The Ramsey Show - App - The Best Calls of the Year (So Far) (Hour 3)

Episode Date: September 4, 2023

МУЗЫКАЛЬНАЯ ЗАСТАВКА МУЗЫКАЛЬНАЯ ЗАСТАВКА Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey personality, co-host of the uber popular Smart Money Happy Hour that he and Rachel Cruz do as a podcast on the Ramsey Networks. He's my co-host today. Open phones here as we talk about you right in front of you. It's your life, baby.

Let's talk about it. The phone number is 888-825-5225. That's 888-825-8255. Anthony, starting off this hour in San Francisco. Hey, Anthony, what's up? Hey, Dave, how are you? Better than I deserve. How can I help?

Yeah, well, first of all, happy early Father's Day. And my wife, well, I started listening to you about a year and a half ago, and I got my wife, recently new wife, into you as well. So we're both on the same plan and have the same head on. And my question is, we want to purchase a house within the next year or two. And the only debt we have right now is student debt that we've been saving over the last year. And my question is whether we should pay it off all now, but wondering if that will affect our credit score with trying to purchase a home within the next year. George, you did this. Yeah. Living this out, I've paid off student loans, and I bought a house without a credit score. So the question I think you're asking is how will it affect it in the meantime if I'm in that weird in-between?

Because when you pay off your student loans, is that all of your debt? Yes, that's all our debt. Before he goes on, let me ask you a question. Do you have enough money in the bank right now to pay off the student loan? We do. We both do. Okay. So you can just write a check and be done today.

And then you want to buy a house about a year from now. Correct. Okay. Making sure I have my facts right. Okay. So your emergency fund, will you have that in place already or will you need to build that up after you pay off this debt? Yeah, so I guess it's kind of scrambled. Total student debt between both of us is about $56,000, and we have about $70,000 in our savings. And we also have together about $20,000 in individual account with Schwab. Cool. Okay, good. So that'll leave you with about $34,000 if you cash out what's in that account. That'll leave you $34,000.

Let's call your emergency fund somewhere, is it $15,000 to $20,000 for you guys, three to six months of expenses? Yes, that's about right. Okay. And then you've got a little starter down payment fund with the rest of that money. So you've got about $20,000 towards your down payment, and you've got a year to finish saving up, right? Yes. Okay.

So we're going to tell you to pay off your student loans today. When you get home tonight, go, honey, we're getting ready to be debt-free. Watch. Push this button. Okay. Okay. Now, then how are you going to get a house? So then in 6 to 12 months after you pay off your debt,

that credit score will disappear once you close all your accounts. And then your credit score will disappear. Now there's a chance you get the house and they run the credit and you still have a credit score. And it's probably still going to be a good score. And that's fine. You can still get a house that way. But there's really no, your credit score is not going to go down to, you know, 600 all of a sudden because you paid off your loans.

You have any credit cards open? We do, but we paid off all of them for each month. Close them, too. That'll keep your credit score open. What we're trying to do is have zero credit activity, which will make your credit score completely disappear in six to nine months zero credit score sets you up for manual underwriting which is where they just check your job check your deposit like we used to back in the day when people had sense back in the old days back in the day when people had to actually qualify for a mortgage and a monkey can give you a mortgage now by looking at a number credit score

and uh but yeah but but we used to actually make sure people had the money to pay the bill and stuff and it's called underwriting the loan manual underwriting is what it's called now as opposed to not underwriting it and so uh that's what george did he went with a zero credit score into churchill mortgage and got a mortgage on his first home did i have that right yeah and there was anthony there's going to be so many friends and family that go, you're crazy. It's going to be so much more expensive. It's going to take forever. It's going to be impossible. Don't listen to them because they've never done it. And so I'm telling you, it's not going to be that difficult.

