The Ramsey Show - App - Don't Stay in Debt to Keep Insurance on a Tractor! (Hour 2)

Episode Date: May 15, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. You jump in, we'll talk about your life, your money. It's a free call at 888-825-5225. That's 888-825-5225. Jonathan starts this hour in Eugene, Oregon.

Hey, Jonathan, welcome to the Dave Ramsey Show. Hey, Dave, thanks for taking my call, man. I appreciate it. Sure, what's up? Yeah, so my wife and I are at Baby Step. We just got off Baby Step 3. We're looking towards maybe Baby Step 3B, or I'm just trying to decide whether to do the home, you know, saving up for a down payment for a home now,

or if we should start putting towards the Step 4. You know what I mean? Just because I know you have said once you get out of debt, that maybe possibly continuing that snowball to save up for a down payment for a house and putting off the retirement for just a little longer. Sometimes people save for a down payment while starting their baby step four, and sometimes people temporarily take a break between their emergency fund and starting for retirement in order to save for a down payment now you don't want to take that break for very long a couple years maybe three

years at the most so what which one are you thinking of doing either one's fine well i think right now our take-home pay is only around $4,000 a month, so we can probably save the $1,000 to maybe $1,300 a month for a down payment. It'll probably take us a couple of years. The only thing is I don't want to take too long with the potential equity in a home and all that kind of stuff. Yeah, I don't want you to take too long either. Well, I'm not freaking out about it. I mean, if it takes you two years and you save $30,000, that puts you in a pretty good position, wouldn't it?

Yeah, yeah, with a conventional loan, 15-year fixed rate and all that stuff. And we're in a pretty good position right now with company housing. We only pay like less than $200 a month for rent. So I put this in a nice position. I just was looking to, I know when it comes to, and I know I don't want to exalt the credit score and everything, but right now, since we just got out of debt, our credit score is like a 798. And at that time that we would be buying a home, our credit score is probably going to be down to nothing. And so when it comes to the underwriting process of a conventional loan, I know there's some constraints there when it comes to prepaying mortgage.

I think it's mortgage insurance or whatever, what that's called, and what those constraints are having up to 18 months is what I was told, of basically a mortgage payment saved up. No, that is not true. Okay. Maybe you can explain a little bit of that. Okay. Number one, manual underwriting is what's required if you have a zero credit score.

And that is simply a mortgage company doing their job of underwriting the loan, meaning they verify your employment. They do a VOE. They verify the deposit that you have the down payment of VOD. And it's a manual piece of paper or a manual transaction. It can be digital. But, I mean, instead of just looking at a simple number called a credit score, which a monkey can do, and make the loan. I'm 58 and 18 years old 40 years ago i got my real estate license when i started selling real estate in 1978 that's how loans were done everyone got a loan that way no one got a credit score loan there was no such thing

you actually had to look and see if the freaking borrower had a job. You know, nowadays these characters don't even do that stuff. So that's all manual underwriting is. But there are no more constraints on manual underwriting than on a traditional credit score loan if the mortgage company knows what they're doing. So get in touch with Churchill Mortgage, and they can walk you through that when you're ready to do it. But, you know, if you have a reasonable down payment, you've been on your job a couple years, you know, you paid your landlord earlier on time, and you've got all this debt in the past that you've paid off on time,

that's all still going to be hanging around there on the credit bureau report, which they, in a manual underwriting situation, they actually pull the credit bureau report and look at what happened. They don't just look at the credit score. They go, well, look at there. There's a human being. And look at what they did. They paid their bills or they didn't, you know. And they actually do underwriting.

I mean, it's a really neat thing when bankers do banking properly. So that's what it is. And no, they don't require that you have 18 months of a house payment extra in savings, which you probably would, though, because you're going to have your three to six months of expenses in your emergency fund set aside, which is probably 18 months of house payments. You know, so you probably have that in addition to your down payment anyway, but that's not a requirement of the underwriting process, so of a properly done manual underwriting process.

