The Ramsey Show - App - Own the "Personal" Part of Personal Finance (Hour 1)

Episode Date: October 30, 2019

Home Selling, Insurance, Home Buying, Savings, Budgeting, Debt Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave 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'm Dave Ramsey, your host. Thank you for joining us.

Open phones at 888-825-5225. That's 888-825-5225. Ivana starts off this hour in New Jersey. Hey, Ivana, welcome to the Dave Ramsey Show. Yes. Hi, Mr. Ramsey. Thank you for taking my call. Thank you. My pleasure. How can I help? So I have a question. My husband and I are thinking about buying our house. We bought it when the market was high in 2005, so I know we definitely overpaid for the house, and we're ready to minimize a little bit, get something smaller,

and hopefully don't have a mortgage. So right now it was assessed at around $620,000, maybe $650,000 high. And I was just wondering if this is something that's a good idea for us to just sell it, pay off the mortgage, and just buy something smaller where we can be mortgage-free. Well, smaller and mortgage-free sounds fun. I would not do it for sale by owner. You will make more on the house, and the house will sell faster on average if you use a high-quality, high-dollar, or high-quality, high-octane, high-protein real estate agent that knows what they're doing.

For sale by owner, net's less price on average nationally, much more than the commission costs you. So anyway, that aside, I think the general move is okay. When you say assessed 650, do you mean assessed by the real estate agent? The real estate agent. Yes yes we already spoke to one um so this is kind of based on what's in the area okay because assessed usually means a tax assessor and that's not an accurate measure but but what you're saying is the real estate agent gave you a comparative market analysis and they're saying about 650650. Yeah, I'm with you. Let's move down.

What's wrong with that? Why would you not do this? No, this is, you know, besides being a little disappointed, you know, about the value, the market value, I guess, but this is because I know the real estate agent was talking about, okay, even she wasn't advising us to, with the remaining money, you know, to put it in the new house. She was saying just keep some and then maybe take a small mortgage. Well, that's not what I would tell you to do. Listening to you, yeah.

No, the purpose of this is to be out of debt and simplify your life, right? Right. Yeah, exactly. So the real estate agent doesn't know what they're talking about. They don't understand what you're saying. Yeah, but I just wanted to hear your point on this matter. So, yeah, thank you very much. I appreciate it.

Hey, here's the thing. Personal finance is personal. And so what you want to do matters a lot. Yeah. That's the point. Yeah, it does. Yeah, own that and run with it. I love it.

Ivan is with us in Florida. Hey, Ivan, welcome to the Dave Ramsey Show. Hey, Dave. Thank you for taking my call. Sure. What's up? Hey, I just, so right now I'm in Baby Step 2, and I'm trying to, I've got about $21,000 left to pay off,

but I'm considering moving back to my hometown because there's a school that just opened up there that is offering a software development course, and before that, the community college didn't offer one there, so I'm looking at doing that maybe before I get out of debt. It would cost me about $26,000 for the two-year program there. And I could cash flow that, but it would considerably slow me down on the debt snowball. Right now, I'm on track to probably finishing that off in about nine months.

What do you do for a living? Well, right now I'm actually kind of in between jobs. I've been delivering pizzas on the side. But you have a two-year degree in computer science, right? Not yet, no. Oh, you're finishing? Oh, I thought you don't have anything in that area. You're starting from scratch.

Right. Before that, I'd done some IT-related work, but I'd like to actually transition into more software development side of things. Mm-hmm. Okay, so what would you be doing for a living? into more of the software development side of things. Okay, so what would you be doing for a living while you're doing this $26,000 in expense? I've been working, well, I'm going to be starting a work in a warehouse, and I plan on delivering pieces on the side as well. And how much debt do you have?

It's about $21,000. And how old are you? 27. Okay. All right. It's not a bad plan. I don't mind it. It's going to slow down you getting out of debt, like you said, instead of 21 000 now we need uh 47 000

right and uh and so that's going to take a little longer to do all of that the um what you could do is uh what pops into my head is you probably with your interest in the area and your um your hardware background you might get on with a technology company now and they might pay your tuition yeah i thought i thought about doing that i think i would spend a lot of time looking for that instead of just taking a job to pay the bills why and let that be a furtherance of your goal move you towards your goal it's okay if you do the job to pay your bills that's not a bad thing that's honorable it's not nothing wrong with that process but if you could if you could land a job with a tech firm uh i don't care if you're making coffee and deliver making copies and delivering

pizza inside the place i don't care what you do, but the idea being that they're a tech firm and they'd like to have you with a tech cert, and so they're willing to pay for your cert, right? Right. Yeah, that's the direction I think about going. So let me send you a copy of Ken Coleman's book, Proximity Principle, which will help you get in the proximity of the people and the places that allow you to hit your goals.

