The Ramsey Show - App - Should I Use My 401(k) to Start a Business? (Hour 2)

Episode Date: December 28, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Dr. John Deloney, Ramsey Personality, is my co-host here on the air today. I promise one thing.

This will be interesting. It always is. It'll be compelling, entertaining radio. It always is. It always is. Thanks for hanging out with me, Dr. D. Open phones if you want to talk about your life and your money. We know we do.

888-825-5225. That's 888-825-5225. Starting us off in Norfolk, Virginia is Fadio. Hi, Fadio. Did I pronounce that correctly? It's Fadio. Fadio. Hi, Fadio. Did I pronounce that correctly? It's Fadio. Fadio. I'm sorry. Okay. I knew I was going to mess it up when I saw it. How can I help?

Well, I'm a father of five special needs children. We're in the process of setting up a family farm. So three of my boys have autism and they're going to actually work the farm as part of their extended life, you know, to earn income and to have good, healthy relationships with how they feel and things like that. Good. So they're high functioning? Yeah, they're high functioning.

One of them has type 1 diabetes and it's also bipolar uh the other one is just regular autism and the other one's a bilateral amputee and autism okay so we're setting up all kinds of stuff i own three homes 100 acres um i don't really have i mean the debt would be like the mortgages on the land and house um and we're uh you know i got a probably about a 200 000 retirement saved up um plus we have another 30 000 another type of ira and then um well you're you're an incredible man. You've done a great job. Wow. Household income is about $250,000

a year. What do you do for a living? I'm an industrial mechanic. My wife is a BCBA behavioral therapist. I'm a licensed behavioral therapist. We're setting this up. we're setting this up.

I'm setting this up, and I just wanted to know if you thought, you know, that I had a good plan. I've listened to your show a lot, and you've helped out a lot of people, and I just feel very unsatisfied with what I've done. Okay. You're talking about your estate plan, on how you're setting it up to survive you and take care of these kiddos? Yeah.

So what's unsatisfying? I just don't know if I've done enough. I don't know. I don't know. Said every dad who loved his kids. Ever. So all this makes you is in the good dad column okay none of us think we did enough but the other part the other part of the equation is regardless of uh the type of challenges that the kid is going to have every one of our kids has challenges and um we can only do so much to get them there and you're doing And they've got some extra challenges, so you're doing some extra stuff to get them there.

But the truth is, there's a part of this that's going to be on them, and a part of this is going to be on God. At some point, you've got to rest in this. Yeah, I think that's where I'm having my problem. Yeah. And what you're going to do is you're going to plan and scheme and stress the time away you do have with them. Yeah. And you don't want to be 70 or 80 and look back and think, I worried my way through those connective years. So, now, I've worked really hard and I have a big estate and I have spent hundreds of thousands of dollars, believe it or not, over the years on my estate plan.

And we have a meeting once a year where we go over what happens if dave dies this year meeting it's very detailed and very complicated we call it the monty python meeting i'm feeling much better and so i hate the meeting because the whole thing's about when i die and it presupposes i'm going to die before all the people in the meeting so i don't know about this but you know but in bottom line is i've spent a lot of time on it like you have and at some point in the process i got to go okay i've done what i can do kiddos you're gonna do what you can do god you're gonna do what you do and i'm gonna be just the i'm just the dave part of the equation is the only part i can manage and so releasing that number

one then number two let's just talk about the mechanics and the tactics of what you're doing obviously you're leaving this stuff into these assets into a special needs trust, and you have a trustee to manage the trust of the assets that you trust, thus the name trustee, to take care of and oversee these properties and investments for the good of these kiddos as they become adults and manage through these issues. Is that right? Exactly. Yeah. And then the details of that trust, you can get down into that.

My trust is pretty detailed. I'm even going to be a bit of a control freak from the grave. But it's my freaking money. So it's my job to make sure that somebody doing cocaine does not get blessed with my estate. You know, that's my job. And in your case, it's your job to make sure some doofus investment advisor doesn't screw up everything you spent 30 years building and mess it up, and then your kids don't have food to eat after you're gone, right?