It's not going to take a lot more time. There's going to be a few more extra documents. And as long as you stick to that 15 year fixed with at least 10% down, you're going to get a really great competitive interest rate. With Churchill Mortgage. Not all mortgage companies know how to do this, Anthony. Yes. So you can't run over some stupid butt place like Bank of America

because they won't know their butt from a hole in the ground. My lender said they won't do it. You've got to stick with one that actually knows what they're doing. Yeah, you've got to get with somebody like Churchill. Because we've endorsed Churchill for almost 30 years and because I've told people to not borrow money, Churchill has obviously system wide learned to and managed their whole process to being able to do manual underwriting because

a lot of ramsey people don't have a credit score because all of us got rid of our debt and our credit we don't use credit or debt but now if you keep those stupid credit cards open you may end up with a 650 and it's going to screw you up so So you can't half but do this, Anthony. You got to decide is you or isn't you. And you got to lean in and push all the way through. So ish will get you in a middle ground you don't want to be in. And I don't suggest that. If you're going to do that, then just stay in debt, son. Yeah. This idea of the credit score is hilarious to me. And once you get the mortgage, there's no reason you would ever need a score at all, even though you don't need one for the mortgage. Because the only

reason people hang on to it is, what if, Dave? What if we need to go into debt? You know, if I was in the banking business, I would invent a thing that said, you need to go get a credit card so you can build up this number, so that you can get a car loan, so that you can build up this number so that you can get a car loan so that you can build up this number so that you can get a student loan so that you can build up this number so that you can get a home mortgage because you need this number. And I would teach you to worship at the altar of the great FICO because I would tell you that FICO was your great provider and that your life on the planet will be somehow substandard if you don't have this number. It almost sounds like revelations. Yeah, this is conspiracy level theory right here.

And it's the only number that we obsess over more than our weight. Those three digits. Man, we are so obsessed. We brag about it. We the culture, not you and me. Dave and I would be a really sad time. You don't even obsess over weight unless it's a lack of it. I don't share those numbers, Dave.

And my credit score is sadly... I would share some of my numbers with you but it wouldn't help either one i'll take one for the team dave you can donate some to me oh but it really is a wild thing that our culture has become so obsessed so here's the interest you you know i have to teach this like and have for 30 years you could get a million-dollar inheritance. Your FICO score doesn't change one penny. It is not an indication of financial well-being or financial health. It's an indication mathematically. The algorithm by which they used, the math they used to build the FICO score is 100% based on how much you play kissy-face with the bank. If you don't play kissy-face with the bank, if you're not making out with Bank of America,

you're not getting a FICO score. I mean, this is not hard, people. If you get a million dollar a year raise at your office today, everyone will wonder why, and your FICO score will not change one point. And you won't care about your FICO score then. It won't change one point. It's not an indication you're winning with money. You can be broke butt deeply in debt and have an 800 credit score,

which, as a matter of fact, is about the only way to have an 800 credit score. This is the Ramsey Show. We know there's a bunch of you out there that are new to this Ramsey stuff. We know that because our rankings and ratings have gone up dramatically. And so if you're brand new and some of the stuff we say is, well, it kind of sounds like inside baseball, like it's tribal speak and you don't know what all the words in the vernacular means. Well, it's like baby steps and debt snowballs and all that kind of stuff. Well, we'll help you jump in. Okay?

Just go to RamseySolutions.com. Click on the Get Started button. It's a completely free thing. It'll just walk you through where you are and what your next step is, and you'll begin to kind of get the vibe of what we're doing, the process here. And we'll walk you through it. Again, completely free. RamseySolutions.com.

Click Get Started. Cole is in Wichita, Kansas. Hey, Cole, welcome to The Ramsey Show. Hey, Dave. Hey. I'm proud to be on here with you. Thanks for your time. Honored to have you.

