The Ramsey Show - App - My Husband's Job Is Ending in 4 Months! (Hour 2)

Episode Date: May 17, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Dr. John Deloney, Ramsey personality, is my co-host today. Open phones as we talk to you about your life and your money. The phone number is 888-825-5225. 888-825-5225. Robert in Brooklyn, New York starts us off this hour.

Hey, Robert, how are you? Good afternoon, Dave. Dr. John, how are you guys? Great, man. How can we help? Great. Great. About a year are you guys? Great, man. How can we help? Great. Great. About a year ago, my father passed away.

He was my business partner. We have a general contracting company and a very, you know, and obviously my best friend as well. And we had two properties that we invested in recently that now I'm half partners with my mother by default, and I wanted to see what your guys' opinion on what I should do with them. I'm sorry for your loss. Thank you. I appreciate it. Is there – okay, you and your dad work together every day, and so you could fight things out. You could talk things out for the business or for

the investments or anything else if you had a renter problem you just talk it through how's it going with your mom uh essentially i'm doing everything which is fine she she had no involvement with the business so uh i just since he passed away i've been doing everything do you want to still be in business dr john at John, that's a conversation for a different time, but that's where I'm at right now. I mean, I do. I do enjoy being a general contractor. It has its ups and downs. Are you asking about the houses, what to do with them, or what are we trying to get to here? Yes, the properties. I'm trying to figure out what i should do with them okay all right well there's nothing wrong with you managing them and owning half with your mom as long as there's not

some kind of toxic stuff going on it's not putting a strain on anybody there's also nothing wrong with you selling both of them and splitting up the money give her some money and you take some money and you can even help her get with an investment broker and do some investing um you know so she's got some of that money coming in uh what would she like to do uh she she's left it in my hands um she is on board either way um my father and mother they had a great marriage, but I never realized how little she was involved in the finances. So since his passing, I've basically had to give her a crash course on how everything gets paid for. You know, and my the two properties, I would say we invested about, I would say, six to seven hundred thousand.

They make about 90 gross a year and they're worth about 2 million if you sell them. So in that circle, that loops me back to my question. Do you want to keep doing this? Um, because if, if your mom's indifferent and the finances here, if you sold these properties and walked away with it,

with a hefty return on this, it sounds like the real question for you is do you want to still keep being in this business? You're in it with your mom financially, but she's not trying to jump in and manage it and I think we should do the lawn this way and I want to use this roofer. So really it comes down to do you want to do this or not? There's nothing wrong with either answer. No.

In terms of the financial or business aspects of it, since there's no toxicity. Let me ask you something. I think I'm hearing a little bit of resentment for her being what we call in the South a kept woman. She was so taken care of and so in the dark, and she's just like, you keep doing all the work like your daddy did and just send me the money. Yeah, I mean, not exactly in that sentiment but yes she's concerned about me having to take on the burden of supporting her because i gave her my father's paycheck for the past year and everything to kind of get everything settled but i'm at the point where if i continue the business i need to free up that capital

to hire people to help me. Yeah, you do. It's a very big spot. Yeah, the business is a separate equation from the real estate, is it not? Yes, but to me, they're intertwined, because if I sell it, I could reinvest in my own business. So, Robert, you still have avoided my question. What do you want to do? Dr. John, what do I want to do?

What do you want to do with the real estate, and then what do you want to do? Dr. John, what do I want to do? What do you want to do with the real estate? What do I do with the real estate? And then what do you want to do with the business? The business I want to keep, the real estate I want to sell. Sell it. Done. Sell it. Split the money with her.

Help her do some investing. Help her go through. I'll give you Ramsey Plus. Let's put her through a money course so she learns how to be a person who handles her own funds. We'll teach her how to handle money and I'll pay for it. I'll take care of widows here. That's what we Christians do. And so we'll do that.

We'll take care of her in that regard. Not by taking care of her, but by showing her how to take care of herself. Teach her to fish rather than giving her fish. And then she's going to have a million dollars. And then you're going to use some of this money to buy her out of your business, aren't you? No, no, she has nothing in the business. It's not to buy her out.

