The Ramsey Show - App - Is Marriage Really a Financial Trap? (Hour 3)

Episode Date: December 15, 2022

George Kamel & Jade Warshaw discuss: When a Roth conversion makes sense, A listener's idea that marriage is a financial trap for men, Choosing and affording health insurance, Adjusting a housing situation when preparing to have twins, Buying a lake house. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Ramsey personality, George Campbell, joined this hour by Jade Warshaw. For the very first time, our newest Ramsey Personality. We are so excited to have her on the team. If you've been listening to the show for more than like seven seconds, you know Jade's voice. She was on the show with Dave in the past few weeks. Just hearing your story, you're starting to take calls. How's it been? George, you're too kind. You're too kind. You know, it's felt good. This has really been like a long time coming,

but at the same time, something that I never imagined. You know, I told everybody before, before this, I was in entertainment. So, you know, money was just, it was learning how to manage money had changed our lives, but really helping others was really just a hobby. So here we are. Yeah, we joked about it the other day that we were always longtime fans of the Ramsey show, both you and I, and now we're inside of it. And it's like, it's the honor of a lifetime.

And you're like, oh gosh, we're in this thing. We're in the Matrix. It's crazy. It is crazy. We are in the Matrix. And I have to admit, I've actually never seen that movie. It's fine. We'll watch it together at some point.

I probably could use a refresher. But you have an incredible story. Give people like the quick snapshot of what you and your husband Sam accomplished. Okay, quick snapshot is this. Picture this. One week after college graduation, right? You get married to your college sweetheart. And you're just hoping for your happily ever after.

And about, I don't know, about a year into it, you realize this is not a dream, George. This is a nightmare. You've got up to $460,000 of debt. Now I'll be honest, at that point, it wasn't quite that much. But by the time we started paying it and with the interest that accrued, $460,000 of debt.

That is suspiciously close. Half a million. Yes. Oh my goodness. Half a million. Can't breathe. half a million can't breathe no you can't breathe uh you're suffocated and you are you're you're not happy i could tell you that george and um sam and i we just looked at things and we're like hey like we've always been the type to talk and you know dream together and at one point it was like if we want to accomplish any

of the things that we say we want even just just base level. We have to change this. We have to pay off this debt. And so I remember Dave from being in my brother's car. Dave was on the radio. And I remembered, I was like, I remember this guy talking about money, Dave Ramsey, let's go get the book. And then from there on, it was just game on. It was like, let's work these baby steps. And I can tell you guys right now, the steps work if you work them you got to work them in order you can't be dave ish because trust me we tried that a little bit we tried to hang on to the credit cards a little too long and and it just puts you backwards you have to follow the steps if you follow the steps george it works the plan works if you work at seven and a half years later we're screaming

i'm debt free freedom that's incredible and you guys did your debt free scream on the show in our old building, which was incredible. And here you are today on the show, helping other folks get out of debt, helping them realize that it's possible. Oh, it's possible. Belief. And especially those that have a big pile of debt and a long journey ahead of them. It may not be 18 months for them. It may be seven years. That's right. And that's why I started thinking about the idea. You might have heard it. Dave mentioned it. Six Figure Freedom Club is about those folks who've got six figures of more debt. Right. And maybe your maybe your process is longer than

average because we say that the average person gets out of debt and, you know, 24 to 36 months. Right. But that's not always the case with everybody. I'm a person who was not average. And for this reason, it was in a bad way. So it took us a little bit longer, but it can still be done. And if you're listening out there and you've been in it three years, four years, and maybe you've got three or four years more to go, you can do it. Stay the course and keep working. It will pay off.

It will pay off. I love it. Well, we're so excited to have you on the team. You've got an infectious energy and passion and you are so wise. And let's put it to the test. You ready to take some calls? All right, George, let's go. Let's go. 888-825-5225 is the number to call. You jump in, we'll talk life and money. Meredith is in NYC. Meredith, for taking my call. Hi. I have a question. I'm 66 years old. I have some money in my Vanguard account and a CREF account, and I'm wondering if it is worth it to do a Roth conversion. Let's say I quit my job in a couple of years. How much money are we talking? In my Vanguard account, I have $1,025,000.

