The Ramsey Show - App - Should I Buy My Company’s Stock? (Hour 1)

Episode Date: July 25, 2022

Dave Ramsey & Kristina Ellis discuss: Buying stock in your company (even if that company happens to be Apple), Term life insurance, Renting out commercial real estate, How much to budget for rent.   Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. We help people build wealth, do work that they really love, and create actual amazing relationships. Christina Ellis, number one best-selling author, Ramsey Personality is my co-host today as we answer your questions about your life and your money. The call is free and some say the advice is worth exactly what you pay for it. The phone number is 888-825-5225. That's 888-825-5225. We're going to start off with Scott this hour in Fort Lauderdale. Hey, Scott, how are you?

I'm good, Dave. How are you? Better than I deserve. What's up? So I work for a company that I get 10% of my salary, the ability to purchase company stock. The stock has been very, very fruitful over the 10 years that I've worked for the company. The way our stock purchase works is that we get to purchase the 10% of our salary twice a year in a six-month period. That's 15% below the lowest point in that six-month period. So sometimes when I get the stock at the six months, it can be $40, $50 a share better than the market value at the time. When I read Baby Steps Millionaire and the Money Makeover, you talk more about putting your retirement into mutual funds. I've kind of considered that 10%

as being my part of my retirement. I take 16% out of my total salary with 6% in a 401k that my company matches. And then the other 10% is in company stock. Um, and the stock has done nothing but gain in the, in the nine years that I've been there and some big jumps as well. So do I leave that in there and consider that, that still 10% of my retirement, or do I switch it? Like you talk about in the money makeover to mutual funds? Well, congratulations. Sounds like you've hit a home run man uh it feels kind of good and so um yeah the your theory has not been stress tested yet and uh that'll come along okay first let me give you a couple observations first uh number one your company stock purchase plan is no different than most of them

they're almost all exactly what you described, 15% below, lowest of the six-month average, whatever. Okay? And so it's not like you're getting some huge discount that other people that work for a publicly traded company with stock options don't get. It's almost always exactly what you outlined. Very, very similar, if not. So it's good, but it's not the biggest deal in most cases if you look at a 52 week high 52 week low on the charts you will see a move of uh most stocks more than 15 percent up or down and so that 15 discount can as you said cause because it's down

cause a uh a great purchase price but also can cause, you know, it can evaporate in about an eye blink. Just because of the normal volatility of stock. Observation number one. Observation number two, single stocks are more risky than mutual funds. Okay. Period. No exceptions. Okay.

Because you're violating the diversification rule. You know, you've got all your eggs in one basket, or at least that number of eggs are all in that one basket. And so you're taking more risk. Even though you've had the benefit of this company doing very well, it's gone up, gone up, gone up. I'm happy for you. I'm glad it went up.

I don't want you to have hard times. But that can gloss over the fact that you're taking risk because you haven't had a loss you're not anything that scared you that woke you up went oh this is risky so what we tell folks to do our standard rule of thumb is uh don't put more than 10 of your net worth in single stocks. And you currently have more than that with the formula you're giving me. Okay. Okay.

So the example of that always comes back to my mind was many years ago I was coaching a lady that had worked for Procter & Gamble, which is a fine company. She had $800,000 in her 401K. It was all in company stock. It went in half the year she retired. So I don't, none of my 401k is in, I work for Apple, is in Apple stock. Oh, that's a wonderful stock, yeah. The stock purchase is a total separate deal. And to be honest with you, Dave, I haven't, I'm recently divorced a couple years and I was um lucky to get out and be debt free and you know I've never really read

your books because I never had any I didn't have any debt but after watching you with Robert Morris I uh I've downloaded the first book and then went to the second book and it really motivated me to kind of get my act together. Ecclesiastes says, spread your portions to seven, yes, to eight, for disaster may come upon the land. And Apple is about as wonderful a single-stock story as there is on the planet. Yeah. It's doubled.

It's just doubled. Yeah, it's crazy. It's wonderful. I would have to get rid of some of it. They have more money than Egypt. They really do. I don't know. They actually have more cash than Egypt. It's an incredible company.