How can we help? Well, I messed up. We are in the hole big time. I mean, I guess not big time. We're on our way there. And I don't know what to attack first, I guess. What we're going to do, we're selling one of the vehicles. It's got some problems that are coming to arise that I've noticed and uh so we're just going to sell that one um whatever money we have left over we're going to save a thousand of

it for our emergency fund and then start applying whatever else we have to the rest. Um, basically what I don't know what to do is like looking ahead to the end of this month. Um, I'm going to be in the red and I don't know what not to pay and still be able to live, I guess. Um, I don't want to go behind on anything, but it's inevitable at this point, I'm pretty sure. Okay. All right. How old are you guys? I'm 31. My wife is 30.

How long have you been married? Five years on Friday. What's your household income? It'd be $112,000 twelve thousand okay so you make good money yeah i mean hundred thousand is no no slouch in wichita kansas dude that's excellent yeah so what what's causing the problems well we i think where we're at right now is after Christmas, there were some bills that I forgot about. And we've got an almost one-year-old, and the hospital called on that, and I got on a payment plan with them.

And that payment plan came out, and it overdrafted my account. And after that, I'm just trying to play catch-up, I guess, on that, and it's just been one thing after another. We had a tire blowout on one of the vehicles. I did a new tire for that, and the other is expensive right now. How much was the hospital bill that came out of your account? That one was only a $222 payment. With making $115,000 a year, $222 does not put you in this mess.

What other debts do you have, Cole? What else do you have? We have two vehicles right now. One of them we owe $4,500 on. The other one we owe $6,200 on. Okay. The $6,200 one is the one we're selling, by the way. Okay. We've got, my wife has around $30,000 in student loan.

The credit card is right around 14 000 um and the house is 102 000 and what else is there how much is the house worth uh house right now i haven't had it appraised or anything but i'm i'm thinking i could get around 140 to 150 so your house payment's not like insane it's not like you guys live in a half million dollar million dollar house um right it's thousand thousand fifty dollars a month yeah so cole i mean you know yes i understand this is it's overwhelming and there's a lot of numbers here but also um this could work so my question is month to month do you guys are you just is

your lifestyle just completely out of control are you guys just spending a ton um no without you got a lot of money going somewhere that you haven't shown us yet. Yeah. Oh, they care too. So 300 a week going to daycare. What's your wife make a year? Uh, she makes 52. Okay. Was that part of the one 12? Yeah, that's part of it. Yeah. I make, I make 62. She $52,000. Okay. The only thing I can think of is you're completely chaotic and disorganized to the point that you're out of control. That's the only explanation because there's nothing glaring in these numbers. I kept waiting for the $50,000 car, and it wasn't here.

I kept waiting for something big that was smacking these smacking this budget in the mouth and it's not here so the only thing i can come up with is you guys must be some of the most disorganized completely chaotic people that i've run into in a while yes i would agree with that okay we're jumping on with this we want to get it you know that's fair i'm not picking that's not i'm just trying to help you trying to figure out where this is going so i know how to fix it i'm not picking on you okay because i'm i'm i get that so here okay the that's bad news and that's good news the good news is that you're the problem the bad news is you're the problem so

we could fix this okay really quickly so a detailed in-depth game plan where you tell every dollar exactly what to do every single month. And you and your wife pinky swear and spit shake that you're not doing a freaking thing with a single penny, except what you agreed to on this hardcore plan. We'll get you out of this really fast. You're going to turn around so fast and call that plan is you're not you're not going out to eat you guys aren't amazoning stuff to the house you're not shot like you're doing you're literally doing amazon prime you're doing nothing but catching up on these bills because you're not going out to eat you can do this call i mean the numbers are

here that i'm like no vacation this summer you're broke people yep no eating out you're broke people you don't see the inside of a restaurant unless you're working there as your extra job to clean this freaking mess up okay so this is like put yourself in financial boot camp because here's the thing you two are not dumb people and if i hired you and said i'll give you ten thousand dollars to look at these people's budget and tell them exactly what to do with it you'd have it done in an hour and a half yeah so here's what you do you take care of food first lights and water a second you pay the house payment third you pay the car payments fourth you put gas in the car fifth you don't need any clothes you got enough this month

