The Ramsey Show - App - Make Your Decisions Based on Your Desired Destination (Hour 1)

Episode Date: December 12, 2023

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual, amazing relationships. Ken Coleman, Ramsey personality, number one best-selling author of the book Paycheck to Purpose, and host of The Ken Coleman Show, is my co-host today. Open phones as we take your questions about your life and your money. Open phones at 888-825-5225. James is in Appleton, Wisconsin, starting this hour off.

Hi, James, how are you? I'm good. How are you? I'm good. How are you doing today? Better than I deserve. What's up? Awesome. So I have a question for you in regards of scaling my full-time gig into like an entrepreneurial situation where I work for myself and no longer for a company.

You mean your part-time gig? Correct. Okay. And how do you quit your full-time job? Is that what you're saying? Exactly. Okay. I got confused.

Okay. I'm with you. All right. All right. So a little bit of background. At this point, with my full-time gig, my wife's income, and the side gig, I make about $360,000 to $375,000 a year in annual income. We completed all the baby steps.

Unfortunately, we did fall back into baby step 6B, and we do own a second home at this point at a lake house, and that is on pace to be paid off at $5,000 a month by 2030. And currently, one of the ways that we're really being aggressive in paying this off is with my side gig gig where I buy and resell video games. At this point, just as a side gig, I have about $200,000 a year of revenue at 85% net margin and really just looking at ways to really grow and build that so that I could maybe step into that at some point in time. I need to back up because I got lost in a number there.

The $375,000, is that your personal income at your day job or is that household income? That's all household income from all income sources. Okay. What is your day job? What do you get paid on your day job? About $230,000 a a year give or take with bonus okay so you would walk away from that for something that is currently making 85 margin on 200k correct so about 170 all right so 230 for 170 Or $170,000? How much do you owe on this lake house?

About $400,000. Jeez, nice lake house. Now, you said, what are you paying yourself off of the side hustle? I know what it's bringing in. Is that what you're paying yourself, the $170,000? I end up paying myself about $80,000, $85,000 a year. Okay, so how much is your wife making? $60,000. Okay, so there much is your wife making? $60,000. Okay, so there we got the breakdown.

So $290,000 between your day job and her day job. Correct. Okay. Well, do you know how you're going to scale this? I mean, you've done a good job getting it up to, I didn't know, you know, buying and reselling video games to get it to that point of about $200 gross income. What is the next phase to scale that? Are you aware of that or still trying to figure that out? Well, I is the next phase to scale that? Are you aware of that or still trying to figure that out? Well, I'm kind of trying to figure that out. So in my mind,

I have a way that I could go big, but it would require about $2 million of investment. And that's just something where I'm not in a spot where I'm going to go into debt for or anything like that. I agree with that. It sounds like a bad idea. Yeah, not an option. Well, the simple answer to this is, when anybody asks us this question, the simple answer is, well, we want to get you to a point where you are replacing your day job income with the side hustle. And I always like to go a step further and have about six months of that income in retained earnings in the side hustle bank account. So that's the simple kind of on paper, because that removes all risk and it doesn't put stress on this side also, which is ultimately this thing you really want to do. And so that's a good emotional and financial

decision. So that's the straightforward answer. But you've been debt-free and now all of a sudden you've got the lake house. And so I think it's going to be a while. It would be my answer before I go full-time. What do you do that makes two-thirds? I'm a director of finance for an S&P 500 company. Okay. So here's the trade-off. You've got to have a way that you can see the thing scaling that's not two million dollars. Because, you know, you don't want to quit your job and be stuck at 85% of 200, right? Correct. So what do we got to do to not take this thing to the moon,

but to just double it? Correct. And I'm asking, do you have any idea how to do a smaller scale than a $2 million investment? So really at this point, I do have one employee that does all my packing and unpacking for me and some of my quality checks. I have debated in terms of scaling it, just basically doubling my inventory. I never have more than $5,000 or $6,000 of inventory on hand. Well, you can double your inventory, but only if you can double your sales.

