The Ramsey Show - App - What You Believe Informs the Way You Handle Money (Hour 2)

Episode Date: September 30, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Chris Hogan, Ramsey personality number one, best bestselling author, is my co-host this hour. Open phones at 888-825-5225. We're going to talk about your life and your money. And it turns out, Chris, that those two things are interwoven.

Oh, Dave, I'm going to tell you, you know, my boys used to play with Legos. And I've stepped on a couple of those things in the middle of the night, went down like I was shot. But the point is, is that those pieces fit together. Better than a burglar alarm. It is better. Spread them in front of the front door. But they fit connected, and you're right. This life and money stuff, it's going to go together, and you can't pry them apart.

Yeah, and this idea that, you know, we Americans, with the way we have learned kind of a Greek methodology of thought, of critical thinking, we'd like to compartmentalize things. Like some things are on Sunday, like church, and then people do weird, wacky stuff that ain't getting to do with church on Monday. And, you know, they compartmentalize different parts of it. Well, that has nothing to do with that. Well, it has everything to do with that because it's all part of the mosaic. It's all part of the picture, and these things all work together. Your dreams, your fears, your goals, your why, your family tree, your upbringing, your jobs, your careers, your character or lack thereof,

all of these things end up being woven together. And we've seen over the decades of doing this all the data points that ensure that, that show that that's true. So we're here to help you with your life and your money. Tiffany is with us in New York. Hi, Tiffany, how are you? Hi, thank you so much for taking my call. Sure, what's up? So i've been dating a guy for

about three months and last night we're hanging out and he dropped that he plans on spending about 525 dollars on a psychic um i immediately felt uncomfortable. I told him that I thought it was a silly idea. We kind of talked through it a bit as to why he felt like this person, what this person could do for him. But things have been going well up until this point. But definitely, I think I've been doing the baby steps for almost two years i started with seventy thousand dollars of debt i'm down to about twelve thousand so i'm on

the tail end of my journey and so uh hearing that definitely you know perked my ears and made me nervous so i guess i'm wondering like what is it that makes you nervous the 525 dollars or the psychic? Both. I mean, and also just... Now, when you put the two things together, it gets, like, really nervous. Is that what you're saying? Exactly. Thinking that he could be irresponsible with money

and thinking about, you know, future casting. I think I had a flash forward to five years from now. I thought, oh, my gosh, like, if I marry this guy, is he going to... Tiffany, how long have you dated this guy? She said three months. Yeah, three months. Well, she started off with long term and then

said three months. Well, that's cool. Okay, so how can we help? I guess my... I've kind of been hit with this a lot in the early dating. You know, I'm a single woman in New York City, and I guess I wonder what are the filters in terms of money?

Because I found myself thinking, oh, are we not financially compatible? Well, I mean, there's two issues. Yeah, there's two issues. Number one, having talked with a lot of the single ladies that work on our team here, and, you know, I get to hear some very interesting conversations over here, some very interesting conversations. In Tennessee, we call it slim pickings. There's not a lot of good ones out there to pick from, right?

And this guy has kind of proven this theory to be true. So, you know, the $525, if he were spending it on something else, doesn't necessarily scare me. But you called me and Chris, and we're people of faith, and so we think psychics are funny. I am also a person of faith, and I think psychics are funny. We're not a respecter of that methodology. Yeah, that's a lot of money to spend on voodoo. So, yeah. Have you talked to him about your financial goals? Has he told you what his are?

I'm not super clear on what his are, but, I mean, you know how it is when you get into this journey. You can't help but talk about it all the time. So he knows my goals how old are you guys i'm 29 okay all right i i've got a uh my daughters are slightly older than you my son's about your age um the only way i know how to answer this is papa dave and it has nothing to do with financial really it's the your values are not aligned. You believe different things. And that's more important than the $525. The $525 is an exceptional amount of money to spend on something where your values aren't aligned. And so it really caused you to go, dee-dee-dee-dee-dee-dee.

But, you know, if you were one of my kids and we were having a cup of coffee, I would just go, this guy's not the one. And the reason is that if you can't agree on spiritual things, if you can't agree on money, you can't agree on kids, and you can't agree on in-laws, those are the four things that break everybody up later on. And as you said, I fast-forward, and now he's spending $5,000 with the psychic because she's now our marriage counselor.

