The Ramsey Show - App - I'm Inheriting $2.5 Million in Stocks (Hour 2)

Episode Date: December 10, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us, America. We're glad you're here. Anthony O'Neill, Ramsey personality, is my co-host today. Open phones at 888-825-5225. That's 888-825-5225. Giovanni is with us in San Francisco. Hi, Giovanni. How are you? I'm good. Happy holidays. How are you guys?

Merry Christmas to you, sir. We're great, man. How can we help? Hey, thank you so much for having me. You know, big fan. So, recently divorced at the beginning of this year due to circumstances outside of my control. But through that, I was, you know, living in my Subaru for a while. But eventually, my folks were kind enough to bring me in.

Through this last year, I've been able to pay a little over $30,000 in debt off, basically liquidated my savings, had the $1,000 in there, and then built from there. I was able to earn about a $20,000 commission check after tax. And so I have that sitting there right now. I bought my brother's old car for $1,000, good shape Chevy Cruze. And I'm trying to convince my dad to, he's looking to get a new car. If he gets a new car, then I can use maybe his car for the off-roading, sell my Subaru, get out of that payment,

and then just drive the cruise for my commuter and then use his car on the weekends to the snow and whatnot. So I have $20,000 in savings, but I have $15,000 in my Subaru. I have a $30,000 personal loan, and I have about $65,000 in student debt. So my question is, now that I have $20,000 in a savings and I have about $3,000 in my immediate savings, should I spend that $20,000 because my dad wants to give me $10,000 to help me get into a rental income property like my brother did and maybe generate some side income.

Other things I've been doing is my immediate side hustle. I opened up a side business detailing RVs, and it's called Giovanni's Mobile Detailing. And then my long-term side hustle is I'm two-thirds of the way through my real estate and trying to be able to help pay back some of that debt you know through selling some homes where are you living you're still living with your parents yeah so right now instead of paying for paying for rent I got that I just don't know if you're still there or not okay all right man you've been through you've been through a hellacious year you've been through a tough year. Yeah. And you still

got good traction. Yeah. You got good traction, Giovanni. And I agree with Dave. You've been through a tough year. And here's one thing I do want to make sure that we also say and do is prevent you from having another

tough year. And I believe if you go get a house, it will add more stress because you're $100,000 in debt tough year. And I believe if you go get a house, it will add more stress because you're a hundred thousand dollars in debt right now. And I get it. You're young. You want to get back on your feet. You know,

you're ready to get out there and just attack life. And I want you to attack life, but I want you to attack it and kill it, not attack it. And it's killing you. Okay. And so my suggestion is rent, get, get back on your feet.

Go rent you a nice little place. Get out of this debt. Go ahead and lay down a solid foundation, Giovanna. And then from there, man, go get a house. There's no need to rush. And oftentimes I hear with us young people, man, I got to get some passive income. I got to flip some money. I need a rental property. No. What you need is a foundation. That's what you need first.

Wealth will come, but you don't want to build something on top of something that's rocky. Yeah. I'd sell the Subaru tomorrow. I sure would. And then I'd work my tail off to get out of debt. I'd use this $20,000 to get out of debt and I'd use it to move out and get on your own. What are you making? What's your income? So I make $130,000 a year. Yeah, you need to be out on your own. Yeah. You've been through a hard time emotionally,

and they gave you a safe place to lick your wounds and to heal and to come together. But you make $130,000 a year. You need to sell the Subaru, get rid of it. It's a play toy. You said it's an off-road weekend. Okay, come on, man. Right now you're $100,000 in debt. You don't need a toy. And so let's get that thing cleared up.

Go ahead and use a little bit of the money to get set up in a new rental and get you a little bit of basic furniture in there, and then let's attack that debt, exactly what Anthony was saying. And, no, you do not need an income-producing property. You're broke and in debt. You don't need to be a landlord. You need to be a renter. You need to be the opposite of that for right now.