And in my Cref account, I have about $175,000. Oh, you have more? Keep going. You got more. No, that's it. That's all I got. Is that all of your retirement? That's your nest egg? Yes. Okay, and what's causing you to want to convert all of this to Roth? Well, not all of it.

The amount that needs to be converted is about $500,000. Okay. I have about maybe $100,000. Some of it is in Roth already. The reason is, you know, I realized that eventually I was going to have to pay taxes on that money. Right. That was tax deferred. However, what I didn't realize was I was going to have to pay taxes on my security.

And that just, that upsets me. So I'm wondering if it's worth it to pay off, pay taxes on my, about $500,000 of my Roth. Do you see your income, do you see your income going up when you retire? Or do you think, is it going to stay the same? Like what you plan to draw? What the, what the RMD is going to be. I don't know what I'm going to have to withdraw. I'm not quite sure what I'm going to have to withdraw, because at 72 you have to withdraw a certain amount if it's not all converted. And that's another thing. I don't want to have to be forced to withdraw.

You're going to take some money outright to live. Correct, correct. But I don't want to have to be forced to withdraw a certain amount. I can understand that, especially, and even if you plan on leaving some of this money, you know, to your heirs, that's also a nice gift in estate planning to make sure that you've got, you know, they're not having to pay the taxes on, on withdrawing it. And also, you know, that you're just getting the maximum bang for your buck there. So there are definitely some good reasons.

George, what do you think? I think it's definitely worth it to convert some of that money over. Do you have a paid-for house and no consumer debt? Well, my house is paid for. I owe about $4,000 more on my car. It's a 2019. I owe about $10,000. I have one credit card, and a lot of that has been towards

my house. I had to have new things. I had to have a new septic and things like that that I had to pay for. So that was for the house mostly. Do you have some liquid cash on hand that you could clear that debt out? Because the way we teach it, I think George, what you're getting at is making sure you're at the correct place in the baby steps. So we want to make sure that you're, I mean, obviously, you're a millionaire, but we want to make sure that everything before that point is in place. So we want to make sure that you've got three to six, you know, number two, we want to make sure you've paid off all of your debt. And then after that, we want to make sure that you have three to six months of cash savings or liquid savings that you can get to. And of course, working on up,

you know, you're almost to that point, but we just want to make sure everything is in order. Yeah. The only time we would tell anyone to convert regardless of their age is once they're in baby step seven, which is no consumer debt, fully funded emergency fund, house is paid off, and you're real close, Meredith. And before you do that, I would still, it doesn't sound like you have a good financial advisor in your life. I would get connected with a smart investor pro at ramsaysolutions.com who can crunch the numbers for you and show you what both pictures look like down the road. Because at your age, they may say, it's actually not worth it to convert for these reasons. So I don't want to steer you wrong in a

one minute phone call here. So get connected at Ramsey Show. I'm George Camel, joined this hour by our newest Ramsey personality, Jade Warshaw, and we're taking your calls at 888-825-5225 friendly reminder that if you enjoy this show you appreciate what we do reminder that this show is free and so here's what we ask of you and it's also free consider subscribing following and leaving us a five-star review if you love the show and share it with a friend it's hard to get a new podcast a new show into someone's life unless it's a friend saying, Jade, you got to check out the show. Oh, yeah.

And he goes, is it worth it? You go, yeah. Yeah. And people are always looking for some new content to consume. Especially helpful content. Right. In a world that's just noise. Yes, George.

So some people love the show so much that they email in. And sometimes it's not love, Jade. Sometimes they've got bones to pick. They got gears that have been grinded. And Producer James sent us one that David sent in. So can I read it out loud? Read it out loud with feeling. Thanks for all the entertainment and advice regarding finances.

