The Ramsey Show - App - Is a Reverse Mortgage Ever a Smart Choice? (Hour 3)

Episode Date: August 28, 2018

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🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in. We'll talk about your life, your money. It's a free call at 888-825-5225. That's 888-825-5225. Thanks for jumping in.

Steve's with us in Tampa, Florida. Hey, Steve, how are you? Good, Dave. How are you? Better. Glad to talk with you. Absolutely. My pleasure. Steve's with us in Tampa, Florida. Hey, Steve, how are you? Good, Dave. How are you? Glad to talk with you. Absolutely. My pleasure. What's up?

Well, I have some lovely in-laws that have reached the age of 70, and they haven't prepared for retirement. They raised five kids, and they were in the ministry. So they gave a lot, but they didn't save a lot. And they have $100,000 in cash and a home that's worth between $280,000 to $290,000, which is paid for. But when they do the math with Social Security and their savings, it's just not there. They've got about a $1,200 shortfall each month on their budget and the income that they would bring in. So I gave them a recommendation that they should consider working part-time in their field, or I didn't know a lot about reverse mortgages, and I wanted to seek your opinion on that. Horrible product.

Horrible product. Yes, very, very expensive fees, and the interest rates that they're calculated on are ridiculous. Really, it appears to solve the problem, but at the cost that it solves the problem, it is not something you want to get into. Okay. There's a huge number of them that are ending in foreclosure. The Wall Street Journal just did an article on them, gosh, about four months ago, I guess, the failure rate among them, because what happens is these folks quit receiving the money when the equity runs out, because they only take it about 65% of the equity anyway.

And when they stop it, then they can't make their remaining payments or they can't even pay their taxes or insurance, and they're turning around and getting foreclosed on by the reverse mortgage people for not keeping the taxes and insurance current. And so, yeah, it's just a bad situation. So the house, again, is worth what? About $290, close to $300. And they owe what again?

Zero. And they're in what city? In Tampa. Okay. Unpleasant option, but the best mathematical option is move down. Yes, correct. Correct. And that's what they would prefer not to do.

Yeah, that's a huge. I've also discussed that with them as well. It's a huge emotional yeah exactly side of the house exactly been there a long time they raise the kids there all that kind of stuff probably but um correct but because they haven't saved any money they're not in a position to so so they can't they have no nest egg at all um roughly about a hundred thousand dollars in cash yeah but it's not creating any income no no no no no and so they're kind of in a pinch and i'm trying to help them yeah figure out the best vehicle so yeah um i'm probably going to invest you know maybe 80,000

of that instead of letting it sit there making nothing and so if they had you said they're 1200 off a month that's 14 000 a year and so if they made 10 on 80 000 that'd be 8 000 of it then they're only 500 a month off and and have you looked at the budget that is creating that they're five so they've got social security income and that's it he he has a small pension from a previous employer. It's like $300 a month. It's not a lot. So they're looking at like a $4,000 a month income. Yes, correct.

Okay. And with the taxes and the insurance on the paid-for $300,000 house. Yeah. Yeah. I mean, it's something's going to give because they were generous. They gave away, you know, their protection on this. So something's going to give. We're either going to move down or we're going to work extra. And we need to invest $80,000 of that $100,000 and get it producing some income.

Either way, by the way. But if they move down to $150,000 paid for property and then they invest, instead of investing $80,000, they invest another $150,000 on top of that, then they're going to be more than fine. Yes, I agree. But that's the emotional very very emotional yeah i mean it's devastating but i don't want to look at my father-in-law the pastor who served god all his life and tell him that i don't want to have i'm with you but but but the other

thing the other thing is just it's it's um reverse mortgage is a um really what it is, it's financial denial. Mm-hmm. I agree. That's what it comes up. And we just might as well go ahead and deal with this so they don't get in a bigger problem later. But I'm sorry he's facing that. The good news is he does have that large asset, so he's not going to go hungry. It's just a matter of unpleasantness is what it comes down to, and it is unpleasant.