Correct. Is inventory limitation limiting sales? No, it's time and investment. I maybe spend five to 10 hours a week on this at this point. So that's what I would be doing, Dave. I would be thinking about how to replace himself to where now the five to 10 hours becomes 25 hours, 30 and then a full-time job so you've got to transfer your knowledge and this experience plus the time those are the three components of what you do in five to ten hours a week yes so i would say you can go full-time when you can see how to scale this to double yeah and if it doesn't work after you go full-time are you willing to sell the lake house because the lake house?

Because the lake house is going to destabilize your whole freaking life right now if you go full-time and this thing turns down. Absolutely. So, yeah, I mean. A failure in this move could cost the lake house. Are you willing to do that? So, you know, because that's the risk you take. You step out of the $230,000 comfort gig, you go for it, and it turns down. You've got to dump the lake house while you do the next step, right?

Yes, yeah, absolutely. That's what you're facing. It's a risk management issue. So, yeah, if you're willing to do those two things, find a reasonable path to scaling this to 400K at 85% or 80% and say, if it doesn't work, we're betting the lake house on this dream. Not the fact we're going to get foreclosed on, but I'm not going to let the lake house a toy oh 400k on take down my life because my dream turned left okay absolutely so you got to manage those emotions with you and your wife going into this if you do that you're going to be in fine shape here and i would tell you to go for it as soon as you can do those two things i'll tell you an interesting story right quick

we got just a second a guy called me in 2012 and said i'm a pharmacist and i have a side gig i make 70 000 as a pharmacist i make 70 000 on my side gig my parents who are pharmacists say i'm crazy to quit being a pharmacist but i want to go do my side gig he's doing silencers for guns, suppressors, okay? And I'm a gun guy, and so I'm like, hey, if you love it, he goes, I love it. I hate being a pharmacist. I love, I don't hate it, but I don't want to be a pharmacist. I love doing this. You love this gaming stuff.

He was doing $70,000 that year net profit. Last year he did $70 million gross. I told him to quit being a pharmacist. It was good advice. Yeah, it was good advice. And he's been successful to this point dave this is now about systems and he's going to have to train somebody to do what he does that's how he scales us yeah the margins there that's what james has got to do he can see he's got the brains to do that absolutely this is the Ramsey Show. Ken Coleman, Ramsey personality, is my co-host today.

Open phones at 888-825-5225. Thank you for joining us. David is in Kansas City. Hi, David. Welcome to The Ramsey Show. Hi, Dave. Hi, Ken. Thank you so much for taking my call. You and your team have been such a big source of motivation and mentorship

for my life. So I appreciate you. Well, thank you. How can we help? Yeah. So I've been following you. I found you all in college and,

and sure. I think my, my main question is, so I'm 25, I make about 90,000 a year. Um, and I do just want to point out like, um,

I am a child of immigrants. And so I've reached a good financial spot being in baby steps four, five and six. But I think thinking of 2024 in short, I think my biggest fear is like lifestyle creeps. And so I still live with multiple roommates and I'm still it's still very hard for me to, you know, spend money. And so I just kind of wanted to talk through goals with you. I think the next logical goal would be to, you know to save up for a house, but I do plan on maybe going for an expat role outside of the country in a couple years. So when I think of the future, there's a big question mark,

and it's been a little bit harder to kind of define what it is I want to, like my actions, if that makes sense. Yeah, that makes sense. So if you were to buy a home and five years later expat, what would mean you couldn't sell the home? Well, I think right now I'm – so where I'm at right now, I have around $30,000 as a down payment, so I would want to maybe save up a little bit more since interest rates are so high. That wasn't my

question. You said, I don't need to buy a home because I'm an expat in the near future. Right? Yes. So, if you were to expat in five years, leave the country, expatriate, right? Because you said you're an immigrant, right?

I was born here in the U.S., but my parents aren't. So I brought that up because I think I have this mentality of where I want my parents to stay. So where would you move? So the company I work for, we have positions all over, but I would love to go to Europe for a couple years. That doesn't mean you need to expat. That's a whole different thing. Expat means you're leaving and not coming back dude okay okay you don't want to expatriate

lose your citizenship to the u.s in order to not pay taxes or deal with the u.s government anymore which that part of it sounds real appealing but the rest of it isn't um you don't want to lose all of that to go work for some company in Europe and four years later change your mind. That's not an expatriate. That's I want to work overseas. Different deal. Yes, sorry. That's okay.

