The Ramsey Show - App - Is the Fed Trying To Replace the Dollar? (Hour 1)

Episode Date: April 10, 2023

Dave Ramsey & George Kamel answer your questions and discuss: Why whole life insurance policies suck, from the blog: What Is Whole Life Insurance? Why the new FedNow payments system is a mixed bag, "Should I sell my rental or keep it?" from the blog: How to Earn Passive Income From Real Estate 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/3cEP4n6 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

Live from the headquarters of Ramsey Solutions, broadcasting from the pods moving and storage studios, it's the Ramsey Show, where we help people build wealth, do work that they really love, and create actual amazing relationships. We're so glad you're with us, America. George Campbell Ramsey personality and co-host of the ever-popular Smart Money Happy Hour with Rachel Cruz is my co-host today.

Open phones at 888-825-5225. And big announcement day. George, it's here. You're doing it's national hug your dog day that's right dave it's a real thing you can't make that up but in bigger news today we launched the george camel youtube channel for the first time in history camel with a k that's right and this is big we've been working on this now for a year or two i've done previous podcasts here like borrowed future and fine print and Smart Money Happy Hour. And we've kind of combined them all into this new YouTube channel where we expose the toxic system.

It's eye-opening. It's informative. It's funny. It's snarky. It's above all snarky. Very snarky. The snarky is… It's on brand for me.

It's like a spiritual gift for you. Thank you. I mean, it's fabulous snark. Tell that to my wife. Absolute fabulous snarky is it's on brand for me it's like a it's well it's like a spiritual gift for you thank you i mean it's it's fabulous snark tell that to my wife absolute fabulous snark so we are having a blast with this the first video launched today on how i bought a house with no credit score and the reason we launched this dave is there's so many creators out there on tiktok and youtube and instagram reels and they're peddling financial crap to our listeners our audience and they're sending me messages crap to our listeners, our audience, and they're sending me messages going, is this real? Should I believe this? To all of America. Yeah.

That you have to go get a credit card to get a credit score to get a mortgage, for instance. Or there are actually people that think that SoFi is good for you, but it actually causes a kind of an allergy if you hadn't noticed. That's it right there. Get some Claritin for Dave every time he has to mention that company. SoFi is good for you, but it actually causes a kind of an allergy if you hadn't noticed. That's it right there. Get some Claritin for Dave every time he has to mention that company. And you know this, Dave. I had fallen for every trend and trap when I first started here back in 2013. I was $40,000 in debt, and I went from negative net worth to Baby Steps millionaire in under a decade following our proven plan.

So now I'm just screaming from the rooftops going, guys, don't listen to the get rich quick, the crypto bros. Don't listen to the whole life insurance people, the zero down real estate folks. There's a simple way to build wealth where you have freedom and peace and joy in your life. Well, we've decided with stuff like Tic Tac and YouTube that we either are going to fill up those spaces with the correct information or just tolerate that the bs will continue there and so what we're going to do is try to put so much good real helpful information out there that is not trying to get rich quick off of you that it fills up the space it displaces no room in your social media day for any more tic-tac warlords of crypto. That's a good way to put it.

The crypto warlords. And there's so much- Which are kind of teeny and small right now. There's not much left of them. No. They've dissipated, Dave. They've got real quiet. They've kind of shrunk down to, honey, I shrunk the crypto bros.

They've been real quiet since the crash, weirdly. And so have the celebrities that have been peddling it. So we break down all the complex topics. We make it simple. We bust money myths with actual facts. We take all the boring financial stuff that's important and we make it fun. And that's the whole goal of this channel is just to intersect into that world of YouTube. And we built a set downstairs. That's really cool. We're having a great time with it. And so everyone can go check out the very first video right now on the george camel youtube channel uh check that out dave won't mind if you leave the show right now he's got enough views here we need you guys over there hey hey you're doing fine this is we're doing fine you're the co-host you're right i apologize keep watching

the show you'll have plenty of just make a note Make a note when you finish here, you should go to George Camel with a K on YouTube and see his new YouTube brought to you by Ramsey Networks. So it's not really a net loss if they leave here and go there, but they should do both. That's right. Okay. They'll both be here. It's on demand. We live in a world where you can get it anytime.