Okay, so she doesn't have any ownership of the business from the estate? No, sir. Okay. Okay, cool. Sell the real estate, split the money, help her get set up and get running, and you use the money on your side to run your business. Is that okay? Sure.

Yeah. Yes. Does that make you smile? It did. Yeah, it did. Okay. Is your dad in heaven smiling? I hope so.

Yeah, I think he is. I think I'm doing a good job. You took care of your mom, and you're running your business, and you're a grown man. You're going to hand your mom a million dollars, Robert I'm doing a good job. You took care of your mom, and you're running your business, and you're a grown man. You're going to hand your mom a million dollars, Robert. You did a good job. You sat down and taught your mom how to take care of herself. You gave her a gift of freedom.

You're a good son, man. You are. You're a good man. Listen, a scumburger wouldn't be wrestling with these things. No, they would have sold the house and given mom $50 dollars and said look at all this money right and hey those are the kind of sons that call my show sometimes dave like they are out there robert and it's not you yeah you're you're a good man so hold on i'll have kelly pick up and we'll get your mom signed up for a year in ramsey plus she can go through financial peace university she can learn how to do a budget on every dollar

there'll be coaches in there to help her uh You can walk with her through the whole process to ensure that she's learning the lessons. There's accountability with groups and coordinators in there. Ramsey Plus is the full package for you to do the whole thing, and it's going to be free to her. Okay? So you hold on. Kelly will pick up, and we'll get that going. And there's nothing wrong with starting Ramsey Plus with a million dollars head start, right? There's nothing wrong with that at all.

Sitting down with a SmartVestor Pro and getting that money invested. What's the best way we can do this? That's right. So if you listen to this show, one of the reasons people listen to the show is entertainment because humans are just freaking entertaining. But the other thing, my challenge to you guys listening is to do what i've done for 30 years doing the show and that is what is your takeaway from some of these things so here's your takeaway 45 year old couple both of you need to know how to

handle money because one of you is not going to be here someday. That's right. You are not empowered. You are not equipped. You cannot just say, it's a famous Southern saying, whatever you want to do, honey. No! Because one day honey won't be there. You've got to learn how to do this. It is unfair to everyone in the picture for you to intentionally not know how to do this stuff and someone else take care of you.

You're a grown-up. Bustin' it, mama. This is the important than ever. While some circumstances can't be controlled, there are items within your budget you can take charge of, such as your health care costs. For nearly 40 years, Christian Health Care Ministries, or CHM, has provided a budget-friendly means of sharing for medical bills when our members need it. Learn more by visiting chministries.org slash budget. That's chministries.org slash budget. If you feel like you will always be stuck paying off your debt, I got good news.

You're not. We're going to show you how to get out because you will have extra money when you get out. Your most powerful wealth buildingbuilding tool is your income, and when you don't have any bills, you're ready to go, baby. It doesn't have to be this way. You don't have to be stuck. It won't take nearly as long as you think. With Ramsey Plus, we'll kick you off with 90 days of guided help so you can put more of your money back in your bank account.

You're going to get practical ways to get small, consistent wins every day that then add up to the big results and all new better habits, right? And that means you're going to get where you want to be faster, debt-free, building wealth, outrageous generosity. To start Ramsey Plus for free, which, of course, includes Financial Peace University and includes the EveryDollar app, premium version, everything is in Ramsey Plus. If you want to do a free trial, text the word TRIAL to 33789. Text TRIAL to 33789.

Mark is in Providence. Hey, Mark, welcome to the Dave Ramsey Show. Hi, Dave, how are you? Better than I deserve. What's up? I have a question. What are your thoughts about investing with family members, my siblings, there's seven of us, in a plot of land? You do not own the land.

The family doesn't own the land. And all seven of you are going to go together as partners to buy a piece of land. That's the idea, yes. It sounds like seven opportunities to be angry. That's what I thought. Yeah, I can't say no fast enough or loud enough to this. Tell your family you love them so much

you can't let everybody do this. Just asking for a mess. I mean, if it was just you and one sibling, it would be fraught with danger. With seven, you can virtually guarantee it, can't you? Maybe. I don't know. Yes, I can. Can guarantee it.

