The Ramsey Show - App - How Do We Prepare for the Future? (Hour 1)

Episode Date: August 3, 2022

Dave Ramsey & Kristina Ellis discuss: Preparing for a child with special needs, How to teach college athletes about money, The best way to pay off student loans, What to do with the profit from a home sale. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the 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. We help people build wealth, do work that they love, and create amazing actual relationships. Open phones here at 888-825-5225. Christina Ellis, number one best-selling author and Ramsey personality, is my co-host today as we answer your questions.

Open phones, 888-825-5225. Stephen's in Mount Pleasant, Iowa. Hi, hi steven how are you i'm good dave uh first i want to say thanks for everything you do uh we spent just over two weeks in the nicu and if i had to worry about money while i was there i don't know what i would have done my goodness nicu nicu is both the most glorious and scary scary experience you can have at the same time isn't it yeah it was the 15 days the longest three years of my life yeah you don't you don't know you don't believe there's angels on earth maybe you just need to visit the people working in there yeah they were all real great but um so I had a question. We found out that my little girl has Down syndrome,

and some of these kids are able to go off to college, and some of them aren't, and we won't know her abilities until she's closer to that age, and we didn't know what the best way to save for her college is, or her future, I guess. Yeah, okay. In your name, just keep building mutual funds in your name, and you can just have one or two mutual funds that are just nicknamed

Little Girls College Fund, but they're in your name. Okay. And you're in control of it, and it's just going to be a taxable event um but um and then you've got all kinds of choices because you can do whatever you need to do or want to do okay big old big old pile of money but i don't want to put them into an account that if she is if her abilities are uh borderline functional okay like she is functional but barely and someone could take advantage of her and all of a sudden 500 000 bucks drops into her name at 21 years old nah don't want that okay right uh and so and if she's if she's really doing great

and she's going to be able to uh you know be independent then um then you can move some money into her name once you know that like you said when she's in her 20s or whatever that's okay you'll be able to do that but i'm just going to keep control of it in her best interest okay the other thing you're going to do is um you're going to set up in your will a special needs trust that is formed upon the death of both you and your wife. Okay. And the money that goes into that trust is set up to take care of her the rest of her life. Okay. And you name a beneficiary.

She's the beneficiary, and you name a trustee to manage that. You give detailed instructions on how you want that money handled. And I'm guessing you don't have a half million dollars to plump down in that today if you died, so you're going to assign part of your term life insurance to that special needs trust. All right. So the beneficiary of some of your current term insurance is going to be changed to where like half a million bucks or something drops in there, whatever the figure is, only upon your death, right? And the death of your spouse. So it's really the contingent beneficiary is what it amounts to.

On your life insurance, your wife would probably be your beneficiary. But in the event of both of your deaths, who gets it? And that's where you would split it up. So in our case, we didn't have special needs kids, but just minor children. We had a family trust that would have been formed when we had minor children upon both of our deaths. And that family trust had a name as a part of the will, and it was the contingent beneficiary. So Sharon was the beneficiary on my life insurance but if both of us died in a you know plane wreck or whatever then the contingent beneficiary goes

to into that trust to be taking care of the minor kids the only difference in that trust and your special needs trust is your special needs trust will go throughout the entire life of your daughter where the minor children's trust would have just been until they reached whatever age we wanted to release it to them as adults. Okay. So this one's more in perpetuation than a traditional family trust is. Does that make sense? Yes, sir.

