The Ramsey Show - App - The Best Calls of the Year So Far (Part 2) (Hour 2)

Episode Date: September 15, 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. Dr. John Deloney, Ramsey personality, host of the Dr. John Deloney Show and number one best-selling author, is my co-host today as we take your questions about your life and your money. Open phones at 888-825-5225.

Chelsea starts this hour off in Mobile, Alabama. Hi, Chelsea. How are you? Hey, Dave. Good. How are you? Better than I deserve. What's up? Well, thank you so much for taking this call. It really means a lot to me. I actually sent this question in after watching y'all's SMART conference in Nashville a few weeks ago,

and it just meant a lot that y'all reached out to have me ask this question live. So I guess I'll get right into it. I've been working the baby steps since 2019. I've paid off $32,000 worth of credit card debt in my car. Good for you. Hope to never have a car note. Yeah, thank you. Hope to never have a car note ever again.

I still owe $72,000 in student loan debt. I currently rent in Alabama, and my husband, I'm married. My husband lives in Maryland, and we own a house in Maryland. He works for the railroad, and he hasn't been able to find opportunities equivalent to what he has right now in Maryland. Long story short, I lived in Maryland for five years. That's where I met him. I'm a person in recovery from substance use. I moved away to get well and then moved back closer down south to where my son from my first marriage is. So that's why we're living separate right now because my son is down south. So my

question is, I'm looking to get closer to my son in Mississippi. He lives about an hour and a half away from me. And like I said, I currently rent the town that he lives in very rural and there's not a lot of opportunities to rent. There's nothing available based on the four calls that I've made. It's like I said, a small community. So my husband and I are considering looking to purchase a second home for me in Mississippi near where my son is and this would require us to go outside of the baby steps and we're just trying to weigh all of our options here and I feel like I'm in a race against time to spend more time with my son while he's you know at this stage of life he's 12 and right now I only get him every other weekend in the summers. So yeah, that's kind of

where we're at, just trying to weigh all of our options. It sounds to me like you are trying to do everything all at once. Yeah. Yeah. It's been a struggle. I mean, I feel comfortable renting. You know, I'd be fine to rent if I were closer to my son I'm not talking about money I'm talking about you're trying to do a long-distance marriage you're you're really right now trying to do long-distance parenting yeah and you're trying to clean up your finances and you're trying to stay sober you're trying to do a lot of stuff all at the same time and I'm afraid all this is going to implode on itself. You're asking a lot of you. Yeah.

Yeah, it is a lot. I mean, it's too much. I feel, yeah, I feel like, you know, if I could get in a second house and to say to my husband and I don't combine finances, at least not now, we're not against it. We just, us living separate, it's just made sense for us not to put our finances together. And that may be wrong. You know, maybe we can look at combining. Let me stop a second because I appreciate that you need to be near your 12-year-old. Yeah.

But you need to be near your husband more. Yeah. It's more important. Yeah. And there's nothing in this conversation that's ever ended this fact that you're in two different cities. I've never one time have i heard you all bring this to a close everything it's almost like it was going on forever the way you talk

about it you guys don't have a plan to land this plane and that's bothering me more than anything you're asking about i've been married 41 years and somebody asked me the other night how we've been married 41 years it's because i told sharon if she leaves i'm going with her i couldn't stand to do what you're doing i i would be a complete wet dishrag wimp i couldn't do it i could i couldn't i couldn't make it she said she says if she dies i'm gonna get married remarried in about 30 minutes just because i can't make it you know that's what she says you know and she's right you know so i don't understand i don't i can't get my head around what y'all are doing well i i work from home so i'm able to see him like we make plans to see each other every six weeks where i stay with him for two weeks that's not marriage that's a that's a fun weekend dating opportunity yeah this is not a good plan honey and

if you buy another house you're cementing yourselves further apart. Yes. Yeah. Well, what would be the solution, like, if I lived with, you know, having my experience in substance use and mental health, like, would it hurt my son for him not to have his mom full-time? You know what I'm saying? Like, it's just a temporary thing that I'm wanting to spend this time with my son until he's grown, you know?

