The Ramsey Show - App - Pause Retirement To Pay Cash for a House? (Hour 1)

Episode Date: April 12, 2022

Dave Ramsey & Kristina Ellis discuss: Getting scholarships as an older student, Investing in retirement vs. paying cash for a house, Moving into a potentially risky financial situation. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. This is the show where we talk about your relationships, your mental wellness, your career, your jobs, your money, and your life. It's called The Ramsey Show. The phone number is 888-825-5225. That's 888-825-5225.

One of the beautiful things about having a career as long as mine has been, over 30 years now, of doing these various things, talking about money and life around the world, and on the air here for coming up on 30 years, not quite yet, is that I've gotten to see a whole bunch of very, very cool milestones occur. And today is one of those. Brand-newly-minted Ramsey personality has been with us for under a year, but has just been on the air a couple of times with me for a couple of segments, is now officially one of our co-hosts. Joining me today is Christina Ellis. We've introduced her to you before.

She is absolutely incredible. She's going to answer your questions along with me and George and Rachel and Deloney and Coleman and all the people we put on here. I probably left somebody out, but I think I got most of them. Anyway, we're here and you know we have a whole series of co-hosts that do this show uh with me and together sometimes when i'm not here and christina joins that bunch today she is a brilliant brilliant lady uh and uh so she'll have a lot to add to your life a lot of comments that'll a lot of wisdom that'll help you

uh and uh i think it's probably a good idea i know we've done this before but on milestone day i want to take a second and uh let our audience one more time hear your story the the short version of your story because it's really really important because our stories are what bring us here our stories are what um you know what allow us to answer these questions because you can get a degree and still not have any wisdom. But when you've got a story, a little experience, you start to get some wisdom. So let's go back to your mom ends up raising you as a single mom after the loss of your dad. Yeah, my mom, she is such a wonderful mom.

She's super motivated and believed in us completely. And she actually sat me down my freshman year of high school and she said, Christina, I love you and I believe in you, but there's just no way that I can support you financially. Once you graduate from high school, you a long and painful battle. And she was an immigrant. She was Venezuelan, Venezuelan. Yeah. Okay. Yeah. So even though it was really hard to choke that down, I knew that she was just trying to help. She actually said, Christina, if you work hard enough now, you can go to college and start fresh, completely debt free with scholarships. And I didn't really know how that could happen at the time. I wasn't a perfect student. I wasn't a star athlete. So I just, I was kind of confused at how I could win scholarships, but she had so much belief in me that I somehow started believing in myself. And I started doing a ton of research. I read every book, every article, every magazine I could find on scholarships. And I put together a strategy and I went for it. I worked hard throughout high school. I built up my extracurricular activity list. I did a ton of

volunteer work. And then my senior year of high school, I treated the scholarship application process like a part-time job. I just applied, applied, and applied. And thankfully, that hard work, it paid off. It led me to win over a half a million dollars in scholarships. $500,000. Okay, hello. But you can't go to school without student loan debt, you told me, right? Some of you people out there.

And I think she just mic dropped on you right there. Okay, so $500,000 and you go and get a degree in? Yep, human and organizational development and business planning and entrepreneurship. And then went on and got a master's in? Education. In education. Okay, wow. Yes, completely debt-free, thank God.

So now we have another graduate level Ramsey personality. Because, I mean, Deloney has two PhDs. I have, you know, a PhD in DUMB. I've got one in life experience. But now unofficially, and we can't make as much fun of Vanderbilt because you graduated from Vanderbilt. I did graduate from Vanderbilt. It was good to me. I've got to take it easy on Vanderbilt if you got your master's from vanderbilt and paid for it all with scholarship

money completely paid for with scholarships no no student loans and wow so and so we ran into christina years ago she became a part of the uh the borrowed future documentary we had her talk to teens as we were working on this whole student loan debacle crisis, epic failure in our culture. She was one of the voices out there saying, you don't have to, you don't have to. You had a best-selling book on the same subject of how I got a half million dollars in scholarship money, and that was about eight or ten years ago. And we have, you know, we remain friends, and then you joined the team.

It's been under a year, right? Yep, right about six months. About six months ago, and she's been, has been a part of our extended family for some time, and so she knew the Ramsey answers to your money questions, in addition to the student loan stuff, and so we knew it would be really, really easy for her to come in and definitely become our in-house expert on don't take out a student loan, because you really can't deny the story that she has lived but also just become yet another money personality along with george and rachel to be able to answer your money questions and your life questions which we all do here as well and so she's been working with dr deloney and king coleman and the uh on the career piece and on the mental wellness piece and also with our leadership team here.

