The Ramsey Show - App - Don't Ask Broke People How to Handle Money (Hour 2)

Episode Date: December 26, 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'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Elijah is with us in Raleigh, North Carolina. Hi, Elijah. How are you? Hey, Dave.

I'm doing better than I deserve. How about you? Just the same, sir. How can I help? Hey, so I'm 19, and I'm a pretty new guy when it comes to personal finance and stuff. I've got a clean slate, and I'm about to take financial peace to university, and I'm really excited about that. And the reason I'm contacting you is because since I'm young,

a lot of people are heavily advertising the idea of getting a credit card to me. And they're saying a bunch of stuff like, you know, getting money back, I mean, percentage of your money back and all that whatnot. And the biggest thing is the credit score, and that if I don't have a credit score, I'm not able to do anything. And I'm pretty sure you don't like credit cards, and you seem to be doing pretty fine. So what you got? What's your advice?

Okay. Well, the long answer is take financial peace university and you'll get a full detailed explanation there but basically you have to decide this okay um you need to look at wealthy people and figure out what wealthy people are doing because they are wealthy in terms of money you don't want to copy if you want to get in really good physical condition and you hire a personal trainer and your personal trainer is 450 pounds that's a problem right yeah so you don't ask fat people how to get in shape right is why i came to you and you don't ask fat people how to get in shape. Right? Which is why I came to you. And you don't ask broke people what to do with money.

Because if you do what broke people say to do with money, you know what you're going to be? Broke people. Right? True, true. 70% of Americans live paycheck to paycheck. Seven out of ten houses on the street that these people are talking to you from have too much month left at the end of the money. They look good. They drive a car they can't afford.

They go on vacations that they can't afford. And they put their stupid fake life on Facebook for everybody to see. But it's not real. It's not real. It's's a facade it's all borrowed money they buy stuff they can't afford with money that they don't have to impress people that they don't even really like and then they give a 19 year old guy like you advice to go get in debt so let's think about the credit card for a minute you said you can't do anything without a credit score. Well, now that wouldn't be true. What you can't do without a credit score is borrow money quickly and easily.

You won't be able to go in debt quickly and easily if you don't have a credit score. The only thing a credit score is used for is to go into debt. The only way you get a credit score is going into debt. So the more debt you go into, the better your going-into-debt score is going to be. And the more debt you could get into, because you've gotten into debt in the past. It's kind of like a dog chasing its tail. You ever seen one of those?

Oh, yeah, for sure. Yeah. So if you're going to pay cash for things, which is what wealthy people do, because they have figured out that their number one method for building wealth is not giving their income to other people. Your number one wealth-building tool is your income. And when you give it to other people in the form of car payments and student loans

and credit card payments and house payments and everything else, payments, payments, payments, payments, payments, payments, payments, payments. When you give everybody else all your income, you have no money to build wealth with. Thus, you become middle class or lower class because everything you make goes out to the bank, and they have big, tall buildings with nicer furniture than the people that give them the money. Think about it. Makes sense. So I'm going to figure out what rich people are doing and do it.

And they don't borrow money is what rich people do because they figured out that they're the most powerful wealth-building tool. And if you're not going to borrow money, you know what? Your need for a credit score just went away. All right. Well, I like the idea of that. What are some, I guess, problems? I don't want to say problems, but situations I could run into without a credit score.

Why do people say it's necessary so much, I guess? Well, you can't borrow money. So if you want to buy a car, you're going to have to save up the money and pay for the car. If you want to go on vacation, you're going to save up the money and pay for the car. If you want to go on vacation, you're going to save up the money and pay for the vacation. If you're going to buy stuff for Christmas, you're going to have to save up the money and pay for Christmas. If you go to rent an apartment, some people will want to look at a credit score. Other people will rent to you without a credit score. If you go to do some things, you know.

