The Ramsey Show - App - My Parents Haven't Planned Financially for My Disabled Brother (Hour 1)

Episode Date: April 29, 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. I am Dave Ramsey, your host, Dr. John Deloney. Ramsey personality, best-selling author, is my co-host today. He's also the host of the Dr. John Deloney Show, the John Deloney Show on podcast, which is massively popular. You should be sure and check it out. You will learn things.

You will laugh, you will cry, and you will be entertained. So be sure and check it out. Open phones here at 888-825-5225. With Dr. John here, we can talk about your life and your, oh, I don't know, mental health things that are going on, relationship things that are going on, as well as money. We're here to talk about you. This is all about you. Again, 888-825-5225.

Jenny starts off this hour in Charlotte, North Carolina. Hi, Jenny. How are you? Hi, gentlemen. I'm honored to speak with you both. Thanks so much for taking my call. Our pleasure. How can we help? Well, I wanted to tell you, Dave, your new website is fantastic. So good job, whoever you hired. It's amazing. Well, thank you. Our in-house team did that, and I will give them a high five from you.

Thank you. Great. My question, I've been a stay-at-home mom for high five from you. Thank you. Great. My question, I've been a stay-at-home mom for almost five years now. My husband and I have a two-year-old and a five-year-old, almost five-year-old. And my husband is a controller down here, and he makes about $170. And he, I would call him a very, very loyal person, employee. He has great integrity. He's just amazing.

And his job as a controller down here, his company keeps acquiring other companies. And when he took the job five years ago, they warned him, hey, the books are a mess. You know, you're going to stumble into a lot of problems. And this is just what keeps happening with this company. And as they keep acquiring more companies, they're buying companies that have the books that are a mess. I'm not an accountant, so I don't know anything about that. However, he just recently received a $140,000 bonus.

It was two weeks ago. And we have been looking at already moving to different states. He's been looking at other jobs. And now it's kind of he's in the debacle of, well, I just received this huge bonus. Am I going to look like, you know, not loyal, just like a, you know, a not great employee, not a great person if I take this bonus and leave? Or shall he wait it out a little bit longer? We just love your opinion from both you gentlemen on what you think.

What a fabulous question. Yeah, that's great. So you've hired and fired more people than I have. I'm thinking through my thoughts on that. What do you think, Dave? I really like your husband. Loyalty is

a type of integrity, a piece of integrity that is a vast wasteland in our culture. It doesn't exist. Very rare. It doesn't exist. So I really appreciate him being what I would call old school in that regard. But I do not think that the – I think he's been paid and bonused for work that he has done, not work that he's going to do. And so I don't think he's doing anything morally wrong or even violating loyalty. I'm trying to reverse the shoes for a second and say, gosh, if I was his leader and we just gave him a $140,000 bonus on $170,000

income. Let's do a fun thought experiment, Dave. So you gave me $140,000. I would appreciate not getting noticed two weeks later. That would feel a little icky if the roles were reversed, right? But also, I don't expect someone to stay here when it's their time to go. You can, you know, we tell people all the time, you cannot work here and go to heaven. And so, you know, this is not the only place to work.

It's a great place to work, but it's not the only place to work it's a great place to work but it's not the only place to work and so sometimes people's season they're they they run through their uh the energy that they had for the cause uh i'm not leaving but other people have and so i've you know come to accept that so i i would think some amount of a little bit of time i mean he wasn't you weren't gonna give notice next week anyway he still hadn't found a job you don't know where you're going. But if you leave in the next six months, I don't think you've done anything wrong. Six minutes? You didn't do anything wrong, but it just feels icky. You know what I'm saying? It's not cool.

Yeah. Huh. Yeah. John, what are you thinking? Yeah, I'm really wrestling with this one, Dave, because I'm trying to think if I gave someone $140,000, this is me being transparent. I think in some way I would be attempting to pay them for work done and buy their continued loyalty. And I think that's a bad motivator. I mean, you know, and the same thing would just be saying if I pay somebody a huge income.

