The Ramsey Show - App - Should Prestige Play Into University Choice? (Hour 2)

Episode Date: May 18, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's The Ramsey Show. Where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host, Anthony O'Neill, Ramsey personality. Number one best-selling author is my co-host today. Thank you for joining us, America. We're so glad you're here. The phone number is 888-825-5225. That's 888-825-5225.

Sarah is with us in Lexington, Kentucky. Hi, Sarah. Welcome to the Ramsey Show. How can we help? Hi, Dave and Anthony. I have a little question. Me and my husband are debt-free. We've been debt-free for three years.

I took a traumatic fall in 2019 and broke my human life down the flight of stairs and damaged my knee. I've had one knee surgery, and I'm getting ready to have another one. Ouch. My husband's gone four nights a week, and I don't sleep those four nights because all my bedrooms are upstairs. So we're kind of like in a dilemma, and he didn't even want to be on Dave Ramsey nine years ago, but now he's turned into a frugal. I think we should sell the house since we have no bedrooms downstairs and buy another house in the next over subdivision. Our house will price at $159,000, and it's about the highest one on the two streets.

And we could add on to it for like $30,000, but then I don't think we could ever get our money back out of it. The houses in the next subdivision are running about $179,000, but we'll probably only clear like $145,000 on our house. Now, we have $550,000 in 401K, and we have our emergency fund, and we have $16,000 because I've been trying to save to put on another house, $16,000 that we could put on the house, but we'll still be a little bit short. What did you say your household income is?

Our household income during the debt free was 84 but since i fell it's down to 65 because no i'm too since 2019 i've only worked like four months each year because i failed and they tried to naturally heal then they did surgery the next year then now i've had the knee surgery i'm gonna have to have another one so i'm only working part-time okay and so you're talking about a one level house i'm talking about a one level house and i need to stay in my area because i'm like the provider for my mother who has cancer so i need to stay within like a five mile radius because you know i'm over there every day so i you know i probably could find something cheaper farther away but then when she calls me

in the middle of the night you know it's going to take me longer to get to her. Yeah, like if you move 10 miles away, it'll take you five minutes more. Well, she's kind of panicky on that stuff. Five minutes? Well, she gets panicky. I get panicky you going back into debt, too. Well, I think we could have it paid off in a year. Well, then save it up yeah and just sleep on the couch for the next year because i don't sleep upstairs when he's not

there i i literally i what happened was i got up in the middle of the night i made the wrong turn i was disoriented and i went down the flight of stairs and i know that that's emotional i'm not i'm not judging your psychological that That's not what's happening. I'm saying what would I do if I were your husband, if I were you in this situation? I completely agree with your desire to move. Yes. And get into a one level. I've got no issue with that. If you're within one year of doing that with cash, then do it with cash. Or move five minutes further away and do it with cash and deal with a 10-minute drive to Mama instead of a five-minute drive.

Absolutely. Okay. Now, the other thing is they make those stair climber things that you sit in. They're $15,000. No. But I don't think we can ever get our money back out of that. No. Yeah, Sarah, don't do it.

I mean, I think you're trying to come up with all kinds of excuses. Listen to what Dave said. You're able to climb the stairs. Yeah. You just don't want to. Right. Well, yeah, I mean, I'm able, but, you know, I've never had one knee surgery. You know, it's like a lot of times I'm not good at it.

I'm not arguing with you. You know, and let me just tell you how weird I am, okay? If it's this important to you, I would move the living room furniture into the garage and move the bedroom into your living room. I'm so serious. Well, we are from Kentucky. Well, I'm from Tennessee, so I think we got this figured out, girl. We got it figured out. Listen.

It's just for a short time, and if it's that big a deal for you to get something that's comfortable i might rearrange something there yeah on that first level seriously i'd consider that as a temporary measure it's not it's not a five-year thing it's like we're going to go camping for four months and five months till we get this money saved up but i think you can do this with cash if you're careful or if you'll just make slightly different decisions sarah would you what you really want to do is when you're facing something like this and you've got several very valid things, a one-on-one bedroom, I mean a one-on-one level, and it's a reasonable request, don't you think?

