The Ramsey Show - App - Plan To Actually BE Rich Instead of Just Looking Rich (Hour 3)

Episode Date: August 3, 2022

Dave Ramsey & Kristina Ellis discuss: Cashing out mutual funds to pay off student loans, Taxes on company stock, What to do after you sell your home, Whether or not it makes sense to move out of the country financially.   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. We help people build wealth, do work that they love, and create actual amazing relationships. Christina Ellis, number one best-selling author, Ramsey Personality, is my co-host today. As we answer your questions about your life and your money,

open phones at 888-825-5225. That's 888-825-5225. Jordan's 888-825-5225. Jordan is in Rochester, New York, to start us off this hour. Hi, Jordan. How are you? Good. How are you, Dave? Better than we deserve, sir.

How can we help? All right. So I'm 21, and I just graduated from college this May. Yay. What's your degree in? Yeah. Information systems. Oh, I love love it you got the

big job yeah so i uh actually was fortunate enough to get a job straight out of the gate so fortunate enough for that yeah what are you making um a little bit over um i'm making 115 000 good more bonuses yeah straight out of college's awesome. I'm so proud of you. I know. Great job. Yeah, so my question is, though, I have $14,000 left in federal student loans, and I also have a brokerage account with mutual funds that I've been contributing to since I was in high school, and there's $15,000 in those accounts. And I was wondering, is it smarter for me to leave that money in the accounts and set up a payment plan to pay out those federal student loans, or should I just pull out all the money from those mutual funds and pay them off now?

Three years from now, the answer mathematically will be almost equivalent okay okay but if i woke up in your shoes and you are an impressive young man uh thank you i i would write a check today and be debt free okay and along with that the more important part of the conversation is this commitment to get out of debt stay out of debt and avoid debt permanently that process that promise to yourself will make you wealthy gotcha because if you don't have any payments and you make 100 grand at 21 years old you can you can become wealthy dude and you're gonna be,000 at 21 years old, you can become wealthy, dude. And you're going to be a millionaire by the time you're 30. I'm hoping.

No, you will be. If you do the stuff I teach you to do on this show, and then have you got a copy of Baby Steps Millionaires? I do. I've read it. Okay. Then you know exactly what I'm talking about. You follow those baby steps, making $115,000 today

with a four-year degree in information systems in a hot tech market like we're in. You're going to be making 200 by the time you're 25, and you're going to be consistently investing and being generous and living on a plan and being intentional and enjoying your money, but consistently investing. You're going to have serious bank, dude. I'm hoping. No, it's not a hope.

It's a mathematical fact. Jordan, I just feel so much joy talking to you to hear that you're 21 years old, you've got such a great income, and you're reading Baby Steps Millionaires. You're in the middle of this process. This is just so exciting. Yeah, just don't get stupid. I'm not. I'm living below my means.

Yeah, Yeah. So if along with this promise to follow the baby steps and say, I'm going to avoid debt so I can keep control of my largest wealth building tool, which is my fabulous income, and not commit it to freaking Lexus motor credit, right? Not commit it to somebody else not fall off the not not go be normal or arrogant and think you're the exception of the rule and you can beat this or something like that just be boring as crap on your money stuff and just socking it away and being generous with it and enjoying it systematically with detailed intentionality, like you would if you were working a flow chart for one of your information system situations,

then you're going to be there, dude. You're going to be there. If you can just avoid the new car panic, if you can just avoid the whatever stupid things your friends get involved in like bitcoin if you'll just go do basic smart stuff you're going to be unbelievably wealthy and you've got such a freaking head start such a good head start i love seeing those charts when it compares you know if somebody starts investing for retirement at 21 versus like 45 and i mean it's just sad that a lot of kids miss out on the opportunity for all that compound interest. I mean, you know, everybody looks back and wishes that they would have done some certain

things sooner. But it's like so cool to see that this generation is starting to jump on these principles early. And like Dave said, if you can stay focused, there's going to be so much temptation, the flashy car, the big house, the opportunity for a credit card, like all these temptations are going to come up. But if you can stay focused starting at 21 and push all the way through yeah you're on your way man you're on your way just don't yeah just avoid the the temptation to look successful don't nobody gives a crap how you look okay what you drive you know let's just be successful and you know

we'll worry about how you look later in an instagram world you know let's try to actually be something instead of just look like something you know the shallowness of our current culture you know we have influencers who are influencing who have never done anything except have a big instagram account and that's you know how do you get to be famous you're famous for being famous you know in that case shoot me oh god but the uh you know now i got a reality show but no instead actually just go be do the stuff and be successful, not look. Right. And it's like what you say,

like the paid off house has taken the place of the BMW as a status symbol of choice. It's like, man, if you're 30 years old and you have a paid off house and you're a baby steps millionaire, that's gonna look so much cooler than if you're driving around in a flashy car that you can't really afford with a big old loan payment.

