The Ramsey Show - App - DAVE RANT: This Stupid Trap Will Keep You in Debt Your Entire Life! (Hour 1)

Episode Date: September 6, 2023

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm your host, Dave Ramsey. Jade Walshaw, Ramsey Personality is my co-host. Open phones for you to call in and talk about your life. We'll talk about you right in front of you. The phone number is 888-825-5225. You jump in and we'll talk. Tristan's going to start this hour in Indianapolis. Hi, Tristan. How are you? I'm great. How are you, Dave? Better than I deserve.

What's up? So I'm calling to get some advice on our situation. I'm a stay-at-home mom. My husband's a full-time nurse making $80,000 a year. We have about $140,000 in just various debts to get paid off. Our house, we have about $173,000 left on our house. If we were to sell today in the market, we can make about $100,000. I guess my question is, should we do that to pay off some of this debt? You got $140,000? How much was it in debt? Yeah, about $140,000 and we have two cars. Okay, how much of that? Give me your car breakdown. My husband's car is like $88,000 to $8,800, and my car is at like $11,000.

Okay, and what's the rest of this mess? We got one credit card at like $1,000. We have another credit card at like $9, We have another credit card at like 9,000. And then we have student loans and we have a smaller loan that's like 11 or 12,000 that helped fix our crawl space. The student loans are the big chunk? Yes. Yes. Mine especially. How much is it? It's about 80. And how many kids do you guys have? We have three. How old are they? Sorry.

I know that's rapid fire. No, we have an eight-year-old, a five-year-old, and a one-and-a-half-year-old. If it's me, I have a couple questions. Okay, he's a nurse. He's making $80,000. Were you working before kids, or have you always been a stay-at-home mom? I've worked here and there. I worked briefly when my oldest was little, and then once we had my second, my paycheck essentially just would pay for child care, and it just wasn't worth it for us.

What was your career? I mean, just customer service type gigs. I worked at a gym, front desk type things. You have a degree? I don't. Okay. And your husband's a nurse. Okay.

Is there anything that you can, let me rephrase that question. I think that there are things that you can also do to earn money from home when you have time, because at the end of the day, the equation here is we've got to get the income up. I wouldn't sell the house to get $100,000 if that was your initial question. I think that you guys need to work through this. And I know that you can work through this $140,000, $80,000 income. If you can find $20,000, if you can find $25,000 a year, anything is going to help this equation move faster. Right because at this point uprooting the family doing all this to get a hundred thousand dollars you're gonna have to then save up three to six months and then you're gonna save up a down payment and whatever you

move over to to rent it's not going to be a big difference as a matter of fact you could end up spending more money monthly yeah if i were in shoes, I would go through three years of hell rather than sell your house. Okay. And the three years of hell sounds like this. He picks up side gigs in the ER and you find something you do to work from home. And those two things together add 40 or $50,000 to this equation. And you throw all of that and some more towards this student loan and you're

done in two to three years. But you're going to not see each other. You're going to be tired. You're definitely not going out to eat. You're not going on vacation. You're going to sell so much stuff around the house that the kids think they're next. I mean, your friends are going to be making fun of you because you joined a cult. I mean, you're going to be having all of this kind of thing going on for about two and a half to three years.

And then you'll be free forever. And let me raise my hand on something here, Tristan. The kids are eight, five, and one and a half. It may have made more sense even two years ago to stay at home because you had two kids outside of kindergarten that were younger. And now you've got a kindergartner you've got an eight-year-old you've only got the one kid at home so if you found the right gig it might do you see what i'm saying it could be worth it to re-crunch those numbers because that does it could be worth it to bring three kids into your home and keep them and that's your gig

oh okay you know because people are looking for inexpensive child care that's reliable. Now, that's kind of cool, too. I don't know what the rules are in Indianapolis, how many kids before you leave being a babysitter and become a daycare. But you don't want to get into that from a regulation standpoint and all that. But anyway, you know, people have kept other people's children's in their home for generations and paid for it and so yeah that's something i would consider and that's kind of becomes a no i don't know but and this is not you know none of this is pleasant but selling your home's not pleasant being in debt's not pleasant you know nothing here there's no pleasant on the table

