The Ramsey Show - App - RANT! Why Whole Life Salesmen Don't Like Dave (Hour 3)

Episode Date: October 19, 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. This is your show, America. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Athena is with us in Hartford, Connecticut. Hi, Athena. How are you? I'm good. Thank you so much for taking my call. Sure. What's up? I'm calling because

my husband and I just started really getting serious about the debt snowball. We have approximately $70,000 in debt, mainly from my student loans, and we have $5,600 in savings. And my question is, we have a baby coming in April. Yay! When's the baby due? April 19th is the due date. Great. Yeah, so excited.

So with that, I was initially going to use, you know, get the $1,000 emergency fund and use $4,600 to pay off bills. Yeah, but not now. But now with the baby, I didn't, okay, that's what I was wondering, like, how we should kind of attack that. What I would suggest you do is push pause on your total money makeover. Okay. And pile up cash as big a pile as you can pile between now and the time baby comes. Okay. And then whatever you have piled up, and then when mommy and baby come home from the hospital

and everybody's fine in April, that event is then behind us and any worries or frets or anything we would have had about that is behind us right um well i mean there's the whole thing of raising the baby but right you know 18 years yeah there's yeah but but basically the you know we want to make sure labor and delivery and everything goes and we don't have any hiccups and we got money. Okay. So let's say you save up. What's your household income? Right now it's about $77,000. Okay.

So let's say you save up $25,000 between now and then. Okay. You take $24,000 after you come home from the hospital and push play on your total money makeover and take your account down to $1,000 and throw it at the student loan, you will have lost no ground. Okay. Unless you go baby spending crazy during the next few months. We have a lot of stuff because this is actually our second child. Okay. We do have a lot of stuff.

The only thing that would be a little bit different is if uh this baby's a boy because i have a lot of girls clothes yeah well there's a little bit but i mean if you just don't go you know what i'm talking about by baby crazy you've had some friends do that where they just go they go drop 20 grand to get ready for you know an eight pound human being i mean they just go nuts and so if you'll just calm down and just you know manage your budget like you were trying to get out of debt but instead of throwing it at the debt, you keep everything tight. You throw it in a pile of cash. And then we don't spend it on baby other than is necessary for baby survival.

And we throw it at the debt. When baby and mommy come home, we push play again. The pause comes off, and we get out of debt as fast as we can then. But in the meantime meantime we just create all you lose is a little bit of interest on that money between now and the time the baby's delivered that's all you lose it's not a big deal tim is with us in west palm beach florida hi tim welcome to the dave ramsey show hi dave how you doing better than i deserve what's up well i'm a financial peace university coordinator and I have a pretty interesting

situation going on. I have a family in my class, and between them, mom and dad have co-signed for their daughter's student loans, which are over $100,000. And so I'm trying to find a way to help them and coach them,

and I'm finding a little bit that I'm short on knowledge and experience. So what's the problem? Well, the problem is they have kind of taken it on, the dad has kind of taken it on to be the collector in the situation, and so he's pressured his daughter and was all right, and he should be, but she's just not interested in paying back. She's not interested in being responsible for it. And so they've kind of pulled her now into financial peace as well with them.

But I don't know what to tell them to do. How is she reacting now that she's in the class? Well, she's reacting. She seems to be reacting like she's kind of wanting to take it on. Okay. Does she have an income? No, she doesn't really have an income. Well, actually, she does.

She's working part-time. Is she married? No, she's not married. Okay. Well, her first goal is to take... How old is this girl? This girl is 25. Okay.

And why is she not working full-time? I don't know. Apparently, the degree that she got was in video editing, and she hasn't been able to keep a job just out of between irresponsibility and just bad decisions in her life. Okay. I'm kind of hearing spoiled brat. And mom and dad co-signed for a spoiled brat, and then they're shocked she didn't come out

and become a great citizen of the United States and pay her bills? Why are they shocked? Yep. Yeah, okay, all right. Well, I mean, you ended up being a family therapist. You may want to send this family to your pastor to sit down and talk through this with them, but the bottom line is legally they are both on this and dad can play collector all he wants but let me teach you something

about collecting you can't collect blood out of a rock there's no blood there and this girl ain't getting money you know why because she didn't work much right yes sir so she's got to take care of food shelter clothing transportation clothing, transportation, and utilities first. Then she pays on the student loan. And if she has a want-to, then what she needs to do is take, like, five jobs in getting gear. But that's going to be a shock to her little system because she didn't like it. She didn't used to working much. Yeah.

