The Ramsey Show - App - Jordan Peterson on the #1 Thing People Should Focus On (Hour 1)

Episode Date: May 22, 2023

Dave Ramsey & George Kamel answer your questions and discuss:  Repairing a car vs. replacing it, from the blog: Is Your Car Worth Repairing? Or Should You Replace It? Dr. Jordan Peterson on vision and why it's the #1 thing people should be focusing on right now, "Should we have a birthday party for our kids while paying off debt?" "Is rental property enough for retirement or should we also invest elsewhere?" from the blog: How to Invest in Real Estate. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale 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 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 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 actually love, and create actual, real, amazing relationships. George Camel, Ramsey personality, star of the new YouTube sensation channel called, oddly enough, the George Camel channel. Real creative. Yes, very creative.

And co-host of the exploding popular podcast and YouTube show, Smart Money Happy Hour with our own Rachel Cruz, is my co-host today as we answer your questions about your life and your money. The phone number is 888-825-5225. Jane starts this hour in Chicago. Hi, Jane. How are you? Hi, Dave. How are you guys? Better than we deserve. What's up?

So I'm trying to get some advice on whether or not I should buy another used car or buy a new car. I have a 2012 Hyundai Sonata now. I've already paid $4,000 in repairs and the car is still not fixed. It's overheating. I've been kind of getting to run around with mechanics and I just don't want to keep dumping money into the car. I got it from an auction, so it's a salvaged title. There's that. I don't know if that makes a difference. I have about

$90,000 between a CD, which doesn't mature until April of next year. I have a loft and probably about $60,000 that's liquid. So I was just going to buy like a Toyota Camry for $30,000, but I didn't know if it was smart to buy a car cash or what to do. That is the only smart thing to do when it comes to cars. So do you have any debt whatsoever?

No, I have no debt. Well, I have a mortgage. Okay. And then what's your income? After taxes, $40,000. I would not buy a $30,000 car if I made $40,000. That's just too much of your world tied up in that depreciating asset. Is there something in between we could get, like a $15,000 car,

and we sell off the Santa Fe for what we can get for it? Yeah, I could. I just, I didn't know how reliable. Hey, Jane. Yeah, I want to. Hey, Jane. Yes. You're pissed off and sick of your car breaking down,

and that frustration is getting ready to cause you to overdo this decision. Okay. I don't blame you. Nothing makes you more mad than sitting on the side of the dadgum road or taking something back to get it fixed four times and it's still not fixed. That's enough to make you do something stupid, and you're about to if you're not careful. Okay.

Just because you're mad. I don't blame you for being frustrated. What you're going through is frustrating, but you don't go from a $2,000 to a thirty thousand dollar car in one fell swoop when you make 40 grand that's that's on that's in the column of dumb girl you don't want to do that just because you're mad i don't i mean i get it okay you want something that when i turn the key it by god starts don't don't you yes and you can get that for less than 30 honey so here here's the here's the overall thing you got to think of when you're making decisions like this what do people who have

millions of dollars who started with nothing what did they do in situations like this and we've actually studied them over 10 000 millionaires that we studied and they did not buy brand new vehicles before they had at least a million dollars in net worth uh because brand new vehicles go down in value like george just pointed out to you you're gonna have too much of your life point because that 30 is going to turn into 15 in about 20 seconds you know that right cars go down in value like a rock that's why chevy has that commercial like a rock you know what i'm saying so you can get you a really nice used car in the smart column for 10 or 15 000 that'll that is going to be a bazillion times better than that piece of crap you've been dealing with and i don't blame you for getting rid of it and you've got the money to pay cash for it and of course you pay cash for it car payments are what middle class

people do and it's not a bad thing but if you want to be middle class keep a car payment it pretty much guarantees you're always going to be middle class from a wealth building perspective because you just always got a car payment and uh And it's the middle class thing of stupid. And rich people do some stupid things. Middle class people do stupid stuff. Poor people do stupid stuff. But it's different stupid stuff. And the middle class one is the car payment.

That's the one mathematically that takes you down. So please pay cash and please buy you a nice used car for under $20,000, preferably like George suggested around $50,000. With a clean title this time. Yeah, no savage title. And get it inspected. Get a pre-purchase inspection. It'll cost you $100, and it'll give you peace of mind.

