The Ramsey Show - App - Cut Yourself Loose from Fools! (Hour 2)

Episode Date: October 3, 2022

Dave Ramsey & Kristina Ellis discuss: Student loan forgiveness news, Getting out of a messy house situation with family, What to do with extra cash, Buying a vacation home. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's the 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. We help people build wealth, do work that they love, and create actual amazing relationships. Christina Ellis, Ramsey Personality, number one best-selling author. Confessions of a Scholarship winner is my co-host today.

And you jump in, we'll talk about your life. She and I get the opportunity to talk a lot about student loan things because she is probably one of the leading experts in the entire world on the student loan epic failure called Washington, D.C. And the story continues. The drama continues. Yes. So President Biden announced that he's going to forgive $10,000 worth of student loans for anyone making less than $125,000. Court cases have ensued uh questioning whether he has

the constitutional right to actually do that um and of course he did this before the midterms uh when which was a politically genius move by the way uh to try to get that get everybody's eye off the ball of the uh failing economy and so forth because the looks most most experts say regardless of your uh your political leaning that the dems are going to take a bloodbath at the off the ball of the failing economy and so forth, because most experts say, regardless of your political leaning, that the Dems are going to take a bloodbath at the midterms. And so he's doing anything he can to get the eye off of that. And then this comes out, and this is not from right-leaning media source, from a left-leaning media source called NPR.

Very interesting. Yeah. They're saying that now up to 800,000 borrowers who thought they were going to be part of the relief may not be part of the relief now. Those are borrowers who had Perkins loans and FFEL loans that were issued and managed by private banks, but not guaranteed by the federal. But guaranteed. They're guaranteed by the federal government. Yes, but guaranteed. Sorry. Yeah. But we're once the mainstay of the federal loan programs until the FFEL program ended in 2010. So if you've got an old student loan prior to 2010, in a remarkable reversal that will affect the fortunes of many student loan borrowers, Education has quietly changed its guidance around who qualifies for President Biden's sweeping

student loan student debt relief plan. This from NPR. Today, according to federal data, more than four million borrowers still have commercially held FFEL loans. Until Thursday, the department's own website advised these borrowers that they could consolidate these loans into federal direct loans and thereby qualify for relief under biden's debt cancellation program but on thursday the department quietly changed that language so as not to raise a ruckus in the media oh we read it we read it we read it so the quiet part goes away now because there's 22 million of you out there. So we just made the quiet part go away. You just found out that they did this. I told you when this happened that it was not going to work exactly the way they said it was going to work.

And besides that, they haven't even said how it's going to work completely. I told you that the Department of Education had no notice ahead of time. Studentloan.gov had no notice ahead of time. Studentloan.gov had no notice ahead of time that there was going to be a student loan forgiveness announced out of the White House. If you're going to announce a sweeping program that the federal government is going to have to institute prior to announcing it, you normally, if you're the president, would let the departments know that are going to have to institute it. They had no knowledge of it.

Hint, everyone knew it wasn't really going to happen. And here are the beginnings of the unravelings. An administration official tells NPR that roughly 800,000 borrowers would now quietly be excluded from relief. I added the quietly because quietly is all in this NPR article, although article although it's not quiet anymore see you put it out right well i think that's the key is that we kind of need to put that in the megaphone because these are people who are already breathing sighs of relief that they're already counting on this forgiveness because biden sounded confident it was going to happen it's a little nerve-wracking so sad it's sad. It's very sad. So sad. You know what screws

up your hope? You know what'll steal your hope? When you place your hope in the wrong things. Let me tell you where to place your hope, okay? There's two places that you can count on. The rest of them are going to let you down. If you're looking at a picture of your spouse, sorry, it's going to let you down. If you're looking at a picture of your mom and dad, sorry, it's going to let you down. If you're looking at a picture of your boss, sorry, it's going to let you down. If you're looking at a picture of Jesus, that one's going to work. You can place your hope there. And if you look in the mirror, you can place your hope there. If you look and you see a picture of President Biden or President Trump, either one, you place your hope there, it's going to let you down.