And so that way it's not as hard because honestly, if that happens, it's like you just got a $21,000 raise or $26,000 raise because if they pay for school and that would be the direction to go. So something to think about. Hang on and I'll have Madison pick up. We'll get you a copy of Proximity Princi proximity principle number one bestseller by ken coleman and um it's a good you know you're thinking in the right way and honestly the career field you're moving towards could be very very lucrative long term if you continue to build your skills continue to learn uh you know continue to

add notches in your belt with the different certifications. We've got some folks on our team here that make a lot of money. They do really, really well in the software side of the equation, the coding side of the equation, building out our digital interfaces with our customer. It's a big deal. It's a big deal. It's a big deal. Hey, man, thanks for the call. This is the Dave Ramsey Show. If you've turned on the TV, read a paper, or been on the web lately, then you know this country's in the midst of an identity theft crisis.

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They cover all types of ID theft, take over the work if you become a victim, and even protect your money if it gets hacked. They also cover kids for free on their family plan. ID theft is a nightmare, and you need to get protected. Call 800-356-4282 or visit zander.com. Gerald is with us in North Carolina. Hey, Gerald, welcome to the Dave Ramsey Show. How you doing, Dave? Better than I deserve. What's up?

Fantastic. I had a question about term life insurance. It's something I never thought about before you. I've been doing this since April. Paid off about $49,000 so far. Good for you, man. Well done. April paid off about 49 grand so far. So, uh, good for you, man.

Well done. Well, I, my grandfather passed and that, that helped subsidize, but we've been a budget. You said it gives you a raise and it does. It's amazing.

Cool. So, um, I'm just trying to figure out how much term life I should have on myself since I'm the only owner for my family. And then should I get some for my wife as well? Yes and yes. What do you earn? Right now, due to I joined a new company, had a bad situation,

so I'm stuck at base, which is 85. Potential should be, I mean, would have been closer to 140. Okay, do you have children? 85 right now. Yeah, I have two. How old are you? A five-year-old and a one-and-a-half. How old are you?

Oh, I'm 36. Okay. We generally say 10 to 12 times your income. And so, you know, you could do a million or you could do a million five, somewhere in there, and price it out. You're going to find it's not that expensive. We say 15 to 20-year level term. Now, where I get that is a simple equation. If we say a million dollars is in your wife's hands because you died,

if she were to invest that, if she made 10% on it, without touching the principal every year, she would have $100,000. Got you. That's where that comes from. So 10 to 12 times, and, you know, given that you have a pretty good upside on your income, you know, you could go a million or you could go and add 500 more later, or you could go a million five. Price them both out at ZanderInsurance.com and just see what it looks like at your age and your health condition and all that kind of thing. Are you overweight or do you smoke?

No, I'm in perfect health um i talked to my smart investor like two days ago and i was looking at like 36 for 500 000 you need twice that bump it up yeah you need you need at least twice that and check zander because they've got the uh the deepest database on shopping it we use the smart vestor pros not for insurance but for invest for investing and so uh check zanderinsurance.com for that and i think you may but it's still going to be around that that's that's a that's a decent quote there's nothing wrong with that quote you won't find it to be half that at zander but you may see a better pricing and uh again 15 to 20 year level term either one is fine because what you're thinking

about is 15 years from today where would you be well you'd likely have built some wealth you'd likely have your house paid off and no debt you you would uh your kids are almost grown or grown right 15 years from today and so something happens to your what to you and you have a paid for house and the kids are out of the house or almost out of the house and you got seven hundred thousand dollars in your 401k 15 years from today no house payment seven hundred thousand no kids or virtually no kids your wife's okay so you might not need insurance much longer than half a million right now i'm sorry we have roughly about half a million in assets right now oh okay all right well then that's an okay reason to have only a half a million in insurance but again i think when you

price the difference in a half a million and a million at your age it's as you can tell it's all the cost of a pizza not much it's just and and it's one thing you can kind of cheat up on, and it doesn't cost you much to kind of pad it a little bit and make sure mom and the babies are okay. And you can always drop it later or change it out later as long as you don't lose your health. And the point is you're not going to keep it your whole life anyway because by becoming debt-free and building wealth

and getting the kids up and out of the house, you've reduced your need for life insurance to zero with good financial planning and good living. And that's what it amounts to. All right, let's go to Sarah in California. Hey, Sarah, welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. How are you?