Oh, man. All right, Joel is with us. Joel is in Ohio, Dayton to be precise. Hi, Joel, how are you? Hey, Dave, thank you for taking the call. Sure, what's up? Well, I am in baby step number two. I've paid off a little bit over $40,000 of $53,000 in consumer debt.

And so I'm getting ready to transition job-wise, getting out of the military. And I've come into a lump sum of money, about $100,000. Oh, good. Where'd you get that? I can't really go into detail for like contractual reasons but um but it's you know it's legitimate it's honest it's uh it's a blessing and i'm trying to figure out how to how to best use it so i can finish off my debt with 10 yep uh 10 000 of that and that's an obvious one seems to me i need to put away some for taxes because they didn't withhold any. And then the next most logical step would be emergency funds taken care of. And that one,

we figured is about $30,000 is our goal for emergency funds. So a couple of thoughts here is I have in my remaining months in the military, I have the benefit of like 18,000 of Roth savings I can put away in the thrift savings plan. And so I've only put away three out of that 18 for the year. So part of my thinking is, well, maybe even though it's not technically going to like a 15%, like baby step four, you know, maybe I can catch up on that by diverting a larger amount of my income the next few months to it and catch up and cut that out because it's going to grow a ton, you know, by the time I'm ready to take it out.

Yeah, and offset it with this, offset the drain on your budget with some of this lump sum. I would do that, sure. Yeah. The other little wrinkle, I mean, just about every mistake that you've described in Total Money Makeover financially. And one of them is buying a home with not enough down payment. We got into our current house, which is worth about $340,000 as a 5% down payment. So we've only lived in it for about a year. And so our equity is low.

And so I'm paying PMI. And so part of me is thinking. Yeah, I'd want to pay that down. But what I would do is just work your baby steps. And that's load that 401K up. Like you said, load that $18,000 up that you can do. Get that Roth full before you leave. And then let's work kids' college, and then let's work on that house, getting it down so the PMI goes away.

You got it in the right order. Just do it that way. That's perfect. This is the Dave Ramsey Show. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans

since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated. And Zander will be there as your guide every step of the way. Visit Zander.com or call 800-356-4282. You need to get this taken care of.

I can give you the advice, and I can tell you where to go, but it's really up to you to take that important step to get your family protected. That's Zander.com or 800-356-4282. I am entitled to do stupid stuff. Well, you're free to do stupid stuff, but you're not entitled. If you want to be entitled, you would start a service called Deserve. That would be like the ultimate entitlement name, right? Deserve. Credit card startup Deserve raises $17 million to help young people build their credit in

a system that makes it way too hard to get a credit card. On what planet do you live if you think it's hard to get a credit card? They will give a credit card to a dog or to dead people. Well, anyway, for many college students, there's a catch-22 when it comes to their finances. They can't get a credit card or a student loan because they have no credit history. But they have no credit history because they can't get a credit card or a student loan, or at least not a good one. This dilemma is all too familiar to CapisceCopedia.

I probably pronounced the gentleman's name wrong. I apologize. The CEO and founder of Silicon Valley. Oh, there we go. Based startup Deserve, which today announces a $17 million round of funding led by lending mega giant Sally Mae. If Sally Mae is here to help you, you ought to be worried. With participation from early Facebook investor Excel, as well as others. When Copedia, or however Copedia, I guess it is.

I'm not trying to butcher his name on purpose. I just can't say it. He came to the U.S. from India for college. He was turned down again and again when applying for credit cards and student loans. I got rejected every time, he said. It was mostly for credit cards and student loans, given that I didn't have a credit history in this country. Everything works around building a good credit history. Building good credit is a weapon.

It's a tool that can advance your entire life. So you can learn about the new startup, Deserve, which is going to help young people bless their little hearts who can't get credit cards. See, I think that credit cards are, I mean, I'm sorry that gentleman had a hard time getting them due to his status or whatever we call it, coming into the country and so forth, but I think that's a fairly rare thing. to his status or whatever we call it, coming into the country and so forth.