Right. So you put some safeguards and stuff in the trust to say, this is how I want the money invested, this is how I want the money invested. This is how I want the farm managed. At any point, if the child becomes too debilitated to manage this or has to have too much assistance and it becomes a burden rather than a blessing, the farm is liquidated, put into assets to manage. And then those mutual funds create cash flow to feed the kid because they can't run the farm for some reason. You know, whatever. kid because they can't run the farm for some reason you know whatever you just try to think through contingencies and ours is if somebody falls off the uh you know falls off the good

life wagon and decides to be a ne'er-do-well they don't get to participate in the wealth because we don't want to finance goobs with god's money and so in our case we're trying to guard against you know the uh the reality show child showing up in the Ramsey Heritage somewhere. Right? Yeah. But I can't control that, but so much. I can invest into the kid and teach them, let them build character, spiritual life. I can invest some time and money into this other process.

But at some point, you've got to set the tools down and rest, what John said. Okay. Does that make sense so it makes a hundred percent i haven't seen every page of your stuff but my sense in talking to you is you're probably 80 to 90 percent there which makes you like a thousand percent ahead of most people because most people don't do beans on this issue that's true and can i tell you the the last 20 here's what you got's what you've got to do. You've got to be honest with yourself and your wife that your kids are going to have a rough go of it when y'all are gone.

Nobody will love those three kids like y'all do. Nobody will know their special needs, Pachadillos. Nobody will know their little things like you do. The thing that sets off the ADD, man. Nobody's going to know that. Or the autism or the bipolar. Nobody will know that. And so are they going to have a harder run of it?

Yep. And you've got to grieve that. And then you've got to enjoy every minute you've got with them. Otherwise, you end up burning now minutes for a future that you can't control. You're going to be gone. They're going to have a tough time. But you are doing such an incredible job setting the foundation for them it's beautiful so keep working on it but don't obsess over it and the fact that you can't get any peace about it means you're kind

of tipping over on the obsessed side so i work mine and people might say i'm obsessed because i spend some time and some money on it every year. Sent an email this morning on it. But I don't sit and wring my hands about it and feel inept because I know I'm ahead of 99.9% of the crowd, and so are you, sir. I'm proud of you. You're a good dad. Absolutely. This is The Dave Ramsey Show. Are you ready to really take control of your money? Personal finance expert and Ramsey personality, Rachel Cruz's brand new book, Know Yourself, Know Your Money, is out on January 5th,

and that means our exclusive pre-order deal ends very soon. If you're ready to start 2021 by making real progress, taking back total control over your money tendencies, this book will give you the tools to win. Know Yourself, Know Your Money goes beyond the baby steps and gets to the root of your money choices and even the mistakes. Our special pre-order deal is ending soon. If you pre-order Know Yourself, Know Your Money for only $20 today, you get $150 worth of free bonus items.

Hurry, reserve your copy today to get your free bonus items before the pre-sale ends. Pre-order before January 5th at the online store at DaveRamsey.com or call our Ramsey concierge team at 888-227-3223. Our question of the day comes from blinds.com. They have a 100% satisfaction guarantee. That means even if you mismeasure or you pick the wrong color, they'll remake your blinds for free. You'll get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code RAMSY to get the best possible deal. John, our question. Today's question comes from Chad in Utah.

My wife has been diagnosed with disassociative identity disorder, otherwise known as multiple personalities. Too often when she goes shopping, some of her younger identities come up and she ends up spending money that we just don't have. Then she gets home and feels bad about her purchases, but is too ashamed to take things back. We are in baby step two and working toward getting our debts paid off, but it's going extraordinarily slow because of this. My question is, what advice would you have to help curb the spending? Aside from simply taking over the money, I just don't know what else to do. You've got to simply take over the money. You've got to take the debit card out of her hands y'all have to when she is in what i would call when she's got her central state when her central

identity is running the show you got to make sure that um she turns over all of her spending and your job is now to go to the store you're working with someone who's not fully well and until she can integrate some of that and that's a hard long process, you're going to be running the show when it comes to the money. Yeah. She is not – if we were to – if, say, someone has dementia, as an example, they are of diminished capacity from a legal standpoint, and so you could take your grandpa into the judge with the docs letters and say,