And now we're ready to have another co-host. Congratulations. Welcome. Thank you. I am so thrilled to be here. Thank you. Such good stuff. Such good stuff.

So you need to expect big things from her and expect her answers to be accurate because they will be as she answers your questions all across America right now. She's been on media for the last two weeks doing media all over the nation. The interviews are absolutely astounding. But you had good media training from back when you had the best-selling book before you got here. Yeah, I've been out there for a while working with students and families just fighting this toxic student loan industry, trying for a long time to tell people you don't have to take out student loans to pay for college. There is another way. And thankfully, I've been able to work with thousands of families around the country and help shift their mindset to help them see that you don't have to go to college with

debt. You can do it debt free. So fighting this toxic culture is something she was doing and we are doing. And so, man, it just made a natural, natural fit. So we'll take your calls. It's toll-free and nationwide right here on The Ramsey Show. The phone number is 888-825-5225. If you do have a student loan question, we certainly have one of the world's top experts here. And I'll speak into it, too, just because I'm like an expert on my opinion and stuff.

So, you know, you call in, but we'll talk to you about whatever you want to talk about, as always. The phone number, 888-825-5225. It's common sense for your dollars and cents. And, you know, I think, to me, I mean, I'm impressed with the master's degree from Vanderbilt. That's an impressive thing. But I think being raised by a widowed single mom from Venezuela probably qualifies you to give answers more than just about anything. Can you imagine?

I mean, the wisdom that that woman and the hard work ethic. And that's the thing, that she instilled a work ethic in us that helped us tackle anything that we faced. And I think that is the biggest key to success is being willing to fight no matter what obstacles stand in your way. Yeah. And she didn't tolerate excuses. She was not an excuse woman. Oh, no. Oh, no.

She's a get-her-done warrior princess. I like it. This is as good as it gets. This is The Ramsey Show. People all over the country are discovering a faith-based and budget-friendly way of meeting health care costs through Christian Health Care Ministries. Christian Health Care Ministries, or CHM, is a non-profit organization that helps members carry one another's burdens with health care expenses. And they have successfully shared each other's medical bills for nearly 40 years. See if CHM is right for you by visiting chministries.org.

CHM is a proud sponsor of Dave Ramsey Live Events. best-selling author ramsey personality christine alice is my co-host today open phones at triple eight eight two five five two two five that's triple eight eight two five five two two five 825-5225 That's 888-825-5225 825-5225 Jacob is with us in Wait a minute, I hit the wrong button. Jacob is with us in Decatur, Illinois. Hey, Jacob, what's up? Hey, Dave. Hey, Christina. How are you guys doing?

Better than we deserve, brother. How can we help? Hey, Christina. This question's more for you. I'm a 30-year-old. See, it didn't take but one call for you people to cut me out of the show. Just one call, and I go straight, Christina, you're all we need now. I like it. I'm so rejected.

No, I'm kidding, Jacob. Go ahead. I'm 30 years old, and I'm thinking about changing careers. Me and my wife have decided that it's a good idea for me to change careers, but we both want me to get scholarships. And just being 30 years old, I'm having trouble finding scholarships for people wanting to change careers. So where would be a good place to go and look? Because I just find stuff for kids coming out of high school for scholarships.

Well, Jacob, what do you want to study? Nursing. And what do you do right now? I'm in the trades. Awesome. Well, you can definitely find scholarships way beyond high school. I've met so many people who've applied for scholarships

all throughout college and gone back as adults. I want you to, one, start looking at scholarship databases. You can narrow down exactly the criteria that fits you. So type in nursing, type in going back to school, look for unique qualities about you that'll help you stand out and you can plug it into those databases. It's basically like Google for scholarships. So definitely start there. And then I, as basic as this sounds, recommend a basic Google search where you type in those unique qualities like nursing, scholarships, going back to school. And that often yields really great results. Now, also being something...