Yes, absolutely. But don't put so many other constraints on it that you can't make your solution true. Yes. Like, I have to be five minutes from mom instead of ten minutes from mom. Oh, no. See, now that one's silly. Yeah. That one's silly.

She could be 15 minutes away from mom. Yeah, and go move today. Right. Or sleep in the living room for a year. Yep. Or move your bedroom to the living room for a year. Or go into debt and pay it off in a year. But I don't think that's the way I would do that in this situation.

Me, I'm telling my wife, we're going to move away 15 minutes so we can give you what you want right now. I'll tell you what the other thing you could do. You could sell the house today. Absolutely. And rent a one-bedroom for a year. Yep. Now, that's even a better plan. I like that plan.

Except for the move two times part, which I'd rather have a root canal, because the move two times thing is awful. But, yeah, that solves the problem very, except for the two moves. Yeah, but they don't have to move in one year, Dave. They can stay there for, you know, two, three years. And pile up a bunch of cash. Exactly. And get an even better one-bedroom.

Exactly. One level. I keep doing one-bedroom. One level, one level, one level, yeah. It could be a one-level, one-bedroom, three years. And pile up a bunch of cash. Exactly. And get an even better one. Exactly. One level. I keep doing one bedroom. One level, one level, one level. Yeah. It could be a one level, one bedroom, you know. I mean, well, for rent. For rent. Yeah. That might be your answer. I like that answer, Dave.

And you can move just about anywhere if you're renting for a short period of time. And she can save within five minutes. Yeah. Yeah. That might work. That might work. That's another idea. But I think you're so close. If it was going to be five years to solve the problem, I might solve it differently. Yes.

But because it's one year to solve the problem, I'm going to figure out a way to push through that. Right. And avoid the debt. Your husband doesn't want to go back into his house and everything's paid off. I can empathize with that. Yeah. And also empathize with you hurting and you don't want to make a wrong turn in the middle of the night

and start this healing process over again. I have no issue with that at all either. Hey, folks, how do money conversations go with your spouse? Do they end in a battle or are they not happening at all? Guys, you can get on the same page with money. It starts with both of you committing to a budget every month. With a membership to Ramsey Plus, you and your spouse get our premium budgeting tool, every dollar. Connects to your bank and to both your phones, so everybody knows what's going on.

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and, of course, the premium version of EveryDollar. Lots of other goodies in there as well. Smart tax is free right now. Get your taxes done free. Yeah. Wow. If current times have shown us anything, it's that the least expected events can and will happen, and we have to deal with it. That's why everyone who has a family counting on them needs term life insurance. For over 20 years, the only company I've recommended is Zander Insurance.

Not only because they search all of the top term life plans to find you the best rates, but over the years, they have constantly changed and updated their systems to make the whole process simpler and easier to get the protection needed. You can now apply with a completely touchless experience with everything being done either over the phone or the Internet. They also have plans with super competitive rates that don't require an exam, allowing you to skip a step and get the coverage you need faster go to zander.com.

They have a 100% satisfaction guarantee. It means even if you mismeasure or you pick the wrong color, they'll remake your blinds for free. You 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 deal. Today's question comes from Spencer in Utah. I'm a prospective law student and I am torn between two schools. One is more well-known, but it's also more expensive. The other is less recognizable, but they have offered me a full tuition scholarship. Does the name of the school help significantly and prove to be the investment that college admins tout to be.

No, no, no, absolutely not. Listen, you guys, I went into my doctor's office actually just the other week, Dave. And for the first time in probably 36 years of me living, I asked them what school they go to. And when my doctor said the school, said hey does it matter like if if a kid came in here and today and said hey um does going to this school over that school is that better uh the doctor said no he said what makes a doctor is is is the doctor willing to learn while he's in school is he willing to submit himself to other doctors to learn even more so my my continual life of learning. Exactly.

And growing. And growing. And the same is true of law school. Yes. Yes. So that's... Can you pass the bar after you graduate? Yep.

Did you get enough knowledge to pass the bar? Yep. And do you have enough knowledge to function as an attorney? That's it. And if you have that in 99% of the cases where you went to school, it doesn't matter. Yep. I have 10 attorneys or so in my life, sadly. Yeah.

