The Ramsey Show - App - You Don't Need to Be Perfect to Help Others (Hour 2)

Episode Date: December 17, 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. Open phones at 888-825-5225. That's 888-825-5-2-2-5. So periodically over the years, people have called and emailed and said, Oh, Dave, I need to get a credit card so I can rent a car. And I would whine and moan and carry on here on the air.

And I would say, you just, you know, I think one of these days, one of these rent-a-car companies would wake up and take debit cards. Because those of us that carry around debit cards, most of us have more money than you people carrying around credit cards so it's not like we're unsafe to rent a freaking car too and yet debit cards people are treated like second-class citizens by the rental car companies and so i'd go on and on and on moan and carry on and so about a year and a half ago uh james is one of my daily listeners here's me me going on about, you know, one of these credit card, one of these days, one of these rental car companies is going to wake up and realize I could send them like 10 million customers

if they would take a debit card and not treat us like second-class citizens. So he is texting his wife at work going, he's doing it again. I told you he keeps saying this. You guys need to do something about it. It turns out James happens to be married to the senior vice president of brands for dollar rent-a-car, dollar car rental. And so we got to meet them. They called and said, yeah, my husband James said that you could like send us 10 million people and that might be interesting.

And I said, well, it'd be interesting for us to send them to you if you'd take care of them and treat them right and let me rent a car from you with a debit card and don't treat me like i'm a second class citizen of some kind like a dadgum redheaded stepchild i don't want to be treated wrong right and so uh i want to walk in there and be treated like first class like you know one of your commercials or something right and so they said you know what and they dug into it and they figured out the reason for their debit card policy. And you know what? The marketing folks and the leadership team at Dollar Car Rental got it.

And they went in and revamped their entire network to where you now can walk in there with a debit card. And in return, I agreed to endorse them. Well, of course i would i got nothing to gripe about now because one of them said we'll take care of dave ramsey listeners we'll take care of you debit card users and so um they roll the thing out we actually is about this time last year we start rolling the stuff out and then by february they started adding other stuff and all year long they've been adding other elements to the relationship with the Dave Ramsey tribe, the Ramsey Solutions tribe, the Chris Hogan, Rachel Cruz, Anthony O'Neill, Ken Coleman followers that are out there that all use debit cards, and they walk into a dollar car rental place.

And you get treated like a normal person. You can book the car, and you can do everything you need to do with a debit card. And so they completely changed their debit card policy. If you book 24 hours in advance, you can pay with a debit card, show your driver's license, you'll be on your way. They even eliminate the credit check. You just walk in just like you do with a credit card. It's pretty stinking cool. And they didn't stop there uh they're they're now making your experience even better right now they just

launched a thing that they have a pre-pay policy if you want to use your debit card when you book the card the car and pay it ahead of time they'll knock an extra 5% to 10% off your entire rental if you pay through the website at dollar.com slash Ramsey. Now, use the slash Ramsey because that gets you the extra 5% to 10% off if you prepay because they know it's one of us. It's one of a tribe that came in there. And they're rewarding you guys for being who you are because they did a ton of detailed research on Dave Ramsey followers with debit cards. And they discovered they are lower risk to dollar than a credit card user is.

Well, duh, because my listeners are out of debt and they got actual freaking money in the bank. Hello. They don't use a debit card otherwise. Right. And so it's working out for everybody you guys are getting a better deal dollars getting a better deal i got less to whine about everything's turning out good here so it's all good an extra five to ten percent off if you prepay so listen it's christmas time some of you are traveling some of you are driving a hoopty

you got a thousand dollar car and you're getting ready to drive to freaking Nebraska in a $1,000 car. Maybe you need to go book a dollar car ahead of time and prepay it and use it for your Christmas trip. Or maybe you're going to get off an airplane to go see grandma on another end of the country or something. When you jump off, have gone ahead and book it with dollar and prepay it and save five to ten percent and use your debit card and dollar car rental will take care of you that's why we have the dave remsey show from the dollar car rental studio that's where that came from boys and girls it says it right over the top of the studio it's because we are thrilled to associate with a i mean these major companies most of them are tone deaf you know but these guys in this

