The Ramsey Show - App - Own Your House - Don't Let Your House Own You! (Hour 2)

Episode Date: November 20, 2019

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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 Bones at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Andre is with us in Grand Rapids, Michigan. Hey, Andre, how are you?

Hey, I'm doing well. Thank you for taking my call. Sure, what's up? So I'm currently finishing up my last year of school, and I'll graduate in April with about $23,000 in debt. The good thing for me is that I have a job lined up. I've already accepted it starting in around September and it pays really well and it also has a signing bonus.

And the thing that I'm considering is doing a Europe trip, maybe $3,000 to $4,000 a few weeks in Europe just kind of as a graduation gift to myself. Okay. Well, you already gave yourself a gift, $23,000 in student loans. What's your degree in? I'm a double major in international business and management information systems, and then I'll have a minor in German. Good for you.

Well done. And so what's your new job? So I'll be a technology consultant, and I'll be doing a lot of traveling and just really helping businesses solve their technology problems. How much of your travel will be in Europe? It depends on which client I'm working with and what project i'm on okay so there's no guarantees majority of projects will be in the u.s and how much you're making how much you're making i'll make 80 000 a year wow straight out of school

yep and my signing bonus will be 12 500 that is absolutely awesome congratulations sir very very well done well none of these decisions are going to bankrupt you It will be $12,500. That is absolutely awesome. Congratulations, sir. Yes, thank you. Very, very well done. Well, none of these decisions are going to bankrupt you, okay? The biggest problem you get into is muscle memory. Anytime you're learning something and you do it right, it locks in to your brain. And when you do it wrong, it locks in to your brain. And when you do it wrong, it locks in to your brain. And so the people who, for instance, are professional athletes,

they don't just practice a lot. They practice doing it right a lot. Does that make sense? Yes. And the problem with your idea is not that it's probably going to ruin your life or something like that. It's not. And it's not that it's so crazy that I can't breathe when I'm talking to you or something like that. It's not that it's probably going to ruin your life or something like that. It's not. It's not that it's so crazy that I can't breathe when I'm talking to you or something like that.

It's not. It's just really bad muscle memory. You're $23,000 in debt, and you're taking $12,000 and you're going to Europe. That's just bad muscle memory. It's a bad way to start out your adult life is being a kid for 90 more days so um i wonder if there's um i just wonder if there's another way to get at the same problem and yet do it in a way that that sounds wiser because the reason you even asked me the question and you kind of knew i'd probably go there right right i mean so the reason you even asked me the question is it's tickling you inside of your

conscience. You're kind of going, I don't know. It sounds like really like a lot of fun. I mean, I got an international business degree. I can speak German. This is going to be a blast. You know, I got the money in my hand with a signing bonus. And on the other hand, it kind of feels dumb.

And that's what was going on inside your brain, wasn't it? Well, for me, it just seems like... Now, was that... Stop. Was that going on inside your brain or not? I was torn. Okay, that's what I mean. That's what I'm saying.

You were torn, which just means you're intelligent. That's all it means. It's why you asked me the question. So let's think about this. Is there another way to do this? How much vacation do you get with this company in year one? I'll accrue the days, every pay period, and then it'll come to around 25 days vacation a year. So what is so wrong with going next summer?

The summer after you've worked a year and take 25 days in Europe and pay cash for it. You'll be debt free. You'll be making 80 grand a year, you save up the money, you're going to have a blast. I think the biggest thing for me now that I think of it is that I miss some of the people that I met while I was abroad when I was studying there. They won't be there in a year? Yeah, you're right.

Will they? They're right. Oh, they live year? Yeah, you're right. Will they? Oh, they live there. Oh, okay. Yeah. I mean, it just feels more, I mean, how torn am I about you doing that? Zero. Because you're a stud. I mean, you're coming out of school making 80 grand.

