The Ramsey Show - App - The Borrower Is Slave to the Lender - Even If the Lender Is Family (Hour 1)

Episode Date: September 25, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones this hour as we talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Starting off this hour is going to be Stephanie in Colorado.

Hi, Stephanie. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up in your world? So my husband and I have a big hole. We are $225,000 in debt.

He and I together make $130,000 a year. He does have bonuses that he can get up to $6,000 a year. And we have about $164,000 of what we owe is student loan debt that is at 7% or above interest rate. And when we did our search on your website, it said it was going to take us about eight years to pay off our $225,000. So we're trying to figure out what the best approach is. Obviously, we need to do this debt snowball, but a lot of those high interest rates are the big student loans that we would be paying toward the end of our snowball. So I'm wondering, two questions. One, what is the best way to think about refinancing if we should? And then the second question was, does that affect our life insurance policy? Because I'll be basically taking on some of his student loans.

Student loans, start with the last question first. Student loans that are federally insured student loans do not survive you, and so they do not count against your estate. Are these federally insured student loans? They are with FedLoan, yes. Okay. Yeah, if you pass away um they're with fed loan yes okay yeah they they uh if you pass away they die with you okay so um if if one of you or the other you know the one that is in your name don't don't put both names on them in any circumstances because you

lose that thing the other thing is if you become permanently disabled they're forgiven as well but they're forgiven at death or at disability so that that's first um the second thing is the thing you had on our website was showing your minimum payments it wasn't talking about how deeply you could cut and it didn't project any increases in incomes during that time so eight years is not realistic in this situation what's the other 50,000 in debt um we have 8, thousand on a car loan we have one thousand dollars on a credit card a family member lent us eight thousand to pay off his credit card and then we have a thousand dollars on our cell phone that's not 50 that plus 164 is not 225 um i have 164 000 is student loans i got that and then the difference okay and then 164 and then eight and one and one and one and eight is only 20 more that puts you at 184 not 225

yes you're right um i must – oh, I'm sorry. So the difference there are my student loans that are at a better interest rate than what he was quoted at. Oh, okay. So you have another 25 in student loans. So really you're approaching 200 in student loans. We have 207 in student loans. So what are your degrees in? So my husband is a doctor of physical therapy,

and then I am a business analyst at a software company. I have an economics degree. Good. And how long has he been a PT? For three years. And he's making $70,000, $80,000? He's making $72,000 a year doing home health PT, and then we've started a business on the side that's covering itself

but not making any money yet. Doing what, PT? His own clinic, yeah. Yeah, okay, good, good. Okay, so see, those are your upsides. That thing taking off is an upside. Your career expanding is an upside. He's probably not going to go to $150,000 as a salary day job on a PT.

It's more like an $80,000 to a $90,000 range, and he's bottom end of that because he's three years in. So you're about where you should be on all of that. So you're fine. Yes, I would look at refinancing student loans. It's the only kind of a loan I would do a debt consolidation on. And if you can consolidate those at a lower interest rate, it'll be helpful. But it is not the answer to your equation okay it's part of the answer i mean if you can cut off you know take it from a uh a

seven to a five that's two percent that's four thousand dollars a year on two hundred thousand bucks you see that doesn't solve your problem four thousand bucks doesn't so four thousand dollars the fact that these rates are a little high are not causing your problem. What causes your problem is it's a mountain. So we're going to be at $130,000, but we're heading towards $170,000 or $180,000 over the next five years, household income. All of that difference will go towards this. And you guys are about to cut your lifestyle to nothing. I mean, further than you thought you'd cut it but you're about to cut it

the rest of the way the children are hiding because they think they're going to be sold yes sir okay i mean no i don't want to hear about you seeing the inside of a restaurant you are broke people broke people don't need to go to restaurants you don't don't talk to me about a vacation you had a vacation when you ran these loans up at school. Your vacation's already been done. Okay. You have got to, I mean, so let's just do some quick math, okay? Let's pretend you made $130,000 and you lived on $60,000, where the difference would be $70,000.

