The Ramsey Show - App - He Even Cleaned Toilets to Get Rid of Student Loans (Hour 1)

Episode Date: June 13, 2019

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Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Hi, I'm Dave Ramsey, your host. Thank you for joining us, America. We're glad you are here. Open phones at 888-825-5225. It's a free call at 888-825-5225.

As I said, it's free, and some say the advice is worth exactly what you pay for it. All right, Seth is going to start off this hour, Salt Lake City. Welcome to the Dave Ramsey Show, Seth. What's up? Hi, Dave. My name's Seth Trader. I am currently 28 years old, no debt, have about $60,000 in cash and about $50,000 in retirement.

I'm just trying to figure out, like, in terms of buying a house, like where i should go what i should do um so yeah just trying to figure out what what next steps should be okay cool so you got plenty of money and you're out of debt you have an emergency fund uh why would you not buy a house well we're just not sure where we're going to end up at the moment right now um not sure how long we'll be here. What's that mean? Why would you be moving?

Well, we may want to move somewhere else. Neither of us are from here originally. Well, why are you there? I just want to move somewhere else. Well, I'm in school right now with a part-time MBA, and the job's good right now. That's where I got a job out of college. So when you graduate, will you stay there or not? We'll see.

It just depends on, you know, we'll definitely plan on, you know, seeing what options are, but it just, you know, depends on, you know, what our situation is at the time. Okay. Well, I would not buy a house unless you know you're going to be in the place probably three years or more. Yeah. It sounds very, very, very, very wishy-washy. Like you have no freaking clue where you're going to end up right now.

Yeah. So, you know, I think you've got to dial that in. So it sounds like you're going to graduate from school, explore jobs, and land. When are you graduating with your MBA? December. Okay, cool. Yeah, I'd wait until next spring because by then you're going to graduate from school explore jobs and land when you're graduating with your mba uh december okay cool yeah i'd wait on next spring because by then you're going to kind of know all right the new mba is going to allow me to work here x and x marks the spot whatever city x is in that's where you would buy yeah but if you buy now and next spring you want to move to wherever with your new MBA, then you're going to turn around and put a house back on the market eight months after you bought it. So I'll pass on that.

No thanks. Let's wait until you know where you're going to be. But, yeah, graduate and then decide where you're going to be for the next three to five years, what your new position is going to be with your MBA, where your family wants you and your wife want to live, and that's where you buy. But you've done a great job getting prepared to do that, being debt-free and having $60,000 in the bank. That's a pretty good position to be in. I just keep piling up cash, getting ready for that.

It sounds to me like next spring, though, you're going to have a lot clearer vision for your future because a real estate purchase is pretty much an anchor you're putting down there for a while you're going to be in that bay for a little while gregory is with us in virginia beach hi gregory how are you man what's going on mr dave how you doing i deserve man how can i help all right cool so my wife and i we started our uh we're getting everything to start our debt snowball. I listed all of our bills from smallest to greatest. Good.

I have the, you know, we got everything situated about to start our $1,000 emergency fund. Good. But the thing that we're kind of at odds about right now is what to do with the car. We have a 2015 Chevrolet Malibu. You still owe $20,000 on the loan. The car's value at a little under $10,000. Good Lord. Yeah, I know.

You got slayed on that thing, didn't you? Yeah. Did you roll some negative equity into it? Well, we had a bankruptcy before we got the vehicle. And so, of course, the bank looked at that, and they gave us a high interest rate on the auto loan. Yeah, but the interest rate didn't cause a car to go down in value that fast. No, it didn't. You did not do a trade-in on this? No, we did not. And no money down

as well. And where'd you get your $10,000 value? For Kelly Blue Book. On private sale? Or trade-in? On private sale. Huh. Okay. Yeah, you got whipped. Alright. uh yeah you're deep in the hole and you're coming out of bankruptcy so your interest rate is what i like that is about 16 percent yeah i hate this car all right um what's your household what's your household income

um i bring in 43 my wife brings,000. So we're looking at about a little over $75,000 a year, if my math is correct. Yep, you're right. And how much debt have you got other than the $20,000 car debt? We have that, and my wife has student loans from when she graduated college. The student loans tally up to $75,000 a month. I mean, $75,000 total, but we are making monthly payments on that. No other debt other than the car loans and the student loans? None. Those are the two major things.