Grandpa's of diminished capacity. We need to take over and take, you know, they appoint a guardian ad litem, and you don't ask someone who is of diminished capacity to make quality decisions for themselves. Right. And so from a legal standpoint, you don't have to do that legally in this case, but you literally take over someone's finances for their own good. That's right. Not for your good, but because they're not capable of doing it in their current state. Hopefully there's some work that can be done. And this is not a permanent thing, but basically she's got a mental illness,

and you're caring for a wife who has a mental illness. That's right, and I would recommend, Chad, I would recommend you get a friend or an accountability partner that will walk with you because she may not be able to carry that load right now, and that's the season you all are in. And you may be in this road for a long time right um this is a very very rare disorder um despite how much attention it gets on tv and whatnot and you may be in it for a while so get somebody you can walk along with you that will

cheer you on that will be frustrated with you and will help you make good decisions but yeah this is your this is your your road to home my man I'll give you another one, okay? Something as simple as I've worked with over the years, someone who's recovering from a gambling addiction. They can't touch money until they've got six months clean, and then they can only touch certain amounts, and then they've got to have another six months clean, and then they can only touch certain amounts. And then when you've got two years clean, we could talk about having joint accounts again.

But otherwise, I'm just going to take care of you. Right. Because when you touch money, you can't do it. That's right. And so it's not good for you. It's not good for us. And so you're expecting something of her that she does not have the strength and capacity to deliver, which is called self-discipline.

That's right. And so you've got to step in and do that very interesting let me ask you this when i read this um because i know nothing about this i mean other than i i know what this is but uh you know in from the three psych classes i had in my life but you know but uh uh how often is something like this misdiagnosed? Significantly, massively, massively. True disassociative identity disorder is super, super rare. And it's a splintering of your identities. It's less about you've got different people living inside of you and more you've got identities. Usually it stems from really significant trauma from childhood.

And you've got different identities that will rise up and take care of different things, like scary moments and joyful moments. And there may be something around money or stores or responsibility that this Jack's wife reverts back. And usually there's one that's a quarterback. There's some interesting stuff man you can look at the brain images change uh blood pressure changes um in true diagnostics it's it's really bizarre but it's very rare it's incredible but it's very very rare right yeah so um maybe not in this situation but maybe if someone thought they had that it could be that it's almost like we're trying to give something a label where I'm just refusing to control myself. Occasionally.

Usually, if you've got that. It's just the younger me. I need a victim. Yeah. If I would go see somebody twice, I'd go see two different people who diagnosed me with this. I would not absolutely 100%. You can't self-diagnose this. No.

Right. And sometimes dealing with trauma. And I can't undiagnose it sitting here obviously either and that's what i'm trying to do in their situation i just uh you know part of part there's a little part of me that wonders you know the younger identity i just i've heard so many people have so many excuses that over the years on why they will not control their spending that's exactly right and i'm not saying this's the case with her, but I'm always leery. That's right.

And, again, in these rare, rare moments, yeah, the working together. Working together means you're taking over. Right. Yeah. Yeah. Because you just are a diminished capacity. That's right. That's different than I refuse to.

Or it makes me scared when. Or it reminds me when I was a kid and those are different. That's a lot different. There's a difference in a 10 and a 2. Yeah. This you're talking, your heart rate changes, your blood pressure. I've seen some where. Even vocal cords reshift. Some are smoking and some don't smoke.

I mean, you're talking dramatic, and it's super rare. And like I said, if someone I love was diagnosed with this, I would be on the phone with another doctor immediately to get a completely new workup to see if this is accurate and true. Very interesting. Yeah. It probably shows up in the movies more than in real life. Way more in the movies. That's right.

Okay. Open phones at 888-825-5225. And by the way, just in case some of you misheard that, neither one of us are saying that is the case with Chad's wife. Absolutely not. It's just a discussion because this kind of thing comes up. Behaviors and mental illnesses and diagnoses. You know, bipolar is the one I do get a lot. We get that a lot.