What are seven people going to do with this land? It's more for maybe recreational purposes, and if possible, if a long term would be a long term, maybe developing purposes. Let me tell you what happens. It's called the D's. The D's will kill you. Let me give you what happens it's called the d's okay the d's will kill you let me let me give you some of the d's drug use divorce disability death disinterest default i don't do my part dummies i'm just trying to help man i don't know dogs these things these d's will destroy this and destroy your little plan and your nirvana that you've got in your head that this is going to be i you're asking what i think i

wouldn't do it and uh i would recommend that you not do it as strongly as i possibly can i've i've hunted on shared hunted land before and inevitably somebody's brother-in-law has a friend who says, hey, nobody uses this place on Tuesdays. It's cool, man. And then they go and you get shot at. Well, they do something stupid. And then it turns into a thing, into a thing. And who took out the this and didn't air up to that? It's just a mess.

And everybody's got good intentions on the front end of it. It makes sense. It's going to bring us together. We're going to have this thing in our family line forever until one person's going to build on it, and then they're going to get a coalition, and they're not going to let... It just is a mess.

You know, Junior wants to sell his part out. Yeah, I'm done. I need the cash. And sister gets a divorce, and now your partner's with her ex. Right. Because the judge gave them your portion. Yep.

And you bought your brother's, and your sister just gave you hers, and now you're going to war. And it's just not worth it. This is the stuff I've heard for 30 years. That's why we have public parks. Go recreate there. Yeah. They're fun. Or buy your own little track of land.

Yeah. Oh, there's an idea. Drake is with us in Columbia, South Carolina. Hi, Drake. How are you? Hey, I'm doing well. How are you? Better than I deserve.

How can I help? So I'm a 16-year-old. I'm still in high school, obviously. I have about $3,000 saved up. I just got my first car for about $500. It's worth about $4,000. My mom, Frank, gave me a very generous discount. Very cool. And I'm taking dual enrollment courses through my local technical school, and I should finish my associate's degree in computer science before I graduate high school.

Yeah, way to go, man. Thanks. I was just wondering what my next step should be, because I know I don't really have a consistent income right now i do have a job um but as far as the baby steps go what should i be focusing on or should i just be educating myself in general well you are way ahead of the game young sir you're you're you're on fire you're obviously got it got a game plan overall what we teach folks is even if you're super excelling like you are while in high school and while living at home is the baby steps really don't apply. Except, you know, we teach teenagers in the high school curriculum to have a $500 emergency fund to still be on a budget. And they've got some steps that we use in the high school curriculum, but we don't, the actual baby steps we talk about here on this show wouldn't apply until you're ready to take a job and leave home.

And that may be after you graduate that you want to go in the technical world, and so you go straight out of high school with your associate's degree into technical world, and so you may be, you know, 18, 19 years old on your own and doing your thing, and then you'd work your baby steps at that point. But as far as our plan goes, that's what I would do. But, man, he's on fire. Yeah. One thing, Dave, challenge me on this.

I always want 16-year-olds to remember to be 16 too. I want kids to remember to enjoy their life. If it's a life worth enjoying, if you've got friends you can hang out with and throw a ball with. There's almost a barbell I'm seeing with kids who just have cashed out already, 16. It's like life's going to be over. It is what it is. Then there's another crew that are just so focused on what tomorrow is going to look like and the next day and the next day and then what's next and what's next.

You just forget to be present and just enjoy being 17, right? Hyper performance on goals, on overachieving goals early. And to the point you don't even carved out room for now. That's exactly right. Yeah. I'm going to challenge you on that. I like that. I agree with that.

There's something about – I worked my butt off when I was in high school. I liked it because I liked making money. I did too. And I would just – because I wanted to buy something. Yeah. But also, you know, I had all the high school experiences as well. making money i did too and i would just i would because i wanted to buy something yeah uh and but also you know had all the high school experiences that's right as well um some of those i wish i could have back i wasn't gonna say that they're not great for that they're not great um but not

all of those i'm proud of that's right matter of fact a lot of them i'm not but there's something about being 17 and being so hanging out go to the lake go fishing go do some stuff that are fun man because the responsibilities once they hit you, they don't ever stop. And at the same time, man, you are a great influence. I'm glad you're growing up to lead the world that my kids are going to grow up into because we need more hearts and minds like yours, Drake. You're killing it, dude. It's awesome.

