The Ramsey Show - App - Our Neighbors Are Ruining Our Backyard (Hour 3)

Episode Date: July 2, 2024

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Dr. John Deloney, Ramsey personality, number one best-selling author of the book Building a Non-Anxious Life, and host of the Dr. John Deloney Show on the Ramsey Network. He's my co-host today. Open phones here at 888-825-5225. Isabel is in Nashville. Hi, Isabel. How are you?

Hi, Dave. It's so great to talk to you. You too. What's up? Well, we've got, we enjoyed four years of a gorgeous home, upscale area, suburb of Nashville, and our home has risen in value to nearly a million dollars. So we're in this gorgeous area, beautiful views. And all of a sudden, our neighbor decided to raise their yard, their entire yard.

We have a half an acre, and theirs is a large yard, too. So they decided to put in a pool. And we have a six-foot privacy fence between us. And they decided to raise their entire yard up seven feet. So it's a foot above the privacy fence. And basically they created an inescapable, bigger than life, very colorful scene. It looks like a stage and everything is lifted up. It's got, you know, they've got everything, huge flotation toys in motion. They've got people, curtains, flags. The whole scene is a big beach scene, but it's in disarray.

And it's a year-round. They don't really clean it up. I'm just shocked that the HOA, I mean, it's very visible. You can see it actually. Our house is the model home. And when you come into the subdivision, you can kind of see it past our house. Is there any chance that your neighbors are Winston and Rachel Cruz? No.

I know they're putting in a pool. I'm just making sure that wasn't them. Oh, no. Okay. Phew. All right. At this point, their pool is not that far along, so we know it's not them. But, yeah.

Oh, I thought our situation was completely unique. We're a military family. It lived all over the world. I've never seen this before. Okay, so, wow. I mean, if the HOA, if it's not in violation of anything in the CCRs, the HOA has no enforcement rights, which they probably don't, unless it's not in violation of anything in the CCRs, the HOA has no enforcement rights, which they probably don't unless it's some kind of visual from the road.

The only other thing I can think is if they violated code in some way putting it in, if they didn't pull permits to put all of it in. But if they pull permits and the city or the county approved all of the installation, you're not left with a lot of options except plant some large trees. Yeah, and we've looked into that, and it would have to be evergreens, and they would have to be at least 10 feet tall. Well, if you just put in 10-footers and then pour the water to them in your area. They'll grow like a weed.

Well, you know, in the home improvement request form, I did ask the – they want me to send pictures and my issue. And so they want me to send that to them. But they did tell me that in the home improvement request form, they do require that anything, any structure, they have to be told the height and everything else about it and the look of it and everything. And they said that that was not provided for them. When they look at that request form, there's nothing that indicates they're going to raise the land and he said that they would have uh said that we can't uh they already said we did turn them down when they wanted to extend their their porch and they and keep the height of it

and extend it and they they got a no from the hoa it's pretty strict hoa these these homes are you know 800 to a million dollars and so it's pretty strict so i can't imagine oh i'm sorry apparently it's not pretty strict it was pretty strict as soon as i started backing dump trucks up and raising the entire backyard seven feet somebody would have stopped them if they were strict so they're not real strict at all do you think they're just lazy and didn't notice yeah that's not strict, though. You can't raise half an acre seven feet and have nobody notice. Nobody notice.

That's a lot of trucks. And why didn't you guys bark when you started seeing that? After it was done. We're so busy with my parents live with us. We're doing so much. And then we keep to ourselves. It wasn't apparent until they were done with it it just looked like they were digging it's apparent when you have 32 dump trucks in the backyard that something big's going on um yeah it was apparent

