The Ramsey Show - App - Don't Choose a Career Exclusively Based on Money (Hour 1)

Episode Date: November 13, 2019

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Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host.

Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Starting off this hour is Amber in Nebraska. Hi, Amber. How are you? I'm good. How are you? Better than I deserve. What's up? Okay, so I just found your podcast last month and i have been binging it like crazy and one of the episodes you were talking to somebody and you would ask them about their tax return and that if they're getting a tax return they're giving the government too much money right is there a magic formula or some way to figure out how many you can claim on your w4

so you get the smallest tax return back? There's a formula, but it's not based on the number of dependents because the IRS tables are wrong, of course. Okay. So thus you can claim. Like, for instance, my daughter, when she first got out of college, claimed six dependents. She didn't even have one. And it still got her a refund. Okay? So she still didn't have enough coming out and it still got her a refund, okay?

So she still didn't have enough coming out. So that's how bad the tables are. They're not minorly off. They suck. So the way you would do it is one of two ways. The most accurate way is to actually do a fake tax return for the year, actually prepare your tax tax return and let it tell you exactly what you would owe in taxes your total tax bill and then divide that by the number of months and that's what needs to come out of your check per month and so if your actual tax bill is

forty eight hundred dollars then four hundred400 a month needs to come out, right? Okay. And so that's the perfect way to do it. Now, if you last year got a refund and nothing major has changed this year, you didn't get a big raise, you didn't get big bonuses, you didn't buy a house, you didn't have a kid, anything like that. Nothing major has changed. It's just life is almost exactly the same. Then you could just take your refund, divide it by 12, and go into your payroll team and say, hey, I want to lower my withholding by that much.

So you've got a $3,000 refund. That's $250 a month. Guys, I need to bring home $250 more. And as long as nothing has changed from last year, and the tax law to this year to last year hasn't changed dramatically, then that would be very accurate, and you'll end up basically getting no refund. You might end up $50 off one way or the other or something like that. But if something's changed, that's an inaccurate way to do it

because you might be withholding enough or the right amount now i don't know so the point is what they take out of your check should equal your tax bill at the end of the year and if they took too much out of your check you get a refund if you didn't take enough out of your check you're short if you come up really short they'll penalize you for not having enough withheld refund if you didn't take enough out of your check you're short if you come up really short they'll penalize you for not having enough withheld and so you can't do sometimes people go crazy they go i'm just gonna have nothing withheld well that won't work if you owe any taxes because you'll get penalized then so you've got to you know you got to work it in but the the most accurate way is just to actually sit down with your tax pro or if you're doing it

yourself with software or whatever and just run it out as if you were doing a tax return right now. And then that will tell you what the tax bill is divided into a monthly amount with L from your check. And, of course, if you get paid every two weeks, then you're going to divide it by 26. So you know how many checks. You've got two magic months a year where you get three checks, so you've got a different equation. But still, what needs to be withheld from your check? And then just walk into payroll and tell them this amount. And if they need to back into the number of dependents for you to check that box to create that amount, that's fine.

But the number of dependents isn't actually your number of dependents that creates this formula because it's, well, the tables are just wrong. Sue is with us. Sue is in Pennsylvania. Hi, Sue. How are you? I am well, thanks to you, Mr. Ramsey. Well, it's an honor to talk to you. How can I help?

Well, I have a question for you. My husband works for a company that was bought out by another company, and he had about 23 years in, and he had a 401k and a pension plan in his retirement package. The 401k has since been rolled over into a new 401k. Good. Well, okay. has since been rolled over into a new 401k good well the pension however had stayed with the company until very recently and they are now buying out all the pensions okay um and we're looking to get back um out of the pension about 220 000 320 220 okay all right good 220 how old 220? 220. 220. Okay. All right. Good. 220. How old is he? My husband, he's 56. Okay.