Does that sound right? Yeah. Divided into $210,000 is $3,000. Not $8,000. Not $8,000. So you have a three three to a four-year program with increases in income and absolutely no life we're up for that yeah but i mean i mean no life your friend your mother is going to think you need counseling she's going to be thinking you're married poorly she's going to think your husband's a bad guy my mother-inin-law, bless her, God rest her soul, thought that we had lost it and joined a cult

and that Sharon was being abused because we were getting out of debt. And we didn't do nothing. I mean, the kids grew up in consignment sale clothes, experienced clothing. And we're definitely doing that. My parents have let us move in with them, so we're doing that until February. We're trying to figure out how we're going to – we have to move out in February. We need to figure out how we can do what rent we can actually afford. You just budget in as little as possible because every dollar you spend on that stuff,

every dollar you spend on anything lengthens the time that you're in this prison. Right. And this is your get-out-of-jail-free. Your intensity is your get-out-of-jail-free card. The depth of your sacrifice is the get-out-of-jail-free card. The crap you don't do is your get-out-of-jail-free card. The faster you do this, the faster you get out of jail. You can do this.

You can do this. You're smart people. When you've got an economics degree, he's a PT. D pt dumb people don't get these degrees dumb people don't work in these categories so you're smart people you'll be able to do this but this is going to be an emotional visceral experience and it's going to permanently change your life if you do it the way i teach you the level of intensity will drive the level of sacrifice which creates the mathematical margin that you need to straighten this up. And if you can go get them refinanced on a fixed rate, no variable rates on the student loans,

and on a fixed rate and no balloons, no calls on the student loans, but if you can get a straight refinance, less than six, go ahead and do it. $4,000 or $5,000 a year is not going to be a bad thing, but $4,000 or $5,000 a year does not solve a $200,000 problem. Interest rates aren't your real math problem, but you can do this. You've got the margin. You've got good careers. You've got incomes.

It's just a matter of time. It's game on, baby. Game on. This is the Dave Ramsey Show. Folks, let's cut through the bull. Interest rates are exceptionally low, so you're missing out if you have not called Churchill Mortgage to see if you can save money on your home loan. Lots of other companies are out there claiming great deals, but don't get lured by slick advertisements. No-cost refinance offers do not mean they're free.

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NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. in the lobby of ramsey solutions on the debt-free stage aaron and michelle are with us hey guys how are you hey dave welcome welcome where do you guys live clayton right outside of raleigh north carolina oh north carolina very. Good to have you guys. And all the way to Nashville to do a debt-free scream. That is correct. Love it.

How much have you paid off? $140,000, $347,000 in almost three years. Way to go. Good for you guys. And your range of income during that three years? Between $170,000 and $280,000. Okay, cool. What do you guys do for a living?

I'm an accountant with my own business, AMJ Bookkeeping in Clayton, North Carolina. I also work for Eva Garland Consulting in Raleigh, North Carolina. And I'm a clinical social worker. I work for the state government in the Division of Mental Health. Love it. Very cool.

What kind of debt was the $143,000? It's just the house. Oh, you paid off your house it's the house whoa i'm looking at weird people way to go you guys very good how old are you two i'm 47 i'm 46 okay very cool not even 50 years old and you have a paid for house by definition statistically that means you're weird yes i've always been weird my whole life well now we've mathematically proved it we're okay with weird way to go you guys very cool well tell me the story how did this start and how did you end up deciding to pay off your house early well we got married seven years ago and um pretty much we're on the same page in terms of money to begin with but we knew we had a daughter who was going to be going to college next year and that was kind of our goal was to pay off the house before she went to college

so you could cash flow college that way yeah to help yes yes absolutely and uh yeah we got you know like she said we got married seven seven years ago on our first date. I kind of said to her on our first date, you know, I'm a Dave Ramsey listener. I've been listening to Dave Ramsey since he came on the Raleigh Market. She kind of said that, you know, she kind of followed the same principles of, you know, being debt-free and not carrying any debt. You guys are real romantics on your first date. Yeah. It would have been a deal breaker.

Just go ahead and get out there early. I mean, we don't even need to wait on the third date. We're just getting out there early. It would have been a deal breaker for me, too. Don't worry. Okay. All right. Very cool.