marketing team and this executive team we met with them i met with all of them i've got to be friends with them they're sharp and they actually understood that there's millions of you under this voice under this microphone right now that react to this and do business with them because they take a debit card oh and ramsey people always like a discount right an extra five to ten percent off and the other thing is if you want to walk straight to your car and just walk past the counter and just get in and drive off all you got to do is go ahead and pre-sign at their website doesn't cost anything to do this and just go to their dollar express rewards and become an express rewards member. It doesn't cost anything. You sign up. And then when you jump on

there, you can buy, you can rent the car and you can prepay it for it, say five to 10% and you can walk right past the counter and walk straight to the car with your debit card. Oh, I'm starting to feel like a regular human now. This is nice. Instead of some second-class citizen. See, so that's why I'm so excited about this company. And I just got to tell you, you don't always run into companies like this. We run into companies that want to advertise on the Dave Ramsey Show, and we have to bring them in here and teach them how to behave so I can actually endorse them because I can't put my name on them

because they're goobs, right? I'd like to take their money and let them advertise, but I can't, I can't endorse them because I can't, I can't endorse somebody that I couldn't send my mama over there. If I can't send my mama over there, I can't put my name on it. Right. And so that's what this is. And these guys are, I'm really, really proud to put our brand right next to a dollar Rental because the people behind the scenes, the way they're making decisions and the way they're taking care of you is absolutely incredible.

They're a huge organization. Is 100% of the people in their organization perfect? No. It's possible you could walk up to the counter and somebody's rude. There's thousands of them. But it's possible I could walk up to the counter and somebody's rude there's thousands of them but it's possible i could walk into your house and you'd be rude too so shut up you know it's possible one of my 900 people here screws up something people sometimes screw up

stuff but that doesn't mean i shouldn't endorse these guys i mean they've had one or two complaints in the year that i've been with them and i they've got like a handful of sites that are not their corporate-owned stores. They're like private stores, but they're like franchise-type things, and they don't do the debit card. So I think there's like three places in the United States you might run into that. But let me just tell you, 99.9%, this is freaking incredible. It's absolutely incredible. Absolutely incredible. Dollar Car Rental. Proud to endorse them. Pre-pay for the holidays and get an extra five to ten percent off when you do that.

Sign up for the Dollar Express rewards and use your debit card. This is the Dave Ramsey Show. Over the years, I've seen so many families suffer by not having life insurance. It's not that they didn't care. It's just that they didn't know, so they did nothing. That's a huge mistake. Listen, husbands and wives, moms and dads, think about it. If you died, how would your family pay the bills, the mortgage, food, and plan for a better future? This is what life insurance is all about, and term life is the only way to go. It's not expensive, and it's not complicated. Stop wasting money on cash value plans. You need 10 to 12 times your income in protection and I recommend 15 or 20 year level plans. I also only recommend Zander Insurance and I have for over 20 years. These are the only people I personally use and they only offer the plans I recommend.

Call them at 800-356-4282 or get instant quotes online at zander.com. Trust me, these simple steps will let your family know how much you care. Thank you for joining us, America. We're glad you're here. Derek is in Iowa. Hi, Derek. Welcome to the Dave Ramsey Show. Merry Christmas. Merry Christmas.

What's going on, Dave? Loving it. How can I help? Yeah, so my wife is 26. I'm 28. We've been in steps four, five, and six the last three years, fully funding our retirement along the way. A year ago, we ended up moving into a new house.

A passion that her and I have is fixing up a house and flipping it. And we found a house we like, and so we moved to it partially as an investment but also as I said for a passion of ours. My question is the money that we invest every year into that house is that included in the 15 percent step four or is it not considered step four since it's not a dedicated retirement fund? I would use I wouldn't use it in my baby step four since it's not a dedicated retirement fund i would use i wouldn't use it in my baby step four i would do that and in addition to that i'd fix up the house as a side thing um the point is save for retirement okay and if you were to steadily fix up houses and flip them fix up houses and flip them, fix up houses and flip them, and every time you move into it, the only thing you've built for retirement is your home.

