The Ramsey Show - App - Don’t Let Money Drama Keep You Broke

Episode Date: September 15, 2025

🤔 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Think you’re good with money? Take our Money in America quiz!⁠⁠⁠⁠ Dave Ramsey and Ken Coleman answer your questions and discuss: "I am getting calls regarding debt on my deceased father. How do I handle this?" "Can we get some advice on managing finances with a large family and disagreements on spending?" "How do my fiancé and I plan to combine our finances when there is a prenup in place?" "We would like to retire early. How should we adjust our investments in order to make this happen?" "How do I get out of $1.8M in debt when I'm stretched thin in spite of a high net worth?" "How do I keep my addict brother from blowing his portion of our inheritance?" "Am I wrong for not wanting to pay for repairs to my mother's home?" "My wife and I disagree on what to do with a whole life policy" "My wife and I disagree on leveraging debt to make money. Who is right?" "I am $10,000 underwater on my leased car. How should I handle this?" "I am debt-free. When can I start buying things I want?" Next Steps: ✔️⁠⁠⁠⁠⁠⁠⁠ ⁠Help us make the show better. Please take this short survey.⁠⁠⁠⁠⁠⁠⁠⁠ 📞 Have a question for the show? Call 888-825-5225 weekdays from 2–5 p.m. ET or⁠⁠⁠⁠⁠⁠⁠ ⁠send us an email⁠⁠⁠⁠⁠⁠⁠. 📱 ⁠⁠⁠⁠⁠⁠⁠Get episodes early in the free Ramsey Network app! ⁠⁠⁠⁠⁠⁠⁠ 📈⁠⁠⁠⁠⁠ ⁠Are you on track with the Baby Steps? Get a free personalized plan.⁠⁠⁠⁠⁠⁠ 🎟️ ⁠⁠⁠⁠⁠⁠⁠⁠Two Weekends. One Life-Changing Experience. Get away with your spouse in Nashville. ⁠⁠⁠⁠⁠⁠ 💵 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Start your free budget today. Download the EveryDollar app!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 📚 ⁠Set and actually reach your goals with the NEW 2026 Ramsey Goal Planner! Hurry—they sell out every year!⁠ 👫 Check out our free Term Life Insurance Guide for helpful info and resources. Connect With Our Sponsors: Stop paying more and start shopping smarter at ⁠⁠⁠⁠⁠⁠⁠ALDI⁠⁠⁠⁠⁠⁠⁠. Get 10% off your first month of⁠⁠⁠⁠⁠⁠⁠ BetterHelp⁠⁠⁠⁠⁠⁠⁠. Go to ⁠⁠⁠⁠⁠⁠⁠Boost Mobile⁠⁠⁠⁠⁠⁠⁠ to switch today! Learn more about⁠⁠⁠⁠⁠⁠⁠ Christian Healthcare Ministries⁠⁠⁠⁠⁠⁠⁠. Get started today with⁠⁠⁠⁠⁠⁠⁠ Churchill Mortgage⁠⁠⁠⁠⁠⁠⁠. Get 20% off when you join ⁠⁠⁠⁠⁠⁠⁠DeleteMe⁠⁠⁠⁠⁠⁠⁠. Go to⁠⁠⁠⁠⁠⁠⁠ FAIRWINDS Credit Union⁠⁠⁠⁠⁠⁠⁠ for an exclusive account bundle! Find top health insurance plans at ⁠⁠⁠⁠⁠⁠⁠Health Trust Financial⁠⁠⁠⁠⁠⁠⁠. Use code RAMSEY to save 20% at ⁠⁠⁠⁠⁠⁠⁠Mama Bear Legal Forms⁠⁠⁠⁠⁠⁠⁠. Visit⁠⁠⁠⁠⁠⁠⁠ NetSuite⁠⁠⁠⁠⁠⁠⁠ today to learn more. For more information, go to ⁠⁠⁠⁠⁠⁠⁠SimpliSafe⁠⁠⁠⁠⁠⁠⁠. Use promo code RAMSEY for 18% off at ⁠⁠⁠⁠⁠⁠⁠The Nokbox⁠⁠⁠⁠⁠⁠⁠. Get started with ⁠⁠⁠⁠⁠⁠⁠YRefy⁠⁠⁠⁠⁠⁠⁠ or call 844-2-RAMSEY. Visit⁠⁠⁠⁠⁠⁠⁠ Zander Insurance⁠⁠⁠⁠⁠⁠⁠ for your free instant quote today!  Explore more from Ramsey Network: 💸 ⁠⁠⁠⁠⁠⁠⁠The Ramsey Show Highlights⁠⁠⁠⁠⁠⁠⁠ 🧠 ⁠⁠⁠⁠⁠⁠⁠The Dr. John Delony Show⁠⁠⁠⁠⁠⁠⁠ 🍸 ⁠⁠⁠⁠⁠⁠⁠Smart Money Happy Hour⁠⁠⁠⁠⁠⁠⁠ 💡 ⁠⁠⁠⁠⁠⁠⁠The Rachel Cruze Show⁠⁠⁠⁠⁠⁠⁠ 💰 ⁠⁠⁠⁠⁠⁠⁠George Kamel⁠⁠⁠⁠⁠⁠⁠ 🪑 ⁠⁠⁠⁠⁠⁠⁠Front Row Seat with Ken Coleman⁠⁠⁠⁠⁠⁠⁠ 📈 ⁠⁠⁠⁠⁠⁠⁠EntreLeadership⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Ramsey Solutions Privacy Policy⁠⁠

Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union studio, this is the Ramsey show. Ken Coleman, number one bestselling author, Ramsey personality, host of the big hit on the Ramsey Network called Front Row Seat. He's my co-host today. The phone number here is AAA 825-5-225. Pat's in Boise, Idaho. Hi, Pat. How are you? Hi, Dave. Thanks for talking to me. I'm the executor for my dad's estate. About six months after his death, I received a letter looking for the person who could act on his behalf. I looked up the company, and it's a debt collection agency primarily focused on collecting

debts related to deceased individuals. Wow. They utilize technology. Yeah, I've never heard this either. They utilize technology like probate finder on demand to identify and contact the personal representatives of the state to recover unpaid debts. So my dad absolutely did not have any debt. He was Dave Ramsey while Dave was running around the diapers.

He didn't borrow money. I do know that there is, just from looking at unclaimed property, I do know that there's a gentleman who lived in the same metro area. areas my dad for many years who had his exact name first name middle initial and last name so I'm thinking I don't know maybe they're looking for that guy here's the deal I don't even want to talk to them I don't want to spend time on this I don't know if you need to know the name of the company but how worried do I need to be well I mean is the estate settled the probate is finished but it's it's not closed yet I haven't closed it

Okay. What is lacking for it to be closed? Nothing. I was just doing some final insurance policies and transfer of his property to my mother. So that is done. I can close the estate at any time as far as I know there was nothing that came up during the probate. So your mom's still there and she's sitting with whatever assets that they had? Yes. Okay. Good. Okay. Okay. Well, I don't know Idaho law, and I'm not an attorney anyway, even if I did, but most states have a period of time that a creditor can file a claim against an estate before, after, or during the probate being open, okay? And I don't know what yours is. Okay? So if they didn't, I'm probably good.

probably from a legal practical standpoint or from a legal standpoint from a practical standpoint um these folks um they get they have one little thread that they're hanging on and they're going to pull that thread and pull that thread they're eventually going to end up hassling your mom probably so from a practical standpoint i would put them down I'm her power of attorney, so they won't get much further. I know, I know, but if they start calling her, start mailing, failing up her mailbox with stuff, I don't think there's a legal issue. I don't think they've got a claim.

You don't think they've got a claim. They're probably outside the notice of meeting the creditors period of time, all that kind of stuff, but that doesn't keep them from driving everybody in the soup crazy, okay? So I probably would invest a few minutes and just shut them down. How do I shut them down? I would just call him and say, he did not have any debt with you. I'm the executor of the estate. And you can give me a social security number, send him a copy of the death certificate.

None of that hurts you in any way. And, you know, I'll give you the last four digits of social security numbers, see if it matches with what you think you're hunting. But I think you're hunting this other guy, and you need to stop. And if you don't provide me proof of written proof of debt, and you don't stop, I'm going to sue you under the Federal Fair Debt Collection Practices Act because you're violating it now that I have told you that I am demanding proof of the debt. Can I just demand proof of the debt without providing them anything to start with?

Well, I've given the last four-digit Social Security number. What I'm trying to do is in case there's two brain cells on the guy you're talking to, if they happen to rub together, you want to give him a way to go away. Oh, it's not him. I've got to go the other way, okay, right? But in case they're, in case they, if they think, but the problem is some of these companies and what you need to be prepared for is, and I think you're kind of already there, is they will try to collect from someone that they know is not legitimately the debt just by hassling them. And that's what I'm worried about. Yeah.

Well, I'm not worried about it because you're going to shut them down. We're not going to talk to them anymore. Okay. We're going to block them. Okay. And if they continue to pursue, I would have an attachment. attorney send them a letter under the Federal Fair Debt Collection Practices Act because they're in violation of federal law if they continue to pursue after you show them that it is not his

debt and you give them last four digits social security number and they don't provide proof of debt. The other thing that's going to come up is they probably don't have proof of debt. They probably bought a line item on a spreadsheet. A lot of debt buyers don't get the actual documentation on the debt. They just get a line item, point of last contact, details about a name, whatever the file's got, and it's just a whole list of line items. It's not like they have a file on him. So the point being, I don't think they can provide proof of debt. But I'm going to ask because I'm going to make one or two phone calls with these people

and try to, in a civil way, make this go away. But if you determine that, A, they're trying to collect from somebody, just anybody, and they just think they can hassle you, then just pound their face, right? and then or B that they cannot provide proof of debt and they won't go away what I'm more than anything trying to do is get them to quit calling you and quit calling your mom and it's worth two phone calls to invest in that or never call your mom okay right I like that okay yeah and then but again write that down it's the federal fair debt collection practices act okay and it is federal law that they're violating if you

demand a proof of the debt. They don't provide it, and they continue to attempt collection. Hammer them. I was looking for something to add. You covered it from every angle. You know, look, you got the facts. And so don't be afraid to take this on and then shut it down. I think that's what this is. I don't think this is harassment. I just think Dave's nailed it. They don't have a lot of info. It's not harassment yet. Not yet. Probably is going to be there if it doesn't stop. That's right. So the thing is, folks, you got to do debt buyers when they buy debts are typically paying anywhere from two to eight cents on the dollar so they're paying 80 bucks for a thousand dollar debt and they can't they can't even find the people in most cases in this case they're chasing deceased people's debt okay so they're always trying to chase down the um this is basically prospecting yeah yeah it's they're dialing for dollars all day long and you know it's a horrible job and here's a here's you want to be worse than somebody trying to collect on an old debt, collect on an old debt that you know the person is dead.

