The Ramsey Show - App - Should We Rent-to-Own a Home From Our Parents? (Hour 2)

Episode Date: September 27, 2021

Debt, Relationships, Home Buying, Taxes As heard on this episode: Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

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. You jump in, we'll talk about your life and your money. It is a free call at 888-825-5225.

Dr. John Deloney, Ramsey Personality, is my co-host today as we answer your questions here, again, about your life and your money. If you haven't tuned into the Dr. John Deloney Show, you should. Most of America is now. It is a ragingly popular podcast. It comes out three times a week these days. You can call in and be a part of the podcast if you'd like. We'd love to have you do that and be one of the callers on his show. If you've got questions about relationships, about boundaries, about life, you can email us at askjohn at ramsaysolutions.com or leave a voicemail at 844-693-3291.

Sue starts off this hour in Greenville, South Carolina. Hi, Sue. Welcome to the Ramsey Show. Hey, thanks so much for taking my call. Sure. What's up? So I'm a 57-year-old veteran, and I'm single, and I've been debt-free for six years now. I own my home free and clear.

I came down to this area to be closer to my mom. She's since passed away. Now I want to move up north to be closer to my son, and the cost of living and housing is more expensive up there. And I was saving money by a farm but decided I can't do that. So I've got a chunk of cash that I can put to a house up where I want to go, and then I could take the cash out of this house and, you know, do a cash purchase or I could get a mortgage and rent this house out down here. I'm trying to figure out what the best thing would be to do. What do you do for a cash purchase or i could get a mortgage and rent this house out down here i'm trying to figure out what the best thing would be to do what do you do for a living i'm a disabled vet so i i help i help some young farmers in in our area with their but your income

that you eat with is disability income from the veterans correct yeah military retirement yeah well thank you thank you for your service and i'm sorry you were hurt my pleasure yeah so you you you're going up to see your son but it sounds like you love farming and you love working with mentoring young farmers is that is that a worthy trade here i love i love growing yeah well i've discovered like farming um in the heat of the summer is very challenging i I like starting speed. So I want to shift to working more with nurseries, plant nurseries and native plants and butterflies. Can you do that? Where is up north?

What's that mean? Where are you going? The Chicago area. Okay. Yeah. Are you going to plug into the agricultural scene out away from Chicagoago but in that general area i was going to stay closer to the city and and do do more like the place of the plant plant nurseries versus actual farming farming yeah something more more more toward my abilities you know here's the easy answer to your question

is what you called for and that is sell the house in greenville pay cash for the house that you moved to in chicago okay okay Okay. Now, here's why. I reverse engineer these questions in my mind, and it gives me the answer instantly, and I'll teach you the technique, and that way you can do it next time. If you owned a paid-for house in Chicago to be near your son, would you suddenly jump up and go buy a rental in Greenville, South Carolina with debt? No. See, it's the same thing but in reverse.

Right. And so it tells me not to keep the house in Greenville. You're becoming a Greenville investor by default, not by strategy. Right. Well, the only thing is it could be a source of income if you will. It doesn't change anything. You still answered no. Right, right, right. and you answered no because it was

wise to answer no uh-huh you instantly you're gonna think about it you just went no i wouldn't buy a rental house in greenville south carolina if i freaking live in chicago no right some idiotal changes hardly in your living room floor you know no you can't manage property four five hundred six hundred miles away adequately yeah yeah my only other concern is that well it's cold up there i mean i grew up in maine but it's cold up there and and all my friends down here are like well you could you could keep the keep the other house and and you can also come down there and visit when you don't have a house payment anytime you want yeah this is true right they'll rent you a b&b for three weeks with what used to

be a house payment right and you change oil to your harley in their living room works way better that way it's a better breakout ramona's in seattle hi ramona welcome to the show hello hi how can we help i had a yes i'm at a loss i lost my brother um three weeks ago 27 very unexpected um and i don't he has no kids no marriage no will he lived with me what do i do with his debt and what do I do with his assets? Everyone keeps telling me to get a probate lawyer. My dad, I'm trying to help my dad and my mom out. My mom has put it all on me because I took care of him. And my dad, he wants to push everything to the side and just says he is grieving and he doesn't want to deal with it

and he doesn't know how to move forward. And so I'm trying to, he owes the IRS. He has, you know, all these debts and stuff. And what do I do? When do we get this ball rolling on taking care of things? I'm so sorry. What a mess. Why were you having to take care of him?

