The Ramsey Show - App - How to Be Ready for the Next $1,000 Emergency (Hour2)

Episode Date: June 14, 2018

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🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. You jump in, we'll talk about your life, your money. It is a free call at 888-825-5225 that's 888-825-5225 oscar is with us to start this hour in lubbock texas hi oscar how are you i'm doing well mr envy how are you better than i deserve what's? Well, so my wife and I are going to be debt-free in about 24 hours. And so our question is, when we look for an investment pro, is it okay for us to

interview them like you would if you're hiring someone? That's exactly what you should do. Okay. How should we go about doing that, and what should we be looking for then? The main thing you're looking for is you ask them questions like about their investment philosophy and what types of investments they use and how long they've been doing it. I mean, you're hiring a consultant. And so if you were going to interview a consultant, a marketing consultant, you'd want to know they've done some marketing. And what's some of their track record in marketing, right? If you were hiring a real estate agent, that's the same thing. You would interview several

real estate agents. The main thing I'm looking for is their ability to teach you and the fact that they have more of a heart of a teacher than the heart of a salesman. In the financial world, that's really only the two buckets they fall in is one of those two buckets. And about 85% of the people are sales slimers. You'll feel slimed like I need a shower after you met with them right and uh and you know what i'm talking about they're transactional you feel that they're there for what they can get rather than what they can give you know people like that don't you yes sir your wife will smell that a mile away

by the way okay she well lady ladies have slime antennas that are unbelievable they can they can sense a slime ball a mile away and so you listen to her input how she feels about having met with this professional whether or whether it's a man or a lady that's the investment professional so you're looking for someone with the heart of a teacher um and you will know they have the heart of a teacher if you left there if you leave having met with them and you know something you didn't know before you came in. You just got taught, right? Right, right.

You got schooled. And that's a good thing. You want to be schooled. That's what we're here for. Because you're not there to do stuff. If they adopt a position, a body language, a tone, a head tilt of arrogance, like you're supposed to do this because i have all these letters after my name and i know a lot and they drop their glasses down on the end of their nose fire their butt you do not use people like that and they're all over this business

they're all over the business because they work really hard to get all these designations and then they think they're smart and and I don't really care. I've got an estate planning attorney, for instance, that's one of the most brilliant estate planning attorneys in the United States of America, and he's very expensive. But the interesting thing about the guy is even though he's one of the smartest guys in the entire space, he's really humble, and he's really concerned that i understand what we're doing with this ridiculously complicated estate plan that we have to keep the government's hands off the money

that i've already paid taxes on when i die and so um you know that kind of stuff right and so but his job is to explain to me that's his job his job is not to be the brilliant estate planner his job is to explain to me so that I can have a brilliant estate plan. Because I'm not putting something in place I don't understand. Your job is don't put money in something you don't understand because somebody had a good suit and you felt like they were smart. Oh, that's how you lose your money. Okay. Does that make sense to you?

Yes, sir. Yes, sir. Absolutely. And that's one of the ways that we vet our SmartVestor Pros. We want them to have that heart of a teacher, and we want them to give investment advice that's consistent with what you hear around here, and they do, and they do. And if they don't, we don't keep them as a SmartVestor Pro,

or we don't hire them in the first place. We don't hire them. We don't hire them. They don't work for us, but we don't hire them they don't work for us but we don't agree to endorse them and they pay us an endorsement fee so if you want to meet with more than one smart investor pro of ours you can do that and you can meet with other people that aren't that's fine and just interview that's a good idea you know just click smart investor at dave ramsey.com and put your stuff in your information it'll drop down a whole list of the smart investor pros in your area and you can meet with three or four of them if you want. And then you choose. I'd rather you do that than you go, Dave Ramsey said, you know,

and don't do it because Dave Ramsey said do it either. Do it because you understand it and you're plugging into that data. And that's how you make your decision. Later on when things get rough, when you made the decision, you will be comfortable with your decision. If someone else made your decision for you, you will be comfortable with your decision. If someone else made your decision for you, you will be uncomfortable and stressed out. Tom is in Greensboro, North Carolina.

Hey, Tom, how are you? Hi, Dave. Great to talk to you. You too. Sure. How can I help? My wife had a lot of things with credit cards and whatever growing up. She thought that's the way it's supposed to be.