Right. I mean, this is a bad job. Cleaning septic tanks is more fun. And so, honestly, seriously, oh, my gosh, what a horrible position. So they probably got high turnover. You got a boiler room, phone room going. It looks like something on Wolf of Wall Street or something. That's right.

And they're just, you know, and the average time on the job is 21 days. And they're just constantly hiring new people that are dialing for dollars. You're probably not going to talk to the same person twice. And they're brainwashed, by the way. They come at you with a script. Oh, yeah. And so that they don't get knocked off. So you've got to really be strong and show a lot of facts.

And the other thing is, the neat thing about the technology is you can just hang the phone up. Just push in. That's always enjoyable. And then slide that little thing over that says block. And you're done. They're done. If you've not listened to Ken's show, it is a has. has exploded as a brand new big hit.

It's called Front Row Seat. It's long-form interviews with people who are changing the world in all kinds of different ways, inspiring people. And Ken, I actually loaded and listened to about half of your episode with Rachel that pop. That's the one that's currently up, right? It's currently. Yeah, I was hoping that you and Sharon would actually listen to it. I thought it was really fun.

I enjoyed it. So Cousin Ken. Did you know this? Cousin Ken. I know, you know, I don't think I've ever told you about it. Yeah, you're talking about it. Yeah, absolutely. You've got to watch it, folks, because I'll just leave it at that.

Well, Ken and Rachel are like a brother and sister in a way and really toxic ways, actually. So he makes a great interview interviewing his sister of sorts there. And it's a great, truthfully, I was a proud dad because you brought out some of the best parts of Rachel in the interview. It's a beautiful, beautiful thing. She did it. It was really fun. And there's a very fun moment where you'll get to actually hear and see. what Dave is talking about.

Are Dave and I related? We aren't 100% sure, but there is some evidence that maybe we are seventh cousins once removed, which makes Rachel my eighth cousin once removed. And interestingly enough, so your cousin Eddie's what we're saying. Yeah, right. And we have fun with it on the show, but it's really funny. I don't know if you ever saw that video when we revealed it to her. I remember you and I talking about it.

Wouldn't it hilarious, how she reacted? Yeah, it's hilarious. Her reaction is priceless. Classic. Because she's so fun. James is in Salt Lake City. Hey, James, what's up? Hey, Dave, you probably answered this question a thousand or a million times, but my wife

and I, we have a lot of kids, which is our decision. You know, I'm not blaming anybody, but I always wanted, like, I always wanted, like, four kids, and she always wanted 12, so we're going to compromise and have 12. So that's our family situation. You really have 12 kids? Well, we have 11 right now. Oh, okay. but I make more money, by the way.

Well, I have that type of voice. Okay. All right, that's good to know. So I make more money than I ever thought I would make, honestly. And five years ago, we were pretty much debt-free. But just in the past four to five years, as our kids have kind of reached that age, my wife has stuck them in sports and extracurricular activities. And now we've amassed almost 50,000.

dollars of debt and maxed out a credit card and you know push some expenses that we haven't paid medical or whatnot and this is something that what do you make i know the answer well net i mean gross i would say i'm pushing right around 200 okay and net though after everything after insurance and medical and whatnot taxes it's about 120 okay anyway the nearest i can figure we're spending about 25 grand a year on the you know a little over two grand a month on these sports and i i think that's kind of the silver bullet and yet my wife is just absolutely not willing to really give these up she's she's going to look for a job and stuff but what do we do you know i i don't know How in the world does a woman with 11 kids work?

Well, that's a good point. She doesn't have the time nor the energy. Our youngest is five. That's just that's an eye. That's obviously not going to happen. I mean, the daycare, you'd have to flow to federal grant. Yeah. Oh, my gosh.

Well, she's hoping to pick up part-time work while our youngest school from in between the fourth and the seventh kid? Oh, my gosh. No way. No, the sports are not the problem, and no, her working is not the problem, okay? Her not saying out loud, we have a limited amount of resources and we're going to live within them. You, not saying out loud, we have a limited amount of resources and we are going to live within them. And write it down.

And my wife stuck the kids in sports. Not anymore. my wife and I decide if we can afford anything and then it goes on the budget and then and only then do we do it because we both looked at the overall picture like two grown-up people and said we chose to have 11 kids and we have to manage $200,000 to feed them and not going debt because going into debt continuously is not sustainable duh well part of our income is with uh and maybe this is my the tail end of my question to get your opinion we have a couple of real estate a couple rental properties that cash flow very decently in my opinion and she

says well let's just sell one of those you know to use that'd be fine but what do we do when that money's gone because you continue to overspend right yeah that's my position yeah you can't you can't it's not sustainable what you're doing is not sustainable because your system sucks you don't have yeah i like that word i've been using that a lot the The system doesn't work. The system, when the two of us sit down and look at our income that we have coming in and say, all right, what are we going to do with this income and we're not going over it? And there's no excuses for going over it, by the way.

None. Yeah, I agree. Yeah, you've just confirmed. I think that's kind of where we are. But you can't be passive and say, well, she did this. No, she didn't do it. You stood there and watched it. Exactly.

So you did it too. And she can't say, well, you know, you just go make the money and I'll take care of the house. No, you're not taking care of the house. You're spending more than we make and that's not sustainable. So we are going to get on a system where we decide together where our money is going. You get a vote. I get a vote. We've got to come into alignment and it's got to be on less than we make.

And so the sports aren't the problem. They're the symptom. Her working is not the problem. It's the symptom. Of you guys not being on the same page of being above this strategic. and then developing a tactical process out of the strategy called a budget that actually makes the money behave. I will add to this that you probably can afford to do the sports once you guys get organized and get aligned. Yeah.

I think the reason, I think the reason you went in debt is she doesn't have an off button because she didn't have any system at all that was, there's no governor on this at all. and so she's just going yeah i don't believe that all 50 thousand of the credit card debt is two years worth of sports is that what you're telling us because you actually called it the silver bull it's about five yeah it's about five years well yeah we spend about 24 grand a year on on sports programs right well the other question i was going to ask you know because you're on the phone and because i'm a man i'm going to ask you this would you have worded the opening question the way you worded it if your wife would have been on the call. Meaning saying that she's got the kids in sports?

Yeah, it was all about her. Here's what it sounded like. Forget your voice because you already gave us an excuse on the voice. The voice sounds like you're beat down and like you've just thrown in the flag and you've having no real communication with your wife. That's what it sounded like. But my question is, it's a real question. Would you set it that way?

I wanted four. She wanted 12. So we're doing it. and then she stuck them in sports. Would you have said it that way if she were sitting in here in the room with Dave and I and you? I agree that.

Of course. What was the answer? We compromised. So I wouldn't have said that because she doesn't like it, but we've talked about this issue with a counselor, you know, and so I would say the same things.

I think that she's sticking them in sports. Right. Okay. And by the way, I didn't ask you to paint you in the corner because that was not a gotcha question, but I'm glad you've answered that way because I think that you've got to be very careful.

I think there's some real resentment there between you and her, and that's got to get solved at the same time, if not before we sit down and get this budget. We have got to resolve the resentment. That's what I feel and hear on this call. I don't know. Your take. I'll go with that. I'll go with that.

So, guys, I would say 50% of the coaching and calls that we get and the different contact points we have with people that are married. come back to this idea that we have to both in the room be adults this is a limited amount of resources there's an this is a math problem there's actually a number of dollars at the top of the page and we spend the money on the page the way we want our life to look and when it runs out we stop and the two of us together both have a vote on that and we figure that out together that is the only system in 35 years of doing this that I have been able to figure out that will actually work the idea that one spouse is off the rails or is not accountable to the mathematics and as a child and the other spouse is resentful that idea that I've never

seen that create a successful relationship or build wealth. If you're tired of living paycheck to paycheck and feeling like you can't get ahead, join one of our free, free, free, free, every dollar trainings, new trainings every week this month. They're all hosted by one of the Ramsey personalities, either Jade or Rachel or George. And we're going to show you how to stick to a budget. You generally find thousands of dollars of margin in about 15 minutes just learning to set the thing up. And you go, oh, look at that. I got a raise.

And you can get out of debt, of course. why, so you can start building wealth. Hello. And you can ask any question during the live Q&A. It's a cool thing. It's a free every dollar training. Go to ramsysolutions.com slash webinar. Haley's in California.

Hi, Haley. How are you? Hi, Dave and Ken. I'm good. Thank you for taking my call. Sure. What's up? Okay.

So I'm going to try to be brief here. I am a single mom to a five-year-old boy. I don't receive any child support. I have a career in finance. I growth 140k a year. Look at you. Where to go, girl. Thank you.

I have a pretty low net worth. It's about 50K. 15K of that is an emergency fund. My boyfriend and I have been together for three years. We love each other. We are discussing marriage. his net worth is a lot bigger than mine um he has a trust fund and he lives off the dividends of his trust the principal is about two million he doesn't work he'll he owns a business

but it is not profitable he's owned it for 10 years so he's a hobby it's a hobby he doesn't pay himself a salary businesses that don't make a profit are called a hobby Yeah, it's kind of like a passion. That's not a good indicator of his character. He considers it like community service. Yeah, I consider it he's hiding in his trust fund money. It's a bad idea. What's the business?

It's a bike shop. He has four more years of his commercial lease, and then he's planning on closing the doors. How old is he? When it's over. He's 43. Have you discussed a long-term range? I'm 37. Okay, I'm sorry.

Let us stop peppering you. How can we help you, hon? So I'm under the assumption that you would recommend a pre-nuts, given the dramatic difference in our net worth. I apply this program to my life, and I would like to apply it to my marriage as well. But I don't know. Um, I just, if we have a pre-up, how do we combine our finances?

