The Ramsey Show - App - Should I Jump Back Into the Stock Market Right Now? (Hour 3)

Episode Date: November 10, 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. My co-host today here on the air, Chris Hogan, Ramsey personality, number one best-selling author a couple times over. The latest time on the book, Everyday Millionaires, one of the largest studies of millionaires ever done in North America, and the results, how ordinary people built extraordinary wealth and how you can too. Open phones at 888-825-5225.

That's 888-825-5225. That's 888-825-5225. Carrie is in Athens, Georgia. Hi, Carrie. Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Great. How can I help?

I have a quick question. Back in March, we decided the stock market was looking very, very bad. And we've always just saved all of our money into our 401k for retirement. But we decided at this moment, because between the market going down so much and my husband had lost his parents, it was just one of those very scary times. And so he took a bulk of our money and put it into cash. Oh, no. Out of fee. And so, of course, yeah. So it's in cash.

So he took a huge loss. Yeah. It's sold at the bottom. Yeah. Yeah. Oh, I'm sorry. Yeah. Yeah. So how much cash have we got? Well, left in the market, we have about $350.

And how much cash? Cashed. You said he took it out in cash. He cashed it out, right? Well, he moved it to cash. Okay. Inside is 401k. Yeah.

So there's $350 in the market, meaning still invested in mutual funds, and the other is in cash. And how much is in cash? $900. Oh, God. Yeah. Okay. And so, of course, he expected, and at the time, like I said,

it was not something he would normally do. I think it was a very emotional time because he lost his parents, like I said. And so now, you know, he just... How old are you, Pastor? We're in our early 50s. Okay. So what's your question? So the question is, okay, so do we...

Because I do know... We know a little bit about real estate, and I have one home that's paid off, and one has a mortgage. Do we take the bulk of that now, that $900, and just start buying more investment property? If you take it out of your 401k, you're going to be taxed and penalized. Yes. You're going to give up 40% more. You're going to give half of it to the government. Okay.

I didn't think it was that much. Well, I mean, it's 30% tax rate plus a 10% penalty. Right. So another $400,000 is gone. I don't know. I can't do that, yeah. Yeah, that won't work. Yeah, and Carrie, here's one of the things that happens.

People get very, like you said, emotional. You start losing loved ones and things start, you hurt. But I'm going to advise you all that that stopgap to have in there is to have a professional to talk to. So you don't make the knee-jerk reaction. An investment professional. An investment professional. Not a counselor. You all need to be able to have someone that you can sit and bounce ideas off of and be given information back that truly will help you.

Like, not only do you all need an investment professional, you need a tax professional now to really start to look and understand the estimated tax you're going to have come April. No, they're not going to have it. It's still in the 401K, you said, right? No. Correct. You have cashed it out. Oh. You just moved the money from mutual funds into cash inside the 401K.

Yes. Yeah, that's what I thought I understood. Okay. I misunderstood. Okay. Yeah, so, you know, it's a pretty simple thing. You're only 50. You've got another 15 or 20 years to invest.

You made a mistake that cost you probably $300,000 or $400,000. Correct. Correct. And so I'm just going to start investing. You need to move it out of cash into mutual funds today. Oh, okay. Because what do you think the American economy is going to do in the next 20 years regardless of democrats or republicans i have seen it grow in every single 20 year period

in modern day history okay okay and so you got 20 years before you're going to need the money. I'm sorry? What about bonds, though? I know that's safe. No, they're not. Okay. No, they're not. You know what happens to bonds when interest rates go up? What's that? Bond prices go down.

They have an inverse relationship with interest rates. Where are interest rates in comparison to the last 30 years? They're at rock-bottom lows. Where are they going to go from here? Eventually up. Bond market is the absolute worst place to be right now. Okay. So here's what you guys need.

