The Ramsey Show - App - Should We Use Our Investments To Pay Off Our Kid’s House? (Hour 2)

Episode Date: November 2, 2021

Debt, Retirement, Career, Home Selling, Budgeting 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

Thank you. 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, Ken Coleman. Ramsey personality, number one best-selling author, is my co-host today. Open phones at 888-825-5225. Ken is host of The Ken Coleman Show, which airs on SiriusXM as a podcast and over 75 radio stations across North America,

answering your questions about your career, your job, finding work that matters and work that has meaning and plugging into it, moving ahead in the career that you've already got, all of those kinds of questions. The income side of the equation, where I always deal with the outgo side just about, so we're here to answer both sides of the equation and help you out. The phone number, 888-825-5225. That's 888-825-5225. Starting off this hour, Sammy in Atlanta. Hi, Sammy.

Welcome to the Ramsey Show. Hey, thanks, Dave. Thanks, Ken. Thanks for taking my call. Sure. What's up? Hey, probably two years ago, my wife and i got serious about paying off our $80,000 debt um we're down to $29,000 um four years ago i left the public teaching to go to private

so uh i left uh $30,000 in a trs fund and kind of forgot about it um so after four years, it doesn't gain anything, and I'm not contributing, so I have to move it over. So my wife and I want to know if we can use that to get six months ahead and pay the $9,000 penalty and take that money and go ahead and be debt-free. Well, you can, but I wouldn't borrow money at 30% interest to pay off your debt. Correct. So I wouldn't. I mean, you know, if you call me up and said, hey, I have a bank that'll loan me the money. It cost me $9,000 to borrow $30 borrow 30 so i can pay off this other debt and i'm going to just prepay all the interest nine grand you wouldn't even ask me that question right and it's the same thing dude you're about

to give the government a third of your money for no apparent reason other than you just want to be out of debt really bad which i really want you out of debt bad too but i don't want you out of debt 33 percent bad right it's just uh looking at being able to uh be six months ahead of the next step which would be more than the nine we would be losing but it's still losing nine it if i suggested to you that you borrow money from a bank at 30 interest to pay off your debt and and you said i don't want to do that and i said the answer was oh you're looking at six months you're going to be out at six months sooner you would say ramsey you've lost your dadgum mind right but that was your comeback

yeah no i already knew the answer before i actually called but excited to be this far along in the journey hey man i'm with you i want you out so uh you're gonna be out you're gonna be out it's just gonna be six months slower and i'll give you a prediction it's gonna be four months slower because you're over this you're ready to be done now take your old retirement and roll it to an ira with a smart vestor Pro. Don't pay any taxes on it, and let it grow from this point without taxes, and you're going to love that you did that later. That's a better move long-term. Don't give the government a third of your money.

It just doesn't make sense. And you can ask the question six different ways, and I'm still going to give you the same answer every time. That's the strange thing about me, Ken. Yeah, you kind of know what you believe, why you believe it. It's fairly consistent. Very consistent. It's ridiculously boring. By the way Ken. Yeah, you kind of know what you believe, why you believe it. It's fairly consistent. Very consistent. It's ridiculously boring.

By the way, that's a general rule of thumb. That's the correct answer and a very specific answer to his question, but it's always a good rule of thumb to try to avoid giving the government any of your money. It's always a good place to start. Let's just start and assume they suck at handling money. Right. So any money you give to them falls under the heading of bad stewardship. Right.

God is not pleased with me when I send them money because they mishandle it. Yeah. And I'm not going to send it to anybody else that mishandles it either if I can help it. Because it's my job is to handle it well. Yeah. So, yeah. They suck at anything having to do with money. It's that simple.

How many times do you hear the word government and efficiency in the same sentence unless there's an N in front of it, like inefficiency? Yeah, you just don't hear them in the same sentence. It doesn't come up. Now, don't send them money. Keep the money for yourself. Yes. It's always better. It's always better. You're not being patriotic. It's just Yes. It's always better. It's always better.

