The Ramsey Show - App - How the Media Uses the Addictive Nature of Fear (Hour 2)

Episode Date: August 10, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. Chris Hogan, Ramsey personality, podcast superstar, and number one best-selling author, is my co-host today here on the air. How do you like that podcast superstar thing? I like that, Dave.

It's got a little ring to it. Got a little ring to it. It does. That helps you out a bit. Let's keep it. You make me feel good today. That's good. Well, you should.

Here you are. You're lifting me up. It's all good. Jennifer is in Stock good today. That's good. Well, you should. You are. You're lifting me up. It's all good. Jennifer's in Stockton, California. How are you, Jennifer? I'm doing very good. Thank you so much for taking my call. Sure.

What's up? So I have, well, I didn't know that I had a couple of retirements from different schools that I had worked with over the years. They didn't have, like, I didn't contribute to them. I didn't literally know anything about them. I've done everything backwards in my life. I've literally gotten my AA before my GED. I've literally everything. I'm currently in the middle of going to be switching jobs. And I'm wanting to know if I should take those and close

them and put them towards the debt that I have. No. You should roll them to an IRA if you can take them. You're allowed to take them in all cases? Some retirement plans allow you to take stuff, some don't. If you're in a pension plan, they may not let you roll it or cash it in, either one.

But if they're allowing you to cash it in, if they're allowing you to take a huge chunk. Yeah, big time. Yeah, you would just roll it from there to an IRA. Get a SmartVestor Pro to help you do that. If you don't have somebody to help you, click SmartVestor at DaveRamsey.com. These are guys and gals in the investment world. We're not in that world, but these are the people we send you to if you need help with something like this that have the heart of a teacher. If you don't do that, Chris, she's going to get hit with a lot of

taxes. You really are. I mean, it is going to be almost close to around 40%. And so there's no reason for that, Jennifer. Roll it over as Dave is telling you. But tell us, how much debt do you have? So I have a total of $52,000 in debt. Okay. How much of that is a vehicle? None. I've been trying to run my car into the ground for the last 10 years now. All right. So what is this $62,000? So the $52,000 is for the house. I took all of my debts, consolidate them. I had owned my house outright at $27,000. I'm now $33,000. And I borrowed against the house in order to just put it all into one spot. Okay. So you only owe currently on your home?

Correct, the $52,000. Okay. And your income is what? My income is going from $26,000 to $33,000. Okay. All right. Cool. In the next couple months.

Good. Good. Okay. So roll this money to an IRA. Do not borrow money at 40% interest or 35% interest, which is what the taxes and penalties will be, which is right, in order to pay down debt. Instead, let's just focus on making sure you have an emergency fund in place of three to six months of expenses. That's your first savings goal.

And then you would start saving for retirement. And then you would start paying down on the house as you go at that point. And, Dave, I'll tell you, I hear about that, those consolidations. And, you know, it's one of those, I mean, if she owned a home at age 27, my goodness. Don't secure unsecured debt with your largest monetary asset. You're home. Don't do that. You don't want to...

In her case, it's too late. It's too late. It's too done. But if you're out there right now and you're hearing people do fuzzy math where we can save you $300 a month, and really not, they're extending the period of indebtedness that you're going to have the debt with a consolidation loan. Leave these loans individual. Go debt snowball smallest to biggest and attack it.

Don't fall for the lie. Yeah. So, Jennifer, that's the answer in your case. And Chris is right for the rest of you out there. Don't fall for this. Because personal finance is 80% behavior. Yep. It's only 20% head knowledge.

And if you, you know, here's what's interesting. The Bible says out of the abundance of the heart, the mouth speaks. So when someone talks about consolidating their debt, like, you know, going and putting it on the house or moving the debt over to something else, they say, I paid off my credit cards with this loan. Instead of saying, I moved it. That's exactly right. Which is because you didn't, you didn't pay it off. i moved it that's exactly right which is because you didn't you didn't pay it off you moved it but that tells you that you feel like you've gotten some relief from the stress of the debt and i don't really want you to have relief from the stress of the debt until you

get rid of it and so if you got some credit card debt you got a car loan you got some other stuff work your way through a debt snowball and get that cleared up. Don't move it around because you'll always find that that P is under one of those shells. It's still there, the shell game. You're going to find it. It's going to turn up. It's not going away until you pay it. And so the only way debt gets paid is you pay it. That's it. And Dave, I can tell you back in the old days when I was banking, you could put people on a clock. They'd come in, do the consolidation. A year later, guess what? Do it again. Coming back to do it again.

