The Ramsey Show - App - Where Is All Your Dadgum Money Going? (Hour 2)

Episode Date: April 12, 2019

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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. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Courtney starts off this hour in St. Louis.

Hi, Courtney. Welcome to the Dave Ramsey Show. Hi, Dave. It's such an honor to speak with you today. I just want to thank you for all of the great work you do. Thank you. Thank you very much. How can I help? Yeah, so I'm calling about a cash value whole life policy that I have, and I'm very familiar with your work and your stance on whole life policies. But when my husband and I purchased our term life insurance, the agent we

bought it from even told us to hold on to this policy. So I'm thinking it may be different than what you typically hear, but it's a policy my parents opened up for me when I was just days old. And so the premium is like just under $7 a month. The death benefits are $15,000. There's a cash value of $950,000 and then it accumulates dividends. Is it worth holding on to or should I just get rid of it? Never keep cash value life insurance. It is never a good deal. There is no such thing as a good deal in term, and I keep saying term,

in whole life life insurance. And if the agent that you bought your term life from told you that it was a good deal, that means you probably paid too much for your term life so go to zanderinsurance.com and shop your term life insurance rates i think you're paying too much for that too well when we compared um on zander to the rates he gave us they were you know a dollar a dollar or two um apart Oh, you've already done that. Okay. Well, yeah, yeah. On the same exact length of time and everything?

Yes. Okay. All right, good. Well, that's good news. Okay. No, I would not keep a whole life policy of any kind ever. And the reason is very simple. The rates of return are horrid.

You're not making a good rate of return. It's not. Usually it's a 1% to 2% rate of return on therid you're not making a good rate of return it's not usually it's a one to two percent rate of return on the actual cash value the actual premium dollars you're spending on that even though it was purchased when you were a child um or you know seven dollars a month with what you paid for your term you would have bought more than fifteen thousand dollars worth of term now additional term if you'd upped your spend by $7 a month today, even in that case. So it's just not a bargain.

There's nowhere in there that it's a good deal. John is with us in San Antonio, Texas. Hey, John, how are you? Good afternoon, Dave. Thank you for the call. Sure. How can I help? Long-term care insurance.

I heard and read you say that it's a good option. Sure. How can I help? Long-term care insurance. I've heard and read you say that it's a good option for coverage and care during your years when you need it. Exactly. But I currently have one that I took out back 10 years ago. My wife is still with me. Excuse me. How old are you? I'm 71. Okay.

Widowed. No children. No family. Retired military. Drawing Social Security. And I'm still a monthly working part-time. The current premiums are $348 a quarter. The 1st of June, they're going up to $5.22 per quarter.

And in two years, they will raise again by another 33%. And how much does it cover? Good question. Let me find that page for you. Maximum benefit is $216,000. Okay. And so it covers about three or four or five years' worth? Is that what the idea is?

Have they got an annual amount? Maximum amount is $4,500 a month okay 50,000 a year for five for four years yeah okay yeah yeah and um that's usually that's a pretty standard policy um well the statistics tell us that 70 percent of people over 65 will spend some time in a nursing home or need in-home care. They'll need long-term care. That's a 7 out of 10 chance of that happening. You'll be spending $2,000 a year for up to a $200,000 benefit that has a 70% probability of occurring. That's a good deal. Okay'm gonna do it okay and when it goes up 33 later i guess we can look at it if you want to at

that point but obviously the older you are the more likely you are to spend time in a nursing home or need in-home care. It's like life insurance. I mean, a statistical fact, right? And so that makes sense. And so you're single, no kids, and what's your net worth? Right now in the 401 and the IRAs, just about 80, between 80 and 85. Okay. All right.

So you would burn that up in a year and a half, give or take, if you were to go into a nursing home without this care. And you'd be in a Medicaid situation, a government-provided nursing home, which is welfare, and you will notice a difference in care. So if I'm in your shoes, I'm buying this. Okay. Yeah, I think it's a good buy. Okay. Thank you for your call, I'm buying this. Okay. Yeah, I think it's a good buy. Okay.

