The Ramsey Show - App - Should We Finance Solar Panels? (Hour 3)

Episode Date: September 8, 2021

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Welcome to the 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. George Camel, Ramsey personality, is my co-host today. This is The Ramsey Show. Thank you for joining us.

Open phones at 888-825-5225. So, George, 30 years ago when I started teaching this stuff, I was first teaching people how to get out of debt, live on a budget, be generous. Live on less than you make. So you have a plan. You avoid debt. You save money for emergencies and later for investing. And all of those principles work, but people kept saying, which one do I do first? And so I started laying out, well, you should do this first and that first.

You should have an emergency fund before you start your 401K. And then I figured out it's easier to have an emergency fund if you don't have any payments and so you need to get out of debt first because of course i learned my lesson the hard way going bankrupt and getting out of debt and uh learning how important it was to be debt free as a process as a part of building wealth so all of that started to formulate after a few years of teaching in various settings and what became Financial Peace University. It used to be called Life After Debt. And it started becoming what we now call the Baby Steps.

And the interesting thing is that now the Baby Steps have gone into the Total Money Makeover book, which has sold almost 10 million copies. And they have become the proven plan, the shortest distance between where you are now and wealth. Where you are, if you'll live like no one else later, you can live and give like no one else. What is the shortest distance? And we need a path to run on because the way you eat an elephant, it's overwhelming. Do I do my 401k with a match or my kid's college? Or do I have an emergency fund? Or do I pay on this 18% credit card debt?

Or, or, or, or, or, and nothing gets done. You get paralysis of the analysis. You get frozen. Absolutely. And this step, these baby steps have worked for me. They've worked for millions. And it's really simple. If you do it, they work.

And it all starts with baby step one, having this foundation, saving $1,000 for a starter emergency fund. This is just a small buffer between you and life before we start tackling the debt. Exactly. And if you have $1,000 already, great. Just set that aside. That's your baby step one. Any money you have that's not retirement, anything you can sell that is not retirement, you're going to liquidate it.

If it's not retirement, you've got some stock over here that Grandpa left you. You've got a gold bar under your bed. I don't know what it is, but you've got any money that's above $1,000. Maybe you've got $10,000 in a savings account. That's $9,000 you've got that you don't need past Baby Step 1. We're going to put it all on Baby Step 2, and Baby Step 2 is the famous one. That's the debt snowball where you list your debts smallest to largest. You pay minimum payments on everything but the little one, and you attack the little one with a vengeance.

Side note, Baby Step 1 should not take you more than 30 days maximum. You need to work extra, sell some stuff, have a garage sale, put the kids on Craigslist, whatever you got to do here. Let's get it done. And, you know, we're going to get busted into this, get $1,000 quick. Baby step two, you should be debt-free but your house. Now, you may have to sell a stupid boat. You may have to take an extra job.

But most people that have followed the Total Money Makeover baby steps in Financial Peace University are debt-free inside of two years. Yeah, and that's with doing it with some gazelle intensity like you talk about in Financial Peace University. And once you pay off all that debt, now you've freed up all those payments, right? You have that income back in your life. Think about what it would be like to have no payments but a house payment. Wow. We're breathing easy. And then we can move on to baby step three, where we save three to six months of expenses in a fully funded emergency fund. This is the final buffer where we

say we're never going back into debt because we are the bank now. Yep. Grandma's rainy day fund. Why? It's going to rain. Dave, you need to be positive. I'm positive. It's going to rain. You need to be ready when crap happens. There's a pandemic coming around every corner. There's something coming, and if you have $20,000 cash in the bank, three to six months of expenses, whatever it is, and you have no payments, you are the third pig in the three little pigs, the one that's in the brick house when the big bad wolf comes. You're ready for life. You're ready to go. Now you're ready to build wealth, but you just now have gotten up to ground zero. You've just now gotten up to even when you have that emergency fund and you're debt

free. Now you're ready to build wealth, and in baby step four, you put 15% of your income aside into good growth stock mutual funds in retirement plans. Start where there's a match. Beyond the match, always do Roth, and if you've exhausted Roth and match and still are not to 15%, then go on to a traditional 401k or IRA. But do Roths before traditional and do match before Roths. It's mathematically in your favor to do that up to the 15%. Don't do 20%. Don't do 11%.