But what I don't get is why you guys get all excited when a guy says, I just got engaged or I just got married. There is hand clapping, cheers, congrats, etc. Especially when it's someone in their early 20s. These kids are just too young to know what they're getting into. But you guys cheer them on. Unreal. Fact is, that guy just signed a contract saying if the marriage doesn't work out, which most don't,

then there's a good chance she'll take him to the cleaners and divorce court. We hear about this all the time. There is nothing in it for guys to get married at all. This did not happen to me. I am not married, so I am not bitter or angry. Women can usually cash in if it doesn't work out. People might argue that getting married is good because you have a partner, someone to help you, etc.,

but you can have all of that without signing a contract saying you'll provide cash and prizes, alimony and or child support, when it doesn't work out. In California, if you get divorced after 10 years, you will be paying her forever or until she remarries. I've noticed that in most marriages, soon after the vows, the woman chunks up, chops off most of her hair, and starts barking orders at her husband. Marriage is not like it was 50 years ago.

Would love to hear what you think. Thank you. Wow, David. So much to unpack there. And I think a professional counselor should do it. But, you know, we'll add some color commentary to this. My guy, my guy sounds like he's been burned, George. Absolutely.

He's jaded one of the two. Like, wow. Yeah, which, you know what? As much as we can pick on David, he represents aaded one of the two. Like, wow. Yeah. Which, you know what? As much as we can pick on David, he represents a large portion of the male population who feels this way. And if you don't believe me, go to any YouTube comment section and they're in there going, this is why you should never get married. They'll take you to the cleaners. That's interesting because there's actually so many great, I mean, this is a show about money, your life and your money, but there's

actually a lot of great reasons to be married. I mean, if we talk about it from the money standpoint, I mean, he seems to think that, you know, it's all about being taken to the cleaners and it's all about losing out. I mean, I definitely have some, maybe you're just picking the wrong lady, but, you know, there are definitely some positives to being married after being married 15 years. I'd like to think that there's yeah i just never once looked at marriage as this like financial contract and who's getting what like that's just a weird way a weird spirit to have well no you definitely don't want to go into it like that like hey i'm gonna marry this guy simply because you know that if you have that attitude and you get married you probably will get divorced and it'll be a self-fulfilling prophecy oh yeah because you went in with terrible intentions

yeah terrible spirit side note that just made me think of a story so my husband sam who happens to be sitting out there when we were engaged he was in his grandfather's will right to to get money upon death but there was a a stipulation that said he had to marry someone jewish to get the money and your girl well your girl is not jewish so that put us ultimately to the test wow and sam chose me over over the money well how much how much are we talking here like 10 million or 20 grand? $70,000. 70 grand. You're worth more than 70 grand. I like to think.

It's great to know that I'm worth more than $70,000. You can't put a worth on a person, but we know that you're at least worth more than that. 100%. And I think he's saying the ROI is there. The ROI. He would do it all over again. He better. He's amazing.

He better. Well, Jay, this is an interesting conversation because there's been a lot in the news yes about marriage and wealth and the power of couples to build wealth versus someone who's single or even those that are cohabitating yes just shacking up yeah so what are we finding you know it's interesting i read an article in the wall street journal and they were talking about this wealth gap that you're talking about and they found that people who were living together just living together together, not married, not even sharing their finances, but their net worth was a quarter of those who were married and sharing finances.

Wow. A quarter. That means if you're married, sharing your finances, you are earning three quarters more. Your net worth is that much higher. Yeah. And here's the numbers if you're curious. This is as much higher. Yeah. Here's the numbers if you're curious. This is as of 2019. Median net worth for cohabitating couples age 25 to 34 was 17 grand. And for married couples, it was 68 grand. And for singles, seven grand. Yeah. That is shocking in some ways. But actually,

