The Ramsey Show - App - What Actually Caused Inflation & Why the Fed Is Screwing It Up (Hour 3)

Episode Date: September 1, 2022

Dave Ramsey & Dr. John Delony discuss: What actually caused inflation and why the Fed is screwing it up even more, How to get out of an upside down vehicle, Buying vs. renting a home.   Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6   Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the pods moving and storage studio, it's the Ramsey Show, where net is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us, America. Open phones at 888-825-5225.

We help people build wealth, do work they love, and create actual amazing relationships. Dr. John Deloney, Ramsey personality, number one bestselling author, is my co-host today. Thanks for joining us, America. So Jerome Powell of the Fed is ready to bring some pain to households and businesses, quote-unquote. These are the unfortunate costs of reducing inflation. Powell said that the market will have to weaken before inflation can be considered under control and these are the unfortunate costs of reducing inflation a failure to restore price stability would mean greater far greater pain um but let's roll this up though he's talking about what the sentence before he says the u.s labor market why does the labor market have to go south for the

the economy to recover while higher interest rates slower growth and softer labor market why does the labor market have to go south for the the economy to recover while higher interest rates slower growth and softer labor market conditions will bring down inflation they will also bring some pain to households and businesses brought to you by your government okay now here's what's interesting. God, this is so infuriating. The problem is he's wrong. That's the other problem. Not only is this just so much an aristocracy that talks down their nose to regular people and i'm going to throw the switch over here and you poor people are going to have some pain in your households and businesses

but you're going to like but you're going to like me for it yeah because it gets rid of inflation you arrogant yeah and he's wrong it's um okay so where did this inflation come from inflation increase in prices okay we've talked about this on the show before but let's talk about it again inflation in this case did not come from a white hothot economy, that the economy just grew and grew, and was too much prosperity, God help us, to the point that prices started shooting up because there was just too much good things going on,

so prices just go up. Now, that actually happened in the 70s. That was real inflation in that sense. The inflation that we had was what we're calling inflation, and it is inflation. It's an increase in prices. It was primarily caused by a couple of things when you don't produce goods and services for a half a year or a year you create a shortage of those goods and services create a shortage of lumber create a shortage of automobiles you create a shortage of those goods and services create a shortage of lumber create a shortage of automobiles

you create a shortage of almost everything when you create a shortage of something 100 of the time the prices go up did you notice toilet paper you know you create a shortage of it you create this this ridiculous urgency to buy people came out of their houses after COVID, and they've been sitting around looking at their own grimy house, and they said, I don't want to live in a grimy house anymore. I'm going to buy another house. And they rushed out of their homes like coming out of the caves like a Baptist after a casserole and went crazy buying houses and drove.

House prices of demand was ridiculous, and we saw one of the highest increases in house prices in a single year almost ever in 2020 and i was 20 percent 29 it went up house price went up shortage more buyers than sellers scarcity it's a supply demand curve they used to teach it in the seventh grade i don't think they teach it anymore apparently they didn't teach it to Jerome. So, but that's what, you know, drove prices up. It was not a white-hot economy. It was a shortage created by a Fauci-induced quarantine where we shut everything down.

You remember when we had to flatten the curve or we were all going to die? Just for two weeks. Did anybody ever come back and go, that was a bunch of bull crap? Just for two weeks. Did anybody ever come back and go, that was a bunch of bull crap? Just for two weeks. Did anybody ever come back and call BS on that? But they never did. But let's just go ahead and remember, we had to flatten the curve or we were all going to die. Right.

