The Ramsey Show - App - My Parents Took Out a Loan for My College and Now They Want Me To Pay It Back (Hour 1)

Episode Date: February 3, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is the Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Chris Hogan, and with me today is best-selling author and the host of The Table with Anthony O'Neill, Mr. Anthony O'Neill, and we are very excited to jump on the phone with you and talk about the things that are on your mind. Now, if you've got a question about money, you've got a question about dealing with teens and how to go to college debt-free, dealing with student loans, AO can help you. If you want to talk about money and building wealth and retirement, I'm here for you as well.

So don't hesitate. Pick up the phone. The phone number is 888-825-5225. Again, that's 888-825-5225. And you can find us online as well at Ramsey Show. Don't be scared to pick up the phone. A.O., I'm ready to roll. Are you?

Yeah, let's go, man. Have you had enough caffeine? No, not yet, but I'll get some. Okay. All right. Well, I need you to wake up and pep up because we have to do this thing today. Hey, man. Have you had enough caffeine? No, not yet, but I'll get some. Okay. All right. Well, I need you to wake up and pep up because we have to do this thing today. Hey, man. You good?

This is what I do, Hogan. All right. Well, I know you got your show, The Table. So tell the people, this online series, The Table, what's it all about? Man, it's simple, Hogan. You know what I'm saying? We're having a real relevant and relatable conversation around money, around mental health, around building relationships and really breaking down what it means to start the process of building true wealth. Because there's a huge difference between looking like you have money and actually having money.

Big difference. And so we're just really breaking that down for that millennial audience. And so it's been a great man. You know, we have a new podcast launching. So I'm excited, man. I really am. Help me out. What's the age of a millennial? You know, we have a new podcast launching. So I'm excited, man. I really am. Help me out. What's the age of a millennial?

Well, you know, it's not you. Okay. You didn't. What's the age of a millennial, though? For real. A millennial age is my bracket, you know. So we're right in between 25 to about like 37, 38. Oh, really?

Yes. I told you it's not you. Well, that's not the point. I just figured 37, 38 is too old to be a millennial. That's a high end. They call us the upper end of millennials. Oh, okay. All right.

Well, check him out. You can find it on all the places. As Anthony said, it's now available as a podcast. You can subscribe to it wherever you listen to podcasts. And you can also find Anthony at Anthony O'Neill on Instagram, YouTube, Facebook, and Twitter. All right, we're going to the phones because this is what we do. And first up, we've got Julie. Julie is joining us from Colorado.

Julie, how can we help you? I am so excited to talk to you guys, but I think my husband's going to be more jealous. Uh-oh. I get to talk to you and not him. Well, that's okay. You can play this for him and he can listen to it. That's right. Thank you for taking my call, both of you. Yes, ma'am.

Okay, so we've done Dave-ish for about 10 years. Yep. And we have paid off some debt. And then about a month ago, we had our we're're done moment and so now we're gazelle intent but we're just tired because we've been doing it a little bit for so many years right and i i think my question is uh did we screw us over you know know, for wasting so many years? Okay, well, first and foremost, how old are you? 40.

Both of you are 40. My husband's a little younger. He's 37. Okay, all right. But before we go forward, what was the I've had it moment? What happened? The I've had it moment was money issues with family members. Real short, my parents said they would pay for my college, and I graduated 20 years ago.

And then a month ago, my dad said, I'm done with this loan. I want you guys to take it over. And we didn't know the amount. We didn't know the amount. We didn't know any information. My parents haven't talked to me about it for a good 12 years. And so it just kind of threw us through a loop. I bet. How much, Julie, how much was it? I don't know the original loan amount.

I know that now it's $42,000. My goodness. And what's a struggle is it's actually a, I have limited information about the loan. It's not in my name or my husband's name. But it's also a combined loan from my mom's schooling as well. Okay. So I actually don't know. I had my own personal loan that we have paid off for my college, but this is consolidated two loans together.

What did your husband say to this? Well, I said, you can talk to my dad about this. And so he called my dad because it was too emotional for me. And he said he was not going to take out a loan to take over the loan, but we would take on the full payment or as much of the payment as we can. And I think for us, morally, there's nothing written. You know, there's no agreement with my parents. Yeah. Well, we feel like we have to pay it.