Right. But I don't want someone, especially someone I'm paying a huge income to, to be here and not be happy, be miserable. Their time is done. It's bad enough if you're paying somebody a little bit of income in there that way, but it's really bad if you're paying them a lot of money and their heart has left. So we always tell people, when your heart leaves a building, take your butt with it. Hey, Ginny, so is he just tired of the constant acquisitions? Is it a toxic work culture where people are not cool to him and then they just will throw money at him?

What's the thing? No, it's nothing like that. The people that he works for, the bosses are my age. They're 35 years old, and they just built up this amazing company, and they're amazing people. There's no toxicity at all. It's just every company they acquire, they're getting it on a deal. And so here you go, CPA, controller, just work with these messed up accounting books.

But I don't know. Like I said, I don't know anything about accounting. It just keeps piling and piling. But he really appreciates rewarding him with a salary. Here's a suggestion. Number one, what controllers are supposed to do is control. That's why we call them that. And so they're supposed to clean up messed up books.

That's what he says. If he goes to another company, I mean, there are very few companies that do a wonderful job with accounting. Most of them do an okay job or a really bad job uh and depending on the size of the company the sophistication of the company and so forth but um you know we have stellar accounting but but i think i think he might ask for some help i think he might be overwhelmed yeah that's that's my thought is two little other pieces they've hired a couple people to couple people to work under him, but then he ends up training all the people, which is great, though, because he trains them the way that he likes. They're going to work under him.

What's wrong with him training them? Yeah, right. So he loves that. But then also he's not in charge of any decisions, too. So I think he said five years I'm putting in the work, and we can wait longer. It was just kind of a bummer because, I mean, a blue belt in great fashion is not a bonus. What is he looking for in the new job that's different? And I would go in and ask for that here because I think he's got a pretty good gig.

Yeah. Because what the big, and I'm bas basing that the big thing you said is these are good guys oh they're awesome yeah and if you go in and go listen i'm frustrated by this and this and in order for me to feel long think longer term about this whole thing i need to i need some help with you adjusting those things well i need about this role yeah i need some control i need to be able to make some decisions and I need to be able to implement this. And, you know, you're giving me all the work but not the authority to get it done. You're delegating the responsibility but not the authority.

That's a breakdown in basic leadership skills. Whatever it is, but I think you could probably come at these guys and reset your job, and it might be the best job you find. Because it sounds like they love you. And you don't dislike them. Right. Very cool conversation. Nice to get a $140,000 bonus.

I'm just saying, Dave. With more frequency than you know, I get calls and emails from people dealing with the recent loss of a spouse or a parent. You can hear the struggle and the heartache that they've been experiencing. And at a time they should be grieving, what breaks my heart the most is the strain and tension that they're going through because of money, especially when it's a situation that could have been avoided. If you have a family, it is your responsibility to have term life insurance. It's one of the things you do to say I love you.

And yes, this is an ad for Zander Insurance. But since this is one of the most effective ways I have to get my point across, so be it. For over 20 years, I've been telling you about the importance of term life insurance and protecting your family. Listen, you need to check out Zander.com or call 800-356-4282. I can't say it enough. Protect your family. It's what you're supposed to do. Go to Zander.com or call 800-356-4282.

Dr. John Deloney, Ramsey Personality, is my co-host today. If you'd like to join him on the Dr. John Deloney Show, you can do so by emailing askjohn at ramseysolutions.com, askjohn at ramseysolutions.com, or leave a voicemail at 844-693-3291. 844-693-3291. 844-693-3291. Tim is in Hartford, Connecticut. Hi, Tim.

Welcome to The Ramsey Show. Hey, how you doing? Better than I deserve. How can I help? I first just want to say thank you. I came across your videos and things online. They've been extremely helpful and very informative. So thank you for all that that you do.

Thank you. A question I'm calling back. So I'm a physician. I'm in my 30s, married with two kids. My wife and I, between both of us, from undergraduate and medical school, had about a little bit over 100,000 combined loans. And right now, currently, we've saved up nice emergency fund savings actually have enough to pay off all of that essentially.

