The Ramsey Show - App - This Is the Mistake the Financial World Makes (Hour 3)

Episode Date: October 17, 2023

Девочка-пай 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. Jade Warshaw, Ramsey personality personality is my co-host today. Thank you for joining us. The phone number is 888-825-5225. Brian is in Minneapolis, Minnesota. Hi, Brian.

Welcome to the Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up? Yeah, so my wife and I, we are both 25 years old. We got roughly $35,000 in debt, and that is pretty well just consumed in vehicles. I got a truck and she got a SUV. We got our first child on the way, and we are just looking for some advice as far as getting out of

debt and stopping living paycheck to paycheck. So you've got $35,000 in two separate cars. Can you just break that down for me right quick? Yep. So the truck we have about $12,500 that we owe and whatever the remaining balance is from that is what my wife owes on the vehicle. Okay, got it. And so what's your income? So our combined income, it varies a little bit because I am full commission sales. However, combined, we gross roughly $120,000 a year. Okay, $120,000 a year.

Good for you. That is good. You know, when I look at $35,000 in cars, I don't think with your income, I'm not like, oh my gosh, you guys are out of control. But I am wondering, where is your income going? And my first question to you is if you're on a budget or not. So we are not. And we actually just started the baby steps. So we paid off. we got our emergency fund,

we paid off our smallest debt just last week. And so we need to get a budget together because it's kind of a deal where, you know, every paycheck, it's like, where the heck's our money going? Yeah. So I think you've got a lot going on in your life. You've got this debt. You want to get it cleared up. You've got a baby coming up. You want to get that cleared up. What I want to tell you is I know you want to get out of debt and that's good. But during this time, what I really want you focused on is just piling up as much money as you possibly can. Until the baby comes. Yes. Because when the baby gets here, everything's going to be fine. Wife's going to be fine. That's the goal, right?

Like that's the hope, wish, and want. And so when the baby gets here, everybody's healthy. Then you can take that big chunk of money and attack these cars in order, smallest to largest. So we'll hit the truck first. You should have more than enough to pay off her car the day baby comes home from the hospital. Yep. Okay. And put a, I mean, not her car.

Well, either car. You know, you might have the $22,000, but you definitely have the $12,000. Agreed? Right. Yeah. So pile it up as big as you can pile it. Start your debt snowball hard and fast with that big pile of cash is what Jade's saying when the baby comes home.

In the meantime, I like just having a big pile of cash when a baby's on the way. Yes. baby comes home in the meantime i like just having a big pile of cash when a baby's on the way yes and that's kind of what i was wondering is you know i don't want the baby to show up and then we have no money well i'm not i'm not worried about you being able to feed the baby that's you can do that on 120 right i'm just in case there's a a little medical hiccup or something you want to concentrate on baby and on mommy not on dad that's right so you know having no money with a baby on the way is scary so let's just pile it up get on that written detailed budget use that every dollar app you and your wife sit down lay out where every dollar is going to go every month before the month begins every dollar has an assignment every dollar has a name every dollar has a mission you both agree has a name. Every dollar has a mission.

You both agree to it. You pinky swear and spit shake and you freaking stick to it. Yeah, because at the very least, you know, you're going to hit that deductible and you're going to have to pay that out of pocket, which depending on your insurance could be pretty high if you've got a high deductible plan. So, you know, you're at least going to hit that with the baby. Yeah, you're going to have that. And, you know, and we want to pay a car or two off.

Yeah. So it would be very cool. And how much money can you save in nine months i mean nine thousand ten thousand dollars i mean hey let me ask you something about that so somebody mentioned if you know you're having a baby going into the hospital up front that there's an advantage to going in and paying up front for the delivery cost. If you don't have insurance. Only if you don't have insurance. Yeah, if you have insurance, it's all settled. It doesn't matter.

It doesn't change anything because the insurance company has already cut the deal. Does it have? They have a baby cost X deal. Uh-huh. Okay, the insurance company does. But if you've got, I don't know, let's just say labor and delivery is $12,000 as an example. I don't know what it is. I haven't paid in a long, long time.