Very cool. Either one of you been married before? I have been married before. Okay. And had problems in this area, maybe? So you're a little sensitive about that area of money? Yes. Yeah.

Yes. Yeah, okay. That's why it's the first thing out of the mouth. Okay, let's order appetizers. Now, I don't do debt. That's right. Very good. So you get married, and seven years ago, but something happened three years ago where you kicked this in.

What's the story again my daughter is turning seven well she's turning 18 next year and she's going uh into college the following year and i figured about three years ago i says you know we need to help my daughter start her life uh not getting into student loan debt like i was when i was in my early 20s and late teens so i really wanted to make to make sure she had a good start on life so you just chunk 50 grand a year and here we go that's right for three years and ding ding we're done that's it wow look at you how does it feel to have no payments uh it's it's like um you feel like you can do anything you want to do um you just feel like you can you know go you know to nashville and and come on the dave ram Dave Ramsey show or just go down to a beach and just cash flow everything.

It's just a good feeling. You know we've got college covered now. That's right. We've got a great income. We've got no debt. That's right. We can just write these checks for school. It won't be any issue.

Right. And there's still plenty of room, for goodness sakes. Plenty of room. Yep. It caught me off guard because you were trained know you were trained in accounting i was trained in finance and so we're we're taught that um you know we're taught to use numbers to see things and understand numbers and see trends and patterns and that's the way our brains are our academic training teaches us to do those things but i i were not taught in those fields uh about the feelings

around money about the behavior issues about the spiritual sense of peace uh nobody talks about any of that stuff ever in academia regarding the subject of money or personal finance even and so it caught me off guard when i had no payments it was like I didn't know what to do. All of a sudden, this flood of peace came over me. That's where the phrase financial peace came from. I didn't see it coming. But the borrower is slave to the lender, and when you're free, baby, you're free. That's right.

No house payments. In college, learning accounting, it's very logical. It's very black and white and you know i had to learn that there's also an emotional piece to it yeah and i i think i kind of understood it but when that debt was gone boy i got it then that's right it's like wow i just something changed down in my stomach that's weird you know and it's just i don't have any payments i don't have anybody going to be knocking on my door for nothing. If it is, it's a wrong number.

That's the deal. So way to go, you guys. What was the key for you all when you're getting out of debt? What do you tell people the key to getting out of debt is? Don't get into it in the first place. For me, it's really just working hard and putting in the hours day in and day out. Just keep working, keep chugging at it. You know, don't let anyone have negative thoughts and, you know, speak negative thoughts into you.

You just want to keep going and you want to, you know, I'm doing it for my family. I'm doing it for, you know, myself. And it was just that sort of constant, you know, keep going, you know, just to keep going. And since starting his business, I mean, Aaron's put in a lot of hours, you know, to increase our income. Too many hours, she says. To make this realistic. So I think it really is a testament to how hard we've worked. And you have to live below your means.

I mean, and that's the key. Yeah, we never, we didn't buy the, you know, our house is worth, you know, $265,000. I mean, it's not an expensive house. It's really just about living within your means and even living below your means at that point. Very cool. Very cool. What caught you off guard as you were working on this together that you kind of went okay we got a goal we're gonna hit the goal we're gonna work together

do this was there anything that happened while you're doing this and you went i didn't see that coming totaling a car yesterday oh no yeah it wasn't my fault i was driving my fault okay the guy was driving. He went into reverse on the highway. He smashed right into me. No, that's not exactly what happened. I rear-ended somebody on I-40 yesterday. On the way over here.

That's correct. No way. But that is why if you're not in debt and you're not fearful, having a car accident isn't the end of the world. Nobody's hurt. It's just a're not fearful, having a car accident isn't the end of the world. Nobody's hurt. It's just a car. It's just a car. We can go out, you know, get a new car. Yeah.

You know. Wow. And not even blink, not even be worried about where the money's coming from. Wanted a different car anyway. Well, yeah, you got insurance. That's right. You got insurance. My gosh, I'm glad nobody was hurt.