Well, I mean, here's the deal. You know, first and foremost, your parents, you should have had that conversation because what you've kind of done now is pitted your dad against your husband. Okay. And so any kind of follow up, any kind of follow up information, any kind of follow up discussion needs to either be the both of you or it needs to come from you. Okay. So you don't need to make your husband the bad guy here.

I agree with you. That was the initial conversation. I can imagine you being emotional. I mean, you getting hit with a $42,000 bill that you didn't know exists is a terrible surprise. And, you know, so how are you all, where are you all on the baby steps prior to this knowledge? Well, we were doing the Dave-ish. I understand. So as you were ishing, what baby step were you on? Two.

Okay. What other debt do you all have? We have one car payment, and it's about $16,000. You got a 16. How much is the payment? It's $380 a month. Okay. And what's you all's household income? $55,000 a year. Okay. And how much is your mortgage payment? We're renters.

You're renting. How much is your rent? With utilities, it's about $1,300 a month. And how many kids do you all have? Do you have any? One. How old? Four. Okay. How are you and your husband doing together with this news? How's your relationship? We're good. We're good we're good it was emotional a month ago and now i'm looking for a job and i'm

securing daycare and we just want to kill it we just want to plow through the loan and and move on well this is tough and the reason i'm asking these questions is because you and your husband are going to have to make a decision about what you can do, but you need to have a conversation with your parents as well. I would get loan verification on this situation so you can understand exactly how much of this debt you're obligated for. If this is a combined situation and it's got other loans and things piled in it, I'm not just assuming the whole thing because your dad's tired of paying it. Welcome to the real world here, buddy.

We got to figure out how much it is you actually owe and what you're responsible for. So I would go to the company, get debt verification so you can know what you're dealing with. And you and your husband start to get serious on the front end of this because what you don't want to do is to allow this loan to get in the way of the relationship of you and your parents. Right. This was a bad decision made on the front end to sign up for this thing.

So here we are. What do we got to do? I say it's game on. Verify the loan, get the facts, you and your husband buckle down and make this thing happen. And that's the bottom line. We'll be back and we'll talk more about this

after the break. This is the Dave Ramsey Show. You've got a lot on your plate, a job, your home, your marriage, and your growing family. While you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your health care. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you. That's chministries.org. Welcome back to the Dave Ramsey Show. I'm Chris Hogan, and co-hosting along with me is Anthony O'Neill.

And before we went to break, we were talking to Julie, and Julie's family had run into a tough situation uh her father and mother had taken out a student loan uh for her and had consolidated it with some other loans and then all of a sudden they contact Julie and her husband to tell them that they're no longer going to pay for it and so here they are with a student loan situation that Anthony could really impact this family. Yeah. You know, and as I was listening throughout the call and listening to your questions and listening to her answers, one of the key things that I'm coming back to is communication. You see, one of the things that I teach is the breeding ground for understanding in the ending is communication in the beginning.

And it sounds like the parents didn't communicate this clearly with her. And so now there's confusion. And I think with her, she needs to go back and have a clear sit down with her mom, with her dad and say, hey, you know what? Hey, I need understanding of what happened, what transpired, because this is it's not a possibility. This will impact my family. And I need to know exactly

why are you coming at me with this at the last minute and how can we have an understanding with each other moving forward? Do I need to give you $10,000? I don't think she's obligated to the full $40,000.

But she did get an education and I do believe she should chip in if she can. But if she can't, then the obligation is not on her. It's not on her.