But let's just say that's probably about what it is give or take right now and if if you did not have insurance which would be highly unusual in today's world that's why i was trying to get around that if you do not have insurance it is the it's a very interesting thing with hospitals it's the only time you go to the hospital that you're glad that's true so babies are pr good pr for hospitals well people come there and everybody that comes about the baby's happy and the baby's happy well mama's not glad until well i don't mean that but i mean it is a celebratory event that's right it's not having your appendix out okay it's not it's not having your knee replacement surgery done it's not having your appendix out, okay? It's not having your knee replacement surgery done. It's not your mother died of gallbladder disease there.

It's not that. People go to hospitals to die. It's not that, right? It's the only time that it's a happy story. That's right. And so hospitals want people to have babies there. Yeah, it's good. Because it's a good thing for them from a PR perspective.

It puts good vibes into the community. Right. So with all that in mind, you can go in ahead of time and negotiate and prepay and they'll cut as much as half off. That's pretty in labor and delivery. They probably will do it on other procedures, but they're known for doing it industry wide on labor and delivery. So which tells us that we're paying too much through insurance,

but our insurance is paying it, but we're paying the insurance, and yeah, there we go. But anyway. The way mine was, the doctor's office set up your, whatever your deductible was, and they were like, you pay half now, you pay this much. And then by the time the baby was done, you had already done it. Yep.

And it really wasn't optional.'s a program yeah but again if you're this would have been a while you know pre-obamacare yeah as an example there were people more people walking around without insurance that's right now they just pay twice as much for it but um but there were more people walking around the insurance out insurance in those days so you could go in and pre-negotiate. And, I mean, we had great success with that back in the day. I don't know how much that would apply today because I don't know how often somebody actually goes into a hospital for labor and delivery without insurance. That's true. Austin is in Jackson, Miss.

Hi, Austin. Welcome to the Ramsey Show. Hey, Austin, you're going to hang on until the next break. I just looked up and saw the time. Sorry about that. I'm not going to try to answer your question in 15 or 20 seconds here. Yeah. That doesn't work at all.

So I suspect if you had elective surgeries that were not insurance covered, that you probably could also go in ahead of time and say if i prepay what kind of deal with you yes and i'm shopping other locations to do this elective surgery that's true yeah i like that i like that so i mean even something again something would not be insurance covered that has not been dictated but um, I suspect you could do that there as well because you've got choices then. A, you don't have to do it. B, you certainly don't have to do it there.

That's right. And so again, your walkaway power from a negotiation standpoint is intact. This is The Ramsey Show. Jade Walsh, all Ramsey personality, is my co-host today open phones at 888-825-5225 austin is in jackson mississippi hey austin how are you austin are you with me yep can you hear me yes sir how can we help uh i hope you both are doing

well today so i recently probably within the last few weeks, stumbled upon your content, and I'm just trying to wrap my head around. I have a 6% salary match, 401K, and I'm trying to wrap my head around foregoing that and putting it straight into debt. And I was looking for an explanation. That's a great question. It means you're being very thoughtful about all of this. Very well done.

So what do you do for a living? So I am actually a purchasing manager for a mine. Okay. And so you have a degree in business possibly? Yes. Okay, good. I thought so. Because you're good at seeing the math thing right in front of you and going, well, that seems dumb.

So here's a couple of things that we discovered. And I honestly doing this for 30 years, 25 years ago, I was backing into some of these ideas because I come from the same academic background. But back when the dinosaurs roamed the earth that you came from. Okay. the same academic background but back when the dinosaurs roamed the earth that you came from okay and so my first tendency is to nerd out and fix everything with math but i figured out in personal finance that the data of best practices among millionaires doesn't necessarily follow math all the time in other words personal finance is more personal than it is finance it's more behavior than it is math and so what we've discovered over the year decades of doing this is that in other words here's an example the power of exclusively focusing all of your money energy, your arithmetic energy, on one goal for a short period of time supersedes the employer match.

