The Ramsey Show - App - How Do I Leave a Great Legacy? (Hour 1)

Episode Date: July 28, 2021

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Thank you. Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is dumb, cash is king, and a paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Christy Wright, Ramsey Personality number one bestselling author is my co-host today. If you want to talk about your life and your money, this is your place.

You can get in if you dial at this moment. The number is 888-825-5225. That's 888-825-5225. We's 888-825-5225. We launched the pre-sale on Christie's brand new book, Take Back Your Time, The Guilt-Free Guide to Life Balance. The book is selling like crazy in pre-sale. Actually, we will be delivering them to your home in September at the actual launch date. But if you buy as a pre-order, you get all kinds of goodies,

$50 worth of stuff, including the e-book, including the audio book as read by the author. It's all there. Take Back Your Time, The Guilt-Free Guide to Life Balance by Christy Wright. You can get that at ramseysolutions.com. And Christy, tonight we have a big event. Yeah, this is exciting because we have been building up to this in celebration of the launch of the new book

and getting ready for it to be here September 14th. But tonight we are doing a free digital event on Facebook and YouTube. And you can register at RamseySolutions.com slash balance. And I'm going to be walking you through the four root causes of why we feel out of balance. Because what I've noticed is this topic of balance, we have a lot of feelings about it. Different people have different definitions. We don't really know what it is. We're just sure we don't have it.

And so I'm going to help people understand what it is and what it isn't. And then what keeps us from feeling that sense of balance we've been looking for. And we're going to talk about those four root causes because when you know what's keeping you from it, you can know what to do about it. So that's going to be 7 o'clock tonight. And I'm going to be doing a Q&A afterwards. So if people want to tune in live, they can ask their question,

and I'll walk them through it. Very cool. Good stuff. So 7 p.m. Central Time tonight, free on YouTube or on Facebook. And if you want to pre-register for that, I'm an RSVP. We'll send you a link out. Make sure it's easy for you to connect up, and you'll be able to watch this talk tonight. As Christy walks you through this whole idea of balance and, you know, the enemies of it, where it's coming from, where it's going to, all those sorts of things.

So, ramsaysolutions.com slash balance. You know, what's interesting is that we've talked about this so much that it feels like I've overdone it, but that maybe balance isn't the problem, what you said a minute ago. It may just be that there's too much. I mean, I'm not sure you're balancing the food on your plate if you have too much food on your plate. Yeah, yeah. That's not a balance problem. The plate's fine.

It didn't tip over. Right. But it's just got too much on it. Yeah, and it's interesting, too, because I think we throw around this this term and we say work-life balance and life balance and all of that. But what's interesting is we can do all the things we think we're supposed to do to have balance where we manage our calendar and we're super productive and we, you know, have time off and take vacations, all those things. But we can still feel as if something's missing. We can still feel like we're doing all the things right and something still feels off. And that's because I think that what we're asking when we're asking about balance is really something different than what we want. I think what we really want

is to be confident in how we spend our time, be proud of how we spend our time, be confident in our choices when we say yes to this thing or no to that thing versus feeling guilty and questioning, you know, am I doing the wrong thing? I think we want peace in a chaotic world. And so, and I think we want to be happy and enjoy our life. And so what if we talked about balance differently and said, okay, it's not this balancing act, which feels stressful and you can do all that and still not feel like things are right. And what if instead it looks more like peace and the chaos and being confident in your choices and that's the type of balance

that that we want it's more about being a balanced person in an out of balance world versus just perfectly walking the tightrope which is not realistic or fun in my opinion yeah you may you may want to talk about this subject as well as anything else jump in the phone numbers are 888-825-5225 that's 888-825-5225. I like what Marcus Buckingham, our friend, said about that. It's as if if you ever do get everything just right, everybody frees. Yeah, don't move. Because as soon as you flinch one direction or the other, all of a sudden that, quote, balance, unquote, is gone.