Mm-hmm. Okay. The pre-nup does not discuss the monthly operation of the household in most cases. Most of the time, the pre-nup just says what happens to the $2 million trust fund if you would get split up? In other words, the pre-nup would be something as simple as, if you did do it, if you did do a pre-nup, just be as simple as he leaves the marriage with the, with the, with, you know, and the, you know what, you would be split up. his $2 million trust fund and you leave the marriage with $50,000 a net worth or you leave the marriage with everything else and he leaves with whatever it is. I don't care. But I mean, most prenups kind of start with the idea we leave with at least what we came in with. And that's it. It's

only if you leave the marriage, it does it come up. But it's not like the money coming off the $2 million that allows him to not be profitable or productive gross is. uh it becomes part of your household income even if you have a pre-nup so that's how you combine your finances but we're not so we'll so we won't combine all of our bank accounts though yeah you combine all your bank accounts absolutely absolutely his trust fund is not a bank account his trust fund's an investment does he have any control over the trust fund at all yeah okay so anything that's my other question anything that's in and around the trust fund would would not necessarily be in your name. But even if it is in your name, the pre-nup would, if you switch

everything to your name, the pre-nup would just say, in the event the marriage breaks up, it goes back to his name. That's all I would say. It's not operationally inside the marriage. It's only what happens at the end of the marriage. Most of them. I've seen a few of them that interfere in the marriage, but most of them are what happens in the event the marriage dissolves. Simple. Okay. And your second question is what? well how do I build wealth with somebody who already has wealth and isn't really motivated to build more wealth now there's a key issue now you've opened up a whole other can of worms I'm gonna love you enough to tell you the truth a guy that doesn't work for a profit

and isn't productive scares me if he's marrying my daughter I'm I'm afraid man the trust fund allowed him to not become who God intended him to be a productive citizen that goes out there, leaves the cave, kills something, and drag it home. Instead, it's stunted his emotional development and he runs a bike shop, a bike shop that's not profitable. Instead of becoming the man that God wanted him to be, that scares me. I'm looking in from the outside and I'm being a little bit harsh, but I'm short on time and I love you and I want you to hear that. I don't want to leave this being dishonest with you. Thank you.

It's greatly concerning to me, and I would want you to deal with that, and I'd want, if I'm you, if I'm your old, ugly Uncle Dave, I would want you guys in pre-marriage counseling to get to the bottom of some of that stuff and some of that be solved to your satisfaction, because, girl, you, on the other hand, are a warrior princess. 78% of the, oh, I'm sorry, 52% of the single moms live below the poverty level. You make $140,000 a year. You're self-sustaining and raising a human. You're kind of amazing.

You know, Dave took the words out of my mouth. I was going to play the older brother card, and I went on a rant last week with a very similar situation like this on this show. And I said, ladies, don't marry Dufuses. He may not be. Well, but hold on. The indicators are good. I understand. Look at you all of a sudden, Mr. Nice guy.

trying to give him a break. I'm not because we've heard enough. We've heard enough. I'm not seeing he's a bad person. But being a dufus and being a bad person are two different things. You have a great heart. And I'm just telling you, I have the exact same fear here. This is a big deal. Three years you guys have been dating. He's been on this plan for 10 years. I don't think that $2 million lasts as long as he thinks. I'm concerned about that. I'm like $2 million is a lot of money. It's not. At 43. That's why I asked that question. old is he. So I echo Dave, and I'm saying I think premarital counseling is an absolute must. And if he doesn't play ball with that, that would be the final red flag. You've got to take care of you and that

five-year-old. And you can love somebody that is not the right person for you. And again, I'm not accusing him of anything, but I have massive, massive red flags. Same ones Dave has. So let me play something back to you that I heard, Haley, and I think everybody heard it. Okay, you came into this conversation like you are the one that is not bringing as much to the table. He's bringing everything to the table. And what we're saying is it's actually the opposite. Yeah, that's right. This guy needs to step up and earn the right to be with Haley because she's a freaking warrior princess. Pretty incredible. Yeah. You're making 140K a year, a single mom, gotten into finance. You're out there swinging the machete through the jungle, kiddo. It's pretty awesome.

and yeah so you know he may have two million dollars but he won't have a long if he doesn't change and so um that you just need to be careful again i all we're looking at is we've known the situation for about a minute and 48 seconds is all so you know a lot more about it than we do we could have missed something he might the guy might not but i'm not saying it's a hundred percent off but there are some things that are concerning enough you've got to dig into to them and get solved before you go forward with this. And to encourage you, you asked, how do I build wealth with him? If there's a pre-nup, it probably needs to include him getting a job that's profitable.

But until we figure out if this guy's the guy gave... In order to get married to me, you have to become profitable. You need to work the baby steps, whether or not he's in the picture or not. And you've bought into that, keep working it. You're doing really well. You got a good income. You can build wealth. You, Y-O-U and Caps, you can build wealth.

Yeah. Ryan is in Green Bay. Hey, Ryan, what's up? Hey, Ryan? Ryan, you're on the air. Hey, Ryan. Bye. All right.

Chris is in Dayton, Ohio. Hey, Chris, what's up? Hi, I was on baby step two, but then life happened, and I had to dip into my step one savings. Okay. Should I replenish that and then get back on track with my debt payments? Yes. And also, my second question, I'm really not looking forward to this day, but a lot of my family members are getting older. and I stand to inherit probably about six figures when that time comes for them.

And I'm disabled, so the best thing I can think to do with it is stick it into an ABLE account. Would you have any other advice as far as what to do with it? I don't have any car payment or mortgage. Are you receiving some kind of government assistance that will be affected if you got 100K? No, not up to 100K. I've got SSI and Medicaid and food stamps, but with this ABLE account, it wouldn't count as a resource. Yeah, I know that, but I was asking why you were using the ABLE account

because you're taking food stamps and SSI, okay. All right, and welfare, you said, too, right? Medicaid, Medicaid, Medicaid, yeah, okay. All right. What's the nature of your disability, Chris? I was born legally blind. Okay. all right wow all right um yeah i'm trying to think what i would do with the able account i probably

would just try to get some mutual funds and set it in that and let it create income for you from the able account and i think you can do that i haven't i haven't dipped into those things in a while i know what they're for and i kind of know what they are but i'm not an expert on it and so uh i would have you sit down with talk to one of our smart vester pros and the people that we have that we endorse to help people with investing and they will know how to structure your able account for that. For those of you don't know, if you're receiving governmental assistance, if you have money in an able account up to a certain amount, if you label the account as an able account,

it has to do with protecting, keeping you from losing your government benefits if you are disabled. That's the purpose of it. That's how it's designed and what it is in general. It's a, it's a legal, proper way to have some assets and not, you know, not in her case, not lose the help that she's getting. So, wow. Jay's in Alabama. Hi, Jay. How are you? I'm better than I deserve, Dave. How are you, sir? Just the same. How can we help? All right. I got a lot to unpack. It's a rather happy story. my wife and I have royally kicked butt. I think we've done good,

but I feel like we need to tweak it a little bit because we both have great jobs. We love them, but we don't think we're going to be able to do this until we retire in our late 60s or 70s, and we're trying to figure out how to expedite speeding up so we can retire maybe in our mid-50s. All right.

So I don't know if that involves. How much have you got, How much have you got an investment? 1.1 million. Okay. Good luck. Good for you. And what's your household income today?

475,000 a year. Yo. And how much of that's you? How much of that's her? She is about 350 and I'm the rest. So you're 175? Okay. Yes, sir.

All right. And what does she do? living? We both work in medicine. I was going to guess. Okay, cool. Good for y'all. But she didn't get Dr. Idaus.

Well done. Yeah, apparently. You got a good net worth and a great, great income. How much of the 1.1 is in retirement accounts? About 800. Okay. What's the other 300 in? I got to buy $120 in a brokerage account that I invest in, and then the rest is home equity.

Okay. And what's your ages? I'm 45. She's 43. Okay. All right. So what you would do is to, is your home paid off? No, sir. We are paying extra on it to knock it down. Yeah, what do you owe on it? We owe about 600 on it. Okay. If you got a paid-for home and you built some money in some non-retirement mutual funds, That's what people in the financial world call a bridge fund.

It bridges from where the, from the time you want to quit to 59 and a half. Exactly. That's what I'm looking for. Yeah. Well, listen, you don't need as much if the house is paid for. Yes. Well, our long term, we might have kind of a strange long-term plan, but we both have very well traveled. And we're, we want to, once we get to that age, we're going to, we'd like.

to sell the house, take the equity we get from selling the house by a smaller house with very, you know, place that we ain't got to cut the grass and stuff like that. And we actually want to spend about half a year in Southeast Asia because we've been there many times and love the vibe. So it's much cheaper to rent a place there. Yeah. Let me ask you this. It occurs to me that you fairly easily could sleepwalk into half of this income working

part-time, even if you were doing some of it in Southeast Asia? My job currently is remote, but to be honest, I mean, I'm just being honest with you. We have no problem adjusting our lifestyle. No, no, that's not what I'm saying. I'm just saying you have the ability to produce an incredible income, and you could probably do that with 10% of the strain you have now. You could probably, between the two of you, pull in a couple of hundred. It's possible.

Oh, I think it is. I think you have to reimagine what you do, but yeah. Right. We're just both getting, we see the writing on the wall, and we just want to do the right thing, pay off our house, or at least knock it down a lot. I would get the house paid off, and I would build some money in bridge. Is this 10 years? Did I hear 55?

You guys want to be checked out? Top 55, 56. We're looking at, you know, say, 2036. Yeah. Well, the 1.1 will be almost 3 million by then if you leave. it alone. Okay. And you would have bridge on top of that, and you'd have the paid-for house.

And you've got the potential to do something, not nothing, the rest of your life, and probably generate a couple of bills doing that. Right. So there's a lot of different ways to roll into that 54, 55-year-old point, and you're going to be in really, really good shape. You're right. You have kicked butt. You're doing really well.

The main place you've kicked butt, though, is your income. Well, also, we laughed, but on our very first date, I asked her, I said, I need to know how much student loans you got. And she said, no, and I said, all right, there'll be a second date. Now hearing that story, we all knew you out kicked your coverage when you told us about your wife, but now this is a woman with poor judgment. Good for you, sir. You did well. You're a real romantic, buddy, I'm just saying. Yeah, you know how to sweep a girl off her feet. Sweep her right off her feet. You got any student loans, baby? And then he declares there will be a second date. Okay, we'll go out again. You get the pleasure of my company one more time. I love the advice you gave there, Dave. And I think there's a bigger lesson for our audience. We know from all kinds of data. You can go research this yourself that when a person completely stops work altogether, there's got to be some purpose beyond just retiring from a job.

In this case, I love what you recommend here, which they can travel the globe, do whatever they want. Stay involved a little bit, just enough to maybe cash full all this and not eat into that retirement. I just think that's something to think about. This idea of I'm going to stop cold turkey and just do nothing but hang out. That's not what he was saying. The data is really scary about how many are dead in six months. It is. And so finding some purposeful work, even if it's volunteering or some type of minister.

Yeah. I mean, you could go, you know, let's go, medical doctors in Southeast Asia would be at a premium. That's exactly right. Great, great point. I mean, that's what I was thinking. You could, a lot of stuff you can do there. Yeah. This idea that I'm going fishing for the next 45 years is probably not a plan.