Do 15%. Don't do 20%. Don't do 11%. Do 15%. While you are doing Baby Steps 4, you're also going to be doing 5 and 6 simultaneously. Absolutely. So Baby Step 5 is where we're saving for our children's college fund. And this is going to look different for everyone. There's no set number here because it really depends on your situation. Did you have the baby last week or is the baby 18?

That makes a difference on how much you need for college, right? What you got to do for college. It's like, is this an oh crap moment or hey, we're going to be diligent and safe. Did we wait almost until too late? Now they have to go to college debt free. They cannot participate in this epic student loan system failure that is called America right now. It is horrible out there. Do not let your kids go in

debt. You do not have to go to debt. Go to community college for free for two years. Go to in-state school. Work six jobs. Get scholarships. Our student loan problem is a parenting problem. Mom and dad let kids sign up for crap they couldn't afford. Bad mama. Bad daddy. They got to have the conversations that's where it starts and there's a reason you say baby step four invest for yourself before the kids because there's a hundred percent chance you're going to retire there's a 50 50 chance or less these days that your kid's going to go to college and graduate yeah yeah this is this less than 50 chance they're going to graduate so uh that this is important so while you're doing 15 you do whatever you need to do

for your kids college whatever you decide to do for your kids college beyond that if you can find any money you do that on baby step six and that's pay off your house start chunking on the house now when you're in one through three you are so intense your friends are freaking out your grandmother thinks you need counseling you are gazelle intense like a gazelle running from a cheetah. When you're in four through seven, you're not intense anymore. You are now intentional. You're just doing it on purpose. But you're no longer on beans and rice.

You're on beans and rice, rice and beans, scorched earth on one through three until you get those three things done. Now, get that house paid off. The average person following this stuff is paying off their home in about seven or eight years. Now, that tells us that the whole program is taking about 10 years, and the average baby steps millionaire, the average everyday millionaire that we've studied, we're finding them become a millionaire from the time they start with intensity followed by intentionality, become a millionaire in about 10 and a half years.

Yeah. 11.2 years, 10.6 years about 10 and a half years. Yeah. 11.2 years, 10.6 years are the two numbers we keep running into. So this is completely possible. Yeah, and once you pay off that house, it's time to build wealth and give outrageously in Baby Step 7. That's where it ends. Yeah, you will be a millionaire shortly after your home is paid for if you don't at that moment. And then you continue to build wealth, and you raise your generosity, and you continue to build wealth, and you raise your generosity, and you continue to build wealth, and you raise your generosity. And you enjoy the money at that point.

That's where it gets fun. Just giving it away. These are the only three things you can do with money, and you should do all of them at Baby Step 7. And that's the route you're going. That's where you are. That's who you are. That is the Baby Steps.

This is the Ramsey Show. People all over the country are discovering a faith-based and budget-friendly way of meeting health care costs through Christian Health Care Ministries. Christian Health Care Ministries, or CHM, is a non-profit organization that helps members We'll be right back. CHM is a proud sponsor of Dave Ramsey Live Events. George Campbell Ramsey personality is my co-host today. Jason is in Washington, D.C. Hi, Jason. Welcome to the Ramsey Show. Hey, George.

How are you guys doing today? Better than we deserve, brother. What's up? Oh, man, I've been pondering purchasing a home here. I've been looking into it now for about six months or so. Actually, it was under contract and got out, but now I'm just pondering the whole idea over again and wondering if it's even something that I should get into now or if I should kind of hold off for a while and save some more money. So just looking for some guidance there. Are you out of debt?

So I have $16,000 in student loan debt, which is currently not occurring interest. I don't believe it starts again until February, I believe. That doesn't matter. You need to pay it off. How much money do you have saved? About $55,000. Is that your only debt? I have a vehicle, which I purchased a few months ago.