Guys pointing at my picture in the lobby, going to let you down. Because I'm not responsible for fixing your life. You're responsible for fixing your life. And Biden is not responsible for fixing your life. And Trump is not responsible for fixing your life. It is your job to fix your life. Our job is to tell you you can do it. Go, kid, go.

Get them. Get them. Go for it it but i'm not giving you any money you're going to make the money to get out of that i'm not going to wave any magic wands from over here i don't have one my batteries are low on the one i do have it doesn't work no harry potter action here we don't have that at ramsey you're just all we are is your biggest cheerleaders and your teachers and your guide we will show you how we believe you can do it we can prove to you that you can do it if you'll get off your assumptions and go do it well yes 100 yes there there have been a lot of emotions around this you know from the very beginning from the moment in this room there's

lots of discussions a lot of emotions around here we bottle them but that being said i've talked to a lot of people who of course there's people who are upset and don't think it's going to happen but there's a lot of people who are genuinely counting on this counting on this so i'm telling you you're gonna have your your hope gets screwed when you place your hope on the wrong things well how do you think people should see this moving forward people who are still qualified for this do you think they should be nervous that potentially they could quietly fall out of it or what's kind of your thought on how people could should look at this my thought from day one has been don't wait on them to fix your life because by the time they get if they actually do institute this it may require an act of congress

many legal scholars are saying that you can't really spend 300. That's $300,000 million without Congress's approval. You can't just do that with a stroke of a pen as a president. You don't really have the constitutional right to do that, or at least that's what some people are saying. I don't know much about it, but it sounds reasonable to me. So it requires an act of Congress. And you know what? When we were kids, we used to say,

well, that's going to take longer than an act of Congress. You know why we say that? Because an act of Congress takes freaking forever. Congress is slower than Christmas. They're gridlocklocked they don't do half of what they say they're going to do three quarters ninety percent ninety eight point two percent of what they say they're going to do and so you know if it requires an act of congress you're screwed if if biden can really do it with a stroke of a pen it's ten thousand dollars you have ninety eight thousand dollars in student loan debt quit acting like your life's better go get

yourself out of debt. $10,000 isn't going to fix your life, by the way. It's going to help. And I'm not mad at you if you take it, but it's, I, there's so many indications here that there's so much about the midterms and so much about optics and posturing and so much about politics more so than actual financial planning. Yeah. It's going to be an interesting few months, I think. Yeah, 30 days from now.

Yeah. We're 30 days out from the midterms. They said that the application should be out any time now. So that'll be very telling. That would be interesting. Let's see if it comes out before the midterms. If you actually have an application in your hands, a place to sign up on a website that they've actually programmed.

So how are you going to prove $125,000 income limit in a year that's not closed? Oh, there's that. Jeez, why is this so hard to punch holes in? It's just like Swiss cheese. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy.

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care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budgets. That's chministries.org slash budgets. Christina Ellis, Ramsey Personality number one bestselling author, is my co-host today. Open phones at 888-825-5225. Right now, you're hearing a lot of talking heads in the news stirring up fear about the real estate market. If you believe them, you think the housing market's going to crash, that it'll be a repeat of 2008. But you're not hearing the truth. You can't make decisions

based on fear you need facts and those aren't facts here they are in 2008 there was a huge supply of homes but not enough buyer demand and demand and supplier what drive house prices so home prices went down in 2008 too many homes not enough buyers but that's not what's happening today as a matter of fact right now there's half as many homes, not enough buyers. But that's not what's happening today. As a matter of fact, right now there's half as many homes for sale as there are buyers. We have two buyers for every house in the market today. That is not a recipe for a housing market crash. We've done the hard work of vetting agents who know your local market and have the transactions to back it up to connect with a real real estate agent, a Ramsey trusted agent, it's free to connect with them.

