The Ramsey Show - App - Despite What You’ve Heard, Renters Don’t Go to Hell (Hour 2)

Episode Date: November 10, 2021

Home Buying, Investing, Career, Debt, Relationships As heard on this episode: Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

Thank you. Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host, Christy Wright. Ramsey Personality, number one bestselling author, is my co-host today as we answer your questions about your life and your money. Her latest book is also a number one bestseller, Take Back Your Time, The Guilt-Free Guide to Life Balance, on sale now at RamseySolutions.com

and where any great number one bestselling books are sold. Jacob starts off this hour in Phoenix. Hi, Jacob. How are you? Good. Thanks for taking my call. Sure, man. What's up?

I'm actually going to get married at the end of the school year. We're going to move. Well, she's in Houston, so I'm just going to move there and finish school. We're kind of debating now is should we buy a house or should we just rent until we get rid of some debts that we have? Yeah, you're going to want to follow the baby steps, Jacob. And so I'll walk you through those really quickly because this is the way for you to build wealth. And so you want to do things in this specific order. You want to start by saving $1,000.

And this is going to be your starter emergency fund. So that if you've got, you know, your brakes go out, you get a flat tire, you've got some cash to cover that and you don't have to go further into debt. Then you're going to list all your debts, smallest to largest, regardless of interest rate. And you're going to attack those debts one at a time, pay them off, cut up their credit card, close the account, whatever you have to do. You pay minimums on the rest and you continue to walk down the debt snowball until all your debt is paid off. When you get all your debt paid off, you're out of school, your school's paid for in cash, everything's covered where you have no more debt. Then you want to save three to six months of expenses for a fully funded emergency fund. And after that, that's when we talk about saving for a down payment on the house.

We would tell you to do that anyway, Jacob, at any stage of life, any age. But even I would just add the fact that you're in school, you're about to get married, you're going through a lot of transition. And so you probably don't really know what you want anyway in a house. So even if you were debt-free, I would still recommend that you get out of school without any debt and really figure out what you want before you commit to a massive purchase like that. But you want to get debt-free, have your fully funded emergency fund, get out of school debt-free, and then talk and then and then

talk about saving up for down payment on a house jacob there's a lot of pressure in our culture to immediately buy a house buy house buy house buy house buy house you're throwing away rent you're throwing away the money you're throwing your money down a rat hole as a renter don't be a renter don't be a renter like renters go to hell or something right and so you you don't you don't want to fall for all of that it causes people to jump into a house because when you buy a house and you've got no money and you're in debt all kinds of problems come crashing down around your head and it's going to put a stress on your new marriage strain on your new marriage just rent something inexpensive and clean up the debt then when you don't have any payments man and you move into a house with no payments and you move

into a house and after you close on the house, you've still got the rainy day fund of like $10,000 or whatever it is sitting there, there's no stress moving in the house. Now the home is a blessing rather than a curse. And we always say, yeah, Christy's right. You need to get to know each other. You'll buy a different house a year after marriage than you will a week after marriage. It takes about a year of being married to know how close to your mother-in-law to buy

this is the ramsey show open phones at 888-825-5225 christy is in omaha nebraska hi christy how are you hi i'm good i'm excited to talk to you. You too. What's up? All right. Okay. So my question is, with my IRAs, I have four IRAs that have been rolled over into an investment firm. And I have one that is still in an old 401k, and they're both about the same amount. And when I meet with the financial advisor, he always tries to get me to bring that 401k money over. But that 401k money consistently does better without his advice, I guess. And it is a super low administrative fee versus I pay about $4,000 in fees with my financial advisor per year. How much money do you have with this advisor? The advisor is $378,000.

Okay. All right. So they've got you on a managed account and they're charging you like a 0.8% or 1% to manage your funds? Yeah, $1.25 per quarter per account. And I added it all up and it's about $4,000. No, that doesn't. That would be 4%, and 4% of $400,000 is not $4,000.

$4,000 is 1% of $400,000. On the statement, it says... No, if you're paying $4,000 and you have $400,000 over there, you're paying 1%. That is 1% by definition mathematically. Right? True. What is 1% of $400,000? It specifically says on the statement expenses 1.25%, and then each four accounts are a slightly different amount.

