The Ramsey Show - App - Thankful to Be Debt Free in Just 10 Months! (Hour 3)

Episode Date: November 22, 2018

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Live from the headquarters of Ramsey Solutions, 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. This is your show. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. You jump in. We'll talk about your life and your money. Tim starts us off in Gainesville, Florida. Hey, Tim, how are you?

Pretty good, Dave. How are you? Better than I deserve, sir. What's up? I had a quick question. I have some federal student loan debt, and they have an income-based repayment plan that if you work for a county or government for 10 years, it's forgiven, as of right now, of course. Would you recommend just keep going that route and save the money, put aside in case the plan goes away, or would you just tackle that debt now? I'd tackle it now.

I wouldn't want to wait 10 years to be out of debt. Ten years is too long. How much debt have you got? All right. It's about 40. What's your household income? Right now it's about 36, but in about a year and a half, once the wife's done with school, it'll be pretty much doubled.

Well, if you've been making it on 36 and you were to double that, you could pay that off in just a touch over a year. Yeah, that's what I was thinking. Yeah. Let's go that way instead of waiting on the government for a freaking decade. Man, that's a long time. Yeah, I wouldn't do that. I wouldn't wait around.

Hey, good question. Jared's with us in Oklahoma City. Hi, Jared. How are you? Doing great, Dave. How are you? Better than I deserve. What's up?

I was wondering if you could help me settle a debate or dispute I had with some of my fellow YouTube crazies. They want me to sell off all of my toys to get out of debt. The only issue is my toys are the only thing keeping me in debt. Okay. So I owe $30,000 on a truck. How much on a truck? $30,000. $30,000 on a truck.

Okay, and what else? I'm saving up to pay cash for a truck. I'm going to sell that, get rid of it in the next six months. Okay. So I have a boat that I'm going to sell that, get rid of it in the next six months. Okay. So I have a boat that I owe $9,300 on. Mm-hmm. And then I have a Harley that's paid off. Mm-hmm.

And what's the Harley worth? About $9,500. And what's your household income? About $70. Okay. All right. Well, I mean, there's three ways to look at this. One is just keep all of it and work your way through it.

How long does that take you? Too long. Okay. Yeah. The second way is sell everything today. And you're debt-free, and you're driving a $10,000 car paid for, because that's what the Harley will buy you. I don't know.

How far upside down on the truck are you? I'll break even. Okay. So you can break even on the truck, break even on the boat. Harley will buy you a car or a truck or whatever for $10,000, right? And you make $70,000. Are you single? Yes, sir.

Okay. Or you could do something kind of in the middle if you wanted. Okay. Yes, sir. Oh, yeah. I agree. and value with motors in it. So you can't have more than half your annual income tied up in stuff with motors in it if you want to win with money because it's all going the wrong way. So, you know, decide. But I'm going to get rid of the truck, and then I'd probably. Which one do you like better, the boat or the Harley? I'm kind of split.

I like both of them. It's my first boat. I bought it this last spring, but I love both of them. Okay. All right. I know you can't tow a love both of them. Okay, all right. I know you can't tow a boat with a Harley. Well, that's true, but, I mean, you can tow a boat with a $10,000 truck that you pay cash for. Yeah.

If you sold one of those. That was my theory. I was just going to get rid of the truck and keep the boat, pay it off, keep the Harley. Yeah, and you're going to drive something, what? I'm thinking $7,000 or $8,000 truck. That you pay. So you've got $20,000 in debt to pay off in under a year? That pays off the boat.

You keep the boat, the Harley, and have a $10,000 car, right? Or $10,000 truck, right? Yeah, that's not a problem. That's not a problem. That's not a problem. That fits. The point is, you know, when do you want to be out of debt? And you just ask yourself that question. And what are you willing to do?

It sounds like you could be 100% debt-free if you sold the truck and bought a $10,000 truck in a year. And that's acceptable in my mind but that and then you just got to decide are you going to keep doing this the rest of your life because dude i mean you're putting money and stuff that's going the wrong way i like boats and harleys and cars and trucks i like all that stuff i'm a boy i like stuff with motors in it but um but but you know i i don't like being broke either and right now now, you're just broke. Oh, yeah. I'm with you, Dave.