Who does that? I mean, come on, man, that's killer. That's awesome. And you got a $12,000 signing bonus to boot, you know? So I am not worried about your life turning out, all right? You know, you're going to be all right. So you can do either one, and you'll survive. You're going to be okay.

I just always force myself, if I'm torn like that, why is it I'm torn? And is there a way to do it that feels more grown up, that feels wiser? And, hey, you and I are going to be friends no matter what you do, so I appreciate you calling and talking to me about it. I'm honored that I was included in your conversation of being torn. But if I woke up in your shoes, I don't think you're going to lose hardly anything waiting a year to take the trip. You get 25 days.

That's a three-week trip in europe that ain't no slouch for 24 years old paying cash making 80 grand that ain't no slouch um i didn't even see the ocean until i was 12 so you know i mean come on you're gonna be okay i i yeah you're gonna be okay way. You're obviously a rock star. So, and I think that's part of why you were torn, is you have this sense about, you have some common sense to go with your economics and your German and so forth. So, good call. It's good to talk to you, sir.

Either way, I hope you enjoy your trip. Open phones at 888-825-5225. You jump in. Carol is on Facebook. Dave, I'm thinking about selling my timeshare. Where do I start? Well, Carol, I got really bad news. You got screwed. There's no place to sell a timeshare.

You can't give the dadgum things away. Look your timeshare up on eBay. They're selling them for a dollar. People sell them for a dollar. Why would they they do that because they want to get rid of the fees the annual freaking fees and that's what you're that's why you're thinking about selling it and um and or you owe money on it god help you so i i have looked at numerous ways over the years of doing this show to get people out of timeshares. And I never could find anything until I found this company called Timeshare Exit Team about three years ago. We started endorsing them. And I have had so much fun pissing off the timeshare people.

Because Timeshare Exit Team will get you out of their timeshare now you're going to pay them money to do that that's what they do and they charge you up front and they give your money back guarantee if they don't get you out but they'll get you out they'll get you out of your timeshare you're just stuck they're worth nothing they have no value there is no market for them there's 99% dissatisfaction with the industry. This pretty much sucks beyond belief. And on top of that, there's several of these people selling these things that tell people in their presentation that Dave Ramsey bought one from them. Which is about as dumb as saying Dave Ramsey has a credit card.

That's ridiculous. Now, time, timeshare exit team. Do not talk to anybody else. These guys are the best at getting you out. Timeshare exit team. This is the Dave Ramsey Show. If you're going to join this team, we want someone who cares and has a passion about what we do. That's why we trust LinkedIn Jobs. They are the best at matching the right person with the right job.

We don't want someone just looking for a 9 to 5. We want thoroughbreds. One of the things that distinguishes a world-class thoroughbred in racing is the size of their heart. A true thoroughbred in the workplace is someone with a heart that is going to be staying and growing with our company. You can't get a more highly targeted field of thoroughbreds than LinkedIn jobs. They literally screen candidates for both those hard and soft skills that you're looking for, so you can hire the right person. LinkedIn makes sure your post gets seen by the people you want to hire. It's no wonder someone gets hired every eight seconds with LinkedIn. Get started today. Pay what you want

and get $50 off your first job post. Visit linkedin.com slash Ramsey. Terms and conditions apply. Thank you for joining us. Amy is with us in California. Hi, Amy. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you so much for taking my call. I feel really honored to be talking to you. You too.

How can I help? Thank you. I have a question about my talking to you. You too. How can I help? Thank you. I have a question about my husband's employee stock purchase plan. He works, I stay at home with the kids. His employee stock purchase plan works, to my knowledge, where we put aside money each paycheck. He currently makes $200,000 a year. So we're putting aside each paycheck $1,000 into this employee stock purchase plan. Every six months, we're able to cash it out and buy our stock for at least 15% under the market value. And every six months, we cash it out immediately and cash it out.