So I am rounding a little bit. That must be the annualized amount then. Okay. Because otherwise you would be paying more than $4,000. You'd be paying $16,000. Okay. Because 4 times paying $16,000. Okay. Because 4 times 4 is 16. Right.

1% per quarter would be 4% a year. 4% of 400, 4 times 4 is 16. You'll be paying $16,000, right? Yeah, but I'm not. Okay. And you're not. You're paying $4,000. So you're paying about a 1% fee, give or take.

It's a pretty standard management fee. So I think what you've got to do is, number one, your job with your investment advisor is not to do whatever he says. His job is to do what you say after he teaches you or she teaches you something. And so if you're paying a 1% management fee, it is reasonable for you to expect that to perform, outperform an index fund by 1%, thus they're paying for themselves. Yeah.

And you've got it just sitting in a basic account, just running itself over at the 401k, and that's kicking this guy's butt. So this managed account's not being managed well agreed i agree it's not getting the same yield and i mean it feels like a loss with that much money i put five hundred dollars a month in so six thousand a year and i'm paying four thousand in fees like it just feels... Well, that's not the relative amount. What the relative amount is is you put it in a managed account at $378,000

and you're paying 1% for him to manage it. Then it ought to be invested, meaning managed. You guys ought to be sitting down together and picking funds that are making you more than that 1% back. And good managed funds do that. So, number one, you need to sit down with him and get that straightened out. If you can't get that straightened out in your mind, you probably ought to interview some other financial advisors

and click, like SmartVestorPro at RamseySolutions.com. Click, talk to one of the folks that we recommend. A lot of those guys do managed accounts, too. The vast majority of them do now. And so, there's nothing wrong with that. It just has to be worth it. That's all it comes down to. And if it's not outperforming a basic fund mix that you picked on your own,

then he's not worth it. He's not worth paying him that. This is The Ramsey Show. MC show. It continues to amaze me how identity thieves keep finding ways to use our own identities against us. Not only do they commit crimes related to financial fraud, medical ID theft, and insurance benefit fraud, but now we have to deal with home title fraud. Thieves are using your own personal info to take ownership of your home so they can take out loans, and you end up with a pile of debt and foreclosure notices. Over 4,000 data breaches happened in 2018, exposing 3.6 billion records.

So thieves have plenty of identities to use, and there's a one in five chance it will be yours. That's why Zander Insurance is the only program I use and recommend. Their plan covers all types of identity theft, and it takes over all the work if you become a victim. Visit Zander.com or call 800-356-4282. Welcome to the Ramsey Show, America. We're glad you're here. Open phones at 888-825-5225. I'm Christy Wright. Ramsey Personality is my co-host today.

If you've been paying attention to the real estate market, you've noticed that it's kind of white hot out there. Yeah, competition's high if you're trying to buy a property. Available inventory is at all-time lows. Inventory's low, demand is high. That'll drive prices up. It'll also make people stand in line in the street to make offers. Sellers want to accept the right offer. Buyers don't want to pay too much.

This is not amateur hour, people. To win in this market, you need a pro by your side. That's why we find, vet, and endorse top real estate agents across the country called endorsed local providers. They're Ramsey trusted. Our ELPs have years of industry success. We do not endorse newbies. We endorse high performance, high octane real estate agents.

Just a handful of real estate agents in your area sell most of the houses. Everybody else just got their license because a monkey can sell a house right now. And you don't want a monkey listing your most expensive asset, although it might be entertaining. Go to RamseySolutions.com slash agent. Find a trusted agent near you. Austin is in Atlanta, Georgia. Hi, Austin.

Welcome to the Ramsey Show. Hey, guys. Appreciate your time. Sure. What's up? Hey, I was calling mostly about a career question. I was recently, I've been in ministry my whole life, recently laid off as many people during the pandemic. Trying to get myself back out there.

