The Ramsey Show - App - Should I Buy a Car That I Can Offer as a Rental? (Hour 3)

Episode Date: April 14, 2021

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Music Live from the headquarters of Ramsey Solutions Broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show. Where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host, Anthony O'Neill, Ramsey personality, number one best-selling author, and host of The Table, a very popular podcast and YouTube show. You can join him there anytime, and you can join him today here on the air with me. Open phones at 888-825-5225. That's 888-825-5225.

Zach is with us in New York City to start off this hour. Hey, Zach, how are you? Hey, Dave, how are you? Better than I deserve. What's up? So I'm currently a college student, and I have a real passion for cars, and I've been doing a lot of research into a business that involves cars. It's an app called Turo.

I don't know if you're familiar. It's like this peer-to-peer car rental service, like Airbnb involves cars. It's an app called Turo. I don't know if you're familiar. It's like this peer-to-peer car rental service, like Airbnb for cars. And so I've been thinking a lot about getting a car that I can put up on this app and manage it. Best case, I'll be making money on it, or even if it doesn't do so well, at least I'll come out of college with a car paid off. Or very worst case, if it's just a total flop, I can sell it for a little bit of a loss. But if it lets me do something with cars, I make money off of it.

I'm trying to see what you think about that. If that's something risky, that's worth taking. And just to see your thoughts on that. So you're currently in college right now, is that? Yes. How are you paying for college? So my parents are paying most of it. I do have a little bit of student loans.

Okay. And will you be taking on more student loans to complete? It's $5,000 in loans per year. Yeah. No. Then right now, you're not buying a car, man. I want you to cash flow the rest of your college experience. I'm like you. I love cars too, no. Then right now, you're not buying a car, man. I want you to cash flow the rest of your college experience. I'm like you. I love cars too, man. And it sounds great. The idea

sounds great, but it sounds great once you have the cash to actually cash flow that experience. I don't want you putting money into a car and you're steady borrowing money over here to complete your education. So I'm going to say no. Sounds horrible to you, but I'm also going to tell you, I promise you down the road, if you listen to Dave and I by saying, invest into yourself, cash flow the rest of your college experience, get your savings up, then once you build a solid foundation, then if you want to explore that in the next two years after you graduate college, by all means, go try it out.

But the key thing there is pay cash for the car you know that's going to be the bottom line so when i was your age when i was your age i was as entrepreneurial as you are you've got a a real passion for looking around making money you not only like cars you like to work a deal yeah and you like to make the the whole process of the system intrigues you i can hear it and it intrigues me i'm with you i i completely understand that and uh one of the things i looked at doing when i was in school and i didn't end up i wasn't able to do it because i guess god protected me was i was going to finance a whole bunch of uh these machines at the market that put air in your car tire and you put a

quarter or whatever in there and it turns on the air compressor and puts air in your tire and i was going to borrow like ten thousand dollars and put these machines everywhere and of course that was going to make me rich um it would have not done that at all it would have caused me to take my eye off the ball i would not have graduated from school because I would have been screwing around with freaking air. Yeah. Literally. And so looking back on it, when I look back on it, it really looks silly. But when I had the entrepreneurial froth, when I had the fever and I was running a fever and I thought this was going to be my way to wealth.

I was all about air machines, you know, and I look back on it. It's almost humorous now. But, you know, honestly, what you're talking about doesn't sound that dumb, as dumb as my idea was. But when you look back on it, it may feel dumb. Yeah. As opposed to what anthony's saying use your money on zach yeah zach is a better deal than a trendy app to airbnb your car that you don't even own yet absolutely and put money in zach yeah uh and that you'll have plenty of chances to make mistakes with your entrepreneurial zeal later. I've made a living making mistakes.

I've made more mistakes than I have done smart things. Many, many more. But I've tried to do them in such a way that they did not cause me to take my eye off the ball, and they were not fatal errors when I failed at them. And so there's too many things wrong with this story. You're going to go into debt. You're going to go further into debt for school, which you shouldn't be doing.

