The Ramsey Show - App - Dave's Thoughts on the Prosperity Gospel (Hour 1)

Episode Date: May 27, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us, America. Open phones at 888-825-5225. That's 888-825-5225. Starting off this hour is going to be Johnny in Tennessee.

Hey, Johnny, welcome to the Dave Ramsey Show. Thank you. Thank you for having me. Sure. What's up? Yes, sir. I just want to get your take on the prosperity gospel and prosperity preachers who say that Christ died so that we could be wealthy and healthy and prosperous. But then you have the other side of the question where people and other believers say that it's wrong to have money at all. And I know that as Christians and as believers, our greatest treasure is Christ himself, and that he died to give us himself and to live for him forever. And so I just wanted to know your thoughts on both of those two sides. Well, you know, I've been studying this subject for probably 35 years and trying to match it up with the reality that I see around me.

And my tendency is to believe that both ends of the spectrum are exaggerating and therefore in error. Right. And we can talk about that for a minute. The prosperity side seems to indicate that if you're poor, then you must not have enough faith, which is ridiculous, because that doesn't match up with experiences that I've had and you've had where we deal with people that are poor, and they've got many times more faith and more of a pure faith. Or that if you're not healthy, it's because you haven't prayed properly.

It could be because you didn't eat properly, you know. Right. And so that kind of, you know, and because I talk about money and I'm a Christian and I'm unashamed about my success with finances, I often get lumped in with the trolls and the hate mail stuff that Dave Ramsey is just one of those prosperity gospels, and I'm definitely not one of the prosperity preachers. I don't believe that stuff. Now, are there elements of what they say that are true? Sure, absolutely. And you can find Scripture that indicates that an abundant life,

which is not everything but money, it's everything including money. An abundant life is a good thing for a Christian. But an abundant life certainly is more than money, and if you limit it to money and apply that Scripture, you know, Jesus' saying there to that, then that gets into a problem. On the other side, it's often funny to me that the anti-wealth is, the people quoting me Scripture there are usually not believers. And sometimes they know the Scripture better than some believers do.

And they'll say things like, well, money's the root of all evil. Well, it doesn't say that in the Bible. It says the love of money is the root of all kinds of evil. It's very clear. And to say that my heavenly Father, who's absolutely crazy about me, if we being evil know how to give our kids good gifts, how much more so our Father in heaven? And so, you know, we're as parents, I have this inclination towards blessing my children that comes from the fact that I'm made in God's image, and he has an inclination towards blessing

his children. Now, does that guarantee that somehow God, you know, isn't participating in that? Of course he's participating in the blessings for those of us that believe in God, you know. And so I'll bless you so you can bless others. Exactly. You are blessed that you might be a blessing. And I have noticed that poor people don't feed hungry kids. And so if you say, if you're on that side of the spectrum from a spiritual perspective, you would say, okay, money is evil, and money's bad, and you can't be a spiritual person with

money. And so by definition, then, you are surrendering the resources of the world to people that are not spiritual. And they're supposed to do good with it? So, no, instead we are called to be stewards. We're called to be managers and faithful managers and trustworthy managers. And, you know, we have to plant because as you sow, so shall you reap. And does it always work exactly?

No. But there are 30 almost 3 000 scriptures dealing with how to handle money and um almost and there's a few warnings about wealth that it's dangerous it is dangerous so sex it's dangerous but it's also a gift from god for a married couple right and so right you know there's a lot of things. Power is dangerous, but when it's put in the hands of someone who sees the power as a tool to be used for the good of others, the good of God's kingdom, then you're what's called a steward.

You're a manager. And so this idea that you have to be poor in order to be spiritual, typed on someone's $700 iPhone who makes $80,000 a year, when if you make $38,000 a year, your household income, you're in the top 1% of income earners in the world. And so almost everyone listening to me right now is in the top 1% of income earners in the world. And if rich people are all going to hell because a camel can't get through the eye of a needle,

then all of you listening are going to hell based on the fact that you got wealth, which also completely invalidates the work that was done at the cross. And so it's really blasphemy to say that Jesus' blood is not enough to cover even those evil rich people so it's it's what it is it's a toxic twist on scripture and where uh where i land is not really between those two but would be off on the third point of the triangle um because scriptures are real clear that there's a cause and effect universe that we live in. Our Heavenly Father is crazy about us. He wants good things for us, but he's not going to give you something you can't control. So if you've not proven trustworthiness with money, then he's not going to give you money

because it's going to bring harm to you. And it's like I wouldn't give my 16-year-old who doesn't know how to drive well a brand-new Corvette. They'd kill themselves because I'm a loving father. And it wouldn't be a blessing. It wouldn't be a blessing. It'd be a curse to give someone something they can't control. So there's tons of Scripture that falls into all that. So it's a great discussion, Johnny.

