The Ramsey Show - App - How To Help Others With Money Problems (Hour 2)

Episode Date: September 13, 2022

Take our Audience Survey & Enter to Win a $500 Visa Gift Card: Click here to take the survey Dave Ramsey & George Kamel discuss: Helping others with money, Selling your house when you move, Being gifted money from a 529, Managing an inherited 401(k), Dealing with $900k of debt. 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 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, 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. I'm Dave Ramsey, your host. Thank you for joining us, America. Open phones at 888-825-5225. This is The Ramsey Show. We help people build wealth, do work that they

love, and create actual amazing relationships. George Camel, Ramsey personality, host of the fine print on Ramsey Networks, is my co-host today as we take your questions about life and money. Again, 888-825-5225. Brian in Columbia, South Carolina, starting off this hour. Hey, Brian, what's up? Hey, Dave, how are you? Better than I deserve. How can we help? So recently I have taken over the affairs of a senior citizen at our church who we affectionately call Grandpa. And in looking over his finances, I've seen that he's been signed up for, sometime in the past, two whole life policies. So I know that you're against whole life, and we were just talking about our options on what to do with it. And so if we cash out the whole life to get rid of it,

between the two policies that he signed up for, he would get a return of $2,900, which is pennies on the dollars from what he's paid. My question is, they also offered us an option of him freezing the policy so he pays no more in it, and he gets $2,200 upon his death if we choose to do that. Now, at first, I just thought to cash it out. And if we do cash it out, because he's got a pending Medicaid application, which tends to take over their finances to help provide that long-term care, how do we secure this money in order to make sure that his final stages, just so it goes toward his final stages when he does pass?

Medicaid won't take $2,900. If it was $290,000, they would get into it, but they're not going to fool with 2,900 bucks. That's not going to mess him up on that. Yeah, I'd just get out of the whole life business. And, you know, I'd rather him have $2,900 in the bank than $2,200 when he dies.

Right. Okay. Because he's got $2,900 when he dies. Right. Does he have any money? Okay. No, he just is on social, which is the basic $1,200 a month. That's what he has currently. And I'm sure there's some kind of a need he has around there then, or at least a need for a little bit of a baby emergency fund,

which this can supply, right? Yes, absolutely, yes. Yeah. How old is he? He's 83. Yeah. How old is he? He's 83. Okay. And the face of the policies, if he dies, is $2,200? Well, the policies are $10,000 each.

Oh, plus... We do cash out to close it. I thought you said he got $2,200 if he died. Well, the $2,200 is if we do a, they call it a reduced freeze. So he doesn't pay anything else at all on the account for the policy. And then upon his death, he gets that $2,200 between those two policies on his death. In addition to the face value no no because if we freeze it out then he doesn't pay anything else so he's paying for a ten thousand dollar policy all these years and these bozos say hey we're

going to help you out because you're a good long-term customer instead of paying you ten thousand at your death we're going to pay you 22 at your death, but you don't have to pay any more payments. How sweet. Right. How sweet. What crux. Yes. As if the other $7,800 on an 83-year-old won't pay the premiums.

Right. What buttholes. And he's almost paid that $10,000 over the last three or four years he's been signed up for. That doesn't shock me. Oh, easy. Easy. Easy. Yeah.

Oh, my God. That's sad. What a horrible. How is this legal still? This is crazy. It's just. And act like they're doing you a favor. Well, we'll give you $2,200.

Call it good. Watch these guys. When they're kissing you, they'll pee on your leg. Oh, my God. It's unbelievable wow yeah oh oh man that's unbelievable all right so yeah you gotta uh you gotta cash these things in man get away from this company as fast as you can this is just ridiculous oh sad whole life policies people this is the companies that you're dealing with. This guy's paid in these policies.

He's paid $15,000 in these policies. And if he'd have put that $15,000 during that time in this $10,000 policy that they're offering to help him with at $2,200, he would have $100,000. He would have been better off with a cookie jar. If he put that in a mutual fund, he'd have $100,000. Easy. Easy. Easy. See, they ought to just have their butts kicked. And then walk around acting like Dave Ramsey didn't know anything about money.