Go to ramseysolutions.com slash agent. It's our endorsed local providers program, ELPs, the Ramsey trusted. ramseysolutions.com slash agent. Tiffany is with us in Arizona. Hi, Tiffany. Welcome to the Ramsey Show. Thank you for taking my call. Sure. What's up? So back in 2014, my husband and I bought a rental house with my parents. And then in 2015,

we remodeled it. My husband and I paid all the expenses and my father did the work. And then in 2016, my parents got divorced and it was a very spiteful divorce against each other. And my dad came to me and was like, if you give me 5,000 cash under the table, we'll be out of the rental property. And I was like, I'm not going to do that because you guys are both my parents. I'm not getting in the middle of it. So then he went down to the county clerk and put a $20,000 lien on the property. So we could not sell it because there was not enough equity to cover the lien. And we've tried paying him three times. He won't take the money because he has to split with my mom so we're just kind of stuck we don't really know what to do next

wow confessions of someone who should not have bought real estate in a partnership huh yeah i mean we're financially able to... No, that wasn't what I said. Confessions of someone that should not have bought real estate in a partnership, which is anyone, by the way. Because the only ship that won't sail is a partnership, including one with spiteful divorced parents.

And your dad is completely butthole. Oh, my God. That's so distressing. I'm so sorry for you. What a jerk. Okay, so what's the property worth? It's worth 63, and we owe 17. Oh, it's a big old property, too.

Everybody's going to get rich on this. Crap. What's your household income? Probably, right now, I'd say about $150,000. What's your net worth? About $500,000. Okay. There's a couple of ways to go at this structurally relationally and spiritually okay

justice would be served but not common sense by way number one and it's not my suggestion but this will work okay way number one is you hire an attorney and you sue the partnership in court for the disillusionment of the partnership assets and you for and the judge will force the sale of the house and he will deal with the illicit twenty thousand dollar lien in the process okay and they in other words the judge would remove the twenty thousand dollar lien because you could present evidence that in state court this is a state court it's not a federal court move you'd have to talk to an attorney it's going to cost you ten or fifteen thousand dollars to do this okay and your butthole dad is out of the picture forever because once you sue this jerk he's never going to speak to you again okay and he's a jerk

okay but that may that may not be a big loss but it is your dad it still breaks your heart yeah dads should not do this to their daughters by the way that's just it's not normal that's strange so um but that technically is how you would get out of a bad partnership is you sue for the disillusionment of the partnership assets the judge says you have to sell it they sell it slow sale with a real estate agent or at an auction and he can also rule on the illicit illegal lien which is what you're telling me this is okay yeah in the process uh now if you want to go that route you can go that route that would be justice that'd be the the correct thing would happen then is he would not get the $20,000 that he's not due.

The property would be sold, and the appropriate people would get the money, although you would be out attorney's fees. And you could sue for those and throw them in there. I assume there's no partnership agreement. No. Of course not. Another problem is every time we, like, I talk to my mom, she's like, you know, when you give your dad that money, half of that's mine.

So I feel like I'm in the middle where I can't make any money. No, it's not. I'm not giving your dad anything. That's not the point. Okay? Yeah. We're not going that route. Okay?

Your dad is not due any money. Is he? I mean, I. No, no. His deal was he did the work and you furnished the repairs that was the deal he's not due any money morally did i miss something we didn't pay him for the work i know he got equity for it you didn't get paid back for putting up the stuff either did you no okay that was the deal quit covering for this

jerk am i missing something no i mean he helped with the down payment too that was five thousand but even when we try to just give him the five thousand cash he wouldn't take it we tried giving him five thousand ten thousand okay here's the other way here's the other way here's the other way out this is this is 90 headache and 10 fruit you know what i would do if i were you i assume you're on the mortgage right yeah i would i would pay off the mortgage today and sign a quick claim deed to these two fools and let them go work it out and walk away. Just give it to them. Screw them.

