The Ramsey Show - App - The Only People Who Recommend Leasing a Car Are Broke People! (Hour 1)

Episode Date: April 15, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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. Dr. John Deloney, Ramsey personality, best-selling author, and host of an explodingly popular podcast. I've got to come up with a better phrase than that. Explodingly is a good word. Explodingly popular. There's a lot.

But Dave, you've been doing this for 30 years. There's a lot of people listening to it in a very short period of time. I'm proud of it and I'm proud of you and I love that it's popular because what you're putting out there, the material, the answers to questions in people's lives is absolutely valuable. And it's unique, and it's fresh and refreshing.

And so I'm glad that the curve on the listenership is through the roof. Well, I appreciate that. Plus, I just like being associated with a big hit. Well, and I think 30 years you've been making up words, so why stop now, right? We're going to go with exploding. This isn't the season to fix your grammar, Dave. So I say, explodingly,

let's do it, man. I'm in. It's a little late in life because, number one, I'm beyond help. Number two, I just really don't care. That's the trifecta. The dufecta.

Is that even a word? That one does it right there. Open phones if you want to talk to this couple of clowns. Open 888-825-5225. We'll talk about your life and your money. The call is free, and some say the advice is worth exactly what you pay for it. Laura is with us in Los Angeles. Hey, Laura.

Welcome to the Ramsey Show. Hi. Thank you for taking my call. Sure. What's up? I'm a little nervous. I'm going to try to calm down. You'll thank you for taking my call. Sure, what's up? I'm a little nervous. I'm going to try to calm down. You'll be fine.

We've never lost a patient. You'll make it. Okay. My husband and I are at total odds kind of right now what to do about a decision. And so we're calling you. So we're new listeners. We've only been listening for a couple months, but we've listened a lot. And so basically, we're 50 and 60 years old.

All of our money is in real estate. We've done well in real estate. We have about $6 million in paid-off real estate. It's all rentals. I hate it when that happens. And we probably made some stupid decisions, but we were lucky and it worked out for us. I think you've made some good decisions somewhere. So anyway, where we're at right now is everything is owned outright except for our personal residence and a vacation home in Palm Springs that's a very successful Airbnb.

Our personal residence is worth like $1.6 million and we owe $350000 on it. And on a rental home, it's worth about a million. And we also owe 350,000 on it. My husband wants us to sell a paid off rental that's about worth about 350,000 that we own free and clear. It brings in about $2,000 a month. And it's really, it's a condo. It's easy. It's, you know, it's just the money just comes in. He wants to sell that to pay off our Palm Springs Airbnb just so he just feels like he's 60 now. And he just wants to not have that debt. You know, he wants to just have a home mortgage and he wants to really attack the home mortgage. And this whole debt-free idea is brand new to us, you know. So, and I want to keep it because we have no retirement other than renters.

We have no stocks. We have no... You have $6 million in real estate. We do. No whining allowed. $128,000 a month. No whining allowed. This condo's not going to break your retirement bank.

Right. Sorry. I mean, it's okay. So why did he pick that condo to sell out of all the other properties? He wants to sell something. And I think he, well, also our tenant just moved out. So it's vacant. Which California rent laws would make it easier, you know, to sell a vacant unit.

And so it's just sitting there and rent it. You know, it's just, and we're at a stalemate, like kind of locking heads. And I said, well, why don't we rent it, take the $2,000, and since we don't need that to live on it, just attack the Palm Springs mortgage. And they're already on 15-year fix that we're already only 13 years left. So what is your household income? It's all off of rental properties is your income? All off of rental, basically, yeah.

So what did you take in in cash that you put in your pocket that you paid taxes on last year? $200,000. On $6 million? Well, yeah. That sucks. Well, it was like $340 is what it brings in, but then we write off a lot. Yeah, I'm not talking about depreciation, but I mean you have actual expenses that eat your cash. I would hope you're making $40 after expenses on six million dollar

portfolio uh well maybe it's because real estate's so expensive like our home is in that you know no no no no no cash you should have 340 000 income net of expenses before depreciation on six million dollar portfolio anyway that's still low but you ought to at least have that yeah well we don't you don't so what is the cash after expenses before depreciation that you guys have coming in to work with um i'm not. Well, that'd be a good number to have. Okay. Because that's called your income. Right.