Well, it's because my calculator works. This is a math thing. Jeez, you people. It's fascinating that the biggest fans of whole life are the whole life salespeople. They're the only fans. That's how you know it's a scam. They're the only fans. Yeah.

Oh, I can't breathe. All right. I got to move on. Melissa's with us in Jacksonville, Florida. Hey, Melissa, what's up? Hey, Dave. How are y'all? Great.

How can we help? So last July, my husband and our family moved from his job and we bought a home. And then unfortunately in September, he lost that job. And so ever since then, he's been trying to find another job. And it seems as though we're going to have to move again. He's got a job offer. It's in Wisconsin this time. So what we're trying to figure out now is whether to sell or rent our home. We're going to get a home provided for us there when we move to Wisconsin. So we're not really sure what to do about our house. So we're a little leery of selling it.

I'm not selling it. I'm a little leery of you it i'm not selling i'm a little leery of you keeping it oh okay you don't need a house in jacksonville florida if you're living in wisconsin yeah but it's like home around here so wisconsin it's like home but it's not home you're living in wisconsin yeah so what kind of work does he do that it took him from September to now to find a job in the hottest job market in the history of mankind? Well, he works in hotel management, and he has been working jobs, but he's doing a lot of traveling. So right now he's in Dallas. So it's been a lot of him being away from our family.

So he's been doing like um independent contract jobs you guys want to go to wisconsin i want our family to be together again amen i'm with you on that so you're willing to live in wisconsin to make that happen yes absolutely okay wow um so he's got a job as a big box manager again or what well he wants to get away from hotels because it has been really crazy the last couple years oh i thought you said retail no he's been in hotel management so um he's going to try something different. He's going to do campground management now.

Okay. Because that's what got offered to him. Exactly. Not because last September he set out to be a campground manager. All right. I'm going to send you a copy of Ken Coleman's book, From Paycheck to Purpose. If you take the job in Wisconsin and you move, sell the house in Jacksonville. But I think he needs to look for a different job.

I think he just took something because it was in front of him, and they made him feel good. This is The Ramsey Show. សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី George Campbell Ramsey personality is my co-host today. Open phones at 888-825-5225. You jump in, we'll talk about your life and your money. Candice is up next. Candice is in Tulsa, Oklahoma. Hey, Candice, how are you? Hi, Dave.

I'm doing great. It's such an honor to talk with you and George today. Thank you so much. You too. What's up? So we recently were surprised with a call after my husband's uncle passed away earlier this year. He had apparently put my husband down as a beneficiary on a 401k he had at a job several several years ago it wasn't the job he had when he passed so we um inherited the 401k it had about fifty thousand dollars in it at the time that the check

was cut to my husband so i don't i've looked you know talked to a few people i know some of the rules change as far as an inherited 401 401K as to distributions and all that. I believe it's within the first 10 years. Everything needs to get withdrawn. I don't know how that looks year to year. And so I'm just calling for your clarity on that and then advice when we take those distributions, what we should do with the money. Well, you have to take a 10th a year.

You're correct. Okay. It's called the the drain in 10 rule and it passed the secure act uh it was signed into law in december took effect at the beginning of 2020 signed into law but right before covid how convenient but um yeah so you used to take an inherited ira using the old r RMD rules that required minimum distribution, but now it's a drain in 10. So you've got good information.

