The Ramsey Show - App - Practical Advice on Running a Nonprofit (Hour 3)

Episode Date: June 21, 2018

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🎵 Live from the headquarters of Ramsey Solutions, 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. Open phones at 888-825-5225. That's 888-825-5225. Rick is with us in Richmond, Virginia. Hi, Rick. How are you? Hello, Dave. It's an honor to speak to you. You too. What's up?

Well, I'm on the fence of selling my rental houses. I've moved about an hour away, and I used to be about 20 minutes away from them. I've got about $500,000 in 401K. I owe $30,000 on one home and $50,000 on the other home. And I've been putting everything extra into the homes mainly the one that are thirty thousand to get that paid off and i don't know if i should sell them they're worth about 215 each and because i just moved now i have a 250 000 mortgage on the house we just moved into.

I do make some money on them, and I really thought that was going to be my retirement money along with my 401K. How old are you? 51. Which household income? 150. Okay. So there's two tracks, right? We pay off your house and, you know, go ahead and knock that $30,000 out probably and then get your house paid off and keep the rentals.

And you spend the next decade or six years or whatever paying off your home, right? Yeah. The other track is sell them and pay off your home now, use the increased cash flow to build wealth, and pay cash for rentals later after you rebuild the wealth back up. So I totally understand that, but since I already have the two, isn't it better to keep the two? Or do you think because if I don't have a mortgage or no debt at all, because we're debt-free other than these two homes and the home we have now,

I'll be able to build the cash? I think you're going to end up in about the same place 10 years from today, that you would own a couple of paid-for rentals that you paid cash for and you will have had your home paid for. And it's either by paying off the ones you have and keeping everything or it and just concentrating on that exclusively um or you sell off sell off the rentals and buy other ones later with the cash that you build up either one is okay with me because you're you know you're in a position that six years from today, you ought to be debt-free.

Right. With the numbers you just gave me, 100%. Rentals, house, everything. So is that where you want to be in owning those two properties? See, that's where I don't know, because now I'm further away. Yeah. You know, and I'm not close to them. So you have a management company? further away. Yeah. You know, and I'm not close to them.

So, you have a management company? No, I'm still doing it myself. And I do go in town every other week. I work on cars. I decide to make extra money because I used to be a mechanic. So, I still go near the houses and I check on them every other week. And I just had a lady move out that had been in there for nine years. I'm spending quite a bit of money this summer to fix it up.

Well, and just to show it to a potential renter, you've got an hour drive. Yeah. You know, that's bothering me just from a convenience standpoint. It is bothering me and my wife and I, too, you know, because we're not close. And our new house is actually on a lake, so now I live closer to work, convenience standpoint it's bothering me my wife and i too you know because we're not closed and our new house is actually on the lake now i live closer to work and i thought you know what if i pay off our house i could buy some other houses near the lake that i could rent out yeah easily that's exactly what i was saying is just move the rentals over and there would just there be a gap between ownership because we're gonna to pay off your house.

And actually, you've got enough equity to do that and probably buy one rental. Yeah, I could pay off our house, I mean, in no time. Well, no, you pay off the house payment on the one. Yeah, what I'm saying is if you just sold both the rentals, the equity would pay your house off and enough to buy the first rental on the lake, right? No, it would pay off our house. Oh, I thought you had $200,000 each in equity. No, a little bit less than that, because I have $30,000 on the one.

Okay. No, the houses would sell, because every time I go in the neighborhood, there's a house that is sold that I call. So how much equity is in the rentals? If you sold both rentals, how much cash do you walk away with? Man, like $225,000, $230,000. Okay, so you get your house paid off, Saul.

Yeah, and our house will be sold and paid off in no time. Yeah, like in a year. And then you start and you say with no house payment, we're just going to pour on, and how quick do you have $150,000 to buy you a lake rental? You know, and that's like three years. That's where you'll be, three or four years from that time.