Mm-hmm. And that's what you're fast-forwarding yourself into i'm just that's just papa dave saying you don't have the same set of values now if you both were into psychics i guess you could go forward but the fact that one of you is not into that then that's going to be a deal breaker you you got to be aligned on the important things, and religion is one of them. Yeah. Tiffany, run. Don't stroll away. I want you to treat this like debt and run. Yeah. Yeah.

Okay. Yeah. You're going to be okay, honey. Just as you meet the next one. Here's the thing. Find out crazy early and then avoid it. Here's what's interesting, okay? You put your money towards what's important to you.

Yeah. And so if you put a lot of money towards something it says it's very important to you so this guy's not like a recreational psychic guy he's in deep recreational psychic is a 50 drive-by for kicks at some fair or something right or a 25 let's see what the palm reader says ha ha ha that's like a recreational gambler. But this guy dropped $525 on a blackjack table, and you don't believe in gambling. That's what got your attention. There was enough money that it's like, whoa! And so there is a one-two punch here. That's a really good conversation.

She said that dollar amount, my wallet twitched in my pocket. Yeah, well, that's because your wallet's pretty tight. You just hushed her out. You're just tight. You're a tight one. But that's, I mean. You're a friendly tight one. You have to look at that and you say, that is a red flag, right?

Again, what we're talking about coming in to the opening of the show today is that your values, there is an integrated thing here. And so sometimes people say, well, Dave, I'll take Dave Ramsey, but without the religion. Well, then it wouldn't be Dave Ramsey, because I truly believe that what you believe causes you to handle money a certain way. And so as a person of faith, when I believe that the borrower is truly slave to the lender, then that causes a separate set of actions, reactions, and attitudes. Yes.

And to the extent I'm not aligned with someone on that, then I can't be in a deal with them. That's right. No, no. Chris Hogan is my co-host today. This is The Dave Ramsey Show. folks i love telling you about well-made well-thought-out products today i'm talking about grip six belts i don't know about you but I'm not a fan of traditional belts. They never fit right, and they're uncomfortable. Grip 6 belts are unique. Owner BJ designed a truly modern, minimalist belt made of high-quality materials with no holes, no flap, and no bulk. And the

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That's GRI blinds.com a 100 satisfaction guarantee means you mess up and they will still replace your blinds for free if you pick the wrong color you mismeasure they'll replace them for you get free samples free shipping new promos all the time it's a great company blinds.com. Use the promo code Ramsey to get the best possible deal. Chris, our question for the day. Sure. Dave, today's question comes from Chris in Nebraska.

He visits DaveRamsey.com, and he asks this. I have a mutual fund account with $11,000 in it that is not a retirement account. My wife has a retirement account through her job as a teacher, but I don't have one at all. I'm wondering if we should cash out the $11,000 in the investment account to put towards our baby step two. Ah, Mr. Ramsey. I would tell Chris this is designated as non-retirement. He absolutely could cash that out to use it to attack debt and continue to stay focused and work in his baby steps. And then once he gets out of debt, build up that

emergency fund and then start investing. Yeah, exactly. Chris, what we've discovered is that the shortest distance between you and wealth is to get control of your largest wealth building tool, which is not your $11,000 mutual fund. It is your income. That's right. And when your income is all going out the door to other people, here's a mathematical fact for you. You don't have the money anymore.

It all went out the door to other people. And so as soon as you can get clear of debt, that is the shortest distance between you and wealth and uh shorter than investing heavily in mutual funds and the mutual funds get you out of debt that doesn't happen the number of times we found that in our millionaire study was almost zero yeah the number of times we found someone said i'm going to borrow on my house put the money in mutual funds or i'm not going to pay off my house i'm going to put the money in mutual funds, or I'm not going to pay off my house, I'm going to put the money in mutual funds in order to build wealth and stay in debt. The number of times we found that in the millionaire study was almost zero.

Yeah, it's just, it's about math, Chris, but it's also about being intentional. And so, buddy, definitely take care of that, liquidate that, get on that debt. But again, have that mindset, getting control of your money. And I want you to hop over into Ramsey Plus. We'll tell you about that here in a little bit. But it's a great opportunity for you to have community as well as tools and tracking. Well, you're right, Chris. A lot of people are saying never again after coming out of COVID or sitting in the middle of COVID or having watched other people go through COVID.