What was wrong with him? A lot. So a lot of medical problems. He had type 1 diabetes with adrenal deficiency, which played a big role. He had intestine problems, also mental problems. So it was just a lot of brain damage. Yeah, we found him. I left the house, came back a few hours later, and I found him from home with no pulse.

His blood sugar went too low, had a seizure, and he died from there. I'm so sorry. Never woke up. You really, really, really did everything you could to take care of your brother. What a great sister. I'm so sorry. So my guess is, with what you're describing to me, that he did not own anything. No assets.

Just like two vehicles. Do they have payments on them? No. Okay, have payments on them? No. Okay. What are they worth? Nothing. Okay. They're not worth anything.

No, they're probably worth at most $1,000. Yeah. And so all he has is debts. Correct. Okay. All right. For your sanity and the sanity of your dad, I want to clear these debts off so they don't pester you. You do not owe them.

Your dad does not owe them. Your mom does not owe them. They're not going to get paid. Because he didn't have any money. When you pass away, what you own stands good for what you owe. So get a copy of his death certificate and send copies of the death certificate to the IRS and any other debtors you're aware of with a letter that says, my brother so-and-so passed away on such and such a date. Here's the death certificate.

He did not have any assets. You will not be paid. And it's just that simple. You don't need a probate lawyer. You don't need anything because there's nobody, there's nothing to collect. There's nothing to collect it from. Yeah, and Ramona, often when we walk in and see the situation that you saw, I'm so sorry that you saw that.

I want you to know it's not your fault. Your brother was lucky to have you in his life taking care of him and loving him the way you did. And you're going to need to get somebody to walk alongside you. get with a good pastor and unpack some of this you're hurting kiddo people always say when i get this promotion i'll be able to make a real impact wrong when you make a solid plan on how you need to grow you you can become the leader you want to be. And that's why Ken Coleman, America's career coach and national best-selling author, wrote his new book, From Paycheck to Purpose, The Clear Path to Doing Work You Love. And it's available for pre-order right now.

If you want to grow or create a legacy in your career, you need this book. It's not just a concept. It's a proven, clear path that will walk anyone in any industry through a step-by-step plan to take their career to the next level. Plus, if you pre-order From Paycheck to Purpose today, you'll receive our Get Promoted bonus pack for free which includes the audiobook ebook disc assessment an exclusive talk from ken and access to our live event and more pre-order from paycheck to purpose at ramsey solutions.com Dr. John Deloney, Ramsey personality, is my co-host today. Open phones at 888-825-5225. How many times in the past year have you heard someone say,

I just wish things would get back to normal? I kind of think we all think that, but what was normal like for you? Was it really that good? Are you worried about money? Too much to do? Not enough time to do it all? Well, you shouldn't have to go back to that normal. Hey, there's a better idea.

We want to help you with a game plan. And that's tomorrow night, September the 28th. Game Plan Live, our free live stream. It's me, Christy Wright, and george camel we're going to be talking about your time about goal setting and about your money and laying out a clear game plan to make sure those goals happen and uh let's have a vision for your life let's do some stuff here you can have the abundant balanced debt free life youfree life you want. And it starts with Game Plan Live, a free live stream from our own auditorium here tomorrow night, right here in the Ramsey headquarters.

We've got about 300 folks attending the live stream already. And if you want to attend online, all you have to do is text GAMEPLAN to 33789. It is free, a free live stream, September the 28th, tomorrow night. All one word, 33789 Text Game Plan. We would love to have you join us and be part of that. Dr. John Deloney, Ramsey Personality, is my co-host today, best-selling author. Anna is in St. Louis. Hi, Anna. Welcome to the Ramsey Show. Anna? Hello. Hi, Anna. Welcome to the Ramsey Show. Anna? Hello. Hello. Hi.