It's on her father. Yeah. And that's why I told her to do a loan verification. This is going back to the loan company, finding out the exact amount of the loan, what it was, so she can understand what her portion of it is. I like the fact that her and her husband are on the same page. I do. And Julie, you were asking, is it too late? No. You said you had done ish, baby steps, Julie, you were asking, is it too late? No,

you said you had done ish baby steps ish. And here's the thing about ish. That's really boiling down to you're not really working it. You're kind of doing your own version of it. And what I tell people is don't do ish do it. That means walk this process because it'll change your financial life. There's no doubt about it. And so being on the same page together with your spouse, if you're married or if you're single or newly single, having a plan for you is really important, but we have to make the decision and stick to it and walk through it. I agree, Anthony, they do need to communicate. She does need to verify and her and her husband need to figure out what it is they can afford to do and how to go about it. But this is another example,

and you know this all too well, of how debt, especially student loan debt, can wreak havoc. And I tell people all the time, we've got young people walking into a financial aid office, signing documents they don't understand for payments they can't afford. And so, you know, this system is broken, and it's got to be fixed. Well, that's why you wrote the book, Debt-Free Degree. Absolutely. That's why I became a number one bestseller, because there's a lot of people out there who needed the clear path on how to do this. Yeah. So, all right, Julie, thank you so much for the call. All right, we're going to go back to the phones, because that's what we do here. So if you're out there and you've got a question,

do me a favor, pick up the phone. Give us a call, 888-825-5225. Again, that's 888-825-5225. We'd love to be able to hear from you. And you can find us on the social media at Ramsey Show. All right, we got Rob on the line. Rob, talk to us, buddy. What's on your mind? Hi, gentlemen. Hope you're having a blessed day. Thanks for taking my call. Yes, sir. How can we help you today? So actually actually similar to the previous caller i was kind of ish for a couple months i just really kind of recently started following your process my buddy jp really pushed me uh to get onto your program was doing ish now fully in uh stopped my 401k contribution sold off all my retail investments paid off student loans paid off the car so i am my wife and i are officially out of

debt fantastic how much debt did you pay off rob um well i was fortunate in the market uh didn't follow your guys's process because i wasn't listening but we ended up paying off about 30 000 in about three months fantastic fantastic okay keep going buddy so my question actually has to do with a cash flow question on, we just got hit with some medical and some tax bills based upon just some things that happened. We had liquidated our savings essentially to follow the baby steps. And now we're essentially going to liquidate our savings again.

So now I'm at a position where I want to build our savings up to three to six months of expenses, but I'm also cash flowing my MBA at WashU here in St. Louis. And I'm just trying to understand, should, from your perspective, I pause that, it's a part-time gig that I'm doing right now, and it's costing about $900 to $1,200 a month. Should I pause that even though I'm still like four years in? It's taking me a long time since I'm cash flowing it, and our second trial is on the way. Okay. Tell me this.

How much medical and tax debt do you have? We don't have any. It's going to be wiped out by our emergency fund. No. How much do you have that you're going to be paying off? Oh, about $4,700. $4,700. And how much do you have in your emergency fund?

About $4,700. Okay. Okay. So your question is, should you pause the MBA program while you try to build back up your emergency fund? Yes. And then just to also note, we'll be saving about eighteen hundred dollars right now is what my every dollar app says we'll be saving per month uh towards our emergency fund

so it's eighteen hundred and then we could be doing an additional nine hundred if i pause my mba i got you okay ao what do you thought uh rob how much are you making a year what's your annual salary right now uh I bring in gross $120. My wife brings in gross. She's part-time. I think close to $30. She's a nurse. So we got about $150 in income.

Okay. You're about to pay off $4,700 in debt as far as in some subsidies came up, medical bills. But then you're paying out $900 to $1,200 a month for school, and you're saying, should we pause it? I got one quick question for you, and I want to dive into this for you. Do you absolutely need this MBA right now? Will it take your 120 up to, let's say, like 150, 160 as soon as you get it? As soon as I get it, no.

WashU is considered a strong school it's considered one of the top 10 usually 15 uh so it's more of a long-term play uh my main reason of wanting to finish it is i'm three-fourths of the way through it so i'm like 70 grand into it yeah uh and two i am had my second child on the way so trying to finish it earlier than later so they don't remember Dad being away. I hear you on that one. As far as in time frame, how much more do you have? Like how many weeks, how many months do you have left inside this program? I've got, I think, six classes left, and I'm doing one class a semester.