Go four pages deep when you do that. Right. Don't take the first three clicks on it. Right. Definitely. And also look into programs for people specifically going back to school with your state. A lot of states have programs that are for people who are returning to school, returning students. And sometimes hospitals have programs where you can work and get tuition benefits while you're actually working for the hospital. So there are a lot of options for you out there, and I just encourage you to really dig deep and explore all those options, but you are

definitely on the right track. Now, the other thing is that you are entering a field that is known for paying for stuff. Nursing, there's been a perpetual shortage for decades, and a lot of the medical field, a lot of the hospital companies will pay for you to go to school. Now, it's going to be an indentured servant program, so to speak. You're going to promise to go to work for them as a part of the thing. Or if you could get a certain level of certification, get your foot in the door, become an employee, they'll pay for you to finish your school and that kind of thing. So the big hospital corporations like HCA, those kinds of guys, there's a lot of those guys that are willing to pay to do that. So if you're in a field that has high demand, the potential employer may do it.

And also consider looking at colleges that are potentially tuition-free, especially if you go with community college first. You know, there's a lot of community colleges that offer two years of free school. And if you're a nurse, you can maybe start with, you know, a two-year program to get your feet wet because you haven't done it before.

And you can figure out in that two years, is this something I really want to do? Is this really the direction I want to go with that career shift? Yeah, find out if there's some kind of an associate's degree that precludes, or that is a prerequisite for nursing that will get your foot in the door again, and work your way through like that. So all of that will work. The great news is the field you're entering is wide open

a lot of people have left the field because they've been driven out by the vaccine controversies and uh so there's a lot of need a lot of need and so uh you're probably going to find assistance from the industry in different ways be sure you're're looking for that. Good question. Jordan's with us in Miami. Hey, Jordan, welcome to the Ramsey Show. What's up? Hey, Dave, and welcome to the team, Christina. Good to have you on. Thank you.

Thanks. I'm excited to be here. How can we help? Hey, great. Well, got a question. What would Dave do kind of question? I'm 42. I'm going to be debt-free, emergency fund and all by next year at this time.

And once I get that, thank you. Thank you very much. Once I get completed with that, I'm going to have to save for a new car. And I want to do the 100% down for a condo, but I don't know if that is going to be possible considering I will be 43 and I've got about $2,500 in retirement right now and I'm not even contributing to that while I'm focusing and getting Gazelle and hitting my goals with this. I'm just worried about retirement and doing the 100% down for the house and I'm single right now so I you know it's just me doing this. So what do you think the target dollar is? What do you mean? How much money would you need to save?

Well, I mean, the condo prices right now, the average price, I'm actually outside of Miami. I'm actually near Fort Myers, Naples, around $250,000. Okay. And what do you make? And that kind of, I make around $47,000. And with my side hustle, I teach, I make around $47,500. With my side hustle, it's probably about $50,000, and with my side hustle I teach, I make around $47,500. My side hustle is probably about $50,000. $50,000 additional or total of $50,000?

No, total of $50,000 a year. So your side hustle is $200 a month? Yes. Okay. Yes. All right. Well, here's the thing. I don't recommend, is a better way of saying it.

We don't recommend that you put a permanent stop on retirement to save up a down payment or to save up for a house longer than about three years. Okay. And so if you wanted to get a head start on it and go, okay, we're going to do maybe step 3B. We're going to finish the emergency fund, go up to three years, and pile up as much as I can pile up towards 100% down, see where we are at that point, and then start saving for retirement. What about in a mutual fund?

Yeah, in good growth stock. Could I save it in there? You could. That's okay, but that's not going to be the answer to the equation. It's just going to take you a while. I mean, if you get $10,000 a year into this account, is that 25 years? Yeah, it is. Yeah.

Okay. And so we obviously don't want to avoid retirement for that. If you put $20,000 in, it's 12 years. I don't want to avoid retirement for that. If you put $20,000 in, it's 12 years. I don't want to avoid retirement for that long. And so it's probably going to involve you putting a down payment on something and paying it off as quickly as you can rather than the 100% down plan, or it's going to involve you getting your income up dramatically. Okay.

Because the ratio of your income to the $250,000 target is what's bogging the math down. Does that make sense? Yeah, yeah. I guess I was wondering if I should just do a strong down payment or just 100% down. Am I going to be okay at retirement considering I only have $2,000 right now and next year? You are. I'll be just going full force at $40,000? Okay.

You are. If you take three years off and save up a good strong down payment and then take off from 45 to 65 and you save 15 of your income during that time and if you never get a raise you're still going to be fine okay and we know you're going to get a raise what would you what would you what would you get what would you guess dave if you had to guess at well i think you can go jump on RamseySolutions.com, use one of our retirement calculators, and it'll help you calculate it to be exact.