Well, it's only six years. Like, for the next five years. Yes, five to six years. By by then your marriage is dust yeah and it's it's not so much of a marriage right now i let me put it this way i know firsthand people close to me that i love and care about who are married to the railroad okay if my wife said i have to leave this town in order to stay sober and be mentally and physically well i don't care what my job is i quit i'm gonna go with her and so right now as far as i'm concerned he is choosing he's married to his job more than he's married to his wife and you're married to a 12 year old more than your husband correct yeah and so what you're no i would not buy a house you guys got

to solve for this he needs to come down there and y'all buy a house and sell the house in maryland and until that's done you don't buy that's what needs to happen um or yeah you need to go back to maryland and you need to spend the money you would have spent on the house on airline tickets to come see your boy or more often. He needs his mom a well more than he needs a stretched, thin, barely hanging on, barely sober mom coming to see him. Yeah. Yeah. It's hard for me to imagine going back to using.

I mean, August will be 10 years that I've been clean and sober. Way to go. I'm proud of you. It's awesome. Thank you. Thank you. Thank you. Thank you. Yeah, it's hard for me to imagine going back there.

Yeah, but the thing is, you don't want to, there's no point in creating all these stress points. That's what John's saying about you being thin. Yeah, yeah, yeah. And you're right, yeah. Somebody needs to give up something here to get a more sane life situation and only then do you make the decision to buy but no cementing the separated marriage by you buying a house uh for six years no no yeah i would make a very clear within 90 days within 180 days we are living together some way or another

right what's that look like and you may have to deal with an ugly reality an ugly reality where he says i'm not leaving and then y'all are going to have some hard choices to make and some hard decisions to make but just pretending that those hard decisions don't have to be made is just making you both crazier and crazier and crazier yeah i'm. Yeah. I'm sorry, honey. I hate it. Sorry you're going through all this. Yeah.

And I love, I love how you want to be there with your son. And I think that that is, it is important. And there's other ways to accomplish it rather than buying a house and in a town because you hadn't been able to find a rental. But I don't even want you buying a rent. I don't even want you buying a rent. I don't even want you finding a rental. I want you guys to solve for how we're going to be together and how we're going to serve the 12 year old. And I think it's important, Dave, people call my show all the time asking about, you know, what do I do? How do I deal with an anxious kid? Or how

do I deal with a kid that's struggling with depression? The number one answer I'm always going to tell parents is you go get well because your kids are absorbing that stuff. You go take care of you. Make sure you're whole and then circle back and start trying to solve your kid. It almost always, not always, but almost always begins to lift that child up when mom and dad are whole. Not a 12-year-old on the planet that doesn't look at this marriage situation and go, huh? Right. This is The Ramsey Show.

Jade Warshaw, Ramsey personality, is my co-host today. Open phones at 888-825-5225. Chris is with us in Atlanta. Hi, Chris. Welcome to The Ramsey Show. Hey, Dave. Thanks for taking my call. So just a little bit of background. I'm 42. I am debt-free. I haven't been debt-free all my life,

probably the last 15 years, but I feel guilty every time I spend money. We have 401k savings. We invest money. I still work. My wife still works, but it pains me to spend anything over $100 sometimes. So I was wondering if you could tell me, do you still feel that even after 30 years of being debt-free or whatnot? Because I feel it.

Our house is paid off. We have no payments. And I still get that clenching in my stomach every time we have to go do anything. I can't relax and have fun. So I was wondering if you could tell me maybe how you feel or if you felt the same way after you got out of debt and built a bunch of wealth. It's not guilt. It's fear. That makes sense.

And what that is, as Dr. John Deloney would say, your body is remembering being broke. And it's telling you that your spending is a threat. It's a threat. It's a threat. It's a threat. And so your fear activates. That's what happened to me anyway. Even 10 years after you got debt-free.

Not 10 years, but for a while it did. And what I did is just what you've done. I just recognized it was happening, and i did is just what you've done i just recognized it was happening and i kind of like you're doing i started asking the question what the flip's going on i mean what's wrong you got a million dollars what are you yeah pissing and moaning about going to the grocery store for you know oh it drives my wife crazy yeah i mean that's what that's what that was me talking to me, not you. Okay. But I'm just saying I had to kind of go, okay.

