The Ramsey Show - App - Success with Money Magnifies Envy and Jealousy in People (Hour 1)

Episode Date: April 24, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave 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. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Stephanie is on the line starting off this hour in Minneapolis. Hi, Stephanie. How are you? Hi, Dave. Thanks for taking our questions today.

Sure. What's up? So I have a question about how to navigate family relationships when you start making, like, good money. So my husband and I's business went from zero to about gross 220 in about a year and a half. It's going really well. The trajectory is up, and it's awesome. But I've already started getting some weird comments from my family. So over that time when we started making some money, I was pregnant.

We upgraded to a tuft and needle mattress and just like a little thing like that. Or we joined a nice gym in the area. And we get these comments like, oh, money bags over here, us making a lot of money. And I think when we joined the gym it was, you must win the lottery to afford that kind of stuff. And so it's just been weird. And with the trajectory of our business going up and making more money,

getting to live the life that we want to, vacations and things eventually, I just don't know how to navigate. What we already have is a really good relationship with my family, but it's starting to get a little weird, holidays and stuff, when we tell them what's going on. So, yeah, just don't know how to do that. Well, number one, if you have a good relationship and someone says something that um is hurtful you

ought to be able to say that yeah say you know um you know i know you probably didn't mean anything by that but when you said that it was like you were questioning whether we should be successful and kind of hurt my feelings i just need to say that to you and so if you have a good relationship you can do that if they're just jerks then you would just have to treat them like jerks. And the thing is, what happens is this. Money doesn't cause things. Money magnifies things that are already there. Good things and bad things.

If you have a high, high-quality relationship, highly functional, it will become even more so with large sums of money around. If you have weak and petty relationships that everyone acts like is okay, but on the surface it's not, then that will be magnified as you have wealth. Yeah. If your daddy is proud of you, when you get wealth, he will be very, very proud of you. Yeah. But if your daddy is a drunk and is dysfunctional and has to be king of the hill or he can't be in a conversation because he's screwed in the head

and all of a sudden he can't be king of the hill because your net worth is eight times his, then your daddy is going to get worse. You know? Yeah. You see what I'm saying? So that's what you watch for. And I'd pick up Henry Cloud's book, Boundaries, because that's what this is. It's a boundary issue.

And read through it. You'll enjoy it and it can be with functional things as simple as you know one of the things we've been very very careful to do with extended family is just not to we just don't talk about a lot of stuff that sharon and i'll talk about it we'll say well i don't know if so and so can really grasp that, so we're just probably not even going to bring that up. Yeah, and I know we've talked about that with extended family or friends or things like that. Yeah, friendships is the same way.

I've got friends that can't emotionally grasp some of the things that we're able to do for charity, for ministries. I can remember the first time I gave a thousand dollars to something and i can also remember the first time i gave a hundred thousand dollars to something but you know yeah that i i can you and i can talk about that now in front of everybody but it's sometimes very awkward with a friend of 20 years ago you know and so i just have to be pretty calm and go you know that's uh uh talk about them more and me less and uh most people like that anyway that's just good conversational manners and uh in other words i might not if you went on a super super nice cruise you don't have

to tell everybody you're not going for them you're going for you yeah and if you are going for them you shouldn't be going right yeah so you know just uh and and i quit buying cars for other people i got really nice cars you know why because i like driving them and i don't really care whether you like it or not i like driving it that's why i got it i can't do with you you know and so yeah but you know occasionally you get a comment about a car and it's like well it must be nice do with you you know and so yeah but you know occasionally you get a comment about a car and it's like well it must be nice you know hope you can remember the little people i'm like oh jeez you know grab you a spine really is i man i grew up little people i've been little people my whole life i'm just a little people that got big that's all it is so just chill your butt you know but you know that's

what runs through your head but you can't say that out loud yeah so i i will tell you that there is a certain amount of awkwardness and weirdness that goes with the territory but the same thing happens in any area of your life that you grow let's say you came from a home that didn't have the faith, and you became a very strong person of faith, and you grow in that area. Well, you're going to get eye rolls over that, too. How's it going over there? They handle snakes. You're going to get people.

How's the cult operating nowadays? You're going to get these snide things from old friends and family that were not there when you were that different person. But you've changed a lot now, you know, and there's it's just envy and jealousy. And they're two of the two of the devil's work tools. And then they are different. And it's interesting to study them them it's a good it's a good discussion so thank you for letting me get up on a soapbox but um you know jealousy is i'd like to have what you have and that's saying something like must be nice and you kind of mean

it like i'd really like to have that i'd like to have gone on that trip or bought that house or whatever envy is i don't think i can ever have, so I don't want you to have it either. It should be taken away from you. And that's envy. And you see both of these things pop up in the political landscape these days with the whole wealth inequality argument and that kind of thing. You know, the evil rich people. See, that's straight up jealousy.