And you'll get there. You make good money, and you're healing. But Anthony's exactly right. Foundation, foundation, foundation. Quit building house of cards. Lay a solid foundation so it doesn't fall in on you. I did the exact same thing the wrong way, and it fell in on me. So please don't do that.

Ryan's in Atlanta, Georgia. Hey, Ryan, welcome to the Dave Ramsey Show. Hey, Dave, how's it going? Better than I deserve. What's up? So I have a quick question for you. So I've been kind of Dave-ish for about, I've been doing the program for about a year,

but about six months ago, back in May, I got really motivated. I don't know, my mom passed in May, so I was about $20,000 paid off, but now I'm up to $62,000 paid off out of $100,000. Way to go. I sold my $30,000 Camaro. I bought her a truck that she had, so I took the payment over for that, but it was only about $5,000 Camaro. I bought her a truck that she had. I took the payment over for that, but it was only about $5,000.

I took the payment over for that to have it memento slash help pay off debt at the same time. My question is, I have about $7,500 on the truck, so I had to pay to get it shipped here from Colorado. About $4,600 left on my wife's car

and i get a i made about three thousand dollar profit off camaro i made about fifty seven hundred dollar bonus here at the end of the year so i can have my car paid for uh the shipping fee paid for and almost her car and her car will be paid off in February. Good. That being said, we only have 26,000 left to pay on her student loans. Good. However, we just, so we're almost there, last mile. So we got a notice by email that we do not have to make a payment until January of 21. So my question would be, should I save up the 26,,000 as a pseudo-emergency fund during this next year? Because I want to work with Gazelle Intense for just one more year.

No. Gazelle Intense. And you're inside of the finish line. Just run. You're inside of the finish line. Don't change this up. Just tear into that thing, man. Every dollar you can get, keep throwing it at it.

It's the last step. You're at the last mile of a marathon. Don't quit now. Okay. And, Ashley, think about it, it right you're not getting any interest this month so why would you want to wait and attack it when the interest is back on knock it out now it's going to save you money in the long run so it's so i love the fact that you're thinking future but you're hurting your future by not attacking it in your present okay so attack so attack it, man, like Dave said. Go after it.

Now, let's understand. He's paid ahead, so they are still charging interest. He's just paid ahead. He's prepaid the payments. That's all that's happened. There's still interest being charged on the outstanding $26,000. So that's yet more reason to go ahead and attack it. Just because you don't have payments

doesn't mean you don't have interest so um yeah let's let's go ahead and get that knocked out dude as fast as you can you've done so well don't don't fall back to ish now go on finish it up you got this you're doing really good this is the dave ramsey show The very last thing Christmas should give you is stress. So our famous $10 sale is going digital. For a limited time only, you can instantly get our most popular audio books and e-books, all for just $10 or less. Get my number one best-selling audio book, The Total Money Makeover, read by me. If you're serious about getting your money in order for 2021, The Total Money Makeover is a must-have.

Plus, it makes the perfect gift. Or learn what it takes to build wealth with our Everyday Millionaires e-book. And as a bonus, for the first time, we're adding Debt-Free Degree and our latest audio book, Redefining Anxiety, by Dr. John Deloney, to our new digital $10 sale. It's not too late to invest in yourself or a friend this year. Skip the lines and shipping delays and shop our new digital $10 sale at our online store at DaveRamsey.com today.

Or call the Ramsey Concierge Team at 888-22-PEACE. Anthony O'Neill, Ramsey Personality personality is my co-host today. This is the Dave 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 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 that's beautiful. And making one hundred and twenty thousand dollars 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 1, $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'll 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 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 i thank 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 that 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 understand so there's two 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. 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. The 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. Right. 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. Okay. Yeah, Patrick, and that means if it takes you a year, let it sit there until you do okay 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 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 going to 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 sounded good and was an old family friend or something, that's the way you could lose the whole $2.5 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. I would look for a CPA, someone to be in my corner on tax issues. 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 a SmartVestor, 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 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. 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 and stuff unless you you understand it Anthony O'Neill Ramsey personality is my co-host today in the Ramsey Solutions Lobby on the debt-free stage. Nicole is with us. Hi, Nicole.

