The Ramsey Show - App - Stop Just Listening And Start Applying! (Hour 1)

Episode Date: February 2, 2023

Dave Ramsey & Jade Warshaw answer your questions and discuss:   How to handle business debt when tackling the Baby Steps, from the blog: Are Business Debt and Personal Debt the Same? When you should pause the Baby Steps and save up cash, from the blog: When to Pause Your Debt Snowball Why HELOC's do make you financially sophisticated, from the blog: HELOC: What Is a Home Equity Line of Credit? "Should we be content in our current home?" from the blog: How to Own Your Dream Home Should I use collector cars as assets for the future? Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studios. It's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Warshaw, Ramsey Personality, is my co-host today as we answer your questions about your life and your money. Thank you for joining us. We're glad you're here. The phone number is 888-825-5225.

The call is free, and some say the advice is worth exactly what you pay for it. Oliver starts off this hour in Canada. Hi, Oliver. How are you? Hello, Dave and Jade. It is an honor to speak with you both. How are you today? How are you? Better than we deserve. How can we help? I am good. I have a question. It's kind of complicated, so I'll explain it as best as I can. I'm going through the baby steps. I've been listening to you since 2017 and, uh, I had made it to what I thought was baby

steps four and six. I'm not sure if I'm actually really there, um, because, um, me and my brother have a partnership business, the small business that we do together. And, um, back in 2018, I foolishly took over, um, some debt that he had created with a lot of business expenses, but it was on his own credit card, but still tied in with the business. Um, cause he was trying to be approved for a mortgage. Uh, so in order to get that mortgage, I had to, well, I didn't have to, but basically he had to get rid of that debt out of his name, and I foolishly put it into my name.

I know that was a stupid thing to do, but that's what happened. And basically, while doing my budgeting since that time, I'm like, as far as the bank is concerned concerned that debt is in my name now so that's my debt even though i didn't create any of that debt and it was all my brother so i'm just wondering on if i should go about the baby steps by sorry i'm just a bit nervous that's okay um no dude it's real simple you're in debt you're in baby step two yeah yeah i, it's real simple. You're in debt. You're in Baby Step 2. Yeah. I mean, it's a long, convoluted, crazy, stupid story how you got there, but, you know, you're in debt.

How much is it, Brandon? It's about, let me see, there's about $19,000 left. Okay, and how much is in your emergency fund? So I did have $14,000, which left. Okay. And how much is in your emergency fund? So I did have 14,000, which is another story. I had to take about 4,600 just this past month in January to pay myself because I wasn't able to pay myself from the business. It's not the most profitable, which is another issue that maybe I should call again about or call call ken coleman yeah but um there's about uh 2600 left in my emergency fund 2600 i thought you started with 14 000 and took out 4600 how did you get to 2600 sorry let me check that so unless you were doing more with that money, you should have around $10,000 left, right? If you only took $46,000.

So I'm just looking at my numbers here. Okay, so here's the deal. I think I went into it a couple times. The business, based on the fact that your brother ran into debt, and they moved the debt over to you, and now you're having to use money out of your savings to eat from the business, it doesn't sound like this business is much fun. No, it's not. So let's go get a job.

I'm doing a side hustle right now. It's not much, but it's flexible. It needs to be a lot. You need a job. Yeah. You need money to eat with, and you don't have money to eat with. Well, I don't know how to do that because it's like me and my brother are the owners i have employees it's a small business i have three employees we've either got to get the income

up from the business or we need to close it it's not a business when it's losing money it's a hobby well that's the other issue i'm trying to you know me and my brother don't agree with um certain things on the finances and all of that. And he thinks credit cards are fine. Even more reason, even more reason to close it. Have you ever watched the show Shark Tank? Yes. And Mr. Wonderful says you need to take this business out back and shoot it. Yeah. I've already spoken with my brother about, you know, I'm not enjoying the, I've told him very clearly, I'm not liking how this partnership is going, even though I care for him as my brother.