Better than I deserve. What's up? Perfect. So I had a question. My husband and I purchased a house in 2018 and we ended up having a 30-year conventional loan at 5%. And I've been looking at mortgage rates and thinking about refinancing to a 15-year. But my question was about a 50, $50,000 that we would want to make, um, towards a principal payment. We, since 2018, we've paid off an additional 16,000 towards principal on the current 30 year. Um, but my question was when you're going to, um, talk about refinancing, is it better to refinance and make the $50,000 principal payment

beforehand and then go to the bank with the new number? Or is it better to take the current conventional loan and have them look at the numbers for that and then make a $50,000 principal payment after? I would do the analysis on whether to refinance after the fit with 50 000 less of a balance there's no advantage to taking the mortgage out the next day plunking 50 on it it doesn't give you any advantage at all uh the only thing that does is make your payment your base payment a little bit higher but obviously you're paying more than the base payment anyway because you're moving towards getting rid of this debt so what's your current mortgage balance um so the current one is 312 000 okay so minus 50 is 262 right okay and so uh you'd be saving about one and a half percent on a 15 year fixed right now it'd be somewhere around

three and a half and you're somewhere around five okay so the one and a half percent on 262 is how you do the analysis not 15 versus 30 okay you don't have to refinance if your current mortgage was three and a half i would just tell you to just pay extra on it and forget it you don't need to refinance it to turn it into a 15 if you pay a 30 like a 15 it pays out in 15 correct yes okay so we're at 262 uh it's 2600 and 1300 so 3900 bucks a year 4 000 bucks a year is your interest savings because you have a three and a half rather than a five. Mm-hmm. Okay? Okay. The idea is then that if you're, you know, you take that $4,000 and divide it into your closing costs,

and that tells you whether to refinance or not, are you going to have the mortgage that long? So has anybody quoted you any closing costs yet? They have not, no. I actually missed a call from the bank when I was on hold. So I was like, good timing. All right. So let's say it's $8,000.

If you're saving $4,000 a year, you break even in two years. It's the third year before there's any gravy on the biscuit because all you're doing is just paying back your extra costs with the savings so the savings gets eaten up with the closing costs until you get past that there's no benefit and so if you're going to pay this mortgage completely off in three years i wouldn't fool with it but if it's going to take you eight years yeah i'd fool with it's going to take you eight years, yeah, I'd fool with it. It's going to save you $3,000 or $4,000 a year through those other years after that, and that will tell you what to do.

But, yes, this is a refinance you need to do while you're at it. Put it on a 15, but you're going to be more aggressive than a 15-year schedule anyway. And just do the deal at 262 because you're going to take your current balance and pay it down by 50 at the closing table. You're going to add $50,000 to the equation at the closing table for the refinance. And check with Churchill Mortgage. They can also walk you through it.

They might be cheaper than that bank you're talking to. As a matter of fact, they likely are. This is the Daveave ramsey show We'll see right back. You know, sometimes when you go through a major life event, getting married, having a baby, all these different big things, you get all caught up in that, which you should get all caught up in that. That's what you're supposed to do. These things matter. But you forget the little detail stuff, like updating your insurance insurance i know the last thing on your mind is insurance when you're doing all that but listen you can make it real easy on yourself if you work with an independent insurance agent go to dayramsey.com and click on elp for endorsed local provider

for insurance on car insurance homeowners homeowner's insurance, those kinds of things. These folks can keep you updated automatically. They'll do an annual checkup and watch what's going on, and you will not believe how much money you can save when you have an insurance agent that shops among a bunch of different companies to get you the best deal. There's two kinds of insurance agents when it comes to stuff like this. There's the kind that work for one company they're called captive agents in the business they work for state farm

or they work for nationwide or they work for whoever right and then there's the independent insurance agent and they shop among all the other ones to get you the best deal, and they can always give you a better deal for that reason, because they actually work for you, not for an insurance company. The other people are employees of the insurance company, so it amounts to. So, go to DavidRamsey.com slash ELP, click on insurance, and get the best deal. And make sure you're doing this when you have these life events happen. Magic is with us in Illinois.