So anyway, my direct question is, with our monthly budget, we're in the red without that extra $2,000 a month. I mean, that really puts a huge dent in our budget. You make $200,000 a year and you're in the red? Without that extra $2,000 a year and you're in the red? Without that extra $2,000. Why? Gosh, really? I mean, okay, so we just started our budget plan with you last month.

We're really gung-ho. We're excited about it. But, you know, we overbought on our house. How much is your house payment? $2,760 a month. That's not your problem because your take-home pay should be $10,000 a month or more. How much is he putting money into 401K also? He is.

He's putting in 15%. And how much of your income is going into cars? We actually just last month, since we started it, we just paid off our car. Good. You don't have another car payment? No, we're done with our cars. We only have two more credit card bills to pay off that amount to $6,179. Wow. Okay. So $10,000 take-home pay.

It should now, not with 15%, and $2,000 coming out. You're not getting home with about $6,000, are you? No. Yeah. Is that something right, $6,000 a month coming in? Yes, that's exactly it. Okay. So each month, yes, $6,298.

Okay. I got it pretty close. All right. Well, let's go back and talk about two or three things. Number one, there's not room in your budget for the stock purchase. Okay? You knew that before you called me. I did, and that's the problem is I keep talking to my husband about it.

Well, you don't have to talk to him about it. You just tell him there's not room in the budget. We don't make enough money for you to put $2,000 a month into stock. Number two, I wouldn't do it anyway, even if you had the money. And here's why. Okay. There's nothing special about this stock purchase plan. All employee stock purchase plans are 15% off.

All of them are. Everybody does that that's a publicly traded company and allows their employees to buy their stock, okay? There's nothing special about that. Here's the other thing. Single stocks are very volatile. It's a very risky investment, even if it's the company he works for that he feels like he knows something about, okay?

And here's the thing. If you don't believe me, just pull up that company. You notice I don't even know who it is yet. Okay? Pull up that company. No, no, no. I believe you. No, pull up that company on the Internet and pull up their stock.

Just type in such and such stock. Okay? And look at the 52-week high and the 52-week low. In other words, in one year, how much volatility does it have? And you will see a swing of greater than 15%. So it is entirely possible you lose money on this transaction before you even make the transaction. Okay. And even if you don't

shortly after, you could lose it. Now, it may shoot way up in value. It may shoot way down in value. I don't know. I have tens of millions of dollars invested in the stock market in mutual funds, personally. And I have none of it, not one penny of it in a single stock. And even if you can cash it out right away, you still advise against it, even though it's the 15% discount. Yeah, because you're not necessarily even going to make that.

Okay. You know, and so I'm just not, this is not worth messing with. And so you're better off to do some other stuff with your money, like, for instance, bring it home so that you're not in the red, which is absolutely crazy. But you make $200,000 a year, and you're getting home with $72,000. You got that? That's nuts. Okay. So $200,000 a year.

Yeah, 15% going into retirement would be $30,000 of your $200,000. You got taxes coming out. Has he bought a bunch of other stuff in his employee benefits package that he pays for? We have our health benefits like any other person. Oh, you're paying for your health insurance? Correct, yes. We're paying for our health insurance as well. So that's probably $1,000 a month, right?

At least because we have three kids. Yeah. So that's another $12,000 a year. So $42,000 is health insurance and 15% going into retirement out of your $200. And we could just kind of get back down. I just want you to understand you're trying to run your household on $72,000. That's $6,000 a month when you started with $200,000 at the top. There's a big gap there.

I know. This is why we're kind of sick. Yeah, there's a big gap there. Some of that's taxes, and you do live in California, so you've got to double dip on the taxes again. A real high tax rate. But you've got federal income taxes, a bunch on this. So all of that's mixed into this equation. But, yeah, I wouldn't fool with it because it's single stocks.

I wouldn't fool with it because 15% is not enough of a gap to fool with. I wouldn't fool with it because you're in the red first and foremost. And I hope that helps you. Thanks for the call. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. It's a free call.