But, you know, I've already told him, like, I need to get it. You guys aren't making enough money to run the business. So it could be you just turn the keys over to him and let him have it, and then you go get you a job. Do what? I've told him that I would just start my own business, you know, doing the same type of business of what I'm doing now, just be the sole owner. I've told them that that's an idea I'm thinking about, you know,

to not have a partnership, just have me run my own business. Well, somewhere you've got to get money to eat, honey. That's what I'm saying. Yeah, I hear you. I hear you. And then we can attack the $19,000 in credit card debt that is now your credit card debt because you decide to make it yours, so now it's yours. And so there's two issues on the table.

One is how do we get out of your credit card debt of $19,000? And the answer is, first thing we do is stabilize our income and get some income. And then the second thing is we're going to start the baby steps, which is $1,000 left in your account because everything else went to the $19,000. The credit cards are cut up and closed, and then you attack them with a vengeance with your extra job, your six extra jobs, and your side hustle and grind. And then you clean that mess up and you move on. But what all of this is doing, sadly, Oliver, is it's going to make you face what you didn't want to admit. So my friend Henry Cloud wrote a book called Necessary Endings.

When is it necessary to end a job, business a relationship it's when there's no hope in the future in your mind that it's going to get better and so uh you know my boyfriend's does drugs okay there's no hope that that's going to get better is when you axe the drug-using boyfriend. Gone, right? If not sooner, but. Absolutely. But yeah, but I mean, same thing with business. When do I close down a product line at Ramsey? It's when I lose hope that we can ever make it work. Until then, I'll go at it, you know. But winners never quit.

Yes, they do. They quit doing stupid stuff. And yet another time when the facts are your friends, because you can look at the bottom line, you can look at the facts over the course of the time of this business and see, hey, like it's not making money and it's not good for our relationship. I have a feeling Brandon, I think he loves the people that work there and he wants them to be all right. And, you know, but still too late. It's too late. Too late. You've lost control of your ability to provide for them because your brother's out of control.

The business is not working. You're not making a living. All of these things are indicating, indicating, indicating this is probably coming to an end unless you have a reason to have hope about the future. But everything you've told me doesn't give me much hope for the business in the future, in the current state that it's in, and the way it's being run, and everything else.

So if you say, okay, these three things change, then I would have hope. Okay, then you could submit those three things to be changed, or the change is going to be, I'm out of here. That would be my choice,

just being honest. Yeah, pretty quick. Only ship that won't sail, folks, Out of here. That would be my choice. Just being honest. Yeah. Pretty quick. Pretty quick. Only ship that won't sail, folks, is a partnership. Woo. This is The Ramsey Show. We'll be right back. well some of you survived the 300 days of january was that a long month or what it was so long long that a lot of you lost all the energy and enthusiasm you had to get your life straightened up. So we're here to remind you that you had energy and enthusiasm to get your life straightened up.

It just seems like a long time ago. Hey, you can make changes with your money. Change is hard, but so is mediocrity. And that's why you've got to have people walking with you and that's why the financial peace university classes have been a game changer for about 10 million people now in an fpu class you learn our proven plan to get out of debt so that you can build wealth and be outrageously generous and you do it with other people that are going over and going through the exact same thing hundreds of fpu classes are popping up all across the country,

both online and in person, and you can sign up for an FPU class. Go to ramseysolutions.com slash FPU class, ramseysolutions.com slash FPU class. You could join Jade's. I hope that you do join mine. Mine starts March 1st. You can find it by going to financialpeaceuniversity.com. But there is a specialized link. If you are watching on YouTube, you can click that QR code. We will also put the link in the show notes. And I'd love if you joined our class. It's going to be great. We are going to dive into all the stuff. Ask me any questions. And not only that, but we will have a Q&A the next day on social media on my Instagram that you can come in there and we'll answer questions there as well. So I'm excited for you guys. This is, I tell Dave,