Like that's not really cool in the grand scheme of things. Like building true wealth that lasts. That is that's cool. Well done. Well done. Hunter's in El Paso, Texas. Hey, Hunter, what's up? Christina, my question is surrounding an incentive we receive at work.

We get X amount of stock over a three-year vesting period for employee retention. And my question basically is how that's going to be taxed. As I read about it, several sources say either capital gains or income tax rates, but I'm trying to figure out how to decide that. And my confusion comes with there not being an initial investment by me, how the capital gains would work. I was wondering if you could give me some insight. In either case, your basis is zero. So it's compensation. And if you haven't held the stock vested for at least one year,

for sure it's not going to qualify for capital gains. So if it's under 12 months, it's going to be ordinary income, 100%. 100% of what you sell it for is going to be taxable in either case. Now, if you've held it three years, is it going to qualify because it's compensatory? Because it's compensation, is it going to qualify for capital gains? I don't know that for sure. You would need to check your tax advisor to be sure on that. I am not really great at details on taxes. I know some of the basic stuff, but something like that, I personally call my tax guy and find out so that I don't screw it up. And so I'm not going to lie to you and tell you I know the answer to that.

But it will be one or the other, and it won't be, it'll 100% be ordinary income if it's under a year, for sure. No question about that. And for sure, your basis is zero, so 100% of the amount is taxable. Just not sure which rate applies after one year Christina Ellis, number one bestselling author, Ramsey Personality, is my co-host today. Thank you for joining us, America. Hey, parents, there's a lot you can't control. You can't control inflation.

You can't control the economy. You sure as crap can't control Washington, D.C., but you can control how you'll teach your teens to face life and all of those things. And the sooner they learn, the better. The best thing you can teach your teen this year is how to handle their money the right way, how to get on a budget, how to save, how to spend wisely. The Foundations in Personal Finance homeschool curriculum has helped millions of families teach their kids. it'll give your teens the tools they need to win with money to pay cash for college and stay out of debt it's not just

another homeschool curriculum it's completely changing how teens think about money permanently and then they come on the air here and do a debt-free scream when they're 25 years old and say my mom and dad homeschool me and so when i married my spouse and they had debt we knew how to get out of it immediately and we knew we needed to get out of it immediately and we knew how to do a budget they're completely schooled up that's what this is for this is part of changing your family tree is the training to learn more go to ramsey solutions.com slash homeschool. ramseysolutions.com slash homeschool. Jen is in Phoenix. Hi, Jen. Welcome to the Ramsey Show.

Hi. Thank you so much for taking my call. I was in a position last year to purchase a home, but unfortunately, the line of work that I was in, I have a child who, you know, is on the spectrum, and the job that I was working with a child protective capacity, and they wanted evenings, holidays, and weekends. So I had to leave that job, and in the three months that it took me to get another job, it made better sense to sell my home than to rent it because I didn't have the cash flow. And I was wondering, I got the money out of my home.

I'm really sad that I had to sell it anyways, but I'm wondering, I'm just getting apprehensive about if I'll ever be able to enter the market again and exactly what I should do with the money that I have saved because I have it all sitting there waiting to get back in the market when things are a little bit more stable. What's unstable? Well, it's stable in the sense that i have a job now that that i can be a mother

and be you know work so are they stay is your life stable now oh it is it just took me i knew that i would i'm employable i'm very employable but it just took a couple months to wait you said you were going to wait until things were more stable but it sounds like they are stable well yes they are they are i'm Well, yes, they are. They are. I'm sorry. I'm nervous. What is keeping you from going and buying a house then? Well, I just came out.

I just sold my home, and I just wanted to – I don't know what the interest rates up and everything. I don't know if I can actually afford – I just don't know what I can afford. I don't know what would be smart. I know waiting probably isn't, but I just want to make sure that I can afford a home. So you're making a whole lot of assumptions about everything being horrible, and you don't even know the details. No, I need to sit down, and I do apologize.

No, I'm not calling you out. I just hear a lot of anxiety in your voice. I even wonder. My home represented more than 40% of my take-home, and I thought about renting the one that I had. No, you did the right thing. You did the right thing. You were trying... Listen, here's what you chose.