But here's the irony of that okay i'm a multi-millionaire the building that i'm sitting in is paid for just this one piece of real estate that i own is worth 17 million dollars just this one building and i own a bunch of other real estate so i can go down the street down here where they require a credit score to rent an apartment and they won't rent me an apartment i can write a check and buy the complex but they won't rent me an apartment that's how stupid but parts of our culture have become and so you just get you know the problems you're going to run into is you're going to run into stupid but people like that who you just don't get to participate in their game oh well

i can't rent an apartment at that place if they require credit score because i don't have a credit score my credit score is zero it's indeterminable because i haven't borrowed money in decades and so i'm just walking around having to pay for stuff oh darn it's my only shot as far as getting money back on your credit card if you get 1% back on your Discover card, that means if you spend $100,000 on your Discover card, they will give you $1,000. How is that a path to wealth? You're going to spend $100,000 so that they give you $1,000.

That's going to make you rich how? It's not. So it's stupid. The whole thing is just stupid. It's a rigged game to make the banks rich. Visa and MasterCard is a multi-billion dollar transaction billions and billions of dollars transacted every year and then we wonder why people are broke that's why so i mean you can do whatever you want to do dude uh but you called to ask my opinion on that. And I have two debit cards.

That's all I have. I have a debit card on my personal account, a debit card on my business account. I travel more than any two of you listening put together. And I go anywhere I want to go, do anything I want to do. Sharon and I spent three weeks in Europe this summer. We don't have a credit card. We checked into the finest hotels and ate at the finest restaurants and had the finest times you can have.

And we paid cash for all of it using a debit card. And never had anybody one time say, Oh, we can't take you into our five-star world-class restaurant because you have a debit card. Never once did they deny us access. You can do anything you want to do, but there's a couple little things here where you're dealing with stupid people that you're going to have a problem. So the rule of thumb is listen to wealthy people, do what wealthy people do,

if you want to be wealthy people. This is The Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry, a Better Business Bureau-accredited organization CHM members share to pay each other's medical bills.

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Hi, Sarah. How are you? Hi, Dave. I'm doing well. How are you? Better than I deserve. What's up? Okay, so my husband and I are on Baby Step 2, and we are a weird combination of two free spirits. And we have in the past tended to try and give and help people and then not have money so that we had to, like, buy groceries on our credit card, right? So we're done doing stupid, and we're totally on board with the plan. But I want to make sure we're doing everything right.

So right now we're considering budgeting in a financial peace university, of course, in the next couple of months, but we have this couple that's really close to us that we feel like God has put their situation and them as a couple on our hearts, and I want to know if it's okay, even though we're not at a debt, to pay for them to go through the class as well, because I know they're not in a position to do that for themselves. No. It's not? Okay. No, you should not buy Financial Peace University to somebody when you're in Baby Step 2.

Okay. Especially when you have a pattern of making all of your financial decisions only with your heart. You have a wonderful heart. You are both very sweet people. And it's killing you. Yeah. It's killing you. Yeah. It's killing you. And, you know, I want you guys to use your generous,

compassionate hearts as your motivation to get yourself straightened up so you can give the rest of your life. I want you to live like no one else so later you can live and give like no one else. Okay. And pray for these guys and sit down and just you can show them what you're learning if you want to. You can do all that kind of stuff, but you don't need to buy my stuff to give to somebody while you're working baby step two. Okay. No, I wouldn't recommend that.

So the good news is you said you're in financial peace right no we're not we're trying to um we're hoping to do that in the next couple of months oh so you were going to buy it for them even before for yourself yeah or maybe at the same time could budget it in you know that was kind of the hope. Yeah. Okay. No. No. I mean, here's the thing. The point of taking financial peace for you especially is to get yourself in a position to give.

And so the best way you, because you're always going to help other people. No one's going to be able to stop you. It's just who you are. It's how you're wired. Thank goodness. It's wonderful. It's wonderful wiring. It's a wonderful people that you are. And so 100% of the time, you're going to always be drawn to helping people.