George, when you really think about it, it's not that shocking because think about it. I'm just thinking of it from compound interest alone. I mean, compound interest on one person's, say they've contributed $10,000, right? And then the spouse over here contributed another $10,000. Compound interest isn't helping you the same as if you had $20,000 all in one spot. So there's that, then there's a whole homeowner side of it. Oh, yeah. You're more likely to be a homeowner, which is, you know, houses appreciate and you're more likely to be investing. You're more likely to have dual incomes. And it's harder to gain traction as a young single person than it is as a married couple. And so better together. And we also there's new studies. One is from Cornell showing that joint bank accounts have a higher correlation to longer lasting and happier marriages that is very interesting that's a controversial stance

we have is that you should combine bank accounts and people come at us with the spirit of David saying oh my she's gonna take you to the cleaners if you have I don't know why I'm becoming a wrestler right now but that's the that's the David voice. I'm here for it. It's interesting. You know, there's got, I think the connection there is that you've, you have long-term planning in mind. You've, if you're willing to, to combine your finances, it means that a, there's a strong level of trust, which, you know, it takes trust to really get anything done. And then that you're really thinking towards the future. You've sat down and you've planned out, which means you're probably on the same page. And you know, as well as I do that, when people, where there is no vision, the people perish. Dave says it all the time, you know? And I think that

when you have that vision as a couple, as a married couple, you put your money together, of course, you're going to go further faster. You're going to do better together. Yeah. And there's accountability that is built in when you have a partner, because when you're single, you can kind of just like do your own thing and no one's going to yell at you for going on a retail therapy spree. Facts. Versus Sam going, hey, I just saw that bank transaction come through. What's going on here? Let's have a conversation about it. And so that accountability helps keep you on track, the shared vision, the shared goals. And it's one of the reasons Financial Peace University is such a powerful tool. Oh, man.

That changed both of our lives. And my spouse works at Ramsey Solutions. And so when we started our marriage off, I had already gotten out of debt. She was way smarter than I was and never touched debt. And so we had this crazy goal of like, what if we saved up a huge down payment and then paid off our house as quickly as possible? And so in 26 months, we paid off our mortgage after the intensity. And we did our debt-free scream almost a year ago. And I'm telling you, the power to build wealth when you have a couple that's on the same page, with the same language, shared common language, the same goals, shared vision.

I mean, that's what makes a power couple. Unstoppable. Unstoppable. You guys are unstoppable, man. If you want that, it's available for you. And don't listen to the hope stealers out there like David saying, don't get married. She's going to take you to the cleaners. Absolutely. Get rid of that turd attitude right now. Okay. Have a little bit of hope. We need more optimists in this world. And there's plenty of amazing marriages out there. Plenty of people who will show you that it's

possible. And one of the reasons is getting on the same page with money. That's right, George. And it begs to be said, because I got to say this, people might be listening and going, ooh, if we just combine our finances, that's our golden ticket. If y'all are out there, say you're living together, but you're not married. Do not combine your finances. If you're not married, don't combine your finances. Yes. Right.

We got to say that because the implications there could be dire. Put a ring on it, go to the courthouse, and then combine your bank accounts. That's right. And by the way, if you're one of these guys that's been dating a girl for like eight or nine years, she's waiting on the ring, Jeff. Come on, man. She's been waiting too long. Homegirl's about to bounce if you don't commit.

Come on, son. So that's just a PSA to all the Jeffs out there. If your name is Jeff and you're a good guy, I'm sorry. But I just had to use someone's name. Jeff's good. I usually use like Biff or... I like Biff. Cousin Boo Boo.

Rarely is there a Biff out there listening. Oh my goodness. Well, it's a good conversation. David, we picked on you, but we do appreciate the email. And thank you for listening. You can send in your feedback at askatramsysolutions.com. And more of The Ramsey Show and color commentary coming right up. We are back on The Ramsey Show. I'm George Campbell, joined this hour by our newest Ramsey personality, Jade Warshaw.

And folks, you've probably heard words like inflation and layoffs in the economy in the news lately. And if you're a little confused, you're a little scared about what all that means, you're not alone. But the truth is, you can't control what's going on at the White House, but you can control what's going on at your house. So I want you to join me, Dave Ramsey, Rachel Cruz, Dr. John Deloney, Ken Coleman this spring in a city near you for our Building Wealth Tour. We're going to teach you the proven plan to inflation-proof your money, build lasting wealth, and invest your money wisely. And we're kicking off Building Wealth in Nashville, Tennessee, January 12th. Then we are heading to Indianapolis, February 16th. We're going to Austin, Texas, February 23rd. We're going to Salt Lake City on April 24th

and ending the spring tour in Anaheim, California on May 2nd. So if you're near one of those places, you can make the flight, make the drive. We'd love to have you. General admission passes start at just 49 bucks, but do not wait because all of our fall building wealth events sold out real quick and these will too. Get your event pass today at ramseysolutions.com slash events. That's ramseysolutions.com slash events. That's ramseysolutions.com slash events. Well, the number to call to join the conversation is 888-825-5225. Sam has decided to do that over in San Antonio.