i mean what you're describing is a major construction thing and yeah you had to notice that if you live next door i mean it's like they're building another house back there um obviously you didn't know how it was going to turn out but you saw an amazing amount of activity and i wish you i mean if you because now to undo it they got to dig the whole thing out that's not going to happen unless they did not pull permits and the city makes them take it all out i don't even think that will happen the only thing i can see them is they're they would find their butt until they made them take it out i mean if they find you or maybe they'll pay for the trees no i'm saying let the neighbor pay for the trees but i'm just saying yeah i think you're going to be planting some large evergreens and putting water to them and i think you're done uh it doesn't sound like you're going to get anything

else the hoa is not going to have the power to make them take it out after they approve them putting it in the city might they might find them or the county by the day until they remove the whole thing if they did it without a permit if they did it with a permit it's their land and you know it's unsightly but it's perfectly legal so nothing else to be done except plant some trees. So I think you're probably down to planting some evergreens and calling it a day. And or that and move, one of the two. But, you know, I've got a couple of properties that we had that we wanted to put up a buffer on for different reasons. Not that it's not similar reasons to this, but we planted some of those and we're in the same area she's in.

And I planted some of the, um, some evergreens along the line of it. And I mean, two years later, these things are, you know, gigantic and they put up a complete barrier. It's so complete. You don't even know anything's the other side of it. Now it won't block noise, but if you've got that much noise, you just call the police for public disorder. Yeah.

And at some point, public nuisance, you go next door and you meet your neighbors and you say, guys, y'all got to keep it down over here. Yeah. Can you help us out? Or, you know, if you don't, we're, you know, they go, okay. You know, but you know, and I have had that. I walked next door in another property where the kids were up at three o'clock in the morning. The music was playing where you could hear it four towns over.

And I'm like, hey, guys, we're trying to sleep over here. Y'all get this. Oh, I'm so sorry. You're so drunk. Yeah, I know. But turn the music down. I'll never forget moving into my first house, Dave, and the neighbors threw a party. And I remember walking out the back the back door.

And I went back inside and said, Sheila, my wife, they could have heard everything. She said, what do you mean? And for some reason at college, I thought if you were in a fenced yard, that was a sound barrier. And I was like, oh no. There's some neighbors that have heard some stuff. Not super great. Oh uh yeah i love it uh i'm sorry you're facing all that isabel i hate that for you for it for you know those of us in

the future we notice things quicker intervene sooner and then we can have better control but i don't think you're going to have a situation where this is undone. You might, again, with the city, if they didn't pull proper permits. But I got a feeling they did. And I got a feeling you're baked. So you're probably planting some evergreens and calling it a day. This is The Ramsey Show. We teach you in the first three steps of the baby steps to get completely out of debt except the house and build an emergency fund and be very intense while

you're doing that. Like so intense that you're like a gazelle running from the cheetah. You're trying to stay alive. Intense like no life like drop an atom bomb on your lifestyle. Nothing left, right? Scorched earth, right? And so then once you break through and you have your emergency fund and you're debt free, then you move from intense to intentional at baby step forward. That's when you start investing and things change, but you pay a price to win. So we teach you to live like no one else so that later you can live and give like no one else so at the first part you're living like no one else it's a pain in the butt but later you

get to live and give like no one else so we are doing for baby step four and beyond folks the live like no one else cruise on the holland america cruise line the ramsey folk are going to be the only ones on this ship and the entire ramsey personality lineup will be there along with steven curtis chapman along with manit shohan from the food channel along with dina carter lots of other celebs are going to be traveling with us it's a complete ramsey cruise it's called the live like no one else cruise and again the holland america ship is absolutely amazing there are just a few cabins left you can still come we would love to have you we'll be going to turks and caicos saint thomas puerto rico the bahamas it's only a 600 deposit and we sail next march 22nd through the 29th of 2025 we'd love to have you with us and uh you should probably get this

book because i don't know if i'm going to do another one this is this is a thing we're going to be on the boat with you for seven days boys and girls so come on out we'd love to have you ramsay solutions.com slash cruise our question of the day today comes from allison in wisconsin i read this one early dave and i already have a little bit of indigestion maybe a touch of the hemorrhoids here we go question comes from allison in wisconsin allison writes my 30 year old son has never maintained stable employment and often asks me to quote-unquote spot him alone. I've given him a lot of money over the years because I feel guilty for divorcing his father when he was just 16. I've exhausted my savings and hope to retire in the next two years.