Oh, so you've got a couple years. Yeah, it's like 2022 before I'm done, which is why I'm asking the question, should I pause and just further delay my already long MBA process? So for me, I'm going to look at this two different ways. All right. I don't think either side of these are extremely wrong. I'm going to ask myself, okay, if it's going to take me two years to finish my MBA, what are the chances of emergencies happening between now and the next two years? There are some good opportunities, some good chances that that will come up with you having another child on the way and you have zero in your savings account.

What are the chances of you getting at least ten to fifteen thousand dollars inside of your savings account within within the next three to four months. There's a good chance of doing that if you can honestly sit there and budget it in. So if I'm in your shoes, I am going to pause the MBA. I'm going to aggressively go ahead and attack my emergency fund. And then I'm going to aggressively get back in school. Now, when I get back in school, Rob, you said it's been taking you a while. I'm going to focus on make sure that I get there. I'm saying temporarily pause so that way you can get back into it because I don't want you going two years without nothing in your emergency fund. Now, on the flip side, if you can go to school and get that funded within the next six months, I'm cool with that too. But for me, I'm going to focus on just

going ahead and getting $15,000 over the next 90 days inside of my account and then jump back into school. Yeah. I look at this and if you're able to, based on your budget right now to save $1,800, you're talking $21,000 in a year that you've got saved up. But you said if you stop the grad school and add that 900 along with the 1,800, now you're at 2,700, you could have 32,000 in your emergency fund in a year. I agree with Anthony. I'm pausing pursuit of the master's degree.

Going to get intentional about saving that every dime to get that built up because you're going to have life happen. Yeah. Right? You're going to be bumping up against something. 2020 taught us, if it taught us anything, it taught us the need to have money set aside because stuff comes up.

And if you're bringing a new baby into this world, you know there's the potential of some stuff popping up. So be prepared. It's going to allow you to get more focused, more intentional as you move forward and make a difference in your life, my friend. Rob, thank you for that call. This is The Dave Ramsey Show. Welcome back to the show. I'm Chris Hogan, and co-hosting along with me is Anthony O'Neill. And we are very excited to take your calls about your life and your money. All you have to do is pick up the phone.

Kelly is standing by and ready to help you. 888-825-5225. Again, help you 888-825-5225 again that's 888-825-5225 you can also uh find us on uh social media at ramsey show and send your question in that way as well all right next up on the line uh we've got steven uh steven is calling us from uh des moines steven how can I help you? Hey, thanks for having me on the show. Sure, my friend. What's on your mind?

Yeah, I'm 26 years old. I've been saving for a house for the past few years. And my mom and dad have helped me out a lot in just them pay for my college, but they let me stay in their house. That way, it'd make it easier for me. Yes, sir. And so, one way, they haven't really saved much for retirement. And one way that I thought I could help them out is if I could purchase their home and the money that they'd be putting towards their mortgage, they could put in retirement. And I was just wondering what you thought of that idea.

Huh. A.O. Takes us. Man, Stephen, I really like your heart, man. I can tell that you love your parents. I can tell that you're grateful for your parents. And so I want to start off with that by saying, young man, I love that about you.

Now, answer this question. Are you currently working right now, Stephen? Yes, I am. Okay. How much are you making a year? My base pay is around $55,000. Okay. $55K a year. How much debt do you have? Do you have any debt right now?

No, not at all. Okay, do you have any emergency funds? How much money do you have in the bank right now? I have around $45,000. $45,000 in the bank? Yep. Okay, I like you, brother. You're doing good.

Let's be real here. You're doing good. I need to hear some excitement in your voice. Let me ask you this question before I dive in. Why do you want to buy the house outside of helping your parents out? If your parents were not in this position, okay, if they were not in the picture, would you still want to purchase this house for you? Yes and no. Yes, because I've been looking at getting an acreage because the house they have is an acreage.

It's four acres. And I want to build a machine shop and a welding shop because I do side jobs. It's kind of hard, hard to do. And I didn't necessarily want to build one if I don't own the place on their house. Cause it on their property. Cause they said I could, but I didn't really want to do that if I was going to have to buy a different house somewhere else.

All right. So, and that, since I would, um, the problem is they produce around here are pretty expensive. Okay. And with a mortgage, I didn't want to be saddled with that for a while.