That's really envy because they shouldn't have that because I don't think I can ever have it. And that's the same thing. But, see, you just watch for that stuff, and then you can address it or you can choose to say, I'm going to limit my conversations about those kinds of things. Worst case is that the person is toxic enough, old friend or family, that you have to distance yourself from them because they're never going to accept that you're winning and you not winning to please them is an absurd idea.

Yeah. You can't go, oh, I'm going to fail at business because Bobby is going to be upset if I win. Well, screw Bobby. Right. I mean, Bobby's just going to have to take a ride. It's crazy. Right.

You can't do that. So there's a Bobby in the booth, and they're all laughing at him in there. No, not you, Bobby. Different Bobby. Oh, my gosh. All right. Hey, good discussion. It's one of the things that happens when you win at anything, but it definitely happens when you win at money.

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Join today at OneDental.com. That's OneDental.com. Andrew is in St. Louis. Well, maybe I'm going with Andrew. That's what you had already said. I don't know. I've got to figure it out. Andrew's in St. Louis.

How are you, Andrew? I'm hanging in there, Dave. How are you? Better than I deserve. What's up? Well, I'm afraid that I believe that the end of my marriage is coming soon. Why? Well, a lot of communication issues. that the end of my marriage is coming soon. Why?

Well, a lot of communication issues, trust issues, mainly that my wife has two times in the past six years just randomly taken my son and just left, didn't tell me where they were going, and just, like, stayed in a hotel because allegedly she was scared of me, even though I've never heard her in any way. Have you all been to a counselor? I have on occasion, but not, I don't scream. Have you guys been seeing a counselor?

You know, we keep talking about doing it, and we've been to counseling before, but this time feels different. Don't bother if neither one of you want to save it, but if you want to save it, you know, sometimes people can help you rewire your brain. It's not a bad thing. Anyway, how can I help you today? Well, what I really want to know is, like, what kind of steps should I be taking for my financial future? I mean, one of the things that we argue about is, I mean, unfortunately, you're a four-letter word in our household. You know, she hates when I bring up, you know, trying to create a budget together. I try talking to her, you know, about like, hey, you know, what's your dream? You know, what do we want to, what do you want to do? Let's set a goal. And with that, let's build our budget so we can,

you know, pay off what remaining debt we have and let's do something big, you know. And she said that I've, you know, destroyed all of her dreams. So I, at this point, I am fully on board with you and I have control of the money because she does not work and doesn't want to work. She is disabled but I still think she's capable of working. She's had a number of spinal surgeries including fusions but she can answer her phone. How long have you guys been married? What's that, sir?

How long have you been married? If we last, it'll be 20 years on july 21st and we have a 13 year old son oh my goodness and what do you make uh 68 000 okay well the the day that the absolute decision is made not not the legal process but in your mind or her mind that this is not repairable or done the day that happens it turns a marriage into a business transaction yeah and so then you're just dividing up debts, assets, and your income. And, you know, certainly child support with a 20-year, there might be alimony. If you have debts, those will be divvied up in some way,

and the decision on the house will be made. And these are just transactions, in other words, where our life used to occur. Yeah. But it changes. The switch has to flip to where you go, okay, that is not wise business, and I'm not doing that anymore. Well, she's going to be mad. Well, you no longer care if she's going to be mad. She's now the X.

Right. She doesn't like that. I don't really care if you like it. be mad. She's now the ex. Right. She doesn't like that. I don't really care if you like it. I'm not going to do that anymore. Yeah. And so, you know, no, we're not keeping this house. You can't afford to pay for it, and you want to stay in it. And my name's on the mortgage, so the house is going to be sold.

You're going to be renting. I'm going to be renting. And, no, we've got to do, you know, whatever it is. You look at it, and you go, this car does not fit in the situation we will be selling this car and so you become the bankruptcy liquidator or the pre-bankruptcy liquidator guy in your own life you know and you go i don't really want to be liable on this note and this woman sitting over there anymore i don't want the contingent liability of that i'm not gonna let her drive a car that has my name on the note um as an ongoing thing now you would certainly do that with your wife and see the problem is the reason i said the day you think

the day you have the decision is made 100 there's no chance of reconciliation once that decision is made you're going to take some financial steps that's going to further damage the relationship. You follow me? I do. I do. And so it's going to get kind of cold and calculated at that point if you're using wisdom. But at that point, it's, you know, you have two concerns, you and your child.