You're not being patriotic. It's just bad. It's just ugly. Don't send them money. They're not good with it. Yeah. Clay's in Austin, Texas. Hey, Clay, how are you?

Good. How are you, Dave? Better than I deserve. What's up? My wife and I are thinking about downsizing into an RV selling our house and downsizing into an RV we did this before we had kids and now we have kiddos and we're kind of wondering if it's a good I mean I know the market's hot right now to sell our house so we'll make some money on it and probably get out of debt I haven't put complete pen to paper because I don't know what we're actually going to make on it. How many kids and how old are they?

I've got two kids. They're four and six. Okay. And your motivation for doing this is what? Getting out of debt. No. Don't do it. No?

No. Two reasons. Four and six in rv reason number three yeah rvs rvs go down it was two reasons rv goes down in value no no we already have the rv, it still goes down in value. Yeah. Now you don't own any appreciating assets. You only own depreciating assets. Okay.

Is the RV paid for? Yes. What do you owe on it? Oh, no, I'm sorry. What's it worth? What's it worth? What's it worth? About $15,000.

Okay, cool. All right. And what's your household income? About $55,000. Okay, cool. All right. And what's your household income? About $55,000, depending on overtime. Good for you. Okay. Well, much like our last caller, I love the motivation to be debt-free. I'm with you on that. I'm not willing to pay the price that you're willing to pay.

I love my grandbabies. The idea of being stuck with two of them in an RV for the rest of my life until they grow up is suicidal for me. I just couldn't do it. One of us would die. Yeah, what's your timeline? I'm not talking to do it for the rest of our life. I was talking about while we, I forgot to say, we're trying to move to a different city and do it that way okay for how long well how long are you gonna be in the rv uh we're expecting

two years max maybe three yeah i you can do whatever you want to do you're a grown-up you called and asked me what i would do i personally could not do that would not do that uh i don't think the financials are that great on what you're talking about i don't think it's like a big windfall and the lifestyle of it i just couldn't do i mean i've got friends that rv i got friends that have i can think of one right now he's got three kids and they rv it's an adventure they live everywhere and they do it on purpose but they're not doing it so they can get out of debt they're doing it because they love being on the road you know know, that kind of stuff.

But would the Ramseys have done that when we were on our get-out-of-debt journey? The answer is there wouldn't be any Ramseys if we had done that. You know, I heard a sad and touching story recently. Zander Insurance has set up a scholarship for children whose parents died without life insurance. Last year, they gave away over $165,000 to help kids avoid debt and go to college to pursue their dreams. It's touching, but also sad since it's a situation that occurs all over the country and can be avoided in so many cases. This is the reason why I talk about Zander and term life insurance every day. It's not expensive or complicated, and it's gotten even easier with many companies no longer requiring medical exams.

Zander shops and compares all the top term life plans and stays with you the whole time to make sure your family is taken care of. That's why I've used and recommended them for over 20 years. Go to Zander.com or call 800-356-4282. So I don't have to keep talking about these sad stories. if you're in debt it can feel like you're constantly at war with your freaking bills it feels like the bills are winning you might wonder if you can never get ahead listen it doesn't have to be like this you can pay off this debt you can move ahead you can learn to handle your money.

You can get control of it. And we'll show you how with Financial Peace University. It's part of Ramsey Plus. You can sign up at Ramsey Plus and you'll learn how to take control of your money and ditch your debt for good. Plus, you'll get all the tools that you need to make it happen. You can get ahead. You can end this constant battle for your paycheck. You've got to take the first step. Start your free trial of Ramsey Plus. That'll get you into Financial Peace University and into the EveryDollar Premium app, among a bunch of other things. Text TRIAL for the free trial.

Text TRIAL to 33789. Text TRIAL to 33789. Text TRIAL to 33789. Our question of the day comes from Blinds.com, a wonderful American company. Blinds.com has a 100% satisfaction guarantee. It means if you measure, mismeasure, you screw up when you order the blinds from them. You get the wrong color. It's your fault. They'll still make your blinds over for free.