Yeah. The power focus, although that's a little bit nebulous and hard to put a math figure to, we've proven that over a decade, getting clear of consumer debt very, very quickly increases the probability that you actually do it, number one. But number two, it gets you out of debt and frees up then your most powerful wealth-building tool, which is your income. When you bifurcate your focuses, meaning you spread them out, when you spread out light, it merely lights a room. When you focus it, you can do surgery or manufacture things with it called a laser. And what we're doing here is for a short period of time, not an extended period of time, the theory doesn't stand up and the hypothesis doesn't stand up over a long period of time. But for three years or less, if you forgo a match and forgo all investing,

and in lieu of that, they have this tremendous emotion and psychological focus on the singular goal of becoming debt-free, and then you stay out of debt for the rest of your life, you not only get the match, you get to max out all of these retirements. And it ends up being, 15 years years later the shortest path to becoming a millionaire although the short-term math of missing out on that match for someone like you austin or me that was trained in nerd nerdville uh it it feels blasphemous doesn't it uh i understand what you're saying i feel like i'm stepping over dimes to pick up pennies almost when you take the match you are yeah but i get what you're saying it's better to direct my approach towards one thing as opposed to try and spread my avenues out and which hasn't worked for

the past however many years i've been going at this yeah let me give you another example because it's a great discussion for everyone to listen in on this conversation because this comes up a lot. And because there's a real it's a real valid question and a valid discussion. But here's the other thing. in consumer debt for 10 years because simultaneously you're trying to invest, then what you've done is you've completely disabled the wealth building mechanism. And so by simply increasing the probability of becoming and staying debt free by shortening the term, you've increased the probability of wealth dramatically in other words you can't half but do the get out of debt and half but do the investing thing at the same time and ever get

this right yeah you never get clear of it that's what ends up happening and so it's a but it's but man i get tripped up on the math thing it here's another. The debt snowball versus I was on a podcast the other day with a young lady in our space, Erica, very smart lady. And she used the debt avalanche to pay off. She's a lawyer. Pay off her law school debt. And she was talking to me about that. And I said, yeah, but you're a highly disciplined, valedictorian law student, okay? You know, you're an unusual human being. Most of us are normal human beings. We have to see the feedback loop of getting the little one paid off

and sensing some success and traction, which keeps me plugged in. The psychological feedback loop supersedes the math change. And here's the thing, the probability of completing the dead avalanche is one-tenth yeah the probability of completing the debt snowball yes in other words nine out of ten people that start that snowball complete it one out of ten on the avalanche completed or whatever the number is but the completion probability is not figured into the stupid math equation when someone says oh you should pay off the highest interest rate first i use the debt avalanche which means you've been on tiktok not in reality that's what that means and so you know again behavior trumps math when you do it on the short term because our behaviors are what caused the debt in the first place yeah i agree i mean when

i look at it i think about it if you look at it as like a football field right and let's say that's in the end zone if you run straight you're getting there faster but if you zigzag a yard here then zigzag yard there and then i'm going to put five over here on this one it takes you forever forever yeah to get to the end zone that's exactly right yeah running right run it straight up the middle yeah all the way you know and and take the yardage you can take it and then take them play the next. And take the yardage you can get. Take it. And then play the next play. That's right.

And then play the next play. Just straight down the middle. Run it up the gut. Run it up the gut. That's exactly what we're talking about. But the other thing that we don't, even us math nerds, because I've been teaching it based on behavior for 25, almost 30 years. So I understand it.

I believe it. And I've got 10 million people that have i understand it i believe it and i've got 10 million people that have done it so i've got the proof text that i'm right yeah you know but but it still messes with my brain that's funny it didn't i'll be honest with you that was the one thing that didn't mess with my brain yeah but you're you came out of the music background the artist background you just went this is how to do it do it yeah that's that is true there's one way to play that song yeah and this is the ways yeah i mean it's not that song if you play it two ways it's a different song that is true you know i mean yeah and so this this is but the math thing is uh you cannot and it's the mistake that the financial world has made all of the financial planning world and all of the investing world and all of the

insurance world, they try to do everything based exclusively on math in a behavior-based world. Yeah, they forget about mindset. They forget about behavior. If we were only doing math, no one would have credit card debt. Facts. Because it's mathematically absurd. If we were only doing math, no one would borrow $250,000 to get a degree in left-handed puppetry come on dave i know that's right only doing math but this is not about math no one would go into debt to go to a college campus because they have a good football team isn't that funny dave how the math

matters until it doesn't matter right when we don't want it to matter because we get something it doesn't matter but then when it's like wait if it's in my doing math we wouldn't buy a car that has a toxic plastic smell in it called new car smell and watch the depreciation happen when we drive it off the lot that's right when you hear that sound when you go off the lot boom boom when you break the curb that was the sound of ten thousand dollars leaving your your net worth. You know, I mean, but if we were doing math, we would never do that. No. But we smell the toxic smell and go, oh, my God, this is wonderful. Smell the leather.