But, I mean, if you're saving 15%, that's $7,500 a year. And if you do that for 20 years, that's going to be in excess of $1 million in good growth stock mutual funds or up close to that. You're going to be retiring with dignity. And during that 20 years, you would get any mortgage you take out paid off because we're telling them never to take out more than a 15-year fixed rate mortgage. Yep. And Jordan, I just love your motivation.

I love your heart in this. I love that you're desiring to put 100% down. That's just incredible. But if you do follow the baby steps and put, you know, 15% in retirement and then get your down payment, get your 15-year mortgage and then pay it off, you're going to be at a baby step seven before you know it, which is really exciting. So I love your heart behind this and just where you are with wanting to do this. Yeah, I agree. And I always want to encourage people to do the 100% down plan.

I want you to be thinking that way. And I love that we've convinced him that it's possible. And the thing is, when you just look at your ratios on the math, that's what throws you. And so, you know, how much can you save out of $50,000? If you could save $25,000, which are serious beans and rice, after you pay taxes and eat, right, can you save $25,000? And that's still a 10-year plan to get the 250 000 so the real trick to the equation is go double your income dude and then boom boom this happens in four years and the whole discussion changes uh but i don't know how you do that you've got to decide how that works in your career field and in what god's called you to do. This is The Ramsey Show. justin and katie are with us in the lobby of ramsey solutions on the debt-free stage hey guys

how are you good great welcome good to have you christ Christina Ellis, Ramsey Personality, just my co-host today. You're here to do a debt-free scream. Congratulations. How much have you paid off? We paid off $133,853 in 25 months. Wow. And what was your range of income during that two years and a month? We started out at $82,000 and we got up to $180,000. Good for you. Way to go. What kind of debt was the $134,000? We had credit cards, two vehicles, lots of medical bills, and $60,000 in student loans. You guys were normal.

Very normal day. Very normal. And you woke up and realized normal sucks. It did. Very much so. Man, how long y'all been married? Ten years. Okay, so eight years or so

seven years or so into the marriage something happened and you said oh crap this has got to change tell me what happened well dave uh i kind of hear you talking about it sometime and um or your callers are calling in you know there was something that i wanted i went to go get it and katie pretty much told me said hey, hey, we can't do that. And I said, there's no way. We live in South Mississippi, make a pretty good income. Why can't I do it? She said, we have no money.

And she kept telling me about this Ramsey, you know, the program, FPU and everything, and I kept blowing it off. I'm like, you know what? I was raised in church. I've heard of Dave Ramsey. And she finally talked me into spending the money, and it wasn't you just trying to get money from us. You know, it was actually going to be helpful stuff.

And when we played that first or second video, it had this guy running around on stage, and he's talking about being this hillbilly from Tennessee, and he's cutting up these cards, and I can relate to that. The redneck boy from Mississippi can relate to him. And I jumped up, and I'm like, that's it. She's like, are we not watching no more? I said, no, we're doing this.

And I went straight to the drawer, and I got the Home Depot card, and I cut it up, and I cut the MasterCard up, and I'm like, that's it. She's like, are we not watching no more? I said, no, we're doing this. And I went straight to the drawer, and I got the Home Depot card, and I cut it up, and I cut the MasterCard up. And I said, we're done with this. And then it was on. And Katie, you're going, what just happened? I was not expecting such a response. And I didn't really think he would jump on board so quick. And so thoroughly. Very much so.

I think it really, truly hit me that this wasn't an impulse because two months later, he sold his $70,000 truck that was his dream truck without even telling me. He just went and did it and came back home and was like, it's gone. Whoa. What kind of truck? It was a F-150 loaded out. I guess it was. Oh, my gosh, man.

A guy like you sells your truck. I mean, hey, Katie, that's a husband yelling, I love my wife. That was I love you. I remember that moment for the rest of my life right there. I truly felt loved. You should have. And, David, it was on. I mean, podcasts.