Hey, you mentioned you read the first two books and that you originally had kind of stayed away because you weren't in debt, but I recommend you pick up Baby Step Millionaires. He did. That's what he's talking about. Oh, perfect. Oh, I did. I did. I read both of the books.

I've actually listened to probably three times each. Well, thank you. So the whole question is, how much risk do you want to take? And I think we can all stand up and cheer and say Apple has done a wonderful job. Of all the single stocks out there, it's the one that might be the most tempting. It is an unbelievable story. But I still, I'm just risk averse enough to say, okay, I'm going with the scriptures that spread my portions to 70 estate. I don't want my whole deal on one company.

And you don't have your whole deal, but you got a lot of it. And so I'm probably going to be a little less apple prone if I'm you. If I was ever going to do what you're doing, it would be that company. Oh, my God, it's wonderful. Okay. So, you know, if you want to keep do what you're doing it would be that company oh my god it's wonderful okay so you know if you want to keep doing it keep doing it i just want you to hear a lot i want you to feel that you're you're violating the diversification principle and that does nothing but increase risk inherently in that one bad iphone launch one bad lawsuit over a tablet or whatever i don't know what can happen i mean i have no idea what can happen but you know it's they get cancel cultured i don't know i don't know

how this works but whatever it is i just don't want it's not in your control you're one of a bazillion employees you don't control this stock and so i i wouldn't be as heavy in it as you are but i will acquiesce and say if i was ever going to be good lord there you know the the financial number regardless of what you think of the products or the people or anything else the financials on that company are blistering good. Yeah, that's a great position to be in. It's crazy. It's crazy how much cash they have. It's mind-blowing.

But aside from that, I still... Well, I'm sitting here saying how much I'm a fanboy of their stock. And I don't own a single share. That says I follow the principles. I don't buy single stocks at all. And if I was going to, it wouldn't be more than 10% of my net worth, don't it? Just you can do what you want to do, but I 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. Guys, if you are in the chicken little camp, whether you think the sky is falling, you're in the right place.

We sell helmets. We're here to help. It's not falling. The apocalypse is not here. The housing market is not going to help. It's not falling. The apocalypse is not here. The housing market's not going to crash. This is not 2008. And even if it was, you would survive it. I did. And many others did. I know it's not what you're hearing on the news because there's a lot of politics underlying a lot of news reports, like all of them. One side or the other, they're trying to trump up or drum up or dumb down or whatever it is they do. So click baits in the headlines.

You're going to die! You're not. Not from that, anyway. You've got to look at the facts. Most of what's happening is simple supply and demand. There's a huge spike in home buying demand in the last couple of years. There weren't enough houses. Prices go up.

Housing slows down. Demand slows down. Prices even out. They quit going up so fast. If there's a whole lot less demand, like if nobody's buying houses and there's an oversupply of inventory, then prices will go down. However, inventory is one-fourth of what it was in 2008, and demand is currently 4X. So there would have to be a dramatic shift for prices to go down.

Calm down. If you haven't seen it, we want you to watch it. You can watch the replay of the RamseySolutions.com event that Rachel Cruz, George Campbell, and I did about the real estate market, the real estate reality check. RamseySolutions.com slash reality check. It is completely free. It's about an hour.

No, it's exactly an hour long. I actually ended up hitting the clock, oddly enough, which with a live stream you don't have to do. But I did it anyway. So there you go. They were airing it on TBN, and it helped TBN to hit the clock. I told them, I'm not sure if we'll hit the clock i told him i'm not sure if we'll hit the clock or not but we'll try and then had a clock up there and i'm a radio guy i just ended up hitting it that's impressive well i don't know it might be somewhat accidental but

um like we ran out of stuff to say or something like that but if we had a lot more to say we'd have kept yakking but i think we i think we had said it so there you go uh jump in here the phone number is 888-825-5225 beth from michigan emails in a question does a life insurance policy end when the term is over or can i renew it indefinitely if i renew will the price go up oh good question. We definitely recommend term life insurance. Usually you establish that on the front end, 10-year, 15-year, 20-year term. And typically, I believe, correct me if I'm wrong, Dave, that you have to renew. If you finish that term, you've got to go through the medical underwriting again just to make sure that you're in good health and to get a new term. Most term is renewable. You can buy what's called renewable term and it can some of

