The Ramsey Show - App - Debt Consolidation Is a Drug (Hour 1)

Episode Date: October 29, 2020

Savings, Retirement, Relationships Sign Up for a FREE trial of Ramsey Plus TODAY: https://bit.ly/31ricKt  Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car rental studio, this is The Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Chris Hogan, and joining me is fellow Ramsey personality, Dr. John Deloney, and we are very excited to be with you, and we are ready to talk to you about your questions on money, or if you're dealing with relationships or dealing with emotions. Dr. Deloney is here, and he will provide you some guidance and some instructions on how to go.

As we kick off the show, I do want to let you all know that John has a show himself, The John Deloney Show. New episodes are every Monday, Wednesday, and Friday. And on YouTube, you can catch him there and get a chance to see him and his facial expressions. But you can get real talk on life, relationships, as well as mental health challenges. So, are you ready to go today? Let's do it, Christopher. You look wide awake.

I'm wide awake. Okay, and you're properly caffeinated just like me, so it is time. So we want your calls. Jump on the phone line. Call us. 888-825-5225. Again, that's 888- 825-5225. Kelly is standing by. Let's light up those phone lines. We want

to hear from you. And if you prefer, you can find us on social media. You can look up at Ramsey's show. You can find me on social media at Chris can look up at Ramsey's show. You can find me on social media at Chris Hogan 360, and you can find John at John Deloney. So you've got all the ways to be able to connect with us. We're going to get to the phones. First up, we've got Dave out of Daytona, Florida. Dave, how are you? Good. How are you? Oh, I'm focused and not finished, my friend. What's on your mind? So my wife and I recently became debt-free,

and we're wondering when it would be reasonable for us to buy a boat or if we should continue piling into that extra retirement and potentially a rental house instead. Just wondering how far we should keep grinding. All right, so you made some stuff happen. How much debt did you pay off? Well, we paid off our house, which is $215,000. Oh! Student loans were about $40,000.

Okay. And then sold cars, you know, new cars, got rid of those. Okay. And got some reasonable cars at about $10,000. All right. So, Dave, y'all paid off the house? Yes. That's amazing.

How old are you all? 29. What? You haven't paid off everything before you hit 30, my man. Good for you. Hashtag unicorn right there. That's the way to go, buddy. I'm proud. So what's you all's household income? $110 after taxes. Okay. And so, listen, I got to double check. I live on about $40.

All right. And you do have a three to six month emergency fund? Yeah. Okay. I need you to answer yes to the next few questions. You invest in 15%? Yes. All right. You paused on that one. Don't make me reach through this phone. Are you doing 15%? No, much more than 15%. Wait a minute. How much more? Well, we live on 40 and we paid off our, and we've been just putting everything into there.

So another, you know, 60. Wait a minute. You guys are investing 60% right now? Yeah. Dave, where's your wife right now? She's at work. How many jobs do you have her working? She's got one job.

Has she been to a restaurant since you paid off this house? You're investing everything. Yeah, we go to restaurants, nothing fancy. Like Taco Bell? Where are you taking her? Like a pizza place. Listen to me, David. Get him, John.

You're in Daytona, Florida, where there's some of the best eateries on planet Earth. You've paid off everything. You're not even 30. Here's what you're going to have to do. You are taking weird to a whole new level, my friend. And when weird goes too far, it becomes pathological. That makes you insane. Okay?

So you're getting real close. And we're laughing and smiling, but you've got to enjoy some of this, too. Yes, you do. You have won, my man. You have won. So we're going to back down to 15. We're going to readjust. Do you all have kids yet?

No kids. No kids. So young. All right, talk to me about this boat. How much are you planning to spend? With the truck, about 80K. Okay, you said boat. Now you're adding stuff in on me all of a sudden.

Here, you said boat. Slippery Dave, here he goes. Yeah, so like probably 60 on a boat and then would need a truck to tow it. Need a truck to tow it. All right. You're going to need a new house, Chris, with a bigger garage to park all this stuff in. Okay, so what's your game plan? Listen to me, Dave. what's your game plan? Listen to me, Dave.