How are you? I'm doing well. How are you, Dave? Good. How can I help? So I have a question regarding, so my husband and I are in Baby Step 3B, and my husband works in commission-based jobs, so we don't have any credit score. So in order for us to get underwritten for a home loan, we have to wait two years. So we're going to have to wait two years to get a home loan, to qualify for a home loan with Churchill Mortgage. A couple of days ago, my father-in-law and my mother-in-law, who are in Baby Step 7,

offered to purchase a house and let us rent to own it from them. And I have been thinking about it and wondering if that's a good idea or if that's something that's better not to just worry about. How old are you guys? 27 to 28. And what's your household income about 3 000 a month 3 000 a month okay um what does your husband do he's a plumber okay that's good news okay and has his income been going up yeah good. Good. He's still on an apprenticeship. Yeah. When will he finish that?

I think he can get his journeyman after four years. Okay. Yeah, he'll go up from there. Okay. This is the kind of deal that makes sense mathematically and is a relational minefield. If you miss a payment, you might go sideways and have a weird Thanksgiving dinner. As a matter of fact, you might really have a high potential for a weird Thanksgiving dinner. And so I tell parents not to loan their kids money, grown kids. And I tell people not to.

Let me tell you, the borrower is slave to the lender. And when you eat Thanksgiving dinner with your master, the turkey tastes different. And so I would tell you not to do this on that basis. Instead, use that two years to save money and get your income stabilized and get his income up. I think your in-laws are not bad people. I think they're very generous. They're being kind. They're trying to get their grandbaby that I hear in the background into a house.

I appreciate that out of them, and they're probably not bad people. They're probably not toxic and controlling or something like that, or you wouldn't even be considering this. But I just am not – I don't want you to be susceptible to that. I tell people not to do this because I've seen more of it go sideways than not. What are you thinking, John? I'm thinking under no circumstances whatsoever should you do this. And I wasn't even thinking about Thanksgiving. I was thinking about that little baby you're holding.

And when mother-in-law says, well, you know, you should be, that's a lot different when she owns your mortgage. And suddenly that baby's got two moms, two dads. And can I be honest with you? Absolutely. It sounds like you knew the answer And can I be honest with you? Absolutely. It sounds like you knew the answer, Colin. I could hear it in your voice. Does your husband want to do this and you don't?

I think you're right. I think we kind of knew we'd listened to Dave and Dr. D a lot. So we kind of knew the answer but needed someone to tell us the answer. Yeah. I'm 1,000% with Dave. Your autonomy here, y'all are grinding it. He's working hard. You're working hard.

You're young. You've got time. Yeah. Get an apartment. Get a two-bedroom apartment, and y'all make it work for the next two years and save, save, save, save, save. And every – yeah, it sounds so good mathematically. Dave's right, but it's not a good move.

Yeah, I just, the problem is, after 30 years of doing this, I've seen, I'm like a cancer doctor. I see what causes cancer. Yeah. You know, and it's like, you know, you can do that if you want, but a lot of people I've seen with cancer had that.

You know, it's like that kind of a thing, right? And so that's kind of what this falls into. Can you get away with it? Yeah, you can get away with it. I remember when we went broke, Sharon's dad went to the bank and got a loan, as if he didn't have the money, in a coffee can in the backyard probably, to help us save the house out of bankruptcy. And so we owed him some money and had to pay the payments to pay that loan off after bankruptcy and um he is one of the sweetest kindest men i've ever known he is just a great guy and he never said uh didn't even wrinkle an eyebrow. Never one little bit of voice inflection.

Nothing. Never said a negative word one time. But, man, my butt was on fire. Yeah. I was driving me nuts. Of course, I'd just gone broke, too, so that's added to it, right? But I'm like, this is killing me. I walked in his house. I felt different.

It was just weird. And if you don't acknowledge that that's just and you're just dumb you can't calculate what those oh is that the is that the shirt he's wearing to church sounds different when she owns your mortgage yeah or hey y'all are only going to stay for two days for christmas sounds different when he owns your mortgage it's just everything because it's like a domino of emotions and feelings and all that stuff. Yeah, and it's bad enough when you've got a brand-new baby. There's all that's there anyway.