I'm totally on board with the plan. If you're through and you want to take a year and hold on to a couple of these items, that's fine. The interesting thing I've found out is this, after doing this a long time, Jared, is, you know, the thing about a car, a boat, or a Harley, unless it's just you've had the boat a year, how long have you had the Harley? I've had the Harley for a couple years. Yeah. I mean, two years from now, if you were sitting on $50,000 cash and you were debt-free, I don't know if you'd go buy that boat or that Harley. Yeah, probably not.

You know, so I'm not sure it's worth it to fight that hard to keep them, is my point. I mean, again, you can get what you want but if you were 100 debt free by the end of the week by selling all three items and driving a ten thousand dollar truck how quickly what would you buy a year from now if you had thirty thousand dollars cash set aside for toys the house would it be those things oh no i'd be buying another house oh well then maybe the toys need to go you know i mean that that's another way of looking at it it just makes you think through it i always think through if i didn't have the stuff would i go buy it again and that that sometimes jogs me loose from something i think is there so the beautiful thing is jared you're single you make seventy thousand dollars

with the decision that you make today you can be debt free in a year or less and have this stuff or not have this stuff and be on your way to doing whatever you want to do so just do it do it on purpose be intentional and there's no actual complete right or wrong thing to do based on what you told me, other than I wouldn't keep this truck. The truck does not fit in the equation. What would Dave Ramsey do? I'd probably sell it all because I've been through enough cycles of buying toys in my life

that I'm probably going to buy different toys. And when I get a little bit further along, maybe a notch up or two in Harley, a notch up or two in boat maybe, and pay cash for it, and it might be two years, and I might buy a rental property in the meantime, like you said, or something like that. So, you know, I've just been through that a couple times, and I'm not as attached to any of these items with motors in them like I used to be. So I'm probably cleaning it all out just to be free

and then set myself on a course to buy some other stuff later pretty quickly. But it's not a bad thing if you want to hold it for a year. There's not an absolute like you're a stupid person or something kind of thing. Hey, thanks for calling in. Open phones at 888-825-5225. You jump in, we'll talk about your life. That's what this show's about. It's called, though, The Dave Ramsey Show. Why in the world would you trust some random guy in a cube when getting your mortgage?

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761 Old Hickory Boulevard. Redwood, Tennessee 37027. Thank you for joining us, America. This is the Dave Ramsey Show. Open phones at 888-825-5225. Jordan is with us in South Bend, Indiana. Hi, Jordan. How are you? Hey, Dave. I'm doing well. How are you? Better than I deserve. What's up?

So, I'm in graduate school right now at Notre Dame, and I'm graduating in July with my master's in global health. I'm trying to figure out, I can't go, I'm eventually trying to go to medical school. I can't go this year because I didn't get in. So I'm going to graduate with $60,000 in debt from Notre Dame and then $20,000 from my undergrad. So do I want to get into medical school

as soon as I can or pay off my debt or try and save before I go to medical school? I'm not really sure what to do. Okay. Well, if you're not careful, you're going to have a half million dollars in debt, aren't you? Right, right.

That sounds pretty scary to me. Yeah. Because, you know, here's the problem with it. Not everybody finishes medical school that starts. Yeah. And we certainly wouldn't start it with that idea in mind but i sure wouldn't want you to be three hundred thousand dollars in debt not finished that would be a horrible situation and that's you know the situation that i end up running into with people

a lot on student loan type debt so what was your plan before med before you came up with med school as your plan? That's been my plan for a while. I didn't get in straight out of undergrad, so that's why I chose this master's program, because with a biology degree, I mean, I was working at a hospital making $12 an hour and having a lot of debt, and it wasn't doing enough for me. So with this job, with the networking at Notre Dame, and I mean we've got a lot of people who have done this in the past. They go work as like an infectious disease specialist at a hospital

and make anywhere from like $70,000 to even $100,000 a year. So I was thinking that looked a lot better than making $12 an hour with a biology degree that I'm not using. So that was my thought. And then if I didn't get into med school, I would still have that to do. Well, what I probably would do if I were in your shoes is I would go do that with two things in mind. One is the income is fun, and you can start throwing it at your undergrad dad.