Yeah. you and your child yeah and and i would like to be nice to this other person but i'm they are now no longer my job yeah and so once you decide that or she decides that then the switch flips and so i would not there's not kind of a middle ground like how can i prepare for the divorce in case we don't reconcile no you really can. Because as soon as you start preparing for divorce, it's going to damage the reconciliation. Right. You're going to have to make some really tough decisions. And you go, this is going down.

It ain't going to be pleasant. Because it's not going to be pleasant for either one of you. How much debt do you guys have? Not very much. In total, about $9,200. How much do you owe on your home? We owe about $62,000 on the home. Okay. And no car payments. My wife had $7,700 in student loans, but because of her multiple back surgeries, she's one year into a three-year uh situation where if she doesn't work uh then they'll be forgiven yeah well she may not be able to live on child support

so she may be working she'll have to find a way i'm pretty sure that may change you know and i don't know i don't know missouri's rules on alimony 20-year marriage is often opens up the uh that's a long marriage and so it often opens up the door to that in most states, but I'm not an attorney, so you'll have to figure that out. I'll definitely consult one. Yeah, but this is now suddenly a cold transaction, and it damages. So that's why I was asking the other questions. I wasn't just being nosy. I was trying to ascertain where you are on reconciliation.

I think my marriage is coming to an end is different than, ah, I just saw an attorney. We're filing this, okay? And so, you know, you've got to decide that. And, you know, you can put some, as you come down to the finish line on something, to the decision, it doesn't have to be where you are now or absolute. I'm done. You could say, well, under what circumstances would I not be done? And let's try those three things.

And if we sat down with a counselor and we could change the narrative of this situation, um, well, I wouldn't be done, but, and so I'm going to give that one try. It's 20 years in 13 year old son. I'm going to give that a try. And then the counselor 13 year old son i'm going to give that a try and then the counselor you know you get some parameters and you go well you know we're not abiding by that we can't do that so it looks like we're going that ways but let's try this one other thing and no we're done you know we're going to attend this marriage retreat weekend marriage salvation weekend where people go to get their marriages put back together kind of thing

didn't work we're done okay so i'm gonna try this or do that and you know then look for behavior and pattern changes that make going forward real and hopeful um or if you two are just one of you is just completely done and don't even want to try anything then you're not left with any options. If going forward in a mess is your only option, most people don't, without any possible hope of change other than just a lightning strike or something. So it's sad, though. Sorry you're facing that. Open phones at 888-825-5225.

Our question of the day comes from Blinds.com, the number one online retailer of custom window coverings, free samples, free shipping with new promos every month. You save even more. Use the promo code Ramsey. Maggie is in Arizona. Every time I receive a paycheck, I put a large portion toward our mortgage. Each month, I make one normal mortgage payment and two, sometimes three, extra principal payments.

I heard on your show the other day that making more than one payment a month isn't beneficial. Is this the case? Please advise. I'm trying to be responsible and pay the mortgage as quickly as possible. You can send it all in in three different checks during the month, but it has the exact same effect of having sent it all in one check. In other words, there's no interest advantage to sending it in three different checks or one check. They're the same thing. It all happens in the same month.

Or if you send it after the 15th, it's going to happen in the next month. And so there's not any harm in what you're doing, but there's no benefit to what you're doing other than you're chunking on the principle. This is the Dave Ramsey Show. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years.

That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated. And Zander will be there as your guide every step of the way. Visit Zander.com or call 800-356-4282. You need to get this taken care of. I can give you the advice and I can tell you where to go, but it's really up to you to take that important step to get your family protected. That's Zander.com or 800-356-4282. In the lobby of Ramsey Solutions, Carla is with us.

Hey, Carla, how are you? Great, how are you? Better than I deserve. Where are you from? Turlock, California. Cool. Well, Carla, how are you? Great. How are you? Better than I deserve. Where are you from? Turlock, California. Cool. Well, welcome. Good to have you.

And you're all the way over here to do a debt-free scream. Yes. Love it. How much have you paid off? $128,600. Good for you. And how long did this take? Eight and a half months.

Wow. And your range of income during that time? $200,000 to $312,000. Whoa! You jumped up $112,008 months? What do you do for a living? How'd you do that? I'm an ER nurse.