Are you there? Sounds like we just lost him. Oh, wait a minute. Maybe now? Are you there, Tim? Oh, you want me to pick back up? All right, I'll try again. I think they're messing with you in the booth there, brother. All right. Hey, Tim, are you there, Tim? Oh, you want me to pick back up? All right, I'll try again. I think they're messing with you in the booth there, brother. All right. Hey, Tim, are you there? Yeah, can you hear me? Yeah, that was all Kelly's fault.

We'll just blame her. But anyway, sorry about that. So you have $100,000 in student loan debt, and you have $100,000 in the bank. Well, correct, give or take. I'm a physician in the 30s, married with two kids. And what's your household income? We're making probably with bonuses and everything just short of about $400. Good for you.

And we've got about $107 in loans between us. I've got $50 in savings and about $130 in checking that is sort of an earmark to pay off the loans and obviously things along those lines. You know, the cars are paid off for a few years, very reasonable. So your question is what, Tim? My question specifically is, with all the pending legislation and discussion about loan forgiveness out there, and where my wife and I are kind of dividing this to get a second opinion,

essentially just to pay this all off or ride this out, keep making payments and see what's potentially going to come over the next year or several years with regard to loan forgiveness? Well, looking at that through three or four different lenses, I would write a check today and pay off your student loans. But let me give you the lenses that I'm looking at it through and tell you how I came to that conclusion. Number one, you borrowed the money you owe the money waiting on me to pay off your student loans as a taxpayer pisses me off

number two um the if they do pass this legislation there well there's not legislation there's been a lot of discussion i have never seen anyone except uh the very far edge fringe of the left suggesting any more than fifty thousand dollars worth of forgiveness and a lot of the forgiveness proposals that have been floated are limited for high-income earners. So on a practical basis, if it did come through, it's probably not going to pay off all of your loans. And if it did come through, you are a real candidate for it being limited. It seems to be aimed at there's a discussion of up to $50,000. There's a discussion of $10,000.

And a lot of the discussions $50,000, there's a discussion of $10,000, and a lot of the discussions were income-limited, meaning that if you were making the kind of money you're making, you wouldn't qualify because you're an evil rich person and you must be punished in socialism. So the third thing is, just as a matter of philosophical, even theologically, the way I live my life, I just have never met anyone who had a wonderful life waiting on the government to fix it. And so I just resist the whole idea of those idiots are coming to the rescue. Because I'm old and I've never seen them do it all they've ever done is take all they've ever done is take from me they've never given me

anything now they talk a lot and there's a lot of you know if if words were now that if words were if you could monetize their words we'd add some money but but they just talk and so real people do what you do you went and got a medical degree you have a wonderful medical practice just go be prosperous and don't wait on them to be your your supply so to speak john you've got a degree in higher ed uh what are you thinking in this it goes to me it's less about the government it's a it goes back to your original point it's a personal integrity thing for me which is i i signed my name on a piece of paper i looked him in the eye and said hey if you'll help me get through school i promise i'll pay you back and man you're making four hundred thousand dollars i'd write this check today and high five my family and take my family

out for a debt-free dinner tomorrow night right well combined between my wife and i but i understand your point that's what we've kind of been wrestling with is that we're obviously doing what we've been able to save and lived very moderately to save what we've done. Well, you're going to have an incredible net worth, and I don't want you to have anything but that. You know, I really don't. People are like, well, medical doctors make too much. Listen, I don't want people that aren't good at their medical practice working on me. They keep you alive.

I don't want them practicing on me. So practice on somebody else. But I like my doctor being expensive. It's preferable to me. I'm really happy when the dentist drives a really nice car. That probability he's not going to hurt me, and I'm pretty much a sissy. So, you know, I like that. I want to do business with successful people, and their successful is showing up in their wallet.

So I'm proud for you, Tim, that you're making all this money. It's a mindset for me that's just making its way from folks who are making $30,000 a year that have $100,000 student loan debt all the way up to making more than a quarter of a million dollars. Thinking, oh, man, it's become a game now. How do I not pay it back, right? And I just, man, you've got the money in your account. Pay the thing back. It's the right thing to do. Yep.

