The Ramsey Show - App - Do I Need a Real Estate Agent To Build a House? (Hour 1)

Episode Date: July 17, 2018

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Live from the headquarters of Ramsey Solutions, 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 am Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. You jump in. We'll talk about your life and your money. Ryan is with us in Houston, Texas. Hey, Ryan, how are you? Doing good, Dave. How are you doing?

Better than I deserve. What's up? Hey, I have a quick question. My wife and I, we are on baby step two. Better than I deserve. What's up? Filling up all the assets, there's going to be about $450,000 that we're going to be inheriting. You know, obviously my wife and I had to hire a lawyer because since there was not a will, her sister has tried to take some of the money. And we're paying legal fees right now to get to that money. However, when we do receive it, we're trying to figure out what type of places to put that money when we get it. You'll walk right up the baby steps with it, wherever you are at that time. Okay.

So what's your household income? It's about $65,000. Okay. And how much debt do you have, not counting your home and baby step two? We have about $45,000. Okay. All right. And so if it takes you two years or more to get this money, which it probably will, you're going to be already out of debt. Yeah, and that's what I was kind of thinking. So you'll be on to baby step three then. Okay.

We don't currently have a house right now. We're living in an apartment, but she's about to go to physician assistant school, and that was the money that was supposed to be used to go towards that stuff. That was my only concern. Wait a minute. I'm sorry. She was going to physician assistant school. How did she know her father was dying? No, she was going to go to physician assistant school, and the money that she was going to inherit was going to be used to pay for it. Yeah, so don't sign up assistant school and the money that what she was going to inherit was going

to use to pay for it yeah so don't sign up until you have the money okay yeah i don't know yeah because you because it may take you two years it may take you four years yeah we're already a year in so that's kind of the debacle as well yeah so you just wait on pa school until you can pay for it or until you get the inheritance in meantime Meantime, you walk the baby steps. And wherever you are in the baby steps at the time that the money comes in, then you just accelerate that. So let's say that you're all the way up to baby steps four and five. You don't own a home, so you're putting 15% of your income away for retirement.

You're starting your kid's college fund. You're starting to think about how she can go to PA school if you never get this money uh and buying a house someday if you never get this money and so you start talking about saving a down payment or saving up money for pa school and then that money comes along well boom you pay cash for a house you pay cash for pa school and you finish up the kids college fund your own baby step seven all of a sudden perfect perfect yeah that's how i was just wondering and i didn't know if we would put it toward mutual funds and then take out student loans for it, or how would that work? Okay, you've not been listening to me for very long, have you?

About six months. Me and my wife are just getting barely started. Okay. Because you never would have heard me say anything about anybody taking out a student loan, right? Correct. Yeah, okay. So we would never do that, no.

Okay. No student loans. No student loans in any circumstance. Hey, thanks for the call. Open phones at 888-825-5225. Scotty's with us in Kalamazoo, Michigan. Hey, Scotty, how are you? Hey, Dave, I'm great.

It's an honor to talk to you. You've changed my family tree. I'm honored. How can I help? Hey, so my wife and I are recently out of debt to Baby Step 2 as of Friday, and we will fully fund Baby Step 2 probably this month or the next. And we're going to continue on to Baby Step 3. We're going to save up for a down payment on the house, and we're not sure whether we're going to buy on to baby step three. We're going to save up for a down payment on the house. And we're not sure whether we're going to buy a house or build, kind of depending on what's on the market a year from now when we have a down payment. And I know you suggest a real estate agent walking alongside us when we're buying a house, for sure.

But in building a house, the process, you know, I've talked to a building company, for example, and I just don't know. I read on your website that you suggest a real estate agent in the building process, I guess, but if you could walk me through that process and any other suggestions you have around building a house. I know the rules that you give on buying a house, but just in the building process, I guess I don't know a whole lot about that. It's not like the cookie cutter way of getting a house, I guess, in a normal sense. Gotcha. Is this your first home? Yeah, it'll be our first home. And how old are you guys? We're in an apartment.