Thank you for your call, sir. I appreciate you joining us. Open phones at 888-825-5225. Here's some interesting stats. I've got a little cheat sheet on long-term care insurance. Because I don't have it all memorized, then I forget it. Seventy percent of people over 65 will require some type of long-term care. In 1985, there were 100 companies selling long-term care.

Today, there's 13. The average premium is $2,500 a year. The average time spent in a nursing home, 7 out of 10 go over 65. Under 60, almost no one goes it's less than one percent so that's why we tell you not to buy long-term care insurance until you're 60 but it is it's almost essential when you're over 60 average time spent in a nursing home is 2.4 years the percentage that stay longer than three years is 24 one in four people stay longer than three years. And most of the coverage links are three, four or five years, something like that.

They have a rider and they have somewhere between a three thousand five thousand dollar benefit. Very similar to what he just had. And 70 percent of the claims are for in-home care. Make sure you get in-home care if you're going to buy long term care insurance because you would rather be be at home it's cheaper to take care of you at home it's a better quality of life um everything's better so um that's the deal 51 of the claims are for cognitive reasons the average age of someone filing a claim is 79. Now, here's what normally happens. 75% of you ladies outlive your husbands. So for a married couple that's 62 years old or your mom and dad are, listen to me right now. 75% of you ladies, your husband's going to die first.

Seven out of ten, three out of four times. He's going to go into the nursing home, run up a $300,000 bill, eat up your nest egg, and when he dies, you're broke. Don't do that. Get long-term care insurance, take your nursing home bill. That way, Papa doesn't crack and scramble the nest egg and leave Mama broke. This is the Dave Ramsey Show. With more frequency than you know, I get calls and emails from people dealing with the recent loss of a spouse or a parent. You can hear the struggle and the heartache that they've been experiencing. And at a time they should be grieving, what breaks my heart the most is the strain and

tension that they're going through because of money, especially when it's a situation that could have been avoided. If you have a family, it is your responsibility to have term life insurance. It's one of the things you do to say I love you. And yes, this is an ad for Zander Insurance, but since this is one of the most effective ways I have to get my point across, so be it. For over 20 years, I've been telling you about the importance of term life insurance and protecting your family. Listen, you need to check out Zander.com or call 800-356-4282.

I can't say it enough. Protect your family. It's what you're supposed to do. Go to Zander.com or call 800-356-4282. Thanks for joining us, America. This is the Dave Ramsey Show. Open phones at 888-825-5225. Maybe step one, you do with great intensity to get $1,000 saved. Two, with complete focus and great intensity. Nothing else is going on with your money. And that's your debt snowball,

where you pay your gazelle intense, you're sacrificing, you're not going on vacation, you're not going out to eat, you are cleaning up your debt because your most powerful wealth building tool is your income most people working our plan are debt-free other than their home in under 24 months most people not everybody sometimes it takes them three years we hardly ever run into somebody that's over five years. I mean, like 1% of the people we work with. Because they just are doing radical stuff to get out deep sacrifices to cause the effect that you want to have, to be clear. Because when you don't have any payments, you can build wealth.

Then baby step three, once you're debt-free, still intense, still focused, still not going on vacation until you get that emergency fund in place of three to six months of expenses then you let your foot off the gas just a little bit and that's after your emergency funds in place and you're debt-free everything with your house that's when you can go on vacation that's when you save up and move up in car that's when you buy a a new couch or whatever anything you want to do at that point as long as you save up and pay for it. And, of course, the more stuff you purchase, the less you'll be able to invest, the less you'll be able to give.

And we want to be saving, investing 15% of our income into retirement. That's baby step four as soon as possible. But if you're doing baby step four and five as kids college and six paying extra on the house, that's when you're, you know, again, you've let your foot off the gas just a little bit we are going to maybe go out to eat maybe not all the time like some people but we're you know we're going to watch what we're doing we're going to be on a plan on a budget but it's not quite as sacrificial not as quite as scorched earth and

that's when it's time to go on vacation and you get in the rhythm of doing that the average person by the way then where the while they're doing that has their home paid off in 7.6 years the average millionaire we studied in the largest study of millionaires ever done pays off their home in 10.2 years and it is one of the key data points this 7 to 10 to 12 year range of getting your home paid off is one of the key data points of becoming a millionaire, meaning becoming wealthy. And so these are data. This stuff is all proven now. I mean, we've been doing this for a quarter of a century with millions and millions of people.