If you are self-employed, they're going to require that you have two years of tax returns showing that you actually make a living at your business, because not all businesses actually are profitable, and that's why they do check that. But again, that's part of a normal underwriting process from back in the day. It's an antiquated thing that people still know how to do if they're seasoned mortgage people and actually know what they're doing in the business. Stephanie is with us in Kansas City. Hi, Stephanie. How are you?

Hi, Dave. I'm doing well. Thank you. How are you? Better than I deserve. What's up? Well, my husband and I have a first mortgage that is about $156,000 at 3.75%. Before we found you and got Gazelle Intense, we decided that we were broke, we had no money, we made a bad call and got a second mortgage at about $36,000 at 7%. That was a combination of some credit cards, we paid off a small car loan with that, and some home improvement properties and whatnot. What's your household income? We have $134,000.

Okay, that's a Baby Step 2 item. All right, you're paying this off as Baby Step 2. So that's my question is we have the second mortgage wrapped up into our second mortgage. We have about $69,000 wrapped into the Baby Step 2. But my question is, you know, right now our first mortgage is a 30-year note. We are considering refinancing to a 15. No.

No? Just keep it within the Baby Step 2? Yeah, keep it in the Baby Step 2. Here's the thing. If you didn't have the second mortgage in the discussion, you would not refinance your first mortgage when it's a 3.75% and a 4% whirl. Yeah. You would just simply pay your 30-year mortgage like it was a 15.

You calculate the 15-year payment and the difference in that and the 30-year payment, and you pay that much extra every month, and voila. Your 30 will pay off in 15, and you don't have to go to the refinance costs and take a higher interest rate in order to get a 15. Okay. So that's what you do with your big mortgage. And your second mortgage that was all a bunch of consumer borrowing crap anyway needs to lay down there. It's less than half your annual income, so it lays down there in baby step two. It's probably going to be the last thing in your debt snowball. But you'll get there.

You can do it. You're paying attention. You're in attack mode. You got this thing dial get there. You can do it. You're paying attention. You're in attack mode. You got this thing dialed in. You can do it. You got this. I'm proud of you. This is the Dave Ramsey Show. This is big news, guys. You need to stop and listen. The Fed decided not to raise interest rates.

That means you've got a small window of time before rates rise again. Here's the deal. Most people are paying too much interest on their largest expense, their home. So you're freaking crazy if you don't take 10 minutes to call Churchill Mortgage right now and see if they can save you money before rates rise again. A mortgage through Churchill could save you thousands, or better yet, reduce the time until you're debt-free. Can you imagine how it would feel to no longer have that payment looming over your head every month? Just go to ChurchillMortgage.com or call 888-LOAN-200.

Their team of experts will give you more clarity about your options and more peace, knowing you're saving significant money in the long run. Call 888-LOAN-200. and more peace knowing you're saving significant money in the long run. Call 888-LOAN-200. That's 888-562-6200 or churchillmortgage.com. Ben is with us in San Diego. Hey, Ben, welcome to the Dave Ramsey Show. Hi, Dave. How are you today?

Better than I deserve. What's up? I think your show is a fantastic, real quality show. Thank you for doing what you do. Thank you. I had a couple questions. I was calling in regards to an investment property that I've held for about 14, 15 years. It's Waterfront. It just hasn't been giving me a very good return. I gross about $34,000 in rental income every year, and I'm paying about $13,000 HOA fees, $5,000 in taxes,

so it maybe nets me out $15,000 a year. The value of the place is maybe worth, let's say, $540,000. So it's really grossing me nearly like a 3% at the end of the day. But it's a waterfront unit, so it's been kind of hard to let go of thinking. I paid $400,000 for it, and I was thinking of selling it. How long have you owned it? 14, 15 years. Well, it hasn't gone up much. What's that? And I was thinking of selling it. How long have you owned it? 14, 15 years.

Well, it hasn't gone up much. What's that? It's only gone up $100,000 in 15 years? Yeah. It's not done that great being on the waterfront, huh? No. I'm a little shocked for San Diego. I would have thought Zoom Zoom.