And so they shut the factories down. And you remember then when you had to be six feet apart, but then you didn't? Mm-hmm. And you remember then when you had to buy a mask, but you didn't you remember then if you got vaccine you wouldn't get covid but then you got covid anyway you remember all that stuff this all affected the economy because people weren't working and producing goods and services creating a shortage and that shortage drove prices up it's pent-up demand right exactly exactly and so lumber went 3x yeah and on top of that then you reach over here to the biden administration and they say well everybody needs to be driving electric cars

because that's good for the air quality even though we know that fossil fuels actually create the electricity that goes into the car so it's kind of a problem there but anyway we're still going to cut off the fuel spigot and create a shortage on gas so now we got five dollar gas at the pump brought to you by a green policy in the white house okay so inflation at the pump inflation in housing inflation in uh supply chain disruptions that's creating shortages chips and all that stuff. So interest rates being low did not cause this inflation. Shortages caused it. We just established that.

So interest rates being high does not fix this inflation. It seems to exacerbate it. And suffering to you little people because that's what you deserve because you're inflationary people thank you jerome you arrogant no good bureaucrat so i mean seriously if if low interest rates did not heat up the economy and cause this inflation then it is fairly easy to establish that high interest rates are not going to slow down the economy in the way you want it to. The way you slow down the economy is you get the supply chain working again, and you turn the stupid green off at the White House and get the pipeline flowing again. And if they flooded the – then prices would go down because there would be a surplus of lumber and a surplus of bricks and workers.

You know why gas was $2 under Trump? It's not because Trump's a magician because all he did was say drill baby drill yeah that's all he said it's the exact opposite and there's a there's a glut a an oversupply of gasoline well i remember that day there was one day that it was prices went under two dollars it went under two dollars and oil went negative oil went negative i remember went negative but gas at the pump was under two dollars and oil went negative oil went negative oil went negative but gas at the pump was under two dollars yeah does anybody that was 20 minutes ago y'all y'all not remember this and and no trump can't he'll strut around take credit for it but he didn't do it right it was just he let chevron do their job let exxon do their job their job is not woke virtue signaling their job is drill for all. That's their job.

And they're good at their job, by the way. They can produce the crap out of it if you leave them alone. So the way you fix inflation when there are shortages is you help the companies under production not raise interest rates. But these bozos are raising interest rates, and they're going to slow down the economy, but they're going to slow it down in ways they don't want to slow it down, and then it's going to be hard to jumpstart it again. It seems like they're going to slow down the economy but they're going to slow it down in ways they don't want to slow it down and then it's going to be hard to jump start it again it's like they're going to crash they're gonna they're this is gonna it's just no it's

not going to create a crash it's just dumber than crap it's classic keynesian economic socialism and these guys tinkering madmen tinkering with the soundboard and buddy they got the sound all off. And arrogant? You arrogant. They will also bring some pain to households and businesses. That's your Fed talking to you people, America. They need their butts fired. If anybody worked for me and acted like that, I'd fire them. Dr. John Deloney Ramsey, is my co-host. In case you hadn't heard the news, we're in a recession. The stock market's falling.

Inflation's out of control. We're all going to die! Okay, calm down. If you're investing, this is not time to panic. Fear is not your friend. Calm down. Breathe. Breathe.

Facts are your friends. Dr. John Delaney says it all the time. You got to stay level-headed. The only person who gets hurt on a roller coaster if you're investing are those that jump off in the middle of the ride. Ride, ride, ride, ride, ride. Don't jump off in the doom and the gloom. Turn off your television. History shows us that the economy recovers time and time again.

It's happened every time there's been a dip. There's always a, It always comes up. And you may miss the coming up if you jump out at the dip. That's how this works. So if you need help in finding an investing pro, someone who can guide you through all of this, someone who can talk you out of your tree, and we all need those,

check out our Smart Investor program. It's an easy way to find pros who truly serve with excellence. They'll be there to help you figure out what's best for you. Stay focused on your long-term goals and to get connected with up to five SmartVestor pros in your area, go to RamseySolutions.com slash SmartVestor. You can talk with the pros, pick the one you want to work with, and make an investing plan you feel confident with. That's RamseySolutions.com. So we'll just throw in with that particular mention about SmartVestor, John,

