The Ramsey Show - App - I Have a Toxic Relationship With My Grandmother (Hour 3)

Episode Date: August 11, 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, and my co-host here on the air today, Dr. John Deloney, Ramsey Personality. And we are answering your questions about your life and your money. It's a free call at 888-825-5225, 888-825-5225. Bethany is with us in Augusta, Georgia to start off the hour. Hi, Bethany, how are you?

Good, how are you? Thank you so much for taking my call. Sure, what's up? So, my husband and I are in Baby Step 2. He is an agriculture teacher here in Georgia. And last year he made $47,000, and we're not quite sure what he's going to make because his new pay raise starts at the end of this month, but they haven't given us the final total. We just know what the raise is. Our question for you is, I have $21,000 in a single stock from a company I used to work for

several years ago. And it's just been kind of sitting there. It's gone up and down with everything that's been going on. And we're wondering if we should take this stock, sell it, and use it to pay off part of our Baby Step 2, or if we should keep it, if we should sell it and put it in a mutual fund, if we should sell it and use it to put it into our house, because we're looking at moving in a year towards Atlanta where my husband can get a better job in teaching agriculture. We're just trying to find some direction.

How much debt do you have? We have 14 in credit card and 60 in student loan, and then we have our house. Very cool. All right, good. Well, what we teach you to do in Baby Step 2 is sell anything that isn't nailed down and isn't in a retirement account. Put the cat on Craigslist and the dog on eBay. Sell everything that's not nailed down and not in a retirement account.

This is not in a retirement account. You've got money in savings. You've got money in investment. You've got a gold bar in your safe get it out and sell it anything that does not have huge emotional value to you needs to go away immediately and clear up this mess as fast as possible so that means you would jump online at DaveRamsey.com click on SmartVestor if you don't have a broker in your area, and get that stock sold immediately, and you pay off all your credit cards.

And by the way, have you cut them up already? Oh, yeah, that's already done. Oh, yeah, I'm an FPU coordinator. Oh, very good. Okay. Well, as an FPU coordinator, I just gave you some clarification then. Anytime someone's in your class, they sell everything that is not in a retirement account. Okay.

This is not in a retirement account, right? Yeah, it's not. My husband's just concerned that I sell it and then I don't have anything, you know, in case something happens. He should go to your FPU class. So by the end of this week, potentially potentially you'll have no credit card debt and you will have eight thousand dollars less in student loan debt as well yeah well i'm that's the other thing i'm concerned about is because our house when we bought it uh four and a half years ago it hadn't been updated from the 70s and it's in 1906 um so we've been, you know, putting in, we've been cash flowing here and there trying to fix it up.

And my husband, he's amazing. He can take basically water and make it into wood, kind of, sort of. I don't even know what that means, but it sounds cool. Basically, we've taken stuff out of our walls and he's... So what are you saying? You want to work on the house or you want to stuff out of our walls and he's so what what are you what are you saying you want to work on the house or you want to get out of debt oh well i wanted we want to do both because if we moved up towards atlanta yeah we're going to be making more so what's your household income today uh right now it's 47 oh so you don't work outside the home no i'm i'm at home with two

little ones okay good for you okay cool all, so when is the move to Atlanta? The move to Atlanta, we're hoping, is April or June. Okay, all right. And what do you have to do to the house in the meantime to get it ready to sell? We have about half of it finished. How much money do you need to get the house ready to sell in the spring? Probably between $5,000 and $8,000. Oh, magic, isn't it?

Mm-hmm. Kind of odd that you have that much left over after paying off your credit card debt. Yeah, yeah. So set that in the construction account, get the house up for sale, get it fixed up, get it gone, and make the move.

Do not be sitting there when I talk to you next fall in your newly renovated home and you decide to stay. I'll kick your butt. Oh, we're not going. Trust me, we're not going. I'm not renovating your house and not paying down your student loans unless you're moving. Oh, I agree.

Okay. So fix the house and move in the spring. Okay. And set $8,000 aside for that and pay off $14,000 in student loan debt or $6,000 and pay off $14,000 or whatever you got out of the stock. But that's about the right amounts, isn't it? Yeah, it is because God's gracious. Yeah.

And set it over to the side. And it's not to buy a new couch. It's not to go on a trip. It's not to go out to eat. It's not to supplement your budget. You're an FPU coordinator. Yep. And you guys, are you doing your every dollar budget and both of you participating?