He lost his job about a month ago, moved to a different state with no job lined up, and I've given him several hundred dollars already i don't want him homeless or hungry but i can't keep bailing him out because he makes irresponsible decisions can i cut him off please god cut him off please right now he's useless today and it's your fault stop it As Eminem said, you've created a monster. You've got to cut him off. You have to. Oh, God. It's disgusting.

Actually, call him and say that you're sorry. I'm so sorry. I've enabled you into stupidity and laziness and irresponsibility. And I love you so much. I'm not going to do it anymore. My favorite quote from our buddy Henry, Henry Cloud, says the greatest gift you could give this young man, this 30-year-old young man, is some problems.

Yep. That's like going to the gym and stop taking the weight off the bar for him. He's got to learn to lift. He needs some new problems. Right. He needs some strength. Yeah. He can only get that by going through get that bike and he'll either find his way or he won't you can't fix it now i mean he's is you know some uh honey i recommend a good church and a good job

and regularly attend both and all of a sudden things will start to straighten out in your life young man uh but yeah what i and by the way allison he's gonna stop calling you and he's gonna blame you who gives a crap and these are not your these are you gotta move on yeah yeah yeah because you create a pattern where he he's gonna be pissed off when you don't keep giving him free money and coddling him. But, yeah, honey, you really, this is, you need to love your son better. You need to love him enough to let him grow and love him enough to let him feel the pain of his decisions. And that's a hard type of love.

That's tough love no it's just real love enabling is not it's not like soft and cuddly love enabling creates stupid people and that's what she's done and enablers are nice sweet people they're just weak they just don't have the strength to love well when i enable someone it's because i'm too stinking emotionally lazy to stand in and tell somebody the truth and love them well and instead i'll just throw some money at it and get away from them and that's just laziness it's you know that's really what enabling is and it just um the enablers are the nicest people on the planet. They never upset anybody except themselves. And so it just, gosh.

And when I'm an enabler, I'm much nicer than when I'm not. But the bottom line is, though, it's like, okay, is a surgeon nice who refuses to cut you because it's going to hurt when he cuts you. No, they're not nice. You mean when they do surgery that that's tough love? No, it's just love. They use the scalpel, doing as little damage as possible, inflicting some pain to remove a greater pain, right? And that's exactly what you've got to do, Allison.

God, this is aggravating. You're right. Indigestion, among other results. There we go. Steve's in Salt Lake City. Steve, what's up in your world? Hi, Dave. Hi, John.

It's a great pleasure to speak with you. You too, sir. How can we help? Well, so here Hi, John. It's a great pleasure to speak with you. You too, sir. How can we help? Well, so here's my situation. My wife and I are on baby step seven. Good. Thank you for all that you taught us. We actually visited your office back in October and did our debt-free stream and got to meet you. It was just awesome. Fun. Thank you so much. Thank you. Yeah. So I'm 50 years old, and we're going to be just fine if I wanted to wait until age 59 and a half to retire. But I keep thinking about retiring all the time, and so I'm trying to figure out a way to do it earlier.

And when we hit baby step seven, I took my retirement savings 401k from 15% up to 25% just to try to save like crazy. How much is in there now? About $750,000. Cool. And your house is paid for. What's it worth? Paid for about $620,000 last time I checked. So you're Baby Step's millionaires.