And that's much more frequent. Yeah, and Dave, we're living in a world where you can only get reimbursed from insurance with a diagnosis. And so there is a tendency, there is an incentive to give a diagnosis. Which means get labeled. Get labeled. We live in a world where we overnight, literally 10 years ago, we all got access to everybody's information without the training that goes with deciphering some of that information. And so we all have become armchair quarterbacks when it comes to what you have, what I have. Pop psychologists.

And then the third is we are all looking for a reason why, like we talked about in the last segment, why we can't just grind out and do the hard, small steps that is every day. And you take all three of those together, and, yeah, you get diagnosis all over the place. You get people diagnosing themselves. Prescriptions issued all over the place. Prescriptions,osing themselves prescriptions issues like their tic tacs and then look around we got a mess right yeah but that doesn't undermine there are very real psychological challenges that people experience absolutely they do there's no question we're living in attention i'm trying to be cold in that i didn't hear that at all yeah

no and i'm just saying neither one of us are saying that about his wife yeah because we don't know in that situation but if that is truly what's going on and it sounds like it is, then, yes, you cannot. She cannot handle money until she has a level of healing past that. And if you're you know, if you have someone that's dealing with gambling addiction, they cannot touch money. If they're dealing with a pornography addiction, they cannot touch money. Matter of fact, if they're dealing with an addiction, they just can't touch money. Because addicts, 100% of addicts are broke eventually. It's the gasoline for their fire, right?

Eventually. They're going to spend money on their thing, whatever it is they're addicted to, to the point they destroy their family and themselves. Eventually. There are no such thing as rich addicts that remain rich forever. That remain rich. That's right. Eventually, they're going to snort their fortune away, or it goes from porn to prostitutes or whatever.

And gambling is pretty quick. You can run through the money with gambling. Real fast. Just open up your computer, and you can go through about $100,000 in 20 minutes. And there's always someone on the street corner to give you some more, right? Oh, yeah. Absolutely. The internet will hook you up, baby.

And we're now seeing the fastest-growing addiction in our offices for financial counseling is porn. Really? Second is gambling because of Internet access. That's right. Driven it through the roof. This is the Dave Ramsey Solutions on the debt-free stage, Tony and Jessie are with us from Indianapolis. Hey, guys.

Hello. Welcome to Nashville. Thank you. Hey, thank you. And here to do with us from Indianapolis. Hey guys, welcome to Nashville. Thank you. And here to do a debt-free scream. Yes. How much do you guys pay off? $221,000. Wow. How long did this take? Five years. Five years. Okay, very good. And your range of income during that time? We started at $70,000 and we're at $130,000 now. Good for you. What do you guys do for a living? I'm an assistant administrator for a construction company. I'm a sales manager for a small distribution company.

Great. Very cool. So five years, $221,000. Did you pay off your house? Yes, we did. Look at that, weird people. I love it. Way to go, you two.

So what's this house worth? Well, we purchased it for $140,000, and today it's worth $210,000. $210,000. You have a $210,000 paid-for house in your home. I'm 29. I'm 33. And you're so weird. Wow.

That is so awesome. Thank you. I mean, 29 and 33-year-olds don't have paid-for houses. You do. Yeah. That's awesome. Thanks. Way to go, you guys.

So tell us the story. What happened five years ago? Got this whole thing started? Yeah. Yeah. So we were just kind of bouncing around as newlyweds doing all the things that normal people do, right? Financing cars, financing furniture. Pretty sweet 70-inch TV that was on loan for about

five years but doing all the normal stuff and and one day jesse looked over and said i think i want to have a baby and i said oh no you can't finance that yeah we're running out of room right so so as the nerd in the family i kind of looked over the budget and i realized how in trouble we actually were right so um our church was was running your program unfortunately we couldn't do that class but um started youtube and yeah and kind of got in that internet wormhole where i was watching dev free scream after dev free scream and i slowly transitioned from you can't do this this isn't real to well heck if they're doing it we can do it so if that guy can do it right right right so so we bought the book and um let's just say it was game on

from there yeah yeah so Jesse you he comes in after going down the YouTube wormhole and says, I bought a book. What'd you say? Well, I bought something else. No, I mean, I've always kind of trusted him there. If he told me, you know, we were going to be fine. I thought, okay, we're going to be fine. But then he was like, we're not going to be fine. So when he told me about your book and then I listened to it, I was like, wow. Like, okay, how are we going to do this and he set up the most crazy budget you've ever seen color-coded and everything and we just started

working the baby steps and when we paid off that first loan um it was game on from then it was it was very motivating and this is going to really happen yeah Yeah. You start to go, this is real. Yeah. There's something that happens, and you gear it up. And then another one, then you gear it up again, and then you gear it up again. So when did you pay off everything but the house? How far back was that? Well, right before, nine months before that little one was born.