You've got to take out a 10th every year until it's gone. Then the only question of what to do with it is wherever you are on the baby steps, right? Right. So where are you guys at currently? So we don't have any debt but our home, and we have about 87 probably left on the mortgage it's probably worth around 200 we have about um so my husband's a police officer so he has a defined benefit plan so we don't contribute to that it's just a pension um so we don't have a 401k aside or any other you know about investment aside from that pension as far as retirement you should you

need to be putting 15 of of your income into retirement. Do you have an emergency fund of three to six months of expenses? We have about $3,000 in savings, not including the size of that. Have you heard of our baby steps that we talk about around here all the time? Yes, sir. So I think we need to get the emergency fund up. You have no debt except the house. So the next step would be fully funding that emergency fund at three to six months,

which is probably somewhere $10,000 to $15,000 for you guys, at least? Right. We have $40,000 already. I have $40,000. But you said you had $3,000. Do you have an extra $3,000 in a different account? No, I'm sorry. We have $40,000 in a savings account. What was the $3,000 you mentioned? I'm sorry. I didn't mean to say $3,000 if I said that.

Okay. I did hear that, didn't I? I heard it, too. Okay. So, yeah, then we'd be investing 15%, and you could use part of this money to fully fund a Roth IRA if you're under the income limits. What's your household income?

About $92,000 a year. Yeah, do a couple of Roth IRAs are your first thing you ought to be doing that out of your budget anyway I just be sitting down doing a budget and putting 15 percent of your income into retirement that's baby step four do you have children we have four children and we haven't we haven't started anything with the college baby step five is kids college and with anything above the 15% going into retirement and above what you do to kids' college, you throw that at the house. So it sounds to me like a fourth or a tenth of $50,000 is going to be $5,000. That's going to help you get Baby Steps 4 and 5 going.

Okay. That's what it sounds like. I appreciate it. You see how we're doing that? So you need to sit down with a Smart investor pro and start working on this and figuring out what you're going to move, where you're going to move it, what it's going to be invested in. And you know, get, you get something started for the kids college, even if it's 50 bucks a piece a month, get a little something going. So you, so you start building the college muscle and then you go ahead and make sure you're putting 15% of your income into retirement.

And this $5,000 a year is just going to help you do those things. That's all. So, hey, good question. We appreciate you joining us. Open phones at 888-825-5225. Jacob is in North Dakota. Hi, Jacob. Welcome to the Ramsey Show.

Hi, how are you guys? Better than we deserve. How can we help? Yeah, so my wife is currently in med school, and we are cash-flowing it right now. I just have a question because my mom, I was very fortunate. I was put mostly through school through her 529, and she has some leftover money in it and um it was it's in my name but she was wondering if she kind of wants to withdraw it and she's wondering if she can use it to pay for my wife's med school and then we pay her back i don't know though if that's allowed or no or how that i would not i would not do the deal because i'm not paying her back. You don't want to be in debt to your mother.

Well, we could pay her back, like, immediately. No. We have the money, but I just don't know if it's legal, basically. Oh, wait a minute. She's going to give you $20,000, and you're going to give her $20,000? Yeah. How did this benefit you? It didn know but it would so she would basically be withdrawing the 529 without paying the penalty is you know without paying

taxes yeah so it's sweet um yeah uh i you're gonna have to check a tax advisor because the nuances in the law you can you use a 529 now for anyone in your immediate family i do not know if we can consider this immediate family or not i don't know the answer i'm sitting here also questioning whether i'm screwing with this or not but how much money is this about 30 uh so it's about what she would be asking yeah okay so you have 30 000 in an account she's gonna write you a check for 30 out of the 529 to pay or pay for school for 30 and then you're going to give her that money right back and you're not going to be right you're not going to be in debt to her okay

no it seems it seems like a tax efficient move um she certainly can share it with her son i don't know where the break point is if her son son is 60 and she's 80, can you do that? I don't know if there's a cutoff on the age. I'm not saying you're 60 and she's 80. I'm just saying these are grown people. These aren't traditional students. I thought it was 30 somewhere, but I need to look into that, the numbers on that. Start poking around there.

Why weren't you poking around there while I was stammering? But anyway. Slow to the punch but uh i the the truth is i just don't know the answer to your question jacob um and i i was gonna question whether or not it ought to be done but i don't hear any problems with the way it ought to be done i think i would do it if you can. But you need to get, she needs to get reassurance that she is not, it's not illegal. It's not a criminal thing. It's just a matter of whether in the event of an audit, would this be disallowed? Would this be considered outside the law, outside the tax law? So it's just a tax question.