Yep. And so it doesn't give you any money to eat with, which we do want to get your home paid off. We do want to get you into a nice home by the time you get to retirement. And you've got 40 years to pull this off but um but but it's not really going to turn into cash you use to buy food and travel to wonderful places when you're 65 years old it's just going into a better house each time agreed yep yep so for that reason i probably would stick with a traditional baby step four and do my fix-up out of pocket, out of my budget. But, you know, if you dial it back, as long as you've got your head screwed on

and you don't say never save for retirement because you've got this house scheme going, that would be a bad idea. Agreed? I agree, and we wouldn't do that. And one conversation piece we had was maybe dialing back um instead of fully invested my rock maybe taking a couple green out of that just this year and then if things go positive towards the end of the year just refunded it then yeah just so we kind of have a little bit nicer um posting area or just just quality of life within our, uh, the house that we bought.

Yeah. And cause you're, you know, renovating a house you live in sucks. It's hard. And so, uh, you want to get some of those big things, the dusty things out of the way, but yeah, I just, I think the point is you've got to be very, very intentional. And the beauty of the baby steps is the more I, I become, uh, like legalistic about them and hold you to them, the more likely you are to create the life that you're trying to create. And so, you know, if you do that stuff, the good news is you're kind of having this feeling like you're breaking a rule or something, right? Yeah, and that's why we wanted to call in.

You know, and so that's going to make you go right back to the right thing as soon as you can. So it's not the end of the world. But, I mean, I think job one, the optimal thing would be to just cash flow out of your budget, your repairs, while you're putting 15% into retirement. And I think you're going to have a really wonderful result from having done that. But I don't know what the level of repairs are what you're facing and you know if you turn it back for a little while and then you turn it back up it's not gonna kill you i'm gonna kill you heather is in tennessee hi heather merry christmas merry christmas how are you better than i deserve what's up so i have got a a little bit of a

predicament about a universal uh policy that I don't really have. Right. You know, I was told then, oh, it's so great. And this is all the things it's going to do. Me and my husband are actually today is our one month mark. We're starting a program. And in just the one month we have, it's like we've given ourselves a raise and just doing

budgeting and figuring out money that we didn't even know we had. And it was just going out the door. Cool. So back in my mid-20s, Scott talked into this universal life policy. That was one of our first things. Let's go sit down with our insurance agent. Let's stop this. Let's get a 20-year term policy.

Of course, he's trusting, oh, but but at this age you'll make this much and of course i give him the numbers well you can take those and put that same amount into a roll and here's my numbers and i kind of almost wish i could have taped the look on his face because it was pretty priceless um he was like well i can't argue that. Yeah, I guess you can. I have one small problem. Six months ago, I was actually diagnosed with MS. Oh, that's not a small problem. Right. Now, thank goodness I am blessed enough.

I have zero disabilities. I have zero in their medical history. And I'm even blessed enough to be a nurse who works for a spine and brain institute. So the neurologist I see, I work with him. Wow. It's been super easy with that. I have no symptoms. It's just like nothing ever happened.

It's just this thing now that we know I have. How old are you? I'm 32. Wow. Okay. So, yeah, hard diagnosis to kind of wrap your head around, but like I said, could be way worse, and I'm blessed that as of right now today, I'm perfectly healthy, like there was nothing that ever happened. Good. Because of this, I've actually spoken to Zander and several other insurance agencies, several have said that they will not insure me

at all. Agreed. Zander has said two years on a diagnosis. Really? After that, they said it would be two years. Okay. My current insurance agency has said one year from diagnosis that they would consider. So my question is, do I continue to hold on to this whole life policy for the next six months and pay that? Yes. I do have life insurance through my employer, so I would not be without life insurance, but it would be employer-based. How much is the universal policy?

What's the face value? Right now, so I think it's a $250,000 policy. The cash out after penalties and all that would be about $5,000. Right. And what is your premium? I'm actually paying only like $100 a month on it right now. Is it deteriorating the cash value at $100? No, not really.