Lee is in Portland, Maine. Lobsterland. What's up, Lee? Hi, Dave. Thank you so much for taking my call. Sure. What's up? Well, I've heard you, and I've been listening to you for years, speak of buying insurance until you can self-insure.

And I'm just wondering if that applies to long-term care insurance as well? It can. It can. I mean, depending on how much risk you want to take and so forth associated with that. So how much money do you have? Well, my husband and I, we're 61 and 64, and we're working part-time now. We bring in between $3 and $3.25 a year, and we have no debt. College is paid for, and we're empty nesters.

We have probably between $7.3 and $7.4. Million dollars? Yes. Okay, you easily could self-insure through this. Here's what you're self-insuring through, okay? The average time spent in a nursing home is 2.4 years. Okay. And the average cost of a nursing home, in your case, you might do a real nice one, say $60,000, right?

So you're taking a $180,000 risk. What percentage stay longer than three years? 24%. One quarter stay longer than three years. Oh, okay. Most of the long-term care insurance covers three to four years, and that's about it. Oh. And 70% of the claims are for home care anyway.

Okay. So if you get sick and your husband needs some help taking care of you, the likelihood when you have a $10 million, $7 million net worth is he's going to hire a nurse to come in and help. Okay. You're not going in a nursing home. I mean, that would be normal, right, in your situation. Right. That's what would happen at our house, and we're multimillionaires, too. I mean, the chances of me putting Sharon in a nursing home, I'll just hire somebody to stay up at the house 24-7.

I'll just turn one bedroom into a nursing home. You know what I mean? I've got the funds to cover it and then some, so it's not a big deal. You can self-insure through that. Because basically the risk is, on average, let's say it's $100,000 to $200,000. That's the risk you're mitigating with this. And you can absorb that risk if you've got $7 million. Okay.

So if you want to buy it, you can. It's okay. There's nothing wrong with it. It's like, I don't need life insurance. Sharon's okay if I die, but I've got some life insurance. S-W-I. Sharon wants it. There's no logical reason except she wants it.

She's earned the right to say that so we got some um just makes her feel a few million dollars better i don't know whatever but it's okay feel better feel better that's what it's about so you can do that but that's kind of the averages on the nursing home world and what someone in your all situation would typically do. Folks, let's cut through the bull. Interest rates are exceptionally low, so you're missing out if you have not called Churchill Mortgage to see if you can save money on your home loan. Lots of other companies are out there claiming great deals, but don't get lured by slick advertisements. No-cost refinance offers

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NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Daniel is in Cincinnati, Ohio. Hey, Daniel, how are you? Hey, Dave, how are you? Better than I deserve. I see on my screen you're debt-free, man.

Yes, sir. Congratulations. How much have you paid off? I paid off $53,000 in 18 months. Good for you. And your range of income during that time? $60,000 up to $75,000. Cool. Very good job. Well done, man. That's excellent. What kind of debt was the $53,000? All student loans. Wow. So, I mean, you must have lived on nothing. How'd you do this?

A lot of hard work and support from the family. I graduated. Mom gave me the financial PCDs for my long commute to work. Got on board. I paid off $10,000 right away. And then I became normal. So a couple years after that, I discovered podcasts. And I was like, I've got to look up Dave Ramsey again and get back into it. So I started listening. And I started dating my fiancee.

And it kind of gave me that why. So it was kind of a catalyst to my debt-free journey um and picked up a couple of side jobs um and got a new full-time position to kind of increase that income um and then just started hammering it out way to go man congratulations so uh you are have you gotten married are you still engaged? Just engaged. I get married next year. Oh, cool. Well, congratulations. Very good.