And I can't tell you where a single one of them went to school. You didn't ask at all? No. Huh. You know, we have trademark attorneys. We have estate planning attorneys. We have tax attorneys. We have staff attorneys attorneys folks on team here

yep uh actually i was interviewing them so i do find out where they're going to school for a higher them yeah but i didn't hire them because of where they went to school yeah to be the ramsey solutions you know uh chief counsel and so forth uh and so you know real estate attorneys don't know where they went to school yep so it just you know school. There's a handful of prestigious jobs that are high-end corporate things or high-end law firms that care tremendously about where you went to school, but it's only because of the prestige. Yes. And so you can go to law school free. Spencer, go free. Go free.

Yeah. 100%. Absolutely. Shane is with us in New York City with a similar question. Hey, Shane, how are you? Hey, how are you guys doing today? Great. How can we help?

I wanted to speak to you guys on the phone. Okay, you're going to speak directly into your phone. It's muffled. Oh, sorry about that. Is it better now? Yes, sir. Thank you. All right. So last year I was going to a university,

which my parents took out a loan for about, it was a parent plus loan. They took it out for about $22,000. And I made a decision to change the schools to a cheaper school, and I was making the payments myself to that school because I did not want to go into debt. Unfortunately, my job had a little issue, and I'm out of a job for about two months now,

but I'm coming back next month. So in order to cover the rest of the year, I ended up taking out a loan to cover the rest of the school year for $5,500. That was the loan I took out. And the thing is, though, is that personally speaking, I would not even go to school. I have very traditional parents who say I must go to school as long as I live under their household, that type of rule.

And only because I'm not sure what I really want to do yet in life. So I don't see the point of spending money to do something I don't even know what I want to do yet. What are you studying? Finance. And you're in your second year? Yes. Okay, and now you're at a less expensive school than the first year.

Yes. Okay. And you're how old? I'm 19. Okay. And you're saying that you don't know if you want to do this, if you want to be in the finance world when you graduate college? Yes, because my heart has been set out for real estate for the past three years. Okay. But my parents, again, under their household, they want me to do something that makes me go to a school and something that they think will pay a lot. Okay.

And I know for a fact you don't really need a degree to become a real estate agent. They want me to get a finance degree or a computer degree, one of the two. So respectfully saying, I do not believe it is right for the parent to tell their son or daughter, their child, what to do with their life. I don't see there is a problem with your parents saying, hey, if you live up underneath this house, you have to abide by these rules.

That's respectful. That's their house. But I think right now you have to make a decision for yourself. What do you want to do at the age that you're at if you're saying hey I want to be in real estate I've never done real estate Dave can speak into that but I know it's a while before you generate any income I do believe some form of education is important for whatever you're going to do but I think right now especially taking out money no you need to stop that process but you do need to be working if you're going to do. But I think right now, especially taking out money, no, you need

to stop that process. But you do need to be working if you're going to quit college. But I think most importantly, man, you need to spend some time and identify what it is that you really want to do. Not just real estate, but even long term. If that is real estate for the next 20, 30 years, okay, cool. But I think you need to go out there and experience life a little bit, maybe get you a solid job that can provide that you can move into your own apartment, maybe with some roommates spend a year to just dib and dab out

there in different things. Once you identify what that is, then what our career expert here, Ken Coleman says, then figure out what does it take to get to that. But right now, I would say pause because if you're saying you're going to school and you're borrowing money, you're paying for to get to that. But right now, I would say pause.

Because if you're saying you're going to school and you're borrowing money, you're paying for something that you really don't even really want to do, pause. But then when you pause,

you got to have a game plan because now your parents won't allow you to stay there. Yeah, for sure. How old do you say you are? I'm 19, sir. Okay. Well, here's something to consider.

How many 35-, 45-, and 55-year-olds buy a house from a 19-year-old real estate agent? That's going to be a hard road. Yeah. It can be done. I actually did it, but it was a hard road. Yeah. It can be done. I actually did it, but it was a hard road. I mean, I had my Magnum PI mustache and my disco suit on, and I'm out there trying to sell houses at 18 years old, 19 years old. I sold a few, but it's just because I worked my butt off, and I was bold and everything else.