Yeah. And, you know, you do lose yourself in that process. And there's a I think that there's been a little bit of a guilt tripping, to say the least, in the culture about this idea that, OK, you're not nurturing enough. OK, you're not productive enough. You're not working enough. You're not productive enough uh you're not working enough um you're not enough right and then we we threw that in the bucket of out of balance yeah and what's interesting is when we put the pressure on ourselves to balance everything whether you use the analogy of juggling all the balls spinning the plates walking the tightrope whatever 50 50

split this perfect pie that's equally divided, whatever you use as your metric of success for balance that looks like that. You're setting yourself up to fail. But then what's really dangerous, Dave, and I see this all the time in women I work with and men too, for that matter, is it because when you can't do that, because you can't and you won't, it's not realistic or sustainable in any way then what happens is it spins up this narrative in your mind that you're failing at everything you're failing at your job you're failing your family you're just failing yeah and that's not true got everything in balance with my family then i'm a bad mom a bad dad if i don't have anything in balance with my work uh then i'm a bad leader, a bad employee.

Yeah, so it's almost like the identity shifts off of this one subject. Yeah, and it drastically affects how you experience your own life. There are people walking around every day. There's people listening right now that feel like they're failing, and they're not. Maybe they can be more intentional with how they manage their calendar. Maybe they can be more intentional with putting their phone away, but they're not failing. And so I want to get to, that's why I love the tagline of this book, the guilt-free guide to life balance, because I think the undercurrent of the issue is this guilt that haunts us. And what I want people to understand is, yes, I'll help you manage your calendar. Yes, I'll help you,

you know, use best practices to be productive and do the right things at the right time but it's not really about the calendar it's about enjoying the life that the calendar represents and feeling balanced and peace in your life remembering you're in control the calendar calendar is not in control of you yes yeah you put it on there yeah so you can take it off that's right uh you cannot put it on there that's a really good one there and i think there's a certain amount of hyperbole, a certain amount of drama has been added to the whole subject. We were with some friends the other night, and he's opening a business. And so he's spent a lot of time opening a business. It always is when you're doing that.

And his wife said, well, he's just a workaholic. And we're fairly good friends. And so I said, I'm calling BS. He's not a workaholic. A workaholic is someone who's addicted to their work and gets all of their juice from work. That is not him. He's paying a price right now to get a business open. That is not workaholism.

Quit giving it names it's not. So you can throw around the fact that maybe he didn't make the bed like you wanted him to. So this is what dinner with us sounds like. That's right. But I mean, really it's just, you know, she completely threw her husband under the bus and he's not a workaholic. There are

workaholics, but everybody that works hard is not a workaholic. So we have to quit throwing the hyperbole on this stuff. This is the Ramsey Show. Imagine spending money without wondering if you have enough in your bank account. Right now, debt

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Ron's with us in Washington, D.C. Hey, Ron, how are you? Hey, Dave, I'm a big fan. How are you? Better than in Washington, D.C. Hey, Ron, how are you? Hey, Dave. I'm a big fan. Listening since 07. How are you? Better than I deserve, sir. How can we help?

I've got a quick question, sort of a philosophical, spiritual angle to things. I know you guys are big into spending and living a legacy. I've got twin girls, 14 years old. I've lost who knows how many jobs over the past, you know, a couple of years. I wasn't even working a year ago. Now I am, thank the good Lord. I know you're big about saving and, you know, for spending for, you know, and saving for the future. And, but as believers in Christ, obviously we believe in the rapture where our Lord could come back at any time. So say he did come back in the next five minutes. All the money that you saved for, you know, is kind of null and void,

but, you know, I'm not saying why save, because Jesus is going to come back, and we don't know at any moment. Does this also make sense? Am I just crazy, or am I just, you know, I'm not saying don't save, but I'm also saying that, you know, say your Christian members of your family are not, you save your money for them, because obviously once they, and again, I'm going a lot of things here with the Methodist background. You go through the tribulation period, you know, and I've read, you know, Tim LaHaye and Jim Jenkins' books, you know, that I don't even know. Is this all making sense? Yeah.

Well, I mean, there's kind of two things pulling at this. Yes. Number one, it's very good. I think it'll increase the quality of your life while you're here. Okay. And the quality of your decision-making on money and other things, if you have what you have, which is an eternal perspective. I'm not thinking of 50 years and I'm dirt.

Okay? You're thinking beyond that. You're thinking differently than that, otherworldly than that, and that gives you an advantage because someone who has the broader perspective generally makes better decisions. And so that's the beauty of an eternal perspective. Then if you, within that context, you've kind of got two things pulling at you. One is that once we're dead or raptured, instantaneously money's not important.