No, no. This particular unit is actually in Florida. Oh, okay, okay. So you're in a market where there's a glut then. There's a ton of supply, so it's kept the prices down. Yeah, the inventory. There's just too much inventory. Exactly, exactly. Okay.

So this property as an investment property is not fun. No, I just figured it was a beautiful waterfront, but I just held on to it thinking it was going to take off. So my debt right now on my current home is $590,000. The value of my current home is $1.3 million. So I have roughly $700,000 in equity um my position right now i have in in retirement of 600 000 roughly 401k two million two million dollars in mutual funds that are non you've done a wonderful job congratulations okay so this is a property that has not died but it's just underperforming there's three places we get a rate of return on real estate.

One is cash on cash, which you've established is about a 3% rate of return. Two is the increase in appreciation, which we've established is lousy because high inventories have kept prices down, so you've only had $100,000 in appreciation, which would be a 25% rate of return over 10 years, averaging 2.5%, right? Does that sound right? So if we have three on cash and we got another 2.5% in appreciation, give or take, I mean, I'm using round numbers here, but that's going to be pretty close, then we're at 5.5%. On top of that, you can depreciate the condo if you're renting it,

and I assume you have been. I'm doing that. And so you've gotten some depreciation on that. That might have yielded you as much as another 1, 1.5%. So you're probably making 7% on your money overall. What's called an internal rate of return, an IRR, that encompasses appreciation cash flow, actual cash flow, net cash flow, and the benefit of having the tax shelter, the actual cash benefit of the

tax shelter. You can put all three of those numbers together. You get an internal rate of return. Most of the properties I own that I bought for investments, A, I bought them cheap. B, we crack the whip on the property and make it perform. Most of them are in the 17% to 20% IRR. Most of them are around 8% to 10% cash on cash. And so, you know, if I owned that property, I'd sell it.

You would? Yeah. I mean, just on the numbers. Just on the numbers. So if you sold it, would you just then wipe out, should I wipe out the mortgage that I have right now? Sure. Yeah. And you don't think I should go and put that into the market and put it this way?

No. 2.5, 2.6 million? No. And here's why. Because I think if you had your home paid off, you would not borrow money on your home to go do those things. And balance sheet-wise, it's the same thing. I've got $500,000 sitting in the middle of my kitchen table from the sale of the condo. Okay?

If I put it in the market, it's as if I have borrowed on my home to put it in the market. Yeah, no, I get what you're saying. It just seems like a lot of money to be sitting in equity in a home of $1.3 million. Yeah, that's a nice house, and you're in California. I mean, it's just the way it is. So, you know, your net worth, it's not disturbing to me with your net worth. You're okay. I would take the increased cash flow that you get from getting rid of your mortgage

and use that to build up some cash to buy another property that performs well if you like real estate. But the aesthetic appeal of the beachfront property, the waterfront property that you've got in Florida, has not panned out in the math. And the only reason it hasn't probably is because they overbuilt the market. And high inventories, high supply has kept the prices down. Anytime there's a glutton supply in anything, goods or services, it keeps prices down.

And it's that simple. And a shortage, and if you artificially raise prices, then you just drive demand down. So that's what's going on. Hey, thanks for the call. Appreciate you joining us. Open phone's at 888-825-5225. And it's pretty simple. All right, Kyle is with us in Indianapolis.

Hey, Kyle, welcome to the Dave Ramsey Show. Thanks, Dave. How are you? Better than I deserve. How can I help? I've got a question for you. I'm 22 years old. I'm in baby step two.

My income is between $125,000 and $130,000. I've got $25,000 in student loans. The other debt I have is a truck payment that I'm required to have for my job. No, it's not. You're not required to have a car payment. You are not required to have a car payment. Stop. You're not required to have a car you are not required to stop you're not required to have a car payment in your job that's not true i don't understand what you're saying i said it you're not i get a car allowance and they give me a certain set of vehicles i know

i know but they're not they don't require car payment they give you a car allowance and they require that you have a certain car you chose to cause that to happen with a car payment but they do not require a car payment yeah i understand that i was just 22 years old when i took this job as i am now so i didn't have you know thirty thousand dollars saved up to go buy the vehicle so that was kind of my question what your advice would be to get to that point to where you're paying cash for that vehicle and they require me to get a new one every three years. So saving up that amount for me to keep up with the requirements. Brand new?