I put 20% down on. I owe about $23,000 on that. Okay. We teach folks, Jason, not to buy a house until they're debt-free and have an emergency fund of three to six months of expenses plus a down payment. You do not have that much. No, you do not need to buy a house right now. You need to pay off your car, pay off your student loan,

build an emergency fund, and then build a down payment how much of a down payment tell me 20 percent that's kind of i think what you i'd love for you to have that because you avoid pmi private mortgage insurance but on a first-time home purchase i don't yell at people for having less than that yeah but i will yell at you for having a car payment and a student loan when you buy a house you're asking for trouble right right and i'll yell at you for having a car payment and a student loan when you buy a house. You're asking for trouble. Right, right. And I'll yell at you not only for the entertainment value, but just also to help you. Now, I understand.

Please. I enjoy the entertainment as well. I'm messing with you, but it's all good, brother. The thing is this. If you buy a house with payments, you are inviting Murphy to move into your spare bedroom. Your transmission will go out the first week. Yeah. I could probably, even if I don't

knock it all out at once, I could probably kind of chunk away at the student loan debt in the vehicle over the course of the next year. No, no, no. You misunderstood. You have the money in the bank today to pay them off. You're saying do it right now. By the end of the day, brother. Moments after you get off the air, you should be debt-free.

Gotcha, okay. And then build an emergency fund of three to six months of expenses. You ever heard of us talk about the baby steps? I have. You know, I tuned into you for a while, and then I stopped, and I just happened to turn it on today. I've been listening for about the past two or three hours, and I wanted to give you a call. Well, you heard us describe it in the last segment, right? I did. I did. I actually took a couple notes. Oh, that's good. Well, you know, I took some notes here, too,

and you got $55,000 in cash, and you have $39,000 in debt, which means you're debt-free today with about, what, $16,000 left over, which may be an emergency fund. I don't know what that looks like for you of three to six months of expenses. Only then are you going to start at zero and start saving for this down payment. So I know it hurts because you've been saving up this money, but that money is not down payment money. That money is now debt money.

That money is going towards your emergency fund. And then I want you to start saving up, like Dave said, 20% towards that down payment. And on top of that, I want you to do it within these parameters. I want you to do it on a 15-year fixed rate mortgage where the payment is no more than a quarter of your take-home pay.

What that's gonna allow you to do is do the other baby steps and have margin in your life to where you can actually enjoy things. Perfect. That's exactly what you should do. Lena is with us in Tucson, Arizona. Hi, Lena. How are you? I'm doing well. How are you? Better than I deserve. What's up? I am a little bit at odds with my husband.

My husband has been bit by the solar bug. The solar bug? I didn't know that was a bug. Are those loose in Arizona? Sometimes. No, he is determined to get us to get solar, and I disagree as it would result in a loan because we don't have the finances to do it outright.

And your question is what? How do I convince them it's a bad idea? Why do you think it's a bad idea? It bothers me. The whole idea of having a loan just creates more financial pressure, and I feel, like, stressed, and I'm the one that does all the books. Yeah. So it is, I believe in solar panels.

I endorse solar panel companies in several of our 600 markets that this show airs in and I am not against solar at all. As a matter of fact, the solar technology is greatly advanced over what it was 10 or 15 years ago. And so the quality of it, it's like batteries in these battery-operated cars. You know, the whole thing's different than it was a few years ago. The batteries wouldn't last 10 minutes. Now they last, you know, for 300 miles.

Same thing's true in solar. The efficiency has gone way up. So they're excellent products. There is not an excellent product on the planet that I will tell you to buy with debt. Bad idea. Well, wait a minute, it pays for itself. Yeah, over five years, during which time the solar panels become worth zero. They do not add value to your home.

There's no market study that shows they add value to the home equal to their cost. So the only way you make your money back is on savings on utilities, and if you've got a five-year or less break-even period, that's a pretty sweet break-even period on solar. And the only way you invest in something with a five-year break-even period is with cash. Yeah, and his biggest argument is that we'd be trading our $400 electric bill for a $150 loan. No, that's not true, is the problem, because the value of the stinking things is going down. You sell the house. The loan is screwing up your house sale.

You've got a mess on your hands. He's only thinking about this month. He's not looking at the overall picture. It's a very bad analysis that leads people to finance solar panels. Don't do it. I agree with you. I wouldn't do it. I agree with you. I wouldn't do it. Anything you want to add?

