The Ramsey Show - App - TODAY Is the Right Time To Change Your Family Tree (Hour 1)

Episode Date: January 29, 2021

Debt, Career, Business, Relationships, Home Buying   Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/31ricKt Tools to get you started: Debt Calculator: https://bit.ly/2QIoSPV Insurance Coverage Checkup: https://bit.ly/2BrqEuo Complete Guide to Budgeting: https://bit.ly/2QEyonc Check out more Ramsey Network podcasts: https://bit.ly/2JgzaQR

🎵 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. Dr. John Deloney, Ramsey personality and best-selling author of the book Redefining Anxiety, is my co-host today. He's answering your questions about your life. I'll answer your questions about your money, and we'll probably both answer your questions anyway. Open phones, 888-825-5225. That's 888-825-5225. James starts off this hour in Tampa, Florida. Hi, James.

Welcome to the Dave Ramsey Show. Hey, Dave and Dr. D. How are you guys? Great, man. How can we help? So my question for you guys today is I am planning on proposing to my girlfriend in the coming year. Congratulations. And I appreciate that.

Really excited. We've been together for about three, just over three years now. And so, yeah, just ready to take that next step forward. Started looking at rings and things like that. And my question, though, is, so I am debt-free, but she has quite a bit of debt. And so I'm trying to figure out how to start planning for that after, you know, we get engaged, we get married, combine bank accounts and all that stuff. How do I plan to tackle her debt for basically going back from baby step four to baby step two?

Well, that's exactly what you'll do. Whatever money you have in savings when you come home from the honeymoon, you will throw it at the debt snowball, and then the two of you will combine your households, your incomes, and you're going to work her debt off then, the two of you. And so how much debt has she got? It's probably going to be around, I guess 55 to 60 000 okay and what's her attitude about all that uh well it's funny you ask that i've been trying to to ease this conversation

and with her um and trying to talk about or kind of have that dream conversation that you guys talk about a lot and haven't had that conversation yet. But she's on board with it, but she does not believe that I said we can do it in less than five years. And I told her, I said, okay, well, jump on board with me, and we'll do it under five years, I can promise you that. And she doesn't believe me. But wait a minute, what is your income? So I make about $50,000 with commission, so this year I'll probably be around $65,000.

What does she make? She's a nurse, and she's a nurse, probably makes $50,000 to $55,000. Okay, so here's a simple thing that a nurse can do. Anybody can do. Okay, is you make a simple thing that a nurse can do, anybody can do, okay, is you make $100,000. If you put $30,000 out of $100,000 on your debt, you're debt-free in two years. Exactly. That's exactly my point.

If you say that sentence and she rolls her eyes, then you've got a problem. Right. And I think I'm wondering how you've been with somebody for three and a half years, and you're about to buy an engagement ring, and you're still tiptoeing around any conversation. You don't tiptoe around a dreaming conversation, brother. You've been together for three and a half years. What is stopping you from sitting down and having that? That should be a point of joy and a point of coming together,

not some sort of apprehensive moment. Why are you waiting to have that conversation? I really don't have a reason. I just haven't done it, to be completely honest. Give her that gift. That's a gift to any prospective spouse, male or female, for the other person to

sit down and say, I want to dream together with you. That's awesome, man. That's a good place. And as Dave said, this is a math problem. And another thing a nurse can do, especially in this universe, is work Saturdays for another nine months and make a whole bunch of extra money, and you can do something on the side,

and y'all can take that two years and cut it down to 18 months or maybe even 15 months if y'all get bananas about it. I left out. How much have you got in savings? I've got about $45,000. Okay. And she has $55,000 in debt? Uh-huh.

So if you write a check for $45,000, there's only $10,000 left, right? Correct. Well, after you're married and you're making $100,000. So you should be debt-free in like two months. This is the greatest call of your life, brother. We've just solved all of your problems and then you're going to rebuild your savings and she can't be nervous about using up your savings because she's not got any savings so she's already should be nervous right yes completely agreed okay you

brother are going to have to work on the pronoun problem which is this is going to quickly become not her debt but y'all's debt our debt our debt our income your savings our savings account our savings that's right yeah when you are married and come home from the honeymoon the pronouns change you are now french we we we do stuff now we do stuff together that's right it's not your stuff my stuff it's uh unless the dog goes in the floor and then it's your dog. But other than that, it's everything else, right? But, oh, my gosh, that's your child that's misbehaving. That's right. That is your son.