that lots of research tracking the actual statistics of the stock market, the people who try to time the market 100% of the time do not get the performance of the people who just get in the market and stay. And so what we then find is that people who buy mutual funds on their own, for instance, I buy some no-load, no-commission mutual funds, and I buy some mutual funds through my SmartVestor Pro, but if you do not have an advisor, if you only buy no-loads, and you are there subject to your own self as your own self telling your own self what to do all the time,

you will have more of a tendency to jump in and jump out and attempt to time the market, usually in fear rather than greed, but sometimes in greed rather than fear. And in neither one of those cases do you end up outperforming the market. So what we also find in the research is, is the people that have a good investment professional who's got a steady hand at the wheel, not some slime ball, but somebody's got a steady hand at the wheel, that talks ball but somebody's got a steady hand the wheel

it talks you off the ledge and talks you out of being greedy and talks you out of being afraid and stick with it be boring be the tortoise don't be the hair be boring be the tortoise don't be the hair and they say that to you a thousand times over 20 years and you never jump in and you never jump out because of that investment professional you make more money that's right not even because of they advised you on some trick stock scheme they just just made you stay in yeah they just talked you into staying in yeah and that's all they did and if that's all they do they're worth their money yep because people that don't have one have a higher tendency to jump out and it's pretty simple you people that you you have one have a higher tendency to jump out. And it's pretty simple.

You stay invested. The number of times I have sold out of the market because of economic situation is precisely zero. And I've been investing for 40 years. Yeah. But once I got that dialed in in my head, I have not broken that. And I've not thrown money into the market when it was down out of greed trying to time it i almost did once yeah in 2008 and i would have been in 2009 i would have been so right i would have caught it right

at the bottom but um but i didn't i just said that's not my policy it's not my principle is just steady principles not try to figure it out, catch it at the bottom, catch it at the top. Principles just keep going. And that works every time. Jeremy's in Jackson, Tennessee. Jeremy, how are you? Doing well. How are you, Mr. Dave?

Better than we deserve, sir. How can we help? So I am trying to get rid of a massive amount of debt uh on a vehicle it's approximately seventy five thousand dollars and i am yes and i am twenty two thousand under uh under trade-in value what kind of car is it i would it is a truck. It is a 2021 Dodge Ram. And it was a false need that my wife and I felt we needed whenever we were getting ready to move. We thought we needed a truck in order to save money on a U-Haul and moving companies. That's incredible.

Now that we're trying to do the baby steps and get a hold of our debt, I understand that this truck needs to be gone. What do you guys make a year? Our net take-home is approximately $105,000. Holy grimoly. our net take home is approximately $105,000. Holy grimoly. You owe $75,000 on a Dodge pickup.

Yes. Okay. And you looked up the trade-in value on Kelly Blue Book? Yes. And you got $50,000. Yes. Did you talk to a dealer not yet no um that's my next step is to go in and talk to a dealer did you trade a negative equity into this thing yes oh okay all right yes it was very uh it was 2021

it wouldn't have gone down 25 000 yet no yet. No. You'd probably make money off of it. No, yeah, it was a very poor decision. Yeah, I mean, that's an understatement. One that obviously should have never happened. That's an understatement, yeah. Yeah, when you trade a $75,000 vehicle for a U-Haul rental, you're really struggling with math on that one, yeah. So, okay. Wow.

Oh, man, I'm so sorry. How old are you? I am 26, as is my wife. Okay. Do you have any money? No, I guess not. No money? No, sir.

No, sir. Okay. Like, none saved yet. Is this a hemi uh yes yeah okay and you are in jackson tennessee okay um so here's what you need to do first is you need to learn a lot about the Dodge Hemi truck market. I don't know a lot about it, but the truck market in general is way up, and it's not as up as far as it was a few months ago, and because of the electric car craze and the threatening of doing away with nice big engines and trucks, uh, stuff like the Hemi, I have an unusually good popularity because those of us that are rednecks that burn gas, we want a big old honking gas engine. And that one is okay. So the good news is you kind of got a cult truck you got a truck that a certain segment of the population thinks is unbelievably cool you follow me so i i want you to poke around and find that

nuanced segment of the population and let's figure that you could get 62 for it. Okay. Which I'm going to guess and say, it might take four or five months of poking around and learning about where to sell it, how to sell it, but that might be full boat retail on the thing. What'd you pay for it?