So you just went crazy working. Well, there were a few other things. I received about $11,000 back from the IRS that year. I started renting out a studio that I have in the back of my property and rented out my master bedroom and bathroom to generate some income. And then I had a rental property that I own with my ex-fiancee, so I got rid of both that baggage. And it generated about 66 200 oh okay that makes sense all right very cool so that helped with 129 obviously yes um and the sale of that and

everything else so what other debt other than the rental house was the 129 well Well, I didn't include the rental house on my debt. It was credit cards, consumer debt. I owed the IRS for a couple of years, 2014 and 15, a Jeep, and then the studio that I renovated in the back. Did you sell anything other than the rental and the fiancee no okay very cool congratulations thank you that's a lot of debt in a very short period of time when you go on you go on don't you yeah oh it was rice and beans man sleeping in my jeep at work and showering at work and coming right back 16 Wow. 16, 12 to 16 hour shifts. Wow. How's it feel now that you're free? Was it worth it?

Yes, totally worth it. Totally worth it. What fired you up so much eight and a half months ago? Well, I was working hard at the time and it just hit me like a brick wall. I'm just so far in debt, and I make decent money, and I'm just living from paycheck to paycheck. I have to do something with my life because I want to retire eventually and enjoy my grandkids and my family and everything.

So I just started about three months before i met you uh i uh just decided you know what i'm going to pay off one credit card at a time so i started with the smallest one about a month later i mentioned it to my daughter my oldest daughter you know our kids are always smarter than us right and i mentioned it to her and she's like why why don't you just do the Dave Ramsey baby steps? And I'm like, what's that? And, you know, being the Amazon queen I was, I got on the phone. I'm like, oh, is this the book I need to buy? And she's like, yeah.

So I bought it and read it, and two or three days later. Wow. And just started it. And with gazelle and tents and blinders on and focused. When the student is ready, the teacher will appear. That's true. Oh, my goodness. Amazing.

I'm so proud of you. Thank you. I bet your daughter is. Yeah, she's here with me. Yeah, she made the trip over to celebrate with you. And my grandchildren. And the grandbabies. Yeah, life is good on your planet.

Yeah, it is. So what do you tell people now that you did it? Because this is a huge success story you are. $129,000 in eight and a half months now you sold a rental property you worked like a maniac what is the key to getting out of debt well i would say um budgeting of course everybody says that but mostly just staying focused on one step at a time because i'm like squirrel you know oh you know I already want to be on baby step four and just doing one step at a time and just trusting

the system I made a couple visuals you know graphs and everything like that because I'm a visual person I should have been a guy but I'm a visual person so uh yeah i had the graphs and uh that's the main thing just stay in focus you know the number of folks that do this that are nurses is amazing and i think the correlation is there because in in your world of care obviously there's a prescribed methodology for treating a certain thing and you don't really do squirrel on that you got to do the prescribed methodology or you can like lose your license it's incompetence so you're used to submitting your whims to a proven system and i i think that your brain is already wired that way and you're in your crozian career field you know what i'm saying yeah and i think

that gives you an advantage in doing this uh where someone whose job is to always color outside the lines and always be creative and you don't do creative medical care that's not a good idea that's how people die so you know we don't do that we do a prescribed process and you do i don't but um and so yeah you submitted yourselves to the system you said don't don't change the program, just do it. And that's a big deal, isn't it? Yeah, it is. I think the hardest part for me was stopping my 401K because I'm not a natural saver. But I do contribute to my 401K, max it out every year.

What was hard about it? Stop just not doing it, stopping it during baby steps. Why was it hard? I mean, it's scary? Yeah, because that's the only thing I know that's like. That was the only thing that was working. Right. Yeah.

Because I, you know, I see my 401k going up. So it's like, oh, my goodness. Okay, you know what? I just got to trust it. So you trusted the system. But was part of that. I mean, I always try to emphasize real heavily that it's a temporary thing. Did that help you be able to go, it's not for long.

I can do it for a little while. And you know what? I think that motivated me more, actually. It was like, okay, I had already paid in $10,000 for that year. And I maxed out at $24,500. And I thought, you know what? Okay, it's just $15,000. And then next year, I'll be able to get it back up.

Yeah, you can max it out every year. Yeah. Wow. Look at you. Well done. Thank you. Who was your biggest cheerleader, your daughter and who else? My daughter, oh, and the rest of my kids and family and daughter-in-law and everything.