yep okay buy clothes only when there's something that's completely about to fall off of somebody or whatever right now you got people got clothes in their closet for days i don't don't talk to me about style you're broke people okay and so you know this is what you do this is what sharon and i did all right and so you could turn this around really fast we call that the four walls you take care of the four walls of your house the necessities of life food shelter clothing transportation utilities gas in the car and everything else can wait yeah but it won't have to by the way when you start writing this out you got enough room in this budget to probably pull this off i don't hear the payments because you're not making any payments on the stupid student loan it's not affecting anything and if you just throw the credit card payments in the in the

trash for one month whoopty doopty oh i'll hurt my credit well good you don't need credit you're not really good with it yep okay and so if you and honestly i'm like where you guys are there's almost this like radical behavior change that needs to occur on a very radical scale because you've been on one extreme i'm like and i know you have a one-year-old but honestly i'd say you know between now and july do uber eats at night for for four months just just do make some extra. You guys need to... Not get Uber Eats. Deliver Uber Eats. Go drive. Go drive. Yeah, yeah, yeah.

But shock the system, Cole. You and your wife. Honestly, shock the system for a short period of time. Deliver pizza. Cut grass. For a short period of time. And hold on the line. Austin will pick up, and we'll give you guys Financial Peace University.

Yeah, go through the Financial Peace University class. Because honestly, you guys got this. You could do this. You're good. Get that every dollar budget out tonight. You and your wife sit down and say, okay, we can eat. We got the money. We can keep the lights on.

We can keep the house payment paid. You can do all those things. And the rest of it, you just got to fight through. And you can do this. Jade Warshaw, Ramsey Personality, is my co-host today peter is with us in canada hi peter welcome to the ramsey show hi thanks for taking my call sure what's up um so i'm uh currently entering my third year of university uh i'm married um i me and my wife have been very financially independent um we're both in school.

We both foresee being able to pay off for our school just through hard-earned cash while doing summer jobs. Wonderful. But we've been doing them. We've been kind of realizing that the student loan rate in Canada, we don't have interest on our student loans, and we don't start paying until six months after we graduate. And so we were wondering, we were thinking about maximizing out the student loans we can take out and putting it aside in a separate high interest savings account, maybe even invest into some short-term bonds. And then when we graduate, take all that money out, pay off our student loans in full,

and then keep the money that we made from the interest. My question is, I know that you're very adamant about staying out of debt if possible. No, I'm just very adamant about staying out of debt. Not if possible. I'm just adamant about staying out of debt, period. Right. But let's go ahead. How much are you talking about doing? How much money? Me, so about $15,000 a year for me and my wife. So that's about $30,000 each. So $60,000. Yeah. Okay. And the bond rate is what?

It's about 5.5%. Okay. So $3,000. That's what you're going to make. Yeah, per year. That's what you're going to make, $3,000. And what's your degree in? Finance. Finance?hmm. And what's your degree in? Finance.

Finance? Yeah. Okay. And you're in your third year of finance degree? No, I'm just doing Bachelor of Commerce currently, majoring in finance. Yeah. Going into my third.

Have you ever had a statistics class yet? Not yet. Not yet. Okay. I can tell. Okay. Go ahead, Dave. So here's what you're missing.

Risk. here's what you're missing risk the only way your program works is if there is a zero risk scenario which does not exist okay so the problem is you call the guy that's been doing this for 35 years so i've seen everybody do every possible stupid butt thing they can do in their lives or have horrible tragedies happen to them in their lives that you have not anticipated or oh maybe the bond market has a problem that's never happened has of course that happens all the time and so maybe you don't make three thousand and uh maybe oh have you did you know that bonds go down in value when interest rates go up? Do you know it's an inverse relationship? Yeah.