Yeah, so that was 2017. Okay, so the last three years of the five has been the house. Yeah. Okay, and the first two was the consumer debt. of the five has been the house. Yeah. Okay, and the first two was the consumer debt. Yeah. You paid off the house fast then. Yeah, I knew when we were debt-free that after listening to your show and wanting to be weird, that we weren't going to slow down our intensity at any point. So we were like, we you know as bad as we wanted to be debt-free and um just start changing our family tree that was something fun we wanted to be able to say so

and along the way the baby did come yeah okay babies yeah how many um well we have an 11 year old a three-year-old and one due in februold, and one due in February. Oh, okay. Very cool. Yeah. Very cool. So the 11-year-old came... Oh, well, it's my husband's daughter. Yeah, we've got a blended family. Oh, okay.

I married him. And she learned many of it along with us. Yeah. She was getting toys as she wanted and needed them. And then that kind of ceased, and we had to kind of explain why. Yeah. And she learned quickly your steps as well. Yeah.

Yeah. Little ones, they don't know what a budget is, but they learn to hate Dave Ramsey. It's like, yeah. Hey, Tony, so put me in year two and a half or three. You've been doing this. You turn 30. This is this big milestone. How do you not run out of gas?

That's a long time. Yeah. You know, Dr. D., that's a great question. And honestly, that was part of our story is I'm going to eat a piece of humble pie here in front of all your millions of listeners and let you know that I didn't do it right in the beginning, right? When I came to her and said, this is a book, my wife showed me so much grace and said, I'll follow your plan, let's just do it. But we never really had a why, right? And it was about that time that we really sat down and had, as Chris would say, our dream date, and we started working together and became equally yoked, and things just

went gangbusters from there. That was the absolute game changer. It was the turning point. It was kind of the fuel that we needed at that season that you were alluding to. So you kind of muscled your way through the first part. I muscled my way through it. The first part. Yeah, for sure.

But then the second part, you kind of got in a groove. Yeah, and then we found our groove and that's why things just started moving a lot quicker. For sure. We also put our animization table up on our fridge, and every time, you know, we got to scratch off many payments. And, you know, we'd rip one page into like a thousand pages and throw it away. And when we made it to that last page, you know, that's an incredible feeling. It says 2020, you know, or 20, I don't even know 20 i think it was like 2025 or something five years early yeah wow way to go you guys there's not a lot of kids with uh

amortization schedules on their picture we have to put it over their paintings sometimes but yeah mom where's that thing i made in kindergarten? Well, I'm scheduled to take precedence here. Don't move the grass, kids. So what do you tell people the secret to getting out of debt is? You two are highly successful. Well done. Well, we really enjoyed Rachel Cruz's book, and I think as long as you can be content is what we got mainly out of it.

As long as you can be content with what you have. I had to go through my e-m emails and just unsubscribe to all the stores and work to, I mean, all our needs are met. We don't need multiple, multiple things. So contentment, I'd say. And obviously the budget is a huge one. Yeah, for sure. And obviously to reiterate it, I would say finding a why, a real why that works for both

of you so you can go the same direction. So what do you buy? You're 100% debt free. You did it. Your house is paid off. What's the first big thing you buy to celebrate? Well, with another baby on the way, we're going to have to upgrade to a van. So Jessie's got her eyes on a minivan.

Yeah, going to a minivan. Awesome. We're going to upgrade vehicles a little bit. Way to go. Okay, cool. So, we're shopping for a cash van. Yes. All right.