I'd never listened to podcasts in my life. I was listening to them. And then all of a sudden, March 2020, the pandemic hits, and I'm a school teacher. So school teacher so i go home and you know to flatten the curve for two weeks i'm there forever it feels like and i'm doing all these chores around the house i'm listening to your show and she's a she's a rn she's a nurse and uh she keeps mentioning about this travel nursing thing that people are starting to travel nurse and i'm blowing it off it's like there's no way we can do this and i start praying about it and i'm listening i'm painting outside the house one day and i'm listening to your show and a lady calls in and she's like uh dave i really we can do this. And I start praying about it. And I'm listening, I'm painting outside the house one day and I'm listening to your show

and a lady calls in and she's like, Dave, I really want to do this, but I don't want this to be my long-term plan. And you're like, this ain't your 10-year plan. This is your short-term plan. So I called her. I was like, hey, God and Dave just spoke. We're going to travel nursing.

You know, so. That's amazing. Who were your biggest cheerleaders in the process our biggest cheerleader was his mother we could not do half the things we do without her she constantly keeps the kids make sure we're fed um i can leave for months at a time and know that they're all taken care of and i mean of course he does a great job with the house and getting them to activities in school but she just constantly we are very flexible are Are you still travel nursing? No, actually, because of financial peace, I was able to take a job two miles from the house

that pays not as much as a lot of places. Well, I know, nothing pays as much as travel nursing. Or even hospitals that are an hour away. A lot of people have to travel from where we live because we're really rural. But because of our peace and our situation, I don't have to. I get to choose something so how long did you how long did you travel nurse for the 22 months for 22 months almost two years that's a long time very long that's a serious sacrifice yes last year i was home 28 days out of the

year i worked all the other ones 14 21 days in a row so how much were you making doing that um up to 100 what 60 140 yeah so i mean we added 100 000 to our income almost yeah i'm doing that yeah but now you're free forever that's right so you paid a price you live like no one else you work like no one else so now you work like no one else wow y'all are and you get to be mr mom Mom. Yeah, he sacrificed a lot. We have four here and one that wasn't able to come with us, and that's a lot to juggle and do by yourself. Yeah, it is. Yeah, man, you guys both really jumped in and went all in.

It's impressive. You're impressive people. Y'all are amazing. What would you tell people is the key to getting out of debt? Like y'all talk about knowing your why. Obviously,

four out of five of our whines are here, but surrounding yourself with positive influences, you know, people that's going to keep you motivated and if you're going

to follow the program, follow the program. It's not easy. You know, going back to what Dave says And if you're going to follow the program, follow the program. It's not easy. You know, going back to what Dave says, him and Sharon throwing down at the house over stuff. I mean, our budget meetings wasn't easy. I mean, we left there mad sometimes. But we'd come back and say, okay, this is what we've got to do. I mean, I know it looks easy because we're standing here now.

But you've got to grind it out and do it. And I know not everybody can increase their income by $100,000. But there's so many things every store you go in right now says we're looking for full-time or part-time help there's stuff out there just to get out of this season of life after all the hard work after all the sacrifice how does it feel to be debt-free um i don't think it's hit all the way for me um sometimes, like, yes, taking the job close to home was easy that I'd get to, but sometimes we're, we still have goals that we're grinding, and so sometimes I forget that it's not toward debt, but then when something comes up, like, if new tires need to be bought, it's okay. We've, we're prepared for that. Used to, that would crush us. Used to, it would take,

I mean, I would cry and just wonder how many more extra hours do I have to work I mean that 82,000 we started with was him working three jobs and me working two different hospitals I mean we were we've always been a worker but now we're down to him just teaching and me just working one job and being home more and God's blessed us through that process and our obedience to be able to make more now than we were when we started when we were working five jobs total. Yeah, absolutely. Very cool. You guys are impressive. You're a very neat couple.

I'm very proud of you. Okay, so you decided to go on the road travel nursing because I travel occasionally, and people that think travel is glamorous are people who don't do it. And so it's actual work when it's involved in work and it adds work to deal with tsa and deal with hotels and deal with all the stuff so uh you had to have people out there looking at y'all like you were nuts like questioning your sanity look even people at church you know i'd come around and like i said when i was all in that's all i was talking about i still talk about you, you know, Dave Ramsey playing, what to do. And people at church, they would always joke at me, you know, something about Ramsey.