for the next two years that's true So let's just choose our pain, choose our hard and lean into it and go, at least there's an end to the one we're describing. And the end is, you know, you're going to call in here. You guys are going to bring the three kids on the show and we're going to do a debt-free scream by God. You know,

that's what we're going to do. That's right. We'll get fired up and wired up here. And that's, that's what we want for you. And we'll help you. We're going to put you into Financial Peace University, our nine week program. And that'll also sign you up for every dollar of the budgeting app. And we'll show you how to do this stuff that people are doing all the time.

They've been doing it for 30 years. I've been teaching this stuff. And be sure to tune into our student loan live stream that's coming up on the 12th. And I mean, you're a big portion of this debt of student loans and you're not alone in that. be sure to tune into our student loan live stream that's coming up on the 12th and i mean your big portion of this debt is student loans and you're not alone in that there's so many people who are facing that and that live stream is going to help them figure out how to budget figure out what their payment is figure out how to pay these things off for good so that they're no longer haunted by the ghost of of education's past yeah and ruled by the uh well anyway we just yeah we'll deal with that later yeah so hang on we'll have austin pick up get you signed up for financial peace university and get

you going in that because that's what you're gonna have to do trust in what we're describing i understand it's almost bizarre it's so weird but so is being free being completely free of debt in america today is so weird that it's bizarre yeah so if you're going to have unusual results unreasonable results you're going to have to engage in unreasonable behaviors and you know the lady sitting beside me did it for seven years you and sam yeah you worked like 17 different things i mean yeah and had little kids while you're doing it. Well, the kids came after the fact. Oh, I'm sorry. But I will say you have to embrace the things that no one else is willing to embrace.

You have to do those things that people look at you and go, wow, they're weird. Yeah. Like they're crazy. They sold the furniture in their house. They're crazy. Yeah, that's nuts. I mean, they just sold. They haven't been on vacation in two years.

Yeah. I don't know. How do you make it? Yeah. They go to the restaurant and they just order water. They're just there for the social aspect. They're not there to go out to eat. To eat.

They're not there for food. That's right. At a restaurant. Yeah. That's weird. That is weird. I'm happy to be weird, Dave. I like it.

Going out for drinks with my friends. More water. Yes. I'll take the water, please. Water for me. With ice. Tap. Tap. No bottle. No frou-frou water. Yes. I'll take the water, please. Water for me. Tap. Tap. Tap. No frou-frou water. 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

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ahead of the payment restart. According to CNN.com. Yes. Now we know a lot of these people were probably automatically enrolled. It says the majority of them. So basically CNN's headline is a lie. Yeah. Four million people

enroll in biden's save plan ahead of payment restart no they didn't the vast majority of them were automatically defaulting default enrolled they didn't voluntarily enroll they didn't actively enroll that's right they didn't enroll that's right you pushed them in like cattle push them in that's not enrolling and so the majority of them came out of the other program that failed called repay and now we're into save because we have to have acronyms in washington for our stupidity right it makes it sound better than what it is because what it is is a trap god this thing is awful it says launched earlier this summer the save plan save they call it saving on a valuable education

that's laughable it's available available to most people with federal student loans and this is what they're saying it can provide an air quote significant relief to borrowers struggling to pay off their student debt it would not be struggling to pay off it'd be struggling to pay yeah it does it does do that yeah okay so basically if you sign up or accidentally were enrolled, even though you didn't enroll, in the new save plan and you're one of those 4 million lost souls, here's what you signed up for. You have a formula based on the poverty level that dictates the dollar amount per month that you are to pay. If it does not cover the interest being charged on your student loan the interest does not accrue however 100 so in other words if the interest on your

student loan is 50 a month and the formula says you only have to pay 30 a month you don't have any extra interest added on they forgive the 20 but what they fail to mention is 100 of the 30 goes to interest consequently what is happening to your student loan balance here's what i'm not moving it's sitting there doofus sitting there like a frog on a log my god how dumb are you people in washington Let's sign up people, forgive a portion of their interest, allow them to pay a tiny little payment with the promise of debt forgiveness, which you always lie about up there. I mean, perpetually lie about up there. When are you people going to wake up?