So, I mean, that – so what we're doing is we're training her to how to be an adult. And, but, you know, dad is that walking around with his chest buffed out like he, like he can just yell at somebody and that makes them have money. They don't have any money. She's broke because she doesn't work. So I'm glad they got her into class. So let's get her into, let's tell her you need to, you treat her like she has $100,000 student loan debt. She's 25 years old because she does. So her answer is you need to get six jobs, live on beans and rice, rice and beans,

live on a tight budget, take in two roommates, sell so much stuff that the dog thinks he's next, and you have no life, kiddo, because you signed up for $100,000 in debt. Get your butt in gear. Go, right? That's what you would tell a single girl that was 25 in your class with $100,000 in debt, wouldn't you? Yes, sir. Good. Okay, then I'm going to look at mom and dad, and they're in my class.

And if somebody came in my class and said, Dave, we signed up because we were stupid. We co-signed for our daughter who doesn't work much, and what are we going to do about this $100,000 in debt? I'm going to go, dude, you just bought yourself $100,000 in debt. And so I would put that in your debt snowball, and I would go, dude, you just bought yourself $100,000 in debt. And so I would put that in your debt snowball, and I would get my butt in gear and pay it off because you're an idiot. You co-signed this because it says in the Bible you're a fool if you co-sign for another. And you can be nicer than that, but that's the message. So, you know, I would put the responsibility on both of them

and let one of them start working on the bottom of it and one of them start working on the top of it, of them start working on the top of it and we'll see where they meet yes sir because if she doesn't pay it they get to if they don't pay it she gets to that's what cosigning works they're both on the stupid note so i'd treat them both like individual cases and let one of them start chewing on the top one of them start chewing on the bottom let's see who takes the biggest bites and who gets there first through the middle and let's try to meet in the bottom. Let's see who takes the biggest bites and who gets there first through the middle. And let's try to meet in the middle on this. But I'd treat them both separately.

And then as far as the interpersonal relationship between these two, you know, if she won't work and all that kind of stuff, then you may want to have the family sit down with the pastor. But this sounds like a family that spoiled their little girl, and now she's having to grow up, is what it sounds like. This is the Dave Ramsey Show. Did you know, statistically, when it comes to life insurance and protecting your family, that women are more likely to be uninsured or underinsured than men?

This doesn't make any sense. Women make up half the workforce, contribute mightily to family incomes, and in many cases are the breadwinners and take care of their families 24 hours a day. This is one of the most overlooked areas when it comes to financial planning. Maybe it's a relic of the past, but a loss of income or the need to replace family care is equally important for women as it is for men. Single moms, working moms, and stay-at-home moms all need term life insurance. Rates are actually lower for women, which is why I send you to Zander Insurance.

They shop the top term life companies to find the lowest rates available. You can compare rates online at Zander.com or call 800-356-4282. This is something every family has to deal with. That's Zander.com or 800-356-4282. Thank you for joining us, America. This is the Dave Ramsey Show. Open phones at 888-825-5225. Brittany is with us in Johnson City, Tennessee. Hi, Brittany. How are you?

I'm good. How are you, Dave? Better than I deserve. What's up? Okay, so my husband and I got FPU for our wedding, and we didn't get to the insurance part before we purchased our life insurance, and we got part permanent and part term. And, of course, we watched the insurance part last night, and we just got the life insurance about a week ago.

So I texted our financial advisor and said we immediately wanted to get rid of the term, or sorry, the permanent and just have term. And he said, Dave Ramsey is talking about whole life permanent insurance, not portfolio-based permanent insurance, which is what you have. So is it still bad? Should we still just get the term? Apparently he doesn't know much about Dave Ramsey. Okay.

Dave Ramsey does not ever invest. I was real clear in the lesson. You heard me. Yeah. I never tell you under any circumstances to use life insurance as an investment vehicle. One hundred percent of the time it sucks. So would you say, because what you told him we wanted to do is switch to a new one? I would say you need a new financial advisor.