Mike's with us in Spokane, Washington. Hey, Mike, welcome to the Ramsey Show. Thanks, Dave. Thanks, Dr. John. I appreciate you guys taking my call today. Sure. How can we help? So, I've been kind of doing long-term planning. One, I actually called you a year ago because I felt

bad about getting an inheritance with you and Ayo, and on July 21st, me and my wife had paid off um with a little bit of help of the inheritance fifty seven thousand dollars of debt um and then we have a fully funded um uh emergency fund um all right before i got out of the navy during this covid pandemic, so that was a roller coaster. Way to go.

Question I have. And thanks for your service. I appreciate it. So I'm doing reserves, and right now, with a lot of diligence and Uber and everything else, we're cash flowing my wife's schooling. She'll be done with dental hygiene in about two and almost three years. I'm not worried about paying for it because we're going to cash flow her stuff at community college. And then she's going to use two years of my GI bill for the last two years out of public school. So that's all covered.

But this is the weird situation. My parents do not have the greatest health. They're 51, 61. And I have an autistic brother who I love to death. Um, he's a year older than me. He lives with my parents. Um, luckily I have been blessed with a wife who is completely open and adamant about my brother living with us one day. And my parents smoke. They don't have the greatest lifestyles.

The thing that kind of terrifies me is they're not the greatest with money. I've talked to them numerous times that their plan for if something ever happens to them is everything will just work out. Obviously that doesn't work. And so I've got a wife and two kids and we don't have a house yet. Um, the plan was for us to buy a house when she gets done with schooling. Um, cause then right before you run out of time, what's your question? Um, because my brother is going to be living with us. Should we, um, look for our first house,

a house that can accommodate my family and my brother? No, not until he comes to live with you. When it actually happens, then you worry about it. But this could be five years. It could be 15 years. You do not buy a house based on your worries. Or what might happen. Or what might happen someday soon.

But when it happens, you may want to move. And you may have a little bit of an uncomfortable period until you do move with too many people in a smaller house. But no, you buy a house for where you are today because we don't know what tomorrow is going to bring. Dr. John Deloney, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Folks, let's get real for a minute. Some of you are getting close to baby step four. You're almost out of debt, almost have your emergency fund in place, and you're freaking out because you know you need to start that baby step four, saving 15% of your household income

for retirement. You have no idea how to start. That's okay. It's okay to have questions. It's okay to not know how. Most people have to learn things. And the trick is to work with an investing professional to teach you, not to do it for you blindly, but to teach you. We call them a SmartVestor Pro, and they can answer all those questions in plain English. They don't sound like Charlie Brown's teacher, wah, wah, wah, wah, wah, wah. When it comes to investing, you need to know what you are investing in, and when you sit down and work with a SmartVestor Pro who knows what the flip they're doing, they'll make investing easy to understand.

We call that the heart of a teacher. Do something about it. Text INVEST to 33789. If you're ready to start investing, you need someone in your corner that will guide you, not do it for you, don't put money in something you don't understand, but learn and get a SmartVestor Pro. Text INVEST to 33789.

Katie's with us in Springfield, Illinois. Hi, Katie. Welcome to The Ramsey Show. Hi, Dave and Dr. Deloney. Hey, what's up? Dr. John. Hey, thanks for taking my call. My question has to do with something up in the house.

My husband and I are both retired. Our net worth is about $965,000. Okay. Our pre-tax income from pensions and Social Security is $110,000 annually. Excellent. Do you owe anything on your current home? No, it's been paid for. What's it worth?

For several years. In talking to a realtor, it's around probably $160,000 to $170,000. So you have $800,000 other than your house? Yes. Phenomenal. So how much are you wanting to move up in-house? Maybe to a total of $300,000. We would like to build a house.

We have never done that before, and it's just something that would be a dream of ours to do that. Are you going to sell the one that you're in? Yes, we will. Okay. So then you would have a $300,000 house, and you would have a $1 million net worth still. Only 300 of it would be in a house instead of 165. What's wrong with that?

Well, nothing other than it's just a big step. We've been debt-free. You're going to be debt-free now because you're going to pay cash for this. Yes, we are. We are going to pay cash for the house between monies that we have saved and savings and the proceeds from the sale of our home. And our current house has stairs, and we want to be on a ground level. What was your career, and what was your husband's career?