Yeah. It turns out YouTube is there for a while anyway. That's how it folks think it's going to be great you're going to love it i've seen a bunch of the um the episodes so far that we already have got in the can and the ramsey networks team has made the best of george george's um world-class snark and uh taking down the uh taking down some of the big liars. The liars that are out there. There's so many out there, Dave. It grinds your gears, and it grinds mine, too.

I'm sick of it. I'm just kind of mean, but you're kind of funny at it. We have a different balance. I've just lost patience for these crooks, but you're kind of funny about it, and so it kind of destroys them in a different way. That's my version of bull i'm not big enough to bully people so i have to get at them with verbal abuse dave that's how you crack them so you get them to shut up all right cynthia is with us in minneapolis to start

this hour off hey cynthia welcome to the ramsey show good afternoon. How can we help? I'm calling. So when my children were born, I wanted to help them out and me. So I bought life insurance and I was looking through them just recently and I found out that it was whole life insurance. Oh my. And I pay, yep, I pay for them yearly. Oh my. And it was, it doesn't seem like a whole lot, but I didn't know what I should do with it currently. It was just best to surrender it now or what to do, wait until they're 20 to surrender it.

I would surrender it. Don't you love that terminology, by the way, of surrender? Like you've lost a battle with these whole life people. Yeah, the truth is, Cynthia, you were sold on this lie that you need life insurance for your kids, but the only reason for life insurance is to replace your income. So unless those kids are providing an income that you need, you can get rid of that. And you were sold it not as that, but as an investment. And as an investment, it sucks. S-U-C-K sucks. It's bad.

It's really bad. They're not going to make it out of the driveway with the money you make there, much less all the way over to the college campus. Okay. Great. Thank you. So what we'll do is repurpose the money in your budget once you cancel this crap to making sure, A, that you have the right amount of term insurance on you

and your husband, and so if something happened to you that the kids are provided for, and, B, if we're going to invest for the kids let's invest in like a real investment like mutual funds on a 529 and that would be at baby step 5 and get in touch with one of our smart investor pros at ramseysolutions.com if you haven't done that or if you don't have an investment advisor but the 529 is going to be a much more efficient yeah and that whole life is such trap. And the fact that it's sold to parents as an investment for your kids just makes me even more angry. And there's a sunk cost because you've been paying into it. Yeah, it's just gone. And you go, well, we've already paid so much. Should we just keep

it? George, when you're doing all this snarky stuff on your new YouTube channel, please point out the fact that if you will take half a moment and think about where the company is coming from meaning who they are that's coming at you um and you'll go oh what environment is this in it because it kind of i mean like here's the point okay gerber baby food company sells gerber whole life policies to send your kid to college. Oh, boy. Now, it's kind of a Jeff Foxworthy joke, right? You might be broke.

You might be stupid if you buy your investments from a baby food company. Same kind of thing. If your investment is advertised on a cable TV station where they also sell Snuggies and walk-in bathtubs, then maybe your investment sucks. It might be, you know, that kind of stuff. I mean, the environment, the company, the background should give you a little bit of a clue sometimes. Not her, but just in general. Yes. Just think about it for a second. This is The Ramsey Show. Thanks for joining us, America.

George Camel with a K. Ramsey Personality, host of the brand new YouTube channel by the same name, launched today, is my co-host today here on the ramsey show our question of the day is sponsored by neighborly your hub for home services after fires or floods their rainbow restoration pros offer homeowners trusted full service restoration expertise like mold remediation carpet cleaning odor removal and more Visit neighborly.com today to find rainbow restoration services in your area. Today's question comes from Caleb in Georgia. What do you think about the new FedNow and centralized banking that's soon happening in the U.S.?