So, again, six years from now, you're going to own a paid-for house and rentals somewhere. Where do you want that to be? You know, and I think you're moving them. I think you're moving these, and you're going to pay off your house because i think you're not going to want to drive an hour to show a rental uh a renter an empty rental house i think you just you know you've worked too hard to get to this point and that that starts to sound like it's not fun to me but i mean either one's okay financially the math works either way it's a matter of what do you want in your life where do you want to be 10 years from now and what is the best what is the shortest distance to that mathematically and you want to be managing rentals for the next 10 years or an hour away i don't think you do i think you just

said that a minute ago um i didn't say it i think you said it so but i'm okay if you want to make that drive i i have a seven minute commute to my office so the chances of me even doing anything an hour away unless it's something really fun that i want to do badly is zero you know and going and showing a rental property ain't on my list of fun things to do so you know it's just you just do what you want to do man that's the beauty of it you've done a really good job of money so you've got some good choices, and all of them are good choices financially, mathematically. Open phones at 888-825-5225.

June is smack dab in the middle of the prime real estate season. It's a particularly good season for sellers right now. Just like he was talking about. You just pop a sign up, a monkey can season for sellers right now. Just like he was talking about. You just pop a sign up. A monkey can sell a house right now. And you don't want a monkey selling your house. There's been a 6.4% increase in home values in the last year alone nationwide. If you're thinking about selling, it's a big deal.

We have a serious shortage of houses for sale in America right now. You are truly in the ultimate seller's market right now. Prices are going up. There's a shortage. And so you do not want to list your house in a buying frenzy with a monkey. And a monkey can get a real estate license. You do not want to list your house with a monkey. A monkey can sell a house. You want to list your house, the largest financial asset you have, with someone who sells a lot of houses. Someone who knows what they're doing, has a proven track record, one of the top 10% of agents in your area. That's who our endorsed local providers are. If you want to hook up with an endorsed local provider for real estate, they will make sure

you get the most possible money in this frenzied environment. And if you're thinking about buying, oh, by the way, you've got to have a realtor. You even have a chance. A good one. This is the Dave Ramsey Show. For years, I refused to endorse any company that claimed to get people out of timeshares. I told my listeners it's a horrible product and that unfortunately they didn't have a lot of options. Then a few years ago, I sat down with Brandon Reed, the owner of Timeshare Exit Team. Brandon walked me through the timeshare industry and I learned that you

can't sell them and you can't even give them away. And then we talked about Timeshare Exit Team's process. Every ownership situation is different, which is why they have more solutions than any other company. And that's when they earned my respect. Don't call any of the imposters out there, and there's a lot. The only timeshare exit company I stand behind is Timeshare Exit Team. They have exited thousands from their timeshare burden this year alone. Yes, you will write them a check, but they stand behind their guarantee their guarantee they will get you out or they'll give you a full refund call 844-999-EXIT online at timeshareexitteam.com Christine is with us in Salt Lake City.

Welcome to the Dave Ramsey Show, Christine. Thanks for taking my call. Sure, what's up? Okay, I have apparently a unique situation. My husband's employment was restructured about a year ago, and due to the nature of how they get paid we knew that we'd go four to six months without seeing an income which he has fluctuating income so rather than just a thousand dollar emergency fund we have a three to four months so that we can pay

ourselves steadily every month and then that refills when he gets paid. Unfortunately, that's gone most of the year, and we've been able to ride it out. But when the employer started realizing how bad it was, and some people were drawing from 401Ks and other things, they didn't offer, they gave everyone a $5,000 advance. You didn't have an option of turning it down. It was given, but the repayment is expected. We also have insurance premiums that the employer covered and has been carrying, and those are

being repaid as income comes back. My question is, do we put those premiums or those debts to the employer in their place within our snowball, or do they take a priority, kind of like the IRS would, so that we don't offend employment? Offend? We don't want to do anything. Like, if they fall into our snowball they're number six and number eight so they're down a little ways um and getting paid off but do they do they not have a repayment schedule no they do not they loaned you money with no terms. Correct. At this point, there's no interest being charged on it. They've been carrying that because it's taken a lot longer to get payments coming back in from clients.