Let them go burn it down. It's $63,000. Who gives a crap? You've got a half a million. You make $120,000. This is not life-changing money to you. What is life-changing is your parents are being twerps. Just walk away just toss them the keys over your shoulder and say you two figure this out good luck you children and just forget it went in foreclosure

it was worth over 200 000 and they owed 90 and they sent it back to the bank instead of selling it agreeing to sell it so money isn't really the issue. I'm not talking about them. I'm talking about you. Yeah. This is not about money. This is about fools. Cut yourself loose from fools. What's happening with the house right now? Are you guys renting it? Is it sitting vacant? We're renting it out. So even though it's a low, like the value is not high of the property, the rental, it's worth $1,000 a month. So let me tell you, by the time you split all this crap up, if you spend $15,000 in attorney's fees instead of $17,000 paying off the mortgage

and you go through all this crap, you're going to end up with $10,000 in your pocket, aren't you? After everything's said and done, after all the crap goes on, you're going to end up with $10,000 in your pocket, aren't you? After everything's said and done, after all the crap goes on, if you sue them and you fight through this for two and a half years in the legal system and you get this house sold, your net in your pocket is going to be between $10,000 and $20,000, isn't it? Yeah. Yeah, it is. It's the number she just gave me.

Something interesting happened in Illinois. They passed a new law that's effective 1-1-23, where if a lien expires, which this one expired in 2018, that you don't have to go through the person who put the lien on to get it removed. Because apparently there were a lot of contractors. It's not the lien that's the problem. You're on a mortgage and a deed with two fools. Oh, they're not. Their name's not on the property at all. It's just the lien that's the problem. You're on a mortgage and a deed with two fools. Oh, they're not.

Their name's not on the property at all. It's just our name. Oh, this is new information. Yeah, it's all in our name. Because they were in, I know this is super stupid I did this, but they were in Chapter 13. Oh, you guys are under the, it's an under the table family. We do illegal stuff for a living here.

Okay. Okay. Yeah. You know, I thought they were on the loan with you and on the house. Okay. In this case, I would just sue him. Just sue him and get the lien removed. That's simple. Just file a lien with the court and get the lien removed.

That's simple. And then don't give them anything. Screw them. I mean, if you want to give them something someday, that's fine, but not now. Christina Ellis Ramsey personality is my co-host today yes we talked about that last call all the way through the commercial break and you did too that's why you listen to the Ramsey show because it's a little cherry springish around here sometimes so um oh my gosh um so here's the thing finally in the last 30 seconds got the information before we move on to the next part that the ownership of the property was in the girl's name her and her husband own it so the only hold mom or dad have on that property

is a moral hold where they did a handshake partnership but there is no legal hold on that property at all and dad has placed a lien on the property that can be removed with a small attorney's fee of three to five thousand dollars so if you have a contractor that you pay and they're pissed and they say you owe me an extra five grand but no that wasn't our deal and they place a lien on your property you can sue that contractor and have that removed have that lien removed for you know a couple thousand bucks in state court it's not a big deal it's a quick hearing may even be you know may even be just local small claims court even possibly depending on how your area is so see an attorney honey and just sue the contractor that placed lien on your property. The contractor, being your butthole dad,

will settle the $20,000 for $3,000 and walk away. You give them the $3,000. Now you own the property free and clear. You have no moral obligation to people who tried to cheat you in an unwritten partnership agreement to pay them anything. You now just own the property, and they're just out to blunch which is where they deserve to be they were in chapter 13 when you bought the property anyway we used your name your credit your money to buy the property to start with the only thing they

did was come up with a really bad idea and stick you in it and so they get nothing which is exactly what these two goobs deserve parents misbehaving on the jerry springer show i mean the ramsey show and so that's the title of that call uh one last thing christina's asked me about something else what about the biblical scripture says to honor your father and mother you are supposed to honor the office of father the office of mother but we do not honor your dad if he sexually molests you. We honor the office of father, but we do not honor a sexual predator. We do not honor mom if she's doing cocaine and stealing your children's college fund. You honor the office of mother, but that mother has severed her rights to be honored as an individual because of her misbehavior, biblically speaking.

And so you're not biblically bound to honor people who are misbehaving in any situation. Well, I think that's important to highlight because I think a lot of Christians can feel guilt around that, and there are boundaries within that. Nothing is guilty as an evangelical Christian. We can do guilt better than almost anybody. Maybe Catholics beat us, but I mean, we're right in there together buddy we got we got guilt down to a science but yeah it's not there's nothing to feel guilty of here you're not you're the victim you're not the perpetrator all right let's move on to something positive like nathan and laura on the debt-free stage how much

debt have you two paid off we paid off 121 000 i love it. How long did that take? Eight months. Eight months. And your range of income during that time? It was $160,000. $160,000. What do you guys do for a living? We started a content creation agency based in Memphis, so we do commercial photography and video production. Of course you do.