Very well done. Washington, D.C., Jeff's calling. Hi, Jeff. How are you? Hey, thanks for having me on the program, Dr. Leroy. Thank you. Sure. How can we help? So, I'm new. I'm a new listener.

I kind of found you guys yesterday. A friend pointed me in the direction when I was complaining about debt and being in debt. And he said, you sound like that guy Dave Ramsey. And I said, ah, was that the guy at your wedding? I didn't like him. He said, no, no, he's a, he's a radio host. So the other, the other Dave, yeah, the other Dave. So here I am calling the other Dave, um, and, and looking for a little advice there. Um, so I, uh, I bought

a house, um, and then I moved. And when I moved back to the area, I love my tenant so much that I bought another house, which is probably stupid. And then I thought I was moving and when I moved back to the area, I loved my tenant so much that I bought another house, which was probably stupid, and then I thought I was moving, so I rented that house out, and now I'm living in an apartment with two houses and $400,000 in debt. Why don't you sell them? I don't really know what to do. Why don't you sell them?

Yeah, that's kind of what I was calling to check and see if that's the right thing to do. I just didn't know. None of this, what you described to me, happened by default, not by plan. Yes. These houses are like left over from plan changes. They weren't caused by I plan to live, have two rentals and live in an apartment.

So you ended up with them by accident, so get rid of them on purpose. That's what I would do if I woke up in your shoes. I like rentals. I mean, I own a bunch of real estate. I want you to have that if you want to own it someday. But I think these two things own you right now. They're taking up way too much of your headspace and way too much of your money.

And you're really not making that much on them. You ain't getting equity. So if I'm in your shoes, I'm dumping both of them. Start my life fresh. Clean slate, baby. Whiteboard. Here we go. Game on. This is the Ramsey Personality, is my co-host today. This is the Dave Ramsey Show. Thank you for joining us.

Open phones at 888-825-5225. Rob is with us. Rob's in Atlanta, Georgia. Hey, Rob, how are you? Hey, Dave, Dr. D. How are you guys doing? Great, man. How can we help?

I am on baby step seven, praise God for that. Me and my wife, I've always been the nerd. She's always been a free spirit. I've found we are on Baby Step 7, by the way. Thank you, John. But I've always found that we've led Financial Peace University probably close to a dozen times, but I just recently found some, like, credit cards that she had had that I didn't know about. Nothing's on them necessarily.

I've always kind of had to drag her to the meetings and stuff like that. And I know oftentimes the answer for this is go to counseling. We've been to counseling. We've been married 26 years, been to counseling many times. And her ultimate response to all of it is, you are who you are, I am who I am, and I don't see the point of going any further much. So I'm kind of at a, am I just, since we're on Baby Step 7, she has a job as well that she does that we don't incorporate into the regular budget. She does kind of her own self-care, like hair and nails and stuff like that.

Just never been completely on the same page, but have great success ultimately. So we're just needing some guidance. Looking for some guidance from you guys. Yeah, brother, this isn't a baby step question. This is a, y'all are on two different pages, man. And this, I can't imagine this isn't showing up in other places in your relationship besides just financially.

Where else does this show up? Well, I mean, we are on the same page in so many ways, spiritually, parenting, sexually, things like that. So it's just money. She says, you be you and I'll be me. I'll keep my paycheck. You pay for the rest of the house. I'll take care of me. I'm going to hide stuff and be deceptive, even though I know you're out leading classes on how people can live whole connected lives.

Everything else is just above board and all good? Yeah, I mean, we have a very healthy marriage. So here's what I'm telling you. Outside of this. You don't. It's not as healthy as you think it is. And, man, if I'm the first guy to tell you that, I'm ashamed of the counselors y'all have worked with. I'm ashamed of your community that surrounds you guys. But there's some deeper-rooted issues here because this is something that means a lot to you,

that you've put on the block, that you've gone up and presented yourself in a certain way to your community members, to your church, to your friends, to your family, and she's gone behind your back and been deceptive. That tells me there's deeper cracks in this thing. Or just straight up bowed up her back and said, screw you, I'm going to do whatever I want to do. I mean, that's the message you got. It's the message I heard.

