The Ramsey Show - App - Your “Status Symbol” Is Just Another Source of Stress (Hour 2)

Episode Date: August 16, 2023

Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studios, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Ken Coleman, Ramsey personality, host of The Ken Coleman Show, and author of the number one best-selling book, From Paycheck to Purpose, Career and Jobs Expert, is my co-host today. You've got questions about careers and jobs, this would be your day to jump in.

Phone number is 888-825-5225. Kelly is with us in Atlantic City, New new jersey hi kelly how are you i'm doing great i'm so excited to talk to you you too what's up okay so i'm 53 years old i'm a kindergarten teacher and um i got remarried my second marriage, five years ago, and when I did that, I moved into my husband's home, and I was very, very attached to my family home that I had raised my children in, so I kept it, and I rented it. And my first four years, I had a military family. They were fantastic.

I loved them. They were fantastic. I loved them. They were wonderful. And they got transferred, so they left, and I took a new family who had stopped paying me. Wait a minute. They stopped paying you? Yeah, they stopped paying. They did not pay June rent, and then they didn't pay July,

and now they're not paying all of it. Why? Because they're scumbags. Why are you tolerating this? Well, that's why I'm calling you. So what happened, what I've done so far is I, um, I went back with my realtor and, um, I started the process. Uh, I sent them the notice, um, with the full balance owed, you know, gave them a week to pay it. And then if not, notifying them that I was beginning the eviction process. They're guiding me along. I just know that you are the expert on it.

So that's why I called you. When does the eviction notice go out well i'm they got the letter yesterday stating what they owed and and advising them they had a week to pay for the eviction process starts okay so a week from today the eviction process starts correct correct um so i just want to tell you this really quick cause it's very important to me. Um, I told you I had, that was my family home where I raised my children. And when I was 39 years old,

I had to marry for 18 years and my husband came home and he had a girlfriend and he walked out the door like that. And when our divorce was finalized, I was upside down on that house, $50,000. I had not a dime, and he paid me a monthly amount, which he paid faithfully. And from that, I now have $160,000 in mutual funds. I have a pension. I have a job. I have, um, my house is worth 300. I have 200. So I really turned it around.

Yeah, you did. That's impressive. Yeah, I did. Good for you. I did. Yes. And so this is very emotional for me. My ex-husband, him and I became good friends. We worked it out. We raised our children. Three years ago, he had a heart attack and died. He left my daughter's money.

They're young, 24, 25 years old. And my daughter wants to buy that house. She wasn't ready yet. She was finishing college. I didn't want to rush her. She felt young to take care of a home. So that was the reason I rushed a bit. So the intention is that she'll buy it.

She's got the funds to do that. But we're not ready to do that yet okay so just evict the scumbaggers right so okay so i just what do i do i just get a lawyer and go to court how does that work yep well it works different in every state and i don't know the laws in new jersey i'm going to be uh i'm going to make an assumption that they're more difficult to evict in New Jersey than they are in Tennessee. In Tennessee, everything's pretty easy. People don't pay, we put them out. It's pretty simple. You may have to go through a whole different rigmarole there than, I don't know. I don't know what your law, do you have a written

lease with these scummy people? Yes. Okay, good. Yes yes i do okay i went to a realtor and i have really ask your realtor who they use what attorney they use for evictions and call that attorney when you get as soon as you get the name and send them a copy of the lease and tell them to start the process uh and tell them what you've done and as long as you have followed what the law says on proper notice and everything in your area then just proceed with the eviction and don't stop the process for anything except these people leaving your home okay unless the law requires you to okay so meaning if they were to pay me some money don't stop no no don't don't accept money they need to move they need to move they have they have broken trust and we

don't want them there anymore under any circumstances even if they bring you 100% current they need to leave yes i i feel the same i don't't trust them at all. And just one final question. You know, I'm paying my bills on that home. I use my emergency fund. Thank the good Lord that I have one. And I'm continuing to use that. I'm trying to prepare just mentally for how long I might think. I mean, this can't go on for more than a year, can it? I have no idea in New Jersey. You need to talk to an attorney, and they'll tell you exactly. I can get them out in 21 days in Tennessee. But in Jersey, I don't have any idea. Okay. And so my guess is it's probably a three-month to a six-month program there.