Welcome back to the Ramsey Show. In the Fair Winds Credit Union studio, Ken Coleman, Ramsey. Ramsey personality, number one best-selling author and host of the new show, Front Row Seat, which is a massive hit on Ramsey Network. He's my co-host today. Ryan is with us in Green Bay, Wisconsin. Hey, Ryan, what's up? Hey, how's it going?

Better than I deserve. How can we help? So, kind of similar story maybe to how you started out. Right now, I got $1.8 million in debt. Um, that, uh, rental portfolio is worth 4.4. Um, that's a conservative estimate off of what realtors would tell me they would list for. Um, currently that, that portfolio puts out approximately, um, at a low end, $5,000 a month at a high end, $19,000 a month. because we're heavily invested in commercial.

So right now with, you know, post-COVID, we're a little behind on the commercial leases. Okay. Just trying to think of like what, but so I had a home run early on. I sold a building that I bought for 426. I sold that building for 1.6, and then I did a 1031 exchange on two of the buildings that I currently hold. Okay. How can we help? Well, I don't know.

What are you asking? Well, I'm not sure. You know, I'm not sure. I guess I have 1.8 million in debt I have a portfolio of 4.4 And your rate of return on that portfolio sucks

Yeah, it's not great No, it's horrible Do you want to get out of debt, Ryan? Do you want to get out of debt? I do, I do Okay No, you're still the guy that hit the slot machine wants And so you keep putting quarters

in a stupid thing you had that one hit and did that 1031 made bank and ever since then you've been putting quarters back in the machine trying to do it again and none of the rest of them did that well no I I yes yes more or less yes I will agree with you but I have I have hit more than one how old are you I'm 38 years old where do you want to be when you're 58 I want 10x this or you want what do you want yeah

I want a 10x this, man. I want to pay off my home that is worth a million dollars, but I have a $360 note. I got two kids. I'm just telling you, I don't want a 10x your portfolio. Your rate of return is awful, sir. When you tell me you're getting an NOI of $60,000 to $19,000 on an asset base this high, your rate of return, your ROI, straight up

mathematics it's horrible it's 3.8 it's 3.8 I know but you're when you make $60,000 as a return on 3.8 I mean that's horrendously bad you should be making a half million dollars on that cracked yeah absolutely I'm correct yeah yeah so you've got to figure out why you these rate these properties are not giving ROI and shed yourself of the properties that are not giving you a return and build a model portfolio where you're getting in real estate you need to cash on cash in residential of 8 to 10 net NOI net operating income 8 to 10% cash on cash annually okay and on in addition to that the thing needs to be going up in value and in

addition to that you need to be taking the tax depreciations that the depreciation schedules with the IRS allows. All of those things together give you north of 15 to 20%. On a commercial, you ought to be making 10 to 12 cash on cash. Ours does that. And it's not rocket surgery to do it. But you've just been buying crap, man. And you didn't think anything about the debt aspect.

And so the debt on some of these is eating your lunch because the rents are not commensurate with the values and with the debt service you're carrying. And that's what's destroying your ROI. So you need to get down inside of that and figure out which of these things you want to and create an ideal portfolio that's going to be 8 to 10 on residential and 10 to 12 on commercial cash on cash. And in properties that are going up in value, those are the ones you want to expand owning and the others you want to get rid of. And so there's the playbook right there. And you adjust it and that's what's going on. But you've fallen backward into this thinking that all real estate's good.

All real estate's not good. Some of it sucks. and you've got some that sucks. And some of it's leveraged too high. Some of it you've got too much debt on and it's pulling you down. And so, yeah, if I'm you, that's what I'm looking for. And in the process of doing that over the next five years, I'm going to sell off enough of it and use enough of my income to become 100% debt-free.

That's where I would be going. But I don't think you're going to do that because I think you're like borrowing money. So I'm not sure where you're going to end up exactly. I hope you make it. Hope you do for your sake. In this case, would you, I mean, because he's got enough, if we take him face value $4.4 million, he said conservative and all that property, $1.8 million debt, would you get out of the rental game altogether and have him invest that? He's a young guy. He's like 37.

Yeah. I mean, he'd be better off. That's what I think. If you just, if you did 100% slate clean and dropped it all on mutual funds, you'd make more money and you're making now. That's where my head was going. Yeah. Because you got $2 million of mutual funds in and you're making $200,000 a year. Right. You know, and that, and you're not doing anything to do that. You don't have to collect rent. You don't have to replace water heaters. The roof doesn't leak. You know, all that. It's a really healthy reset for a guy his age with kids. I'm not sure I would go that far. Instead, I'd probably cherry pick it and take about three years

and clean up most of it. Clean it all up in about a three-year period of time, but clean it up by getting rid of the properties that aren't cash flowing but have equities. And then get out of the debt business because that's part of what's bringing you down here. Hit those part is you're still trying to replicate that one deal. So hit those numbers again for people because too many people watching. TikToks and reels. So what is the ROI you're looking for on commercial versus residential, that stuff that you own or else you say it's not worth having? I pay cash. Right. And so I want to make, if I put a half million dollars in a house, we don't buy houses anymore. But I got a

bunch of them. Still, I didn't get rid all of them. But on the houses that we own, the residential single families that we own, we look at what we paid for it, what it's worth in the market, we want an 8 to 10% cash on cash after all expenses are paid rent minus expenses is net operating income we want to see a cash on cash of 8 to 10% if you get that and you have appreciation and value and you take the depreciation those three things together are called the internal rate of return the iR and those will be north of 15 17% on your residential's which is a lot better return than a mutual fund absolutely but it's a lot more hassle right then on our commercial stuff we're making anywhere from 10 to 14% cash on cash. And so we're seeing most of our IRAs, our internal

rates return up in the 20s on those. So we're making serious money on those commercials, because commercial property does that. But it's a lot bigger property. And again, it's a lot more cash tied up in them. So those are the processes you've got to go through to get there. You've got to just decide what you're doing. Because if I can't make 8 to 10 when I can make 12 on a mutual fund, Right. Why am I going through all this hassle? Exactly. Reed is with us in New Jersey.

Hi, Reed. How are you? I'm good. Thank you for taking my call. Sure. What's up? So I'm getting married in April, and I have about $15,000 worth of student loan debt.

And I've saved up about 17,000. thousand and that's not including my 401k and my investments and I'm wondering if I much is in your non 401k investments I have 17,000 in a high yield savings account not including a 401k okay and not including the other 17,000 no there's just one 17,000 you said okay I'm sorry so you have savings of 17 you have 15 in a student loan and then you said I have investments and a 401 Okay, the 401k, I understand. What are the investments that are not in the 401k? I have about $5,000 in an IRA.

Okay. All right. Do you have any investments that are not in a retirement account other than the 17 in the high yield savings? No. Okay. All right, trying to make sure I had the clear picture. Okay. Because if I heard $20,000 laying in a mutual fund over there that wasn't retirement, that changes the picture. You follow me? Right. That's what I was looking for. Okay.

Yeah, yeah, yeah, yeah, yeah. All right, what do you make? 120 before taxes. Good for you. Thank you. What do you have been spending in all on? I'm living expenses in New Jersey, and I travel back and forth a lot between New Jersey and Atlanta to help take care of my mom. She has MS, so it's a little bit difficult to save, but I'm putting away at least $500 a month.

Which is $6,000 a year out of $120,000. That's not much. No, it's not. Okay. So you've not been very intentional and careful and controlling with this great income that you have until now when you start focusing on it recently? Correct. Okay. Not trying to blame you.

I'm just trying to make sure I get the picture of what your, what the story arc of your behavior is because that's going to that affects my answer so here so the good news is you kind of just started all this stuff and you probably can do a lot better than 500 bucks a month so if you took the 15 of the 17 paid off student loan and really bear down on the budget you probably could put the 15 back pretty quick yes we are planning a wedding okay are you paying for part of that yes for about half of it how much um 10,000 total is our budget for that. Okay, so you need five. No, I'm sorry. It's my budget, so that's 50% of the wedding. Oh, okay, 10. Okay. So that changes the discussion again. Okay. And does he have

debt? What's his financial condition? My fiancé has no debt other than the condo that we live in. Okay. All right, cool. All right. Well, so number one, as long as you do it between now and or as soon as you get back from the honeymoon, I don't care. You're still going to get to where you need to go. More than anything, what I'm wanting to do is create a behavior pattern that's realistic that you can lean into and take all the way into your marriage. That's a positive behavior pattern, okay? Because you make good money, and you don't have much to show for it.

So that's why you're asking these wonderful questions because you want to do something better. You want to see, well, you want to have something to show for it. Am I reading you correctly? Yes. It just becomes pretty challenging with the amount I have to fly and helping my parents out. Yeah. And that also is not the only reason. Yeah, for sure.

Okay. All right. All right. When is the wedding? April. Okay. To the extent that you can be. confident that you can build the 10,000 and then rebuild the other 15, I need $25,000 by

April. Okay? To the extent you can be confident of that, can't be confident of that because you're just starting. All right. So I was going to give you an answer that I'm not liking now. Yeah, I saw you crunching those numbers. So, no, I'm going to take 10,000.

of your 17 and move it to a separate savings account and the wedding is now funded pressures off okay okay and then I'm going to take 5,000 and throw it at the debt leaving you 2,000 or 3,000

6,000 and throw it at the debt leaving you $1,000 in the account and then I'm going to get on a tight beans and rice rice and beans budget and my you have no debt at that point correct correct no no You still have the student loan debt because we only put six stores of the 15. You got nine.

So we got nine thousand. We got to tear into that nine. And then we got to rebuild the emergency fund by the wedding. But the wedding pressures off. We've got the 10,000 sitting there to do that. We're throwing $6,000. I need $9,000. And I need to rebuild my emergency fund by April.

You can do that making $120 if you get on the every dollar budget and you really start pounding it. And you say, I'm not going out to eat. I'm not spending money. We're not going over this wedding budget. That's it. That's a whole budget, not a dime more. We're picking out a dress that fits within that, a videographer and a reception that fits within the 20 budget. And buddy, you're putting up the 10.

He can put up the 10. He's going to be able to do that. Sounds like you guys got a good match here. So, yeah, that's what I'm doing. Let me recap. What I'm trying to do is I'm trying to get not too many things coming at you to put pressure on you. The only pressure is getting out of the debt now because we got the wedding financed. You see what I did?

Right. Yes. But then you've got to create the people read that change their lives doing this stuff are the ones that create this internal positive anger. It's like I've had it. I'm sick of making this much money and I got nothing. Yeah, I got this expenses running back forth to Atlanta, but I got nothing. And I'm sick of this and I'm going to do whatever it takes that's moral and legal to change that in the person in my mirror.