Right. Yeah. I'm a grown-up. i have the right to do whatever i want to do and our you know the fact that that is contrary to everything you believe doesn't matter i'm gonna do whatever i want and um it's not about whether you have a credit card or not it's about the disconnection yeah this is about about the marriage i mean if um you're not on the same page. And there's a level of disrespect here. And, you know, if you were doing this to her, it would be the same thing. I mean, if – and so I'm – you know, I don't know, John.

I mean, he said, you know, more counseling, but I don't think more counseling is going to do him good. So I don't know. What do you do i to me that you sit down and yeah yeah she's not being fully known and he's not being fully known they're not being fully honest with one another and the temptation here is he's trying to measure the success of his marriage by the size of his bank account. And that's not how that works, man. You can have a remarkable marriage without seven figures in the bank, and you can have a train wreck of a marriage,

or marriage number six or seven or eight with seven figures in the bank. And at some point, you have to sit down and say, I'm going to have to put all the cards on the table. I'm heartbroken over this. And I need to know what else is there. Because this will be the first time I've ever heard of everything firing on all cylinders in a relationship and somebody saying but i'm just i'm gonna lie to you and deceive you and not do this thing over here but everywhere else it's okay that's just not how that works man so there's something there

that people aren't incongruent in one area, incongruent in other areas. Not that sharply, right? Yeah. And so there's something else here. You're right. If she says, I'm not going to counseling, what you may want to do is go on your own and say, I need to work on myself because that's all you can control in this moment. You can't fix her. You can't solve her. You can't help her.

She's going to have to want to be plugged in and included in here, too. And a good counselor can coach you on how to interact differently than you ever have before, maybe. It creates a different result. And without talking to her, there may be things that, you know, that, Rob, you're bringing to the table that make you not a safe place for her to come home to, that make her have to hide stuff because you're somebody that flies off the handle. You are fill in the blank, fill in the blank. So I don't want to dump all this on her, but what I'm telling you is, man, it would be the first of my experience that you guys are just humming along except for this one place where she lies to you and is just completely dismisses you.

Obstinate. Yeah, obstinate. Yeah, that's just strange. Hey, thanks for the call. That's hard work, man. Wish I could be more help. So the recommendation, you were right, Rob, is more counseling, that you get a different one and someone that's a little more bold and that calls you out on your stuff and also trains you up on how to interact with her to draw her back into the conversation again. Because couples who look at each other and say, yeah, you do you, I'll do me.

This is not a couple. This is a roommate. Right. Yeah, it's a business partner. Y'all have done well as a business community. Way to go, man. You made some money. Sage is with us.

Sage is in Tallahassee, Florida. Hi, Sage. How are you? Hi. How are you? Better than I deserve. What's up? Okay.

My husband's job is ending probably in about four months. And we have about $58,000 in cash and about $180,000 in our 401K and about $20,000 in stock. We are completely out of debt except for our home. We have paid $100,000 of it off this last year, so I'm down to the $167,000. My question is, he's 63, so since he's losing his job, we're wondering if it would be smart to take our 401K and pay our house off if you keep it if you had more money i would but i'm it's going to drain you down to almost nothing because by the time you're going to have to pay the taxes on that 401k and by the time you do that i mean he's over 59 and a half so he doesn't have any penalty but you'll have taxes on it so if you told me at 600 000 in there i'd say

yeah i'll do it pay the taxes on that much and pay off the house, but you'll have taxes on it. So if you told me it's $600,000 in there, I'd say, yeah, I'll do it. Pay the taxes on that much and pay off the house today. But you're going to end up with no nest egg and a paid-for house. Well, I have a rental house that's completely paid for that my elderly parents live in. And so I do have rent from that once they are, you know, no longer with us. That house right now is worth about probably $350,000. Okay, so that gives you a little nest egg. That's helpful.