Actual sticker at the time. Uh, on the thing. What'd you pay for it? Actual sticker at the time. I think it was 68 or 69. And it's a 21, you said, right? Yes, sir. How many miles? It's currently got 8,200. Have you torn it up?

No. Okay. Do not run it through the brush. Treat it like it's a Mercedes, okay? Because you've got to keep it in pristine condition and sell it like new. A like new 21 that was stickered at 68, you might get 62. I might be right. Yeah, you're not going to fall off.

I'm impressed at how good I am at this. So I'm thinking you're going to do that, okay? But you're still $14,000, $15,000 in the hole. at this so i'm thinking you're gonna do that okay but you're still 14 15 000 bucks in the hole you're 26 years old and you're broke so you're still gonna have to go down the credit union and borrow 15 000 bucks and buy a three thousand dollar car or two thousand dollar car for cash right and you're gonna have fifteen thousand dollars that and the fifteen thousand dollars the amount of money you lose on this truck i want you to write it down i want you to take a picture standing beside the truck write it on the back of the picture print the picture out and keep it in your file i used to do this stuff i've done a lot of

stupid things and when i lose money on something i call it stupid tax and my young friend you are about to pay some stupid tax because you were straight up stupid when you did this. And so you want to remember it so you never do it again. You can get out of this and we'll help you. Dr. John Deloney, Ramsey Personality, is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Cameron and Maddie are with us. Hey, guys, how are you? Hey. We're good. How are you, Dave? Welcome, welcome. Where do you all live?

Cincinnati, Ohio. Cool. Welcome to Nashville. Thank you, sir. How much debt have you paid off? So we paid off $227,300 in roughly 30 months. A lot. Well, that's amazing. That's a lot of money.

Well done. And what was your range of income during that two and a half years? So when we started out, it was around $80,000. And wrapping up, it was $220,000. Nice jump. What do you all do for a living? We're nurses. Both of us are nurses. Yeah. so how do you go from 80 to 220

as nurses good question so we're both nurses by trade but i transitioned actually into the medical device industry shortly after my nursing career yeah okay and uh doing very well at that apparently it's going well yeah we did in the in the middle there, we did a travel assignment together. So that really took care of the grand majority of that debt. But yeah, we worked our butts off. Very cool. Very cool. Good for you.

What kind of debt was the 227? So a boatload of student loans. Nursing school. Yes, four degrees worth of student loans, actually. And then two cars. Two cars were paid off. All right. How long have you been married?

Four years now. Four years. Yeah, four years. Just celebrated four years. So, a year and a half into marriage, kind of say, okay, wait a minute. Now we got to do like the adult part of this. What happened? What was the wake-up call?

Yeah. So, in the beginning of marriage, we went through a lot of premarital counseling. And we knew that one of the biggest reasons why people get divorced is money problems. And so we definitely started dabbling in your content. We watched a lot of YouTube, a lot of podcasts, and we had good mentors in our church. We met at church, so we had really good relationships. And I think at some point, you know, in the beginning of our marriage, I was still in school. And so we were living on a very small amount of income at that time. It was just Cameron's income. And so we kind of dabbled in paying off our debt, but we didn't get really serious until about,

you know, eight, nine months in. And then like, once we got into it, it was so overwhelming for us because we had such a big number. And I don't even really think we factored our cars in at that point. We were just looking at the student loans, like how did we rack up almost 200 grand in student loan debt and looking at the interest, we were like, if we don't pay this off now, we're going to pay double what it is. Um, and it really was my husband that led the charge on it. I'm, I'm the spender, he's the saver.ver um but i'm also the risk taker so i think i think we make a good pair yeah so what what caused you to be able to kind of double down and say all right this ramsey process we're going to use it when when did that really kick into gear yeah i