Never again am I going to be broke. Never again am I going to be broke. Never again am I going to be in debt. Never again am I going to be in a situation where I don't have any savings to take care of my family. I've been there. It is a scary butt place to be, and you don't want to be there. And if you've been there, you know what I'm talking about. And we have the right plan, the right tools, and the right teaching

to where you never again have to be here. Ramsey Plus gives you all of that. It's our brand-new all-access membership, and you can try it for free, a free trial, starting today. Here's how it works. You learn all the proven money plan with our best-selling content, including all of Financial Peace University. You budget, taking control of your money, with every dollar. It syncs up with your bank, syncs up with your spouse. The budget finally will work.

And then, as you're budgeting and you're working the principles, you're going to track your progress with the new Baby Steps app. All of that is in Ramsey Plus, and all of it is available on a free trial. So you can start this and do the next right thing for your money. It is your choice to start a free trial of Ramsey Plus today. Text TRIAL to 33-789. That's TRIAL to 33-789. Jake is with us in Eau Claire, Wisconsin. Hi, Jake. How are you? That's trial to 33-789.

Jake is with us in Eau Claire, Wisconsin. Hi, Jake. How are you? Good, Dave. Thanks for having me. Sure. What's up? Hey, we just discovered your program recently, and my wife and I have differencing opinions on Baby Steps.

We're on Baby Step 2. When we bought our new house, we kept our old one, and we decided to rent it out and we've been renting it out for now for about four years. And we owe about a hundred thousand on our primary residence. We owe about 40,000 on our rental unit. And I would like to sell it and be free and clear. Um, but we've said we've had pretty good luck renting it for the last four years.

So you have a hundred thousand dollars, uh, more or more inequity on the rental? Uh, no. Okay. What's the rental worth? It's worth about $110,000. Okay. So you get $70,000 out of it minus some expenses, so maybe $60,000, and you would apply that towards your $100,000 mortgage? Correct. We also have $50,000 saved in our bank account. And that would make you 100% debt-free house and cars and everything? Correct. We have no other debts other than the two mortgages. Okay. Jake, do you have an emergency fund? Well, I guess that $50,000 was part of the emergency fund.

So probably $20,000 emergency fund and then $30,000 savings. Yeah, you pay off the house and still be sitting there with a pretty decent-sized emergency fund. So here's the way that the two of you can discuss it and talk it through. What's your household income? About $110,000 a year. Okay. So you can kind of map it out one way and say, all right, we're going to keep the mortgage, and we're going to keep the rental,

and we're going to get the $50,000 down to, in either case, we're going to get the $50,000 down to an emergency fund and use it in the baby steps. Okay? So we're going to pay down on the mortgage or pay down on the rental, one of the two. Okay? Okay. And then you map that out and say with $110,000, how fast can we pay off $140,000 minus $30,000 of the $50,000? So $110,000.

Making $110,000, how fast can I pay off $110,000 and have both properties free and clear? And am I willing to be on beans and rice to pull that off for that period of time? So let's call that four years. Okay? I'm making up a number, but y'all look at it. Yeah, I'd say about five, but four is probably good. Yeah, somewhere in that range. All right.

And so, or we can be debt-free in a month, and we would use all of those payments we don't have anymore in order to build wealth. Now, a good way to look at that part of the discussion would be to say let's pretend our house was paid for and we didn't have our home was paid for and we didn't have a rental would we take out a 100 000 mortgage on our home to buy a rental on our paid for probably not it's the same discussion isn't't it? Yeah. I'm just reverse engineering it, but it makes you feel it with your heart, not just your head. And you might pose that question to your wife and just say, if our house was paid for and we didn't have a rental,

since you like the rental, would you borrow on our house our paid for home in order to buy a rental? Because effectively, that's what we're doing if we keep the rental right and she wants to keep it right jake yeah the reason the reason she's given me is because she didn't get much for her retirement and past employers and she wants to keep it long term as a potential you know retirement plan yeah um but now it's like we're putting 15 to our retirement worth she's 33 i'm 30. In my mind, we still have time to... You're going to be a multimillionaire. Plenty of time. Either answer to this question, you're going to be multimillionaires if you'll stay on task.