It's not really a criminal legal question. It's just, is this an improper use of a 529 that will be disallowed in the event of an audit? And I don't know what the cutoff is. I know you're allowed to share the new 529 rules a couple years ago that came in. It used to be siblings could share it, but now you literally can use your kid's 529 for you to go to school if your kids don't use it i mean so it's anywhere in the family it goes any direction back and forth so i kind of think you can that's i think when you dig into it you're going to find that did you find anything well i'm just seeing that uh the earnings portion of any unspent funds after the beneficiary turns 30 are subject to 10

penalty but that doesn't include if you change beneficiaries and what that would mean to the age limits. So I jump on RamseySolutions.com. It sounds like if you're under 30, because you definitely could share it with your wife, you might have to roll it. You might have to put it in a 529 in your name, from her name, in order for you to share it with your wife

because she's not blood kin to your wife. That might be the catcher. Check with your investment broker and or a SmartVestor Pro if you're working with one or a TaxPro, and you can get those at ELP for TaxPro as well at Ramsey Solutions. I'm sorry. I just don't. That's a weird little corner of the world. I don't know the answer to that nuanced thing.

This is The Ramsey Solutions, in the lobby of ramsey solutions tom and kim are with us on the debt-free stage t-shirts say living financially peaceful i love it well done well done all right how much you paid off guys we paid off 128 565 and we did it in three years and two days. Way to go. Way to go. And your range of income in that three years and two days?

When we started, we were at about $138,000. By the end, $179,000. Cool. What do you all do for a living?

I'm an operations manager for a commercial distributor. And I'm an HR assistant manager for an auto part manufacturer. Excellent. And you guys live where? Plainfield, Illinois. It's about an hour southwest of Chicago. Okay, cool. Cool. Welcome to Nashville. What kind of debt was the $129,000? You name it. Student loans, personal loans, some medical bills, two cars, credit cards um 401k loan wow you're kind of we had it all you're normal yeah and normal sucks yeah yeah way to go guys okay how long y'all been

married eight years okay so five years into marriage or so yeah you look up and you went oh crap something's got to change tell me your story how'd you get connected to Ramsey and what'd you do? Yeah, so it actually started about a year before we actually really got on board. We were, you know, going through just living normally. You know, if we could afford the payments, then we could afford something. We had an excellent, I love debt score, you know, and we're real proud. And we were just fighting all the time about money. You too?

Yeah. Wow, I love it. That's cool. Yeah, we came a long way. So I think we had probably our 500th money fight, and I had added the total money makeover to my Christmas list, and then Tom ended up buying it for me. So, you know, there's our sign there.

Almost in spite. Yeah. Here, write this. Yeah. So what were y'all fighting about? Obviously, there was a lot of stress. A lot of it was on Tom paying the bills, and we weren't on the same page. We weren't communicating.

We weren't doing it together. But he wasn't doing it right i mean what was the problem he didn't i wanted to spend it and he didn't want to spend it oh okay there's the fight that's what i thought okay all right yeah yeah now we're coming clean the tension builds and so he did throw that total money makeover book at you and said yes he did he did which is really not a good way to get you to read it well i actually i did get on board and i read it oh um a couple months after after he got it for me for christmas i was on maternity leave i read it um we decided all right let's do this we got our envelopes we got our

budget we paid off a couple of the small debts all right um and then we decided you know what let's do a really uh quick solution let's sell our house oh yeah so we uh we decided, you know what? Let's do a really quick solution. Let's sell our house. Oh. Yeah. So we decided to sell our house. We listed our house that was, you know, we were not even ready to do this. We got it ready. We went, Tom got a second job.

And in that same week, I went back to work from maternity leave. He got a second job. And we put an offer in on a house and it was accepted. And we had no offers accepted on our house. We hadn't even listed it yet. And so there was so much anxiety and stress around the entire situation. So we were the opposite of peaceful. And we so we were like, let's just get through this.