No, I mean, the biggest thing here is I don't know how much debt you guys have, Lena, but I want you guys to realize that debt freedom is just a lifestyle that you're going to live, and that means we're going to figure out a way to pay for this thing in cash. Now, I mean a sinking fund for six months that we put this money towards in order to pay for that in cash. That's the only way I want you to get these solar panels. Only way that makes any sense at all. All right. Brittany is with us.

Brittany's in Madison, Wisconsin. Hi, Brittany. Welcome to the Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up? So my husband and I are thinking of, well, we already signed up for the LLC for the cleaning business and everything.

But my question was, should we have like the $1,000 savings for that? We currently have no debt except for our mortgage, and we do have three months of expenses currently saved up anyways. Okay, your business finances are separate from your personal finances. Yeah, this is our personal finances, but so far we are just going to use money that I've been making from my current job to fund this business. Why would you have to fund a cleaning business? You should make money from the first day. Yeah, we just started with the LLC, so we're just starting to try and get clients now.

Yeah, well, the LLC is not even necessary, but that's okay. That's done, and that's behind you, so now go get clients. You shouldn't have any expenses to set up a cleaning business. Okay. Go make some money. Okay. And then let's worry about this. And no, you should not quit your job to start a cleaning business.

You should start a cleaning business on the side, and when you get your cleaning business income up until, up close to what you're making, then you can afford to quit your job. Until then, it takes too long. Okay, thank you. Yeah, you could get yourself in trouble because you end up being desperate looking for clients and taking clients you shouldn't take, taking jobs too cheap, everything else, because you're running on desperation mode.

Yeah. Really important to get that boat close to the dock. Oh, yeah. And there's a lady in my neighborhood who does this exact thing. She's got a day job, but on the weekends, she's cleaning houses and at nights. And so she comes over once a month, and this is something that she wants to's got a day job, but on the weekends, she's cleaning houses and at nights. And so she comes over once a month and this is something that she likes, she wants to do as a side hustle. And she's going, maybe I'll do this full time, but you've got to get enough clients. Maybe that's in a neighborhood Facebook group where you're at, but you can do this. It's just

going to take some time. And like Dave's saying, I want you to get this boat nice and close to the dock. So it's not a leap of faith. This is the Ramsey Show. I'm just sitting here drinking my coffee. Open phones this hour. This is the Dave Ramsey Show. The Ramsey Show. Thank you for joining us. George Camel is our co-host in the lobby of Ramsey Solutions on the Debt-Free Stage with a question. Kathy is with us from Alexandria, Minnesota.

Hi, Kathy. How are you? Hi, I'm good. Good. How can we help? I have a question about the budget. I have farm rent that I get every spring, and if I put it into my budget, into my income in the spring, I can't zero out my balance at the end of each month. So how do I put that in there?

Divide it by 12 and put it in each month. But then some months I have higher expenses than other months. So I'm not sure how to do that. Do you have other income that you guys actually live on, and this is just like rental income? Yes. I have Social Security and pension. And you guys live on that? Pretty much, except for some of the bigger things like income tax and some insurances.

Okay. All right. And those are kind of once-a-year things? Yes. Okay. So probably what I would do is just set your budget up on everything but the farm income and then what i would do with the farm income is what sharon and i do when we have a lump sum coming in like for instance a publisher sending us a check on a book so a

royalties check okay so similar situation we get this big check again we know it's coming we know it's coming, we know about what it is, then what we'll do is we just spend that one time on paper. And so that means we're going to probably put some of it in investments. We're probably going to set some of it aside for taxes. In your case, we're going to set some of it aside for giving. We're going to set some of it aside for, what was the other one? You had insurances. Insurances. Yeah, some stuff that you're not picking up in your monthly budget,

but you know when that check comes in once a year that it's going to have names already on the dollars but it doesn't necessarily have to be monthly expenses because if you disperse this out one twelfth each month if you put in a savings account and put one twelfth each month into the budget you're going to be turning around and pulling it back out, saving up for the taxes, and pulling it back out and saving up for the insurance. So we're just, you know, it's just a dog chasing its tail then. So instead, what I would do is just say, I'm going to take this one check and give every one of those dollars a name and set it over here with those dollars named.

