The Ramsey Show - App - Real Estate Ownership Isn't Always a Good Idea! (Hour 1)

Episode Date: May 25, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Kenneth is in Alaska.

Hey, Kenneth, how are you? Hey, Dave, I'm doing really well. Thanks for you and your staff taking some time to hear me out here. Appreciate it. Sure. How can I help? Hey, so we live in Alaska and I have household income right now of right about $59,000 a year. We have a home we live in in kind of rural

Alaska and that home, we're taking care of the mortgage payment, no problem on that. It is a 30-year note, but we have a second property that's in Anchorage, which is about four hours away, and we have some really solid renters in there. The problem is we are losing money on that rental, and my wife and I, we differ a little bit on kind of what to do. We basically have $75,000, at least that, in equity built up into that condo. And the issue is we would have it paid off in about nine years from now, but the condo dues keep going up on this thing. They're going from $350,000 to $ to $380 a month for this next year,

and I foresee it going up again in the future. So my question to you is, if we're losing roughly $4,500 a year on this property, we don't want to lose the renters, but do we increase the rent? Do we sell it? We are on baby step two. We have $6,000 left in credit card debt to pay off, and then we are debt-free besides the house. What's the condo worth? The condo is worth $225,000. Okay. Let's visit your house 10 years from now. The condo's paid off, and it's worth $300,000 or whatever at that point,

and the HOA dues are still going up, and you've still got tenants in it. If you were in that situation, would you buy that condo if you had $300,000 in the middle of your kitchen table and no debt and you just pay cash for it? Would you buy that condo? Because I don't think that you got into this condo to lose money for year after year after year, hoping that someday you have it paid for. I think this condo you had before you moved out of it and you became a landlord by default i don't think this was your game plan it wasn't your strategy you've held your nose and tolerated it that's you're exactly right yeah my wife actually purchased this on her own before we even met and she lived lived there with some roommates for years was very very wise

with with that purchase and that money and now we we moved my we changed jobs we have kids and and we we kept that and i'm glad we did but at this point i'm not you should sell it okay thank you um we should sell it and then yes um as far as... Because if you call me up and said, I have $100,000 in the middle of the table, and I want to go buy a condo and put $100,000 down and lose $4,500 a month, unstable homeowner situation, HOA situation where they're going up in cost all the time, you wouldn't even ask that question. Right. And in a sense, when you decide to keep it, that's the decision you're making is to buy it again.

Right? I mean, the amount of equity that you have sitting in the middle of your kitchen table, would you go buy a condo that loses $4,500 in an unstable HOA? No. Definitely not. Right. And so that answers the question. If you wouldn't buy it again, you sell it.

Okay. Okay. Thank you wouldn't buy it again, you sell it. Okay. Okay. Thank you, Dave. Appreciate that advice. Hey, good question. Thank you for calling in. I love real estate, you guys, but real estate is an amazing thing. There's very few pieces of real estate that are just kind of, eh, kind of in the middle.

The piece of real estate you own is either like yeah that's awesome or this thing sucks it's sucking the marrow out of my bones real estate really falls on one side of the other and somehow people got the idea that all real estate purchases are a good idea all real estate ownership is a good idea it's not it's not i love real estate the are a good idea. All real estate ownership is a good idea. It's not. It's not. I love real estate. The vast majority of my net worth is in real estate. I have more in real estate 2, 3X than I do in the stock market.

And I love the stock market, too. I've got good mutual fund investments, millions of dollars in that. I love it. But, you know, I got my real estate license in 1978 when I was 18 years old and I have just been simultaneously terrified and enthralled at how people lump real estate. It's almost like they do it with, with their college education. It's like all college education is good and worth the money and you'll be glad you did it. All education is good. All real estate is good and worth the money and you'll be glad you did it all education is good all real estate is good wrong answer you spend 250 000 getting a degree in german polka history all college education is not good it's not worth the money some of it is very good and worth the money.

And you don't pay as much for it and you get a lot more. Same thing with real estate, right? And so you can't just put this blanket thing that says, I always wanted to own real estate. No, you didn't. You always wanted to own good real estate. I always wanted to get my degree. No, you didn't.