I appreciate you letting me get up on the soapbox a minute. But, you know, the ones that believe that all things money are not spiritual actually fall under the heading of what we would call gnosticism which were some heretics of the first century gnostics were they were uh supposed christians that came to believe that anything physical was evil and all things spiritual were good and so everything physical is evil, and all things spiritual were good. And so everything physical is evil, and that's not what Scripture teaches. It teaches that we're supposed to take dominion over physical things in order to be a blessing to our families and to others. So, cool discussion, man.

Thanks for letting me yak about it for a minute. I'll send you a copy of my latest book, which deals with this very in-depth. It's called The Legacy Journey. It's actually the only book I've written that's purely my latest book, which deals with this very in-depth. It's called The Legacy Journey. It's actually the only book I've written that's purely a Christian book. And it's scripture upon scripture upon scripture and deals a lot with this issue, The Legacy Journey. Hold on, Johnny. Thanks for calling in. This is The Dave Ramsey Show. For most of us, health care costs seem to increase every year,

and saving money on health insurance feels more and more out of reach. For example, take the Olcheski family from LaGrange, Texas. Jeff and Carice had just celebrated the birth of a new baby boy. Shortly after, they had a health scare involving one of their kids that was completely unexpected. With today's health care climate, this could have bankrupted them. But thanks to Christian Health Care Ministries, the Olcheskis were spared from a ton of medical bills. As members of Christian Healthcare Ministries,

they're part of a group of believers who financially and spiritually support each other. CHM is the original health cost-sharing ministry and is a Better Business Bureau accredited charity. It's biblical, affordable, and it shared nearly $97,000 to help the Olcheskis. To be a part of Christian Healthcare Ministries, visit chministries.org.

That's chministries.org. CHM is a proud sponsor of Dave Ramsey Live Events. Thanks for joining us, America. This is the Dave Ramsey Show. Jason is with us in Oklahoma. Hi, Jason. Welcome to the show. How can I help? Hey, Dave.

Thank you for having me. Sure. What's up? I'm having a hard time wrapping my mind around the value of money in the stock market, especially in today's environment. And so it just seems like the price of a lot of stocks is completely irrelevant to the company's earnings. And so my question is if my money is more effective in real estate than it is in the stock market. If I buy a rental property, for example, it actually generates cash, whereas the only value that you get from a stock is whenever you sell it, and if somebody wants that particular certificate of stock. Well, or if you buy a dividend-paying stock, which I don't buy single stocks anyway,

but we can discuss the philosophy or the concepts behind it. Generally speaking, you would make a lot – if you do a good job with it, you would make a lot more rate of return on real estate. But it involves more hassle, more of your time. Even if you hire a management company or whatever, you've still got more time than just buying a mutual fund and throwing it in the drawer and forget it. Okay? And you get the statements on your email, you know, once a quarter, once a month or whatever. You have zero hassle factor buying a mutual fund or buying stocks,

unless you're going to try to buy and sell them, which I would never recommend. But a buy and hold strategy on real estate, while it generates cash flow, it should outperform stocks, but it has more hassle. It outperforms mainly because it's an imperfect market in terms of, that's an economic term you may be familiar with. A perfect market is one where all buyers and sellers have exactly the same information and the exact same access to buy. And so the stock market is closer to a perfect market than real estate. Real estate, each item is unique.

It's unique to a certain area. And all buyers and sellers never have even close to the same amount of information or belief about a piece of real estate. And so real estate gives you a lot more opportunity to get a bargain, in other words. And if you're willing to invest the time, you should make more on it. Real estate creates three types of return. One is, as you said, increase in value, and cash flow is two, which is the rental income on it. And three is you get to depreciate it. So you actually get a tax break that covers a portion or all of your rent that comes in,

and that actually has a cash value to it. So when you put those three together, that's called an internal rate of return. Have you ever heard that? Yes. Okay. So an IRR on a piece of real estate that is under a million dollars, a small apartment, a small, you know, a basic home, a small office or something like that, your IRRs ought to be north of 15%. Mine are on almost everything I own that's income producing.