I'm 31 and she is 25. And how long have you been married? Six years. Wouldn't build a house. I wouldn't build a house as my first purchase. I would buy a house as my first purchase. Okay. Unless you're a contractor and you do this for a living or something.

No, no. Building a house together can cause a divorce. Yeah, we've got a real strong marriage. I know, I know. Sharon and I do, too, but we've thrown kitchen sinks at each other building two houses. And I would say yes, dear, to a lot of the decisions that would be made. Yeah, yes, dear, yes, dear. That is a lot of the answers.

You're right. You can do it that way. But no, dear, yes, dear. That is a lot of the answers. You're right. You can do it that way. But no, dear, this is not in the budget. What do you mean it's not in the budget? Well, we have a budget for this freaking house, and you're going over it. Oh, but I want it. Then stomp your foot and get red-faced, and it's not. Just buy a house.

Okay, all right. On your first one, and then I would build maybe as a second or third house later on. There's nothing wrong with it, it is there's nine million details there's a lot of extra stress it's probably 5x stress of just buying a house um and you do get a cool brand new house that you picked out everything that's very neat uh but sometimes people are under the illusion that that's going to last because your dreams change almost by the time you get the house finished so your dream home your dream home's a moving target and uh it just i i'm okay with building a house i built a couple and it's an you know it can be an enjoyable process if you're a project management type brain um which that's the way my brain works anyway but so yeah all that to

say brand new young couple married first house I'd save up and just buy something. I really would. I think you'll be glad that you didn't have all that extra stress. It's got to be at least 5X stress, at least. But to answer your question further, yes, I strongly recommend, because it's 5X stress and because there's 5X or 10X, the detail that you have to go through, that you have a good real estate agent that knows about building, that's going to walk you through the whole process.

And that's, yeah, having a real estate agent walk with you when you're building a house is absolutely vital, especially if you've never done it before. Now, I grew up in the real estate business. I've run rehab crews. I used to buy and sell property for a living. So me building a house was kind of a no-brainer. It's not a hard process for me. But having a real estate agent in your corner, if you've never done that kind of stuff before while you're building for the rest of you that are thinking about buying a new home or building

a new home, yeah, I definitely would have one in my corner 100% of the time. Hey, thanks for the call. Open phones at 888-825-5225. You jump in. We'll talk about your life, your money. This is common sense for your dollars and cents. Common sense is so rare in America. It's like having a superpower. Boy, there's 15 million listeners to this show.

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Better than I deserve. What's up in your world? I have three cars all with loans. Good lord. One for $45,000 it's worth about $35,000 $36,000. One is $14,000 and I think it's worth like six and I have an $8,000 loan on the next one, and I just got it appraised, and it's only worth $4,000. Uh-huh. Okay. And when you say you're giving these values, it was appraised, you went to a dealer and asked them what they would give you for it? Yeah, that's what the last one.

I looked the other two up on Kelly's. We looked. And what were you looking at, wholesale or retail or private sale? Private sale. Private sale. Okay. All right. And what's your household income? Private sale. Private sale. Okay. All right. And what's your household income? $104,000. Okay.

And I have about $300,000 with the house in debt. Okay. What other debt have you got other than these cars not counting your house? I have a Disney timeshare and credit cards, and I had to get those basement waterproofs. And how much do you owe on all of that? Disney, I think I owe approximately $8,000. The basement, I owe approximately $17,000. It just got done.

And the rest is credit cards. And what do you owe on credit cards? I owe 85. 100 or 1,000? 100. Okay. 100. All right.

And then the rest is medical bills. And how much do you have in medical bills? Because I don't have a rest. You said 300,000 including your mortgage, and I don't have your mortgage, so I can't back out of it. What's your medical bills? About $4,000. Okay. All right.

And you make $104,000? Yeah. Yeah. Okay. So what's your goal here? Where do you want to do? I want to get rid of them. I'd go drive junkers if I could.

Well, you can. Is your credit okay? it's maxed out now i'm just saying is your credit clean i know it's maxed out for the most part yeah um okay who's the loan with on the 45 000 piece of insanity. GM Financial. Okay. I would just go to your credit union and borrow the $9,000 difference on a personal loan and sell the crap out of that car. Okay. And then actually do the same thing on the $14,000 car. Okay.