Here's what I heard. You chose taking care of your kid. Yeah. Which makes you, like, the best mom in the world the the by owning a home does not make you the best mom in the world sure you can get into the house there's freaking house on every quarter you just got one kid though yeah that's true you made the right choice you. You were in the situation you were in with the information you had. You made the best decision you could make at the time, right?

No, I did. Thank you. So quit beating yourself up. You're an awesome mom. Thank you. Okay. Let's breathe in, and let's put all of that in the rearview mirror. Now let's look out the windshield.

Okay. Okay. You now have a stable situation where you can take care of the kid how much money you got in the bank from the sale of the house about 70 000 okay nothing's on fire you don't have to rush out and do anything but let's just begin the process of learning about what it is you can afford at 25% of your take-home pay with $70,000 down on a 15-year fixed-rate mortgage. And begin to look at those types of houses and go, I don't really want to buy one of those. I think I'll save a little while before and add some to the 70 before I do that. That's okay.

But we're not going to sit around and watch the news and by the way interest rates went down this week oh okay i'm traumatizing myself exactly you're catastrophizing so and that's okay i mean you've been through you've been through a lot you had a lot of stress and i did what i'm what I want you to do is gain some peace from where you're sitting today and from the fact that you did make good decisions. And now let's just ease back towards the right direction of homeownership again. But we don't have to thrash around and say, oh, we can't do it because interest rates are, oh, we better do it because we'll never get in if we don't rush over there

and get something right now. And just calm sure and let's just steady yeah facts are your friends i love that getting getting your plan together figuring out what you can actually afford laying everything out on paper on purpose so that you can see clearly not just feel that anxiety and just live there but i'm with d Dave you're a great mom you made the right decision for your family one question I have is are you still in the same job or do you still have a pretty unstable schedule with evenings and weekends and nights you know I'm looking for I'm in the same capacity but I'm in a job that doesn't require me I can actually work from home in this job. The other job I had to be like out. How much do you make?

About 50. Okay. How old are you? I'm in my late 40s. Okay. How old is your baby? She's 12 this year. Okay.

Good. Good. Well, I think that's even a breathing point. You're probably feeling some of the fear from just the last time you owned a home and you were in that situation where things fell out of control and you know you're working the weekends it's difficult balancing a family and even breathing and letting that go and just kind of refocusing as you think about buying another house you know and just letting go of some of that stress and difficulty from the last time this is a new situation you're in a totally different position your baby's taken

care of you're in a good spot to move forward yeah just because the last guy you dated is a new situation. You're in a totally different position. Your baby's taken care of. You're in a good spot to move forward. Yeah, just because the last guy you dated is a jerk doesn't mean the next one has to be. I haven't dated in years. No, no, I'm talking about the last house didn't work because you bought too much house and it was an unstable job situation. So the new house doesn't have to be a jerk. It can be okay, right?

Definitely, and I guess what I'm wondering is I don't mind saving. I mean, my job, I can't, whether I like it or not, they're putting 12% away from me of my salary, and I think they're matching it, so I can't even touch that. So whether I want to save for retirement right now, I'm saving anyway. You're moving in the right direction. You've got everything going. So what I would tell you to do is if you're debt-free,

let's hold that $70,000 and begin to add to it. Get in touch with one of the endorsed local providers, one of the Ramsey-trusted real estate agents in your area. Sit down with them and say, listen, I'm a little scared and freaked out because I bought too much house last time, and it scared me, and I had to get out of it. I don't want to do that again. And so I need to start gathering information to help me make a calm, wise decision. Teach me, help me, show me the market, and let's begin to work our way through that. And they will gently, gradually, slowly show you and you'll get your confidence based on the new knowledge you start gathering from this

ELP with the heart of a teacher. Well, I think that's good for anyone sitting on the sidelines of the real estate market right now, because the reality is every day there's a new news article out that sounds scary and there's a million different opinions and there's a lot of fear. You know, you have a very legitimate situation where, you know, you had some family things and too much house that caused fear now. But there's a lot of people feeling fear for a lot of reasons. So sit down, figure out the facts, talk to a professional who knows what they're doing and can bring peace. Yeah. When you're feeling all hyped up, folks, Deloney talks about this all the time.

Facts are your friends. No one makes good decisions when they're afraid, greedy, or drunk. This is The Ramsey Show. Thank you. Christina Ellis Ramsey personality is my co-host today. This is the Ramsey Show in the lobby of Ramsey Solutions on the debt-free stage. Kyle and Tricia are with us. Hey, guys, how are you? Hi, Dave. Hi, Dave.