But it's a very difficult track to start residential real estate at 19 years old. It can be done. I'm not saying it's impossible, but I do want you to know that that's a little different than you rolling in there at 29 in terms of credibility and who you're dealing with and how you get started and all that. So what I would think is that maybe we address a couple of other things, and let's take a step back. I'm not disagreeing with Anthony.

I'm adding to it. Number one, we're both saying no more debt. Yeah. Okay, for school. That's silly. But this school that you're in now is affordable. You just got to get six jobs and be able to pay your way through. That's what it amounts to.

And so that's just what's necessary the um uh uh you know and so you're going to pay your way through now that's step one then step two is do you want to continue to study finance uh i got a degree in finance with a specialization in real estate that was what my degree was in and that's how i end up you know someday a thousand years later sitting here but uh and it did and it served me well the academic uh you know the underpinning of learning statistics learning marketing learning accounting the things you learn to do finance are those are good classes that are very usable in almost any business situation and so uh whether you're the owner of a small business, whether you're in real estate,

whether you own a company that does X, Y, or Z, or whether you go to work for somebody in almost any industry, they're going to need people that know those things. So I don't mind you continuing with a finance degree as long as you pay cash for it, or switching degree fields and pay cash and stay at home. But you're going to get six jobs to do that, and you're going to have to rethink this. Right now, you just feel like you're being pushed around by everybody involved,

and you're just being, you know, this just feels random, and you need to get the randomness out of it. Absolutely. This is The Ramsey Show. We'll see you next time. In the lobby of Ramsey Solutions on the debt-free stage, Lee and Michelle are with us. Hey, guys, how are you? We're great. How are you, Dave and Anthony? Absolutely.

Better than we deserve. Welcome to Nashville. Where do y'all live? Cartersville, Georgia. Okay. A little north of Atlanta, then. Just a little bit. Welcome all the way up here.

And up here to do a debt-free scream, how much have you paid off? $305,000. I believe it's $968,000. Excellent. Excellent job. How long did this take? 18 months. Good for you. Wow. To the day.

And your range of income during that 18 months? Between $190 and $210. Wow, you guys are killing it. What do you all do for a living? I'm in the insurance business with my brother. We have an insurance agency in Cartersville. And Michelle? I'm a parish administrator with a church. Oh, wonderful well done you guys so what kind of debt was the 306 a little bit of everything uh mortgage we actually had two mortgages because we

are actually celebrating our two-year anniversary today almost to the minute with you guys and actually we're podcasting with y'all when we decided to do the thing but um it's mortgage credit card some tax debt just a little bit of everything wow okay so you paid off your house yes i'm looking at weird people two houses two houses oh double weird with being newlyweds when we got married i had a house he had a house. He had a house. So we sold my house, paid that one off, and used the profit from my house to do our three to six months, and then threw it into the mortgage of his house. Oh, good. Yeah.

Good. Okay. So we're just cleaning up. Yes. Yeah. Yeah. Very good. Very good.

Starting a new marriage the way you want to start one. Amen. We actually started on our honeymoon. Wow. We were in Chattanooga for our honeymoon, and we stopped to get gas. I was the only one with a credit card, and we cut it up in the gas parking lot and threw it in the trash can. Was he listening to the podcast going down the road or something? Yes, that's exactly right.

Oh, my gosh. Then he ordered the Total Money makeovers while we were sitting there in the parking lot. By the time we got home, no, we did it a couple of days before. But by the time we got home, they were sitting in our driveway waiting for us to start them. Wow. So, yeah, it's been a lot of fun. We've had a great time. Great, great time. So, just getting married and being excited about a fresh start and all that said, okay,

we've got to address this money thing, and then the podcast just pops up. Well, we, no, that's not true. We dated with you guys a lot. Instead of listening to music, we would listen to podcasts on our dates to and from. I really thought he was weird when he looked at me and said, you want to listen to Dave Ramsey? And we're coming home from a date. That is weird.

I went, who? Yeah, I love Dave, but that's real weird. I learned to love Dave even more, though. Actually, all of you guys, I drive an hour to work every day. An hour to and an hour from. Which means you're a mile from home in Atlanta, right? Yeah. Yeah.