You ought to be working your way around that. You're going to take your eye off the ball. You're going to be worried about this instead of your studies. You're going to be screwing around with this stupid app. And, you know, it's just, there's just, it's just, it's, you know, entrepreneurs, Zach, we all are a little bit ADD. Squirrel. You know, I mean, there's always something getting our attention, and that's what's happening to you here.

And it's easy for us to sit over here on the outside looking in and see that, but you're in the middle of it, and you've got the fever. So please don't do it. That's the answer to your question. And it's a headache possibly waiting, too, Dave. And I really want Zach to hear me. One of my friends does that, and he says, Anthony, manony man i just one of my cars got into a car accident and the last thing i want you to be worried about is school now this business and then now an accident yeah and it's in your name yes you know and i'm not sure what insurance is insurance has to go up

because it's peer-to-peer so it's like yeah you're here. Well, or it doesn't cover it at all. I mean, there's some companies that won't cover delivering pizza. Yeah. Because that's a commercial activity as far as they're concerned. You wreck your car while you're delivering pizza, they won't cover you. And so you need to look at all that or don't look at all of it because you're not doing it. Right. That's a better idea. Open phones at 888-825-5225.

You jump in. We'll talk about your life and your money. Juan asks on Facebook, where do student loans fit into your seven baby steps? Student loans, as far as in paying them off, fits in at baby step number two. All right. It doesn't matter where they are. Baby step number two, paying off all your debt using the debt snowball. Just line them up. If you have a credit card, that's 500.

And if you have a card, that's 10,000. Your student loans are 20,000. It's going to be third in line, you know, and so it falls into baby step number two. There's an emotional temptation when the student loans, especially when they're large, to try to treat them in a later baby step like they're a mortgage. Yeah. But that is a mistake. Huge mistake. You need to get rid of them.

Yeah. If it's a mountain, you need to tear that mountain down. And a lot of people right now, Dave, are waiting for the government to see what our new president in Congress is going to do. Since you don't have to make any payments, since you don't have any interest securing on it right now, I'm just going to let it sit there and just wait for the government. And I will personally say this is my personal opinion that it is a huge mistake. If you have the money, if you have the resources, attack all of your debt right now, especially if your student

loans are your only debt. Take advantage of this time of making payments without any interest rocking up on you. And if the government does do something down the road, great. If they don't, you're still moving forward. Yeah. Hey, listen, when you say the words out loud, I'm waiting on the government to fix my life. By definition, you have signed away your life. Pretty much.

You pretty much have signed up for Loserville. The government is going to fix your life? Come on. Let's all laugh right now. Are we ready? One, two, three. This is The Ramsey Show. You've got a lot on your plate, a job, your home, your marriage, and your growing family. While you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your health care. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you.

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Hi, Max. How are you? Hey, Dave. I'm doing good. Hi, Anthony. Hey. Very excited to talk to you guys today. You too.

What's up? Well, I'm just hoping I can get some advice or counsel from both of you guys regarding a situation and a vacation home that we have, whether or not we should keep it, maybe downsize the prime home in order to owe nothing on either home, or just sell the vacation home until a later time when we have enough money to buy another one. How much is owed on each? So the vacation home we owe nothing on. The primary resident, and it's about $500,000.

The primary residence we owe just under $150,000 on. It's worth about $650,000 probably. And the reason we owe the $150,000 on the primary is because we took out an equity loan to finish building the vacation home. I didn't have enough cash to pay for the whole thing. I have refinanced that into a 12-year mortgage, but that's where that loan came from. What's your household income? That's the only debt we have um i make or we make approximately a hundred thousand um i do normally make more than that

but that is based on overtime so i can count on for sure a hundred thousand. Last year I made $140,000, but that's not guaranteed. What other assets do you have? Besides the two homes, I mean, nothing big. You know, we have our vehicles, we have a boat, but well, we have pretty good retirement assets, but those are all in like 401Ks, 457 Roth, individual Roth accounts. We have, between all of those, about $800,000. But in just our cash, like our emergency fund, we have $15,000 to $20,000. How old are you guys? I am 48.