And again, I'll, I'll just bring, I'll channel my inner Deloney. God help us. But, um, yeah, but the, uh, but, but the, you know, the, the, the thing it, um, I had to do two things. One is I had to say, all right, facts are my friends. Okay. So what is your net worth chris i would say probably 2.2 and you're 42 years old and you're 100 debt free and your household income is what uh around 275 okay so let's just be realistic for a second if we took two hundred thousand dollars

in hundred dollar bills out of your net worth and put it in the fireplace and burned it he's now got cold sweats jade i know he does if we did that yeah if we did that your life is not going to change one percent really that's a fact no that's a fact other than the nervous breakdown that you would have but i'm just saying but the but you know what i'm saying? Mathematically, are you as okay with $2 million as you are with $2.2? You are. We know that to be true. That is a fact.

It's a fact. Right. So when you go and go on a nice vacation and drop $10,000 for your poor wife who has put up with you. Mm-hmm. Trust me, I just did that, and I had a nervous breakdown. I know, I know. But the reason is you're acting like your fear mechanism is activating as if you're broke, and the facts tell us that that is a false signal.

And can I take it one further, Chris? Because I kind of relate to some of what you're saying um on sam and i's journey through this debt-free journey and and then some i've had to go there's been certain moments that i've had to go back and find where that emotion is coming from and i've had to think back on what what was the instance where that was ignited like okay it was when i asked for lunch money and someone blew up on me, right? Or it was because I did this. And that was the first time that that triggered that. And there was a phrase you heard.

Yes. We ain't got no money. That was the phrase I heard growing up, Chris. And there's been so many times in my life I've had to go back and find where that came from and speak to it directly and go, hey, if I buy this pair of tennis shoes right now, it's not going to break the budget. No one's going to yell at me. No one's going to. You know, and I've had to go back and say that if I buy what I would like to have for lunch at the grocery store, there's no guilt there. I'm not going to throw the budget off. The family's not going to pay for it.

I've had to say that. And I think sometimes my guess is that there's some things that have happened that have caused some trigger in you and you got to go back and identify that and honestly speak directly to it and say, hey, I'm not there anymore. And I'll tell you, I'll tell you this, another place we've dealt with this, Chris, was once I kind of started getting past it, the fear, the sheer, it's not fear, it's sheer terror that my wife Sharon felt when we went bankrupt and lost everything and we had a brand new baby and a toddler and the lights got cut off if I even have a similar body language or tone 30 years later towards spending like the emergency fund and it makes it activates

that it triggers that inside of her we have to we have to just time out and back up because she has to start breathing again it because she i can suck it she's she feels like i'm doing what i did when i went broke for just a nanosecond and it activates and all of these lights light up in her in her uh her physical body changes i mean her her she gets pissed off from being really terrified again and it just doesn't i am yeah yeah and it it activates all fear and anger are best friends they run around together and so um terrible feeling yeah it is it is but here's the point okay number. Number one, facts are your friends. All you got to do is when you start doing that, you just have to stop and go, now, wait a minute.

That's not real. This is, this is fear. That's called false evidence appearing real. This is a, this is a falsehood. Us spending this money is not irresponsible and it's not going to break our family. And you just have to talk to yourself and build the muscle then of doing that. The other thing you can do is you have a very specific process put in place and go, okay, like for instance, Sharon and I,

we do not spend or give more than $1,000 without talking to each other. And if it's more than $1,000, we wait overnight also. We breathe. Now, do we have to do that mathematically today absolutely not we got all kinds of margin but we do it as an act of respect to each other to keep from activating those scars those wounds from having gone broke and uh you know it was the first five years after going broke for me and even today today, I'm telling you that we still, if we don't abide by some certain processes that are safety valves, then we can still step back over that line.

And there are emotional processes. They're not mathematical processes. Because again, we could give away, I mean, we could take X number of dollars and put it in the middle of the floor and burn it. And it wouldn't affect our lives. We've got the money. That's not the issue. So mathematically, it's not the problem.