No, it's not leather. It's carcinogens. You're getting cancer right now. Oh, my God. Unbelievable. But, yeah, I mean, if we were doing math, we wouldn't do almost anything that we stupid human beings do out there. Austin, that is a great question. You're awesome.

Thank you for asking that question. But the answer is don't solve a behavior-based problem with a math-based solution. Ding, ding. This is the Ramsey Show. Thank you for joining us America. Jade Warshaw, Ramsey Personality is my co-host today. I'm Dave Ramsey, your host. This is a show where

we talk about your life. Your life. Right in front of you. And we unpack all of it and we're generally really nice about it. I tell you, even if we're tough, it's just because we love you. That's right. And we unpack all of it. And we're generally really nice about it. I tell you, even if we're tough, it's just because we love you. That's right. And we want you to win.

Ben is with us. Ben is in Meridian, Mississippi. Hi, Ben. Welcome to the Ramsey Show. Hello. Thanks for taking my call. Sure. What's up?

So as of this time next week, we will be Baby Step 6 complete. Ding, ding. Look at you. Baby step seven is what that means, right? Wait a minute. Wait a minute. Let me stop. He tried to just breeze past that.

You finished baby step six next week. You mean baby step seven, you got your house paid off? We will pay it off next Tuesday or Wednesday when Mr. Schwab gets us our money. Well, come on, Mr. Schwab. Here we go, baby. Love it. Congratulations, Ben. How much is the house worth? Worth, hopefully, about $450,000. Cool. How much in your retirement accounts? About $100,000 and $401,000, and then pulling some of these investments in a

big savings account to pay it off. All right. Good for you. All right. How's that feel? Palms are sweaty just thinking about it. You're going to love it. If you hate it, you can go get you another mortgage, but you'll be all right. No. I love it, man. All right. How can we help you today?

We also have other money set aside for sinking fund. Our house is 15 years old. We expect things like HVAC, water heaters, things like that to come. Is that simple savings account type money or is that investment money? I would not put that as investment money. I think the idea when you know you have things coming up and you want to do sinking funds, that's separate. Even from your, you know, emergency fund, that's separate. Yeah, you can use the EveryDollar app to create a breakdown of the sinking funds for instance let's say you had an emergency fund and then you had a high yield savings account that you dump all the sinking funds into all right and you say the every dollar app will keep up with okay there's ten thousand dollars in there four thousand is for air conditioner future um a thousand is for christmas

uh you know and so on to where the thousand the ten thousand dollars none of it is vague it all has a name in that one high yield savings account you can break it down the every dollar app right that's how you do it yep you do it as funds the only time i would think about something that's investable is if it was years and years down the line like maybe you have this dream of renovating a room in your house and you know it's five or six or seven years down the line something like that yeah or ben i'll tell you when i did it in addition to that okay i'm gonna talk sinking this is not a sinking fund this was just extra investing and i was what i was doing was i was saving to buy my first rental with cash after we went broke and

had a house that was paid off so i just start throwing that in an s&p 500 index fund and it would just sit there and churn until there was enough to buy a rental and then i would throw all the rental income net of expenses and any other money i could find into an index fund until i had enough money to buy another rental and then every time i did that i had more rental income going into there so it pretty quick those houses started buying other houses but uh uh and rental properties started buying other rental properties uh and rental property started buying other rental properties but that's the only time I did it other than that just a high yield savings for stuff like air conditioner roof replacement Christmas next car uh that kind of stuff I would