My wife is 47. Okay. My first choice is just pay off the $150,000 in, like, the next three years and keep everything. Because I think I hear you like this vacation home a lot. And that's where the boat is, I'm pretty sure, too, right? Well, it goes there uh it gets it's the winter is pretty long in there and so i don't leave the boat over the winter but gotcha um yeah uh like my hesitancy is just the the um small amount of liquid cash that we have. So in the event that my wife breaks down or something like that,

I run a very detailed budget and I just don't feel like there's money in that budget to pay for a new car if I had to, or things like that. And I, if we didn't have the vacation home, we could go to that town whenever we wanted and just do an airbnb or something but then it would free up so much cash that well let me just tell you i own a couple of vacation homes and they do not make sense yeah you can always go and rent 100 times before you could buy. 200 times in a lot of cases before you could buy. I mean, I rented a house for our whole family in the mountains in the Rockies.

It was $13,000 for the week, but it's a $6 million house. And how many times can I do that for $13,000 versus $6 million? I didn't buy that house by the way but um i rented it but uh uh you know you just do that math you can rent that house for the rest of your life and and two more lifetimes before you can afford to pay for it they don't make sense vacation homes are toys yes and if the toy the cost of the toy is pinching you you have too expensive a toy. And I think that's the conclusion you're coming to, that the vacation home sells to give you the liquid cash in a paid-for house again.

I would agree. Would it make sense at all to downsize our current home? No. No? Okay. Not for a toy. Okay. home no um no okay not for a toy okay yeah you're gonna lower you're gonna lower your quality of life day to day for a property you spend three to six weeks a year in yeah right yep okay that

does not make sense it's just it's it's a toy now i'm okay if you guys want to roll up your sleeves and knock this thing out with a ridiculous amount of overtime or something in the next three years or so i'm not okay with you dragging along for 10 years with this crap yeah because you shouldn't have done it yeah you couldn't afford it yep yep i totally agree and that's the pinch you came on because you pay cash for toys or you don't buy them and you didn't pay cash for this. You overbuilt by $150,000. And if that thing was sitting there paid for, you wouldn't have ever thought about calling me, and you wouldn't have ever thought about selling your personal home. None of this would have come up.

But the fact that you guys overbuilt it is what got you. And so, you know, but here's the thing. Either way is okay. You're there today. I wouldn't have done it, but here's the thing. Either way is okay. You're there today. I wouldn't have done it, but you're there today. Am I necessarily going to go, oh, you're stupid if you don't sell it? No, you're not. If you want to fight to keep it and you guys live on beans and rice and you take that budget of yours apart

and you put it back to a gazelle intensity mindset where we're paying off this stinking house so we can keep it because we love this house um i would fight to keep my lake house i love my lake house yeah and i would fight to keep it i mean i would do you know i would sacrifice like crazy if i had backed into it wrong in order to fix the mess and that's what you'd be doing here i got you but but you know you're you're holding this thing with a pretty open hand which makes me think you don't really want to fight that hard to keep it i think you're probably going to sell it and buy something later and there's nothing wrong with that that's exactly

right yeah nothing wrong with it nothing wrong with that at all that's a half a million dollars back in your pocket and i still wouldn't have a whole lot of money though sitting in my checking account i'm still going no no i'm saying i mean you can invest it in mutual funds where you can get to it right but it's not if you want to put a couple hundred thousand of that money in a mutual fund that's fine pay off your house yeah um and uh sit there and then keep piling some money up and later on buy another home up there absolutely you can do that it won't be the one you built or build another one up there i don't care pay cash though for second homes and toys but that just makes me think though if you're going to build another one in two years from now then it's not going to be two years okay no if they're going to do it in two years they