What does he do for a living? He's an attorney. How large a law firm is this? They're a pretty good size. I'm confused how an attorney goes months and months and months without making money. Because it's considered a merit-based income, so we're paid on commission, and some of the clients that they work with can take up to six months to pay their bills. So he's brand new?

The firm is, yes. Well, it's now a year old, but my husband's been working as an attorney for nine years, going on 10. And so what does he normally make in a year? Last year was $100 before taxes. So if he's not going to get paid for six months to a year, why didn't he just start his own practice? He's not comfortable doing that at this point.

I'm not comfortable working without getting paid. Nor am I. He is getting paid. We've gotten paid for the last three months. Sounds like this law firm is dramatically undercapitalized. It feels that way from a spousal perspective. No, I think that's a math perspective. Yeah. I think it's a spousal perspective. No, I think that's a math perspective. Yeah.

I think it's a spousal perspective. Yeah. So I'm not worried about when I'm going to repay these jokers. Okay. I've just put them in the debt snowball, and when you get to them, you get to them. Okay. But I am worried about his career. Yeah. There's a lot of red flags and flares going off and bombs dropping around this story that are scary.

Because, you know, if he was in a specific type of law with one specific client or something, and he's making $300,000 a year, but they only draw down on this client twice a year or something, and he's making $300,000 a year, but they only draw down on this client twice a year or something, I would just say, let's go restructure the payment terms with the client. But it sounds like their business model is screwed. I'm concerned about that. Yeah, I mean, we work with attorneys all the time. I mean, not only as their customer, but also coaching them on their personal finances. And I just don't know any that make no money for six months.

It's just very, very weird. So I'm concerned about that. But as far as the answer to your question, where would I put the unsolicited advance that is interest-free, I would put it in the debt snowball where it belongs. And if they get offended about that, they're the ones that advanced it with no terms. There's no term sheet on this. They didn't say you have to pay this back in six months.

They didn't say, do you want this? They just issued the check. And this is just strange. Strange, very strange. So, yeah, i'm not worried about whether they're offended because i'm getting ready to leave them anyway if he if this doesn't turn around he that you know a couple couple more months of this crap and you guys really need to make a decision ray is on the line in nashville hi ray welcome to the Dave Ramsey Show. Hey, Dave. How are you? Better than I deserve. What's up? Well, I have a 501c3.

I am personally debt-free. And so is the business at this point. We help veterans with PTSD. And we have a 30-acre farm out in Gainesboro, Tennessee.

Wonderful. And right now we're not bringing anybody in except for we're bringing animals in right this moment. But the veterans will come out there, stay for three months, have different activities set up for them. They learn life skills, how to build, how to do several things. Right now we're trying to clear the land, though, and it's being pretty costly. That being said, we're trying to apply for grants, but the grant writing is so difficult we're going to have to hire a lawyer or somebody that does write grants.

And nobody right now we're able to get pro bono. And unfortunately, I'm retired military. I'm on a fixed income myself. And all my money's been going. I have four kids and a wife. But all my money,

spare money, has been going into feeding the animals. It cost me about $1,100 in order to keep everything going with the farm on its own entity. And then plus I have my own house bills and everything else. So without taking out a loan, I'm trying to make this thing survive. And it's just been, you know, we're getting donations and everything like that.

It's been going fairly... Not enough. It's just not going as fast as what needs to be because I've got people knocking on the doors begging for help. You don't have enough coming in in donations. No, I had an $8,000 donation, and we had a $4,000 donation. And we have another restaurant that's trying to donate a vehicle for us to fix up and sell an auction. So here's the reality of non-profits

and ministries that are non-profits. You've got a wonderful heart, you've got a wonderful cause, but a non-profit that does not make a profit is closed. And so you cannot personally support

this ministry until you have taken care of your family. And you cannot go into debt to keep this thing running. You have to fix your model. And your model is you have to bring in more than you spend. Agreed.