My husband was a police officer, and then he went back to school as a surgical nurse, and I was in education. And you're millionaires. I'm so impressed with you. Thank you. So, John, that's your mom and dad. Yeah. Police officer and a teacher.

It's incredible. Yeah. It's really cool. So, Katie, I'm hearing this cool story. What's the question there? Are you just nervous to pull the trigger on it? We're nervous to pull the trigger. Exactly.

All right. There's no way a teacher and a police officer and a surgical nurse are going to be scared about this little thing. Well, you know. No, no. You've all done combat. You can't think about it that way. Katie. You know what?

We've just always been so conservative and saved. How old are you, Katie? You know. Besides the fact that you're 22. 65. Okay. and um how old are you katie you know besides the fact that you're 22 65 okay here's the thing there's two parts of this equation probably number one you have earned it you are millionaires you started from nothing and as a teacher a surgical nurse a policeman you became millionaires i'm so proud of you and a three hundred thousand dollar house is not out of range you've earned it you are not being opulent you are not being silly you are not being crazy and overspending like some nutty person on the television or something like that you have

earned it and this is a very reasonable percentage two, it is not going to damage your finances one penny. Thank you. You know what? I think we just needed to hear that. Yeah. I really appreciate your perspective. You know, sometimes we feel a little bit of shame from having succeeded, and sometimes there's some people in our culture that want to help you feel a little bit of shame from having succeeded. And sometimes there's some people in our culture that want to help you feel a little bit of

shame for having succeeded. And I want to just tell you, touchdown! Spike the freaking ball! Oh, that's wonderful. It's nice to hear that from you. And we have worked really hard. Do your touchdown dance. I want to see what it looks like.

You probably don't. You've worked really hard. You've saved really hard do your touchdown dance i'm gonna see what it looks like you probably don't that you've worked really hard you've saved really hard and you get a i mean if you're gonna pay cash for a house i already got a paid for house that's what i'm saying and you're just moving up in cash and let's not forget they're going from stairs to to a a like oh i guess more of a range style house it's gonna be a safer house for them over the long haul this is i like that it's a great investment good it's just everything there's nothing wrong in this picture everything screams wisdom everything screams you earned it i'm so proud of you waited and waited and waited so you are true everyday millionaires hold on i'm gonna have kelly send you a copy of the book everyday

millionaires you need to read it because you are one of them well done done. Chris is with us in Austin, Texas. Hi, Chris. How are you? I'm well. How are you? Better than I deserve. What's up? Thank you, Ted, for taking my call. I'm a little nervous, but I'll get right to it.

So, basically, I'm an addict in recovery. I'm trying to get my life together. I moved out here to Austin a few years ago. I've got almost four years clean time. And I found your book about a month ago. And it would just like seem like the obvious next step to personal and financial recovery. I got really excited about it. So I realized all the money I had saved up uh in my uh savings account was not mine because i was about thirty thousand dollars in debt so i took the twenty thousand dollars i had and i just threw it all at the debt i've got about nine thousand left um and uh and now i'm

trying to figure out like how to move forward from here. I've got the EveryDollar app. I sit down and I look at it, and I'm like, I don't know what to do. I don't know how to assign EveryDollar. And I was wondering if you had any advice on the first steps to get started there um get started there good for you yeah first chris i want to celebrate four years man that's a long hard road and if you remember back to step one or two of your original 12-step program you remember looking up and thinking man i'm never gonna make step stage six ever i'm never gonna get out of stage six but i'm never same boat brother and you're gonna take

this one step at a time you're gonna have a thousand dollar emergency fund you have done the right thing and you're gonna slowly start walking these baby steps right and you're gonna work like crazy and pay the rest of your debts off rice and beans you're not gonna go out you're not gonna hang out you're already a hard worker you know what that's like and then you're gonna save an emergency fund you're gonna have a night's sleep that you haven't had in years what uh what were you addicted to uh i was addicted to uh anything i could get my hands on more i like to say but uh i like the thing that really took me out the thing that took me out was methamphetamine yeah oh my lord you drive that four years you're a stud stud, man. That's exactly right.