that is renewable without medical some of it will require medical depending on what it is how expensive it is but if you have a five-year term basically the policy is a for a term of five years it ends in five years and the price you will be older in five years so the price will go up because you're older and the older you are statistically the more likely you are to die so life insurance goes up as you get older and so if you have an art an annual renewable term it goes up every year because you get older every year we recommend 15 to 20 year level term insurance because what they've done is they've averaged out the number of times people drop a policy buy a policy don, don't renew a policy, all that kind of stuff. And a 20-year level term is cheaper than the average of 20 years of annual renewable term.

Okay. You would think that annual, because annual renewable term is much cheaper at the front end, but you would think it'd be right in the middle for 20 years if you took a 20-year graph and it goes up every year for 20 years right in the middle would be the 20-year average right and so it would average out exactly the same no it's cheaper for the insurance company to cover you and they pass that savings on so the cheapest way to buy life insurance is a 15 to 20 year 15 or 20 year level term policy now if you only need the policy for five years for instance we were building a a 25 million dollar building next door okay and we're about halfway through that building and my wife goes what if you die which she does ever so often what if you die and so we went and bought a five year 10 million dollar policy uh she we had the money but she wanted to make sure that building didn't

burden her little self with the other stuff she didn't want any of the other stuff that we'd laid out messed with because of that building and so the so that was a business reason to buy a shorter term but in most family situations you're trying to get the kids grown and gone get the house paid off in 15 years and you're trying to build some wealth so in 15 years you become an everyday millionaire your house is paid off and the kids are grown and gone in 20 years or 15 years right like you got little ones what age one and three one and three so 20 years from today you have a 21 and 23 year old something happens you'll be they'll be okay they can make it they can make it you'll have enough money for them finish out college so a 20 year will be just fine for you 15 could leave you

a little bit shaky right but you don't need a 30 because you don't need to cover your family for a 31 year old being at home because they need to leave right you know so there's that right so that that's what we're doing and so it gets the kids in and out of the grown and out of the house which is that way the spouse that's left behind is taken care of uh and it doesn't take as much because you don't have any kids to raise right now you're at the highest point of insurance need you'll ever have in your whole life right at your point at me i'm at the lowest point uh no responsibilities in a big pile of money there you go i mean so i'm at the lowest point. No responsibilities and a big pile of money. There you go.

I mean, so I'm at the lowest point, right? And so Sharon's perfectly fine. We don't need term life insurance. But a term is for a term. And that's what we recommend, 15 to 20. Go to ZanderInsurance.com, Z-A-N-D-E-R, ZanderInsurance.com. They're an independent agent. They'll shop a bazillion of these term companies, get you the best deal on a 15 or a 20 you got a 10 year old a 12 year old you need a 15 year

policy you don't need a 20 right and the goal is after that 15 to 20 years is you're basically self-insured right like you've got enough in your account that if anything happens your spouse is taken care of and it's not an emergency yeah know 20 years from today um something happens to your husband something happens to you the house is paid for because you're on a 15-year mortgage or less right okay the kids are grown and gone almost no liability there okay financial liability okay and you've been investing in your 401k for 15 years so you got 700 800 grand so if you die at 50 years old and the kids are grown and gone everything's paid off and there's a pile of money you become self-insured by getting out of debt and investing

and so you've done away with your permanent need for insurance you need permanent insurance the only people say that are people that sell that crap the only permanent need for insurance is your agent's need for a commission they're always out they always have that so we we want you to get 15 to 20 year level term it's what i had when my kids were little it's what you've got now i'm sure um and it fits with your stage of life and what's going on and that's what you look for but term insurance is for a term if it's one year term it's one five five ten ten renewable not renewable almost all term insurance nowadays is renewable the only question is whether a medical is needed and it almost and it all will go up upon the renewal so if you keep a 20-year level term and then you want to renew it it's probably going to be cheaper to actually go buy a new policy that was going to be my question

is it better to just get a new policy at that point or because they jack that what they had to do is they had to estimate the rate 20 years ago when they wrote the thing and the rates every year have come down and so it's probably a higher rate than a brand new policy because every year they've adjusted the actuarial tables uh and term life insurance has been progressively over 30 years of doing this show it's gotten cheaper not every single year but over time it's gotten cheaper because uh people are living longer they're healthier in general i mean i know we can argue about that but i mean overall the the average death age is older and the tables they were using 30 years ago to write these things were from the