No, they don't. They require you drive a car that is not older than three years old. Yeah, so if you bought a three-year-old. So you made a set of assumptions again. You've got to stop that, dude. It's killing you because you decide to go buy a thirty thousand dollar car and got yourself in a pinch and you're destroying it because you live in a car don't you i do yeah and so whatever you drive you are destroying its value you're a road warrior

and so you've got to this is a business overhead problem you have chosen to destroy a thirty thousand dollar vehicle when you could have chosen to destroy a fifteen thousand dollar vehicle and still met all the requirements and trade every year trade once a year and that's what you would recommend to do a two-year-old listen do you want to destroy thirty thousand or fifteen i understand that's it so you get the minimum vehicle that will do the job and meet their requirements and that's going to be a two-year-old vehicle you drive it for a year run the wheels off the stinking thing and it goes way down in value because you're putting 50 000 miles on a car probably aren't you yeah right on it's fine with 50 000 yeah and i could tell i mean that's this is

who requires you to do this kind of stuff is people that run the wheels off cars. And so what are you selling, pharmaceutical sales? No, I'm selling construction equipment. Good, good. Okay, good. Well, you're making bank. You've got a great career. But don't take these general guidelines they give you and let that be an excuse for you to lose this much money because you're losing fifteen thousand dollars a year on the transaction you're talking about.

So you need to trade down in cars to a two year old car. Get the cheapest possible thing that will do the job. That's reliable and comfortable. You live in the cars. It needs to be comfortable. Certainly got to be reliable. Certainly got to be presentable to the clients. That's what they're wanting.

And then they're giving you this big car allowance. But they do not pay your car payment if they fire you and you still have the car payment. And they did not require you to get a car payment. They did not require you to buy brand new. Those were rationalizations that you used. We'll be right back. In the lobby of Ramsey Solutions, Aaron and Angel are with us. Hey, guys, how are you? Great, Dave. How are you?

Better than I deserve. Welcome. Where do you guys live? Los Angeles, California. Wow. And a trip all the way to Nashville to do a debt-free scream. Wouldn't miss it. Love it.

How much have you paid off? $233,000. Woo-hoo! How long did this take? 40 months. Good for you. And your range of income during that time? Started at $150,000 and ended at $210,000.

Good for you. What do you guys do for a living? I license production music. And I'm a business analyst. Very good. Very cool. business analyst. Very good. Very cool. Great careers. Very cool.

What kind of debt was the $233,000? So we are normal. $22,000 was credit cards. $38,000 was cars. And the rest was all mine. Student loans. Student loans. Okay.

So you were normal. You're not normal now. Now you're weird. Yes. Now you're debt free. Okay. Very cool. How. So you were normal. You're not normal now. Now you're weird. Yes. Now you're debt free. Okay. Very cool. How long have you two been married?

Four years in October. Okay. So eight months after marriage, you look up and you go, there is a pile of debt here. We've got to do something about it. Forty months ago, what lit your fuse? There was a couple of events that happened we were getting off a plane from our honeymoon and i was terrified that i was going to get into this place where i was never ever going to be able to spend money again i'm the free spirit and i remembered being in the

airport looking for a souvenir in belize and i was looking for something just to buy, just to buy it, and everything said unbelievable on it, and I didn't want that. And I'm like, so I got a mug, and it was one of those representations of something that was tangible that I just thought I was going to be punished for the rest of my life. And when we got home and we got on the budget, it wasn't like that. And in fact, it felt like I was getting a raise. I was given freedom, permission.