But the action, the body language, the tone, the process used seems impulsive, irresponsible, out of control, immature, and it feels like the old days. That's right. And boy, it'll light your butt up. It will. I mean, it's just another component to when we say money is, I mean, it's behavioral and it's behavioral in the moment,

but it's also taking into account the behaviors you did beforehand and you feel that and you're still connected to those. And so when you get in a moment where you're like, why am I freaking out right now? You know, when I know for Sam,

if the bank account used to hit a certain number, he'd start being like, OK, OK, OK, we got to go do something. And and that's the way it is. We can't act like these things didn't have an effect on us mentally and that that behavior didn't affect us because it does. Now, I am much more healed. Yes.

30 years ago than I was 30 months after the bankruptcy. Yes. You know, 30 years later versus 30 months later. And so you should go through a healing process, but it's also just wise to acknowledge what's really going on here. Absolutely. And then number one, we're going to say, oh, that's not real. Number two, you look at the actual ratios and go, okay, we're not being irresponsible.

So why am I feeling, you know, and then you learn to practice your way through normal feelings versus wounded feelings. This is The Ramsey Show. Hey, you guys, health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours

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Open phones at 888-825-5225. Carrie is with us in Montgomery, Alabama. Hi, Carrie. Welcome to The Ramsey Show. Hi. Thanks for having me. Sure. What's up? So I recently got a divorce.

Well, I left him last summer. It was like a domestic violence situation that I had to get out, and I was in nursing school full time. And so I got out, and I got back on my feet like a lot quicker than I thought I would. Good for you. A lot quicker than he told you you would. Oh, yeah, he said I would be nothing, you. A lot quicker than he told you you would. Oh, yeah. He said I'd be nothing, you know, all that fun stuff.

And you're going to be the rock star that we all know you to be. I'm proud of you. Yeah. But anyways, he kind of controlled the finances. So I had a credit card left, but I hadn't been using it. I kind of used it to get a lawyer and to kind of get back on my feet. And so I have about $6,000 left. I had like 16, but I've been paying it off.

And then I got a job. I work in like medical sales now, and my base pays like 60. And with commission, I make on top of that about five to seven every month. It kind of varies. My worst month was like $3,000, but it was when I was getting started. But I did buy a house in november unfortunately when interest rates were 7.25 it's an sha loan i have 26 000 auto loan on but it's three percent interest rate i got a really good interest rate on that and then i have about 18 000 in student loans so i'm just wondering like what i should

pay off first and then we just closed on our house we flipped houses together and i we had to split the last profit so i have 25 000 from that that i just put in the market i got it i got it like a week ago that'll jump start your plan yeah good it's making it's like a 4.5 apy so it's a really good money market. So I'm trying to decide, like, should I keep it there? What should I pay off first? I really want to get a better home interest rate, but I'm just not sure when I'll be able to do that, you know? Yeah. Well, Carrie, you're doing an incredible job. I mean, you absolutely have taken hold of your life. I mean, you're doing incredible work-wise. You're making great money. And yeah, you're just in an incredible spot, which I'm really happy for you.

And I mean, that's a courageous, the whole event is a courageous thing that you just stepped out of. And you said, I'm taking life back in my own hands. So I'm just really, I'm impressed by you in that way. Do you have any other money saved besides this $25,000 that's in a money market account? Not really. Like I have my banking account set up for like 20%. I just stuck it up to 40% of like when I get paid, it just automatically goes to my savings, my money market. So I was saving like 20% each paycheck. So I have about $2,000 in savings on top of that. So maybe $27,000 total. That's great. Okay. So what I would do is I would take this $25,000 and we teach you to pay off the smallest debt first. So with that $25,000,

plus you have $2,000 in your other savings, which I would take that down. I would drain it down to $1,000. So you really have $26,000 that can be thrown at this debt, which means you can pay off this credit card and then you'll be paying off, gosh, this auto loan. So you only have $6,000 left on your car. No. By the end of today. No.