would say um when we first got married i always had that uneasy feeling of, I just felt like when I was going to work, I was like, I just felt like we were paying everything we were receiving. We're like, it's not ours. You know, so I kept reminding us like, you know, we're in all this debt. Let's just keep thinking of the, let's keep the why in mind and keep that the main thing and that feeling of, hey, when we're out of this debt, all the money we're making is ours. We don't have to give it to our lender. We aren't slave to our lender. So I think we just kept the why the main thing. And I think once I started working and we had dual income, we were like, okay, now we can really make this happen

and accelerate our debt-free journey. And I think once we got to a point where we were under a hundred thousand, like we just went crazy. People thought we were insane. Like we were making massive payments every month and saying no to everything. Yeah. It was baby step, baby step, sprint. Just use the momentum. Yeah. Most people don't recognize how challenging it is to be a young married couple or newlyweds figuring this stuff out on top of the additional pressure where your colleagues kind of have a ballpark of what you're making. And why are you driving that?

And why are you bringing your own lunch? How did y'all navigate being married and finding your own identity with other people saying, what are you doing? Yeah, good question. I think we had a really good community of believers who knew the why behind what we were doing. And I think a lot of people really admired it. I think some people that I worked with thought I was crazy, but it was inspiring. Once we could, you know, send out that final photo of us paying off our debt,

I got hundreds of messages of people asking, like, how did you do it? Help me. What do you tell them? What do you tell them how you did it? Oh, I always give credit to you. Oh, thank you. Thank you. I mean, what are the principles to get out of that? So the biggest principle I think that really changed everything for us was knowing where our money was going. I think having a budget and every month tracking everything that

you spend, we use every dollar. And I, I used to get in the beginning of the journey. I really, um, I hated that end of the month meeting where we were looking at every dollar because my husband would be like, all right, what is this? $10 on Amazon? And I'm like, it's $10. Yeah. Yeah. We, we grew a lot, but he would always tell me like, that's not our $10. It's not ours. Oh, man. You know, so I think budgeting was massive for us. And then realizing that, and we watched a lot of your videos and talking to people,

like, we had to have the realization we're broke. Like, we make a decent income, but really we're broke. We have a negative net worth. So we have to live like we're broke. And we did. Yeah. That is kind of a switch that flips that's it but that's an incredible amount of wisdom for somebody to get there right and as nurses you both have those hard conversations or you're in the room when those hard conversations this is the reality that we face and for somebody to get there that's

the magic moment so good for y'all just to look in the mirror and say yeah we make a lot of money it's not ours i love i've never heard that i. Just to look in the mirror and say, yeah, we make a lot of money. It's not ours. I love, I've never heard that. I love that. That's not our money and we're broke and we make 100 grand.

We're broke and here's what we have to do to get out of this. That's incredible. Yeah, and it can be overwhelming at first, you know,

it's just start small. Start getting that momentum. Keep your why in mind. Keep that vision at the end that you can live and give like no one else and just take the momentum and run with it. Yeah, and now we feel so free.

Yeah, we're not the shackles. Yes, we're free. Well, congratulations. Very, very well done. Thank you. All right, when you look back on it, it's 30 months, really, really tough. What was the hardest part of the whole thing? You want to take that first? Yeah yeah we were just talking about that we i think because of the principles we learned it was like we're like

it's honestly because we we it kind of taught us a lot of things about materials and um it kind of taught us like less stuff less stress you know like know, like, uh, for us, it wasn't the material aspect. I think it was just the discipline it took, you know, the rollercoaster of emotions. And I think our marriage, I think we had to learn how to communicate really well with each other and realize we're on the same team. I think a lot of times having different spending habits, we, we argued about how we should spend money and what was significant. About $10 on Amazon. Yeah. No, I'm not kidding about that either. I'm not exaggerating. And, you know, I think at some