But I think that's a fairly rare thing. And $17 million is not a lot for a startup in Silicon Valley, I can tell you that. That's a fairly slim little micro-business in that world. Here's what's interesting. You need to remember the credit card is the most aggressively marketed product in the history of the world. Now, that sounds like hyperbole. That sounds like an overstatement. It's not, though. I mean, it's pretty easy to say we spend more money on lots of things right now than we have at any time in the history of the world.

So you can kind of get that part out of the way. So history of the world is not an overstatement. It's the truth. The credit card is the most aggressively – think of the most slimy, pushy sales thing that you can come up with. And multiply it by 10x, and you still don't have the credit cards. The credit card industry spends more money marketing the credit card than the entire car industry spends marketing cars. The entire housing industry spends marketing houses.

Think about it. Is there anything else that is in your face to buy more often than this product called a credit card? It is a product that the banks and Visa make money on. It's a product. Debt is a product that is sold to you more aggressively than any other product in the marketing landscape in the world, in the history of the world. Let me tell you how absurd it is if you take what visa spends on marketing in a year what mastercard spends on marketing in a year what discover card spends on marketing in a year and what american express spends on marketing in a year now this is not counting store cards and it's not counting what

the banks and credit unions spend on marketing to sell you a credit card. I'm just talking about the actual home office of Visa, MasterCard, Discover, and American Express. Got any idea how much they spend in a year? Over $4 billion a year. Now, let me help you. That's almost twice the gross domestic product of France. That's almost twice the GDP of France is spent by those four companies only

selling the credit card in a year. They spend more than the entire economy in France produces times two in a year they spend more than the entire economy in france produces times two in one year is that bizarre and so deserve deserve a credit card i don't think so i'm telling you man they are everywhere and the hilarious thing is of, I'm probably the arch enemy number one of the credit card, right? Do you know anybody more associated with hitting credit cards than the name Dave Ramsey anywhere? No, not even close. I get pre-approved credit cards all the time that I have to cut up and make sure that they're not out there fraudulent and butting their self around, right? I mean, they mail them to me, for God's sakes.

Who in the world? You would think they would at least cleanse their database of that name, right? Hilarious. Not really. But Chase, Wells Fargo, Bank of America, they keep on shipping them, don't they? We used to collect the absurd credit card offers because they're so aggressive that they make these absurd mistakes in their databases. One guy, to prove it was absurd, that was a listener of ours, I don't recommend this

because it's technically not legal, applied for a credit card in the name of Buck Naked. They issued him a card in the name of Buck Naked. Now, Buck Naked does not exist as a person. Some people are Buck Naked occasionally, but Buck, the man,, Buck naked does not exist as a person. Some people are Buck naked occasionally, but Buck, the man naked does not exist. Doesn't have a social security number. He put a fraudulent social security number down. They issued him a pre-approved card because he applied for it. Another guy shredded to prove how bad I are with identity theft, shredded the credit card application through a shredder, you know, long stringy pieces of paper, right?

Taped it back together and filled it out, and they issued the card. Now, you might think maybe a crook had taped that back together if you were a normal person and you saw a shredded document had been taped back together. But no, these people, they issue the card. Unbelievable. Another guy's dog got a credit card offer. And the dog was dead i mean really at what point do you not be people not look up and go this is an industry that's out of control this is an industry that's

lost its mind and yet we are so stupid that when you get a gold card, when you get a piece of plastic that is colored gold in your mailbox, you still think you're somebody. Isn't that interesting? You know, you've got to read the marketing story behind the gold card. American Express accidentally stumbled into that years ago. And once they caught on, then we went from gold cards to platinum cards to super plutonium cards to the black card. It's metal. You can't cut it up without a pair

of shears. A pair of tin snips. You have to have a pair of pliers to kill that one. But you're somebody. You are somebody. But you're somebody. You are somebody. You are big time.

