The Ramsey Show - App - Finding a Real Estate Agent You Can Trust (Hour 1)

Episode Date: October 2, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Jim is with us here in Philadelphia. Hi, Jim.

How are you? Good, Dave. Thanks for having me on. Sure. What's up? My wife and I work currently in Baby Step 2. We started this time last year with about $160,000 in debt. We've been gazelle intense and paid off $100,000 as of this month. Yes.

Sold my brand-new pickup truck, sold a race car. Wow. Sold everything. Wow. So we have an interesting situation. We have one child, and we're looking to expand our family. However, we're going to need to do IVF. We still have another $66,000 left to pay off.

What is your household income? We're making about $140,000 a year right now. So you did $100,000 a year, but a lot of that was from selling stuff. Pretty much. What's the math telling you that it's going to take you to do this other $60,000?

If we continue on this course, we've literally sold everything, so the rest of it's just going to be working really hard. I think it's going to be probably about another year, maybe a little bit more. That's what I was thinking. Okay, cool. And so what is the pricing model of IVF that you guys are looking at? Well, we actually met

with a doctor a few months ago and got a ballpark of about $20,000. Just, you know, we haven't signed anything or started any processes yet. We're just still kind of shopping around. But 20,000 is what we're looking at. We've spoken with other couples, and it looks like it was kind of around there. Let me give you a little insight, okay? This comes up a lot because babies are important.

Having kids is a big deal. It's an emotional thing, and it causes people to change their financial directions and to violate things and everything else. So let me tell you, I absolutely know nothing about medical things. I am a medical idiot okay but i have actually been involved in about this decision probably a hundred times over the years and what i am hearing even as late as last week with couples that we are coaching on this is that when they press in they find several different pricing models and prices. You don't just accept the first opinion you get on how you go about this. Okay? Right.

In other words, I heard the other day I heard $35,000 for one pricing model, but that was like a guarantee as many times as you need to do it until you get a baby, right? Mm-hmm. Okay. Well, that's not one we're going to do. Okay? Yeah. And then I's not one we're going to do. Okay. And then I heard the other end of the spectrum. I'm hearing, you know, single tries as low as 7,500 a try.

And but they want to sell you packages and or guarantees or whatever because they know you want a baby and they want to help you get there. I understand that. I should probably add that this is also going to be for a genetic disease, so it's going to be a little bit more than just we're not having issues getting pregnant. It's just we're looking to prevent disease. Okay. That's cool.

I got no issue with that. But my point is it's still uh i don't think that's going to change the equation okay uh if i'm in your shoes i want you to not just accept carte blanche that there's one way oh not not i mean not medically one way but pricing structure and approach to this paying for it there's only one way to do this is the twenty thousand dollar way and i've talked to friends, and that's what they all say. It's all $20,000 because they all went to the same doctor,

and it's all $20,000. I want to learn about the $7,500 idea and try that a couple times. I'll gamble a little bit with the medical profession if I'm in your shoes, in other words. And that helps me if I'm in your shoes go, hey, we're going to take a couple months off, and we're going to take $10,000, and then we're going to go back at it again on the debt while we see how that works out. And then if we need to stop again and go at $10,000 and then go back at the debt again, that'll be fine. Yeah.

Okay. My wife will be very happy to hear that. Yeah. I mean, I would do that. But don't just accept the one guy as the only way to attempt this, okay? Not in terms of the medical procedure. I'm not talking about that. I don't know anything about that. But in terms of the pricing structure, and it has to do with, you know,

whether they guarantee, you know, multiple tries, you know, you buy a package of five or whatever, all that kind of stuff. I've heard all kinds of ways of getting at this, and it's kind of weird to talk about it that way, but that's really what's going on. And so just learn a little bit more, push back, get some other opinions, some other pricing structures, and then based on that, yes. You know, if you want to take a month or two off of Baby Step 2 and, you know, have the cash to do whatever you're doing and then go back at the Baby Step 2 again.