Way to go. Well done, you two. All right, what kind of debt was your $121,000? It was our mortgage you're weird people you have a paid for house in memphis we do i love it what's the house worth uh about 125 one i'm sorry 225 250 so there you go just you just moved up considerably one sentence good and how old are y'all i'm 26 and i'm I'm 27. That's amazing. And they have a $250,000 paid for house. Oh my God, you guys are awesome.

Way to go. Boom, boom, boom. All right, how'd you get started on all this Ramsey stuff? So when we got married four years ago, we came into the marriage with no consumer debt. And really, thanks to our parents, we didn't have any debt from college or anything like that. And so we really had a clean slate. And then when we got married, like kind of right after that, we started the business. And so three years ago, we kind of said, you know, if the Lord chooses to bless our business,

we would love to pay off our house and then be able to help other people and really invest back into our business and our team. Amen and amen. And so this year, once we've started hiring team members and once that kind of started going, we said, you know, we really need to get this debt gone so that we can start on that path and so we just hit it hard so were your families financial peace families so i did financial peace junior and had the piggy banks and all that kind of stuff i love it your financial peace babies yes and at 26 and 27 years old you have a paid four quarter million dollar house ding ding see what those little banks will do those little banks are powerful i'm just saying the principal stick that's it yeah i truly didn't know i didn't know

that you could buy a new car we've just always had used cars and my family's i didn't know that was legal i didn't know well eight months you guys weren't playing around that's a lot to do for ten thousand dollars a month yeah so what did this look like? What did this journey look like? You just laid into it. We really just kind of decided at the beginning of this year when we kind of saw that it was going to be a good year for the business, we kind of decided, you know, hey, let's just pull more money out of the business and get that debt gone so that then we can use all of our cash flow to give and put it back into the business and really like Laura said pour into our team members and pour into others personally he's so understated we just decided to put 15,000 a month on the market at the first of the year we just decided

we could do that yeah then it wasn't a thing and we just did it well we had meetings like every I feel like first of every month we were like okay what are you working on what am i working on like who are we you know who are we trying to sell to right now and gives you a different reason to sell when you got a big goal yes i like it it does what was the hardest part um i would really say i i feel like we did a great job of being on the same page um but sometimes it was hard just to want to put that much on the house instead of into other things what was the month you put the biggest month chunk on you remember what the biggest chunk i think it was this month this month yeah what was the biggest chunk we put 60 on it oh 60 in one lick yeah dad gum

we just say we were like okay we're going to wait and then put it all on. Oh, you saved up a little. Yes. Okay. We kind of let it build up in the retained earnings. How'd that feel to write a $60,000 check at 26 years old? Oh, that's scary. I know.

That's just like a cult moment. It's like a roller coaster. You're like, wow. It was kind of like, you just don't think about it. You just kind of do it and say because you know all like i'm very business-minded so it's like oh well you know we could go do this and do this and it's like no we need to do this first and then we'll have that later so these guys these guys are amazing you guys you got it dialed in man you're gonna be so rich

it's gonna be so rich i wish i was on commission this is awesome y'all did people think you were weird at 26 and 27 paying off people don't even know well i i would say i mean yeah i think it is very weird among just our age group to be thinking about that because we we kind of said you know when we got married we have to avoid lifestyle creep of just like everyone around us is buying a big house and they're getting new cars and that sort of stuff and our parents did a great job with that too yeah so I think just you know not thinking we had to do everything in the order that everybody else is doing it and then I'm so proud of y'all yeah way to go heroes I know your mom and dad are sitting here'm so proud of y'all yeah way to go heroes i know

your mom and dad are sitting here they're proud of you well done very very well done good stuff hey we got a copy of total money makeover for you a copy of a membership to financial peace and a baby steps millionaire book for you that's the next chapter in your story if you're not already there by the way how much do you have in investments uh about 50 okay so you're on your way then all right so next order of business is to finish up baby steps millionaire journey so that's the next chapter in your story and you'll be there about what 31 years old yeah oh my god you guys are awesome wow so cool so cool mom and dad are over there grinning they're not gonna be living in the basement yeah this is these two made it. This is so good. So good.