And I'm freaking changing. I mean, you've got to get this thing going, right? And when you get that going, then you're going to be okay. But you can wander into debt. You can't wander out. You've got to get passionate about it. And that causes you to sacrifice deeply to hit the goals. So 10,000 in an account, 6,000, leaving 1,000 in your savings account.

No more money going into your 401K. Stop it temporarily. Stop everything temporarily. Your life is now on hold until you get the other 9,000 of student loans paid off. and your life is not on hold until you finish that emergency fund rebuilding it to $10,000 or $15,000. So when you come home from the honeymoon, you have $15,000 cash, no debt on the wedding and no debt, and you make $120. That feels good. That's worth pushing for.

Yeah. And that's a burn the ship's mentality, which is what you need at this point. It's now I have no margin, but instead of stressing out over the wedding, we're just, hey, I don't like the fact that I don't have an emergency. fund. That's a very different vibe. And that motivates you very clearly. I love that. All conviction at this point. Yeah. I just, I create systems that push me to do what I want me to do. Yes. Right. I put myself in those positions. Right. So one of the reasons I love stuff like automatic draft on your checking account going into your investments or the four, one of the reasons the 401k has caused more people to build wealth than just about anything else because it's

automatic. Anything I can do to put a system around me, that automates my discipline. Well, tell everybody why you, I know what you did, but what's the psychology behind saying, all right, we're going to fund the wedding. Why'd you tell her to do that? Because I know what you did, and it's brilliant, but explain the psychology behind having her do that.

Can't focus on two things at once. And one of them is going to suffer. Yeah. The wedding is so important to her. It's such a huge deal that if Dave didn't have her do that, what happens is she starts to go, Well, the wedding is super important, super important. I can't do both.

And it kills any momentum on getting rid of the debt. This way, you give her a full one way. Instead, I've got a light at the end of the tunnel that's not an oncoming train. Brilliant. Even if it's a pin light. That's right. There's a light there. That's right.

And it's a singular focus point. Yeah. And when you're trying to modify behaviors, you look for a singular focus point and lean in on that with visceral passion and craziness. And then you can create this permanent change in your brain. And you get and you rock on then. You reset who you. You are is what you're doing. Folks, when we get you out of debt, the getting out of debt is not the important thing

that happened. It's what you became while you were getting out of debt. That's the important thing that happened. Our question of the day is brought to you by why refi? You've tried budgeting. You've tried making minimum payments. defaulted private loans are still weighing you down. Y-R-R-R-E-F-I-R-E-F-Y.com might be able to help.

Learn more at Y-R-R-E-F-Y. That's the letter Y-R-E-F-Y dot com slash Ramsey. Not available in all states. Today's question comes from David in Massachusetts. My father suddenly passed away recently and did not make the will he always planned to create. He owned five properties and only two have mortgages. He also owned a business with a partner which brings in close to one million in residuals annually. My mother is not in the picture, and I have an older

brother who has a substance abuse problem. My father did not inherit any money from his parents and built all this from the ground up, so I want to honor him by making sure none of this goes to waste. My brother will waste away his half of the inheritance on drugs if he gets access to it. My name will be the only one on the death certificate, and our attorney will file for me to be the head of his estate. Is there anything I can legally do to prevent my brother from getting a lump sum. You need to seek legal counsel that really knows what they're doing. No, I doubt it.

I think he's going to get his lump sum unless he's declared incompetent by the court, unable to take care of his own affairs. And just being stupid or doing drugs is not going to cause that to happen. Stupid immature drug person is not going to, that's not incompetent by legal terms. my mother's not in the picture she is now if they were married

or if they were married at the time of his death she's very much in the picture whether you want her to be or not so again we're not attorneys in Massachusetts so you need legal advice in Massachusetts where you are and my suspicion is Massachusetts has some wicked crazy

probate laws because there's some other stuff on the books there that's wild and so I wouldn't surprise me a bit but you need to find out what you're dealing with okay so in most states if your mother is alive and they're still married she's going to get at least half of these assets whether you wanted her to or anybody else wanted it to and your brother if not if she's dead or they're divorced and gone or whatever and she's really not in the picture legally then you and your brother are going to get half each and i'm not aware of anything you can do to legally prevent your brother from getting his half um now what i would do if that's the case when you sit down with your attorney is i would sit down with your brother and say look i love you

dad loved you uh i don't want you to use this to od i don't want you to use this to od i don't want you to use this and have nothing to show for it later if you would allow me to manage your half for you until you get through these this part of your life i will do that as a favor to you because i'm very afraid that you're going to end up with nothing what do you think and see what he says um and again what percentage of guys in this situation are going to go oh yeah why don't you take None, but it's worth asking, but that's probably, persuasion is probably your only technique. Yeah, tough situation. So sorry for your loss.

Yeah. What does this illustrate? Illustrates everyone needs a will. Period. And here's why. What you, what this guy did when he died suddenly is he has put a curse. on his two sons. He left them with a mess because he didn't do a will.

And so now you've got one son trying to navigate the older brother trying to navigate the prodigal and try to do what dad wanted and try to think through and not, there's no direction and there's no legal binding anything. If your dad had simply left half of this in a trust for your brother, it would have taken and an hour and a half to do that will maximum. And if he'd left half of it in the trust for your brother with you as the trustee to manage it, and upon such time as your brother exemplified positive behaviors, you release the trust to his control,

which would be a fairly normal thing where you've got an immature kid or a kid doing drugs or whatever, you're going to hold it for them, but not let them have it. It would take, it just, you know, it's just, so those of you that are out there, do your freaking will. if you love the people that you're going to leave behind because you just you screw up everything for the people you leave behind by not doing it. It is an act of love to do your estate planning

because now this poor guy David has got this whole thing is sitting on his shoulders. He's the only adult in the story. Just aggravates the pee out of me. So this is millions of dollars we're dealing with here. And by the way, there's a partner in a business he was running with him that doesn't know what to do too.

And I'm sure there's no freaking plan there either. So you guys, I don't care if you got two nickels and a kid. You need a will because the kid is going to be controlled by the state if you don't have a will that dictates who's going to take care of your kid. You're going to leave that up to the DMV people? The people that run the DMV. That's the level of competence you have when you're doing with the state.

No, I'm not leaving that up to them. No, I'm not leaving anything up to the government. to decide anything because I was too trifling to get my dadgum work done. And getting your will done is being an adult and getting your work done. Oh, man. Poor David. I'm so sorry, David. But I'll tell you what, if you want to, if you have a bunch of people, a bunch of kids that you don't like,

and you want to, you want to really mess up the next 10 years of their life, leave about $2 million with no instructions and a bunch of scraps of paper laying around of what they thought you wanted. And watch them fight through it and all the lawyers get the $2 million over the next 10 years and nobody in the family talks to each other the rest of their lives. It's almost a guaranteed formula. That's right. Yep.

It's like dropping a bomb off in the middle of it. A family. Yeah. That's exactly what it does. So just aggravating. David, I'm sorry you're facing that. But I wouldn't burn a ton of calories on your brother. It's not his fault.

It's not his problem. He's his problem. He's what's known as an adult, and I wouldn't burn a ton of calories on anything except just getting this thing settled and moving your part over to the side, and you go live your life like a responsible human being. And, oh, by the way, get a will. Did I mention that? Rebecca's in San Diego.

Hi, Rebecca. What's up? Hello, how are you? Better than I deserve. How can I help? So my mother inherited my great-grandmother's property. that has two houses. Unfortunately, both of them need significant amount of work that my mother cannot afford to do.

If we were to move there, it would be five generations on this land, so we are trying to do what we can to not have to sell it off. My husband and I do have a down payment saved to buy a house, but we were thinking instead that we could move into the bigger house, we've got two kids and another one on the way. You know, down payment to fix up that house and live in it and have no debt, you know, no house payment. And my mom would take on the smaller house that needs less work and better suitable for just her by herself single. She recently decided she wanted to only be the sole landowner.

We wouldn't be put on the deed or anything legally. That settles it. I'm not going. She wants us to pay $800 on top of about $100,000 we would be putting into repairs of the house and the property. I'm not going. That's what I said. You don't put $100,000 in somebody else's house. Let's pretend, Rebecca, that you were my renter and you were my tenant. And I said, hey, why don't you renovate my house?

You would look at me like, you're an idiot. I'm not putting $100,000 in your house, Dave. Why would a renter do that? yes don't do this sorry mom this isn't going to work out we're going to have to just go by a house somewhere else and i hope this all works out for you yeah family um said that because one day i would possibly inherit my siblings that children should take care of i'll deal with it when i inherit it right now i'm not doing a thing yeah you already don't like this and you're still trying to figure this your mom has set up a trick bag here you need to run this is a bad vibe bad

you kiddo really bad you run this a trick bag she likes to mess with people and i can see the strings from here you need to run run run run run run run run run run run run if you died tomorrow how much would your family need to keep the lights on how would they pay the mortgage how would they by groceries. If anyone in your life depends on your income, you need life insurance. And how do you choose from all the options out there? Well, life insurance is term life is the only kind that does everything you want, which is replace your income for the lowest possible cost.

And we've recommended only term life insurance for the last 35 years here on the air. You need a policy worth about 10 to 12 times your annual income. And the perfect term length, we think, is a 15 to a 20-year level term policy, meaning the premium stays the same. For more info and resources, use our free term life insurance guide. You can go

to ramsysolutions.com slash term life guide. It's free or click the link in the show notes. Speaking of life insurance, Kyle is with us with a life insurance question. Look at that. Hey, Kyle in Tampa, what's up? Good. How about you? Better than I deserve. How can I help?

Yeah, so I think we're doing good. on our savings to retirement. But we have like a large life and whole wife that we got kind of sold on. And my wife, she doesn't agree with giving it up, but I do. And now it's kind of like a catch 22 where I think we have enough, but I just want to give it up kind of just for potential growth.

Okay. So it's like $800,000 in cash. value potential it could be maybe i looked into the end like you currently have cash value of 800k yes are you sure yes how much did you put into this we put a lot of money into this i don't know we just kind of got caught up into it i think it was like 10 years ago so what is the face value what's the payout on death at this moment 1.2 for me 2.3 for her. Okay.

And what do you make, sir? And we're 40 checks. I don't make them. Together, we make about 325. What do you make? About 55. And what does she make? About 275.

Okay. All right. Is she a doc? Yes. Yeah. That's who they go after. Okay. Yes.

And that's kind of. Yeah, she's a target. She's a target. They worked all her and they worked all her buddies. Yeah, you got screwed and you're getting screwed every day that you keep it. So do you have, you said, I think we've got enough. I mean, what, do you have a large net worth or something? I mean, yeah.