You got $26,018 and $ on the car right yeah she has six thousand dollars in credit card debt no yes four thousand of that is like a 24 month interest-free credit card you got an eighteen thousand dollar student loan yes that's right so you got eighteen thousand dollar student loan and you've got how much on your credit cards? Um, 6,000, but 4,000 of that is like interest free. I don't care. We're not going to play interest free games and interest rates don't matter. You are in debt. We need to clean up the debt. Okay. When you get the debt cleaned up, you're going to have no payments anywhere in your life and you're making money. You're going to put this whole horrible mess in your rear view mirror and it's just going to be smoke back there.

It's going to be awesome. I love it. Okay? So I would write a check today and pay off your credit cards, and I would close every one of those credit card accounts and use only a debit card for your transactions. Then I would pay off the student loan today. Okay.

And then you've only got the car left at 26 000 right yes okay and we people people keep talking about the student loan forgiveness do you think that's ever going to happen or no okay and you know what even if it even if it does you borrowed the money you owe it yes sir okay and you make good money now you're gonna be making a hundred thousand dollars this year aren't you yes sir yeah so pay off your twenty six thousand student loan okay who cares yeah and the house i bought is a fixer-upper so should i just wait on fixing up the house yep okay yep let's get the debts cleaned up because when you don't have any payments but the house payment you're making a hundred thousand dollars a year you feel that freedom already when i just said that

wow you got no payments but a house payment you can fix that house up pretty quick yeah and no more debt no more debt you don't need any banks telling you what to do you got rid of a jerk that used to tell you what to do we don't need anybody else telling you what to do you got rid of a jerk that used to tell you what to do we don't need anybody else telling you what to do you are amazing go get it done girl yeah and when should i refinance my house since i just bought it when you're able to get a lower interest rate all right as soon as you call churchill mortgage and find out what you've got to do is your credit damaged by this mess is that the problem um i paid off a lot of it so it shot back up um it was like a 650 but now it's back up above a 700 when did you do that before before or after you got this seven and a quarter um i did that a couple weeks ago when i first i got like 32 000 and i paid most of it off with that. And then I was making chunks.

I was doing like a $1,000 payment on the credit card. Go ahead and get rid of this debt, all this debt. And when you get rid of all this debt, you're going to see that score jump up again. And right when it does that, if you can get down around a 6%, that will give you a one-and-a-quarter savings. That will make it worth refinancing and call Churchill Mortgage and get that. If you can get it down to 6% or lower, it's going to be worth refinancing. And should I do a 15-year or a 30-year?

Always a 15-year. And, hey, listen, you're asking a bazillion different questions about all of the different things because now you're in control of your life again. And we want to help you with this recovery, this bounce back that you're doing and give you the confidence on the money piece to do everything. I want you to go through financial peace university because we want to be a little part of your amazing story. And so you hang on, we're going to have Austin pick up. We're going to pay for you to go through this class. It's online. You can do it. And you're, you know, when you get all these answers, these questions are all swimming around your head and you're going to go through this class it's online you can do it and you're is you know when you get

all these answers these questions are all swimming around your head and you're going to go through this class and go oh now i know exactly what to do your confidence is even going to soar more and you're probably going to make more than 100 then you probably make 100 and a quarter and with that care you're going to get every dollar plus as well and so honestly too the the amount of control you're going to feel of just budgeting when that paycheck hits, knowing exactly where it's going. And once this debt's paid off, because even at the end of today, I'm like, you could have just your car loan left at $24,000 and not get out. So you can actually start to see your goals and where your money's going and being really

intentional with it. And there's something empowering, too, about that. And again, especially from what you've walked through the last year and a half, to be able to have full control over that income where your money doesn't even have you, like you truly have it. You are the one controlling it. There is something in that too. And just that simple budgeting app, I'm telling you, that's going to give you so much freedom and so much confidence. So we're excited for you, Carrie. By the way, for those of you out there that think you have a friend or a relative that is a victim of domestic violence, married to a jerk who thinks his wife's a punching bag, let me tell you a real symptom. The data shows this, and we know this from 30 years of working in these situations.