Oh, yeah. No, I'm the nerd. He's the free spirit. We have it both written down and in your every dollar budget and both of you participating? Oh, yeah. No, I'm the nerd. He's the free spirit. We have it both written down and in the every dollar. And he's in agreement on all these goals? Yes. Okay, good. Well, we have a way to execute both goals magically from this stock.

I think it's wonderful. And now that you don't have any credit card debt, we're going to accelerate out of your cash. And you don't have any cash flow needs for the construction. So you should be able to find in your budget with no credit card debt and no construction coming out of your monthly budget, you should be able to accelerate your student loan pay down quickly. And you just taught me something, Dave. So I think I would have walked in and assumed that if it's in a stock, it's some sort of retirement-ish account. And a single stock is not.

It's probably never in a retirement account. Okay. It's a good, it'd be a very unusual stock, single stock is in a retirement account, unless her company was matching her with stock in her 401k. Okay. And that's not what happened here. Okay. This is just a stock option that was given as a gift or a compensation issue or a bonus issue or whatever.

But most of the time when you hear single stock, the only way it would be in your insider retirement account is if they used it to do the match. Like if you had a 5% match, instead of giving you money, they give you company stock in the match. And that's not that unusual. But other than that, if you hear single stock, it's almost always going to be a standalone account like that is. I love it.

Man, one phone call and all of your credit card debt goes away. Well, and we have a more thoroughly trained Financial Peace University coordinator now. That's right. So life is good. Man, if every phone call could result in people having no credit card debt, man. That's a good start. She's already cut them up, though. She's way ahead.

Way ahead. Speaking of leading FPU classes, the crisis this year has left a lot of people feeling scared. And, you know, if you're scared, you don't want to be that way. You want to get into Financial Peace. You want to get into Ramsey Plus. And here's the deal. If you will lead a Ramsey Plus Financial Peace University virtual class from home, we will give you a free Ramsey Plus membership for a year. Yeah.

We need some virtual coordinators right now to get these classes going. They're popping up everywhere. There's lots and lots of classes coming on right now. A lot of people are ready to get out of debt. A lot of people are learning from COVID that they need to get their act together. So if you want to lead, text the word LEADFPU to 33789. Text LEADFPU to 33789, and you can participate. Have a front row seat for someone changing their whole family tree. This is the Dave Ramsey Show.

I heard a statistic recently that absolutely blew my mind. 43% of Americans are not protecting their loved ones with life insurance. This drives me crazy, people. What are you thinking? Taking care of your family has to be a top priority. Think about it. If you died today, would you be the hero by making sure that your family had the money necessary to carry on their life without struggle and hardship? Would they be able to pay the bills and plan for the future? That's what term life insurance is all about. Regardless of where you are in the baby steps, you've got to make this a top priority. Have I gotten my point across yet?

That's why I talk about Zander Insurance every day. They keep it simple and make sure they find you the best rates out there. Zander will do their job to find you the best rates and make sure you're served like i expect but you have to take the first step go to zander.com or call 800-356-4282 Dr. John Deloney, Ramsey Personality, my co-host today here on the Dave Ramsey Show. Open phones at 888-825-5225. Tyler is in Chicago. Hey, Tyler, welcome to the show.

Hey, how's it going, Dr. D and Dave? Thank you so much for taking my call. My pleasure. How can we help? I'm in a crazy family and financial situation right now that I want to get some advice on. About a year back, my grandma gave my wife and I a gift of $9,000 for a home, telling us that it was our wedding gift, birthday gift, Christmas gift forever, so forth. We were grateful and we offered to pay her back eventually as soon as she gave the gift to us. But she told us, don't worry about it, that she was so happy to help us out.

Fast forward a year, she's been asking us recently how we were doing financially, uh, just weird, weird questions for her. She's, she's not that intimate usually, and come to find out, she just wanted to see when she could ask us for that money back that she told us was a gift. Um, she wrote us a letter in the mail saying that she wants all the money back plus interest. And in the letter, never mentioned that it was a gift money back plus interest and in the letter never mentioned that it was a gift to us so now in her eyes we owe her twelve thousand dollars we have paperwork yeah yeah so we have paperwork um that she filled out to get tax exempt from like because it was a gift and we just don't know what to do right now. She's done stuff like this before to my parents.