Now, what you don't want to do is just let it sit there miscellaneous. Okay. Because if it doesn't have a name on it, it just disappears. Right. And every dollar still needs an assignment, just like in a monthly budget. Okay. That makes sense? Yes, it does. Good way to go at it. Thanks for asking. Thank you. That's a cool question. Yeah, it's really an irregular income question. We talk about this with every dollar, you know, with sinking funds and things where you go, hey, I know that insurance is going to have to get paid out in December. So we're going to save up for those 12 months.

So that's one way to do it. Or you can just go, hey, we're going to give every dollar a name coming out of this lump sum. Yep. That's the way to go at it. Exactly. Good question. Open phones here at 888-825-5225. Bernie is with us.

Bernie is in Massachusetts. Hi, Bernie. Welcome to the is in Massachusetts. Hi, Bernie. Welcome to the Ramsey Show. Hi, Dave. Thank you so much for taking my call. Sure. What's up? Well, two years ago, we had a paid-off house and about $4,000 in the bank and no debt.

And then our house burned down. Oh, no oh no yeah it was a total loss wow um how traumatic yeah oh yeah we even lost our pets we didn't even know who's like it was oh my god it was bad um a couple days before christmas you know standing there in 17 degree weather. Wow. But anyhow, we were well insured and we have since rebuilt. And, you know, I'm a cheapskate. So when we were going through this process, I was extremely deliberate and frugal. Bought some of my light fixtures at architectural supply, salvage places, whatever. So anyhow, we came out pretty good. We now, again, have a paid for house, but I now have about $100,000 extra because I bought used furniture. I didn't run out to the furniture

store and replace everything I own with brand new stuff. So I would like to know the best way to use that money. Wow. We didn't have any retirement accounts beforehand, just the $4,000. Right. How old are you guys? My husband is 69, and I'm 62 this month. Okay. Sounds like you need it as a nest egg, doesn't it? Yeah. The outside of the house is still not finished. I mean, like the ground, we've still got like a dirt path to the front door,

and we haven't paved the driveway. He walks right now. We're very low. No. I don't know if I should hang on to the money. You need to set a budget to finish the house. Well, I haven't done except the outdoors work. Can you finish the house for under $100,000?

Oh, sure. Okay. Oh, sure. Finish the house. Finish the house and invest what's left. Okay. What, like a mutual fund? Yep. Your house is not finished, though.

So you don't have $100,000 left because you don't have a driveway. And you have a dirt path to the front yard. You're not a hillbilly. You need a dadgum sidewalk out there. Well, yeah, I think we could finish that up for probably about $20,000. Okay. Then you've got $80,000 to invest. Is the house actually finished then?

Yes, we're living in it. No. When you put $20,000 in the driveway and the sidewalk, are you done? Oh, yeah. Okay. Do you have income from any other sources? My husband collects $1,600 a month in Social Security. I have not filed yet for Social Security.

Even though I'm 62 this month, I'm exploring. I don't know if I should file yet or not. And one of the things we did when we rebuilt was I looked at the garage and the size of the garage and thought, boy, that's a lot of space above that garage. So we put in an in-law apartment when we built and I have a son who's renting from us. So we're getting an extra $600 a month from the in-law apartment. Okay. Well, it sounds like you need to invest the $80,000 and create some extra income for you all to live on. Yeah, and good mutual funds. And sit down with a SmartVestor Pro.

Click SmartVestor Pro at Ramsey Solutions. Select one in your area and sit down with them. But don't do that and have a dirt path to your front door. Finish the house. Because you're going to be living there a long time, and that dirt path is going to be a reminder of the trauma that the fire was. And a fire trauma, losing everything, pets and everything in the house, fire is on that list of one of the ten things

that can put you in the hospital from stress. Yeah, that's very emotional. And, Bernie, like Dave's saying, the point of the baby steps is not to be miserable, and so I don't want you guys to sacrifice a level where you have a dirt path going up to your house and you have college dorm room furniture because you're sacrificing. I want you guys to enjoy the things that you have, and you can do that without going crazy. I mean, it sounds like you're very frugal already, but I don't want you to go nuts on this stuff. So do what you need to do to get the house in order to where you enjoy living in it,