That's actually a rule my wife and I have. Yeah. Whichever. If he's standing in the middle of the street peeing, he's your son. Whichever behavior the principal calls a son, that person's got to go to the school. That's your son, John. I'm just saying. That's right. I agree with her on that part. But,'s got to go to the school. I'm just saying. I agree with her on that part.

Change your pronouns as soon as you get married. And you can even do that in the dream meeting and say, how is life going to look like for us? What is it we're going to do? And what if we took after marriage and applied $45,000 to $55,000 worth of debt, and in the meantime you work like crazy and you've already paid it down 10 from working weekends. And so when we come home from the honeymoon, we're like debt-free. How cool is that?

That would be a dream. That's better than five years. Five years kind of sucks. Yeah. And your life right now kind of sucks. So maybe we can fix this thing. I think we just did. That's not a bad dream.

Not a bad dream. We're going to put financial coaches and counselors out of business if we solve people's marriages like that, man. Yeah. Well, I mean, Sharon and I were on about our third date. I was driving a Monte Carlo with 285,000 miles on it, third engine, second transmission. I was going to say, that's back when.

Yeah, I mean, I had driven this car. It was on its third life. And I was explaining to her, I had $ this car. It was on its third life. And I was explaining to her, I had $1.16 in my checking account. And I was explaining to her how someday I was going to be a millionaire. And about that time, we went across the railroad tracks and a muffler fell off my car. So this is the dream meeting, right? The dream meeting. This is the dream meeting.

What could this look like? And, you know, the strange part is the woman actually believed me. And she was right. That's right. Because I'm so dumb, I've done it twice. There you go. I'm a millionaire twice, two different times now. Oh, my gosh.

Yeah, that's the dream meeting. That's what you're doing. And it's okay if the muffler falls off the car in the middle of the dream meeting. But just have it and sit down and change your pronouns and start laying out some math plans and start talking about going through maybe you go through ramsey plus during this year uh while you're planning and getting married and finish up and revisit after the marriage and that kind of stuff you'd have a whole year lined out to do all that very cool man very cool open phones at 888-825-5225. This is the Dave Ramsey Show. 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. Dr. John Deloney, Ramsey personality, writer of the bestselling book, Redefining Anxiety,

What Is, What Is Not, and How to Get Your Life Back. If you want to talk about that type of thing and talk about your life and maybe boundary issues or whatever else is going on in your family, he's here today with me. And we'll certainly take your questions about life and money. The phone number, 888-825-5225. Mo is next in Belgium. Hey, Mo, how are you? Hey, Dave.

Hey, John. How are you guys doing? I'm doing great. Good. How can we help? It's a money-based question, so sorry, John. The emotional things are not necessary with me. So the question that I have is actually about I started a business a year ago, and it's been doing okay with the cash flow, but I'm just asking about what is the best way to invest my money,

like what should I do, just pay myself out and do something with that, or just keep it in the business and invest in something else? Well, you know, there's three things that I invest in. I put money back into my business, I put money in mutual funds, and I put money in real estate. I do not know the real estate landscape in Belgium well enough to tell you if that's a good investment or not. You probably could tell me. And what types of vehicles you've got that are similar to mutual funds that you can get into. Yes.

So I actually don't know much about investing or anything i actually know a lot about housing and i really think housing is a good investment in belgium okay i'm just uh just thinking about what should i keep the money uh in the business and buy it buy houses from the business or put it on my personal accounts and pay the taxes on that and then buy the houses. Again, I don't know the tax implications there, but if all things are equal, I would have them separate from your business because you wouldn't want your business to appear to be so wealthy that it became a target for lawsuits. And so I don't own any real estate inside my Ramsey Solutions business.

Ramsey Solutions is actually a tenant of mine on another company that owns the building. And so, you know, your structure that way is typically good risk management to not have all your investments in one entity. And that would include, you know, separating your business from your real estate. And even with real estate, once it gets to a certain size, I would have a different entity. In the States, we use an entity called an LLC for real estate. And I don't get but about five to $10 million worth of real estate into an LLC. And then I open another one because I don't want – if someone sued us that got hurt on a property or something and we lost everything in that LLC, that would be all there is that they would get.

It's limited to whatever that holds. And then the other buckets, the other LLCs are safe. They're protected from that. And so, you know, that's just risk management once you get to a certain level of wealth that you spread around the target so that it's a series of smaller targets, not a super large singular target. And so that's why I would not put it in the business. Again, I am not familiar with structuring stuff in Belgium, though. I would be known as clueless.