Oh, my God, it's dumb. This is ridiculous. It's ridiculous. And here's my thing. I'm like, okay, the interest, they say it's not going to accumulate or that it and here's my thing i'm like okay the interest they say it's not going to accumulate or that it will be forgiven at the end of your term which by the way the term starts if you let's say you have twelve thousand dollars just twelve thousand dollars dave okay and student loans okay the forgiveness starts at 10 years of payments

so they want you to keep a twelve thousand dollar debt no it's 20 years of payments they're proposing to bring it back to 10 the proposal has not gone through right now let me see here let me buy and propose canceling up to twenty thousand dollars unlike one-time cancer yeah they're unlike one-time cancellation proposals the same plan can benefit both current and future borrowers which the new people that are getting a student loan debt can sign up for this ridiculous moronic thing also the biden administration first said it was developing a new repayment plan last august save is expected to cost over no that's not the one we meant this isn't where's this this is not the article this is different so what it is is if

you have you you get in at twelve thousand twelve,000 equals 10 years of payments. And for every additional thousand, Dave, that you owe, so 13, you're paying for 11 years. 14,000, you're paying for 12 years. $14,000. The max is after 20 years, they promise to forgive whatever's left. Exactly. So after you've done nothing for 20 years, it's going to be forgiven. But let me help you with the people that got promised 10 years ago that they were going to have their loans forgiven for doing for working for non-profits

and in underserved areas okay you remember those people yeah yeah 900,000 people have applied for that you know how many got it 1.6 percent so after 20 years of doing basically nothing, hoping you're going to get forgiveness, 1.6 percent of you. So bad. This is basically the DMV of the financial world. This is the dumbest butt thing, the most inefficient socialistic garbage I've ever seen in my life. Kick the can down the road. Put your hands over yours and go la la la la this is not happening dumb but idea now have I been unclear I hope I hadn't been unclear so how are you going to get out student loan this is what you need to do guys twelve thousand dollars in debt yeah deliver pizzas so easy like and make two thousand dollars a month delivering pizzas every

night and you're done in six months. Yeah. And you have the rest of your life to not be screwing around with people like the Biden administration. Oh, my gosh. Yeah, it's unbelievable. It's unbelievable. This is ridiculous. And CNN is so stupid.

And, you know, half the media will pick the same. This press release, by the way, this headline came from the White House. Yeah, the white house yeah it did and they republished it because it's a lot student loan repayment four million people enrolled in biden's save plan had nobody enrolled you automatically defaulted into it yeah i mean the number of people that physically signed up for this idiocy on purpose is very small. But they're making it, well, four million people did it. You should, too. Yeah. No, you shouldn't.

Good Lord, people. When are you going to get a clue that the White House and the people in Washington, D.C. are not here to bless you? These people are, you know what this does? It keeps you in debt your whole freaking life. You're 35 years old you're 55 with grandkids and you're still screwing around with your college you ought to have unbelievably naive at best stupid at worst to believe the lies they peddle out of the republicans or the Democrats regarding student loans. Because let me just tell you, student loans are awful. They're horrible.

Then why do you morons keep making them? Now, there's a question, Dave. There's a dadgum intellectually dishonest bunch of people. Yeah. You know, we're going to do everything we can to forgive your student loans and make it easy because there's such a burden on you while we continue to make them to the next generation. You can't solve a problem. You're a freshman in college right now. We're going to put you a hundred grand in debt, let you get a degree in left-handed puppetry, and then put

you on $30 a month for the next 25 years and then lie to you about whether we're going to forgive it at the end of that. Please, people, don't be so stupid. This is ridiculous. It's completely out of control. I mean, I read this. I don't know why I got pissed off, because I should expect this kind of stupidity out of Washington, and I should expect this kind of stupidity out of the press where they put a headline that is completely false across the top.