So she's okay on that. But the question is, really what the whole thing boils down to is, as you talk this through, what do the two of you come to believe is the shortest path that's right to wealth the paid for house and no rental and then save up like crazy buy another rental with cash and continue to invest which is what i have done or uh we're going to take five years and clean up these two mortgages and then we're going to go do that with two with a paid for rental paid for house and an income we're going to go do that with a paid-for rental, a paid-for house, and an income. We're going to go use all of that cash flow to buy more rentals

and build up wealth. Agreed? So which of those gets you there the fastest and with the least risk and with the most peace? For me, and I love real estate. I've got a bunch of it. But for me, I'm selling that rental in about 30 seconds. Yeah. Yeah, me too, and'm selling that rental in about 30 seconds. Yeah.

Yeah, me too. And that's where I feel like the risk. The big thing for me is risk and going that path where we sell that apartment and become free and clear and save up for the next one to me makes sense. But I hope that I can convince her of that. Well, just play this back. She's not wrong in her having those feelings. Right.

But the question is just, you know, ultimately you have the same goal, and the same goal is her retirement statement is the goal, is Bill Wealth, right? That's the goal. So the only argument is not what the goal is. The only argument is which is the fastest. That's right. Which path do you take? Most efficient.

Go to the short one, Jake, from State Farm. Oh, no. No, Jake's a good guy. No, I know. I'm just playing. It slipped. This is the Dave Ramsey Show, Ramsey personality, Chris Hogan. In the lobby of Ramsey Solutions on the debt-free stage.

Jeremy and Jean are with us. Hi, guys. How are you? Doing great, Dave. Doing wonderful. Good, good. Welcome. Where do you guys live? We live in Iowa. Oh, cool. And all the way to Nashville to do a debt-free scream. Yes, sir. I love it. How much have you paid off?

We paid off $131,000 in four years. Good for you. Great. And what was your range of income during that time? We started at about $100,000 and finished at $110,000. Good. Cool. What do you guys do for a living? I'm a pharmacist.

And I'm a technical writer. Oh, great. Very good. Great careers. Good for you guys. What kind of debt was the $131,000? What did you people buy? Her student loans.

Ah, pharmacy. Pharmacy degree. Yeah. All student loans, 100% of it. $96,000 was student loans, and about $35,000 was personal loans. Okay. Cars or just? Just personal debt.

Just odds and ends. We paid off a little more than we can chew when we built our house. Ah, okay. That makes sense. All right. So how long have you guys been married? We've been married for 12 years. Okay, cool. What happened four years ago that got this whole thing started?

Well, it started about four and a half years ago. We had just finished building our house. We were settled in, and we were just coasting. Thought everything was doing just fine. I got this pressure, like this stress and constant wait. I falsely assumed it was because my house wasn't clean enough. And so I thought, oh, let's get a cleaning lady. So we're trying to find in the budget where we could get, you know, just $80 a month for a cleaning lady. And we couldn't find it. We just started noticing every month we were spending more than we were bringing in every month.

And we're like, this is not okay. We're not okay. We're not in Congress. No, this is not. So we met with a new financial advisor and I was really stressed out having him work on that budget and help me find that $80. And he's like, you know, budgeting's not my strong point, but I know a guy. And he wrote down your name and the total money makeover said, get this book, read it. Wow. Ask me if you have questions. We got the book, kind of grudgingly going, okay, it's just going to be fixed expenses, variable expenses, okay, budgeting, yay. But when we got reading the book and I read the first success story, I had my never again

moment. Wow. I read that. I wanted to be on the stage right here, having that peace and not feeling the stress. It wasn't from my house being not clean. It was from the money stress and us not being on the same page and not feeling like we're in control. Wow. That's powerful. We jumped in with both feet and here we are. Very cool. Okay. So you, you, you immediately adopted the book. And so Jeremy, were you,

were you right in there? I was kind of on the fence with it to start off with. I was like, okay, you're kind of a systems guy when you do, right? So you had to be suspect of the system. I would have been, well, you go into it and like, okay, what's, what's the catch? Yeah. Yeah. That's the catch. My cynical. And so she, she got the book. She started reading it. And she's like, oh, Jeremy, I love this book. You've got to read it. I'm like, okay, fine. Okay, fine.