Because they never treated the symptom, which is the debt. The problem was the overspending. That's right. And the problem was the disorganization. The problem was no budget. The problem was no vision and no plan. And until you get down and you fix that problem, you're going to continue to run up debt. It's just going to show up somewhere else.

And you moving it around doesn't stop that. So, again, that's not picking on Jennifer. Her deal's already done. Right. So we're not shaming you, Jennifer, but it just brings up the subject of debt consolidation. The answer to your question is, in your case, is roll your retirement into an IRA, a direct transfer rollover. It's called direct transfer rollover with a SmartVestor Pro. Stan is with us in Gadsden, Alabama.

Hi, Stan. Welcome to the Dave Ramsey Show. Hey, Chris. Hey, Dave. How you doing? Good. How can we help? Yes, sir.

I'm 62. My wife is 64. Okay. When March rolled around and COVID-19 took over, I took our money that we had in the 401K and I put it all in stable value. I know now I shouldn't have did that, but that's what I did. Because, you know, I've took the big hit a couple other times. I don't want to take a big hit again being my age.

You just took one then. Yeah, I agree. I agree. I don't want to take a big hit again being to my age. You just took one then. Yeah, I agree. I agree. I did do that. All right. I have right now in my 401K sitting there on stable value, I got about $300,000 sitting on stable value, and I got about $170170 in my savings account.

You just send there, and neither one doing anything, okay? Another thing is— How many times have you done this? How many times have you pulled the money out of the market when it was down and you were scared? Too many to say. Too many times to say, Dave. And that's my fault and part you know and if i'm conservative my wife is a hundred percent more conservative we're and we're we're i'll say

conservative i'll say more like skeeter okay what can we answer for you today so many times we're just more scared yeah okay so and that's where we are i'll tell you what when you come back from this break we'll talk you through and find out what's going on with you and we'll go from there this is the dave ramsey show In today's world, technology and innovation are crucial for any company's success. But the primary focus should always be on you and meeting your needs. That's why you get the best of both with Zander Insurance and their term life plans. Zander uses time-saving technology like over-the-

phone applications, voice or electronic signature, text message updates, electronic policy delivery, and even plans with no medical exams to speed up the process of getting you the protection your family needs. One of the reasons I've endorsed Zander for 20 years is they never skimp on service. They are committed to serving you, whether you want to do business online or need that personal touch. You pick your path. Go to Zander.com or call 800-356-4282. Zander will guide you through the whole thing, keep it simple, and find you the best rates. That's zander.com or 800-356-4282. Chris Hogan is my co-host today here on the air, Ramsey Personality. We're talking with Stan in Gadsden, Alabama. Stan has pulled his money out of the stock market when it dropped several different times.

He did this again back in COVID. That's $300,000 sitting in stable value, I think he said, and $170,000 in a bank account. That's how far we got in the discussion. Is that a fair summary of what you told me so far, sir? Yeah, that's pretty good. Oh, and you're in your early 60s, if I recall. 62.

My wife is 64. And she's more conservative than you. Okay. Yeah, she's a lot more conservative than me. And here we are. I lost my job in March also, okay? When I lost my job in March, they had a, for our severance package, I took this option that over the next two years, I'll make $800 a week over the next two years and keep my money.

And they keep investing $8,000 a year in my 401k. Plus, they keep paying my insurance for two years. And that's why I'm mad. I can't go out and get another job. If I go out and get another job, I've lost that. Okay. Okay? So that's why i'm at and we we went the last about a few weeks ago we went to some smart investors

okay smart investor pro they talked to two of them two of them nicest people you can meet but i'm i'm getting different signals from different people I talk to, okay? One of them wanted to put me like 70% in bonds and 30% in mutual funds. The other one wanted to put me like 124 in a variable annuity and then 120 in mutual funds. And I've heard you talk negative about bonds, and I've heard you talk negative about variable annuities, and, you know, I'm just confused. I don't know which way to go from there.