I mean, this is, oh, jeez. So we're going to help you with that. Listen, your student loan interest has restarted. It started last week, okay? Your payments are going to start October 1st. You know when that's going to be here? Faster than Christmas. It's going to be here in a minute, okay?

A hot minute. You're going to have to start paying payments again. And if you're dumb enough to sign up for a $30 a month plan and stay in debt the rest of your life i can't help you you're just too dumb to be helped okay that's not gonna work i can't help you you got no more you got the motivation of a dead brick oh come on seriously i can help you though jade can help you if you will get up off your assets and go do something about this that's right you guys got to sign up for our student loan.

It's Student Loans in America, how we got here, how we're getting out. It's a free live stream. If you have student loans and you are not signing up for this free live stream, there's something wrong with you, and I can't help you. If you want help, sign up for the live stream. We're going to tell you everything you need to do. We're going to help you. Hey, let's charge $30 a month for 20 years for this oh i love that i mean that would make it popular and four million

people could accidentally sign up for it isn't that funny dave how when we want to do something to set people free that sounds asinine yeah well it sounds like you you people are taking advantage of poor people by giving you a free live stream would you shut up seriously it's free figure out how that's manipulative okay that's free yeah jade is going to show you we're going to i know some of you're scared okay well then do something about it i know some of you're confused good do something about it i'll show you how i've been doing this for 30 years and it isn't going to be you screw around with this for the rest of your life. I can promise you this.

Spoiler alert. You're going to get with it. You're going to get a callous on your working hand, baby. This is what you're going to do. You're going to go. And don't worry about working too hard. Just before you die, you'll pass out. It's okay.

We're going to teach you how to do this stuff. Sign up. Student Loan Livestream. RamseySolutions.com Slash Student Loans Livestream, RamseySolutions.com slash studentloans. That's right. Jade Walshaw, Ramsey Personality, is my co-host today. Thank you for joining us, America.

Jake is with us in Dayton, Ohio. Hi, Jake. How are you? Hey, thanks for taking my call. Good. How can we help? So, world got a little flipped upside down. I got a injury. I'm 26, and they said that I'm going to need a total knee replacement, and it's not going to affect my career now. However, in the next 10 to 15 years, I'll need a second knee replacement.

And based off that, they said a decent chance that I would not be able to go back to work. At that job? Yeah, in this career field. So I'm in law enforcement. So my thought process I'm trying to figure out is, do I go ahead and switch careers now? Because I don't want to keep dumping money into a pension and then be 40 with kids and then have to switch careers and take a pay cut. Because everything I'm looking at right now is a significant pay cut to where I'm at. Okay. Well, let's just change the set of assumptions.

What do you make? Last year with overtime, I made 102. Okay. All right. So the assumption that you can't make 102 ever again in your life is not a correct assumption. No, sir. Yeah, I get that.

It's just everything I'm looking at right now. I know. But right now, your heart's kind of broken because you've had your sights set on being in law enforcement your whole life or a large portion of your life, and you're heavily invested. And then you got injured, and you've gone through the trauma, the emotional trauma of the injury and the physical trauma. And now they're telling you that that you know your dream's gonna die early right and so in that mindset you usually don't see this

the sunlight you usually see the storm clouds that would be in human nature not that you're a bad guy okay but i'm not sitting in all that mess that you've been through and so for me i've got 26 year old guy who's bright enough to become a police officer he's bright enough to become a lot of things between now and 10 years from now i mean you could open a business and make two million a year i don't know how old are you 26 i'm i'm 26 and i since I found this out, uh, I signed up for classes again and me and my wife are cashflow in that, but I'm just trying to, yeah, I just don't know, like how long is too long to stay in this career based off of, you know, like when, when's the best time to switch careers?

Well, number one, you don't want to get injured again, um, or, or, you know, leave your partner in trouble because of an injury or something like that. And number two, you don't want to wear it all the way down. But do we have to decide this week? No, we don't decide this week. I mean, we have to go work at Chick-fil-A. No, crap no. That's not what you're doing.