But then on top of that, let's just go ahead and put in there that they – But it's so tempting, and you said it best, Dave. Those parents, they're loving those kids because they know how. I got nothing in her conversation that said that they're off the rails. That they're off the rails. Yeah. Nothing at all. Open phones at 888-825-5225.

Eduardo is in Los Angeles. Hi, Eduardo. How are you? Hi, Dave. Thank you for taking my call. Sure. What's up? but I'm following the baby steps, and I kind of want to know your thoughts on if I should press pause, all those things, from credit card debt.

So how much damage was there to the car? So I do have an estimate, and it says around $1,100. Okay, and you have a $1,000 deductible? Yeah, $1,000 deductible. So you're turning it into insurance benefits you by $100? Yeah. It sounds like the car is very drivable to me

yeah it is very reliable still i said drivable after the wreck you can drive it without fixing it right yeah yeah drive it you don't need to pay fix a thousand dollar repair with a thousand dollar deductible don't turn that into insurance yeah i mean drive it and keep keep getting your debt paid off brother yeah plow through brother grind hustle grind hustle grind hustle sorry you got in the wreck yeah this is the ramsey show Dr. John Deloney, Ramsey personality, is my co-host today. You can hear him every couple of days on a brand new podcast. It comes out three times a week called The Dr. John Deloney Show. You should tune into it.

Most of America is these days. In the lobby of Ramsey Solutions on the debt-free stage, Craig and Rachel are with us. Hey, guys. Hey, how's it going? Great. How are you? Where do you live? We are from Central Michigan.

All right. Very cool. Welcome to Nashville. And how much debt have you guys paid off? We paid off $55,000. Cool. How long did that take? Just shy of two years. 23 months. Good for you. And your range of income during that time?

$50,000 and then we ended just over $70,000. Cool. What do you all do for a living? I work in customer service in the waste and recycling industry. And I'm a sales manager at our local radio station. Oh, good for you. Very cool.

Good old radio. Love it. Gotta love it. It's a great world. Yeah, it's been a wild world this year. It has. Craziness. I was going to draw a parallel

between waste management and the radio world, but I won't do that since we're on the radio. We already know. We get it. Very cool. What kind of debt was the $55,000? Mainly my student loans, a couple cars, a couple credit cards. Normal debt.

Some student loans. We were normal. How long have y'all been married? Five years. So about 35 months prior to making our last payment, we started. And two or three weeks into the journey, we found out that we were pregnant with our first child. So everything got put on pause there for a little while.

And so that's why our journey's really only about 23 months. Okay. Very good. Very cool. So what made you guys decide to get serious about this get out of debt thing? We had always kind of been on a budget, but not a Dave budget by any means. And we knew we wanted to start a family, and so we were like, all right, we've got to get serious. We've got to start this process. And then three weeks into it, we really had to get serious. Um, so just, she's our

why, um, moving forward. Yeah. And to be honest, you know, for me, what it was, was hearing you talk about changing your family tree and your legacy. And, um, with us starting, it was like, okay, she's going to drag me along. I'm definitely the spender. Anybody that knows us knows that. I'm the spender. I'm the free spirit. And so we started. I was excited.

And then three weeks in, we obviously got the news. And so that message of changing your family tree really hit me in a different way. And it was like, all right, it's time to get really serious about this. There is something magical happens when the first baby comes. There is. Game on! There is, for sure. Yeah, I hear you.

Well, congratulations, you guys. Yeah, thank you. So who had the conversation with who? Well, I started. Friends of ours, Chris and Kendra, actually sat down and helped me write our first budget. And I was like, we're starting. It's going to happen. We're just going to start. Friends of ours, Chris and Kendra, actually sat down and helped me write our first budget. And I was like, we're starting. It's going to happen.

We're just going to start. And then he started listening to your show every day, every hour, like got crazy. It hooked me. Then we were both on board and there was no stopping at that point. Are we on one of your stations? Unfortunately, not as of right now. I'm on the competitor. Okay. There's actually not really any local stations that are carrying you.