Yeah. And so you're going to take out a $60,000 loan with $60,000 worth of bonds. Interest rates go up. Now your bonds are worth $50,000, but you have to repay $60,000. You know values go down when interest rates go up it's an inverse relationship with the bond market to interest rates and we're in a rising interest rate environment aren't we is that that's called risk okay so your plan is um not good it's left out key components which makes it really really risky and naive that's problem number one with it problem number two with it is you are trying to make money doing nothing making money doing nothing usually will cause you problems So don't try to make money doing nothing. Problem number three is,

I'm pretty sure, I'm not positive, but I'm just about positive, that the government of Canada did not come up with a student loan program for Peter to invest in the bond market. Meaning that you are misusing these funds, which is not illegal, but it is at a minimum unethical or immoral. I agree with that. So lots of reasons, Peter, to not do this. Lots of reasons. You did not anticipate risk.

Another way that you can, if you're ever faced with something like this again, that help you feel the risk is just take your proposed scenario and multiply it like 10 or 100x and see if it doesn't make you want to throw up a little bit that's so good then you really see the gravity of it so in other words would you do this with six hundred thousand dollars if you could do it would you do this with six million dollars if you could do it oh no see now you're starting to feel like oh god something could go wrong well something could go wrong well, something could go wrong. Well, something could go wrong.

Well, dude, something could go wrong. And let me just tell you, it's not something could. It's pretty likely to. Absolutely. It's pretty likely to. So, yeah, it's just and all for three grand. That's my thing. It's not even a lot of money. Go deliver some pizzas and get you some three grand.

For a year. Yeah. Yeah. It's just not a lot. It's not even a lot of money. Go deliver some pizzas and get you some three grand. For a year. Yeah. Yeah. It's not a lot. It's not worth it. You are playing with a barrel full of snakes for three grand, hoping to not get bit. So there's the problems with your theory, because your theory is empty. It's missing entire sets of variables that, when implemented, make this really unattractive and you forgot the ethics and the

morals part of it too which will also lead you astray and get you into problems so Dave that was good I I was expecting you to really go into one of your Dave modes well you taught you taught the thing is I um I it wouldn't have been fair to him. That's true. Yeah. No, you taught. So he had to, because he doesn't know. And he didn't call up with an arrogance.

He was asking an honest question. And he just didn't know. So it wouldn't have been fair to him to kill him. As tempting as it might have been. I was giving you the energy. Yeah, I know you were. I felt it. I felt you agging me on.

It's almost as bad as when Sharon does that. Oh, my gosh. No, I mean, he's a good guy. He just hadn't thought about some of the stuff because he's young. And I'm glad he called in because I know a lot of people have fooled around with that idea in different types of way, basically taking debt to invest it. So for those of you over in the nerd side who's head are still spinning the reason i ask about statistics class was not to be sarcastic but um in stat one the first class you take they will teach you uh a measure of risk called a beta

and a beta is the the distance uh between the hill and the valley if you look at a graph and it's going up and down like a mountain in a valley the distance between the bottom and the valley. If you look at a graph and it's going up and down like a mountain in a valley, the distance between the bottom and the top is your beta. Okay. So, and so in an investment analysis, a beta is your measure of risk. And so for those of you out there doing your investments, you'll see it actually, it's one of the people that you'd actually do see it in the real world, other stack class is with mutual funds so a in the in the united states the standard and poor the s&p 500 is the measure the baseline of the stock market it is a 1.0 beta so it's your baseline okay so if you have a mutual fund that has a 0.8 less than one that means it's less volatile than the stock market if you have a mutual fund for instance

an aggressive growth stock mutual fund might have a 2.0 beta which means it's twice as volatile as the s&p baseline okay the standard poor baseline so you see it there but what happens is people do not apply that type of mathematical thinking and formula, which that's an actual math measure of risk. People don't apply that to debt. And see, he left risk out of his math formula. Yeah, he did. So he's thinking, okay, I'm going to make $3,000 on $60,000, but I did not adjust my

returns for risk. And that's why I was asking about that, because you adjust it for risk. And this is really an egghead explanation of why God says in the Bible that the borrower is slave to the lender. Slaves don't have choices. Slaves are seldom generous. So slaves lose their personhood. And this is what happens when you step into the noose of debt,

because you haven't measured risk adequately. Very good. So you look at it through a biblical lens, a spiritual lens, the lens of faith. We can look at it through the academic lens. We can look at it through grandma's common sense. Grandpa says, son, you bought that car. You did what? That was my grandpa.