Might keep the $8,000 because you don't get much ground with it and just put it in your debt snowball and then begin to work your debt snowball. But the $45,000 is gone as soon as I can get the loan okay because it's insanity what kind of car is that it's a silverado truck yeah yeah i had 10 000 negative equity going into it uh-huh that's a great truck i mean my son-in-law's got a Silverado. They're a great truck. He owns it, though. This one owns you. Right. So it's time to get rid of it. It ain't that great. Yeah, we have negative flow every month because of all these cars. Yeah, but half of your debt, not counting your house, is one car.

Yeah. You know, so, I mean, you can plow through this pretty quick. You get rid of those two cars and get you one $1,000 car. Keep the $8,000 one, the $4,000 car that you owe eight on. Keep that one and get you a $1,000 car. Dump the other two and borrow the difference. So you need nine and eight. So you need about $17,000 from the credit union.

If you can get that as an unsecured loan or your local bank, that gets you out of those two. And you're just looking for a personal loan. But that drops your debt way seriously down. And then you just list your debts, remaining debts, smallest to largest, individual medical debts, individual credit cards, not by category, smallest to largest individual debt, and begin to pay them off in that order as fast as you can. But you'll be back on positive when you get rid of that debt, those two car payments, because those two car payments are just outrageous. You just have a mess on your hands. And, you know, so and then we get after this and tear our way through it.

So it looks like you'll clean up, you know, some credit cards, some medical, clean up that car. You can sell that timeshare, by the way. Disney's actually one that you can sell. You can call timeshare exit team if you need to to get out of it, but I don't think you need to. Disney timeshares you can actually sell. So I'd get rid of that thing and get it sold and get rid of that debt as well. So sell so much stuff the kids think they're next, dude. That's what it comes down to.

It's time to have a bloodletting around your place. David is with us in Charleston, South Carolina. Hi, David. How are you? I'm doing well, Dave. How are you? Better than I deserve. What's up?

All righty. Dave, I'm active duty military. So I'm on baby step two. I'll up my $1,000 and slowly paying on the debts. And I guess my question for you is, as with being in the military, I can be displaced to a new location whenever the government pretty much needs me to. So my main question is, I have to be able to, in that time span, also move my wife, get a place to live, basically set up shop in a whole new area.

I'm trying to figure out how much I should keep in my bank account besides just the $1,000 for strictly emergencies in the event that I would get displaced and have to pay first, last month's rent. What branch of the service are you in? Navy. What's your job? I'm a nuclear electrician's rent. Yeah, what branch of the service are you in? Navy. And what's your job? I'm a nuclear electrician's mate. Okay. They're not going to move you instantaneously in that position.

They're going to give you notice. Probably enough notice. It's been only about three months. Yeah, and you've got three months to stop everything and pile up the money to make the move. So if you get notice that you're moving, you just stop all your debt repayment, extra payment, pay minimum on everything, go on to Beans and Rice

and pile up enough money to do the move. You can pile up enough money to do the move in three months, can't you? Possibly. What's your household income? I'm the only worker, so I make about $45,000. Okay. I think you can. Are you living on base? No, you're not. I think you can. You're living on base?

No, you're not. Yes. You are? I am living on base currently. Okay. Yes. And so if you made a move, hypothetically you'd move on base, and that lowers your moving costs considerable. You've got no deposits on the other end.

Correct. And you're not receiving any back on this end. So that's what base housing does for you in that situation. So, yeah, I would elect for on-base move, which lowers your need to have money saved. This is not instantaneous. Again, you're going to have a 90 to 120-day notice, and that sounds about right to me. We work with the military all the time. So I'm staying with $1,000 for today.

And you get notice, stop everything. Stop all your debt snowballs. Stop all investing. Stop everything. And pile up cash right quick to do your move. That's how I'd handle it. Oh, by the way, thank you for your service, sir. We appreciate you.