What I commonly see is that they're gunning to take away cash, which goes against a lot of what your programs are for. Please correct me where I'm wrong. I'm still learning more about it, but I'm curious to see what you have to say. Well, the Fed has announced this, and there are really two components of it that matter. The first one is that they're going to modernize an antiquated banking system. Today, when you, for instance, deposit a check, it takes three to ten days for that check to clear the other bank. In a digital world, that should take three to ten seconds for your check to be bouncing or good. When I put your check in my account or vice versa,

or I make a transfer to your account, it shouldn't have to sit there three days to be verified. It ought to be able to just reach over to the other bank, find out if you've got some freaking money in there, and take it out and move it over to your bank. That's how a check's supposed to work. And that system is operating like the 1930s right now, and they're trying to move it into to your bank. That's how a check's supposed to work. And that system is operating like the 1930s right now, and they're trying to move it into the digital world.

That is, as far as I can tell, 100% positive, what I understand of it. The second piece is they're talking about issuing digital dollars, which they already do, so I don't understand. I mean, they're not saying they're going to do away with cash. They're saying they're going to offer digital dollars. Well, let me help you, George. When we move money from your account to my account, and you don't use actual physical dollars to go to the branch and make a deposit,

you have have by definition move digital dollars baby that's what they are and most transactions in today's world are digital like 98 are digital they're not cash transactions they're not actually shipping boatloads of hard cash there's not other banks there's a whole lot more money in our economy with digital transfers flowing around currency. It has a current than cash. And they're not talking about doing away with cash in this proposal. Nothing I've read anywhere except maybe some dark web conspiracy theories say they're trying to do away with cash. Now, the downside is if they actually issue a template, which is what they're talking about doing, it's almost a crypto of sorts of the dollar is what it amounts to.

They're going to issue you a digital transaction that's different than the digital transactions that we do now. The downside is the fear is that they'll start controlling those digital dollars. More government overreach. That's the worry. Exactly. those digital those government overreach that's the worry exactly like esg for instance they're going to like try to say okay if you're uh not going to be woke you're not going to be able to use your digital dollars or if we wanted to ration gasoline you're not going to be able to use your digital dollars but you can only use 50 digital dollars to buy gas and then you have to come up

with other dollars of your own black market dollars. No, it's not how it works. Okay. But that's, that's the fear that's out there. DeSantis and Kennedy both came out against this on the basis that the central bank could overreach their use of this as control. And if they try to use it for ESG stuff, I would agree. If they're trying to control currency and trying to invoke some kind of power over it, I think that would be a problem.

But I won't have all of my money in their digital dollars. I'll just have it in digits in my account. And they're not going to force people to use these digital dollars. They couldn't. The conversion to that would require a complete overall of overhaul of the way we do everything in our economy i mean think about it yeah if you went from have let's say you had to have a certified number to move money to venmo or to just to reach over and move money from your savings into your checking so you could cover your pizza hut bill, right,

or whatever it is. This would be the number of transactions this would involve would be so large that for government to get their arms around it and control it, I don't think it would be possible on scale. I mean, it would have to be some kind of real fascism, which honestly some of the ESG stuff approaches fascism at times because they've got this. Well, they're assigning values to your money. They're like religious zealots, in a sense, to push their agendas,

and they'll stop at nothing to do that. And that's, of course, DeSantis and Kennedy's argument, is to keep the central bank... Not their job to invoke social change. Their job is to run the banking system. You stay in your lane let them stay in there and as long as they do that no harm no foul with any of this it now to the extent that they might do that with the digital dollars it could become it could become hairy and you know

uh it's a whole new place you could get canceled if you didn't meet the oh they'd be able to meet the woke criteria or whatever, right? And so that would be a problem. If your dollars freaking got canceled, that's a whole different thing. So if that got to that point, then I think long before then, we would have fired a bunch of people. And Americans just don't tolerate being controlled for very long, with rare exceptions.

We're stubborn like that. With rare exceptions. Sometimes we're sheeple and we all go into our houses for 90 days and wait on a virus to pass. But other than that, we very seldom are controlled. Most of the time, we don't do what we're told, which is good. Even if you disagree with me, you shouldn't have to do what you're told. That's called like freedom and stuff. So, anyway, that's the downside of this thing that everybody's moaning about.