You've got to have to retrain your brains. You need to go. What happened was you made a really bad decision. Mm-hmm. Really bad. Mm-hmm. really bad decision really bad and you need to undo that decision and you need data points and historical data on mutual funds that indicate to you that you made a really bad decision so that you don't do it again and that will also give you confidence to invest going forward which you don't have because you just told me you wanted to do bonds right so you guys do

whatever you want to do if i were you i would sit down with a pro what chris is telling you go to dave ramsey.com click on smart investor and don't go over there to invest go over there to learn for a little while let's just gather up some learnings yeah and just go and let them just teach you without shaming you i'm not trying to shame you that's what i'm trying to but i am trying to convict you because the conviction versus condemnation because when i do something that's dumb and it costs me money and then then I have to have confidence in the future to not do the same thing or not stay on the same track. And so what you're telling me by asking me about bonds is you still don't trust the stock market over the next 20 years, and I do. And by the way, it's the only reasonable option for your 900K right now because it's inside of a 401K.

And so put it in mutual funds. it grow again and you just you just and don't obsess like glance but don't obsess over it like like it's it's remember investing is long term it's going to be the roller coaster ride you're going to have the ups and downs but i mean you can we can look inside of this year with the pandemic at what the market has done and what it's doing right now and what it's going to continue to do. So slow down, Kerry. Like Dave said, you need to get somebody in your corner to guide you that you guys can sit and look at this and go, oh, this is how it works. And this is the expectation of what's to come next.

And you'll get confident and you and your husband will be able to breathe. You all have done an excellent job of having money invested. You've intentionally put that money away. So I'm proud of what you've done. Now let's get back on the course, back into the game, so we can cross that finish line, young lady. You still got time. You can do it.

Open phones at 888-825-5225. Trying to pull up and get... Yeah, here it is. Wow. Yeah, that's exactly what it did. It cost her 300 grand. I just pulled the chart up. Oh, this is the Dave Ramsey Show. you've worked hard to make your business successful blood sweat tears and prayers

because as a business owner you are the secret sauce and your company is only as strong as you are. So what happens if a key ingredient is missing? And what if that ingredient is your health, resulting in expensive medical bills? Christian Healthcare Ministries, or CHM, presents health cost sharing. It's different from insurance in that Christians help other Christians

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depending on your needs and budget. Learn how CHM has served small business owners just like you by visiting chministries.org budget. Learn how CHM has served small business owners just like you by visiting chministries.org slash budget. chministries.org slash budget. That's chministries.org slash budget. Chris Hogan, Ramsey Personality, is my co-host today here on the air open phones at 888-825-5225 pulled up the charts at the break just to review the highest point the stock market has been at in this calendar year in the year 2020 known as the year of the dumpster fire, the highest it was, the Dow was at 29,500. It's at 29,100 today.

It dove all the way down to 17,000 or 18,000. And so it lost a third of its value from February 12th to March 23rd. So a month and 10 days, it dove straight off a cliff. And from that low on March the 23rd, which was, that was the shutdown week. That's the week things, shelter at home, flatten the curve. Things we don't hear anymore. No. Now they just yell, wear a mask.

But, you know, it was flatten the curve, flatten the curve. I hadn't heard flatten the curve in a while. No, we don't hear anymore. No. Now they just yell, wear a mask. But, you know, it was flatten the curve, flatten the curve. I haven't heard flatten the curve in a while. No, we haven't. So the, anyway, sidetrack. But the. But we sit at where now right now? Do I know? Where are we with the Dow?

29 or 29,001. So we're right at where we were right back to where it was so if he had if that guy you know so he sells out at 900 which cost him approximately uh 350 000 in lost value between march the uh i mean between febru February 12th and March 23rd, and then now here we sit in November, and it's back, and you've recovered 99% of the value. You would have broke even if you'd have rode it out. And you and I were on the air March the 23rd yelling at the top of our lungs, the only people that get hurt on a roller coaster are those that jump off. Yeah. Take off your safety belt.

Boy, that's like a primo example. It is a primo. It really is. I was just making notes of that. You begin to look at this and you realize, oh, and, you know, stomach in that, right? Doing the math on that. Missing out on $350,000. I mean, come on, right?