Congratulations. Yeah. Well, thank you very much. That's what you told us at the office. Yeah. Very good. Well done. Okay. engineers congratulations yeah well thank you very much that's what you told us at the office yeah very good well done okay so my my question is is i can't touch any of this money in my 401k and until i'm at retirement age i'm just wondering if it could make sense for me to take that 10 percent um that and put it into a regular brokerage account so that i can access that

whenever i want to whenever i i want to see if i can retire doesn't need to be a regular brokerage account so that I can access that whenever I want to, whenever I want to see if I can retire. It doesn't need to be in a brokerage account. I just put it in some mutual funds, what we call bridge investing to get to money you can get to before retirement. If you want to fund some, put a couple hundred thousand, it sounds like you'd be able to do that. The other thing that always comes up in this situation, though, is if you retire at 55, you intend to do no work for the next 40 years of any kind.

No, not at all. My wife and I would make a plan. So you might be creating enough income to live on, and I'm not talking about being a Walmart greeter. I mean, it may be just a whole other career, an encore thing. Oh, well, one thing I didn't tell you is one of the things when we really got gazelle intense was I created a side hustle. That's what helped pay our house off a lot faster,

and it nets me about $20,000 a year right now. I just kept doing it yeah and so i imagine i would keep doing that or or could i just what do you make at your job uh about a hundred thousand i'm thinking about something that makes you 200 000 a year this is more fun than your job because you're wanting to quit your job you're not wanting to not work yeah i was hoping you wouldn't see intoia but you did that's all it is i mean you're not afraid of work and i hey i'm i'm continuing to work because i love it not because i need the money love what i'm doing and i continue i'm going to continue to work until they don't let me anymore because i don't make

sense so um there's so many places i could go right now with that. We're getting close. That's all I'm saying. We're getting close. It could happen any minute. Even if you're the president, it could happen. This is The Ramsey Show. Selling or buying a home in this current real estate world

can either be a curse or a blessing. And the difference is not the economy or the interest rates. The difference is whether you're ready and whether you go through the process and select the right price range of home for your situation. Getting plugged into a Ramsey trusted real estate agent will help you do it the right way. And then home ownership can be a blessing. Selling a home can be a blessing. And we have vetted these high protein, high octane agents, and they do a great job. There are people that sell bazillion houses, not two a year. If you sell two houses a year, I'm happy for you, but you won't be a Ramsey trusted real estate agent because I want someone that I'm going to

send our listeners to that actually does a lot of transactions and therefore is going to help you do a lot of do a transaction. That's what it comes down to. So if you want to know who we trust in your area, find a Ramsey Trusted Real Estate Agent for free at ramsaysolutions.com slash agent. Matt is with us in Portland, Maine. Hi, Matt, how are you? I'm good, Dave, how are you? Better than I deserve. What's up? Yeah, so I had a question. So I have about $25,000 left in school debt, 25, and I have the cash to pay it off. But I'm wondering if I should pay it off right now or if I should continue with the state program we have here in Maine, where if you went for a certain degree and you live and work in the state, they will pay off your loan up to $2,500 a year for a max of $25,000. So over that time, it will cover it.

So really I'm wondering if I should just continue that program or if I have the means to do it, just pay off the debt and never have to think about it again. So let me make sure I understand the question. Do I pay off my loans today with money that I have or do I let the state pay it off and I stay in debt for 10 more years? Yes. That is the question.

Yeah. Well, that's kind of a no-brainer. Pay it off today. You know why? Even though they'll pay. You know why? Why? Because building wealth is not about borrowing money.

Building wealth is about avoiding borrowed money. So the faster you get this paid off, the faster you're on your wealth building journey. What do you make a year? Okay. 90. Yeah. You are your secret sauce, not some main state hack. Okay. $2,500 a year is not going to make you rich.

What's going to make you rich is you getting out of your own way. You are already a saver. You are already a high income earner. You are doing a great job. Let's use Matt as the solution to our problems and our challenges and our opportunities because Matt is a stud. The state of Maine, not so much. Yeah, Matt, can we walk backwards in history real quick? Sure. Our current president is a thousand years old. The president before him hosted a reality TV show. The president before him was a first-term senator. The president before, like, in 10 years? You tell me what the leadership of Maine is going to look like. You don't know. Bro, I'd rather give myself 10 years of freedom.