Plus, I've been to two Financial Peace University classes, New Life in Turlock and Redeemer Church in Modesto. Wow. And just being around, you know, same like-minded people. Well, that gets you in the, you've got to get positive peer pressure. Plus, a shout out to all my coworkers that have had to listen to me for a year. Talk about you and the whole program. And I have so many people at work doing it now.

Oh, you've converted a bunch of them? Oh, a bunch. I bought almost 70 books. Wow. I mean, I shouldn't be spending my money on them. Wow.

And I've given away about almost 70 books to people, strangers, co-workers, whoever wants one, family. Well, thank you. Yeah.

Oh, my goodness. You're a huge customer. It's a way of giving back. Well, thank you. Yeah. Oh, my goodness. You're a huge customer. It's a way of giving back. Well, thank you. Well done. Very well done. Well, I'll give you one today. We're going to give you Chris Hogan's Everyday Millionaire book, signed by him, because there's

no question that's the next chapter in your story. You're going to retire a millionaire without a doubt. You are on track, kiddo. Absolutely very cool. Carla from Modesto california 129 000 paid off in eight and a half years eight and a half months making 200 to 312 count it down let's hear a debt-free scream three two one Two, one, I'm dead free! Woo!

That's how you do it. I love it. Boom! There you go, man. Hey, you're never too old, you're never too young to be smart. You're never too old, you're never too young to be smart to start saying this is a thing but you know what there's something about us and i'm one of you i'm the same way it is hard to as a friend of mine said to me a while back submit to someone else's system people don't like to do that i don't like to do that. I don't like to do that.

I'm a rebel. I don't want to submit. But if you're going to stay alive, you submit to a proper process of care if you have a disease. You submit to that. If you don't, there's consequences. And this is a proven process

for the disease called debt and the spreader of the disease called the bank. This is the Dave Ramsey Show. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225. John's with us in Chicago. Hey, John, welcome to The Dave Ramsey Show.

Hey, thanks for taking my call. Sure, what's up? I've got a question. I have been able to save up quite a bit, a decent stash of savings, and the only debt I have is a mortgage. I've always been an avid investor, and I was lucky enough to get locked in at a low rate, about three and a quarter. So just curious your thoughts. I'm having a difficult time convincing myself to pay off my mortgage with such a low rate. How much do you owe on your mortgage?

About $180,000. Okay. And how much is the non-retirement nest egg? About $90,000. Okay. And so you don't have enough to pay it off? Correct. So I've been trying to decide, does it make sense to just throw that chunk at that and walk away at it?

Okay, I got you. Even though it doesn't pay it off. Okay. And what's the home worth? About $520,000. Good. Okay. And how much do you have in retirement?

401K of about $150,000. IRA and Roth of about $100,000. Okay. How old are you? 35. Okay, good. You've got a great start. What do you make of your household income?

Household income is $140,000. Oh, great. Yeah, you're in great shape. You're doing great, man. Okay. Well, here's what we teach, and then more importantly, why we teach it. Okay? What we teach is a thing called the baby steps, where you're debt-free, everything but the house, and have an emergency fund.

That's one, two, and three. You've done that. Then we suggest at baby step four that you start investing in retirement 15% of your household income. Are you doing that? I am, yeah. So you've got $20,000, $25,000 going into retirement accounts a year, $2,000 a month. Yeah, but 10% in my 401K,

and then about another 10% just goes into savings. Okay, but it's not going into retirement well yeah december since going into the 401k so we suggest okay i'm just trying to clarify where you were on what we teach and then i'll go back to one okay so 15 of your income going into retirement is what we would recommend and so that would mean you would put 10 in your 401 401k and 5% more into Roth IRAs in good mutual funds. And in your 401k, you'd be in good mutual funds. That's baby step four. Five is kids' college.

Do you have kids? I do. And you need to save for their college, right? Right. Is there something independent of what we've talked about that's covering that that I don't know about? I do have 529 plans. How much is in those? About 75 between the two of them. they're how old the kids uh five and eight okay so you got a really good start

there good so that's we can kind of check that box and you just keep adding you've been adding systematically to that it sounds like and you keep doing that Six is pay off the house early. So above 15% going into retirement and above kids' college check, we would say throw everything at the house, which is the $90,000 that's in discussion here, unless you don't have an emergency fund. If you don't, we'd use some of the $90,000 for that and throw the rest at the mortgage. Why would I do that?