I got to say, there's two things that I tell people about all the time, FPU and Jesus. They're the two biggest X factors of life change. And Sam. Well, I don't tell them about Sam because Sam is mine. No, no, there's no sharing there. You't tell them about Sam because Sam is mine no no I know there's no sharing there you do tell them about it but so hey I will warn you people do not join Jade's class unless you're about doing this because she loves you well and I'll let me define that for you she gonna knock the crud out of you if you don't get yourself in gear oh yeah don't don't come in talking about oh Jade it's it's so hard no no whining no whining whining with jade because you know what else is hard it's a no whining zone it's hard not being

it's hard being collected by bill collectors i can't even get it out of my mouth it's so hard you can't say it man it's hard to go to the grocery store and not have enough money for groceries it's hard it's hard to be worried all the time it's hard it's hard to not sleep well at night because you've got so she's gonna love you so much that she's gonna call out the stuff and hey you're gonna do it you're gonna do it this is a fun thing i mean we work together we call each other out and we lift each other to another level you'll level up as you go through this right and so financial peace university ramsey solutions.com click on fpu so blake thompson was my very first That's right. has got a very, very large crew, including all the booth people in there running the show today and the ones on every podcast that we do around here or every radio show that we do around here. And, of course, Blake and I started with the money game, later the Dave Ramsey show, now the Ramsey show on radio.

And he sent me an email this morning that just kind of blew my mind. So we have now tallied up and we are billionaires uh not net worth although maybe but uh aside from that we now have had one billion dollars worth of debt reduced in debt-free screams alone during the time we've been doing debt-free screams alone. During the time we've been doing debt-free screams, all added up, all the people, just the ones on the air, not all of you that didn't come on the air, but the ones that did their debt-free scream on the air is now over a billion dollars.

We have now had over one billion podcast downloads of this show and we have now had over 1 billion youtube views of this show wow we're three billionaires buh buh buh billion with a b wow let's just close my mind a billion downloads of this podcast uh yeah we're in the top five podcasts in the world literally um there's only a handful of people that have had a billion downloads joe rogan me npr a couple of others but uh that that's about it but we've been on the podcast scene since before podcasting was cool and i've been putting what was what was and is a radio show out over that venue and that's where this comes from a billion dollars of debt paid off with a billion podcast downloads and a billion youtube views that's a lot i'm just

saying that's a lot brandon is with us brandon's in atlanta how can we help you brandon hi sir congrats on the 1 billion successes so here's 1 billion. You're going to hear that I'm wrong and you were right. Um, I got a dummy express card about four years ago. I've been listening to you since then. I never took everything that you said to heart, but I did listen and I kept paying off the American express. I got to a point where I accidentally racked up about $11,000 in debt and credit card debt. Um, I'm down to 9,000. Now I've been taking you serious for the last three months. I have a budget. I'm paying about $200 a month on it. Um, I've saved up though on the side, almost 5,000 to put towards it. But right now my job is in jeopardy. I make

about $70,000 a year after tax. My job has been in jeopardy lately. We're just waiting on some contracts to hit. Do I put the $5,000 and just go ahead and start knocking down that debt or do I hold it as an emergency fund just in case i need to find another job in jeopardy sounds serious like a 50 50 chance you lose your job um but yeah around that or 60 40 i'm hopeful but i don't want to use that as my excuse this is not vague worrying. There is a more than half chance you're going to lose your job. Possibly, yes, sir.

Yeah, you hold your cash then. Okay. Until you get your income stabilized. And you're not working the baby steps. All we're doing is piling up cash. Yes, sir. And you hold the cash you've got. You pile up other cash to get ready.

Because $5,000 is not spit, you lose your job. And once those contracts hit, if they do and everything goes back to being stable, that's when I go back into the baby steps. Then you push play. You push play again, and you empty everything out but $1,000, and you attack that card. And $200 a month when you're making $70,000 is pretty stinking wimpy. Yeah.