That's a hard one. Yep. I'm proud of you. So what do you do for a living? I'm a UPS delivery driver. What a stud. What a stud. Oh, man.

That's awesome. What a great position. Yeah. All right. So here's what we're going to do. I'm going to put you into Ramsey Plus. I'm going to pay for it because I want to be part of your recovery story, the second chapter of your recovery story. All right?

And we're going to teach you every little thing and make sure you learn how to do every dollar of the app. Make sure you have a coach in your corner. Make sure you go through Financial Peace University. It's all in there. I'm going to pay for all of it. And then you call us back when you're debt-free and tell us how good life is. Hold on. Kelly's going to pick up.

We'll get you signed up for everything, young man. Dr. John Deloney, Ramsey Personality, is my co-host today, best-selling author and host of The Dr. John Deloney, Ramsey Personality, is my co-host today, best-selling author and host of The Dr. John Deloney Show, which you ought to check out as a podcast. It is, if you're not listening to it, you're one of the few. It's really going zoom, zoom. Steve is with us in Daytona Beach. Hey, Steve, how are you? Hey, Dave, how are you guys doing today?

Better than I deserve, brother. What's up? That sounds great. Well, my wife and I are in a dilemma. We want to pay our house off. We owe $127,000 on a $250,000 duplex. And she was wanting to know if she should go back to work or if we should use our retirement to pay it off. And here are the numbers. We're both debt-free.

We have a fully funded emergency fund. And our retirement amount is $464,000. So what do you think? Total, $464,000. That's all the nest egg you guys have. Correct. Well, plus I have a lifetime pension, and we have the Social Security. Okay.

And so what is your income nowadays in retirement? $48,000. Okay. $48,000. You're able to live on that? Oh, easily. Okay. Plus, if you didn't have a house payment, it would be real easy to live on it.

Oh, you know that. Yeah. And so the money's all in 401Ks or IRAs and that kind of stuff? The money is in mutual funds and Roth IRAs. Okay. How much in mutual funds that's not in retirement? Well, actually, it's all in retirement. Okay, okay.

So it's all in an IRA or a 401K but in a mutual fund or not. Okay. Correct. 403B because I mutual fund or not. Okay. Correct. 403B because I was a school teacher. Okay, so you got $467,000. If we take out $150,000 to pay off taxes and the house, then you've got $300,000. We have $300,000 plus. You'd have $300,000 left over, right?

Correct. After you paid off the house and the taxes, and you can live on your income without touching the $300,000. Oh, easily. And you're 65? Correct. Okay. My wife's 55.

And so if you don't... She was thinking of going back to work. She does not need to go back to work. If you don't touch this money, the $300,000, if it's invested at a rate of return of 10%, it will double in about seven years. So at 72, you'll have $600,000. At 79, you'll have $1.2 million. That's if you don't touch it. Right.

In six years, she'll get Social Security, too. Well, I mean, you're living on the 48. You'll live on the 48, plus her income will go down, but then it'll go back up with Social, right? Oh, no, she's not working now. No, we're both retired. Okay, that's right. If she was taken to go back to work, I'll pay at the house. No.

Not as long as you don't have to touch this nest egg. I mean, after you pay off the house, as long as you're not living out of the nest egg, I'd pay off the house today, and I don't think she has to go back to work because of the numbers I just gave you. Sounds pretty comfortable to me. So walk me through that. Normally we tell folks don't cash out retirement, but he's got this pension. Don't cash out retirement before you're retired.

But they're retired. So they've got taxes but no penalties. If it's his retirement, and we can't cash hers out, she's only 55, but I'm assuming he's got enough that they can do this. But between the two of them, they'll have a nest egg of $300 left over after we cash out a portion of his to pay off the house and then how do you get what's the difference between a non-retirement mutual fund and a just a regular old john went to the store and got a mutual fund well the mutual fund john went to the store doesn't have uh didn't have any tax

protections okay and so the taxes have already been paid on it. So it's after I get my paycheck, I'm contributing to it. So if I need $127,000 out of a mutual fund that's not in a retirement account, I take $127,000 out. Because I've already paid taxes through my payroll. Right. But if it's over in a 401K, I've got to pay taxes on it, so I've got to take enough out to pay the taxes and the $127,000. Okay. So now we've got a $150,000, $160,000 withdrawal out of $467,000.