That's what you have to work with. Because if I wanted to answer the question, how fast can I pay off $700,000 worth of real estate debt, I would need to know what my income is to do that with. I will tell you $24,000 on a property that's worth $350,000 as your gross income, meaning you're netting somewhere around $17,000, really sucks. The ROI on that condo is pitiful. Yeah. It's bad. I don't care if it's hassle, not much hassle.

You're not making, what, 4% on your money. That sucks. So I was hoping maybe you were going to tell me he picked it out because the income is horrible on it. But no, she said it's empty, yeah, right now. Okay, yeah. Well, as you know from listening for just a few weeks, I'm going to lead you to be debt-free as fast as I can.

So the answer to your question is going to be you have to go back and do some homework, and you guys have to keep talking because you need to get to the bottom of this. So number one, we need these properties to be producing a cash-on-cash rate of return that is substantial. Mm-hmm. Okay. Number two, that's our income. Once we know what our income is, number two, how fast, if we keep the condo, can we get these $750,000 worth of debt cleared? How many

years is that going to take? How many years is that going to take? Five years, six years, seven years. He's 60 years old. He doesn't want to leave you with debt. that's that's the goal okay he's trying to take care of you so uh then then uh if you if it's going to take you 15 years because you're really making 200 000 on this 6 million because your your real estate sucks um if that's really all you're making on it and it's going to take you 10 or 15 years to clear this, yeah, you need to sell the condo because you need to clear this debt as a part of preparing for him to not be there or for the golden years, whatever we want to call this next decade or two. If, however, you're making $300,000 or $400,000 that you have cash at your fingertips, which I suspect you should be, I mean, unless these properties are just not well run, you should be.

Well, we've, I feel like because everything's so expensive. No, it's not going to do anything with that. It's not going to do anything with that. Right, okay. You know, if a property is worth a million dollars, it should rent for a price, the rental price should reflect the value of the property. Right. If you've raised the prices as the values have gone up.

Because rents go up as values go up. And so, anyway, I own several hundred thousand dollars, several hundred million dollars of real estate. I love real estate. So, you're in my sandbox right now, kiddo. So, you either need to clear the debt with your income or you need to clear the debt by selling the condo in the next five years. Now, you run the numbers out and decide which one's the best.

Your number one wealth building tool is your income. For business owners, this comes as no surprise as you're used to putting in extra hours and watching your bottom line. That's why Christian Healthcare Ministries or CHM is a great option for those who are faith focused and budget conscious. CHM is not health insurance, rather it's a health cost sharing program. It's not harder, but it is different. To learn if CHM is a fit for you or your business, visit chministries.org slash budget. Well, speaking of real estate, if you've ever made a dumb decision with zeros on the end, you know you didn't do your research. Me too. Most people make choices based on feelings or opinions, especially when buying a house. But when it comes to the real estate market, feelings aren't your friend.

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Text HOUSE to 33789. Sarah is with us in Dallas, Texas. Hi, Sarah. Welcome to The Ramsey Show. Hello. Thank you so much for having me. Sure. How can I help?

All right. Well, my husband and I are in Baby Step 2, and since December of 2019, we've paid off $58,000. All right. And we only have about $3,000 here. We're very proud of that. But we are on the second half of our debt now, and that's $37,000 left in student loans. But due to increased costs of having a second child over the last year and taking a job with a decreased salary, our shovel is substantially smaller compared to what it used to be.

So I'm trying to think of ways, brainstorm ways to be gazelle intense in a situation. And I had this crazy idea, and my husband was not super thrilled with it and actually asked me if I could call you to talk about it. What if we paid off our paid or what if we sold our paid-off cars. If we did that, it would be a big step, but it would wipe out this $37,000 immediately, and we could then focus on all of the other things that we need to do. So you have a $40,000 car. And then, you know, getting back into a car. We have two $23,000 cars. Oh, you'd sell both your cars?