You've got to get after it harder than that you'll stay out of the restaurant stay out of the restaurant yes sir am i wrong no you're completely right uh with 70k of income he you doing a lot of restauranting and a lot of mauling and a lot of whining and dining, it sounds like. Yeah, rents went up in my area. Everything's went up for everybody, so that's not an excuse I can really use, but definitely once I got my contract up. The interesting thing, Brandon, and you've heard us say this because you've been listening but not applying,

but let me say it again just for you, okay? The thing that we have all discovered in this process is the angrier you get about this, the deeper you'll sacrifice temporarily and then the faster you get out of debt. Because the deeper you cut your lifestyle, the more money you throw at the debt, the faster you get out mathematically. But that has to do with this visceral emotion that where you start to be like okay i'm ready to do it now no no no no no this is like ah okay and when you get that thing going that's when you're going to get like two thousand dollars a month hey you got to make it hurt you

got to cut it deep because when you cut deep, you hate it. And you hate that you have to live like that in order to pay off this debt. And so you'll never do it again. You will vow to never put yourself in that situation again. Open phones at 888-825-5225.

Thank you for joining us, America. We're glad you're here. And we do appreciate you guys. The fact that a billion of you have clicked on a YouTube, a billion of you have downloaded the podcast. Thank you so much. That's pretty stinking incredible. That's greatly honoring to us, and it makes us excited to come down here and help you every day and to answer your questions and to argue with you and all the fun stuff we get to do here. So thank you. Thank you, thank you.

Jade Warshaw, Ramsey Personality, is my co-host today. I'm Dave Ramsey, your host, and this is The Ramsey Show. Cynhyrchu'r ffwrdd o'r ffwrdd a'r ffwrdd o'r ffwrdd. Cynhyrchu'r ffwrdd a'r ffwrdd a'r ffwrdd. Cynhyrchu'r ffwrdd a'r ffwrdd a'r ffwrdd. Cynhyrchu'r ffwrdd a'r ffwrdd a'r ffwrdd. Cynhyrchu'r ffwrdd a'r ffwrdd a'r ffwrdd. Cynhyrchu'r ffwrdd a'r ffwrdd a'r ffwrdd. Cynhyrchu'r ffwrdd a'r ffwrdd a'r ffwrdd. jade warshaw ramsey personality is my co-host today open phones at 888-825-5225 i was being interviewed on another podcast this morning, and the guy asked me,

Jade, he said, so what has changed over 30 years? And I said, well, everything's changed over 30 years. The principles that we teach have not changed at all, but there are new and improved ways to do stupid. Absolutely. That comes out every year and uh to you know and sometimes they rename old things and try to make them sound like they're new and stupid uh but they're still violating basic principles so let me give you the basic principle the basic principle is the shortest distance

between where you are and wealth is your greatest wealth building tool, which is your income. When you pledge your income to someone else in the form of debt, you slow down your ability to build wealth and you add risk and anxiety to your life. It's a very simple equation. Zero debt leads you faster into wealth than anything else you can do with money. The number of millionaires, when we did the largest study of millionaires ever done in North America that said they borrowed their way into wealth was precisely zero. The number of them that said that their airline miles on their card made them a millionaire

was precisely zero. The number of them that said, I became a millionaire because I leased a car was precisely zero. The number of them that said they became a millionaire because they took out a whole life insurance policy was precisely zero. The vast majority of them had avoided debt completely or like the plague and it kept their incomes freed up and caused them to be able to invest i don't have any money for my 401k no but you have a 750 car payment idiot no wonder you don't have any money for your 401k 1300 car payment that's right or here let's bring back an oldie but a goodie. Now, because everybody's doing it again, you know, those clothes, if you keep them long enough, they'll come back in style.

And the same is true with stupid. So the home equity loan is back. Yes, home equity line of credit. The HELOC, the home equity line of credit. And Lifehacker says, I used one when I got in trouble, so everyone should have one. In this stupid butt article, I remembered we'd taken out a home equity line of credit and we bought the house and it saved our butts. Oh, really? Oh, really?

His whole house is leveraged on this money. Yeah. So, you know what a home equity line of credit is? Explain it for him, Dave. It's debt. It's a second mortgage. And you know what they base the interest rate on? Your credit? Nope. Whatever they feel like when they wake up that morning. Because it's variable.