So one thing we have never done is celebrated with you while you're in Baby Steps 4, 5, and 6. We always do a debt-free scream, you know, when you get debt-free. But, you know, we need to celebrate, and we need to celebrate you everyday millionaires. We start doing that, let you call in and talk to you guys and learn from you how you did that so that other people are encouraged and believe that regular people can build wealth in America, that the systemic economic issues by big pharma and health care and the little man can't get ahead and stagnant inflation and stagnant wages by the oh jeez the whining goes on for days and yet people get out of debt and build wealth all the time from all socio-economic strata so it's done all the time

so once we're in baby steps four, five, and six, we decide we need to celebrate with you a little bit more. And our guys came up with the idea. We've never done this, and we didn't even know if it would work. And it has worked, to say the least. We launched the Ramsey Cruise. So they first brought it to me on a cheesy little cheap-looking little ship, and I'm like, listen, I've been on cruises.

I'm not riding on that thing. So, no, this needs to be nice, okay? So they went to the top end, one of the top ends, the top of the main cruise lines anyway, Holland America, which is really, you know, Sharon and I have been on there several times. It's a wonderful line, and it's not cheap, cheesy. It's nice, and this is a brand-new ship, too. So we're going to good itinerary, like, you know, Turks and Caicos and Puerto Rico and St. Thomas and Bahamas.

And so it's a good itinerary, seven-day itinerary. And so it's all the Ramsey personalities are going to be doing, you know, workshops and stuff on the ship, of course. We're not going to work you all the time. Obviously, you want to play, but we're all going to be there. My friend Stephen Curtis Chapman is going to come. Chris Grammy award winning Christian artist, Christian artist icon, really. But obviously, Chris Hogan, Rachel Cruz, Christy Wright, Ken Coleman, Anthony O'Neill, my buddy Jeff Foxworthy is going to come and do a bet for us. So he's going to hang out with us.

That'll be fun. And big time Food Network star Manette Chauhan is going to be with us, too. She's a big one of the big celebrity chefs. She lives here in Nashville. She's got several restaurants here. And so she'll be doing some demonstrations and stuff like that. She's not running the kitchen on the ship. OK, but she's been doing some stuff to show you you know food network stuff so it's going to be really a

lot of fun and apparently you know that it's next march 2020 it's 250 for a deposit per person and um here's the thing we announced it just three weeks ago, and it's 91% sold out. And there's a $100 discount per person early bird discount that is over this coming Monday. So our guess is at current rate of sale and with that $100 discount being a thing that everybody wants to get an additional you know if it's a couple going that's not the 200 dollar saved kind of a thing that um you know you need to go and go to ramseycruise.com if you want to go because they're it's going to be sold out next week or so i mean right in there and um just check it out ramseycruise.com but we just want to celebrate with you and um sh and I will be there. It's going to be a lot of fun.

It's quite a lineup, really. I mean, it's a pretty cool thing. I mean, you've got Hogan on a cruise, and that's kind of scary right there. Oh, you have no idea how much we've given him a hard time about this. But we'll all be doing workshops and stuff. And, of course, the entertainers will be doing entertainment and things. But more than anything else, we'll all just be there hanging out with you. It's only 2,400 people, so it's not a huge, huge ship.

It's not one of these that's like a rolling, you know, a floating shopping mall. Some of these things are massive, man. But this one's kind of, it's nice. It's a good size. It's big enough, but it's not so big that, you know, you're just overwhelming human beings. So, anyway, Mary is with us in San Diego. Hi, Mary. Welcome to the Dave Ramsey Show.

Oh, thank you, Dave. Thank you for taking my call. Sure, what's up? So, I'm a 27-year-old. Make about $96,000 a year. I have no debt. Have $96,000 a year. I have no debt. I have $13,000 saved. I have 403B with my work, 457, and a pension plan.