And after just having my daughter, I was diagnosed with postpartum depression and anxiety. And that led to a lot of stress there. So we finished with the house, ended up, it worked out. 10 out of 10, do not recommend following our story. Please don't do what we did. So you did get it sold and you didn't buy the other one we got it sold and we bought the other one okay i don't know how but it all came through um but we go into this new house we have you know no emergency

fund we're not we're not ready at all and about four days later um i went to the doctor for a lump four weeks later i found out it was thyroid cancer. About four weeks after that, I had surgery. And, you know, about four weeks after that, I had, you know, my treatment for the cancer. And so it was about four to five months of just kind of crazy, you know, doctor's appointments and, you know, whatever we did have on the side or expected to get from the house was now going to these medical expenses. Um, so we kind of slipped into a point where it was like, you know, why us and why me? And will we, let's get dinner because we deserve this, you know, or, you know, throwing out the cancer card or something. Um, so then about, then about a few months after that, things kind of settled with that storm.

And I started listening to the podcast after downloading it like three months before I finally listened to it. And I listened to it every day on my commute to and from work. And I was like, Tom, we have to do this. We have to get back on it. And this time we have to do it together and so we um we signed up for financial peace we went through that together he read the total money makeover so that we were on the same page um and it was just a different vibe going through it together and when we um you know we were in the middle of financial peace and I found out I had to have another surgery. And this time it wasn't panic. This time it was, okay, that's all right.

We can do this. So we, it really just kind of changed our mindset when we were doing this together and we were doing that peacefully. How are you doing now? Good. Yeah. I'm real good. Cancer in the rear view mirror? Yep. Yep. Cancer free? Yep. Cancer in the rear view mirror? Yep.

Yep. Cancer free? Yep. Cancer free. For how long? It's been about two years since they were able to say like cancer free. Praise God. That's awesome.

Yeah. That is so awesome. That's the important part of the story right there. Yeah. Yeah. Yeah. We get to keep you around. That's what we want.

That's first choice. Worry about the debt stuff later. First, we got to keep you around. Right. Yeah. Good job. Wow. Yeah. We get to keep you around. That's what we want. That's first choice. Worry about the debt stuff later. First, we got to keep you around. Right. Yeah. Good job. Wow. Wow.

You're a warrior. I mean, with all that stuff you went through, and you're the one the whole time saying keep at it. Yeah. I mean, you guys busted it, and it sounds like this cancer was kind of the wake-up call that got you guys on the same page, and you went, this is scary, and if we can control anything, it's our money. Yep. Yeah. We can we can't control all of life circumstances but we can get our butts in order when it comes to our finances but this is real um i mean you went from really tense

in every part of your life to relaxed yep and peaceful that shirt has a whole lot more meaning now yeah living 100 financially peaceful yeah it sure does what do you tell people the key to getting out of debt is commitment yeah i guess you gotta buy in you gotta stick to it i guess in this case for sure yeah and being intentional and communicating you know even if you're kind of anxious about the conversation or something you want to buy you know just talk with your partner just be be communicating how's it feel to be free oh great free i mean you're cancer free debt free amazing so that's like a two for two right there and probably fight free has there been a lot of

money fights since becoming debt free no no wow no but the first but the first five years lots of fights lots of them yes all the time wow Yes. All the time. Wow. So cool. Yeah. That's a transformation. Yeah. You were normal and now you're not. Be not conformed to this world. You don't want to be normal.

But be transformed by the renewing of your minds. Well done, y'all. Thank you. Well done. You're amazing. Absolutely powerful. All right. We got a copy of Baby Steps Millionaires for you.

That's the next chapter in your story. You're definitely going to be that. And, of course, in addition to that, a total money makeover book and a one-year subscription to Financial Peace University with brand new classes. You want to go through it, you can. Or you can give it to somebody since you guys have been through it. Let's bring the kiddos up. What are their names and ages?