It's completely variable and it is not indexed to any outside thing. So Mr. Banker says today, I think I'm going to charge Joe and Susie stupid money. So you mean to tell me in 2021 when I saw everybody in my neighborhood redo their yard, redo their kitchen, redo everything, and I'm going, where is this money coming from? It's because they took advantage of their home equity. They leveraged. That's the word I like, Dave. They leveraged. Well, I'm sophisticated because my equity otherwise was not working for me.

And now I have new bushes. At what cost? Yeah. That's what the banking ads sound like don't they i mean if you listen if you listen to sofi oh yeah it's oh just make me so smart money moves i'm just gonna so far throw up right here oh my god man i dave i told you this before the break it's a good thing because i did so much stupid stuff before i got a hold of of the principles here if i had known about a heloc thank God I didn't know about this because I would have

just added it to the list of dumb stuff right next to co-signing a loan. I would have put HELOC. Well, here's the thing. There's a lot of idiot financial planners and people like Lifehacker who will tell you to get a home equity loan in case there's an emergency. Now, let's follow this line of, in air quotes, logic. Okay? So, you lose your job or you have another financial calamity of some kind.

So, the home equity line is there to help you. You can go draw on it and you have money. So, at the moment that I've lost my job or had a financial calamity is precisely the moment that I want to go deeper into debt. This is the line of thought. That's a head-scratcher. Yeah. So I've had financial planners talk about this for years, and I've had to just rip them to shreds because it's just so freaking stupid.

Not all of them do this, but, I mean, some of them will say, open a home equity line of credit, don't use it, and use the fact that you can go tap into it if you need to as your emergency fund and i always tell them so what i want what i want to do when there's an emergency what i want to do is add to the anxiety and the stress by going deeper into debt right you're turning in it's dumber than a rock oh my god it turns the emergency into a crisis. Into a crisis. Because now you got whatever it is that you're having to deal with, and you have to pay off the debt, and it's at a variable rate of interest. So her point was that they had a storm damage,

and they were able to use their home equity loan to fix it. Because apparently you don't know how to work with your insurance company. Because if you have storm damage and your roof's leaking your insurance company will show up start writing checks in about 36 minutes yeah uh if you actually know how to talk to them instead they didn't show up for you you know why because you didn't need them because you went into debt yeah there's a lot underneath the surface here on this article and let me tell you what else happens every time you do this crap right here okay house gets torn up we use debt to fix the

house and we're going to pay off the debt when the emergency when the insurance check comes you know what you always do a hundred percent of the time people well 98 percent of the time people will do more repairs to the house because while we're at it we're going to go ahead and renovate then the insurance check will cover. So when the insurance check comes, it's not enough to cover because while we were at it, we did some other stuff. Yeah. Human freaking nature.

That's what I love in this article. He says the HELOC allowed us to get started immediately with the repairs. As if insurance won't show up when the roof gets blown off your house. Yeah. I mean, really, if you have an insurance company on homeowners that will not show up and give you help immediately when there's storm damage, you have other issues that a HELOC won't fix. You know, I wonder what would happen if you just saved up for emergencies. Oh, wait.

You had money. If you just saved up. Oh, there's an idea. I wish I had thought of that. And you had money if you just saved up oh there's an idea i wish i'd have thought of that and you had the amount we should we should do a radio show about that that's awesome idea and in your three to six months you had the amount of your homeowner's insurance deductible and you didn't have any payments and so while you're at work you're making money without any payments and you have an emergency fund and then when you have a crisis you have this thing called money that's a great idea jade and you just go what is it that sucks all right write a check yeah that's all you do dave emergency fund turns a crisis into an inconvenience and a home equity loan turns a crisis into an opportunity to be crisis squared mm-hmm double up triple up exponentially worse so here's

the here's you're not sophisticated if you use the home equity loan to cover your problems in life you're broke there's nothing sophisticated about being broke. It's just dumb. Okay? Just dumb. Now, I've been dumb and I've been broke, so stop being dumb, stop being broke. We're going to walk you through this. And you don't use, well, I'm utilizing the equity in my home that otherwise would not be working for me. You're an idiot.