But conceptually, you want to spread that risk around. Open phones at 888-825-5225 jeffson phoenix hi jeff how are you i'm doing well dave how are you great how can we help okay just wanted to get some feedback from you the situation is um my daughter uh finished finished her bachelor's degree back in may She's been accepted into a graduate occupational therapy program. I've talked to the finance people there and run through the numbers, done some financial modeling. And it looks like after, if you consider the loans she would take,

and I would pay for the plus loans, but she would pay, have to take on the direct loans. The program is about three years long. The numbers show that, uh, given those factors and the interest on those loans, when she graduates and she would graduate with about 88,000 of student loan debt. So the, uh, the fly in the ointment is she has a pretty good job right now. So she's considered deferring for a year. On this job, we conservatively estimate that she should be able to make about $60,000 to $70,000 a year. And so we think after taxes and expenses, if she lives conservatively, Yep. What's your question? I'll get your input on what your thoughts are. Should she just go ahead and start the program and bite the bullet or wait and use this chunk of money to pay for the program so she doesn't have to go into debt so much?

Absolutely under no circumstances do you borrow money at all, a penny of it for an OT program, period. So the magic about an OT program is they make you feel like you were, you know what, we scoured earth and you're the one. We accepted you. And the reality is there is a ton of empty seats in a number of these graduate programs across the country. And the tide has turned in many, many, many academic programs where there's more seats than there are students. Which, what does that mean?

That means next year. That means the year after, after she works her butt off for two years and decides this is really, really what I want to do. Then she saved up 80 grand and she can go write a check and it's going to be a painful check. She's going to pay cash for that job and then she's going to walk out. And as an OT, Dave, you may have seen different numbers, but we're talking 65 to 80,000 bucks a year being an OT depending on where you're doing the work and so if she's doing it to make more money or to quote-unquote move up she's already got a pretty good job and so I'd really dig in as to why she wants to do that but under no circumstances do you borrow money Jeff just to give you a little context John has a PhD in higher

ed and has served on served in universities all over America, lately as dean of students. So this is not something he just made up. He's lived this for decades. My opinion is the same thing. OT is treated like your medical student or something like you were given a gift from heaven to be let in, and that's a bunch of hogwash. OT is not med school, and it shouldn't cost like med school,

and some of them try to charge for it like it's med school. We know it's not med school because you make 60 to 80 coming out, not 160 to 180 coming out. That's how we know it's not med school. And so I think it's overrated. I'm not sure that's what she wants to do. I think she just got in this track and then got accepted and felt approval from being accepted. And John's trying to truncate that, and so am I.

So definitely work a year. The other thing I would try to do is I'd try to work a year or two in the freaking field so she can get in there and get her hands in the middle of occupational therapy and figure out if it's what she really wants to do. Oh, by the way, the company she's working for may pay her tuition after that to go up and finish her master's and go ahead and get the degree free i'd be okay with going in student loan debt for anything is a bad idea i really would beg you not to go into student loan debt you or her for this right of any amount not two dollars worth oh and by the way there's a vast array of charges

depending on which school you get approved for that's right there's books and fees and hospital charges well no what i'm saying is is that school a may be double what school b is yeah yeah yeah school b may be half of this and again this idea that oh that's the one i got accepted in they picked me they picked me and i'm special and bullcrap you know this you are shopping for the cheapest eggs man and you just get the you go to store to store and get the cheapest eggs is their eggs and because no one ever walks into an occupational therapy's office and goes i you know i see you went to that school i don't think i'll come i'm out right no know, I see you went to that school. I don't think I'll come. I'm out.

Right? No one even asks where you went to school. They're not even positive you did go to school. Now, I'm a nerd, and I had both my knees done two summers ago, and my occupational therapist was incredible, and I did ask, hey, where'd you go to school? After. After.

Oh, I wasn't going to walk out. Well, you couldn't. Your knees are messed up. That's right. That's right. She had me strapped to the table anyway. But I want't going to walk out. Well, you couldn't. Your knees are messed up. That's right. She had me strapped to the table anyway. I want my OT to be awesome. I also don't want him to be a dick. I've hired a bunch of lawyers in my life, a bunch of docs, and I've never asked one where they went to school.

Never. Never. Because I'm just not impressed with your pedigree. All I want to know is can you fix what's broken. That's all I want to know. And so this idea you pay double because you went to that school, it's laughable. It's just laughable.