Okay. But the idea that I proposed to them was I would take over the rest of their mortgage, pay it off. The money that they would put, they'd be paying for the mortgage, would go into retirement, or they'd invest it for retirement. And then the money that I would pay, would go into retirement, or they'd invest it for retirement. And then the money that I would pay them would go to retirement too. So that would kind of give them a leg up because they don't exactly have that much. Well, hold on a second.

You said you would take over the mortgage they have. Yeah. So where is the equity going to go? The equity? I would pay. Well, what I would want to do, my dad talked about me paying off the equity. I would pay that, too. Okay. I was thinking more of I would want the house revalued because what they paid for it back then is it's worth a lot more now.

I got you. Okay. So I would want to just be paying for the whole house. Yeah, yeah. I see what you're saying. And I want to give you just a different perspective to consider because I want to respect your heart and your posture for your family because I believe that is very sensitive and I want to be respectful to that. But I also want to present another option to you because it sounds like you're not too excited about purchasing this house what i would do if i was you is i would talk to your mom and dad and say hey how about we sell this house now okay um and we get the equity i steven will go buy my house the house

that i want the house that i'm excited for and mom and dad you just move in with me if you want to if that's what if you're're about, I want my parents to live with me. I want to help them out. That's fine. I just don't want to see you make a decision. And then 10 years down the road or five years down the road, you're like, I should have never done this. I want you to get into a home that you actually love. And if you want to help your parents and offer them a room in your house and offer to move in with you, that's fine. I think that's totally up to you because you're in a great position. You have money, your career is doing well, you're a solid, bright young man. And so I would say I would purchase the home that I want. I wouldn't purchase the home to help out my

parents. I would do something that I want and go from there. I do want this place. I'm just, I might sound a little nervous because I'm just talking on the phone. I got you, buddy. Yeah. I got you. No, I really do like this place. I grew up on this farm. Right. How many acres is this home?

It's about an acre, right? It's four acres. Four acres. And how much is it worth, do you think? Oh, well, there's my parents' house, and then my grandma has a trailer on it, too. Ballpark. They moved up from Kansas with us. Yeah.

What do you think it's worth? Between $250,000 and $300,000. And how much do they owe on it? I think around $60,000 or $70,000. Okay. Well, here's another option that you have. Ayo, I hear your option. And here's another school of thought.

Why don't you start paying them rent as you're living there? That gives them an opportunity to be able to use that money to attack this debt. They're $60,000 or $70,000 away from paying this off, to having it outright. And then they could sell it, go find a place to rent or a smaller place to pay cash and use that money to invest to be able to grow for them. I don't think this is yours to solve. Yeah. I think for you, young man, you've got yourself in a great position.

Now it's a matter of let them know, hey, for the next nine to 10 months or nine months to 12 months, I'm going to pay you all $800 a month in rent. You guys need to use that toward attacking the house. And I think getting this thing paid off is the better way. I agree. Buying this home, A.O., the parents are always going to see it as their home. It doesn't matter whose name is on the mortgage. And so I think it's just going to put him in a situation that he might regret later. Yeah, I mean, you've got some options there.

I mean, you really do. I think you've got to sit back and just mean, you really do. I think you got to sit back and just figure out what is the best move for you. And with you being in a good financial place right now, especially at the age of 26, Hogan, I wouldn't see you starting to build wealth now, not trying to bail your parents out. And that may sound wrong, but I'm just like, get yourself in a good, healthy position to build. And while you're building, you can be helping a little bit. But don't do so much helping and you're stopping yourself from building. That's what I really want to see for you, young man.