And we started dating, and she was concerned that I might have a problem with her finances and whatever growing up, and she thought that's the way it's supposed to be. And we started dating, and she was concerned that I might have a problem with her finances and whatever. So we went to Financial Peace University, and it literally saved her life, really. And she credits you with helping her be happily married. Wow. Literally. So fast forward into now we have a good problem to have. In about three years, we're going to be able to comfortably pay off what student loan debt she has left in our house. Great. And so I have a financial planner, and we're putting the money all over the place.

And so we're not having a heated argument. We're having a discussion. The discussion is, I want to get out of debt, and they're telling me, you have a 3.5% fixed rate on your house, and we can make more money than that on your 3.5%. But make more money than that on your three and a half. But I want to be at debt. So my wife and I were talking about this last night. She said, call Dave. Whatever Dave does, I'll do, literally, and that's why I called you. Okay.

Fire your financial planner. Fire them? Yeah. Okay. They're useless. So listen, here's what they're proposing. Okay, what do you owe on your home? 201.

Okay, what's the home worth? Probably 350. Okay, based on the logic and the thought process that they're using, if you have the opportunity to borrow a million dollars on this $250,000 home at 3.5%, you should do it. Because they can take it and invest it and make more. Right. That doesn't feel comfortable, does it?

No. Because in this drama-based, crazy, whacked-out example I gave that's not reality-based at all, what I did by putting all those extra numbers on it is I made you feel what this guy has completely left out of the equation, and that's risk. Correct. Borrow and that's risk. Correct. Borrowed money equals risk.

And he left that out of his little equation. Based on the fact that you don't measure risk at all, you should borrow all you can, no limits, at three and a half, because he can invest it and make more. That's an absurd but statement. Correct. That's why I think you ought to fire him. And I think you ought to pay off your house.

And by the way, I don't think you ought to be investing right now. Do you get your student loans paid off? You remember that part in Financial Peace University? You shouldn't be putting money in investments until you get through Baby Step 2 and get your emergency fund in place. And you shouldn't have your emergency fund fully funded until you get out of Baby Step 2. You remember the Baby Steps? So that's what Dave would do is follow the Baby Steps And you shouldn't have your emergency fund fully funded until you get out of baby step two. Remember the baby steps? So that's what Dave would do is follow the baby steps, and I would get my house paid off,

and I would get an investment advisor that was aligned with the system and the process that I was using. There's logic to this. This is The Dave Ramsey Show. By the time I was 26, I had $4 million worth of real estate, and then I lost it all because I didn't do it the right way. That's why I feel so strongly that buying real estate is an incredible way to build wealth, but only when you're debt-free and do business with people who have your best interest at heart. My friends at Churchill Mortgage have been showing people how to build wealth through real estate for over 25 years. Their whole program is engineered around having better information so you make smarter decisions for your family. Whether you're buying your first home or your last, Churchill Mortgage is the only lender I

would trust. I trust them. My team trusts them. And so should you. You need to call Churchill Mortgage today at 888-LOAN-200. That's 888-LOAN-200 or churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. Equal Housing Lender 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Jan is with us in Canada. Hi, Jan. How are you? Hi, I'm great, Dave.

Thanks for taking my call. Sure. What's up? Well, Dave, my husband and I, we would like to buy a vehicle. And I'm a little unsure, but we're both a tiny bit unsure. And this morning he said to me, well, what would Dave Ramsey do? And so I was thinking, you know, because I really follow, we really try to follow your program. We have three months' worth of income saved.

We have no credit card debt um we uh live by a budget you have no debt you have no debt except your home no debt except our home and how much do you have saved for the car we have 20 000 cash saved for For the car? Yes. Okay. And what's your household income? A little over $75,000. Okay. What's the other car worth? Okay, we have two other cars.

We've got a 211 and a 206. Both have, or one has $160,000. What are they worth? The other has $280,000. Oh, what are they worth? Mm-hmm. Okay. Probably the one is worth probably The other has 280. Oh, what are they worth? Mm-hmm. Okay, probably the one is worth probably 1,500.

The other one is worth approximately eight. Okay, all right. And you make 70. Okay, so what are the rules I tell you about cars? Do you remember? Yeah, that's what I'm calling. Do you remember? No, I don't remember.