You give yourself permission. Yeah. To spend and to enjoy, but also to sacrifice to win. Yes. And you did all of those things. And we learned a lot also, Dave. We had a spiritual retreat before we got married, and we talked about finances,

and we talked about the relationship that we both had with money prior to that. And we learned about the debt that she had and that we had and that we became a team. And she's right. When we got off that plane, a team. And she's right. When we got off that plane, we became gazelle and tents together. Very cool. Very cool. So you got off the plane from the honeymoon.

You said, okay, we're going to attack this. Yes. And then what did you do? What is the secret to getting out of debt? A couple of things. We did have a few God shots, Dave. I wanted to let you know we were in our bedroom one day, and a DVD camed came out just fell

out of the closet and it was one of your dvds i don't remember where i got it from someone gave it to me obviously seeing my spending habits right okay and you threw it in the top of the closet hoping that he would never see it again that's a good point it was way up in the corner and the earth california earthquake shook and out comes the dvd yes so um yeah it was just those god shots a couple of things that really helped us obviously the budget communication uh celebrating the wins the the small things about halfway through our our debt journey we we created these paper chains and we linked them together. And after every thousand dollars we paid off, we came home and we broke the chains together.

And I sang Hank Williams to him and drove him crazy. It's just about... Music licensing lady singing Hank Williams. This is awesome. And I don't sing. In LA. This is great. Yeah, this is sing. In L.A. This is great. Yeah, this is, oh, that's so punishing.

That's so funny. And we inspired our community. I had a bunch of girlfriends over for dinner one night, and we had just put all the papers together, and I made it kind of like an arts and crafts moment, and I have pictures of my girlfriends we're all hanging these chains up so when he came home we really looked around it looked like a chandelier of paper and we're like wow this is insane those are each representing a thousand

dollars and we decorated our home with that and you got serious about getting that garbage out of your house and it was in an annoying place so it hit our heads and you know lots of good visual reminders yeah very very cool so which dvd was this that fell out of the closet it was financial peace one of the financial peace class dvds okay like an intro the intro piece okay all right and then that got you to poking around finding the podcast or whatever yes yes okay and. Yes. Okay. And lots of long commutes in L.A. You had lots of them? Yeah. That's how that works.

Okay. Well, congratulations, you guys. Very proud of you. Who were your biggest cheerleaders? Well, my boss, Anna Maria Hall, every time we went out to lunch, she's like, until you're debt-free, you can't buy me lunch. We were able to just take her and her boyfriend out this weekend

to a really nice, beautiful restaurant in Malibu. It was freedom. It's just the freedom. I just want to give a shout out to my mom too. She was a huge cheerleader for us as well. Very cool. Good for you guys. That's good.

That's good. Way to go, man. You did it. How's it feel? You don't have any payments. Feels like hope. Surreal. It feels like inspiration.

I mean, $233,000. That's like you lost 300 pounds or something. My gosh. You know, it's just crazy. Well, we got a copy of Chris Hogan's Everyday Millionaires book for you because that's definitely the next chapter in your story. I mean, you're making a couple of hundred, and you know how to handle money now. You know how to work together now. You can do anything.

There's nothing going to hold you guys back. So proud of y'all. Well done, heroes. Thank you. Thank you. Thank you, Ramsey team. Excellent job. Erin and Angel, Los Angeles, $233,000 paid off in 40 months, making $150,000 to $210,000.

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Touchdown, baby. I love it well done you two very well done fabulous man awesomeness that is very good stuff rosemary's in det. Hi, Rosemarie. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you for taking my call. Enjoy the show.

Thanks. I believe as you do about money and how to save it. Thanks. How can I help? My situation. I am 59. My husband is 60. I want to retire sooner.

He wants to work another two or three years. We have a home value that $2.5 to $3 million paid. Wow. I have a million dollars in cash. I have $500,000 in SEP that we can take out. We own a business. Our business has about $300,000 or $400,000 in cash that we'll have to withdraw without even selling it. Now, here's my issue. In 2008, I told my investor to take all the money out. I was one of those lucky people that yelled and screamed at him, told him, take it out. I don't care what everybody else is doing. I got out with not too much hurt.