Okay? Otherwise would not be working for me. You're an idiot. Okay. When you say stuff like that, you're just an idiot because you are, you're truncating your most powerful wealth building tool. You're slowing your wealth building down because you didn't have any money to cover emergencies. So everyone should have an emergency fund after they're out of debt, except their home baby step three of three to six months of expenses. We've been saying that longer than home equity loans have been in existence. They were not even in existence when we started this radio show 30 years ago.

They didn't make them. And now we have a HELOC. Because we like HELOC. It sounds so... Well, you're locked in. I'm a financial person. I have a HELOC. You get a HELOC, you're locked in. I'm a financial person of a HELOC. You get a HELOC, you get locked into debt. Yeah.

That's about it. You know what? I think somebody ought to complain. Why didn't they call it a SHELOC? Dave, don't go there. Don't go there. I think I just got canceled somewhere in the universe. This is The Ramsey show We'll be right back. jade warshall ramsey personality is my co-host today open phones at 888-825-5225

stewart is in atlanta hey stewart welcome to the ramsey show hey dave thank you guys so much for taking my call. Sure. What's up? So just wanted to get your thoughts on where my wife and I are at. We are 32 years old. Our income is roughly $185,000 a year, and we are currently on baby step six. And my question is more around what we should do over the next couple of years. So we are almost ready to pay off our house. And over the next couple of years, we are going to want to move to probably a bigger house. But my question is more so around contentment, because I know that once we pay off our house, we won't have any other payments. And so my question, I guess, revolves around, should we take the next three or so years and

save up a really big down payment to get the house that we would live in forever, I guess you could say? Or should we not do that and instead just stay where we're at in the current house that we're in and just use the money that we'll have every month, you know, to invest more, et cetera? Yeah. Well, I mean, there's a lot of different ways you can get at this. First, let's just dispel the idea that there is such a thing as a forever house i'm 63 i've had four forever houses so far i keep thinking they're forever and then they're not um sharon and i are planning to build another house right now and she says well this i'm gonna build this because i'll probably die in this i said not a chance no and unless you die quick i

mean it's just because we're not gonna i mean we we're just we're 10 12 years 13 years and we move on the next one i mean so uh maybe maybe not but so all of that's aside you got a really good question you put yourself in a wonderful position congratulations you make a lot of money uh you're debt free you're being very wise you're thinking about things which makes you also wise. Most people just do crap and then wonder how to clean it up, and you're just doing really, really good, Stuart. So this is more of a discussion of smart or smarter, okay?

There's no dumb in this discussion, okay? So just way to go, dude, way to go. So if you live there and you're going to pay off the home, is it paid off now or it's almost paid off it's almost paid off we should be making our final payment this month oh way to go and what's that house worth um probably around 220 225 way to go good for you okay and then you're going to want to move up sometime in the next few years to a house that is worth maybe what uh we were we were thinking probably around 500 okay so double okay so you need you need 300

grand and you make 180 right yep okay so i just do big math in my head as a way i do it if i'm looking at this stuff to start to see how I can emotionally swallow this or not. Okay. Is it going to take me 10 years or is it going to take me 20 minutes? You know, that's what I'm always looking at. And so in your case, if I did 100 a year for three years, you're there, right? And you live on 80. Right.

You live on 80. So that's one kind of contentment. Another kind of contentment is you live in the current home you're in for the rest of your life. A lot of people do that. Another kind of contentment would be to go ahead and sell your house now, buy the $500,000, $550,000 house, put the whole equity from your current home into it, and then turn around and pay it off in three or four years with your great income. None of these are in the dumb column. Now, I will tell you this. If you pay off your home, the way you've been intentional about this, the words you're using, how dialed in you are to the Ramsey stuff,

and you sit there in a paid-for home until Christmas, I will tell you from personal experience, it's going to be very hard to take on a payment again and swallow it and get that down your throat. Yep. Yeah. That's what we've thought about too it's up to you i'm just saying it really tastes especially bad the second time yeah it's like getting to swallow your food the second time that looks gross you know so uh yeah it's just's just hard. Again, is anybody who can put down enough money and pay off their home in three years stupid? No. You're not even close. I mean, you're just in great shape.