Hey, Magic, what's up? Hi, Dave. How are you? Better than I deserve. How can I help? I'm calling because I'm a huge fan. I recently just found you. My sister pointed you out.

I found you in July. And I'm calling because my kids are fans. My daughter, Naila, is like, tell Dave I said hi. I'm like, July and I'm calling because my kids are fans. My daughter Nela's like, tell Dave I said hi. I'm like, okay, I'll tell him hi. But that's why I'm calling, especially my little one. She screams, we're debt free and I really want her to be able to scream that for real. But here's the situation.

I have three girls, 16, 10, and 4 and we're getting ready to get the oldest one ready for college. Me and my husband, we make about $159. That's what we net a year. Good. And we just started saving for college two years ago,

so we're behind the power curve. We had about maybe $7,300 saved up now. Okay. We do have a mortgage. That's our only debt that we have. Good. We went ahead and paid off our cars and everything else we have. We just have a mortgage. That's our only debt that we have. We went ahead and paid off our cars and everything else we have. We just have the mortgage. I can't foresee how to cash flow college and pay off the mortgage within a, I guess, a faster pace. While I have this and I have like all my girls are six years apart, I feel like we're going to be paying for college for the next

15 years. You probably are. It's going to slow down paying off your mortgage. Okay, okay. But it's the right thing to do. I mean, you're paying cash for college, and all that means is it slows down your debt reduction on your mortgage. I'd like for you to be able to do both, and you probably can. I mean, you need to be on a written budget like we always talk about around here.

Get on the every dollar budget and make sure everything's happening the way it's supposed to. Every dollar's got an assignment. The second thing is I think the girls can work while they're in school, and they can earn some money to cover part of their expenses. And, you know, school choice is going to be a big deal. What they choose, what you allow them to sign you up for, that'll kill you. That'll kill this whole deal, right? And so, you know, we got three girls to put through college in a 12-year span is what it amounts to and so um if if uh if you want my money and i'm the parent in this house i'm going to be very involved in the decision on where you go to school because of the cost of it

and no we're not borrowing any money so that you can go to a school that makes you grin yeah nope nope nope nope nope nope the school that makes us grin is the one that's that doesn't come out with that that's the one that makes us right and so they need to be working on their grades so that they get good act scores and are qualified for more scholarships they need to be working towards getting scholarships and school selection is a big deal all these things that anthony o'Neill talks about in his book, Debt-Free Degree, that I'm going to send you. Oh, well, thank you.

I actually have his book. Oh, well, all right. You're ahead of the game. If you read through it, you're going to see what I'm talking about. But here's the thing. You need to have, and Anthony talks about that in this week's podcast of Borrowed Future, and it's a really, really good point. This is not a conversation you have with your kids one time.

It's a conversation that starts, and it happens a lot, and the 12-year-old or the 10-year-old and the 4-year-old are watching the discussion with the 16-year-old, so that when you start having that discussion with them, it's going to be a big deal because the 10-year-olds, by the time they get to ninth grade, they have to be real serious about their GPA. Okay. Because that's their part in this equation.

And if you want my money, you know, if you're going to be under my direction, and we're going to do this together, we'll talk it through together, but it's going to be a school that is a reasonable expense that fits in the budget and does not require any of us to go into debt. Well, I'll take the debt, Mom. No, you don't understand. That's me helping you cause stupidity, and I'm not going to be the cause of harm in your life. And so you're going, you know, well, you're a control freak, Dave. Dadgum right. It's my freaking money.

And that's how that works and so i mean you know if you want to get nasty about it we can get nasty about it people out there say that stuff all the time you control freak you were controlling over your children no i was controlling over my money that they wanted they can go do whatever they want to do when they're adults it's legal for them to be stupid on steroids. And a lot of people have proven that. So we don't want that to happen, though. We want to guide them and coach them and cheer them and give them money. But it's not without strings attached.

And so you get to make the decision, and you can involve them in the decision, but you get to make the decision because it's your money. And that's a great way to go. So read through the debt-free degree book. But I think Anthony's point in the podcast was valid. You can't have this discussion one time and then just walk away from it. It's a constant rhythm of here's how we're – you have to get the grades. You have to learn work ethic.