And then if you have to stop again and try another time, that's fine. I don't have any issue with that. But do we just say, oh, no, it's $35,000 like this guy said the other day, which is absurd, and we're just going to stop everything and go do that because we've completely lost our minds. And because this is an emotional subject and it's very, very important to have babies, and I'm completely with you. Babies are the best things on the planet. I mean, it's awesome. I love it. So, you know, that's what I would do.

If I were in your shoes, that's what I would do, is just learn more about it, and then based on that structure, you're starting and stopping of your baby step two. Thanks for calling in. Open phones at 888-825-5225. Emilio is with us in Atlanta. Hi, Emilio. How are you? Hey, I'm good. Hey, how are you doing, Dave?

Better than I deserve. What's up? I knew that was your response. I was just calling to see about something about the house that I'm living in. I'm going to try to give you a rundown real quick. My wife, her great-great-wait, her great-grandma had passed away, and basically everybody that was living there, they had to leave because they couldn't pay the bills, and they didn't know what to do with the house.

They just let it go. And my rent, my lease ended up. So me and my wife, we basically just moved in over here. But she died without a will or a deed or anything like that. So we've basically been living here almost a year now. But the mortgage is still in her name. And I'm trying to figure out what I should do with the house.

I don't understand. Do we get in our name, sell it? How much is owed on the mortgage? It's $95,000. Okay. What's the house worth? They said, well, on the paper, it's Nation Star. They said it's worth $120,000.

I mean, if you put a sign in the yard what would it sell for say that again if you put a sign in the yard what would it sell for um um i don't know uh 95 000 100 000 i'm not really sure it's not a deal i don't know this is this is my first you know time even living somewhere like that, like owning a house. I kind of don't understand. Okay, I'll tell you what. We're going to walk through this together, but it's going to take us a minute, and I'm out of time heading into a commercial break.

So when I get back, I'm going to figure out whether you keep this house, and if so, what are the steps you've got to do to get it, and I'll help you with that. This is the Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and has struggled to make ends meet, but they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance and the other doesn't. Big difference. If one of the parents die, and that does happen. Their well-being would be destroyed.

Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. All right, we're talking with Emilio in Atlanta. His great-grandmother died.

Family couldn't keep up the house. He's moved in it and been paying the mortgage and wanting to know what to do, whether he should fool with this or not, and whether he ought to try to buy it or work it out or however. Is that a fair summary of what you told me so far, sir? Yes, sir. Okay, so the granny owed $95,000 on the house. That's what it takes to pay the mortgage off, correct?

Correct. Okay. And the next thing you need to do is you need to talk to a real estate agent and find out what this house is actually worth. Because right now you don't know. Yeah, I don't know exactly who. It's my wife's great-grandma. So I know when I look on Zillow, it says it's $103,000,

but I don't know if that's even correct or not or nothing like that. Zillow's not always that accurate, but it's probably not that far off. We could use that for discussion purposes, okay? If you found a house that was worth $100,000 and you could buy it for $95,000, that really wouldn't be that great a buy. That'd just be an okay buy. It's not like you're getting a great great deal to where you just went wow that's the best deal ever right this is i'm not sure if i'm like i even get kicked out could someone get it or should i leave or should i move or should i go back renting or well where

do you want to be long term with it do you want to own it um well my wife she we kind of do want to own because we i got a daughter she's four and my wife, we kind of do want to own because I got a daughter. She's four, and my wife, she's in school now. So we're just trying to kind of settle down right now. Have you got that? We like the area. Like I said, my wife's great-grandma's house. She's been here her whole life, so she likes it.

It's like about two and a half, three acres. And it's kind of in the country little part of Atlanta. Gotcha. Okay. And how old are you two? My wife, she just turned 20 yesterday, and I'll be 21 in a couple days, so we're both 20 now. And you got one child, you said, and how much debt do you have?