What's your game plan? Because please tell me, you've worked this hard to get to debt-free. You're not going backwards, right? No. Okay, I'm going to ask that one more time. I need you to answer faster. It's a year or two from now. Yeah, okay, so a year or two from now.

So you're going to cash flow this thing? Absolutely. Okay. I don't see an issue with that, to be honest with me, to be honest with you of where you all are and what you've done. If you're going to cash flow it, meaning you're going to back down your investing to 15%, you don't have kids yet, you've paid off the house, so now you guys having a sinking fund, i.e., that you're saving up toward to get that boat, I don't see a problem with it.

I think you and your wife need to make a list of priorities of what do you want to do. Do you want to renovate some rooms? You need to find out what your wife wants to do because this boat sounds like your idea. So what's her thing? You know, what is that? And I think John is absolutely right. It's imperative to enjoy some of it or you'll start to feel like you can't. You'll feel you'll be a prisoner of your own making, right, of your own prison, and then you will have these rules that will become ironclad feeling.

They'll feel like concrete. At the same time, man, I mean, y'all are just doing great. You just need a new vision now. I bought a boat right at the beginning of COVID. My boat cost $3,000. Now, I got ripped off by a couple of 20-year-olds. They scammed me. They did a good job. I got to high-five them. It's a Craigslist

boat. They got their deal. I'm not saying buy a $3,000 boat, but there is a big gap between $60,000 and $3,000. Enjoy your money, but if you can find a boat that's... You might find it cheaper. There you go. But you know what?

You paid off your house. You got all your money in retirement. You're winning. Get what you want to get. John, how much was your boat? $3,000. I am never getting in your boat. I'm going to tell you as your friend, Chris, do not get in my boat.

This body size does not belong in a $3,000 boat. It does not. I need something seaworthy. I need something that can go to the Pacific. This one can go through a medium sized bathtub. But it was fun. It was fun. Here's the deal. For you all out there that are hyper

focused and intentional, being intense is good. But when you fall off, when you don't allow yourself to breathe and do a little bit of stuff here and there inside the budget, what'll happen is you'll collapse. I can remember the Atkins diet. You don't remember that. I remember the Atkins.

You're too young. You remember that Atkins, you could eat a side of beef, but you couldn't have one potato chip. That's right. I was on that diet for about, hold on, let me count, about two hours. I was on that diet for two hours. Lost my mind. Ate a whole bag of Doritos.

Like, okay, I couldn't take it, man. After the rack of ribs, right? Lost my mind. Yeah. So you got to have moderation. And I think that's what's so important and i think again dave seriously congrats on you all paying off everything being completely debt-free at age 29 you all have been fantastic and on the ball but it's now time as john said for a new vision

what's the new thing you all are chasing because you're obviously in sync and aligned financially now what you got to do is again again, give yourself permission to enjoy. And our colleague, Rachel Cruz, talks about that. And know your life, knowing about your life and enjoying yours. And so have that spirit. You all have that dream date again. Set a new vision and chart a new path that you all are going. But you're not going to go backwards, buddy, because stupid is out there lurking.

This is The Dave Ramsey Show. Families all over the country are discovering a faith-based and budget-friendly way of meeting health care costs, whether they're anticipated or completely unexpected. 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 another expensive medical issue come up. They could have faced a huge financial setback. But thanks to Christian Health Care Ministries, the Olcheskis were spared from a ton of medical bills. As members of CHM, they're part of a group of believers who financially and spiritually Thank you. 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. Welcome back to the Dave Ramsey Show. I'm Chris Hogan and hosting along with me this hour is Dr. John Deloney. And we are excited to talk with you and take your calls. We are wreaking havoc and helping people as much as possible right now. But I've got to tell you, 2020 has been wild. So many plans have changed this year. So many things have been canceled.

But the year isn't over. And we've got some amazing things coming up next weekend here in Nashville. Now about now you have definitely heard for sure we are live streaming our Smart Conference event for the first time ever next Saturday, November 7th.