could have paid it off in two years right right so the math won't do that it's going to be 10 yeah so i'm okay you guys sit down talk about it here's here's the thing you've been fretting about it and what you do need to do max is make a decision and let the worry go and go okay regardless of how we got here regardless of whatever regrets we have about this we're gonna buckle down and pay this thing off in the next three years or 40 40 months or whatever it is when you run the math out but you're gonna do it in short order or it's not worth it to do that and i'm not going to sit here and wring my hands about a car breaking down during that 40 months and so i'm selling it and then let it go yep let it go but this back and forth sitting on the fence not having to make the decision is more stressful than making a

painful decision pretty much make the call and run it out. This is The Ramsey Show. We'll be right back. In the lobby of Ramsey Solutions on the Dead Free Stage, John and his daughter Heather are with us. Hey, guys, how are you? Hey, Dave. Hey, Anthony. Thanks for having us today. Welcome. You're welcome. Honored to have you. Where do you live? We live in East Hart Hey, Dave. Hey, Anthony. Thanks for having us today. Welcome. You're welcome. Honored to have you. Where do you live?

We live in East Hartford, Connecticut. Oh, beautiful town. Very nice. Well, good to have you, brother. Thanks for coming all the way down here to do your debt-free scream. How much have you paid off? We've paid off $33,000 in 19 months. Good for you.

And your range of income during that time? $88,000 during that time. I was salary frozen, so I kind of had to become the side hustle king. Okay. That works. Cool. What do you do for a living? I'm a teacher. Oh, good for you. What do you teach? I teach computer science and English at Buckley High School in Hartford, Connecticut. Go Bulldogs.

I love it. Wonderful. Very cool. So what kind of debt was your $33,000? Three personal loans, two credit cards, and a car that I financed used. You were normal! So what happened that woke you

up 19 months ago? It was wake-up time. I was shaving one morning, and I kind of, it was one of those, like, Newton and the apple falling on your head kind of moments that you're having, and it was a New Year's morning. But what was really happening is I was taking a look at my life. I'm like 51 years old. And I grew up in a house with a lot of love. My parents, God rest their souls, were Depression-era babies. Lots of love, not so much with the money. And so when I

became an adult, I made all the same mistakes. And then, of course, went into making my own mistakes on steroids, including, and I wrote some of them down, obviously, the massive credit card debt piece. Then I impulse-bought a half-million-dollar house that I financed at 110% so that I could buy two cars I didn't need and put renovations on the house that it didn't need either, which now loads me in ungodly quantities of debt. Very soon, the market crashed. I lost the house. Very soon after that, the marriage fell apart. So I thought it would be a good idea to finance my divorce with a 403B loan.

And so I eventually landed in Chapter 7. And so I'm now doing the chapter seven thing, got out of the chapter seven. This is now in my forties and get that cleared up. Plus, of course, you know, you can't cancel out the 403B loan. So I have to get that paid back, got that cleared up and started getting back into the exact same habits. So now fast forward to that morning, that New Year's morning. And you think about, you know, New Year's, what you think about New Year's what's it going to represent

she's in middle school I got no future a big pile of debt I'm a dad I got one job and my one job is to take care of her and I'm not getting it done and so I said okay

got to make a change so I'm a teacher teachers are nerds by nature so I read every book out there and I'm going to be totally truthful with you, Dave. I refused to read Dave Ramsey. I refused to do it because when I was married, my wife at the time said, gee, you know, honey, maybe we should do the Dave Ramsey program. And I utterly refused. Fast forward to the divorce. And so we never read it for like three months. Finally,

after about three, four months of reading every book under the sun, including people who thought that it was a good idea to borrow money to get rich i went ahead and got total money makeover read it in one night joined fpu the next week wow and it turned on a dime i've actually coordinated two fpu classes since then so well thank you oh thank you that's amazing actually can i give a shout out to my fPU people? Sure. I just, my principal at the school allowed me to run an FPU class for the faculty. Wow. And which was unbelievable in a public school setting. And she said, please run it.