And also the possibility, as you shop around for the hospital organization to join to do that with, there might be one of those that would be willing to pay for your med school as an employee benefit. And especially if you agreed to work for that hospital group for a certain number of years or something after you were to graduate. And so it would be pretty cool to be in there making $70,000 or $80,000, and then they go, oh, by the way, we'll pay for your med school if you'll agree, since you're an employee, if you'll agree to come back to work here for three years or following or whatever, or if you'll take one of our rural or inner-city hospital assignments, you know, underserved

area type things. Some of the chains, not chains, it's not the proper term i guess but the large hospital companies um they're very profitable and they do a lot to recruit docs including possibly finding one that would pay for your med school so that's the kind of angle i'm looking for on this and of course the military is an option they'll pay for it as well and um if you want to go that route uh and avoid the student loan debt the third route is the md phd program there's they're difficult to get in and if you can find one, what that amounts to is that you are working at a university and they furnish free tuition. That's what it amounts to.

And so you're working on a Ph.D. track at the university and you're teaching and so forth at the university, and then they will pay med school for an employee. Difficult programs to get in, the MD-PhD programs are. But if you can get in one of them, again, that makes med school free, and it's furnished. But I like our first plan the best. I think it probably has the highest probability of getting you where you want to go. So, hey, good question. Thank you for joining us, and I hope that all works out for you, brother.

Tony is with us. Tony's in Indiana. Hi, Tony. How are you? Hi, Dave. Great. Thank you for taking my call. Sure.

What's up? Well, my husband and I are looking at purchasing our next home. We're currently debt-free, and we actually have a paid-for home. It's only about 900 square feet and about $40,000 once we would sell it. But we are looking at a house in the $295,000 market, and I don't know if we're overextending ourselves. Okay. Would the payments on a 15-year fix be more than a fourth of your take-home pay? No, it wouldn't. And we have been working with Churchill. But the other kicker is it's also the most expensive house on the block.

So we don't know. I'm kind of second-guessing this. Now, that's a bad idea from a resale standpoint and from an appreciation standpoint. That house will appreciate less than the house next door, which is in the middle price range of the block. And so probably looking at a different house, but price range wise, if it's, um, if you put it on a 15 year fixed and the payments less than a fourth of your income, I don't yell at you. Uh, and then the idea being you're going to turn around and pay it off as fast as possible. Um, what is your household income? One 90.

Okay. Um, making that kind of money living in a paid-for $40,000, 900-square-foot house, how quickly could you save? We're saving about 50 every seven months. We can save around 50. So, I mean, we've got our down payment. How much down payment do you have? We have 60 okay i mean what if you did it for like for two more years and like i mean almost paid cash well we have a baby and we're planning on having a second one so we're kind of going crazy with the space size okay all right well uh, then, that if you buy something conservative, maybe we don't jump as far.

Because the beautiful thing is you've got this huge income, and you can pay it off real fast. And then you can save up and move up again. I mean, what if you said, okay, we're going to buy a house that we're going to live in for three years. Okay. And we're going to pay cash for it. And we're going to do that this time next year. Could you hold on that long? We definitely could.

Yeah. Like a $150,000 house, I pay cash for that, and I'm going to live there three years, and then I'm going to pay cash for a $400,000 with a sale of my $150,000. Because you could do that with your income. How old are you guys? Okay. I'm 32. Yeah, that'd be pretty cool.

I mean, but the answer to your question is that that kind of sounds like the most fun to me uh i'm just throwing out new ideas and new ways of thinking about this uh for you but the maximum you should buy would be something that is the payment is no more than a fourth of your take-home pay on a 15-year fixed and i would never buy the most expensive house on the block, just from an investment standpoint. I'm just going to look for something different. But you can buy another $295,000 house, and it fits the discussion that we're having.