And we have a very limited number of seats available for an exclusive in-person studio audience experience. Now, not only will you get to be in the room as we stream this event to tens of thousands of people across the nation, but you'll get to join us for an amazing VIP reception on Friday night, November 6th, with Dave and all the Ramsey personalities here at Ramsey Headquarters. We're going to have heavy hors d'oeuvres, a bar, meet and greets, photo ops, and all kinds of fun.

So if you're interested in joining us for this, act fast because we have less than 50 seats left. It's only 50. It might be shrinking by now. Tickets are available for the Smart Conference live stream studio audience today at DaveRamsey.com slash events. Now, I've got to tell you, Smart Conference, is this your first one? It's my first one.

Listen to me. It is one of the best events that we do by far because we're going to be talking on topics such as parenting, talking about goal setting, talking about money, talking about retirement, talking about career. I mean, it is all the information in one day. Now, for those of you out there that are already smart enough to be signed up for Ramsey Plus, you're going to have an opportunity to live stream that for free.

But if you want to come here and hang out and meet John and Dave and Christy and Rachel and maybe even me, you can meet me too, as well as Anthony and Ken Coleman, you need to register now to come at DaveRamsey.com slash events. It'll be a great time. I'm looking forward to it.

You got your talk ready? We're getting ready to go, man. I'm excited. I'm telling you it's going to be fun. I'm looking forward to it. It's a great day. I love to hear from the team. When I'm not speaking, I'm sitting in the green room taking notes. That's the most common thing I hear, Chris, from my colleagues

is they speak and then they sneak out and go sit in the audience because this it's it's so good that that those of us who are also who are personalities who speak for a living but also our husbands and wives and dads and community members we want to figure out how to do this too man absolutely and why would we why would we not waste this opportunity to grow ourselves to be able to hear it so it's that constant growth mindset and that's what happens. I think if you ever get too comfortable to where you think you've arrived and you can't grow anymore, that's where you begin to backslide. That's where you just start digging your own grave, my man.

Yeah. You know what I mean? Yeah, I do. You always have to keep making yourself uncomfortable. Keep being around people who think different. Read a book that's going to make you uncomfortable. Listen to speakers. Grow, grow, man.

Yeah. I think, too, this is a good time to assess your friends. Like, are you around people that are pushing you to better? Right? And I think, you know, I talked about it. I've got a YouTube video out there where I say you've got four people you need in your life. John, tell me if you agree with this. You need a coach.

That's somebody to push you. You need a mentor. That's somebody you're kind of patterning yourself after, someone that's had some success. You need cheerleaders in your life, people that believe in you, and you need some good friends. That's right. And you get those four people in your life, and I'm telling you, it starts to change the game. But here's the deal. This is where I flipped it on people in my video, John. Not only do you need to have those four in your life you need to be one of those four for others that's right because you get to you get to learn by doing right you grow by doing and there's so many times i'll show up in somebody's life in a in a really tough situation and on the way home i have to ask myself how would i how would i have this conversation

with my wife how would i tell my kids this and then i realized i'm ill-equipped to deal with this in my own house then i got to go get a mentor and the loop starts again right and so it's constantly pressing yourself to lean into hard conversations and grow well the weird thing is is as you focus on others it makes us less selfish man it does it makes you more empathetic it makes you realize oh i don't i don't know how to do that either. Yeah. Or I wouldn't have handled it like this. Hey, Chris, tell me why did you do X, Y, and Z? And you and I have had some of these conversations back there, right?