And so the best way for you to help people is what? Have more money. The best way to have more money is learn the stuff in Financial Peace University and get yourself straightened around and do every bit of that. That's exactly what I would do in those cases. Hold on. I'm going to pay for you and your husband to go through Financial Peace University, but I don't want you to buy that other couple.

I want you to get yourself straightened around so that later on you can buy 100 Financial Peace Universities if you want to for 100 different people that you care about. But right now you don't need to do that especially you because you've got to learn to say no to this impulse so that you can say yes later this this natural part of your wiring you've got to get it under control saying you know live like no one else so later you can live and give like no one else. And in your case, we could even change the saying, right? We could say, give like no one else, which means not much. Okay?

Stop giving like you've been giving for a short period of time so that later you can give more. And that's not selfish or greedy. There's nothing wrong with that at all. It's just being wise and understanding the way the math works to get yourself in a position to win like you've never won before and be generous at a greater degree than you ever dreamed you could be. Instead of nickel and diming, you'll be able to really do some big stuff later. But hold on. I will pay for you to go through,

but only if you promise not to buy it for someone else right now, especially you. Trevor is in Phoenix. Hi, Trevor. How are you? Good. How are you doing? Better than I deserve. What's up?

Good. Okay. I am $36,000 in debt and with credit card debt from my children. And I'm thinking if I consolidate all that in a home equity loan, would that be a good thing or not? You have $36,000 in debt and you have credit card debt on your children? Well, no, that's the school. You have to pay for the schooling. Credit card to pay for the schooling. Oh, you've got that's the school. You have to pay for the schooling, credit card to pay for the schooling.

Oh, you've got them in private school? Yeah, in Catholic school, yeah. And you're paying for that with a credit card? Yes. Right now it's about $36,000. And I want to see if I consolidate it all into one thing, like a home equity loan, is that a good thing to try to bring down the payment and bring down the interest rate? Yeah, interest rate's not your problem. Spending money you don't have is your problem.

Yeah, okay. So when is that going to stop? Let's see. Spending money you don't have. When they get out of college. You're going to quit spending money you't have. When they get out of college. You're going to quit spending money you don't have when they get out of college. Well, I put some money aside for the school, but it's just not enough. What is your household income?

Sorry? What is your household income? With my wife and I, we're looking at probably about $70,000. And how much is the Catholic school? Catholic school, one is $12,000. And then the college is, of course, my daughter's college. Oh, okay. So in addition to that, there's college.

You have one child in school for $12,000 a year, making $70, okay. So in addition to that, there's college. You have one child in school for $12,000 a year making $70,000, and then you're paying for college, which is how much is college? Oh, that's like about $8,000 a semester. Mm-hmm. Okay. Is the college student working and paying for part of this? She has a part-time job, but she she's not paying she's not part of that the problem is uh i have a family that are not on board with this that they don't see the financial

part of this they're saying well they're getting it that's what i thought okay let me tell you the problem okay here's what you're going to run into okay when people do debt consolidation they feel like they have gotten rid of the debt and they continue in their bad habits so then what you're going to end up with is credit card debt and a debt consolidation loan because you're going to continue to make these messes right that's what has to stop trevor and if you don't stop that moving the money over is not going to do anything except allow you to go further into debt that's all it's going to do in your mind you're thinking oh i'm going to save on interest but you haven't you know the debt is not the problem it's the symptom it's the symptom of the family's not on board you don't

have a plan you're spending more than you make and if you don't fix that symptom there's the symptom of the family's not on board. You don't have a plan. You're spending more than you make. And if you don't fix that symptom, there's no amount of restructuring in the world that's going to do it. You're just going to keep piling on debt. You look like Congress. You know, and you start talking about, like, I'm saving on interest. Well, that's what Congress is. You know, we cut spending. You know, so you spend, you know, so you're still going in the hole every dadgum second that we all breathe up there,