Sam, welcome to The Ramsey Show. Hey, guys. Thank you for having me. Absolutely. How are you guys doing? What's going on? Hey, so I just got married last month. Woo!

That's awesome. Thank you. And we're planning to have a family. I'm currently finishing baby step three. And we're looking at health insurance plans or health plans. So, yeah. That's adulting right there. And we do not know how much to plan for it or how much to budget for it.

We know you guys back up Christian Ministries, but they have several plans too, and I don't know how to budget them or which one to look for. I was looking for some advice. Is the insurance coming through your employer and they just have several options for you or are you self-employed and you're kind of out there in the market yourself? Oh, I'm in the market myself. My boss does not provide nothing for health. We have to pay it out of pocket. Okay. Yeah. I mean, I can attest to that. Sam and I were business owners for a long time before we came here and we had to pay, we had to research our own insurance and find the plan that worked for us. I would love if you got connected with Zander because they can shop out

all of the different options for you and you can choose the one that works best for you. And without a whole lot of information, it really depends on what you're looking for. If both you and your wife and everybody's healthy, then you can search for something that's got a really high deductible so that your out-cost monthly is not quite so much. And maybe there's an HSA attached so you can plan for future health, you know, concerns that you might have to pay for out of pocket. But if, you know, if you think you're going to be going to the doctor all the time and things like that, then you might look for something that's got, you know, a lower deductible. So it really just, it depends on what's going on with your health

situation. Have you shopped any yet? Yes. And they're all around $500 to $1,000. Is that for the whole family? They should do around 4% of your income, but 4% of my income is around $300 a month. I wouldn't worry about percentages at that point. Especially when you're self-employed and you're going out in the marketplace yourself, the numbers are going to be higher,

which is not fun to deal with, but it's a part of this journey you're on since your employer doesn't cover it. And it may be beneficial long-term if you're like, hey, I might find a different employer that does have health insurance, either subsidized or covered. That may be worth it for some people. It's a big benefit that people look for when it comes to employment. So that's something to look out for in the future. But for now, like Jade was saying, if the family's healthy, it's kind of the extremes. I would be looking at the high deductible health plan if you've got a real healthy family or if there's a ton of health issues where you're going to the doctor a lot because you willred Provider Organization. So that's kind of the way to look at it. And again, it depends on how much risk you're willing to take on versus the insurance company. And the more risk you're willing to take on with that high deductible, the less you'll pay

in that monthly premium. And so the good news is you guys are almost through baby step three, right? Yes. I'm going to finish next week. I love it. That puts you guys in a very different place. It gives you financial peace. When you don't owe anyone anything, you've got the margin to cash flow a lot of these medical expenses. You can take the hit on the full deductible if something happened. And so that's what I would be more concerned about. Do I have the money to cover the full deductible until they would pay 100%?

And if you've got that, you're in good shape. That's so good. And how about a burning pile for all medical expenses? I don't know. Hopefully it never happens but what time playing like i don't know for little by little and waiting for nothing to happen i missed that what was the first part putting like a little money apart and just saving it and saving it just in case you get you need use it in the future yes and that's where the the hsa if you get a high deductible health care plan it will be attached with an hsa health savings account and so you can contribute money. There are limits in there,

but it's thousands and thousands of dollars each year you can put in there and can use that towards qualified medical expenses. And it's got some great tax benefits because the money goes in tax free, it grows tax free, and you can withdraw the money tax free. And it has an investing vehicle as well. Once you get past a certain threshold in the account, you can actually invest that money into mutual funds and have that money grow for you. So there's some really great options. So I'm a huge fan of the HDHP with the HSA, so many acronyms, so little time. But that's how I would be looking into, Sam, to kind of start your homework off. But I love that you're thinking about this stuff. Okay. No, but it helps me a lot. Thank you guys for your time and your opinion. Yeah, man. Yeah, head to RamseySolutions.com and