Sure have. It just makes us realize that we have way more in common than we do different, right? We sure do. And I'm telling you, we're all living this thing called life. And the reality is it's not meant to be done alone. So I want to encourage you out there. If you are not plugged into a community, um, we've got the Facebook, uh, baby steps group. I've got an everyday millionaire Facebook group of people that are chasing their everyday millionaire dream. Some have achieved it. Uh, you can go to facebook.com slash Chris Hogan, three 60, click on the group section and you can join Hogan's

everyday millionaires. People are in there from 18 to 80 and they're cheering each other on, which is just a great opportunity to never be alone. And if you're already plugged in and a part of Ramsey Plus, you've got a great opportunity to be plugged in with the community as well. Don't do life alone. I'm telling you, it'll give you a new area of focus. All right, we're going to get to the phones. We've got Patrick on the line. Patrick, how are you? I am doing great, Mr. H. Dr. J., how are the two of you doing? Oh, I'm focused and not finished. How are you, Deloney? I feel like I'm running a scam here. This is my day job. So, Patrick, we're doing great, brother. Well, let me tell you why I'm calling. First off, a little unsolicited plug. Back in July of 2018, I called into the show, and Chris, I believe you were on the air with Dave that day,

and I called in with some very dire concerns about my retirement. My wife and I were $60,000 in debt. We were doing all sorts of really wonderful balance juggling with credit cards. And we are now in baby step three, and our outlook looks so much more hopeful. That's great. My wife is sleeping through the night, and I actually feel like I'm doing something right. That's fantastic. I want to thank the folks at Ramsey Solutions for sending us Financial Peace University. It has really rallied our marriage and our relationship and our outlooks on our future.

And in January, we're going to be facilitating a class. That is fantastic, Patrick. Thank you so much. It's great to hear that because it's also great that you are doing the thing we also talk about, which is giving. And so you're giving back by facilitating. So you'll be able to blaze the trail for others. So congrats to you, my friend. How can we help you today? Well, so my follow-up question from two years ago has again to do with retirement. And so I recently discovered the existence of a pension that I've been paying into at the tune of 6% of my annual income. Okay. And I also have a 457 where my employer will do a 5% match. So my question has to do with, so if 6% of my income is going into

the pension general fund, and I'm getting 5% into my 457 once I start that particular step, what then is my percentage? Does that make sense? Yes, sir, it does. You're making absolute, complete sense. So you've got 6% of your money going to a pension, and when you start the 457, they're going to do a 5% match. Here's the reality, Patrick. We tell people, once you get yourself out of debt and you build up that fully funded emergency fund, you yourself are investing 15%. So if you've got 6% going into the pension, that leaves 9% left that you need to do either using the Roth IRA or going back

to you investing in growth stock mutual funds outside of retirement. So you yourself want to be doing 15%. I don't care about the match at all. And so that's that percentage you want to be at.

Great. Yeah. No, no. That's a really, really good question. The match is just gravy money, right? That's exactly right. You don't count it, John. Because it comes and goes. It can stop. Like a lot of businesses right now have stopped the match because of COVID. It's a cost-saving measure. It'll come back. It happened in the Great Recession in 07-09.

So it's just a cost-saving measure. That's why you yourself are doing the 15. So to be clear out there to all the listeners, you are investing 15. The match doesn't count. We're going to call that like gravy. It's extra. Of course, it's good. It's free money. You want to take advantage of it, but you yourself want to have the habit of 15%. Other Patrick,, with your pension, when you get to that point of retirement, you want to make sure that they're offering you that in the form of a lump sum. And I want you to always take that lump sum because you can go invest in many more options and sit down with a smart investor pro and get a better rate of return than that pension will. Stay tuned, people.

This is The Dave Ramsey Show. I'm Chris Hogan, and hosting with me this hour is Dr. John Deloney, and we are having fun. And it's because you all are reaching out and calling and connecting with us, and we appreciate you. That number to call is 888-825-5225. Let me tell you one more time, 888-825-5225. Or you can find us on social media at Ramsey Show or you can hunt down John at John Deloney. He's on the Facebook,

the YouTube, as well as the Instagram. You do have Instagram now, right? I've got it. Did we tell you? 21st century, baby. We learned you what that was. 21st century, man. You can find me at ChrisHogan360. John and I have been on and we have begged for your vote before and this is not about the presidential election.