But the implications are, you know, I'm not losing sleep over this. I'm not going to bed worried at night about what if centralized banking and digital dollars and cashless society, this usually turns into fear-mongering from the media and paranoia. Here's the weird here's the weird thing the faster you can transfer funds the more freedom you have the more robust an economy is the more freedom you have the easier you can do a transaction the more transactions occur the more prosperity you can endure uh and the more prosperity you can endure and the more freedom you have.

So the first part of this discussion, this ease of transfer and the shortening of the hold periods and all that because they're updating the antiquated system, is going to add way more freedoms than the little corner of the digital dollars might try to take away. So the net-net on it, I think, is going to be extremely positive. Although I'm not a big fan of the Fed and I'm not a defender of the Fed. Certainly for you bozos on Twitter, not a shill of the Fed, just to let you know.

But, matter of fact, I think some of the stuff they're doing with interest rates is some of the most asinine, anti-economic, anti-capitalism stuff I've ever seen in my life right now. Complete freaking morons. So there's the other side of the equation, right? If you were confused, now he's been clear. Yeah, but that's it. I mean, you If you were confused, now he's been clear. Yeah, but that's it. I mean, you know, so I, overall, this is good. Overall, this is good. It's, I think it's going to help. And here's an interesting thing we can kind of parlay into this too. I think what I said a few minutes ago might be the most important part of our little discussion on this, I think. It's not the individual pieces of this

FedNow thing. The thing you need to remember is where there is no prosperity, where there is extreme poverty, where the economics, where economics are hard to create, where it's hard to start and run a business, where it's hard to transact, where everything's clamped down, where there's poverty. Poverty follows a lack of economic opportunity, not the other way around. Poverty is the result of economies that are choked down, where freedom is not. So if you want more, if you want less poverty, statistically and historically, if you'll study the economies of the world, if you want less poverty, increase freedom. Increase ease of transactions. Increase ease of starting and less regulation on a business.

Let people go and do what people do. Jefferson said capitalism is what happens when you leave people alone. Amen. And that when you do that, people, nations rise up out of poverty. Why do you think the poverty level in the U.S. is so much lower than it is in developing countries? Freedom. That's why. Land of opportunity. Freedom matters economically. this is the ramsey show george camel ramsey personality is my co-host today his brand new youtube channel dropped today check it out it is snark on steroids you're gonna love it george camel with Snark on Steroids. You're going to love it. George Camel with a K on YouTube. Be sure you look it up.

Give him a follow. So, George, the headshot we're using there looks almost like you've got highlights in your hair that you don't have. I look like a Backstreet Boy. It's all that airbrushing they do in Photoshop to make me look human again. Is that? Maybe that's what it is. Somebody got out of control there in creative. Now we know what it would look like if I got highlights.

So I'm going to avoid that at all costs. I mean, you see it right there, right? Yeah, it might be our screen. I don't know. Yeah. I think it's the way the light. It's the lighting glancing off of all your hair product is what it is. It's the pomade.

Problems I don't have. You don't have to worry about pomade glistening? No, I get glistening, but it's a different kind. It's just a general bulb shine. Just a rawhide there. Just a bulb shine. Yeah, that's it. So, hey, if you're a new listener and we know it's a different kind. It's just a general bulb shine. Just a rawhide there. Just a bulb shine. Yeah, that's it. So, hey, if you're a new listener and we know there's a bunch of you based on our rankings and ratings that are continually going up this year, thank you.

We appreciate that. If you're trying to learn the new lingo around Ramsey, like baby steps and debt snowballs and such, we'll help you for free. Go to RamseySolutions.com. You can learn a lot of stuff there. But one thing you could do is you could click the Get Started button, Get Started, and we'll help you figure out the next best step for your financial journey, exactly where you are and what you do next and why. And we'll teach you all the whys because we don't want you doing it

because we said do it. We want you to do it because you understand it and you think it's smart because, of course, it is. 888-825-5225 byron or brian i'm sorry is with us bren is with us i'll get it right in a minute in springfield hey bren what's up hi i just wanted your advice on if you think that we should pay off we have a house that has a mortgage on it, but we have renters in it right now. So I was wondering if you think we should pay it off or sell it. Okay. Do you have a personal residence?