Okay. That's what I would say. You don't have a financial advisor. You have a life insurance salesman. Okay. That's selling you insurance. So what we were thinking we should do is switch to $400,000 just of term each, and then the money we were, because it was like $300 a month, which is a lot,

and just go ahead and open up our Roth IRA and start getting money into that. Into good mutual funds. Okay. That's exactly what you learned in class, wasn't it? Yeah. So you already knew what Dave Ramsey said. Yeah. Which tells me one of two things.

Either this guy's a liar or he's ignorant. Right. He's a family friend, isn't he? Actually, one of our friends just apparently gave him our number because they use him for it as well. Yeah, yeah, okay. So I don't know which it is. I mean, I don't know. But I do know that I have never in my life told someone to buy life insurance as an investment under any brand, heading, name, or description ever.

Right. And the last thing is on our term policy, on your class you said, you know, 20 years, 30 years, whatever was fine. And our term policy was until we were 80 with him. Okay. Why don't you jump on Zanderinsurance.com and see what you can buy a 20-year level term policy for. I think it's going to blow your mind how much this guy's overcharged

you for everything he sold you. Okay. And you're probably going to end up just canceling everything with him. So, this guy really needs a good firing. Okay. That sounds like what we're gonna do um in the end of this week all right thank you for calling in and when you compare the prices you'll see what i'm talking about and you understood the lesson when we were talking about

using life insurance as an investment vehicle and the reason is folks for those of you that haven't seen the financial peace university lesson or never for some reason heard A. Ramsey talk about this, in case someone else ever brings this up because it does come up periodically, the people who sell investment-based or whole life or permanent life or portfolio or universal or anything where there's an investment going into insurance are not happy with me. They don't like me. And so they generally try to ignore me or lie about me or something else

because I pretty much cost them all a bunch of business because they sell crap. Crap in a bag. That's what it is, okay? It's pretty simple. So here's the thing. When you use life insurance as an investment vehicle, A, you get a bad rate of return. Regardless of what they quote you,

after they take all of their fees, which usually in the first two years is 100%, sometimes up to four years is 100% of what should have gone to the investment goes out in fees. Even after that, you're going to make 3%, 4%, 5% on your money, and you should have been in a good mutual fund making 10%, 11%, 12% on your money. And that's where you should be. When you die with cash value, permanent portfolio, universal indexed, universal life insurance, they pay only the face amount of the policy, not the extra money that you put into the investment.

That money is gone. So you have a savings account that for the first several years, they keep all your money. After that, they give you a bad rate of return. And when you die, they keep it all. This is a bad savings account. It's a bad investment program. life insurance products that give you the opportunity to pay 20 times more than you would pay for term insurance, in order that you create an investment inside of the policy,

are basically the payday lender of the middle class. They're crap. And that's what Dave Ramsey has always said. For 25 years here on the air, I've said it. And for 25 years, it's all I have owned myself. I have never owned, while this show is operating, any kind of whole life or investment-based life insurance of any kind. Ever. investment-based life insurance of any kind ever. Now, I did get a horrible Northwestern Mutual whole-life grotesque old school, one of the worst of the worst of the whole lives when I was in my early 20s,

and it was the same way, Brittany. It was a guy my wife knew from college came around selling right after we got married, and we bought this crap from him. I had it for about nine months until I finally sat down with some guys who unpacked the numbers for me, and I about kicked my own butt when I saw how bad it was and got rid of it. And since then, I have never owned it. And since then, I've never told anyone to buy anything other than 15 to 20 year term life insurance. About 10 to 12 times your income on you. The best way to buy life insurance is through a broker that shops several companies.

The best way to buy insurance of any kind is through a broker that shops several companies and gets you the best possible deal. Whether it's your car insurance, your homeowner's insurance, your long-term care insurance, your life insurance, your insurance of any kind. Let a broker shop among several companies and get you the best kinds of deal. And that's why we've endorsed for about 20 years Zander Insurance. Jeff Zander has become a personal friend of mine during that time. And I buy my personal life insurance from Zander.