You have to be applying for scholarships. Yes, we're going to go to a school you can afford. If you go to a super expensive school, as long as they give it to you free, that's going to be fine, darling. But if they don't give it to you free, yeah, you don't get to go. Because I'm not paying $50,000 a year for what I can spend $12,000 a year for. Just because you what? I don't get it. What's the ROI on this?

None. Can't prove it. All right, Brandon is with us in Kentucky. Hey, Brandon, how are you? I'm good. How are you doing, Dave? Better than I deserve. What's up?

So quick question. Earlier this month, my wife and i finished baby step two we are working on baby step three which we are anticipating around the first of the year to be done so as we're sitting crunching numbers looking ahead to baby step four of our 15 percent here's my question obviously 15 percent of our income, mine and my wife's. We also receive on top of that approximately $20,000 a year subsidy payment for adoption of our children. Would you include that $20,000 as part of into that total household income, or would you just focus on, because in 10 years that's going to go away when they're 18. But would you just focus on because in 10 years that's going to go away when they're when they're 18 but would you just focus on our actual income now well you you're not signing up for a 30

year promise to pay a certain amount it's every year you calculate your household income and based on that you save 15 of it so i would include it as long as it's there okay it's been listen here's the thing it doesn't matter because you're still going to be saving a bunch of money you're going to be investing a bunch of money either way and so it's not like this is some kind of a a dave regulation that you have to get permission to do one way or the other i think the point is always the more money you invest the more money you're gonna have wow that was deep and so you know that that's the only thing that's how i answer the question i'm like well yeah i'd put another three grand in there so while you got that income coming in someday you may not have it and your situation may be

different but for today i'm in in, baby. I'm in. This is the Dave Ramsey Show. David's with us in Florida. Welcome to the Dave Ramsey Show, David. Hey, how are you, David? Better than I deserve, sir. How can I help? So, my high earner, like recent new high earner, I just finished training. My wife's lease is up in five months, and we're kind of debating how much is too much to spend on a car. We're pretty frugal to begin with. So I just wanted to have your take on it.

I use two rules of thumb. Number one, how much cash do I have? Because you have to pay cash for whatever it is. Yeah, obviously. And then two, you don't want to own vehicles, all your vehicles combined, anything with a motor or wheels combined should not be more than half your annual income because otherwise you have too much tied up in things going down in value,

and everything with wheels and motors pretty well goes down in value. Agreed. So what are you talking about spending? We're thinking about maybe like $20,000, something like that, just paying cash for it. Okay. And what's your household income? I make around $360,000.

Oh, it's no problem. Sure, you can do that. You're not out of it. You know, obviously, I owe a lot of student loans, and we're working all the way. So that's where my question came in. It's like, you know, we're in Baby Step 2, or obviously... How much student loan debt do you have? Like $320, 320 000 and you make

like 360 correct so you're a doc yeah okay so the difference in a ten thousand dollar car and a twenty thousand dollar car in this scenario does not move the needle on your student loan debt reduction okay what we do want to do is we want to apply heavy levels of frugality to the rest of your lifestyle yeah i mean we'll we'll still i mean we're living as if we're still residents you know and so you would be debt free in what a couple years our plan is between 18 and 24 months there you go if you're doing that I'm good with a 20. You've got everything else lined up. I'm good with a 20 versus a 10. Because you can see what I'm saying.

If your total debt was 40 and you made 30, it'd be a bigger difference, right? But you've got so many zeros on the end of this income and on the end of this debt that the $10, dollars on the car one way or the other doesn't make a big difference now i would not go much higher than 20 because it starts to feel like oh i should have put that on the student loan after that but you can get a really fine two-year-old three-year-old anything just about for 20 grand i mean you can get a ton of car for that, really. And that'll go a long, long way while you finish this process up.

Good question and a good plan. All right, Colin is with us in Missouri. Hey, Colin, welcome to the Dave Ramsey Show. Hey there, Dave. How are you doing? Better than I deserve. What's up? Well, I'm a 17-year-old high school senior right now,

and I've wanted to do aviation my entire life. I'm looking at a state school that'll be about $150,000 for four years. And then after that, in the airlines, after about five years, I'll be making about $100,000 per year. I'm going to try and apply for as many scholarships, as many anything as I can. But I was just wondering if you think that that's a good idea to go to pursue a career in aviation. So why is it $37,000 a year for a state school? Exactly, yeah.