Because you have plastic. How stupid. Well, that's what you can buy for $4 billion a year with the marketing. You can completely change the way people think about something. And move the whole cultural needle. Twice the GDP of France. Think about it. This is the Dave Ramsey Show. Now here's something you don't hear a talk radio host say very often. I completely screwed that up.

I messed that up so bad. Scott just called me out on Twitter, and he's completely right. I dropped to zero. No, the credit card companies do not spend twice the gross domestic product of France. France's gross domestic product is not $2.8 billion., it's 2.8 trillion. Oh, there's always that. So, sorry about that, France. But, point still made that, of course, credit cards are the most aggressively marketed product in the history of the world. I'm still right about all that, of course, but

Scott, thank you, man. Completely screwed that up. Look foolish. Feel foolish. Oh, well. move on to the next thing i've done almost 30 years of talk radio the amount of dumb stuff i've done here on the air is uh innumerable my staff collects it but that one was pretty bad sorry about that guys but the uh the rant still stands but boy was i off on that part of it so just just the ditch the france part of the, and the rest of it is dead on. Thanks, Scott. Appreciate you calling me out, brother. In the lobby of Ramsey Solutions, however, on Better News is Tyler and Bree.

Hey, guys. How are you? Pretty good. How about yourself? Welcome, welcome. Where do you guys live? We're from Iowa, central Iowa. Cool.

What part? Marshalltown. Yeah, good. And that's the Des Moines area, right? What part? Marshalltown. Yeah, good. And that's the Des Moines area, right? About an hour, yep. Okay, cool. Well, welcome to Nashville, and you're here all the way down here to do a debt-free scream. Yeah.

How much have you paid off? It's technically, we paid off our house, which was $52,000. What? Yep. I'm looking at weird people. You two aren't old enough to have a paid-for house. That's right. How old are you guys? I'm 21. Oh, my gosh. I'm looking at weird people. You two aren't old enough to have a paid-for house. That's right. How old are you guys?

I'm 21. Oh, my gosh. I'm 24. No! This is awesome! Wow! You paid off your freaking house and you're not 25 years old. Yeah.

Unbelievable! 52,000 bucks. Yep. Wow. That's amazing. What's the house worth? We'd say now we've done some renovations, probably between $50,000 and $70,000. But in central Iowa, that's probably not the same as Nashville.

Yeah, not the same as a lot of places. How many square feet is this house? About 1,200 square foot. Okay. Very nice. Very nice. Good starter home for a young couple. And boom, you paid it off and we also paid

um for college along the way as well we cash flowed that and how much was that um that was roughly twenty thousand dollars so over what period of time did you do these two things well we got married three years ago and we were i was kind of already on the plan started the emergency fund um i had just finished college so I cash flowed my way through college. And then Bree still had two more years. So really, it's been about three years. From the time you got married, you've been beating on the house and getting Bree through school. Yep.

Very good. And your range of income during that three years? We started probably 65 and ended probably around 105 now. Wow. What do you guys do for a living? Well, when I first started, I was working a minimum wage job just like I was a receptionist, and now I have my own small business,

and I've been doing really well. I'm a photographer. Good. And I'm an insurance underwriter. Yeah. Good. Way to go, you guys. So how in the world do you get this smart

at 21, 24 years old? We listen to you, Dave. Yeah, right. Okay. I'll take all the credit. Not really. I'm so impressed. I mean, it had to be like parents' influence or something, right?

