The Ramsey Show - App - I Need Help Deciding What To Do About an Apartment Deposit (Hour 2)

Episode Date: May 21, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, 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. Anthony O'Neill, Ramsey personality and number one best-selling author of the book Debt-Free Degree, is my co-host today here on the air as we talk to you about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Gavin is with us in Houston, Texas. Hi, Gavin. How are you? Good. How are you all doing?

Better than we deserve. How can we help? So I'm 25, and due to a very fortunate situation, I kind of got doubly lucky here and got some money from my parents and my grandfather, and also got really lucky investing in some things I didn't completely understand with that money, like you often say. The tricky part about that now is that 95% of my net worth is in stocks. I only make 50 grand a year. I'm getting ready to buy a house with my fiance. I'm just concerned about the capital gains tax hit to create a down payment for the house. So I'm thinking I've made my fair share of dumb decisions with this money being young. Obviously, I've got a big Chevy Tahoe that I don't think I necessarily deserve, but I just happen to like. So I'm thinking, do I sell it to, number one, be debt-free and create positive equity

to maybe absorb that tax hit, or do I keep the truck just because I enjoy it? Is the truck paid for? Yeah. It's got $28,000 left on it, but either way, I'm not taking the car payment anymore. So I'm thinking both situations, me either writing it off and writing the tax off. So you're 25 years old, you make $50,000, you have a $28,000 truck, and you have how much in this investment account?

About $650,000. Wow. Wow. You've been blessed beyond measure, sir. Yes. And how much of that is gain that is over a year old? Probably about 70% of it. Okay. So that'll be taxed at 15%, and it's in single stocks. And from the way you're describing this, it sounds like it's a fairly high-risk situation.

Am I right? Some of it is the i decided you know i got scared of it pretty early so i moved uh about 60 percent of it into management i would say the other 40 percent is individual stocks around consumer data collection and medical diagnostic data collection yeah okay yeah uber high risk cutting edge uh small cap technologies and yeah you're pretty much playing russian roulette with those things or the roulette wheel anyway um so uh the way i answer questions we answer questions on this show is what will we do if we woke up in your shoes yeah man here's a very off, thank goodness you're where you are. Congratulations.

It's wonderful. The danger is that it worked and that you may try to do it again. That's the dangerous part. It's like the guy that drops one quarter into a slot machine and wins, and he spends the rest of his vacation putting all his money into a slot machine and trying to do it again because you're not going to do it again. So I do not have investments of those types because they scare me. And my real estate portfolio alone is worth hundreds of millions.

So I can speak with emotional authority in this situation, how it feels. When I was your age, I was a millionaire, and I lost everything, and I don't want you to fall into that. So what I would do is I would move anything that is not in a managed account in mutual funds into that, and I would pay off the truck tomorrow if you're going to keep it normally we say do not own things that are more than half your annual income this is barely but you also have 650 000 freaking dollars laying over here so i think you can afford to drive this truck

if you want to right um and then uh believe it or not i'm going to suggest you do not buy a home with your fiancee right now uh number one you don't'm going to suggest you do not buy a home with your fiancé right now. Number one, you don't buy homes with people you're not married to. After you're married, I would rent something, even if it's something nice, for six months. Get to know each other. It takes about a year of being married to know how close to your mother-in-law to buy. Yeah. Yeah. In other words, after a year of marriage, you will make a different housing decision than you would make today together.

We've been running here for about two years. We've been, I mean, we'd probably be married already. You're not married. Yeah, correct. After you've been married a while, you will make a different decision than you would make as shacked up fiancés. It's a different thing. It just is.

That's the truth. And so I would take my time. Yeah. And you've been the, there's a tortoise and the hare. You've been the hare and you're ahead in the race. And I'm going to switch sides and become the tortoise. And I'm just going to slow your butt down on the investing and on the house. I'm really happy where you are, and you're obviously a very sharp guy. Yeah.

I mean, you're obviously very bright, so you may not do anything we say to do. But you called and asked us, which the danger of that is, is we're going to tell you. Tell you the truth. And I think he will, Dave. I think he's a little nervous. He's a little scared. He wants to make the right decision. She wants to buy a house.