Okay? And the reason is very simple. As we've studied millionaires over the last 25 years, and we just completed the largest study of millionaires ever done, over 10,000 of them, we find, to start with, that somewhere in the neighborhood, 79% inherited nothing, and somewhere in the neighborhood of 90 inherited not enough to make them millionaires so 90 of millionaires in other words are not millionaires because of inherited money but because of their habits and what they do with their money and the two primary things we see that those habits that cause them to be successful, meaning hitting a million dollar net worth and above,

is the primary initial levels of wealth, the first million or two million, is 401k and a paid-for house. Now, the paid-for house not only is going up in value and stabilizes, but we do not find them saying, I'm going to borrow as much 3.5% money as I can borrow because I can invest it and make a better rate of return. We do not find them doing that. We find them getting the house paid off and using the increased cash flow of not having a house payment to then go bananas on their investing, and their 401ks and non-401k investing starts to go through the roof. But if we fast forward your situation like five to seven years, and you're sitting in this house, by then it's worth $700,000, and by then you'd have $500,000 in your 401ks, probably $700,000 in your 401ks. You'd have about a million and a half net worth, million seven net worth, of which 700,000 is your house.

You would be typical in the case study that we've done. You'd be a typical case study of the representative statistically of the typical millionaire. If, however, you didn't pay off the house, you might still reach millionaire status, but you would be very unusual among that group. So the data points tell us that the millionaires are paying off their house. Now, why would they do that? Because of risk. Because 100% of the foreclosures occur on a house with a mortgage.

And when you have zero mortgage and you walk in the backyard and the grass feels different under your feet, it's mine by God, you know, kind of thing. It changes the way you operate the rest of your money because you're standing on such a more solid foundation to live your life you don't you know you don't a lot of people change jobs because they're no longer worried about losing something they were in a job they hated just to pay bills they change careers they they take a little bit of more calculated risk or something and we see their incomes go up overall and so it's more than just a three and a half percent mortgage

versus mutual funds return there's risk in there there's life in there there's stability in there and and that's why we're seeing these millionaires do that so all of that to say i would pull enough out of your 90 000 if you don't have a separate emergency fund to fund an emergency fund of three to six months of expenses. I'd throw the rest of it at that. I would adjust your saving by up 5% into, so you've got a total of 15 going into retirement, 5% more going into Roth IRAs and good mutual funds. I think your kid's college is on track. I'd keep doing that. Throw the rest of it at the mortgage.

And then anything else you find in your budget that you were saving above that 15%, I throw it at that mortgage until that mortgage is gone. I think your mortgage will be gone in about three years. And you would never borrow on a paid-for home to invest. And so you wouldn't keep a mortgage. Hey, good question. Thanks for letting me walk through it with you. Blake is with us in Atlanta. Hi, Blake.

Welcome to the Dave Ramsey Show. Hey, David. It's an honor to be speaking with you. You too, sir. What's up? I'm 26 years old. I'm engaged to be married in August of this year. Now, I'm looking forward to it. My fiancee is an accountant for a pretty major company here that's based in Atlanta.

She makes around $85,000. I'm going to be starting a new job this coming week, making right at $50,000 with potential to move up quickly and make a good bit more money. The only debt that we have between us is her mortgage. The home, as it sits right now, has around $80,000 in equity. We both have emergency funds. There's no other debt at all. We don't even have credit cards. My question is, ultimately, we want to buy around 30 to 40 acres and build a house on

it. Cool. Is it possible to do that without taking out a bunch of personal loans and going into mountains of debt? Because I know if we buy a house, we can get a mortgage, but with land and then building a house, from my understanding, from what she's told me and I've read, you can't get a mortgage for that. So I'm just trying to find the best way to do what it is we're trying to do. Well, you can get a construction loan that has a permanent mortgage takeout to cover a portion of this. It would cover the construction and some of the acreage. A 40-acre tract usually is not going to qualify for a conforming mortgage, a Fannie Mae, FHA-type mortgage, okay?

So it's going to be a bank loan of some kind. That can be done. So with the kind of money you all are making, the good shape you're in, with a good, strong down payment, you could do a construction loan, buy the land in the construction loan, but it'd be a bank loan. It would not be a traditional mortgage. And, yeah, you can basically, a construction loan encompasses the purchase of the property and the build-out. And then the permanent mortgage encompasses both of them as well.

But, again, that is not a conforming loan. The only other way to do it is break it apart and parcel it out and say, I've got five acres here and I've got 35 acres here. 35 acres have to be paid for in cash. That puts this hour of the Dave Ramsey Show in the books. This is James Childs, producer of the Dave Ramsey Show. Did you know you can now listen to the Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and

listen, check out our show page at DaveRamsey.com slash show.