Right now we're just selling t-shirts and simple items like that. That's fine. I don't care where it comes from, but you have to face the reality that your good intentions and the wonderful cause that you're serving is not enough. Right. You have to bring in more than is not enough. You have to bring in more than is going out.

This is going to end very poorly otherwise, and it's going to be not only a financial problem, but a broken heart. Yours. And what about the monies that we've already received? If anything does go awry and I'm not going to be able to afford

doing all this... I have received... They made a donation to a nonprofit that failed. You're not liable for that. That's not a debt. It was a donation. But you need to get your donation model working and your revenue generation off the T-shirts or whatever model working and the grant writing going because we have to have stuff happening on the income side of this equation for this ministry, for this nonprofit to prosper, to be able to serve the veterans that you want to serve.

Because otherwise, the animals are going to eat it. It's going to be over. That's what you described. So we've got to get the income up from donors on fire all over the country. If you're looking to buy a home and you need a mortgage, don't sell yourself short by going and getting a typical pre-approval. That's a false sense of security, and it's just not good enough in today's fast-moving market. Instead, call

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I trust Churchill Mortgage. Call 888-LOAN-200 or visit churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. Equal Housing Lender 761 Old Hickory Blvd. Brentwood, Tennessee 37027. In the lobby of Ramsey Solutions, Anna and Chase are with us.

Hey guys, how are you? Hi. Good. Good to have you. Welcome, welcome. So where do you guys live? Wichita, Kansas us. Hey, guys. How are you? Hi. Good. Good to have you. Welcome. Welcome. So where do you guys live? Wichita, Kansas.

All right. Fun. And here to do a debt-free scream. Yes. Yes, we are. Cool. Seems like it's taken forever, but it's been really short. Now we're here.

So how much have you paid off? $65,019 months. There you go. Good. And your range of income during that time? We went from about $90,000 to about $110,000 now. Excellent. And your range of income during that time? We went from about 90 to about 110 now. Excellent. What do you guys do for a living? We both work at an aircraft plant. I'm in the office and he's out in the shop. Ah, very good. What kind of debt was the 65,000?

It was mostly student loans, but we had a little bit of car in there that we actually ended up selling and some phones and small personal loans. Okay. So how long have you guys been married? About five years now. So what happened 19 months ago that set you on this journey? Go ahead. Well, I was actually on maternity leave with our first son. And I had thought about staying home with him a lot during that time.

And we were thinking we'd be able to do it that year. And then we started going over the finances and it was not going to work. Not even close to what we thought in the beginning. Yeah. So that kind of gave you the wake up call. Yeah. Yeah. And we realized at one point we were paying more for student loans than we were paying towards our mortgage.

Yeah. And that was kind of like very eye-opening. Yeah. Time to get that cleaned up. Mm-hmm. Cool. And then he came home one day and was talking about Dave Ramsey. And I was like, what?

I'm the cynical one of us and so I have the gift of cynicism yeah and I'm the person that's either all in or not in at all and I'm glad I was all in yeah and so it took me about oh probably a couple weeks and I he'd been badgering me to listen to the podcast and listen and so one day I was just like okay i'll do it and after that it was it was all over from there yeah once you hear a couple of these debt-free screams you're kind of like yeah we're doing this let's do that yeah yeah that's from the beginning and i was like we're going to nashville yeah no question yeah we gotta dial that up as part of the equation yeah good good so here you are you paid off off $65,000 in 19 months.

Way to go. I'm proud of you. You're heroes. This is great. Very good. So what do you tell people the key to getting out of debt is? Because you did it. You definitely have to be on the same page with your spouse.

It's so important. And you can't listen to what other people are trying to tell you to do because most other people aren't on track. Yeah, they're both. Yeah. Everybody's got a cynic. It's just a matter of whether you want to listen to that. Yeah.

I hear you. So what was the biggest budget fight you guys had? Actually, we're not really fighters. Yeah. We're more like we hold things in and then eventually. What was the biggest budget fight you guys had? Actually, we're not really fighters. We're more like we hold things in and then eventually. But we never really had a blowout. Really? Yeah, we've been pretty much on the same page the whole time.