Yeah, you want to get something where you do turn the key, and it turns on. But you can get a wonderful vehicle right now for $15,000. That will drive you for the next decade. A wonderful vehicle right now for $15,000 that will drive you for the next decade. A wonderful vehicle. And there's lots of, you know, the thing is the way they build cars now, they last if you take care of them. Now, not necessarily if they've been in a flood or whatever the salvage situation was that caused this thing to have an overheating problem that they can't figure out

and its electronic brain is probably fried or whatever it is. But, yeah, no salvage tires. Don't look for the wrong kind of bargain. Look for something that is dependable, dependable, dependable, low miles, and that, you know, it just screams. And let me see, you said a Toyota Camry? Hey, a $15,000 Camry right now, that's a great car. It might be 10 years old, and it'll last another 10 or 20.

I mean, you get a lot of American-made stuff, a lot of foreign-made stuff. And for that matter, half the foreign-made stuff is now made in America. It's all a weird mix. Toyota truck plant is all made here. So there you go. Nissan made right here outside of Nashville. So you just, who makes what anymore. But anyway, the point being not waving a flag, but the point being just get something that works and that is consistent.

And, George, it's important to point out to everybody that it's not just Jane. We all have this thing of we do two things in our culture we we say three things i'll throw in a third one while i'm thinking of off the top of my head here safety reliability and status cause us to buy way more vehicle than you can afford and your car is safe and it is reliable and no it doesn't have any status so shut up but so what if you attract people into your life because of what you drive you did not attract quality humans and when you have a kid you don't need to go buy a tahoe for the kid that often happens they go david got kids now we got to get the most gigantic expensive suv for the kid you're gonna give the 16 year old time well a guy called the other day he had a hoopty car engine transmission issues and he went

and financed a 60 000 car yeah because of his car issues made that same that's another hint okay unless you suddenly inherited two million dollars you don't need to make a jump 10x in your car so if your car is worth three grand and you're jumping to 30 hint you're probably screwing up and jane's point i made that point to her too okay i've done all this stuff that's how i know i did i've done stupid with zeros on the end i have a phd in dumb people that's how i know it so we're here with you we're walking with you. We're walking with you. We're just a little further down the road than some of you. That's why we do this show. Good pun.

This is The Ramsey Show. George Campbell Ramsey personality is my co-host today honored to have uh entree leadership summit full of great thought leaders next week great people talking about leadership and talking about business i'm really excited to be with about 3 000 folks one of the folks i'm excited to be with is one of our speakers dr jordan peterson uh author of the huge bestseller 12 12 Rules of Life, and personal terrorizer of all things Twitter. Enjoyed getting to looking forward to getting to spend some time with him, and we wanted to have him on today to talk just a little bit. Welcome, Dr. Peterson. How are you? Thank you. Good, good. How are you doing?

Doing great, man. We're excited to have you next week. Thanks for coming. Hey, my pleasure i'm looking forward to it you've been uh you've been on the road europe it looks like all over the place huh yeah for a long time i don't know we've been 400 cities my wife and i something like that in the last couple of years yeah it's been uh been a brutal run it looks like so uh nashville will be one of the stops on the state side as we said next week so with. So with these leadership guys talking next week, what is the plan for your keynote? What are you going to be talking about? Probably about vision, and I thought that's something we could discuss today in principle as well.

Yes, I completely agree with that. I've looked at a lot of the stuff and a lot of your comments, not only on wealth inequality issues, but also just on the psychology of handling money. One of the things we say around Ramsey all the time is personal finance is 80% behavior. It's only 20% head knowledge, and getting the guy in the mirror to behave is the battle. And you've got a lot to say on that subject. So talk about what you've discovered around the correlation between just a mental stability, a mental maturity, mental health maturity, and how that correlates to wealth. Well, people, it's easy to presume that the reason people are poor is because they don't have enough money. But that's an oversimplification.