Very good. So the key for you getting out of debt was the extra jobs and what else? Just kind of hard work and determination. Just kind of putting a nose to the grindstone and just getting after it. I mean, I got a big why. I've been blessed with so much, and it was time for me to pay the price to earn those blessings. So I just wanted to get it done before getting engaged so that, you know,

down the road I can provide for family, kids, you know, all that. There you go. Well done. Good stuff. Who was your biggest cheerleader? My fiancee is one. They were supporting me along the way, along with my parents. But instead of pom-poms, they carried credit cards in their hands,

so I worked on that on them. That works for me, man. I love it. So cool cool great job well congratulations sir i'm very very proud of you guys well well done well done all right it's daniel in cincinnati ohio daniel we've got a copy of chris hogan's book for you retire inspired that is the next chapter in your story we close the debt chapter we're going to open chapter two and that's where you become an everyday millionaire and outrageously generous as you go along so uh and you get married and you have kids and you take care of life and wife and hey you're going to be in a great place man you're gonna be in a great place daniel in cincinnati

fifty three thousand dollars paid off in 18 months making making $60,000 to $75,000. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! Yeah! This is how it's done. Well done, well done, sir. Fabulous.

Milton is with us in Florida. Hi, Milton. Welcome to the Dave Ramsey Show. done, sir. Fabulous. Milton is with us in Florida. Hi, Milton. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. It's an honor to speak to you. You too, sir. What's up?

My question is, I've been contributing to my 401 cases. I was 25 years of age. I'm 51 now. And I'm just trying to find out. I currently put 17% into my 401k. I know you say it should only be 15%, but I was trying to play a little catch up because for the first 15 years, I was only contributing 8%. And by the age of 40, I started contributing 17%. So I'm debt-free. I have my emergency fund, and the only debt I have right now is my house, and I'm hoping to pay that off in the next five to six years. So my question is, should I take 7% of that 17% and fully fund a Roth IRA and then continue contributing the 10% to my 401k.

So that as far as tax implications, you know, the Roth is going to grow tax-free, and I can let that sit while I'm retired and just you have that kind of as backup money. But I don't know if that's going to make a difference for my retirement. I currently have a 12% return rate on a 10-year return rate of 12% in my 401k, so I'm just trying to figure out what's going to put me in a better position if I start opening the Roth IRA and fully fund it for retirement. Well, here's the thing. Here's the thing.

You're going to have enough in your 401K that you don't need to touch this Roth IRA for many, many years, and it will continue to grow well past up into your 70s, maybe 80s even. Before you touch it, you may never touch it, and it continues to grow completely tax-free. And so the math is going to say tax-free, tax-free, tax-free. You can do $6,500. If you're married, you can do $13,000 over $50,000. Your limit is $6,500 on a Roth IRA. Yes, I would do that.

I would not do it as part of my 17% plan. I'd do it as part of my 15% plan. Does your 401K have a match at work? Yes, it's 4% on the first 8%. Okay, then let's do 8% and then let's do 6,500 each. And I think

that's going to put you around 15% and I want you to concentrate on paying off your home faster than you were. Because you said, I hope I can pay off my home. I don't want you to hope. I want you to lay out a game plan and do it. It's not a hope.

It's not a wish. It's a game plan. We lay out the math. We're going to need to put this much extra on in a month so that by the time I'm 60, I'm 51, the sucker's gone. And you get rid of it. And then you go back and max out everything for the last few years of working. You're going to be fine. You've got years of working. You're going to be fine. You've got plenty of money.

You're doing a good job. You're saving aggressively. You're thinking. You're paying attention. You're making your money behave. You're the kind of guy that ends up an everyday millionaire. You've got all the attributes. There's somebody that's going to end up there.

So get that house paid off. Limit your contributions to 15% and baby step four until your home is paid off. And so we're going to do the 8% and get the match. We're going to do two fully funded Roth IRAs if you are married, 6,500 each. And if that leaves you at 14.8% or something, well, so what? It's okay. 15% is where you want to be, right around there. So good question, sir.