So she was maybe a third of the way through the book. And I said, I'll just pick it up and start reading it. Read through the book that night. Crawled into bed at 3 o'clock in the morning and she was just, what were you doing? Wait, you finished the book, didn't you? Yes, yes, you finished the book. I have to clean my plate. Well done.

You finished the book, and what's your mindset, Jerry? My mindset went from, yeah, right, to this makes sense. It's just, this isn't rocket science but nobody talks about this kind of stuff exactly and going going through it like build up an emergency fund you know pay off your your debt snowball and he's like well yeah that makes sense you know the next

baby said well yeah that makes sense Okay. And just got through it. And like, okay, we're on. Let's, let's do it. Let's go. That's fantastic. Jean, what was the biggest sacrifice for you throughout this? Biggest sacrifice? Um, we had to say no to a couple things and, um, you know, I refused to buy a purse or new socks during this whole thing. So is this just for you or the whole family? Just me. They keep growing over there. They need socks here in Iowa.

Going to have to have those. That's awesome. That's very cool. Very cool. Now that you've done it, if you were sitting down with someone that was like you were right before you started reading the Total Money Makeover, they're scared, but they're a little bit cynical, which is most of us. I mean, we've all kind of been there. And they say, okay, right, but how'd you do it?

What's the real key? What would you tell them the two or three things you have to do if you're going to get out of debt? Because you're a success. You paid off $131,000 in four years. Touchdown, baby. They're talking to somebody who did it, okay? And you can answer the question. What would you tell them? They're listening right now, by the way. What would you tell them? What do you got to do to get out of debt? My biggest thing is contentment. Rachel Cruz talks about it all the time, but being content. Look around us. We are in this wonderful country. We all have so much stuff in our house.

Use what you have. Wear out all your old socks. Be happy. Be content. Find those things that make you happy. It's not your stuff. It's the people that you spend your time with. I think for me, it's just with the eye at the goal line, thinking know, thinking, that's my money.

But it doesn't belong to me right now. And I want that to be my money. I want it back. I want that money back. I want my money back. It's like if you get bad service, I want my money back. That's good. Very good.

Well done, you guys. And you brought the kiddos with you. What ages and names are they? Bring them over. Let's get them in the shot. We have. Well done, you guys. And you brought the kiddos with you. What ages and names are they? Bring them over. Let's get them in the shot. We have Rowan, who is 10. Come on over. Miles is 2.

He's working on coming up. All right. We have Aubrey. She is 8. And we have Cora, who is 6. All right. All right. The gang is here.

That's right. And how much did they understand what was going on? It really sunk home when we read um smart money smart kids and they each have a chore chart and work on commission and they have their own savings envelopes and savings goals and so now they know what mom and dad were doing yes yeah with the no socks no purses thing yeah okay very cool very proud of you guys well done very well done we've got a copy of chris's book for you everyday millionaires that is the next chapter in your story for sure so uh excellent excellent job all right it's jeremy and gene rowan aubrey cora and miles from cedar rapids iowa 131 000 paid off in four years, making $100,000 to $116,000.

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! That is a family that has changed right there. Yes, it is. Wow. That's Yes, it is. Wow. That's really, really cool.

I love that mindset. That's my money, and I want it back. I want my money back. I want it back. I want my money back. Yes. We ought to tell Washington, D.C. that. You guys suck. I want my money back.

Right now. I want my money back. Yes. You suck. I'm not going to give you money anymore because you suck. I want my money back. Right now. I want my money back. Yes. You suck. I'm not going to give you money more because you suck. I want my money back. That's great, you guys. You know what occurs to me when I'm looking at that beautiful family

and their whole thing that they got the kids involved. That family tree has completely changed. And so many families, sadly, too many families in America, have taught their kids that they're victims. Right in America have taught their kids that they're victims. Right. And they taught their kids that they're not victims. Not only mom and dad not a victim, but they told the kids, you're not a victim.