Okay. All right. I would leave that alone. I would not touch that policy until you get clear of this and can get a good 20-year policy. And just keep up with what I'm doing until I get that six months. Just sit on it. Yeah, you don't drop a policy when you've got a health issue until you get the other policies in place. So you can price with your current company.

Who's the current company? It's actually through Farm Bureau. Okay. And they're saying they'll write you a term in one year. Xander's saying they may be able to write you a term in two years unless more symptoms pop up. Right. And they both actually quote me for the 20-year, the same price, which would be about $40 a month. Okay.

At my age, usually, of course, that's way more than a normal, healthy 32-year-old, but with my diagnosis, that is going to make that cost go up. Now, is that for $250,000? No, that would be for a $100,000 policy because of the fact that if I went even higher than that with that diagnosis, it would almost be about what I'm paying for my medical costs. Well, I mean, let's pretend that this other one is not a cash value, that it's just term. You're paying $100 for $250. I would just keep that.

And just roll with that? I mean, that's the same price. $40 for 20 years, right? Now, the problem is long-term, out there, way on out there, 30 years, 20 years out there, the universal is going to self-destruct. Because the way universal is structured is, of the $100 that you're paying, they've got a certain amount allocated to life insurance for a 32-year-old. Next year, the amount they allocate to insurance for a 33-year-old goes up.

So it's almost like your principal and interest payment on your house, except it's going the wrong way. The interest is increasing. The amount going to insurance is increasing every year to where it'll reach the point that it's more than $100 a month just to buy the insurance based on your age, not based on your diagnosis. So it's not a 30-year plan, but it's probably a 15-year plan to keep that policy. I'm probably keeping that policy with your diagnosis unless you can get better pricing on the term later on. But the $40 for $100,000 versus $100 for existing $250,000, that math doesn't work.

We stay with what we got. That's what I'm thinking. Unless I'm missing something here. You stay with it and keep analyzing it, keep watching it. I'm James. James is in Michigan. Merry Christmas, James. How are you? Hey, Merry Christmas, Dave. Thanks for taking my call.

Sure, what's up? Here's the situation. My wife and I are five payments. And when I mean payments, I mean five weeks away from being credit card debt free. Yay! So we, yes, and we have a good amount of money every month that will be freed up

by doing that, over $5,000 a month that we can then move to another debt. So at this point, I'm looking at two things. We have two vehicles and a recreational vehicle that we owe on or a house. I'm wondering, I'm looking at two things. We have two vehicles and a recreational vehicle that we owe on or a

house. I'm wondering, I'm leaning towards taking care of three vehicles before we start going at the house. And I was wondering your thoughts. Well, we teach people to pay off everything but their house and what we call baby step two. So vehicles always come before the house. So how much do you owe in your cars in your rv uh it's a jet ski uh we owe 13 000 on one car 20 on another and then 13 on a jet ski so we could literally pay that off next year all of it with the all of it all right and yeah we um we you know we we got really serious this past summer we started you know i started watching you i put my wife on to you know your concepts and we just decided that we were we're 50 years old it's time to stop playing and

get serious good well i'm proud of you so you've heard me talk about the debt snowball then and paying off everything but the house and baby step two, right? Yes, sir. Yes, sir. That's the way I was leaning, and I wanted to make sure that you're right. I mean, we're literally going to be able to pay $1,200 a week on whatever loan we go after next. That's wonderful. So that's what I want to do.

Yeah, I mean, think about this time next year. You're sitting there with everything paid for but the house. You're going to be in really good shape, man. That's going to feel great. I'm going to call you back, too, and tell you we did it and thank you a bunch because, you know, you really have inspired us, and I appreciate it. We'll look forward to having you for a debt-free scream, brother. I love it.

Brooke is in Washington. Hey, Brooke, what's up? Hi, Mr. Ramsey. I'm in $212,000 of student loan debt. It's the only debt I have. Wow. Are you a doctor or a lawyer? I went to law school.