I'm not sorry. It's okay. I just want to explain. There's a, you know, people that expatriate, they move to Costa Rica because they're never coming home. It's the ultimate go off the grid thing. Okay. That kind of stuff. So what's the timeline? Realistically, today, you can change this.

He doesn't know. How old are you? He has an idea. I'm 25. I'm single, and I'm currently in the middle of a role right now, so I plan on rolling off in, like, July 2025. And so, you know, when I'm thinking of the next year, I'm like, okay, do I keep being as single as I can and max out HSA, max out 401K,

or do I kind of take a step back and kind of, like, a lot, I think I mentioned this, but I'm a little nervous about lifestyle creep because I've kind of seen like my peers kind of, you know, go all out on their apartments and their cars. And so I don't really fall into that. And so I just, I don't know if I should keep being aggressive. David, I think the chances of you having lifestyle creep is close to zero. You've mentioned it three times in the last four minutes. So you're not going to do that. It's not inside of you, okay? The chances, though, that you – what you do need is a place, something to aim at,

a more defined process that will enable you then to build your financial plan around that. And so let's just say, let's just announce to the world, we're going to move to XYZ in 2025 with my company, and I want to live there for five years. Okay, I just made that up or whatever. If that's your announced goal, then save to make that happen. And that's not maxing out HSAs, that's piling up cash in a mutual fund. So you've got a big old pile of cash. So while you're in Europe or Dubai or wherever it is for five years working for your company, you've got some pad. You've got some extra things.

And then when you come home, you've got a big – but later, 10 years from now, you've got a big old pile of cash to buy a house with. Okay. Okay. And I guess the only reason why i bought up the 401k and the hs is for the tax advantage accounts does that that's fine load them up but load them up but don't do that and have no other money you need some other money to make some of these other

to give yourself some wiggle room in some of these other areas so what's hurting you what's giving you anxiety is it's difficult to plan when there's not a set goal and so i'm encouraging you to set a goal even if you change it later let's set a goal of saying i'm going to go that's right for five years beginning on this date and if it ends up being seven years or three years so what or even if you want a little earlier or a little later that's fine but at least you're planning towards that which tells you then don't buy a house that's right because you're going to be in europe for five years you don't want a rental property in the states when you're in your or where to buy or wherever it is you're going to go i don't know why i picked up to buy he didn't say that but um but that's you know

that's the thing so you can plan uh and can you know in in the case of our last caller you can plan to open a business that's right you but you just if you if you just say someday yeah then you can't plan right it's like the equivalent and you're too young to know this but we used to have these things called atlases david right and so you'd put them out and it was like what you see on a phone now but a smart map but it's the idea of idea of just staring at it and going, well, I could go here, I could go here, I could go here, and it's going to drive you mad. And Dave's exactly right. I know I want to go overseas. So now let's come up with our three best options based on your company. They have locations. So we start there. Very specific. Okay, these are my top three destinations based on where

my company has offices. Now I'm going to look at cost of living there so we know portugal is going to be way less cost of living than dubai if you will and that's what dave's talking about a very specific strategy to go i'm going to go spend some time here while i'm young and single and experience life over there what's my cost of living you know and i can continue on my financial goals which you already have done a great job so this you're stressed out because you don't have a very clear direction destination choose a destination then make the financial decisions based on the destination yeah it's a good point and you know that that really parlays over into a whole nother discussion ken of some of you are facing some really tough stuff right now and uh my friend uh jim collins wrote a book was a thriving on chaos and i was discussing this book with him in the green room we were both speaking one day at a leadership thing

and um he was so excited about it he said i have discovered that people uh that that uncertainty is much more stress-inducing than ambivalence, is much more stress-inducing than a known tough road. That's correct. So if you'll lay out a road, even if it's a tough road, it's not as stressful as just not knowing. That's correct. You know, obviously, the least stress-inducing is a great road, but if you've got a tough thing to do, lay it out in detail.