But if you'd be willing to move again in three years, I think you can pay cash for everything. Tap the brakes just a little bit, pay cash for something. I don't know, $150,000, somewhere in there. You could get there, I think, pretty quick. But I don't blame you for going crazy in 900 feet either. I mean, I get that. I see what you're saying, especially when you're making $190. It's hard to live like that, you know.

So I get you there, but it's whichever one you want to do or maybe somewhere in between those two ideas. I don't know. But the whole point being don't buy too much house, and you're not, it doesn't sound like, and have a plan to pay it off or to pay cash for it, one of the two. Let's just have a plan to move that way. Let's think in that mindset. Open phones at 888-825-5225.

Ashley's on Facebook. Friends of mine are trying to tell me about a company called Primerica. They say you used to work for them. Should I trust this? Well, that's pretty disingenuous. Technically, I did that for three months when I was 22 years old. I'm now 57. So for them to use that as if I'm some kind of an endorsement of them is disingenuous. That's a nice way of saying

crappy. They shouldn't have done that. I mean, you know, I did a lot of stuff when I was 22 years old for three months, but I don't have all that coming back to haunt me, you know? Oh my gosh. So, no, no, I wouldn't trust this. And no, I wouldn't do that. And no, we don't endorse Primerica, nor have we in decades. 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 ryan and me are with us. Hey, guys, how are you? Good. How are you? Welcome, welcome. Where do you guys live?

Dallas. Dallas, and all the way to Nashville to do your debt-free scream. Absolutely. So how much have you paid off? $51,665. Love it. How long did that take? Ten months.

Good for you. And your range of income during that time? From $155,000 to $170,000. Okay. Very cool. What kind of debt was the $52,000? Mostly student loans and her car. And what do you guys do for a living?

I am a teacher. I teach the foundation's curriculum and love it. Oh, thank you. It's wonderful. I'm a physician assistant. Okay. Very cool. So, Ryan, what's the story with the pants?

So the guys, I mean, people on the radio, they can't see. Ryan is wearing pants with money on them, a money print made into pants. You know, I like to call them my first day of school pants. I like to set the tone on the first day of school because I teach the foundations curriculum and just talk about money all day, every day for nine months out of the year and just set the tone. There you go. We're going to have some fun. We're going to work hard in class, but we're going to have some fun doing it.

Cool. Well, money's fun if you've got some. It sure is. Very cool. All right. I saw you in the hall a while ago with the pants, and I'm thinking there's a story. Oh, yeah. So you're one of the high school teachers teaching our high school curriculum.

Thank you for doing that. Very nice. My pleasure. So what put you guys on this journey 10 months ago? Well, my journey started a little sooner when I started teaching this curriculum six years ago. Kind of put some stuff on hold when I met Megan. And when she really found Rachel, we both got on board together and decided after we got married, we would attack this debt just as hard as we could.

So you got married about a year ago? Yes. Okay. And so we just, we hit it. We made the plan, and that was it, and we did it. Very cool. So where did you all meet? We actually met online.

Oh, okay. Very cool. Good, did you all meet? We actually met online. Oh, okay. Very cool. Good, good. Neat. Well, you have a great household income, and you look up, you say, okay, we're going to get married. My husband teaches. My fiance wears money pants and teaches this stuff. He does.

So this is pretty dadgum sold out, all in, shave my head, drink the Kool-Aid deal here. Yeah, I was kind of introduced to it even when we were dating. I sat down. I had never heard about anything like this. Sat down with him. Went through his deal here. Yeah. I was kind of introduced to it even when we were dating. I sat down. I had never heard about anything like this. Sat down with him. Went through his classroom book as we were dating and was like, this is pretty cool. And didn't really get fully into it until I found Rachel's YouTube channel. Oh, okay.

And read her book, Love Your Life, Not Theirs. Okay. And after that, we were done. We were getting it done. We were going to commit our first year to marriage to doing it perfect so the rachel cruz connection turned the corner for you it really did yeah perfect good as it should be i love it very fun well thank you guys very much so um you teach this stuff ryan what do you tell these teenagers because you can tell them hey i did it i got married my wife I, we paid off $52,000 in 10 months.