I thought that my wife and I were the exception, but come to find out we're not. She's also saying things about her will that weren't her will and the money that we're going to be paying her back monthly is going to go towards quote unquote, our future home, which it's just a mess. And how old your grandma And we don't know what to do. She's 64. What's your household income? After taxes, about 70.

Okay. So you said you've got a payment plan. Have you already worked something out with her? No, we, we've been very vague in communication. I didn't want to agree to anything before I talked to someone who could help. Okay. Dave, I'm going to love to hear your way on this. Tyler, I'm answering you, but I'm also leaning towards Dave as I answer this question. It sounds like, Dave, he's going to choose between $9,000 or $12,000 and or a relationship that's going to ripple through his entire family. And it sounds like they've been through this before. It sounds like he has a decision to make,

whether he wants to go to war with Grandma or he wants to write her a letter back and say, I'll come up with some sort of payment plan and wash his hands of that and learn this lesson and never make this mistake again. Beware, grandmother has big teeth. Right, yeah. Yeah, she does. Yeah. Yeah, she does.

There's a story about this, yeah. Yeah, exactly. And it's hurting. She told me the gift and said, don't ever worry about paying it back, that it's, you know, it's her gift to us. So is she mentally ill? Yeah, that's a good question. Or is she just a liar?

She's a liar. She's been diagnosed as a narcissist and a liar. Okay. So the thing right now. Where is the money? In our home. Oh, you used it to buy a house as requested. Yes, I wish I would have listened to you guys sooner, but.

So can you write her a check for $9,000 today? Do you have any money? Oh, right now? We're building up our emergency fund. We have about $5,000 today? Do you have any money? Oh, right now? We're building up our emergency fund. We have about $5,000 in the bank. Okay. Yeah, and my wife, she works at a gym, and we live in Illinois, and, I mean, if COVID flares up, she's going to be out of her position.

Yeah, and she was for a while already. So, Tyler, one thing. Yeah, she was. Dave's about to answer here. One thing I want you to put down, like quit carrying around what she told you a year ago. You're trying to balance those two realities and the new reality that you have is a letter. It's a demand letter for $12,000. I don't see any way in the world legally or morally or otherwise that you owe her $12,000.

I don't think that you, I think legally or morally you owe any of this money um i just think there's a broader family conversation that you need to engage in yeah so yeah you you do not morally owe her a dime and so you would be you would be in your rights to just get on the phone with her and say grandma you told us that this was a gift we have paperwork that shows that it's a gift, and now you're reneging on that, and that's not okay. You're misbehaving. I love you, but I don't love this behavior,

and I'm not going to pay you because I don't owe you. That's one option. Now, you and I both know what's going to happen when you do that. Oh, for sure. Yeah. She's going to be Mount Vesuvius because she likes to pull people's strings and when they don't dance

at the end of her string, she has a little fit. Right? Absolutely. This is the pattern that you watched when you were growing up with your parents and her. This is what this woman is. And so we can predict fairly accurately what she's going to do

now is that what you want to do or do you want to just give her twelve thousand dollars or nine thousand dollars or whatever as fast as you can and i wouldn't set up a payment plan i just save up some money and ignore her until then and then write her a check for $12,000. But I kind of think when you give her $12,000, you're probably going to get a letter that goes, oh, yeah, I forgot about the other $1,000 you still owe. Yep. That's right. Yeah, or building up interest from now until I pay that.

Yeah, or more. Or she changes the interest rate because there was never an agreed interest rate because it was not a loan. Right. So she makes crap up as she goes in order to get her, in order to keep her hooks in the end of the puppet.

And so I don't know if you're ever going to make her happy. I know. So I'm not sure paying her is going to work. I am sure not paying her is going to piss her off. Yeah. So it's up to you. You got to kind of play this out and go, am I willing to have her angry with me, or do

I want to give this a shot and be rid of her? And obviously, we're doing no more business transactions with this woman as long as she breathes. Oh, absolutely not. We have learned that. We have learned that lesson the hard way. In either case. So you guys just got gotta decide which one but i think we can predict that if you just confront

her and just call it what it is it's a lie it's a lie and you told me this and i'm going with what you told me and we're not going to pay you and you don't have you can't pay her right you don't have the money well i'm not no it doesn't matter it doesn't matter if you had $50,000 in the bank. You know, it's morally wrong. She's a manipulator, a narcissist, a liar. And so do you want to, at what level do you want to have a relationship with her, and do you want to attempt to try to spend $12,000 for that option? Right. And that's really all it is because it has nothing to do with the actual transaction.