My brother was suggesting that I buy a house and rent it out or buy a couple apartments and rent them out or get a loan to open up my own business, a nursing home business. And I'm at the same time thinking about getting my doctorate, my DNP, so I'm kind of, I don't know what to do. Okay. What's the best option?

I live with my family, so I don't own a house. Okay. You're making $97,000 and you're how old? Yeah, 27. 27. Okay. You're making $97,000 and you're how old? 27. 27. Okay. All right. I do not recommend that you go into debt to buy rental properties.

Okay. Or a nursing home, for sure. Yeah. No, I recommend you pay cash for your investments. Usually, the way I have lived and the way I have taught and the way I've learned from wealthy people to do is that your first round of wealth is usually built in your retirement and in a paid-for residence, which you don't need to do today, I understand. And then your second round of wealth would be built, meaning like your first million dollars usually is in mutual funds and your 401ks and Roth IRAs and in basic investments. And then somewhere in there, right around that time, you start saving up and you pay cash for your first rental if you want to own rentals. But I have a feeling this is your brother's dream, not your dream. Yes. Yep.

Yeah. I think your dream is a Ph.D. That's what it is. Yeah, you go work on that. We'll make you a bunch of money. We'll be getting a loan for that, though. No, we're not going to get a loan for anything. You make $97,000 a year, you live at home.

You cash flow your Ph.D. You don't have any reason not to. Where's all your dadgum money going? This is the Dave Ramsey Show. One Dental is a company I've been telling my listeners about because I know these guys will save you money at the dentist. One Dental is a dental savings program that allows you to go to one of over 158,000 dental practice locations nationwide and save on things like cleanings, dentures, root canals, crowns, and even orthodontics. Here's the really cool part. You can join One Dental right now and you don't have to worry about high deductibles, waiting periods, or pre-existing conditions.

Just find your highly qualified dentist in the network, make the appointment, and start saving every time you go to the dentist. This is a great cost-saving alternative to expensive dental services and a great alternative to costly dental insurance. It really is that simple. And unless you want to blow your emergency fund, everyone needs to go to the dentist. Folks, this is a no-brainer. Join today at OneDental.com. That's OneDental.com. In the lobby of Ramsey Solutions, Orlando and Gina join us.

Hey, guys, how are you? Hey, Dave, how are you? How's it going? Welcome, welcome. Now, where do you guys live? We're here in Nashville. Cool. And here to do a debt-free scream.

Yes, sir. How much have you paid off? $100,000. Wow. How long did this take? About four years. Four years. And your range of income during that time?

$75,000 to $55,000 to $85,000. Cool. And your range of income during that time? 75 to 55 to 85. Cool. What do y'all do for a living? I work for the state. I do graphics for the Department of Transportation. And Gina is? Well, I've gone from teaching English as a second language to adults to health care to now mortgage and assisting. Yeah. Lots of changes in my life in the past few years. Good for you guys. What kind of debt was the $100,000? It was a car and a house. Oh, you paid off your house?

We did. I'm looking at weird people. Yes. All right, touchdown. Yes. And I understand, Carmen, that has worked on our team for decades, it feels like, over 10 years anyway. How long has Carmen been with us?

Give me your fingers. How long have you been with us? How long? Seven. Seven years. Okay. I thought it was over 10. Okay.

Is your mom? Is that right? It is. She's my mom. All right. Very cool. Well, you didn't really have a choice then. No, I was forced into this.

I love it. Well, congratulations, you guys. Your house is paid for. How old are you two? I'm 37, and I'm 37. Close to that. Yeah. That was good.

Well played. Well, guys, amazing. How fun is it to be 37 and 37 and have your house paid off it hasn't sunk in yet yeah what's the house worth about 180 to 200 yeah wow look at you you don't have a house payment you're so weird i love it okay so four years ago you started this seven years ago your mom came to work here yes so what happened four years ago you started this. Seven years ago your mom came to work here. Yes. So what happened four years ago that lit the fuse?