If I've got that money in my account, right, we have no idea. It could all be amazing, and it could all not. I think all of us have learned. There's just, we don't know the rules anymore. And so I would take what I could control, which is I'm out of debt today. I would take what I can control and control the heck out of it. Yeah, control the controllables, and that is you're out of debt, and then you use your wealth building, your largest wealth building tool, which is your income, not debt repayment avoidance to build wealth. All the millionaires we interviewed, none of them said, you know, I use that student loan payoff program and that's how I built wealth. None of them said that. They all said, I took control of the controllables. I got out of debt debt you didn't have any payments and i jacked and stacked money and i tell you what i'm still burned what those programs

did some of my top students who chose to go to public service because of these promises and just got cooked man so i i have i just have no faith in those programs not because i don't have any faith in the people that institute them on either either side of the aisle, you bozos. So seriously. Because you keep making the loans. And if they're so stinking bad, you shouldn't keep making them. This is me talking to Congress again. You should go testify before Congress.

Your congressman invited you. I know, but I try not to do things that are a waste of time. Open phones at 888-825-5225 zachary is in columbus georgia hi zachary how are you good what about yourself better than i deserve what's up so me and my girlfriend are planning on buying the house in two years, and I was wondering if I have an 800-credit score, if I should let it go to zero, or if I should uphold this and continue on that path. Well, number one, don't buy a house with somebody you're not married to. Really dumb idea.

You're going to get burned, okay? If you want to buy a house and have a roommate, that's your decision. But don't buy a house with somebody you're not married to. Don't put her name on anything unless she's your wife. Or don't put your name on anything that's hers unless you're her husband. You'll get into a mess. And I talk to those people every day on this show, and they will tell you over and over, don't do that. So now then back to you buying a house and answering your question.

Um, are you a hundred percent debt free right now? Yes, sir. Okay. You're not going to maintain an 800 credit score then unless you go back and you have to go back in debt yeah yeah i've only been maintaining it with credit cards anyways yeah yeah so you're going to have to continue to borrow money and pay it back to maintain an 800 because the 800 credit hundred credit scores a Ponzi scheme yeah how old are you 28 what do you make I make approximately 40,000 a year well the only way I know how to answer questions is if I was in your shoes I I'm a single guy. Someday I might be marrying.

Two years from now, I'm thinking about buying a house when I'm 30. I make $40,000 a year, and the only way to maintain my 800 credit score is to continue to go into debt. What would I do if I woke up there? I would not maintain it. I would let it go to zero and do manual underwriting to buy my house because I am well aware that the whole credit score thing is a scam. The only way you run your credit score up is go into debt. Why do you do that?

So you can go into debt. So why? So I can run my score up. Why? So I can go into debt. Why? So I can run my score up. Why?

So I can go into debt. It's a dog chasing its dadgum tail. And all you do is get dizzy. And then people walk around. And I was at a party the other night and the guy goes yeah dude but i have an 800 credit score and i'm like gee bless your heart man it's cost you at least 100 grand in interest so yeah because the only thing you can do is just worship at the altar of the great fico great fico we bring you offerings of interest so um you know and that's that's what americans have done they've

fallen for the biggest scam in history which is the fico score so yeah i'd let it go zach if it was me but please don't buy a house your girlfriend dude and i don't think you heard that i want to be real clear john we get those calls and they're really particularly heartbreaking. Yeah, because nobody sets out to buy a house with anybody, their spouse or their boyfriend or girlfriend, without thinking this is forever. And we wouldn't have a show if everyone's plans worked out exactly like they thought they were going to. And they just don't.

We would, but it wouldn't be nearly as entertaining. That's right. And, by the way, All you folks' plans that didn't work out your great radio my guess is that zachary is is can only buy a house if he has somebody else's income attached to it because he only makes 40 grand and so maybe the conversation is if i really want to be a homeowner in two years then i'm going to figure out ways to up my income in pretty dramatic fashion and not just settle for a $40,000 a year life at the age of, in my mid-20s.