How are you? I'm great. How are you? Better than I deserve. Welcome, welcome. Good to have you. Where do you live? Minneapolis, Minnesota.

Oh, fun. And all the way to Nashville? Yes. Twelve and a half hours. Oh. Did you drive? I did, yeah. How much did you pay off um 131 707 94 love it and

how long did this take you 39 months good for you and your range of income during that time 110 000 up to 178 000 wow what do you do for a living? I'm an attorney. I do corporate and mergers and acquisitions. M&A. Good for you. I love it. So I'm guessing the 132 was law school? Some of it. Some of it was undergrad. Another was a car. Personal loan to my parents who helped with car repairs during law school. Cell phone, credit card, and some medical. Oh, you had like every debt out there. I mean, you were like normal completely. Yes.

Completely normal. A broke attorney. Yes, exactly. Yeah, I love it. Well, congratulations. Well done. What in the world happened 39 months ago? Well, I decided I wanted to buy a house.

And when I wrote out all my debt, I realized I'd be over $400,000 in debt. Freaked out. Realized I'd only paid interest for two years. And so I remembered my church doing financial peace when I was in high school. So I started Googling and I ordered your book. And then I started listening to the podcast just constantly and just went to town on my debt. Wow. Just like that. Yes. Just took the total money makeover in the podcast and went to town? I did, and then I gave the total money makeover to my best friend, Michelle,

and she and her husband read it, and they paid off $97,000 in two years. Oh, my gosh. And now her brother's doing it, too, so she wanted you guys to know how much it's spreading. I love it. Very cool, very cool. Now, you brought a cheering section with you. Who's that? Yes, that's my sister, Angie. All right. Very good. So, you got everybody involved. Yes. I'm proud of you. Well done. Well done. I mean, this is a big accomplishment. Graduating from law school, passing the bar is a big deal. Paying off $132,039 months might be harder. Yes, it was very hard. Lots of hours billed. What was the hardest part about it?

I think, you know, I didn't have an accountability partner because I'm single and I was doing my budget on my own. So there was no one like overseeing it. And so I would fall off the wagon sometimes. And so I would just have to keep going and persevere and have a lot of grace towards myself. And, um, really the hardest part was like within the first year I actually was diagnosed with, um, post concussion syndrome and, um, I couldn't process what I was reading and I would get sick reading and I couldn't do my job. And I, after a lot of prayer, I actually just randomly found out about something that I could go through to fix it. And so I spent kind of like the first year or two doing that and able to do my job. And then I started a new job, which has been amazing.

And I can read, which is very important. Yes, it is. It was, you know, it was really hard to keep going. My goodness. You've been through quite a lot in three years. Yeah, it's been a lot. Well, congratulations. You're a hero, man.

You pushed through every bit of this. Well done. So on the debt part of this thing, this is a big accomplishment. People listening, this lady paid off $139,000 in 39 months. So that makes you like a professional, like an expert, because you've actually done it. A lot of experts have never done anything, but you've actually done it. You did pay it off. So what's the secret to getting out of debt?