click on Ramsey Recommends. You can get in touch with our trusted providers over there to figure this stuff out. Juicy conversation, Jade. I love the HDHP. High Deductible Health Plan, right? Oh, man. So many acronyms. So many. All right. Let's move on to something non-healthcare related. Maybe. We'll see. Dave is in Tulsa, Oklahoma. Dave, welcome to the show. Hey, George.

Hey, Jade. How are you guys? What's going on? We're doing great. How can we help? Well, so I'll give you my situation real quick. My wife and I sold our home and moved in with our sister-in-law in the meantime to try to buy more land and build or find a house that has more land. In the meantime, we just found out a few weeks ago that we are

having twins. Yeah, very excited. And I feel like the pressure's on a little bit more to get us moved into something. So the situation is we might be buying anywhere from 7 to 13 acres for $115,000 to over $200,000. And I'm thinking, well, maybe we buy less land and build something small because we have a dream home in mind. We know what the price is on that. And it's pretty much at the top of our budget um or do we just try to buy all the land and then go buy a home that's already built and you know wait four or five years i don't have any kids this will be my my first two um knocking two out at once i'm just trying to figure out do i just need to go ahead and get in a home or should i kick it

with the in-laws for a little bit and build our dream home in four years? I mean, I for sure want an exit strategy to be on your own, whether that's renting, buying, building, whatever you do. I want to have a clear plan on what this looks like so that there's no resentment and weird relational situations. How much money do you guys have saved? Are you out of debt, fully funded emergency fund, plus the down payment? Absolutely. I've been a Dave Ramsey fan for probably the last five years now. My wife's fully on board. We've got $130,000 in cash, no debt. We're ready to do something. I just, we can't figure out what we should do. You know, Dave, you've got a lot going on. You're living with the sister-in-law.

You've got twins on the way. You're thinking about buying land, buy land with a house, buy land and build a house, buy land and build a different house. You know, there's a lot going on. I think as much as you can simplify, I think that's the choice that I'm going towards. And I don't know what that means for you. In my mind, I'm thinking, okay, if we're simplifying, we're just trying to get out of the sister-in-law's house. If we've got money to put a down payment on a existing home that we love and that serves the purpose, I might veer towards that. The land that you're looking at buying, is it, does it hold any sentimental value? Like, is it family related or is it just a plot that you saw and you thought? It does. It is pretty close to my,

well, some of it is my wife's old family land. Okay. And then the rest of it would be, you know, our uncles or cousins, whatever. And we are wanting to build there. But there's also a home that just popped up not too far down the road within our budget. If you can snatch up some of that land,

maybe snatch up some land. And if you have enough to do both. That would be cool. Split the difference there. within our budget. If you can snatch up some of that land, maybe snatch up some land, and if you have enough to do both. That would be cool. Split the difference there. Yeah, but it sounds like you might need to delay the dream of the land because we got kids coming to the picture. We got to have somewhere to live.

We got to get out of the sister-in-law's house. Okay. So I might just jump on a house that's available right now and the land and building can come later. Right now. It's time to be a dad dave congratulations man This is the Ramsey Show. Our scripture of the day comes from John 16, 33.

I have said these things to you, that in me you may have peace. In the world you will have tribulation, but take heart, I have overcome the world. Edwin Lefevre said, being broke is a very efficient educational agency. That's a nice way. I like that framing of it. I like that. It's a little more positive. It's the school of hard knocks, if you will.

Some teaching moments. That's right. We love it. Well, I'm George Campbell. Joined this hour by our newest personality, Jade Warshaw. You may have heard her on the Ramsey Show a few times, hanging out with Dave Ramsey. But today is our first time co-hosting together, and it's been a real joy. It's a momentous occasion, George.