So we live and work on a ranch and housing is provided here. And so as long as we stay here, we have a house. And then when this ranch sells or the owner passes away the house that we live in is ours free and clear the ranch house wow yes but it's a brand new home so nice deal okay all right and so the only debt you have in your whole life is this rental yep we did Financial Peace University when we were 23 and paid off $38,000. So we've been debt-free for four years.

So what part of Financial Peace University did you miss where you pay off the rental? Well, that's... Yeah. It's been a minute. So what is this rental cash flowing?

Are you guys wanting to keep it long-term? I think it would be... Yeah, like, I don't know if it's a good investment since we have a loan on it or not, but so our mortgage is like $18,000, $19,000 on it, and we rent it out for $2,200. That feels like real tight. So not.

Do you have the money to pay it off today? You have money to put on it? No. No, we don't have money to pay it off. Okay, so you to pay it off today? You have money to put on it? No. No, we don't have money to pay it off. Okay, so you would pay it off. What is the question then? Whether you would pay it off gradually or whether you would just give up and sell it? Yeah.

Okay, how much do you owe on it? We owe $340,000. And what's your household income? $65,000 a year. Sell it. Sell it? Yep. You don't have enough margin in this okay you said 2200 rent over an 1800 payment if you spit you're in a negative and you don't have the income to cover negatives one three thousand dollar heating and air unit and you're in the negative one leaking roof one month to two months of not being paid and you're in the net because it's empty or because they just decide

they're not going to pay you because they don't like you or there's a pandemic or whatever and you're in the negative you have no margin here right this thing's rubbing up and you don't have the if you told me you made 265 you could absorb the blow of not of not you know being able to make these payments but if you start having to make these payments out of your income that's going to be really unfun right get rid of it it's not an asset it's a liability so if we sell it then what do we do with the cash how much cash are we talking so you have 340 owed what could you sell it for probably 430 when i asked our realist so after fees you're probably

talking 50 or 60k you'd net yeah yeah and you don't do you need the money for anything right now no okay i would just invest it in mutual funds okay yeah just something simple just keep it real simple but i i'm just scared for you i'm afraid this is going to end up being more of a curse than a blessing matter of fact i'm pretty sure it is over time because um and george not not reflecting on her but just in general this is the problem we've talked about this before that over uh ever so many years uh the get rich quick real estate movement kicks up again it's about a seven or eight year cycle roughly um because you have to get the young people who don't remember how stupid it was a little bit older so they start doing stupid stuff and so that that's

what you know there's a whole movement when i was when i was a wee child the get rich quick real estate movement was some goober on midnight cable television selling get rich tapes sitting by the ocean you too could sit by the ocean and hear the waves if you were yeah and they got rich but most of us went broke the guys selling the tapes got rich but most of us that did their stuff went broke and then it came another cycle came through and then the latest of course is the tic-tac goobers in skinny jeans telling people to buy nothing down real estate and the the classic line from that bunch whether it was 40 years ago or whether it's 40 minutes ago, is the renters will pay this off for you.

Proof you have never, if people, if you say that, that tells me one thing. It's passive income, Dave. I've owned over 2,000 pieces of real estate in my life. I've got a whole, I've got several hundred million dollars worth of real estate today, okay? One thing I know for sure is if you tell me the renters are going

to pay the payments for you that tells me you've never managed rental property that tells me you've never done it that's a hundred percent you are a novice at best an idiot at worst and um i mean that's the truth because anybody who's ever had a renter and been a renter, and I have both, I've been a renter too, knows that sometimes renters don't pay. Sometimes there's cancer. Sometimes there's car wrecks and job loss. Sometimes there's a pandemic. Sometimes dot, dot, dot, dot, dot.

It's, you know, as if there's a perfect stream of every month the rent is going to come on time or early and you can pay your stupid little payment and that's the most ridiculous assumption which indicates a lack of experience or knowledge of how rental property really works well they get starry-eyed by the numbers and they turn their risk meter off and just go it'll all work out as long as it works out until it doesn't work out yeah and if you want to go broke don't just turn off your risk meter do what i did in my 20s take a hammer to it just smash smash that sucker and because i had absolutely no perception of risk i was 100 sure i could out earn my stupidity and stupidity will chase you down and run you over find you like last week's cat in the road.