My goodness gracious. Nobody was hurt. Cool. Well, we're so proud of you guys. Very, very well done. Who was your biggest cheerleaders outside of the two of you? I don't know that we, I mean, we really didn't share with a lot of people that this was kind of our plan. I mean, we, honestly, we just didn't need cheerleaders.

I mean, this is just kind of the way we live. It's a way of life. It's a way of life. And if people don't accept it, then they didn't need cheerleaders. I mean, this is just kind of the way we live. It's a way of life. It's a way of life. And if people don't accept it, then they don't accept it. My parents have always been great cheerleaders of mine, so I could just say my parents. Yeah. Michelle's parents. Yeah.

Yeah. Okay. Very cool. Well, well done, you guys. We got a copy of Chris Hogan's Everyday Millionaires book for you. Number one bestseller, all about millionaires. You're on your way to that if you're not already there. And very, very well done.

That's the next chapter in your story for sure. To live like no one else so later you can live and give like no one else. And you are in a unique position. Very proud of you guys. It's an honor to meet you. Very well done. It's a paid-off house, baby. $140,347 in two years and 11 months, sometimes known as three years.

Well done. They did this making $170,000 to $280,000. House and everything! Touchdown! Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

We're debt-free! Yeah! There we go. So, most people think they're going to have a mortgage their whole life. They think that's what mortgage means, whole life. It doesn't mean that. By 50 years old, they were done. Why?

They decided to. When are you going to decide? Oh, yeah, I'm talking to you. This is the Dave Ramsey Show. Business leaders, if you're not using LinkedIn jobs, you're missing out. Our Ramsey Solutions Company page on LinkedIn has over 100,000 followers. That's 100,000 potential like-minded people our team communicates our current openings to. We also post our jobs on LinkedIn because we know the best candidates already have jobs. And LinkedIn makes it easy by doing the legwork for you. It's no wonder a hire is made every eight seconds on LinkedIn and over 600 million members

visit LinkedIn to make connections, learn and grow as professionals and discover new job opportunities. Get started today with LinkedIn jobs and get $50 off your first job post. Visit LinkedIn.com slash Ramsey. Terms and conditions apply. Lots of stuff going on on the Dave Ramsey Show today. So we're doing something we don't usually do, but back-to-back debt-free screams. On the debt-free scream stage, Tyler and Kelsey are with us. Hey, guys. how are you? Hey, Dave. Doing well. Good to have you guys. Where do you live?

Indianapolis, Indiana. Oh, cool. Well, welcome to Nashville. Thanks for joining us. And all the way down here in the south to do your Debt-Free Scream. That's right. How much have you paid off? Dave, we paid off $64,800. Good deal. How long did this take? That took us 17 months. Good for you. And your range

of income during that time? When we started out, we were making $58,000 a year and we ended right at $110,000. Cool. What do you do for a living? I am a district sales manager for a global food and beverage company. And I'm a clinical dietitian. Excellent. Very well done. Good guy. Good job, guys. So what kind of debt was the $65,000? So a lot of it was my student loan. And then some of it was medical debt, and then we also had a little bit of car debt. Okay. All right. So you're kind of normal. Definitely normal.

How long have you guys been married? For a little over two years. Ten years. Two years. Two years. Oh, okay. All right. I thought, man, they got married when they were 12. Okay. Oh, wow. Okay. Good for you guys. So two years, but seven months in then, 17 months ago, instead of 24 months ago, something happened. What happened? Yeah. So

actually about three years ago, I was a student at Purdue University up in Indiana, and I had an internship down in Evansville, Indiana, about two and a half hours away from where we lived. And I didn't have any friends. I didn't have any family. I didn't even have TV or internet. So I actually went down to Evansville, Indiana for a summer internship, and I had my Bible, and I had your book, The Total Money Makeover. Wow. Yeah. And so a long summer, but a time where God really worked on my heart. And he taught me some different things. He taught me that I am saved by grace through faith. There's nothing that I could do and that he loved me infinitely. And then with that, that helped us.