Yeah. And here's the thing, Dave, I was going to say. Instead of for, you know, save, like you said, spend the first six months to a year once you all get married. And then with him walking away after he pays the capital gains. I pay cash. I pay cash for the house. That's what I was going to say. And I'm saying cash like a $200,000, $300,000 home.

$400,000. I don't care. Yeah. $500,000. I don't care. I pay cash for it. Now you're good. Really good.

Everything's paid for. Everything. The money's gone. Yeah. Most of it. It's not really gone. Your taxes. Well, I mean, by the time you, it's not gone.

It's not in the sense of it's that investment accounts. Yes. Yes. But your taxes at 15% on 70% of 650 is just, that's not going to cripple the situation. It's not. And yes, I would pay the capital gains in order to get this in the right setting. Yeah. And it doesn't sound like that much of it's going to be subject to capital gains.

It's going to sound like you've already done that when you moved it from these higher risk things into the managed stuff. You probably took your capital gains yet then. Yeah. Because you liquidated the investments to move them. That's my guess anyway. I don't know exactly how you did that, but that's what it sounds like you did to me. So anyway, I'm going to pay what capital gains you got to pay for making the move,

and I'd get it all under managed, and I would sit there, rent something for a year after marriage or six months after you're married. Then I would buy with cash, and I'd pay off the car today yeah and i want to say this to america listening i know y'all probably say oh man that worked for him let me go try that no do not do it i mean i think the numbers they've i don't know the updated numbers but it's right around 78% of the people who play in this field do not make a dime they actually lose money yeah and so um yes you hear it worked over here uh but it does not mean more than likely it will not work if you had a buddy that hit a lottery ticket doesn't mean that you're smart to buy lottery tickets yes it's just you

know that's the bottom line and so and brandon's or gavin's smart enough to wise enough to be a little bit afraid in this situation. But congratulations that you're there. I'm so happy that you're 25 years old and you have $650,000. That's just so cool. That's so neat. And thanks for calling in and asking the question.

You get to do what you want to do. You're a grown up. That's what we would tell you to do. Thanks for calling. This is The Ramsey Show. With more frequency than you know, I get calls and emails from people dealing with the recent loss of a spouse or a parent. You can hear the struggle and the heartache that they've been experiencing. And at a time they should be grieving, what breaks my heart the most is the strain and tension that they're going through because of money, especially when it's a situation that could have been avoided. If you have a family, it is your responsibility to have term life insurance. It's one of the things you do to say, I love you. And yes, this is an ad for Zander Insurance. But since this is one of the

most effective ways I have to get my point across, so be it. For over 20 years, I've been telling you about the importance of term life insurance and protecting your family. Listen, you need to check out Zander.com or call 800-356-4282. I can't say it enough. Protect your family. It's what you're supposed to do. Go to Zander.com or call 800-356-4282. Anthony O'Neill, Ramsey Personality, is my co-host today. This is the Ramsey Show. Open phones at 888-825-5225. Our question of the day comes from Blinds.com.

They have a 100% satisfaction guarantee, meaning if you mismeasure or you pick the wrong color, they'll remake your window blinds for free. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code RAMSY to get the best deal. Today's question comes from Garrett in Ohio. I am 27 years old, making $120,000 gross annually. I currently have $75,000 in student loan debt

and $70,000 in my savings account. I should have enough in my savings at the end of next month to completely pay off my loan. Would it be wise to pay off the loan with every little, with every little left, everything left in my account, or would it be better to pay it off in three months with a financial cushion. I am fortunate that my major assets are paid off, including my house and car, so the only large expense is my student loan. Wow. Yeah.

27 with a paid-for house. I mean, that's beautiful, and making $120,000 a year. Not bad. Not bad at all. But to answer your question, would it be wise to pay off your student loans? Absolutely.

I wouldn't even wait until you have the full $75,000. I would go ahead and dump that $70,000 now. And so this way you can save some time. And as soon as you get the extra $5,000, put it on there and be 100% debt free. Exactly. The only thing we would tell you to hold back is $1,000 so that you have your baby step one, $1,000 starter emergency fund. Then you put everything else towards the loan as fast as you can. As soon as the loan's gone, then you build your emergency fund to three to six months of expenses.