Oh, my gosh. They're a little ways away. Okay. But we definitely tuned in. We tuned in on YouTube and on the podcast. And any way we could, we did. And before long, we were driving some Dave cars. And probably my biggest struggle throughout this whole thing was wanting to get a new lawnmower.

We purchased a new house before we were on the plan, and it's got some acreage, and I wanted to get a new zero-turn mower. Sure. You know the whole thing. Yeah. And instead, I'm driving a 1986 lawnmower around, and that's our form of entertainment. I have a picture of it on YouTube. I love it. It doesn't even have the hood on it.

Yeah, it doesn't have the hood. I like it. We put the girls in the wagon, and we go for a drive. That's how we have fun in Michigan, apparently. That's a manly lawnmower right there. There's our Dave tractor, for sure. Yes. I love it.

Wow, wow, wow, wow. Very well done. Y'all weren't making a million dollars. Y'all didn't mess around. This was a hard year and a half for you guys. It was. We were very blessed to keep our jobs through everything that happened. And student loans went on and zero interest and everything was put on hold.

And we said, this is our chance. This is our blessing. This is our time to just start throwing everything we've got at it so the last nine or ten months we actually paid off 20,000 of it whoa game on i've got to tell you guys that this may we celebrated our fifth anniversary and we had a an elaborate trip planned for the weekend and instead of going on that trip we decided let's take the money that we would have spent because it's pretty close to what our last payment is. Let's just pay off our debt. And so we actually, on

our fifth wedding anniversary, we made our final payment. Submit. Ding, ding. Push the button. And submitted our last payment. And celebrated. And it was great. So that means you've had several months of both checks depositing and no bills feels good huh it's been wonderful that's cool what do you tell people the key to getting out of debt is um for me i was the one to actually write the budgets each month and

there were so many times in the middle where it's not like the beginning fun exciting point and you're not in the home stretch yet and there's so many times where you're like i don't want to do another month i don't want to do another month something hits life hits and you're like it's not working but just keep writing the budgets keep doing it stay consistent and just keep moving it's the grind it is for me i would say just listen to your wife and do as she says and uh no i think uh finding that why, and it's going to change multiple times regardless of how long your journey is. Everybody's on a different journey, and whether you make a million dollars or you make $10, it's all relative, and you just have to focus on your journey

and put your head down and stick with it. Well done, guys. I'm proud of you. Good stuff, man. Well done. Good, good, good, good, good. Wow. Who were your biggest cheerleaders outside the two of you?

So my mom and stepdad are actually here with us. They were a huge support through the whole thing. They've been listening to you forever. My brother and sister-in-law, they were kind of our go-to for calling and what should we do here. Go ahead with friends. My parents also were big cheerleaders and then really my whole family. But our friends Chris and Kendra that walked us through it,

and Kendra actually led our FPU class, and then our friends Tori and Shauna. Oh, you went through Financial Pitch University? We did. We did, yep. At nine months pregnant, we went through Financial Pitch University. Oh, wow. Okay. That's commitment right there.

It is. And a very generous we. We were nine months pregnant. Yes. We were. I was just along for the ride. There you go. And our friends, Tori and Shauna, gave us your book to get us started.

And so they were there alongside of us the whole way. Very cool. Well, way to go, heroes. Thank you. How's it feel to be the whole way. Very cool. Well, way to go, heroes. Thank you. How's it feel to be free? Amazing. So good. Good for you.

So good. We've got a copy of the Legacy Journey for you. That's definitely the next chapter in your story, without a doubt. Can bring little Bailey up here. Going to bring Bailey into the shot here. We've got to have the proper why in the picture. This is a beautiful why. Look at her.

Wow. I love it. She's cute as a button. We have Bailey, and we have proper why in the picture. This is a beautiful why. Look at her. Wow. I love it. She's cute as a button. We have Bailey, and we have number two on the way. All right. So a whole other reason. Yay. I love it. Congratulations.