That helped shape our hearts and our minds going into our marriage, our relationship. And that helped us think, okay, if we have this freedom in Christ, what does that mean for us going forward with our friends? What does that mean for our family? And, what does that mean for us going forward with our friends? What does that mean for our family? And then what does that mean for our finances? Because that's an area that we didn't know a lot about at that time. So we got married, and then Kelsey was still in school for another year while we were married.

So we took out more student loans, and we just decided this isn't what we wanted for our future. We didn't change anything after we got married right away. So that following January, January of 2018, we enrolled in Financial Peace University through Traders Point Christian Church up in Indianapolis. And we took class, and we were gazelle intense ever since. There it is. There's the game.

All right. There it is. So now you're experts. You did it because people who talk about things that haven't done them aren't experts. You've done it. You're out of debt. How much, what do you tell people the key to getting out of debt is? So one of the biggest things that I think of is delayed gratification.

And so during our debt-free journey, I thought we needed some kind of motivation for us to go toward. And so if we stayed in debt and decided not to get out of debt we were not going to have a future that we had set up so we decided to look forward at the motivation part of it that if we got out of debt we would eventually be able to give our money to people who needed it more than we did and set our kids up for a good future yeah i think that just looking at um just our, we aren't entitled to anything. Our life was bought with a price. And so what are we going to do with the time that we have here on earth? And we decided we want to do everything we can, even when we fail,

we're going to continue moving forward. And we're going to hopefully bless people in the future, bless others and live our lives for Jesus and for others. So now that you're out of debt, what's your first big thing you're going to do? This trip was the first thing. We haven't gone on a trip in a long time, so we actually went to Nashville, Tennessee. We splurged. Yeah, we got to stay in this really nice Airbnb. We don't feel like it's in our element at all, but pretty neat trip.

Yeah. Well, that's cool, though. You get to live like no one else and give like no one else because you paid the price you lived like no one else for sure very well done proud of you guys very cool who are your biggest cheerleaders outside the two of you oh we had so many anybody that's listening or watching right now our friends our family our small group people that we met randomly and talked to it about a lot of people uh throughout our debt-free journey did say hey you can't do that you can't ever get out of debt you won't make it and things like that and we weren't angered by that we weren't offended by that for that that was that

when it happened that was just an opportunity for us to say hey you really can do this you might not have the same situation as us but if i can do this trust me you can do this amen amen well done good job you guys very very cool very cool so the secret to getting out of debt is a big enough why you got to have a big enough reason a big enough future motivation definitely and that's yeah i i very seldom meet someone who actually gets out of debt because it's hard work it's deep sacrifice i'm very seldom meet someone who actually pulls it off who got out of debt just so they could get out of debt. For sure. It's always so that something else.

It's always a so that. We're actually taking your financial peace class again right now with some of our friends. And we actually had a dream meeting recently to dream about our future. That's one of your lessons is to get together and have a dream meeting. And so now that we're actually past paying off our debt that's really where that's the stage we're in right now is hey what are we going to dream for for the future for our lives well done you guys very well done we got a copy of chris hogan's book for you everyday millionaires thank you that's the next stage in your life and the next part next chapter in your story and then i'll put

you in a position to be outrageously generous and be able to take care of each other and take care of your family in the future. Great witness. Very well done, you guys. Thank you. Very, very cool. Very good. All right. It's Tyler and Kelsey, Indianapolis, Indiana.

$65,000 paid off in 17 months, making $58,000 to $110,000. Count it down. Let's hear a debt-free scream three two one we're debt-free there you go bring it baby i love it that's about as good as it gets right there open phones at 888-825-5225. Deanna is in Canada. Hi, Deanna. How are you?

I'm great. How are you, Dave? Better than I deserve. What's up in your world? I was looking for some financial advice on a major life decision that I'm going to be making here. My mom passed away, and she had an acreage in the country surrounded by farmland. And we're executors of her will and we're ready to sell the property. We're giving the property or we're selling the property to the immediate family for a lower price than what we would put on the market.