That's good. All right. We got a social question in real quick for A.O. Jared on Instagram asked, my wife and I are on baby step three. Looking forward to baby steps four, five, and six. How much do you think is reasonable to save for college? Our kids are one and five. I mean, one to five, so estimating about 10 to 15 years out from school,

I'm going to say right now the average school process is going to be about $100,000 for a four-year in-state tuition room and board and books. And so projecting 10 years out, Hogan, I'm going to up because of inflation. You're going to need about 110 to 117, depending on what in-state school you go to. And so I will start anticipating for that. So now when you know that ballpark number, I will get with a smart investor pro and start asking, how can we invest into a 529? Do we need to open up maybe another growth stock mutual fund? How can we do something to start getting towards that number? Yeah, it's imperative to start to look at this and

take college seriously and understand exactly where you are. There is no magic formula on what dollar amount to invest, but you start to look at where you are. But if you are working steps four, five, and six, I want you to invest that 15%. I want you to definitely get intentional about attacking the house. And so you start to look at that. And that might be $200, $300, $400 a month that you're able to set aside. Again, being intentional, understanding what your goal is. And like A.O. said, get in one of the SmartVestor Pros so you can make sure, are we on track? Are we on schedule?

And that stuff keeps you aware. Keep your hands on the steering wheel, people. Your dreams are available. You just got to drive toward them. This is the Dave Ramsey Show. I'm Chris Hogan, and joining me is Anthony O'Neill. And we are excited, America and everyone internationally that's listening, to take your call and talk to you about your life and your money. All you have to do is pick up the phone, 888-825-5225.

Again, that's 888-825-5225. We'd love to be able to hear from you. All right, so we've been taking calls, diving in, and we're going to continue with this. We've got John is up, calling in from Texas. John, how are you? Good. How are you doing, Chris? Oh, I'm focused and not finished, my friend.

What's on your mind? Well, how are you doing, Anthony? Doing well, man. Thanks for asking. I've got a question that I've been listening to, Dave Ramsey, for probably three and a half years, and I've never really heard anything about the rule of 55 on your taxes, 401K. My wife is 55, and she's been at her job for over 37 years and she's going, she wants to retire and we're going to pay the house off that we're in now,

probably by April or May. So she's waiting for that and then she'll retire. Okay. Uh, we, we've been in this house for 21 years and we want to move, um, an upgrade. She has about 280,000 in her 401k and we'll probably need about 200,000

on top of what we sell this house for to upgrade what we want. Um, so should, should we take advantage of that rule of 55 where they won't pay the 10% penalty to use that money to pay off the house that we want to get. I've got about $800,000 in my 401k. Okay, good. That's what I was going to ask. So all totaled right now in retirement savings, you guys are everyday millionaires, correct? Correct, yes. Okay.

So the home you're about to pay off is worth how much? About $300. Okay. How much square footage do you have in that house you're in now? A little over $2,200. Okay. And how many of you are living there? Well, it's just me and my wife.

Okay, just two of you. Okay. And so how big of a house are you trying to buy well it's not so much uh bigger uh maybe just a little bit but not much but we will want just to uh move to another neighborhood with a swimming pool we're just upgrading a lot of different things okay so how big of a house do you think is in this new neighborhood um well it would be anywhere between what we have now, maybe up to 2,500 square feet.

Okay, and how much will it cost? We're thinking somewhere between $450 and $500. Okay, and what's your household income right now? Right now, it's probably right at $200. But she makes $110. When she retires, she doesn't have a degree or anything she's just been with this company for a long time and she wants to take you know maybe six months to a year off and then find another job but she she doesn't think she'll probably get anywhere between 50 and 60 000 at a new job because she doesn't want anything so stressful.

So right now you're saying you're pulling in about $90,000 a year? Yes. Okay. So if I'm hearing you correctly, then walk with me here. You're wanting to sell the house you guys are about to attack and pay off, buy a more expensive home, and your income is going to drop by $110,000. Correct. But she will be getting another job.

In six to 12 months at about $50,000. Right. So, all right, John. We did all the budgeting. John, in that situation I just laid out for you, what would you do? What would I do? Would you spend more, have less income coming in and go from paid off home to now bigger mortgage well we wouldn't have a bigger mortgage we were thinking

about taking her uh okay yeah no i would i'm not doing that there's no way there's no way i'm going to pull 200 000 out and go it's just the two of you. So you're telling me it's about this other neighborhood and a swimming pool. Join a community club. Like, go swim. I'll get you a little portable pool. Like, no. I'm going to pay off this house and be done with that mortgage payment, freeing up that payment, and being an everyday millionaire.