And your cash on cash in most cases with a typical piece of real investment property would be 8% to 12% somewhere in there. Your cash-on-cash alone would be that. Now, again, on stocks, you've got two possible places of return. One is the increase in value, and two is possible dividend payouts, which are profits shared with the owners of the company. And when you're a stockholder, you're an owner of the company. So you could get dividend payout stocks, and you'd have a cash flow with that kind of a thing, and you'd have the increases in value.

So in both markets, though, people make the statements that you were making, that it's artificially high or it's ridiculous or there's a bubble or there's no way that that supports that when in reality there's a few times that that's the case uh we had a tech bubble in 1999 the dot-com rage where people were buying stocks on companies that had never made a profit. So that was ridiculous, obviously. And they shot through the roof. Most of those didn't survive. A few name brands that are household names did survive, like, for instance, Amazon. And so, but by and large, the stock market overall is never overpriced over the scope of time.

There may be a moment in time that it is, or there may be a moment in time that it's underpriced. I'll give you an example. You remember the oil glut because the ships were all parked off the shores because nobody was driving, and oil went down to $0 a barrel, or sub-zero a barrel, about five weeks ago. Do you remember that? Yes. Okay.

And so that drove Exxon's stock way down. It was artificially low because it was a temporary situation. So the numbers didn't justify how low it was. Other times something hypes up and the numbers are artificially high. But over the scope of time, they generally correct back and forth. And, you know, you can look at P.E. ratios, profit-to-earnings ratios, and you can look at the book value of the company, the assets that they own, and compare that to the stock prices and the outstanding shares.

And, you know, most of this stuff's pretty close. So to say that the Dow's at $30,000 and it just cannot maintain, why? Because you emotionally can't accept it when when the math is actually there that's absurd so that's like saying you know this piece of real estate is never worth this well the rents coming in off of it actually say it is worth that uh and so you know i'm looking at a at a cap rate on my noi my net operating income on this piece of real estate says it is worth that and so um and seven people ride around that have just paid similar prices for that. So, yeah, it is probably worth that.

Just because, you know, when I was a boy, that piece of property sold for, you know, a hundred times less does not mean that it's not worth that today, just because I can't emotionally keep up with the prices. There's math on all of it. Now, again, there's examples of individual companies on stocks or individual pieces of real estate where they are overpriced or where they're underpriced but by and large you have a better chance of sneaking up on a deal with a piece of real estate i like real estate i've got a bunch of it that does that help at all

yeah it does i mean especially in today today's environment, the stock market personally just seems like a giant casino in some instances. In what way? But the stock was artificially undervalued. But at the time, whenever it was supposedly correctly valued, if I purchased shares of ExxonMobil, I don't get a portion of their earnings with the exception of the amount of dividends that they pay. I agree. The only way that my investment... You are betting that Apple, McDonald's, Coca-Cola, Home Depot are going to be worth more five years from now than they are today. And why would you make that bet? Well, you would look at their track record of growth, the stock price growth, and you would look at the management team, and you would look at the management team, and you'd look at the profit margins, and you would also kind of project in the future what you think the business climate is that they're going to exist in.

Right. And so it's not a casino. A casino is truly a game of chance. You have nothing to analyze there except dice are going to turn up or cards are going to turn up. Right. It just seems like the stock price, though, isn't tied to that realistically at all. The only way that it's going to go, the stock price is going to go up in value is if somebody else wants to buy it for more than I paid for it.

Well, no. If the company continues to grow profits and continues to grow in size, then the stock price would go up in value. Let's just pick take Home Depot. Let's just pick out Home Depot. I don't even know what their stock does because I don't follow single stocks. I'm just using an example, okay? But let's just say with Home Depot.

Let's say that why would their stock price grow? Well, let's say they open another 500 stores, and all those stores make a profit. And they have 500 more profitable stores than they did have. Or Coca-Cola opens up some new lines of product and continues to grow. So as long as these companies are diversifying and growing and adding profits to their bottom line, the stock is going to continue to be worth more. I think you could probably make the case that Apple has done a really good job with that. It's almost an iconic stock.