Yeah. No, they sure have, Dave. And I'm going to tell you that passing along that mentality of the victim mentality is a shame. It's a detriment. And what you're doing is perpetuating a cycle instead of breaking in and so you do have to think differently you got to you got to make some decisions for yourself and uh hopefully we can get more people believing in what is possible not what's happened yeah right

that's the key yeah i mean there's evil out there oh yes evil's out there but you got you know those kids have been taught by watching their mom and dad for the past four years with four kids scratching and clawing. I mean, that wasn't an easy trick. No. That's not an easy trip right there. They made some sacrifices. They watched them, and then they'll remember the time we went to that weird ball guy's place

and stood on stage and screamed, we're debt free. And I'm talking about you. No. Go to commercial break. Wow. This is the Dave Ramsey Show. As your insurance company ever bumped your car insurance rate for no freaking reason, this is so maddening, especially when you're giving it all you can to get out of debt, and then they bump it.

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So don't put it off. Say never again. Go to DaveRamsey.com slash ELP. Click on insurance. DaveRamsey.com slash ELP and save 700 bucks. That's a really smart idea. Mike is with us. Mike's in Los Angeles.

Hey, Mike, welcome to the Dave Ramsey Show. Well, thank you very much. My wife and I are getting ready to retire. Thank you, Dave and Chris, for taking my call. Sure. And we're thinking about retiring, and we have quite a few properties, and we were wondering if we should liquidate some of them. Why? That's kind of our dilemma here.

Why? Well, all of our kids are out of town. They left the area. And we were thinking about maybe moving sooner than later. Okay. You know, and it's our concern to have property all over here in california and they live in memphis and chicago and stuff okay so where are you thinking about moving to well we were thinking somewhere out there memphis or somewhere like that

how much real estate do you own uh well we own 10 properties. Okay. What's it worth? Well, our net worth is probably $3.8 million. Good for you. Very well done. How much of this did you inherit? About $200,000. And how long ago did you inherit that? Oh, five years ago. So you were already worth over a million.

Oh, yeah. We've been very frugal. So you did not become millionaires because of inherited money. I just want to say that out loud because there's a lot of stupid people in America that believe otherwise. So I just want to make sure I get that out there. He was being very intentional, Mike, with that line of questioning. So, Mike, anyway, the answer to your situation is the properties are worth $3 million? Yeah, the properties are worth $3 million? Yeah, the properties are worth $3 million, and then we have $800,000.

What type of real estate is this? Are they residential? We have two triplexes that are worth approximately $600,000 each, and then we have individual homes. So they're all residential okay all residential okay and mike you sound like mike you sound like you are a lover of real estate well yeah i we always love to hold it yeah so if you my guess is you've got substantial equity and you would have substantial capital gains if you start liquidating this.

That's what we're worried about. Yeah. You know, what I might do is I might do a series of 1031 tax-deferred exchanges. And so it would sound like this. I would figure out where I want to live and I would move there. And after I'd lived there a couple of years, I would begin to liquidate these properties one or two at a time with a 1031. Now, the way a 1031 works is you sell it, and it goes into, you have to use a special title company that is IRS approved to do a 1031 tax-deferred exchange. And you sell it into escrow, and then you have to use that escrow to purchase other property of like kind within a set

time usually it's six months that you have to identify and close on it and so you know you could sell off um you know a million a year for three years or half million a year for six years or something like that out of the out. And whichever property is giving you the most hassle would be the one I would get rid of first. The ones that kind of run on their own and that are more stable tenant base and that kind of thing are the ones I would get rid of last. But over a period of the next decade after I made the move, I would not have long distance landlording.

But I would not panic and do it all at once in one fell swoop. And you can do any of them in 1031s as long as you repurchase greater or equal value out of that escrow account within the set time. You have zero taxes. You've rolled your capital gains into the next deal. And, Mike, you need to find another hobby because real estate has been your hobby. It's a good one. Why isn't there another one? Well, he's got to slow down, Dave.

I mean, he's got to move. And I would suggest you rent out an Airbnb in each of the three cities where you have kids until you figure out which kid you like the most. So you don't buy. He already knows. He said Memphis, though. He did say it. But, I mean, you guys have been very intentional as a couple with this real estate.

Congratulations. Yeah. Congratulations. Very, very well done. Yeah, we've been dedicated to, you know, trying to build some wealth. And you have, yeah. Yeah, we're really proud of that. But now we're in a dilemma where we're both 67 and we're sitting here and the kids all moved and they're not coming back.