This is The Dave Ramsey Show. Guys, let's talk about that timeshare pitch that you fell for. They promised you exclusive access to travel anywhere you want. Tropical beaches, mountain getaways, or whatever. Oh, my gosh. They claimed it was the affordable way to travel, and then they convinced you it was a good investment. But here's the deal. Search any auction site for your exact timeshare and see what it's selling for.

It's listed for a dollar with no bids. That's not a good investment. Now, I know I'm just adding salt to a very old wound, but look, if you tried calling the resort and they won't take it back, if you tried selling it and no one will buy it, call Timeshare Exit Team. Timeshare Exit Team will get you out.

You'll have to be patient. It can be a long process, and it costs money. But it works. They're so confident in their exit service that if they don't get you out, you get a 100% refund. Call 844-999-EXIT. It's free to talk. 844-999-EXIT.

TimeshareExitTeam.com. In the lobby of Ramsey Solutions, Sarah is with us. Hey, Sarah, how are you? I'm doing great, Dave. How are you? Better than I deserve. Welcome. Where do you live? Just outside Charlotte, North Carolina in Dallas. Oh, fun. Good to have you. Thanks for joining us. Thank you. Here to do a debt-free screen.

Yes, sir. How much you paid off? $26,300 in 13 months. Wow, perfect. And your range of income during that year? I started around $36,000 and ended up around $56,000. 56? Wow, that's a big jump in one year.

I worked about six jobs. Oh, okay. That's what did that. Crazy. So you worked extra jobs like crazy. I did. So what was your best paying extra job? I have my athletic training certification.

I actually just got a new job. And so I was able to work weekends. I worked about 15 hours a day on the weekends for four to six months. And I made $20, $25 an hour. Oh, okay. As a personal trainer or what? Athletic trainer for injuries and things. Oh, I got you.

Okay. Wow. Good for you. Now, that makes for great part-time work. Absolutely. Very good. It was a blessing. Very good.

But you can dial that back whenever you need to now that you are free. Correct. I like it. Good for you. So what kind of debt was the $26,000? Mostly student loans. I had $24,000 in student loans and a small credit card. Okay.

And so what happened 13 months ago? Because you got your hair on fire. I did. I heard about you from a friend of mine many years ago and didn't really do anything about it. Everybody has student loans. I'll pay it back when I get to it. But then I paid off my car in 2016 in January. And I was like, okay, maybe I can do this.

And I started watching all of the debt-free screams on YouTube in December I watched every single one and I downloaded every every podcast and you don't do stuff halfway no wow it's not it's not in me so um and then I was like okay I'm gonna start February 2017 um and I did and that was that was it I actually and I saw all the interest I was paying um in the seven years since i graduated i paid twenty eight thousand dollars to my student loans which was a grand total of 40 when i graduated and uh twelve thousand of that 28 was to interest oh that makes you sick so i was like okay i can't do this this has got to go away right so just jump on it right

so in um 13 months i paid off the same amount that I did in seven years. Well done. That was nice. Well done. So what do you tell people the key to getting out of debt is? It's definitely sacrifice. You have to be okay with telling your friends no and not going out to eat. I did take a small vacation, but that's because my family has a house.

I basically used my food budget and just ate at the house that week. And you just have to work really hard. You have to want it to be able to do it. So what correlations do you find between you getting out of debt and what you try to get your patients to do? They have to want to have a drive to return to play or to recover from whatever. It's a mental game, really, in both aspects. Yeah. It's a decision.

It is a decision you have to make. And the more you want it, the faster you get it. Correct. There's a desire factor to it. Right. You can't. I get asked all the time. I think almost every day, how can I get my husband? How can I get my wife?

How can I get my friend? Right. I get my wife? How can I get my friend? You can't make people want stuff. No. And I've had those conversations with friends who were like, how did you do that? I was like, I wanted to do it. So I did it. Really, really bad. Really, really bad.

More than I wanted all this other stuff. Right. And so all the other stuff goes to the side and boom, it's game on. Right. And speaking of desire, I really wanted to come do my debt-free scream. So I put my information in twice, and I hadn't heard anything. So you had a post on Facebook, and it said, now that you're debt-free, what's one thing you want to do? And I said, my debt-free scream.