And anything you've acquired is instantaneously. One second later, none of this matters. Right? Right. Okay. Wait, later, none of this matters. Right? Right. So, go ahead. The point being that the bumper sticker is right. He with the most toys when he dies is dead, which is kind of your point, right? And then the other side of that is the wisdom with an eternal perspective of living my life in a way that is mature,

that is thoughtful and wise, that does leave a financial legacy for my family behind, life insurance, a will, savings, paid for assets, those kinds of things, which also line up biblically without being inconsistent with the other thing. So what we're saying is we don't rest our eternal hopes on the stuff, but Proverbs does say, in the house of the wise are stores, this is the Bible, of choice food and oil. And a foolish man devours all he has, even if he used a spiritual reason man devours all he has even if he used a spiritual reason to devour all he has and have no savings he would be by biblical definition a foolish man

exactly and so these two things appear to be at juxtaposition with each other while i and i think if you take a step up above it, you go, no, they're not. I'm not going to rest on the depth of my real estate portfolio. I'm not going to worship at that altar. And I don't want my kids to either. And so that's the eternal perspective of idol worship and so forth. And on the other hand, I've got this mandate by my maker to be wise. Christy? Yeah, it's interesting because I think sometimes we like to, and you can apply this to anything my maker to be wise christy yeah it's interesting because i think sometimes we like

to and you can apply this to anything swing to extremes and assume these things are mutually exclusive and i think it's exactly like you're saying dave we're going to hold these two truths where we're going to fix our eyes on eternal things our hope is in our eternal destination and while god has us here today we're going to do what we can with what we have where we are, which means just being a good steward. And so what we know today is we're here and we need money as a tool

to fund our lifestyle, to take care of our family after we're gone and so on. So we're going to do that in the name of stewarding God's blessings. And we're going to know, exactly like you said, Dave, our hope is not in this.

This is not the end game. We have an eternal perspective. It's not either or. It's both. You can hold both of those at the same time, those truths. So people – go ahead. I was just going to say that I've heard the phrase, you know, you're so heavenly minded, you're generally good.

Yeah. You know. And then on the other hand, you're so materialistic, you forgot God. Exactly. That's the other end of that, right? And so – and really, we don't even have to play on that spectrum. We can go up above that at a completely different point on the diagram, and let's go three-dimensional instead of a linear perspective

between materialism and spirituality as if that's the only part of the spectrum. So, I mean, we're called all throughout Scripture to manage things and love people. The Minimalists were on the other day, and that's the title of their new book, Love People, Use Things. Don't use people and love things. I heard that conversation. It's great. It's a great title for a book.

I mean, because it just encapsulates everything that you brought up. And so what's the legacy that we want these 14 year old twins to have we want them to have a high quality life living here with wisdom which puts them financially in a position not only to take care of their own household first or they're worse than an unbeliever but also to be generous to widows and orphans because they have the money to be generous right to widows and if the rapture comes then they're in a higher place and not to worry about the crap down here so it's i'll be happy to leave all of this behind and let it burn wouldn't make me mad at all i'm ready to go come quickly lord jesus

i mean this it's crazier and crud out there come quickly lord but i i don't know the day or the hour and scripture is pretty clear i'm not going to. And so, meantime, I've got to live with what I've got here and manage this thing until I don't have to manage it anymore. And the beautiful part about that is the management of stuff and keeping stuff in its place spiritually and transferring that skill to your kids is character building. It builds your character. It builds your spiritual character. Well, the one thing I've learned is that they both started summer jobs this year. You know, rather than going to summer camps, they're working so much,

they're making more than their father, you know, who is a part-time stay-at-home dad. I work from home. I have been before the pandemic. And I'm like, your checks are more than mine. But the thing is, I've noticed this with my younger daughter. She is more like, we actually just got out of getting lunch. She will go in, order for herself. I'm like, do you want to come with me?

No. She never did that before. It's huge character building. Yeah. Yeah. And see, that's, and what we're discussing here is not the actual amount. It's what's happened in their hearts as they've engaged in these earthly activities, how their spirits have grown, right?