Yes, that's why it's a big step. And then you'd get your two beaters huh yes maybe not beaters and what is your house what is your household income 140,000 a year and why can you not pay off 37 making 140,000 um so we bring home 8800 a month which is a lot and we're very fortunate um five thousand of it goes between daycare and our mortgage they're about the same that's over five thousand dollars uh we spend a thousand on groceries diapers household things your daycare

is sixty thousand a year uh yeah but well between the two kids uh we pay twenty two hundred dollars a month so not fifty thousand50,000 a year. That's not $5,000. No, mortgage plus daycare. No, no, no, I'm sorry. It's between daycare and mortgage. Oh. Yeah.

Okay. Well, let me know. $140, I don't know why mortgage and daycare are on the same list, but anyway, we'll put them there. So $140 minus $60, isn't that $80? $140 minus $60 is $80. put them there so 140 minus 60 isn't that isn't that 80 140 minus 60 is 80 and why can you not pay off 37 000 again so i can pay off 37 000 i have a thousand based on our no our debt snowball i have a thousand dollars a month going towards that i don't think your budget is very sacrificial and that's true. There are other things that we could sacrifice.

Yeah, like you're still doing a whole bunch of crap that you don't need to be doing. Okay. Well, then we'll take a look at that and make it a little bit higher. Help me with this, because I'm not just making this up. I mean, I just took $140,000, and I took out the mortgage, and I took out the daycare, which were your two primary things you're worried about. You don't have any payments except a student loan payment, and we took care of daycare, and we took care out the mortgage, and I took out the daycare, which were your two primary things you're worried about. You don't have any payments except a student loan payment. And we took care of daycare, and we took care of the mortgage.

Now we've got to buy lights, water, and food, and you can't find $37,000. That's just weird. Okay, well, looking at our budget and the growth that we come home with, like I said, it's $8,800. Yeah, that's $120,000 a year. That's $120,000 a year. Absolutely. And that's our growth, right? That's what we take home after taxes. Our net, I,800. Yeah, that's $120,000 a year. That's $120,000 a year. Absolutely. Minus, and that's our gross, right? That's what we take home after taxes.

Our net, I'm sorry. Yeah, I know. And then we take, and then it's about $1,000 on food, diapers, other household items. That's $12,000. We're going $1,000 on student loans, about $700 in bills, and at the end of the month we may have an extra $500 left, which will go towards our student loan. You did not get down to $500. Your budget, you're still not doing it.

I'm sorry. The only thing I'm good at is math, and you still did not spend all that money. So you've got some work to do, kiddo. Sharpen the pencil. Sharpen the pencil. So one car maybe but i don't think so you're putting a thousand dollars a month towards 37 that's 12 of the 37 so all you need is 24 000 all you got to do is find 24 000 out of 140 120 take-home pay for one year and to do it in one year if you want to do it in two years all you need is 12 000 i'll do it in one year. If you want to do it in two years, all you need is $12,000. No, do it in one year.

Just get it done with it. I really think you can do it. Absolutely. I really think that there's some whining in this budget. I really do. Yeah, it sounds like I want to be comfortable and get there. Let me tell you, I'll go further. I don't think you're doing the whole budget because you're doing this from your head.

That's why you've got daycare and diapers broken out of separate line items. Diapers don't go in a separate line item. They're not that big a line item. You're trying to crank this through in your brain. You need to sit down and do a written, detailed, line-by-line budget. With every dollar. Get on the EveryDollar app with your husband. The two of you give every dollar a name, and then going to see where why i'm why i'm raising up on you

you're going to see there's money left here and you can knock this out no you don't need to sell your cars you need to tighten your budget and lower your stinking lifestyle and i actually think that but when she first called dave i was going to say yeah sell your cars and be done with this thing but i think i think the exercise, it's much better than selling the cars. This is going to be a... I hate to use this word, it's going to be a spiritual exercise for this crew to get down and see what you're made of. Yeah, yeah.

This is going to force you to do the last 10% of truth. Yes. Which is the detailed budget. Because you can, I mean, you can do big piece budgets in your head. And when you make $140,000, you just feel like you've got so much wiggle room. Or you should have. And it's frustrating when you get to the end of the month and there's no money left, but you haven't detailed it out.