What's the key to getting out of debt? What are the principles that they need to apply? For us, it was communication, first and foremost. We have money as a regular conversation in our home, almost daily, about our goals and what it is we want to do. What are we working towards? Just constantly reminding each other to keep that motivation. A lot of just communication. A lot of it.

So that constant conversation, Megan, is that a good thing? Yeah, it's hard, especially when it's your first year of marriage and you're trying to figure out how to be married. It was hard, but I always kind of just set my mind to what the goal was and knew what we could accomplish after getting debt-free, and so that made it a little bit easier. You've got to see the light at the end of the tunnel because you can get lost sometimes. You know, a lot of marriages that are very successful marriages,

one of the things they do is when they first get married, they have something they attack together. And when couples, it's not unusual at all to hear a debt-free scream today that, you know, I got married, and then the first year of marriage, first two years of marriage, we attacked our debt. And, you know, regardless of whether it's debt or something else, you guys learn to work together to accomplish a goal bigger than your selfish self, you know, bigger than the goal of the couple, not the goal of the individual. And that right there, that lays a foundation for your marriage. I mean, anytime you guys face something, you now know how to attack the project, whatever it is.

I tell him all the time, if we can get through our first year of marriage and getting debt free, we can do anything. Amen. Amen. It sets you up because you learn to work together to do this. You learn to work together to do anything. It's the same process. I mean, you can decide whatever it is you're going to fight, whatever it is you're going to win, whatever game you want to get into. You now know how to do it instead of just running off half-cocked by yourself and then going, oh, roommate, come with me.

Very much so. It's a big difference. Way to go, you guys. Very, very well done. What was the hardest part of the last year? For me, I had to figure out the real difference between needs and wants. That was a hard feat for me. And then when I figured it out, I figured out how I could rework everything and almost turned it into a game for myself.

Like, where can I find extra money to send to debt this month? But yeah, it was hard. It was hard coming from the mentality that I make X amount of dollars I deserve to buy this to, no, you don't really need this. So get debt-free instead. And then you can do anything else. Yeah. Live like no one else so later you can live like no one else. What was the hardest part for you, Ryan?

Just keeping motivated. I don't think I had a lot of challenges. I get the constant daily reminder when I go to work. When you're teaching it. Yeah. Because it's. Did you tell your class you were doing this? Oh, I'm an open book with my students in the classroom.

So were they like, you know, you couldn't fail. You didn't have a chance. No. Because you'd be letting all them down. Yeah, absolutely. That's the way to set a goal right there. I mean, you had to follow through. Oh, yeah.

Absolutely. That's cool. I like that. Yeah. That's neat. Well, congratulations, you two. We've got a signed copy of Chris Hogan's number one bestseller for you, Retire Inspired. And that's the next chapter for you to be millionaires and outrageously generous along the way. And thank you so much for teaching the high school curriculum for us. There's nothing else I'd rather teach. I love it. Thank you. We're honored to have you doing that. Ryan and Megan, Dallas, Texas, $52,000 paid off in

10 months, making $155 to $170. Count it down. Let's hear a debt-free scream. 3, 2, 1. We're debt-free! Awesomeness. Way to go, you guys. Very

well done. Very well done. Fabulous. Our question of the day comes from Blinds.com. You don't need a second mortgage to make your home over. You get brand new custom blinds without paying custom prices from Blinds.com free samples

free shipping and with the new promos every month you can save even more use the promo code ramsey josh has our question he's from texas i don't have funds available to negotiate with my creditors just yet in the meantime do i refrain from making monthly payments? Yes. And just save the money so I can settle with them? Yes. If you have loans like old credit card debt that you are in default on, paying monthly payments that are nickel and diming is not doing you any good, especially if you're going to get to them in the next month or two with an offer, meaning you're going to save up and make them a cash lump sum offer,

then I wouldn't fool with making $25 payments. It's counterproductive. You're better off to come to them cold with the loan completely in default, and they show no activity on the account, so they don't think they're going to get any money unless they settle with you right now. And that's your best thing to do. And any of you that are settling with old debts, always remember, you have to get it in writing when you're dealing with a creditor.