He needs to roll it to an IRA. Well, that's the question. Should we roll the whole amount to a new IRA? Yes. Or he was thinking about taking about $65,000 and paying off our home and taking the rest and putting it into a new IRA. No. It'll be penalized because he's not 59. Okay, because there is a qualification that says that if he was separated from his company...

They can pay it out, but you can't take it without penalty. Okay, even though he's over 55 and he was separated from the company if he's over 55 if the pension dictates that you might double check a tax advisor not hr's pamphlet and not dave ramsey's tax advice okay so let's get a tax professional's opinion on that because if you start pulling money out of this it's gonna it could cost you serious money uh the safe thing to do is to roll it to an ira how much do you owe on your home 52 000 okay so you want to pull enough out to do that it at it at a minimum will be taxed the only question is whether it's penalized yes and from what i understand it won't be penalized okay yeah

i know i want you to double checkcheck what you understand, because I understand different, and I don't know which one of us is right. So it may be if the actual pension dictates R-55 that the feds may give you a break on that. I don't know. You need to see a real tax professional, someone like check one of our ELPs for taxes and sit down with them and get that. I'm not taking the hr department's guidelines on this uh because there's a lot of hr people that have information that they they want it to be right but they just aren't and so check it check it

check it check it because i don't want you to get hit for five or ten thousand dollars for the penalties because we did this wrong but uh if there is no penalty and taxes only, like you suspect, and you might be right, then, yes, I would take enough out to pay off my house. I would. Because you've got plenty of money in other stuff. You're in really good shape. You guys have done a good job. So very, very well done.

Hey, thanks for the call. Open phones at 888-825-5225 jesse's on twitter dave is there ever a time you recommend less than one thousand dollars as your baby step one starter emergency fund yes if your household income is under twenty thousand i'd make it five hundred then as your starter emergency fund and for instance we're teaching high school students uh we always tell them to use a $500 Baby Step 1. As a matter of fact, we tell them to use a $500 emergency fund for a high school student because mom and daddy are feeding them

and giving them shelter and so forth, hypothetically. 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 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-accred organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually

supporting each other. It's what Christian Healthcare Ministries has done for over 35 years, and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225. Jan's in California.

Hey, Jan, how are you? Hi, Dave. I'm so excited to talk with you today. You too. What's up? So, I have a question about whether you think I can self-insure long-term care. So, I've been listening to you for about the past year and have made some changes. In my retirement, I will tell you that my husband and I have already purchased a long-term care policy.

I'm 55, so I know I went too early. My husband is 60. Our premiums are due next month, and I'm thinking about maybe canceling mine. Okay. Well, the chances statistically of using a long-term care insurance policy before age 60 are substantially less than one-half of 1%. And that's why we recommend 60 and beyond on the purchase of it. It just doesn't happen, in other words.

And so then as far as self-insuring through long-term care, that would just have to be with your wealth and how much of it you'd be willing to burn and how much you can burn and still be safe in nursing home care. And so what is your net worth or your nest egg size? Okay, so our net worth is probably about $4 million. Okay, and what is that invested in? So I have over a name in my 401k. My husband has 250 in a Roth IRA. We have about $400,000 in just investments.

We both have a pension. He can't get his until he's 65. Okay, here's your numbers. The average household that uses long-term care, which is most people, by the way, end up with some level of in-home care or nursing home care, one of the two. It lasts 2.4 years on average. Less than one-fourth go longer than that. So you have a one in four chance of going longer than 2.4 years the number

of people that use it five years or more is almost zero because usually once you need the care your health is in decline is what it amounts to and so that that's what it comes to so uh if uh and you know the national average is 50 to 75 000 a $75,000 a year for nursing home care. You're in California. It might be higher than that where you are. You'd have to look and see. But let's just play with some numbers. Let's take the high side, $100,000.