Yeah. And we don't want to leave them a whole bunch of stuff in California. Yeah, that makes sense. And, you know, you can liquidate some of it and just move it to mutual funds if you want to, but you're going to have that 15% capital gain rate. Right. Unless your household income is over 400, and then you're going to have a 20% capital gain rate. And that's not over what you paid for it.

That's over your adjusted basis, and you've depreciated these properties down. You've held them a while. That's the problem. So the whole freaking thing just about is going to be gain is what it amounts to. So, you know, we're talking about $150,000, $500,000 in capital gains here if you liquidate the whole portfolio, and I'm not going to recommend that. No. I would do 1031s if I were in your shoes and roll.

Move the properties over near the kids, meaning buy rental properties over there in the area where you're going to be living around the kids so that they can inherit them and carry them forward. And they'll get a stepped-up basis when they inherit it, too. So it's a very good thing. Don't involve them in the ownership until death because you're going to be in a great position to do that and they'll have no taxes on the gain. If you roll it to a 1031 and then you die, whatever it's worth at the time you die,

the value at the time you die, which is all of that equity in there, all of that gain in there is all going to be the new basis for them, their tax basis. So it's called a stepped-up basis from what you paid for it and have depreciated it down to versus what the actual value is. Massive savings. Yeah, it's a half-million-dollar savings. Yeah, massive amount. But I think, Dave, too, I was talking really from Mike, giving them permission to be able to enjoy and do some stuff. Yeah, I might sell some of it and just spend some of it.

Yeah. Just go take a trip. Go to, well, I mean. And give some of it. Can't go nowhere right now. Can't go anywhere. Go to the store. Where are you going to go?

To the store. To the store. You can go there. You get looked at mean. People look at you mean. But they look at you mean all the time. No, they like me. They look at you mean when you come in.

I know they do. I'm not going to let you put that on me. I just did. Hit the button, Ramsey. Come on, let's go. You look at you mean when you come in. I know they do. I'm not going to let you put that on me. I just did. Hit the button, Ramsey. Come on, let's go. You've got to talk to people. So we're overdue, James, for an Everyday Millionaire theme hour, I think. Yes.

Hogan and I used to do these. We do them pretty frequently, but the scheduling, COVID, and other stuff have preempted them, but we're about due to hit another one. Do you know when it's on the schedule off the top of your head? I don't. So the everyday millionaire theme hour is when we have nothing but people call in that have net worths of over a million dollars. And what we discovered by doing that theme hour was that most of them did not inherit their money.

And, you know, there's all this crap out there in politics. You inherited wealth, and it's absolute morons because you just don't know what you're talking about. Statistically, you're just wrong. You can't be wealthy without inheriting it because you want to be a victim. So suck your thumb, okay? But that's the deal. They're not.

And so we ended up doing these Millionaire Theme Hours, and then from that was born Everyday Millionaire Theme Hours, and from that was born the largest study. We ended up doing a formal, in-depth research study that's airtight, the largest study of millionaires ever done in America. Yeah. And over 10,168 of them, if I recall correctly, that we interviewed. That's right.

Actually, you've got the little book. I've got the study here. The quick read. Yeah, the quick read. If you're having trouble sleeping, you and actually you got the little book. I got the study here. The quick read. Yeah, the quick read. If you're having trouble sleeping, you can get a copy of the study. Okay. You know what? I said the next time you said that, I was going to stop that.

No. This is enthralling. Have you read it? Yes. Did you make it through without napping? Yes. You lied. Seven cups of coffee.

I just saw you lie. Seven cups of coffee. I got through it. But listen. If you nerds want the details of the study, we sell you a little thing called the National Study of Millionaires for nine bucks. If you want the real book, it's the Everyday Millionaire book that Hogan wrote, which is actually a good book. It's entertaining, and it's a number one bestseller. But if you want the nerd stuff, you can get the other one, too.

Both of them got Chris's beautiful face on them. So either way, you've got something to keep the bugs out of your house. That's it. Clean it house. That's it. Clean it up. That's right. This is the Dave Ramsey Show. This is James Childs, producer of 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.