Okay, all right. That's okay. No big deal. We tell folks not to buy things with wheels and motors total in their life that equal more than half their annual income. Because things with wheels and motors go down in value rapidly. Right. We all like them. I like them. I like them. But, you know, your tractor, your lawnmower, your boat, your sea-do, your motorcycle, your cars,

when you add all that together, if it equals more than half your annual income, you have too much tied up in things that are going down in value. Because they go down in value rapidly, all of them. So if you buy a $20,000 car and you have an $8,000 car and a $1,500 car, you have approximately $30,000 tied up in things that are going down in value, and you make $70,000, you're less than half. And you can pay cash for it, which would, of course, be one of our guidelines. You're not going to go into car debt.

If you're asking Dave Ramsey, we know that. So this is within the guidelines. And, you know, if you want to spend up to $20,000, you can. What were you going to spend? Well, yeah, we were going to spend the $30,000 because it's a 2015, and it's only got $30,000 on it. So you were going to spend $30,000? Yeah.

You were going into debt? And get rid of one of the cars. Get rid of one of the cars. But there's not enough. You get rid of one of the cars. Get rid of one of the cars. But there's not enough. You get rid of the $8,000 car? No, we would save that one as our second car, get rid of the really old car, and then we'll only have two vehicles. I'm confused.

You're going into debt to buy this car? Yeah. You called me? So that's a no-brainer. Yeah. In 30 years of doing this show, I've never told anybody to take out a car payment. Okay. Not even in Canada.

Okay. So what if we borrowed from our savings? Your emergency fund? Your emergency fund? And paid off within six months. It's not an emergency. Number one, you're buying too much car. Emergency fund? Your emergency fund? And pay it off within six months. It's not an emergency. You're buying, number one, you're buying too much car.

Because now you're going to have $38,000 tied up in cars and you make $70,000. You need to move to... Oh, yeah, both cars are, they're all paid for. All our vehicles are paid for. I know. You have $38,000 in cars if you buy a $30,000 car and keep an $8,000 car. Is that right? Oh, I see. I see what you're saying.

Too much of your money tied up in things that go down in value, given that you make $70,000 a year. You can do whatever you want to do, kiddo, but there's not a chance anywhere that I'm going to tell you to take out a car payment. Not going to happen. And you're buying too much car. I think you've got car fever you probably need to take a cold shower and um i think you don't you ain't got hot over this car and it's

a bad idea um i think i'd move down to about a twenty thousand dollar car that's what i would do and um pay cash for it uh or less caroline is with us in Los Angeles. Hi, Caroline. How are you? Hi, I'm good. How are you? Better than I deserve. What's up? So my mom turned me on to you, and I'm so excited to do baby steps and actually pay off my student loan debt. But my problem is that I have a contract work job, so I know I won't have a job in October. So would someone in my case, would you recommend saving up the emergency fund

or I guess not emergency because I know it's happening before I start on Baby Step 2? Well, that depends on what kind of contract work you're doing and how unstable it is. There's lots of contract work that just goes from one contract to another. Well, last time you ran out of a contract, how long was it before you got placed again? The longest I've gone is nine months. How long ago was that? Two years ago. What field are you in? I'm a TV writer. You're a what? I'm a TV writer.

A TV writer. Oh, okay. Yeah, I write on television shows. I have to go find a new show. Pretty unstable. Yeah, pretty unstable. Okay. Yes, I would. How long is your typical, well, you know, your contract's a season, really, unless they take the show back up. It's usually, like, it's, like, six months of work, and then you're looking for a new TV show. So it's so unstable.

So I've always just saved so much money and just, like, never paid off my debt. And now I'm like, I want to pay this off, but I also don't want to, you know, run out of money. Yeah, I'm probably going to build up three or four months of expenses, and then I'm going to start my plan. Just because you're right, I think there's a storm cloud on the horizon, and it pretty much stays there perpetually until you get that hit show that goes 10 years, you know, but that's not the norm. You and I know that. So I hope you get one of those, but I hope you write for Friends someday, right?