You always wanted to get a good degree at a reasonable cost that would cause you to make more money as a result of getting the degree. That's what you wanted to do. But you can't just throw this thing out there and go, all education, all real estate, and people do that, and he wasn't doing that. But it terrifies me sitting in this chair when I hear people just go, well, it's all going to work out. The renters are going to pay for it. You've never been a landlord.

When you say the renters are going to pay for it, that tells me you've never been a landlord. You don't know what the flip you're talking about because, you know, I have good renters. I have really good renters on our property. You know why? Because we don't let the bad ones in. But this idea that renters are going to pay for it and not put a $10,000 cat in your house, because that's what they'll do to your house, is spend $10,000 worth of damage to your house. You know, that's, you know, no, no.

All renters are not good. And renters don't pay for it rent pays for it renters are necessary in order to get rent but that's all from a landlord's perspective and so it's a financial transaction it's not a dehumanizing thing i'm not mad at you if you're a renter i've been a renter i'm not it's none of that don't get all philosophical and pissed off on twitter or go jump off a creek if you're going go jump off a creek if you're going to. Jump off a bridge if you're going to into the creek. But the bottom line is this. It's a transaction, and the rent has to bring in a ton more than the costs are for it to be fun financially for the landlord.

That's how this works. It's an investment. And we're trying to get a return on investment. And not all investments are good. Oh, that was insightful. This is The Dave Ramsey Show. Business leaders, now more than ever, we need people with the right skills to support our communities, especially the frontline workers who provide resources and care for those most in need. To help, LinkedIn is offering free job posts for healthcare and essential service organizations that need to quickly fill critical roles with the people who help us all. If you are hiring for one of these organizations,

free job posts on LinkedIn can help you quickly find the right people for your front line. LinkedIn jobs can help by screening candidates for skills and experience you're looking for and putting your job post in front of qualified people who have what you're looking for so you can find the right person to quickly fill critical roles. To post a health care or essential service job for free, or if you're in another industry and have hiring needs, visit linkedin.com slash Ramsey. LinkedIn.com slash Ramsey. Terms and conditions apply. Joy is in New York City. Hi, Joy.

Welcome to the Dave Ramsey Show. Hi, Dave. I'm so glad to speak with you. You too. How can I help? I had some questions about buying a used vehicle. I know that on your show you talk a lot about buying used vehicles, and I'm not vehicle savvy, and I just needed to know, I guess, some tips or different points that you could give me

just for things to look out for. What are you talking about? How much are you talking about spending? Somewhere between $10,000 and $16,000. I have a sedan now and then I need a van. Yes, I will be paying cash. Okay, and you're single? Yes. Okay. So I just didn't want to, it would be taken advantage of and then also I didn't really want a ton of maintenance issues either. The car I have now, I bought new previously before that vehicle. I had bought used, but then I had a mechanic that still lived nearby that was able to just check things over.

And he's retired now into Florida. Okay. Call him and find out who in the area you can trust to check things over. He'll know some other guys that are still in the business. Okay. And do you have a way to get in touch with him? I'm not sure. I'll definitely try.

Or are you a member of a church? I am. Okay. Ask around the church. Ask your pastor and a couple of guys around there who you can trust to have a look over a car. Because it's a good thing to have a car inspected in a situation like you're in before you buy a mechanic. Just have them look at it and go, hey, what am I getting into here? Okay.

And they're looking for two things. One is, is this a brand of car, a make of car that is constantly breaking down? Do they know this car is, you know, you don't want one of those, right? Or, hey, this one's pretty steady. This one's going to be a tank. You don't have to worry about this one. It's good. The second thing they're doing is they're looking at that particular vehicle and saying this particular car you know you need to put hoses and

belts on this thing or you're going to have to do a brakes on it or you're going to have to do whatever as soon as you buy it or within six months of buying it because it's got these things going wrong and at least you know what you're getting into and then based on that you can make the decision um that so that's how you do the mechanical side of it. They actually, if you really want to get super technical and nerdy, I never have, but I've heard of this being done, you get permission, a current owner of the vehicle, for you to pay for an oil change. And your mechanic can learn a lot about what's happening with the car by changing the oil

and looking at the oil. You know, it'll tell you a lot about the condition of the engine, and you can actually do a technical chemical analysis on it if you really want to go crazy. Again, I've never done that, but you just look the car over, have it inspected with a quality mechanic that can give you some advice. That's thing one. Thing two is he with the most information always wins in a negotiation. And so I want you to become an expert on vans, if that's what you're looking at.