Okay. But what I would do is say, okay, over the next two to three years, I'm going to develop my next, my encore career, my next career after the curtain goes down and comes back up. And I'm going to get, you know, what classes I have to take or certifications I have to take to be that. And I'm going to become a student of Ken Coleman and go live my next dream, which oddly enough might end up better. Now, I like that. that's interesting yeah yeah that's thinking god's making me making me change your career here i'm trying to figure out well what what what kind of timeline is here you know yeah maybe or or you know um you know my my whole life was set up for me to be a real estate investor. And then my real estate portfolio was deeply in debt, and I lost everything.

And I was 28 years old, just a tiny bit older than you, with a brand new baby and a toddler, and went bankrupt and lost everything. And so I get to have a new career after that because guess what? They don't loan you a bunch of money at the bank to go do flips if you just file bankruptcy. So that was kind of out. and so those days were over plus i was done with them because it didn't bring me a lot of fun and so and by the time your knee got busted you know you're you're part you're partially over being a policeman at that point because you're like this this is less fun than i thought it was going to be yeah you know and so you're having a little bit of that

same kind of an experience and you get this next chapter of your life this uh second half so to speak and i yeah you know i think about things like that even what you just said dave you did this i was just about to say i came from entertainment i was an entertainer my entire life and then covet happened and there was no entertainment and i had to contemplate my life and i realized the fauci being entertaining that's how low we got but i realized hey there's other things I can do. There's other things I'm good at. And I think that you'll find the same thing. And I'm the type of person where I think we just go from from good to better to best. Like if you if you're living your life, right, it's just getting better and better. And I think that this has the opportunity to take you

on yet another adventure that's going to have another great outcome. You know, being a law enforcement officer is going to be the first part and then you're going to move on to something else. And then who knows, you might move on to something else, but that's just the evolution of life. And it's not a failure. It's not an, it doesn't have to be a negative. This can be a, this can be one of the greatest things that's ever happened to you because it'll open that, that next door. You don't know what's going to be behind it, but you got to keep turning those knobs and something's going to be behind there. And you're going to look back on this and go, man, here's what my prayer always is. I want to look back and go, man, I'm so grateful XYZ happened because when that happened, it allowed me to do this, this, and that. And this has the potential

to do that for you. You'll look at this right now. It's painful. It sucks. But in a couple of years, in eight years, in 12 years, you might go. I would have never dot, dot, dot if that hadn't happened. Yes. I never would have been at Ramsey if it wasn't for 2020. Yeah.

Yeah. And everybody hated 2020. Thank you, Fauci. Thank you, Fauci. That's the only time we'll say it. That's the only time we'll say it that's the only time it's the only time you ever hear that nobody nobody but except the plexiglass people say thank you Fauci I'm just saying now that's what it means to get Fauci'd then so yeah that's the thing anyway

but I mean yeah the point is I mean I didn't I didn't sign up for bankruptcy it wasn't what I wanted to do uh and I won't say it's the worst it's the worst thing that ever happened to me and it's the best thing that ever happened to me both yeah very dramatic traumatic uh and I I you know I I still you know we've got the actual bankruptcy filing on the wall wow bankruptcy out here in the in the Ramsey lobby when you come out here just so you can see how this started and I walked by that I still kind of go you know it's like oh crud you know but and it's been 30 years and I still get the heebie-jeebies but yeah but so it's not like I'm still joyful about the whole thing but you know I never would have sold 10 million books selling houses yeah I feel that I I thank God that we went through that four hundred and sixty thousand dollars of debt it

sucked at the time I'm going to sign you up for Ken Coleman's career assessment. And it takes about 15 minutes to take. I'm going to give it to you free. And I want you to take that. And it's going to kind of point you in some directions that you probably were already thinking about. But it'll start to give you some clarity on that. And I'm also going to send you his book, From Paycheck to Purpose. Because I think what you've got here is not the end of the play.