What is your net worth? I mean, it's probably like $3 million. Okay, invested in what? And that's not included that policy. It's probably like 1.5 for houses. and then about 1.4 for just 401K things. Okay. And then I have 800,000 of this, and I'm just kind of like...

I got you, all right. Well, let me kind of give... You can play this back. You can play this back for her, okay? Docs are targeted by whole life guys. They're the sweet spot for those guys that sell this crap. It is one of the worst financial products in the world. It's absolutely horrendous.

No one in the entire financial world believes in whole life life insurance as a good product except the people that sell it. All the rest of us, all the financial planning community, all the investment community, all the estate planning community, unless they're involved in the whole life business, they do not believe in it and they tell people not to do it. All of us have abandoned this product. because it's not just bad it's one of the worst it's the payday lender of the insurance world it's how bad it is this is not a medium product this is a product that absolutely is horrendous okay now let me walk you through why and then we can then you guys can go home and you can talk about this after you play this back because it'll be on the podcast okay so life insurance has one possible need

in a scenario like you're in, and that is to replace lost income if one of you dies and the rest of you are dependent on that person. You do not have a large enough estate to have an estate tax problem, and so there is no, you have zero need for life insurance for that purpose. You've got to get to $25 million before you have to worry about an estate tax problem, and you're a long way from $25 million, all right? So you don't have an estate tax problem at all. Not even close, nor are you going to have one anytime soon.

Now, so, but what you do need life insurance for is if you wanted to replace the income. Now, we replace her income. You would need about 10 times that. So you would take about two and a half to three million dollars, probably $3 million policy on her. And we'd take about 10 times on you. So we'd take up $750,000 on you just to round up. Okay. You could do that at your age for nothing.

The cost of a pizza. If you don't smoke and you're not obese. If you're not fat and you don't smoke, life insurance costs almost nothing. It's ridiculously inexpensive. Like the cost of a pizza. Well, in your case, there's many millions, probably three pizzas. But it's really no money compared to the 800 grand we're talking about, all right? Now, here's the problem.

You put so much money into this thing. If she dies, you know what they're going to be? pay 2.3 million. You know what happened to the 800,000? They're going to keep it. Cash value dies with you. This is a dangerous situation because you guys have gotten screwed so bad. So if I were you, I would cash this out really fast. And let me, and let me say like hers is 500 and months 300. So we have two different policies. That's okay. I'd cash you out real fast. I just get rid of them. I get both of them. I'll be done by the end of the day. because if one of you dies without life insurance in the next 60 days

and you've got $3 million left to live on, I think you're going to be okay. Yeah, that's what I told her. All right. So you're self-insured. If you want to go buy some term insurance, price it out with Xander insurance, it doesn't cost nothing if you want some extra insurance. But right now you've got $3 million.

Oh, wait a minute, no, you've got almost $4 million, counting this $800,000, right? Yes. Yeah, and I think you guys, if one of you dies, the other one can make it on $4 million. Yeah. So you're self-insured. Just taking this $800,000 and putting into like a mutual fund. You should have put it in a good investment.

Yeah, absolutely. One that goes up in value. Cash value has an average rate of return nationally of 1.26%. One percent! You're making nothing! This is costing you $100,000 a year in lost opportunity of what it should be growing. It's awful. Absolutely awful.

So, no, she needs to tell his life insurance got to jump off a cliff. And he screwed you guys. Bad, really bad. And I can name the company probably. Uh-oh. Why are doctors ground zero for this? Because they make a lot of money and they feel all fancy because they're new doctors and they have no knowledge of finances at all.

they're the worst with money with the possible exception of actors and country music stars MDs are horrendous with their money there's a handful of country music stars do a really good job there's a handful of doctors do a really good job right there's a handful of NFL players do a really good job and the rest of them are financial morons and so these guys weigh in on these guys who are all puffed up because I just got my MD and these gals and they're feeling all good about themselves because they just got to be a doc and they swoop in just just about that time, about the time you're making a little money, and they go, oh, well, you need whole life, life insurance.

So, yeah, horrible, horrible product. Yeah, you're, and I don't care. I'll sell either one. You know whatever you want to do. But if I woke up in your shoes, by the end of the week, I'd have my 800K in my hand, and I'd be sitting down with a smart vestor pro and opening up a good mutual fund and making 10, 12% on this money instead of 1%. And when I die, they don't keep it.

there's an idea and if you want some life insurance in addition to your four million dollar net worth at that point just call zander insurance and get you some insurance um you can get like again 46 years old if you're not obese and you don't smoke you can get some insurance it's really not that much but long ago i quit buying insurance because sharon's okay if i died matter of fact she's really okay if i die i kind of need to sleep with one eye open Welcome back to the Ramsey show in the Fair Wins Credit Union Studios. I'm Dave Ramsey, Ken Coleman, Ramsey personality, number one bestselling author and the host of the new Ramsey runaway hit called Front Row Seat, Long Form interviewing with people who really know how to do life well. You'll learn a lot if you join him on front row seat. Our phone number here is AAA-825-2-2-25. Jessica's in Birmingham.

Hey, Jessica, what's up in your world? Hey, guys, I feel so blessed to talk to you today. Thank you for taking my call. Well, thank you. How can we help? Okay, so I run a solo aesthetic skincare business that grosses around $85,000 a year, but after expenses, I only bring home about $24,000. My husband and I are on Batesap 2. I do really love my business. I love my clients, but I do have a lot going on in my life right now, and I just do not have the drive to keep pushing and building my business the way that I have in the past. I'm just, I'm just tired.

But my question is, should I take a full-time job for a year to pay off all of our debt? And while I do that, keep the business open for like one to four days a month? Yes. And then go, okay, okay. I'm tired. I don't make any money. Yeah. It's a formula, right?

What would you make if you did the exact same thing you're doing, the aesthetic skin care for your clients? If you're doing that for somebody else and you were just getting paid for your time, what would you make? Easily double or triple. Yeah. That's the answer.

Yeah. As long as they allow you to keep your clients. Yeah, that's the problem is if I worked for another, You'd have to give up your client's conflict of interest. Yeah, exactly. So what I was thinking was doing something similar in the industry, like working in sales for a brand or something like that that wouldn't be directly a conflict of interest.

Would you make as much as if you did your actual craft? Yeah, I'm sure I could probably, if I got into sales and worked for like a skincare brand, I could probably bring anywhere from 70 to 100 in a year. Didn't do it. Okay. Yeah, it's a no-brainer. Meanwhile, consider, can begin to read and study business?

Yes, sir. Because you're a classic accidental entrepreneur. Here's what we find when we're working with our entrepreneurial clients and Entree leadership, and we coach about 10,000 small businesses. There's a vast difference between being good at your skill and running a business that accomplishes your skill. Yeah. You are good at your craft of helping people with their skin.

You suck at running a business. That's okay. You can do it. You can learn how, though. It's a learned skill, business acumen because you're not making any profit. We know this because you're not making any profit. We know this because you should just talking to you for a few minutes. You're obviously bright.

You're articulate. I think you're right. I think you could go make 100K selling just after talking to you. I actually believe you. All right. Now, if you're all of those things and you're not making at least that doing this craft that you're good at, it's a business problem. And so learn the business part. Let me recommend a couple books to you.

I'm going to send you a copy of building a business you love, my latest number one bestseller. I'll give you a copy of it. Another book I'm going to recommend is by a friend of my name Michael Gerber. It's called the e-myth, the entrepreneurial myth. And it is learning to work on your business, not just in your business. Okay. So what we run into all the time, Jessica, and I tell them exactly the same thing I just told you. A guy who knows how to work on heating and air, and he's doing a really good job fixing people's heating and air, replacing their broken heating and air, all that kind of stuff, an HVAC guy.

And he decides I'm going to open my own thing, and he gets a truck, and he's doing a really good job. he leaves his job and he goes into business fixing heating and air. Now, he's really good heating and air technician, but he knows nothing about running a business. And he ends up exactly where you are instead of making $80,000 working for somebody else fixing heating and air, he ends up making $20,000 with his own truck. And he's miserable. And so, but the only difference there is pricing and marketing and accounting and growing the business, understanding the parts of a business and growing a business, and you can reset, relaunch four years from now with some knowledge that you don't have now on how to run a business, hire three people

that do skin care, and you do some skin care, and you could make 150, but you've got to have those pieces, you've got to have those other tools in your belt you don't have right now, and right now you just need some money, and you're tired. Yes, sir. Do you want to run a business long term? after Dave gave you that pep dog. It's a great one, by the way, and he's right. Do you want to run a business on the other side of this debt elimination

and how tired you are? No, I really do. I absolutely love entrepreneurship. We just have a lot going on in our family right now, so that's the reason I'm tired. But I love. No, I mean to tell you, if you go to work every day and you make $24,000, you're tired. Yeah, that's right. You got to work every day and you make $20,000, you're not as tired.

That's true. That's true. just it's hard. I mean, you're just in a slog. Yeah. And we call it the treadmill stage of business. You feel like you're on a treadmill. And when you're on a treadmill, it's more tiring than running down the road because you're not getting anywhere. It's just tiring. And it's emotionally exhausting because the scenery does not change. And that's part of the thing. And I've been there myself running hours over the years in years past. So I think you're amazing. And I think you, this is not a permanent solution. It's a solution for three years.

to five years. Go make you some money, get not tired. That's right. And you're going to come back on the other side of this and you're still an entrepreneur, so don't let the doubting voices, you know, kind of win the day here as you take a break. Because a lot of entrepreneurs refuse to do what you're actually doing, which is A, you raise your hand and said, Dave, Ken, I need some help, number one. Number two, you've taken it and said, okay, it doesn't mean I'm a big giant failure because

you're not. And you're going to pause and you're going to learn during the pause. and I think you come back and you're way more successful. I'm very excited for you. This is not the end of the story. It's just another chapter. Yeah. Absolutely.

Kelly, I don't know if we've got E-Myth in stock. If we do send her one, if we don't, you'll have to get it yourself, Jessica. But, I mean, there's this thing called Amazon. They'll put one on your front porch where I can get it there anyway. But E-Myth by Michael Gerber. It's a short book. You'll like it. And it's a classic in the business literature realm.

And we'll send you a copy of mine as a gift, building a business you'll love and read it and begin to learn. But start becoming, I'm going to read 12 business books on small business, running a small business this year, while you're doing the other stuff. Yeah. And turn off Netflix. And I'd add more. And learn how to run a business.