Exactly. And so that's this weird dance that we do as Christians and as people of faith, this weird dance between the earthly possessions. If you believe all earthly possessions are evil and to own anything is evil, that is not actually a Christian track. That's a track called Gnosticism. And it was a toxic form, a heretical form of Christianity that popped up in the 3rd century. I was going to say it goes back to the ancient Greeks, exactly, yes.

And it was born out of that, but then they took it and put it over with an overlay on what we would have called Judeo-Christian ethic and shifted it. And then that's translated into today's world with people who are ignorant of theology and doctrine who start to say things like, well, all rich people are evil because they have money. Oh, and rich people can't go to heaven, which, by the way, is not in the Bible. But a lot of people quote the Bible that have never read it. And so it's a very interesting discussion. Hey, I appreciate you calling in. Thanks for letting us kick that can

around with you, because it's something we don't do often enough around here. We should stop and do that kind of thing. Very, very good stuff. This is The Ramsey Show. We'll be right back. Christy Wright, Ramsey Personality, is my co-host today. Mitchell and Courtney are with us in Dallas, Texas. It says on my screen, you guys are debt-free.

Congratulations. Thank you. Very cool. How much have you guys are debt-free. Congratulations. Thank you. Very cool. How much have you paid off? We paid off $86,000. Good. And how long did this take? 22 months.

Good for you. And your range of income during that time? $125,000 to $127,000. But in that time, Courtney took a pay increase and I took a pay decrease, so that's why such a small increase. That works. But 22 months, so two years, you pay off $86,000, $43,000 a year, making $125,000. That's beans and rice.

You were careful. Yes, sir. What kind of debt was the $86,000? It was about $60,000 of college loans, a truck loan for $24,000, and $2,000 of credit cards. Wow. How long have you two been married? Four years in December. Okay. So what happened? What happened 22 months ago that changed your mind about this debt? I got a job about an hour away from where we lived. This was right after buying a house the

wrong way. And I was looking for a podcast to listen to and yours showed up. So I started listening to it. I was on board immediately. Courtney took a little bit of convincing, though, and it just so happened that there was a money and marriage seminar coming to Dallas that year and got Courtney to go to it, and she was all in. Wow. Okay, so that would have been Rachel Cruz and Les Parrott then. Yes. Yeah, they're funny.

That's cool. That's a fun night. Good. That's then? Yes. Yeah, they're funny. That's cool. That's a fun night. Good. That's a good seminar. Good, good, good. So, Courtney, you go to that thing after your husband's been hanging out with this weird guy in a car for an hour every day, two hours every day, and you go to this seminar. What was going through your head?

At first, I mean, I knew the principles and everything. And so it was just more, I'm a very visual person. So it was just actually like seeing it in practice and the way Rachel talked about it, it just really got to me and it just made complete sense. So I think as soon as we got home from the seminar, we sat down and we figured out how much debt we had. And I think at that point in time when we saw the amount, that's when I was really on board. Yeah, like, oh, crud. We got to do something about this. It's amazing how events can be so motivating and so inspiring that even if they tell you something you already know,

if they present it in a way like Rachel did, like Les did, in a way that fires you up and makes you care and gets you excited, that's what actually can be the catalyst, just because they presented it in a way that got you fired up. It absolutely was. Yeah, that's awesome. Way to go, guys. Way to go. All right, so two years, you crunch away. What was the secret during those two years to paying off $86,000?

Definitely working as a team. Both of us kind of had our weak moments, so we really had to rely on each other to make sure we kept to our budget. And then making sure that we kept our eye on the prize. Like Chris Hogan says, we need to dream in HD and know exactly what we're working towards. So we just kept telling ourselves what our goals were, and we just needed to make it past paying off all the debt, and we could get there.

Yeah, great job. Who were your biggest cheerleaders through this whole process? Honestly, all of our friends and family were really behind us. They were really in our corner cheering us on. And, in fact, my parents actually, they got so excited about it, they started the plan themselves, and now they're on the Dave Ramsey plan too. That's awesome. You've spread this through the family.

Way to go. Ripple effect. That's really cool. How old are you two? We're both 27. Yep. Okay. And you're debt-free.

$86,000 paid off. How does that feel? Surreal, to say the least. Very freeing. We can focus on putting money towards everything we want. We recently found out that we're expecting. Oh, congratulations. Thank you.