Welcome, welcome. Where do you live? Oxford, Indiana. Cool. Welcome to Nashville. We're glad you're here. Thank you. And how much debt did you pay off?

$433,000. All right. How long did this take? Seven and a half years. Woo-wee! And your range of income during that time? Started about $36,000 and just now went to about $160,000. Well, there's a jump.

Okay. And what do you all do for a living now? I'm a veterinarian and I own my own practice and i own a welding business welder and fabricator okay so i'm guessing you came out of vet school and that's where some of this additional jump in income came from it did um and then it went back down well when i quit my first job and then it went back up slowly yeah as built the business. Okay. All right. Very good. Very good. So $433,000 worth of vet school bills?

A lot of it, yeah. It was about $230,000 of student loan debt. I had a really pretty F-350 Platinum truck in there. Good, good. Yeah, large animal. All right. With a vet box yeah you yeah you're I I looked really good yeah I don't look that good now now you just make money oh well yeah

but credit cards um but yeah a lot of student loan debt y'all y'all are fun good very cool okay so what happened seven and a half years ago got you started on this whole Ramsey way? So it actually started back when I was an undergrad. My dad works for New Corsteel, and they put all of their employees through financial peace. When you were a little kid. I was in undergrad, and so it was at the Holiday Inn, and it was the 13-week course. So I drove down from Purdue and went to every lesson, and I loved it. But I had no income, no bills.

I didn't know how it could apply to me at that point. Right. But I always kept a $500 emergency fund through college. All right. But I had big dreams of going to vet school. I'd wanted to be a vet since I was four. And it costs a lot of money to do that. It does. And we got – It's as expensive as med school. It is. It is. And so we got deep in deep in debt and I kind of woke up

again as a third year and realized oh my gosh like what are we going to do. And so our good friends Matt and Sarah was Sarah was also a third year. And so we took FPU again as married couple. And I vowed then like, okay, we're going to do this. But then I graduated and I might've got a little doc-itis. And that's when I bought the truck. And so it was when I quit my first job and decided that I wanted to live differently and practice medicine differently that I really buckled down and said, no, this we're done and that was seven and a half years ago so you got your own practice now I do we sold our first home um and lived in a rental and now we live in the practice

oh wow so we built from the ground up um I was a year out of vet school when I quit my first job um I had eight clients and my truck and we built the building five years ago. Okay. Wow. That's a lot of debt to pay off in seven and a half years and in that income range. What did this journey look like for y'all? Yeah. So it was a lot. But one key point that I wanted to point out with you was that we I was fortunate in 2016 to apply for the veterinary medical loan repayment program in our area there's eight districts in Indiana and we I serve a low a population for rural practitioners and so I was awarded 75,000 through the USDA of grant money and then I

actually got that again in 2021. Wow. Yeah. So 150 of this came from grant money. Yeah. Ding ding. Well done. Yeah so I was asked to be on the board to select the next award winners. And then I was like, but I still have student loan debt. Can I apply again? And I did. Three times? No, just twice. Oh, that was the second time.

I got you. Oh, okay. I thought she just keeps going back. This is awesome. Yeah. Very cool. And Kyle, you've had your business the whole time. Yeah, about 10 years.

Okay. Yeah, I've been welding and plugging away. Good, good. Did y'all do anything unusual to get out of debt? Did you do any side hustles or just get super tight with the budget? What was the hardest part, most interesting part to y'all? I think living in the practice has been the most interesting i mean financially it's helped us tremendously um but when we built the practice

i wasn't going to have any children and now i have two and y'all still live there yeah we have a two bedroom it's about a thousand square foot that is cool that we live in so large animal small animal both i do both okay yep all right very cool and you got a welding shop or you just do on-site work or yeah i've got a shop and a truck i go out and do mobile work um the shop there at the same site uh no it's up the road a little bit okay but um but yeah you know i've had other jobs along the way too you just work as much as you can. And for me, staying humble and what we've got to work with was a big deal. So for the people who think it can't be done, people who are sitting with $400,000 in debt, what would you tell them?

Contentment. It's huge. You know, when I graduated and bought the truck, that's what I thought a vet did. I thought that's what I was supposed to do. And when I sold that truck for my boys and knowing that we could have more, that's when it changed. And we were paying off 80,000 plus a year at that point. You know, point. I still show up to farm calls and they ask where the veterinarian is because I drive not a nice truck now. But I'm still the veterinarian that I was supposed to be.