It's got to do with power and control. Yeah. The actual transaction that occurred is very clear in your mind. And I think it is exactly what happened, too, because you were so able to articulate the details of the transaction. And so I believe that your view of this is not crazy. I'd also advise Colin sitting down with his parents, if he hasn't already, and saying, how have you all handled this in the past? What's Grandma going to do here? And they may have circled back and said, we told you not to take that money.

So if you were to do this again someday, or if someone listening has a similar situation, if you think Grandma is a suspect her end game may be not what it appears when you're offering the new young couple that just got married the new newlyweds nine thousand dollars why nine anyway that's a random ten but um round up geez but um anyway but but yeah if you think that's the case i would have her put in writing that it is a gift because we know her track record of having changed her story. And then when it comes up, I just send her that back. That's right.

And if I had that in this case, there would be no question. And I can't help but think that rattling around in their minds is if we draw a line here, usually people who operate like this may have substantive accounts other places, maybe in a will somewhere. I don't really care. Well, that's what I'm saying. I want people to draw integrity lines and say, I'm not going to take that burnt money anyway, right? I don't really care if I'm in the will.

We're going to hold down to our integrity here. We're going to say, nope, we're out. If you take me out of the will, that's fine. That's right. Please take me out of the will because I don't really want to negotiate with other crazy relatives. That's exactly right. Please take me out of the will. That's fine. That's right. Please take me out of the will. Because I don't really want to negotiate with other crazy relatives. That's exactly right. Please take me out of the will. This is The Dave Ramsey Show. Thank you for joining us, America.

This is the Dave Ramsey Show. Dr. John Deloney is my co-host here on the air today. Ramsey personality joining me as we talk about your life and we talk about your money. Up next is going to be Danielle in Hopkinsville, Kentucky. Hi, Danielle. How are you? Hi, I, Danielle. How are you? Hi, I'm good. How are you?

Better than I deserve. What's up? Okay, I'm nervous. So we sold a car, bought a car with cash. We're debt-free other than our home and a loan to mom for a remodel on our house. $31,000 for a home loan at 3% interest, $43,000 for a remodel. You owe your mother $43,000? Yes.

Okay. Do I combine and refinance the home and pay her off and pay her off on a 15 year fixed yes yes or do i go back to baby step two because we never was in baby step two and pay her off what is your household income 75 00075,000. You refinance. Refinance. And Thanksgiving dinner will taste different when you don't owe your mom money. Especially almost $50,000, right? It's not strained.

I didn't say it was. I just don't like it. I said Thanksgiving dinner will taste different. And you know what? It's your mom, so it's less strained for you than it is your husband. Yeah. When Sharon and I went broke danielle sharon's dad loaned us some money to catch up the house so we didn't lose it in the bankruptcy so we owed him some money and he is the sweetest kindest most generous man on the planet and i my brain was about to explode until I got him paid off. There was absolutely no strain whatsoever coming from him,

but the borrower is slave to the lender, and that does not change if your master is nice. Right. And so I wouldn't have to stop our retirement. We're at 15%, and I've got $12,000 in emergency funds. You're there. You've got the equity to refinance, I assume. Yes.

It's a $150,000 house. We've always had it on a 15-year fixed rate. Yeah, go ahead and put it on a 15-year fixed rate, and let's take her out. The reason I'm doing that is we always put a normal second mortgage, not a mom's second mortgage, but a normal second mortgage in Baby Step 2 or a home equity loan in baby step two if it is less than half your annual income it is not it's more than half your annual income and it's a mom loan double reason refinance and get rid of it and you're it's not because we're mad at mom it's

not because we didn't appreciate mom it's not any of that it's a bad idea to owe your family money that's been a theme this hour it is and it's gonna let mom be mom and not mom and bank right it's just gonna yeah i love that there is no human on the planet that can't wonder about your vacation and what it costs when you owe them 43 000 or her husband's able to make eye contact with his mother-in-law just because he knows I'm in the hock to her for $50,000. It changes everything. Everything. The nicest people on the planet, it changes it still.