40s and 50s and now they're using tables from the 70s 80s 90s and so you got a lot different situation do you have any recommendations or encouragement for somebody who has a pre-existing condition or has had some medical history call zander and make sure that your assumption that it's going to mess up your insurance is true. Okay? Because a lot of stuff that they wouldn't cover, you couldn't get an insurance cover. Somebody that was five years clean of cancer, you couldn't get it 30 years ago. Now you can get it.

Okay? That kind of thing. So sometimes people think things that will keep them from getting coverage. Make sure you actually can't get coverage. Then deal with that situation but you'd be amazed the number of people they will cover now and in what situations two biggest problems you got out there right now and getting covered is smoking and obesity and these are like rampant and that messes you up messes up your rate big time double triple as much this is

the ramsey show double, triple as much. This is The Ramsey Show. open phones this hour christina ellis ramsey number one, best-selling author, is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Nate and Jamie are with us. Hey, guys. How are you? Good. How are you? Dave, this is great.

We are so honored to have you. Where do you live? Hudsonville, Michigan. And what is that near? It's just outside of your favorite city, Grand Rapids. I love Grand Rapids. Very cool. Well, good to have you guys visit Nashville.

Thank you. Thanks for being here. And how much debt have you paid off? We paid off $118,000. And how long did this take? It took us 24 and a half months. 24 months. Love it. Solid two years. And your range of income during that time? $80,000 to $128,000. Cool. What do y'all do for a living? I'm in sales. I take care of adults with severe mental disabilities okay cool it's so good to have y'all thank you thanks for being here so what kind of debt was this 118,000 dave we paid off the house no way looking at weird people normal is broke and mortgage to the hill and you not you too you're weird you are paid off baby done wow and they're weird. You are paid off, baby. Done. Wow. And they're young. How old are you guys?

I'm 33. I'm 31. Oh, my God. And I'm paid for. You're super weird. Thank you. I like it. So how much is this house worth?

It's about 360. I love it. How much you got in retirement? About 125. All right, man. Half a millionaire. On your way to being Baby Steps millionaires. Hopefully by 40.

Beautiful. Beautiful. You're right on track. Very well done right tell us a story what happened two years ago and how'd you get connected to all this ramsey stuff yeah so really this all started in high school um my high school took or had a financial peace course that i took so shout out mrs dawson that kind of lit the fire back in the day mrs dawson look what you did it kind of lit the fire but as a high school kid you really don't take all that to heart so much but it kind of got it kind of lit the fire back in the day. Go Mrs. Dawson. Look what you did. It kind of lit the fire. But as a high school kid, you really don't take all that to heart so much. But it kind of got me Dave-ish, right?

So my wife and I, we kind of stayed in minimal debt, I would say. But then two years ago, I kept getting emails from my mortgage provider being like, hey, do you want to refinance? Do you want to refinance? So I actually sat down and looked at the numbers and realized how little we've paid off on our mortgage in the five years we were there. And I was shocked. Like, this is ridiculous. We've paid off $7,000 over five years. So I started looking at what we make and what we owe. And I came home. I'm like, we can do this in three years. Let's just knock

this out. And then it just becomes more and more infectious. I got plugged into the podcast. I would go on walks every day. I'd listen to you for hours, just get super excited at the debt-free screams and just got pumped. And here we are. Jamie, it sounds like you developed a problem. You know, a little bit, but when you're passionate about it, you just keep going. There he goes. There he goes again. Exactly. That's impressive, guys. 118,024 months. That is quick. What kind of things did y'all do to get out of debt? So the big thing for me is I picked up side jobs. There's so much opportunity out there right now for people to make more money. I did DoorDash.