The problem I'm having is I can't seem to make this money work for me. I know how to save. We even have a million- dollar annuity that's going to be available to us at 65. It's about a $90,000 we'll probably get. Well, you've done a wonderful job with money. Congratulations. Well, you got two options. You got two options. You can't leave it in cash. It's killing you. Okay. Yeah. It's costing you a hundred dollars. It's costing you a hundred thousand dollars a year. It's costing you a hundred,000 a year. It's costing you $100,000 a year, leaving a million dollars in cash. So you need to go buy some real estate that makes money and pay cash for it,

and real estate in a good neighborhood that you like and that's going to be rented and is going to give you some rent. You could do that. The second thing is you can just study and learn a little bit about the market. I did not take my money out in 2008, and I did not get hurt. Because now, what happened was the Dow went from $13,000 to $6,500. It went in half. You probably remember that.

You know where it is now? Yeah, I do. Four times that. I know. I didn't really do the right thing, in essence. Yeah, because nobody gets hurt on a roller coaster except those that jump off. So it wasn't like you timed the market wisely or something. You missed a downturn, but you missed the money going up fourfold or double from when you took it out.

You would have doubled your money to now from when you took it out. So you need to get comfortable with the actual history of the market, and then that will alleviate your fear. This is the Dave Ramsey Show. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. It means even if you mismeasure or you pick the wrong color, they will remake your window blinds for free. You get

free samples, free shipping, and new promos every month. They'll save you even more. Always use the promo code RAMSEY. It's magical. Alright, Jeanette is in California. Dave, I've got a couple of friends that were advised by financial planners not to open a college savings account like a 529 for the children so that it won't count against them when they apply for financial aid and assistance. So if you have a financial planner that tells you not to get a job because that way you can get welfare, what kind of moron is this?

They were instead told to put their money into their own retirement. My understanding is that when you apply for financial aid, they look at the assets of not only the child, but also the parents. Please shed some light on this. Yeah, you've got some financial planners that are morons. You don't tell people not to save money so they can act like they're poor to get financial

aid. That's ridiculous. Save money and send your kid to school why is that a hard formula why does everyone some want some kind of trick or shortcut there's not i'm not going to pose like i'm broke fraudulently when i'm not broke in order for my kid to get financial aid. Good Lord. That's ridiculous. Hope I wasn't unclear. Edith is with us in Houston, Texas.

Hi, Edith. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? So my question is, last March, my husband and I purchased a tractor, and we paid a tractor,

and we paid $26,000 for it, and of that $2,000 was for insurance, and it was insurance straight through Kubota. So we are new listeners and we're down to our last debt, but we're not sure what to do because when i try to make the last payment they told me that i'd be kind of downgrading on my insurance and that i'd have to get either a second policy through them or through another kind of insurance are we talking about um just tractor insurance so to replace it or to fix it, any repairs, anything that happens to it. Oh, you bought an extended warranty. Um, they didn't say it was a warranty.

They said it was insurance. Well, that's repairs. Okay. And it's not if the tractor gets stolen. You have insurance through your homeowners or your farm operation for the tractor gets stolen, right? So the tractor is not at my house. It's at my mom's property. That doesn't matter.

You bought insurance from your insurance agent on the tractor being stolen, didn't you? Yes, but my insurance will be voided if I pay off the loan early is what they're telling me. One more time did you call your insurance agent and buy insurance on your tractor in case it gets stolen no i not through all state no i bought it through the tractor okay cancel the crap with kubota and pay the people at kubota off they've combined some kind of bogus extended warranty with some kind of coverage. And I'm not sure you even have theft insurance on your tractor. Well, they said I do.

They said that the only difference would be that if anything happens to it, I lose out on a replacement tractor. Okay. That they would be able to replace it. They are awfully desperate for you to keep this insurance and stay in debt to them aren't they yes and that should be a weird yeah you need to get on i mean do you guys have a farm operation or is this like a gentleman farmer tractor no it's it's just a um it's it's for my mom's property. I was helping her clear the property. Yeah, okay.