Aiden, who's six, and Emma, who's four. All right. And it says Financial Peace Baby on each T-shirt. I like it. Well done, guys. Oh, they're goodshirt. I like it. Well done, guys. Oh, they're good looking. I love it. That's so fun.

Well done. Well done. All right. It's Aiden and Emma and Kim and Tom from the Chicago area. $129,000 paid off in three years and two days. Making $138,000 to $179,000. Count it down. Let's hear a debt-free scream.

You ready? Three, two, one. hear a debt-free scream you're ready three two one the littles have been practicing i like it wow oh wow a lot of drama That one takes your breath away right there. Woo! Man, I love freedom. This is The Ramsey Show. ស្រូវានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលានដែលា� George Campbell, Ramsey personality, is my co-host. Alan is with us.

Alan is in New Jersey, Newark to be precise. Hi, Alan, how are you? How are you doing, Ramsey? Just trying to put this all together and I hope to see how we can best unpack this. Now, I have about, me and my wife have about like $900,000 in debt, but it's not all crazy debt. It's investment debt. So just to give you a runabout, just from what we make, my wife, she works at the port. She's a longshoreman, and she makes about $160,000. I work in the IT field and the data field, and I make about $115,000. So let's put that there. I have a nice little nest egg of about $60,000. Let's put aside.

I'm 33. She's 32. We're married with four kids. That's under $10,000. So it's $10,000. Yeah, so that's one thing. About the debt portion, I have about $166,000 in my primary home. I bought a house that I renovated and, you know, I just renovated it as a two-family home. And that's probably, ARV is probably worth

about $400,000 right now. And I don't have no debt on that. But however, I had to take out about $100,000 to put into the property to renovate it. So you do have debt on it or you don't? I don't have debt on that property, no. I don't have debt on it. But you got $100,000 unsecured. Unsecured. That you used on that property.

Okay. Correct. I got $20,000 in the line of credit. Well, it was less than $100,000, but it's like $20,000 in the line of credit and about $50,000 from your favorite place so far. Yeah. Okay. Yeah, I got that one. a hundred, but it's like a 20 million line of credit and about, you know, 50, about 50 from your favorite place so far. So yeah, I got, I got that one. And then we bought another house, a four family for about four, for half a million, but we

got it down to like four 50. We put some money into it. We put about 40 into it. What's it worth today? About like six 50. And what do you owe on it total? What I owe on it right now? Mm-hmm.

$450. Okay. So I got $850. Okay, there it is. All right. And then we have about, my wife, she got a car, $23,000 in car, and about $6,000 on credit cards. No student loans.

We paid all that off and yeah okay why are you calling us how can we help um now here's the thing the my the property that doesn't have any debt on it right i need to pull money out that property to get rid of the interest rate on the debt that i took out to renovate it, right? Yeah, why are you calling us? To see... What do you want to do? How could you... What's the best way to structure it

and to see what your recommendation is? Okay. I started buying real estate when I was 22. By the time I was 26, I owned $4 million worth, and I had about a $3 million debt on it. So I had a million dollars worth of equity in the real estate, starting from nothing. What you're doing sounds very stressful to me. It does not sound like there's any peace in your voice. Yeah, we try to figure it out

just try to structure everything so yeah i think you i think you play the edges on everything don't you uh no not really you know my church every time i hold i have 170 000 miles on it i want to deal with ship the bar car you've moved the p three or four times on the shelf still trying to hide it just in this conversation. We're not in the debt restructuring business. We're in the debt payoff business, and it doesn't sound like you're at a point where you want to become completely debt-free or that you're willing to do what it takes to get there. The question you're asking and the answers we're going to give are all around the same issue the issue is okay you're 33 when you're 43 what moves are going to make you