This is about helping Deloney and I beat Rachel Cruz and Christy Wright. They are dominating us on Instagram as far as number of followers that they have. And we need to catch up. Can I tell you what happened once? I was sitting in the office, and i was looking at this instagram machine and uh i said man i need x number of any 500 more people or something and i'll hit some some number and rachel cruz looked at me and she pulls her phone out and just puts me in the rear view mirror of it and she goes live and says hey everybody i'm rachel Cruz. Please follow this guy. I had a thousand.

It was like all this wisdom I think I'm putting out there, Chris. All these good nuggets. These ladies. Nothing. These ladies are on it. She's a sorcerer. She really is. No, she really is.

And listen, I joke. We do want to beat them, by the way. That's not a joke. At Chris Hogan 360 at John Deloney. But again, follow us, Ramsey Personalities, on social media. Ken Coleman is pushing out information about careers. John is helping people with relationships and emotions. Christy is talking to women in business. Rachel is talking about money and lifestyle. Anthony O'Neill is talking to millennials

about money and life. I'm helping people with building wealth and getting prepared for retirement. So, again, you've got a great opportunity. There is no reason to be plugged into all this negative stuff going on when you've got an opportunity to plug into some positive, uplifting stuff. It's actually going to get you somewhere. Yeah. Right? Yeah. It really and truly is.

So, join us on social media. We'd love to talk with you. All right, we're going to get to the phone lines. We've got Jesse on the line. Jesse, how are you? Yeah. It really and truly is. So join us on social media. We'd love to talk with you. All right, we're going to get to the phone lines. We've got Jessie on the line. Jessie, how are you? Hi. I'm great. How are you?

Oh, we're focused and not finished. How can we help you today? Well, thanks very much for taking the call. Yes, ma'am. First time caller, long-time listener. Short story, my husband and I, we've been listening for about 10 years, but really last year just got focused. Started the steps.

We're in step six. Good. Yeah, we're putting away about 21% into our retirement. That's with my profit sharing with my company. You know, and I've always listened to callers call in and have discussions about their financial advisor and dumping them and that sort of thing. So we've really been paying attention to our return. And we have a rollover account that we set up when we first got married. And just noticed that the performance on those was not what our personal funds have been.

So we dug in a little bit more, talked with a new financial advisor that we really enjoy. And we realized these are C funds. And those were set up, my goodness, 10 years ago. The more I read and investigate, it's almost like a gut punch. And this initial advisor was a good friend of a family and grandparents. Right. Really, we're going to get out of these. But I guess I want to understand what that was. Yeah. And now what to do with $178,000 that's in these funds. Right. They can be moved.

Yeah. No. And realistically, Jesse, what you're dealing with in that scenario, you were dealing with someone that had a very safe and very no-risk type mentality as they were doing the investing. And so, unfortunately, when, you know, at that point in time, you were dealing with someone that wasn't asking you all what your goals were, or maybe they were, maybe they asked you what your goals were, and your risk tolerance was extremely low.

And by risk tolerance, I'm talking about, say, for example, the speed limit. Like when I speak to groups and people around the country, I say, all right, you need to know what your risk tolerance is. So I asked them, how fast do you drive on the speed limit? If it's 55, how fast are you willing to drive? And people will tell me, well, I'll go five miles over or 10. And then you get daredevils like Deloney that'll go 20 miles over. And I'm like, okay, all right. And so what you're seeing is risk tolerance for getting a speeding ticket. The same is said with investing. So typically, seed funds are used for more beginning investors that have a small risk tolerance because they're making their fees through annual fees.

It's not a high fee. It's not a high risk. It's kind of there. A shares, you're up in a different class. They're going to have fees, but as you can imagine, the difference between A, B, and C, it's a four-class difference. So what I would do if I were you is I would sit down with your investment professional, and if you've had one and you've had a conversation, I want to encourage you to have another consult with a smart investor pro, looking at what you have in the $178,000, understanding your options based on your newfound risk tolerance today. And so you're right. It is frustrating and irritating when you're not seeing the growth and the things that could have happened if it was invested.