But, you know, but that's, again, most of these things have a one- or a two-year shelf life at the best. So, cool. How old are you? Twenty-six. Cool. got you've already made a career in that well done good for you you must be must be really talented congratulations very good yes i agree with you i think you need to have um a rainy day fund because you are in a very very very very volatile industry and um you need to get ready because you could go easily go nine months again and but you're back waiting tables long before then but um you know in between or whatever it is you do in

between leland is with us in orange county hi leland welcome to the dave ramsey show hey dave thanks for taking my call sure what's up so i had a quick question. I'm a real estate agent in Orange County. I'm 26 years old. Things are going well. I'm on a team out here. Right now, I virtually have no debt besides a car payment. I have about five months of expenses saved. Way to go. I'm currently working on a down payment savings for a very expensive house out here in Orange County, as you probably know that. My question is, in your your opinion should i finish college and get a bachelor's degree i have about 20 classes left it would take me about three years to finish because i worked full-time in this crazy animal called real estate what's your what is your field

of study i was just i was just doing it just to get a degree in business to be honest just something just to get it done so uh you're 26 What do you want to be doing when you're 46? Honestly, it would be great to own investment properties and do ministry, you know, full-time and kind of have investment homes, pay my bills. So you love real estate? I found it through a Bible study, and here I am five years later and I have no complaints you're moving from

brokering to owning is all the differences but you just love the business me too by the way I got my license when I was 18 years old so no if you want to do it it's a luxury item but is it necessary for your career track?

Absolutely not. Absolutely not. You're already successful in the real estate world. What did you make last year? Last year I made close to $90,000. Yeah. Well, your income would not be one dime difference if you had a bachelor's in real estate. Is that right?

Okay. How many times do you go on a listing appointment? Do you had a bachelor's in real estate is that right okay i mean how many times you go on listing appointment they go do you have a degree none true right so i mean if you want to go get the degree it's just a luxury item to go get it and it's not a bad thing to have it but it doesn't affect your career track whatsoever and by the way pay the car off today you save it for a house with a car payment. Your car paid off now. Or sell it and move down and car one of the two. This is the Dave Ramsey Show. Hey, business leaders, are you hiring, posting your position to job sites,

and waiting and waiting and waiting for the right people to see? Well, you need ZipRecruiter. ZipRecruiter knew there was a smarter way, so they built a platform that finds the right job candidates for you. ZipRecruiter learns what you're looking for, identifies people with the right job candidates for you. ZipRecruiter learns what you're looking for, identifies people with the right experience, and invites them to apply to your job. These invitations have revolutionized how you find your next hire. In fact, 80% of employers who post a job on ZipRecruiter get a quality candidate through the site in just one day.

And ZipRecruiter doesn't stop there. They even spotlight the strongest applications you receive so you'll never miss a great match. The right candidates are out there. ZipRecruiter is how you find them. ZipRecruiter, the smartest way to hire. Just go to ZipRecruiter.com slash Dave and my listeners can post jobs on ZipRecruiter for free. That's right, free. That's ZipRecruiter for free. That's right, free. That's ZipRecruiter.com slash Dave. The lobby of Ramsey Solutions, Ethan and Ashley are with us.

Hey, guys, how are you? Great, Dave, how are you? Better than I deserve. Welcome. Where do you all live? Tahlequah, Oklahoma. You ever heard of that? Nope.

Where is it? It's about an hour east of Tulsa. Oh, okay. Wow. Well, I see all the OKC stuff and Oklahoma Sooners stuff and everything on you. So, cool. Very cool. Welcome.

How much debt do you guys pay off? $48,450.89. Love it. Very cool. All right. And how long did that take? So, three years in total. The bulk of that, when we really hit the ground running, was about 14 months.

Okay. Cool. And what was your range of income through that three years? We started at about $45,000 and up to $135,000. Whoa. What do you all do for a living? I'm a sales rep for Frito-Lay. I'm an occupational therapist.

Very good. Good. What kind of debt was the $48,000? It was all Ashley's student loans. Student loans, yeah. All Ashley's student loans. Look at that yeah. All Ashley's student loans. Look at that. You see the bus tracks?

He just threw you right there under the bus. That's all right. Right here. It's all good. Very cool. So how long have you all been married? It'll be five years in August. Okay.

And so what happened three years ago, and then what happened 14 months ago that kicked it into high gear? So actually going back five years ago a little over five years ago when we were just engaged my parents gave us fpu as sort of an engagement present um we ended up taking the class before we got married and took almost nothing from it except for the budgeting portion and no credit cards um but we just kind of use the excuse of we're full-time college students part-time workers. This isn't really applicable to us right now. Okay.

Unfortunately, that was the case. When did you graduate from college? I actually just graduated a year ago. Okay. So three years ago, we began to just sporadically pay off debt. We weren't really following the plan still. But as we would get large sums of money from tax returns or things like that, we would throw it off at the debt.