Yeah. So get your wills done and laid out. Get the contingent beneficiaries where you're funding the care of her. And then later on, you know, 20 years from now, you may have just the money in a mutual fund, and you say, this mutual fund funds her special needs trust, and you don't need life insurance assigned to it. Does that make sense? Yes. But that way, she's got care perpetually, the financial care she'll need. And, of course, you're going to arrange other custodial issues as well, on uh you know how she progresses how she develops

so uh you have uh you have a rare privilege my friend um down's kids are an incredible joy uh they are i never met one that wasn't just the sweetest person on the planet big old hearts yeah hey dave in a situation like this would it be wise if he has other kids to potentially save in a 529 as well since it can be transferred to siblings you could yeah you could and you're the custodian so you're controlling that that that that might even be a better plan i didn't think of that that. Or just an option. But the other thing is, the problem is the 529 is, we transfer the siblings, but it has to be used for education. And we haven't, let's say that she doesn't go to school,

but still needs the money. Yeah. You can't get it out of the 529 for that. That's true. So you got to, I'm just going to keep it in my name. But that's a valid strategy. But the problem is you can't access it if something happens, if she doesn't go to school. And she is going to need financial support.

Right. Perpetually of some kind, because depending on, again, the severity of what she's facing on the development side. But wow. Wow. Wow. All right. development side but um wow wow wow all right open phones to 888-825-5225 that's a reminder for everyone uh listening if you don't have your will you get a well done yes and it's also so good he's being such a great dad thinking about this early and making a plan i know obviously coming out of the NICU and going through everything you just did is pretty traumatic and intense and just that's a great way to channel that energy thinking through you know how are we

going to walk this out how are we going to set her up for success in the best way possible yeah exactly it's um um you know start start planning and laying all that out and then that relieves that portion of your brain that worries about those things don't worry about that i can now concentrate on just her care right and her development just being her dad because i don't have that's done one less thing you know it's all for a scum thing one less thing one less thing to worry about because you did it because you check check the box you got it done and i gotta tell y'all the wealthy people that i meet that have immense financial peace in their wealth they're not dysfunctional they do detailed estate

plans and it's it's a because you want to keep the government's hands off of it b so that the money that you've worked so hard for goes the direction you think is best. And C, one less thing. Yeah. One less thing to think about. One less thing. I don't have to think about it anymore. Box checked.

There you go. This is The Ramsey Show. សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី how many times have you found yourself saying one day when you're thinking about a goal you have one day i'll be be able to buy a house. One day I'll be happy with my career. One day I won't have to battle with anxiety. That's called kicking the can down the road, boys and girls. Stop waiting around. Whatever your one day is, let's get with it. That's why we created Smart Conference. Smart Conference is the one-day event, oddly enough,

where we tackle all areas of your life. And guys, let's face it we could all use that kind of boost right now you're going to hear from the nation's top thought leaders on money career mental health relationships marriage leadership the event is hitting the road will be in dallas texas on saturday october 22nd it is 64 sold out that means if you want a ticket you should get one before they're gone this is a limited commodity they're on the platinum is sold out the vip is sold out uh general access passes are 39 these are best-selling authors world-class

speakers number one best-selling authors like rachel cruz dr john deloney ken coleman george camel christina ellis to my right i'll be speaking uh craig and amy groschel from life church will be talking about marriage and this is a world-class event this is an event that i sit in the audience and take notes i want to hear what these people have to say about their given areas and um it'll be about six or eight thousand folks in the arena it will be booming it's going to be a day long event you will leave it's the smart conference so you will leave smarter it's gonna work this is your first one to do it's my first one my first Ramsey live event all right so how nervous are you for that oh gosh are you I mean you get nervous you don't seem nervous on stage six to eight thousand people that's a lot of people well they don't there's

no more than 800 I mean it's the same you spoke in front of staff meeting the other day that's 1200 people you weren't nervous at all if you were if you were your cool hand Luke I'm just saying good nobody knew I like that I was standing on stage beside you I all. If you were, you're cool hand Luke, I'm just saying. Good. Nobody knew. I like that. I was standing on stage beside you. I didn't know you were nervous if you were nervous.

I think it's going to be great, and we're excited to have you join the lineup. It's going to be very, very good. So get your tickets, RamseySolutions.com slash events, RamseySolutions.com slash events. Do not miss this, folks. A lot of times you need your batteries charged. Let me just tell you what happens here, okay? This is not just information. Information doesn't fix your life.