Because you know. I would say it's budgeting every month. And when you do mess up, because you will, it's just too long not to. You just have to accept that that's human and keep going. And I just would tell everybody what I was doing and have little rewards for myself. And I also had a why, which is I have a wonderful niece and nephew, Raylan and Eatlin, and I want to provide for them something different in the future. And I want to be able to take them on trips, pay for their college if someone else can't, and just make sure that they know what it's like to be debt free and that they grow up to be godly men and women who can handle money. And I just want them to know that that's possible

yeah the idea of doing something for the family that is a noble thing that can lift you up absolutely now what's next for you you've had a tough three years you've paid off i mean you are you're free now i mean you got you got this thing going now what's next I'm not 100% sure I'm gonna go back and quarantine for two weeks and then have Christmas and hoping to do another trip to Nashville you know in a few months to just enjoy the weather and then you know when things calm down my mom and I will go to Scotland which was canceled before and it was supposed to be a celebration trip so we'll do that i like the sound of scotland though yeah that's fun that's a great trip good for you well done well done you are a lady who achieves goals you have set them for yourself and hit them repeatedly uh you will

have no trouble finishing this out well done very very well done we've got a copy of chris hogan's book for you everyday millionaires and that's the next chapter in your story for sure. So the best cheerleaders you had were the people that you turned on to it then? Yeah, my family. Even though they weren't doing the same program, they were always very supportive, just encouraging, and I just love them so much. I couldn't have done it without them that's very cool very cool it's great to have a good support network yeah and uh that's very well done man you're impressive girl you're a hero very proud of you good great job very great job

all right nicole from minneapolis 132 000 paid off in 39 months, making $110,000 to $128,000. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! Yeah! Yeah! I love it!

Anthony, as long as I continue to run into millennials like that, I know we've got hope. Hey, Dave, I agree. I agree. But are you saying that millennials don't have hope? I know. I said if I run into ones like that, I have hope. I'm talking about the other ones. I run into more of them like that than I do the stereotypical living in their mother's basement idiot that you hear about.

I don't run into them, but they kind of stay away from me. They're scared of me. But the good ones like this, man, we got a bunch of them on our team. You work with them all over the place, all over America. I work with them, too. I love this generation. I think they're so missional. I mean, she wants to make sure that her nieces and nephews are walking with God and never know the burden of debt. This is the new movement,

Dave, amongst the millennials, this 20s and 30-something. We have another 21-year-old who's sitting out there, and she paid off her debt as well. So we're seeing that this younger generation saying, you know what? What's cool, what's popular is building wealth, avoiding debt, getting out of debt, even starting businesses and just dreaming. And being unbelievably generous. Yes, sir. Yes, sir. Yeah.

It's very, very cool stuff. Well, this time of year can be stressful. Speaking of giving, we are giving away $5,000. This is the final week of the Ramsey Christmas giveaway. Could be your chance to win our grand prize of five grand. Enter daily to increase your chances of winning. At DaveRamsey.com, there's no purchase necessary. Plus, this is the last day to place an order and have your gifts delivered in time for Christmas.

So if you want a hard product, one of the books or something, today's the day. Get life-changing gifts for your family and friends during our famous $10 sale today. You can pick up books like our number one bestseller, The Total Money Makeover, for only $10. You can pick up The Proximity Principle by Ken Coleman and Love Your Life Not Theirs. Audiobooks are on sale for $3 each. Anthony's bestseller, Defree degree is on sale for ten dollars enter to win some cash and save some serious money at davramsey.com slash giveaway for the five thousand dollar giveaway there is no purchase necessary be sure and check out these deals folks and get these orders done but so we can get the stuff shipped to you uh these you know this is cheaper than amazon

amazon's running our books a few dollars higher than we're selling them for right now ten dollars so jump in there at davramsey.com get your stuff purchased i mean buy a case of them for 10 bucks and give them away i mean 100 bucks is 10 people right that's that's a deal unbelievable deal these are all number one best-selling books every one one of them. This is the, Ramsey Personality, is my co-host today here on the air. Open phones at 888-825-5225. You jump in, we'll talk about your life and your money. Brady is in Tulsa. Hi, Brady, How are you?