Is that Ramsey approved, what we were doing or whatever, you know. And they still do that. And, you know, I laugh it off, but there's also people that reach out to us that say, hey, what are y'all doing? How can y'all help? Or what can I do? You know, we love to pass on the information. That's something I'm looking in is trying to go into the ramsey coach and you know and uh that's kind of my future

plan to kind of do that on the side and a lot of the conversation comes from he he's always been a great gift giver but i did not realize until we started this journey how much he loves to give and we were making more money and we're in this journey, and I get focused, and I'm a planner. And so this is our plan, and this is how much we're going to put toward debt. And he'll be like, oh, this family needs their water turned back on, or this family needs their dad just lost their job. Let's help them out. And I'll be like, but that's what we're putting toward debt, and I'd have to refocus. Okay, God.

And he would just give it. And so a lot of people reach back out and be like how are y'all able to do that not that they know but um he's just constantly if there's a need okay we can meet that or even if it's just a small thing i'll help you know put a little gas in your car so you can get to work let's bring it let's bring these girls in their names uh micah magnolia madeline and maddox y'all like m's don't you and the oldest macy she had j softball, so she couldn't come. Okay, so what are their ages? What's the range?

14, 10, 7, 5, and 3. Oh, beautiful. Very cool. Well, we're so honored to have y'all. Way to go. We got a copy of the Baby Steps Millionaires book for you. That's the next chapter in your story. And this is $134,000 paid off in 25 months, making $82,000 to $180,000.

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! If you think it's easy, you're wrong. If you think it's worth it, you're right. This is The Ramsey Personality, is my co-host today as we answer your questions about your life and your money.

It's a free call at 888-825-5225. Harrison is in Dallas. Hi, Harrison. What's up? Hey, y'all. How are y'all doing? Better than we deserve, brother. How can we help? Yes, sir. Hey, I'm calling in Dallas. Hi, Harrison. What's up? Hey, y'all. How are y'all doing? Better than we deserve, brother. How can we help? Yes, sir. Hey, I'm calling in today. I'm just in a particular situation. Thought I'd seek some advice.

I'm 27 years old. I have a farm out near the Dallas area. And basically, the in-laws are moving out onto the farm, which is great. We're excited about that. And they're going to buy essentially the farmhouse currently on the property.

And so my wife and I, we are going to build another house. And with the market the way it is and how expensive things are, it's just a little nerve-wracking. And I personally do not want to go into more debt. So that's kind of what I'm dealing with. Okay, so they are building, they're going to buy a house from you on the farm. How many acres is the farm? Yes, sir, we have 26 acres.

Okay, so you're going to sell them a portion of the farm that has a house on it? Yes, sir, that's right. Okay, and so how many acres are you selling them? Well, so the way we're actually going to do it, they don't want to be on the deed. So they're just essentially going to, as long as it checks out with my CPA, from what we understand, they're just going to gift us the money. And it's kind of a, it's just an agreement that we're going to take care of them as they get older. And they're, you know, obviously they're going to help us with our kids and stuff like that.

So they're about at retirement age. Mom-in-law just retired. So dad-in-law, he's got one more year to go and then he's done. So they're going to gift us basically what the house is worth. And then we're going to take that cash and probably build another house. And you live in a home in town? No, sir. No, sir. We live on the farm. Oh, you already are on the farm. We are on the farm.

Okay, so is there two houses on the farm, or they're moving in with you while you build? They are going to be in the house with us while we build. Yes, sir. Oh, this sounds fun. Not? Oh, we've done it before. I was in the house with us while we build yes sir oh this sounds fun not oh we've done it we've we've done it before i was in the military i mean we moved around a lot we had to stay at their house for for good chunks of time so as we transitioned to different places so how much money is involved how much money they're going to give you um so we're uh and this is kind of a we we haven't got the house actually appraised we're're going to do it fairly, so we'll actually get it appraised. But we're thinking just between my father-in-law and I,

we're thinking $250,000 for the house is what it'll probably value at. Does your wife have siblings? Yes, she has a brother. Okay. Because he's giving up an asset of $250,000 for no asset He just reduced his net worth So are we going to give the sibling $250,000 extra in the estate plan? Or how are we evening this out?

Exactly, that's going to come out through his life insurance Okay So this is an advance on the estate plan And in return you're going to give come out through his life insurance okay whenever so this is an advance on the estate plan and in return you're going to give so the way you would legally do this is you would give them a life estate to the prop to the house right and i would carve it out and have it on a separate plat so that they have a life estate to that plat not to your whole freaking farm right okay and so you need to put an acre you know with a driveway around it

and that kind of stuff so that they have their own place and they have a life estate it remains yours but they have the reuse of it as long as they are alive yes sir okay that's what and it would be a legal document and you need to do it properly because you're gonna get in trouble if you don't now they can do that with a unified estate tax credit. Remember that phrase, unified estate tax credit without any gift tax. Okay. And so their CPA or their estate planner, better yet, can show them how to do that. Right.