That's correct. And say, these are the things I have to do to survive this time I'm in right now, and your level of panic, your level of anxiety will drop dramatically. Without question. That's why the baby steps have worked for millions of people. People are freaking out. My financial house is a complete dumpster fire. I don't know where to start.

It's overwhelming. I've got $250,000 worth of debt. And then they begin to watch the show, listen to the show. They begin to read Total Money Makeover. They begin to use every dollar. And they begin to see, wait a second, debt freedom is the destination. And now I've got seven steps that i can walk through very clearly it's gonna be painful oh gosh it's gonna be hard i gotta work extra but now i know where

to start i gotta live like no one else yes but later i get to live and give like you told me a story years ago i think you were in the middle east maybe even israel you talked about going in a cave and you were like i don't get freaked out by dark and close, but this was so dark, Coleman, I couldn't see him with a hand in front of my face. And that is the same emotion that we see in finance, relationships, in our professional lives. When we don't know where we're going, you're paralyzed. Oh.

And even if you are stuck, that freaks you out. Speaking of caves, oh my God. We're glad you made it out. Just being stuck. The idea that I'm stuck is terrifying. It is. I can walk through sewage up to my neck, but just don't make me stuck. That's the thing, right?

That's the way we all are, though. And that relates really to David's situation as well. The ambivalence is more stress inducing than the hard path this is the ramsey show ken coleman ramsey personality is my co-host today i'm dave ram, your host. Open phones at 888-825-5225. Thanks for joining us in the lobby of Ramsey Solutions on the debt-free stage. Lance and Morgan are with us. Hey, guys, how are you? Pretty good. Awesome. How are you? Better than I deserve. Where do y'all live?

Evansville, Indiana. Oh, yeah. Just up the road. Not a bad run to Nashville. Nope. Welcome here. Good to have you. Not a bad run to Nashville. Nope. Welcome here. Good to have you. How much debt have you guys paid? $168,170. Good for you.

How long did that take? About 35 months. Good for you guys. And your range of income during that three years? Started out around $140,000, and we're going to end out the year around $195,000. Good for you. What do you guys do for a living um i'm a gis technician at a local wastewater utility and i'm a railroad signalman all right very good you guys are doing great congratulations thank you what kind of debt's the 168 it was our mortgage you paid off your house we did looking at a couple of weirdos that's right i love it

way to go you two well done what's this house worth uh around 275 wow very good and how much have you guys got in your nest egg already your retirement uh we're out halfway to the millionaire okay 500 about another hundred in that so you're about a half million dollar net worth yeah way to go how old are you two i'm 30 and i'll be 30 tomorrow hey happy birthday thank you so 30 years old and a paid for house y'all know how weird that is right it's pretty weird that was pretty weird that's pretty weird we want to be weird that's good way to go so tell us the story what happened 35 months ago that made you think you could actually do this by your 30th birthday? We got married in October 2020. Oh, wow. Yep.

Good. A little COVID wedding. Yeah. And then we decided, hey, we might as well tackle it. Hit the road running. Yeah. Okay. Prior to that, I had to pay off my student loans.

And he was like, okay, well, see, you can do that. So the day I paid him off, he decided to go buy the engagement ring. Oh. That's an interesting correlation. Yeah. So it feels a little bit longer than 35 months for me, but we decided to go ahead and be weird. We set the goal, and we were able to do it.

Knock it out. How did you find us? Radio. Okay. Yes. goal and yeah we're able to do it knock it out how are you how'd you find us radio okay yes so you were listening on the radio and y'all are talking about it when you're engaged or when you're dating and then you're engaged and then you're married so we're gonna pay off the house yeah i made her listen to it i became slightly obsessed a little bit oh listen to it every day oh yeah um yeah eventually i think we just said we can keep being gazelle and, you know, give up some boating. Yeah, we gave up boating. Two years.

That was a little hard. And then gave up vacations. We did, you know, many weekend trips and some concerts we had to give up. We had some COVID concert tickets that had to be moved. So at least we still kind of got to enjoy that a little bit. Okay. All right. Wow.