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and I'm focused on getting an internship in high school along with that future job. I wanted to know how you would go about pursuing this career if you were in my shoes or if you would do anything differently. Well, Mustafa, I love this. You are a 14-year-old who's on the ball. I love that you're going after an internship in high school. And I would try to turn that internship into any kind of job, entry level, doesn't matter what it's doing or how much it's paying in high school.

And I would be focusing on getting a job with a real estate developer because what's happening is it's a paid internship. You are learning the ins and outs of the industry you want to be in from somebody who's already doing it. The only thing I'd add to that is I would literally be taking notes, whether it's on your iPhone or with pad and pencil, and talking, questioning everybody, customers, people that are working, and truly have that head on a swivel, Dave. I think a 14-year-old doing that early on,

you're going to learn all the ins and outs of being a real estate developer. And should you change your mind, it'll be because of that experience. You go, oh, it's not what I thought it was going to be. But in this case, he's probably going to get a master's degree in just knowledge and wisdom from soaking it up being a human sponge. Yeah. While you're doing that, look for old real estate developers. That's a great point.

Some gray hair. Because there's not many of them. That's a good point. Real estate developers developing a piece of real estate, taking raw ground, putting in streets, sewers, infrastructure, selling off the lots, or even putting in the buildings, whether it's commercial or residential afterwards, is the highest risk of all real estate transactions. Because it's a lot of money, number one. Number two, it takes a long time, and you can get caught sideways with an economic cycle and so there are more people in the real estate business that have gone broke being developers than any other category more than

being home builders more than being real estate agents more than owning real estate of other kinds so uh if that's your goal there's nothing wrong with that. But talk to some old ones that have figured out how to limit the risk, how to be ready for the economic changes, because otherwise you're going to talk to people who have absolutely no concept of risk. And if that's all you learn, then you're going to learn some stupid stuff that's going to put you in harm's way. But I'm with Ken. Your concept, you're dead on. I would stuff that's going to put you in in harm's way but you're i'm with ken your concept you're dead on i would go after it go do it uh obviously you're you're a sharp young guy and you got some got a real future ahead of you bobby is in uh west virginia fairmont to be exact hey bobby how are you i'm good dave how How are you? Better than I deserve. What's up? Yeah, so I just recently, actually yesterday, sold my house. Wow.

I have a $110,000 check that I need some advice on what to do with. I don't have any debt, so my assumption is to invest in some way, but I really don't know much about that. Where are you going to live? In West Virginia, where I live now. I moved in with my girlfriend. I've lived with her for about a year, so we decided it's time to sell my house. Since the market was pretty hot, I thought it was a good time as well.

Okay. So right now you're freeloading? Yeah. Well, I pay half her expenses, expenses too so i'm basically renting from her yeah so you have a roommate okay yeah all right well when you get married you're not freeloading anymore by the way right okay uh what does your girlfriend owe on her house um she actually just refinanced it, and I think there's about $160,000. And how much money do you make?

I make just a little over $100,000 a year. And how much money does she make? Somewhere in the neighborhood of $200,000. Oh, wow. So $310,000 income. $310,000 income. You've got $110,000 check in your hand, and she owes $160,000. Oh, wow. So $310,000 income. $310,000 income. You've got a $110,000 check in your hand, and she owes $160,000 on her house. Do you have any other debt?

Does she have any other debt? No. Well, she has student loan debt. She has about $120,000 in student loan debt. I have zero debt. Okay. Yeah, you have zero debt of any kind. She makes more money than you uh but as a as a

married couple you guys are a power couple with some student loan debt to clean up and then a mortgage to pay off or if that were to happen right right so what i would do is um decide when you're going to get married because if you you get married, this $110 goes to clean up her student loans. Then the two of you jump on this mortgage with your huge income and knock it out, because it becomes your house at that point that you are sharing. Agreed? Right. But you don't do that with someone you're not married to.