Don't do it. So, yeah, take a year off, preferably working in the field, and then get free tuition. This is my best course of action on this. This is the Dave Ramsey Show. We'll see you next time. Dr. John Deloney, Ramsey Personality, is my co-host today here on the air. Open phones at 888-825-5225. Cliff and Ryan are with us in Cleveland, Ohio. Hey, guys, how are you?

Good, Dave. How are you? Good, Dave. How are you? Very cool. I see on my screen you're debt-free. Congratulations. Thank you. Love it. How much have you paid off?

$71,135. Love it. How long did this take? Don't want to forget the 52 cents. That's right. Get the 52 cents in there. It came out of the corner of the couch, right? So how long did this take?

Just under two years, so right around 23 months. Okay, very good. And your range of income during that time? It was $113,000 to $117,000. Okay, cool. What do'all do for a living we both work in television broadcast production actually very cool i work in professional sports and cliff works in television okay local affiliate there yes okay great yeah very. What kind of debt was the $71,000? Well, it was a range. We had cards and cards and cards, four credit cards, credit union credit cards, both of our school loans,

and then a vehicle loan and then a home improvement loan. What was the big one? those pesky student loans i think they were the biggest student loans are gigantic okay oh pesky sally may had to go how long you guys been married sally how long you guys been married we've been married just over 11 years okay we've been married just over 11 years. Okay. But we've been together about 17. So what happened two years ago that set you guys on fire? What's the story to this journey? So a lot of my family had been mentioning your name at various holidays, and I always brushed you off, and I thought we were good with our money.

We had good debt. Like everybody says, you should have good debt. And then fast forward a couple months and my best friend Whitney came over and she pulls out these white envelopes. And I was like, what are those? You know, we were just trying to pay for some pizza. And she's like, oh, these are my cash envelopes. I'm following this Dave Ramsey plan. And I'm like, wait a minute. My family talks about this guy, like who is he? And then I brushed it off again. And fast forward to July of 2018, and I just couldn't get you out of my head, Dave. And so I Googled you, and you happened to be running a Christmas in July special. And lucky for me, I was able to get the bundle of the Total Money Makeover,

Rachel's book, Live Your Life, Not Theirs, and then a kid's financial piece set for our son. And we created our first budget that day on every dollar. I read the Total Money Makeover in two days flat. Wow. And we immediately performed plastic surgery on all our credit cards, became mega gazelle intense. Wow.

And literally the rest was history. Cliff, how did you keep up? Because once she stepped on the gas, she went. Yeah, so... A little whiplash. ...to the right. That's good. So, you know, at what point did you join into this process?

Well, like she said, we were together over at her friend's house um and like she said the family talked about it all the time and and you know we're like we get in the car driving driving home and we're like what are they even talking about like what is this thing what is this thing you know you get more and more interested and then next thing you know you're reading books and paying off debt. Okay, so you were in there right from the start with her then? Oh, for sure. Okay.

All right. Very good. Congratulations, you guys. We're so proud of y'all. Thank you. So peaceful. As a part of this journey, Cliff and Ryan, what happened to your marriage? I'm always fascinated by these joint journeys people go on and what happens to their marriage.

I mean, it definitely strengthened it. How so? The communication, especially, because I do think that's one of the main keys of getting out of debt and being on this journey is just clear, open, constant communication. I mean, just the way that you have to have that between the two of you. And then I think dreaming together for what the future holds for us now that we are on our way to financial freedom and dreaming together alone and then for our family. Say that again, Cliff. We talk about retirement all the time now. It's a real thing.

It's not a boogeyman in the closet waiting to pounce later. It's something you're going to make happen. It's within reach, for sure. Yeah, yeah. Way to go, guys. Very, very proud of you. So this is 23 really tough months. $35,000 a year,

about $3,000 a month average that you paid off during this time. What was the toughest part of this? I would say saying no. And really I think that was a complete sentence, especially to our son. He was eight and nine years old and having to say no to him a lot for certain things that now he throws back in our face which is hilarious you know you said no to me all these times now let's order as much pizza as we want so I would say saying no to him was definitely hard and then the last big debt of our snowball, because we weren't getting those small victories that you get at the beginning to keep the motivation going.

So I had to create some sort of reward or treat for ourselves for every thousand dollars that we ended up knocking off of that last debt. So those are the two hardest parts, I think. Very cool. Yeah, you know, saying no to certain sports for kids and for parents is kind of difficult. But when you know it's going to be a short-term decision, it makes it a lot easier. So I know there's families all over the country that listen to this and tell themselves, I've got two little kids. We just can't do that right now.