And you just start reading articles on Consumer Reports. You start Googling that van and scrolling down three pages into Google and finding anybody that wrote anything about it. Look it up on YouTube. See what pops up uh on that van and uh then you're also looking at pricing you're jumping on auto trader and uh kelly blue book and you're looking at the pricing of the different vans and the different uh options that are available and you're going to narrow down really what really really do research like you were getting paid to do it because you are as to what that van's really worth.

This van is worth $15,400. It is not worth $17,000. And if I can get it for $14,000, I got a good deal. You need to know that because you've looked at the numbers, and you've broken it down. And, you know, I go in. Last car I traded, I went in and said, okay, here's what Kelly Blue Book says this car is worth, and I need this on the trade-in, and here's what your invoice is,

and here's what I'm willing to pay for the car. And the guy goes, well, we can't give you that for the car. And I said, well, it's what Kelly Blue Book says it's worth. You can give me that for it. And I'm like a little off, so you can make a little money on it, but I went in armed with the knowledge of what the car is worth and that helps you a lot in the negotiation and then lastly uh you know is patience take your time don't get car fever uh this is a big purchase the bigger the purchase the more complicated the purchase the more time you should take on the purchase you're buying a pack of gum buy it and get out of the way everybody's in line behind you The bigger the purchase, the more complicated the purchase, the more time you should take on the purchase.

You're buying a pack of gum, buy it and get out of the way. Everybody's in line behind you. Shut up. When you're buying a car, you don't impulse that. You're buying a house, you don't impulse that. You take your time. So patience and knowledge and inspections. And if you do those three things very thoroughly, like it was your job and you were being paid to do it, and if you did it wrong, you were going to get fired, you're not going to get ripped off then.

You're going to be in a good position of knowledge and confidence, and you're going to be able to make the decisions that you need to make very carefully and very easily. Abe's with us in Fort Lauderdale. Hi, Abe. Welcome to the Dave Ramsey Show. Hey, Dave. Long time listener, but unfortunately I did not practice what you preach, and I'm in a bit of a situation. I have about $70,000 in credit card debt, which I have not made a payment in, I would say, about two years. Why? Just due to financials. It just got too much. I wasn't able to keep up with the payments, and I just let it go. What do you make a year?

What's your household income? 60 a year. 60, okay. And you have $70,000 in credit card debt. What other debt do you have? That's it. That's it? I don't have any assets.

You don't owe anything on your car? No. It's a? I don't have any assets. You don't owe anything on your car? No. It's a private loan. So you owe money on your car. How much do you owe on your car? Are you there? I'm here. Okay.

How much do you owe on the car? $4,000. $4,000. Okay. How much other debt do you have? That's it. Okay. How much do you owe on the car? $4,000. $4,000. Okay. How much other debt do you have? That's it. Okay. All right.

And what are you paying rent? $1,450. Are you single? No. Married. Okay. How many kids? Four.

Okay. Well, it's time to address this mess then. What are you facing today? Well, American Express is suing me right now for $15,000. Okay. A lot of the credit cards, some of them are charged up, some of them are about to be charged up. Okay. They're suing you.

Is that because they said they were suing you, or you actually got served a lawsuit paper? I got served, and I got a letter in the mail recently saying that they're having a hearing. Okay. All right. Well, you're going to lose the lawsuit because you owe the money and haven't paid it. It's pretty simple. And they're going to take a judgment against you. That's not the end of the world. You know, from there, what you're going to have to do is figure out how to settle with them, you know, because obviously this has gone way long, and you're going to have to build up some money to settle with them.