I am going to take the bar in July. Yay! Why are you waiting? Don't you lie. Well, I took it twice already. Oh, okay. Okay. It's hard.

I graduated in 2017. I failed twice by six points both times. Okay. So my question is, half of that debt is already with creditors. Half of that debt is about to be defaulted on. What do I do with the debt that's already with the creditors, and I don't even know where to start to kind of even start paying it off and if I can with the creditors because you know they want large lump sum yeah yeah the collectors yeah um now these are all federal student loans

no um a lot of them are private so higher interest rates. Correct. Okay. And what are you doing for a living? I'm walking dogs. I'm trying to find a job. I'm trying to get a bigger shovel. But a lot of the jobs that I qualify for are check your credit. And because my credit is not that great, I don't move forward in the process so i'm

i'm working two jobs looking for a third what kind of a job would you try to get that checks your credit i was i got an interview for a hip compliance for the federal government and they said that they rather me have credit card debt than student loan debt because i would be in violation of public trust with student loan debt. Yeah, which, you know, makes a lot of sense since they're the ones that make the freaking student loans. Right. God, our federal government is so bass-ack. It's just ridiculous.

Unbelievable. Yeah, I know. Okay, but you're in default either way, so you don't really qualify for stuff where they're doing a security check or a HIPAA check, regardless of what you're in default on. So what else could you do, though? I mean, you've got a degree in what, other than jurisprudence? Psychology. Okay.

And so you were just trying to use the law background with the feds? Well, I was just trying to get a good-paying job so I could start shipping land. At this point, I don't care what I do. I just want to be debt-free. It's the only debt that I have. But, I mean, I would think you could go to work with someone almost in a paralegal capacity. I've applied for paralegal positions, but they say, you know, we want someone here that's going to be five years.

You're taking the bar. You want to be an attorney. We need someone with less ambition. That's true. That's fair. Okay. All right. Yeah, so anyway. All right. to be an attorney we need someone with less ambition that's true that's fair okay all right yeah so anyway all right um really what it amounts to is you're making survival money

until you pass the bar they're probably not getting any money agreed so it doesn't really matter all you do is just say i can't pay you any money what are they gonna do take one of the dogs you're walking? I mean, there's nothing they can do. Well, my mom is my co-signer on one of the loans. Oh, Jesus. So they're threatening to take her house and her cars. I don't own anything, but my mom does. So even if I do get a bigger shovel, is there anything I can do with the creditors?

Yeah, once you get your bar passed and you land a good law job, you can begin to attack this because you've got some income, but you're going to have to have some income to attack this with. You can't attack it with a wish. Right, right, right. And so, you know, I don't think they're probably going to do a lot of the stuff they're threatening to your mom as quick as they're acting like. They're just trying to jack everybody's emotions up,

which they're really good at. Right. acting like they're just trying to jack everybody's emotions up which they're really good at but i think you know i think any money you can make to make sure you get survival done and then beyond that that you can start to address some of the more aggressive ones with some kind of a payment plan until you pass the bar and until you get there anything you can do to just kind of stiff arm them and hold them off. But the bottom line is we need to pay $220,000 off. Right. And in order to do that, we need to make $100,000. Right. And so we've got to pass the bar, you know.

Right. So then you continue to live on nothing and you start throwing $50,000, $75,000 at this thing a year or more. It's going to go away. The pressure is going to go away first and then the debt is going to start to go away. It'll melt away because, you know, but it is just an arithmetic thing that you simply do not have. You have a desire to pay it. You just don't have any money. Right, right.

And so the way to solve the shortest path in discussing this with you, I think, to solving that is passing the bar. And you're not eligible to sit for it again until July? Correct. I missed the February deadline because it cost money to take the bar. Okay. Well, this is a priority. Not only sitting for it, but passing the bar is a priority. Correct. Not only sitting for it, but passing the bar is a priority because it solves not just the – it hits the goal of why you did all of this, but then also it solves the arithmetic problem that we've got here.