Inspiration does not fix your life. Inspiration without solid information is just a wisp in the wind, right? It's just gone. Information without inspiration is boring as crud, and you won't activate on it you have to put the two together so you're going to laugh all day long you're going to hear great storytelling all day long you're going to hear world-class communicators that know how to take information and inspiration weave them together and cause you to come cause you to leave there and activate and that's that's what this is about and the other thing that happens that people have forgotten about and they kind of should remember after the pandemic shutdown the economic shutdown

uh you remember when we were flattening the curve and now we have no idea why we did that but yeah i remember that and so um yeah people all being in the room all ready to learn all ready to do something they uh there's energy that comes off of that that's very real and it's like going to your favorite sporting event right you go you know go watch your football team and everybody's cheering you leave energized from that and this is the only difference is you're not cheering for someone else's success here you're cheering for your success and it's it's exhilarating it really is our question of the day comes from blinds.com find out for yourself why blinds.com is the number one online retailer of custom window coverings you get free samples free shipping and with the new promos they run every month you'll save even more more. Use the promo code RAMSEY and you'll get the best possible deal.

Today's question comes from Katie in Mississippi. I'm a women's basketball coach at a large college. The topic of financial literacy came up in conversation with one of our freshmen yesterday. Our team of 18 to 23-year-olds is in a unique position to graduate with no student debt. They get monthly scholarship checks, additional cost of attendance money, academic incentive money, and whatever deals they acquire. Some of these young ladies are making serious bank and I'd love to set them up to succeed. Do you have any insights that would help our players maximize their financial opportunities during their college years?

Oh, I love that question. Well, I think just the fact that you're already talking about this is awesome. You know, so many students in college, they don't have conversations with adults about money. I know that's shocking. It seems like we use it every day. We should have these conversations, but I hear it all the time. Why did no one tell me about these basic financial concepts and how to prepare myself for the future? So the fact that you are having this conversation right now and wanting to set them up for success is huge. Lean into that. Now, of course, we talk about budgets a lot around here. So just even helping them set up a budget because a lot of these students, you said they're making bank. That's a lot of money for 18 to 23 year olds to deal with and figure out. So helping them figure out what a budget is, you know, get them set up

with every dollar or budgeting app and help them figure out where that money needs to go. Also, an emergency fund is always going to be useful if they can start having that money set up as a, you know, aside for any emergencies that pop up. I know a lot of their stuff is covered right now, but especially as a college athlete, things can happen. You know, they could get injured. There could be, you know, for some reason they could lose a scholarship or a deal. So having that money set aside while it's fruitful right now is going to be great. And then, of course, talking about their future, help them understand why it's important to not just spend that money right now. Like, it's great that it's coming in, but why is it important to save? You know, why is it important to build your emergency fund? And

then, you know, as they get towards graduation, thinking about, do they want to get a master's degree? You know, they need to start thinking about retirement. Do they want to buy a house? So helping them cast that vision at this point in their lives is going to be so helpful. Yeah, absolutely. If you're smart, you'll have them, you'll call and have Christina Ellis come speak to them. And that'll be a good basis for kicking this off. I'm not coming, but she would. And so my calendar's just completely blown up already through about this time next year. But it's important that you get information in front of them. And you might put them through Financial Peace University.

But at the end of the day, if you can somehow through some process, you teaching them as a coach and, you know, just pull them aside and go, OK, today we're doing an hour and we're going to talk about this. But the principles are this. What we don't want, and it's the problem with the with the NIL money that's going on. I've talked to several head football coaches who have already contacted me that are friends of mine in D1, and they've got kids getting, you know, a million bucks, three million bucks, five million bucks in D1 football. And I doubt girls' basketball is getting that much, but they may be getting something with the NIL monies out there, the name, image, and likeness money that's available.

They went from college athletes couldn't get five dollars to now they're millionaires you know and it's just nuts so um and and they're scared the coaches are athletic directors across the nation are scared to death the damage this is going to do to these kids it should be a blessing but i mean just look at at an NFL player and you can, you know, what do you got? 78% of them are bankrupt within four years of leaving the league. 78%? Is that bizarre? That's bizarre.