Quick as you can, Garrett. Quick as you can. Don't fool around with Sally Mae. She will invade and haunt you the rest of your life. You cannot get rid of that woman. She is ugly. You need to throw her out as fast as possible. Patrick is with us in dallas hey

patrick welcome to the dave ramsey show thanks for having me dave sure how can we help i have um inherited about two and a half million in stock after my father passed away earlier this year And, um, yeah, I'm sorry. Thank you. Um, it was a big shock, but we've, uh, I, I, I've gotten with a financial planner and stuff like that. And, um, basically I guess to align it with their investment objectives we're looking at, because it was stock that was from my mother that was in the trust. It was to him and stuff like that, that there's some capital gains, but it's like 200,000 worth of capital gains if I'm, you know, to go with these guys I've been talking with. But if I, you know, I keep it at the bank that it's been invested with, I guess, you know, nothing's been pulled out, so I don't have any taxes to pay on it. But I'm just kind of torn of like, should I keep it where it is? Should I, you know, put it somewhere else with another investor?

You know, somebody watching money a little better or something like that. It's just a big number, and, you know, I've been thrown in the deep end on this. Yeah, you sure have. How old are you? I'm 32. What's your household income? 150. Okay.

Well, in addition to the hurt and the broken heart of losing your dad, now you're in the deep end. And I hear both of those things in your voice, the uncertainty. There's a certain amount of fear that goes with this, isn't there? Yes. Yeah. I just don't want to do something wrong. I understand. I understand.

So there's two ways to avoid doing something wrong. I understand. I understand. So there's two ways to avoid doing something wrong. Number one, go slow. Slow down. Nothing's on fire. Number two, do not do anything with money that you are in charge of unless you understand it. And right now, all you're worried about is, did I pick the right guy? And let me tell you who the guy is, the guy in your mirror.

That's the guy. And God picked the right guy, and your dad picked the right guy, and you have the right stuff, you just don't have the right knowledge yet. And as you get more knowledgeable, you're going to be more confident. Do you remember the first time you ever got behind the wheel of a car? Yeah. Yeah, I do too. I was really scared, uncertain, and I sucked at driving because it was the first time I ever did it.

I threw gravel all over my dad's house. Okay? So we really don't want to put you you know you got thrown behind the wheel of the car without any driving lessons right so just take your time now what you're looking for in an advisor is someone who gives advice not someone who tells you what to do they teach you they need to have the heart of a teacher and so then once you understand that you can say well i think it's probably worth the two hundred thousand dollar capital gain to get out of single stocks which are higher risk and get over into some mutual funds where my risk is spread around a little bit and you can say that with confidence if that's what

they're looking at i kind of think that's probably good advice because they're worried that that single stock represents a lot of risk to you. A single stock is much more risky than being in a mutual fund with 90 to 200 stocks where if one or two stocks go up or down, it doesn't destroy you, right? And that's why I don't have any single stocks. I only have mutual funds because by spreading it around, financial people call that diversity, you get safer because you don't have all your eggs in one basket. Right now, you've got one basket and all the eggs are in that.

So I kind of think they're leading you the right way. What I don't like is that they haven't taught you because I still hear the uncertainty in your voice. You're not sure. You don't feel it yet. You don't feel peace about it. And so you've got to keep learning until you get peace. And it's okay to let it sit there until you do. Yeah, Patrick, and that means if it takes you a year, let it sit there.

If you want to cash it out just to get out of single stocks and put it in a CD, I'm okay with that. It doesn't matter to me. Whatever you understand and gives you some peace because listen if you mess up 200 to 2.5 million by 200 000 you're gonna be okay if that's the biggest mistake you make you're gonna be okay it didn't destroy the whole fortune right correct and let's just say it's a complete error and you did that now putting it in the wrong thing because some slickster sounded good and was an old family friend or something but that that that's why you could lose the whole two and a half million

but you put it in something that someone taught you so you understand, and that's what you're doing. So what I would recommend you do is build yourself a little miniature advising council, a group of people that you can talk to, and you can talk to them all at once or separately, whichever you want. I would look for an attorney that works on estate planning. That might be the one that your dad used because he apparently was using trusts and other things so he might know what he's doing um i would look

for a cpa someone to be in my corner on tax issues and then and they're not investment counselors although some of the idiots think they are okay they're cpas they're bookkeepers and they're accountants and they do accounting and taxes. They're not investment advisors. Okay? And then I would get on DaveRamsey.com and click for tax advice. You can find us one of the CPAs that way. They'll help you with that.