Okay. I'm confused, too, so I'll put you on hold when we're done, and I need the name of both of those SmartVestor Pros so we can investigate what happened with this advice that's off kilter. Okay. So, and, you know, we'll work on that. I'm not sure you should invest in the stock market. Okay. It's what I would do, but I don't think you should because you suck at it.

You are right there. You keep pulling money out at exactly the wrong time regularly, and every time you do it, you know it's the dumb thing to do, and you keep doing it. So I don't think I'm going to put you back in there again, man. Right, right. And, you know, like I said, sometimes I wish I could stay in, but I just got more scared than anything. Stan, you won't.

You are bound and determined to do this again. So let's get real. How much debt do you have right now? I'm good with debt. Not good. What does good mean? Well, just our... Are you debt-free?

Yes, sir. Don't owe nothing on my house. Don't have no credit card bills. Well, see, that's great. Okay, that's beyond good. We just have our monthly bills that we always have. All right, Stan, listen. We got to grow this money, though, buddy.

Okay, right now you have it buried in the backyard in a jar. I agree. Watch what we do, Chris. Well, buddy, you're it buried in the backyard in a jar. I agree. What should we do, Chris? Well, buddy, you're going to have to grow it. Now, unless down in Gadsden you can grow some interest out the ground, we've got to invest this money. We have to. Listen to me, Stan.

Buddy, you. I really, I think you need to buy like a rental property. You're over 60. You can start pulling some of this money out. You got the $170. I'd probably go buy a rental property or two and manage the rents off of that. It's a little harder to sell every time you freak out because I'm scared to put you back in mutual funds. I don't think you're going to stick.

He won't. There's no chance he is going to pull back out. And, guys, what we're talking about of pulling out of the market, you're missing the opportunity. Hey, Stan, hold on. Zach is going to pick up. I need those two SmartVestor Pros. When you pull out, you miss the opportunity for the rebound. And that's where you've got to be able to look at this and be able to stomach and understand

what it is you're dealing with, which is why we talk about talking with the SmartVestor Pro so you can talk about your concerns but understand what you're invested in. Yeah. Vista Pro so you can talk about your concerns but understand what you're invested in. Yeah, you know, the variable annuity has a feature to it that allows protection of principle. And so if the market turns down, you don't lose your principle. So that may be what that Smart Vista Pro in that case was talking about. Bonds, I have no idea how you got there because that sucks. But the thing is, if you keep jumping off in the middle of a roller coaster ride and every time you do you break bones and you do it again anyway,

I don't think you need to be on a roller coaster again. Just because you get crazy when the ride happens and you jump out in the middle of it. Yeah, it's just, you know, and that's hard for people, you know, to continue to do that time and time again. Everybody just about has a story they did it once. Right. You know, I didn't. But, I mean, just about most people do. And not because I'm smarter.

I just did enough other dumb things. I didn't do that one. But you don't get hurt. You know, we were yelling at you guys during March. Well, we were trying to be kind. Maybe we weren know we were we were yelling at you guys during march well we were trying to be kind maybe we weren't yelling you were yelling we were being very direct and very blunt do not take your money out of the market when it's down in february and march when it dipped because the stock market did because of covid and the perceived idea that companies were

going to lose profits which of course many of them did did. But the market is back. Yep. If you had just waited for 90 days, you would have experienced an upturn. And if you buy at the height when everything's going good and you sell when it's low, of course you're going to lose money. You know? So you have to ride it until it comes back up. And it's hard to do emotionally but the only thing that makes you do it emotionally is if you believe that it's going to come back up right if you didn't think it was going to come back up you wouldn't do it but there's tons of historical

data that indicates that fluctuations in the market are the only thing you can count on up and down up and down up and down so when it goes down you can just about i mean you can just bank on it literally that it's going to come back up you really can't and what you have to stop doing is listening to the talking heads on tv oh lord jesus i mean they will have you swigging on pepto like it's a milkshake you listen you can't listen to that stuff you gotta you gotta be clear and say okay i gotta sift through the crazy to find out the facts and they they the best ratings in television and on radio the best ratings are when we can make we in broadcast can make you afraid so a thunderstorm a tornado a hurricane a stock market crash a pandemic