The average is $2.4. Hardly anybody goes five years. But if you went five years, it would be $500,000 out of your $4 million. Your husband would still be okay. Okay. at five years it'd be 500 000 out of your four million your husband would still be okay okay and so you're self-insuring for 500 000 event with a four million dollar nest egg or four million dollar net worth and in reverse for him too but if each of you if each of you exceeded the averages by double and you went through a million of the four million your estate is still three million dollars right so yeah you're in a position to self-insure as long as you're willing to play those odds right right okay all right

thank you i really appreciate your help does that do you see the math i'm doing no i totally do it's just i have a mother like not just whispering but yelling in my other ear that i need long-term care insurance which is why i got it well you do if you don't have a four if you don't have a four million dollar net worth you do because what happens let's take let's take a typical family has a five hundred thousand dollar nest egg which is a pretty good nest egg for most people right the 75 of the ladies outlive their husbands and so the normal scenario with that family is papa goes into the nursing home burns through 300 grand leaves mama 200 grand when he dies and that's not that's not a scenario you want to do that's leaving everybody too cheap

doubt right so we do need long-term care insurance for those people, which is most people. I mean, there's only 11 million millionaires in America. And so that's you and me and a few others. And so that's it. And so everybody, until you get to that level that you can afford to take that $300,000 to $500,000 hit and the person left behind is still in excellent financial shape then you would definitely want long-term care insurance so the voice yelling in your ear is a great one it's a it's a big deal it's a big big problem so thanks for your call see what we've got is we've got uh the boomers have what we call them the sandwich generation now because their parents are needing this fifty to,000 to $100,000 care.

Their kids are going into college at $50,000 to $100,000 a year. And they're getting hit from both sides of both these groups wanting help from them. If you've got your mama and daddy in a nursing home and your kid in college, yeah, yeah, yeah, it's bad. It gets bad fast and so you would need long-term care insurance or have built a great net worth like you guys have done congratulations by the way very well done all right andrew is with us in georgia hi andrew how are you i'm doing wonderful dave thank you for the thank you for the opportunity it's such an honor to talk to you. You too. What's up? My question is, I'm currently going to a four-year university with a degree to be a teacher within two to three years, but I'm also contemplating the idea of working in IT, going to a technical school, leaving the university,

going to the technical school and finishing in less than two years, but possibly making close to twice as much that I would as a teacher. I was kind of wondering, would it be better to stick with the teaching or go to the technical school and cut basically the time I would take to go to school in half and possibly make more money? I don't choose careers exclusively on money. I choose them on what makes you smile. And so how old are you?

I'm currently 23. Okay. Well, let's kind of reach into the future and say you're my age. You're 60. And you've been doing this for 30 years. Which one do you want to do? I would love to do either one of them. I enjoy teaching people, and as far as my current job that I do,

I'm teaching people and helping people with a call center. But as far as the IT side of it, i love to be able to help out people i'm i'm one of those server people i want to help anybody in them any way that i can uh whether it's teaching in a classroom or teaching with computers anything that i can do to help somebody is just is what puts a smile on my face so however i can do it i would love to do it you love teenagers? Yes, sir. No, go to IT.

You just answered it. Yes, sir. You just laughed. Go to IT. Yes, sir. You love to teach, but you might not love managing 8-year-olds and their crazy parents. Yes, sir, absolutely. I was a substitute for a short amount of time at a middle school.

I enjoyed the kids, but trying to get them to listen is something else. Yeah. So you enjoy the process of causing someone's light bulb to come on above their head, but the process of helping with their child development issues is not your joy. Yes, sir. Yeah, and a teacher in a you know a grade school or a middle school classroom has to have that love i love teaching i i um and i like children one at a time where i can control them but i cannot stand the idea

if you had to put me in a classroom of eight-year-olds you might as well just put me out of my misery now because if i didn't kill one of them, I'd kill one of their stupid parents. And so, you know, I couldn't do it. I couldn't do it. And I do love kids, but I don't love large groups of them. Yes, sir. You know, Anthony O'Neill speaks in high schools. I don't.