So I want to know on the other side of this, you paid the house off now. And you guys went after it. There's some serious sacrifice you just mentioned, but this was a lot of effort. Why? I want people to hear why did it matter to you to pay off the house? And in that why, what does it feel like on the other side of this? Did it match up with your why, the actual feeling? Yeah, we got a lot more freedom, I feel like now.

The grass feels a lot greener. It still feels surreal seeing our checking account, you know, start to increase the first of the month. You know, it's not getting the mortgage being taken out of. And then off to the stage here, we got a three-month-old that we just had. Oh, yay! So we get to bring him into this world. Yeah.

You really were trying to get him to come to a home that was actually ours. Oh, wow. That's great. And you did. You did. Wow. So what's your first big thing you're going to do with money now that you're completely debt-free at 30 years old? We've got a couple vacations planned already.

Where are you going? We've got Kenny Chesney concert tickets to Boston. Okay. Nice. Good run. We were hoping to do Ireland as well, but it'll probably be pushed back to 2025. But for now, that's about it. It's a great con, but we don't don't really know we're going back boating

now next summer there you go all right what's that mean you buy a boat well we always had a boat we just parked it because the upkeep was okay so it's in the driveway we just got to activate it that's right okay gotcha it's that's cool it's a good reminder to come back yeah yeah i'm waiting waiting yeah good yeah good for you well way to go you guys way to go what do you tell people the key to getting out of debt is because there's people listening going you you'll now never have a house well you got a house paid for and you're 30 um i would say budgeting was huge um using every dollar i liked being able to track you know each transaction we have every dollar is addicting it is i always look forward to going to work and you know

moving it over real quick particularly but yeah it's addicting yes um communication was a big one between us i mean about everything we spend pretty much. Like, is this okay? Is this in the budget? Can we go for this this time? Yeah. Okay, let's go for it. Yeah. When it got really tough, we had to remind ourselves.

Why were we doing it? This is the goal. We're almost there. Keep going. Teamwork makes the dream work. We've got to be on the same team. Yeah. And we want to

bring this baby home to a debt-free house so we're not going out to eat tonight yeah right yeah way to go y'all and you got the rest of your lives do anything you want to do now i know it's surreal yeah and you already have a half million dollar net worth you're going to be baby steps millionaires in 20 minutes now i mean it's going to happen so fast it's ridiculous yeah the next one's going to come home to a millionaire's house you know that's that's where you're going to happen so fast. It's ridiculous. The next one's going to come home to a millionaire's house. You know, that's where you're going to be. That's how fast it'll roll because you got no payments. You know, payments, you get wealthy. I mean, and your generosity factor this time of year, particularly, you start seeing it, you know, around Christmas,

so you can go just bananas with stuff. You don't have to, but you've got the margin to, you know, and, you know, find somebody that's in need. You can do all kinds of stuff to help people. I mean, it's a cool place to be. I'm excited. It's a very cool place to be. Yeah. I love it. I love it.

Listen, here's what I want people to hear, okay? That the sigh of relief, even as you're recounting it, you said this is very surreal. And you guys have got total freedom to do whatever you want to do now. And I think that people need to understand the exchange for all the sacrifices, true freedom. When we talk about peace, it's freedom to make the choices you want to make, to live the life you want to live. That's what's on the other side of this. And that's what I see with you guys. It's really exciting.

Yeah, it's a great feeling. It really is. Way to go. We're proud of you, heroes. You took control of your life. You've got to keep control of it for took control of your life you got to keep control of it for the rest of your life you're an unusual married couple uh you know you actually get along you actually communicate uh i mean we watched it happen i asked a couple questions both of you knew

the answers to the questions at the start of this time together i mean you both are on the same pack this is what we're doing this is who we are this is where we're going and there's nobody dragging their feet nobody having a hissy fit like a four-year-old we're both gonna go win like two freaking adults you know i'm so proud of y'all well done thank you well done this kid's got a great set of parents are you gonna are you what's your baby's name it's cormac cormac okay so here comes cormac into the shot because we're gonna do a debt-free scream we got to have the reason for doing it in here. That's good. How cute.