just use a high yield savings separate from your emergency fund but you can keep it named inside of every dollar broken down yeah that's a really good differential and I think Dave you and I were on the show a couple of days back and we talked about that. Your emergency fund, like if you want to have some savings, like, you know, sinking fund type stuff, that is totally separate from your emergency fund. Your emergency fund is only for actual emergencies. And I would not put those in the same. I keep them physically separate. Yeah, I would not put those in the same savings account. No, because otherwise

a bass boat will turn into an emergency oh yeah you know it's like you know and who says it's not but it is but you know it's like of course it is i need a larger motor those bass keep out running me yeah that's it so they're fast little critters but um so yeah that that's the thing and you know i but you look down and you go hey the boat i was thinking about i had ten thousand dollars saved for i are twenty five thousand dollars i really want to buy five thousand dollars more and reach over and pull it out of the emergency fund without even half thinking because but because it's not in the same account it makes it hard to do that it'll keep your butt from doing it that's right it sure will because my wife will

amputate my hand if i reach towards that account i call that uh you know i call that uncle boo-boo uncle boo-boo yeah that's the we all have an uncle who convinces us to make the worst possible financial decisions the dumb the dumb little guy sitting on your shoulder oh yeah like a little devil on your shoulder yeah uncle boo-boo yeah he'll he'll look at that money together and say oh that looks like you have enough money to go to my wedding in the caribbean next thing you know this sounds like this happened jay did that really i know look that that sound like that really happened just then i sensed that you went to a caribbean wedding at some point that you wished you hadn't. He will convince you. I saw that. Uncle Boo Boo.

Uncle Boo Boo is a persuasive sales guy. I didn't know him before, but I think I know him. He sells whole life insurance. He only buys new cars because he thinks they're good investments. He owns a payday lender. That's right. What a jerk. James is in Chesapeake virginia hi james how are you

i'm doing good how about you better than i deserve what's up yeah so let me give you a little rundown i'm a i'm 19 years old i'm an electrician and i make just over forty thousand dollars a year cool and of course drive a company vehicle with that as well very good um i've had I've had some, uh, I guess a couple of people, but one in particular mentioned about credit cards. I don't have a credit card. Don't intend on getting one. And I guess I should say won't get one, but, um, with the credit cards, I've had somebody say that they, when they use them, they're like a fraud protection, not because you need the cash back or for the actual, cause you don't have money and you've got to pay it in advance or, and you don't have the money now, but you could pay it at the

end of the month. What is the fraud protection or why is it, I guess, okay to use a credit card because of the fraud protection? There's a lot of lies out there that have been spread about this by people who love credit cards, James. So you can look it up for yourself. It's not hard. If you pull up Visa and MasterCard's fraud protection on their website, both of them use this language, okay? You have a zero liability in the event of fraud for credit card use as fraud.

Visa and MasterCard, no MasterCard product, no Visa product of any kind, credit card or debit card, allows someone to misuse your number and the bank charge you for it. So if there's online fraud, if someone steals your number, if someone steals your card and uses it, you are not liable. You have a zero liability with a debit card or a credit card with Visa. And you can look it up on their website. It has big old capital letters, zero liability liability policy on their agreement their cardholder agreement so the idea that a credit

card has more fraud protection than a debit card is simply not true it's someone that doesn't know what they're talking about okay you can look it up i mean it's not it's really just pull up zero fraud protection on debit card debit it's right there it pops up anywhere and google will put it right in your face so it's not it's not even hard to research this and find it out but people hear some duber talking about i get airline miles and i get fraud protection no one should ever recommend a debit card because it doesn't have fraud protection and they they heard some moron on TikTok say that, and so they believe the moron on TikTok instead of actually looking up the credit card agreement or the debit card agreement. It's universal.

In order for it to have the little MasterCard or Visa symbol on the front of it, whether it be a credit card or a debit card, the issuing bank has to abide by the agreement with visa and mastercard and provide a zero liability in the event of fraud there you have it ding ding done yeah yeah it's over i've never had a problem using a debit card and if somebody did for i've never ever had a problem with them giving my money back i've never even had it i mean i get it gets shut down with the stupid fraud algorithms but so so are the credit cards. Yeah, at this point, yeah. I mean, did you make this charge?