Pretty much. Yeah, yeah. A little too much. But that's changing next week. So that's a good thing. Oh, wow. But you guys really inspired me in the afternoons to go home and find more stuff to sell on eBay, more stuff to put on Facebook Marketplace, more stuff to just get rid of so you got rid

of this. So once we got to $83,000, I said, I need something visual. And we did a paper chain that every change is $1,000. And it hung all the way across our breakfast room. And our grandkids would come in and see it. And our kids would come in and see it. And every dollars we um paid off we cut a link and it's a new set of kitchen cabinets or it's going to italy or it's doing something that we knew that thousand dollars would help us do so when we got to that point the last one was freedom and so we have kept all these

little pieces of paper and we just start pulling them out and what are we going to do because you helped us get here so thank you so much thank you thank you so we were just under bondage with a chain yeah and that was just a really good visual for us but it was also a witnessing tool for us to to not only witnessed about what the lord's done in our life but also witnessed what your program can do for other people. I mean, we were just talking to a couple off set here just a minute ago, and they're in their 20s. It would have been nice for us to start in our 20s,

but we're in our late 50s, and, you know, it's never too late. That's it. It's never too late. Never, never, never. You guys are impressive. Very, very well done. Thank you. We have a good time.

We're an ELP for you guys. Oh, okay. But I got to tell you, I always wanted to be one, but I knew I did not want to even think about it until I got my house in order. Wow. And once I got our house in order, then I made application and went through the interview process and met some great people and our agency is now an elp for you so on the pnc side on the pnc side very cool yeah well i'm honored to have you as part of the team man that's incredible thanks thank you well done well done how does it feel to have not a payment in the world oh my it's like um nothing i've ever felt

before truly i mean i love being married to this man because he is my leader and he is the head of Oh, my. It's like nothing I've ever felt before, truly. I mean, I love being married to this man because he is my leader, and he is the head of our household, and he got me into this craziness, but I don't know of any other way that I will want to live the rest of my life. Yeah. So thank you so much. We spent our anniversary in Nashville, and I told her, I said, baby, the best part about it, everything we've done, while none of it was extravagant, I said, there's no bills waiting for us when we get home.

Right. And there's no money that we've got to send to anybody else other than just our normal power bill and things like that. Love it. Vacation is not going to follow you home. Never. Never again. Never, never, never, never. Never, never, never.

So good. No. Well done. It sounds like your life is a vacation, though. Much, much so so it is we each day is um a breath of fresh air yeah it really is yeah to not have that load waiting on you when you put your feet on the floor and know that you're having to go to work to pay that load off yeah is amazing yeah so or the air conditioner busts on the way home, no big deal. So you had 18 very intentional, very intense months.

What was the toughest part of that? You know, it really wasn't that tough. And I don't mean to say that. I mean, it was a lot of hard work. You didn't do a lot of things.. You didn't do a lot of things. But we did not do a lot of things. And we got a lot of people who said, well, come on, you can just do that a little bit. Or go buy yourself a new set of golf clubs.

Or go do this or go do that. And I'm like, no, we've got other plans for that. That money's going somewhere else. And I said, I can do that later. Or she would do the same thing. The envelopes, they were my best friends. And I would be at lunch with a girlfriend, or we'd go shopping, and I'd pull out an envelope. I'd go, nope, it's going to have to wait.

I can't get those shoes. Or she'd say, where do you want to go to lunch? Well, let me look. And I'd look and go, well, I got seven bucks in my meal envelope, so let's figure out where we're going to eat. And he handed me this i looked over there earlier and i said i love the new um wallets and i said but i wouldn't give mine i wish i had it it looks like it's just falling apart it's leather it is it's just falling apart and envelopes i'd get to the point that I didn't have any extra envelopes and I'd write all around them.

You need to put that in the chain link zip bag and keep it all as a memory for the grandbabies. And then go get you a nice envelope system that says Rachel Cruz on it. I really like the new ones over there. You've earned it. You've enveloped like no one else.