I'm not going to go backwards. There's no chance. No chance, A.O. What are you going to do? Don't look at me, Hogan. You're going to hold up. I can see. You know what I mean?

Now, let me play the devil's advocate. All right? Don't come for me. All right? You stay over there. Okay? I hear, what I hear in his voice, and you correct me if i'm wrong but this is your sweet spot what i hear in his voice is like we just want something a little bit better we've been

working all these years we've worked hard we're in our older season we just want something a little better we've sacrificed we're everyday millionaires we want something a little bit better so within that from that bubble hogan how can they do that where they are now well i mean i'm gonna a i'm gonna take a look around if i want something a little bit different if i pay this thing off yeah and they're saying they're about to do that in may yeah yeah the only way i get another house is if i pay a hundred percent cash for it i got you and so i would find a better neighborhood but i'm gonna find a cheaper house in that neighborhood so i can take this 300 000 from this home that's very clear yeah and i'm gonna go buy a house for 250 yeah you know what i mean i can't i can't fathom going backwards i

know if they really love this neighborhood let's say all their friends in that neighborhood and their hearts are happy and everybody's holding hands and skipping and singing kumbaya and this is the place you got to live. Then guess what, honey? Let's work another year of you making 110. I'm going to kick it into high gear and get a second job. And we're going to have this extra. We're going to get another 125,000 saved up.

And we're going to pay, sell our house for cash, get 300. We're going to use this money that we've saved for another year. And we're going to go to this neighborhood that is Shangri-La and I'm going to be debt free now I like that I like that Hogan I heard in his voice my wife we worked so hard I feel like they want a brand new kitchen

they want a bigger bedroom here's another thing here's another thing you could do if you like the house and you just say boy I just would like something different, cash flow some renovations. That's a good option. You know?

But if that's the neighborhood, I'm going to work another year or two or whatever. I just can't go backwards. Now, I'm now going to get riled up because we're talking about pulling money out of the 401k. You're going from an everyday millionaire. You're going to go backwards pulling $280,000 out. I don't care about the rule of 55. This money was put there so you all could secure your financial future.

You're going to erase the years of deposits from this one withdrawal form. There's no chance I'm doing that. Not for a home, and it's just two of you, right? I mean, I might even downgrade. You guys might decide you want to take trips and you want to travel some places and do some things. That I'm fine with, but I want to cash flow it and be intentional i'm with you i'm still trying to think about what i mean just what just wave your head at me sir out here in the lobby uh if you're 60 are you swimming in your pool every day yes or no see see i'm trying to figure out why why

do they want to pool well Well, they want to swim. What's wrong with that? But you're going to spend a lot of money to just have a pool in the backyard. You ain't swimming every day. Well, they don't make floaties my size. But listen, the bottom line is you're right. But there's nothing wrong with enjoying. And I'm saying there's nothing wrong.

These people obviously have worked hard. They've become everyday millionaires. It's not an accident. But I just, again, I would be more willing to work another couple years. Right. Just so I go in and go, we can't go backwards. Yeah. Like, we've come too far.

And now with that home paid off, if we decide we want to take a trip to Europe or we want to decide to do something, I mean, if you want to swim that bad, pay off this house and put a pool in your house. I like it. Right? I mean, again, I think there are options, John, is what I'm saying, buddy. And what you hear is, I'm a little riled up because I've been hearing the numbers of people that have been pulling money out of their 401k, and they're erasing all those years of deposits and growth, and they're going to look back on it in about five or six years and they're going to say, oh, wait, what did I do? I'm going to have to work seven, eight more years to make up for that one hour of not thinking clearly.

And so you all have been so intentional, brother. Stay the path. Like, I want you to have that mindset of I'm not going backwards, not for a pool, not for anything. We're going to pay this house off. Wait about four to six weeks and get that deed in your hand. And I want you to look at it. This is the thing you'd worked hard for. Typically, people are paying off their homes

or paying on them for around 30 years. You've got a chance to be different, brother, and to start a new legacy for you as well as your family. So I hope you and your wife sit down and think about it. Be clear. Your dreams are available. You just got to make the right choice. This is The Dave Ramsey Show. your dreams are available you just got to make the right choice this is the dave ramsey show

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