a trillion dollars a minute. I mean, these people in Congress have lost their minds. We all say that, but then we weren't around acting like them. So, no, I would not move it because you're going to end up bankrupting yourself if you don't deal with this. And by moving it, it's going to allow you to go further into debt and make a bigger mess, and I think that's a real mistake. Instead, I'm going to do everything I can to try to actually get you

to address this situation with your family and say, guys, we're going bankrupt. Some stuff's got to change here. Something's got to be shifted. Something's got to be different. Something's got to be different. And you can't just keep doing what you've been doing and expect a different result. And interest rate is not why you're in debt. The reason you're in debt is you're disorganized.

You're out of control. You're overspending. The family's not on board. You're spending money you don't have because you don't have a plan, and nobody hears no around your house. No one ever hears the word no around your house no one ever hears the word no in your house and your family needs to relearn that word it's a great word it'll set you free no no it's a great word it's an ancient word no one says it anymore it's politically

incorrect no this is the dave ramsey show Correct. No. This is The Dave Ramsey Show. I just love it when the companies we work with make it a point to give money away, especially during the holiday season. Once again this year, Zander Insurance will donate 25% of all sales from their ID theft protection plan in December to Operation Homefront. Operation Homefront is a very special organization that provides emergency financial assistance and housing to our wounded veterans and their families. To date, Zander has raised and donated over $300,000 with your help. That's amazing.

And if you don't have ID Theft Protection, there's no better time to get it. Not only will you receive the smartest, most affordable plan available, but you'll be helping those who serve and have sacrificed for our country. You can even give it as a gift. Visit Zander.com or call 800-356-4282. There's no better way to protect your loved ones while also helping those who protect our freedom. That's 800-356-4282. Brian and Rachel are with us in Los Angeles.

Welcome to the Dave Ramsey Show, guys. How are you? We're doing great, Dave. How are you? Better than I deserve. I see on my screen you're debt-free. Congratulations. Thank you.

Thank you. We absolutely are. How much have you paid off? We paid off $143,055. All right. Good for you. Making what kind of range of income during that time? From $103,000 to $149,000.

Great. What do you all do for a living? I am a teacher. And I'm a preschool teacher. Excellent. Very cool. What kind of debt was the $143,000? It was a little bit of everything, Dave. It was adoption fees, medical, an ugly timeshare, student loans, two cars, and we were so broken, desperate, and stupid that we took out a second on a car to pay for the adoption.

Oh my goodness. Man, you did everything. It was everything. So what happened 55 months ago? Tell me about your journey. So 55 months ago at our former church, Antelopeach University was being offered, and we saw a preview in church on a Sunday morning and decided, you know what, it was time to clean up our mess. Cool. So you went to the class? Went to the class. I went to the first class. Rachel stayed home with her son, Emmett, and I went to the first class and came home and made her watch the, there's a free, the free first class video was online back then, and we sat down and I made her watch the first out, the first class again. And from then on we just you know we started with a budget um just really dug into it listed our debt smallest to largest and and was able to get through it

so rachel he comes home and is a little bit fired up to say the least about you got to watch this you got to watch this what did you say i was skeptical at first um you know you're you're programmed a certain way for so long and so having to reprogram your entire life and your entire way of thinking so i was skeptical at first but i was pretty much on board by the by the second meeting okay very cool good good and 55 months later, my goodness. Wow, you've been slogging through this. This took forever.

How did you stay with it? What enabled you to keep with it for 55 months? We had to push pause a couple times to take care of some cash flowing from college for me and some therapy for our son. But really, for me, for us, I think it was following the baby steps, sticking to the budget and realizing that, you know, the baby steps on financial peace, it's like a GPS for financial freedom. And even though we might think that our way is better, you know, when you follow the GPS, when you follow what it says, you do the tried and true ways, you end up where you need to be, which is debt-free at the end of the journey.