if we can make you afraid, you get glued to the TV because fear activates the same part of your brain that pornography activates, and it's addictive. And I call it fear porn. And so these networks have engaged for the last six months in fear porn, and people have gotten to where they're just, some of you have lost your dadgum minds with fear. You used to be nice people and you become mean and hateful or you're curled up in the corner of your house,

sucking your thumb and you're perfectly healthy. You've become addicted to fear because you keep that stupid television on. I've never thought about it that way, that fear can be that level of addictive. You would think it'd be the opposite. Well, you think about it, it's like moth to a flame, right? Right. You're drawn to it, you know, and it's activating. It's almost out of your control.

It has an addictive principle to it. And so, and it's the fear porn is worse right now in America than it has been in the history of this nation. It has never been like this. It's peddled. And let me just has been in the history of this nation. It has never been like this. It's peddled. And let me just tell you guys, I know these guys, and they're doing it for ratings. They're doing it for ratings. And so when the Weather Channel can put COVID-19 deaths on there,

and you can click on it in the toolbar of the navigation of the site, when you're looking at temperature and storms and whatever. You can click on COVID-19 deaths for your state, COVID-19 cases for your county. Wow. You don't think they put that on there for a reason? No, yes. Because they sell banner ads, and the clicks is what their ad sales go off of. So, you know, the weather channel, for God's sakes.

But they're specialists at this. This is what they do. So when do you click on the weather?, for God's sakes. But they're specialists at this. This is what they do. So when do you click on the weather? When it's sunny? No. You click on the weather when it's stormy. That's right. When you think there's a line of thunderstorms coming in, you're going to get struck by lightning or hit by a tornado or hurricane or something.

And so it's all fear-based, and it's really, really dangerous. And it can affect your health, your mental health, your relationships. It dadgum for sure affects your money. Oh, it does. I've got a friend of mine who's perfectly healthy. He was. And since then, his blood pressure's through the roof. Cholesterol levels are high.

He has scared himself sick. Dr. Ramsey has a prescription for it. Wait. Throw a brick through your TV. His blood pressure will go right down. What? It will. Okay.

Turn off CNN. Turn off MSNBC. Turn off Fox. Turn it off. Don't break the TV. Well, if you can't do that, then throw a brick through it. It'll stop it. This is the Dave Ramsey Solutions on the debt-free stage, Jeremy and Sarah are with us.

Hey, guys, how are you? Hi. Doing well. Thank you. Welcome. Where do you guys live? Columbus, Ohio. Oh, fun.

Welcome to Nashville. Thank you. And all the way down here to do a debt-free screen. Yes. How much have you paid off? $197,000. Well, and $274,000. Can't forget that. Good for you. Very cool. Almost $200,000. Wow. How long did this take? Seven years. All right. And your range of income

during that time? Started at $88,000 and up to $130,000. Cool. What do y'all do for a living? I'm a senior financial analyst. I'm a registered medical assistant. Cool. What was the $197,000? So the primary piece of that is $136,000 in student loans, $36,000 in car, and $25,000 between medical, other consumer debt, and a personal loan from my former friend now. Wow. Uh-oh. Yeah, that does that sometimes. Yeah. Sorry. Wow, $197,000. Yes. What started this journey seven long years ago? Well, this goes back kind of to when I was

10 years old. I started working and at a very young age developed an infatuation, a very unhealthy one, with money, which led to theft from family. And then what led to theft from employers. Longer story short, got done with high school, went to college. And at the end of my first year in college, started playing online poker. That led to a seven-year crippling gambling addiction. And for the back half of that, I had met her. And every step of the way, she had been by my side.

And finally graduated in 2009 with my undergrad in finance, oddly enough. And then felt like the Lord was calling me to go back for my master's. And I fought and fought and fought. Ended up doing it and just pushed through 11 months. Got that done. And then not long after that, her brother, who had previously gone through financial peace, he and his wife put us through the financial peace course back in 2011, which led to 2013 where we paid our first student loan payment.

It was $445.82, and I saw that $11 of that would be going to the principal. Found that if we were to pay minimums based on their schedule, I would be two weeks shy of my 98th birthday. Oh. So he got angry. Yeah. Very angry. Where did the gambling addiction fall off?