Well done. All right, Nathan and Laura, Memphis, Tennessee, house and everything. 121 paid off in eight months, making 160. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Yeah!

Hey, for you parents out there, you got a 12-year-old running around with a piggy bank. That's your future. This is how you change your family tree, baby. This is The Ramsey Show. We'll be right back. Christina Ellis, Ramsey personality, number one bestselling author, is my co-host today. This is The Ramsey Show. Steve's in Columbus, Ohio. Hi, Steve. How are you? Great. How are you? Better than I deserve. What's up?

All right. Well, thanks for taking my call. As of probably about a year ago, I didn't even know that Dave Brantley Show had existed. But since then, I've been listening to you guys on the radio and your podcast. Well, thank you. All right. Thank you. So what I've done since then is I've eliminated some small building cards and credit cards. Okay. Your phone's going in and out. If you could speak directly into it, maybe that'll help.

Okay. I'm sorry so so since then i have refinanced my house from a five year or a 30 year five percent fixed rate to a 15 year two and a half percent rate which saved me a ton of money i would have never known to have done that unless i was listening to you guys. So now the only debt that I have is my house payment and a car payment. But one of my questions is, I have $22,000 in cash in a safety deposit box, and I probably keep about $20,000 cash in my savings. What would you recommend that I do with that? I'm 48 years old and have no retirement.

Okay. So you're 100% debt-free except your home. Except for the home and a truck payment that I probably owe like $7,000. Okay. First thing I'm going to do is pay off the truck. Okay. Today. And now you're debt-free.

And then you need to set aside three to six months of expenses as an emergency fund of that money. So what do you think three to six months of expenses sounds like? Well, my house payment's only $850 a month. What's your household income? So right now I'm single. I am engaged, but just mine alone, I make $40 an hour. I average probably about 45 hours a week. Okay.

So will you pay taxes on a year? I think it's around $2,300, $2,400. A year? Yep. Now, what's your annual income is what I'm asking. Oh, my annual income for me is probably about $80,000. That's what I was thinking. Okay income is what I'm asking. Oh, my annual income for me is probably $80,000. That's what I was thinking. Okay.

Okay. I'm sorry. So let's call three to six months of expenses $20,000 for the fun of it. Okay. And we're going to set that money aside and never touch it for anything. It's there just as an umbrella when it rains. So that's kind of what I've been doing with the safety. Yeah.

I don't want to kind of do it anymore. I don't want to kind of do it anymore. I don't want to kind of do it. I want to label it that and then never touch it. Okay. I have kind of forgotten about it. Yeah. Unless there's an emergency, you don't touch it. Okay.

And a new bass boat is not an emergency. I understand that. Yeah. Okay. So every time, since I've been listening to you i'm like do i really need this then the rest of it we're going to move on to the other baby steps and start your retirement account and you need to set up a roth ira and anything else you can set up to get going on your savings and start saving for retirement okay and your your smart vestor pro can help you with that if you just go to

ramsey solutions.com and click on smart vestor and so christine that's an example of a lot of that guy's a natural saver he's done a good job yeah really good job i mean he's got money there he's got not got much debt little seven little $7,000 truck payment, way ahead of most Americans by far, you know. But he's sitting there and he's listless and hasn't yet used the power of his income to not only get out of debt first, but then to point it towards something other than just piling up cash in a safe deposit box and start pointing it towards wealth building. Because if the inflation rate is 9%, and that's what they say it is, that means every $10,000 that is in there is losing $900 a year. Ouch. In two years, that's $2,000 you lost sitting in a safe deposit box in purchasing power, right?