And there's a reason. There's a reason. I just don't. I don't want to. That's why I don't do it. And so we love teenagers, and we love helping the teenagers, and I love having somebody here that will help teenagers, but it isn't me. So, yeah, go get your IT certs and have fun, bud.

That's what you need to do. And you may end up teaching in IT to adults. You end up teaching software implementation and hardware implementation and other stuff for the onboarding or whatever at your company. And you may end up using your teaching skill in the IT setting. Sounds like that's a better deal. But I think we found the route for you. Hold on.

I'll send you a copy of Ken Coleman's book, our famous number one bestselling career book. It's called The Proximity Principle. And it'll help you also continue to analyze these questions. This is The Dave Ramsey Show. Thank you. Our question of the day comes from blinds.com. You can find out why they are the number one online retailer of custom window coverings. You get free samples, free shipping, new promos all the time. Always use the promo code RAMSY. I love this company.

Blinds.com. Zach's in Colorado. Dave, I'm a city employee. I'm close to the end of my open enrollment. I'm wondering what's the difference between the Roth and the 457 and which is a better choice. 457 is deferred comp,

which means you are deferring or not yet receiving choosing to not yet receive defer your compensation so if i don't if i if you work for me and i don't pay you you don't get taxed on it you didn't you chose not to take your pay yet not sitting in an account over here for you and you can get it later but when you take your pay you'll get taxed that's what a 457 is deferred comp or deferred compensation the roth however and any growth on that is taxable as you take it out later you can put it in an account put it in a mutual fund it'll grow and you're going to pay taxes on it like you do a 401K on the whole thing when it comes out, the amount you put in and the growth. The Roth IRA grows tax-free, so all of the growth has no taxes.

So the answer to your question is do the Roth. Christian is in Ohio. Hi, Christian, how are you? Hey, Dave, I'm doing well. How are you? Better than I deserve. How are you? Hey, Dave. I'm doing well. How are you? Better than I deserve. What's up? So I'm 26 years old.

I've got a father who is about 63, 64. He's not in the best health. He's on disability. He was diagnosed with leukemia. So my question is, final expenses and things like that, what's the best way for me to go about handling all that? My mom passed away in 2015, and she didn't have life insurance. She didn't have any plans or anything set up or anything like that, and I was the executor at 23 years old, so I had to deal with all that.

It was pretty much a nightmare, so I just wanted to prepare. He does have life insurance. He does? He has $50,000. He does? Yeah. Who's the beneficiary? Yeah, me, my sister, and I. nightmare so i just want to prepare he does have life insurance he does fifty thousand dollars he does yeah who's the beneficiary yeah me my sister and i okay and you and your sister in agreement you're going to use the money to cover his final expenses before you divvy it up well that was my question so does is they're not required to but if you don't have any other money that's a good way to do it well no i mean does it

come in before it does it come in in time to handle the funeral and all the final expenses at that point or does it take a while to process i usually get it usually get it within six weeks and a funeral home will accept uh the fact that the policy is on the way okay they'll do the funeral you pay them when the money comes. Okay. Well, that was my biggest question because, like I said, I'm fairly young, and my wife and I just started the baby steps, and I'm wrapping up graduate school now, and I don't want to be set back anymore the way I was in the past. Yeah.

So I think you would talk to your sister and your father and have a handshake family agreement that the money from this policy, we're both beneficiaries, is from this policy we're both beneficiaries is going to be, we're both agreeing we're going to first pay for the funeral and whatever's left will split. Okay.

Now, if he has other bills, that money does not have to be used for those other bills because that money is not his money, it's your money. Correct. Okay. Unless he has named the estate his estate as the beneficiary which i would not do well he has no assets or anything like that if he has any bills if he has any bills if he's got thirty thousand dollars in credit card debt your

fifty thousand dollar policy that comes to you does not have to be used to cover that but if he has assets they would cover the they would cover his bills what you own personally covers what you owe personally when you die but but beneficiary of a life insurance policy is not him it's you you see the difference i think yeah so so but here's the thing if your sister just decided she did not want to use this money for his funeral, there's nothing legally binding for her to do that. So I would want agreement with her that we're both agreeing we're going to pay for the funeral and we'll split the proceeds.