We don't have any debt. Okay. And what's your household income? I make about $30,000 a year. I'm trying to also get in school, but I had to kind of work with the circumstances. How much are the payments on this house? I pay about $617 a month. And your wife doesn't work?

Mm-hmm. Okay. That's pretty tight on your budget. This is very tight on your budget. Yeah, and we just found out about you not too long ago. One of my friends from church, he recommended me to start listening to you. So now we actually kind of made a budget and stopped going out to eat, and we're already kind of you know trying to start it

off a little better and good good for you okay well here's the thing if you wanted to buy the house the only way you can buy it is the uh the relatives that are involved that would be the heirs uh this would be great-grandmother's children or grandchildren that would be the heirs since there was no will. Someone would have to petition the court. You'd have to get a lawyer and go to probate court, and probate court would have to rule that the house could be sold and would assign someone to sign the deed as the seller to be able to give it to you. You're going to have to have a court action to do that.

That's going to cost $2,000 or $3,000 to get all that done. Okay? I don't think you need that expense right now. Yeah, I don't. With all the numbers you gave me and the situation you're in. Now, is anybody going to throw you out? As long as that mortgage is paid paid i doubt you're going to get thrown out yeah because that's what i was thinking too should i because i also kind of want to

actually start even going into real estate because i do construction that's what i do so i kind of this house is kind of it's not beat up it's kind of beat up since like the last few years she yeah she has like other relatives staying there kind of beating it up so i mean i don't know if it's like maybe worth more maybe you know i'm saying maybe we can flip it and get another house or you can't flip it unless you become the owner of it yeah and that's what i'm saying like i do i need to you'd have to see in a state my instinct to just hurry up and no my instinct is where should i wait tell you what I would do if I were you. I would be willing to walk away from this house someday when you get – I would treat it like you're renting it.

You're probably not going to ever bother to own it, and if you do, you're going to go through a lot of hassle to become the owner going through this court action that I'm talking about. Okay? So what I would do is pay that rent or pay that payment as rent i would not spend any money on this and i wouldn't fret about becoming the owner today it's inexpensive rent in the atlanta area it's a place you like living any money you spend on it just say to fix it up is money you're probably going to lose you're probably not

ever going to become the owner of this thing yeah it's going to be it's going to be a really strenuous process with the courts to become the owner of this because we don't even know who the heirs are yeah well i know a couple of the the heirs it's not that many and um well that they actually even know about it like i said we've been here for a year so i don't know like should i i'm not like should i be worried that i'm still staying here paying it or should i just keep paying it and no because that's not about it that's you shouldn't be worried because it's not bad rent yeah but i'm just worried like can't nobody come and kick me out because it's not in my name? Yeah, they can come kick you out.

The people that own it can. They're the heirs. But they'd have to all get their crap together, and they're far from doing that. Yeah, and they're far away. They're, like, in another state. Yeah, but they're not worried about this is what I'm saying. Yeah. They're not worried about this at all.

It's not bothering them one way or the other. They're not going to get any money out of it when it sells because it's not worth much more than it's owed on it. If it was valuable, now there'd be some sharks in the water circling, right? But it's not got any value because it's not worth anymore. So you're not going to get kicked out. But someday you're going to want to move on. So don't spend a bunch of money on it because someday you're just going to walk off and leave it. Yeah, because I've already done painted and scraped up the floor, did a little something, you know, to make my wife a little happy.

Whatever money you spend to make her happy, money is gone when you leave because there's going to come a day two years from now that you guys are just going to stand up and walk away, or you're going to go to the trouble to get the heirs to take the thing to probate court and get the deed transferred to your name and you can probably do that but again it's going to cost you a couple thousand dollars and you'd want to make very sure that the property was worth more than the mortgage before you did that and um and you don't want to spend a bunch of money renovating this house because