The thing that scares me about the whole thing is there's no – if this goes sideways for some reason, there's no escape plan. Right. Yeah, I mean, we're Christians. We don't believe – Yeah, I know. I understand. I understand. But Christians have stupid crap happen in their life, too.

Sure. Okay? Yeah. And so I don't know what happens here, and I have no idea, but I've just seen a lot of things go wrong because i've been doing this a long time and there's no exit strategy here if everybody decides that you're going to live next door to the people that hate me now for whatever reason that they decided to hate me i don't think that's going to happen but i'm just trying to be bizarre enough and cause you to think this through uh because the only way you've thought this through is if everything is skittles and rainbows. Sure.

I mean, my wife and I, we've had conversations like this with them, and we're pretty confident that, you know. Yeah, you're confident enough to move in with them. I get it. Okay, I'll let them move in with you. But I think you think this is going to work. As a matter of fact, I think you know it's going to work. But I'm just saying there's, on the 2% probability that somebody loses their freaking mind in this equation. I need a better legal structure.

Otherwise, you're going to have somebody's got a life estate to your land that lives next door that's in dementia or something and is shooting across the field at your cows. I don't know. I mean, people do crazy crap, okay? Yes, sir. Is there a rush on this? Is there a rush, she said? Well, no, there's no. I mean, obviously, when their house is already sold,

so they're, you know, within a month, they will be on the farm with us. And so, I mean, we don't have a building yet. We haven't paid any money towards the builder or anything like that. So, you know, we have time, that is for sure. And that's why I'm calling, because it's kind of a funky situation, right? Yeah. Well, maybe before you commit to doing the official transfers and officially committing to this long term,

maybe you just take a little time to live together and see how that goes. See if you really, if things pan out the way that you're thinking and you really enjoy living on the farm together. Because that is, like Dave said, a huge commitment and a very long term commitment. Yeah, I think you can do it. If you want, the tactical way to do it is the estate plan, the life estate to the property, and it needs to be platted out. Two acres in the house or whatever it is is platted out with its own access,

its own driveway or whatever, which might be an easement. I don't know. But a life estate and a unified estate tax credit dodges the gift tax issue. And so that's the way you can legally pull this off. And then you guys have just got to really talk through what happens if things go wrong here. What happens if you want to sell because life changes? Well, you really can't because they live on the property and the title is clouded. Well, you've carved off this separate idea.

This is a separate plaid piece, which is what I'm telling you to do. Well, then you could sell the other acreage around it, and they would be left, you'd own a house with the four acres or two acres or whatever you left with them as long as they're alive and then when they're alive that they have access to as long as they're alive so that's a reason for carving it out um yeah i mean there's all kinds of weird things happen in people's lives and we don't anticipate them we don't see them coming so you have to lay out things that work in bad times and work in good times and if it only works for skittles and rainbows it scares me so you gotta have a you gotta have something going on so good call sir

we appreciate you calling so christina the thing this is like the um a miniature version of that is when uh someone calls me and says hey my fiance and i are getting ready to buy a house together and i yell into the phone no because i have talked to more than one in 30 years that the fiance died ouch and now you own a house with your fiance's dad and mom because by the way we didn't do a will of course and so her half his half the person who passed away's half is now in their heir's name since there wasn't a will and it goes so their mom and dad now with your dead fiance parents i mean you talk about awkward crud and but it's all we were just going to buy a house together you know and then you know and it doesn't happen very often it's a one percent of the time thing or a half a percent of the time but i've seen this and i've seen or you know more often

than that they break up now they own a house with their ex and then they get married and now the new husband or the new wife owns a house with the ex-fiancee half you know i mean this is the unintended consequences when but we're christians it doesn't matter christians have scrap happen okay so um you know that you just have to think through your all your worst case scenarios and have an exit strategy right you don't want to bury yourself deep in problems yeah literally and i i don't think that's going to happen with them i hope it doesn't happen to them but if weird stuff happens man i hope i hope they have a plan. This is The Ramsey Show. Dave here.

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