The old joke is if you loan your brother-in-law $100 and he never speaks to you again, was it worth it? So, I mean, you know, it changes. Money changes relationship. only so moms and dads quit loaning your kids money grandmas that are narcissists quit loaning your grandkids money and we had we had a call if you want to if you want to pass some money to the net to another generation give it to them we had a call at a on another show dave, where I wrote this down, the child said to you and I, I borrowed some money from mom and I'm going to pay him back. It's a mutual understanding.

And that just rang in my head. If you have borrowed money, sit down and negotiate the terms. Let people know, here's how I'm going to pay you back. Here's my plan. If it's just unsecured, if it's just a mess. the problem is when you do business with family people don't treat it like business they don't right and then it gets to be lack of communication it's unclear we don't have same expectations and the deal changes right and um it changes based on a whim and you know what i do deals i do a lot of business deals and uh i don't do any of them except in writing.

And it's partly because I forget, I forget. Right. And I want to remember what I said I would do. And if it's written down and you go, Oh yeah, now I remember saying I would do that. I want to honor somebody else that they happen to forget.

They did a bunch of deals. They forgot that. Yeah. I want to know what was really said. Right. And it was right down. It's real clear. Right.

And so, but don't loan, don't loan don't loan your family members money don't loan your friends money if you can afford to give them the money give it to them if you want to but don't loan it to them and that's no strings attached right that's no like wow and you should maybe do that no no no no no no no no no now i do know one guy that um did a thing where he took care of his kids first house and in return they promised to never borrow money again it's a good deal now that's a fair string to put on it i'll

sign up for that deal all day long and uh so yeah that that was a good one i like that and one guy said you know he put in the will you got to go to financial peace university i've heard stuff like that that's not you know that's not super manipulative it's a little strange but it's not super manipulative. It's a little strange, but it's not super manipulative. But the trick is you don't get to, because you gave them $10,000 eight years ago, still interfere in their personal lives. Right. That's what you don't get entrance to. And so you've got the gift. It's not a gift if it has so many strings attached. That's right.

Sometimes there's payments that aren't payments. Well, and it can be a sneaky way to get your hooks in somebody. And sometimes I want to think about it as from the receiver. That $10,000 may really feel good right now, but you know if there's hooks there or your dad's going to just start showing up or he's going to have input on it. My mother-in-law is very controlling, and she demands that we're there on Thanksgiving, and she wants to give us $10,000. It's probably not worth it.

It's not worth $10,000. Nope. It's not worth it. Because she's going to call that back. You know she's going to call back on that and go, yeah, well, that time I gave you $10,000, so you have to be at Thanksgiving. It's like the payments. That's exactly right.

And so, you know, if you're dealing with a control freak or somebody that's got boundary problems or they're a travel agent for guilt trips or these kinds of things, you know, then you just cannot. Even then, you've got to really go very, very clear discussion about a gift. This is an incredible offer. Thank you very much. But we need to say out loud, as a matter of fact,

depending on how toxic the situation is, we may we need to say out loud as a matter of fact it depends on how toxic the situation we may even need to write it down that there are no strings attached or if there are what are they and blame us say hey a couple of hacks on the radio one hack and dave ramsey on the radio says a couple if i'm going to take money if i'm going to take money let's write it down and so i just want to even a gift. Even a gift. Right. Even a gift. If you think there's a problem. If you think there's a problem. And so the guy that I'm talking about, this buddy of mine that did this thing with a free

house thing, he's written down. It's not a binding agreement. It's just a letter. Right. And the kid just promised. And so, you know, if they go crazy later and say, we're going to go buy a house we can't afford and go into debt after we had a free house, then you told me you weren't going to do that.

Right. And it's in writing. Right. And they both signed it. So, you know, I mean, that's a, that's a, you know, at least everybody knows the terms of the deal. Right. And you can call back on them then. But this thing of I'm going to loan my kids money

because I get more interest that way than I would get on a CD. And they get a cheaper rate than they would get on a mortgage. It seems like a great transaction, except that the turkey and Thanksgiving dinner are just as chewy. Right. You can't put a price on losing your kid or altering that relationship. It just changes the dressing. It's not as good anymore. It's too salty.