Okay. So I don't want to be taxed and penalized. So I would have cashed out, if he had mutual funds that were not in retirement, I would have used those first. Because the taxes weren't even paid on them. They're going to take out extra money. I want to leave as much money in there churning to make more money as I can. So I would have gone to that first to let it. Well, just tax efficiency is what it amounts to. Brian is in Rochester, New York.

Hey, Brian, welcome to the Ramsey Show. Hey, Dave, thanks for taking my call. I appreciate it. Sure. How can we help? Got myself into a little situation here. So I got myself into a car lease sometime back in November of last year. I was working from home at the time, so I wasn't going to put a whole lot of miles on it.

Just recently got myself into a new position as of a couple months ago, which is now more of an outside sales position, which requires a lot more travel. So basically I have the leased vehicle. I'm putting a lot more miles on it now than I had originally anticipated. And I'm just curious as to what your thoughts were as far as what I should do at this point. Well, you really got in a stupid mess, and then you made it even worse with adding the miles to it so it was never smart and it never it didn't just get dumb all of a sudden because of the miles it was dumb to start with so we're gonna get out of it that's what we're gonna do

uh have you looked up what the car is worth uh i have a general idea as to what it's worth uh so it originally was about a forty thousand dollar to what it's worth. So it originally was about a $40,000 vehicle. It's probably now worth somewhere around $34,000. Okay. Look it up on Kelley Blue Book, kbb.com, on private sale. We'll use $34,000 for our discussion. Have you called the fleece company and asked what the early buyout is on the fleece? No, I have not.

Okay. It was originally $40,000. I assume you put down nothing. Let's call it $37,000 is the buyout, meaning the early payoff, where you pay off the whole freaking car because you sell it. Okay? If that's the case, you're $3,000 in the hole, $37,000 minus $34,000. If those numbers turn out to be true,

they're probably not going to be too far off of that, but you need to get the real numbers. And then, so, yeah, you just, you got to have that $3,000, and then we've got to have enough to get you some kind of car to drive around. But if you're putting a bunch of miles on it, whatever you're driving, you're destroying its value. So you need the least expensive car that will get the job done, which means it doesn't break down, and it's not some kind of dinky butt little smart car because you spend all day in the car and you're going to be at the chiropractor's office if you have that so you need a you need like a real car not a pretend car and uh and you know something that that is going to be reliable but you know maybe a ten thousand dollar

car max and even if you borrow the ten thousand it's better than being thirty four thousand in debt and running this miles up on this lease because you're going to get hammered with the miles you're putting on it at the end. It's really turned into a bad situation. Don't lease cars. Period. So, folks, let's talk about that for a second. Okay? 78% of the BMWs that leave the lot this year will be leased. Really?

New car dealers make more money in their pocket on the transaction when you finance or lease a car than they do by far. They make about six times more if you lease or finance the car with them than they do if you just walk up and pay cash for the car. There's not a lot of spread on cars. They don't make a ton of money. The most profitable square footage on the new car lot is the finance office. The second most profitable square footage is the shop. It is not the showroom floor the

showroom floor is the gateway drug it's what gets you hooked and so the average car dealer will make 1500 to 2500 dollars in their pocket cash on a 25 000 car on the lease. They make $500 to $700 less if it's bank paper or Chrysler Motor, and it's just straight-up debt. And they make $2,500 less if you pay cash on a $25,000 car. The reason all people are leasing cars is because they're selling you that because they make more money on that than they do anything else. So please don't let them set the tone for your finances.

When you drive down the road and see all these BMWs just know it's not real. It's a mirage. It's a rental car. It's a rental car. Jeez. And it's not just Beamers. It's's lexus it's everything yeah you're getting slayed people this is the ramsey show

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