and you can get to the front door, and then invest the rest like Dave's talking about so that you guys can retire with dignity. Now, keep in mind, if you make $10,000 on $80,000, that's $8,000 a year. Okay, so we're only talking about a few hundred dollars a month we're adding to your budget it's not a ton but it'll help some just like the mother in law apartments helping some with the son with the kid renting it and all that and so you just keep taking those little steps but you're going to make these you do not have a big monthly income with all these things added together you still don't have a big monthly income and so you're going to have your your Social Security check is going to start pretty quick because you're going

to need to add that to this pile to be able to live on what you guys are actually making. Unless there's income coming from somewhere that you did not outline for some reason here that we didn't understand. Do you have a rule of thumb for when to take out that Social Security, depending on your situation? Well, in her case, it sounds like she's got to take it out because I think they're starving. It's a necessity. But, you know, if you don't need it, the longer you wait, the bigger the check is.

But, you know, me, I'd get it as soon as I could get it because I want to get all I can get out of the government before I die. Before it runs out, which sounds like it might happen. Yeah, you just never know. This is the Ramsey Show. Our scripture of the day, Matthew 5.16, Let your light shine before others that they may see your good deeds and glorify your Father in heaven. Thomas Paine said, Reputation is what men and women think of us. Character is what God and the angels know of us. George Campbell Ramsey, personality, is my co-host today. David is in Raleigh, North Carolina.

Hi, David. How are you? Good. Thank you for taking my call, Dave. Sure. What's up? So I've got a kind of a complicated question. I bought a wedding ring, Dave, and I'm going to ask my girlfriend to marry me in a few weeks.

Phenomenal! Woo! So I want to try to pick your brain for a second and go over our financial situation. So I am a 39-year-old single dad. I've got a 12-year-old little girl. I've got $67,000 saved. I've got $50,000 in my 401K, $5,000 in my Roth. And last March, I paid off my house, which is around $450,000 right now.

Wow. I've also got $20,000 in my daughter's 529 plan, and I make $75,000 a year. You have done well, sir. Yeah, I've been at the same job for 19 and a half years, and I've been a big fan of yours for the last 10 so you know just kind of really focused but uh here is the uh here's the kicker my girlfriend is 39 years old she makes 211 000 a year uh she makes 38 000 a year on her her rental incomes. She owes $171,000 on one of her rentals, $44,000 on a home equity loan, and then $468,000 on her primary house. Now, her primary is worth about $700,000. Her first rental is worth about $330,000. And she has a $260,000 paid-for rental house already and about $220,000 in her 401K.

So she's doing quite well herself. She's only got $8,000 in cash savings, though, which we argue about that all the time. She doesn't feel the need to have a lot of cash savings, and I'm the opposite. My question here is, I enjoy the rental houses and I see a good future, especially in the Raleigh-Durham area with these rental houses. And I want to attack them once we get married and everything, and we'll probably actually tie the knot within a few months. So do go after this $44,000 home equity loan, then work my way to the $171,000 loan,

and then start tackling the $468,000? Or would you recommend me going to a bank, combining it all, seeing if we can get a better interest rate, and attacking it that way? I'll just work through what's there. Okay. Now, where are you going to live? So we live in the $468,000 house. Well, I will be moving in with her, and then I'll be renting my house.

The $700,000 house says 468 owed on it. Correct, yes, sir. And so yours becomes a rental? Mine's going to become a rental, yes, sir. Okay, so you have two paid-for rentals and a primary that you owe 468 on correct and your household income is going to be approaching 300 i should be around 325 but we also owe 171 000 on another i got that one and then okay no i would knock out the uh uh the the home equity loan that 44 very very quickly probably out of your savings

and then uh then then i'm gonna build up uh from there we'll treat that thing in a credit card debt and then i'm going to build up my make sure i have my three to six months of expenses set aside and then i want you to pay off the primary okay and then the rental last uh surprising i didn't expect to hear that okay so go ahead and start attacking the 46 last. That's surprising. I didn't expect to hear that. Okay, so go ahead and start attacking the 468. Here's why, okay? When crap happens, like pandemics, if your personal residence is paid for, it's a different level of peace than if your rental is paid for.