But still, how old are they? They're in their late 80s. Okay. And not in the best of health. I don't want to set up a scenario by paying off the house with your only cash money that you've got, not counting this piece of real estate, that puts you in a position that your parents have to die for you to be okay money-wise.

That ultimately is going to happen. We all know that, but I don't want to be financially wishing for their death so that we can get some money because we're broke, except for this house that they're living in. So I don't want to do that.

No, I'm not paying off the house today. You don't have enough cash to do that and be in a safe place. And your husband's career is not over. He needs to go to work. He's going to have to go back to work. It's not done. You're not in a position to retire. And I've got two parents that found new careers in their early 60s.

Making more money than they did before, doing something similar or totally different, depending on which one of my parents is possible. But you're going to have to suck up your ego and your pride, and you're going to have to go do it. There you go. This is The Ramsey Show. Thank you. Welcome to the Ramsey Show, Dr. John Deloney, Ramsey personality, number one best-selling author, is my co-host today. We're glad you're here. Phone number is 888-825-5225. Joshua is with us. Joshua is in Fredericksburg, Virginia.

How are you, Joshua? Hey, Dave. I'm doing great. How are you doing? Better than I deserve. How can I help? So I just have a quick question. I'm relatively new to your show, but I've been watching a lot of clips.

And I'm on my way. I'm on baby step number one, getting my money put away in savings. I want to ask a question about when I'm moving full force onto step two. I want to ask your advice on I have the opportunity to act as a private option so I can flip a few cars a year. And I wanted to know if you agree with stuff like, you know, spend money to make money type side gigs where I can buy cars and flip them in the process of paying off debt to, you know, help me get more profits overall and pay things off quicker.

Are you doing that with cash? Yeah. Well, so instead of just putting it full force on the debt, I would put cash aside to buy cars on the cheap and then flip them but when you buy the car you're paying cash for the car yeah that's what i mean okay so give me an example you would buy a car you buy a car for how much and flip it for how much so i could probably get a car for two grand and easily flip it for four to five because, like I said, I have access to a private auction,

so the cars are a lot cheaper than a public auction or anywhere else. Mm-hmm, mm-hmm, okay. And what do you make a year at your day job? About 33 grand. I just started up a new job. Okay, and how much debt do you have? at your day job? About $33,000. I just started up a new job. Okay. And how much debt do you have? So I have around $14,000 in debt.

Okay, cool. Yes, I would do that. Now, let's think through some guidelines, because as you know, you can get sucked into this, and you can put all the money back in and all this kind of stuff and then you ended up benefiting your debt payoff not at all, but you sure did get into a bunch of cars. So we don't want to do that.

So it's one at a time and you say, okay, I'm going to put some seed money in or prime the pump, if you will, and so we're going to set $2,000 in. And then you buy that car and you flip it for $3,500, and you pull the $2,000 out to do the next deal, keeping it there. But anything above the $2,000 goes on the debt every single time. Everything above the $2,000 goes on the debt every single time. Everything above the $2,000 goes on to the debt. Okay.

Don't buy a $2,200 car or a $3,000 car the next time you're buying a $2,000 car every time or whatever your baseline is. But what can happen is emotionally you get more caught up in doing the deals than you do actually causing the deals to benefit you. And you go, well, you know, gosh, if I turned a $2,000 into $3,000, I could turn a $3,000 into $6,000, and then I could turn a $4,000 into $8,000, and then you get sucked into this vortex, and all the money's pouring back into this system you're building rather than in getting out of debt. Does that make sense?

Yeah, yeah, absolutely. I get you. I didn't even think about that. Knowing me, I would fall into that for sure. Well, you're a player. That's how I know to warn you against that because I'm a player. It's the kind of thing I do. And so I have to watch against it.

And car auction directors love players because they say, man, if you just go to five on this, you can flip this for 14-3 easy. And it's just hard, hard. You have to be disciplined, right? Yeah, you really have to be disciplined. That's the purpose of an auction is to take advantage of undisciplined people. Or to pit disciplined people, undisciplined people against each other. Yeah, exactly. And then all of a sudden there's no room in the deal because you've overpaid.