I've kind of got a limbo job, I would say, to pay the bills now. But from asking all my friends and everyone else in ministry, it doesn't seem like the money is quite there like it is everywhere else in the world. And what I mean by that is, like, you know, everything's getting so much more expensive, but it seems like ministry jobs are actually paying less. So I was trying to see, should I keep pursuing this? That is really my passion, or should that more so be my side gig being your all-star volunteer and maybe going more into the workforce to help provide for my family? This is an interesting question, Austin, because there's more to this than just the financial equation because of what you're asking about.

And so I'll tell you something I'm kind of learning right now, Austin. And this is just from very recent for me. So I'm in seminary right now, and I'm taking a class right now on practices and vocation formation. And it talks about how different people are called into ministry, called into different aspects of serving. And there's a very pretty consistent correlation where people are called into ministry. They feel called in different capacities, in different ways. And they're called because they pursue that, their obedience to that because of the calling, not because of the compensation. And you need to pay your bills.

But I don't think that you can look at this question you're asking from purely just a financial lens because of the faith aspect of what you're saying. Right. You know, if your question is... You're always going to make less in ministry. Yeah, that can't be the reason you go or don't go, because that's just a given of the industry. Right.

Now, the other thing is this. Really, the last hundred years or so is the first time in the history of Christianity that we've looked at professional ministry as the only people doing ministry. Prior to that, everyone was in ministry, meaning that the blacksmith did his job as unto the Lord. The restaurant owner did their job as unto the Lord. And the way they treated people and the way they did marketplace interaction was a ministry. They were ministering through their business and through their vocation without being,

quote, professionally in the pastorate. There's nothing wrong with being professionally in the pastorate, obviously. Some of my best friends in the world are that. But this idea that the only people that serve God or that are in ministry are on a church staff is a fairly new idea. And so, you know, the Jewish mindset is the word worship and the word work ship are very similar words. Worship service on Sunday morning and customer service on Monday morning. Both are a service. In both cases, we're having a service.

So we view what we do here very much as a ministry, as believers. And some agree with that, some don't, but that's not relevant to this discussion. It's what we do do and it's who we are so uh it may be that you are uh you know you're being released from vocational ministry to do ministry in the marketplace so to speak with wherever you land i'm okay with either one if you feel like you have a solid call on your life to be in vocational ministry, to be on church staff, then you're going to make less. My contemporaries that run a $40 million budget at a church make probably 50%, 60% of the income of someone who runs a comparable size business.

And so it's not that unusual at all. So it just kind of goes with the territory. And it's not that it's right or wrong, but it just is. Well, I think you bring up a good point, though, because one of the challenges I would have for you, Austin, is as you reflect on this and you think about this and you pray about this, ask yourself, have I always been in ministry and feel like I need to be in ministry because that's my heart, my passion, because I feel called specifically to that method of ministering

in the church world, for example? Or do I feel like I need to do that type of work because to me that represents somehow good work. That somehow represents work that makes a difference. And the secular world, the for-profit world represents bad work, work that somehow represents work that makes a difference. And the secular world, the for-profit world represents bad work, work that doesn't really help people. A lot of people get these mixed up.

And Dave, you and I have talked about this when it comes to business, nonprofit versus for-profit. There are people that believe that nonprofit organizations are more holy than for-profit organizations to them. That represents a different value and worth. And it's so interesting, Dave. I mean, I learned all of this from you.

But the nonprofit for-profit designation is a tax status. It's how the money flows to the organization. NFL, the NFL is a nonprofit organization. So I would just encourage you, Austin you're reflecting to think what am I pursuing is it good work because you can do good work in the church and outside the church you can change lives in the church and outside the church or is it I feel called specifically to being on church staff like you said Dave and that's a different that's a different question just know that you you will make less if you do that which is fine we need people in the pulpit we need people

in churches. And God's calling your life. I really believe he'll provide for you. But just make sure you're not pursuing it because you think somehow that's the only way to do good work. I believe that every one of us here at this organization and many other organizations, nonprofit or for-profit, are doing good work that changes lives. So that might be a good exercise for you to reflect on as you think about this. Yeah.