You owe them $3,000 and they agree to accept $750 as settlement in full. You need to get that in writing. An email is fine fine but you need something to be able to prove to a judge or prove to a lawyer or prove to that company later that they actually did make this deal because you can tell credit card collectors are lying if their mouth is moving and so you have to get it in writing it is a filthy filthy business and they lie you know george told you that they would accept 750 you send 750 over there then they call you up the next week wanting the rest of it and you go wait a minute george told me you know 750 and they're

like uh no george doesn't work here anymore and he didn't have the right to do that you're still on the hook you got nothing if it didn't in writing it never happened and do not allow them to have electronic access to your checking account they'll clean you out so either set up a prepaid debit card on the side a separate checking account just for these transactions not your operating account or send them certified mail overnight check money order certified funds whatever you need to do. But settle it without giving them access to your main checking account. They will clean you out.

This is the Dave Ramsey Show. Our scripture today, 1 John 4, 1, Beloved, do not believe every spirit, but test the spirits to see whether they are from God. For many false prophets have gone out into the world. Coco Chanel said, don't spend time beating on a wall, hoping to transform it into a door. Steve is with us in Knoxville. Hi, Steve. Welcome to the Dave Ramsey Show.

Hi, Dave. Thanks for having me. My wife and I are 26. We don't have any debt. We have a fully funded emergency fund, and I'm currently putting 15% into my retirement. My question is, I'm in the military with at least nine more years to serve. My question is, should we just rent those next nine years or consider buying, realizing that we're only going to be in a specific place for about three years at a time.

Yeah. Well, here's the thing. There's two problems with buying in your situation. Number one is the property does not go up enough in value. If it doesn't go up enough in value during the time that you own it, you actually lose money by being an owner. Or, worse than that, it doesn't sell at all, and you end up with rental properties dotted all over wherever you've been stationed.

Right. And that's not an investment plan. That's landlord by default long distance. Bad. Right. Really bad. plan that's landlord by default long distance bad right really bad so uh the only time we suggest and we work with the military a lot and by the way thank you for your service thanks for your support but the uh as we work with the military what we teach you guys is yes i number one i'd be saving towards buying a house when you do step out of your service. Or you can buy if you're in an area where the property can be sold and you can make money. Now, the way you ascertain that is you do some research when you're moving into your next location.

And you talk to a realtor and you say, okay, pull me some statistics from the multiple listing service, the MLS computer. In most cases, that'll be a thing called real tracks. Okay. And the statistics are two. Number one, in this area, in the last three years, and where I'm talking about buying within a five-mile radius, a 10-mile radius of here, what have the homes appreciated percentage wise for the past three years and if they say one percent two percent you're going to lose money right because it's not going to go up enough in value to even cover your costs when you turn around and sell it right if they say oh this market is hot, and for the last three years it's gone up

10% a year, in three years it'll be 30%. Well, you're going to make some money. That's a good one, right? The second statistic you're looking for is average DOM, days on the market. And that tells you how long the houses in the area are on the market before they sell. And so if they pull up in a 5-mile radius or a 10-mile radius and they say the average days on the market are 270, that's freaking nine months.

No! Right? Right. But if the average days on the market, again, it's white hot, average days on the market, again, it's white hot. Average days on the market are 12 days. Well, if you've got a 12-day DOM and a 10% appreciation rate, yeah, I'll buy a house in there. You'll make money, and you'll be able to turn around and sell it. And by the way, guess what?

Those two things run together. Low appreciation usually is going to be long days on the market. And in your world, let me tell you what it is. It's a military-only town. Yep. If it's a small town, military-only is the economy, and the guys are buying houses, the gals are buying houses in and out of there, there's always an oversupply on the market, which keeps the appreciation rate down and keeps you from being able to sell it.

But if you're in something like maybe you're in the Navy and you land in San Diego, well, I mean, you might find those numbers I'm talking about in San Diego. Okay. But it doesn't necessarily mean small military town, but a lot of times those towns have a glut. They have too much on the market, too much supply, which slows the market down and slows the appreciation rate down. Is that logical to you? Yes, very logical.