You don't really have a dime today, do you? I have a little bit of tax money that I have saved for, I guess, something like this. Wait a minute. Your phone is breaking up. Try again. I could borrow some money, but that's obviously not ideal. Right. Where would you borrow money? Who would loan you money? I have a friend that would loan me some money.

Oh, no, no, no. You don't need to put your friend in an American Express's seat where they hate you. Right. Because you can't pay bills right now. You don't need to put your friend in an American Express seat where they hate you. Right. Because you can't pay bills right now. You don't need to do that to a friend. Right. All right.

We've got to get you on a detailed, written budget. No life. No vacations. No seeing the inside of a restaurant. You've been listening, but now you're going to do it, right? Yeah, I kind of have no choice. Yeah. Yeah, you don't.

It's time to get after this. And you're scared, aren't you? Yeah, it's something that I've ignored for a long time, and it's just mounting up, and it's kind of like... How's it affecting your marriage? It's not good. Yeah. Yeah. Well, you don't feel real good about you, and she's scared to death, and that's dangerous chemistry in a marriage.

So here's what we're going to do. We're going to put you into Financial Peace University. I'm going to pay for it, because I've been where you are, scared and stupid. I know exactly how it feels, okay? And I'm going to walk with you, brother. You're going to make it out of this, but you're going to save up money rapidly, and then we're going to offer American Express $3,000 or $4,000, and they're going to take that as settlement on this judgment.

It's not the end of the world. We can turn this around. You hang on. I'll walk with you. But you're going to have to do it this time. Hold on. Hey, folks. Father's Day is just around the corner. If you're looking for the perfect, unique gift to give Dad, I've got it. Grip 6 belts. If Dad's like me, he's not a fan of traditional belts. They never fit right, and they're uncomfortable.

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their products and source their materials in the u.s so show dad you love him and get a grip six Steve and Leanne are with us in Columbus, Ohio. Hey, guys, how are you? Hey, Dave. Welcome. Welcome. I see on my screen you're debt-free. Congratulations. Thank you.

So how much have you paid off? $290,000. Wow. How long did that take? About four and a half years. Good for you. And your range of income during that time? We started at $150,000, dropped down to $80,000, and back to $130,000. Okay, cool. What do you all do for a living? I'm in software quality assurance. I'm an office manager. Very cool.

Good. So what kind of debt was the $290,000? Well, at the time that we got married, I had a house that was in contract that hadn't sold yet. That was $120,000. Once that sold, that knocked that off. But it was upside down, so that came with a 401k loan and a family loan. It's credit cards and student loans, a little bit of everything. Oh, my gosh.

Okay. Yeah. So you guys had everything in the world, but you still got your mortgage on the home you live in then? We do, yeah. Okay. All right. Cool. But $120 of it, plus or minus, of the the 290 went with the sale of that one property. That's correct.

Very cool. Okay. So when did you all get married? Four and a half years ago? Yeah, going on five years. Okay. All right. So that's what started this whole journey. When you started combining your finances, you said, we've got to attack this. Tell me the story. Yeah, so when we combined the finances, I saw how bad we were in debt, and I actually couldn't tell Leanna at first. I had to kind of wean her into that one and get her ready for it. Okay.

Steve was already on your plan prior to our marriage, so he was really on board with you for a while. I was not. And even when we did FPU, I was still skeptical. And then just something clicked with me about two years ago. And I came home from work and said, Steve, we need to sell my car. And so I was leasing a car. We sold that car, pretty much broke even. And from then on, I was just totally on board. So what do you think clicked? You know, I think it was a God thing. I think he was just really working on me. And all of a sudden,

just, I don't know, I can't explain it. I just had this overwhelming feeling that, you know, this has to, the only way this is really going to happen is if the two of us work together. And that's exactly what did it, is our communication, and we had an end goal in mind, and we were finally on the same page. Okay, so Steve's just kind of keeping steady pressure, pushing, and then the Holy Spirit's just whispering to you until you hear. Exactly, exactly. I was kind of the one that budget.