And I don't own Zander Insurance. I don't own any of it. That's the other lie that's always told about me. I would have a whole lot more money if I did own Zander Insurance because Jeff has done rather well due to the Dave Ramsey endorsement. But the reason he's done well is he's got a very, very good system for getting you the best possible price on term life insurance. And it takes about like 13 seconds.

And they don't sell your name to a list of people when you go on there either. So that's why I've endorsed them. It's real simple. It takes care of you guys, you the listener. And you need to get term life insurance. It doesn't cost that much. So just jump in there and do it. So, Brittany, thank you for calling in with that question and giving me the opportunity to clarify on that yet again.

Yet again. Yet again. Yet again. Yet again. Yes, you need life insurance. Oh, by the way, a broker, you know, like even with your car insurance, jump on the ELPs, the endorsed local providers, for what we call PNC, property and casualty. That's your car and your homeowner's insurance.

You can shop. Most people save $300 to $800 a year on their car and homeowners when you shop at among several companies. Instead of using what we call a captive agent in the business, a captive agent can sell for one company, like a State Farm agent or a Nationwide agent. Or Peyton Manning and Brad Paisley can sing to you, agent. What is it? Nationwide? That's Nationwide, isn't it? And they're both good guys. I like both of them. Manning and Brad Paisley can sing to you, agent. Was it nationwide? That's nationwide, isn't it? Yeah.

And they're both good guys. I like both of them. It's nothing to do with that. But you're paying for those guys when you use that insurance. It's built in. And neither one of those guys work cheap, I'll just tell you. This is the Dave Ramsey Show. Are high health care costs getting you down?

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And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org Thank you for joining us, America. Jody's with us in Los Angeles. Hi, Jody.

Welcome to The Dave Ramsey Show. Hey, Dave. It's great to talk to you. You too. What's up? So we have a question that we would like your advice on. We are currently debt-free. We just paid off our home a few months ago. And we're looking at whether or not we should buy a bigger house,

but that would involve taking a $200,000 mortgage, and we wanted to hear your thoughts. Okay. Well, I mean, it's a personal decision. I've made the personal decision I don't go into debt. And once I got out, I don't think I could go back right and that's kind of the um the you know what we're thinking about um however you know we could definitely benefit you know with an extra bedroom um and uh we are yeah i mean you could benefit with five extra bedrooms but you'd be in debt to do it i I mean, you know, it's a want. It's definitely not a need.

You have a house. So $200,000, how much do you make now? What's your household income? About $220,000. Okay. And you don't have any debt but your home. You don't have any debt at all? Yeah, we don't have any debt.

Okay, with no payments in the world, you're making $200,000. How fast can you save $200,000? About four years. That's pretty lame. Four years? $50,000 a year out of $200,000, and you want to buy a better house? If you couldn't get the house unless you did this, I bet you could do it in a little over two.

I mean, how bad do you want the house? Well, I guess not bad enough to, you know. Yeah, there you go. But bad enough to go in debt. So this is where, you know, I'm picking on you just to make you think, okay? Right. And I'm not just picking on you for the fun of it. But here's the thing.

What happened with Sharon and I, Jody, when we went broke was we said never again. We're never again going to take a phone call. If somebody calls us collecting money, it's a wrong number. Right. Okay. And life is good. And there's nothing I want bad enough to go back into that noose again where the borrower is slave to the lender. That's our decision. That's how we decide to live. That's whatose again where the borrower is slave to the lender. That's our decision.

That's how we decide to live. That's what we teach people the goal is. It's kind of like the Holy Grail of the Dave Ramsey Show, right? Get everything paid off so we can become very wealthy. And you're making $200,000 a year. You're there now, and now you're going to go back into this for a couple bedrooms.

I couldn't do it. It makes me sad just hearing you talk about doing it. But if you do it, you makes me sad just hearing you talk about doing it. But if you do it, you know, you're just living a different thing. So you called me to ask me my opinion. What would I do? Once I drew the line in the sand, I said I'd never borrow money again no matter what. Then if I want something, I have to get really creative about it or I have to really, like, work hard to save up the money for it.