Right about that time? It was 2010, actually, right when I graduated the master's program in information systems. So you've been dry 20 years? 10 years. 10 years. 10 years, I'm sorry. Okay, good. Well done. Congratulations.

Thank you. That's a tough one to break. Fastest growing addiction in America today is online porn. Second fastest is gambling. Everybody thinks about drugs or opioids or alcohol or anything else, but that's the second fastest growing addiction right now. We deal with it every day in here with our financial counseling. Yep.

So, wow, congratulations. I'm proud of you. Thank you. That's very cool. So for 20 years you've been dry from that, but in 13, or in 11, the next year you went through FPU. Yes, and then we got married in 2012. Okay, and then we're game on. And then, yeah, so 2013 we made our first payment, and we're thinking, okay, well, now this will kind of jumpstart that.

Well, 2014 to 2017, we had a medical catastrophe every year. Anyone that you would talk to that knew us knew our luck with that. Either I was in the hospital or she was in the hospital or I was in a car accident. Wow. Something like that. And it was just just it was draining and uh 2016 is when i finally reached my boiling point uh because i was working in my career and i uh told her i wanted to get a second job so i was a server at cracker barrel for about six months in that and then i ended up

working a third job for a while uh ended up being for about two years for a friend's uh retail business on amazon so you were throwing every extra dime at the desk yes every uh bonus that came in um and it was so the majority of this happened in four years not seven uh the last i believe it was 130 roughly in the last four years. And just got pissed off. There was a lot of money fights. And this woman, I think before we got married, I tried to push her away with everything. She just wouldn't go away.

And that's a good thing. She's been by my side ever since 2007. Just incredible. So Sarah, what's this journey felt like for you? It's been long. And you had mentioned earlier that your name being a cuss word in the house and for a long time, it really was in our house.

I was very much so the free spirit and I hated having the debt, but it just didn't really seem to be such a burden to me as much as it was to him. He's very much so a numbers guy. So I was just kind of like, eh, it's there. Like, everybody has debt. It's normal. Like, we're going to be fine.

You know, we'll get it paid off one day. And he just was relentless. And when he gets a fire lit in him, he doesn't stop. And it was lit. So there was no putting it out. And it was easier eventually just to be on board than it was to be off. And I'm thankful that I jumped on board. So how long ago did you feel like you jumped on board?

Oh, gosh. Honestly, probably within those last four years. Yeah. It sounds like that's when everything came together. Yeah. The past was far enough in the rearview mirror and all the other stuff that caused you to have a lump in your throat when you were telling it a minute ago. Yeah. The past was far enough in the rearview mirror and all the other stuff that caused you to have a lump in your throat when you were telling it a minute ago. Yeah.

That's just far enough back that you can move past the shame and into the victory and start winning in some of these other things. Very well done, y'all. Yeah. Thank you. It's close enough that you can still grab it emotionally. Oh, yeah. And, you know, that's one of those things.

You don't want to forget it. You know, I tell people, it's okay to glance back. You've got to focus forward. But there's some stuff you've got to glance back and you go, that hurt. of those things you don't want to forget it. You know, I tell people it's okay to glance back. You've got to focus forward. But there's some stuff you've got to glance back and you go, that hurt. I don't want that anymore. Amen. You know, proud of you, man. Thank you.

No, I really am. I really, really am. This is, you can see it on you that you battled. You went through some stuff. And, you know, you haven't hurt by your side. It makes a difference. Yeah. Makes a difference.

Absolutely. So what advice do you have to a young couple out there that's facing this kind of debt? What are the steps, what are the keys in that last four years in particular that caused the needle to move for you guys? I think just being intentional with your money and sacrifice. There was a lot of sacrifice. That was honestly one of my biggest reluctances to the whole process was just seeing everybody else around getting to take really great vacations or just do really fun things with their money and just kind of holding back a little bit and reserve and, you know, not chasing the dream that we wanted so quickly, but just taking the time to get there. So I think just and also.

Who were your biggest cheerleaders outside the two of you? So I think first my brother and sister-in-law that they put us through that before we even got married. It was just a great foundation to be laid. And then, honestly, I feel like he was the biggest cheerleader for me just because there was so much reluctance on my part. You know, that he'd be like, look, like, it's working. We paid this off. You know, and he'd be the one doing the budget. When you get that anger.