point we had to be like, okay, we're on the same team and like, here's the vision. Let's write it down and give glory to God and do this for our future and our family tree. And I think now I look back on the student loan forgiveness program and things like that and it's easy to get bitter and be like we just paid off our debt and we could have used that but I think I would go back and do it all over again because we have the character traits and like the hard one wisdom and you got the calluses so much more valuable and we're different people now like we're different people will you ever borrow money again never absolutely not never again never again very cool well congratulations you guys we're very proud of you excellent job got a copy of baby steps

millionaires for you that's the next chapter in your story for sure and a financial peace university one-year subscription and a total money makeover book. Read all that stuff. Do all that stuff. Give it all away. Whatever you want to do. We're proud of you. We just want to say thanks for coming to Nash Phone and letting us be part of your celebration. Thank you, guys.

You changed our lives. Thank you so much. Cameron and Maddie, Cincinnati, Ohio, $227,000 paid off in 30 months, making $80,000 to $220,000. Knocked it out, baby. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

Yeah! Yeah! Woo-hoo! That's how it's done. This is The Ramsey Show. We'll see you next time. Our scripture of the day, John 10, 10, the thief comes only to steal and kill and destroy. I have come that they may have life and have it to the full. John Eldredge said, don't ask yourself what the world needs.

Ask yourself what makes you come alive, because what the world needs are men who have come alive. Absolutely. Absolutely. Open phones at 888-825-5225. Now, John, we're going to have to get with Rachel and George with their Teslas, their plug-in cars, that are saving the environment. I love them. By using electricity created by fossil fuels. We know this because officials, Peter Hasson just tweeted, officials will ask Californians not to charge electric vehicles if conditions worsen.

There's rolling blackouts and an electricity shortage in California because, of course, fossil fuels there's a shortage of right now because they're evil and they've been cut off, and we're creating a problem with electricity we also have seen electricity nationwide go up 15 percent why is that because there's a shortage of fossil fuels and most electricity is created by fossil fuels so your your emissions free car that's electric by definition is not emissions free it's just creating the emissions somewhere

else well the emissions had to be done to create the fuel that went into your car the electricity that's your car didn't create emissions but lots of emissions were created to create electricity to go into your car so just to help you with this it's something you need to think about that's um this uh i'm saving the planet. Bullcrap. You just moved the end of the tailpipe over to the factory. Instead of the back of your car. That's all.

That's all you did. I didn't know that. This message comes after California regulators moved last week to require all new vehicles in the state to run on electricity by 2035. and now they're going to ask Californians not to charge electric vehicles if conditions worsen. So, kind of a problem. We're going to, it's September 1, we're going to waive some of your student loans, and then September 2nd, we're going to sign up for that new semester. We're going to let you take out some more loans. And then September 2nd, we're going to sign up for that new semester. We're going to let you take out some more loans. Kind of

the same thing. It's a logical government. Here's the thing. When I was a kid, I grew up in Houston and hurricanes would come through and it would knock trees over. And when you wake up in the morning, you go just survey the damage. It was a scary

time right and nobody had any time for all of the complaining and what you just got to move the trees that let's get to the root of this issue so that we can drive down these roads and there's what we have to do and nobody will get to the root of some of these actual issues man and it's just a bunch of people intervening and like you mentioned earlier intervention after intervention and the more interventions man the more a system just falls over on itself yep without dealing with the root man yep instead of letting the natural flow occur on these things jennifer is in Kansas City. Hi, Jennifer. How are you? I'm good. Thank you. Good. How can we help?

I'm 69 years old, and I am single. I am currently renting, and I want to know, based on my age and the current environment, should I continue to rent or should I buy? Okay. Let me ask you a funny question. Yeah. When are you going to die? Because if we know that, we can tell you what to do.