I'm going to go for it. Or if you love your job, that's cool. It's just going to be longer than two years before you save up that kind of down payment. Figure out a way to make some serious money. Yeah. Or put a ring on it. Marry the girl. There you go. This is the ramsey show our scripture of the day proverbs 16 3 commit to the lord whatever you do and he

will establish your paths plans i'm sorry maya angelo, You may not control all the events that happen to you, but you can decide not to be reduced by them. Hmm. That's cool. All right. Travis is with us in Dayton, Ohio. Hi, Travis. How are you?

Good. How are you? Better than I deserve. What's up? I got a question about some investing stuff. I don't know a lot about investing, but I know stuff about sports cards, and I was wanting to get your input on if you thought that was a decent thing or if that was just like a childish

hobby. It's neither. It's not a childish hobby, and it's not an investment. It's a collectible, and collectibles should not be where you put your investments. You can make money in collectibles, and if you've got an expertise in that area and a knowledge in that area, that's fine, but there's very little data that shows that people build fortune in collectibles. Very few people do, and so whether it's art or cards or coins or whatever it is you want to, that goes up in in value and because of scarcity and uniqueness and so forth I don't think it's childish at all I've got a lot of different collections I'm kind of a collectible type person but none of that is considered an investment by me it's just something

that's fun and it's an added benefit that not only is it fun but it goes up in value and that's kind of part it's kind of part of the game for me like i've got a ridiculous gun collection um many of which are what we call safe queens in that world meaning that she's going to stay in the safe and never be shot never have a bullet go through her but uh but you know which makes her go up in value right so that kind of stuff so i've got that kind of stuff. I've got some unusual firearms. I've got some valuable firearms in that collection, and I've just enjoyed it. And I shoot some of them, obviously, but not. And so that's not childish or manly or anything. It's just a collection.

It's just that. And yours is not childish. It's a fun collection because it does sometimes tie back to our childhood or tie back to maybe something you did with your uncle or your dad or something, and that's cool. But again, the data on it as an investment, no, I would never call those an investment. So it should be something you do in addition to your investing.

Okay, that makes sense. Yeah, but it's valid. I mean, I would imagine. How many cards have you got? I've started a third collection. The first two I sold for probably a total of 5,000, but now I probably got close to 6,000 cards. That are worth probably what?

I just sent five in, and when I get them back, they should equal out to about $1,500. The whole bunch? Or just those five? I'm asking what the six thousand cards is worth twenty grand probably all together about twenty grand yeah okay all right yeah so obviously you're not going to retire on that i mean no yeah so that that's fine like i've got a buddy that collects knives and he's probably got thirty thousand dollars

worth of knives that he'll never sell because he didn't have to, A. But, B, a lot of them have interesting memories attached to them because he bought them when he traveled and things like that. So, yeah, that's cool. Nothing wrong with that at all. And, no, I would not call it horrible or childish or something like that. And if you do it properly, as you've discovered, they do go up in value. And you may take joy in turning the whole portfolio over ever so often and that's fine but i'm just going to call it a hobby that works and a collectible that works because collectibles you know art should go up in value if you're doing this right the portfolio you've got should go up

in value but it's not enough to uh to justify you're not going to, the portfolio you've got should go up in value. But it's not enough to justify. You're not going to end up with a million dollars in your 401k, you know? And you need a million dollars in your 401k. That's where I want you to go. Good question. That's fun. Yeah, and it reminds me of that conversation Warren had. Do I?