You said, let's do this. You sat down and did a budget and just dialed it up. Yes. Okay. Yeah, it takes a lot of grit, hard work, and dedication. Did you sell anything big? The car we sold was about 10. So we probably could have kept it in the scheme of things, but I decided it was my car. And so when he came and said, we need to sell your car, I was like, I don't know about that.

She didn't want to at first. But eventually, I decided to do it for my pride reasons. Like, I figured out that I was holding onto that car a little too tight. So we sold it and then paid cash for a trailblazer. And it worked well for us. Which we became debt-free back in March. And less than two weeks later, the car that we got after the Hyundai that we sold, we got in a wreck. Yeah, I got in a wreck and totaled it. It wasn't my fault, and no one was hurt. But, yeah, so we used the insurance money and got a van for cash.

Yay! Yeah. That worked out. Yeah. People had told us, like, well, you could just use that for a down payment. And we were like, there's no way we're going back into debt. You kind of missed the point. Yeah.

We went on your website and we listened to the negotiating video all the way down to Oklahoma, which is where we got the van from. All right. And we drove from Kansas City. And we got $500 knocked off. Yay! Very good. Good for you guys.

Well done. Very well done. What was the hardest part of this for you all? It was definitely like gaining all of this new information and then learning that not everybody wants to hear your opinion. Because at first I was like so excited and I wanted to tell everybody everything, but a lot, they don't want to hear it. Yeah, especially because right in the beginning, from an outsider's point of view, nothing

has changed. Right. All they see is you making sacrifices and not everybody wants to do that. I mean, people are content. The hardest part for me was working so much. Short story here. I was working so much one week that I didn't see my kids awake. I got two sons, Leland and Latham, three and one.

And I was working so much I didn't see them awake for three days. And at daycare on the third day, my wife walked through the door to pick him up, and my son started crying because he missed me. Yeah, he's definitely the daddy's boy or oldest. That's great. Well, the good news is that happened one time and now you're done, right? Yeah. Never going back.

Yeah, you're completely free. You got that as your motivation from now on. So very cool. Well, congratulations, you guys. We've got a copy of Chris Hogan's book for you, Retire Inspired. We want that to be the next chapter in your story, that you become millionaires and outrageously generous along the way. And I think you're on the way.

Very well done. All right, it's Anna and Chase. Is it Case or Chase? Chase. Chase. Okay, make sure I get that right. From Wichita, Kansas, $65,000 paid off in 19 months, making $90,000 to $110,000.

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! You did it! Wow! Well done, well done. Kenneth is in Afghanistan.

Hi, Kenneth, how are you? Pretty good, sir. How are you doing today? Better than I deserve, Kenneth. How are you? Pretty good, sir. How are you doing today? Better than I deserve, sir. How can I help? Question for you, Dave. I was just introduced to you about a week ago. I'm a co-worker.

Had good things to say about you, so, you know, it's my day off. I had your book, skim through it. I'm looking at your YouTube videos, very informative, and it's awesome. Thank you. So my question is, I have a rental property. I owe $95,000 on. My interest rate at the time, or right now, is 5.3. What's it worth?

What's it worth? $120. Okay. My mortgage is $736 that I pay out of pocket. I rent it out for $11. The rental fee to the agency is $110. Yeah, you're not making any money. Yeah, I'm making some.

No, not after vacancy and a heat and air going out every so often or a water heater going out. You're breaking even. Yeah. Okay. So you didn't buy this as a rental. It was your house, and you turned it into a rental when you moved out of it? No, I just bought it as a rental. You did?

Okay. Yeah, I just saved up the money, and there's guys been telling me, you know, make your money work. I went down that route. So my question is, is that I don't have a mortgage. I don't live in America. I'm just over here. I go on break and I come back over here and work. So right now I have 90K in my 401.

I have, I think, I'm looking at it right now, 15,000 in mutual funds. So I was wondering, should I keep contributing to my 401K, or should I just dump all the money to the rental property? I'd probably dump the rental property. I don't think it's making any money. I think you're breaking even. I like rentals, but I don't like rentals that are this tight. This thing's too tight.