Thank you. We've also got an extra copy of Total Money Makeover for you to give away to somebody. Pay it forward and keep this stuff rolling. Let's keep getting people, keep getting America out of debt so they can be wealthy. So proud of you guys. Well done all right craig rachel and bailey lansing michigan 55 000 paid off in 23 months and at a baby look at that girl my goodness 50 to 70 000 count it down let's hear a debt-free scream three two one we're debt-free i love it congratulations you guys very very well done that's impressive ah that's hey i don't want

to blow by the math on this. They rice and beans this one. Yeah, I mean, that was a rough ride. That's a tight turnaround, man. And they did some of it. They're piling up cash while she's pregnant, which you're supposed to do while pushing pause. And then throw it on the debt, push play. When the baby comes home, mama's okay.

Rock on through this. Grind through it. Push it through. Both of our debt-free screams on this particular day have been modest incomes and amazing amounts of debt, which means amazing amounts of sacrifice. But they did have a 1986 lawnmower to help ease the pain, right? I'm just saying, that lawnmower, that's a manly lawnmower. That's incredible. This is The Ramsey personality is my co-host today.

Open phones at 888-825-5225. John is with us in Cincinnati. Hey, John, how are you? I'm doing well. Thanks for taking my call. Sure. What's up? I've got a capital gains question.

My wife and I are preparing to sell our home. We didn't want to reinvest right away in another home. We kind of wanted to do a little bit of traveling first. Is there a time frame that we have to work within? You're over 40, aren't you? No, I'm definitely over 40. Yeah, that's an old law. That law hadn't been on the books in a long time.

The law for the last 20 years or so has been that your personal residence, when you sell it, if you've owned it more than two years, has zero taxes on the first $500,000 of gain if you're married filing jointly. Are you going to have a gain greater than a half million dollars? No, it will be under that. Then there will be zero taxes regardless of what you do with the money or when you reinvest.

You don't have any limitation at all. That is perfect. I really appreciate it. Verify that with your tax professional, but you'll find I'm right. It's one of the few tax laws that I actually do know and understand. Most of them I don't. I'm horrible at taxing. When did that change?

It's probably about 20 years ago. It used to be you had two years to buy another house. I thought that same thing. But you're over 40. Yeah, I bought my first house 20 years ago well used to be you had two years to buy another house i thought that same thing back in and but you're you're over 40 yeah i bought my first house 20 years ago wow yeah i mean that was the law of the forever and that was a big change because now your home largely grows tax-free i mean if you sell it after you owned it a couple of years you don't have any taxes on the first half million married filing jointly first quarter million as a single and uh so like one of our good friends sold his house not long ago made like 160 grand on it a guy that was working here a little while back and he don't did um like two years in a day and paid zero taxes so conceivably you could sell your house every

couple years and continue to move up and i guess once you didn't don't get that gap i would assume you're not married because moving every two years would cause other issues at least at my house it would d is with us d's in detroit michigan hi d how are you i'm doing great how about yourself better than i. How can we help? Okay. I am retired. I'm a widow, and I'm debt-free. And my problem is that my house needs some updates and repairs. I've been getting estimates. The estimates seem like everything is three, four, five times what I expected to pay. And what I'm looking at is I'm looking at getting a line of credit to do the repairs and the labor saving updates,

because I'm 63, versus using my savings, but I wasn't going to go beyond what I have to, you know, if I was going to pay cash for. So what I wanted, I just wanted to get some advice from you. Do you think that's a good idea? Do you advise something else or what? But, you know, the house needs to be updated. How much in repairs is the total?

Probably about $50,000, $60,000. And how much money do you have in your total world well i got more than sixty thousand how much money do you have in your total world in my total world i have five hundred thousand okay d you have done a really good job fix your house with your money use money and fix your house don't use debt and fix your house not a line of credit nope why would i put you back in debt you're my friend well because i'd rather have my money working for me it's not working for you you're paying the bank you're paying the bank. You're paying the bank. Well, okay, we'll see.

There's another caveat. Problem is I always have to pay taxes every year. And if I took a line of credit, I was thinking that that would help reduce. If you want to do that, all you have to do is give more to your church. Pardon me? You give more to your church. Pardon me? You give more to your church, you'll have the exact same mathematical effect. You don't have to go in debt. If you want to lower your tax bill, increase your charitable giving.