Now you can envelope like no one else. Alright. It's Lee and Michelle from the Atlanta, Georgia area. $306,000 paid off in 18 months, making $190,000 to $210,000. Count it down. Let's hear a debt-free scream.

3, 2, 1. We're debt-free! Woo! Woo! Woo! Yeah! Wow. That's some happy newlyweds. Absolutely.

Look at that. I love it. That is so fun. That is so fun. Well done. What rock stars, man. So you're out there at the gas pump, and you're listening. Did you hear what she said?

She cut up her credit cards at the gas pump. At the gas pump. Made the decision never again. And you're listening right now, and you're going, well, what about you? When are you going to do it if you're listening to us right now, what's your problem? When are you going to do it? It's there for the taking, baby. You just got to decide. You can do it. They can do it. It's possible. This is The Ramsey Show. Thank you. Anthony O'Neill, Ramsey personality, number one best-selling author of the book Death Free Degree,

is my co-host today here on the Ramsey Show. The phone number is 888-825-5225. Tom is in San Antonio. Hey, Tom, how are you? Good. Thank you, Dave. I had a question about a property that I sold a year ago. We had an agreement. They made a 10-year loan, and I'm financing it for them. But we had an agreement that they would be able to pay it off after two years.

They've paid up to exactly one year so far, and I just want to know now they're wanting to pay it all off. And if they pay it all off now, I think the interest I would lose would be about $45,000. And I'm wondering if I should go ahead and take the money and invest it or stick out for the next year. Wow. So you're charging what kind of interest rate? Six and a half percent.

Wow. Okay. And so this is like $800,000 loan? The actual loan amount was $708,000, $750,000, so about $709,000. Okay. So $45,000 of the interest for one year at six and a half. But they've been able to get a loan better than six and a half. Well, they wanted to pay it off sooner anyway,

and my attorney decided it would be beneficial if we say, well, you can pay it off early, but not until at least two years. And they agreed to that. So I don't know if they're getting a loan somewhere else or they've just got the money. It's a commercial property, and when I owned it, the occupants were paying $8,000 a month rent, and the people who bought it, their payment to me is about $4,700 a month. They they're the people who bought it their payment to me is about 4 700 a month

they've gotten another loan okay um just took them a while to get a bank uh i didn't even think of that but i guess that would make sense with six and a half percent interest they probably got a much better interest rate. Yeah, it wouldn't take much in a 3% world. I'm trying to think what I would do if I found myself in this case. Okay, here's what's running through my head. I'll just go ahead and say it all out loud so you can kind of calculate it with me, Tom, okay? Sure. Number one, there's the $45,000 that you would have gotten had they taken it all the way so you can kind of calculate it with me tom okay um sure number one there's the

forty five thousand dollars that you would have gotten had they taken it all the way through two years uh what's the right how much did they put down they put down uh the selling price was 750 okay so you've got a loan almost equal you've got a loan very close to equal to what the property's worth right so you don't want this property back no no the main reason i sold this because it's in el paso and i'm 550 miles away in san antonio you don't want it back i mean if they had put down 200 000 and you could take it back for 500 and do it again you'd do i'd take that right but you don't have any equity here you're not going you know so they're not threatening to hand you the keys but i'm just saying uh that that kind of tells me how much hardball you want to play not much because you don't want this thing back we want to work this out okay so what i would do is say um i was supposed to get another 45 000 out of you guys in interest um i will let you pay

it off early and negotiate a prepayment penalty that is not 45 000 but less i thought about that and i was thinking maybe throw up maybe half exactly what i had in mind i might even say 20 say if you you know if you'll pay me half of what you were going to pay me, they're probably, if they're getting 3%, that's still, it doesn't really save me any money. It doesn't save me money. Close enough, though. I mean, 15 to 20, if you could get the information out of them

in the discussion as to what they're doing and what their interest rate is, then it would tell you how much it's going to save them. Like, if they got a 2%, then they'd save 4.5%. You can calculate out, don't take the whole 4.5%, but take a chunk of it, right? But if they're getting a 4% and they're 2.5% and the savings you're offering them is equal to 3%, they're not going to do that.