you're going to very likely move on in about two years but in the meantime i just look at it as cheap rent to a place you kind of like living and uh you know 600 bucks rent in atlanta is not a bad gig on two and a half acres so i'm sitting there if i'm you for now uh it's not hurting anything no one's you're not stealing anything you're not doing anyone harm the mortgage company's getting paid they're happy the relatives that aren't going to get any money anyway still aren't getting any money everybody's happy but just look at it like you're a renter and someday you're just going to move on quit worrying about being the owner and then if you really want to be the owner then get ready to spend three or four thousand dollars and six months of pain in the butt court actions and you

probably can work this through if you can gather up all the people you need to sign on it and that's what you're facing so it's an interesting situation but uh my guess is it's not worth any more than is owed on it my guess is zillow is probably fairly close on this. If we thought it was worth $200,000, if the relatives thought it was worth $200,000 and $90,000 was owed and they were going to get $100,000 in their pocket when it's sold, those sharks would have already been circling. They would have been trying to figure out some way to get that thing sold and get the courts to do it. When you die without a will, you have to go in and the judge has to you know authorize the sale of the asset and it has to go into a pool to be dispersed

to the heirs just like it would in a will but it's just a lot bigger mess and dude you can't get clean title to this thing unless you do all that and you do not want to become the owner of it any other way than doing it properly and getting clean title because you won't be able to sell it if you don't get clean title so that's how you'll do it if you decide to do it later but for today i would treat it as cheap rent it's a rental house how much money would you spend on a rental house that you're going to move off and you don't own not any that's what you would do. Hope that helps, man. Thanks for calling in.

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SmileLove.com, promo code Dave. Rebecca is in Seattle. Hey, Rebecca, welcome to the Dave Ramsey Show. Hello. Hey, I see on my screen you're debt-free. Congratulations. Thank you. How much did you pay off?

It was around $37,000 in the last four years. Four years. Okay, cool. What was your income during that time? It ranged between $60,000 to $70,000. Okay, cool. What was your income during that time? It ranged between $60,000 to $70,000. Okay, cool. And what kind of debt was the $37,000? It was actually the rest of my mortgage, my townhouse. You paid off your house? Yes. Look at you. Thank you. Wow. So how old are you? I am 31. Whoa, with a paid-for townhouse in Seattle. What's that worth? Well, we're actually like 30 minutes south of Seattle.

That counts. Yeah. I still count that. Yeah, yeah. So I would say it's around right now 150, 140. But when I bought it, it was like around 70, so it doubled. Okay, wow. So you're single? Yes, single mom. I have two kids. But when I bought it, it was like around $70, so it doubled. Okay. Wow.

So you're single? Yes, single mom. I have two kids. They're 11 and 9, so this was just on my income. So you just plowed through it as making $60,000 as a single mom with two kids and paid off your house at 31 years old. Yeah. You're a rock star. Thank you.

It's incredible. Tell me your story. What happened four years ago that made you think you could do this? So actually my journey started eight years ago. That's when I found you. Back then I used to listen to Susie Orman read her books and I'm kind of a nerd. Went to school for business and I think I was looking for like a book in personal finance and that's when I came upon the Total Money Makeover. At first when I read it, I was like, okay, this sounds interesting. But as I got into it more, I really liked what you had. I started listening to you, and that's when I was like hooked

because you got straight to the point. So I started off paying off my credit cards. I had a little bit of credit card debt, a student loan, small student loan, like $3,000. And then I really got intense on paying off my car, which at that time was like $12,000. So that was around eight years. I've been on this journey for eight years. I've had my two kids. What people didn't know was that I was in a relationship that was toxic.

It was abusive, both verbal and physical. So being on this plan helped me kind of set myself up to where I didn't have to be stuck in a relationship, in that particular relationship. I started, I paid off my car, started putting money in savings, emergency fund, because I knew that once, you know, this relationship ended that I'd be the only one, you know, financially responsible for my kids, which is what happened. So five years ago, I had an emergency fund. I started putting money aside for a house.

Luckily, I was able to stay with my mom at that time. We were staying with my mom. There was some domestic abuse, and then that ended. But I had set myself up to where I had no debt, so I was able six months later to purchase this townhouse. So that's where it kind of started. You're amazing. Thank you.