Well, I've been doing that. Well, it's the same thing. Listen, if you give the bank $10,000, which you're not going to, if you give the bank $1,000 in interest, okay, you know what it saves you in taxes? No. $200. Really? Yep.

Tax deduction is not a tax credit. It's a deduction. And so it reduces your income that is taxable by $1,000 as applied to your tax rate, and in your situation, the way you're structured and the way your life's set up, you probably have an effective tax rate of around 20%. Maybe it's 30%, but it saves you $200 to $300. The other $700 is just burned. You didn't make $1,000 by giving them $1,000. So you gave them $1,000 to not give the government $200.

I don't want you doing that. If you want to do that, give your church an extra $1,000. That way you don't have to give the government $200. I don't want you doing that. If you want to do that, give your church an extra $1,000. That way you don't have to give the government $200. And you don't even have to be in debt to do that one. Okay. Is there a way that I, if somebody told me that if I incorporate. Hey, Dee, you're listening to a lot of stupid people. Who are your friends, Dee?

I don't know who's in your ear but they're dumber than a rock i don't know who this is you don't need to incorporate you're a 64 year old widow trying to fix her house you got five hundred thousand five hundred thousand dollars fix your freaking house just fix it and then i don't have any nightmares and if you want to turn a thousand dollars into a two hundred dollar deduction, just increase your charitable giving by that. You don't have to be in debt for that. It's the exact same ratio. Here's a promise I'll make you, D.

If you mail $1,000 to Ramsey Solutions here in Nashville, I will mail you $200. That's a personal promise. If you want to make that trade, John deloney has a system to do it i will in fact this isn't just for you d this is for anyone in america a thousand dollars to the ramsey solutions building and you're gonna get me arrested personally mail you two hundred dollars cash ramsey sets up pyramid scheme. John Deloney at the tip. I'm happy to. All day. This crap is going to get... This is not going to go well.

Some liberal left-wing newspaper is going to think you're serious. Because they can't do math either. Oh, God. D-U-1 life. Don't pay a bank 3 or 4 or 5%. God, no. And call yourself sophisticated. pay a bank three or four or five percent. God, no. And call yourself sophisticated.

No. Don't. You're not sophisticated. That's just stupid. In fact, call the contractor in and say, I have $40,000 in cash. Yeah. And this $60,000 is not an, it's, yeah. Real money.

I got 40 grand. I'm going to hand it to you in cash. I want this work done in my house. After it's done. After, of course. And they're going to line up in front of your house. Yeah, well, not these days. But, yeah, there's a lot of people. That's true.

But it's a labor shortage because of the government. But anyway, it's, Dee, don't go in debt, honey. Please don't go in debt. You have the money. You've earned it. You win at life. You did a good job. Pay cash for your home repairs

the other interesting thing is in addition to all of this stuff is that when you spend the forty thousand dollars in cash or fifty thousand two things will occur one john is correct you'll get better deals uh and the reason is number two you're more careful it is interesting to me that when all of us when we spend a hundred100 bills out of our checking account, we are more careful with those than we are with borrowed money. So I had a buddy back when I was in college, and he worked with some home builders, and he said, I could always tell the millionaires versus the middle class people buying and this building in this neighborhood he said it was the millionaires who came in with the newspaper flyer and they said uh-uh i said i wanted this sink because it was on sale at this place at this time and y'all put in that sink versus the middle class buyer that came in and said we don't know what do you think and it was this attention to detail and this attention to the dollars because it's real money versus some big loan. That's right.

That's right. And folks, never do something for the tax deduction. You're trading a dollar for a quarter. Where does that come from? I hear that all the time. It comes from the real estate business. We used to teach people, oh, it's smart to be in debt because you get a tax deduction. I did that crap, actually, when I was 18 and stupid. When I got my real estate license.

You need the tax deduction. Get a bigger loan. Yeah. Trade a dollar for a quarter. Matter of fact, trade $100 for $25. That's even a better deal. You don't want to go pay off your home. You'll lose the tax deduction.

One of the things we address in FPU. Yes, absolutely. This is the Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit theramseyshow.com and register. We would love for you to come to Nashville and tell Dave your story.