There's no fun here for the risk you're taking particularly. And then I would load my 401k up and continue to do that and then continue to do some other investing just in mutual funds. And when that gets big enough to pay cash for a rental, maybe the next time you're stateside, you might consider it at that point. But a rental that's this leveraged, that's got this much debt on it, it's just not fun. Hey, thanks for the call. Over the years, I've seen so many families suffer by not having life insurance. It's not that they didn't care. It's just that they didn't care. It's just that they didn't know. So they did nothing. That's a huge mistake. Listen, husbands and wives, moms

and dads, think about it. If you died, how would your family pay the bills, the mortgage, the food? This is what life insurance is all about. And term life is the only way to go. It's not expensive and it's not complicated. Stop wasting money on cash value plans. You need 10 to 12 times your income in protection and I recommend 15 or 20 year plans. I also only recommend Zander Insurance and have for almost 20 years. These are the people i use and they only offer the plans i recommend call 800-356-1780 or visit zander.com and compare online it's just the smarter more affordable way to buy insurance that's 800-356-1780 or zander.com Our scripture of the day, Isaiah 26.3 You will keep in perfect peace those whose minds are steadfast because they trust in you. Venus Williams said, I don't focus on what I'm up against.

I focus on my goals and I try to ignore the rest. Well, there you go. Judy's with us in York, Pennsylvania. Hi, Judy. How are you? Hi, I'm fine. How about you? Better than I deserve.

How can I help? The usual. Hi. You've got me a little concerned. I started listening to you since Monday. I retired for four years now, five years, I guess. I'm 72 years old. I'm single and own my own house, but I have a $22,000 home equity loan on it,

which I'm now paying about $1,000 a month on it. With my pension and my Social Security minus my giving, I'm living on $3,300 a month, as it is. But I only have $100,000 in IRAs, and you sound like I should be having a lot more than that. And I'm just concerned whether I need to panic about what I'm doing with my activity and my finances or whether I'm starting to relax a little bit in them, and also about long-term health and long-term home care insurance, nursing home insurance. Okay. No, I would not panic. You're living on your income without touching the $100,000, right?

Right. Okay. As long as you can do that, you haven't got an issue. And so no need to panic at all. And I think you've got a good goal there of finishing off that little home equity loan. The sooner you get that finished off, the more margin you'll have and the easier it will be to live on what your income is. But your nest egg is not large enough to create much of an income.

So it's a good thing that you have the other income. And that's what you're hearing when we're discussing, you know, you need to have 10 to 12 times the amount you want to live on because it creates, you know, the investment returns create enough for you to live on at that point. But I think you're fine. And definitely you ought to research long-term care insurance. I don't know if it's going to be affordable at 73. It may not be. But obviously in-home care or nursing home is very expensive, and it could crack and scramble the nest egg that you've got, without a doubt. The average nursing home stay is a little over two years, two and a half years on average,

and it costs, you know, $50,000 a year. So, you know, it would use up your home and the money that you have saved if you didn't have some long-term care insurance. And so I probably would try to get some in place as long as it's not so expensive that it puts everything else we're doing in jeopardy here. But, no, I don't think there's anything to panic about here, but I do think you have to be very careful. Adam is in Atlanta.

Hi, Adam. Welcome to the Dave Ramsey Show. Hey, buddy. How are you doing today? Better than I deserve. What's up? I have got, well, really just trying to get some wisdom on it. I'm self-employed, and last year I personally built my wife and little girls built a new house.

And I did it and ended up saving a lot of money. And I paid cash for it as I went and finished it out. So we've got a very nice house paid for. Still have some the land that it's on. I owe money on that. That's not paid for. But I did pay for the house that I built it, so I didn't have a mortgage on that. Getting back to the self-employed part, I have a business, I guess a vendor,

basically called an account due because we had a little discrepancy. And long story short, they wanted the money in four weeks, and there was no way it was possible. So we're going, just started a lawsuit on it, and I'm trying to figure out would it be better for me to pull out money on my house and pay them or set up the payment terms with them directly rather than the reason I ask is I'm trying to get this monkey off my back. What's the balance with the vendor? It's about $100,000.