I might be wrong, but I'm not. I might be wrong, but I'm not. Been doing this too long. So that's my opinion. You keep digging on it, kiddo. If we can help you, we're here to help you. But part of the time we help you by raising up money because we love you. We want you to win.

All right. Up next is going to be Armin. Armin's in Los Angeles. Hey, Armin, how are you? Good. How are you, Dave? Better than I deserve. What's up?

All right. So before I get into my question, I just want to give some context on my situation right now. So I'm 17 years old. I'm on my last semester at a community college and I'm about to transfer to a UC school. But I'm faced with two different conflicting opinions. So I'm faced with the dilemma where if I transfer to UC Irvine, I would need to rent out a private house through UC Irvine Housing. And on the other hand, if I go to UCLA, I'll need to get a car. But it's that question of should I lease or should I buy? Because my surroundings of family and friends, they're both raising pretty good arguments for leasing and buying.

So I don't know. Leasing and buying what? A car. Oh, okay. Well, the only people that promote leasing a car are broke people. Okay. I mean, wealthy people don't lease cars. I mean, a few of them do.

But by and large, let me tell you, we did a study of 10,000 millionaires, the largest study of millionaires ever done. None of them, not a single one of the 10,000 said, you know, I became a millionaire because I really leveraged the use of that car by borrowing on it. Not one. I mean, it wasn't a small percentage it was freaking zero arman now this is not your broke friend or family member who can make an intellectual argument this are real millionaires they don't borrow money on cars dude and when you ask them what the largest mistake they ever made in their working lifetime they They usually say, I borrowed to buy brand new cars. I bought a new car. I bought a brand new car when I was 26, and I was so stupid when I was 26,

and now I'm 46, and I would have been a millionaire four years sooner if I hadn't bought that stupid butt car on payments that I couldn't afford to buy. So to answer your question, Orman, I drove a 1988 Toyota Tercel EZ hatchback. It cost a thousand bucks. I bought it from some lady at my church whose husband had passed away. And that got me through my undergraduate. It got me through my first year of my professional job. And I'm still driving somewhere, right? Yep.

Buy the cheapest beater car you can get to get to and from. You're an 18-year-old kid. And don't take financial advice from broke people, son. This is The Ramsey Show. sean and char are in denver and it says on my screen that you guys are debt-free. Congratulations. Thank you. How much have you paid off? We paid off $100,000 in 27 months. Wow, good for you.

And your range of income during that time? It was actually pretty steady. We were about $100,000 a year. Okay. So kind of like the lady I was talking to a minute ago making 140 to pay off 37 they paid off 127 months making 100 exactly so i have to hear this story now because it seems like maybe i know what i'm doing okay so allegedly what kind of debt was the hundred thousand our debt was um the irs t-lock like credit cards, auto, and medical bills.

Wow. I mean, you had some nasty piranha in that pond. Yes. Yeah, the tax man was not real happy with us. How much of the $100,000 was the KGB? I mean the IRS. It was about $20,000 was to the IRS. How'd you end up owing that much in taxes

uh well i went a few years without uh filing i'm gonna i'm gonna go with a my bad on that one yeah yeah i'm just thinking that yeah i got it oops yeah so so what happened 27 months ago? What was your wake-up call two and a half years ago? Well, so Char and I have both been through one marriage already. So when we met, we decided that we were going to base our relationship in God's word and try and live our relationship by his will. And as we were moving through and we decided to get married and, uh, we were planning our wedding, we were

kind of noticing how much it was going to cost us. And, uh, you know, as part of being, uh, living in God's will was to be good stewards of his blessings. So, you know, and being one of the blessings that he's given us is, you know, our financial money and how much we make. And so we were talking about it and decided that, you know, we wanted to cash roll our wedding and we wanted to get out of debt and, you know, start our life together on the right foot. So that's kind of how we decided to do that. And I'd heard of you from years ago. You're kind of a household name around our family.

And so we got your book and we were reading it to each other before bed for about a week or so. How romantic, right? Yeah, right. Well, I got to admit, I put Char to sleep a couple times. That would be me. You were reading it, but I would be the one. That's great.