You don't pay someone student loans you're not married to. You don't pay someone's mortgage you're not married to. Okay? So for right now, I'm parking this money to the side. If you think you're going to get married within a year or two, I would just set it in a money market account. It's not fancy, but it's going to be available to execute the new plan after marriage. But if you're not going to get married and you're just going to hold on to this money

and she's going to hold on to her mess, then you probably ought to invest it into some mutual funds. Okay. Yeah. But by the way, you're going to end up homeless someday with that scenario, no real estate, and you're going to end up using this money to buy real estate at some point. Okay. When she kicks you out because you won't marry her.

Okay. Or whatever happens. Yeah because you won't marry her. Okay. Or whatever happens. Yeah, I'm glad you said it. I was going to say, when are you putting a ring on it, man? I know that's what everybody's wondering out there. So it's interesting. You've got to lay out the decision-making paradigm here. So let me ask you this, Dave, because you laid it out so beautifully from a relationship standpoint.

We didn't ask him. We didn't put him on the spot. But let's assume that they say, well, we don't want to get married. And this comes down to the way we teach them. That's what I'm saying. I mean, this gets really interesting. No. Because they're keeping separate accounts but living together.

But they're not married. Yeah, well. We tell married people, come on. Yeah, the problem is that that they by statistically okay the data tells us that they're going to struggle to build wealth trying to act like they're married but they're not right because two horses pulling in two different directions that's what i wanted and you don't pull the wagon you just pull it apart yeah you just destroy it that's all you do yeah and so that i mean that's the whole thing because they're separate but they're living together. And it just never gets connected.

That's the challenge with that. And there's all kinds of research. Yeah. Not picking on him, but just in general. For sure, yeah. This says that as a married couple, there's what they call the marriage advantage. It increases the success curve on your career, your health, and your finances versus just trying to play house. And yet half of America now is choosing not to be married.

But it's problematic, not just morally or spiritually, but it's problematic from the data of what happens in your life. This is the Ramsey Solutions on the debt-free stage, Sam and Natalie are with us. Hey, guys, how are you? We're good. How are you? Very good. Where do you guys live? We live in Minnesota. Oh, wow. What part?

Just south of Minneapolis. Okay, fun. Good to have you guys. Welcome. And how much debt have you paid off? Dave, we paid off $320,000. $320,000. And how long did this take? 58 months. Okay, cool. Good for you.

And your range of income during that time? We went from about $115,000. Last year we did $205,000, and we'll probably hit $2.25 this year. Good for you. What do you guys do for a living? I'm an operations manager. And I'm a stay-at-home mom to these four amazing kids that we have here with us love it so i'm guessing with 58 months and

320 000 did you guys pay off your house we sure did wow look at it weird people i love it good for you guys and it took you five years huh yeah wow amazing how old are you two i'm 39 36 all right and what's this house worth uh this is crazy market they got it about 475 and it's all yours yeah how does it feel to not have a payment in a stinking world man that's amazing it's it's still sinking in to be honest pretty amazing well tell me the story what in the world happened here well

I've always been kind of money driven you know kind of money focused but I was out in Denver and I was buzzing around the AM radio and I heard this southern guy come on the radio and he was talking all about money and interviewing people about money

and I was glued I was hooked anyway I just turned it off i parked the car and that was it and um i was out there again another trip a couple months later and i i found you again on the radio and i was leaving denver and but before i did that i i pulled over and i was like this guy's got to have a podcast or something and so sure enough enough, I found your podcast, downloaded it, and then I binged it from Denver to Minneapolis. No stopping. Oh, you drove. Oh, my gosh.