We just took a selfie to commemorate. We did. That's how millennial we are. We're still hip. We're still with it. Am I considered a millennial? I don't know. Let's not tell the people. Oh boy. I might be on the... Well, you know, you haven't aged a day since I've known you. All right. Open phones at 888-825-5225.

Alan joins us in Charlotte, North Carolina. Alan, welcome to the show. Hey, thank you very much. How you doing, George? We are doing great. How can we help today? I kind of have a dilemma here. My wife and I have been going back and forth on it for probably the last three weeks. We're baby step seven. House paid off, obviously no debt. Love it. We were on the Ramsey show about a year ago with Deloney and Ramsey. That's awesome.

Doing your debt-free scream? Yeah. And still debt-free scream? Yeah. And still debt-free today. Those cookies are very good, by the way. We got to treat you well. Oh, yeah. So here's the math. I know Dave always says math doesn't lie,

and I appreciate that. But our house has paid off. It's worth around a half a million. We're looking to buy a lake house that we're supposed to close on on December 29th, right after Christmas. Wow. The wife and I have been going back and forth trying to decide whether we should just stay in a paid-off house for the debt-free life, Baby Step 7, or roll the dice. What is rolling the dice? That's what I want to know. The roll of dice is to take out

a mortgage again and go back to baby step six. And with these interest rates these days with the Fed, we're looking at 6.385 and that's with no debt. And I know credit scores don't matter, but we have 800 credit, no debt. So are you saying you would sell your primary residence and then buy this lake house and just move there yes and it has better schools in that town and it's something my wife really wants um we were open to the option of renting out the current house that we live in that's gorgeous or rent to own or selling but the house we do purchasing is around $725,000. Oh, wow. So you don't have the cash to do this deal. We make $200,000 a year.

We can get around $485,000 to $500,000 for the current house that we have that's paid off. And I'm kind of just looking for your blessing to move forward with the lake house, knowing that this house isn't contingent and we still have to sell it, which it's on the market right now, or should we just stay at Baby Step 7 and stay in this house and just wait a little longer until we can buy the house?

Can you get out of this deal legally? Yes. Yeah. Basically, it costs us the due diligence somewhere around seven grand, but we could basically just walk away. Yeah, man, I don't have peace about this lake house deal because if you do stay in your house you don't have the money for this seven hundred thousand dollar lake house well right now isn't it contingent

isn't it contingent on the sale of his current house is that what you mean when you said it's well what i mean is our house is appraised for around a half a million it's listed right now to sell the house we're buying is 725 000 but we don't have an offer yet or any traffic in the current house that we're living in and that could be due to christmas and people not looking to purchase over the holidays so we're thinking within by january febru, we should have an offer around a half a million. So if you... I think I'm with George. I wouldn't only do it if you can sell your house. And it's okay if you want to go to Baby Step 6 temporarily and pay off that mortgage quickly,

but I wouldn't have two properties doing that. It's got to be contingent on the first sale. Yeah, which is tough and it might slow down the process but it's also going to give you a whole lot of peace oh yeah because otherwise you're on the hook for 725 000 right so if the house sells our mortgage would be around 225 and we make around 200 000 a year combined sure and we're debt free yeah and it's a it's a lake house with the private boat dock, everything, views, whatever you can picture for a lake house. It's not to say that

you can't have the lake house. We just got to do it the right way. And I think that's what George is saying is we want to make sure that you're at no point trying to float two mortgages. Is that right, George? Yeah. Because right now, if this was an investment property, we would tell you to pay cash if you're going to keep your primary. But if you're saying, hey, we're going to sell our primary, move into this one, take on a mortgage, pay it off quickly. You guys make a great income. I got no problem with that. But having both properties plus having a mortgage on that one, that one doesn't give me peace. So I would slow down and get out. Well, keep in mind, we are baby step seven, and the primary's paid off. I understand. And it's worth $500,000. But if Dave Ramsey were on

air, he'd tell you, investment property, that's a toy, and you're paying cash for that. That's the only way you're doing it. And so as long as you're hanging on to the primary, it's not really that kind of situation. So if we sold the primary and profited $500,000 liquid to put towards the $725,000. That is the only way I'd do this. Are we good to buy a house with the $725,000. That is the only way I'd do this. In a year, are we good to buy a house with the $225,000 and go back to maybe step