This isn't the right season. So you're living proof. You've got two beautiful little kids. I'm looking here on the monitor. Your kids survived, right? They made it? Yep. And everybody's okay and safe and fed and all that yep and they're stronger

on the other end yeah they're not they're not going to counseling for missing a pizza right right or instead of an understanding of the sacrifices that we were having to take on in order to put ourselves in better success financially for the future. Yeah. Way to go, you guys. Today, it now is the right time. Today is the right time to get started. Hogan says some days aren't on the calendar. It's always too late to wait. It's never too late to start. Yeah. Never too late to get a great head start on

something well done you guys well done we're so proud of you you're heroes you took control of your life changed your family tree you absolutely rocked this well done we got a copy of chris hogan's book for you everyday millionaires we definitely want that to be the next chapter in your story you truly have lived like no one, and now you're going to be in a position to live and give like no one else, including all the pizza you want. $71,000 paid off in 23 months, making $113,000 to $117,000. Count it down. Let's hear a debt-free scream.

Three, two, one. A, B, C, c d we're good yeah this is how it's done oh fabulously done man what she said um about the impact on marriage is essential. Right. We take calls virtually every hour on this show about, well, can I do this without my spouse? I don't want to get my spouse involved.

My spouse, my spouse, my spouse. And on top of that, you know, we've got 7 million people have been through Financial Peace University now, so we actually know what we're talking about when it comes to it's almost impossible to do this against the will of your spouse. Right. And not only that, when you do it on the other side with your spouse, you find yourself closer.

Sweeter. Yeah. Communications increased. Unity has increased. Unified vision that you created together. Yeah. We're truly walking out this, as the preacher said, and now you are one.

There it is. And now you are one. This is the Dave Ramsey Show. Dr. John Deloney, Ramsey personality, is my co-host today. Open phones at 888-825-5225. Mitch is in Cleveland, Ohio. Hi, Mitch. Welcome to the Dave Ramsey Show. Thanks for having me. I've got kind of a two-part money housing question, but I also want to tell Dr. Deloney,

I've never been a big psychology guy, but I'm pretty hooked on your show. I like the podcast, so keep it up. Well, I appreciate you. Thanks for listening. I think it's you and my mom right now, so I appreciate you, man. There's probably more.

Yeah, a few hundred thousand. My question is, I'm 26, I'm on baby step four. I'm excited to buy my first house in the spring. I'm trying to decide if I should consider buying a duplex and renting it because I can get one for about the same price as a single family. And then I've got roughly $75,000 cash, $18,000 or so with my emergency fund. And so I'm trying to decide exactly how much to put down because I wouldn't mind keeping a little extra cash too. So I was thinking more like $50,000,

which is a little more than 20%, but just wanted some guidance on whether you think that's a good move on either one of those. I'd hold your emergency fund. If you want to keep it at six months instead of three, that's fine with me. And beyond that, I'd put everything else on the house. The idea, the more you put down, the less you've got to pay off. Sure. What about the duplex? Duplex is fine. The good news is your renter lives next door.

The bad news is your renter lives next door. And the other thing is that the buyer buyer when you get ready to sell it is more of a wholesale investor than a retail joe and suzy buyer with a picket fence and a little puppy dog that they want to live in the house with and that that single family is going to appreciate all things being equal faster than a duplex will in most markets because of who the buyer is on the other side. And duplex buyers are typically not owner-occupants. You would be one of the rare exceptions. I get this question on the air fairly often, but it's still, out of all the number of duplexes in the United States,

the vast majority are owned by non-owner occupants, and so that's typically who your buyer is. I didn't know that. That's new information for me. That's good to know, because I thought they were all, I'm going to buy one side and rent out the other side and knock out this mortgage. Hardly any of them. Most of them are, matter of fact, I used to buy, when I was buying real estate back in

the day, I'd buy like a whole street of them. Right. You know, I'd buy like 10 of them or 15 of them or something like that. And it just turns into a miniature apartment complex sort of thing like that. Or if you own 10 or 15 of them all over town, even. It's the same situation. So, it's now, I mean, there are people that do it. Now, the zero lot line looks like a duplex, but you own half of it. And it's called different things in different markets.