Okay. And what is your business revenue top line in a year? We'll probably do $700,000, $800,000 this year. So why were they not paid? Well, it wasn't not paid. We did have a... No, you haven't been paying them off. Why are you running a $100,000 balance with them? Well, a lot of that was marketing through an agency with them as well. So a big chunk of that is they billed us monthly for the large chunk of the ad revenue. And why didn't you pay them? Well, yes and no. It's over a couple-year period, that balance is.

So, yes, I take complete fault for the balance. But we did. It wasn, they weren't getting paid. No, I'm not talking about morally. I'm not talking about pissing them off. I'm talking about mathematically, you know, it was just sloppy to let this get to this level. Right. That's all I'm saying.

Cause you're making it, you were making enough to clear the thing and you just, you know, you were holding back and weren't clearing it. So now you got to quit. Now you got to clear it in a painful manner. Well, partially, probably some of that had to go with me paying for my house as well. So, and not, I kind of just misappropriating funds. Yeah, well, that's probably overstating it. It's not misappropriating funds. You were just borrowing from Peter to pay Paul.

I got you. Okay. What's a net profit? What's your household income taxable a year? I'll probably do around $200 this year. Okay. So how quick can you pay $100 if you just cash flow it? I would say realistically, with all my other bills, probably a year and a half.

No, they're not going for that. Yeah. We haven't gotten to the terms yet of it. It's kind of just started. Yeah. So we're just beginning that. Yeah, I don't think they're going to go for that. Yeah.

Not with you sitting there with assets. I'm hoping some sort of settlement out of it. Okay. Yeah, I'm't think they're going to go for that. Yeah. Not with you sitting there with assets. I mean. I'm hoping some sort of settlement out of it. Okay. Yeah, I'm thinking a year. Yeah. If you can pay them in a year and cash flow it and they'll go for that, then I would do that and not mess up your house. How much do you owe on the land?

It's in two different sections, but altogether but all together, right about 200 grand. Um, and what is the house and all the land worth? The house is probably worth about 400 grand. Um, the land is probably right on value. Maybe 200, it's pretty close to what I owe. Yeah, I paid a little higher. So you have $600,000 worth of property that you owe $200,000 on? Yes.

Okay. That's what you're telling me. Okay. $400,000 house, and then you can put the dirt under it for another $200,000. Exactly. All right. And so, yeah, I'm going to try to put them on a one-year payout, and I'm going to cut your lifestyle down,

and we're going to roll money out of that business towards the where it should have been going which is getting this vendor cleared up um if you can pull that off i you know i don't think they're going to go for much more than a year i wouldn't if i were on the other side of this table i'd force your hand and make you go get a mortgage um i'm not waiting a year on you maybe to pay me unsecured uh if i'm on the other side of this. So I don't know. It depends on how lightweight they are in their negotiations with you. But if you can pay them over a year, I would.

If they're trying to cram it down where, you know, it's going to be two months, you don't have an option. You have to go take out a mortgage at that point. And that's probably going to involve rolling the land into a house mortgage, and it will all be one mortgage. And so you're going to end up with a $300,000 mortgage on $600,000 worth of property, which is not the end of the world. But learn your lesson from it, that you have to cash flow vendors.

You know, an account that runs 31 days is overdue. You cash flow your vendors. And if you don't have your business model set up to where you can anticipate your vendor expenses to clear them every 30 days like this, then you've got a business model that's broken. And you've got to watch that and tighten up on it. And so because you did what a very typical small business mistake here. And you can get yourself in a real bind doing that.

The good news is you've got assets and income to address at this time. So you've got to figure it out from there that this doesn't happen again. So, hey, good question, man. I appreciate you calling in, and I hope that helps you. That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer, and Zach Bennett filling in today for Kelly Daniel. 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,

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