It's faster than you. It's bad. It'll get you. Well, and you learned this the hard way, but now your advice of paying cash for investment property feels even more countercultural and controversial than it was back in the day. Yeah, and one of the beauties of doing what I did, which is go broke, one of the beauties of going broke is you no longer care what people think. I am not trying to impress a 26-year-old on Tic Tac. You're the last person I care what people think i am not trying to impress a 26 year old on tic tac

i can that you're the last person i care what they think i'm not mad at you but you're supposed to take my advice not the other way around i'm really not interested in your input uh much less do i even care so uh it's just real i'm not you know i know what i'm doing and i know what's worked over 40 years and i know how much wealth has been built because i don't have any risk i mean virtually no risk rental properties we had all kinds of people we got all this commercial property um you know we had one that was like a crossfit type gym a burn thing or whatever they call it right well guess what guess what they did during the pandemic shut down nothing you know guess what the daycare did in one of our properties?

Nothing. You want me to keep going? How about the dance studio for the kiddies? Nothing. You know, guess how much rent they could pay because they had nothing coming in. This is how life works. And guess how much the lenders cared? There weren't any.

There were no lenders. Oh, my gosh. There were no lenders. So I could have all kinds of mercy be helpful be understanding be demanding i could do whatever i wanted to do it's a different position this is the ramsey show george camel ramsey personality co-host of the Smart Money Happy Hour with Rachel Cruz, our very popular podcast and YouTube show, launches today his own YouTube channel, George Camel with a K. K-A-K-A-M-E-L. Look at it. K-A-M-E-L. In other words,

check it out on YouTube. He has the gift of snark, which makes him one of my favorite people on YouTube right now. How do you enjoy it? It's a spiritual thing. It's a spiritual gift. What's yours, Dave? It's in second hesitations. Cynicism. There we go.

There you go. All right. I got that one down. All right. Ross is with us. Not really. Ross is in Montgomery, Alabama. Hey, Ross, what's up?

Hey, bud, y'all. Thank you for taking my call. Um, I, so I have a, um, traditional IRA that I put around two 60 a month in, and then I say 500 a month. Um, and I'm renting right now and I really want to buy a house and possibly get my roommates to pay my mortgage. So, yeah, I'm just wondering what should I do? So what you're talking about is kind of a house hacking thing where you want to get in the house, but you charge them rent. It covers the mortgage and more, and this is like passive income. Right. In the house I'm renting in right now,

I know the landowner pretty good, and he is willing to sell it to me, but I don't know how much he wants for it yet. Do you have any money? I have around $7,000 saved up. What do you make a year? Around... I just got, so around 32. How old are you?

I'm 1099. How old are you? I'm 23. Okay. All right. You're not quite ready to buy a house. Okay. ready to buy a house okay houses are a blessing if you have the wiggle room in your life for them to sit there and go up in value they are a curse if they uh if they make you broker

that's why we call them brokers you get broker and broker when you buy a house and you're not ready so you need an emergency fund of three to six months of expenses set aside probably your seven thousand is pretty close to that okay okay and then you need to save up a good down payment above that and um and then you need to be able to pay the payment if none of your roommates pay you. Right. Because that could happen. Right, yeah. That's exactly right.

Yeah, and sometimes it does happen. So, yeah, that's the, you know, and it sounds to me like that the idea of owning a house is a bigger deal to you than the actual fact that you've kind of heard, oh, buying a house is a good idea, which it is, by the way. But buying a house when you're broke will hurt you rather than help you. Especially when your tenants are your friends and they live in the same house, that's a dangerous situation, too. Because if it's your buddy, you go, dude, I can't pay you this month, man. I'll get you next month. I promise. And all of a sudden it turns into three months and he hasn't paid.