It sounds like taking money from the government just sounds nice and wonderful and clean, right? They're not going to expect anything from us. They're not going to want us to ever pay it back. I don't know when that would ever happen. Never. Here you go, guys. Matter of fact, we'll just forgive your student loans. Oh, wait.

I'm just going to mail you a check. We just changed our minds again. Why? Because we're in Congress. We're going to go with an R-bad on that one. Go ahead and pay it all back. Oh, my bad. My bad.

My bad. So I'll just pay it. Be careful about taking free anything. Yeah. But listen, the only way you can help out friends and family is not alone. Right. It's off the table. Because can help out friends and family is not alone. Right. It's off the table because you will change the tenor of the relationship. You cannot debate with the law of gravity.

It's known as the truth, and this is the truth. You cannot debate with this. You're going to change the tenor of the relationship, and to the extent you don't agree with me on this, you're what's known as wrong. This is The Dave Ramsey Show. our scripture of the day proverbs 1 7 the fear of the lord is the beginning of knowledge but fools despise wisdom and instruction vernon sanders law said experience is a hard teacher because she gives the test first and the lesson afterwards. Oh, I like that one. That's true.

And the problem is if you flunk the test, you get to take it again. That's right. You'll take it over and over and over. You know, if you just take that one stupid thing you just did and never do that stupid thing again, and then the next thing and you never do that one again, and the next thing and you never do that one again, and you start ruling out a whole long list over your life of stupid things that you never do again.

They call you wise. That's right. And you wrap it up in a pretty bow right as you die. Right as you slide in there at the end. This is how it works. Michelle is with us in Dallas, Texas. Hi, Michelle. Welcome to the show.

How can we help? Thank you very much for taking my call. Sure. What's up? I used to be a teacher. I'm a stay-at-home mom now, and most of my time is in Texas, maybe 10 years or so. I had a short stint for a couple of years in Florida. My question is about an IRA. Should I take the two years of accumulated teacher retirement and roll it into an IRA I don't have? Yes. Yes. Okay.

Now, traditional Roth, I don't know what these are. Traditional. I know their names. Okay. Traditional means that if you have not yet paid the taxes on it, there are no taxes due. You've not yet paid the taxes on it, there are no taxes due. You've not yet paid the taxes on this. So you can roll it to a traditional and pay no taxes. From that point forward, it will grow without taxes until you cash it in.

When you cash it in, all of it is taxable. But you don't pay any taxes until you start to cash it in. So if it grows to a hundred thousand dollars you'll pay taxes on a hundred thousand dollars okay if it is a Roth the taxes are due when you do the rollover so how much is this money how much money is in this account it's probably maybe three grand okay so if you I would roll it to a Roth and go ahead and pay your taxes. Taxes will probably be about $700, $750 on that. Okay.

And here's why. Here's why. It will grow from here on 100% tax-free. So if it becomes $100,000, which it won't, but if it became $100 thousand dollars which it won't but if it became a hundred thousand dollars it would all be tax free whatever it becomes growing in the mutual funds inside the roth is tax free because you've already paid your taxes and the roth grows tax free because it's such a small amount and it's kind of just cleaning up details is really all you're doing i would get with a smart investor pro the rollover, and then you will have a tax bill due at your tax rate for whatever the balance on

the account is when you do the rollover. Travis is with us in San Antonio, Texas. Hi, Travis, how are you? Hey, guys, thanks for taking my call. Sure, what's up? Hey, so my wife and I are planning on selling our house, and we were wondering what the cost difference is between getting an ELP and possibly selling our home to a company like Zillow or Nextdoor or something like that. Well, when Zillow or Nextdoor buy homes, they buy them at wholesale because they're going to resell them and make a profit. Okay.

And so it's a discounted thing. All these guaranteed purchases none of them are at retail they make the radio ads make it sound like it is but it's not and so because listen think about it for a minute okay if you own a company called next door and you you took a house that is appraised at 200 000 and000, and you buy it from Travis for $200,000, and you sell it for $200,000, how does Nextdoor make money? They don't. Yeah, that's what we were wondering. Yeah, so they don't.