And somebody from your team saw it, and I got a phone call the next day. Oh, perfect. So it was great. Okay. But I also got, I want to shout out to my college roommate, her mom, Ellen Looper. Thank you. She got me a free flight. Wow. And she redeemed some me a free flight. Wow.

And she redeemed some airline miles she couldn't use. And I used a cheap Airbnb and an Uber. I had some coupons. So I was able to do this trip pretty cheap. Yeah, like almost nothing. Yeah, pretty close. Wow, good for you. Well, welcome.

We're glad you're here. I'm proud of you. Very well done. So were people cheering you on or saying you were crazy? Most of the time, people were cheering me on. My parents were big supporters and a couple friends that are doing it as well. But I did have some friends that just didn't really understand. They were just like, I don't understand why you're doing this, why you're working so hard.

But, you know, now they can see why, you know, now they see the end result, big picture. So how does it feel? You don't have any debt. It is, I can do things. It's fantastic i can go to the store and i have a budget for how much i can spend and i don't have to eat on 25 or 30 a week now i can eat a little spend a little bit more on groceries so what feels better the financial freedom or the sense of accomplishment because you just climbed a mountain um i think

both just not having those student loan payments drafted out of my checking account every month is pretty nice. It's real. It is. Yeah. It probably took two months for it to hit because I finished at the end of February. My goal was to finish by the time I was 30, which is next month. Yeah, you did it. So I finished six months ahead of my goal.

Well, happy birthday. Thank you. Well done. Well, you have conquered one of life's biggest challenges, and that is controlling you. Yep. And you know that you now can do anything when you set your mind to it as far as money goes. Right. Money is no longer going to be intimidating.

It is now your slave. It will behave when you tell it to behave. It makes a fabulous slave. It's a horrible master. Correct. Totally agree. P.T. Barnum actually said that, believe it or not. So, yeah, it's impressive horrible master correct and uh pt barnum actually said that believe it or not so uh yeah it's impressive what you've done thank you proud of you well done well done you've set

yourself up to be a millionaire you're on track to do that we've got a copy of chris hogan's book for you retire inspired uh we want that to be the uh the next chapter in your story that you're outrageously generous. That's what I'm playing. Being a millionaire. Yeah. Good for you. Thank you.

Well, thank you for persevering to get on, too. I appreciate that. Thank you. I'm glad we got to hear your story. Me, too. This is an important story. Well done. All right.

$26,000 paid off by Sarah from Charlotte, North Carolina area in In 13 months, making 36 to 56. Six jobs. Yeah, she wanted it, baby. That's how this works. Count it down. Let's hear a debt-free scream. To God be the glory. Three, two, one.

I'm debt-free! I'm debt-free! Yes, ma'am. This is how it's done right here wow i love it i say it all the time but i'm not going to quit saying it um so far very few people have asked me to quit saying it that the millennials get a bad rap i get to meet impressive millennials every day on this show. People from 20 to 32 years old who are doing amazing things that are mature beyond their years. They're driven. They live a life of excellence.

They play through, and Sarah's one of them. That's an impressive young woman right there. Very cool stuff. I mean, there's one of them. That's an impressive young woman right there. Very cool stuff. I mean, there's a spirit there. A zest. Yeah. Now, I know that there's the participation trophy crowd that feels entitled and victimized about everything, and there's that section of the millennials.

I'm running to them, too, and they're useless. I get it. It's odd that in every generation there's a bunch of bums and there's some people that get things done. And the millennials are no exception. These millennials are special, y'all. The ones that get it, the ones that aren't victims and entitled and participation trophy brats,

the ones that get it, they're going to do some stuff, you guys. I got a bunch of them on my team. I love them on our team. They get stuff done. They are serious-minded some stuff, you guys. I've got a bunch of them on my team. I love them on our team. They get stuff done. They are serious-minded, the ones that are. And they're easy to interview because they tell you if they suck. They just go, I suck. I'm useless.