Well, I began grad school. And when we first began that journey, we were like, we don't have the money necessarily saved up to pay for this. How are we going to do it? So we had a sit-down talk, and then... Yes. So Gina started school and we were that first year, that was the second year of our marriage. After the first year, it was loosey goosey with the budget. And we were more of a retroactive budget where in March we would look at what we spent in January and then we're like, oh, we shouldn't

have spent that much money there yeah um our bad we'll do better next month but we never did so that first year was very loosey-goosey and then the money or the not the money the bill for the tuition came in and we're like we don't have the money so we either borrow money or we're gonna have to cash flow this. So that first tuition, we just put it in easy pay just so we can actually make the first payment. And then by the third month, we have finally paid that first tuition. Right. And then we just from there on cash flowed it. But that's when we got serious about budgeting.

So it got your attention. It did. It's kind of like, okay, we don't have as much money as we pretend that we do. Okay. All right. So Carmen, I know her pretty well. She's pretty sweet. So I doubt she's real interfering.

She's not? That would be my guess. No, she gave me the book. Did she play a part in you guys getting this turned around, though? Well, she gave me the book well before our marriage. And I had been following the book. We had been technically debt book we had been like technically debt free when we got married uh with except the house and then when we got married we got a car

and we went to uh eat as often as we wanted to and it was just a fun year our honeymoon year if you will and then the grad school kicked in and that's when i'm like oh we gotta pay for that okay and then you just parlayed that all the way through the house and knocked the house out. Well, yes. We were doing, once we paid off the car, we had enough money for the emergency fund, and we were doing all the other steps. And we were going right along with it until two years ago when Gina lost her job. And that was a bit of a wake-up call for us because we wanted the leverage to be able to allow her to do whatever she wanted. And the only teaching job available at the time that she really liked was it paid nothing.

And so she went in, like she said, into healthcare, not out of what she wanted to do or really a new career she wanted to pursue, but out of necessity. Right. And so that's when we realized, okay, this is not where we want to be. We want to be done. And if we didn't have the albatross that is the house, we could afford, if we wanted to, to take a lower-paying job to pursue our desires, our dreams. And that was the one that really kicked it off. We did a Dave-ish plan where at that point we just moved step six as if it was step two. So we were like, okay, let's just pretend.

We were doing our budget and at the end of the month, whatever was left over was going to the house. We switched it. Everything that we wanted to, how much does it take to pay it off in two years? That payment in the beginning of the month, and then the rest of the budget gets taken care of. Okay. Then you've got to live on what's left. Exactly.

So we flipped that. So what do you tell people the key to getting out of debt is? Discipline. And you just have to let some of the things that you really want to do go i am i'm the social butterfly i'm he's the anchor and so it's hard to say no it's hard to say i can't go this weekend i can't do these things but you know you've got to you've got to focus and buckle down and, you know, let things go sometimes. And we had a lot of support along the way, a lot of just people saying it's okay and encouraging us the entire way.

So I want to encourage everyone out there that the same thing. You can do this. Good. Very cool. You can do this. Good for you. And who were your biggest cheerleaders outside the two of you? Well, my parents were definitely. Good for you. And who were your biggest cheerleaders outside the two of you? Well, my parents definitely. Yeah, they were so vital in allowing me to sometimes just vent

and us just to talk about just being serious about money. Sometimes even when you have a good budget and you know how everything's going, you could just vent and like, you know what, it's not going exactly as I want because life is never a cookie cutter. Right. Always life has something to throw at you that you don't expect. Definitely. We also had, we're very blessed that we have a nice, a good core of friends that just supported us and surrounded us.

Yes. And while sometimes they did make fun of us, it was always in a fun spirit. It was never a situation of, you know, trying to talk down to us or put us down or make themselves feel better. It was always we felt support, and they understood that, no, maybe not this month, but next month we could do that. Yeah, very cool. Yeah, it was nice. Well, congratulations, you guys.

Thank you. We're very proud of you. I know Carmen is. Yes, thank you. Very, very well. Well done. We've got a copy of Chris Hogan's book for you, Everyday Millionaires. That'll be the next chapter in your story, how ordinary people built extraordinary wealth,

and how you can, too, show you exactly how to do that next chapter. You've got a house paid for at 37 and 37. Yes. This is impressive. I mean, this is well done. Well done. Thank you. All right, Orlando and Gina in Nashville, $100,000 paid off. House and everything.