Everything else is like, you know, $100 bill here, $200 bill there. Gotcha. And you're just getting started on all your debt snowball stuff. All right, here's the problem. If you sell the car, it only moves the needle by $10,000. You still have a $10,000 problem. Exactly. And so the interest rate is outlandishly ridiculous, obviously.

So here's the plan. $75,000 a year, $95,000 in debt. If you want to be debt in two years, that would mean you'd have to pay off $47,000 a year in debt, which means you're working extra and selling some other stuff probably. This car, I'd love to get rid of it, but you're so far upside down in it, I don't know that it does any good. And that's where we are. And I told my local credit union, they said they are willing to refinance with me because I have improved my credit, and I'll try not to do things off of credit.

Yeah, it's okay to refinance it and get the rate down but here's the thing it's the first debt you're going to pay off and if you're doing $47,000 a year in debt reduction in order to be debt free in two years that means $20,000 is going to happen in the first six months this car's not going to make it till Christmas debt wise got it so cars paid off before christmas in order for you to be on a two-year plan understood and so that's a tight tight tight budget at your house yes sir no life yes yes uh just one more thing can you post this on youtube because i want to show my wife this because i've been trying to call for the longest and i'm so excited well i don't our guys looking at it, but they'll probably pull calls out from time to time,

and certainly it just streamed on YouTube, which means you can watch it later, I think, on that. I don't know how that works, later in the day. They're trying to tell me. Can they or not? He can watch it later? Okay. Yeah, you'll be able to do that.

So keep the car, but dude, this means live like no one else so that later you can live and give like no one else. You don't need to see the inside of a restaurant unless you're working there. Okay? You don't need to be talking about any vacations. You're coming out of bankruptcy. You got screwed on a car, and you're trying to get your life back. This is game on. It's nose to the plow, baby.

Get her done. And you can do it. You can to the plow baby get her done and you can do it you can do it lots of people have and you'll be the next one you'll be ready to do your debt free scream in about 26 months i'll be waiting on you this is the dave ramsey show Thank you. No matter what time of year it is, focusing on your family's financial plan is always a smart move. I get questions all the time about where to start and what to do first. One of the most crucial and affordable first steps to take is to protect your family and get term life insurance. I know it's not glamorous, but all the other steps mean a lot less if something happens to you and your family has no financial protection. Getting term life insurance needs to be a top priority. I recommend 10 to 12 times your income and lock in rates for 15 to 20 Thank you. most affordable term life rates. Go to Zander.com or call 800-356-4282.

It's not that expensive, it's not complicated, and you need to do it right now. That's 800-356-4282. Lee is with us in Huntsville. Hi, Lee. Welcome to the Dave Ramsey Show. Hey, thanks, Dave. My wife and I had taken Financial Peace University, and anyway, I'm getting paid tomorrow. I just want to mention this.

I'm getting paid tomorrow, and I'm really excited about getting one of our – actually, our last credit card paid off so that we can tackle our two last debts, one of them being a house. Awesome. I'm looking forward to meeting you in a couple of years in your studios to get the debt-free scream out. Very cool. Yes.

My question is, I'm an insurance agent for the largest insurance company in the country, and right now I've got two employees, and I'll have two more next week, and so it'll be a total of four. And I was just listening on one of your podcasts that one of the things that you offer to your employees is the identity theft protection. And so being a small business owner, having, you know, let's just say five employees or less, what employee benefits do you suggest, you know, giving? Because I found that, you know, taking care of your employees is one of the most important things that you can do as a small business owner.