Yes, I was in Mexico, okay? But, oh, my God. You know, like, I have to call and tell my, we have to call and notify our bank if we're leaving the country. Yeah. Because they immediately assume someone stole our number, right? Yeah. So, but that's just, that's the world we live in because there's fraudsters everywhere. But either way, you're protected in the event someone actually did use it.

We actually did have somebody hit my card, come to think of it. And the bank just put the money back instantly. That's right. But they can wait two or three days, but they generally don't. Yeah. This is The Ramsey Show. Our Scripture of the Day, proverbs 13 11 dishonest money money dwindles away but whoever gathers money little by little makes it grow hmm like investing in stuff oh there you go bob hope said a bank is a place that will lend you money if you can prove that you don't need it.

I miss people like Bob Hope. Oh, I'm so old. I love it. I love it. Wow. All right, Cody is in Montgomery, Alabama. Hi, Cody. Welcome to the Ramsey Show.

Hello, Dave. How are you? Better than I deserve. What's up? So I'm a 21-year-old college kid, and I'll be graduating this May with zero debt. Way to go. I've had the honor. Well, I have to pay credit to my parents.

They've really helped me out with this, and they've seen the damage that student loans can do. Wow, wonderful. So me and my girlfriend have been together for six years now, and we're both in nursing, and we're projected to graduate together in may and um we're expecting to make 120 to 140 our first year combined you're not combined you're a girlfriend well yeah that's to come though i plan on getting married before all this is over okay like before graduation is that what you're saying? Shortly after. Okay. Good for you. Okay, fun.

What a great life. Thank you. My parents are going to allow me to live at home and save all this money so I can adjust to this new job before I jump out and start making a bunch of crazy decisions. And my girlfriend, she doesn't really want to do that. She wants to maybe stay at home for six months. I'd like to stay home for a year and save all my money so I can have an accurate down payment on a house. And I wanted to ask you, should I put down larger than the 20% that you recommend and put the excess in investments?

I'm a little bit confused. Are you getting married and the two of you moving in with your parents? No. So shortly after graduation, we're going to live at home separately. I mean, she lives basically right down the street from me the first year. That's my plan. Oh, so you're not getting married right after graduation? No, it'll be within that year, though.

It'll be within that year. If the point of waiting to get married is so that you can do this house and down payment i that wouldn't be a reason for me no i don't you know what i mean i feel like what you're trying to do is create like this perfect scenario freaking years you're gonna go live in your mother's basement to save money to be one more year before you actually marry the girl yeah no not a chance dude y'all go get married get you an apartment get you an apartment this summer okay get married in may start life in an apartment start piling up money if it takes you a year or two buy a house you're gonna be making you're both nurses oh my gosh it's a wonderful career field you can work like you know as much as you want to work save up money don't

worry about a house you can buy a house after a year buy a house after two years i don't care you're still gonna be 25 years old be a homeowner and be debt free everything but the house you'll be very smart and very married i appreciate it and i have one more question um we are we're both uh we love the idea of being a travel nurse and we'd like to do that after about three years of experience so three years years after graduation, we're going to try to go all over the country and do that for about two to three years. Should I be renting or should I buy a house before I leave and try to rent it out? If I knew that I was wanting to be a travel nurse and travel all around the world, even more reason to just get an apartment and hang out there until you're ready to settle. Yeah, I wouldn't buy while you're traveling. If you're

going to travel for three years, why don't you do that early why do you have to wait you have to have experience to do that yeah the field usually requires one to two years some of the rules have changed with covid but that's still what yeah with the nursing shortage after the fauci pandemic that's uh yeah yeah that's real i mean the nurses it was man we had some nurses coming in here we had one lady you remember that lady i don't remember if you were on the air with me or who was did a debt-free scream the travel nurse and she made like i mean covet year oh yeah chick made like 550 grand in one year she worked all the ot and they were paying like triple time because i mean wow they because you guys yeah i mean you were that you're the hot commodity then

and you are still because there's now a shortage because so many people left over uh uh you know vaccine requirements mask requirements other things they left the industry they got out of it and so now there's a shortage and now the hospitals have this weird thing they forgot that they ran all their talent off. That's right. Now they're, oh, God, we were stupid. Who knew? But we were requiring everyone to be vaccinated, and people didn't want to do it.