Very few complex things are attributable to a single cause. I had lots of clients who were much better off when they had no money at all. Those were often people who had addiction problems because as soon as they had any money at all, they're just in the bar and into the cocaine until they were face down in a ditch. And so there's all sorts of causes of poverty. And certainly one form of poverty and one cause of poverty is absence of a plan. I mean, you need to develop a vision for your life. And that makes delaying gratification, for example, and not engaging in impulsive momentary pleasure

worthwhile because you're building towards something that you actually want to attain. And we're very, very bad at, in our society, like appallingly and miraculously bad at helping people develop a vision. We don't do it with students in school, for example, not at all. And it's really, like I said, it's a miracle of stupidity so it is it truly is it's the it's the number one thing we should be teaching people and we don't do it at all who do you want to be and why what do you want your life to look like in five years what are you building towards why are you gratification assuming you are why are you saving for example or working like what what's your vision what makes it worthwhile and how do you even come up with a notion like that and the

strange thing the strange thing is when you have a vision that's very very clear in high definition uh burnout just kind of goes away you get tired like your schedule has been horrendous but you're not burnt out you're probably tired but you're not burnt out yeah well i mean look all the positive emotion we feel that uh except for the type that is just a consequence of basic satisfaction you know the sort of satisfaction you might have after a big meal. All the enthusiasm and excitement and hope and curiosity, essential meaning in life, all of that, all of that is experienced in relationship to a goal. When you see yourself moving towards a goal, then you're inspired. You have hope, you have enthusiasm, you have energy. You can communicate effectively and enthusiastically. No goal, you have none of that. No vision, no goal.

So you're not going to get tired and feel, what would you say, hard done by if your sacrifices and the difficult things that you're endeavoring to do are clearly worthwhile by your own definition. One of the things I do, I have an exercise online called, it's at selfauthoring.com called Future Authoring. And we built this to help people develop a vision. And one of the things we ask people to do is just to sit for 15 minutes, write for 15 minutes, badly. Here's the game. Imagine you were taking care of yourself like someone you cared for. So imagine someone you care for and pretend that's you. Maybe it's a son or a daughter or a friend. Now imagine five

years down the road. You can have what you want and need. You can be who you are, but you have to figure out what it is. What is it? What do you want? What do you need? And don't worry about getting it right. Just get it down for 15 minutes That's a good start the whole exercise you can do in about 90 minutes, but we had students do that say before they went to university and Just doing it for 90 minutes developing that vision drop their dropout rate 90 or 50 percent 50 percent and increased a grade point average 35%.

And that just shows you how badly it had been done before because students went to university with no vision. They had no idea what they were doing there. And so, of course, half of them didn't succeed because they had no idea why they were doing anything. Well, that's not helpful or wise. And the reason that's the case, by the way, is because our school system was set up to produce mindless, obedient workers by essentially by fascists at the end of the 1800s. And that's well documented historically.

It was based on the Prussian military model, and they wanted to produce obedient soldiers. And we haven't updated our notion of what schools are for, for 140 years. Yeah. Ken Coleman says we've not made pathfinders, we've made test takers. If that, we're not even very good at that. Well, Dr. Peterson, I'm curious. We have so many similar principles. We want to help people avoid the pitfalls of education and debt. And we're both kind of truth tellers in a world gone mad. And that can be countercultural, controversial, offensive at times. What is the secret sauce to really connecting with those people and getting them to change

a paradigm and actually getting out of debt or doing that hard thing? Well, I think a huge part of that is to get them to start conceptualizing themselves as people who could be pursuing a goal that they found compelling rather than people who are driven by circumstances. I think it's 35, 40% of young Americans now feel they have no agency in their life. And you say, well, how do you, you have to entice people into, I suppose, the hypothesis of a vision and you do that with, well, this meditative exercise, for example, that I described. Just imagine for a moment that you could have what you needed and

wanted. And I mean, literally imagine that. Daydream like you did when you were a kid. Now, you know, you want to bind that with a little bit of intelligent rationality. You know, you don't want to be, if you're starting from scratch, maybe you don't want to be, if you're starting from scratch, maybe you don't want to be thinking that in five years, you're going to inhabit a 350 room mansion in Malibu, although stranger things have happened to people. You want to develop your vision within the realm of possibility,