All the way home. The whole way. The whole way. And I was just hooked. And so I got home and I said, Nat, I'm like, hey, we've been doing this, doing that. I'm like, we got a new goal. We got a new plan here. And we talked budget,

and that was not the easiest thing to introduce, but she was... I was up to my eyeballs in babies and toddlers. I was not sure I wanted to take on a whole nother challenge. He was doing such a good job with my finances. I was like, let's just keep doing what we're doing. But he wasn't going to let it go. I just wanted to step it up a little bit. And anyway, Ken Coleman there, he was the emcee of the Rachel Cruz,

Les Parrott Marriage and Money event that you guys did in Minneapolis a few years ago. Natalie and I went to that. And Natalie really connected with Rachel's message about permission to spend. We've lived a really frugal life. We've always had hand-me-down clothes. And we've shopped at Goodwill, thrift stores, stuff like that. We've always been pretty tight. But when she was talking about permission to spend and putting that in the budget,

I couldn't really wrap my head around that. And then as she talked it through, I was like, okay, this is going to make life easier. And so I was like, let's try it. Let's go ahead and try it because I won't stop when I see something like when our kids need clothes. I won't be like, oh, I don't know. I don't know if I want to spend that. But the permission to spend is a big thing for us. Yeah, it is. That's really what the budget is. Because you decided together that this meets our goals and we have this much allocated to this,

so you have to spend it on that because that's what it's for. Yeah, and that's awesome. Yeah. So was that a moment where the budget thing was a little bit like, I don't know, and then when she gave you that psychology on that, it was like, oh, now the budget's not this big nasty monster. Yeah, it flipped it upside down. Very interesting. Yeah.

That's awesome. Yeah, I grew up working from a really young age, and when we had our first daughter, we decided I was going to stay home and take care of the kids. So not having an income going into um things together i was like well i can't spend anything and i felt terrible spending money that he was bringing home so that kind of gave it a purpose that it wasn't his money it was our money together and that also really helped having that budget put there yeah wow way to go guys and your house is paid for at the end of the story, touchdown.

It's all about downloading and binging a podcast. Pretty much. And it didn't stop there, Dave. I just submerged myself in your material from there on out, and it was a big motivator to stay focused and keep the task at hand. Way to go, you guys. We're so proud of you. Well done.

Who are your biggest cheerleaders? Oh, my gosh. We have such a good network of friends at home, our family. They've all just been super supportive and have really helped us along the way. That's good. Good. Well done, you guys. So well done.

Proud of you. Now that you're done, you don't have a payment in the world, what are you going to do next? You know, we're going to travel a little bit more. Good. And we're going to be more giving. You know, we're going to give back a little bit more, I think. Good. Good. That's a good answer.

Well done. Good job. We got a copy of the Legacy Journey for you. That is definitely where you are. You're going to bring a whole new legacy into your world because of what you've done. And a copy of the Total Money Makeover for you to give away, pay it forward, and get somebody else on this journey with you. Give them the encouragement of your story because you've got quite a testimony.

Very, very well done. And you brought the kiddos with you. What are their names and your story because you've got quite a testimony. Very, very well done. And you brought the kiddos with you. What are their names and ages? Let's get them up into the shot. All right, so we've got Brad. He's 14. We've got Maddie. She's 10.

And Macy's 9. And Alita is 6. All right. Good-looking guys. Now, all the way from Minneapolis, if they've been practicing a death screen. A couple times, yeah. They kind of know what we're doing. I think we'll pull it off. All right, good Minneapolis. Have they been practicing a debt-free screen? A couple times, yeah. They kind of know what we're doing.

I think we'll pull it off. All right. Good deal. Good deal. Sam and Natalie, Bradley, Maddie, Macy, and Alita. $320,000 paid off in 58 months, making $115,000 to $2.25. House and everything! These are weird people.

Count it down. Let's hear a debt-free scream. Three, two, one. We a debt-free scream three two one we're debt-free yes there you go kiddos yeah boom i love it very well done you guys very well done, you guys. Very well done. That's amazing. It changes everything. Yeah. It really does. You look at four kids, and you look at the legacy they've been handed. And they're not even 40 years old.