Yeah, so yeah, we can just put the money towards the baby. We were actually able to refinance our house in a Dave-approved manner, so we're excited about that too. That's awesome. Congratulations, y'all. I'm so proud of you guys. What a great start you've got on life and for this baby. Very, very well done, and all because you just decided you're going to take control.

Because this was no small feat. I mean, you have really leaned into this this is you've been hustling and grinding for two years this is really tough wasn't it there were certainly some really tough days but when i look back at it it it went by really quick good will you ever go back ever go back into debt so next time you get ready to buy a car oh we're actually saving up for a car so we can pay in cash there you go that's the right answer you're passing the quiz way to go y'all are awesome very very cool heroes well done completely changed the family tree of this

baby that's on the way excellent excellent excellent got a copy of the legacy journey for you because that's what you've done has changed your legacy a copy of the total money makeover for you to give away to someone get their journey started way to go mitchell and courtney dallas texas 86 000 paid off in 22 months making 125 to 127 count it down let's hear a debt-free scream all right three two one way to go you guys absolutely incredible wow that's fun that's awesome very fun zach is in milwaukee hey zach welcome to the Ramsey Show. Hey, Dave, how's it going today? Better than I deserve.

What's up? I am currently debt-free as of March. Pay off the last of my student loans. I am looking to move out on my own. I was curious, should I find a cheaper place to rent and save up the money and buy it with most of the house with a physical money or should i take a 15-year mortgage i'm a truck driver making about 58 a year before taxes okay how much can you save a year as much as i can i don't try i don't know as much as i can is not an answer how much

money can you save a year? If I go hard, I probably could save two-thirds of my check. Okay, so let's call it $35,000, $40,000? Somewhere in there, yes. Okay. And how expensive a home are you thinking about buying? With me being not married and no kids that I know of, I'm looking at about $70,000 maybe. Okay.

And so if it was $35,000 a year that you were saving and you were going to buy $70,000, it would take you two years. Does that sound right? About right, yes. I am currently not renting stuff with mom and dad, so there's going to be that expense. Are you over the road driving or local driver? Regional. I'm home on weekends. Okay. All right. So you're gone most of the time already I'm home on weekends. Okay.

All right. So you're gone most of the time already. Most of the time. Yeah. And so, you know, it'd be pretty tempting to me if you can buy something for $70,000 in your area that suits your needs, it'd be tempting to me if you could do that in two years to pay cash. We don't yell at people for taking out a 15-year fixed rate mortgage where the payment's no more than a fourth of your take-home pay but we certainly

always encourage the 100 down plan when we can yeah and especially if you if you got you know 75 of the way there let's say you rent and the rent ate away at your your income more than you thought well you're a lot closer than you would have been if you didn't try that plan so it doesn't hurt to try for it and set that goal yeah Yeah, I mean, what if you saved up $30,000 and you put that down on the house and you got a little $40,000 mortgage and you knock it out in a year, knock it out over the next two years or something. That's very doable too. Right.

I mean, that's kind of a mid-range. That's not all the way to a 15-year fix. That's like a two-year mortgage, but you take out a 15 but pay it off in two. Yeah. And you probably just get that at your local credit union, your local bank. You're not going to get a small amount like that for a short period of time. A traditional mortgage company, like a Churchill Mortgage Company, they don't make a $35,000 or a $40,000 loan because, you know,

the Fannie Mae secondary markets, FHA won't accept those. Interesting. So you've got to get $50,000, $75,000 minimum, and even then it's kind of expensive. So you've got these under $100,000 mortgages. Most of the time you're going to do that with your local bank, your credit union, those kinds of things. So, hey, good stuff, man. You're thinking, Zach. Good question, yeah.

You're thinking, you're thinking, you're thinking. This is The Ramsey personality is my co-host today. Open phones at 888-825-5225. If you want to talk about your life and your money, we're here to help. Nathaniel's with us in Louisville, Kentucky. Hi, Nathaniel. How are you? I'm doing well.

Thank you for taking my call, Ramsey. Sure. How can we help? Hey, I just finished to pay off my house, and I need some financial advice on what else to do with the money after you max out your 401K and your Roth for the wife and me? What other investments are good to keep doing so you can, you know, keep building your portfolio?