That's what you get into. But, yeah, give yourself some real strict business operational guidelines, if you will, like I just laid out. Something like I laid out. And then every time, stick to them. Don't let the greed on one shoulder talk you into losing your common sense on the other shoulder. And if there's no $2,000 deals to be had this particular Saturday, go home. You walk away. Go home.

You walk away. That's exactly right. That is a good plan. Rob is with us in Tampa, Florida. Hey, Rob. Welcome to the Ramsey Show. Hey, Dave. How are you doing?

Thanks for taking my call. My pleasure. How can we help? So I have this out-of-state property that I want to get rid of. It's a rental property. And I don't know whether or not I would like your advice on either paying the capital gains or taking a 1031. I had my tax guy kind of look at it,

and he estimated something about 75,000 in capital gains. So you got like a half million dollar gain uh yeah i think where i'm trying to sell this out-of-state property so you've got you've had it a while and the uh what's the sell for i'm asking for upwards of over 800 yeah okay and you've adjusted the basis down by depreciating it over the years. You have a lower adjusted basis. Am I right?

Yeah, I bought it 10 years ago. Yeah, and you've been depreciating it on your taxes. Yes, sir. Yeah, and every time you do that, that amount of depreciation comes off your basis and increases your gain. You understand that, right? I do, yeah. Yeah, okay.

All right, that's what i'm talking about adjusted basis all right so uh a 1031 tax deferred exchange will probably cost you 1500 to 2000 in legal fees to execute you have to have an irs approved closing company to do it in you can sell the property into an escrow account with one of those companies, and then you have so many days, I believe it's 60 days to identify and six months to close on the other property. And that effectually creates a trade, and you've rolled all of your equity and your basis over to the other property. Someday, if you ever sell that property, you're going to pay even more capital gains because you will have lowered the basis even more at that point.

So do you want rental property in your area? If I can give you just a brief history. So I didn't expect to become an out-of-state landlord. I always thought I was going to move back into that house, but I like where I'm at now. I wouldn't mind having rental property here, but that house was really my house that I wanted to live in. It's gone now. It's gone. So do you want this money to invest in mutual funds minus $75,000, or do you want to own rental property

in your area? I think I wanted, I was wondering if I could move back into it after a 1031 exchange and it'd be my house again. Now, if you sell the house, you don't own it anymore. No, I know. So my question was, I'm sorry, whether or not to go ahead and just pay the capital gains tax, buy myself an own house, or kind of do a 1031. You can't do a 1031 to your personal residence.

It has to be to another rental property. Okay. So do you own a property in Tampa that you live in? No, I'm renting right now. Okay, so you want to use this money to buy a house with, to live in? Yes. Okay, you cannot do that with a 1031. 1031 is a like-kind exchange, and it requires you go from rental to rental.

I didn't know that either. Not your personal residence. You can't board into your personal residence. And you can't sell your personal residence. So pay the $75,000 in taxes, take the gain out, and buy you a nice house in Tampa, Rob. That's the answer. Sounds good. You don't have any other options, really.

That is your best choice at this stage of the game. Now, 1031 is about moving investments around. So you can do it with a ranch or with a farm. As long as it's income producing. Okay. Yeah, like I had a friend that had a lake house, but he never rented it out. So it never produced any income. And he sold it, and we were going to try to do a 1031 for him to get another lake house,

from lake house to lake house. And I'm claiming that's like kind, and the tax guy looked at me cross-eyed like I was an idiot, because I was an idiot. And he said, you know, no, you can't do that because it never produced income. If he'd been renting it out occasionally as a resort rental or a B&B or, you know, VRBO or something, he probably could have done it to the, moved it to a different lake house. But lake house to lake house doesn't work. Doesn't work.

And I ran into that a few years ago on a transaction I was helping a neighbor with. So what's the government's, what is their long-term play? You know what, we'll do this another time. Why they even would allow a 1031 exchange? Well, they used to allow trade. You could trade properties and not have to pay the capital gain. That was all. Oh, okay.

And this is effectively a trade. Okay. They'll get it at some point. They're going to get it at some point, unless you die, and then there's stepped-up basis when you don't. Okay. Lots of crap going on. That puts this hour of the Ramsey Show in the books.

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