I love it. So $100,000 income, what do you guys do for a living? I own my own hair salon business in Boulder, Colorado. And I design medical equipment. Very good. Okay, so you've been married about two and a half years, three years? Coming up on two years in May. Okay, so you started the process a little bit before marriage then?

Yes. Okay. Excellent, excellent. Well, congratulations, you guys. Who had the first conversation with who, who actually sat down and said, hey, what if we did this? Because that first conversation, especially for a new couple, takes a lot of courage, a lot of vulnerability. Who's the first one to have that conversation? That totally is on Sean's shoulders.

So he looked at his wife, soon-to-be wife, and said, what if we just scaled back and cash flowed this, and what if we stopped spending so much money? And you were all in? All in, yep, all in. Oh, that's cool. Yeah. So you were feeling the stress and the pinch too then? Well, yeah.

I mean, I came into our relationship with, you know, a good $60,000 of that $100,000 that we had. And I just didn't, you know, when you have that much debt, you don't, I don't know. Like, I didn't know where I was going, and I was living paycheck to paycheck, and I didn't want to be like that. That was my typical, my family's typical MO, and I didn't want to do that. I wanted to change that for our family. You just think that walking through life with those ankle weights on and not sleeping

and not knowing how we're going to eat the last couple of days, that's just normal, right? Yeah, you get used to it. Yeah. How's it feel now that you're out? Oh, my gosh, it's amazing. And honestly, as soon as we started doing this and we were knocking bills out left and right, that's when I started to feel like I was free. Mm-hmm. Yeah, you don't even have to be there.

You just got to know that you can get there. Yeah, yeah, we saw it coming. It was great. So what did you learn about yourself and about each other through this 27 months? Well, we were just talking about that this morning, and one of the things that we learned was we don't always speak the same language when we're talking about our finances and budget and just life in general. So sitting down and forcing ourselves to learn how each other communicates and how to listen and speak each other's language was really nice.

So give me an example of when one of you was speaking French and the other was speaking Russian. You know, it usually came up when we were doing our budget and Char would be trying to make sense of the numbers in her head. And I'm trying to make sense of the numbers in my head. And, you know, I'm, I'm looking at it as, you know, an engineer and she's looking at it as a hairstylist. So those two things didn't always, uh, line up. Okay.

So the nerd and the free spirit for one thing right yeah yeah or the spreadsheet lover and the room the guy the guy reading a financial book to his his new wife in bed and the artist right and i'm falling asleep yeah and the artist yeah this is great i love it guys, guys. You guys are amazing. I'm so proud of you. Very, very well done. What do you tell people the key to getting out of debt is? Well, I think that the key, or our secret anyways, is that it has to be, you have to

get over the heart problem instead of it having a math problem. So when you change your heart the math will do itself oh yeah profound very well done good good job you guys we've got a copy of rachel cruz's latest new york times bestseller know yourself know your money and it'll help with the russian and the french yes that's what it's for what would you tell to a new couple who's about to get married or just got married that how this benefited you two? Because I want you

to give hope to folks who are thinking, I'm not going to have this conversation. It's definitely a hard conversation, but I think in the long run, I mean, it's definitely

well worth it. I mean, it's just to have the debt off of your shoulders and not have to worry about anything. Like when also the when the pandemic hit because of my career, you know, we were closed for two months out here and we didn't have to. It didn't hurt us as bad as most people would because we were on a budget and we still live on a budget even though we're debt free. Yeah, me too.

I just, I tell everybody that they should do it, whether you're married or you're single, because just the financial freedom and that weight lifted off of your shoulders is huge. I can't even explain it. Like it's more emotional. And I'll even go one step deeper and suggest that y'all two have worked together on a hard thing. They got behind the thing, right? You got behind

the fear, and you guys worked through something hard together, and now y'all know, hand in hand, y'all can conquer anything. It's not a matter of if, but when life throws its next thing at you, y'all two both know, we can do this, because we've done it. We're going to take over the world next.

There you go, man. I love it, man. It needs a good taking over. So would you please get in business? Hurry up, Sean. Hey, pay your taxes on the way, too, brothers. Keep your taxes paid. That way the world won't kick back.