and you should be honest enough with yourself. So it's actually something compelling to you. You know, the other thing we ask people to do, and I'm talking about this, because it's very practical, is might say, well, I don't know what I want. It's like, okay, well, what other people have that, that seems to work for them, you probably want a relationship. What's your vision for that? You probably want to have something approximating a family of some sort. What's your vision for that you probably want to have something approximating a family of some sort what's your vision for that even if it's your parents not children necessarily not even a wife necessarily some family connections some friendships some job or career some educational goals some strategy for dealing with temptations that's five things some conception of how you

would use your time intelligently outside of work some conception of how you would use your time intelligently outside of work, some conception of how you might, what would you say, uphold your civic responsibility. There's sources of meaning that people generally have. Dr. Peterson, we are so looking forward to seeing you next week. Thanks for taking time out of your crazy schedule and spending a minute with us. Look forward to continuing this discussion a bunch. Thanks for coming on with us. Yeah, yeah. Thanks for taking time out of your crazy schedule and spending a minute with us. Look forward to continuing this discussion a bunch. You bet. Thanks for coming on with us.

Yeah, yeah. Thanks for the invitation. This is The Ramsey Show. George Campbell Ramsey personality is my co-host today. I was trying to give Dr. Peterson as much room as I could in that segment because he always has a lot of pretty interesting things to say. Always keeps you on your toes for sure. But I blew it in the process of doing that because I'm supposed to remind you guys out there that Entree Leadership Summit is next week and it is sold out. So if you don't have a ticket,

you're not coming. sorry about the FOMO but um it's 3200 folks and it's Malcolm Gladwell uh Willie Robertson uh Dr. Jordan Peterson me uh Ken Coleman Dr. John Deloney many others Brian Buffini several other people speaking and teaching on leadership uh for three or four days in a row there at the uh Great Opryland Hotel Resort. And the bad news is you're not coming if you don't have a ticket. The good news is you can actually watch it if you want to see one of the premier leadership events in the world right now, including Dr. Peterson's presentation. You can actually watch it on a live stream, and you can purchase that.

And you can do that from us at RamseySolutions.com. Just click on entree leadership summit and it will take you to the live stream and there we'll go from there so george uh car payments we talked about this earlier equal retirement they're costing people a whole lot of wealth and all your life people have heard it's normal to have a car payment but hear me out the average car payment in america right now is around 600 bucks a month uh higher in some studies and if you invested that instead each month into your 401k a roth ira you could retire with get this more than 7.1 million dollars after 40 years of not having a car payment age 25 to age 65

seven million bucks so george if you're half wrong, they'd still be okay. That's still a good life, and you're still debt-free with no car payment. And that's why most millionaires, they pay cash for used, reliable cars and never lease or buy new. You see, building wealth is not some secret. You can learn the same plan that millions have used to pay off their debt, build wealth, and invest. And it's all in Dave Ramsey's best-selling books, The Total Money Makeover, and his newest baby steps, Millionaires. And even better news, you can get them today for just $10 each in our $10 sale. That's pretty wild.

Pretty cool. All at RamseySolutions.com. Don't miss it out. And a lot of them, almost all of our books, Deloney's, Rachel's, Coleman's, that are number one bestsellers, all they're on sale for $10 right now. So check them out. We've risen above inflation somehow here, Dave. Yeah. It's sale doesn't last. Um, well not for long. Cause I did declare in a meeting the other day, the $11 sale next year, guys. No, it's going to be more than that. Cause our cost, our paper costs has

gone through the roof and, uh, man, it's costing us almost double what it used to cost us to build a book now. Wow. So Get it while you can then. Welcome to... Owning a business. Welcome to businesses passing along inflation to you. It's how it works. Yeah, it's how it works. Sorry.

Except for the Costco hot dogs. Somehow they're still trucking along. Yeah, I think that that's just a national treasure. All right, let's go to Andrew in San Jose. Hey, Andrew, welcome to the Ramsey Show. Hi, Dave. Hey, let's go to Andrew in San Jose. Hey, Andrew, welcome to The Ramsey Show. Hi, Dave. Hey, what's up? So, we've been working through Baby Step 2 for about four months and doing decent with it so far.

But me and my wife are debating about having a birthday party for our two kids as her sister, who doesn't come down very often, is going to be over about two months, which lines up with that. Should I argue with her about it, or should I just shut up and put it in the budget? I'm sorry. You're arguing about a birthday party for your children, whether you can afford that. Yes, basically. What are you spending on a birthday party for children? Not tons, but I'm just...