Doing great. Is this really Dave? Yeah, that and $5 will get you a cup of coffee, man. What's up? Woo! Okay, great. Thank you for taking my call. I appreciate it. Sure. So, I'm 38. My wife is 36. She's a realtor. I run a small tree service business. And at this stage in our life, I'm trying to figure out kind of our investment strategy. Traditionally, we've been leaning heavily on rental properties. This year, we had six rental properties paid for, and we took advantage of the hot market and sold our least favorite one.

And so now we have some extra money. And we're trying to figure out, should we just keep going back down to rental houses again? Should we, our liquid is kind of out of balance. We have, you know, 100,000 in liquid and much more in real estate. So I didn't know if we need to kind of even that out. But what we really enjoy doing is seeking out deals, properties, small businesses, dreaming about should we open a miniature golf place, should we open an RV park, you know, that kind of deal.

So trying to figure out. Yeah, nothing you're doing is wrong as long as you're paying cash for it. And is your home paid for? Yes. Okay. So you're 100% debt free at 38 and 36, plus all your rentals are debt-free? Correct. Okay.

So absolutely nothing wrong with what you're doing at all. Just pay cash for whatever you do along these ways. Here's the balance. Two words of caution or things to think about. Number one, you have already figured out the money is made on these deals at the purchase. You bet. Buying it at a deal means everything as to whether the deal works. The second thing you got to know, you got to remember, is that you can make more money on real estate and on the stuff you're talking about messing with than you can on mutual funds.

A good deal more. But it has a good deal more hassle. Sure. And you've got to have your hands on it. I mean, you don't, you know, with a mutual fund, you just open up your computer screen and it tells you what you made. That's it. Right. You don't have to do anything. But with a rental property, as you know, there's a certain amount of time, a certain amount of effort that somebody's going to put on it.

And you're either watching that somebody or you're watching it yourself, one. And so your hassle factor is way up, but your rate of return is way up. So I make a lot more on real estate than I do on mutual funds. Right. But I also have some mutual funds. And then the last warning is people that are wired like you, and by the way, that's me, okay, very entrepreneurial and real estate minded,

most of us don't come with a properly installed risk meter. And so we don't keep enough cash until we've been burned. Now, you mentioned that you didn't have enough liquidity, and you're probably right. You probably don't keep enough cash until we've been burned. Now, you mentioned that you didn't have enough liquidity, and you're probably right. You probably don't. So, I mean, because it sounds like you've got a portfolio well in excess of a million, maybe $2 million, and, you know, you only got $100,000 you can get your hands on.

That's not much. That's not a good ratio. So real estate has with it, it sucks time and it sucks cash, but then it makes you money. But you've got to have time and cash available or you get yourself in a pinch with it. So I would increase your liquidity position there and just know that you're naturally wired to not keep enough cash. I know that about myself. A bunch of cash starts piling up. I want to do something with it.

But I've learned over the years that I need to keep that cushion. And the bigger my portfolio, the bigger that cushion needs to be because that liquidity position is what keeps you from getting in a pinch, keeps you from getting burned later. So you do need to mix some mutual funds in there. They're liquid. You can get a hold of them if you have to. You're not planning to get a hold of them.

But if you got in a COVID pandemic pinch and you got 10 rentals and six of them quit paying, you're going to need some money. So Dan, following up with that, I mean, as someone who plans to be there in the next two or three years, you know, buying rental properties. What is a good liquidity cash? Like how much cash should I have? Let's say if I do have $2 million in real estate and rental properties, how much cash should I have? What's a good safe number? Probably 15% to 20% of the portfolio, give or take. Now, that would change if you got to, you know, I don't have that, but I'm sitting on

several hundred million in real estate. So I don't need to have that because the stuff I have, and it's well diversified. But, you know, up to your first $10 million, if you had a million in cash to $2 million in cash and you had $10 million worth of real estate, you'd be all right. Okay. But the point being, kind of judge it out, and there's not a magic number, but the idea kind of run some worst case scenarios. Something like a pandemic and your rental income ceases. Yeah. Well, you still got property taxes, insurance.