the best off okay the best off financially and have the best quality of life with four little kids and both of you work in big uh high stress jobs uh and everything So I'm going to get rid of one of these properties and a whole bunch of, if not all of this debt in the process. Because I think that's going to add an amazing amount of peace to your life. A, you cut your number of tenants in half. B, you got rid of almost, if not all, of your debt. So $400,000 and $166,000 pays off. You get rid of

everything but the debt on the rental your you pay off your mortgage your car your credit cards and the hundred thousand so do you sell the four hundred thousand dollar property that's probably what I'm gonna do because that will take me because the peace and the calm steady movement rather than the flailing about will cause you to build more wealth over time. And you've been just kind of pushing the edges on this. Maybe you don't realize you are, and if you don't realize you are, that's even more of a problem. Because I know this guy because I was him. I mean, something about the real estate business, they take the risk meter out of your heart,

and they put it on a table and hit it with a hammer and break it, so you no longer can measure risk. And you don't perceive that all of this is risk. You just see returns. You get a little starry-eyed. It's just like, well, the renters are paying it off. No, they're not. The renters don't pay their bill half the time.

You've got a problem all the time with that. And so it's just an issue. So, no, I'm going to move you backward what feels like backward to you but sets you into a real calm place let's visit where you are at that point okay that probably the 650 with the 450 loan is cash flowing it's probably cash flowing a little not a lot but you got zero debt then no house payment no car payment no hundred thousand dollar unsecured hanging out there at a high interest rate and you only got a couple tenants and you make 275 thousand dollars a year and you're 33 years old that's a much better place than where you are

today brother to be that's a much more solid platform to launch into the future we don't find alan very many people in our millionaire study that borrowed their way into becoming millionaires using the system you're using or that i used when i went broke um most people the vast majority of millionaires do not do that to become millionaires and And so that data is real. It's not a theory and it's not a, well, what about the... There's no arguing with the actual data. Most people, Dave, especially young guys, they want to get into real estate investing. And our advice is to have a paid for property for yourself first, then do all of your real estate investing in cash to them it sounds insane why do we say that because the shortest distance to wealth is always no debt it's the shortest fastest route

and it's not just i made that up i mean it's in the bible borrower slave to the lender oh also all the data with the 10,000 millionaires that we've studied oh also if you just walk around and talk to rich people they're not going to tell you you know I did it with bitcoin you know I did I got this big hit I bought llamas I opened a llama farm they were big one time there was a big get rich quick thing on llama farms llama farms wow and I bought beanie babies they don't tell you that and they don't say i did nothing down real estate because i gotta tell you man i i knew probably a hundred people doing nothing down real estate in the 80s a hundred percent of them are out of the business or they paid off everything and got out of the debt business one of the two i actually know one

guy that he cashed out of about three quarters of his portfolio ended up with 25 as many properties and they were all debt free that changes everything he got tired of he got tired of living on the edge most people go well that's stupid dave you're losing out on all the cash flow of the properties well the thing is in the in when they're leveraged they don't cash flow that much you know that 450 over 650 he's not making much money. There are margins on that. After you have vacancy, you have loss, you know, credit loss, meaning they don't pay their bill, they go into bankruptcy,

you have a heat and air unit go out, you have a roof leak, you know, you pay your taxes, you pay, you know, and by the time you finish all that, he's not making much cash flow on that. He's not getting rich off that house. Now, the value may be shooting up, but the actual cash on cash, there's not much there. So this idea that somehow you're going to like, I'll just buy a house and the money just starts coming in. No, it really doesn't if you leverage it up to your eyeballs.

So it's all about delayed gratification. Yeah. It's go a little slower or go a lot slower, which in the end of the story ends up being faster. He who hastens to be rich will not go unpunished. There it is again. Boom. George Campbell, Ramsey personality. In the booth is Austin, Ben, Zach, Andrew, and, of course, James.

I am Dave Ramsey, and we'll be back. Dave here. We just launched a brand-new audience survey for The Ramsey Show, and we'd love your feedback. You could be entered to win a $500 Visa gift card. No purchase necessary. Take the survey at RamseySolutions.com slash survey.