Good question, sir. Thank you. The other thing that was in his, he said know i wonder if i just volunteer kind of made me think his heart is is already gone has moved on and he's ready to ready to have another phase in his life so it sounded like when there's permission for us to to change seasons i think sometimes we are so resistant to let go of something we don't recognize it was a season. We think everything's forever. And so I remember when I felt my heart being done serving in Young Life

ministry in the day-to-day with teenagers at high schools. I wrestled with that for probably a year too long. My heart had already moved on, but I couldn't let go that this was what I was supposed to be doing. And now we support Young Life in other capacity, but everything isn't forever. It might just be a season and you have permission to change your mind

and change your plans and move into this new season. Yeah, and on the other subject, it is good to remind everybody. Here's the thing. There's no such thing as a nonprofit organization. A nonprofit organization that doesn't make a profit is closed. They always take in more than they have go out. It's just an accounting function.

The IRS does not decide if something's holy or not. And they do decide whether something's a non-profit or not, based on the guidelines that they have. But a non-profit that's not profitable closes. They go broke, just like a business does. So this idea that somehow they don't make a profit is asinine. This is The Ramsey personality is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Frank and Nicole are with us. Hey, guys, how are you?

Good. How are you? Better than we deserve. Welcome. Where do you guys live? Cleveland, Ohio. Cool. Welcome to Nashville. And here to do a debt-free scream, how much have you paid off? $125,563. Amazing. Way to go. How long did that take?

20 months. Good for you. And your range of income during that time? Stayed right around $120,000. Wow. Y'all busted it. Yeah, you've been beans and rice, baby. Something going on here.

What kind of debt was this? Everything but a timeshare pretty much yep we had uh 401k loans student loans car lease credit cards tons of credit cards medical debt on a care credit card yep how long y'all been married two years so you combined to make this mess no no no we each made it ourselves that what I mean. You brought the two messes together. Yes, we brought two messes. You didn't do all of that mess in two years. No. Nope. You've been busting it since you got married to clean it up, is what it amounts to.

I think I financed my first truck at 19, and I have had a car payment ever since. Both of you bring the junk in, or one of you? Both. Okay. All right. Cool. And so you've been married two years. Yep.

In 20 months, you've been doing this. So you've been doing it the whole time you got married. So tell us the story. How did you get plugged into Ramsey? My mom actually gave me the Total Money Makeover book several years ago. Didn't work. Well, it worked for a couple weeks. It's a great coaster.

Yeah, yeah. And then after getting up every morning and checking my bank account to see if i could eat lunch if my credit card payments didn't clear yet um i told her i gotta do something with this so i kind of told her about it and we were both kind of back and forth with it and then i kind of started on my own um we were hesitant to combine all our finances and everything. So I got her listening to the podcast, and every day I'd come home, she'd say, Dave says we should combine everything.

So finally we just had enough, sat down, did a budget, combined everything, and within two months we were what? We were knocking things out. Yeah. Wow. I want to go back to something you said, Frank, because I think a lot of people listening feel like maybe you felt back then. You said we were hesitant, hesitant to start the plan, hesitant to combine our accounts. What was going on there?

What do you think? How would you describe that hesitation? We both are on our second marriage. So I don't want to say it was not a trust issue between each other. Just, you know, having everybody, you know, accessing each other's stuff was just kind of strange at first. Yeah. That's normal. Yeah.

You're like grown-ups when you got married. You're independent. You got your own thing. You're a grown-up. Yeah. It was something else. I mean, when you get married and you're 20, it's different, you know, because, you know, but you guys are second go-round. You got some scars from before, and you've been doing it yourself a long time,

and now just to combine everything feels weird. It's like doing it with your roommate or something. But then you push past that awkwardness, and was it worth it? Absolutely. It's like the weight of the world has been lifted off our shoulders just by doing the budget, and within two months it was like, once we got our emergency fund, it just changed life. Wow.

Did you sell stuff? Oh, yeah. What did you sell? What's the biggest thing you sold? Nicole said, oh, yeah. It was like once we got our emergency fund, it just changed life. Wow. Did you sell stuff? Oh, yeah. What did you sell? What's the biggest thing you sold? Nicole said, oh, yeah. Everything. My Harley, probably. Oh, that hurts.