Very cool. Very cool. Good for you guys. Way to go. What do you tell people the key to getting out of debt is? I really think it's the budget and following those baby steps and having a plan. You say it all the time, Dave, that children do what feels good and adults devise a plan and stick to it. And you have to be an adult.

You have to budget everything out. And EveryDollar.com has really helped us in terms of monitoring that spending and making sure that we're staying where we need to be. Very cool. Well, congratulations, you guys. Rachel, what was the hardest part of this for you? I think changing the way you think about debt and changing that everything is debt and not just people tell you that you always have debt, and that's not true. That's not true. And having to go back to them and say, you know, I'm sorry we can't do this right now

because we don't have the budget. It's not in our budget. So, you know, just sticking to it and seeing it all. We made a spreadsheet of all of our debt and being able to cross that off was amazing every month, crossing another line off, and that really helped. Yeah, walking your way through that debt snowball keeps you, the sense of traction keeps you moving. Very good.

Well, we've got a copy of Chris hogan's number one bestseller retire inspired which will uh help you move on to the next chapter now which is millionaire status that's where we want you to go and of course in the process be outrageously generous as you go along as well okay well thank you for that thank you congratulations you two brian and rachel los angeles california 143 000 paid off in 55 months making 103 to 149 count it down let's hear a debt scream three two one We're debt free. Way to go, guys. That's how it's done right there. Well done, well done, well done. Darby is with us in New Orleans.

Hi, Darby. How are you? Hi, Dave. How are you doing? Better than I deserve. How can I help? I got a question about legal protection or prepaid legal what about it uh how do you feel about prepaid legal services oh i wouldn't do it

i wouldn't buy lawyer insurance the and the reason is really simple. Prepaid legal, the typical fee is $25 a month, which is $300 a year, which is $3,000 in 10 years. The typical person does not spend $3,000 on legal services in a given 10-year period of time. You know how I know that? Because if they did, prepaid legal would be out of business. Okay. In other words, you're giving them $3,000. If you take out more than $3,000 in services, on average, person that does business with them,

then they go broke, right? Right. So we know that you're not spending that on average, and they make a profit on this. So that tells me that this is a a potential three thousand dollar expenditure sometime in a 10-year period of time that your emergency fund can cover and you would save the money and not uh you know not give it to them in profits they're not evil or anything but that's how all insurance works and the only so the only insurance you buy is to transfer risk that you cannot afford to accept yourself

because all insurance has a profit margin in it. And most of it has a pretty good profit margin in it. And so I don't know what the profit margin is in prepaid legal for sure, but I know that it's there or they would be closed. And I'm not against them making money. I'm just not giving them mine. Oh, open phones at 888-825-5225. Our question of the day comes from Blinds.com.

They have a 100% satisfaction guarantee, which means even if you mismeasure or you pick the wrong color, they will remake your blinds for free. Free shipping. New promos every month. Use the promo code Ramsey. Caleb is in Florida. A few years back, my father-in-law started a business named to all of his daughters as owners, with him owning the majority share.

The business failed. Now he's being sued by creditors. He told us that since he's the majority owner, they can't come after us and the other siblings. Is this correct, or do we need to get a lawyer? They can't come after owners um well i don't know how the business was structured i'm guessing it was probably an llc and unless your wife signed paperwork making her liable for a loan or with a creditor of some kind then as a minor owner in an LLC, he's probably right.

She's probably safe. I wouldn't worry about it. But if she signed paperwork, like if she went down to the bank and signed a loan, then she signed and is liable. It's that simple. She's a co-maker on the loan. Or if she co-signed on the trade account where he's, you know, taking supplies from a supplier of some kind and paying them,

or supposed to be paying them and then didn't. If she signed on any of that paperwork, then she would be liable. But she's not liable simply by being a minor, a minority owner in an LLC or a sub-S corp. Now, if she's a general partnership, which I doubt, I doubt that's, I'd be very surprised if that's how it's done. Slight possibility she could end up being liable. That's why I hate general partnerships, partnerships in general, but general partnerships too. So I think you're okay.