But we were still taking vacations. We were still drawing out student loans. And then 14 years ago, or 14 months ago, we came back from one of those vacations and just decided it's time to get busy. Wow. Okay. And so that's when we really started. No big event. You just looked at it.

Well, you got out of school about then. Yeah. So it was actually January before I finished school. I finished that following May. But that January, we started listening to your podcast almost every day. We started teaching an FPU class. Built a support group. Actually, our friends um are doing

their debt-free scream in the next hour they're in the first class that we taught um so then i graduated in may began my job in july and so we paid off 36 000 in that last 14 whoa you put it into high gear yes well done Well done. Good job. So you're leading a financial peace class. You pay off $36,000 in 14 months, but $48,000 overall in the three years. People ask, how did you do that? What is the secret to getting out of debt? So we've kind of gone back and forth with this.

You might be asking this question. We've tried to talk to college students students talk to those kids five years ago um when we first took fpu class and try to tell them that it's possible because it was possible then to go through school without without becoming into debt especially making 45k right the amount of money it was exactly. So talk to those people and give them hope. That would be one key for us. When we finally flipped the switch, it was just realizing that we had hope in this journey and that we could do it. Also, within hope, which is totally on you to find in any situation, when you don't have hope, you really start to find excuses, just like we were on excuses not to do it. And then when you have hope, I mean, you have reason to do it.

That's powerful. Yeah, that's true in a lot of things. But it's certainly true on getting out of debt or, you know, anything where you're changing your behaviors on something, you know. Most definitely. That's a big deal. Well done, you guys. Did you have people cheering you on?

We did. We had a really great support system. Like I said, we had friends in that first FPU class that we taught. Of course, my parents who gave us FPU were on board with us. My sister. They're going, finally. Right. We had a really great support group.

Good. Anybody tell you you're crazy, finally. Right. We had a really great support group. Good. Anybody tell you you're crazy? Yeah. I've had plenty of friends. It's just the standard answer is, you know, you're going to be in debt until you die. Pay off that car finally when you're 80. That's just another bill that you have day to day. But as far as people that were close to us, you know, not only do I feel like they were supportive,

I may have even motivated them to think this way. So it's inspiring. It turned people towards the show. We realize that our story is not the most inspiring. We didn't pay off a restitution from a bank robbery or didn't lose a spouse but uh i mean if you're looking for inspiration uh it doesn't take i don't know 10 seconds to find those stories on youtube which is exactly what we did i mean just motivation every day yeah we don't really miss the death free screams so we'll catch them all and now you is one i love it well you guys. I'm very proud of you.

Congratulations. What was the hardest part of this? I think the hardest part was definitely getting started. You know, I mean, it took us from five years ago and then three years ago kind of starting and then finally actually getting started. You know, that last little bit was just to get the ball rolling. I drive a car that's kind of fallen to pieces, and the obvious answer in the normal world is just to go get one. It's easy.

Throw a small down payment at it. I've learned to live with it. It really doesn't bother me, but I would definitely say that's probably going to be one of the tougher things for just a normal individual, for sure. Yeah, it does throw you back. You know, you said getting started, and that sounds so simple, but you know what? Anytime there's a daunting task in front of you, I remember all the way back in middle school or whatever,

you've got to write a paper, a term paper later. Ooh, the first term paper. Ooh, it's a daunting task. And later, writing a book. You know, it's a daunting task. Getting out of debt. I'm going to lose weight. What is it you're going Ooh, it's a daunting task. And later, writing a book. You know, it's a daunting task. Getting out of debt. I'm going to lose weight. What is it you're going to do that's a daunting task?

You know, the weirdest thing is that sometimes the hardest part is actually getting started. Once you get started, you kind of get sucked into it. Definitely. You know, the thing starts to build its own momentum. The process does for you. But that first two or three steps is a big deal exactly it's a big deal that's one of the reasons we want the the starting barrier to be so low and it's been so successful with the baby steps to only have you know baby step one's only a thousand

dollars so let's get started let's do something right let's get started and then you get sucked in and it changes everything way to go you guys you guys. Thank you. Thank you very much. We've got a copy of Chris Hogan's Retire Inspired book for you, signed by him. We want that to be the next chapter in your story, that you become millionaires and outrageously generous along the way. And I think you're on your way. Well done. I think so, too. Well done, you guys.