Not today, Jennifer. Later. How's your health? Decent, yes. I'm okay. You said you're 68 or 69, right? I'm getting ready to turn 69. Yeah. And so how long did your parents live?

My dad, 73, and my mom, 92. Okay. You think you're on your mom's track? I would, no. okay uh you think you're on your mom's track i would no well it's hard to tell how's your health your health is good you said right now my health is good yes any reason not to believe that there's no indicators that you're not going to live 10 years today oh no no that'd be 89 no that'd be 79 yeah okay yeah but either way so here's the thing if you're gonna live five years or more you're gonna be better off to own okay and i think you are we don't know obviously can we just speak that we're joking i'm 62 so i'm just a

little bit younger than you but i mean we're joking around about that, you know. Right. But mathematically, the house will go up in value. You're going to stabilize the largest expense in your budget, which is housing. Because guess what rent does every year, no matter what? It goes up. And for 10 years more, it's going to go up. Every year, it's going to go up 10 times. You buy a house now, your house payments are it's going to go up every year for it's going to go up 10 times

you buy a house now your house payments are not ever going to go up how do you approach the amount that you leave in your investments versus the amount that you put down on on a home how much do you have in investments i have 575 is my net worth good good for you and um what what do you pay in rent today what do you live in today uh one bedroom i pay 1250 okay what could you buy something like that for like a one-bedroom condo or a small two-bedroom condo, right? Yeah. I can find a small, like, two-bedroom house or a two-bedroom condo for that. For how much?

I mean, how much total price? Well, it depends on if there's a homeowners association fee or not. I'm just saying the price. What would the sales price be, the purchase price be? $250. Sounds high. Okay. Okay. If I could get you into something for $150, $175, I'm probably doing it in cash,

write a check in cash and be done with it. If I can get you in there for $200, maybe even $250, that's starting to be half of your nest egg i'm starting a little scared then okay you see how i'm doing that yeah but i want you to pay cash for it i don't want any payments oh okay so let's pretend okay let's let's walk this through let's say you bought a property for 200 000 you000. You said you had $575,000. That would be $375,000, correct? Correct. All right.

And if it's invested in good growth stock mutual funds, and if it averages 10%, it will double every seven years. So you're 68. At 75, the $375,000 will be $800,000 almost, right? You're just under $, $800,000. Okay. Or about $750,000, whatever. And so if it's, we'll call it, let's call it $700,000.

We'll just call it conservative. Seven more years at 82, you'd have 1.4 million. If you're not living out of it. Are you living on pension and social security and not touching the retirement right now no i have to take money out of retirement how much do you take out how much do you take out um currently i'm taking out about um three thousand um so thirty six thirty six thousand dollars a year yeah okay and it's it's how much but your rent is 1250 correct yeah you wouldn't have that anymore

right okay okay so uh my point is you're going to use some of this money but the money will double roughly every seven years that you leave in there okay and so if we do this at and we just said you're gonna have seven hundred thousand dollars cash a two hundred thousand dollar house it's gone up a bunch in seven years and you have no payments all in the meantime we've stabilized your most expensive your most expensive part of your life which is housing we cut we got rid of the cost and we stabilized it now your insurance and taxes and HOA fees will probably change, but they're minor compared to rent or payments. So I would have a budget around $200,000, and I'd start looking.

There's no rush. Nothing's on fire. Take your time. Go get a bargain on something. Do a little work to it if you want to or something like that. But find you a deal at $200,000 that's a nice condo or a small home, and that's what I would do. I'd pay cash for it.

And you've done a really good job, by the way. Yeah, congratulations. Yeah, by the time you're 75, you're going to be a millionaire. That's pretty interesting to think about. Good work. Good work, John. Thanks for hanging out with me today. You bet.

Thank you. That puts us out of the Ramsey Show and the books. 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, it's John Deloney, co-host of The Ramsey Show. Did you know over 18 million people listen to The Ramsey Show every week? A lot of those people listen on one of our 600-plus radio stations across the country.

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