But, yeah, I love it. Congratulations. All right, Sean and Char in Denver, Colorado. $100,000 paid off as newlyweds in 27 months, making $100,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

Yeah! Now, let's just round that 27 months up to 36 months and call $100,000, $33,000 a year, making $100,000. And I will say it for you, America, Dave was right. He's always right. And it's frustrating. I sit next to him and he signs my paychecks. Dr. John Deloney, Ramsey Personality, is my co-host today.

Julie is in Denver. Hey, Julie, welcome to the Ramsey Show. How can we help? Hi, thank you for taking my call. Sure, what's up? I have kind of a funny situation. I have a brother-in-law who just offered to take us on a trip this summer. We're on Baby Step 2, and this year already we've had some extra bills come up with some medical stuff.

We think it's strange that they've offered to pay for a trip for us, and we don't know how to say no, we don't want to go, because we don't ever want to pay them back, even though it's a gift. Why is it strange? Well, they have not talked to us for about six years, and then in the back, excuse me, about a year ago, they've had a change of heart and want to reconnect. That's nice. Yeah.

It's nice. It's nice. It's your husband's brother? Brother, yes. So is there something about this gift you feel like is going to have strings attached to it? Yes. My husband and his brother had a fight over a four-wheeler about six years ago, and it's just now being repaired.

Whoa. Don't worry about it. The fight is being repaired the relationship like we're being invited back to family gatherings and stuff oh so you got ruled out of mom and dads and everybody's yes you know that was bigger than a four-wheeler right i think so yeah i'm an in-law a thousand percent bigger than a four-wheeler. Yeah. That's probably some 30-year-old stuff that was proxy-wared with the four-wheeler.

I think so. It was a joint-owned, you know, father and son's four-wheeler. Yeah. And it got ugly for years. You don't excommunicate family members over a toy, right? There's usually other stuff there. Yeah, there's big stuff. Yeah. But it's strange you know just

the other day they offered to bring us on this trip and we're on baby step two and we are just not there to go on vacation but it's strange we don't know how to answer because if we say no it's a money thing and then they say we're paying for it how How much of this is your pride? I don't know. Well, it would be kind of hard to be like, thanks for the airfare and hotel. Why is that hard? I just don't want it to blow up down the line and be like, well, we took you here. I don't know.

I didn't think about that, Dr. John, actually. I'm going to defend her a minute. I don't think it's pride. I think she's gun shy. It feels like you're projecting a future. You're predicting a future maybe. If these people will blow you up over a four-wheeler, why wouldn't they blow you up over, come back later, and circle around and hit you in the back of the head over a paid-for trip?

That's right. Yeah. But I also, if somebody says, man, what an idiot brother I was for losing out on six years of relationship. Hey, I want to start spending some intentional time together. And then all of a sudden I walk up and y'all are in baby step two of this weird cult that's happening off in nashville and it's like hey cool come with us we're gonna so i the only reason i'm asking i'm trying to be provocative with you how much of this is you saying i'm too fancy i'm too i've got too much pride to take someone else's money versus no man if we do this is going to end poorly for us because i think to answer your question i think it's relatively easy you say hey you know what we're not going to do vacations this, this is going to end poorly for us. Because I think, to answer your question, I think it's relatively easy.

You say, hey, you know what? We're not going to do vacations this year. We're going to stay in. If y'all want to come visit us, that'd be awesome. But we're not going to do vacations this year. Next year, the year after, we can't wait. And then your boundaries are your boundaries. And if they want to throw a temper tantrum over that,

then you've got your question answered for you, right? Okay. You knew they were using this as something else. Otherwise, if they say, great, we can't wait until we can do this again, just so you know, money's never a thing with us. But we're coming. We want you with us, and we're going to make up for lost time. Then you know, hey, there's something bigger at play here. Right. But trust your gut, right? I don't know what to think. I guess I don't have a problem either way with it.

John's point that are hovering around in his point, I think, is if this is truly an olive branch, don't saw it off. That's what I'm feeling, and that's why I don't know how to respond. Well, no, I'm saying there's a way to push it to the side gently gently but you don't have to saw it off and so number one you don't need to respond your husband does this is about him and he responds and says hey bro man i really do want to reconnect and this is this means a lot to me that you would offer to pay for this and it's so kind and generous of you we are committed to this plan and i know that might not be something you understand, but we're going to stay home, but it's not because of anything except we're working this stuff. And I know you're paying for everything, but it doesn't work for us this year.