Thank you for joining us. You're doing a good job. Open phones at 888-825-5225. Lisa on open phones, I'm sorry, Andrew on Twitter says, When do you suggest not spending more than 25% of your take-home pay on housing? Is it safe to assume that includes property taxes as well? When do I suggest not spending more? I never suggest you spend more.

I don't understand your question. The wording has got me confused. How do you not spend more? Can't figure that out. Okay. Anyway, so here's the thing. Don't spend more than 25% of your take-home pay on a 15-year fixed rate. If you spend less, that's always a good thing.

Because the whole point here is get the house paid off and avoid debt of other kinds because you're not house poor. When you have a 35% of your take-home pay, 40%, 50% of your take-home pay as your house payment, then you don't have any money left, and you end up, oh, I don't have any money to buy a car. I'm going to get a car payment. Oh, we can't fund the kids' college fund. The kids are going to get a big student loan debt. Oh, oh, debt, debt, debt, debt, debt, debt, debt.

And it's all the mathematical result of your house owns you instead of you owning your house. That's what house poor is. You have no wiggle room left in your budget because too much of your payment went to your house payment, went to your budget. Too much of your income went to your house payment. It ate you up. And that's what you want to avoid. So that's the point.

And, yes, principal interest, taxes, insurance is your house payment. P-I-T-I. And so, yeah, that includes insurance, includes property taxes. And no, you don't get a pass on math if you live in California. Math still works in California. This is the Dave Ramsey Show. Thank you. Anita is with us in Seattle. Welcome to the Dave Ramsey Show, Anita. Hi, thanks for the call, or letting me call in.

My pleasure. How can I help? Yeah, I have a question. So my husband and I are both new to the program. We're in baby step number two, and we own two houses. And my question is if we should consider selling one of the houses to pay down our debt. Okay. I assume you live in one, and the other one is what?

It's a rental. Okay. All right. And how much debt do you have not counting your houses 120,000 on what student loans and cars okay how much is student loans and how much is cars oh and some credit cards okay how much is each category? So our student loan, we actually rolled into a HELOC because it had a lower interest rate. So we have about $72,000. Cars, we have about $16,000.

And credit cards, we have about $22,000. Okay. And your household income is what? $150,000. Okay. Cool. And how much do you owe on the rental so the rental we owe um 200 000 what's it worth uh 350 000 okay all right so selling it selling it would clear the debt then i'm not going to sell your primary.

I wouldn't sell your primary. Yeah, and then the other thing I should probably note is we pay about $100 out of pocket per month to keep that rental. Why? It doesn't cash flow and you've got $150,000 worth of equity? No, it does not cash flow. No. Okay. Well, that's a no-brainer to sell it then, isn't it?

Yeah. Let me give you the figures for our primary, though. Why does the primary even come into play? Do you want to sell your primary? Well, the primary has a lot of equity in it. Do you want to sell your primary? Do you not like your house? It is a bit of a fixer-upper, and selling our primary and moving into our rental would clear all debt, including the mortgage on our rental. Where do you want to live five years from now? That's a great question.

I think that's why it makes it a little bit difficult for us because, yeah, either house, really. No, no, no, that's not true. Where do you want to live five years from now? Not in the condition that my primary house is in. Well, we're not... It's not... The area, yes, but not in the house that... Not in the condition that my primary house is in right now. Could you not get it in condition

if you were out of debt making $150,000 a year? We could. Okay. We could. So if you sold the rental and paid off all your debt and you learned to live on a budget

and you chop up your stupid credit cards and you lean in and fix up the house, what's it take to fix the primary to where you want it to stay where you'd want to live there five years from now how much money about 200 000 okay and you make 150 so it sounds like that's a three-year project yeah do you want to do that yeah i mean i would love we live in a great area um it's how long have you lived in this thing half-baked in our primary yeah we have lived in here for seven years yeah well you've been living in a half-baked mess for seven years you're tired of it yes i am yeah you need a plan to fix it or you need to move.