You're a survivor. I don't know if you know this or not. There is a very high correlation between extreme levels of financial control and domestic violence. So usually if a guy is this big a jerk, that he's abusive verbally and physically, he also tries to control you through the money. And that sounds like what was going on here. Am I hearing that right? Yeah.

I'm the one that worked. So I was able to push. He didn't work. He's also a bum. Yeah. So I knew that. Wow, you got rid of a loser. That's awesome.

This guy like three loser checks right here in the loser column yeah and i have to you know give things to you for putting together this plan so i can you went and did it you're a hero i mean you bust loose from loserville and you go get your car paid off move in with your mom get your emergency and now you're living in a paid-for house just outside Seattle that's worth $150,000. Oh, and by the way, you're 31. I think you're incredible. Thank you. I also want to say thank you to Aubrey.

She's like my best friend, sister, not really sister, but, you know, biggest motivator. So there's a 26-year-old out there listening that doesn't think she's worthy and she's a punching bag for some loser. Tell her she can make it. Yeah. Tell her right now. She's listening right now. Oh, gosh.

You can do it. I mean, just set yourself up. You don't need to stay with someone just because of money. He's lying to her, isn't he? Yeah. He's telling her she's not worthy and she's not capable, isn't he? Exactly, yes. Your life is proof that that's wrong, that that's a lie.

Yeah. Isn't it? Yes. I'm proud of you. Thank you. I bet your mom's proud of you i hope so and my dad my dad and your kids yeah you got a good life because you made hard tough decisions you're a tough one you're amazing very well done very well done okay we're going to send you a copy of chris hogan's bookired, because I suspect it won't be long before I hear from you on the millionaire theme.

Oh, I hope so. Yeah, and outrageously generous along the way. Hey, make sure that you watch for the signs of what was happening to you because you have a special story, and you can inspire some people to get out of that hell that you were in. Yeah, thank you. You're amazing. All right, count it down.

Rebecca! And I love my kids, too. What are the kids' names and ages? What are their names and ages? Junior and Mariana, 11 and 9. All right, very good. Rebecca and the fam, $37,000 paid off in four years. She's 31.

Her house is paid for. $60,000 to $70,000 a year income to do all of that. What a great story. Count it down. Let's hear a debt-free scream. Ready? Three, two, one. We're debt-free!

That's the sweetest sound on the planet right there, baby. Real freedom right there. It means a lot of different things, doesn't it? Yeah, freedom from somebody beating the snot out of you. Freedom from somebody telling you you're a loser when they're the losers saying it. Yeah. And by the way, if you're out there and you're a guy that's hitting a lady, you're a loser, in case I didn't make that clear. You're scum. Yeah, just want to make real sure. If you don't guy that's hitting a lady, you're a loser, in case I didn't make that clear. You're scum.

Yeah, just want to make real sure. If you don't like that, good. That's what I'm here for is people like you to make you mad. But you're not a man enough to bother with somebody like me. You look for somebody else. Yeah, it's unbelievable. Unbelievable. Yeah.

The first time I ever ran into that i you know you any of you old enough to remember an old show that was on tv sally jesse rafael with the red glasses remember sally jesse i was on sally jesse show like four or five times and we did one uh did one with just it was always crazy people because she kind of had a jerry springer thing going so it's always crazy people because she kind of had a Jerry Springer thing going. So it was always just nutty people on there, and I was trying to help them with their money, and it was just like I'm the only sane one in the whole dadgum set. It was crazy.

But there was one other lady that they would bring on this lady that was a psychiatrist or a psychologist or whatever. And so she was there to, like, help crazy people with their crazy, and I was there to help crazy people with their money thing. And it was those shows, those kind of show. And she and I ended up talking in the green room after that, and she was the one, she sent me a study, and I read through the whole study. I was amazed.