Ethan and Ashley from Oklahoma, $48,000 paid off in three years. Did most of it in 14 months. Making $45,000 to $135,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! That's how it's done right there. Man, I love it.

Wow. Very, very love it. Wow. Very, very, very well done. Brian is on Twitter. Dave, does Baby Step 1 double for a couple or stay the same? No, Baby Step 1 stays the same. The only time we modify that little starter Baby Step of $1,000 is if you have an ultra-low income. If your income is under $20,000 a year, we say, you know, do it for five, you know, make Baby Step 1 500. Because the point of Baby Step 1 is what we were just talking about.

Get started. Get started. It's a big deal. When you get started, you've got a daunting task in front of you. Boom. It sucks you into the process. So, I know it's not enough money saved to cover a real emergency. We never said it was an emergency fund.

We said it was a starter, a beginner emergency fund. A baby emergency fund. Not for babies, but for one that's like, I don't want a baby. That wasn't the point. It's a small. That's what babies are. They're small. Emergency fund. Not for babies, but for one of those, like, I don't want a baby. That wasn't the point. It's a small that's what babies are. They're small. Emergency fund. There you go. This is the Dave Ramsey Show. For years, I refused to endorse any company that claimed to get people out of timeshares. I told my listeners it's a horrible product and that, unfortunately, they didn't have a lot of options.

Then a few years ago, I sat down with Brandon Reed, the owner of Timeshare Exit Team. Brandon walked me through the timeshare industry, and I learned that you can't sell them and you can't even give them away. And then we talked about Timeshare Exit Team's process. Every ownership situation is different, which is why they have more solutions than any other company. And that's when they earned my respect. Don't call any of the imposters out there. And there's a lot. The only timeshare exit company I stand behind is timeshare exit team. They have exited thousands

from their timeshare burden this year alone yes you will write them a check but they stand behind their guarantee they will get you out or they'll Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. It means even if you mismeasure or you pick the wrong color, they will remake your blinds for free. Site-wide savings is happening right now, and you can take an extra 5% off when you use blinds.com slash Ramsey. Blinds.com slash Ramsey. Dan's in Georgia. What is your take on supplemental insurance through an employer? I'm currently 14 years into a cancer, heart, and accident policy.

Two of the policies have a return of premium after 20 years i don't buy any gimmick insurance at all your health insurance covers cancer your health insurance covers heart attack and when you die by accident you are not double dead so i um i don't buy any of those kinds of things and uh i don't know that it makes sense to continue to pay six more years in order to get a return of premium. If you want to run that math out, you can play with it if you want. It might be that it turns out to be free in a sense, but in general, the only type of that kind of thing that falls into place is long-term disability, which is not gimmick insurance. But the short-term disability, the income policies, cancer policy, heart attack policies, accident.

If you die, your family needs a certain amount of money to replace your income. They don't need twice as much if you die by accident. Well, you're more likely to die by accident. Well, maybe. You do not think that the prices on these things are figured out mathematically. There's a thing called an actuarial table, which is the statistical measure of the probability of your death at a certain age by a certain methodology. And that is built into all of the pricing.

These insurance companies do not make mistakes. They make money. When you buy car insurance, which you do need to buy, you know, it costs them less on average per person that drives your car at your age group with your speeding record, your ticket record. It costs them less on average to cover you than you pay them. Thus, they make a profit. It's a statistical probability. That's how insurance is priced out. And so if something is cheap in insurance,

it's because there's a very low statistical probability of it happening. It's that simple. So they don't make mistakes on this stuff, guys. It's just insurance companies that lose money are out of business. So keep that in mind. Alicia is with us in Springfield, Illinois. Hi, Alicia. How are you?

I'm confused. Thanks for taking my call. Sure. How can I help? My family and I, I've been listening to you for a while. We've got our house paid off. Mom got all the credit cards, and we still have that. But my uncle died, and he left us the house, but he had taken out a mortgage on it.