Jesse, this is why I tell people to quarterly, at minimum annually, sit down with your investment professional and bring everything. Bring old 401ks, bring IRAs, bring it all and sit and look at it so you can get this full picture. Because oftentimes what happens, I can remember my first 403B that I did while I was coaching, you know, I literally was picking stuff like I was picking out Cheerios, right? You know, do you go with this one or this one and just grabbing stuff? Didn't have rhyme or rhythm to what I was doing.

So grab your paperwork, bring everything, sit down with the SmartVestor Pro, and begin to get a comprehensive adjustment. I would switch, without a shadow of a doubt, from the C to the A. Now, it's just a matter of you understanding what those options are based on the goals of that money. When are you needing it? What do you need it to do? People have told me, Chris, I want to grow this money and pass it on to my grandkids, or I'm going to grow this money to buy a second home. I want you to have it a name and a high definition dream of what it's doing. And you and your husband can get aligned in what your money is doing together. So reach out to a smart investor pro go to Dave Ramsey.com. You can find a smart investor pro in your area just to have a conversation with and begin to

get these this dream aligned and jesse before you hang up i want to pass along one one un non-finance related tidbit you mentioned that you did something 10 years ago you got some good wisdom and you did it and then you look up 10 years later and you called it a gut punch couldn't believe this happened what a bunch of idiots we were we got taken advantage of do me a favor don't beat yourself up you learn something could you have made some more money yeah i have a heart for somebody that was trying to invest with a young couple 10 years ago remember 10 years ago the world was sideways and a mess and um the rules felt weird and different and shifty so whatever

happened 10 years ago let yourself off the hook. You learn something new and let's go forward and go change it, right? No. But let's don't carry that gut punch and forgive yourself and move on. You know what? That's a good point because thinking back 10 years ago, that would put us at 2010. We didn't know what day it was. But we were just coming out of the Great Recession.

Sort of, right? Yeah, exactly. The government was just buying bonds. That's right. were just coming out of the great recession so people right so people yeah exactly the government that's right so people saw their 401k become more like a 201k and the government just start printing money yeah and they hadn't quit right so nobody knew anything so i don't know the heart of the person you worked with 10 years ago but john's right there's no sense beating yourself up what it is what it is my grandmother used to say that it is what it is. My grandmother used to say that. It is what it is. Now what? What are you going to do moving forward? I think you guys could take control and really begin to have a new outlook

and a new area of focus for yourself. Again, for those of you out there, if you're going, boy, I haven't looked at my 401k statement in a while. Again, I know the market's been doing this and all that stuff. It's the roller coaster. But I want you to actually open up those statements. Take a look at it. And if something looks off or weird, I want you to reach out to your investment professional. Get on the phone. And if you prefer, get on Skype or do some kind of technology so you and your spouse can be there and you can see them and you can ask those questions. Can I be vulnerable for a second?

Yeah. So this number, this retirement calculator, tell me what this is because here's why. I get nervous about that eternal question, am I going to have enough? Yes. Am I going to have enough? Yeah. The RIQ. Free tool at my website to help you start to answer that question, to tap into your

dream of what you want for your retirement, but also understanding how much am I going to need? That way you don't feel like you're chasing a ghost. You actually begin to put some skin on the bone. I struggle with that, man. The Retire Inspire Quotient, free at my website, chrishogan360.com. You can do this, and we're here to help. This is The Dave Ramsey Show. Thank you. Welcome back to the Dave Ramsey Show.

I tell you, we were just out in the lobby. We've got real people here. People from all over the place. We've got Wisconsin. We've got some newlyweds in the house. Tori and Christine. Some Californians. Tori and Christine. Some Californians. Tori and Christine celebrating their honeymoon at the Dave Ramsey Show.

Yes, they are. So good to see them. Good to see them. We've got some Californians in the house that are actually going to be looking at land here in Tennessee. So we are recruiting people. Come on. Come on. Come on.