It's kind of ridiculous, actually. But, you know, and I don't play single stocks for this reason, but I do buy them as a group in mutual funds as part of my portfolio. And no, it's not a casino.

It's really not. There's a lot of things you can look at there that give you a feel for it. You may feel like there's not a lot you can control these days, but I'm here to tell you, you can control your budget and you can control what you feed your family. My longtime friends at eMeals are here to help help they have simplified meal plans and created new recipe collections such as easy pantry meals and freezer meals utilizing basic ingredients it has never

been easier to shop smarter and stay on a budget try it free for two full weeks at e-meals.com dot com. I will never again take for granted humans being in the lobby at Ramsey Solutions. It's so nice to have humans back. And standing on the debt-free stage is Rodney and Cresha from Oklahoma City City standing right on the debt-free medallion, which means they're here to do a debt-free scream. Hey, guys. How are you? Hello.

We're good. How are you doing? So proud of you guys. How much have you paid off? $367,000. Whoa! How long did this take? Took us 10 years.

Okay. And your range of income during that time? Well, we started at around $70,000 a year and got up to about $128,000 by the time we paid everything off. Cool. All right. So I'm guessing with the 10-year and looking at this whole thing here, this must be your house and everything. Yes. I'm looking at weird people. You have a paid-for house and rental property. Woo-hoo!

What's your house worth? About $220,000. And it's yours? Yes, it is. It's completely yours. And this is in Oklahoma City. That's a nice house. Yeah.

Yeah, pretty sweet. I love it. Very cool. Congratulations, you guys. Thank you. What was the rest of the debt? Well, the rest of the debt, $24,000 of it was a home equity loan that I took out several years ago, actually before we got married. $6,000 was some debt that I owed with a partner, and then another $12,000 in revolving and other kinds of debt.

So you cleaned that up first, and then you went through the long slog of knocking out the house, right? It was tough doing that. We got married, and it was his debt that we had to fix. Oh, yeah. There you go. But you're wearing a T-shirt that says, I love my husband. We still love each other. And he's wearing one, for those of you that look deeply into your radio,

that says, I love my wife. So there you go. So what's the story on the T-shirts? This is our ministry. You know, one of the things about being debt-free is we we can do marriage ministry now without stress at all and so it's eye to eye community.com and we sell these t-shirts but it's it's the ministry that we're trying to share to help couples just continue to love on each other the way christ loves the church that is so cool that's awesome well done all right so tell me the

story what happened back there 10 years ago and then when did y'all get married in this process how this whole thing go down so what had happened was i had been watching and listening to you dave for um i think about 15 years before we got married and i discovered you on the radio going back and forth to ou commuting and I was just going through the radio station. I heard a guy talking sensical about money. And I was so in debt. I had a lot of debt, you know, mortgage and credit cards and student loan. And I wanted to do something about it.

And so I had taken care of, I think, all the way up to Baby Step 3. Then we met. So I still had mortgages. Then we met. And so we had to go back to Baby Step, I guess, all the way up to Baby Step 3. Then we met. So I still had mortgages. Then we met. And so we had to go back to Baby Step, I guess, 2 or something like that. 2, yeah. But I'll let you finish. Okay.

So how long have y'all been married? 10 years. Okay. So 10 is when it started. When you got married, it was like, okay, we're doing this. Game on together. It was rough, though. Okay.

It was rough. You're pointing at him. Yeah. She's pointing at me because I struggled. She's all about Dave Ramsey. Dave Ramsey, I kept hearing your name, kept hearing your name. I'm sorry. And I'm trying to get to know my wife, and I just want to enjoy life.

Dave Ramsey keeps getting in the way. Yeah, and I said, if I ever meet this guy, you know. Yeah, really. Anyway. I'm going to stay behind the glass. But over time, you know, of course it's a process, but over time I began to see the fruit of paying off debt little by little. I decided I'm going to check it out and see how it works out.

And I just saw things start to happen, and I said, oh, maybe I can get on board with this. And once I got on board, I stayed on board, and I got more motivated than she is so so it worked out really well and we've taught five facilitation or we've facilitated five classes oh you've gone through fpu five times teaching it wow good for you so that's been helping us as well okay so rodney like the first time you're the coordinator were you like a little bit of a reluctant coordinator the very first one or by then were were you on board? Oh, no, I was reluctant.