And I have to sacrifice like work hard to save up the money for it and i have to sacrifice other stuff to get it and then it makes me go i like my lifestyle better and i like those two more bedrooms so i'm probably not going to cut my lifestyle down to nothing to get this which is kind of what you just said and so um which is okay that's an okay choice you just made a choice though but what debt does is it allows us to buy something we can't afford so you can do whatever you want to do well you and i'll be friends i'm not gonna be mad at you but you call the dave ramsay show and ask to borrow money and it's just you're not ever gonna get a yes on that one um so it just makes me sad that you would go back in so i i would because i i think you guys need to

stop and measure the freedom that you have, the sense of peace that you have. The economy turned down. Did you have your house paid for back then? If you did, to have that feel. When the world's falling apart and you have a house paid for, it gives you a different set of peace. Because, I mean, we don't know anything on any of our properties anywhere because I've done research. I've done detailed research, and 100% of the foreclosures occur on a home with a mortgage. So we quit borrowing money.

So you do whatever you want, kiddo. We'll be your friend either way. But the way I live my life is how I answer questions on this show because it's brought me great wealth and great peace and great prosperity and great sustainability in up times and in down times, and joy to not have a soul in the world named Countrywide on my back. Bank of America on my back. I can't even imagine. It's been so long since I've had any debt.

I just, oh, I think I would probably, like, have an anxiety attack. It would be bad. Carl is with us in Pennsylvania. Hey, Carl. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. I appreciate it. Sure. What's up? Hey, I've got a good problem that I'm hoping you can give me some advice on. I'm 48 years old. We're debt-free. I recently paid our house off. Yay! Way to go, dude! Yeah, we're happy about that. Decided to sell off some investments

just to do that. People kind of said, well, why would you do that? Well, that people's money is your money. That's right. And I tell you what, the peace of mind is great. But hey, the good problem I have is we were able to sell some stock options, and I've got about $500,000 or $600,000

that I'm trying to figure out what to do with. Look at you and I've got about $500,000 or $600,000 that I'm trying to figure out what to do with. Look at you. I've got about the same amount in a 401K, which has to be in the market. So I'm a little nervous about possibly also investing this amount of money in the market. And when I flipped homes, we flipped about 10 homes in the past, and I'm thinking about using that money to buy rental properties outright and do that and maybe diversify a little more. And I wanted to hear what your thoughts were on that.

Okay. I think it's excellent. If you've got the stomach for real estate, real estate gives you a better return than the stock market will give you. But it's a higher hassle factor. Yep, it is. You know, you put money in a mutual fund, they don't bother you. You know?

You put a renter in a house, they bother you. And so there's a hassle. You know, you've got the hassle of buying it. You've got to pay the taxes. You've got to pay the insurance. I mean, dealing with managing real estate, all the aspects of it, is a hassle factor. I've got a bunch of it. By far, I have more in real estate than I do in the stock market. I've got a bunch of it. By far, I have more in real estate than I do in the stock market.

I've got a lot in both. But real estate will give you a better rate of return, but it requires management by you or someone else. And even if you have somebody else do it, you've got to manage the manager. You cannot ignore it. And so my real estate with an internal rate of return, which is the tax benefit, the depreciation schedule, in other words, the actual cash-on-cash return, the rent minus the expenses as a return on my investment, and the growth in value.

You put those three things together in real estate, you get the actual return, which is called the internal rate of return, the IRR. Okay? Which you would compare to a mutual fund rate of return to do apples to apples. Higher hassle factor, but most of my real estate is 17% to 20% rate of return, IRR. Now, cash on cash is about 10. Okay. Or a little less than some of it, okay? But IRR total with the increases in value and other stuff. So I'm making more on that than I am on the other.

Maybe double than I'm making on mutual fund. but i've got a lot more hassle with it i mean it's um you know even though i don't manage my son-in-law runs our real estate company and he manages all of it and i don't i don't put up i don't personally deal with a renter or something like that or anything or vacancy or a broken air conditioner all that he deals with all that stuff but but you know i went over all the p&Ls this morning with him to see how the properties are doing. We check on them, and he's telling me the stories of the drama he gets to deal with. And such is real estate.