I worked for a buddy who does fireworks. I helped him do professional firework shows. I donated plasma. Really, there's so much opportunity out there just to go make a little extra money. And we were bringing in an extra $1,000, $1,500 a week just in side jobs. Wow. And we did that for about a year, the last year. Once we found out we were pregnant with our little Lainey over there,

we really went ham for the final eight to nine months. You want to bring her home to a paid-for house. You betcha. You betcha. Yep. And I just picked up, I mean, at the beginning of COVID, when no one was working, I'm in health care, so I worked a lot of extra hours, like 50, 60 hours a week.

And just my whole paycheck so go straight toward the principal and just and once I found out once I found out helping people when they were the scaredest exactly once I found out I was pregnant I did cut back a little bit but for the most part just worked many many hours and all the government inflation checks that they sent us during COVID we just put those right toward the mortgage. Got a lot of bonuses. There you go, Countrywide. Throwing it right at it. Get rid of it.

Way to go, you guys. Wow. Y'all are weird. But you're completely free. We are. 33 years old and no payments. It's an amazing feeling. It really is.

It hits me at these little weird moments just like man this is mine i'm here with my family and my friends and my kid and like it's just a sense of peace that i didn't know was possible it really is you didn't even know it was missing nope it's so subtle and normalized in our culture but then when you're free you just look around and go these poor people they don't know the rest of them he mentions that all the time just don't know they don't know you want to grab them and go no well you get the opportunity to scream your debt free that'll wake up a couple of them hopefully oh my gosh yeah what do you tell people the key to getting out of debt is like i said for us it was work there's so much opportunity now especially now

there's all this what was your best job the one that made the most money uh door dashing delivering food i would average how much could money? Door dashing, delivering food. How much could you make door dashing in a week? I was averaging $25 to $30 an hour doing that. And I would do that most nights and on the weekends. So there was weeks I would pull in over $1,000 doing just that. That's impressive. And that's cool that it's like something anybody could do.

It is, yep. So there's no excuse. Yeah, it's not a second job per se. You can kind of turn it on and turn it off. You can turn it on and turn it off, yep. But now that we're done with all that, once the baby came and the house was paid off, it's like, nope, we're just going to go back to work on our 40-hour jobs and just enjoy life, enjoy each other. You've got a lot of time now.

It's amazing. Oh, my God. You figure out what to do with your free time now. It's great. Who are your biggest cheerleaders in the process? For me, it's my best friend Kyle over there. He's the one who I share all of life with. And I think he probably knows more about my finances than I do, but it was, it was great to have him along on the journey and he could come along with us today. Yeah,

that's cool. That's fun that he made it down. That's neat. Yeah. Great job to you too, Kyle. Yeah. Excellent. Excellent. Excellent work. Well, you guys are absolutely incredible. You're an inspiration, man. I mean, this can be done. Wow. What a legacy to leave your baby to. Y'all are going to have so much freedom moving forward, and it's just, whew, what a sigh of relief to have nothing to worry about. No financial stress. You don't owe anything to anyone. That's just a beautiful way to step forward. Yeah, but I want to be able to take my daughter on trips and be able to see the world so she can make her worldview on what the world really is, right? Instead of

who's screaming the loudest on Twitter, who's screaming the loudest on Facebook. If she can see different cultures, meet different people, and build that worldview from her actual personal experience based on what she sees from social media, I think that's what really excites me about this, that we can, yeah, we can be free and we can go live and we can go do things and not have to worry about how's that mortgage going to get paid. It's just it's an amazing feeling. And she'll probably discover what the rest of us have that whoever's screaming the loudest usually has the least to say. Wow, that's great.

You guys are incredible. Very, very, very well done. This is beautiful. Fabulous, fabulous. You mentioned a trip. Do you have anything planned? Not yet. She's a little young.

We're hoping she's a little older, maybe go to Mexico or Europe or wherever, really. That's awesome. Anywhere you want to go? Anywhere we want to go. Don't have a payment in the world. No. There's a lot of financial peace. It always works.