Okay. But you get sucked in when you're leading it because you either stand up there and fake it or you got to do it, right? I had to do it. Yeah, it puts pressure on you to make you do it. Yeah. Nothing like teaching or leading something to force you to do it. That's true.

Very cool. Well, congratulations, you guys. Thank you. Okay, five classes. You guys are how old? I'm 58. 52. Okay, five classes. You guys are how old? I'm 58. 52. Okay, and so before you're 60 years old, you have a paid-for home and a paid-for rental property.

Everything's paid off in Oklahoma City, Oklahoma. So you would be what people would call successful. Way to go. You're heroes. We'll take that. Well, I'm proud of you. We're trying. So now that you've led five classes and you actually did this stuff, you're not someone with just an opinion. You're heroes. We'll take that. Well, I'm proud of you. We're trying. So now that you've led five classes and you actually did this stuff,

you're not someone with just an opinion. You did it. What's the secret to getting out of debt? I would say communication included with the budget. Just constantly talking about where our finances are going and making sure we're on the same page. But it's every single month budgeting, but then every week checking on what we did each week all the whole 10 years.

It was rough in the beginning. Yeah, I was just going to say, and I'll just add lots of prayer and self-sacrifice. And it's worth it. So rough in the beginning. So you fought about this at first? Oh, yeah. Yeah. Because Sharon and I did. We about killed each other at the beginning. I you fought about this at first. Oh, yeah. Yeah. Because Sharon and I did.

We about killed each other at the beginning. I'm like, what? Yeah. It was ugly. But, yeah, once you get on the same page and you get that rhythm, you don't ever want to turn it loose because it brings a unity to your communication style and to your relationship that you can't really get any other way.

No. And I want to mention during our 10 years, he got laid off four times. Whoa. Yeah, it was interesting. And then so that was a struggle for both of us to continue doing these baby steps while that was happening. I was laid off the first time before we got married. So we dealt with five layoffs.

But we did get a chance to celebrate during milestones so we would go we went on four major trips like barbados and you know costa rica and so after your baby step two and three while you're working four five six yeah we're celebrating yeah you're celebrating along the way which you should do that's perfect barbados and where else um costa rica italy and a cruise to Cozumel. Very nice. Good. And then I want to mention during all this time, he finished both degrees, his bachelor's and master's. So, I mean, it was just a journey, the 10 years going through all these baby steps and all the things that we've overcome.

Y'all are going to be bored now. We have enough on our hands with the marriage ministry. I'm guessing, yeah. Well, and the interesting thing is that a financial ministry and a marriage ministry are inextricably, I can't say it, they are woven together. They are. And if you don't, you can't really do one without the other. That's right. You know, it's very difficult to have a high-quality marriage where you're not working on money together. It's very difficult to win money where you're not building your marriage together.

Yes, sir. So it's just, the data points are all there in the actual statistics it's not just theory so you guys are incredible so proud of y'all thank you well done how's it feel it feels great yeah and you're coming down into this covid mess with a complete shutdown and everything else and no worries no worries no worries whatsoever a guy last week on the show said we were with a complete shutdown and everything else. No worries. No worries. No worries whatsoever. A guy last week on the show said we were economically immune. Exactly.

That's what we were. I'm going to borrow that term. Yeah, because that's really what we were. I kind of almost felt guilty for not feeling bad, you know. But then I thought, no, for 30 years I've done smart stuff. Of course, I'm the little pig that built a brick house. You paid your dues. Not the one that built a straw house.

And so I guess I'm going to be staying in the brick house while the big bad wolf huffs and puffs. That's right. You earned that piece. Yeah. Yeah. I mean, you know, God's blessings, but with our hard work, right? It goes together. And that's faith without works is kind of not good.

So there we go. Hey, guys, I'm so proud of y'all. Thank you. Got a copy of chris hogan's book for you everyday millionaires if you're not there yet you will be in any minute you're probably there are you kind of edm's yeah all right rental property in the house and a little bit in a 401k should get you there right three rental properties oh you're definitely there then over the top i love it well way to go you guys that's so cool so cool are you

the first millionaires in your family um i don't know we don't we don't advertise or ask or talk about it so we have no idea i mean you've probably got a good feeling about back up in the tree though yeah yeah i you know good for you i'm proud of you well done all right it's Rodney and Cresha, Oklahoma City, Oklahoma. $367,000 paid off over 10 years. Some fights, some struggles, some scratching and clawing, but they did it. House and everything, all the rental properties, everything debt-free, making $70,000 to $128,000. Count it down. Let's hear a debt-free scream.