Quality of life is better. We even got some Texans over there that are wearing their full Texas uniform. I love to see them. They've got the boots and the jeans. They look great. They're full on. Come on. Quality of life is better. We even got some Texans over there that are wearing their full Texas uniform. I love to see them. They got the boots and the jeans. They look great. They're full-on American right there. Man. So listen, if you're ever in the area, come by and visit.

We've got some coffee and cookies, and Miss Melissa will take care of you over at the Baker Street Cafe. And you've got an opportunity to browse the bookstore to pick up all of our best-selling books. Speaking of best-selling, somebody else that I know has a book coming soon. They just put the – they brought it and put it on my desk yesterday, Chris. I saw it. Preston brought it in. It looks good. Yes, Dr. John Deloney has a book coming out, and it is going to be a fantastic book and a fantastic guide in the time of need right now that we have going on. John, tell them the title.

It's called Redefining Anxiety. We are going to look at anxiety in a whole new way. What we've been told about it, that we're broken, something's wrong with us, is a lie, Chris, and we're going to get into it. It's a quick read. It's a short, simple book, and you're going to put it down and go, I'm going to be all right. Yes. And that's the goal. That's the goal.

To me, it sounds like exactly what we need in this country right now. Because everyone is feeling anxiety in some way, shape, or fashion. We've had to change the way we go to church. We've had to change the way that we hang out with family and hang out with friends. Change has been thrust upon us. And so we've got to learn how to deal with this and be able to walk through it confidently. But here's the key to getting that information in John's book. When's it going to be available, John? November 7th, I think. Okay, so it's coming up. So you had a chance to hear about it and be ready. So you can click on that button when it comes.

But it's time for us to be able to grow forward and move forward in this life. And the best way to do that is get the right people around you and get the right information in your life. Change can happen. And go do it. That's right. You got to do it, John. That's right. All right.

November 7th is this book coming out. Keep your eyes open, people. It's going to be amazing. All right. We're going back to the phones. Next up, I've got Ann. Ann, how are you? I'm doing well, thank you. Well, you're welcome.

How can we help you today? I have a question. I have a home equity loan credit plus a private loan. Both of them, one's $45,800 and one's $45,700. The HELOC is a 20-year HELOC. I'm three years in with a 5.25% variable. And the private loan through Linky is 45, 7, 15 years. I'm three years in and it's a 6.25 fixed. I didn't know if I should refinance that into my first mortgage. Right now I owe 226 on my house at a 3.5% interest rate, and they are offering me

a, it would still be 80%, so I wouldn't have to pay PMI, but it would be 3K in closing costs at a 3% rate. But it technically increases my length of my 15-year and my 20-year HELOC. Okay. Well, hold on. The refinance that you're looking at, you're looking at a 15-year and my 20-year HELOC. Okay, well, hold on. The refinance that you're looking at, you're looking at a 15-year fixed, right? A 20-year. No. Uh-uh. Yeah, see, I would go, okay, hold on, back up a second.

What's your household income? I make $1,500 a month. Okay. And do you have any other debt outside of this home? No. Okay, do you have any? I have these two home? No. Okay. Do you have any? Besides these two things. What's that?

Besides the HELOC and the... Okay. So no other debt, no car loans, no credit cards? No. Okay. And do you have an emergency fund in place? No. Okay.

Okay. So looking at this, you said how much is this property worth? $400,000. $400,000. And you only have these two mortgages, right? Your first mortgage and the HELOC, correct? Well, and then a private mortgage, or like I put in the poll, so it's like a private. Okay, you put a third mortgage.

You've got a third mortgage. So right now, look at this. Hold on, because you're using the bank's terminology, which is all about marketing. We're going to get real here. A HELOC, a home equity line of credit, is a mortgage because it's a deed that's recorded on your home. So you have a first mortgage of $226,000. You've got the second mortgage, the HELOC, at $45,800. And your third mortgage is your pool at $45,700. And that's just a big old credit card, right, Chris? The HELOC, yes. It's a revolving, which means as you make payments,

you have the opportunity to borrow on it again. I would call and look at getting a 15-year fixed-rate mortgage on all three of these, and you're right. Combining the three of these, you're going to be looking at a 15-year, but at 3.5%. Like right now, your HELOC is at 5.25 variable, which as soon as they burp or hiccup in D.C. and the LIBOR goes up, your payment's going to go up.