And now you have to evict your friend. And so you've destroyed a relationship. Yeah. And sometimes when you're particularly in your early 20s, your tenant's not only your friend, they're your drinking buddy. That's even more dangerous. And you really can't trade a case of corona for rent it won't work have you tried so i might have known a guy um one time that did something like that so i don't know it's possible but the uh no that that's it's a problem so uh you know i would get yourself on a much more solid ground financially so that the home becomes a blessing and doesn't pinch you

uh where you have very little money very little income and um and then the roommates don't pay and like you said then you've got to evict your friends who you're drinking buddies or whatever all this stuff it's a problem jordan's in traverse city michigan hey jordan welcome to the ramsey show hey dave thanks for taking my call sure what's up so recently discovered you and your baby steps love it and i'm completely on board with the baby steps. So fast forward to my current situation. My family and I are relocating for my job, moving to a new city. We're going to buy a new house there. We are selling our current house,

and we stand to walk away from that deal with about $100,000 cash that we're going to put towards the new house. Haven't wiped out all of our debt yet. I have about $12,000 left on my truck that I could very easily pay off. And then our lease on another car is ending soon and we either keep it or let it go. So I could very easily wipe out all of our debt. Uh, my question is, is how much of our savings do we use to put towards a down payment of our new house to keep our payment at 25% of our monthly income like you recommend on a 15-year fixed rate mortgage. So let me get this straight.

You take this $100,000, you pay off all of your debt, plus set aside a three- to six-month emergency fund, whatever's left you would use as a down payment? $100,000 from the house would be completely used as a down payment. Currently, we have about $92,000 in savings. Okay. And another interesting fact is my wife is Canadian. She has $60,000 Canadian sitting there, which is about $44,000 U.S.,

which would, after conversion, would be about $44,000. So in total, possibly $136,000. Yeah, you're not doing the baby steps. You just got introduced to them, but you're not doing them yet because the baby steps would have entailed paying off all of your debt except your house as soon as you understood them because you have the money to do that. Correct. Yes, I would take the 100.

You have 92 plus 100 plus 42, right? Correct. Okay. uh correct okay so i mean we're dealing with dadgum over two hundred thousand dollars minus paying off your debt minus uh an emergency fund of three to six months of expenses and the rest is your down payment and yes you would buy a house then where the payment is no more than a fourth of your take-home pay what's how expensive is the house you're selling uh we sold it for 215 000 and where are you moving to of your take-home pay. How expensive is the house you're selling? We sold it for $215,000.

And where are you moving to? A little town called Sault Ste. Marie. Oh, fabulous. Great town. Very similar, maybe even cheaper housing prices than Traverse City. Agreed? Yes, agreed. Much cheaper. Yeah, Traverse City's got a bit of the resort pricing going on,

and Sault Ste. probably doesn't have that trouble. Yeah, so you can buy more house and put down all you've got except the emergency fund and your debt-free cars now. So you either buy out the lease or sell the car and buy a car. You pay off the other car. You put an emergency fund of three to six months aside, and you've easily got $150,000 plus to put towards your house, then you almost are going to pay for it.

You almost pay for it. Yeah, because I need $150,000 to put towards the new house to keep that 15-year mortgage at 25% of my monthly income. Okay. Let me make sure I didn't miss something then, because the numbers are pretty obvious in front of me right now. Twelve on a car plus a lease. It's got to go away and you've got to buy a car.

So I'm going to call that another $12,000, $13,000. That's $25,000. And you've got cars. Okay? Go buy a $15,000 car. Pay off your $12,000 car. Turn in the lease. Okay?

That puts us at $25,000. You with me? Yes. $12,000 and $13,000 is $25,000. Well, I have $12,000 on my truck that I'm going to pay off. That's what I said. Like now, yep. That's what I said.

And that's the two numbers. That's the only debt you have other than your house. Did I get that right correct okay and you've got 92 in the bank and you've got 100 coming out of your house that's 192 and we've got the canadian 60 that turns into 40 44 yes okay so all of those three numbers add up to over 200 minus 25 puts you at about 200 and minus your emergency fund. You don't have a $50,000 emergency fund. So you're putting down 150 and you're 100% debt free with an emergency fund in place

other than your house. And if you buy a $200,000 house, let's get the thing paid off really, really fast. You'll be in great shape, man. The plan only works if you work it. And it's real simple, but it's hard because you have to decide. But it works, man. Yeah, but the numbers are right there on that one. They're just right in front of you.

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