If you're, if you have a question, see an attorney and ask to be double, triple sure with more details than you've given me in this email. This is the Dave Ramsey Show. Thank you for joining us, America. This is The Dave Ramsey Show. We're glad you are here. Open phones at 888-825-5225. Barbara is in Sacramento, California. Hi, Barbara. How are you? I'm doing very well. Thank you, Dave. Good. How can I help? Yes, I'm a new listener. I've been listening for about two weeks now, and I just started

EveryDollar, same time. Last year, I was only making pretty much for the last four years, $30,000 and under with me and my husband. This year, about a month ago, I finally got a raise and a new job, and I'll be making probably together about $70,000, maybe a little less. My problem is we have two cars. We each owe about $11,000 on his he owes about $11,000 on his. I owe $9,000 on mine. We have a house mortgage of $120,000 FHA.

And the problem is because I didn't have a job that paid a lot and I always kept the finances separate. He has his own bank account. I have my own. I pay all the bills. He He has his own bank account. I have my own. I pay all the bills. He just started giving me money this month. My problem really is I don't know if we need to start paying off the cars or start possibly paying off a little bit on the house because we do need a roof. We've needed a roof for four years, and it keeps getting worse. But because we filed bankruptcy two years ago,

we can't even refinance to a 15-year or get money out, which I know you definitely say no to. So I'm really not sure on what to do. I'm still trying to get ahead. I did get behind, and now I'm just now crawling out of that hole. So my question really is what should I do now? Okay. What's the priority?

What is the interest rate on the mortgage? 4%. Okay. That's not punitive. You're fine on that. I'm not going to worry about the refinance, so that answers one question. Just let it sit there for now um as far as the roof versus the cars go you start laying out your budget and the first thing you got to do before

you do either one of those is maybe step one you set your thousand dollars aside and then let's get a price on replacing the roof have you gotten a recent bid uh i did a couple months ago, and, oh, gosh, it's expensive. It can range from $10,000 all the way up, depending. I can probably try to get it just kind of fixed a little bit or patched up for half of that. How many bids did you get? A $120,000 house with a $10,000 roof does not sound right. Well, it's a 1,511-square-foot home. That's not a $10,000 roof.

Well, I was going to get a whole brand new roof on it. I know, but that's not $10,000. Okay. I want you to get some more bids. Okay. I want you to work harder on the price, okay? Now, is it leaking? Yes.

It's leaking through a couple light fixtures. I mean, it's the first thing. The first thing I want to do is get it patched and stop the leaks temporarily. And then you've got to save the money to do the roof, right? Yeah. We've been trying. We've been patching it every year, and it holds up for a month or two. It's not going to last. You have to have a roof. Okay. So let's get three bids so we know how much we have to save. Let's get it patched so I can make it a few more months while you save money to pay for the roof.

And I would fix this roof as an emergency before I start my debt snowball. But you've got to save up the money to do it. You don't have any money, right? Yeah, I don't. And my problem is because of taxes taken out of my check, my husband, he owns his own business, so we don't pay his taxes until the end of the year because he only still brings home about $15,000.

Why does he only make $15,000? He only works about two to three times a week, and he makes about $50 an hour. Why? Well, he actually got a second job to make up for that, and he now has my old job, and he'll be bringing home this year probably an extra $20,000 with that. But the problem is really with my paycheck i should be bringing home about four plus thousand dollars a month but because of taxes and 401k well don't do 401k you're broke

well you have a roof leaking you don't do a 401k when your roof is leaking there's only about two grand in there anyways i just started putting money. What money in there? And with taxes, I'm only bringing home about $2,400. Okay. Your taxes are not that high. You have too much coming out for something. Number one, you need to stop the 401K. You need to find out what your actual taxes are and have that amount withheld, not the proposed amount because I think you're going to get a big refund,

it sounds like, and we don't want that. I always get, yeah, about $2,000, even though we don't pay any taxes during the year for my husband's business. Right, right. But your husband needs to start making more money yesterday. Okay. Sacramento, California, $15,000 is called the poverty level. Yeah.