I think you've got the second act. We're between the first act and the second act. And there's no rush. You said you've got 10 years before this is going to go sideways on you, so to speak. And so, I mean, we can take two or three. We can take six months and figure this out we do want to actively figure it out though we don't want to sit and let this situation happen to you that's right you want to happen to it be proactive but let's determine you know okay here's the direction

and then and let me tell you what the direction is jake the direction is not go back to school that's a good point that isn't people get this I just go back to school for what because if you don't know because that's just I just go back to school no that's dumber than a rock you may be studying exactly the wrong thing and you may not even need to go to school for what you're thinking about doing so um when we talked to a guy the other day he's making 300,000 a year and he has a landscaping business he cuts grass yeah you know yeah shut up yeah do not go back to school unless you know you've done your research you are locked in you have to have it yeah you definitely don't go into debt for it no but you have to have you have to have the degree or the knowledge base to open up the fee you know it's permission to

play in the field you're going into right okay and Okay? And so, you know, what have we got to do there? And, you know, it could be as simple as, it may not be appealing to you, it could be as simple as you work on your master's level stuff in law enforcement administration, and you move up into leadership. That's interesting. And, you know, where the knee is not the problem, and that changes the whole discussion.

I don't know. Maybe your law enforcement parlays you up into that. the problem and that changes the whole discussion i don't know maybe maybe you're but maybe your law of law enforcement parlays you up into that it's okay to be either any of those but do it intentionally take two to three years to get tooled up begin to make your move gradually so you sneak up on this it doesn't sneak up on you and we'll send you the tools from ken coleman to that this is the ramsey show thanks for joining us america jade washall ramsey personality is my co-host today jim is with us in nashville hey jim welcome to the ramsey show how can we help hey dave glad to talk to you you too man enjoy your Thank you. All right. I am calling in response to a video I saw recently that you claimed infinite banking concept was a scam and actually got quite pissed off about it. So I do not agree with that in certain points that you made in that video.

And I have set up a policy for my son when he was one years old. He's five now. I'm sorry. Say that again. I said I'm sorry. Yeah, so am I sometimes. No. So I set that policy up for me.

He's one years old. Um, it has a $500,000 face value. We pay $5,373 a year for 13 years and it's paid up at that point. Um, there's a few points that I wanted to discuss that I just didn't agree with. Do you want to just kind of take one thing at a time? Sure, that's fine. Okay. One of the main things was that you claim that the cash value dies with you,

and you only get the face value paid out. That's true. Well, it's not true if you reinvest the dividends back into the policy. Dividend reinvestment is not cash value. Dividend reinvestment is because you have a mutual company and the policyholders are the owners of the company. And so the profits from the company come to the policyholder and they use that to buy paid up additions. That is not the same as keeping your cash value that's buying extra insurance with your overpayment but it still works out to be no um having a cash

value much greater than the 69 849 dollars we put into it the actual cash value, not the paid-up additions, the actual cash value dies with you. No, because Yes, it does. Okay, but your death benefit is larger than your cash value. So whoever you're so for me, I looked at it.

Because you bought more insurance. You know what a paid-up addition is? A paid-up addition is buying additional insurance. I understand that. That's why you're getting more at death, not because you got your cash value, but because you used your policy dividends to buy additional insurance. Right. That's different than getting your cash value.

If you took those policy dividends and went and bought a term insurance policy for $100,000, well, you'd get $100,000, but that's not your cash value well i have a term policy i know but you missed my point okay let you're talking about you use the policy dividends you use the money they send to you because you're in a mutual company to buy additional insurance yes paid additions yeah if you buy a term policy on the side for $100,000 instead with that same money, you would get $100,000 more than your face value, but that's not your cash value. That's additional insurance.

They're different. Right, they are different. In term, you don't have cash value to borrow again. I'm aware of that, but your point was that you don't lose the cash value, and my point is 100% of the time, by definition, you lose the cash value. Okay, so as I said, tit for tat, if he lives to be 80, I'm looking at the readout here. Say he only lives to be 80, okay?