I'm going to add one more homework assignment. There's got to be somebody in your neck of the woods who's winning in this area. Yeah, go learn from them. And just go buy their lunch and just ask them, like a book report. Keep it simple. I think you're doing a sixth grade book report on their business. You'd be surprised what you'll learn. Yep.

Yep. You could, you know, I would imagine there's about four levers if we had time to get into it into an in-depth coaching session that you could pull and go from 24 to 50 quick. Yeah, that's right. You're probably double the nets on this because there's probably just some stupid. I mean, it's just, it's, when I look back on some of the stuff I've done, I go, God, man, that one little thing, it was so stupid. And it changed them, it changed a million dollars. It's just nuts. Yeah, you can do this. And you're very capable. I don't, I don't hear someone that's lacking in capability. I think you got it. Well, don't just set goals for 2026, learn how to reach them. The 2026 Ramsey Goal Planner is here. It's packed with monthly content from Jade, Rachel, and Deloney to help you stay on track with your money, faith, and relationships, and follow through on your goals. We sell them out every year early, so don't wait around. You'll end up without one. Get yours at 4997.

a lot but it's one of the most expensive products that we produce for us but it is fabulous we completely turned the creatives loose and go play in your sandbox and boy did they it is a good looking product the design the interior design elements are amazing so ramsysolutions dot com slash store the ramsie gold planner for 2026 is here and you can click the link in the description if you want to go that way too we'll help you out sam's with us in connecticut hey sam how are you i'm good how you doing better than i deserve. How can I help? So I wanted to get your advice. My wife and I have a very different risk tolerance when it comes to investing in debt, specifically when it pertains to a single

family home that we currently live in that I would like to rent and get a different home for us to live in, and my wife would like to sell it. She has the mentality of being completely debt-free and we're conflicted because of some of the variables underneath. I wanted to kind of walk it through and see what you thought. Okay. What are your underneath variables? Yeah, so for me, I have more in cash on hand than I owe on the mortgage. We have about $330, 330, I'm sorry,

330k in equity on the house and the only debt that we currently have are my wife's student loans which she has 30k in student loans 20k of that being at about 5 to 6% interest 10k at 3.5% or lower so my thought process was between the two of us we have about 190k in cash and what's your mortgage What's your mortgage balance? The mortgage balance, we have 97K left on the mortgage. It's a fixed 15 years at 2.4%. Okay. And what's your household income?

Household income between the two of us before taxes is 285. Okay. All right. Cool, good for you. Well, well, well done. And how old are you two? 34. Okay, all right.

And so that's the variables you were talking about, the underneath, right? In other words, that's your story, your financial story, your math story. Yes. For me, I'm thinking we have a very low mortgage. So her vote is to pay cash for the next house and sell this one and pay off the student loans today out of the cash that you have. Your vote is keep the rental house and keep the student loans because they're low interest rate and stay leveraged. Yeah, so what I said was let's pay off the first. 5% or higher, the 20K.

The 3.5% is about the same as what we can get in a high-yield savings. It's low. Leave them. If the rates change, then let's pay them off. But I would like to stay leveraged and make money on the spread because my mortgage is about one point. One more time.

Tell me how old you guys are again? 34. Okay, I'm sorry. And what do you do for a living, Sam? I work in corporate finance. Ah, okay. Sounded like it. Okay, good.

All right. Do you have a finance degree? Yeah. You have an MBA? No. Okay. All right, cool. All right.

So I've got a finance degree, too, by the way. And with specialization in real estate, that's the world I grew up in, which is the king of leverage, right, real estate. So obviously you two are smart people and you make really good money and you're going to be okay if you watch what you're doing. You're not in bankruptcy zone or anything like that. Do you remember looking at the case studies back in college when we used to do case studies on companies? And when the bond, when a publicly traded company, when the bond, when they were putting out too many bonds, they were issuing so many bonds and they were carrying a load of bank debt that we looked at that as risk. And we would there, we would run a formula and lower the value of. the stock because they were carrying too much debt, that debt equaled risk.

Do you remember those case studies? At a high level, yeah. Yeah, okay. And then when I got out of school, I got my securities license and I was selling investments in the investment world. And there's a thing when you're comparing an aggressive growth stock mutual fund, which has high volatility, and the measure statistically of the high volatility is called a beta.

It's a math number that the, more volatility the higher the beta okay in a low low volatility smooth curve versus a high mountain and valley curve is a low beta and what we were taught to do in that world on a sophisticated level was to say all right we're going to adjust for risk by adjusting with the beta we're going to use the beta as the mathematical way to adjust for risk because you can't really compare a 20% rate of return high volatility mutual fund with a 11% rate of return low volatility mutual fund and compare them apples to apples you have to adjust for risk and mathematically the way you do that is to use a beta in an inverse math formula does any of that

sound familiar yeah a little bit okay that's that's how it's done point all of all of that gobbledy-goop academic talk was because you approach this from an academic intellectual viewpoint and that So that's the way I'm approaching your question. The point being that mathematically, we are 100% sure in business, and it's proven in every area, more debt equals more risk, period. Lots of debt equals lots of risk, no debt equals almost no risk. So risk is associated with levels of debt. Would you agree with that?

Yeah. So to compare your zero risk of being debt free by paying off the 3% loan, and say, no, I don't want to pay that off because I'm going to invest that money at 3% to say that you're actually, or 4%, to say that you're actually making money on that transaction, you're not after you mathematically adjust for risk. Do you follow that? I do, yeah. So your initial formula is a formula most people use, but it's a naive, unsophisticated

formula because you're not mathematically including risk in the discussion. That's all I'm bringing up. So all of that to say debt and leverage equals risk. Now, does that prove out in the data over long periods of time? Well, it does, because when we interviewed 10,167 millionaires, and I'll send you a copy of the book, Baby Steps Millionaires, which has the white paper of the research in the back of it, and you can go through it, when we interviewed 10,000 millionaires, the number of them that said, I became a millionaire by borrowing money, at my house on my house are not paying off a student loan at a low interest rate and investing the difference the number of people that said that caused me to become a millionaire Sam it was precisely zero none of them did it they all said what your wife said they all said I'm getting

out of debt and with the lowered risk and the increased cash flow because I don't have debt payments I'm going to use the increased cash flow to bill wealth and the sustainability of this is very high because I've lowered my risk quotients, and this is a real fancy long diatribe to say, Sam, your wife's right. That's true. Yeah. She's right. Sorry, bud.

You'll lose. And again. If I woke up in your shoes, I'd sell your house and I'd pay off your student loans today. And I buy me another house with cash. And I kiss my wife on the lips and say, thank you, Jesus. I married a good woman. That's so true. Because the 190K cash

Oh, you're in such a good position You've done so many things right And this is almost a esoteric philosophical argument It's really not really a big But you've got to work this through Because the problem is You're going to extrapolate

You're going to magnify Whatever your value system is here So if your value system is Sam's And you're going to continue to borrow money into it All of that crap I just laid out there That's all true Is going to take you down eventually That's right

Because you'll keep doing And if you go her way, which is grandma's way, it doesn't feel as sophisticated to a finance major, but it's actually technically more sophisticated. Hmm, isn't that interesting? Yeah. Then you end up with a high sustainability, high cash flow, low risk environment. And it's not about risk tolerance. It's about what works in the end. Elijah is in.

in Oklahoma. Hi, Elijah. How are you? I'm good. How are you guys? Better than what you deserve. What's up, sir? Hey, so me and my wife, not too long ago, decided to go ahead and start doing the baby steps. We're still on baby step one. It hasn't been that long since we decided. But the reason I was calling today is because we did lease a car about a year ago. I've been listened to you for a little while, and I know that's a no-no, but we did do it. and we're upside down on it about $10,000 and so we're kind of in a pickle and I was just calling you guys to see if I should just ride the lease out and and you know see how you know figure it out when it ends or if there's something I can do in the meantime to kind of get us in a better position okay what kind of car is it it's a 2025 Chevy equinox okay How long is the lease?

I believe it's three years, so coming up October will be one year, so we'll still have a couple years on it. And how much is your monthly payment? $6.45. Okay. So it's good. It takes $14,000 to ride the lease up. $15,000?

Yeah, it's so. Yeah, give or take. Yeah. And, um, okay. I'm not. not sure. I want you to double-check your numbers on the $10,000 upside down. That sounds wrong after one year. Okay. Well, we had, I had another vehicle that I had leased previously, and again, I know it shouldn't have done it. You rolled, you rolled the negative

into this one. Yes. Okay. So when you call, did you call, you called to get a payoff? Did they give you the early buyout number on the lease or the total number on the lease? um i believe it was a total number i didn't ask you need the early buyout if i wrote you a check today to pay the car off and own it what is the number today because i think that's going to be less than 10,000 with the numbers you're giving me okay might not be but it could be okay that's the first thing i want to do all right so here's the thing we know if you write a check for 15,000 you can drive the car for two years that's your numbers today we know that number okay 645 times 24 okay and so we know that's where that's going to take us now

and so that's our worst case scenario and then you turn it in at the end of the lease like you said ride the lease out okay that's our worst case now if we sell the car and in order to sell the car we have to write a $10,000 check, then we could have driven the car for two more years for only $5,000 difference. Okay. I'd probably ride the lease out if that's the case. So if your 10 number is correct, I'm going to ride the lease out because you're not making enough headway on this versus you get the full use of the car if you pay the 15.

Yeah. If I only, if I write a check for 10, I don't have the car for two years. and so really I get the use of the car for the difference which is five in that scenario now I think you're going to find it to be less let's call it seven and if you could get out of it for seven would I get out of it um yeah probably would that's like 10 months payments and then I'm free from the other months payments so yeah if you could get out of it for seven or anything less I'm probably going to write a check and get out of it or borrow the money of the 7,000 at the credit union and get out of it um but I don't know if

how much negative equity you rolled and I don't know which numbers you're getting and of course you got to compare this to the actual value of the car what how did you value the car uh well I had I called some dealerships and and gave them all the information and they they told you what they would pay for it oh yeah yeah exactly see that's that's the wholesale number you could sell the equinox to an individual yes yeah and if you did that is it seven or is it five difference yeah probably because that that's a wholesale number you You got so the second, so first thing you've got to do to figure out your real numbers is you've got to call the finance department. That's your 1-800 number on your payment book, okay, on your website for payments.

And talk to him and say, I need the early buyout. If I write a check today, what's the payoff today? I need that number. I think it's less than 10, okay? Then the second number, you go to Kelly Bluebook, KBB.com, or Edmund's car guide, either one, and look up the private sale value of your car, not the trade-in value. Because when a dealer buys a car from you, Elijah, they buy it to resell at a profit. Okay.