If you all want to come down, hang out, get your hotel in the area, we'll go to dinner. We'll all go out and throw frisbees in the backyard. We'll do some stuff like that. And then maybe another year we'll go on vacation together. But I just can't do it this year, and thank you so much for reaching out and if if he then bows up and goes well you won't take my gift then you go well see there it was okay like john said but it's it's a way to test the waters without smacking the possible reconciliation in the face or without ending up four days into a seven-day cruise really like oh no oh, no. Oh, no.

We can't get away. We're stuck on a boat now. I'm stuck in here with Cousin Eddie. Yes. Yeah. Okay. That's fair. That's fair.

Yeah. And my husband will talk to him. I won't respond for him. We talked about it the other day, and we're like, we don't know how to say this. Yeah. It's like a vacation. It sounds great.

Well, it's, you know, it is way over there on the edge of awkward. Yeah. But, hey, Julie, I also want to put this out in the water. It is easy from you and your husband's perspective to look at your brother-in-law and say, man, I can't believe he burned us for six years over a four-wheeler. But your husband's got to own some of that, too. It wasn't a four-wheeler. There's something else going on. And he may not have the tools to have this

conversation well, so he's going to know, I've got to be gentle. I've got to be appreciative. I want to always go into this thing assuming it's an olive branch. I love that analogy, Dave. I'm not going to cut it. I'm not going to saw it off. I'm just going to move it aside and say not this year, but soon. Gently. Analogy, Dave. I'm not going to cut it. I'm not going to saw it off. I'm just going to move it aside and say not this year, but soon. But soon.

Yeah. Gently. Yeah. And then that's having you having strength. And boundaries. And it also gives you a little bit of a little test here, because I'd rather do Frisbees in the backyard than in Cancun for a week. Yep. You know, in this weirdness.

So let's just have a little where there's a little better escape hatch and everybody's not heavily committed and, you know, that this weirdness. So let's just have a little, where there's a little better escape hatch and everybody's not heavily, is heavily committed and, you know, that kind of stuff. So, yeah, I would want, we want you to rebuild the relationship if it's possible. Absolutely. And it doesn't have to start on a paid-for vacation. In spite of your hurt and in spite of your scars. Yep. Yeah.

John is in Tampa, Florida. Hey, John, welcome to the ramsey show how can we help thank you dave and john for taking my call um my wife and i are in baby step seven we have paid for rental property that i'm trying to figure out what our roi is on that to determine whether they are a good investment to keep long-term. We've owned it for about 10 years. Is it a residential house? It's short-term rental, actually.

So they're vacation rentals. Okay. Usually those have much higher management fees. Management company takes a bigger chunk, right? Yeah, we actually manage it ourselves. Oh, okay. So you're like running a vrbo type thing correct okay yeah the benefit is is that you get high rents when you get them but

then there's the off season correct and we've had a significant increase in property values over the time too which has been beneficial but a significant increase in turnover of the tenants i mean you're it's week by week it's's not, yeah, okay. Correct. It's a pain in the butt. Yeah, I'm just trying to figure out. Okay, on residential, traditional residential, I own a bunch of houses, and our portfolio averages a little north of 8% cash on cash.

Okay? Okay. Meaning that the value of the property it we generate eight percent of the value after expenses without depreciation not counting depreciation not counting increase in value cash on cash no so the actual cash you paid for it no No, the actual cash of value of the property. It would be cash on cash if it's cash on value. You're correct, but we do it on value. We want to see our rents coming up to match the values to keep us around that 8% mark after expenses. Now, that's a traditional rental house that rents for a year, not by the week.

By the week, you should be making more because you've got a lot more labor. And you've got to account for the gap of no rent, right? And you've got these gaping holes of off-season and all that kind of stuff. So, yeah, if you're not getting north of that, you should probably rent it straight up instead of vacation rent. Because you're dealing with this pain in the butt. This is The Ramsey Show.