So it's a gentleman farmer operation at most. We're not really doing this as a business. No, not at all. Go online at DaveRamsey.com and click on insurance and price your car and your homeowners with an independent insurance agent and price tractor insurance and pay Kubota off and tell them to jump in the creek. Okay.

Because you're getting ripped off. Okay. Okay. You got ripped off at the purchase. You paid way too much for this insurance because they rolled it and they combined it together with basically what is an extended warranty on the tractor the tractor already had some warranties and if it's a brand new kubota tractor they actually make a very good tractor and so if it's a brand new kubota tractor you probably had almost no

trouble with it uh and likely won't they're very reliable so um no you do not buy insurance from the manufacturer on your tractor and you definitely don't stay in debt in order to keep the insurance cancel the whole thing get debt free as soon as you get insurance on your tractor for theft and you self-insure through the repairs that the standard kubota warranty does not cover which is not a bad warranty either if you bought a brand-new tractor, which, by the way, you should not have done for a gentleman farmer operation. Probably shouldn't have done it, period, but you should have bought a tractor for about half that much money that would have done the exact job used,

and it wouldn't have gone down in value so quickly. So side issue. But, you know, we're there now. So pay the thing off, get clear, get your basic insurance in place with a good property and casualty agent who can shop among several different companies. They're called an insurance broker, and they'll put good insurance on your tractor so that if it gets stolen or there's a fire and it burned or something like that just like your car just like buying car insurance think about it this way if you bought a new car from ford and they covered your car and it cost about five times more for the insurance

than you could have bought the insurance from an insurance broker for. But it includes all this extra stuff that it covers in case the car breaks down. What did you buy? You bought an extended warranty bundled with an expensive car insurance policy from Ford. That's what you bought. And that's exactly what we're talking about here. That's what Kubota did. I didn't even know they did that, but that's what they've done here. Anytime these insurance companies start bundling stuff together,

you can pretty well figure out they're getting ready to screw you there's one exception to that and that is if you buy your car and your homeowner's insurance at the same place oftentimes you can get a discount on that but other than that if they start trying to sell you um long-term care insurance for a nursing home but it includes life insurance. Eh, eh, eh, eh. Danger, Will Robbins. You're getting ready to get screwed.

Okay? Every time they put stuff together in the insurance world, it is for their benefit and their profit. And these companies that sell extended warranties on their products make more money on the extended warranty than they do margin on the product a lot of times. So that's why when you can't go in Best Buy, you can't buy a pencil at Best Buy without getting an extended warranty than they do margin on the product a lot of times so that's why when you can't go in best buy you can't buy a pencil at best buy without getting an extended warranty offer on it i'm amazed at what you can get an extended warranty on i mean a bick lighter they will

give you an extended warranty on it it's it's ridiculous it's crazy but they figured out where their money is best buy doesn't have much margin in those TVs. It's really a really good buy on the TV. It is a Best Buy. They're not kidding. I mean, it's a really fair price when you go in there and buy the TV. But try getting out of there without borrowing money or buying an extended warranty. You look down, there's a salesman hanging on your leg while you're trying to get in the car.

It's ridiculous. They wear you out trying to sell you a credit card or extended warranty you can't get in and out of victoria's secret with underwear without somebody trying to sell you a credit card because they pay them more for selling credit cards than they do selling underwear it's the same thing they know where their money is made and you just gotta look if that if they're giving you this much grief about it it's because they make money on it it's that simple they wear your butt out you know you just but they make a ton on this stuff the credit card i mean get 10 off at macy's oh my god 10 off so you can make

5 000 on me for the rest of your life in a chokehold. All because I got a pair of socks at your place. Oh, my gosh. But that's exactly. They figured out where their money is. They make more money on extended warranties and on car offering credit on this stuff than they do. And now insurance will add to the list with the old Kubota tractor here. Wow. Who knew?

But that's the way it is. Same thing is true with a car. They're going to have extended warranty. They'll wear your butt out. And they make a ton on it. Especially on a used car, extended warranty. Stay away. Warning.

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