I don't know how I'd find that information. I would ask, yeah. You think they would just tell me? Yeah, just say, why are you paying it off? Oh, you got another loan? Cool. What was the rate you got on the new loan? I'm glad you were able to get a better rate because I want to work this out with you.

I don't want to charge you the whole interest as a prepayment. I want to let you go, and I'd love to have my money. I've got some other stuff I can do with it. But let's work this out for a win-win where we kind of meet in the middle. Okay. And don't charge them a penalty that is greater than their savings. Right. There you go.

Right. I get it. Okay. So if we come to an agreement, then I should probably have my attorney drop the thing. Yeah, it should be a one-page thing. It's a release. It's really a release provision. I agree to release the thing, and I'll give you a deed release on this.

I'll release and cancel the note for a payment of X plus X penalty, the actual principal balance plus a penalty of $21,000 or a penalty of $17,000 or whatever you come to agreement to, right? Yeah. That seems fair. They're getting out, and you're not going to right yeah that seems fair yeah they're getting out and you're not you're not going to take all of it um because i bet you they're not saving 45 000 by the way by doing this year early they're thinking that you're just going to go hey i want my money which most people do by the way um so nothing wrong with what you're doing i'm trying to take

a little a little tougher stand uh just because it sounds like they have a real reason to do this. But there's nothing wrong with asking. I just like having a great conversation because if I get information, I can design a deal that's good for them and good for me. Right. I see. I'm not trying to screw them.

I'm just trying to design something because if I was trying to screw them, I would just go $45,000, right? And they're not going to pay you off. Then they're going to sit there another year. Right. Because they're not – I'm guaranteeing you they didn't get a rate low enough on a commercial building of $700,000 loan cheap enough that they're saving 50 cents on the dollar here. Now, Dave, let me ask you this question. Would it be a bad idea?

Let's say if they come back and say, yeah, we got an interest rate for 3.5%. Would it be bad to just renegotiate the contract with him and say all right i'll go down to three percent won't you all sign up at least if i need i'd let them go and get their new loan because they might lose the loan over the coming year or they might how the rates might tick up over the coming year it could change the deal i got but that wouldn't be a bad thing either if it was a longer than one year yeah i might consider just lowering my rate I got property. I will sell a property cheaper as long as I get all my money than if I carry a note back. The only way I want to carry a note back is what we used to call in the business happy,

happy loans. Okay. And a happy, happy loan is you get a good enough interest rate, which he did. He got a great interest. Six and a half in this market is a booming interest rate, right? And you get enough of a down payment that you're happy if they pay because you love the interest rate, and you're happy if they don't pay because you're happy to take the property back. Yep.

And so if you put $200,000 down on this deal, and I'm getting it back for $500,000, it's worth $750,000, I'm not mad about taking it back because I can make money on the flip again. Yeah. But he's not got any margin on taking it back because he didn't get enough of a down payment i like it now here's another question david i'm asking because i'm learning i'm learning on the ramsay show um and charge it to my head if i asked the wrong question i'm asking and learning i'm debt free got my money you know all that and if i go out there and do something like that and charge someone interest do you suggest that people know that or not? No, I would not do that.

Okay. Because I think you can take that cash and make more than six and a half on it. I got you. Either by buying more real estate, you can make a better rate of return than that if you're careful. Yeah. And or investing in good mutual funds, you can make a better rate of return than that if you're careful.

There you go. I thought so. And while that property is going up in value, your note's not changing. It's actually going down. So you're better off, if you're going to collect payments off a building, you're better off to collect rent and be the owner. Yes. Than you are collect payments off a note. I thought so.

And so, but if you're going to carry a note, then get a good high interest rate and get a good strong down payment, happy, happy loan. Happy on both ends. But I don't recommend that. That's why I don't carry it. Yeah. Because I figure if I'm going to sit here and worry about whether somebody's going to pay me monthly, I'm going to worry about the renter while this thing's going up in value. Right? And I get the upside.

Yeah. So you don't get any upside once you step out of the ownership role and become the bank. Thought so. Just wanted to ask. It's a good question. It's a good discussion. And it's something to think through. This is an unusual question in these times because interest rates are so low,

very few people carry back on returns in this situation. That puts this hour of the 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.