Weird people. Four years they did it, making $75,000 to $55,000 to $85,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! We're debt-free! Love it!

Well done, you guys. Very, very, very well done. Man, that's awesomeness. Very cool. Yeah, your mom works here. It probably could have an effect on this, couldn't it? It could. I mean, you know, when he's talking about doing the budget,

you cannot do it retroactive like that. That's what they discovered, right? You have to get in front of it. You have to, before the month begins, give every dollar a name. If you get to the end of the month and you have too much month left at the end of the money, you wonder where your money went. There's a way to skip all that money stress. The free budgeting app takes 10 minutes to put together your budget. It's called EveryDollar. We've spent millions of dollars on this thing and several years building it,

iterating it. It's robust. It's elegant. It gets it done. It's simple to use. Six million budgeters use EveryDollar. You can join them. You'll find out what they know that you don't know,

that when you control your money, you have more of it. EveryDollar.com. Download it for your phone, from any of your stores, for your app stores. Every dollar. It's completely free. Check it out. This is The Dave Ramsey Show. Thank you. Brian is with us in Raleigh, North Carolina. Hey, Brian, how are you? Hi, Dave, how are you? Better than I deserve. What's up? Pleasure to speak with you. So me and my wife just became debt-free. I'm 29, she's 26. Our house has paid off, all our vehicles have paid off, and we have about $50,000 saved up, and we're looking to make the next step into investing for the future.

My wife, she kind of made this goal of she'd like to be, you know, have a million dollars in assets by the time she's 40. And we're kind of looking for your advice on our plan for investing for the future. So our plan right now is we make about $100,000 after taxes. We live off about half of that. And our plan for the future, we already have 15% for our retirement, going into our retirement. And we're thinking about, like, 50% into mutual funds and then 50% into, like, cash. So our thinking was if there's ever a downturn in the future, we can kind of take advantage of that and have kind of money ready to take advantage of that situation.

Mm-hmm. Okay. And we were wondering, you know, do you think we should put more money into, like, mutual funds, or how much should we keep in the liquid assets for taking advantage of problems in the future? Mm-hmm. You know, what I would do is make sure you have your emergency fund in place, like we always talk about. You're aware of that, obviously. And then, as you said, be putting 15% away.

And above that, I don't see any reason to not just move above that. Do you own a home? Yes. Is it paid for? Yes. Wow, way to go. What's it worth? Yes. Is it paid for? Yes. Wow, way to go. What's it worth? Yes, thank you.

We've paid $140 for it, and I think we just got assessed for $165. Good for you. Well done. Okay, cool. Well, you know, above the mutual fund, I mean, above your 15% going into retirement, you're past baby step four. You're at what we call baby step seven because your home is paid for. So then what I would do is look at your percentages and say, okay, I have X number of dollars to invest.

In your case, you're trying to say we're going to try to do $50,000 a year. We're going to live on $50,000 a year. I think I heard that right. Okay. Yeah. Out of the $50,000, if you maxed out all retirement that was available to you, Roths and 401ks and everything, how much of the $50,000 would that use up? Do you know?

So for me, it would use up about $18,000. And then I'm not sure for my wife, it's already included in that. So that's already taken out, so $50,000 would be what's left over after what she has. Okay. So for me, maybe I already put in, so I'd probably be like maybe $40,000. Okay. All right. It would use up, of the $50,000, it would use up $10,000 more. Is that what you're saying? Yes. Okay. All right. It would use up, of the $50,000, it would use up $10,000 more.

Is that what you're saying? Yes. Okay. And you'd have $40,000 to do something else with beyond maxed out retirements. Wow. You are going to be very wealthy. Above that, what I did, Brian, in your exact situation, when I'm in Baby Step 7, I maxed out all my retirements. Everything above that, I just started dumping it into mutual funds.