We'd do a budget, and then I was like, yeah, okay. I can go and do my own thing. But once I was on board, it was, no, that is what we're going to do. To the point that I think sometimes Steve is like, oh, my gosh, I've created a monster. Went the other way. The pendulum swung all the way across. A little bit, yes, sometimes. So now that you guys have done this, what do you tell people the key to getting out of debt is?

I think the biggest thing is working together. It cannot be done alone. Ironically enough, Dave, we made way more money before I was on board, but we were paying off less debt. Our salary dropped due to a job change for me, and yet we were just going full steam ahead because by that point in time I was on board. And I think that made all the difference, us working together. Sure does.

Sure does. Okay. So what advice would you give Leanne to a husband who's got a wife who's sort of, who's doing this stuff-ish, right? Right, right. How should he work with her to get her to come around? Or, for that matter, a wife with a husband. I would say patience.

Steve, do you have anything to add to that? I think part of it is just knowing how your spouse reacts to things, if they get overwhelmed. You just have to be delicate and make sure you've got the right timing and you come with the right message and make sure that husbands should be coming to their wife with a loving manner and trying to understand what their whys are in the future and then start to kind of work towards addressing the why as opposed to the what.

Mm-hmm. Definitely. Yeah, that makes a lot of sense. Well done, you guys. How does it feel now that it's cleared up? Oh, it feels amazing. Absolutely. It just totally changes everything.

Yeah, it does. Yeah. You've got a great. Yeah, it does. Yeah. You've got a great income now, no payments but the house payment. You should be able to really win at this stage of the game. Congratulations, you guys. Absolutely. Thank you so much. Thank you.

Were people cheering you on or people saying you're crazy? We had a lot of support. We picked up a lot of side jobs in the last few months of paying off debt, and there were definitely people who thought we maybe were going off the deep end. Mm-hmm, mm-hmm. Well, you did. You're off the deep end. You're debt-free.

That's the deep end. Exactly. Nobody swims in this water. I mean, if they've never swum in this water, yeah, it is the deep end. I get it. Wow, very cool. Yep, yeah, it is the deep end. I get it. Wow. Very cool. Yep.

It was totally worth it. Well, we've got a copy of Chris Hogan's retire-inspired book for you. We're going to send you. That's the next chapter in your story for you guys to be millionaires and outrageously generous along the way. Okay? Awesome. Great. Cool. Steve and Leanne, Columbus, Ohio, $290,000 paid off in four and a half years, making $150,000 to $80,000 to $130,000.

Count it down. Let's hear a debt-free scream. Three, two, one, we're debt-free! That's how it's done. Love that. that's how it's done love that fabulous great job jonathan is in atlanta welcome to the dave ramsey show jonathan how are you i'm doing great day how you doing better than i deserve how can i help um i got a quick question um i made 54 000 a year um all i think i have is a house payment and a super 401k loan payment and um i just started listening to your show um i got 5 000 in a cd that gives five percent and um i got a thousand000 in cash and savings.

And I was wondering, which one do I pay off first, the 401K or the house? How much is the 401K loan? It is almost $10,000. Okay. And how much do you owe on your home? $20,314.04. Okay. And how much do you owe on your home? $20,314.04. Okay. I'll pay off the 401k loan. You can't pay off a 401k loan by the month extra.

You have to just pile it up. So you're going to have to put another $5,000 to go with your $5,000, and then write a check and pay off the 401. So your first goal is just keep adding to that $5,000 account until you get it up to the 401k loan balance, and then reach over and pay it off and be done with that. Boom, that's over. Then be putting, are you putting any money into the 401k now other than paying the loan? Yes, I am. I'm putting it at 3%. Okay, I would stop that temporarily until we get this money saved up and get this loan paid off and then keep it stopped temporarily until you get your emergency fund of three to six months of expenses in place. When you've got both of those things in place, then I would restart your 401K.

And you ought to be able to do this really quickly. I mean, you make good money, you don't have a lot of debt, and you got a very, very small house payment. Very small house mortgage, anyway. And so let's get on a really detailed written budget. Jump on EveryDollar.com and get your EveryDollar budget going. It takes about 10 minutes to set it up on your iPhone or on your Android. It's free, and that'll get you under control. Get EveryDollar barking.