And so if they buy that car for 20, that means they plan to sell it for 25. Okay. Which means you could have sold it to an individual for 23, if that's the case. And that's a, that's probably your difference, something like that with that Equinox, somewhere in there. Yeah, I'm sitting here listening to this and, you know, it's just a reminder to not get sucked into whatever the decision was. There was an emotion there because here's a young guy who's going, man, we messed up and now you've got to try to wade through this. Stuck. Yeah, and as you were laying this out, I just, I feel legit compassion.

And there is such an emotional pull. It seems like such a good idea, the lease idea. And then when you actually get stuck with it and the pit in your stomach or your chest of that 600. And what, I think I wrote $645 a month payment. Yeah, that's a lot. That's a heavy weight. And now he doesn't have a ton of options because I don't, I mean, I'd love for him to try to sell it on the open market to somebody, but not a lot of people in today's economy

are looking for a 2025 Chevy Equinox. You try it, but you may have to just bite the bullet on this. There's a guy named Elijah. They bought one. Yeah, that's right. But the, somebody buying them. He leased it, right? You know, I think you bring up a good point, too, that when you're excited about buying something

or you're in what feels like a desperate situation and you're buying something, you need to push pause in both cases and wait overnight. And here's the lens, I think, Ken, you're bringing up this very smart. Here's the lens to look at it. Say, all right, is this a good decision 10 years from now? Yeah. If I'm 26 years old, will the 36-year-old version of me be pissed at the 26-year-old version? That's a great way of looking at it.

If that 36-year-old version of me is going to look back and go, I'm going to choke you, you little, you know, and because you're just being impulsive and excited and you like that new car leather smell, all that stuff. And, you know, you got stuck in it, or you're feeling scared and you're scared about nothing. Mm-hmm. You're acting like this is a big deal. It's not a big deal. And that's what perspective gives you when you pan back and you say out there 10 years, 15 years, 30 years. One of the things we found, I found this study like, man, when I first started on this show, like 30 something years ago,

that wealthy people, when you talk to them and interview them, their planning window, when they're getting ready to do something, they ask themselves, how's this going to affect me 10 or 20 or 30 years from now? middle class people say how's this going to affect me three years from now poor people say thank God it's Friday that's right that's right oh God it's Monday yeah it's right and so Zig Zigler used to say poor people have big TVs rich people have big libraries you know so it's a long-term thinking thing and you know so you know don't think like poor people yeah and if you want to be rich people start

thinking like rich people and you'll become rich people in America. That's right. By the way, here's a notion. In the 24-hour pause that Dave recommended, actually go home and run the numbers on what a $645 a month payment is going to do to your expenses. A lot of people don't do that. They're on the car lot, right? And there's a negative emotion or an excited emotion that drove them to the car lot. They got a salesperson, all the things, endorphins are exploding when they sit in the car, when they drive it and they wonder what it's going to feel like, what am I going to look like? and nobody sits there and goes, what's $645 a month going to feel like? Yeah.

Well, the number of times somebody gets a $500 a month raise and celebrates it with a new $750 a month payment. Yeah, that's just, yeah, that's a great point. It's the same exact thing. What are we doing here, folks? The same exact thing, yeah, it falls into all of that. And point being, Elijah, you're not the only one. Most of us have done this dumb thing you did. Yeah.

We love you. We're proud of you for turning it around. Get those two numbers, the actual private sale value and the early buyout, compare those to the $15,000 number to keep the car, and then ask yourself, is it worth it to be set free? If you're only going to save $1,000 or $2,000, drive the thing through the lease. If you're going to save $15,000 or $10,000, then get rid of it today. Our scripture of the day, Proverbs 4, 18, and 19, but the path of the just is like the shining sun that shines ever brighter into the perfect day the way of the wicked

is like darkness they do not know what makes them stumble theodore roosevelt said knowing what's right doesn't mean much unless you do what's right sarah is with us in grand rapids hey sarah what's up hi dave i want to thank you for walking with me every day i listen to on my walks and I pray. So thank you. I knew I was getting some exercise. I got free, but I make about $55,000. And I'm just wondering at what point can I, should I help my daughter buy a car or purchase windows for my house or go on a vacation. When you have the money. Yeah. Yeah. So that's what I was trying to figure out. Um, I think according to you, I probably need to save more, so.

Well, I don't know. I mean, I don't know why what I told you on your walk, but, um, yeah, give us a picture but, uh, I mean, you're debt free. You have an emergency fund of three to six months of expenses, right? Um, I am about 12,000, yeah. Is that three to six months of expenses? Yeah, probably the lower end of that, yeah. All right.

Then you, we have an emergency fund. in place and then do you have any more money saved than that no no not much when you have money saved you buy windows or when you have money saved we buy daughter a car by the way it won't hurt for daughter to be working and you know maybe she pays for half of this car maybe you put in a little help or you put in a thousand two thousand dollars she puts in a thousand two thousand dollar car gets her a little teenage hoopty right right well yeah yeah that's a whole issue but yes Why is that an issue? Well, I gave, when I went through one of my divorces, my ex-husband promised both my daughter's a car.

Well, that's his problem. So I gave one of my daughters a car, but I made her pay half, but I gave that money to the other daughter. So I think then if that daughter was, and she hasn't bought a car. And I'm driving her back and forth to school in Ann Arbor. So it's a lot of driving, and I have a 45-minute commute. You gave her cash for a car, and she didn't use it for a car. Well, she still has the cash, but she just is saving it. How much money does she have?

She has, she's about $6,000. I'll just go buy a dead-gum car. But I only gave her $2,000. Okay, that's fine. She can go buy a car. What's the problem? Your ex-husband hadn't got anything to do with this. That's why we call him out.

Yeah, but I gave the other daughter half of it. I made her pay half the value of that car. Well, so what? You don't have any money. Okay. $6,000 daughter? Get a $6,000 car. Other daughter?

That's the way it went down in the divorce. If your ex-husband wants to put some money in, that's fine, but you don't have any money. No. And your note need to be commuting for a kid. It's got $6,000 in the bank, and you're driving around half of Egypt up there. Ann Arbor is a long way. from Grand Rapids. That's insanity.

I know. Get that kid's butt in a car. Tell her to be up, get up and drive herself down there. Sarah, I think you've got to get to a point where you realize you are going to disappoint your daughter at some point. And when we have real reasons for the disappointment, like Dave's saying, you're just going to have to own that. I feel like you're in this crazy cycle right now, trying to please, trying to make everybody

happy, and you don't have enough money to get windows in your house. Right. So start taking some initiative. I'm going to help you a whole bunch in this one call. This is even better than our walk, okay? So the one call, you ready? Tell your daughter to go buy a car because you're not driving her anymore. And I'll help you go pick out a car.

Okay, now that one's done. And let me tell you what you just got back. Two hours a day, you just got back. And all the gas money. And all the gas. And that's going to help you save up a lot of money for your windows. This is just miracle right here It's a miracle

I'm so glad you called And we also found you some overtime opportunities Or a second job opportunity Now that you're not driving all over Michigan Now that you're not Uber and a kid That has the money to buy her own car Yeah Wow

I love to disappoint my kids when I'm right You know When I'm right or it makes common sense It's like yeah I'm disappointed you right now I used to tell them all the time I'm like look you gotta have something To tell your therapist when you're 30

so we're just going to go ahead and cover that now okay come on everybody needs a struggle everybody needs a struggle everybody needs some dad issues so i'm going to give you some dad issues right now oh that's good answer's no nope nope let me give me help you with that i'm going to open out the big box of nope so true though yeah i mean it's tough and poor little rachel survived didn't she and poor little daniel's done the least they survived it's just amazing they're resilient little creatures they are it's amazing what they can come through yeah poor little thing mommy ain't driving her all the way to dad gum ann arbor from grand rapids good lord a lot of guilt and shame open up a big old box of nope here let me give you a present nope nope happy birthday right

carry is in charlotte north carolina hey carry what's up hi i just had a quick question for you um I recently got married, and we each had a house before we got married, and we're just trying to figure out what to do to maximize, essentially, the growth on my house, avoiding capital gains, maybe. You're not going to have any capital gains. You've lived in it. Well, if we rent it out. Oh, no, I just sell it.

I'd sell it. No details needed, just sell it. Well, the details are I'm making the assumption that you have mortgages on both of these. Correct. Okay. No, I don't need another mortgage. mortgage payment. I got a husband. So that's enough. So now we're going to, now we're going to combine our households, move in one of them, take the money from the other one, pay down

the one you're going to live in, pay off your debts, the one you're going to live in, walk your baby steps with the one you're going to live in from the equity of the old one. If you tell me, I'm wrong, and they're both paid for, and you've got a million dollars in your 401k. I might change my answer. Not that much, but we're in a good spot. Are they both paid for? Are they both paid for? Are they both paid for? no do you have the money to pay both of them off today

no okay then don't keep it because essentially you've defaulted into I borrowed money to buy a rental property that's what that's the default that you backed into and I'm going to avoid that mistake and so that that's I'm not trying to just rush the answer and say there's an answer that your your situation is not different your situation's got its nuances without a doubt

but I'm not going to lead you into borrowing money to buy a rental property. And if you keep a property that has debt on it, you backed into it and had the exact same effect. And I want to point out that when we talk to so many people like this and they think, oh, this is a great investment, and you start running through the actual numbers of what you make, there's not much there for the headache. Now all of a sudden you're a landlord in a new marriage, and it's just never worth to squeeze. I shouldn't say never. It's very rare in the situation you gave, then it would be worth it.

If it cash, you own it cash, well, that's one thing. Well, then there's some actual cash flow. That's exactly right. But the margin are so small on a lot of these stories. Very small. That's an interesting thing, and we don't have the exact numbers in this situation. But let's pretend you had a $500 house payment, a low, low house payment, okay? And you rented it for $1,000.

Right. You're barely breaking even. Barely. Okay. Now, I own $700 million in real estate right now. That's where I get that formula from, a barely breaking even. I would know what I'm talking about is what I'm saying. Yes.

We own a bunch of houses. We own a bunch of commercial property. We own this campus that we're sitting in and so on, okay? And so the deal is that in the real estate world, you have your gross rent potential, the maximum of if it stays rented the whole time, minus vacancy. right minus credit loss which is people who don't pay and you have to remove them and then you never get your money minus repairs the heating and air that goes out the roof that leaks the floor that has a creed you know the mold scare whatever the nine million things are

that's going to go wrong with that house in a year minus taxes minus insurance minus your payment you didn't really make any money you did a lot of work for a hundred bucks And you took a lot of risk for a hundred bucks. And that's where most of these things shake out to Ken's point. We'll be back with you before you know it. In the meantime, remember there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace Christ Jesus.