What's a ton? Is that 50 bucks or 500 bucks? A couple hundred bucks, probably. Like, probably up to four to five, probably, on the range. And these children are how old? One, oh, they will be one and eight. Okay, all right. Well, so the one-year-old birthday party is really for the adults.

No, no. That's why I'm asking. Yeah. And so I, you know. Are people invited to this big party? You're inviting a lot of people, or is this more just for the family? Okay. Does your wife cook?

She could. So she could, like, make a cake? Like my mom did for my birthday. I never had a store-bought cake until I was in college. I didn't know you could get a cake at the store. I didn't know that was an option. And I haven't said that one time to a therapist. I've made it okay.

So, I mean, you know, good old duncan hines right um so i mean i think you could have a whale of a party for 100 bucks if you kind of put your heads together yes i think you ought to have a birthday party for your children but do we have to have um six dancing ponies that cost two thousand dollars no we'll have to skip the petting zoo and the inflatables this year. Okay, so you're saying just going with something more reasonable is the way to do it. Yeah, go to the dollar store and get some cheap decor and plates. It'll cost you $5. Hey, and let me tell you what happens with Sharon and me, too, is we start arguing about concepts,

and we actually end up with actual similar numbers in our heads. Like, she's got this big party in her mind. For instance, maybe you've got a small party in your mind. And if you actually sat down and wrote out what you were going to spend, both of you probably wouldn't be that far apart. How could we do the party? You know, a good question would be, I think a party is very important. This is you talking to your wife.

I think a party is very important. It's really important for a one-year-old that we celebrate that. You only get one of those. We don't want to miss out on that, okay? And so let's have a big party. How can we do that given that we have this goal of trying to remain reasonable with our budgeting? And so what are you thinking of spending? And how can we get a lot of bang for our buck and I'll help?

I'll get out the directions and bake a cake. You could do that. It wouldn't kill you. And I could probably pull it off, and I'm really suck in the kitchen, but I could probably pull off a cake. It might take a couple tries, but it'd still be cheaper than buying one. Dave just auditioned for the great British Bake Off. It just happened.

There's a thing called the British Bake Off. It's big on Netflix. The kids watch it. Okay. But, Andrew, the key here is you don't want to set you back on your debt-free journey. You might be closer than you think you are when you have a discussion. That's not about do a party or not do a party. It's more about what do we spend on a party that is reasonable and when

sharon and i start doing that she's kind of talking in these flowery terms about buying you know redecorating the home and i'm like okay crap i just heard two hundred thousand dollars and she's thinking two thousand dollars i just wanted another thing in there you know and i'm like oh i should have shut up and listened okay because i i she said redecorate i heard 200 she was saying you know two two thousand or three you know i'm saying sometimes you miss each other because all i hear is one thing in my head goes from warning warning warning yeah you dig into the details you heard party and you went my budget is busted i'm trashed dave ramsey's going to come to my house and hit me with a baseball bat. No, none of that's true.

Okay, it's not going to happen. Well, you can go to Costco and get two pizzas and a sheet cake for like $30 and call it a day. See, now there you went buying cakes again. You can get a sheet cake at Costco for $30? Yeah, they'll put your face on it. Whatever you want to do, they'll do it. How is it that you know this, George? I've been known to shop at Costco.

To put your face on a cake. You can do anything a george cake dave i'm sure people have sent you cakes with your face on it has that not happened yet we didn't eat those no that's that's not edible there's something weird about cutting into your own face and then eating it's just it's uncomfortable it's just yeah i worry about what's in that cake but how do you dave how do you grapple with folks that are in Baby Step 2 and things come up? We had one about a quinceanera, and she was going to spend $8,000 because she needed to go on the cruise for her niece for the quinceanera. And we said, you're not going on the cruise.

Nope. So what are the boundary conversations you need to have? What are the financial pieces that you need to go, all right, set a budget? What if you had to do something you really couldn't afford? What would you say? I'd go make the money to do it. Okay, in order to make the 16-year-old niece happy, you need to buy her a $600,000 Bentley. You would go, well, that's stupid.