You can click at DaveRamsey.com on SmartVestor and SmartVestor Pro in your area. Talk to a couple of those. Interview them in addition to the investment advisor that you're talking to. And then, you know, you go, your job is to find people with the heart of a teacher that are going to teach you. And that confidence comes up under you then when you know. I mean, you've experienced this in other areas of your life, Patrick, where you didn't know something and you were uncertain and insecure, and then once you did understand, it gave you a tremendous confidence and you could throw your shoulders back and step into it, right? Mm-hmm.

Everything from learning to drive a car to learning to do whatever your job is. The first day, you don't even know where the bathroom is when you show up to work, right? Right. It's the same thing, man. And so the uncertainty means you're wise. If you were not uncertain, you would be arrogant and unwise. And Dave, wouldn't you agree that with something like this, maybe even find like a mentor that can help him walk through this process as well?

Yeah, as long as that person has the heart of a teacher. Yes. Everyone here is teaching. You don't want anyone in your corner selling you or slamming their fist down and telling you that they're smart and you're not. Those people need to leave. You need to throw them out of your life as soon as you can. Yeah. But you're looking.

I didn't hear anybody like that in this corner right now. But just make sure that everybody you're dealing with has the heart of a teacher and go slow and don't put money in stuff unless you, you understand it. Anthony O'Neill, Ramsey personality, is my co-host, number one best-selling author. The phone number here at The Ramsey Show is 888-825-5225. Kevin is with us in San Diego. Hi, Kevin. How are you? Good, Dave. How are you?

Better than I deserve. How can we help? So anyways, I appreciate you guys for taking my call. A little back story. I just recently separated from the military. I did about 10 years. Currently, I'm a full-time student utilizing the post-9-11 GI Bill. I also just recently took a government contracting position full-time in San Diego,

which pays about $60,000 annually. Good. My wife is a registered nurse, but we just had a baby back in January, so she's a stay-at-home mom for now. Anyways, my question is regarding equity in our mortgage. We owe about $300,000, and our house is currently worth about $450,000. My wife and I are almost debt free. We've paid off, uh, almost $60,000 of debt. But my question is,

would it be smart to take out about 20 or 30,000 in equity out of our mortgage to pay off the rest of the debt and possibly upgrade some things in the home? No, it wouldn't be. That's not a wise move at all. Again, and you said the numbers. I don't make sure you're hearing correctly. What's your household income right now? 60. 60 altogether. Okay, cool. And you said you have

about $20,000 in debt? Yeah, about that. Yeah. Yeah, I'm not touching the home loan. I'm not the home loan. i'm not touching the home loan i'm not the home loan i'm not touching the equity at all um what i'm doing is i'm trying to come up with a game plan and knock out this twenty thousand dollars cash so kevin thank you for your service um your wife is at home with a new baby and she's standing around inside that house looking and seeing everything that needs to be fixed and that's standing around inside that house looking and seeing everything that needs to be fixed.

And that's what started this conversation. It did. I came home to a list of things. I was afraid I read that right. Oh, my gosh. And so, yeah, the answer is no, babe. When you are able to get back to work, we'll be able to do this list of things after we've gotten out of debt and have our emergency fund in place. Yeah.

You cannot borrow your way into abundance. Yeah. I understand. I do receive a housing allowance through the post-9-11 GI Bill. And you get that whether you do these repairs or not? Yeah. So instead of taking out, would it be smart just to use that money? No, it would be smart to use that money to get out of debt like every other piece of money you've got.

Yeah. Because you're in baby step two and you're knocking the debt out. You've got a brand new baby. We're trying to get out of debt. How much is your housing allowance, Kevin? The housing allowance is about $3,000. But you get that no matter what? You can do with it what you want to do with it.