And so we fired them. Oh, yeah, that's us. Yeah. And wow. Okay. Yeah. So if you can go on the road, the sooner you can go on the road and make bank, I would call that your early adventure. Yeah.

The two of you get married and may pass your bars and go on the road and go make three or 400 between the two of you, not 120 between the two of you. That beats Mama's Basement all day. Ding, ding. You know? Gotta tell you, beating Mama's Basement is a low bar, though. Hey, it comes with free meals. That is still a low bar though hey it comes with free meals that that is still a low bar love mom love you mama love you mama not coming all right mama and them that's

a southern thing right there that's right tracy is with us in portland oregon hi tracy welcome to the ramsey show hey dave and jade it's so good to talk to you both. You too. What's up? Thank you. I need some more shop Ramsey math magic, please. Let's go. We'll give it a shot. Okay, so here's my background. In April of 2022, I purchased a home in New Mexico. However, due to medical reasons, I had to return to Oregon and I'll be staying here.

So as of now, the home is with a property management business and it's currently rented short term. And so here's the numbers I have for you. I purchased it for $380,000 with $120,000 down at 4.9% in April of last year. It's currently valued, just looking online at Zillow, for $60,000 less than what I paid for it already. Ah,ow's not dependable i know what city are you in i get it uh alamogordo which it's out in the middle of nowhere but there is a military base nearby i put a 50k in upgrades and my question is should i sell it or leave it as a rental in hopes that it continues to be occupied or sell it at a really big loss. And it rents for $2,500 a month. My mortgage is $1,700 a month. So with the property management fee, that gives me about $550.

I'm not looking to make money. I just want to break even, but it doesn't look like – I don't know what to do. Number one, I want to get better facts so what I would do is go to ramseysolutions.com and click on the Ramsey trusted real estate agents the endorsed local providers have one of them go do a comparative market analysis a CMA on it which is basically a realtor appraisal and let's find out what the house is really worth and find out find out if the blood bath you think you have is really real because that changes everything i mean you think you're going to lose 50 000 turns out you're going to lose 5 000 right it changes the discussion right

right and so yeah 5 000 i'm out of here uh make 5 000 i'm out of here uh make 5,000 i'm out of here okay but generally speaking nationwide houses have not dropped that much yeah what do we think would have if this is true what do we think would have caused that other than you overpaying initially she got in she got in the fever and overpaid you got in the tail i don't know i mean maybe i did maybe i did because i sold my house here in portland to move down there and made a killing so i mean people were doing the same thing on that end is they were getting what they could for the houses and there wasn't much of a market so i had to buy a house at the time so i didn't buy it where it was it was valued it appraised at that i had to go through the va so it appraised at that. I had to go through the VA, so it appraised it that.

But the market has fallen there. It's possible that a unique micro market, the macro market nationwide has not dropped. But some of the individual markets have. And some of the individual markets have increased still substantially because there's still a shortage of housing. So it's possible. But I would want to do something more than Zillow to make the decision i'd want solid info so get a good ramsey real estate agent a good ramsey trusted real estate agent to go out there and walk you through this and they'll tell you you know i think if you'll hold on six months this market will rebound

based on things that are happening in that local economy. I don't know. No, I definitely wouldn't listen to Zillow. Well, I mean, not as my sole arbitrator. I mean, it might be accurate. Sometimes it is, but it's just not. They use algorithms. They're not using actual CMS. And so it's not slamming Zillow. It's just a matter of, you know, it's a mass produced thing. So anyway, look at that and then decide if you can stomach the loss or not. And if you want to, there's not a wrong answer unless it's putting you in a pinch today. This is The Ramsey Show. We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, what's up guys? It's Jade. Look, if you like what you heard in this episode and want to know more about getting started on the Ramsey Baby Steps, go to ramsesolutions.com and click the Get Started button. We'll help you figure out the best next step for you based on your specific situation. That's ramsesolutions.com and click Get Started.