Way to go, man. Congratulations. Congratulations. Baby step seven, huh? Yeah. Well, I never did any of the steps. I just used biblical principles to grow my money. I'll take that.

But I did hear from Joe a lot, yeah. Good. Well, thanks. Good. But anyway, you're 100% debt-free, right? Yes. Good. Good.

Okay. Well, what I have done and what we've recommended in those situations is do what you've done. That's max out all available anything to keep the government's hands off the money and any kind of a retirement plan, 401Ks, as you said, Roth IRAs, as you said. If you've got any self-employment income of any kind, you can look at a self-employed pension plan. But even then, that maxes out pretty quick. And then what I personally have done is two things. You can do whatever you want, but this is what i have done and what we've recommended i have invested in mutual funds now

at this point you want to invest in mutual funds that have what's called a low turnover ratio and their turnover ratio is how often they sell the stocks inside the mutual funds. If it has a 4% turnover ratio, that means 96% of the portfolio does not sell every year. That's pretty cool. So if it doesn't sell, then as it increases in value, there's no taxes on it until you do sell it. So just like if you buy a single share of stock and it goes up in value, you do not pay taxes on it until you sell it the other thing i do is i buy real estate that i pay cash for so my first goal when

i did when i hit where you are years ago is i just start dumping money in a low turnover mutual fund you can do that like an s&p 500 fund no load if you want that's what i did and just dump money in there and when it got enough when i got enough money in that account to buy a piece of real estate i'd buy a piece of real estate then i'd dump money in there until i got dump money in there. And when I got enough money in that account to buy a piece of real estate, I'd buy a piece of real estate. Then I'd dump money in there until I got enough money in there to buy another piece of real estate, and I would buy another piece of real estate. Because I love real estate, but you may or may not.

That's the two things I've invested in. Oh, that's great. Great idea. I appreciate that. Thank you, man. Thanks for the advice. I appreciate your call. Dave, do you have a formula or a percentage, like in that scenario,

if someone was going to do both, where they were going to do some real estate and some just putting in an investment, do you have any kind of percentage or whatever you're comfortable with, whatever you're interested in? Just whatever you're comfortable with. Mine has resulted in being much heavier real estate. Yeah, because you love real estate. A, I love real estate, but the other thing that happened was 2008 yeah so i bought like uh about 200 million dollars worth of real estate in 2008 for about 20 million dollars wow about 10 cents on the dollar real

estate was just a it was on sales on fire sale yeah so consequently my net worth is lopsided just from the fact that I stole that stuff. Right, right. And that changed it. So even more so than just investing steadily into it. I just caught that wave, the best wave of my entire 60-year life in terms of the market being way down, and it was really good for people who had money to buy stuff while it was way down. And then we've developed these properties that our offices are in, really good for people who had money right to buy stuff while it was way down and so um and then

we've developed these properties right the the our offices are in and they're very expensive too so i've got those two things that's caused mine to be very heavy real estate you certainly would not want to do that if you don't want to deal with tenants yeah and in my case we've got uh rachel's husband winston as you know runs all of of our property management and our development and all that. And so I'm blessed that I have Winston and a company, a real estate company that does that for me day to day. So that takes a lot of hassle off of me personally. I'm not over trying to make sure the heat and air is getting fixed on the house or something. I'm not because I got to run this place.

And so but anyway, all that to say that when you're first starting, you know, you can change the ratio back and forth. You could get into real estate and go, I don't like it. Yeah. And move back towards mutual funds or vice versa. Let's talk about those real estate things. I'm thinking there's probably people listening right now that they may be in that spot where they are ready. They've maxed everything out and they want to get into real estate, but they they've never done it before other than their own home that they've paid off. And they're looking to save up and pay cash for their first piece of real estate.

Do you have any advice for them? Like, hey, you've got to do this. You're just getting into it. Here's what you need to know from someone who's done it. Things to look out for, that type of thing? Yeah, the cheaper the property, the better the rate of return typically is, and the higher the hassle factor. Interesting. So you can buy lower income stuff in that end of town that your ROI, your math on it, is really sweet.

Okay. But your ROI on your time is not. Headache. It's quite the opposite. Yeah. So on the other end of the spectrum is like credit commercial real estate. So if you've got a household name as a tenant, or let's even go further, the post office wants you to do a bill to suit on a commercial. So the post office is your tenant, the federal government.