Come on, man. So now we're at 78. That's what I'm saying. Household income, right? Yeah. Now you added debt in. No, I'm sorry. 36.

Did you say $3,000? $3,000 a month, right, right? Yeah. Now you're out of debt. No, I'm sorry. $36,000. Did you say $3,000? $3,000 a month, right, Kevin? Yeah, $3,000 of housing allowance. Oh, I'm sorry. Now we're at $96,000 household income. Now we're out of debt in five months. Yeah. And then you save up and do the repairs.

What's the cost on the repairs going to be? Rough number is probably around $10,000. Okay. So here's the thing. You have a $96,000 income. You need $30,000. You should be done with both of these in one year without borrowing a dime. Okay.

So now what we've got to do is walk through, hit this. What happens is very few people look at a situation like this, and they're really doing a bunch of math, and they're really thinking about how it's going to turn out 15 years from now. They're more thinking about the here and now. Yes. And that's what drives you to ask a question like, do I borrow money to fix up a house while I'm still in debt? Right.

And the answer to all of it, of course, is no. And the reason we answer the question we did is, what helps Kevin and his wife and new baby be in the best place 10 years from today? Not 10 days from today, not 10 months from today. 10 years from today, what is best for you and your family? What is going to put you in the most money situation? And that is to have avoided the debt and paid cash for the repairs and have paid off your existing debts. Yes.

And that's going to continue to free money up and continue to give you options and continue to do these things. And it's just a normal thing for her to be sitting at home. You know, she's dealing with a human that can't talk back to her all day. And so that is highly needy. And so it's in human nature to walk around and go, well, we need to paint that. We need to fix that. And didn't even notice it before.

Come on now. And that's just normal. There's nothing wrong. She didn't do anything wrong. But that's shorter-term thinking, and we need to think what's best for this child long-term, 10 years, 20 years out. Yes, sir. Yes, sir. And if you put it through that paradigm, that's how Anthony's quick answer as soon as you asked the question was, no.

No. With no explanation, zero. Not a chance. No. All right. Elise is with us in Buffalo, New York. Hi, Elise. How are you?

Better than I deserve. How are y'all? Just the same. How can I help? Yes. So my question is, me and my husband are on Baby Step 2 right now, and we're looking to be finished in October. And then, you know, we'll do Baby Step 3, and then we'll start interviewing some smart investor pros. And I've read like Chris Hogan's Retire Inspired and Everyday Millionaire, both awesome books.

But one of the things I guess I'm thinking is kind of for us, like if we're, because we're about 25, and so we're wanting to like learn from our smart investor pro, but I mean, wouldn't, if we're the type of people who like, we're not going to pull out, you know, our money from retirement, it's just going to sit there from like, you know, 25 to 65 or 70. Would we need to have a smart investor pro for like more than a year or two if they're just going to be like teaching us i don't know like how to do

investing then we'll be able to learn from them and kind of like take it from there yeah well you're not paying them a monthly fee anyway or even a flat fee per year to do your financial planning or something you're you're basically taking care of your financial planning needs. The SmartVestor Pro is in your corner to help you make a purchase where you could do an investment if you needed to, if you needed to do a rollover because one of you changed jobs or something like that, or for advice. And on a particular situation, something comes up and you go,

hey, what about this? And so I, as an example, like you say, I'm kind of in the rhythm of steadily investing, and I don't have some kind of big meeting with them every three weeks or something. If I need something, I call my guy and I say, hey, or I send him an email. I say, listen, this is what I'm thinking. Got any ideas? And he'll send me back a few ideas and maybe a few things to purchase that would do that, and then we'll execute that purchase or we won't. You know, I do my backdoor Roth IRAs.

I just finished them up the other day for this year, and, you know, so I have contact with them during that time, but I don't sit and go over my statements with them every year. They're not that complicated, you know. You can if you've got questions, but the main thing a smart investor pro does is they're just there and available and in your corner, and you just need to kind of have these professionals at the tip of your fingers, you know, at the end of an email or the end of a phone call or text that can get back to you and give you an answer.