Well, with us together this year, we'll be making more but yeah but he really i mean he needs to be working a lot more your roof is leaking he needs to be working like all the time like his hair is on fire okay let's get this thing in gear everybody's working nobody's doing anything but working. We're going to get the roof fixed. We're going to get the cars paid off. We're going to start building a life. You guys have lived from stress to stress to stress to stress,

and the reason is you didn't have an income, and the reason you didn't have an income is you didn't work much. It's what you just told me. It's what I heard real loud and clear. So it's time for you guys to kick this in gear. Stop your 401K. Get your taxes withheld properly where it's not too much withheld but is enough withheld. And so you're not getting any big refunds.

You don't need a refund. You need your money coming home to be able to save and pay for a roof and pay these cars off as soon as possible. So get that all focused and dialed in. Hold on. I'm going to send you a copy of the book, The Total Money Makeover, and help you pull off as soon as possible. So get that all focused and dialed in. Hold on. I'm going to send you a copy of the book, The Total Money Makeover, and help you pull some of these things together. Brian is with us in New York. Hi, Brian.

How are you? Good. How are you doing, Dave? Better than I deserve. What's up? I just have a question about estate planning for my mom. I've got a power of attorney with gifting clause, and I went to the bank today because I've got to write checks

to pay all of her bills and stuff. And they mentioned to me that they should just put me on the account for purposes of avoiding probate. And I wasn't really sure about that, so I wanted to give you a call and see if... They can put you on POD, paid on death. I'm sorry, what was that? They can put you on a POD, paid on death, where it's paid out to you on death,

and that should avoid probate. You can check your estate planning attorney there in your area to be sure about New York law. I'm not an expert on estate law nor on New York law for sure, which has some unique items to it. You can count on it. New York, California, seriously unique laws. But most states you can do on an account, you can put on there paid on death, which is kind of like a beneficiary clause on the bank account. And so the bank account passes to that person.

It's paid on death to Brian so-and-so. And you can do that. And as power of attorney, you can set that up in most states. And that should set you free of probate. But, again, I am not a probate specialist and, uh, uh, or expert in the details of things, but conceptually that should work. Um, and it's better than you being on the account, because if you're on the account, you start to be liable personally for the account. Um, now if you, yeah, and I just, I wouldn't want to be on the accounts unless I had to to avoid a substantial tax.

And if I did that, if I was facing that, I probably would get on the account. But paid on death should serve, POD should serve the purpose of what you're looking for. So thanks for joining us. Open phones at 888-825-5225. You can follow me on Twitter at Dave Ramsey. Over 800,000 of you do. Thank you for that. We're on there yakking pretty regularly.

Aaron is with us on Facebook. Says, for the past year, I've been investing into an adjustable life insurance policy. I'm so sorry. What's the best way to get out of this and into something that will generate a better wealth? Well, just about anything will generate more wealth than a stupid adjustable life policy. Bad news, dude. Bad news. So, no, what I would do in your case is just do your investing straight into mutual funds.

Make sure before you cancel this adjustable life policy that you have your term life in place and then cancel this garbage. And it is just that. It's crap. So, hope it wasn this garbage. And it is just that. It's crap. So, hope it wasn't unclear. Go to Zander Insurance. You can check your term out. Zanderinsurance.com.

This is the Dave Ramsey Show. Hey, guys. It's Blake Thompson, Senior Executive Producer of the Dave Ramsey Show. This hour of the show is over, but you can also watch on our free mobile app, our website at DaveRamsey.com, or on the Dave Ramsey Show YouTube channel. We are everywhere to serve you.