Yeah, you get that anger-based laser focus. There ain't no stopping it. I love it. It ain't going to stop. Well done. Good job, you guys. Thank you. We've got a copy of Chris's book for you, Everyday Millionaires.

And you're definitely on your path to be one of those without a doubt. Congratulations. Thank you. Very proud of you, heroes. Very well done. You took control of a whole bunch of areas of your life. All right. Jeremy and Sarah, Columbus, Ohio, counted down $197,000 paid off in seven years.

The majority of it in the last four years, making $88,000 to $130,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Oh, boy. Woo-hoo-hoo-hoo!

You can hear the chains fall off. Yeah, baby. I love it. Yes, that's awesome. They went through Financial Peace University because their brother-in-law put them through it. And Financial Peace University is now a part of Ramsey Plus. And you can be a Financial Peace University coordinator, a virtual coordinator, and get a free one-year membership a whole year for Ramsey Plus

by leading a Financial Peace University group as a virtual coordinator. And this is a brand new thing. It's exploding. We definitely need your help. Text the word LEADFPU to 33789. Text LEADFPU to 33789. If you're a virtual coordinator for Financial Peace University, you get a free whole year of Ramsey Plus,

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That's a really smart idea. Mike is with us. Mike's in Los in los angeles hey mike welcome to the dave ramsey show well thank you very much i i my wife and i were getting ready to retire thank you dave and chris for taking my call sure and we're thinking about retiring and we have quite a few properties and I we were wondering if we should liquidate some of them why that's kind of our dilemma here why well all of our kids are out of town they left they left the area and we were thinking about maybe moving sooner than later okay you know and it's our concern to have property all over here in California, and they live in Memphis and Chicago and stuff.

Okay. So where are you thinking about moving to? Well, we were thinking somewhere out there, Memphis or somewhere like that. How much real estate do you own? Well, we own 10 properties. Okay. What's it worth? Well, our net worth is probably $3.8 million.

Good for you. Very well done. How much of this did you inherit? About $200,000. And how long ago did you inherit that? Oh, five years ago. So you were already worth over a million. Oh, yeah. We've been very frugal.

So you did not become millionaires because of inherited money. I just wanted to say that out loud because there's a lot of stupid people in America that believe otherwise. So I just want to make sure I get that out there. He was being very intentional, Mike, with that line of questioning. So, Mike, anyway, the answer to your situation is the properties are worth $3 million? Yeah, the properties are worth $3 million? Yeah, the properties are worth $3 million, and then we have $800,000. What type of real estate is this?

Are they residential? We have two triplexes that are worth approximately $600,000 each, and then we have individual homes. So they're all residential okay all residential okay and mike you sound like mike you sound like you are a lover of real estate well yeah i we always love to hold it yeah so if you my guess is you've got substantial equity and you would have substantial capital gains if you start liquidating this. That's what we're worried about.

Yeah. You know, what I might do is I might do a series of 1031 tax-deferred exchanges. And so it would sound like this. I would figure out where I want to live and I would move there. And after I'd lived there a couple of years, I would begin to liquidate these properties one or two at a time with a 1031. Now, the way a 1031 works is you sell it, and it goes into – you have to use a special title company that is IRS approved to do a 1031 tax-deferred exchange. And you sell it into escrow, and then you have to use that escrow to purchase other property of like kind within a set time usually it's six months that you have to identify and close on it and so you know you

could sell off um you know a million a year for three years or half million a year for six years or something like that out of the out. And whichever property is giving you the most hassle would be the one I would get rid of first. The ones that kind of run on their own and that are more stable tenant base and that kind of thing are the ones I would get rid of last. But over a period of the next decade after I made the move, I would not have long-distance landlording. But I would not panic and do it all at once in one fell swoop. And you can do any of them in 1031s as long as you repurchase greater or equal value out of that escrow account within the set time. You have zero taxes.