That's good, Dave. And you know what's so funny with my financial advisor? I told him I was trying to build my dream home in the next three years, and he's the one who told me, hey, instead of parking your money in a savings account, this was two years ago, he said start parking in a mutual fund. Then I heard you talk about it. So financial advisors are just good people to go to to get advice for any situation. Yeah, but it's not like you're paying a daycare to watch your kids or something.

Right. Or hiring a full-time governess for your children. Yeah. This is more like someone that gives you parenting advice once a year. That kind of a thing. Yeah. So you're thinking about it correctly. You've got the right mindset about it, but they still need to be there available to you.

This is The Ramsey Show. so so Anthony O'Neill Ramsey personality is my co-host today open phones at 888-825-5225 Christina is with us in Orlando Florida hi Christina how are you I am good thank you so much for taking my call sure what's up so I I have a question. I have my parents are aging and, you know, they're not in the best of health. And I also have three children. I'm a single mother. So I wondered, how do I start? And unfortunately, I do not have my three to six month savings yet. I'm working toward that. But how do I start saving also for their college fund I mean my parents because I unfortunately the brunt of any financial burden you know should they pass heaven forbid is going to fall on me I

already know that um so I just wondered what's the best plan I mean do I focus only on my three to six months for a time frame and then start saving also for the other items? Or how do I plan all this out? Your first goal is your emergency fund of three to six months of expenses and to be debt-free. Those are foundational things for you to be able to build wealth to be able to address the other things. You'll not get to the other things if you don't first cover emergencies. Okay.

All right. Fortunately, I am that, well, other than my home, I am that. What do you make? I'm a little bit under, I just got a raise. I'm not 100% sure, but I'm under close to 90, or I'm sorry, close to 90, about 88 something. Yeah. How old are your parents? My dad just turned 72, and my mother is in her 65.

And I take it they have no money. They don't, no. Okay. Then what I would do is get up in their business about them making sure they have all the Medicare, Medicaid options lined out and that they are properly covered with those options because that will lower the uh the medical cost out of pocket to virtually zero if you do it properly right and it is a tangled web and it's a mess to comb through to figure out which of the ones to do but i'll guarantee you if they're like 90 of the people that are 72 years old they have not

addressed that properly and if you get in there and people that are 72 years old, they have not addressed that properly. And if you get in there and make sure that they use what money they have to make sure they've got their health insurance needs covered with Medicare, Medicaid, and all the different option B, option A, option C, whatever, that they need to get into and what is in their state and that they get that purchased and in place, that is mandatory. Christina, what are they doing for income right now? Well, my dad is a veteran, so he gets a check, and my mother does not work. So basically they live off of – well, and she just managed to get a little bit of Social Security. I don't remember how much it is.

Well, he should be getting Social Security too. Right. So he gets that in his VA. Right. So that's it. But even that, I mean, I still have to assist with bills and things monthly for them because it just doesn't cover. Why? How much is he getting from the veterans?

That I don't know. I couldn't even begin to say that. So why are you giving them money when you don't know what they got coming in? They might have $5,000 a month coming in right um well just based on the way they live i i doubt that um but yeah i don't i should probably ask yeah you need you need to not put any more money in this until you get your fingers down in their budget yeah and christina here here's the truth um i do this with my parents once a year me and my siblings we get together and we ask them hey where are you guys at financially?

What is your income? Do you have a will? All that type of good stuff. So stop giving them money. Stop taking away money from your family until you really know what's going on within their home. Yeah. Okay. Exactly.

Because it's your responsibility as your home. And then your parents comes after that. So let me help you with this. I'll give you the rundown. Here's your rundown. Number one, before you give them another dime is your emergency fund. Yep. Number two, before you do anything else with money,

you get your retirement started at 15% of your income towards retirement so that you're not in their situation when you get there. Yes. 100% of you are going to retire or you're not in their situation when you get there. Yes. 100% of you are going to retire or you're going to die. These are your only options. And to dive deeper in that number two, Dave, do that so that way you're not putting your kids in the same situation. Yeah. Yeah.