Good for you guys. Well, I'm so proud of you. Thank you. Thank you. You're rock stars. Who were your biggest cheerleaders? Oh, I'd have to say our parents were huge. And then a couple at church, and deb bergman um they lead

the financial piece and um really just i mean all of our friends um they weren't gonna do it or join us but they encouraged us along the way yeah and now that you've done it they all kind of go oh yeah yeah it's kind of switched a little bit they're starting to get a little bit more curious about your house then people get interested. They make that noise. I love it. Well done, you guys. So great, guys. Beautiful, beautiful. Okay, so the babies are how old?

And they're with you. Let's get them in the shot. We've got Bailey's 11 and Carson's 3. All right. Very good. Way to go, Bailey. Good babysitting. You did good during that.

Good job. Good job. All right. Tony, Jesse, Carson, and Bailey, Indianapolis, Indiana. $221,000 paid off in five years, making $70,000 to $130,000. That's their house and everything, and she's not even 30. Shut up. Count it down.

Let's hear a debt-free scream. Three, two, one. We're debt free! Wow! That's so cool. There's got to be some science in the science of transformation. I may talk about it when we come back in a minute. I'll be thinking about this.

You muscle your way through the first part of transformation emotionally spiritually and then it starts to you can catch it through you want to hear what you think about that this is the dave ramsey show Thank you. Dr. John Deloney, Ramsey Personality, is my co-host today on the air. We've heard all the excuses from people that they use to put off making a will. Like, if I do a will, I might die. You're gonna die! We've done research. 100% of you ain't making it out alive. So, in fact, our MC Solutions research team

found that 74% of parents do not have a will. Guys, that's ridiculous. Can't do that. Too important. You need a will to protect your family and to keep the state from taking over and telling everything what to do, including your kids. So stop putting it off. Get it done. You can start with our free will preparation checklist.

This guide helps you think through the seven important areas like naming guardians and beneficiaries, plus all the little things you haven't thought of. Once you've gone over the checklist, setting up your actual will will only take you about 10 or 15 minutes. So get the free checklist, get the guide by texting WILL to 33-789. That's WILL to 33-789. That's Will to 33-789. Give your family peace of mind by getting your will done. It's just a grown-up thing to do. All right, Todd is with us.

Todd's in Sacramento. Hey, Todd, welcome to the Dave Ramsey Show. Thank you for taking my call. Sure, what's up? So we are trying to buy some land, and one of the process things we're thinking about was to sell our home and move into a fifth wheel. And I was trying to figure out if that might be a good idea.

Who's we? Who's we? Me, my wife, and four kids. And so the thought process would be is we would buy the land and put the hookups on the property, and so we would be able to live there while the house was being built. And then at conclusion of the house being built, we would sell the trailer and trunk. How long is it going to take you to build the house? I'm assuming probably about a year.

I couldn't do that. Yeah, the way I answer questions here is what would I do if I was in your shoes, and it wouldn't be that. Okay. Truthfully, this sounds like a nightmare. That's a lot of people in a little place. That's a lot of people in a trailer, a fifth wheel. I mean, you know, I guess it depends on your family. Maybe your family is adventurous, and they think this is fun or something.

My family would not think this is fun, and my wife would not be on board with this, I can just tell you. And that enters into the discussion. But, I mean, people do all kinds of things. I've talked to a guy not long ago. He bought a $5,000 used mobile home for cash and, you know, took $200,000 from the sale of his house, saved another $100,000 and built a $300,000 house. Took him three years and he lived in that little dumpy trailer for three years while he was doing that.

I couldn't do that. So I can't. And I'm one of these people that says, I'm not going to ask you to do something, like Dave Ramsey said, that I wouldn't do. Because that's hypocritical to me. So you can do it if you want to. I won't say that you're dumb or something. I would say you wouldn't buy a brand new one because it's going to lose half its stinking value

when you drive it off the lot. No, our thought process would be truck and trailer would be probably about $40,000 total. It's probably going to be worth $20,000 when you sell it. Yeah. And so we would lose some, but my wife doesn't, It's probably going to be worth $20 when you sell it. Yeah. And so we would lose some, but my wife doesn't. She's the one who brought the trailer up,