You're more now. Yes. Because you can actually concentrate on the animal instead of the truck payment. I can practice the way i want to practice for sure when you're walking examples of that contentment like to live in the practice to give up the truck to be content that way that's that's impressive it's powerful it's powerful and got great next chapters coming i mean the next the next five years gonna be amazing amazing yeah because um yeah the um i can see it on you i can see the the peace on you and um what folks don't realize running a business is that's unbelievably

attractive and so the number of people that are going to come and do business with both of you because you don't have to and um that's uh it's a different world it's a different place to be well done y'all i'm very proud of you you're incredible you're incredible young couple who are your biggest cheerleaders in the process oh i mean each other for sure and um our parents um and my employees they have to listen to you constantly um i do surgery to you i do all my office work to the show um she does it's on all the time i'm sorry kyle yeah somewhere there's a hound dog that woke up out of anesthesia and is now out of debt yeah but you, they're all cheering us on. And, you know, I hope that we've maybe helped a few along the way as well. And then I've been fortunate to lead FPU.

I'm coming up on starting my sixth class. Oh, wow. Thank you. Here next week. And so, you know, all of them have been very much part of our journey. Well, thank you for doing that. It's very rewarding. The biggest thing that i

guess i'm walking other than being debt free um is feeling my money i love that um when i walk into a gas station i've got i'm using cash and i appreciate you teaching me that because man you can spend a lot of money sure just a couple times of the gas station all right let's bring the boys up here and introduce them what are their names and ages uh so case is five and cane just turned three all right we got a copy of baby steps millionaires for you total money makeover and a financial peace membership kyle trisha casey cane from indiana 433000 paid off in seven and a half years, making $36,000 to $160,000. Very impressive. Count it down.

Let's hear a debt-free scream. Three, two, one. We're debt-free! Love it! This is The Ramsey Show. Love it! This is The Ramsey Show. our scripture of the day galatians 5 13 for you were called to freedom brothers only do not use your freedom as an opportunity for the flesh but through love serve one another audrey hepburn said as you grow older you will discover that you have two hands one for helping yourself and the other for helping others very good christina alice ramsey personality

number one best-selling author is my co-host today john is with us john is is in San Antonio, Texas. Hey, John, what's up? Hey, Dave and Christina. I just had a quick question for y'all. I'm a master financial coach on Baby Step 4. I've been following you and your program for, gosh, over five years. I switched careers about almost two years ago to become an insurance agent. And that job went full-time remote, got engaged to a girl who lives in Mexico and have been spending a lot of time between Texas and working in Mexico. And I just wanted to see your thoughts. I've been seeing this opportunity and, you know, moving away from California after being there for so many years

because of the expense. I've been seeing that, you know, you can have a pretty good life like in a safe part of Mexico and even a beach life and things like that. And I've been thinking about, you know know maybe doing that in the you know going forward here one day as kind of like a more permanent move and just one of your thoughts on that your reason for doing this is that your girlfriend is there no well she we're going to be we're going through the immigration process and she's going to be having to live in the u.s under greek card before she can become a u.s citizen but then once she

does that my real motivation is because of the the u.s dollars of income and spending pesos which you know pretty much takes you you know takes you a lot further, right? It takes your money a lot further. No, I mean, it converts, and then it's a bazillion pesos. You know, pesos is about a nickel right now. And so it just takes a lot of pesos to get, you know, 20 of them to get to a dollar, right? Yeah, exactly. pesos to get you know 20 of them to get to a dollar right still yeah exactly and in my my my well it's still a 200 hotel room and it's still the equivalent of 200 in pesos it's not like

because the peso is less that the hotel room is 120th it's still there right like like for example my my fiance has a two-bedroom um apartment for five hundred dollars a month you know and like you know in a great area you know that's considered like you know the rich part of town here yeah well i mean the cost of living in general in mexico is there but it's not because of the conversion of pesos it's just the cost of living is lower um and in many cases the standard of living is considerably lower but not every case um i love mexico i um uh and and honestly i love mexican people they're some of the sweetest people on the planet i just i i thoroughly enjoy traveling there

uh so i'm a fan in that regard um i i you know and if you're a young guy getting married and you want to call that, would I expatriate to Mexico? No, I would not. But would I live there for a while as an adventure with your new bride and say, we're going to live here for four or five years and just have that part of our adventure, and then we might move back to Texas. But you don't have to take the U.S. off the table. And it's certainly not a statement that the U.Ss is going down the toilet because you want to do that it's just like hey man i could go down and live on the beach and it doesn't cost a lot and we're young and married and this sounds like a fun portion of our life let's go do that it's like some kid backpacking europe for two years after they get out of college or something that's cool go do it that's great you know that's fine fine. But I wouldn't say that this is like a permanent thing or a policy decision