Then number three is your kid's college. Yes. This is a responsibility of yours before you care for parents who you don't even know what their budget is. Right. Now, if they're hungry, you buy them a bag of groceries, that's fine. But I think you're willy-nilly throwing money at them, and they're disorganized, and you're disorganized. And then number four, above those things, after you've got your emergency fund, you've got your retirement, this is your order of priority

and then you've got something going towards your kids college and uh so they don't end up living in your basement you get it from both sides being a sandwich right and uh then you but you can supplement mom and dad because you do have a nice income and you should be able to do all of those things if you're very careful and very intentional and you move along. In the meantime, before you get through all four of those to mom and dad, I'm going to insert myself into their life in a loving way and help them comb through. Let me tell you, the Medicaid, Medicare, the options that you go through, I've looked at them.

It is a barrel of fishhooks. And even somebody that knows what the flip they're doing, it's very difficult to get through that. So I doubt that your parents have bought the proper coverage and or adequate coverage for the best dollar that they could use. And I need to know what his retirement is and what the two Social Security checks are. And then let's look at what their house payment is and what other stuff they've got. And do they need to have a garage sale? And what else needs to happen here? And let's get on a budget, Mom and Dad, and let's be responsible and live on this

instead of calling our daughter, who's a single mom and has no money, asking her for money. Yeah, and I feel her pain. I mean, I'm the oldest of the three siblings, and if something was to happen to my parents, I'm going to feel it. I am going to have it. That's why I'm having a conversation now. Yep. Because I want to make sure that I do not impact and take away from my kids for my parents. And I love them.

I love my parents. It's not a question of love. Yes. It's a matter of what your primary moral responsibility is. Yes. It's to your children before your parents. Right. Right. And it's to your retirement before your parents. Right. Right.

And it's to your retirement before either one of those. Right. Because your kid may or may not go to college, but you are going to retire. 100%. And so we've got to put these things in place. Hey, thanks for the call. Open phones at 888-825-5225. Derek is in San Antonio.

Hi, Derek. Welcome to the Dave Ramsey Show. Hi, Dave. It's an honor to talk to you all. I listen to you all the time, so I'm just thrilled to be on here talking to you. Certainly. How can we help? Yeah, I got a simple question.

My wife and I, we're moving back to an apartment. We're actually living in New Braunfels. We're moving back to San Antonio. I'm going to college right now. They're offering us either a $750 traditional deposit on the apartment where you pay, does any damage if they take it out of that, or they have a $131 smart deposit where it's non-refundable, you still pay out of pocket. Is it better to just let them have the $750 and wait in the end because I'm losing the $131 anyway, or I'm kind of lost on that. I'm sorry, you're going to lose the $131 at the end anyway?

Yeah, I think it's in lieu of the $750. I think it's supposed to be for... Okay, I'm sorry. I thought the two choices were $750, and if the apartment's clean, you get the $750 back, or you put $131 up, and you never have to do anything else. That is correct, but you don't get the $131,000 back. I got that part, but on the $750,000, you get the whole $750,000 back. That would be correct, yes.

Okay. All right. Yeah. Man, how long are you going to be there? Yeah, that's my question. Our lease is 18 months at least. I'm finishing out. I'm going to be going to UTSA.

I'm going for my master's in accountancy, and so we're going to be there at least three or four years. Let me ask you this question. Do they require you to do carpet cleaning and you pay for all that out of the pocket if you do the $750? No, I think that if it's normal wear and tear, they don't charge you. The last apartment we moved out of, I think they had a little bit of resurfacing. They didn't say anything about the carpet. We're pretty good tenants. We have a one-year-old daughter though. It's just me and my wife. With an accounting major, we should be able to look at it this way

then. What's $131 as a rate of return? What's the interest of $131 on $750? That's a lot. That was my thing. It's like a 30% interest on your deposit,

so I'm putting up the deposit. Okay, excellent. Just wanted to make sure I shouldn't be doing something, but I figured it was a high interest rate. Wanted to confirm it with you and get my dumb call in for the day. Yeah, no, that's interesting. I've never heard that option presented, and what a great deal for the apartment complex

to take $131 because 90% of the time they're going to be giving the deposit back anyway. And this time they get to put the $131 in their pocket. They made 20% on the money. Yep. Wow. Very creative. Interesting.

Smart business moves. Somebody will. When the other side gets screwed, I don't call that smart. I got you, Dave. This is The Ramsey Show. Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes.

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