The second thing you can do if you want an extra level of comfort, and since you went through a bad process with your mom, you might do this. You might go over to the funeral home and go ahead and select everything now, even if it's years and years before you actually buy it. Don't pay for it now, but just go ahead and have everything. And, you know, dad's in agreement. He can be standing there if he wants. I don't care.

But you and your sister then have a budget. You go, okay, this is going to be $8,642 turnkey on this or whatever it is. And you can just decide, you know, we don't need the Bentley coffin. We'll go with the Chevy. And, you know, and there's a vast array of, as you found out with your mom, of costs that you can get into, right? Right. And it's much better to do that that you can get into, right? Right. And it's much better to do that when you're not in the middle of grief. So pre-planning, not prepaying, but pre-planning a funeral would be very beneficial,

particularly at your situation where you had a bad experience with your mom's situation and where you and your sister are coming into agreement now that you're going to split this cost before you split the $50,000. And so that's a good thing for everybody to be on the same page now rather than later on because when people are grieving, their memories sometimes don't work well. All right, Kyle's with us in Kentucky. Hey, Kyle, how are you? I'm doing good, Dave. How are you doing today?

Better than I deserve. What's up? So I'm 21. I'm wanting to stay out of debt, of course. So I'm trying. I'm not out of debt. I still have debt, of course. And I'm trying to get my wife.

I'm trying to get my wife to come with me and do it with me because I don't want to do it by myself. I feel like it's not going to work by myself. I got a budget, like I filled a whole budget on Google Sheets out, and I looked at the past three months. I'm ready at that part, but I just need to figure out a way to get her on, and I can't get her on without just being like, I want to do it, and I'll just add another.

Well, the problem is you're being a guy. And let me tell you what guys do. Me too. We always immediately go to fixing the problem. And here's what we've got to do. We've got to get on a budget, and we've got to do this, and we've got to sell this, and we've got to work extra, and no, we can't go out to eat anymore.

And you start talking about what to do. That's what guys always do. What do we do? We're going to fix this. What are we going to do? What are about what to do. That's what guys always do. What do we do? We're going to fix this. What are we going to do? What are we going to do? Meanwhile, she's standing there going, no thanks. I don't want to play.

Right, yeah. And so what you should do is apologize to her for doing that and then say, you know, what we really should be talking about is why I want to do this and why as a couple we should want to win financially. I really am. Honey, I've been reading this stuff. I've been looking at this stuff on YouTube, and I've really come to the conclusion that if we were to work together, we could become very wealthy. And that would change our family tree for our kids.

That would allow us to retire with dignity, allow us our kids that would uh allow us to retire with dignity allow us to be more generous allow us to travel allow us to get out of this dumpy butt car and get a nice one whatever it is okay i don't know what her dream is but if you gave her a million dollars what she would shoot what would she do with it that's your why that's why we're doing this and then if she says okay and then i I'd like to have a million dollars so I could do X or I could do Y or I could do Z. That's your why. And you say, all right, now how are we going to get there? Well, the way we're going to get there is we're going to get on a budget.

We're going to get out of debt. We're going to stay out of debt. We're going to invest. And we're going to work on this together. Because all the data points say that couples that work together have a very high probability of building wealth, and almost no couples that don't work together become wealthy. It's highly unusual for a married couple to become wealthy when they're not working together. Right.

So also, like, that works. I appreciate that a lot. But, like, also, so she's graduating college next semester. Great. And then we'll be going full time. Great. Doing what she's doing. And should we merge our bank accounts then, or should we go ahead and do it now?