or everyone ought to do it or something like that. It's just like you're just kind of on an adventure. You're going to go surf a little. I'm assuming you can run your business from there, right? I'm working for an employer and my uh small small agency and they uh they don't have a problem with me doing this um i mean i've been doing it for about seven eight months now off and on and the internet's great and and you know it's safe where i'm at and you know and you know it's like the fourth time you've said it's safe where I am, which is an indication that you do understand the truth.

It's not all safe. So law and order is a problem. Yeah. I'm with Dave. I think if this is something that you want to do because it's fun, it's something that you want to do to be near your future wife's family, if this is something you want to do because it's a joy and an adventure, that sounds awesome.

But if it's out of fear that you're, you know, not going to have enough money here in the U.S., if it's something that's kind of just a negative thing where it's like, you're going to Mexico to try to save money, but, you know, there's fear around money here, and does the, like, that kind of sounds like a bummer. I think that in the career that you're in, you can make enough money to have a great life here in the States. But again, if it's exciting, then more power to you. Living on the beach, I think that's awesome. Yeah. Have some fun with it. All right. Mike is with us. Mike is in Phoenix, Arizona. Hey, Mike, what's up? Hey, thanks for taking my call. Sure. How can we help? I started watching your show and listening to your show about five years ago, and it was then

I decided to get serious about paying debt, so thank you very much for that. Thank you. Since then, I've paid about $382,000 in debt, and all I have left is the mortgage. Yay! Good job. Yeah.

So after paying about $150,000 towards the mortgage and then refinancing at a lower rate, I kind of fell off the bandwagon of the 15% investing and tackling the mortgage and then instead opted to save approximately 60% of my income for the last two years. So I stopped heavily going after the mortgage. So on short notice, I got moved for a job and in two weeks I'm going to close on a new house for $415,000. And because it was such short notice, I didn't have enough cash for down payment. So I took a brokerage loan of $80,000 for the down payment. I plan to keep my previous primary residence as a rental.

So all of this has gotten me focused on paying back debt and I'm planning to be 100% debt-free in six years. The question I have is, I know you recommend the smallest balance first because of behavior modification reasons, but does that same principle apply to mortgage debt too? No, but if I'm in your shoes, I'm not going to have that problem. I wouldn't keep that other house. You're in debt up to your eyeballs, man. You just fell completely off the wagon and rolled down the road. Yeah, I did.

Yeah. And you went to a brokerage account for a down payment. You're curling with two hairs I have left. Unbelievable, man. You are really playing it. So, no, sell the other house and get this mess cleaned up you made would it change anything if you know my mortgage payment on that house is 350 a month but it rents for 3 000 nope and it could be additional income nope because you know how you bought that rental property that has this great cash flow? Because you borrowed against your current residence.

You didn't actually, but on your balance sheet you did. Because since you didn't put down all of that equity on this current house, you're up to your eyeballs in debt on this current house. So it has the same effect of, hey, I had a house almost paid off, and I just went and borrowed on it to buy a rental, and now I'm smiling because the rental cash flows no no sale hey you do whatever you want to do but i'm telling you the shortest distance between where you are and wealthy is not leveraging your personal residence up to your eyeballs to own a rental property the cash flows it's not you've added so much risk to your

life um well the renter is going to pay it the renters don't always pay well you know you know you know what happened during the pandemic it's called a moratorium on eviction and so they sat there on their butts and didn't pay you a dime because you couldn't legally do anything about it and they're just sitting over there grinning living in your house for free there went went your cash flow. No, no way, dude. Don't need the risk. Don't need the risk. You can do whatever you want to do, but I think 10 years from today,

you're going to regret this move versus if you get completely clear house and everything and then start investing on the side and save up and pay cash for your rental. That's what I would do. It's going to feel so much better that way. This way sounds very stressful, and I know that deep down it feels that way. Yeah, Mike, the problem with our stuff is you can't go through it like it's a buffet and just pick some of the stuff off the buffet. You kind of got to do the whole thing or it doesn't work.

That puts this hour of the Ramsey Show in the books. Good job, Christina. Good job, Austin and Will and Zach and Andrew and James. I am Dave Ramsey, your host. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Dave here.

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