There's a huge correlation between extreme levels of financial control and domestic violence. So if you have a friend who is not allowed to go to the grocery store by herself without her husband or her boyfriend, if you have a friend that is not allowed to touch money in any way because her husband or boyfriend is in complete extreme control of every decision around the finances, I'll give you a 90% probability he's hitting her. That's how strong this study correlation was. I mean, there's just because there's so many.

It's all about control, and it's all about bullying at a different level. And so there's just this sickness that's involved there, and it shows up in the money, believe it or not, and you can see it. And after doing that, reading that study all those years ago, now I'm always listening, and when he won't let her touch anything, I'm like, yeah, he's hitting you. Yeah, you're hanging out with a scumburger. Wow, what a cool story, Rebecca.

So proud of you. Bust and lose, kiddo. This is the Dave Ramsey Show. I'm out. Thanks for joining us, America. Brady is with us in Abilene, Texas. Hi, Brady. How are you? Doing all right. Thanks for taking my call. Sure. What's up? Well, ultimately, my question is whether it's a good idea for me and my wife to sell our house.

Basically, we should have never bought it, but we did. So now we're trying to figure out the best route to go from here so that we can even get started on your plan. I would say we're at baby step zero right now. How much is your house payment? $870 a month. And what is your take-home pay? $3,800 a month. Okay.

So why should you have never bought the house? Well, we bought the house knowing that I would need to work several shifts of overtime a month to be able to afford it. We have a daughter with special needs. She has spina bifida, so we have lots of medical bills each month. And basically overtime shifts are not consistent. Wait, wait, wait. Your house payment at $3,800 over $800 does not demand overtime. You can pay an $800 house payment on $3,800 without working several shifts.

With our medical at $5,000. What? Hello? Yeah, I'm here. I'm just hearing weird voices coming from somewhere else. My wife sitting beside me. Oh, okay, good. All right.

But the $3,800 over the $800 is not your problem. What were you paying in rent before? $400. Okay. So $400 is breaking you guys, making $3,800 a month. Well, I mean, we've looked at our budget multiple times trying to figure out where we can cut. We don't have vehicle payments. Both our cars are paid off. But medical bills for my daughter equate to about $900 a month. You had that whether you rented or whether you bought though correct the house

didn't didn't change that the only thing the house changed was four hundred dollars a month correct and you don't have any do you have any other debt other than your home uh school loans um we have six thousand dollars in outstanding medical bills we haven't paid yet, and then, unfortunately, about $5,000 on a credit card. Okay. All right. Well, you've got a tight budget, but this is not, you know, the house. I mean, I don't tell people to buy a home when they're in debt, okay?

So if you had called me ahead of time, I would have told you not to buy it. But this house is not like, you know, if you call me up, you're making $3,800, your house payment's $1,500. Now, we got a problem. I'm going to put that house on the market. But your house payment is way less than a fourth of your take-home pay. And so you're fine. I mean, it's really not your problem. I think you guys are just starting to budget,

and the emotional weight of dealing with the medical situation you're facing and with your baby. I mean, when your baby's hurting, it just weighs you down, you know? That just makes you human. It makes you a good daddy and a good mommy. But the truth is it makes it kind of hard to see past. I'm just looking at the dry math numbers right now. I mean, I feel for you guys, and I'll pray for you, but I don't have the emotional weight that you guys have got

facing the stuff you face every day dealing with this situation. So that's just very real. But the math, actually, you know, $3,800, minus $900, minus $800 for a house payment, you know, minus food, minus lights, minus water. It doesn't leave a lot of room, but you could pay your payments on everything doing that, and then you could pick up your overtime and start making some headway on some of these debts and cleaning them off. And as these little debts clean off, these credit cards, outstanding medical bills, and student loans clean off, you know, over the next year and a half, two years,