That's so fun. All right, Lance and Morgan and Cormac, who has no idea. From Evansville, Indiana, $168,000 paid off. That's their house and everything. Before their 30th birthday. Did it in 35 months, making $140,000 to $195,000. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free! Yeah! Oh, yeah! Didn't even phase for me. He's still rocking. He just kind of furrowed his brow. What's mom yelling about?

Pretty cool. Very fun. Congratulations, you two. Absolutely beautifully done. Hey, we've got the live and give box for you. It includes the Baby Steps Millionaire's book, because as I mentioned earlier, you're about 20 minutes from being there. You'll be surprised how fast that'll happen now. And, of course, the Total Money Makeover book,

you can give that to someone who doesn't believe your story. But if you follow the plan, the plan works, people. It's not rocket surgery. You can do it. It's really simple. It's just hard. That's the deal. And, of course, a Financial Peace University membership is in the live and give box as well.

So thanks for coming down from Evansville, Indiana. We're proud of you, heroes. Way to go, Lance and Morgan and Cormac. You got it down, buddy. This is The Ramsey Show. Ken Coleman, Ramsey personality, is my co-host today. This is The Ramsey Show. Thank you for joining us.

Jack is in Portland, Oregon. Hi, Jack. Welcome to The Ramsey Show. Hey, Dave. Hey, Ken. Thanks for having me. Sure. What's up? Hey, so my question is, my wife and I are looking to purchase our first house in the near future here, and I'm kind of curious if you think we should keep saving and pay cash, being that we are close to affording it, or should we get a small mortgage and maybe the pros and cons to each of those situations? What's your household income? around 150,000. Okay. And what have you got saved now? We have around the end of the year, we will be at around 300,000. Okay.

And what's the price of the house? We're looking in the range from 400 to 450. Okay. So you're talking about like three more years or so, right? If you pay cash. Yeah, I mean, hopefully not. I mean, we've saved up

what we have really quickly. Out of $150,000 household income, what are you saving a year? Roughly $70,000, a little over maybe. Okay, so it's two to three years then. 70. Okay. A little over maybe. Okay. So it's two to three years then? Yeah. Okay.

All right. Or you take out a small 150 and you pay it off in two to three years, right? Right. Yep. Okay. Well, there's actually one of the few things on this show there's two answers to. Answer number one is I don't borrow money. And I'm always a little bit uncomfortable telling

somebody do something I won't do but anytime you take out a mortgage that's something I won't do and so if this was sharing in me we don't have an option we have to wait and pay cash because we don't borrow money for anything ever under any circumstances I will never be a dime in debt again ever for, for any reason. There's nothing I'm scared enough of or want badly enough to get in debt for it, ever again. Nothing. Period. So I'm not borrowing money.

So we would wait and pay cash. That doesn't mean you're wrong, because taking out a mortgage, as you know from listening to the show, Jack, is something we don't yell at people for on this show. Now, if you go take out a stupid car loan, I'll yell at you for being a fool, okay? But just for your own good, not because I like to yell at you, but I'm just going to call you a fool. Because it's going to keep you from getting rich. That's the bottom line. But in your case, if you take out a mortgage, it's a 15-year fixed where the payment's less than a fourth of your take-home pay. that's the maximum mortgage we tell people to do with the whole idea of turnaround getting it paid off as fast as you can you know all that jack and so that's one end

of the spectrum the other end of the spectrum is i tell people i don't borrow money at all so you could do the i don't borrow money at all and wait two years and pay cash or you could take out a small mortgage and pay it off in two or three years, and you're well within the range of what we say to do on the show. So either answer is okay with what we teach on the show. You see what I'm saying? Yes. Yep. Okay.

What is the living conditions where you are now? They're pretty good, actually. I mean, we're happy renting where we're at. Our rent is relatively low compared to if we were to move to another area. If I ask your wife, does she give me the same answer? Yes. You hesitated. Yes.

I have a feeling I'm talking to the nerd tightwad, and she's not. Well, you're correct. Okay. All right. She would say buy the house and pay off the mortgage quickly. You would say I want to save and wait. Yes. We're just so close to being there that we're getting trigger happy, I'd say.