And three of the staff members signed up. And these three women in nine weeks paid off $10,500 in nine weeks. That's awesome, man. Best part of the journey. Very cool. Very cool. Very cool. Now on this journey, I'm curious,

what was the hardest thing for you on this whole journey? Saying no to her because, I mean, she's my why and so, and you're the one,

Anthony, you always say your why's got to make you cry and she did, right? Wow. And so, but it was saying no to, no, we can't go out for tacos every week like we used to.

And we can't do all the fun trips that we used to do and saying no to vacations and saying no to, you know, to my girlfriend saying, hey, you know, we can't do this and that. Or I can't. You can do it, but I can't. And, you know, all those things that I had to do to make sure that she would be taken care of. Yeah. But it was worth it. I would do it again tomorrow. Wow, cool.

Cool. How old are you, Heather? I'm 15. 15. So you watched your dad go through this divorce, this bankruptcy, and then took control of his life and changed his life. I'm very proud of him. You ought to be.

You ought to be. That's a good word. And that's a word he lived to hear right there, for sure. Very well done. So what lessons do you take away from this whole thing? I'm definitely going to follow in his footsteps when I'm older. That's good. And I've learned that you can always take control of your life.

Yeah. So let me give you a quick lesson to a young lady. I'm jumping ahead of the game. Your dad can break this down later on. Let me give you another lesson. Date a man who's, who's better than your father down the road. Whenever he approves that. So no debt, you know, and man who knows how to take control of his life.

That should be one of your great lessons that you should have down the road. The younger version of her father. Yes. Not the current version. Absolutely, Dave. The current version would be totally acceptable. Very good. Cool.

Well, I'm proud of you guys. Well done. Very, very well done, John. So you've done FPU classes. You've been through the ringer. You've seen the top. You've seen the bottom. What do you tell people the secret to getting out of debt is? Make the decision today to do the right thing today. Then get up tomorrow and do it again.

Work the plan because the plan works on you. I was thinking about a Frederick Douglass quote that I love. That upon which a man works, works upon him. And this plan really did change that. So of all those things, that's it. The other one is celebrate the wins because there's a lot of time that you're putting together this train wreck of your life. And you want to say, oh, yeah, we we got this thing done we knocked off this credit card you also want to occasionally remember that you were the engineer on that train so you know don't repeat the mistakes yeah but then keep celebrating it you know heather and i have had charts and she colored in the debt

free land on our fridge and we just you know keep celebrating it every day coordinate FPU. Don't wait until the end to be generous because that's the most fun you're ever going to have with money. Well, it holds you completely accountable too. It does. Very, very well done. I'm curious. What's next? I mean, you're debt free. Your daughter watched this journey. What do you do next? Well, right now

we're working our way through Baby Step 3 and 3B. I want to get into something a little more stable. I'm renting right now. So it and 3B. I want to get into something a little more stable. I'm renting right now, so it's 3B. Fortunately, through some circumstances in her life, she's all set. She's okay for college. So we're going to do debt-free degree, but I'm still going to ask you to sign our book, if you don't mind. Absolutely.

And so we're going to do that. And then getting ready for Baby Steps 4, 5, and 6 and taking care of the legacy. Love it. Well done. Well done. Good job, John. Amazing. and taking care of the legacy. Love it. Well done. Well done. Good job, John. Amazing. Absolutely incredible.

I'm so proud of you. Very well done. And we've got a copy of Rachel's book for you, of course. Know Yourself, Know Your Money. So you'll leave here with a whole bunch of autographed books as a part of this trip, and we're honored to celebrate with you and with Heather. What a cool thing. You talk about changing your family tree.

That's it. That's how you do it right there. I'm looking at it right now. More is caught than taught. Yes. So $33,000 paid off in 19 months, making $88,000. John from Hartford, Connecticut. Count it down.

Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Woo! Ha, ha, ha! one we're dead free yeah yeah life is good you know what Dave if your why doesn't make you cry like John's then you don't

you need a deeper why seeing him hug his daughter seeing her hug her father and say she's proud of him and And to hear that, that will make any father cry. Mm-hmm. Mm-hmm. Sure does. Daddy, I'm proud of you.

That's about the best words out there. And the interesting byproduct of this is that her brain is completely reformed. Absolutely. There's no possibility of her doing a normal life and going out there and creating a mess after having walked through this and witnessed it firsthand like this. There's too much going on. Too much water on the bridge. She's changed, too.

Amazing. This is how you change your family tree right here. You go first. You go first, too. Amazing. This is how you change your family tree right here. Woo! You go first. You go first, baby. You go first. This is The Ramsey Show. Our scripture of the day, John 15 and 7. If you abide in me, in my words, abide in you, ask whatever you wish, and it will be done for you.

Milton Berle says, if opportunity doesn't knock, build a door. There we go. That's it. Drew says, in Atlanta. Hi, Drew. Welcome to the Ramsey Show. Hey, Dave go that's it drew says uh in atlanta hi drew welcome to the ramsey show hey dave how's it going better than i deserve how can we help so basically i was just wondering what the best way to allocate my current income is in terms of investing you know i'm investing in a 401k um building up my checking uh account, but I also have $550,000 in a brokerage account as a result of some good investing from an inheritance over the last about 14 years. So I just want to know if I'm doing the right things, putting my money towards the best investment possibilities right now.

Okay. So you inherited $550,000? I inherited about $280,000 back in 2007. So it's just built up. And you've had it invested in what? Mutual funds and stocks, about 75 mutual funds and or 75% 75% to rest in stocks. Okay. And how old are you? I'm 24. Okay, good.

Well, I don't play single stocks. There's too much risk for me. And I buy two things for investing. And I don't recommend people do things that I don't do. That would be hypocritical. And so I buy real estate that I pay cash for as an investment. In other words, income-producing real estate. And I buy mutual funds.

Single stocks, more than 10% of your portfolio in single stocks is too much risk for me because I don't like losing money. And the numbers on playing single stocks are not that good for the individual. So if I woke up in your shoes, I would move that money into good mutual funds with a good SmartVestor Pro, and I wouldn't use a brokerage account. And I think you'll end up doing better in the long haul. It'll be a lot more boring, but boring is good as far as I'm concerned. Exciting means there's a chance I'm about to lose some money and i don't like exciting so so um you know that's what

i would do with that money and then uh you know what do you make a year 60 000 okay and what i would do is just go about living my life as if that money isn't there. And it sounds like that's what you've done so far. Absolutely. Yes. Yeah. And are you married? Do you own a home or anything like that? No, none of that.

Okay. Well, I would make sure you had no debt and that you're putting 15% of your income away for retirement and that you're growing your career and that you're living intentionally on a budget uh now i would use some of that 550 out of those mutual funds to pay cash for my first house when you're married and get ready to do that or when you just decide you're going to buy a house and there's no rush in that you're 24 if you didn't buy a house for two or three more years it wouldn't be that big a deal yeah uh and so you know let that money grow and sit there and you're paying cash for everything if you can learn to live as if that money grow and sit there, and you're paying cash for everything. If you can learn to live as if that money's not there,

except for the fact you pay cash for a house later, that's going to take this pile of money and make it tens of millions because you've got 40-plus years for this money to parlay. And if you're invested in good mutual funds and making uh you know 10 or so that money's going to double about every seven years yeah and so seven years from today when you're uh 31 years old you'd have a million one seven years later when you're 38, you would have $2.2 million. Seven years later, when you're 45, you'd have $4.4 million. Good gracious.

And that's if you don't mess with this, and it just sits there in decent mutual funds and grows at a decent rate. This is. And so, again, you pull some of that out, you buy a house with it, then you take what was going to be a house payment and invest that, you'll end up in exactly the same place. You just used your own money, and now you're putting your money back in the form of a payment. And as your career goes on.