Of course I'm not doing that. A, I don't have $600,000. B, I don't have a Bentley, so she's sure not getting one. So C, I hadn't been on a cruise, so I'm sure not getting one so c i hadn't been on a cruise so i'm sure not going on one for you you know and i don't have eight thousand dollars because i'm broke people in debt but you gotta you gotta extrapolate this stuff in your mind to go the absurdity of the request if you if you just pan back and go what if it was add a zero to it you would go well no well that's the way we're

looking at it. When you bring up something like spending $8,000 on a child's cruise while you're broke. Now we know why you're broke. This is the Ramsey Show. George Camel Ramsey personality is my co-host today thanks for joining us if you want to understand a little bit more about what's going on with all things ramsey

we've got a little free process to help you just go to ramsey solutions.com click the get started button it'll help you ascertain where you are and what the next steps are to get where you want to be yeah that's how that works so get started at ramsey solutions.com of course completely free george camel ramsey personality my co-host today and matt is in portland oregon hey matt welcome to the ramsey show hey guys thanks for taking my call. Sure. What's up? I recently discovered your show and really can't get enough. So thank you. Thank you. I'm 52. Yeah, I'm 52. My wife is 47 and our household take home is roughly 8,000 a month.

We have a $34,000 in an IRA. Instead of traditional investing, we've gone the real estate route and currently have mortgages on three homes. One is a primary residence and two are rentals. Um, and just need some advice. I, I, up until I discovered you guys, um, this was our pretty solid plan, but, uh, um, is it too late to go the traditional investing route? No. And it's not necessary that you only do the traditional investing route.

I've got a bunch of real estate. As a matter of fact, I have more real estate than I have mutual funds because I love real estate like you do. And so, you know, as long as we're building wealth somewhere, we're certainly not going to be out of there. What I would want to do is I would want to lean in and have a plan to knock those mortgages out sooner rather than later without panicking about it. So what are the balances on these puppies? Let's see.

Primary residence, 315. Rental number one is 200,000, and then rental number two is 225. Okay. All right. We do, we, you know, we, we can pay them off in 15 years. Um, you probably pay them off a lot faster than that. Probably pay them off in about eight if you lean into it a little bit.

And, um, so I would start, I mean, you, you throw your rents back at it. Number one, you ought to be getting substantial rents on these things. What's the $200,000 mortgage rental worth? Worth about $300,000 right now. Okay. You're not making much on that one. What's the $225,000 rental worth? That's worth about $350,000.

We added a bathroom and did some stuff on that. Yeah, you're not cash flowing a ton on either one of these. You're making money, but you're not like bailing it or anything. No, these were recent acquisitions, and our plan is to have them paid off in 15 years. Yeah, and you can work that, but I would work towards paying them off faster. I certainly wouldn't add any more to this because you don't have enough equity in these things for them to be making a ton of money. They're, you know, this will work out for you, but it's not going to for a while.

It's going to be, you're going to be, you know, spinning your wheels for a little while because you just don't have any margin in these things. There's not enough equity for you to have big cash flow, and if you don't have big cash flow, you're not to be spinning your wheels for a little while because you just don't have any margin in these things. There's not enough equity for you to have big cash flow, and if you don't have big cash flow, you're not making big money. Translation, every dollar you've put into this is not getting an ROI yet except an increased value, but you're not getting cash-on-cash ROIs, not to amount to anything. Do you guys have any other debt?

We do have a car loan at $15,000, but other than that, no credit card debt. What's your cash position, you said? We have about $12,000 in the bank right now. Okay. Well, first thing is you've got to get your emergency fund up because you're sitting on a lot of debt and a lot of potential problems with no cash you get two or three heat and errors go out or two heat and errors go out in a water heater blow between these three properties in a short period of span you got a problem you're going to

be looking at debt yeah do you love both rentals or is there one of them that gives you a headache that you wouldn't mind selling? You just got them. I mean, we've had them for a year and a half. Do we love them? Yeah, one of them we really love. We're going to move into at some point, but the other one is just a rental. Yeah. Well, point being, if you want to hold these, if you want to clear them, that's fine. Get rid of them. You're not going to lose much.