Okay. Yeah, I throw you there and so it's like okay it's bad for those renters over there because i'm gonna have to sell that one versus oh crud we're in trouble over here at the main castle problem problem king and queen you know and uh it just activates a different part of your soul. And so one of the things I do when I'm answering these questions is I run best case and worst case scenarios through my head. And whatever the answer is, it ought to line up with both. Okay.

And that's, you know, so I like taking extreme worst case. Under what conditions would you be having an oh, crap moment and be the best off because the thing hit the wall, so to speak? Would there be any harm in him selling his house? That's $450,000 to knock out a lot of this debt. There wouldn't be, and I probably would go there, except they make $300,000. And so they should be debt-free on this residence in three years. $150,000 a year in three years 150 a year for three years they got a huge shovel so that's the key that's the key thing here we go you don't

need to sell a hundred grand income i sold his house yeah but to get it knocked out because it's going to take too long to pay off that 468 but they got enough money flying around in equities here that they can do a shell game pretty quick and there'd be no peas underneath. I mean, you could clean up the mess pretty quick. But if you add it all up, it's $700,000 in debt. And they've got $67,000 in the bank.

So, you know, we could call it, you know, $650,000 in debt. How quick can you pay $650,000 off making $300,000? The whole thing's going to be done in five, six years. Yeah. The whole thing. And then future real estate, pay cash.

Exactly. Good point. Good follow-up. Because apparently she's got the rental bug and he does too. Yeah. They love real estate. It's great. It's a good thing.

Nothing wrong with that. But let's make sure we're paying cash as we go. Good point. Chris is with us in Tampa. Hi, Chris. Welcome to the Ramsey Show. Good morning, Dave. How are you all right after the rest i guess either one works for me brother how can i help right so my father recently passed away in january and left me an exotic car um i'm in the process of

getting it running um and my question was it's kind of he bought it originally it's a 1965 356c porsche and he bought it originally brand new it's a gorgeous car um but i'm 140k basically into my house uh i was wondering should i sell that car and be debt free i'm debt free other than the house how old are you 51 okay uh i make enough money and i think I've got enough savings. I've got enough 401K. I've got enough in top. What's your household income? Probably about $30,000.

$30,000 a year? No, $1.30. Oh, $1.30. I thought you said about $30,000. Okay. No, no, no. That's a little difference. Okay. No, no, no. That's a little difference. Okay.

So how quickly, if you don't sell the car, does the 141 get paid off? I'm two years into a 15-year fix. You're going to pay it off in two years? No, I'm two years into. I know. How quickly does it get paid off was my question. 15 years? I don't know. No. I don't know. How quickly does it get paid off was my question. 15 years? I don't know. No.

I don't know. No. You make $130,000 a year. How fast do you pay off $141,000? Four years. Really? Yeah. That's $30,000 a year.

Okay. Is that worth trading that Porscheorsche for i don't know what i can't gauge and the only you're the only one that can gauge it is the nostalgic value of this the older i get the more something that my grandpa owned or my dad owned means to me i have a lot of that though that's the thing i mean but his fortune is i'm already getting rid of the boat i'm selling his house uh matter of fact probably a lot of the assets from the house once i sell the house can go to pay off mine i don't know it's just a question of you know is that kind of money worth future investment and future retirement. Yeah. I think that's a pretty good point. Basically, this is a collectible that, in decent condition, should go up in value, not down in value. I don't think it's an investment product,

but I don't think you're going to lose half the value like you would on a new Porsche in five years, which any new car is that way, by the way. So, you know, you just got to gauge out how much you want to. Ten years from today, are you going to be crying that you sold this Porsche? That's the way you ask yourself the question. Nothing's on fire here with Chris. He's doing fine. He's got a good financial situation.

So there's nothing telling me, yeah, you got to sell the car today. Agreed. Good show, George. Well done. Thank you. It's been fun. James Childs, Callie Daniels in the sell the car today. Yeah, agreed. Great. Good show, George. Well done. Thank you. It's been fun. James Childs, Callie Daniels in the booth. I'm Dave Ramsey, your host.

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