That hurts, Frank. What did the Harley bring? A heart for you. $15,000. Oh, that's substantial. I mean, I still had a payment on it. And we were in the program for a few months, and I came home and said, I'm going to list the Harley. That's when I knew he was for real.

Yeah. Wow. That's when you knew you married a man. Yeah. It was interesting. He's willing to get rid of his bike for his family. That's called a man. Yeah.

That's good. Wow. Good for you. That's hard to do. But you'll get another one. Oh, yeah. They're out there. They make them all the time. Yep. Oh, yeah. And they get a little better every year, I hear. So you never do. But you'll get another one. Oh, yeah. They're out there. They make them all the time.

Oh, yeah. And they get a little better every year, I hear. So you never know. But wow. Wow. Very cool. What else did you sell that was big? Gosh, we sold anything with a payment pretty much.

The car fleece? The car fleece. We got a quote from Carvana when everything was, they were looking for cars like crazy. We got rid of that. We sold something. It was a $600 lease. and everything was, they were looking for cars like crazy. We got rid of that. We sold some. It was a $600 lease, and we actually sold it to Garbana and made $1,000. Whoa.

And we got out of the lease 10 months early. Wow. That really, once that happened, that really boosted our snowball a lot. Yeah. That and the Harley were two big things to move this along. About $900 a month to our snowball by getting those two items. Well, and that lease was how much of the $126,000? We had it listed, I think, as $30,000. Yeah, okay.

So $45,000 of the $126,000 of those two moved out. That's excellent. That's harsh, but it got her done. Oh, yeah. And it got the cash moving, too. The cash started moving in the budget then. It started going, yeah. Maths start working. Yep. Once that started moving in the budget then. It started going, yeah. Maths start working.

Yep. Once that started happening, it was just, like I said, you smile every day when you get up. Yeah. It's different going to work when you don't have to go to make a credit card payment. You get up, and you're like, hey, there's interest in our account this time. You know? Yeah. It makes getting up in the morning easier.

That's good. That's really good. Who were your biggest cheerleaders through this besides each other i'd say probably both our parents oh wow so they came alongside and said go huh oh yeah yeah and who was it had given that had given you the tmmo book earlier years before that was my mother okay okay was she excited to see y'all get on this plan she passed away about four years ago. Oh, I'm sorry. So that was a little motivation, too. She is excited. She'd be going crazy right now. Yeah, she's watching it.

She's excited right now. That's good. Way to go, you guys. I'm proud of you. Good stuff. Very good stuff. Very well done. Very, very cool.

So, man, that's powerful. Now, so you did all of this off the book and the podcast? Yep. Okay. And that was book and the podcast? Yep. Okay. And that was your inputs from us? Yep. All right. Good.

Very cool. All right. We got a copy of the, well, tell everybody what the key to getting out of debt is. Working together, for sure. And the budget. Yep. Together and the budget, I'd say. I'd add selling crap, because you sold a bunch of it.

My buddies used to call me and say, is everything okay with you guys? Your wife's selling, what was it? Selling everything. Your kid's swim mask from four years ago on Marketplace. Scrappy. Work in that Facebook Marketplace. How much have you made on Marketplace? A few hundred dollars, just little things.

It's spiritually representative, though, isn't it? It's like we're cleaning up here. We laughed because we actually talked about selling the house with this market, just talking. We weren't really going to do it. And my daughter goes over to her friends, and she's crying. Her mom calls me and says, You guys okay?

Your daughter says you're losing your house. I'm like, Oh, we're not that bad. You're selling everything on Marketplace. That, oh, we're not that bad. You're selling everything on MarketPay. That was interesting. We're not that bad. That's so great. I love it. If you're broke friends or think you're losing your mind, you're right on track.

Right. That's so perfect. Well done, you guys. We got a copy of The Legacy Journey for you. That's the next chapter in your story. You're going to be Baby Steps millionaires. Before we know it, you'll be right there. that's what's coming up next and uh wow very cool very very very well done copy the total money makeover you can give it away to somebody maybe

they'll read it a few years from now you never know you never know hey thanks for coming down guys frank and nicole cleveland ohio 126000 paid off in 20 months, making $120,000 a year. They sold everything. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah!