You know, so get people in your corner you can have a conversation with so you can understand what's happening and what you should do. Here's the thing. When I was a kid, I was 16 years old, I got a 1974 Monte Carlo. It had 36,500 miles on it. Between that time and the time I graduated from college driving that car, I put 200,000 miles on it, two transmissions and three engines. I was hard on a car.

And it was hit on every side. It had Bondo all over it, under the paint. So I wore that car out, which means I knew how to turn a wrench. Because I had to be able to put the muffler back on after it fell off. I had to be able to whatever. I changed the transmissions and the engines out. I did everything when i had to so i know how to turn a wrench but you know what i have a nice new corvette in my garage

the chances of me lifting the hood and even knowing what is going on under there much less actually putting a wrench on that thing are zero yeah not gonna happen yeah i do not diy on that car don't diy on your investments it's good sit down with a pro i have dave ramsey has chris hogan everyday millionaires chris hogan has a smart investor pro in our corner and if we need something if we're scared if we're going through a hard time we call them yep and talk it through you do not need to add unnecessary stress in your life you do not want someone making your decisions for you but you need a coach in your corner that says no don't run out of bounds that's right matter of fact i'm going to be reaching out to one of the taxi lps as soon as we get done here today just to double check some stuff for year in and start to do some planning.

And so it's this mindset of don't let your pride get in the way of your progress. Again, talk to people that have knowledge that you don't. That's what smart people do. presidency, if you're worried about the pandemic, if you're worried about the future, you need to sit down and get some perspective by looking at the history. Listen to this. Text the word INVEST to 33789. INVEST to

33789 and we'll connect you up with one of the SmartVestor pros. We're not in that business, but let me just tell you man, don't DIY. I don't diy that new corvette i'm not doing it that just would be silly joshua's in phoenix hey joshua how are you good how are you doing better than i deserve what's up so i recently graduated college uh back in may and I recently found your podcast around a month ago, and I'm currently on Baby Step 2. I have around $36,000 in debt, $9,000 of which is a car loan, and $27,000

in student loans. I just wanted your advice on how to tackle this. I was thinking about selling that car. I can sell it for around $14,000 to $15,000 or just paying that $9,000 off and also paying off my student loans. Yeah, that's what I would do. What do you make? What's your income? I make around pre-tax $8,000 a month. Oh, you're killing it, man. I would keep that car. You don't need to move down the car. But you do need to get on a written budget and completely lean in and do nothing with money but pay off debt. Hard and fast.

Fast as you can. Like your life depended on it. Okay, so I do have $30,000 in savings. Oh, good. Write a check and pay it off. Pay off the car or pay off the student loan? Pay off the car and put the rest of it on the student loan down to $1,000. Because you only have $36,000 in debt.

And so you're going to be out of debt in like three months or two months. Yeah. Okay. So let me recap. let me recap let me recap the shortest shortest distance between where you are and wealth is debt free and that's why i'm doing this it feels herky-jerky to you and you're in love with your 30 000 savings account so this when i just said this your head just spun around twice right yeah okay so but knowing what i know having lived as long as i've lived and as many people as i've gotten out of debt and taught them how to be wealthy and me included and chris included we know that we as fast as

we possibly can need to get rid of the debt and then very quickly rebuild your emergency fund. You need three to six months of expenses emergency fund. You make $8,000 a month. Okay? Mm-hmm. You're in good shape, man. You're killing it. What's your career? I'm in mortgage.

Okay, good. You're doing great. So here's the thing. We pay off the car, and we put $20,000, and we put, put let's see you said you had 30 is it actually exactly 30 000 that you have um i have around uh 30 000 and 500 okay good all right so baby step one is a thousand dollars i want you to leave a thousand dollars in there which gives us $29,500. Right? Okay, that pays off a $9,000 car. That leaves me $20,500, which means you have $6,500 left on your student loan.