But it's a, meaning you have a shared wall. Right, but it's not technically a condominium in most cases. And so those are almost all owner-occupied, depending on the market and depending on the city and what's going on there. But, yeah, you just think about the property and go, okay, who's your buyer on the other end, and how sophisticated are they, and are they a retail buyer or a wholesale buyer? Obviously, if they're a wholesale buyer, the property's not going to appreciate as much. Tim's in Milwaukee. Hi, Tim.

How are you? Better than I deserve, Dave. Thanks for taking my call. Sure, man. What's up? Well, I got a question for you. My wife and I are looking at paying off our home good balance on it right now eighty three thousand dollars and we have about three hundred and

seventy five thousand sitting in uh tax deferred accounts and we have our emergency fund fully funded and our concern is that if we only pay off this house right now, we're going to have a tax bill of about $18,000 due. My concern would be one of two things. Do we go ahead and do it, pay the house off, pay the $83,000, and then just stop contributing to our deferred comp or our retirement next year just to fund the taxes. How old are you guys? I'm 54. My wife's 49. Okay. And so what type of account is this that you can pull it out without a penalty? Mine's in a deferred comp so i'm a retired law enforcement okay so you can get that with

only being taxed with no penalty then in your situation that's correct okay yeah i'd pay off the house and uh i'd wait a lot for the first of the year to do it. So your tax bill's not due for 14 months or 15 months then. Okay. And that gives you that time to, if you wanted to pull the plug on their deferred comp and build up the $18,000, that'd be the same thing. It'd be really neat if you could do the deferred comp and cash flow the $18,000 during that 15 months that you've got to save it up. That was my question. What's your payment every month? What's your mortgage?

It's only $392. Oh, wow. Okay. What's your household income? About $120,000. Okay. You might be able to continue your deferred comp and save $18,000 in 15 months if you wait until January to do this.

That would be best of all worlds because that way you're paying your taxes out of pocket, which has, in effect, mathematically is the same thing as investing that much more, is the way it will turn out. And because otherwise you would have pulled the money out of there to pay the taxes and would have lost that much. Or not put it in, which is the same thing again. So basically, by doing both, we're adding to the net effect of your investments. I'd pay it off, yeah, but I'd wait until January to do it.

Hey, thanks for the call. Open phones at 888-825-5225. Connor is in Seattle, Washington. Hey, Connor, welcome to the Dave Ramsey Show. Hey, Dave and John, thanks for taking my call. Sure. Wanted to be on with you guys. You too.

How can we help? Okay. So I'm 27, single, baby step four, five, and six, and I've been thinking about looking for a house pretty soon here. My mother and father are starting to go through, they're going through their will again, and my mom is presenting me with kind of what feels to me like an unusual option. So she's let me know that I have about 750,000 in inheritance coming whenever they pass away. She has given me the option to purchase the house that I'm living in,

which is their house, from them at a discounted rate, and it wouldn't be quite 750,000, but I've been just kind of trying to figure out how to run the numbers, figure out if this is a good choice for me or if I should, I guess, politely decline. The house they're currently living in? No, excuse me, one of their rental homes that I'm renting. Oh, you're living in?

Several roommates. Okay. Yes, I'm currently living in. And so what would you be paying for the house? About $600,000. Okay. And what is the house worth? Well, I'm working on that.

I think the main real estate sites think anywhere between a million and a million two. Okay. So you would be getting $400,000 of your inheritance up front, and they would discount your inheritance by the amount of the equity. Yeah, that's correct. Okay. All right. Would you buy this house otherwise?

Well, not at the price that it would normally list at, but, yeah, if I could afford it, sure. I like the house okay well if your parents are doing a good good estate planning they can gift you that much under the unified estate tax credit as long as their uh net worth is under 40 million right now they can pull that off uh and uh you they won't have any taxes on it you won't have any taxes on it and you would get four hundred thousand dollars less upon their death than you would get now, right? So you're paying full price for the house. You're just getting part of your inheritance early to buy the house with. Yeah, that's correct.

The inheritance part is a little bit complicated because I have siblings. This particular 750 came from her house siblings. Oh, my God. Okay. The last thing I would tell you is this. I would get the house appraised or get a real estate agent to give you a comparative market analysis, and it should not be at 100% of value. It should, because if they sold the house, they wouldn't get 100% of value. They'd get about 80% of value or 88% of value. So somewhere around 85% of value minus the mortgage is the amount deducted from your inheritance. And then, yeah, there's no reason not to do that deal as long as you can afford the $600,000 mortgage.

This is the Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows. Ask Dave money questions like, how do I invest my money? Or what is the debt snowball? Find out more at DaveRamsey.com.