Agreed. The other thing you cannot do as a small business owner is attempt to compete with huge companies' benefit packages. You simply don't have the margin. I mean, when you've got four people, you can't put on a benefits package like ford motor does or southwest air or somebody like that you just can't do it um the benefit of working for you versus a huge company though is you actually get treated like a human because you're hanging out with a few other humans you're not a robot you're not a commodity and so the benefit working for you is is that when you know the lady working there has a baby you can you can go down and see her and her husband and see the new baby. Somebody's in the grandma's funeral, you can let them off and let them go to the funeral.

It's the humanity of working for a small business that is the largest benefit. And you need to constantly point that out when you're hiring as a brand differentiation. It's a different environment inside this building than it is inside corporate America. The air smells different. You walk in here, you smell chocolate chip cookies because Melissa will be cooking them over here in our kitchen across the way here. So it's a different thing. That's what you're looking for and then what i look for are just what can i afford that gives us the biggest bang for the buck years ago when we started out we paid uh fifty dollars a month of their health

insurance well now we pay a whole lot more than that but we're a lot bigger and a lot more profitable than we used to be. But when I was your size, I paid $50 a month of their health insurance because I couldn't afford to furnish health insurance at that time. There's not enough margin in that business to do that. Now, you may be able to since you're in the insurance business. I don't know. But I just look for other stuff. I mean, we would do stuff like take everybody to the latest movie that came out or something.

We just do random things like that that nobody in corporate America ever thinks of. But as far as line by line, trying to compete with insurance investments, you know, all this other stuff that the big companies put out, I don't attempt to do that. You know, whatever you can furnish inside your business that has little or low cost to you that has a big lift for them is something you'd want to do. For instance, our team has always, and to this day, gets $200 worth of our stuff every year as an employee benefit. So you can get books and event tickets and Financial Peace University for your relatives and it makes a lot of great Christmas gifts and all that kind of stuff. And you can do all of that, do a whole bunch of it for $200, and you get that every year as an employee benefit.

But that doesn't cost me $200. It only costs me what it costs to produce those products, right? It costs a good soul. So that's a way I can give a benefit that gives a big lift, a big bang for the actual dollars it costs me. Liability insurance, I'm sorry, long-term disability insurance is very inexpensive, even in small groups. And I would look at that. And I like the identity theft insurance idea. That's not a bad one.

But you'd have to look at it and say, is there enough bang for the buck? We used to buy, uh, we had four tickets at the predators, our NHL team for a long time and people got to go and it was a big deal when we first started doing that. And then it kind of wore off and it was more like we were begging people to go and something. And so we just canceled them and quit carrying them. That wasn't a reflection on the Preds. It was a reflection on how our team viewed those tickets as we changed in size over time. And so you can do all kinds of fun things like that.

But it doesn't have to be. I mean, pizza parties and ice cream parties uh periodically go a long way uh with a small team and uh you know just say friday afternoon we're just all leaving at three o'clock that goes a long way with a small team a little tougher to do that with a thousand people and just go hey we're all leaving at three o'clock oh god man what you know there's too much going on i gotta stay you know there's too many things happening. It's a little more complicated. So just enjoy the size that you are and use that as your brand differentiator when you're hiring.

Good question. Interesting discussion. Debra's with us. Debra's in Denver, Colorado. Hi, Debra. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you. I am, I've completely

turned into a dork because I've always leased cars because I like them shiny and new. And now I am selling my car because I'm a Dave dork and I'm excited about it. I'm excited to sell my car and get another one, but I don't know how to do it. I've never sold a car before, and my question is, and I need the cash from the car to get my Dave car. So I don't understand how it all works. If you could please explain that to me. Okay. And so is the car leased now?

No. Okay. Is it paid for? This one I bought after the lease. Is it paid for? And I'm paying on it. Oh, you have a debt on it. I do.

How much do you owe on it? About $9,000. Okay. And what will it be going up for sale for? About $12,000. And you're going to use the $3,000 to buy your car? Yes. Okay.

All right. So you put it up for sale for $12,000 a check for 12 000 you take the 12 000 down to the bank and pay off the car they will either hand you the title or mail you the title meantime the buyer has the car and a bill of sale from you and they're you and the buyer are waiting on the title to come in from the bank and you sign the title over to them as soon as you can get it, whether you pick it up or not. Where is it financed? It's through Bank of America.