So that's the sole focus of everything is survival and passing the bar. Between now and July, that's what I would do. And so – but I don't have any expectation that you're going to make any big headway until you get some income coming in, and I don't think you're going to have a big income coming in until you get this done. It doesn't sound to me like. So if there's something you can take with your doctorate and jurisprudence, your fact that you passed the law or passed law school,

and go land something somewhere that pays you $100,000, have at it. I'm up for that. I'm not mad about it, but you're much more likely to create an income if you pass the thing. So, hey, good question. Thank you for joining us. Folks, if you want to help people with their finances but don't think you can because you're still in debt, that's not how it works.

Perfect people don't usually help other people. You can stay gazelle intense on your own journey while you're helping other people get out of debt. You do not have to be debt-free to be a Financial Peace University coordinator. Very few of our tens of thousands of Financial Peace University coordinators are debt-free. People don't need a perfect person to lead the class that they're going to. They're not learning from a perfect person when I'm teaching it. I'm not perfect.

I've got a Ph.D. in DUMB. That's why they come to listen to me, because I've done stupid, and I know what it looks like. It's because I'm not perfect. So all they need is somebody to give them hope, somebody to give them encouragement, someone to tell them, yes, the baby steps are for you too, yes. If you're fired up about what we teach, become a coordinator by texting LEADFPU to 33789. LEADFPU to 33-789. Mark is in North Carolina.

Merry Christmas, Mark. Welcome to the Dave Ramsey Show. Merry Christmas to you, Dave. Thank you for taking my call. My pleasure. How can I help? I have a question. Right now, my wife and I are renting and we're paying for having a lot of our stuff in storage.

And we'd like to buy a house, but we're going to retire in five years. And so the question is, when we retire, we more likely will move. And so we'd like, I guess, to determine what is better for us financially, to continue to rent or to buy, and then, like I said, possibly in five years, knowing that we likely move, you know, the difference between paying rent and a mortgage and the down payment and everything else that goes with it. Yeah, good question. Well, the analysis mathematically would be based on how hot the area that you are in is from a real estate perspective.

Where do you live in North Carolina? In Charlotte. Oh, good market. Okay, good. So in the particular neighborhood that you were going to live in, I would drop a point there with your real estate agent and say, do me a five-mile radius analysis of this area, okay, or 10-mile. I don't care. Something like that.

And you're looking for two statistics from the multiple listing service from your real estate agent. And you can get one of our real estate ELPs to do this for you. First thing you're looking for is in the last 10 years, 5 years, what is the average annual appreciation rate in that 5 or 10-mile ring? How much have the houses gone up? Okay. The second thing you're looking for is DOM days on the market, average days on the market. So then let me throw you a couple numbers out. They're going to run congruent.

They're not going to run opposite of each other, meaning that if you see a high appreciation rate, that means it's a hot market, and you're also going to see a short days on the market, agreed? Right. Easy to sell a house in an area that's hot going up, and the market's hot, right? So if you're going to see a low appreciation rate, you're usually going to see long days on the market. So if you find a 2% appreciation rate, you might find a 200-day or 270-days, nine-month time on the market, right?

Days on the market. Don't buy if that's the case because what you got is you got two percent a year for five years it's a ten percent increase your commission off the backside will be six plus other expenses and you're going to sit there nine months trying to liquidate the stupid thing that's not going to work agreed yes but if you find that market's hot like the the county i live in she nuts okay white hot and so i mean you might find average days on the market be seven days and you might find a seven percent appreciation rate well seven times five is a 35 percent increase in value during the five years not counting compounding and and uh and so if i pay 10 out in expenses

i still made 25 and so i lived there for free and made money and i'd want to do that one if i was going to be there five years so if you're going to live in my county you'd want to i don't know that that's the exact numbers in my county but if you were to live in my county which is hot as a firecracker uh you you'd want to buy for five. But if you're in an area where the market's a little more sluggish, you know, you might not even break even, and you might be sitting on a stupid thing you can't get rid of it off the backside of the five years. So that's how you do the analysis.