You've rolled your capital gains into the next deal. And, Mike, you need to find another hobby because real estate has been your hobby. It's a good one. Why isn't there another one? Well, he's got to slow down, Dave mean he's got he's got to move and i would suggest you rent out an airbnb in each of the three cities where you have kids till you figure out which kid you like the most so you don't buy i mean he already knows he said memphis though he did say it but but i'm i mean you guys have been very intentional uh as a as a couple with this

real estate congratulations yeah congratulations very very well yeah we've been uh dedicated to you know trying to build some wealth and you have yeah we're really proud of that but now we're at a dilemma where we're both 67 and we're sitting here and the kids all moved and they're not coming back yeah and we don't want to leave the kids all moved, and they're not coming back. Yeah. And we don't want to leave them a whole bunch of stuff in California. Yeah, that makes sense. And, you know, you can liquidate some of it and just move it to mutual funds if you want to, but you're going to have that 15% capital gain rate.

Right. Unless your household income is over 400, and then you're going to have a 20% capital gain rate. And that's not over what you paid for it. That's over your adjusted basis, and you've depreciated these properties down. You've held them a while. That's the problem. So the whole freaking thing just about is going to be gain is what it amounts to. So, you know, we're talking about $150,000, $500,000 in capital gains here

if you liquidate the whole portfolio, and I'm not going to recommend that. No. I would do 1031s if I were in your shoes and roll move the properties over near the kids meaning buy rental properties over there uh in the area where you're going to be living around the kids so that they can inherit them and carry them forward and uh they'll get a stepped up basis when they when they inherit it too so it's a very good thing. Don't involve them in the ownership until death because you're going to be in a great position to do that and they'll have no taxes on the gain. If you roll it to a 1031 and then you die, whatever it's worth at the time you die,

the value at the time you die, which is all of that equity in there, all of that gain in there, is all going to be the new basis for them, their tax basis. So it's called a stepped-up basis from what you paid for it and have depreciated it down to versus what the actual value is. Massive savings. Yeah. It's a half-million-dollar savings. Yeah.

Massive amount. But I think, Dave, too, I was talking really from Mike, giving them permission to be able to enjoy and do some stuff. Yeah. I might sell some of it and just spend some of it. Yeah. Just go take a trip. Go to, well, I mean.

And give some of it. Can't go nowhere right now. Can't go anywhere. Yeah. Go to the store. Where are you going to go? To the store. To the store.

You even go there, you get looked at mean. People look at you mean. But they look at you mean all the time. No, they like me. They look at you mean when you come in. I know they do. I'm not going to let you put that on me. I just did. Hit the button, Ramsey. Come ramsay come on let's go you gotta talk to people

uh so we're uh overdue james for an everyday millionaire theme hour i think yes hogan and i used to do these we do them pretty frequently but the scheduling covet and other stuff have preempted them but we're about due to hit another one do you know when it's on the schedule off the top of your head? I don't. So the everyday millionaire theme hour is when we have nothing but people call in that have net worths of over a million dollars. And what we discovered by doing that theme hour was that most of them did not inherit their money. And, you know, there's all this crap out there in politics. You inherited wealth, and it's absolute morons because you just don't

know what you're talking about statistically you're just wrong yeah you can't be wealthy without inheriting it because you want to be a victim so suck your thumb okay but um but that's that's the deal they not and so we ended up doing these millionaire theme hours and then from that was born everyday millionaire theme hours and from that was born the largest study we ended up doing a formal in-depth research study that's airtight the largest study of millionaires ever done in america and over 10 168 of them if i recall correctly that we interviewed and um, you've got the little book. I've got the study here.

The quick read. Yeah, the quick read. If you're having trouble sleeping, you can get a copy of the study. Okay, you know what? I said the next time you said that, I was going to stop that. No. This is enthralling. Have you read it?

Yes. Did you make it through without napping? Yes. You lied. Seven cups of coffee. I just saw you lie. Seven cups of coffee. I got through it.

But listen, the stats. If you nerds want the details of the study, we sell you a little thing called the National Study of Millionaires for nine bucks. If you want the real book, it's the Everyday Millionaire book that Hogan wrote, which is actually a good book. It's entertaining, and it's a number one bestseller. But if you want the nerd stuff, you can get the other one, too. Both of them got Chris's beautiful face on them. So either way, you got something to keep the bugs out of your house. That's it.

Clean it up. That's right. This is the Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for the Dave Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes section or head over to DaveRamsey.com and click Dave recommends. Thanks for listening.