Okay. Do you bank with Bank of America locally, or did it just happen to land there? No, it landed there. Okay. All right. Then be in touch with them and ask them what the process is to get the title and how fast you can get it after the payoff well okay so based on what you just said here's my question after i sell this car and the people drive away with it do i walk

to the bank i mean i guess you'd rent a car. You might rent a car for a day or two. Okay. But is it better for me to... I mean, I'm guessing it's better for me to have another car lined up for me to purchase. If you found it, but you don't have the money to buy it until you get the car sold. Right. That's what you

told me, right? Yeah. Okay. Alright. You don't have any money in savings right now, right? Not enough to buy a car. Buy a $3,000 car. Okay. So, yeah, you're probably going to call Dollar Car Rental and have your car rental set up, and you're going to rent a car for a couple days.

Okay. And then go to the bank, get your money, give the bank $9,000, walk out with $3,000, go buy your $3,000 car, take your date. If you've got it already lined up, that's fine. If you know where it is, where it's sitting. But that's how you just got to think through the logistics. But go ahead and call B of A because Bank of America is a pain in the butt. They're so large that they have no brains. And so you need to call them and find out what the process is to get this title.

You don't want this buyer waiting on this title six or eight weeks because Bank of America can't find their butt with both hands. And so you've got to have that all kind of lined up to get that title ready to come towards you and what that process is so that you can get the people title because they can't get tags on it until they get the title in most states sometimes you can do it with a bill of sale but most places you're going to need the title um sometimes it's done online now so maybe you can get that pulled off you just got to see how your state works this is the dave ramsey show Thank you. In the lobby of Ramsey Solutions, Ricky and Brittany are with us. Hey, guys, how are you?

Hey, Dave, how's it going? Better than I deserve. Welcome. Honored to have you. Where do you guys live? Fayetteville, Arkansas. Awesome. And all the way over to Nashville to do a debt-free scream.

That's right. So how much have you paid off? $80,930.76? That's it. Gee, they're wearing T-shirts that have the amount on it, guys, for those of you that are not watching on YouTube. Wow, look at you. That's awesome.

So how much, what kind of debt was this $81,000? We had credit cards, a 401k loan, a vehicle loan, and my husband's student loans. Uh-oh, y'all were normal. Yes. You were just regular old folk. Yes. I love it. So how long did it take to do $81,000? Seven months. Whoa! What's your income? How so? Range from the time you started to the end.

$160,000 to $165,000. Look at you. What do you all do for a living? I work in IT at a food company. I work in career services at the University of Arkansas, WuPig. Hey, look at you. Very cool. Very cool. Well, great income.

You did it in seven months you must have had some money in savings or sold something though because you hardly made 81,000 in seven months yes i sold my company stock oh and how much was that was that about about 38,000 38,000 okay and then the other 40 or so you knock out just cash flowing with your great income. Yes. I also took a second job working for a cleaning company. I was cleaning toilets and cleaning office buildings, taking out trash, doing that for six months. Man, you wanted this.

I mean, you make $150,000, $160,000 a year, and you're cleaning toilets. Yes, sir. You wanted out of debt. I'm proud of you. That's cool. That's humility. I love it, man. Good for it man good for you good for you well done and now you can quit that job oh yeah absolutely already okay so uh what happened how did you guys get connected to us and how did this because you

you just blew up man y'all went crazy yes well it all started with a janet jackson concert of course yeah that happens all the time. My friend Jessica came up for the concert, and we went and had a great time. On the way back, she told me that she was on your program, and she was just so excited about saving money and doing her debt snowball. And our church had done it before, but we never did it. But I was familiar with the program, so I knew what she was talking about. And so when I came home, I told Ricky, you know, Jessica said it was great. Maybe we should did it but I was familiar with the program so I knew what she was talking about and so when I came home I told Ricky you know Jessica said it was great maybe we should do it