And so the mortgage is now owned by the wife that he divorced two years before, and we have the house. Her name's not on the house. Her name's not on the house. His name's not on the mortgage. The mortgage company won't talk to us, and we're in a quandary of what to do. The real estate agent didn't seem to know what to do. I've started looking at your university and everything, and we were going to switch to one of your providers, but we're just in a, we don't know exactly what to do. So what is this house worth

approximately 140 000 okay and what is owed on the mortgage approximately we think that it's about 70 but we're not sure because we can't get any of the paperwork they won't talk to us okay the last paper that it had his name and her name on it, we looked at about like 70. Okay. All right. And how long have they been divorced? Two years. Okay. And apparently she's not wanting to get rid of this mortgage? She told my mother that she was going to not pay it off and let the bank take the house because she paid her house off with it, which was supposed to be sold to pay it off and let the bank take the house because she paid her house off with it, which

was supposed to be sold to pay it off when they were doing it together, but she just decided not to do that. She's got her house paid off and she's not worried about it. So we're stuck with it. No, you're not stuck. You own a house that has a lien against it, okay? Right. And you can order a payoff on that house on that mortgage regardless

of if you are the holder of the mortgage or not you're not liable on the mortgage but they can take the house if the mortgage is not paid okay right and so uh does do you plan to sell the house yeah we put the house on the market six months ago because what we thought we were going to do was sell it and then pay off that part of the mortgage because that's kind of what we thought we did. You have to pay the mortgage off when it sells to give the buyer clean title. And the title company that's doing the closing

on the house can order a payoff letter from the mortgage company. And the mortgage company will send them a payoff letter. We're just trying to pay it off. So if the title company is the one that will do that, not the real estate agent? I doubt they'll give it to the real estate agent, but they'll give a payoff letter to a title company.

And I'm guessing you have the account number, don't you, in the name of the mortgage company? Yes, we do still have that. We actually have made a couple of payments because we didn't want it to get... Yeah, I would. We've been making payments because we knew she wasn't going to make the payment, and we didn't want it to get taken by the bank. So we thought...

But then we were unsure... She's just mad at all of y'all. Yeah, she hated him. I think it was just financial that she took him, honestly. But in terms of, you know, he left you the house, and she wouldn't do you the favor of just calling them and putting you on the approved list to talk to at the mortgage company. No, no.

There's no chance. She won't have anything to do with that. She told my mother she was just going to let it go. Yeah. Okay. And it was left to your mother or left to you? It was left to my mother and my uncle collectively. Their brother died.

Oh, I see. Okay. So you're, it's not you. And they're asking me to take care of it all. Well, you can't take care of nothing. You're not on any of this. I'm the co-executive director of the will. The executor of the will.

Well, as the executor of the will, you probably can order a payoff letter. Oh, really? Yeah. Okay. You have an attorney that's probating the will, right? No, we didn't. We had one, and the attorney that was supposed to be probating the will has never contacted us back.

We spent six months down there trying to get lawyers. But you have the document that assigns you as the executor of the estate, right? Yep, we have all that. Okay, send that to the mortgage company. Get on the phone with the mortgage company and say, I'm the executor of the estate. I will email you the proof of that, and I need to pay off on this mortgage. Okay.

And then that's what we go about using with the real estate. Yeah, they'll talk to you because you're in charge of this property legally, and so you have rights to that information to pay off the mortgage because they have a lien against your property. Yeah. Yeah. You can get this. Between you and a title company and a real estate agent, one of the three of you,

especially if you send them copies of the order from the court that appoints you as the executor of the will, and you may have to send the death certificate. I mean, you may have to send them a whole package of stuff showing the whole situation. But what it is, is federal law says that they, under the Privacy Act, they are not allowed to disclose your information to me. That's illegal. Otherwise, you could call up and ask your neighbor's mortgage balance, you know, just because you were nosy.

And they can't give that. It's against federal law to give out information on somebody that's not them. But you have a vested interest here, a legal position being the executor of the estate. And all they're worried about is they don't want to give this lady's loan balance out to you, this ex-wife's loan balance out to you, and violate her privacy. That's what they're worried about. And you've got to prove to them that you have a right to that information, and it's not just a hillbilly argument.

It's a legal position. And so as the executor or as the title company that is paying off the mortgage and the sale of the property it has to be the title the mortgage has to be done we need a payoff letter one of those situations they will release this information but they're not going to put you on the mortgage and they're not going to do any of that other kind of stuff but they can release you give you payoff information so that that's the reason they're trying to keep from violating the Federal Privacy Act. Good question.

Thanks for joining us. Unusual situation. That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer, and phone screener. I am Dave Ramsey, your host, and we will be back. Hey, it's Blake, chief production officer for the show. And here's a little tip for 2018. Go download our revamped Dave Ramsey show app from the app store. We're always listening to your feedback and adding new features to make it even better.

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