I mean, they pretty much admit it, you know. Or it's game on, and you know right where we stand. So very, very well done. So how do you get out of debt? Fifteen hours a day every weekend for a year plus extra jobs plus the regular 40 plus living on beans and rice rice and beans she just gave you the formula the problem is some of you don't like the formula and you want to do ish ish won't get it.

We're doing your program ish. Then you're not doing our program because our program involves intensity, involves sacrifice, involves focus, involves a righteous level of anger. I'm not living like this anymore. I've had it. When you start saying stuff like that to yourself and you actually believe it, you're probably ready. I can show you how to become wealthy. But as long as you want to just bump along and look for a system or a scheme or a scam or a thingy,

I need an app to get me out of debt, Dave. No, you can't get an app to get out of debt. You have to change you. There's your app. This is The Dave Ramsey Show. Okay, I need you to listen to this. Because one normal routine that everyone does can cause total chaos in your life. I'm talking about the simple act of using Wi-Fi. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and every search you're doing online.

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Download it right now. Just search Hotspot Shield on iTunes or Google Play or go to hotspotshield.com. You can be secure in seconds. Download Hotspot Shield by Anchor Free today. Jeff is in Bakersfield, California. Welcome to the Dave Ramsey Show. Jeff, how are you? Good, Dave.

Thank you for taking my phone call. Sure. What's up? Well, I was wondering if you could point me in the right direction. My wife and I are currently on baby step number seven. Our current home that we live in is paid for, and our rental house is also paid for. But I think we're probably going to be moving out of state here in the next two years.

And so we're thinking about maybe selling our rental house right now and that's we're probably net about 170 175 for that home um i guess my question is what do we do with that money in the short term um i've always been told that you know you don't want to put money into mutual funds unless you have four to five years' time frame of when you actually need the money. How do you feel about that? That's what I tell people as well, because a five-year mark, about 90% of the five-year periods have made money. Only about 65% of the three-year periods have made money. Now, the difference in your position is you've done a really good job with your money,

so you've built a position of wealth. And so how much is in your 401Ks and your nest egg? We have probably $650,000 in our 401. And what's the equity in your home? What's your home worth? The one I live in is probably $400,000 in our 401. Yeah, and what's the equity in your home? What's your home worth? The one I live in is probably $400,000. Okay, so you've got a net worth of over a million dollars. Okay.

And your household income is north of six figures, isn't it? Yeah. And how old are you, 45? Yes. Almost like I've done this before. Okay, well done. I mean, you hit the marks, man. before. Okay. Well done. I mean, you hit the marks, man.

You're perfect. Well done. Proud of you. So what is your household income? $175,000. Yeah. Okay. A little even better than I projected.

Okay. Great. Good for you. So here's the thing. When you place $170,000 in a 1% money market for two years, you will make nothing on it, obviously. If you made 10% on it for two years in a mutual fund, you would have made $34,000. Okay? Okay. If the mutual fund went down 10% a year for two years,

which would be a highly unusual two consecutive years of that kind of loss in the market, like historically almost never happens, okay, then you would lose $34,000. Right. None of these are deal breakers for you. You have a million-dollar net worth, you make $175,000, $34,000 doesn't change your life, okay? Right. So all of that said, too, that puts you in a position more like I would be in personally if I were going to do this.

I'm probably going to put some of that money in a mutual fund, and just because I can't stand for it to all sit there at 1%, knowing that I'm taking some risk, but I'm probably not taking risk that's going to completely cripple my financial plan. Okay. You know, even if you, let's say, pray tell, had the worst possible scenario and you lost the entire amount of money, it does not ruin your life. It'd be horrible.

I'm not suggesting you'd put it at risk at the blackjack table, okay? I'm not suggesting that. I wouldn't do that. But my point is that you are in a position to accept some volatility on this $170,000 in order to try to get a little bit better rate of return. So if I'm in your shoes, I'm probably throwing like $70,000 in a money market. I'm probably popping $100,000 in a growth in income that's got a long, stable track record. You know, that's a boring type mutual fund.