yeah so we had heard about you through our church and I had watched some of your videos a few years back and I was not convinced I was like no one can pay off debt in a year or two I just didn't believe it but when Brittany came to me and talked to me about what Jessica said I went back to your YouTube channel and started watching videos. And I found a few videos where you really broke down

the baby steps and I just started to learn more. And so it started to touch my heart because we have a two-year-old daughter and I wanted her to grow up in a different, just be more financially savvy than we were growing up. And so that really touched my heart. And so I came home to talk to Brittany about it. And if you know my wife, she does not like to talk about finances at all. So I had to be very kind and gentle when I presented this to her. And so I sat her down and said, hey, Brittany, would you like to watch this Dave Ramsey video where he's kind of breaking down the baby steps? And so she sat down with me and she watched the video and took a few days to think about it. And she was like, let's do the program.

Yeah. Wow. But actually what he did, he said, well, we've been together almost 10 years. I'm not going anywhere. I don't think you're going anywhere. Can we just pay off this debt? That's true. That's pretty good.

I like that. Slick. Very slick. So you did it all from the videos on YouTube? No. No. So we actually went all from the videos on YouTube? No. No, so we actually went through FPU at home. Oh, you went to the class then. Okay.

We did it at home. And so because we have a two-year-old, it was kind of difficult to go to class. So every once a week on Wednesday night, we would put her to bed and we would sit down. We would watch the video and we would actually do the worksheet. And so we did that through nine weeks. I love it. Way to go, guys. Very cool. Very cool.

Okay, so now you're going to a concert with a friend of yours who doesn't know anything about this. And you start telling her. And she says, I don't know. You say, well, if you do these three things, what are the things you do to get out of debt? What are you going to tell her? I would say get on the program and stick to the program 100%. Don't be Dave-ish. Don't try to put a spin on it. Just on the program and stick to the program 100 don't be dave ish don't try to put a spin on it just follow the program okay submit yourself to the proven system yes all right good

um i would say don't be afraid to be weird because what we did was weird so once we paid off the debt we knew we would pay it off in March. But in December, I became a minimalist and I was the Tasmanian devil throughout the house. Everything we did at Christmas time. Yes. So true. Everything we didn't use or didn't need was gone, donated or trashed. And the house became so big. I was like, Ricky, the house is too big.

How about we sell the house? Let's sell the house. And I was not for Ricky, the house is too big. How about we sell the house? Let's sell the house. And I was not for that. No. Absolutely not. No, you need to get some of that furniture back in here. Oh, yes. This is our second house that we lived in.

We've been married 10 years. Second house we lived in. Nice neighborhood. Big house. Loved it. And I just didn't want to do it. And so she continued to talk to me about it. I prayed about it and got to thinking more and more.

And one day God just told me to do it. So I said, okay, we can do it. I said, but one stipulation. I said, we cannot use any of the money that we get from the sale of the home to pay off the debt. We have to stick to this and pay off the debt on our own. And so that's what we did. Wow. So you finished on out at March and boom, you're done.

Yes. Boom, done. Yeah. So good for you. Well done, guys. So who are your biggest cheerleaders? and so that's what we did wow so you finished on out at march and boom you're done yes wow done yeah so good for you well done guys so who are your biggest cheerleaders while you're being weird all right so i have four people uh three gentlemen uh we have a a text group that we text each other and they're going through the program with their wives two of them live in alabama one lives in california and then i also have a mentor that lives in the Northeast. And he's been really inspirational in pushing us through. Wow. Good.

That's very cool. And for me, it's my friend Jessica. Okay. Yeah, because she was already there. Yep. Yeah. Love it. Love it.

Very cool. And it all starts with Janet Jackson. Who knew? I love it. That is so great. So fun. Well, we're proud of you. Congratulations.

Thank you. And you brought the kiddo're proud of you. Congratulations. Thank you. And you brought the kiddo with you? Yes. And she's how old? And what's her name? She's two. Her name is Taylor. Two.