Now, you connected to Ramsey, you said, through the podcast only? Yeah. Mainly the podcast. And then I did sign up for the free trial of Ramsey Plus, and we took the class there just to kind of refresh it. So you've been through financial peace? Yes were high school you said yes yeah it was kind of a slacker course at the time but I'm glad I took it it really plant it planted that nothing against you Dave but I planted that seed I'm a slacker course but it but it planted that seed as a high school kid that really just stayed with me for the past 20 years and I'm so thankful that

I did take the time to take that course. It really changed the whole projection of our lives. Well, what it did is it made you wonder if you could be debt-free. And most people don't even wonder about it. And later on, you went, wait a minute. I think there was a guy that said I could do that. The funny ones are the tweets from the kids in the class in high school. I read one this morning.

It's like, Coach so-and-so don't do nothing. he does is turn on these dadgum dave ramsey videos and walks out of the room my real teacher is a video it's like hilarious but i think there needs to be more of that in high school like kids aren't taught that they get into the real world with college debt like with you christina they get into the real world and they're just they just don't understand what it means and what it all takes to pay these debts off and these loans and i had that seed planted in me then so i was fortunate enough to graduate college debt-free. She graduated mainly debt-free. So we started off on a good forward step and just kept going.

Hats off to our foundations and personal finance crew here that puts it in high schools. 48% of the high schools in America have now taught it. So it's good stuff. All right, Nate and Jamie and Laneyy we got a copy of baby steps millionaires for you that is the next chapter in your story copy a total money makeover for you to give away get somebody else started and another year to financial peace university membership the new videos are on there you can give that to someone get them started because i'm sure uh you people are uh have heard you talk about this i bet so there So there you go. Nate and Jamie and Laney.

Hudsonville, Michigan, $118,000 paid off in 24 months. House and everything, they're weirdos. Making $80,000 to $128,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! We're debt-free!

Laney looks like she's ready to go to Mexico. This is The Ramsey Show. Thank you. Christina Ellis, number one best-selling author, Ramsey Personalities, my co-host today as we answer your questions about your life and your money. Nelson's in San Francisco. Hi, Nelson, how are you? Hi, Dave, how do you do better than we deserve sir how can we help i have to say dave first of all it's such an honor to have gotten the chance to speak to you i started to think where we would be had it not from being for my wife and your teachings thank you so much for everything well thank you i have a quick question. Both Marth and I currently own a very small Montessori preschool here in San Francisco,

and we're very fortunate we have the wait list, and we are trying to expand. It's our first time looking for a commercial spot here, and looking for a commercial spot also means that we have to do the renovation. So I was wondering if you can give us some advice as regards to the do's and don'ts of lease negotiation and the start of actually if we should find an architectural designer or a contractor. Well, you're going to try to rent an existing building, you're saying, and then just redesign it for the use of the school right correct so we have to do the soaring the floor plan the bathroom for the children okay well obviously uh the more time you spend shopping the more

likely you are to find something that is closer to usable that requires the least renovation that's our best bet okay if you're moving into a typical commercial setting um they're going to lease it to you and include a certain amount of ti tenant improvements and so yes yeah so like we own commercial property that we lease out and when we lease to a tenant we'll give them so many dollars a square foot of ti for a three-year lease more dollars per square foot of ti for a five-year lease in other words the landlord is putting up a lot of the renovation costs in the form of tenant improvements built into the lease. Now, obviously, I as the landlord am going to recoup that out of you in rents

during that time, but it's our way of investing because a lot of small businesses, like we own some strip centers and stuff like that, that have a simple bay in them, and a lot of small businesses that want to rent out in that bay don't have three hundred thousand dollars to renovate it okay so we might put in depending on the lease terms and whatever i mean we might put in a hundred thousand bucks or something but that's then built into or capitalized into the lease we get our money back over the period of that lease and we get rent so it's built into it but that's a normal carrot to dangle for a commercial landlord to draw in someone is a certain amount of ti and what i would be looking for is a situation where the ti will cover your renovation and so you know uh and a lot of landlords have a, you know, they have a contractor to do the renovation, a designer to do the renovation in their pocket in a good way.