and I thought she was initially kind of crazy, but she's been. Your gut reaction was correct. How old are your kids? Ten, eight, four, and ten months. Yeah, there's a zero percent chance this ends well for anybody. It's just real close quarters. I think I'm going to go at this another way. I would rent a house, spend a little money. You're going to lose $20,000 on this hookup anyway,

so I would rent a house and lose my $20,000 that way. You're going to lose your marriage and at least two of those kids. At least two of them. One of them is going gonna hurt the other one but yeah the uh i i i mean you again you're if you pull this off and and come out of it mentally healthy and your marriage is healthy and everything uh financially you're gonna be okay but if you pull this off you would be an unusual family that pulls this off. Most people that did this would rue the day. At the end of it, they're going, God, that was awful. It sounds like one of those YouTube-ification plans where there's always a YouTube channel of somebody doing something crazy

or a Pinterest channel where somebody's created a new thing out of egg cartons and pony hair or whatever weird thing and it's just like well we can do that and you end up in a mess and nobody likes you and your neighbors want to burn your house it's just like man there's a reason why things work most of the time right yeah i you know so yeah i'm telling you i probably would not do this but it but i'm also not gonna just absolutely tell you not to do it if you choose to do it but it's unusual weird and so and the reason it is is it's a lot of people in a very close quarter and um it just doesn't sound fun. Do this. If you do decide to do it, email me at askjohn at ramseysolutions.com because I'm going to have you on my show, and I'm going to chronicle this with you.

It'll be a blast. You'll follow him through the year. Yes. All right. Lucy's in Oklahoma City. Hi, Lucy. How are you? Good.

How are you, Dave? Better than I deserve. What's up? First, I just want to say thank you i listened to your show a few years back religiously and i paid off like maybe 34 000 and um maybe about eight months or so and i got debt free well done i have a i have a question i'm purchasing a home for my sister cash and it sits on about an acre and it's only had two previous owners um a mother and a son and i am wondering whether i should purchase title insurance i figured if i would just do

title a title search and purchase the abstracting work i'd save about 1500 or more yeah i would buy title insurance i won't buy a piece of property without title insurance. There's just too much crap that happens in title. And, you know, if it's a normal transaction, you're probably perfectly safe. So the land has only had two owners since when? 1700s? I mean, the mother, I don't know, on the land, land i don't know the house is what the mother built that house on what in a subdivision yes yeah and how long has the subdivision been there right and who owned the subdivision before and did they did the brother that was the air who

ran off to california crazy did he actually sign off when the guy four pieces of uh four deeds ago that before the subdivision was actually there did he actually sign off on it or is he going to show up and want a piece of all of your lots right this is why you get title insurance okay weird crap happens i bought a piece of property one time and uh four places back in the title, four owners ago, one brother did not sign. There were four siblings. One brother did not sign. He showed up wanting his money. He said, I own a fourth of this property.

And technically, he was correct. So what happened? The title insurance company wrote him a check because I had title insurance. And I've just owned too many pieces of real estate and seen weird, wacky stuff. I always buy title insurance. And for 99% of the people out there, I always recommend you get a home inspection when you're buying a property, even from your sister. I do want to high-five Lucy, though. She sounds like somebody who follows a plan and actually does research.

She figured out what to do. It doesn't just... The title abstract, she knows something about it. Act like the world's happening to her. I love folks like that. Yeah, she's digging in, going, okay, I don't understand this fee. Why is this fee worth it? It's not worth it.

I can just go do the title search and pull the title. The title abstract is just the history. That's the breakdown of who owned it before, before, before. It's the worth it. I can just go do the title search and pull the title. Title abstract is just the history. That's the breakdown of who owned it before, before, before. It's the begots. Beginning of the New Testament, right? That's right. And you go right down the title, and that's your abstract, and you can see the flow of it. And again, 99% of the time, you're okay.

And I've owned probably 2,000 pieces of property, and I've only had a title problem two or three times. So it doesn't happen very often. But boy, when it does. Man, oh man, oh man. That puts this hour of the Dave Ramsey Show in the books. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show.

This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes or head to DaveRamsey.com. Thanks for listening.