And here comes Miss Taylor into the shot. I love it. Very cool. We've got a copy of Chris Hogan's book for you as well. Retire, not retire inspired, everyday millionaires. And so, hey, count it down, guys. Ricky and Brittany, $81,000 paid off in seven months, making $160,000 to $165,000, including the sale of some company stock. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free! One, we're dead free! Cute. I love it! Welcome, you guys. Welcome. How fun is that? Open phones at 888-825-5225.

You jump in and we'll talk. 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'll remake your blinds for free. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code RAMSY to get the best possible deal. Today's question is peter in michigan uh should you pay defaulted debt that is not pursuing you why or why not yes you should

pay it number one you owe it that works number two at the worst possible moment, they will decide to pursue it. It will show up someday, somewhere, at the worst possible time. There's a lot of articles on the Internet, and of course we know everything on the Internet's true. That's what Abraham Lincoln said. There's a lot of articles on the Internet that say, well, if it's past a certain date, then, of course, they can't legally pursue you.

It's past the statute of limitations. And after seven years, it comes off your credit anyway. Well, not really, because if they just choose to re-report it, even though there's no activity on the account, they're not supposed to do that, but they do it periodically as a collections method just to stay up in your grill, stay up in your business. So, always get back in touch with them. Many times they've jacked it up, and you're going to want to settle it down to what it was originally or below. That's fine, but you ought to clean up your life and pay your bills. Because it'll chase you later. Because it's the right thing to do. Thank you for joining us, America.

We're glad you are here. Andreas is with us in California. Hey, Andreas, how are you? Not too bad, Mr. Ramsey. How are you? Better than I deserve. How can I help? Well, sir are you? Not too bad, Mr. Ramsey. How are you? Better than I deserve. How can I help? Well, sir, I'm 28 years old, and I just realized after finding you about two months ago that

I've lucked my way into baby step four. Good. So I'm starting investing. I was investing in mutual funds through my bank, and I realized that they are worse than if I gave my money to a potato. Unfortunately, over the last 10 years, they are performing at a rate of 6.1%, and they take 2% in fees.

Yeah, you're right. A dead potato. Okay, I'm with you. Yeah, I was wondering if you had any tips on finding a new manager. Okay. Because unfortunately, and I think you said California. Unfortunately, I'm in Canada, actually. Oh, I'm sorry. I'm sorry.

No, no worries. I see Winnipeg on there now. That makes sense. Okay. Yeah. Well, we don't have SmartVestor Pros that we recommend in Canada, only in the U.S. So I can't help you with a direct referral like that, but the, you know, a list of people that we've vetted and that kind of thing. But what you're looking for here is more about someone with the heart of a teacher. I want you to sit in a different seat than you've been sitting in. You were sitting in the seat where you sent your child to boarding school and asked someone else to raise them.

That's what you did with your money, okay? Instead, I want you to do the day-to-day parenting with some guidance from an advisor. I want an advisor to be your teacher, your advisor, not make all the decisions. I want you to make the decisions because you increase in knowledge as a result of having met with your advisor. About 85% of the people in the financial world are salespeople, which makes them useless. The 15% that are teachers are the ones you're looking for.

They have that heart of a teacher. You'll know you've got someone that has the heart of a teacher if you leave the meeting knowing something that you didn't know before you went into the meeting. You learned something. And you know if you learned something, you were in the presence of a teacher. So they're not just trying to slime you. They're not trying to just keep you around as a customer or build their book of business. They truly want Andreas to understand what he's investing in, why he's investing in it, how it, that's a good mutual fund broker that can help you pick out some investments and guide you, then you've got the right kind of a person.

In terms of how to find them, I just start asking around somebody, people that you perceive to have money, ask them if they know a good financial advisor that has the heart of a teacher. I'm looking for a financial advisor that has the heart of a teacher. And by the way they're not insurance agents insurance agents are not investment advisors some of them say they are and act like they are but they're not they sell insurance that's not what we're trying to do we're trying to get someone to help me with investments and show me and teach me.

And that's who you're after. Kiara is with us in Montgomery, Alabama. Hi, Kiara. How are you? Good. How are you? Better than I deserve. What's up?