Wow. No, that's not right. 78% are disabled. The bankruptcy rate is 4X, the national average. It's four times, you're four times more likely to go bankrupt if you're an nfl player than the average person dang that's painful and because what they do they they do stupid on steroids they get money coming out their ears and they go bananas and if you can't do it at 23 years old when you're a second round draft pick you sure as crap can't do it when you're 18 years old without somebody coming alongside you putting their arm around your shoulder and kicking your little butt and that's what needs to happen here and lovingly

this coach is asking that in a very nice way she cares about her students welfare and that's great what a great coach so thank you katie for being that person now here's what i would tell them if you can get it if you can get this through their little heads, they got a chance, okay? They need to lay out a game plan where a percentage formula is applied to every dollar that comes in. I'm going to set aside X for generosity, Y percent for future investment, and Z percent for spending. And I'm not going to spend more than the amount I set aside. So you give them some money to spend and enjoy the money that they're making. But the vast majority of it is invested and set aside for their future. And that way they don't wake up at 32 years old and want to kick their little 18-year-old self's butt later.

And so that's, God, man. So, yeah, you've got to have them lay out some boundaries so they don't live with that horrible taste of regret in the back of their tongue the rest of their life. This is The Ramsey Personalities, my co-host today. Open phones at 888-825-5225. In the lobby of Ramsey Solutions, Jazz and Cassie are with us. Hey, guys, welcome.

Hi, Dave. How are you doing? Good to have you guys. Where do y'all live? We live in Fresno, California. Oh, great. Cool. Welcome to Nashville.

And all the way here to do a debt-free scream. How much have you paid off? We've paid off $446,000. Cool. Wow. And how long did this take? It's about nine and a half years. Very cool. And your range of income during that time? We went starting at about $150,000

and then up to about $265,000. Very cool. What do y'all do for a living? He's a bus driver and I'm an engineer, civil engineer. Ah, very good. Good. So nine and a half years, $446,000. Is that your house? Yes. You paid off your house! You're weirdos! Way to go, weirdos! I love you!

Dave, we did something more weird than that. What'd you do? We paid off two houses. Two houses? Well, you're double weirdos. Okay. What's the other one? A rental or?

A rental, yes. Okay, very cool. So what's the other one a rental or a rental okay very cool so what's this house worth so our house right now is worth about six hundred thousand dollars our primary house and then we have the rental that's paid for as well we have a second rental that uh what we inherited so that was a booster what are they worth they're about four hundred thousand so just in real estate alone you're millionairesaires? Yes, sir. Way to go! How much in investments? In investments, it's about a half a million and 1.5 in real estate. Okay, excellent. I love you. Amazing. All right, somewhere around a decade ago,

you learned something about the Ramsey Way. How did you get connected to the Ramsey way it was through my dad and and it's hard for me because in 2016 he passed away my dad was 100% blind he was hit and killed by a car but I can still remember when we first started this Dave Ramsey plan my dad when being a city bus driver I was driving buses and i had split shifts and so when i would go uh to their house during the split shift he would have dave ramsey play on am station i'd be like dad turn that stuff off i ain't trying to hear all that turn that off and so about five years happened of that and it's all god's timing where uh i heard something that caught my attention and from that point forward we started just you know we're uh i was all in at the time yeah okay i

remember what it was it caught your attention no i wish i did a lot of people have asked me that okay all right sorry about that cassie what were you gonna say i was just gonna say i was slower to the table it was like who is this dave guy living in our house i do not know who he is i don't even like him what is happening i make I make good money. I want to spend, spend, spend. But it was contagious. And Financial Peace University was the game changer for me. Went and attended at my church and was just encouraged that everybody was there trying to make their life better. And it's definitely been life changing. And I can't say enough about that program and just how it brought me to the table to really support my husband and be in it all all in all in at that moment well that's definitely

the way to learn the Ramsey way now the uh uh how long ago did you go through Financial Peace University it was about nine and a half years ago that's when it kicks the whole thing off oh that's the final bow then and then here we go. Game on. That's right. Okay. Very cool. What's the name of your church? It's Cross City Christian Church in Fresno. Very good. Cool.