You should do it now. You're married. Of course. They should be merged the rest of your life. And you should merge your goals and your dreams. Because you are now one, the preacher said, when you walked down the aisle. He didn't say, and now I pronounce you a joint venture. You are now one.

That's why couples that work together are the ones that are able to build wealth. And that's what we push you to do. Hold on. I'm going to tell Kelly to sign you guys up. We're going to put you into Financial Peace University, the one-year membership. It's going to include every dollar, the world's best budgeting app. It's going to include the nine-week class. It's going to include everything.

I'm going to give it all to you, get you started. I wish somebody had done that when I was 21. This is the Dave Ramsey Show. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225. Max is in New Jersey. Welcome to the Dave Ramsey Show, Max. Thanks, Dave.

Thanks for taking my call. Sure, man. What's up? I wanted to see what you would do. I'm currently in a situation where I'm about ready to survive. I'm in baby step two. I have some money set aside due to a trip I'm going to have to take, but I don't know when.

It will probably be sometime next year. I don't know if I should keep that money in savings for when that trip comes because it could be at any time, or should I roll that into my, you know, put that towards my debt snowball and then worry about the trip later when it pops up? What is the nature of the trip? It's a trip I have to take due to my wife's citizenship status in her home country.

Okay. All right. And you have to go. Why? It's her citizenship. She has to go, right? Right, but I'm petitioning, so I kind of want to be there. Oh, awesome. petitioning so i kind of want to be there and um and it um i'm sorry um yeah so she's gonna have to be there for about a month i'm gonna be there for two weeks the final two weeks of her of her stay right and um so far we have about 4 000 saved up um just because i don't know what the

fluctuation of the trips i don't know how much the airfare is going to be or various expenses. Yeah, I think you've got to set that aside, and that's a known expense that is coming, and it's not really flexible because I'm sure this is something that's been, the process has been worked on for years, and if you don't take the trip when it becomes available for her to do this, it'll probably delay her process quite a bit. So it's something you need to do when you're going to do it.

So I'm not sure I understand exactly. She's trying to become a citizen of another country? No, no, she's trying to become a – her parents came here. Oh, she wants a dual citizenship. Correct. So she is currently – she was born in the U.S., she's a U.S. citizen, right? No, no, she wasn't born in the U.S. Yeah, so right now she's not working because I don't want to risk anything.

You know, we've been through all the expenses. Everything's been approved. They're just waiting for the interview date to get her visa. So it's been a stressful process, but we're near the end of it. Okay, I'm still confused. What country is she trying to become a citizen of? She's trying to become a citizen of this country, the U.S. She's Brazilian.

And you have to travel somewhere else to do that? Yes, because of the nature of her parents coming legally with her. She has to have the interview at her home country. She cannot have it in this country. Oh, is it a refugee status or something? I never heard of that. I thought all the U.S. citizen work was done on the state side. I didn't

know that i don't i'm not i'm just ignorant i'm just interested and she because originally she was doctor but she her renewal wasn't approved as a result of that she can't have that she can't have the interview here she has to have in brazil now i'm catching on okay it's the daca thing okay cool interesting yeah well yes this is a known thing and if you don't take care of this it's the DACA thing. Okay, cool. Interesting. Yeah, well, yes, this is a known thing, and if you don't take care of this, it's going to cause serious upheaval in your family, and it could cause serious delays in her citizenship or even put it in jeopardy. So, yes, you need to do this when it's available, and you need to have the money sitting there, and you don't touch it for anything.