If you want to play through on your plan, what you do need to do is continue to follow the baby steps. Get your emergency fund up. You need a pretty substantial cash position to be holding this kind of property, probably 75 grand. And you're sitting on 12. And because you've just got a lot of exposure that's going to have cash needs and the problem is these things all come in threes believe me i've been managing property for 40 years and so it's just it it's it's always the perfect freaking storm basement leak stupid car runs through the fence i mean it's something you just when you own property it goes with the territory i love

real estate but it is a hassle compared to on a mutual fund so number one get your emergency fund up then number two i would start with a two-pronged approach of getting these paid down pretty aggressively and also let's reach over and uh uh start that 15 going into retirement and get rid of this car debt. Oh, definitely. Car debt's got to go before we do anything. You're going to get rid of that tomorrow. That's just ridiculous.

Not the car, but the car debt. So first, work your baby steps, man. You just started listening. Baby step one's $1,000 saved. You've done that. Two is debt-free, but the house. Need to knock out the car like George said. Three is three to six months of expenses saved for emergencies.

In your case, I'm going to jack that on up to 75 because you've got heavy expenses with these rentals that you don't have a cash position to cover. Then four is we start to put 15% of our income into retirement. You work all of that for the next 15 years. You're going to have a bunch of paid for property and you're going to have a pile of cash over in mutual funds also, and you're going to be in really good shape, but you're going to have to lean into it and be very intentional. Sometimes when people first start buying property and you're going to be in really good shape but you're going to have to lean into it and be very intentional sometimes when people first start buying property and you're a little bit further into this you're not brand new but we feel like uh like it's magic and it's automatically works and it's anything but magic and anything but automatic well everyone says it's passive

income dave i saw tiktok passive about anybody says real estate's passive incomes never manage real estate there's nothing passive about it it's freaking active as it can be that's an absurd butt statement when people say that that's somebody selling a get rich quick thing on tic tac you know that's all that is it's just not even real all right amanda is in cincinnati hey amanda welcome to the ramsey show hi thanks for speaking with me. Sure, what's up? So I've been listening for a couple months and trying to implement what I've been hearing. So my husband and I had whole life policies, so we got rid of those. Good. We went with standards, got term and policies, and we have three children, six and under,

so we did the rider for the children. Good. children um six and under so we did the rider for the children good but um we have a whole life policy we were talked into getting for my oldest son when he was an infant it's 15 years pay and we are six years in so should we get rid of that also sure okay absolutely sucks now the money you put into it you're going to get very little out of. It has a horrible rate of return. It is not good for saving money, and it's not good for insurance. You got him covered for insurance now with a rider, right? Correct. Yeah, and so now it's just a question, is our whole life policy a good investment,

to which everyone in the financial planning world that doesn't sell that crap is laughing. Of course it's not a good investment. It's a horrible investment. Much better off to take any money you get out of that policy and any money you are putting into it monthly and put that in a good mutual fund in a 529 for his college. I thought, Dave, that whole life policies were going to start to die off, but it's only gotten louder with social media and index universal life and infinite banking and all these concepts now that are being touted. Those aren't new, though.

Those are 40-year-old ideas. They're making them fancy and slick now with one-minute videos. You put them on Tic Tac with somebody with good hair, and all of a sudden everybody's talking about it. But, you know, it's the same old crap. You know, it's just, yes, Amanda, to answer your question, honey, get rid of your whole life policies. You've got the child coverage.

You don't even really need child coverage except enough to bury them if, God forbid, something happens. Because they're not creating an income that the household is dependent upon. You, however, are creating an income that the household is dependent upon. You need to replace that income with a big term life policy 10 to 12 times your income. So you make $50,000, you need $500,000 to $600 your income so you make 50 000 you need five to six hundred thousand on you to cut to invest that would then create 50 000 and replace the income that is lost with the death of an income producing adult children do not need life insurance except enough for quote final expenses we call it do not have to say insurance is not an investment

don't believe anyone who says it is. Never. Never. Listen, you don't get your muffler fixed at the transmission store. Don't go to life insurance people to do investing. You know, seriously, no thank you. This is The Ramsey Show. Hey, George Camel here. If you love the show and you want a deeper dive on your money journey, we've got a weekly newsletter that gives you helpful articles and tips on following the Ramsey way. Just go to RamseySolutions.com today to sign up for the newsletter.

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