In other words, it's handy. Like I've got a guy we use it most of ours in most of ours. And so if you want to do that, we'll just go, okay, so-and-so over here, he can roll in there and throw up those stud studs put in the dance floor for your dance studio or whatever it is and this is what it's going to you know he runs out of bid on the restrooms the way you want them in this situation that are or that way they have to be modified to fit your situation with children going to be there and so forth and uh all of that added together then we add it up and go okay there's the budget well our ti covers all but twenty thousand dollars of that and you got to come up with that extra 20 and we cover the first whatever you know as the landlord and that's that's really the way you get

into the lease and and but again if i've got something there uh that um okay i have a a daycare in one of ours okay and if that daycare were to move out and you were to move in there wouldn't be a lot of retro as a matter of fact if you really wanted to tough it out you could probably just move in and what i would have put up as ti i can give you as discounted rent then because i don't have to write those checks for your construction to get you as a tenant so I'll just give you some discounted rent as a result and that's not unusual so I'm really in your case looking for something more like that than I am this massive glorious glass box somewhere that you start from scratch and have to draw up and build every little element of it because that gets really expensive. Dave what's the best way to search for a commercial property to rent? Is it through

a traditional real estate agent? Are there certain people that can help you, a certain place to go? Commercial real estate agent. And again, they specialize, a lot of those, a lot of them make their living on leases just like this. And they get paid by the landlord a percentage of the lease uh commission uh you know when the lease is built out and so we'll pay if a real estate agent brings us as the landlord uh a tenant we do the tenant improvement we pay them so we get a lot out of pocket to move somebody in there uh in a lot of cases but um yeah there are commercial agents that don't do any houses and all they do is make their living leasing space okay and it's a pretty good living if they're in a situation like you know he's out in san francisco that's some high dollar stuff and you know if you're working

that they may be exclusively that they may not sell property at all they may only work leases uh it's not unusual at all in a market that size to find people that make their whole living doing that in a very specialized way but what you've got to do you got to go out there and kick the tires and turn over the rocks and find you know be shopping and calling messing around poking around um to find the thing that's the best fit because if you just go to the again again, the gleaming, shiny glass box and go from ground up, it's going to be expensive. It's going to be very hard to make the move. And you're trying to expand your business at the same time,

trying to make a bigger school. So very, very, very difficult. Open phones at 888-825-5225. Linda's in Omaha, Nebraska. Hi, Linda. How are you? I'm good, Dave. We love your show and your people

and you and all that thank you ma'am how can we help okay just curious um what percentage should your residential rent be of your income if you're 75 with no debt and in good health for 75 score good for you still living still kicking around yeah right just you know with the way the rents might be going up and all that oh they are going up you used to always say like 25 exactly yeah we usually recommend that you don't spend more than 25 of your take-home pay on housing just that you still have that flexibility in your budget to do other things and not be strapped. Yeah.

And why have you not bought something? Well, I have that, but with my age, I wanted to get, you know, just down to some simple apartment. Mm-hmm. Well, why don't you get down to something simple, a condo that you own? Well, that's just... That's a thought.

That's a thought. What's your net worth? Around a million. Good for you. Good job, Linda. Are you selling a house, or what are you doing? Yeah. How much are you getting out of the house?

Not much. Okay. So you're going to have to use some of your million to buy a condo. What can you buy a decent little one-bedroom condo that you would have rented anyway in Omaha for? I don't know. I really haven't looked at that. I was just figuring what percentage of income. Mm-hmm.

And the income fluctuates. Here's the problem, okay? Statistically, since you're 75 and in such good shape, you're probably going to make 90. Oh. And that's 15 years of rent increases. Yeah. And I'm not, you know, your largest item, all of us in our budget, is housing in most cases.

And if housing, if your largest item is going up every year for 15 years, I mean, think back 15 years when you were 60. Oh, yeah. What rents were. I don't want that to happen to you in your last 15, 20 years or whatever it is you got. So that's why i'm saying if you buy a little condo you're locking it in no more cost increases yeah i should just say you're for you're you know you're the only thing that's going to increase your hoas will go up your you know taxes insurance that kind of stuff you can't keep that from happening but

the actual monthly rent is going to increase when you are a renter so long term renting is i renting is, I mean, that's assuming you're going to make it that long, but you sound like you're doing pretty good. Well, with a net worth of a million dollars, you could buy that in cash, too. Yeah, buy a $150,000, $200,000 little condo in Omaha. You'd be in pretty good shape. And that's pretty simple. And you've locked in your costs that way. That's what I think about.

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