They buy it for $180,000 or for $170,000 or whatever, and then they sell it, and they make a spread on it. But what you got, it's like taking your car to CarMax and selling it. It's instant. You get an instant offer, and they'll hand you a check right then, but they're buying the car for the purpose at CarMax of resale. Is CarMax even open still? Whoever it is, but you know what I'm talking about.

And the purpose of reselling it at a profit because they're not evil. It's just what they do. So an endorsed local provider is going to charge the real estate commission that they charge it's customary in your area a lot of areas are six percent and the studies tell us and it's the reason i personally would use an elp you know one of my my uh my son is getting ready to sell his home and he's listing it next week or week after next with an ELP. Why would he do that? I have a real estate license.

His sister has a real estate license. His father has a real estate license. Me, his brother-in-law, Rachel's husband, has a real estate license. So we could easily list that house and take care of it. But we use an ELP that's a professional. And here's why. The data tells us that the house sells not only faster when sold by a pro, but it sells by more than enough extra to cover the cost of the commission. So it ends up costing you virtually nothing, probably even makes you more money selling a house with a real estate agent that knows what

they're doing. Now, I'm not talking about a donut eater that sells three houses a year. I'm talking about a pro, somebody who does a bunch of house deals and gets it done and is high-octane, high-protein. They're worth every penny. The data in the research actually shows that a high-quality real estate agent will get you more for the house than they cost you. And so I always would list it.

And our endorsed local providers in the real estate section, none of them are donut eaters. They're all – I mean, they may eat a donut. But none of them are – the guy sitting around the office doing nothing is what I'm talking about. And we all kind of know those guys. Oh, yeah. Or somebody that, you know, a buddy of mine at church just got got his license and I feel like I don't want to hurt his feelings. So I'm going to give him my $400,000 asset and he doesn't know what the flippy's doing. Well, that's dumb. Don't do that. Get a pro, get somebody who knows what they're doing. And so we've vetted these ELPs and they're the top people in their market. They get it done. They know what

they're doing. It makes all the difference in the world. Jacob is in done. They know what they're doing. It makes all the difference in the world. Jacob is in Chesapeake. Hi, Jacob. Welcome to the Dave Ramsey Show. Hey, Dave. How you doing? Good. How can I help? Hey, so I recently lost my father. He passed away. Oh, gosh. And yeah, unfortunately, he had left me some of his life insurance money, and my wife and I are thinking about using it to set up a college fund for my son. He's two months old. So my question is, what do you think would be the best way to invest it and get the most return? I'm so sorry.

How old was he? 55. Whoa. That's too soon, man. When did he pass uh he passed on the 23rd of june just the other day i hate that for you man i'm sorry it's hard thank you not the easiest no it's tough time yeah well how much money is involved? $44,600 and some change. And how old is your baby?

He just turned two months. Okay. All right. What I would do is click SmartVestor at DaveRamsey.com and find a SmartVestor Pro in your area that will sit down with you. I think when they run the calculations with you, you're going to find you don't need $44,000 in your child's name for the kid to go to college. You can do it for less than that. So you're probably going to have a second question, which is what to do with the rest of the money. So let's just pretend and say $30,000 goes into Junior's name, and that's going to be more than enough. And to answer your question, in some good growth stock mutual funds with 10-year or longer track records so that you can count on how well they've managed the

money over long periods of time, because we're doing this for 20 years or 18 years here, okay? And you're going to put it in a 529. You may have to move it in there in a couple of sections, some this year, some next year, that kind of thing, but your SmartVestor Pro can walk you through how to do it, how to fund it, and help you pick some good mutual funds and show you. Don't let them pick them. You put money in things you understand.

Okay? And then if there's another $15,000 left over, what are you going to do with that? If you've got any personal debts, you're going to clear that. Make sure you have your personal emergency fund in place. But funding your baby's college fund and your dad's memory with his life insurance is very poignant. I think he's in heaven smiling at you talking about this. I agree. And, Jacob, don't rush too fast to try to solve this one.

Make sure you honor your father's passing. Breathe. Take a breath. Take your time. Take your time. You're okay. If it takes you six months to get this all worked out, it's going to be okay. You got time.

But it's a good way to... I love it. Good show, John. Well done. That puts this hour of the day, Ramsey Show, in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

This is James Childs, producer of The Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows, ask Dave money questions like, how do I invest my money? Or what is the debt snowball? Find out more at DaveRamsey.com slash smart speaker.