Okay. So once y'all are on this journey, there's a little bit of hesitation to start, but once you were on it, you were on it. What did it look like? What did y'all do to get out of debt? Well, the way it started for us,

we were already doing smart things with our money. We were already on baby steps four, five, and six. And so from listening to the show, I'd seen so many people talk about gazelle intensity and baby step two, and I wanted to feel that. And so what we did was be pretty much gazelle intense and where we made, like David Bogtox in his book, Automatic Millionaire, about making everything automatic. That's what we did. And we set aside 5,000 a month for 54 months to knock out our house. And then we were comfortable. But the key for us was making everything automatic.

That's awesome. Did people think you were crazy? Yeah, some did and some just, oh, that's nice. That's the thing that you're doing. That's good for you guys. I love that you just went gazelle intense to get this house paid off.

That is a lot of money in real estate, y'all. That's amazing. What he didn't say is he worked all day, every day for a very long time. So we didn't see him so that we could do all of that. And it was hard. It was hard, you know, people going on vacation, people buying new cars.

I had the same van for 12 years. It's like, oh, I'm tired of this man. I want a new van. 12 years it's like a dire to this man I want a new van was it worth it it was so worth it it was so worth it and we would do it all over again and and in a heartbeat was it worth all the extra shifts jazz yeah one of the things was uh I averaged several 30 days 60 days straight uh my record was 86 days straight and it was a good thing I love what I do I love the the people there. It was a great experience. But you got to have your why in front of you. And when you have that why, we have lots of,

we had a poster board where we set our goals for the house originally. And then for the second house, we set up a rice and beans like a thermometer jar that we could visually see. And when you set those type of goals and make it visual, it's life-changing to where it forces you not to quit and hold yourself accountable, especially when your kids are watching you. For all the people who think, you know, I could never pay my house off, that's an unattainable dream, what would you tell those people is the key to getting completely out of debt? I would say the key to getting out of debt is a lot of people that I like to be coachable, teachable to, and I teach this plan to people is I tell them, if you want to lose weight, you go to a basically a physical gym to get physically fit. Well, in the financial world, then you should be going to a financial gym.

And that's where I go to the financial gym, Dave Ramsey podcast and listen to Dave Ramsey show and listen to other self-help or also read self-help and spiritual based books to keep yourself focused because you got to stay strong and stay committed because the people that I've seen around me in this 10-year period, the majority of them that quit, stopped watching the show, stopped doing the things that got them

to where they were heading in that right direction. So that's key, I believe. Yeah, you guys played all the way through. Pretty cool. Now, you don't have a single payment in the world. How's that feel? Amazing. Definitely freedom like no other.

I have people that I know, we all know that struggle. And it's just a freedom like you can't explain. You don't have to worry about during the pandemic. You didn't have to worry about what happens, what's going to happen if we, you know, lose our job. And it just brings a peace that is just indescribable. Yeah, I don't think you can. I mean, we try to talk about it and try to help people visualize how it feels and so forth. But there is something that happens when that last payment goes out and you go, we're done.

You just kind of have this moment. It's a physical reaction for a lot of people and me it was so way to go y'all way to go i'm proud of you excellent excellent job baby steps millionaires along the way a hundred percent debt free times two yeah and two houses yeah you did two of everything didn didn't you? So good stuff, guys. Very, very well done. Very well done. So we got a copy of Baby Steps Millionaires for you, the book. We got a copy of Total Money Makeover for you.