If the guy is 1,000% in control of the money and will not let his wife make a single decision of any kind with the money, there's a high correlation between that behavior and domestic violence. Because if he can control the money, he thinks he can control her, and this whole domestic violence thing is about control. And so if you see a guy who's doing that to his wife, he's probably beating her. That's what I'm saying. Not 100%, but there's a high correlation to that. This is The Ramsey Show.

George Campbell Ramsey Personality is my co-host today. Thanks for joining us. If you want to understand a little bit more about what's going on with all things Ramsey. We've got a little free process to help you. Just go to RamseySolutions.com. Click the Get Started button. It'll help you ascertain where you are and what the next steps are to get where you want to be. Yeah, that's how that works. So get started at RamseySolutions.com. Of course, completely free.

George Campbell, Ramsey Personality, my co-host today. And Matt is in Portland, Oregon. Hey, Matt, welcome to the Ramsey Show. Hey, guys, thanks for taking my call. Sure, what's up? I recently discovered your show and really can't get enough, so thank you. Thank you. I'm 52, yeah, I'm 52, my wife is 47 and our household take home is roughly 8,000 a month.

We have a $34,000 in an IRA. Instead of traditional investing, we've gone the real estate route and currently have mortgages on three homes. One is a primary residence and two are rentals. And just need some advice. Up until I, up until I discovered you guys, um, this was our pretty solid plan, but, uh, um, is it too late to go the traditional investing route or no? And it's not necessary that you only do the traditional investing route. Um, I've got a bunch of real estate. As a matter of fact, I have more real estate than I have mutual funds

because I love real estate like you do. And so, you know, as long as we're building wealth somewhere, we're certainly not going to be out of there. What I would want to do is I would want to lean in and have a plan to knock those mortgages out sooner rather than later without panicking about it. So what are the balances on these puppies let's see primary residence 315 uh rental number one is 200 000 and then rental number two is 225 okay all right we do we you know we we can pay them off in 15 years um yeah

you probably pay them off a lot faster than that probably pay them off in 15 years um yeah you probably pay them off a lot faster than that probably pay them off in about eight if you lean into it a little bit and um so i i would start i mean you throw your rents back at it number one you ought to be getting substantial rents on these things what what are the what's the 200 000 mortgage rental worth worth about 300 right now okay you're not making much on that one what's the uh 225 rental worth that's worth about 350 we added a bathroom and and did some stuff on that yeah you're you're not you're not cash flowing a ton on either one of these you're making money but you're not like bailing it or anything no no these were, these were recent acquisitions, and, you know, our plan is to, you know, have them paid off in 15 years.

Yeah, and you can work that, but I would work towards paying them off faster. I certainly wouldn't add any more to this because you don't have enough equity in these things for them to be making a ton of money. They're, you know, this will work out for you, them to be making a ton of money there. You know, the, the, the, this'll work out for you, but it's, it's, it's not going to for a while.

It's going to be, you're going to be, you know, spinning your wheels for a little while because you just don't have any margin in these things. There's not enough equity for you to have big cashflow. And if you don't have big cashflow, you're not making big money translation.

Every dollar you've put into this is not getting an roi yet except an increased value but you're not getting cash on cash rois not to amount to anything do you guys have any other debt uh we do have a car loan at 15 000 but other than that no credit card debt what's your cash position you said we we have we have about 12 000 in the bank right now okay well first thing is you got to get your emergency fund up because you're sitting on a lot of debt and a lot of potential problems with no cash you get two or three heat and errors go out or two heat and errors go out in the water heater blow between these three properties in a short period of span you you've got a problem.

You're going to be looking at debt. Yeah. Do you love both rentals? Is there one of them that gives you a headache that you wouldn't mind selling? You just got them. I mean, we've had them for a year and a half. Do we love them? Yeah, one of them we really love we're going to move into at some point

but uh the other one is just a rental yeah well point being if you're gonna if you want to hold these if you want to clear them that's fine get rid of them it's not you're not gonna lose much uh uh if you want to play through on your plan what you do need to do is continue to follow the baby steps get your emergency fund up. Uh, you need a pretty substantial cash position to be holding this kind of property, probably 75 grand and you're sitting on 12 and, uh, because you're just got a lot of exposure that's going to have cash needs. And the problem is these things all come in threes.