Does that sound right to you? Yeah. If you do that, if you follow that through. And you're going to do that this afternoon if I'm you. Okay? Okay, so just leave $1,000. Leave $1,000 in there's your little baby starter emergency fund. Now, making $8,000, and you've only got $6,500 in debt,

I would expect you to pay that debt off within two months, wouldn't you? Two months? Yeah, that's definitely something I can do. $3,200 a month and you're done. Then I want you to save $4,000 or $5,000 a month into that $1,000 account, maybe step three, and let's start raising this back up. Now walk through the math with me here for a second. $1,000 has got your stomach and your throat, right?

Yeah, definitely. Month one, it's still there. But now you've got month two, it's still there, but now you've got zero debt and no payments. You still with me? Yeah. Month three, you're going to put $4,000 into that account, and you're going to have $5,000 90 days from today.

Month four, you following this? Yeah. You're going to have another $4,000, so now you're going to be at roughly $10,000 in this account. Four months from today, you're going to be 100% debt-free with $10,000 in the account. Does that feel a little bit better? That does. I think what initially held me back was just seeing all that savings because it feels like it's forever and my point is it's only for four months

five months is 15 six months is 20 seven months is you know eight months from today you're gonna have thirty thousand30,000 and no. There you go. In the lobby of Ramsey Solutions on the debt-free stage, one of our own Ramsey Solutions family members, team members here. Ashley Craft is with us. She's one of the creative recruiters. That doesn't mean that she's creative as a recruiter. It means she recruits creatives.

She probably is creative as a recruiter, though, too. And her husband, Joshua. Welcome, guys. Thank you. So how long have you been with us? I've been working at Ramsey for about a year and a Joshua. Welcome, guys. Thank you. So, how long have you been with us? I've been working at Ramsey for about a year and a half. Okay, cool, cool. I thought it was about that amount of time.

Yes. Just verify that. So, how much debt have you guys paid off? We've paid off $169,156. Wow. And how long did that take? Just under three years. Three years, okay. And I won't ask your? Just under three years. Three years.

Okay. And I won't ask your income since you work here. Thank you. And half of your teammates are standing around. Completely unfair. But what kind of debt was the $169,000? Pretty much everything. We had car loans, student loans, credit cards, iPhone payments on AT&T, everything. Kind of normal.

Just anything we wanted, we bought it and had a payment. Yeah, that made you normal. How long have you guys been married? Four and a half years. Yeah, almost five. Okay. So you're married a couple of years, and something happens, and you went, I'm getting out of this mess.

Tell me about it. Yeah. So, I mean, it's really just when we're dating, we think we're going to combine our incomes and just be set. You know, we're going to have double the income. And six months in, we were broke. And I mean, just every week it was checking our bank account. Can I buy at the grocery store? You know, can I get gas today or do I need to wait till tomorrow? And it just wasn't working for us and really just kind of hit that point where

we had to change it. Yeah. So what'd you do? So actually, I was listening to the podcast. My brother introduced me. Oh, to mine. Okay. And kind of started thinking about it and visiting my family. I found an old CD FPU kit. Wow.

And from like, I don't know, 15 years ago. The leather one with all the CDs in it. The leather one. Yeah. Leatherette. It wasn't real leather. Leatherette. Right.

So I brought it home and I was nervous to talk to her about it. I didn't know how she'd feel. I love it. I'm the spender. I'm the free spirit. So we listened to it on a car trip, straight, all nine lessons, and, I mean, we were on board from then. Wow. Okay.

Yeah. So you had the stress point, and you're just like, and then the CDs come along. So actually, at what point on this car trip, what were you listening to when you went, I think we need to do this? Well, it was actually beforehand. So when he brought that FPU kit home from Maryville, Tennessee, which is where he visited his dad, he brought it home and he was nervous to tell me. And he came and he said, are you sick and tired of being sick and tired and broke?

I was like, yes. And so we went downstairs and for the first time ever totaled up all of our debt. And really it, it, it was heartbreaking to see. And so at that point it was the moment where I knew we either do something drastic or we're going to be in this for the rest of our lives. And so that heartbreaking moment was really when I said, I am the free spirit, but I want to be a free spirit later with money and be able to serve differently and give differently. And we have an 11-week-old, and so we just wanted to change our family tree for our daughter as well.