The cash value will be worth about $2 million, but the payout for the death benefit will be $2.6 million. So, okay, technically... So you're taking your policy dividends and go buy term insurance with it and you would have more than you're

talking about because you get a better buy on the insurance than you're getting about because you get a better buy on the insurance than you're getting with this rip-off whole life crap yes you would get a high but you wouldn't be able to use it throughout your life as a as your own bank i think that's okay but here's the thing that's a side issue that's a side issue but your first issue was you know he's going to have all this money at retirement well let's just do a little present value calculation on what you put in for a baby. $5,000 a year for 13 years. Do you know what that would be in a mutual fund at age 88?

It would be $25 million, dude. Well, he's going to have that anyway. Instead of putting it into this ripoff thing and making 4% on your money and when he dies he loses his cash value if you put this in a good mutual fund you'd have a hundred x 10x the amount of money and that's your infinite freaking bank but i we're only putting in 70 000 and he's going to be that's how present value formula works in finance you know um look let me just okay take the same i mean i understand let's intellectually deal with this for a second okay take the same amount of money when you get off the air and put it in a financial calculator at 11 and pretend it was invested in mutual funds and see what it is when he's 88 years old

it'll be more a whole lot more but and he'll have that too with this to me is a way to no he doesn't have that to borrow again that's what you that's called opportunity cost on your money you put it into something that's going to make him at 88 have two and a half million and he should have had 25 million because you screwed up and put it in the wrong thing well we when we screwed up and put it in real estate too and he's going to get real estate but then put the money in real estate but don't put it in this crap i have to respectfully disagree well on what basis he's getting more money if you put it somewhere else. But he's able to borrow against this. Hey, if you've got $25 million in mutual funds, you can borrow against it.

But he's going to have to wait until he's retired to get that amount of money. Okay, so you're going to teach him that the way he becomes wealthy is borrowing against money that his father invested for him that's how he builds wealth said no one rich ever i mean banks use this product to no they do not you've been watching too much tiktok banks do not use whole life not ever banks nowhere no bank sell i would respectfully disagree no they don't they do not use whole life life insurance what bank well i mean we we google it and see what typically banks do with their money but um i believe typically banks never put money let me tell you what banks do. They put it in bonds. They're required to. They wouldn't be allowed by federal regulations to put it in whole life.

It's not a place to invest money because it's a horrible investment. The rate of return sucks, and when you die, you lose your cash value. I know, but you're making it sound like I'm losing money on the whole thing. You are. You're leaving money on the table. You're making it sound like when, not me, but my son, when he dies, that he's only going to be able to get his money back. He's going to have $22 million less than he should have

if you had put this in a good investment. You had mentioned that the cash value dies when you only get the face value. That's not true. That is true. That's not true. I just covered that with you for the last 10 minutes. Paid-up additions are the only way that cash value increases unless you're using a universal life program B

where you pay extra to get the extra insurance, which is another form of paid up additions that isn't coming out of my pocket though i put 70 it is coming out of your pocket it's coming out of the policies pocket i know the policy you put the money in dude and then it paid you a dividend and you chose to buy more of this crap with the dividend and you're calling that i kept my cash value no you didn't you bought more insurance well i know that i put in 70 000 and at a certain age it's going to be at age when he's 15 years old that's going to be paid up yeah jim and you understand what paid up is understand if you're

alive that there's a probability of your death and so 100 of the time that a life insurance program is paid up it means that you prepaid it that's all it means because as long as there's a probability of death there's a cost so the insurance company has always got a cost as long as you're alive so there is no such thing as a paid up that's a that's an industry term that gets suckers like you that's what it is is. Now, paid up means prepaid. You paid all of the premiums in 13 years for his whole freaking life in advance. That's why it's paid up.

Hey, man, I think you ought to keep it. It's perfect for you. But thanks for the call. Hey, what's up, guys? It's Jade. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to RamseySolutions.com today to sign up for our newsletter. Again, that's RamseySolutions.com to sign up for our weekly newsletter.