You just pretend like you don't have that money. I already do. She's the one that has, you know, it's under her savings account, so I pretend it's not there. Yeah, exactly. And just you're sitting there, and there and then yes that's exactly what you should do sorry i'm just curious about that i didn't know interesting okay uh mary beth is in north carolina hi mary beth how are you i'm doing well i'm so excited to talk to you dave well you Dave. Well, you too. What's up? So we have, my husband and I, we have three houses that we, well, we own one outright, totally own it outright. We use it as a rental. That brings in approximately $1,500 a month. The second one is our primary residence as of now,

but we are planning on using it as a rental and getting $1,500 a month. And then we're going to buy a third one that's going to be our primary residence. And that one we're going to do on a 30-year loan. So my question is, which house do we pay off first? Do we pay off our one that we're about to use a rental for, which we owe $105,000 on it, and it's a 2.8 interest rate? Or do we pay off the new house that we're about to move into, which is a 30-year at 3.1% interest rate? Well, I absolutely love rental real estate i own a bunch of it and i recommend that if you do like rental real estate that it's a great place to make some money uh if it's paid for uh i would not keep the house that you're living in

i would sell it and i would use all of the equity to buy your next home that you move into. And when I get it paid off, I would save up and buy rentals for cash. The one you have that's already paid for can just sit there. It's fine. It's not the end of the world. But I'm not going to tell you to keep your current home, which causes you to go further into debt on the next one because effectively it's like your next home like you borrowed on it to buy a rental yes and i wouldn't

do that i wouldn't do that okay okay that makes sense i'm always leading you to be debt free because it's the shortest path to wealth. Because if you get your personal residence paid off and you've got that other property paid off, you can save money like a crazy person. I mean, the money will just pile up because you've got no bills. You've got no house payment. You've got no payments of any kind. And your most powerful wealth-building tool is your income

when you don't give it to somebody else. Joseph's in Massachusetts. Hey, Joseph, welcome to the Dave Ramsey Show. Thank you, sir, for having me. Sure, what's up? Real quick, I wanted to say thank you for your show. I appreciate it. Thank you.

I am a retired veteran. Thanks for your service. Thank you, sir. My father just passed away about a month ago. He had no will, nothing like that. Unfortunately, he didn't have a life insurance because of his cancer. But I've taken over his estate. I'm trying to take over my bills.

Unfortunately, I can't keep my mom's house. I can't sell it, so I'm kind of forced to renting it out, which leads me to having to buy a house. Stop, stop, stop, stop. Why can't you sell it? Because I talked to a real estate agent, and it's not a market right now where I can sell it. They owe $290 on it, and I wouldn't make a whole lot in equity off of it right now. Okay. So what would it sell for today uh probably about 230 about uh excuse me about 330

okay uh well like they owe 290 on it yeah you need to just sell it okay um you're not gonna make you're not gonna make, but you wouldn't buy this house. No, no, no. It's too small. By keeping it, you're buying it again. Yep. You need to sell it. Get rid of it. You've been through a lot of emotions. I mean, your dad's just been gone a month.

Where's your mom living? She's living in the house. She's moving with me, which is the reason why I called. So being military, I have a VA loan on a house in California. I have about $230,000 in equity on the house. I only owe $233,000 right now because I've been making extra mortgage payments throughout the year. I have about $33,000 in my bank account right now, or $41,000 in my bank account right now, where I was either going to take out a HELOC for $100,000 to put on a down payment of a house for, put out basically 25%, which is about $74,000 on a house here in Boston to house my wife, my son, my mother-in-law, and my mom. You got them both?

Yes, yes. Wow, got them both. Yes, yes. Wow, that's exciting. Yes. Okay, what I would do is sell the house in California. Even though I have all the equity in it? Yes, especially because you've got all the equity in it. And I would use that equity to buy the house in Boston. Be careful when you're buying a house for this many

mother-in-laws that you don't end up with a house that's not marketable. Because someday they're both not going to be there. And then if you've got this weird house because it was all designed around this unusual family situation, you'll have a hard time selling it. So don't buy a house that becomes a white elephant. I'd sell

both those houses, put all the money in a pile and buy one house to accomplish this goal. But don't buy a white elephant. I'd sell both those houses, put all the money in a pile, and buy one house to accomplish this goal, but don't buy a weird house. This is The Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register.

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