Yeah! That's awesome. You know, this car market is allowing people, that's the second people today talking about how they got out of a lease early and didn't have to write a check. Yep. This is the first time in the history of leasing that that's happened. Yeah. And it's because this market's so substantial on cars like it is on real estate. So this car market has moved stuff around and

honestly i have noticed a trend in the last two or three years in debt-free screams not as many people were selling big chunky items until i got to them today i like hearing that yeah the number of times people would sell a a boat a harley a car uh to and it's a it's a big number out of their number right to where it made a big difference. It's not a few hundred dollars on Marketplace, which is fine. That's a good thing to do. But that mathematically wasn't what got them there. Spiritually, it got them there.

But this idea that you can sell so much stuff the kids think they're next, and the poor kid thinks they're losing their house, Yeah, they do. That's the mentality. You got to be going for it, man. I mean, you got to go for it. I love it. Way to go, you guys. You guys are fun. This is The Ramsey Show. We'll be right back. Christy Wright, Ramsey Personality, number one bestselling author, her latest number one,

Take Back Your Time, The Guilt-Free Guide to Life Balance, is my co-host today as we talk about your life and your money. You can get that book anywhere your number one bestsellers are sold, including RamseySolutions.com. Sam is in Phoenix. Hi, Sam. Welcome to the Ramsey Show. Hi, how you doing? Thank you for taking my call. Sure.

What's up? Let's see. I'm blessed. I've got about $1.7 million in my retirement IRA account. Good for you. Wow. Thank you. I've got about $150,000 in cash available, annual salary about $180,000, and also from a military retirement and from another company retirement, about $80,000 a year as well.

Wow. Only debt we have is mortgage, $270K, and the house is worth about $900K. Financial advisor, very reputable, Edelman Financials. Been with them for quite a few years, and they also follow the Ramsey methodology, if you will. But recently, they've had a couple of articles about not paying the mortgage because of the return on investments and the low interest rate. Our interest rate is about two and an eighth. And last year, our accounts made close to 30%. The question is, should we pay off the mortgage? We can pay it off in about two to three years or invest more

in our retirement account. Okay. Well, let's be real clear. That article had nothing to do with the Ramsey method. Correct. There's never been a Ramsey method that suggested that. Right. Okay. I just want to make sure that our audience didn't misunderstand that. Okay. You've done, listen, Sam, you've done really well. The answer to this question is not going to mess up your life, and it's not going to make your life awesome where it's not awesome now. Okay? It's more of a technical question and a viewpoint question. All right?

Now, I can give you a two-hour dissertation on this, but I'm not going to. That's not fair um the bottom line is when you look at your home as a borrowing on your home as a way to make money on investments that is not including mathematically risk now you're not taking a ton of risk because you're not gonna lose your home in your financial situation. If you get in trouble on that mortgage, you just take some money from somewhere. It might hurt a little bit, but you take it and just pay it off. You're not going to lose the house.

So you don't have a ton of risk. But debt always theoretically, spiritually represents risk. Always. And if you don't believe me me just think about what if you owed 900 000 on this house instead of 200 000 then you would say well that's more risk than i have today well debt represents risk you see what i'm saying yes yes so uh when you say i'm going to compare my investment returns to my mortgage cost you're leaving out mathematical adjustment for risk. So from a sophisticated standpoint, the formula that the blogger you were talking about is using is naive because it does not include risk.

And it is not realistic to think you're going to make 30% on your investments long term. That is not a long term number. You may have done that for a short period of time, but you and I both know over a 10, 20-year period of time, that's not what the market returns. It's not going to do that with any financial advisor, anybody that tells you that's full of crap. So the normal stock market returns are around 10 to 12 percent, something like that, over a period of time versus mortgage rates. So when you adjust that for risk you're you might be making a little bit of money now here's how you can kind of prove that