Okay. So I'm calling in to get advice on buying a house. I was wondering if it is smarter for me and my husband to rent a house or to buy one. And I just want to tell you a little bit of my situation before you give me advice. So, I'm 24 years old. He just graduated in December from college. And he has $45,000 in student loan debt, and I have $14,000. And what happened was we were living rent-free in a house that my grandmother lived, my mom and my auntie. And we were living in that house for two years.

We got married in college, so that was the only way we were able to get married, was a free house. Anyway, we had a baby. I was on bed rest for a couple months. And we only had, like, just enough money for closing costs on buying this house. But anyway, I'm sorry, I left out a huge part. So my auntie, she is now in a hard place, and suddenly she's asked if we could, you know, move out so she could live in the house because she's homeless. And so we didn't have money to save.

We didn't have time to save up to, you know, prepare for that. So I was just trying to get your advice on it. You need to rent. You're broke. Yeah. You have student loan debt coming out your ears and you need to rent until you get that cleaned up and rent the cheapest possible thing what's your household income uh like 60 that's both of you now have your big big boy big girl jobs right yeah okay um but the issue is to rent in an okay like if we okay so this house no the issue is you're broke you don't need to be buying a house yeah you're going to make a mistake

buying a house when you're broken deeply in debt the house is going to be a curse rather than a blessing. I want you to own a home. I don't want the home to own you. And so you guys need to clean up your student loan debt, live in something as cheap as you can possibly live, and clean up all of your debts, be debt-free, build your emergency fund with three to six months of expenses, and then save a good, strong down payment and start talking about

buying a house and don't buy a house where the payment is more than a fourth of your take-home pay on a 15-year fixed but you got two years before you're ready to buy a house right now okay and that's okay but can i let me just say one more thing okay because i just wanted complete clarity so okay um so to find you know, I did your 35%. You know how you said you should spend 35% of what you know more than that on living expenses? No. So together, 35% is like, did I say that right? No.

I didn't say that. Oh, sorry. Okay, I'm sorry. That's okay. Okay, so to rent, okay, when you look at the area we live in, to rent a place to stay in a decent area is at least $750. And this house note is $500. You're not buying a house, honey. Okay.

You're broke. Okay. Okay. And you can't rent, you know, if you're buying a house for $550,000, the exact same house would rent for more because that's how real estate works. Yeah. But that doesn't mean you need to buy a house right now. You are deeply in debt and you have a mess.

Okay. And you guys need to clean up your mess and buy a house from a solid position. So, no, I would not do that. Your auntie needs you to move. You need to go get you a little apartment somewhere, and you guys need to do this on a solid footing. You're going to mess up if you don't listen to me. This is going to come back and bite you in the butt, kiddo. But I'm not sure I won this discussion, but that's okay if I didn't.

It's your decision. You're 24 years old. You get to make decisions, but you called and asked my opinion, and I was not unclear. I've done this a long, long time. I want you to own a house. I want you to be blessed with homeownership as a part of your wealth-building plan and as a safety mechanism and a stability mechanism for your family.

I want all of those things for you i do not want that house to be a curse to you when broke people buy houses it makes them broker that's why we call them mortgage brokers that's where that comes from not really but it's a good joke anyway hey, hey, thanks for calling in, kiddo. Open phones at 888-825-5225. Guys, real estate is not a good idea. It is not a good purchase when you're broke. And real estate people that do investing with no liquidity, they don't have any cash laying around.

They're playing Russian freaking roulette. They're asking to blow their own head off. And that's what you're doing. And listen, I've ran around with those nothing down guys for years in real estate. You cannot find somebody who's been buying real estate nothing down for 10 years and has not been bankrupt. There's no one who's been doing it 10 years and survived. Because you can't. There's too

much risk involved with no liquidity. They don't exist. It's a pipe dream. Real estate's a blessing only when you have the cash for it to be a blessing. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you heard about a product or service and didn't have a chance to write it down, don't worry. We list everything that is mentioned during this episode in the podcast show notes section. Thanks for listening.