And so you can't let money just sit in a stack of benjamins it goes down in value and um i remember when i first got on the air i had this whole hillbilly guy call me i love there's a great call because people remind me my whole growing up years and he's like yeah i got twenty thousand dollars buried in a coffee can somewhere out in the yard what do you think of that i'm like i think that's really dumb on a whole bunch of fronts. Number one, your neighbor might have a metal detector, and he's out there with a beep, beep, beep, looking around in the middle of the night. You wonder what's going on out there. Number two, paper left with moisture around it, and bugs will deteriorate.

You might go out there and find nothing but a little pile of confetti where your money used to be. And number three, you know what $20,000 is in seven years? It's $40,000. You know what it is in seven more years? It's $80,000. You know what it is in seven more years? $160,000. And so in the last 21 years, you have lost $150,000 with that money sitting in a coffee can.

I think I'm going to dig it up. I think you need to, son. So that's called opportunity cost. We talk about that in high finance. It's the missed opportunity that the money could have had. Yep. Yeah, and I think it's awesome that he's a natural saver because when somebody like this finds a plan,

then they typically get on fire and they're good at executing. We're not having to deal with changing habits. We're not having to deal with cutting off a spending bleed not having to deal with, you know, cutting off a spending bleed. But this person's going to find this and just dive in and be on track for wealth quickly. A spending bleed. A spending bleed. There could be a spending bleed in the culture. People could, there could be a lot of people bleeding to death with their spending bleed.

Yeah. That's very possible. Yeah. Because what you're talking about is most people spend more than they make they spend money like they're in congress right and uh you know he's not he's doing a really good job so well it's like if you've got the spending blade we have not only the principles that you need to learn we have the tourniquet we have the tourniquet we can stop the bleeding baby it's what we we do. We will light you up. Jeanette's with us in Sacramento.

Hey, Jeanette, what's up? Yeah, thank you for taking my call. My husband and I are in our late 50s, and we have some money in the bank minus our emergency fund. That's all set. We have about $350,000. We owe $305,000 on our house. And our adult children have recently moved to Florida. So we're considering buying a condo there. We could take that money in the bank and buy cash, buy the condo with cash, or we could pay off our first mortgage. And we're just wondering what you think would be the better thing to do. If you buy the condo, are you going to keep the house you're in right now?

Yes. And our goal would be to spend about four months a year in Florida. So like two months in Sacramento, one month in Florida and back. And so we don't have to rent a hotel and that kind of a thing. So we, you know, they're in the military, so it may only be a three or fouryear thing that we would keep that condo. So we're just debating.

The interest rate's higher now, and our current interest rate on the home we have is 2.85%. And this $350,000 in the bank, is that just cash sitting there, or where'd that pile of money come from? That's sitting there because we have not been sure what to do. What's your household income? Or by about $300,000 a year. Good for you. Well done. You've done a great job.

Okay. So your question is a question of prosperity. I'll tell you what we believe and what I did personally. I've got a nice lake home and I've got some other properties as well that are for family enjoyment. Okay. Those are called toys. So a Florida condo is a toy.

You pay cash for toys and you pay cash for toys after your home is paid off. So what I would do is I would write a check and i pay off my house today and then i would begin to aggressively save if i want to buy a condo but in the meantime i'd just go over there and get me a real nice airbnb or just go you know for less than three hundred thousand dollars uh you can rent a house just rent it for the year i mean wouldn't cost that much i mean what could you what could you rent that 300 000 our condo for probably 2 000 a month you know uh they sign up quite a bit like 3 200 a month okay all right so 36 000 instead of 300 000 so and here's what you're gonna find out i did this one time okay i was i was hell-bent on a certain property that shall remain nameless that I wanted to live in.

I mean, I wanted to have as a second home. It was a vacation home. And my wife was convinced we needed it too. So we had talked ourselves into it. So we went and rented one for a year. And we went up there four times in a year. And we counted up what we could have stayed in the freaking penthouse in the Ritz-Carlton for that instead of and not had to deal with the maintenance yeah all that so yeah we figured out

it wasn't such a great idea after all and that renting experience taught us that we didn't want to be an owning person in that type of property so yeah I would rent for a year and I pay off my house that's what I'd do. This is The Ramsey Show. Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today.