Tuition, regular housing, food, everything like that. What's the tuition? What's that? How What's the tuition? What's that? How much is the tuition? I believe tuition by itself is about $10,000 per year. That sounds right. Okay. And so you need $27,000 worth of food and housing?

Well, no, it's because the aviation program specifically for plane rental and everything, it's an extra $75,000 per year, or excuse me, for the four years total. So it's double? Yeah, basically. Okay. And how are you paying for this? I would be taking on student loans. No. My parents, no.

No, I would not do that. Yeah, all righty. You're going to do what you're going to do do because i could tell by the way you said yeah all righty but um no i would not do that i'm gonna find another way to do this or i'm not gonna do it um i mean i would join the military if you want to go into aviation that's an excellent way to do it and they'll pay for all of this and 150 000 bucks in your pocket for serving your country. Plus, they're going to pay you while you're there. And, yeah, you can definitely come out of there and go into the airlines without any question.

They do it all the time. Lots of captains on the fronts of the jets have been first served in the cockpit of a military jet of some kind. So, yeah, no, no, I'm not going $150,000 in debt. I'm going to keep shopping. I'm going to look for scholarships. I'm going to consider stuff like the military. I'm going to consider another way to skin this cat,

but I am not going to tell you to do this because here's what can happen. You get almost out, and something happens, and you don't get the hundred thousand dollar a year job but you still have all the debt this is what happens 52 of the people that start college finish it that means 48 of those that took out student loans with the promise of a big income later are screwed because they don't finish the degree well that's not going to happen to me dave i know right that's what they all said or they wouldn't have started it so dude no this is a bad idea not going in debt for it if you can figure out a way to cash flow it working get your parents

involved get scholarships go the military something like that i don't mind you living this dream but there's not a chance i'm going to sign you up for a nightmare not on my watch you do what you want to do you're going to anyway jessica is with us in arizona hi jessica how are you hi dave wow thank you how are you better hey hang on up he's gone hey did you have his number or he just called and he's gone okay i should have given him anthony's book i screwed up okay anyway how can i help well we are trying to figure out if we should that we have a rental property that's completely paid off and we're trying to figure out if we should sell that to pay down our mortgage on our house what would it sell for about 270 cool and what do you owe on your home? $350. How much? $350.

$350. Okay. Do you have any other cash that is non-retirement? Yes. How much? We have probably $70. Okay. Not counting your emergency fund, or is that your emergency fund?

That's somewhat included, so $50. Let's say $50. Okay. What's your household income? $120,000. So if you put $50,000 plus $270,000, that would be $320,000. That leaves us $30,000 from having the house paid for, and you make $120,000. How quick would you pay off your house?

Probably within the next year or two. Yeah, I would hope. so what's more important to you being debt free it's up to you no it's not a question it's it's a question you have to answer there's not a wrong answer there's not a wrong answer you can work that you can work this through go ahead i think my husband is more he's looking at the long term. He wants to have rentals as kind of our retirement. That's fine. And he's looking at the equity more that we're building in that. Yeah, how old are you?

37. Okay. So here's the thing. If you have a paid-for house and you make $120,000 a year, how fast can you save up and buy a rental? Pretty quick. Pretty quick, yes. And so I'm not saying don't do rentals. four house you make 120 000 a year how fast can you save up and buy a rental pretty quick pretty quick yes and so i'm not saying don't do rentals and rentals can still be part of your plan the question you ask yourself then is what is the fastest way to wealth utilizing debt or not i believe and i have proven it for 30 years, not.

And so I love rental real estate. If you guys want to roll up your sleeves and not buy anything else and attack your mortgage and get your mortgage paid off quickly in the next few years and keep the rental, it's not the end of the world. It's not to say you won't win because of that. I think you'll win faster by just getting the house paid off and then turn around saving up with your increased cash flow in your household saving up and paying cash for your rentals going

forward it's actually what sharon and i did i mean it's how we built our we own hundreds of millions of dollars of real estate we love real estate but we paid cash for it and the very first one was the hardest one save up and buy that first one right but then it cash flows like a bandit because you don't have any any payments on it it makes money and then we do the next one then we do the next one and we do the next one and the more you get of course the more money you're making and the more you can buy so it snowballs in a good direction then so i'm selling it but it's not the end of the world if you don't. This is not a you're in the stupid column type question. It's like smart and smarter. This is the Dave Ramsey Show.

This is James Childs, producer of the Dave Ramsey Show. Once again, you made the Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.