Drove up in a new Jaguar. I was a millionaire. My grandpa looked at me like I'd lost my mind. He goes, 10 years, what's that car going to be worth? And I said, not as much. And he said, well, I call my investments things that go up. Look at that. Grandpa was right.

This is The Ramsey Show. Dr. John Deloney, number one best-selling author of the book On Your Past, Change Your Future, is my co-host today. Thank you for joining us. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Tricia is with us in Washington, D.C. Hi, Tricia. Welcome to the Ramsey Show. Hi. Thanks for having me. I have one simple question and one that's a little bit more complex.

The first is maybe step four, 15% of income. Is that based on the base salary or is that total including potential bonuses? Total. Gross before taxes. Okay and then my second question relates to a second mortgage that I have or a mortgage that I have jointly with my mother-in-law or that my husband and I I guess have with my mother-in-law and whether how we should really be accounting for that in the baby steps does that go in bucket two or does that go in the bucket with the general mortgage payoff? Yeah. How do you have a mortgage with your mother-in-law? So when my husband and I were expecting our first baby, my mother-in-law was retiring and we wanted

her to move closer to us, but she couldn't afford a house near us. And we thought that, you know, helping her move toward where we were would be, you know, better than paying for a stranger to do child care for us. So we essentially assisted her in getting the house. So I'm on the mortgage. So you took out a, you're on her mortgage. We're jointly on the mortgage. We own it, you know, 50%, 50%.

But it's her house. Yeah, it's her primary residence, yes. Okay, so you took out a mortgage. You're a cosigner, in a sense, on her mortgage on her house. Well, I'm on the title as well. Oh. Yes. This is your mom?

No, it's my husband's mother. Oh, okay. So all three of you are on the title. Yes. Okay. All right. All right. So my question basically is, do I just kind of let this linger out there and make the payments?

I mean, the payments is fine. Are you making the payments? We split the payments. As a method of helping her? Yeah, yeah. And she helps. What happens to the house when she passes? Are there other siblings?

My husband has two siblings. We haven't actually discussed that, what happens when it passes. When she passes, we haven't discussed that. So all the money that you're paying in reducing the principal may go to them? Well, I'm on the title. I know, but you don't have exclusive title. She's got the title, too. And her estate will get her portion of the title,

and that portion of the estate could go to the siblings. Sure, yeah. Number one, not discussing this is a really bad plan. Not having a plan is a really bad plan. So we need a will and a game plan immediately. And you may want to have it where the deed is changed and it comes to you at death. Okay?

Okay. That would solve a whole lot of things. If you can get control of it like that, then I would put this in your plan. A normal second mortgage on your residence, we tell folks, if it's less than half your annual income, put it in Baby Step 2. If it's more than half your annual income, put it in Baby Step 2. If it's more than half your annual income, it's in Baby Step 6. So what's the balance on this particular house, although it's not a real second mortgage? The balance is $371,000.

Okay. I'm guessing you're not making $800,000. I make, after bonus, it'll be $500,000. Household income? $500,000. My husband's retired well i mean he gets you know 30 000 through the whole year for disability but um yeah you really need to get this straightened out so that you can get it paid off but it really is a baby step six item

okay and um but but if you pay it off and there's a paid for house and half of that house is owned by her and she dies and there's no will, that half of the house will be split among you and your husband and his siblings. Yeah. Dumb plan. Well, Dave, I'm going to ask you a question about Tricia's situation, okay? So, Tricia, I'm using your situation as Dave. What happens if trisha pays off her half but mom's still making payments it's an undivided interest there's not a half so 371 is just the total balance of the loan if you pay down if you pay down 371 by half the other