So I had started school. I got some student debt. I was like 5,000. And I heard this dude on the radio. I'm like, what is this dude talking about? And so finally, eventually, it came around to me. I heard this dude on the radio. I'm like, what is this dude talking about? And so finally, eventually came around to me. I got smarter, paid that off. And we kind of just said, we're going to do this. You know, we both grew up, I grew up in a trailer. So, you know,

you see what the good, the bad, and you learn a lot. And I was like, that's not how my life's going to go. And so when we got married we're like let's just do this three years we'll be done might not be the best house in the world but we're free now it's dadgum paid for house i'll tell you that that's right and uh like you man i'll tell you and it's gonna go up in value and you've already done some renovations to it very cool so brie this guy is listening this crazy man on the radio and you look up decide he wants to start talking to you about getting married and all this and you're like what did you say well i was 18 when i got married to him right out of high school so and i we knew we

wanted to get married and we've been saving um when we were in high school because we'd been dating for about five years before we so you. So you were childhood sweethearts. Yeah. So, yeah, I knew that we wanted to get married, and I wanted to get on board and be able to do that. So that's what we did. I'm going to admit I probably cursed your name a few times. I bet. I'm going with that. But, yeah, we did it. Wow.

You're so impressive. Very cool. So what's your degree in, Bree? Marketing and HR. Wow. You're so impressive. Very cool. So what's your degree in, Bree? Marketing and HR. Wow. Good for you. Thank you. And you guys cash flowed that through, get married straight out of high school, and then

you work your butt off, and you pay for college, and you pay off your house. We ate a lot of pork chops. I can't eat any more pork chops now. Everyone should have a food that's their broke people food that they never want to eat again. Mine's tuna fish. The first year, that's all we ate, and they're so disgusting now. Just the smell is awful. Mine's tuna fish.

Sharon used to make me tuna fish sandwiches, and I would go to work broke, and they'd be in the refrigerator, and they'd get soggy during the day, you know? Like soggy tuna fish sandwiches. Gross, gross, gross. I smell tuna fish. My net worth goes down now. I hate it. I hate it.

Yeah, pork chops will always be that way for you. That's okay. You've got to have broke people food. That's good. I like it. You're not broke people anymore. You're on your way to being multi, multi-millionaires. Oh, my goodness.

Between the two of you. I mean, 24 and 21, household income of 105, not a payment in the world, and have learned to work together, and, I mean, fell in love in the eighth grade. My gosh. Right. Whatever. Yeah. Wow.

My dad wasn't a fan of that one. Was he a fan by the time you got out of school? Yes. Okay. And is he a fan now? Yes. I bet. I bet he's high-fiving going, yeah, my son-in-law's a stud.

This is awesome. Very good. Very good. Very cool. So did you have people cheering you on? You know, we've been pretty quiet about this. And some people that are listening to this might not know that we were even on it. We don't share a ton about kind of our finances. But we've been on the plan.

People close to us know we've been on the plan. And, I mean, I guess we've got a lot of motivation from this show. We've gone to some live events, books, whatever. Wow. Which live event did you go to? We went out to Denver a couple years ago for the Smart Conference. Yeah? Yeah.

Oh, wow. The whole Smart. Yeah, that was a good one. Yeah, it was cool. That was fun. Yeah, you come out of there like on rocky steroids, man. Yeah. Yeah, those Smart Conferences are amazing.

And at your age, going in, I mean, your marriage and everything. Wow, wow, wow. You are awesome. Your future is so bright. It's unbelievable. So what do you tell people the key to getting out of debt is? Well, I would say it was also cool because, yeah, we've got this goal done, right? We've done this plan.

But more importantly, it's given us something. When we first start in marriage. You know, we're young. We don't know a lot about marriage. And it gave us something to work towards together. And we were always on board. Obviously, we had disagreements about how to do certain things. But it got us on the same page and it helped us work together as a team and do what we considered a pretty big goal.

So what would you say? I don't know i just think um working together is really important and um just communication was what we founded our relationship on early on and that's i think what really helped us get out of debt is talking to each other and communicating when we both weren't on board with something or if we decided that we needed to up our spending money, which was something that I argued for a lot. But, yeah, at first he was a little... I was a little extreme.

He was a little strict. No, not Tyler. Wow. But then, you know, we just kept communicating and making sure we were on the same page so we could work toward the goals together. Wow. You guys have so much future ahead of you. This is amazing.