No. And they have a paid for $500,000 house. Game changer. Wow. It changes everything. I mean, if you just take a house payment from 40 years old and invest a house payment from 40 to 65 it's going to be millions upon millions of dollars that one thing yeah just that one thing yeah your most powerful wealth building tool is your income yeah and when you

don't give it to countrywide when you don't give it to toyota motor credit ford motor credit when you don't give it to master card who named that anyway when you don't give it to discovered bondage when you don't give it to american distress when you have your most powerful wealth-building tool and you invest it from 40 to 65, it's millions of dollars. Everyone in America should be a millionaire. Instead, we build tall buildings in the skyline for major corporations that are screwing you. It's time to stop it. They stopped it. They're free.

They broke the chains off. Did you see Superman rip the chains off? I saw it. They're free. They broke the chains off. Did you see Superman rip the chains off? I saw it. Oh, yeah. He just busted them off. Yeah. No more kryptonite in that house. No.

Pretty cool stuff, dude. Yeah. I love it. I love what she said about Rachel's talk. One line in there changed the entire attitude towards the discipline. It wasn't holding us. The budget wasn't holding us down. It was freeing us up.

Fantastic decision. It's amazing, yeah. I mean, permission to spin. Yeah. That's why people love Rachel because she's so nice. Yeah, she says it way nicer than you, Dave. I know.

You're like, do a budget or you're an idiot. Stop it. Hey, guys. Don't stop it. Hey, guys, he's permitting to spin. And it works. It works. So good. Stop it. Hey, guys. Don't stop it. Hey, guys. He's permitting his spin. And it works. It works.

So good. Stop it. This is the Ramsey Show. Thank you. Carol is with us in Sacramento. Hi, Carol. Welcome to the Ramsey Show. Hi, Dave. How are you? Better than I deserve.

How can Ken and I help? Okay, I have a question. I'm actually a Ramsey coach and also an everyday millionaire. We have three homes that are paid for, and we are also a co-owner with one of our children due to a divorce. Our question is this. If we sell one of the rental homes, we could net about $560,000, which is almost enough to pay off the kids' homes and surprise them. We don't quite have enough.

We're about $60 60k short of paying off both of the homes should we do that or should we keep the house or should we sell it and put the money in mutual funds i'm confused you said kids homes two homes we yes, two homes and two adult children. Okay. And we're co-owners on one of the homes. Okay. But you would pay it off and surrender that ownership? Yes.

Okay. Because you're only a co-owner because you had to bail them out in the divorce. Yes. And then our other kid has his own home. Okay. And our other kid has his own home. Okay, so you sell the rental and it brings $560,000, but you need $620,000 to do this. Exactly. And you don't have the other cash. We kind of do.

I just don't know if it's smart to pull that out. We have other funds. It's not a retirement fund. I just don't know if it's smart to do right now. We're getting eaten alive in capital gains. We're paying about $200,000 in capital gains. So what is your net worth? Probably about $3 million. Okay.

I would do it, but I would only do it if you pull out enough out of your other investments in order to actually do it. If you don't actually pay off the mortgages, it kind of defeats the purpose, doesn't it? Yeah, kind of, because from what I understand, in California you can only gift so much money per year, so we may not be able to do the whole thing all in one. I don't know California law, but in the federal taxes, you have a gift tax limitation that this is well in excess of,

but you can use some of your federal estate tax exemption called a unified estate tax credit. And you just have to do a file. You have to do a unified estate tax credit. And you're using some of your federal exemption up. So when you die, you would have used some of it up already. But you're nowhere near the limits anyway. It's like $20 million, so you're fine. That's what you would do to get rid of the federal gift tax.

I do not know California tax law at all. So you'd want to consult a tax professional to figure that out. I suspect that that unified estate tax credit would also apply in California. I bet you it's aligned with the federal guidelines is my guess. I'd be shocked if it's not. But California does some weird butt stuff to tax their people, so I don't know. But anyway, yeah. So your net worth now becomes two and a half and they have paid four houses. The only other question I've got is,

would they commit to never borrowing money again for anything? Yes. Now, I wouldn't make it a big deal, but I probably would have like a little one-page letter and both of them and their spouses sign it. If we pay off your home, you never borrow money again, and so our family tree is completely changed. Never borrow money again for anything so our family tree has completely changed.