Right. Well, that's kind of like automatic. Right. You're going to get your check. Right. You don't have to worry about the collections. And it's a 50-year lease. It kind of just becomes you just go to the mailbox, open it, there it is, and there's your money.

But your rate of return is way down on that. They don't give much of a cap rate, much of a rate of return on that. So like a Walgreens, there's a lot of Walgreens. Walgreens doesn't buy those properties. They do build the suits suits and they get investors. But Walgreens is a credit tenant, meaning that you can actually take that contract to the bank and borrow against it. It's that strong. But on that end of the spectrum, that's the least hassle. And so kind of in the middle is like just regular offices or apartments. And then on down a little bit, it's just a nice

single family home. You're not going to make as much on that, but you also are dealing with a little different class of person, typically, and how you're going to interact with them, and the hassle factor goes down. So that's thing one. Thing two would be your money is made at the buy. And what happens on almost all of us, including me, on our very first investment property, we get really excited about being an investor. And you pay too much. You pay too much. On our very first investment property, we get really excited about being an investor. Yeah. And you pay too much.

You pay too much. You should always buy investment properties at a discount. You should never pay appraisal, ever. Okay. And in a market like today, that sidelines you. Right. It's very difficult. You don't have a chance, yeah. Very difficult to find deals today.

It's quite the opposite of 2008. Mm-hmm. It's very difficult to find deals today. It's quite the opposite of 2008. But if you buy a $200,000 property for $200,000, it's a little tougher to get your ROI on it. But if you can pick up that $200,000 property for $150,000, now you've got that built-in $150,000 to start with, and you're going to always not only have the appreciation, but then you're ready to return on that $150,000, because your rents aren't based on what you paid for it. They're based on what it's worth. Right. Right. All right. That makes sense. So you've got a $200,000 house rents aren't based on what you paid for it they're based on what it's worth right right all right that makes a two hundred thousand dollar house

rents for the same whether you got a mortgage on it whether you don't whether you paid 250 for it or whether you paid 150 for it still rents for the same amount yeah and so uh your rate of return on your rents and everything is changed by the monies made at the buy which requires this most difficult thing in real estate and and that's patience. And you're just shopping and shopping, and you're not emotionally involved, and you're looking for a deal, and we're not trying to hurt anybody's feelings, we're not trying to rip anybody off, but I just don't put money in stuff unless it's a deal. And I own... Because that's why you're doing it, is to make money.

That's why you're doing it. If you remember that, that's going to help you resist that temptation to overpay. This is a mathematical transaction. Right. Nothing else. Right. But there's something about real estate that's just very emotional. Yeah. For all of us. Even if you're not going to live there.

The first house I flipped, I made 800 bucks on. Wow. Translation, I almost lost money. Yeah. Yeah. Yeah. If I hadn't crawled around under the stinking house and put the pipes in myself, I would have lost money.

Lost money. So I didn't even make my labor back. Yeah. You know, I probably made a buck an Lost money. So I didn't even make my labor back. Yeah. You know, I probably made a buck an hour on working on the stupid thing, right? On my labor. And didn't make a dime as an investor. So that's unwise.

Yeah. But I was all excited. I had to buy it. And I thought it was a HUD foreclosure. I thought, because it said foreclosure on it, it meant deal. I didn't think that. But something in my emotions said, plus it's a foreclosure it justified it for you it's got to have some i gotta work on it i need some ways to fix it up it's a fixer-upper but i paid stinking obviously full price for it almost yeah uh because it took 90 days to sell

the stinking thing it didn't sell super fast and i had to work on it and i barely got out even with my own labor in it for free yeah so that's all about I was excited to be a real estate investor. Now, granted, I was 21 years old. Sure. But still, that's the mistake that beginners make. Yeah. That's a good discussion. Good.

Christy Wright, Ramsey Personality, is my co-host today. James Childs is in the booth running the show. Kelly Daniels is running the show and letting James think he is. She's the associate producer. I'm Dave Ramsey, and we'll be back. This is James Childs, producer of The Ramsey Show. You can listen to all our shows with the Ramsey Network app on your smartphone. Browse by topic or even send clips to your friends. Download the Ramsey Network app in your favorite app store today.