And you've got such a runway. Man, this is great. Well done. I'm so proud of you. Thank you. Well done. Very well done. We've got a copy of Chris Hogan's retire-inspired book for you.

That is the next chapter in your story for sure. Millionaire and outrageously generous as you go along. You guys let us know how you're doing. I want to hear the rest of this story as it unfolds. You started so young. It's just going to be, I mean, 10 years from now

where you're going to be is going to be unbelievable. All right. It's Tyler and Bree, 21 and 24. Their house and everything is paid for. Household income of 105. Count it down. Let's hear a debt-free

scream. Ready? Okay. One, two, three. We're debt-free! Wow! Boom! I love it! Wow! Wow!

This is the Dave Ramsey Show. Our Scripture of the day, 1 Corinthians 15, 58. Therefore, my dear brothers and sisters, stand firm. Let nothing move you. Always give yourselves fully to the work of the Lord, because you know that your labor is not in vain. Neil Simon said, If no one ever took risks, Michelangelo would have painted the Sistine floor. That's a pretty good line, really.

If you don't know the story, Michelangelo painted the ceiling of the Sistine Chapel, laying on his back on scaffolding at 78 years old. It's one of the examples I always use when people say, I'm too old. You're not too old. Colonel Sanders never fried any chicken until he was 67. Started the whole thing. Made millionaires all over the world.

I was in Africa a few weeks ago. There are McDonald's, Kentucky Fried Chicken, and a few Domino's Pizza places. And that's what they consider America. Wow. Yeah. Thank you, Colonel Sanders. I mean, wow. There you go.

It's not over until you quit. I don't care how old you are. But that Michelangelo story is a classic. That's amazing stuff. Well, summer is ending, which means there is a Financial Peace University group starting near you. To get you off on the right foot, we are offering a Labor Day sale for one week only in the online store at DaveRamsey.com. We're offering Financial Peace University 20% off. Yeah. It's fall.

It's time for you to get going. Let's go. Summer's over. Game on, baby doll. Let's go. Let's go. Financial Peace University 20% off at DaveRamsey.com. And you can save up to 72% off our best-selling books and tools that will

help you take control of your money. You can pick up our number one kids bundle, The Adventure Pack, for 63% off, or get my number one best-selling book, The Total Money Makeover, for 48% off. But hurry, because our Labor Day sale ends on September the 3rd. Also, you don't want to forget to pre-order the brand new book, Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and How You Can Too. It's Chris Hogan's work with our team and the research firm that we hired. 10,000 millionaires studied and what we found out about millionaires. You can get the book at DaveRamsey.com or ChrisHogan360.com. If you pre-order it, we're bribing you to do that.

Now, here's what happens. You're going to get the Everyday Millionaire's audiobook read by Chris himself. I mean, that's Barry White reading an audiobook. I'm kidding, but not much. Everyday Millionaire's e-book. You're going to get a video lesson from Chris, How to Retire Inspired, and a video lesson from me called It's Okay to Be Wealthy. You'll get the two video lessons now.

You'll get the rest of the Everyday Millionaire stuff if you preorder the book when the book comes out in January. But we're giving you $50 worth of extra stuff here to preorder it. And 15,000 people have already preordered the book. Thank you. Wow. It's coming out of the gate fast. This is going to be a big book, and it should be.

It's absolutely vital information. Scott's with us in Idaho. Hey, Scott, how are you? Good, and you? Better than I deserve. What's up? Well, I had a couple of questions. Unlike Tyler and Bree, I'm getting a very late start, and I hope, like Michelangelo, I'm not too late.

You're not. I'm trying to get my retirement stuff put together, and I've just almost to the three- to six-month emergency fund set up, Dave. Good. How old are you? And I'm looking. I am 60 years old. Okay, perfect.

Cool. What's your income? My income is $123,400. Phenomen old. Okay, perfect. Cool. What's your income? My income is $123,400. Phenomenal. Okay. And what I'm looking at with that, with everything else paid off, I'm a state employee, and so I have a defined benefits plan. And they take 8.36% of my income and then they match a little over 11 percent so how do i fit that into with wanting to pay off the the house on the how much how much do you owe on your home we owe 265 okay and you want to have it paid off by when?