So this money, literally, you should be worth over $10 million when you hit retirement as a result of this. So very, very nice gift as an inheritance and you will be one of those millionaires that are a millionaire because of an inheritance which by the way is a very unusual thing statistically and a wonderful gift from whoever did a great job with money in the last generation that left it to you a pretty cool situation man i'm sitting here just going over the numbers in in my head dave like drew if he does the right thing today the caliber of his future is so bright if he just sits there and act like the money is not there and he's continuing to put money into it he's just adding

fuel to a positive fire for his future and guess what there's a high probability he's going to do that yeah and there's two indicators of that yeah one is he was probably raised or influenced by whoever did this the first time and left him the money yep and two we know that because he's had this money yeah for a while and has doubled it already and three he called in to ask us and asked us what's the right way he didn't go buy a lamborghini yep yep and which i'm i gotta say i'm surprised you know for a 20 something sitting on that much cash i'm not surprised because he was raised by the people that did that and so uh you know so the rule is for your parents then uh your grandparents then and i'm talking to myself as well legacy journey book is more is caught than taught.

Your main inheritance is knowledge and character. And if you leave them money without knowledge and or character, you will raise a kid in a reality show. But if you leave them character and knowledge without money, they will get money. Yep. But if you leave them character, knowledge, and money, now you've changed

your family tree. Yes, sir. And that's what's happened with Drew. Don't you just sense he's mature beyond his years? Absolutely. That's what I'm like,

man, I'm just excited for his future. Yeah. I think he's in great shape. This is brilliant. Lila is in San Francisco. Hi, Lila. Welcome to the Dave Ramsey Show.

Hi, how are you guys? Great. How can we help? So I need guidance. I have parent plus loans for my children. They're already graduated. One's out on his own. One is almost out on their own.

I don't want them to participate right now in paying back the student loans because I want them to establish themselves. I make $160,000. I have a home. I owe $485,000. I have a car, $14,000, and this student loan of $160,000. Oh, good. Okay.

And you're single, I take it? Yes. Okay. So i need guidance i'm thinking one the government has no interest right now and two do i refive uh for a lower rate like with sofi um so i can start paying this off no don, don't do anything with SoFi. SoFi is a dangerous operation. You want to stay completely away from them. But you could look at refinancing it, and that'd be okay. And Kelly, help me with our company that we do that with. Student loan refis.

Splash Financial. I'm sorry, my brain just locked up. I should know this. What is refis. Splash. Splash Financial. I'm sorry. My brain just locked up. I should know this. What is it? Splash Financial? Splash Financial. But here's the thing, Lila.

You're not going to get out refinancing. Refinancing is only going to help you 1% of the problem. 99% of the problem is you're going to have to live on nothing and beans and rice and clean this mess up. A scorched earth. No life. Yes. And clean this mess up.

So how much Parent PLUS loans is there again? It's $260,000. $260,000? For once? Yes. Whoa. For two. For two.

Mm-hmm. Not a good decision. They're first generation. That would be less than an understatement. Oh, my gosh. Yes. Yes. I'm so sorry. Okay. Well less than an understatement. Oh, my gosh. Yes. I'm so sorry. Okay.

Well, let's do it anyway. And $14,000 on the car. So we're going to list our debts, smallest to largest. Yes, refinancing this is going to be important because of the mammoth amount it is. Yeah. And getting the cheapest possible rate. But, kiddo, I mean, you're going to like living on $60,000, throwing $100,000 at this, and it's going to take you four years.

Oh, great. But I mean, you're living on nothing. You understand? I just took your life. I didn't take it away. You took it away when you made this decision, but I just took your life away to get this mess cleaned up. The further you sacrifice, the faster you get out.

Splash Financial. Look them up. I just looked them up. Their rates are pretty low. Wow. That puts this hour of the Dave Ramsey show in 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. Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey Call of the Day podcast wherever you listen to podcasts.