And every so often, I would take the money out of those mutual funds if I could find a deal on real estate, and I would buy a piece of real estate for cash after my mutual funds built up. And I just used a simple S&P 500 index fund because there's no commissions, and I don't mind paying a commission for a long-term investment, but where I may be pulling it back out in three years, those commissions really damage my returns. And so using a mutual fund for a short-term investment, I always try to do a no-load, and I used an S&P 500,

and I would just dump money. As a matter of fact, I still have that S&P. I just dump money in there until I find a piece of real estate. And what's ended up happening now, if you fast forward and I'm almost 60, I'm 58 years old, I ended up with a whole lot more real estate than I did mutual funds as a result. But I love real estate. And the downturn in 2008, I stole a bunch of real estate i mean i got deals right but i was in a cash position to get deals because i had done exactly what you're planning to do so i actually love your overall strategy and i would just say max

out your retirements and everything above that you if you want to buy other things or you just want to have it available in case there's something you can buy to deal in a downturn. And there's always cycles in the economy. Right now, it's tough to find a deal on real estate in most markets. You can find them, but they're very, very hard to find because the markets are just hot. But when these markets, when cold water's thrown on them, that's the time to buy. And we bought a lot of real estate in 08 and 09 a lot and um basically drained cash position down to almost nothing but uh and then it's shot way up in value so it's

turned out to be just this huge second wave of wealth building that i didn't even anticipate but i just like real estate and that's how it worked out though so cool man it's a great plan you got i like it it's exactly what i did jordan is in wichita kansas hi jordan welcome to the dave ramsey show hello hi how can i help so how do you recommend handling medical bills because my house has a net of about 40 to 45, depending on how much extra jobs we pick up the year, but I was just slapped with a $12,000 estimate for a necessary surgery. You were just hit with an estimate for a necessary surgery.

You don't have health insurance? I have health insurance, but even with the dental coverage and the health coverage, it's still going to cost us $10-ish, the estimated after cost. This is dental insurance or dental surgery? Yes, all my teeth are just rotting out of my skull, and it's past time to get them fixed. Okay. I'm sorry. How old are you? 24.

Wow. Okay. What do you guys, what's your household income? Gross on paper, about 50 to 55. Okay. Net, we bring home about $3,300 a month. Okay. Net, we bring home about $3,300 a month. Okay. That means you have too much coming out of your check or you have money going into a 401K.

Which is it? Do you get big refunds on your taxes? Nope. I only paid $50 this year. No refunds. Okay. Then you're putting something else in because you don't have a $14,000 tax bill on a $50,000 income. And that's the numbers you just gave me.

So something's wrong with your take-home pay. But you got stuff coming out of your check at work? Medical insurance, dental, and vision, but other than that, not that I'm aware of. It's my end anyway. What does it cost? I think the last estimate I saw was about $250 a check, so about $4 to $5 a month.

Okay. All right. Well, if I woke up in your shoes, what would I do? I'm going to pay cash for whatever I do. where you're talking about this extensive dental work, I'm going to get second, third, maybe even fourth opinions.

For that matter, estimates on a job this size. I'm not going to take just one person's word. By the way, I did have one dentist when I was 26 and we were broke and we were going into bankruptcy. I went in for a simple filling and told me I had to have $3,500 worth of work done or I was going to lose my teeth. I still have them, and I never went back to that dentist. So I'm not saying all dentists are that way. They're not. This particular guy was really trying to fund his kid's college, apparently, on my mouth.

So I want you to get a couple estimates and really firm it up and then lay out a detailed game plan of exactly where you're going to find your 10,000 bucks and that's going to be working extra a lot and delaying the surgery until you can have the money put together and that's how you do it if you go into debt to do this and you just go with the first person you come to you're going to overpay and you're into debt to do this and you just go with the first person you come to, you're going to overpay and you're not going to think about it. And then you're going to think about it for the rest of your dadgum decade while you clean the mess up that you're getting ready to make financially. So save up and pay cash, get estimates, become an expert on what you're getting ready to do

with your dental surgery. I'm sorry you're facing that skin up. This is the Dave Ramsey Show. Hey, it's Blake Thompson, Senior Executive Producer for the show. You know you can listen or watch anywhere with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the App Store and download it today.