And the way you guys are talking about this and evangelizing out there, you're going to let people know about it. And we'll give you a one-year membership to Financial Peace University, the new one, with the new videos with Dr. John Deloney, Rachel Cruz, George Camelorge camel me it's the best videos we've done on that course right now and so uh but you can give that away and you guys are givers i can tell you're going to be able to help a lot of people as you talk about this and plug in we'll hand all that off to you all right bring the kiddos up so introduce them get their names and ages so this is our son Zachary he's 16 and this is Malaya she's 12 all right very good very good good job guys excellent I think the other thing Dave that we

didn't mention is knowing that we're setting these guys up on the right path that that's the other thing that's just very encouraging as a parent to know that these guys know that debt is not okay and not to get themselves in those types of situations. And this kiddo, when he was in kindergarten, said that there was some kid talking about a credit card, and he got in trouble. I got a call from the office saying, your son said credit cards are stupid. He used the S word. And I said, well, I can't really get him in trouble for

that right so i taught our son to speak the truth i said just you know just maybe use a different word yeah well maybe not that was pretty that was pretty descriptive yeah i like it all right jazz and cassie way to go guys fresno california 4, $446,000 paid off. Baby Steps Millionaires, times two. Nine and a half years, making $150,000 to $265,000. Count it down. Let's hear a debt-free scream. To God be the glory. Three, two, one.

We're debt-free! Yeah! Woo-hoo-hoo-hoo! That is how it's done! This is the Ramsay Show. Christina Ellis, number one bestselling author of Ramsey Personality, is my co-host today. Thank you for joining us, America. Ben is with us. Ben is in Charlotte, North Carolina. Hi, Ben. How are you?

Good. How are you? Better than I deserve. What's up? Yeah, so I just had a quick question for you, and that is, I'm getting a lot of financial aid uh refund money and i was wondering if i should go ahead and start paying off student loans with that money are you out of school uh no sir i'm a senior and um i finished getting my undergrad where is this refund money coming from did you get a bunch of scholarships this year yeah so I got around $6,000 in scholarship, and then I also got married two months ago. So we got around $10,000 a piece as well. Okay, and the $6,000 in scholarships, is that being used to cover tuition? Covered already? Yeah, so my tuition is actually only $3,900

per semester. They split it up between the two and I'll be getting like $4,900 or $4,700 back per semester. Okay, and how much money in student loans do you have right now? So my wife's the one that has student loans and she only has $11,000 and the only reason i even uh was calling tuesday i know that the uh 2 000 of it is unsubsidized and i know that that accrues over um like while you're still in school the interest accrues on that and i know there was a stop on it until august 31st has she graduated uh no sir she graduates with me next May as well. Okay.

What are you studying? I'm actually doing accounting. Good. What about your wife? She's doing graphic design. Good. Great. Good job. How are you all paying for your expenses right now? Because I know a lot of times that refund money is built into your package to pay for room and board and meals. Do y'all have jobs? Like, how are you paying for your living expenses? So right now I'm an intern at a local accounting firm up in my school. That's actually about to end. I'm about to actually pick up another job. She's a server at Chili's. And that's what we're both going to be doing during the school year. I love that. Good for you guys.

Well done. All right, so here's the thing. The 10 months we have until you graduate in May mathematically doesn't matter on interest accruing. Okay. What does matter is a brand-new marriage, a senior year in school, and making sure that we get out of school with no debt. And so what I would do is park all the cash to the side in a simple savings account and forget it's there. Okay.

And work your way and scholarship your way through the remainder of the year. If you end up with more cash just pile it up over there when you both graduate and land your jobs in may june and now we're setting off uh we're changing we're transitioning from college years to uh to to the adult game then right when you make that transition and you have those jobs and that money's coming in now you set your new budget up and then you pull the money out of that account and you pay those student loans off that day okay so one year from today okay pay them off then and in the meantime that cash that big pile of cash here's what it gives you at number one it's an insurance policy that you're going

to finish school with no more debt agreed no matter what happens you can make it with no debt we know that okay now the trick is to maximize your other stuff and not use any of it so that that money's free and clear next summer okay but number one it's an insurance policy here's the thing that you should get from it if both of you are in agreement on this you both should get a a level of stress a level of anxiety removed because you're sitting on 25 30 000 over there it ought to allow you to go and that's a really cool thing to do in your first year of marriage so not have your back against the wall with somebody pointing a gun at your face right yes sir and this this is that relaxing thing and there's so there's a relational benefit you're going to study better you're going to work better at chili's you're going to