Super boring, in other words. That kind of a thing. And I was trying to thumb through here and look. I've got one fund that I own that's had a 12.07% average rate of return since 1934. But here's the interesting part for our discussion. Out of those 83 years, 15 times it was down. The rest of the time it was up. So that's called a growth and income fund, and that's a very stable fund.

Okay? And so, you know, you could put $100,000 in that, and you'll probably make something. You might lose a little, but you probably won't, you know? So I'm doing that. And even if you do, you're okay. That's the way I would analyze it is. But if you call me up and you go, I have $170,000 to my name, this means whether I get to buy my next home or not,

and I make $65,000 a year, I would say money market. You can't stand the risk okay you see the difference sure but you could do either one you can do either one either go either way all in a money market or all in a mutual fund because you can handle the risk either way you're fine it's just what's going to make you you know what's going to be fun but the point is it's a ratio thing in your overall net worth because you've done such a great job. Well done, millionaire.

Another everyday millionaire calling in here on the air. Todd is with us in Baton Rouge, Louisiana. Hey, Todd, how are you? How are you doing, Mr. Ramsey? Better than I deserve. How can I help? Okay. I've been listening to your program for a couple of years now and I think I've been

doing very well. I'm pretty much out of debt. I just sold my house. I got about $40,000 of equity. My question is, what do I do with the equity? Why did you sell your house? I need a bigger house. Me and my wife had twins. We have two other kids. Now we have four kids in the house. We needed a four-bedroom. So you said you're pretty much out of that.

What does pretty much mean? I have a vehicle, $15,000 I owe on it. But there's my question. My question is, what do I do with my equity? What's your household income? It's not 80. Okay. You can do what you want to do.

You need to pay the truck off and put less down on the house, which means you're going to be buying less house, because I don't want you to take out more than a 15-year loan where the payment's more than a fourth of your take-home pay. You've probably heard me say that. Or you can sell the truck and put more down on the house because the house is more important than the truck. Well, it's our main vehicle, so we can't really sell it and buy something cash like you talked about. But, yeah, I can do that.

What's more important? I mean, it's up to you. Putting more down on the house or driving that truck? It's up to you. But, I mean, you're trying to move up in-house, and with $40,000 down in Baton Rouge, you can get a pretty decent house, an $80,000 income. You can get a decent house on a 15-year fixed rate

where the payment is no more than a fourth of your income. Or you can put $25,000 down and pay off your truck. But the truck debt's got to go. It's either gone because you sold it or it's gone because you paid it off. No way I'm keeping that truck debt. I rode a bicycle before I had a debt. I'm car payment again. Absolutely ridiculous.

Nathan is on Instagram. Why do you think all debt is bad isn't some debt okay like a house or student loans nathan when you ask a question that is actually a statement that's called a passive aggressive aggressive question so you weren't really asking a question you were just saying you think all dead is not bad and i'm wrong that's the truth of your statement now uh so you and i will now argue are you ready oh it's fun so here's the thing is it it's not necessarily what Dave Ramsey thinks. I happen to be the aggregator of the information,

meaning I've gathered the information over 30 years of walking with people, with millionaires and billionaires and broke people. So I have a lot of data, a whole lot more than your broke brother-in-law with his opinion or the idiot you were playing golf with yesterday and his opinion. Our data says that the shortest direction, the shortest distance between you and wealth is having no debt. Our data comes from researching millionaires in detail, formal research projects,

having had 5 million families go through Financial Peace University, having answered 15 hours of questions on this show for coming up on 30 years now, having read the Bible and what it says about money, and there's no time in there that it says student loans are a good idea or a mortgage is a good idea. So get out of debt. If you hate it, and I'm wrong, you can go back in debt. But it's the shortest distance to wealth and to you being more generous. That's why I hate debt.

This is the Dave Ramsey Show. Hey, it's Kelly, Dave's phone screener. We finished 2017 with a bang as the fourth most downloaded podcast of the year. Thanks to all of you for listening and helping us spread the word. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and has struggled to make ends meet. But they're starting to make headway with their budgets

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