And then you've got 6.25 on that pool loan of yours. So yes, I would reach out to your lender or reach out to Churchill Mortgage. Begin to sit down and look at the refi on this. Mortgage rates right now are hovering in the 2.9, 2.8. And on the 15-year, you look at this, you start adding up your payments on it. Yes, it's going to be a little bit more, but we're going to get out of debt. We're not letting this just hang around and chris i want somebody to have a spiritual moment literally before they take the consolidation route oh no consolidation is a drug

yeah right yeah suddenly you're going to feel freer you still owe the same money that's right right that's exactly doesn't give you more liberty to go pull out another thing on another thing i've been down the consolidation drug route. Well, think about it. Look at the word, consolidation. It's a con, right? I love it. So if you've got debt out there, and again, we're talking about this mortgage situation,

but if you've got credit card debt, we've got to teach people the difference, John, between secured and non-secured debt. Right. Secured debt is a mortgage, a car loan, a boat loan. They're going to come get that boat if you don't pay. If you don't pay that stuff, they're going to come get it. Unsecured is a credit card, a personal loan. There's no collateral on these debts.

So the last thing you want to do is to pay off a bunch of unsecured debt and secure it with your largest monetary asset, your mortgage. That's right. Yeah, you don't want to do that. So I'm telling people, if you've got credit card debt and personal loans and car loans, leave them bad boys separate. List them out, smallest to biggest. It's the debt snowball approach we talk about. And you pay minimum payments on all the other debts, and you throw all extra money at the little one.

Because what we found, John, is that getting out of debt is not about math. It's about momentum math it's about momentum that's right but ann has experienced some things in her life that have caused her to go to a dark route and say i'm gonna take a second mortgage out and then she took a third mortgage that's right so this is somebody who struggles with either massive events or with self-control or with both no you're right right and and the thing of it is, John, I'm telling you, one of the most brilliant pieces of marketing in the financial world in the last 25 years is the home equity line of credit. Because it is a credit card that's attached. Against an imaginary number.

That's right. And it's attached to your house. And here's the deal. Nobody thinks it's a mortgage because it's called a home a HELOC and people go I'll take a HELOC if they said it was a second mortgage some people would take off running but because it sounds cool and hip people would take it and they didn't realize that oh my gosh this is like a giant as you said a giant credit card attached to my house and it's against an imaginary number that imaginary number being what we all think the house is worth right now.

Yes. And that can shift and change up or down or sideways. And so we're taking out a credit card, a giant one. A big one. We would never go get a Visa with $45,000. Nobody would do that. That's right. But we will put it on the HELOC.

That's right. Against an imaginary number that they will take your home. Yeah. Right? No. And if you don't make that payment, that is exactly what will happen. So if you're out there and you're going, wait a minute, I don't know if we signed a mortgage on this or not. Get your loan documents.

Call your bank. Get a copy of your loan documents. As you can imagine, there's no swimming pool that's worth 6.25%. We've got to learn how to slow down. And I actually just recorded on my show, I gave people some tips to how do you make, finish 2020 strong financially and kick off the year 2021. And I was telling people, you've got to say no to sales. Right? Black Friday's not going to be in person this year.

It's going to be at home. And so you could be clicking on some buttons and get boxes showing up and do a whole lot of stupid and do a whole lot of financial damage to yourself. So you've got to be smart. Woo! That's one hour down. Hey, I like that, man. I do, too. I do, too.

Look at me. Fired up. I'm sweating and I'm ready to roll. I want to thank Kelly Daniels, associate producer, Ben Hill, producer. Thank you, John, for hanging out. We had fun, buddy. Yes, sir. Hey, you all, this has been the Dave Ramsey Show.

Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey Call of the Day podcast wherever you listen to podcasts.