Yeah. That's fantastic. Yeah. And so it wasn't hard once I saw that number. And once I had a plan, once I have a plan, I can get on board. There's kind of the process where you have the, oh, crap moment. Yes. And then you go, okay, something's got to give.

Yeah. And I think there's a moment there where we all grow up, and you just go, oh, yeah, I've got to change this. For us, it was a three-hour silent period where we just kind of stared at the numbers, and we just didn't know what to do. You wait on them to shrink, and they don't. Yes.

This can't be real. I married into most of our debt, too. A lot of it was his student loans, and he didn't have his degree yet. And so it was really hard for me, as his new wife, to accept that. He has all this student loan debt. He doesn't even have his degree. Like, this is ridiculous. And so it was a moment for us to accept what we've done. And I had some of it as well. But for me to really say, we're going to tackle this together and I still love you, but

this is something we have to tackle together. So when you're recruiting a creative, do you talk about your personal story at all? Oh, a hundred percent. So, yes. So, I mean, getting somebody, a creative to come to work on our team, someone in one of our many creative positions that we have around here. So because you're responsible for hiring four or five people a month, aren't you? Yes. Roughly. Yeah. Okay.

Wow. So this is, it's really come, I mean, and then you come over here halfway through your get out of debt journey and come to work here. Yes. Now, how did this happen? Tell me about that. Yeah. So partway through our journey, actually really closer to the beginning, Josh worked like

four or five super random jobs. I decided to start a calligraphy and design business. And so I am a creative. And really, I was working a job that I absolutely hated. But I had to work because we had so much debt and I couldn't do anything except work. And so for me, partway through our debt-free journey, I didn't want to hate every day. I wanted to thrive in what I was doing.

And so I decided I'm going to find work that I love right now and I'm going to find a job that really makes an impact. And honestly, this is the only place I wanted to work. So I applied, accepted the job, and we absolutely love it here. Very cool. Very cool. So you guys moved here? Yep, from Louisville, Kentucky. Okay. All right. Cool. And what do you do, Joshua? I work at Schneider Electric. Oh, yeah. Okay. Very good. Yeah. Excellent. Well, way to go. All right. Now you've done it. You're heroes. $169,000. What is the secret to getting out of debt? your pride when you sell your nice car and you start driving to work, you know, just a piece of junk. And, you know, just knowing that people are seeing you, seeing the changes you're making and just being okay with that. Um, so that was mine. Yeah, I think, um, I mentioned it earlier, but

just really accepting the fact that we did this and you have to really look yourself in the mirror. And that's the hardest part is to kind of forgive yourself for all the mistakes that you made and realize we, we need to get out of this, but that's, that's the hard part. And then again, I'm the free spirit, so I love spending money. So saying no to yourself is really hard, but I think keeping your why front and foremost. Um, one of the things that we did all the time was we had dream dates and so we'd go out to dinner, um, and we would, or we'd make dinner and we would just talk about what is our why to keep that front and center. That was really important to us, and we loved our dream dates.

That's really neat. Joshua, what did you find out about this young lady throughout this journey? She is really just unstoppable. If she puts her mind to it, there's nothing she can't do. I mean, she started her business, and just really being through this whole, just seeing how just she can just do anything. That's awesome. Ashley, what about you? What'd you learn about Joshua? Uh, he loves Excel spreadsheets and I hate them. He is our nerd and I love him cause I don't think like that. And I come to our budget meetings, but I hate them unless there's like a category for bows for our daughter or something cute.

So that makes me happy. Very fun. Very fun. All right. Are you going to put Everly in the shot here? We'd love to. All right. Let's have her in there.

So way to go, you guys. We're so proud of you. We've got a copy of Chris's book, but you probably already have one. You're definitely in the next chapter here to be everyday millionaires. And how old is Everly now? She is 11 weeks. 11 weeks. Oh, my gosh.

Just barely older. There we go. That's good. She just screamed, I'm debt free. I heard her. Yeah. She's better now. That's awesome.