And so my question is, as a buyer, I just want to know if I'm financially, is it feasible for me to purchase this property? Oh, you're not selling it to someone else. You're selling it to you? Well, we're offering it to meet family numbers first and then we're if none of us can afford it then we'll pass it we'll put it on the market so what does it cost what's the value what's the price that you could buy the price is 125 000 and what is the market value uh well the realtor said around 200 000 okay so you can buy around $200,000.

Okay. So you can buy a $200,000 property for $125,000. Do you have $125,000? I do not. Okay. And why would you buy this acreage if you don't have the money to buy it? It's been in the family for 100 years. Yeah. More of a...

What if it was $2 million? The property? Yeah. You wouldn't buy it. I wouldn't, no. Because you can't afford it. Well, can I or can't I? No, I'm saying if it's $2 million, you couldn't afford it.

No, I wouldn't. You would have instantaneously made the decision, and you don't have the money. So, you know, the only reason you're buying it is because it's been in the family well i'm thinking i'm trying to uh run the numbers in my head to see if i could use it as an investment property if i bought it for the base price how far away from you is it uh 20 minutes 20 minutes okay uh you could do that i personally wouldn't i don't. I own a lot of real estate. I love real estate as an investment. But I do not buy real estate with anything except cash.

I do not borrow money. And I'm not going to recommend you borrow money. I think this is a highly emotionally charged situation, and it's skewing your math. I personally would not buy that piece of property if I were you. I would let it go. I don't think five years from now you're going to be really glad you own it. This is the Dave Ramsey Show. We'll be right back. Our question of the day comes from Blinds.com.

They have a 100% satisfaction guarantee. It means even if you mismeasure, you pick the wrong color, they will remake your window blinds for free. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code RAMSY. It's magic. It'll get you the best deal. Barb's in Montana.

I just went from part-time to full-time at my job. My income's almost doubled. We only have around $24,000 in a line of credit and a leased car. Every question you get usually revolves around someone having multiples of our debt. So the question is, is the advice for someone drowning in debt the same as those who are just wading through it um yes the advice is the same all debt is standing between you and becoming wealthy your most powerful powerful wealth-building tool is your income. And when you give some of it or a bunch of it to someone else, you don't have it anymore.

That's a mathematical fact. When you pay car payments on a stupid fleeced car and you have a $24,000 line of credit buying crap you couldn't afford and you pay payments on that stuff, you don't have the money anymore. If you had that money, you could have used it for investing and for generosity. And so, yeah, you get very, very intense. The good news is that you can get out of debt quicker. You didn't mention your income in your email request for an answer.

But you can get out of debt quicker probably because you don't have the multiples of debt that a lot of people do. Lady earlier this hour, $225,000 in debt. You probably have more like $50,000 in debt, depending on the price of this fleeced automobile. But the point is, get rid of the debt. Because without any payments, what you have is money. And then that gives you options. Now, money is not the end of the world, but not having money sometimes is.

Money is what you feed your kids with. Money is what you pay the light bill with and keep the heat and the cool on. Money is what you keep a roof over your family with. Money is how you help other people, generally speaking. It's hard to feed hungry kids if you're poor. And so this is what money is for. It's just to feed hungry kids if you're poor. And so this is what money's for. It's just a tool. It's not got any existential, there's no existential beauty to it.

It's only for what it's good for. It's a tool. It's like I have a car. What's the car for? Getting to work, taking my family on a vacation, going to see grandma's house. This is what your car is for. But your car is not got, you know, it doesn't change your life.

It's what the car does that changes your life. Instead of walking or riding an ox cart. You have a car. That's all money is. It's just a tool. So the point is, yeah, Barb, let's get rid of the debt because then you have more money. And it's not, again, it's not a spiritual problem to have more money. Spiritual problem is when you worship it.