All right. Three, two, one. We're debt-free. We're dead free! We're dead free! Love it! Yeah! This is the Dave Ramsey Show. Please hear me loud and clear. The government is not going to bail you out of your student loans,

at least not completely and not without a catch. What they're talking about only impacts federal, not private loans, and you need to take responsibility for what you owe and pay your debt down quicker. Right now, Splash Financial is offering their lowest rates ever. With lower rates and extra payments, you could just find yourself debt-free in the next five years. Visit SplashFinancial.com slash Ramsey to see if you qualify. Thanks for joining us, America. Open phones at 888-825-5225. Travis is with us in Kentucky.

Hi, Travis. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for having me. How are you? Better than I deserve. What's up? My employer is allowing us to take a one-time distribution from our 401k that is not subject to any kind of penalties or early withdrawal fees. I unfortunately went through a divorce

last year, at the end of last year, and in the process of getting a new home and furnishing it have acquired about $13,000 in credit card debt. It is on a zero balance card. I've got about another 10 or 11 months where I could pay it off interest-free, but I'm wondering if it might be beneficial to take $13,000 out of my 401k balance, again, interest-free, penalty-free, and pay off that debt and kind of just get that out of it. Anytime you take money out of your savings account, it's, interest-free, penalty-free, and pay off that debt and kind of just get that out of the way. Well, anytime you take money out of your savings account, it's always interest-free. True. It doesn't, of course, there's going to be a lot.

There's no penalty because the CARES Act removed the penalty through October. And so that's not something your employer did. That's something the stimulus bill did. But you still have to pay taxes on it. You still have to pay taxes on it. You still have to pay taxes on it. Okay. And so it's going to cost you, you know, whatever your tax rate is, 25%. So I'm going to borrow money at 25% to pay off a credit card I can just pay off anyway? No, I'm not doing that. And I guess the way it read is it did the early withdrawal penalty tax or the mandatory 20% withholding tax. Doesn't matter. Otherwise apply to early... This is not up to your employer.

It's not up to your employer. The federal government is not going to give you a 10% penalty, according to the CARES Act. They are going to tax you, your tax rate, on anything you withdraw from your 401k. It is not a tax-free withdrawal. They may not do withholding on it, but it is not a tax-free withdrawal they may not do withholding on it but it is not a tax-free withdrawal whatever you withdraw when you do your taxes next april your butt's gonna pay taxes on it okay and i wouldn't do that i had my answer yeah i wouldn't do that i would just instead i just you know cash flow it let's get it knocked out chop up the card don't go back there if you have another

problem figure out another way to solve the problem. Sorry you went through this, and I'm sorry you ended up there. But that's the mathematical answer and the answer overall. Hey, good question. Thanks for calling in. All right, Jason's with us in Minnesota. Hi, Jason. Welcome to the Dave Ramsey Show.

Hey, how you doing? Better than I deserve. What's up? Okay, so, well, my wife and I farm and uh well we were farming we aren't farming this year but uh we only had a little obviously the farm economy is bad and everything uh has been for the last few years and we kind of got upside down and uh we're looking at like one i don't know we've sold some properties now we're looking at about one and a half million in debt right now what are you doing for a living well we're struggling through farming oh you're still farming you're still

farming okay yeah yeah well kind of yeah but uh so but 500,000 of that's capital gains because we sold some farms and uh we have a little bit of property left to sell, which would be about $2.2 million or so in that area. And my question is, would it be better for us to file bankruptcy on the debt or sell the properties and everything and then just pay it off and we would have maybe $500,000, or if we filed bankruptcy, we'd be somewhere around $1.2? Capital gains taxes are not bankruptable. Well, besides that, I mean, there's still about a million that's not capital gains. And is it not secured by the land? No, it's not.

You have a million in unsecured debt. Correct. Was it on equipment? No, some of it, it's just mainly all uh your inputs and then uh uh credit card debt other other debts that are you know out there well i mean you don't have a million in credit card debt what kind of what kind of what is the million uh well it's you know inputs which would be your chemical companies and seed and all that, and then also credit card debt is some of it. We have other bills, other debt houses and stuff like that too.