I'd like to have it paid off by age 64, 65, something in there. Well, divide that by five. $54,000 a year on the house. Right. You're not going to do that. We're making $120,000. Yeah. Not and be going to do that. We're making $120,000. Yeah. Not and be saving for retirement aggressively.

So you're probably working a little longer than $65,000 in order to have that house paid for and be putting money, 15% of your income or more, into retirement if you can. Now, if you can do other things to increase your income during that time, you can. But it's not too late. It's just a matter of you might be working to 67 to get there. Let's get the house paid off as fast as we can. I'm with you on that. But whatever number of years you're going to work, back that out as to how much and divide, you know, just divide 265 by that.

Right. Divided by five, divided by seven, divided by six. I don't care. But I mean, if you're working to 67, I think this is a very, very doable deal. If you're allowed to keep going in that state environment two more years, I would. I would plan that right now. Now, that's unless your wife picks up an income or you pick up a side hustle. We do something to increase your income.

Now, you change your income by $20,000 a year, this whole thing changes real fast because you start throwing that $20,000 towards retirement, and yeah, then you probably could make it. And in terms of having a paid-for house and a good, solid nest egg, that's where I want to get you to. And you're right on track to do it. Hold on, I'm going to send you a copy of Chris Hogan's book, Retire Inspired. It's got a lot of information in there about this very, very subject. Jeanette's with us in Casper, Wyoming. Hi, Jeanette, how are you? Thank you for taking my call.

Sure, what's up? I'm a widow, 85, and my husband did all the financial decisions and the bills and paid the IRS. And so I, now that I'm a widow, I have all that on my shoulders and it's overwhelming to me, but I sold a piece of property and I bought, I did a 1031 exchange and bought two apartments, uh, condos and I rent them. And I am really getting tired of being a landlady and having all the headaches that go along with that. But I don't know how to get out of the 1031. Well, you're out of the 1031. You just have all your equity and your capital gains rolled into that property.

So you're just going to pay capital gains when you sell it. But that's not the end of the world. Well, the house that I sold, I bought at $50,000 and sold it for over $100,000. So there's going to be a big... I talked to an accountant, and he said I'd be paying about $43,000. That's about right. Yeah. It's just capital gains tax at 15%, but it gets you out of the landlording business,

and you've got plenty of money. Yeah, and then what do I do with the money? How do I invest that so that it supplements my income? Because I don't have that much coming in without that rent. Well, what I would do is to meet with a financial advisor and maybe look at some mutual fund investing. Because the only way I know to create income is some kind of mutual fund type investing that's safe and or real estate. I do both of those two things. And, buddy, you are on it, Jeanette.

You got it going. You're sharp. So I would sit down with a financial advisor, maybe even before you sell the properties. Just go ahead and click on at DaveRamsey.com. Go ahead and click on SmartVestor and fill out your info. It'll drop down a list of the SmartVestor pros there in your area. You sit down with them in person. Make sure you feel good about them.

Make sure you walk away from them going, I really trust this person. I feel like I'm learning something. I have a heart of a teacher. And then you look at some possible mutual fund investments. You say, I think I would do that. If I want to get these properties sold, then let's do that. And then you don't have to panic on selling the houses or the apartments, but you go ahead and move them at a good price at a reasonable pace.

And then you're going to pay the taxes, and what's left over you can invest, and I think you'll have a pretty good income off of that. Got to have somebody help you crunch the numbers more than me on the radio for 45 seconds, but the little time that we had together, it sounds like you really got your act together. I think you're going to be okay. Thank you, Jeanette. That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer, Blake Thompson, our senior executive producer,

and, of course, Zach Bennett filling in today for Kelly Daniel, our associate producer. I am Dave Ramsey. We'll be back 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. Hey, guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carrying on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show.