theory let's pretend for a second that your home was paid for that you had no debt on it okay right breathe that into your spirit just a second yep then someone comes to you and says, hey, Sam, let's take your paid for $900,000 home and let's borrow $500,000 on it and put it in the markets because you can make more on it there than your mortgage rate. When I say that, does your stomach not jump into your throat just a little bit? Yes. Yeah. that does your stomach not jump into your throat just a little bit yes yeah and see that tells you that you know your heart is where you measure risk your head is where you do math and that jump of your stomach is a human reaction to risk and so when you reverse engineer your question meaning let's pretend your house was paid for would you go borrow on it it was the same math so sure you would matter of fact you if you're going to use only i can make 30

and i pay four percent then you would borrow two million on your one million dollar house if that's the only math you're using but when you say that out loud the risk starts ringing in your ears and you know that's not right anymore but with with it only being $200,000 out of $900,000 out of a $3 million net worth, it sounds like, it's not much risk, so it doesn't really ring in your ears. And you can real quickly reduce it to only a naive math formula. So all of that to say, I would challenge you to pay off your house tomorrow as fast as you possibly can. Now, if I'm wrong and you hate it, you can always go get you a new mortgage.

Right. All right. And I'll tell you, here's what's going to happen. What do you do for a living? I spent 33 years as an engineer. Now I'm consulting as an engineer after I retired from that company. And you were in the military. And 28 years military, yes. And you were in the military? In 28 years of the military, yes.

Thank you for your service. Number one, when we did a study of 10,000 millionaires, number one profession of millionaires in America, engineer. Okay? And so you fit the mold exactly of everyday millionaires of the study that we did. We found lots of people look just like you. And so here's the thing. The process that you have used is what made you wealthy, not the rate of return.

Yep. Your steadiness, your consistency, and you as an engineer looked at the spreadsheets and said, I'm going to keep doing this. You recognizing compound interest when you saw it. This is what made you wealthy. It was not the rates of return. It was not that I made an extra half a percent over here playing this game. Or I made a quarter of a percent spread over here. I made a two percent spread over there.

That wasn't what made you wealthy what made you wealthy was steadiness consistency process systems that you had in place because that's the way your brain works and that's what that's why these engineers that's why teachers are number three because they are used to doing a lesson plan yeah and following the lesson plan they get the process so sam i'd pay it off that's what i would do well i love how you walked through that dave because i've never heard you walk through the emotional piece of it of like well let's reverse engineer this and how do you feel the idea of going out and taking out a loan on your paid for house that makes your heart jump in your throat but i think the the feelings the spirit of it is important for people to pay attention to because this idea of the burden of debt,

the burden of owing someone else, the burden of those payments, there's something going on in your spirit where it just feels wrong. And when you're free of that, you don't want to ever go back. So we can justify it while we're in it because we're used to it. But if you could get out of it. If you're a person of faith and you hear Proverbs 22, rich rules over the poor, the borrower is slave to the lender if that doesn't kind of grab you around the throat just a little bit and go all right i know technically i'm not submitting myself to slavery but mathematically i am uh

there's a risk involved that's a you know i'm making different decisions because i do have a mortgage because and here's the interesting thing even someone that is as system systems driven as sam is i mean sam's a numbers guy like me he's gonna have a a reaction when he gets his house paid off that he doesn't see coming right he's gonna feel like i just got set free there's gonna be a little little moment now for those of us that are a little more emotional and a little less systems it might be a big moment right might be like fireworks and stuff go off yeah but it's like i'm free you know that whole debt-free scream thing right and but there's going to be like i didn't even realize i had this little tight place right below my right shoulder blade right and all of a sudden it's gone yeah it's not it does

manifest itself physically in your body. Yes. Deloney talks about that. But there's a sense of release. Yes. When you have no payments. Yeah. Of any kind.

Anywhere. That's exactly what you were talking about. Yeah. Because you get so used to the payments and so used to the normal, you don't question it until you're set free. You're like, oh, I didn't even realize I felt like that. Didn't even realize I was a slave. That's right.

Because I had a fairly, you know, tolerant master. Right. Right. Fairly easy master. Yep. But then when I was free, I went, oh, I did have a master. Yeah. Now I don't.

That's right. This is the Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit theramseyshow.com and register. We would love for you to come to Nashville and tell Dave your story.