All right. Joshua and Ashley and Everly, $169,000 paid off in three years. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! That's so cool.

That's perfect. I love it. I love it. 11 weeks old and screaming debt-free is pretty cool. I don't care what you say. Might be the youngest one ever right there. I think it might be. I love it. 11 weeks old and screaming debt-free is pretty cool. I don't care what you say. Might be the youngest one ever right there. I think it might be. It really is.

At least on the stage in front of us. Yes. Somebody might have had one in the background at their home or something. Well, listen, I can tell you. Front and center and in the picture right there. Looking around out here and seeing the team members and people that she's impacted, recruited, and worked with being out to celebrate. This place, Ramsey Solutions, is a different place.

And it's displayed when you see team members smiling from ear to ear, grinning, rooting for another team member who's crossed the finish line. That's something special, people. That's special. Absolutely. Good family. Well done, you guys. We're so proud of you.

Well done. I love it. This is the Dave Ramsey Show. I'm James 1, 17. Every good gift and every perfect gift is from above, coming down from the Father of lights, with whom there is narrow variation or shadow due to change. The Dalai Lama said, remember that not getting what you want is sometimes a wonderful stroke of luck.

Open phones at 888-825-5225. Chris Hogan is my co-host today here on the air. Open phones at 888-825-5225. Daniel is in Winston-Salem. Hi, Daniel. How are you? Hey, Dave and Chris. It's good to get to talk to you guys.

You too. What's up? I was calling. I have a question about long-term disability insurance. Me and my wife is on we're going to be a baby step forward next month. And I'm the sole income provider. I've started having some vision issues that could potentially be the start of heading into blindness, potentially. But we don't know that yet.

I visited one doctor, and he's sending me to a specialist, but I haven't had a diagnosis yet so my question is would it be immoral to go and try to get long-term disability insurance at this moment knowing that i'm having these these symptoms and also if i could get long-term disability insurance what should i look out for when i buy it most of them are going to ask medical questions and you would have to lie on that medical question which would be not only immoral, it would be called fraud. But if you don't lie and you have a long-term disability policy that you can apply for that does not require a medical screening or medical questionnaire, then that's fine. Do they have long-term disability through your work?

I'm a realtor, so I don't have... There may be some through the National Association of Realtors. Sometimes there's like association group plans and things. I would check on that. And again, all you've got to do is to tell the truth. Right. And if it does not require a medical, then it doesn't require a medical. You haven't done anything wrong.

But obviously, or I guess I should say maybe it's not obvious to everybody, but obviously to me you should not, and to you probably, you should not lie on the thing because it's A, it's wrong, and B, it's called fraud. And, you know, it would be undone if you lied because they'll come back and say, well, you had this diagnosis ahead of time and you would, you know, you would lose the coverage anyway. What you look for, the main things to remember are just if you can get inflation kickers that kick the inflation, kick the income up due to inflation ever so often. That's one thing to look for.

Another is you want to know what your elimination period is, which is your same as your deductible. That's exactly right. And that's the amount that you have to pay before the insurance kicks in. And so that elimination period is a very crucial word, and you want to be aware of it. Yeah. So is it a 90 day elimination period, meaning from the time of disability is declared until you get money would be 90 days. And by the way, 90 days is a fairly standard elimination period. That's kind of like a $500 deductible on a car or something like that. That's what you would expect to see. 30 days is highly unusual and usually much more expensive. And six months, if you can get that, might save you on the

premiums if you can get the policy. So those are the main things you're going to want to look for. But in your case, I think you've got a lot more things to worry about than the actual policy features. It's just whether or not you can get one issued or not. Yeah. And Daniel, do, like Dave said, definitely check with the National Association of Realtors to find out what group benefits you have available. But please, my friend, also get a second and third opinion so you can really find out exactly what it is you're dealing with. And you're down in North Carolina, so that's a cradle for fantastic care down there. But make sure you're getting to a specialist so you understand you're awfully young to be

dealing with a challenge like that, my friend. So my prayers go out to you and your family. Amen. Amen. Tyler is up next, and Tyler is in Missoula, Montana. Hi, Tyler. How are you? Hey, Dave and Chris. Great to speak to you both.