she's still liable for the other half it's not you can you don't it's not two loans it's one that's that's what i mean but trisha your 371 isn't half of the remaining balance of the house that's how much the whole remaining balance is yeah that's the remaining outstanding amount on the mortgage so you're not you're not talking about splitting the payments with mom you're talking about just paying the house off i am i'm saying pay off the house and but pay it off in such and when you put the documentation in place that the house is yours yeah that that you know treat it like it's a rental property and it's in baby step six and you pay it off but right now it's not a rental property right now you start paying it off you're going to get in an argument with somebody a judge or a sibling or both because there's no will and no plan or there's a will that says just

split it among the three of them it's dumb that's dumb i mean that was not the intent of this deal that's not a fair deal here because the others haven't put anything into this house you should split the rest of stuff with them or that's fine but and certainly if you go and pay off you know a house that has your name on it, but her name on it's your house. And, you know, you're benefiting those siblings if you don't clean this mess up first. So, yeah, we've got to do some estate planning work here. And then we need to put it in Baby Step 6 as your overall answer. So, hey, good question.

Just note, I would not have done this the way you did it i think there was other ways to help grandmother and help her move and help her be there to help raise your kids and all that kind of stuff without uh getting all tied up in this barrel of fish hooks that you got yourself in but you can straighten it out and by paying it off and by getting it deeded to you upon death um or before either one's fine with me open phones at 888-825-5225 geo's in miami hi geo how are you hey dave how are you doing better than we deserve what's up yeah all right um so i just had a quick question um so i'm thinking about buying a rental property with my sister. But she's made it very clear that she doesn't want a 15 year.

We're kind of on a time limit because my income of this year is going to be like not really that high. And so we're going to be going off on my income of last year um and so i was just wondering if it's going to be a rental and if we're not really going to be living in it um and if you know we can potentially sell it before the 30 year mark this would be through you have three reasons you should not do this deal number one you're broke you don't make enough money to do the deal number two uh you're you're going to be in a partnership with someone you're already in a disagreement with on how to structure the deal that's dumb partnerships are dumb partnerships with family can be really bad idea and uh number three you shouldn't buy rental property with debt at all you should pay cash for it so um but you're kind of new to

this whole ramsey thing so you didn't know any i was going to say any of those things but one of the sayings we use around here is the only ship that won't sell as a partnership because i'm doing 30 years of financial coaching uh you know what i see a lot people like you and your sister in my office both of you pissed off yeah i can see it yeah because it didn't because the partnership didn't work i would i would tell her i love you enough that i'm not gonna do this yeah or i'm i'm out it's not gonna work for me well i mean you're not making as much money tells me that you're not you know you're not making good money you don't need to be getting in a rental property and you're financing it and you want to do a 15 because you

got at least that much of a glimpse of the ramsey stuff uh and she's like no i want to stay in debt forever no well it's i dave i just keep having this conversation with folks about my age a little bit younger a little bit older who just keep living on tiktok and they think that they are broke if they don't have rental property. Let me tell you what. They will live in a two-bedroom apartment and try to buy a rental house with a 30- or 40-year note. It's madness. It's heartbreaking what it is. It's a get-rich-quick syndrome, and it's this idea that I'm going to invest in property

because that's going to make me wealthy. And the truth is that real estate does not make broke people wealthy. It makes them broker. That's why they call them brokers. And so it's just when you're broke, real estate is a game that you play when you have cash. Lots of it. Because you need to play the long ball with real estate. And when you get up against the edge and the sparks start flying because there's friction, because there's no margin, that's when you're going to lose your butt in real estate. So I started with nothing.

I had $4 million worth of real estate by the time I was 26 with a million dollar net worth. I was making $200,000 a year in 1980 freaking threes. That's a lot of money back then. I lost it all because I was playing the same stupid butt games that you people are watching on Tic Tac. This is The Ramsey Show. Hey, it's Dr. John Deloney. 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.

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