's just a expensive. Just go to dayramsey.com, click on our insurance ELPs. They'll help you. It's just a couple hundred bucks.

And you don't walk around without renter's insurance because your contents are not covered in the event of a fire, a storm, something else by your landlord. They can't be covered because the contents are yours. They're not your landlord's. Your landlord does not have what's called an insurable interest in your stuff. In other words, I can't buy insurance on your stuff. You have to buy insurance on your stuff. That's what insurable interest means. And so you have to get contents insurance because it's just simply not covered.

And, I mean, if you're renting and you've got $20,000 worth of stuff in there, it's not the best stuff in the world probably, but it's all you've got. I remember being there. It's all I've got. i can't afford to lose what little i got man it sent me back a decade trying to catch back up you know so now yes renter's insurance is worth it and a little 250 deductibles about 200 bucks a year for most of you and it covers roughly 20 thousand bucks in in odds and ends around your place. And yes, yes, yes, and yes, you need renter's insurance. And yes, you need renter's insurance immediately.

Go get it today. Do not pass go. Do not collect $200 until you buy it. This is the Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show.