everything's going to be better because you don't have money worries. Yes. Oh, what a relief. What a strong foundation to start on. And what a great job you all have done. Yeah. They're impressive. And I love that his story highlights something that I think a lot of people don't realize

about scholarships. So a lot of people think scholarships just cover tuition, that if you cover tuition, that's all you need. But most schools lay out their cost of attendance, which includes everything you need to go to school, meals, books, housing, transportation expenses. And you can get scholarships all the way up to cost of attendance. Therefore, you can get it to cover things like meals, books, and it'll come in the form of a refund check.

He is getting a check cut to him by the school to pay for those other expenses. So it's really great to go for scholarships because it can pay for some of those outside expenses. You can't go over the cost of attendance. So you can't just want a bunch of scholarship money and go buy a car with it, but it will cover your living expenses as well if you get enough scholarship money. Yeah. Excellent.

Well done. Well done. Well done. Good job, guys. Open phones at 888-825-5225 dan's in atlanta georgia hey dan what's up dude is hello hey how can we help okay wife and i are going to have eight hundred thousand dollars on the 29th of this month i hate it when that happens yeah sale of our home that we had paid off.

We doubled our money in 24 months on that home. Good Lord. So we feel very blessed. We bankrolled three college educations over the last few years. So we don't have a lot in retirement, only about $40,000. So the idea was we're going to downsize a little bit, maybe build or buy no more than 500K and then have the extra 300. Just kind of want to know if that makes sense, or should we be thinking, should we not buy at all? Should we rent? Just kind of want to get

your feedback. No, you should buy. And that sounds like a good number i like your number what's your household yeah what's your household income uh it's a hundred right now david um i uh i originate mortgages so right now you know if things stay the same the way they are right now there's no refi business yeah uh and with my agent business you know our our household income is going to probably drop to 70 i'm guessing yeah that would be at least yeah yeah so with that in mind uh you think half millions okay yeah you're paying cash for it oh absolutely yeah you're paying cash for it i mean and that leaves you 300 to put it sit down with your SmartVestor Pro with the $300 and start some good mutual fund investing.

How about some residual income, maybe a little $200,000 fixer that can be an Airbnb or a renter? What are your thoughts on that? Be fine. And that's going to leave me $100 in the bank. That's fine. You're real estate people. But I wouldn't run my pro forma out based on Airbnb. I would run it out based on rental. If you want to run the Airbnb, that's fine, but that's unrealistic. That's not sustainable long term for a lot of reasons. Number one, there's a lot of markets that are shutting down. Airbnb's with zoning changes and law changes.

Yeah. And the other thing is HOA too. Yeah, HOAs are shutting them down. It's, you know, it's really tight. That market's tightening up. And the second thing is it's a complete pain in the butt because you're dealing with a new tenant every 20 minutes, you know. And so you make a lot of money, but the hassle factor of it is legitimately a problem so you know you can go make some money for a few years with it but you're gonna get tired of

it and rent it so uh i think um let me tell you how many airbnbs i own zero just for that reason okay i don't i don't there's good money in it you can do it but it's a complete it's a lot of work you're in the hotel so i mean it's like real work and stuff so it's not you said passive there ain't nothing passive about it it's not passive income at all it's active income so i mean technically from a tax standpoint you could call it that but it's very active so yeah go ahead and do that but buy it based on the fact of what you can rent it for, because someday you're going to end up doing that. But if you want to do real estate instead of mutual funds, fine with me. I do.

I do a lot of real estate. Especially as he heads into his retirement years. Running an Airbnb does not sound like the most relaxing thing to do. I mean, you can do it, but it's... It's a lot of work. It's work. Yeah. It's...

There you go. That puts this hour of the Ramsey Show in the books. Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today.