six? Yes. And guess what? Within a few years, that thing's paid off. How old are you guys? I'm 43 and my wife's 33. That's incredible. You guys are killing it. You're crushing it. So I think we just need to be patient. It sounds like we got real excited about the lake house idea and I just don't want you to sidestep some things and step into a

stressful situation when you're trying to sell the house and i might just pause and go all right we're gonna wait until uh 2023 and do this the right way or make it contingent on the sale of our house and that might slow things down i agree i agree appreciate the uh call alan good conversation congratulations on baby step seven those are the kinds of problems you get to have I agree. I agree. Appreciate the call, Alan. Good conversation. Congratulations on Baby Step 7. Those are the kinds of problems you get to have by following this path. Oh, yeah. But you know what? I think a lot of people get to that point, George, where maybe they have paid off a mortgage and they're ready to move up. And once you're totally debt-free, no debt in the world, it's tough mentally, I think, to go back to the idea of having a mortgage, even in his case, if it was only going

to be, I think he said 125 or something like that, he's going to knock it out in four years or less. But I think that's hard to kind of go, oh, am I going to take on a mortgage again? Or am I going to just sit pretty where I'm at? So either way was fine. Yeah. And I understand it's a controversial, very conservative financial stance to say only buy investment property with cash. Because if you have watched TikTok for more than four seconds, there's all these get rich quick real estate gurus telling you to do the burr method and you shouldn't buy with nothing down. And then you can refinance that because the house appreciated and you get the HELOC.

Nope, nope. And you're just playing all these crazy games and it's very risky. Very. And I just want to sleep better at night. The blessing of the Lord makes rich and adds no sorrow. Oh, George. Jade just dropping those mic drop verses. That's what they say, you know?

And like you said, I think sometimes you just got to take a cold shower, you know? You just got to cool the emotions down because I think we've all been there. And I'm not saying that this is where he was, but you get emotional about something and you rush into it. And before you know it, you have a little bit of remorse. You don't feel that peace. Well, I'll drop another one on you. Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.

Bars. So take that, get rich quick crypto bros. Look at them now, Jade. I mean, I'm not happy about it. I'm not gloating. They're shaking in i'm not happy about i'm not gloating in their shnikes not gloating in it but as much crap as we got from the crypto bros coming at us saying like you guys don't understand the blockchains the future you particularly oh yeah you were on the front line because i did an episode on the fine print about crypto and uh it wasn't it wasn't

pretty it was like hey if you want to play with crypto, that's fine. But a lot of these get rich quick from real estate to crypto, there's so much risk. There's so much greed. People like the, in your brain, the part of your brain that's like, hey, safety is important. That goes out the window. And people make terrible decisions. And I just want to save people from financial harm. That's the heart of it. It's not that I'm trying to hate on something new because I'm oh yeah have a you know boomer brain or something

I'm young and I'm hip I just also know that the tried and true methods of gods and grandma's ways of handling money always works in good time and in bad

George you're preaching you're preaching and if that makes me an old curmudgeon so be it an old curmudgeon yeah just the word curmudgeon

makes me a curmudgeon gosh unbelievable well hey Jade it's been a fun hour An old curmudgeon? Yeah. Just the word curmudgeon makes you a curmudgeon. Gosh. Unbelievable. Well, hey, Jade, it's been a fun hour. It has. Appreciate you being on the team. Excited to co-host more and more with you. She's fantastic.

You can check her out at Jade Warshaw on Instagram. Appreciate all the folks in the booth. Austin, James, Zach, Andrew. They're keeping the show afloat, America. And you are too. Thank you so much for listening. Leave us a review. Share this with a friend.

We want to spread this impact, spread the hope to all of America. We'll be back soon on The Ramsey Show. Do you love a good day, Brandt? Want to see the latest Ramsey Show videos going viral? Check out your favorite moments from The Ramsey Show on YouTube. Go watch and subscribe to The Ramsey Show channel on YouTube.