But I love real estate, dude. Can I ask you a follow-up question? Sure. So say my price point was a $100,000 house. So at $500,000, I can get five homes all in $100,000 each. So I own them outright, and all the rents minus expenses are free and clear. Or somebody else said, well, why don't you buy three and then leverage four at 50%? Yeah.

You know I don't leverage. I think I know your answer there. You know I don't leverage anything. I'm not going to leverage anything. I don't want the extra pain in the butt of dealing with a banker on top of this. Right. And on top of that, I've got risk, and it just takes all the joy out of this whole discussion. What's the average price point in your area?

Nationwide, it's a little over $200,000. Yeah, probably about that. I mean, I can get a three-bedroom, one-bath, three-bedroom, two-bath for about $100, maybe $120. If I'm looking at single-family homes. Yeah, I'm probably going to bump on up in the $150 range in you and do three. Three $150, $175 is right in there, rather than five ones. And the only reason I'm telling you that is get a good buy on whatever you buy, whatever it is. I'm not above buying anything.

But the higher the class renter, the more they they pay in rent the easier they are to deal with generally speaking as a general category it's not always true i mean there's some wonderful people that rented every strata but you know people pay two thousand dollars a month you know it's a different different type of folk that you're dealing with there then somebody pays 500 800 bucks a month and i've been both myself so i'm not talking down to somebody shut up don't send me hate mails from you people but i'm just talking about as a general concept who you want to deal with Our scripture today, Proverbs 22, 4, The reward for humility and fear of the Lord is riches and honor and life. Casey Stengel said, You gotta lose them some of the time.

When you do, lose them right. There you go. Kristen is with us in Green Bay hi kristin welcome to the day ramsey show hello mr ramsey thank you for taking my call sure what's up okay so my mother is about 177 000 in debt i just got the power of attorney so that I'm taking care of her bills. One of her three creditors has transferred over her debt to a lawyer, and I've heard you talk about creditors and how to deal with them, but I don't know how to deal with a lawyer on it now. Well, it's a collections attorney, which is basically a collector.

Okay. They're it's a collections attorney, which is basically a collector. Okay. They're bottom feeders. So what kind of debt is the $177,000? There is $101,000 for her student loan. I have $58,000 for her mortgage. I have about $6,000 for her car, $7,000 for one medical bill, $4,000 for another medical bill, and $1,000 for another medical bill. Okay. How old is she? 63.

Why are you now power of attorney? She's starting to forget stuff. She's getting checked out for dementia. She's in the process of doing that, and she hasn't been paying her stuff, so I put her on a budget, and so now I'm taking care of her stuff. What is her income? She makes about $28,000 a year. Okay. And what is the house worth? She's retired. Sorry. What's the house worth? What's the house worth?

My sister lives in it now and she's kind of destroyed it. Where's your mother living? In an apartment. Your mother's paying rent in an apartment so that your sister can live in the house. Yeah. So what's the house worth? I'm guessing $65,000. Okay.

Okay, so how fast are you throwing your sister out and selling the house? By Friday? She's on the deed. I can't throw her out. Are you on the deed? No, sir, I'm not. How did she get on the deed? My sister has a child with needs,

so my mom wanted to make sure my niece had a place to live, so she put my sister on it. Is your mother paying the mortgage? She's been. Not anymore. Yeah, I told my sister I was not anymore. Everything's in my mom's name. All the utilities, everything is.

Take them out. Yep. I can't turn the heat off. I can't turn the utilities off because winter's coming. Your sister can put the utilities in her name. She says that she can't because her deposit is too high. Uh-huh. Because she doesn't tend to pay her bills, so they raised her deposit to compensate for that.

But you can cease to pay the bill. Right, yes. Okay, cease to pay the bill. Right, yes. Okay, cease to pay the bill. Yep. And that's it. And cease to pay the mortgage today. Okay, I just got rid of $58,000 of the debt. Good.

And $101,000 in student loans passes away when your mom passes away. Yep. Okay, so we don't worry about those. Quit paying those. Quit paying the student loans. Quit paying the student loans. Yeah, quit paying the student loans. So now all I got is $11,000 and some medical bills.