I was just unsure about the, you know, since I have nine years on my commitment, it's going to be at least nine years before I get out, and obviously that's a lot of money to be renting. Yeah, but you're going to spend more money if you buy houses and lose money on them. Right, exactly. So which is the cheapest way to get housing during the nine years? And the cheapest way to get housing, what's the best investment, is to be a renter if you're in towns where you're going to get stuck in the house

or you lose money on it when you flip it. So that's the end of my speech on it. But I don't mind you guys buying, but I don't want you to get harmed because we do know that every two to four years they're going to move you, except for very unusual job titles or levels of promotion or whatever whatever but most of the time they're going to move you every two to four years so you've just got to have numbers that work jennifer is with us in hattiesburg mississippi hi jennifer how are you doing well thank you how are you better than i deserve what's up so we have um five properties one that we live in, four rentals, debt of $72,000.

We've got our emergency fund. $72,000 on the mortgages or in consumer debt? Mortgages. Okay. Yeah, no consumer debt on our cars, everything. So most of the rentals are paid for. Yeah. Excellent.

Well, yeah, everything. So most of the rentals are paid for. Yeah. Excellent. Well, yeah, absolutely. Good. But we want to get a few more rentals. Good. So we're trying to figure out the best way to go about that. Pay off the $72,000 and then start saving money. That's the best way to go about it. I think if we refinance one of the houses,

pull a little bit of equity out of it to buy another house or two? Because in our area, it's very possible to buy houses for, you know, rental properties for less than $70,000, $60,000. Jennifer, I own tens of millions of dollars worth of real estate, and I've never borrowed a dime to buy it. You've never what? Never borrowed a dime to buy it. You've never what? Never borrowed a dime to buy it. How do you manage that?

Slowly at first. Frustratingly, slowly, because I'm like you. I love real estate. And I didn't have the money at first. But, you know, the more of it you've got that's paid for, the more money you've got. It cash flows crazy yeah we're ready to see a little bit more of that cash flow yeah but you're getting ready to take a bunch you're getting ready to have service you're getting ready to add a whole bunch of risk to your life that i would recommend you don't add

i don't think i can stop you though i think this uh i think this cow's already out of the barn but you call me and ask me and what i would do if i woke up in your shoes knowing what i know i would get out of debt and then i would use the incredible income that you have from the properties and the income that you're making and i would continue to build my portfolio but i would build it a little slower and i would pay cash as I went. Now, you do what you want to do, but you called to ask me what I would do, and that's what I would do. Thank you for the call.

Open phones at 888-825-5225. Randy is on Facebook. Dave, I've been paying on both a whole life and a universal life policy for three years. I'm so sorry. How much of that will I get back if I cancel and open a term policy? Almost none. Because all the money that was supposed to be going in the investment in the first

two to three years in a whole life or universal life goes to fees. So if you look at your cash value buildup in the first two to three years on those horrible, horrible policies, you're going to find they kept all your money. So this is kind of like you got a big hole in your pocket and you keep putting money in the pocket and it all goes out the hole. And then you go, oh, wait a minute. There's a hole in my pocket.

I need to sew up the hole in my pocket. How much of that you're going to get wait a minute. There's a hole in my pocket. I need to sew up the hole in my pocket. How much of that are you going to get back? None. It's gone. But at least you're not going to lose any more because you're going to sew up the hole. So, yeah, you need to get your term insurance in place immediately and cancel this crap. You got screwed, dude. Yeah, probably by your friend.

Oh, I hate that stuff. Oh, I hate it. That puts this hour of the Dave Ramsey Show in the books. Thanks to James Childs, our producer, Blake Thompson, our senior executive producer, and Kelly Daniel, our associate producer and phone screener. I'm Dave Ramsey, your host. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace,

and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Kelly, Dave's phone screener. We finished 2017 with a bang as the fourth most downloaded podcast of the year. Thanks to all of you for listening and helping us spread the word.