Forget all the other stuff. Forget the debt. Forget the rental. Forget everything else. It's the fact that you all are sitting there languishing without a plan in a half-baked renovation. That'll exhaust anybody. Yeah, yeah. And so you need a plan that says we sell the rental and we're going to lean in and we're going to be on beans and rice and we're going to lean in, and we're going to be on beans and rice, and we're going to do.

And here's the list of projects on this. And the first project we're going to do is this one, and that's going to be done at the end of six months, and the next project in the next six months, and the next project in the next six months. And three years from now, we will have spent, you know, $180,000, $60,000 a year out of our $150,000 income, and we'll have this thing fixed up and we'll like it do you want to work on that house for three years if you can do it aggressively and keep it or do you want to sell it and sell both of them and and move into something that's ready yeah so that's that's what we're considering can i give you the figures for our primary sure uh so we we um so we owe about 265 on it and it's worth 700 as it sits

yeah even half baked yeah okay all right so if you sold if you sold both of these and you paid off all your debt you'd still be sitting on a huge chunk of cash and just buy something that you like. Yeah. But sell everything. Okay. Here's the thing. You need to make decisions not based on what gets me out of debt today.

That's a good decision unless you're about to go bankrupt, which you're not. You've got plenty of equities, okay? It's time for you to sweep the corners out of all these areas of your life because there's dirt piled up in two or three of these corners. You've been sloppy with the stupid credit cards. The student loan's been around so long you think it's a bet. You're sick of that. The cars are just exasperating.

And you've been sitting in this thing half-baked for seven years, and all of it's just kind of stuck. And so what I want, if I'm you, is I want a plan that executes all of this. But the way to ask yourself the question is the one I asked you earlier, and that is, where do I want to be in five years? Do I want to have spent the last three years renovating this house, or do I want to just sell everything and go buy one that I want to live in five years from now great i like that one personally yeah i like you too yeah i like the cleanliness of that because i think you all aren't very good at completing renovations we're not and you would notice that if you walked in our house. Well, it's seven years. I already noticed it in three minutes on the phone with you.

So, yeah, I just think you're going to have a great life. You don't have anything hanging over your head. You don't have any debt hanging over your head. You don't have a rental that's losing money hanging over your head. And you don't have an unfinished renovation hanging over your head. And so, you know, the rental basically clears the debt on this, and the $500,000 equity and the personal residence, take that money as a huge down payment or buy a house for $500,000.

I don't care. That is the house you want to live in five years from now. And then get about the business of paying it off. Let's go ahead and keep working the baby steps. Good question. Interesting discussion. Very interesting. Took me a little while to catch up with where you were.

Thanks for being patient with me. Open phones at 888-825-5225. This is the Dave Ramsey Show. It's all about you. But you know what? The way we were talking about there is not a bad exercise for everyone listening. We have noticed in dealing with millionaires that a survey, to affect me 10 years from now, 20 years from now? People who are broke and stay broke say, thank God it's Friday.

Oh, God, it's Monday. They make very short-term, impulsive, immature decisions. And the neat thing is, is you can just decide, whether you're 22 or whether you're 62, you can just decide right now, I'm going to start making mature, long-term, visionary decisions. And it will lead you to make the decisions like we're talking about with anita there where do you want to be in 10 years and what has to be true to get there that's not true now and you know when i buy this car does it take me to a really sweet, cool feeling in my little boy has a big truck,

and Saturday, and I just sacrifice the next decade of my life for a freaking $700 truck payment because I was an impulsive child, or I save up and pay cash for stuff because then I'm going to build so much wealth I can drive whatever truck I want to drive. Ah, see what I'm talking about here. Think long term. It leads to wealth. Adults devise a plan and follow it.

Children do what feels good. It was a great discussion with her. It was a great discussion. This is the Dave Ramsey Show. Spotify. For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.