Okay. Well, anything that has a lien against it, you're either going to keep the debt or you're going to give up the item. Correct. So if there's a lien against a piece of ground, there's a lien against a house, there's a lien against a piece of equipment. All the land lien against a house, there's a lien against a piece of equipment. All the land's paid off on the equipment zone, scot-free. There's nothing there as far as liens or anything on the U.S. stuff.

Yeah, but the problem is you can't have a million dollars in land paid for and walk away from a half a million dollars in debt in bankruptcy. The trustee's going to force you to sell the land to pay your debts. Okay. Yeah, that's what I was wondering, that they're going to force us to sell everything, and then we should cover it up, which means there's no point in selling it. Now, the other possibility is that's a Chapter 7 bankruptcy, which is a typical bankruptcy. There's a Chapter 11, which is a reorganization, which, for instance,

Hertz just filed Chapter 11 bankruptcy, and they'll wipe off some of the debt and restart without all the debt and some of their bond debt and other things, and then they'll reopen or they'll continue to operate under Chapter 11. bankruptcy called a chapter 12 and it has some very unusually good stipulations in it for you and so you would want to get an advice from an attorney on exactly your situation what would occur in a chapter 12 well chapter 12 would mean we would have to continue farming though and continuing farming is not part of the equation okay Okay, so you're walking away and going to start a new career. Right. Okay, so if you sell all your land, how much money would you have? Well, it would net us about $2.2, and then we owe like $1.5 total. Okay, so you'd walk away with $700,000.

Right. You have a $700,000 net worth. Correct. Okay, there is not a form of bankruptcy that's going to allow you to not pay those debts and put the entire proceeds from the land in your pocket. Right. So your $700,000 net worth, one way or the other, is what you're going to walk away from this with, even in a bankruptcy. Right.

So then there's no point in even filing bankruptcy exactly exactly i would just i would just sell the land and now what i might do is go back to some of those inputs and since those are unsecured creditors i might negotiate with them and say guys all right i'm going to write you a check and i'm going to have to sell my farm and liquidate everything in order to pay you and in in order to do that, you're going to give me a deal. How much off? Right. We've been in some of that now, and they really don't care that much, it seems like.

They still want their regular money. Well, I mean, worst-case scenario, and I'm not suggesting you do this, but you could get their attention if you chose to do it this way. You sell the land, put all the money in the bank. Don't pay them. And when they don't get paid for a while, then they may soften up a little bit. But if you want to work with them, if you want to just write them a check, you're still going to walk away with $700,000.

You owe the money. You borrowed the money. It would be the right thing to do. So I think if you're done with farming, you're throwing up your hands, you're going to walk away with $700,000. You owe the money. You borrowed the money. It'd be the right thing to do. So I think if you're done with farming, you're throwing up your hands, you're going to something else. Right? Correct. And you got a $700,000 net worth.

That's pretty good. That's pretty good. What type of farming were you doing? I was just cropping. Yeah, corn and beans. Corn and beans. All right just the uh the market just this last little bit with covid just took it took the last little bit of fun out of it huh well yeah that i mean the last few years have been kind of rough up and down you know the market's

fed up and you know it's been down it's been it's just been a down turn for the last i don't know three or four years yeah and it's unbelievably hard work yeah oh it is there's a lot of work i mean you never you never quit working yeah you're never done all right man i'm sorry but um the good the good news is you're coming out of this with some net worth and you can start something else and you got a whole new chapter right that's right all right bro thank you you call me anytime I can help. I'm sorry you guys are going through that. It's heartbreaking to sell your dirt, but I think it's where you are. I don't disagree with you.

You can double-check my advice with a bankruptcy attorney, but I'm right. I'm not an attorney, so you would want to get legal advice from somebody technically other than me. But what I've told you is correct so check it out and um verify that in a 12 you're not you're not getting away with that debt not with that net worth ah i'm sorry wow what a mess that puts us out of the dave ramsey show in the in the books thanks to james childs and kelly daniel in the booth i am d Dave Ramsey, your host. We'll be back. Hey, guys, this is Kelly, associate producer of The Dave Ramsey Show. Did you know over 16 million people listen to The Dave Ramsey Show every week?

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