Yep. The rest of it we're just not paying. Your mom doesn't have any money. She's broke. She's apparently got dementia. She has $28,000 a year. She's 63 years old. She lives in an apartment. We have to make sure she's cared for first and that's food shelter clothing

transportation and utility she doesn't need transportation did you say there was a car in here does she need to be driving i say no you're the power of attorney yeah i know that i've tried to convince her to sell her car and get a thousand dollar car because fifty eight hundred dollars is a lot for a car so it's not a lot for a5,800 is a lot for a car. It's not a lot for a car, but it's a lot for a car for somebody that has dementia, and I'm not sure they need to be driving. Right. She can't remember to pay her bills.

Can she remember how to get home? I'm scared for her. That was one of the problems. She forgot how to get home. That's what started it. Is it responsible on your part to let her drive? The answer is no. Right.

I love her. You love her. You don't want her to be hurt or to hurt someone, for God's sakes. Definitely not. She could go driving off and end up in Tennessee from Wisconsin, and we'd have one of those silver alerts or whatever they call them, right? Yeah. Yeah. Yeah.

No, I think we're going to do away with cars, period. Oh, okay. Now we're down to medical bills. These are very hard decisions for you. Right. But you have to do your job as the power of attorney and as a loving daughter is do things that are good for your mom regardless of who it upsets your sister is upset your mother's upset i don't care yeah it's very hard for you to make those decisions but we're only going to do things that are good

for your mom none of this you are doing is out of greed for yourself. Okay? So tell the student loan people they get zip. Nothing. Nada. Okay? Tell your sister she gets nothing. Nada.

Zip. Sell the car. Now I'm down to just a few medical bills, and I think you can work your way through those with her income or at least get some kind of a payment plan going that's very small. And you can let that attorney's office know that basically she has no money. Wait a minute. What is the $28,000 coming in from? She has a pension, annuity, and Social Security. Okay.

Then what I probably would do with these medical bills is let them know they're probably not going to get paid either, except if I have a little extra money here or there after taking care of mom. Okay. Because in the beginning... I paid $50 on it last month on each one. That's okay if you want to pay $25 or something. If you can work out some kind of lump sum and, you know,

$500 settles a whole debt or something like that and clears them up, that's fine. But here's the thing. If they were to sue her, do you know what they're going to get? Nothing. Because you know what she has? Nothing. All of the income that she has, they cannot attach. You can't attach pension income, you can't attach Social Security income, and you can't attach pension income you can't attach

social security income and you can't attach an annuity and so that she's what we call judgment proof because she's broke and so that puts you in a very strong position to talk to mr or mrs collections bottom feeder attorney when you do talk to them. And just go, here's the situation. She's 63. She's got dementia. She has no assets, and her only income is pension and Social Security. She's judgment-proof.

Tell them I said that. Tell them you talked to your financial coach, and he said they're judgment-proof. Okay. And so what we'll do is we would like to clear this up, but we're going to do it for pennies on the dollar. So make me a ridiculous offer because that's the only way you're getting any money. And play hardball with them. Because we've got to take care of mom here. Yeah.

I'm not trying to beat anybody up. I'm not trying to hurt anybody. I'm trying to protect your mom. And the last thing I need is she gets her food paid, her lights and water, her rent, and she is taken care of. Only then do we deal with a couple of medical bills. Sell her car. Sister gets nothing.

Student loan gets nothing. So I'm saying this real kind of like, ah, because I want you to get a little of that down inside because I know these are going to be hard conversations for you. Yeah. But you've got to be, ah going to be hard conversations for you. Yeah. But you've got to be, because it's your mom you're protecting. Okay? Exactly. You can do it.

You can do it. If you need some help, you call me back. But just play hardball with them. Tell them she's judgment-proof. My goodness, what a story. Wow. There's a reason to save for retirement right there. Do you not want to retire, bro? Save for retirement. There's a reason to save for retirement right there. Did you not want to retire, bro?

Save for retirement. There's a reason right there. Here it is right there. That's why you want to have half a million dollars in your 401k when you get to retirement. Right there it is. Instead of buying that stupid car. Yeah, hello. That puts us out of the day.

Ramsey's showing the books. 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. Hey, it's Kelly, Dave's phone screener. We finished 2017 with a bang as the fourth most downloaded podcast of the year. Thanks to all of you for listening and helping us spread the word.