So, any of these are fine, or you can kind of meet in the middle, Sharon. We don't borrow money, so we would have to wait and save it up, Sharon and I. But we don't yell at people on the Ramsey show for taking out more than a 15-year mortgage where the payment's no more than a 15 or a fourth of your take-home pay, and you're nowhere even near that side of the equation. So you could actually land in the middle and say, okay, we're going to live here one year and put another $100,000 in the bank, and then we're going to do it, and then we're going to pay it off in two years, or we're going to live here two more more years and put 200,000 in the bank and pay it off in one year to be honest with you

Dave I you know that third option that you gave you said regardless Stuart whether you save up for three years or it's such a small period of time too because I'm the type three years I'm like oh if we're going to pay it off in three years anyway I'd rather live in it while we're paying it off but these are the these are great problems to solve because like Dave said, there's no stupidity here. It's just options. And if you make that final home payment and you're like, I like this, I will never go back into debt again, then wait it out. But for those people listening, I do think it's important to hear that you pay off one home. You're not a bad person if you go back and get a small mortgage again to move up in-house. What I will tell you

is this. Don't start looking at $550,000 houses after you've looked at $750,000 houses. That's a good point. That won't work. So just don't even go over there. Don't even go over there because you can actually pull that off too but you gave me these guidelines that's a good point i would hold you to those in the name of contentment because i didn't give you the number you gave yourself the number so stick to it because i gotta tell you you you look at a million dollar house they're great until you look at a two million and it just the line keeps moving doesn't it it doesn't matter i mean you know you know what's nicer than a fifty thousand dollar car

a hundred thousand dollar car yeah so i mean it's just but don't go drive one unless you're gonna be buying one yeah so yeah stay stay out of that neighborhood don't go to open houses i just want to see what the color no no don't play yourself no no no i don't feel like no you don't stay away from there hey stewart you're doing good man congratulations tom's in peoria illinois hey tom what's up hey dave long time follower uh first time caller here for you thanks uh appreciate you guys uh really appreciate you taking the call here uh just want to get your idea here for me. I'm kind of in a unique situation. I am 56 years old.

My wife is 52 years old. We live, we are completely debt-free. Our house is paid for. Following your steps early on in life here, starting in my 30s, our first home, we took out a small mortgage for, I shouldn't say small, it was a 15-year loan. We paid it off in five. We saved up for approximately five more years living at that home, comfortably, until we started having children. Okay, what's your question for our run-out time?

I just want to know, I'm a big car guy, and I have quite a few collector cars here, and I just want to know what you thought as collector cars as an asset for later on in life to cashing in on value, as, I don't know if you call the collector car market at all. I've got a 1970 frame-up Restro, or 1960 frame-up Restro Corvette. So, yeah, I got one in my garage. So, I was born in 1960 1960 so i wanted a 1960 so yeah i'm in i'm in i'm in the business uh the thing about collectibles is uh they're so dependent it's such a weird market it's such an imperfect market it's an unpredictable market um and uh it's more dependent on your expertise than it is actually the market as to how much money you end up making on one.

They're an asset for sure, and they do increase in value if you did a decent one for sure. That car is probably going up some in value since I bought it. But I tell people of collectibles of any kind, fine art, wine collection. I've got a gun collection. You know, they're all assets because I've got money tied up in them, but they shouldn't be more than 10% of your net worth because then you're betting the farm, so to speak, on that category. And so it's okay, and you can make a little money on it, and it's a great hobby that goes up in value.

That's fun, and you've got the margin because you've got the money. I would do it, but just limit the value to about 10% of your net worth or somewhere around there, and you'll be okay. That puts this hour of The Ramsey Show in the books. Hey, what's up, guys? It's Jade. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramseysolutions.com today to sign up for our newsletter. Again, that's ramseysolutions.com to sign up for our weekly newsletter.