You still got maintenance. You still got to keep the lights on. Yeah. Yeah. Yeah. And that's something that I I just think about that when I heard you say this. I never thought about that. It's almost like a an extended. I hate to say it like this.

So correct me if I'm wrong, but like an extended i hate to say it like this so correct me if i'm wrong but like an extended emergency fund well the emergency fund won't be that big but it is liquidity and the same thing's true in business you know you've got to have a liquid position in business yes because if things turn down you're either going to run to the bank and get a line of credit and get yourself deep in debt yeah or you're going to have uh lay people off because you can't make payroll or you're going to have uh lay people off because you can't make payroll or you're going to have a cash position so you need a cash position and that's what it is but i you know growing up in real estate business i used to say in the real estate business when you get your

real estate license they take a hammer and break your risk meter because you forget to measure risk because real estate people are the worst we're people that love real estate we just buy real estate wow wow and because we love to own the dirt and the bricks and the mortar and it creates income and to us that's the that's the thing you know but but and that cause that natural bent causes us to not keep enough cash position we we get nervous if there's too much cash around people that are wired like him and wired like me yeah and that's not good that's unwise okay so in the house of the wise are stores of choice food and oil the bible good that's unwise okay so in the house of the wise are stores of choice food and oil the bible says yes and it doesn't say in the house of the wise they own a bunch of houses right it said they had a store house of goods of money of liquidity to

take care of business if it needed to be taken care of yeah so that's really good stuff you're doing a great job brady great job job, man. Keep it up. All right, DJ is in Colorado Springs. Hey, DJ, how are you? I'm doing well. How are you? Better than I deserve. What's up?

So I'm a widow. I have three young kids, and I have my own business. I do have student debt because I have a few degrees. I'm like I was a career student. What I'm trying to do is I don't have any, I'm not good with money at all. Because I make cash every day, as soon as it comes in my hand, I move it out. I have been binge watching you for about, I'd say about two months now and um everything that i've learned more in watching you for two months than i have any time in my life no i haven't had a family member or anybody tell me

anything about financial nothing so what do you make of your clueless i don't know well you pay taxes don't you i do pay taxes so what is your tax but what was your taxable income last year uh it was 55 000 okay all right but i feel like i make more than that because you don't report all the cash um because i don't um not all the time do i give all my clients' receipts. So sometimes it's just I'm busy. I'm so busy. I'm a hairstylist, so I'm so busy doing hair that when they pay me in cash and taking care of my kids, I don't always mark who I have.

Well, you're a rock star for taking care of your kids. They go back on my banking stations. Listen, you're a rock star, and you're smarter than you're giving yourself credit for. I'm not going to let you off the hook because I don't think you're dumb. I think you're disorganized, and it's time for you to get serious, okay? Okay. Because I think you need to run this business better and run your life a little tighter, and I think you'll get some peace when you do that.

Do you think so? Oh, I 100% agree. Yeah. So, DJ. Because there's nothing dumb about you, DJ. Nothing dumb. So, when he says organized, nothing dumb about you, DJ. Nothing dumb. So, when he says organized, what it means is I didn't like the fact you couldn't say how much money you made. It simply shows.

What you're doing is I tried to do this for you, DJ, and I can hear it right. You're trying to out-earn your disorganization or out-earn your stupidity. Right. You're going to make enough. It's going to be okay. And it's not. You can't make enough to do that. So, we're going to take care of you.

We always take care of widows at Ramsey. It's what we do. And it's one of can't make enough to do that so we're going to take care of you we always take care of widows and at ramsey it's what we do and uh it's one of the many things we do but hold on kelly's going to pick up we're going to get you signed up for ramsey plus put you into financial peace university into the every dollar budget we're going to teach you how to get organized and you do this stuff because you are worth it you you you are a rock star you just got to do a little fine tuning here and this this is going to go to the moon for you. Hold on. Kelly's going to pick up.

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