You too. What's up? Awesome. I'm 22. I just started Baby Step 4. And I've decided to go to the university here, get the four-year, and then go to the law school and just cash flow it. Good. So I'm curious if I should, one, stop investing for my retirement, and two, if I should treat this more like Baby Step 3, like kind of because it's going to be future debt, you know, kind of trying to attack that before it happens.

Yeah. Yes, I would stop investing and just pile up cash as high as you can pile it so that you can get through school debt free. And if you do that, you are a better investment than a mutual fund is. Yep. Okay. And, Tyler, will you be working while you're going to undergrad? Yeah. Yeah. I'm an independent contractor. That's fantastic. Yeah. Yeah. Buddy, you will give yourself more and more options. The more debt that you can avoid, even with law school. And I mean, I want you to bust it in the summers, uh, and really understand that, Hey, you are going

to avoid a heartache and headache. I know some attorneys that have had some legal debt hanging around for 15 and 20 years. So the more of that that you avoid, the better off you're going to be. Yeah, you're going to not regret a moment of that. Not at all. If you pay cash all the way through and you've saved that up and cash flow this, that is a huge accomplishment

and be very proud of you sandra's in indianapolis hi sandra welcome to the dave ramsey show how can we help hi dave uh thank you for taking my call sure um i have a bit of a dilemma i want your advice on we attempted to refinance our mortgage we started the process process in August. We have a balloon payment that matured on at the end of September and we're trying to get that refi done in time and they said it was fine to do it. They dragged everything. Sorry, I'm very nervous. End of last September or this coming september this uh this last september so you're overdue on the on the bloom payment by two months now exactly we're overdue now because they delayed and delayed and i kept calling china hurry the process up and they kept having excuses and now they're saying they can't do the refi they They've declined us now. Why? Because we're overdue.

Sandra, what was the reason they gave you for the decline? The initial reason they gave us was because they can't do a refinance once the balloon payment has become due. Okay. You need to go to a different mortgage company. You're trying to work with your existing mortgage company, right? Right. Yeah, you need to run away from them and should have like months ago. Yeah, we want to run away from them.

The problem is, though, that now we're showing you as defaulted, is this going to affect our credit? I mean, we're now late. It may. What's the house worth? The house is worth $235,000. And what do you owe on the mortgage? We owe $117,000. Okay. You've got tons of equity. You're going to be okay. Is there a HELOC or second mortgage on this property? No. There's a second mortgage, but we're going to pay that off.

How much is the second mortgage? Oh, it's like $13,000. How much is the second mortgage? Oh, it's like $13,000. How much cash do you have? We have about $25,000. And do you have investments that are not retirement investments? We do not, no. They're all 401K. How much is in your 401K?

Probably about $130,000 or somewhere there or somewhere there okay all right here's our scenario number one you got to breathe because you're really scared and you don't need to be scared you don't need to be scared you don't need to be scared because the only time i cash out a 401k is to avoid a foreclosure yeah and so you're not going to get foreclosed on worst case scenario is you cash out your 401k put 25k with, and you're going to pay off the house. That's your worst case scenario. You're not going to do that. But that keeps you from losing the house with all this equity, and we'll start again fresh.

Okay? Now, what you do when you hang up, I want you to call Churchill Mortgage that we've endorsed for 20-plus years on this show, 25 years on this show. And I'll tell you what, better than that, I'm going 20 plus years on this show 25 years on this show and uh i tell you what better than that i'm gonna put you on hold and kelly is gonna pick up and she's gonna hand you white glove to churchill mortgage and get this solved for her tell churchill i said get this solved and i'll bet you they can do it i bet you they can walk matter of fact hank just walked in and he can make that happen. Yep. So you've got to be careful when you walk in the booth right at the end of the show. You get a new job. Beacon into existence.

There you go. Good job, Chris. Thank you, sir. Good job to James and to Kelly there in the booth. I am Dave Ramsey, your host. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, 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.