Never borrow money again for anything for any reason. Ever. And by the way, you shouldn't have to. If you don't have a house payment, you ought to be able to save up and buy anything you want to buy. Yeah, yeah. And just, you know, we bring in a nice income off of the rent. We don't have to have it. So that's kind of my dilemma, too.

I'm just like should we sorry how old are you guys we're in our 60s yeah i would do it yes really yeah okay and pull the other 60k out of yes i would not do it unless you're going to pay them off i mean there's no point in paying it down that doesn't do. You still have a stinking mortgage. But get rid of the debt and have them both sign a little one-page letter. Just type it up and just talk about legacy and how you want to change your family tree. And everybody participates. I think that's a fair trade.

And then after that, you just don't bring it up. And you can't go managing their finances anymore. This is their life. You don't get to interfere. This is a gift. But the gift is predicated on the fact that we're changing our family tree, and that is a fair level of control in return for the gift. Yeah, let me ask you on that.

Are you saying in the letter that they are committing? They're just asking the kids to commit to that. They're not going to be checking up on them. That's what you're getting at, correct? There's no strings attached, but it kind of is? Well, it's a promise yeah i like that it's just a promise i promise in return for having my mortgage paid off to never borrow money again i think that's fair that's a family oath so to speak but it's not a it's not a legal commitment and no you're not going to check up on them once a year and look at their balance sheets and no you're not doing any of that it's just like you know if they go and buy a house and put it on a mortgage in the future you

would just look at them and say you broke your promise you know that's it that's all it is and then you just go well that's sad you broke your promise because you shouldn't have had to yeah if you're because the kids are going to be millionaires pretty quick oh yeah no question about it they'll be there very very quickly depending if they're if they are you know learning from their parents model uh to not borrow and to be generous and to be investors that they'll get there very very quickly open phones at 888-825-5225 matthews in phoenix hi matthew how are you? Doing well, Dave. Yourself? Better than I deserve. How can we help? I have a question about refinancing. We owe about $131 on the house with about seven years left of payments after refinancing about eight years ago. And my wife is going to be losing, going on to a full disability probably within the next six months to a year and unable to work, which will be cutting our income in half.

To have money for medical expenses, would it be smart to refinance to lower the house payment to cover medical expenses in the future? What do you make? Uh, currently, uh, 45 for my work. And then with a veteran, uh, disability, I collect another 24,000. So about 65 a year and the house payment okay um what does she make uh currently about 60 to 70 so after uh she what is the nature what is the nature of her disability uh it's a terminal um illness that's slowly debilating her where she has chronic fatigue and unable to stay awake or work. Oh, my. How old is she? Mid-40s, and I'm in my mid-30s. Wow.

I'm sorry, man. That's a battle we've been going through, but still staying strong and trying to follow your way as best as possible to prepare for the upcoming future of her health issues. Seven years is so fast. You're going to be done. I hate to have you walk away from that, but I would not trade quality of life if we've got a terminal diagnosis for anything so um yeah i probably

would i probably would consider just because i don't only want you to have the wiggle room to make sure you got medical bills and stuff covered i think you can cover the house payment i think you could get it out and make it but it might mean that you don't get to do some things with her that you need to do while she can. Exactly. So it was the out of being debt-free because we only owe $131 on the house. Yeah, you're almost there in seven years. Oh, I hate to have you lose that. But if you put that on a 15, it will relax that payment considerable, and you can circle back later and maybe still make it in seven years or eight years or something.

You never know exactly where this journey is going to take you. But, yeah, I mean, you need to concentrate on her. Okay, just wanted to hear from you because I know always snowball forward, and we've been doing really good the last seven years after taking your course. I would love to see you finish it up, but not if it means that you lose some experiences with

the time you have with her. That's not a good trade. I wouldn't. Either way is okay, but I just wow, heartbreaking. This is The Ramsey Show. This is James Childs, producer of The Ramsey Show.

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