So get after it, kiddo. Get your mess cleaned up. And listen, you're in a real dangerous position. Every question you get usually revolves around someone having multiples of debt. So the question is, is the advice for someone drowning in debt the same as it is for those waiting out? Honey, don't wait out. Your language reveals that you are not nearly concerned about this enough. I want you to get more angry about this they're taking your money samantha's with

us samantha is in virginia hi samantha welcome to the dave ramsey show hi there dave how are you better than i deserve what's up okay so i'm wondering um my husband and i have been discussing it um he has fourteen thousand dollars in a 401k from a job that he no longer has we're wondering if we should take that money out of the 401k and pay off the rest of our debt besides our house and get out of baby step two or if we should keep it in there and just keep chugging along yeah so how old is he um he's 32 and what's your household income um well he he just um he was leco from his job two weeks ago he just got hired yesterday and what's your household income 88,000 it'll be 88,000 88,000 yes okay all right well if you pull money out of a 401k at 32 years old you are charged your tax rate which in your case is right around 30 percent and um a 10 penalty which is another 10

so it's a 40 percent hit on the money so it's kind of mathematically like saying hey dave i want to borrow money at 40% interest to pay off my debt. Okay. No, we wouldn't do that. Agreed? Right. Okay. So what we're going to do is we're going to roll that just to an IRA.

It's not a lot of money, but I hate to give up 40% of anything. Right. So let's just roll it to an IRA, a direct transfer rollover get in touch with one of the smart investor pros they'll help you do that and roll up your sleeves with your 88 000 and clean up your little bitty debt here you only got 14 000 knock it out get it done fast anthony's in new york hi anthony welcome to the dave ramsey show hey dave thanks for taking the call sure what's up? So my journey started when my wife got pregnant in February.

I kind of got overwhelmed with all my debt, and I started tackling it and tackling it. I paid off a lot of it. We just had our baby. Our parents are finally moving home, but we're looking to buy a house. So my question is, we're buying the house from them. I'm on Dave's side, too. Should we buy the house from them. I'm on Babeside, too. Should we buy the house from them? Because it's a great deal at this point. Or should we still have them keep the house currently in their name and just work on tackling our debt?

And we don't have much left. I think I have about $23,000 left, which I plan to pay off by next summer. Okay. So really the only question is, do we buy the house now or next summer? Yes. Next summer. And I would, even if it's like... It's going to be the same deal next summer.

Yeah, it will be. Okay. But we're paying to live there anyways right now. Yeah, it's no big deal. The waiting costs you nothing. No. Except just you're being impatient impatient you want to buy a house you got a new baby and your wife said buy a house your daddy said he wanted to sell you a house you won't buy a house but don't buy a house when you're broke you're still broke i understand my my wife's child at home we've been living there for like seven eight years

but they're finally gonna put in our name and they're gonna hold the mortgage so um that's why i was wondering if we should jump around but i i don't have much left and i do plan to pay it off very fast yeah next summer do the deal and i'm gonna give you another piece of advice that nobody in your family is gonna like me when we're done um i would not let them carry the mortgage i just go get me a mortgage no they're doing uh the personal note is going to get signed over so me a mortgage. No, they're doing the personal. I know it's going to get signed over, so it's all to the lawyers. They're not going to carry it. It's going to be in our name, but we're just making an agreement with them to buy it

because we're both self-employed, so our income's not the highest. You're going to pay them a mortgage payment. Correct. I would not do that. You're going to change the way thanksgiving dinner tastes how so well the borrower is slave to the lender and when you borrow money from someone it changes your relationship with them and no matter how sweet they are or how strong and dignified you are that is not an option it changes everything you're going to do it anyway but you're going to regret

doing it and you're going to remember the day that Dave Ramsey told you not to do it it's going to come back and bite you in the butt please don't do this hey thanks for the call open phones at 888-825-5225 y'all jump in we'll talk about your life and your money the old joke is if you loan your brother-in-law a hundred dollars and never speaks to you again, was it worth it? When you do debt transactions with someone, you are enacting a universal truth that is independent of your wishes, your thoughts, or your desires. You are a slave. Even if you have a nice master, even if your master is loving and kind you still have a master even if your master is your father-in-law you still have a master the borrower

is slave to the lender don't screw up relationships borrowing money or loaning money to people you're going to get yourself in a pinch, folk. Don't do it. 30 years of me watching what causes cancer. That causes cancer. This is the Dave Ramsey Show. Hey, guys. This is Blake Thompson, Senior Executive Producer of the Dave Ramsey Show.

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