And if it's kind of in the middle and you just don't care, then I'd probably rent. Okay. Yeah, because that's the concern is you put down the 20% versus paying the rent. Well, you'll get the 20% back and some on that if the market's going up. Agreed? Right. Right.

So I'm not worried about getting the down payment back, but I'm worried about when you get it back, how hard is the house to sell? And the DOM is going to really tell you that. Days on the market in that particular area that you would want to buy in. And, of course, what's that going to be associated with? It's going to be associated by the quality of the neighborhood, the quality of the school system. It's going to be associated by reasonable traffic patterns and shopping and access to restaurants and things to do and economic activity. And these are where people want to live, right?

And it's known as a good neighborhood in air quotes, right? A good neighborhood. And so you'll see that show up in the statistical analysis if you really want to dig down into it. You can kind of get a gut feel for that just by walking around in the area. I mean, you live there. You kind of know. And you hear stories from your neighbors like, oh my God, that house sold so fast, or you can't give a house away right now.

You know, you hear these things, right? And so that's what you really want to get into and figure that out. My guess is in Charlotte, if you're in a reasonably good area of Charlotte, that you will make plenty of money in five years to buy. That's my guess. But check it and run the numbers, and you'll see what you find. Charlotte's very similar to Nashville in size and in demographics, not quite as hot a city as Nashville is right now. And the neighborhood I live in is not Nashville. I live in a county south of Nashville in Franklin,

which is twice as hot as Nashville. And Nashville's pretty crazy. But anyway, Charlotte's a good market. There's nothing wrong with it. It's not a dead market. It's not in the doldrums. You ought to make enough in five years to buy there, unless you just go into a bad corner over there somewhere.

All right, Matthew's with us in Colorado. Hey, Matthew, how are you? Hey, good. How are you, Dave? Better than I deserve. What's up? Hey, so me and my wife started a business 16 years ago, and it's completely debt-free. So I could do a debt-free scream.

However, I'm not happy with myself because I got greedy and went out and started a second business and borrowed the money to do it. So we're in a situation right now where we owe $306,000 on the new business while being debt-free with the other one, and we're kind of cash-flowing the new business with the old one. The new one's not making money? It's not making money right now. We're about $150 per day cash flowing from the other business. Why is it losing money? Which is a lot. It's been open for a year and five months now and it's just the neighborhood is kind of in a neighborhood where it's going to explode, but not quite yet. It's a coffee shop.

$300,000 in a coffee shop? Yeah. Okay. So what's your question? So we're kind of interested in selling the first business because... Let's sell the one that's making money, not the one that's losing money. That's why I'm calling you. That doesn't make sense. Well, where, where my question is, is where, and this isn't our expertise is, um,

can you sell a business that's not making any money? In other words, can you sell the coffee shop? Yeah, it's probably, it's what you call book value, and it would be based on the, I don't think you can get 300 grand for it, because you probably don't have 300 grand in fixtures and inventory. No. What do you spend 300 grand on? Equipment, tables, the build-out. It's beautiful.

I bet it is. Okay. And you're going to make it up one cup of coffee at a time. We'll see the pro forma. Okay. What's the other business making? The other business is making close to 500 000 a year all right and we're um um we're cash flowing 850 every two weeks into the coffee shop um as a loan to shareholder and then we've got to come up with another $4,000.

So you're making $500,000 and you've got a $24,000 burn rate on your other business per year. Yeah. Just feed the thing. Just feed it for a while. Just what? I'm sorry? Feed the coffee shop for a while. It just didn't make money as fast as you thought it was going to.

It's going to have to make money eventually. You going to do something really painful like lose three hundred thousand dollars but um because you know a business sells based on its net operating income what the net profit is as a multiple it's what a small business sells on or it sells on book value which is equipment fixtures inventory and receables. And you don't have anything there. You've got to use some used tables and some used coffee-making equipment in a failed coffee shop. So I'm going to feed the thing. You make a half million dollars a year, feed it.

It's only 24 grand. Feed it. Keep it open a while. And work your butt off on marketing. Get some people's butt in those chairs and drinking coffee. And turn the thing around. That's what I would do. 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.