Make it all work like it's supposed to work. Every dollar squawking and doing its thing. Every dollar screaming. You're making every dollar behave. And the first thing is build up out of the $5,000, stop the 401K, get the 401K loan paid off, build your emergency fund of three to six months of expenses, then restart the 401K with a tune of 15% of your income going in at that point. Then we'll reach over and pay off the house.

This is the Dave Ramsey Show. Thank you for joining us, America. This is the Dave Ramsey Show. Open phones at 888-825-5225. You jump in, we'll help. It's a free call. Andre is in Jackson, Tennessee. Hey, Andre, how are you? I'm all right, Mr. Ramsey.

How are you doing? Better than I deserve. What's up? First, I just want to thank you for all that you do, Mr. Ramsey. I have a question for you for all that you do directly. I have a question for you that I think you can get me out of it. So the past, let's say, four or five years. I'm having trouble with your phone.

Can you get where we can keep it from breaking up, possibly? Can you hear me better now? Yes, sir. Thank you. All right. Thank you. Thank you. So for about the past four and a half years, I've been saving up for a particular purpose of trying to pay down debt. And we have now, right now, is around $58,000 in debt and mortgage with like a 3% interest rate,

but also a $118,000 debt when it comes to student loans. And my question for you in regards to the advice, should we pay the mortgage off that we set up and refinance the student loan, a mortgage to the house? Does that make sense? No. No, because if you die with a mortgage, the mortgage is still on the house. If you die with a federally insured student loan, it's no longer due.

If you become disabled, the mortgage is still on the house. If you become permanently disabled, the student loan is no longer due. You lose the benefits of all of that. And so I do not want an unsecured student loan debt to become a mortgage. So how much money do you have saved to pay down on the debt? $60,000. Say again? $60,000.

$60,000. And what is your household income? Right now we've been blessed to have an income of around $150,000 a year. Okay, you broke up again. $150,000? $250,000. $250,000? Yes,,000. $250,000? Yes, sir.

Well, dude, just pay it all off. My gosh. I wouldn't do that easy, Mr. Ramsey. It is. You make $250,000 a year. It is that easy. You should be debt-free by the end of the year. Well, I hope so.

Praise God. I hope we are. If you make $250,000 taxable income, dude, I mean, there is no – you pay the $60,000 on the student loan today and then knock the rest of that student loan out really, really fast and then turn around and knock your mortgage out. Dude, you are killing it. Get yourself on a budget and quit spending money like you're in Congress.

Knock this stuff out. $150,000 in debt is all you have. $160,000 in debt. And you have $60,000 in the bank, which means you only have $100,000 in debt and you make $250,000. You should be debt-free inside of 12 months. Pay the $60,000 on it. Be done with it. Now, Candace is with us in Charlotte, North Carolina.

It's not in South Carolina. What's up, Candice? Hey, Dave. How are you today? Better than I deserve. How can I help? Well, so I just totaled my card last week. It was paid off.

A lady hit me. It was her fault. So her insurance company is reimbursing me $6,800. And I'm currently on Baby Step 2, so I have a little under $4,000 left on my student loan. I was on track to have that paid off by this summer, but I was wondering if I should put that on hold or if I should take this money that they're giving me

and knock out the student loan. You're getting how much from the insurance company? $6,800. And what do you owe on your car? I don't owe anything on my car. I paid it off. Oh, okay. And your household income is what? Right at $27,000.

Okay. All right. And so our options are to spend all of this money on a car or spend like $3,000 on a car and be debt-free right now. Mm-hmm. Is that the options? Yes. I would spend $3,000 on a car and be debt-free right now, and I would immediately build my emergency fund. As soon as that's done, I'm going to save another $7,000 and move up to a $10,000 car with cash. Baby step 3B.

After you're debt-free and build your emergency fund, I want to move you from a $3,000 car up to a $10,000 car with paid cash. Okay. You see how I'm doing that? Yeah, I see. I understand that. And I think you'll be doing all of that within 12 to 18 months. Okay, that sounds doable.