Yeah. Yeah. Well, she is. Yeah, you are not. And you're trying to go, Dave, please tell me I can't do this. But, yeah. Yeah, I'm not going to tell you that because it'd be inconsistent with what i've told people for 30 years so i'm okay if you go ahead and buy um prices are not going to come down in uh portland oregon i don't think uh and i don't you know unless portland in and of itself has issues but um which it does but

depend on where you are in portland actually as to whether or not you're going to see price problems but that's a political climate thing that's not a um uh it's it's not it's a law and order thing it's not a um a an economic thing for you so as long as you're you know outside the realm of where issues are and you're in a stable area that you're talking about buying prices are not going to go down in that area of portland oregon you're going to be fine and i i would not wait for prices to come down uh the interest rates are irrelevant because you're going to pay it off so fast you're not even know you had an interest rate right and uh now what i would want to do if we go with her side of the deal where we're getting where we're getting to house fever and start looking in the spring and buy

something i would want a firm commitment that the two of you sit down pinky swear spit shake sign a little agreement together or whatever to where you both are saying when we buy the house we're going to lean in and pay it off in this many months because i it wouldn't be fair to you your side of the feelings and argument for you to buy and then she goes oh we're gonna pay it off in four years instead because I want to furnish it. Right. That's not fair to you because you're saying we can pay it off in two or three,

and she needs to commit to that if you're not going to wait. You follow me? That's just a relationship thing, though. That's not a math thing. Yep. Because what will happen is you go in there, it's easy to just say, oh, we've got to go buy the $2,500 play set for the backyard.

Yep. And didn't have to have that before, but now we've got to have it, you know. And there's all this stuff that you need to have after you buy a new house that you don't really need to have. People spend $18,000 to decorate the nursery for a child that takes up about four square inches of place. You know, it's just like ridiculous. People go bananas.

We had to do that for the baby. The baby doesn't even know it. You did it for yourself. That's a lie. So, you know, it's the same kind of arguments people get into there. So I don't care which way you go. Ken, what would you and Stacey do? I would buy it now.

And the reason is I'm just looking at the real estate market. And even though rates have gone up, we see that the inventory is really low. And so housing values haven't dropped. Now you've seen housing purchases drop, but prices haven't. And to your point, I just don't see a situation where they're going to get a better deal on a house. So I'd go ahead and buy now with his intensity and pay it off quickly. Yeah, but agree to a 36-month plan or whatever the plan is. Okay, let's do the math and go, okay, we're going to take a $150,000 mortgage, and we're going to pay it off at 70, and so that's 24 months, right? I agree, because they're saving $70,000 a year on a $150,000 income.

That's extreme saving. I got a lot of hope and faith that he's going to pay that house off and she as well. If the whole idea doesn't get sidetracked. And that's what he's a little bit afraid of. I think so. But I think you've had more experience in this. Yes, she wants the house. You nailed that. But she's also gone along with this. She hasn't fought him. She's on board to save 70 grand a year. They're on board. Yeah, they're hardcore. So I feel really good about it. That's what I would do, Dave, only because I'm going three years from now two years from now what are the housing that housing is that going to go up to 500 that 400 to 450 is that going to go for 450 to so from that

standpoint i probably buy now if i find something i like i do think that even if house prices are stagnant for the next 24 months right as soon as the market is enlivened again, we're going to see them jump up. I think you're right, because demand. Any gains you get by an interest rate reduction in your payment, you're going to lose in a price increase. Yeah, I agree. Because people are sidelined, and they're all going to come back to the game like they did after the're you know after the fauci pandemic right they're going to come back to the game after that yeah well i've asked you about this before i'd love you to share with our audience you know let's say we got another year of sevens all of a sudden if if we see something in the high fives there's a

psychology to that and people go well that's a lot better than the seven and so now they move is that what's going to happen exactly the opposite psychology what we had we went from three to four and you would have thought we shot people that's right it's you know it's true three to four right you know i'm selling real estate in 1982 and the interest rates went down from 16 to 14 and the floodgates opened. I sold 78 houses that year. I was 22 years old. I just had a horrible but slightly entertaining thought. Could you imagine if interest rates on mortgages were 14 to 16% right now? TikTok would melt.

You know? There's something we can hope for. That generation would melt. There's something we can hope for. This is The Ramsey Show.