Believe me, I've been managing property for 40 years. And so it's just, it's, it's always the perfect freaking storm. Basement leak, stupid car runs through the fence. I mean, it's something. You just, when you own property, it goes with the territory. I love real estate, but it is a hassle compared to owning mutual funds. So number one, get your emergency fund up. Then number two, I would start with a two-pronged

approach of getting these paid down pretty aggressively and also let's reach over and uh start that 15 going into retirement and get rid of this car debt oh definitely car debt's got to go before we do anything that's you're going to get rid of that tomorrow that that's just ridiculous yeah not the car but the car debt so So first, work your baby steps, man. You just started listening. Baby step one's $1,000 saved. You've done that. Two is debt-free, but the house.

Need to knock out the car like George said. Three is three to six months of expenses saved for emergencies. In your case, I'm going to jack that on up to 75 because you've got heavy expenses with these rentals that you don't have a cash position to cover. Then four is we start to put 15% of our income into retirement. You work all of that for the next 15 years. You're going to have a bunch of paid for property and you're going to have a pile of cash over in mutual funds also. And you're going to be in really good shape, but you're going to have to lean into it and be very intentional. Sometimes when people first start buying property and you're a little bit further into this, you're not brand new,

but we feel like, uh, like it's magic and it's automatically works and it's anything but magic and anything but automatic well everyone says it's passive income dave i saw a tick tock passive about anybody says real estate's passive incomes never manage real estate there's nothing passive about it it's freaking active as it can be that's an absurd but statement when people say that that's somebody somebody selling a get-rich-quick thing on Tic Tac. You know, that's all that is. It's just not even real. All right, Amanda is in Cincinnati.

Hey, Amanda, welcome to the Ramsey Show. Hi, thanks for speaking with me. Sure, what's up? So I've been listening for a couple months and trying to implement what I've been hearing. So my husband and I had whole life policies, so we got rid of those. Good. We went with standards, got termed in policies,

and we have three children, six and under, so we did the rider for the children. Good. But we have a whole life policy we were talking to getting for my oldest son when he was an infant. It's 15 years pay, and we are six years in. So should we get rid of that also? Sure.

Okay. Absolutely sucks. Now, the money you put into it, you're going to get very little out of. It has a horrible rate of return. It is not good for saving money, and it's not good for insurance. You got him covered for insurance now with a rider, right? Correct. Yeah, and so now it's just a question, is a whole life policy a good investment

to which everyone in the financial planning world that doesn't sell that crap is laughing? Of course it's not a good investment. It's a horrible investment. Much better off to take any money you get out of that policy and any money you are putting into it monthly and put that in a good mutual fund in a 529 for his college. I thought, Dave, that whole life policies were going to start to die off, but it's only gotten louder with social media and index universal life

and infinite banking and all these concepts now that are being touted. Those aren't new, though. Those are 40-year-old ideas. They're making them fancy and slick now with one-minute videos. You put them on Tic Tac with somebody with good hair, and all of a sudden everybody's talking about it. But, you know, it's just the same old crap. You know, it's just, yes, Amanda, to answer your question, honey,

get rid of your whole life policies. You've got the child coverage. You don't even really need child coverage except enough to bury them if, God forbid, something happens. Because they're not creating an income that the household is dependent upon. You, however, not creating an income that the household is dependent upon. You, however, are creating an income that the household is dependent upon. You need to replace that income with a big term life policy, 10 to 12 times your income.

So you make $50,000, you need $500,000 to $600,000 on you to invest. That would then create $50,000 and replace the income that is lost with the death of an income-producing adult. Children do not need life insurance except enough for, quote, final expenses, we call it. And insurance is not an investment. Don't believe anyone who says it is. Never. Never.

Listen, you don't get your muffler fixed at the transmission store. Don't go to life insurance people to do investing. You know, seriously, no thank you. This is The Ramsey Show. Hey, George Camel here. If you love the show and you want a deeper dive on your money journey, we've got a weekly newsletter that gives you helpful articles and tips on following the Ramsey way. Just go to RamseySolutions.com today to sign up for the newsletter.

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