Yeah, your emergency fund plus $7,000. Starting today, you're 100% debt-free with a $3,000 car. Okay. I guess my second question into that is in buying a used car, are there any tips that you would have? Yeah, a couple things. A $3,000 car in particular, what you're looking for in a $3,000 car is not something that's pretty.

Okay. car is not something that's pretty okay uh you want you're more concerned like 99 concern with how mechanically sound it is because you're going to be driving it for about a year okay and uh i don't care if it's ugly i don't care if it's a car people make fun of or you have to give it a name actually that's kind of what you're looking for but has very low miles and is in very good shape uh in terms of the mechanics of it the body might have you know might not be pretty it might be faded it might be a type of car that people that make fun of or whatever all i'm looking for is a year's worth of transportation and then i'm gonna sell this thing okay second thing is uh when you're looking for a car uh how old are you i'm 26 okay is your family in the area yes okay uh because

sometimes when you're looking for a car uh that is one of the spaces that sexism will abound sometimes men don't look at a 26 year old lady like she knows what the flip she's doing, and they can take advantage of her. It makes no sense, and it shouldn't be, but it is, that if your dad was standing beside you, even if he says nothing, you'll probably get a different deal than if you walk up there by yourself. Okay. Just because. And it shouldn't be that way.

I'm not saying it is. I'm not saying it's always that way. It's not. But can you imagine what I'm saying might be true? Mm-hmm. Okay. And then the last thing is this. If you really want to be super careful about it,

find a repair shop that will charge you like $100 or something for a little bit of an inspection. And they can look over the car and look at the boat belts and the hoses and the give it a drive and they'll tell you if the transmission's there you want to get super nerdy you can actually have the oil changed with permission of the current owner and a good mechanic can run their fingers through that oil and maybe even do an actual technical analysis on it and tell you a lot about the condition of the motor on that car whether it's burning smoke or the rings are running out or whether there's shavings in the bottom of that

oil pan or whatever you got there i mean you can find a lot about an old car doing that not 100 necessary i probably wouldn't go to that that extreme because i'm pretty comfortable buying an old car but uh but if you really want to get super nerdy about it, at least get it inspected by a mechanic. Spend a little 50 bucks, whatever, to get it inspected. And if you want to go super far like that, you can do some other stuff and have it looked at. So that's three ideas. But the biggest one is don't buy something that's a sexy, cool car

with a crummy engine and transmission in it for $3,000 that looks nice but won't run. Go the other way. Want something that doesn't look nice but that will give you that full year of service. That's what you're looking for is a year of service. Because during that year, you're going to get your emergency fund in place, and you're going to save $7,000, and you're going to move up in car. Because the good news is a $3,000 car won't go down much in value this year. It's pretty well done. So you could probably still sell it for $3,000 and you're going to move up in car. Because the good news is a $3,000 car won't go down much in value this year. It's pretty well done. So you could probably still sell it for $3,000 and put your $7,000 with it.

You probably won't lose any money on it. Maybe a tiny bit. You might even make a little bit on it if you buy it right. So that kind of stuff. And that's what you're looking for. It's almost what we call a garage sale car. You pull up and they're having a garage sale at the estate sale, and it's a 15-year-old vehicle that's only got 25,000 miles on it

because Grandma never drove it, and Grandma died, and they're doing the estate sale now, and the car's sitting out there with the furniture in the driveway where they're doing the sale. That's a garage sale car. And you find something like that, that's a beautiful $3,000 purchase because, again, we're not driving this long, and we want it to run while we're driving it.

Good question. You're going to do well. You're going to do really well. You're thinking. This is good, good stuff. Well done. Well, that about puts this particular hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer,

Blake Thompson, our senior executive producer, and Kelly Daniel, our associate producer and phone screener. I'm Dave Ramsey, your host, and we'll be back. In the middle of these uncertain times, Ramsey Solutions wants to give you some hope. For the very first time ever, we're giving you Financial Peace University free for 14 days. Go to DaveRamsey.com slash hope so you can watch from home.