Oh, you got guitars you collect. Oh, I collect. Dude, I got so many collections. I used to collect cards like crazy. I love it. It reminds me of the conversation that buffett had with some kids that were pressuring him on on bitcoin and i loved that conversation about like if i'm investing in something i have to it has to be in and of itself of value not that i have to sell it so that i can get a thing so then i can go buy a thing of value

and that's so that was a good reminder for me like if i'm investing in something i'm going to invest in a company that's going up in value or in a mutual fund that's something that's creating money that's creating value it's not driven purely by the nuance of shortage there you go yeah and that's that's what the commodity is what he's discussing, and that's what Bitcoin is, why he hates Bitcoin, and why I hate it is because it's a commodity. It's not really an investment. And so when you put money in something like that, it's speculation, not investing. A whole bunch of people said that Mickey Mantle card,

we're all going to say it's that much, right? But you can't eat it. You can't power a car with it. You can't do a thing with it. Yeah, there's enough of a market. There's probably more of a market for that Mickey Mantle card than there is the Bitcoin. Because you can at least hold the Mickey Mantle card. Yeah, at least touch it.

It's not an NFT. So yeah, there's that. But completely validate you collecting. I love collecting. But just don't categorize it instead of investing. I know a guy that was uh has passed away now there's a billionaire and i got to visit his car collection he had three different buildings full of cars and there were some really cool cars in there got my picture made with some of them

there were some of them from movies and things that he bought off the off the uh and they were really neat uh but it had nothing to do with his net worth his net worth is a completely different thing that car collection was just like travis with his cards or me with my guns it was just for fun just for fun that's simple good question sir thank you garrett is in phoenix hi garrett how are you i'm doing good how are you dave better than i I deserve. What's up? Hey, I'm getting married at the end of this month. Congratulations.

Thank you, sir. We're going through combining our finances, and I have a fully funded emergency fund. She has a bit of money in savings. But I'm wondering, should I empty my brokerage account to finish funding that emergency fund together? I'm confused. You said I have a fully funded emergency fund. I do for me, yes.

But when her and I get married, it won't be fully funded for both of our... I see. And how much does she have in savings? About $4,000. And how much is in your fully funded emergency fund? $10,000. Okay. And what do you need?

$18,000. You call that three to six months. Okay. And you'd have $14,000. Right? Between the two of you. And you have how much in your brokerage account? About $6,500. Oh, okay. Yeah, liquidate it. Sure.

Liquidate it. Yeah, that's fine. And then start your investing plan based on the fact. Are you 100% debt-free at that point? Yes, sir. 100% debt-free, 115% going into retirement. Yeah, you're going to be just fine then. Yeah.

And then when you get the house, get it paid off and work your baby steps. Yeah, you're right on track, dude. Well done. Good stuff. Jessica's in Scranton, Pennsylvania. Hi, Jessica. How are you? Hi, good afternoon.

Thank you for taking my call. Sure. What's up? My father wants to gift my brother and I his house. Currently, he's 75. Why? And he wants to gift it to us now with him and his wife having life rights so that when he passes, we don't have to pay inheritance tax. You don't have to pay inheritance tax.

He does not have a net worth of over $20 million, does he? No, no, not at all. There's no inheritance tax. Okay. There might be a probate tax in Pennsylvania, but it will pale in comparison to this stupid move and what it will do to your capital gains. Because if he gives you his house, his basis becomes your basis,

and when you all sell it someday, you're going to pay tax on everything above what he paid for the house originally. Dumb. If, however, you receive the house upon his death, you get stepped-up basis, meaning that your basis in the house for tax purposes is the market value at the time of his death. You see the difference? Okay. Yes.

He inherited the house from my grandmother. Oh, so it's even worse. Okay. So he has a zero basis. What's the house worth? If I had to guess,'d say four grand i mean 400 000 okay so the difference is capital gains tax on 400 000 bucks okay this is a uh this is a 60 000 error if he dies now to give you the house before death you You're going to pay an extra $60,000 in taxes.

Do not do this. I'm so glad I called. It's a $60,000 phone call, Jessica. Way to go. Yeah, and guess what? It was free. Even the toll-free number is free. Go figure.

Good show, John. That puts this hour of the show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Thank you.