you're going to start having a little bit of wiggle room, and you guys will keep moving forward and ahead. But I think that you're just feeling the weight of all of this, and it's kind of clouding it. This is doable, though. Where you are is doable. I think you can pull it off no i would not sell your house i would not have bought it because i don't ever tell anybody to buy a house while they got debt but your house is not like when i hear those numbers i'm not like what what are you crazy none of that's there none of it you're you're it's very very reasonable uh for your

situation now would it help if you earn an extra thousand bucks a month you dadgum right it would clean this mess up faster two thousand bucks a month even faster so are you if you got a couple years of really hard work and lots of overtime and side jobs ahead of you yep you sure do are you guys gonna be taking a bunch of fancy vacations? Nope, you got a bunch of debt. You're going to be cleaning it up. That's your reality. But hold on, I'll have Kelly pick up. We're going to get you a copy of the Total Money Makeover book and give it to you and help get you started.

And if you need some more help, you call me. I'll help you any way I can. I'm sorry you guys are facing all these challenges, but I think you're up for it. I think you can do it. The math makes sense to me that you're giving me, unless there's something we left out of this equation. So thank you for the call. Josh is with us in Los Angeles.

Hi, Josh. How are you? Good. How are you doing, Dave? Better than I deserve. What's up? Not too much. I've got a question for you.

I'm on baby step six, which is pay off my house early. Um, I don't have any other debt besides my house. I have a six month emergency fund. Um, but I kind of did all your stuff out of order cause I've never really liked debt. But anyway, um, I have $164,000 left to pay off my house, but I also have about $100,000 invested in mutual funds and stuff like that. And I'm curious, would it be wiser to take that $100,000 out of my personal investment, put that all towards the house, and then just pay off the remaining $64,000? Or should I leave that money invested and the money that I save every month just accelerate payments on my house? What's your household income? Probably about $150,000. So you could be like debt-free in one year if you did this? Yes. Yeah, I'd be done by the end of next year i'm sure if i if i took the hundred thousand

and put it towards the house okay if your house was paid for and you didn't have any money in investments would you borrow a hundred thousand on your home to put in investments no same thing in it um i don't follow. Okay. Well, I mean, if you have $100,000 in an investment and you take it out of the investment in order to put in and pay off your home, that's the same thing in reverse. If you didn't do that, it's the same thing as if you leave it in the investment, it's the same thing as borrowing on your home to invest, isn't it? Got it. Yes. Okay. it in the investment it's the same thing as borrowing on your home to invest isn't it got it yes okay so it's a balance sheet equation meaning that a balance sheet is where you list your assets on one side of the page your liabilities on the other side of the page

and and you can switch them back and forth by borrowing money meaning if you were sitting there with no investments in a paid for house you could you could borrow money and put you know money you'd have dad over there on that one side of the page but on the other side of the page now sitting there with no investments in a paid-for house, you could borrow money and put, you know, money. You'd have debt over there on that one side of the page, but on the other side of the page, now you'd have an investment, right? And all I'm doing is undoing that. By asking the question in reverse, though, it's a bit of a trick. I kind of tricked you. The trick is that it makes you think not just with your head, but also with your heart.

And I always like to think of my head is where i do math my heart's where i measure risk and you're real risk averse you hate debt like i do yep and so the idea of borrowing on a paid for house to create an investment is absurd in your mind yeah i mean you immediately reacted but that's a heart thing see that's that's that risk part that's that you're measuring that's causing you to do that you didn't stop and do math you went you recoiled and went no that's crazy in your mind right you know and that's that that but and so by asking it in reverse so all of that to say yes i'd throw the hundred grand at it in a heartbeat i assume this is not in a retirement account. No penalties, right?

No, that $100,000 is just personal investment. Right, yeah. The only thing is, I mean, you're talking about the head and the heart. Just with the mathematics of it, I'm going to get 8% per year. If you put risk in the mathematics of it, it changes the mathematics. And so your heart is actually correct. Your heart is helping you do a complete measure of the mathematics. And so, yes, I take the money out of there. I throw it on the house. I'll be debt-free in a year. That's exactly what I'd do. Thanks.

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