But I really don't know. Some states require ridiculous notice, and they require six different kinds of notices, and they require you to do it certified mail, and you have to be able to do all this stuff. So you may have to start over on the demand letter that you did because you may have done it without good legal advice um and so but you need to find out exactly what the process is and don't miss a day on the process tighten up that calendar because what people do is is they they go oh well you've got 30 days and then they wait 40 days to do the next thing now do it at 31 30 days and 10 minutes okay and then right on the wire on everything and move them out as fast as you possibly can and um because here's your other problem every day they stay there

disrespecting you there is a day they're more likely to tear up your house agreed in addition to this and you're not going to get any money out of these deadbeats probably. All you're going to get from this is a PhD in evictions. You're going to get a degree, a new certificate on how to do evictions. You're going to know how to do it now in your state. So find out what the law is in Jersey. Follow the law exactly and start immediately and don't miss a deadline. Hit every milestone, every marker exactly on the head and move them and push them and move them and push them and move them and push them. This is The Ramsey Show.

Ken Coleman, Ramsey Personality, is my co-host today. Kay is with us in Amsterdam. Hi, Kay. How are you? Hi there. Thank you so much for taking my call. I'm really excited to talk with you, gentlemen. I need advice and I need help.

Well, we're here to help. How can we do it today? Well, here's my question. I've been listening to you for a while, and I know how you feel about taking money out of retirement to buy a home. My situation is that I'm currently living in the Netherlands and I will be returning to the U.S. within a year and I would like to be able to buy a home. All I have is what's invested in stocks, bonds, savings. However, I am one of your statistics. I am an elementary school teacher with a net worth of a million.

But it sounds better than it really is because I have no Social Security. I have no 401Ks. Oh, excuse me. I do have 401K, but I have no Roth. I don't have any of those tax advantages. So that million is pretty much all I have. What is that million in? It's all invested in stocks, savings, bonds. We are recently married two years.

We do have a $50,000 cash set aside for the move back to the U.S. We have a $15,000 emergency fund. Okay, so you've got no taxes on this except possibly some gains if you use some of it to buy a home, right? I don't know. That's what you know, right? Well, I mean, if you're just going to invest in stocks and bonds and it's not in a retirement, not in a 401k, not in a retirement fund of any kind, in your mind it was a nest egg for retirement. But in terms of taxation, it was a nest egg for retirement. But in terms of taxation, it's only going to have taxes on the gains of it

if it's gone up in value. You'll have some taxes on that when you sell it. I do have $149,000 in a 401k from the time that I worked in the U.S. I do not have enough quarters earned for Social Security or anything. So, yes, that was my retirement nest egg. I do not have enough quarters earned for Social Security or anything. So, yes, that was my retirement nest egg. Can I pull it out to buy a house or part of it? You don't need to pull that out. I would pull some of the other out that is not in a retirement account.

Okay. And use that to purchase a home? Yes. How much would you recommend that I could pull out? I'm looking at prices of homes, and they're about $350,000 upward. So if you take $350,000 of your million and buy a house, that means you have $650,000 in investments, and you have a paid-for house.

Okay, and that takes care of it. I have no idea how expensive things are there. Well, it depends on where you're moving and how big a house you're going to buy. All these things come into play, right? Yeah. But, I mean, if you stick with what you just said, if you bought a home for $350,000 and you have a million, then after you do that, you're going to have $650,000 left in investments.

Did I do that right? Yeah, I think so. Okay. So then it's okay to go ahead and pull money out to buy a house and just put cash down. Yes, I would. I'd absolutely do that. Because a large portion of your money is not in an account that's going to be penalized. If all of this was sitting in a 401k, we'd have to have a different discussion.

We'd think about how we're doing this, okay? No, it's just all in stocks stock it's just all in stocks and so you're going to move some you know you've been saving money or your whole life and now you're going to use some of it to buy you a house and that house is going to go up in value too so it's going to be a wonderful thing and uh are you going to be working when you move to the u.s um hopefully at the moment i'm a stay-at-home mom um our household income here currently is 60 000 i have no idea what the job market's going to be like there you're getting married you said right i'm no recently married two years okay two years married okay so and our current household income is 60 000 so is he american or what no dutch dutch okay so he's

going to move to the u.s obviously with you and um hopefully move through marriage towards dual citizenship and be employed here correct correct okay but that's also we're starting that whole job market thing there too what does he do the do? The biggest thing, a dog groomer. Okay. Well, there's no shortage of dogs to groom in the U.S. You're going to have no trouble getting that. If that's what he does for a living, I don't think you really got to apply. You just get you some clippers and go at it.

I mean, that's how it works. It is true. The amount of money, folks, you need to look this up. I don't have it right off the top of my folks you need to look this up i don't have it right off the top of my head but i saw it recently it's staggering the amount of money spent by americans on pets is mind-boggling the amount of money that dave and sharon's on a pet well you're part of that big number is mind-boggling yeah yeah it's disgusting um, there you go. I think I sent my kids to college cheaper. Oh yeah. Yeah. Unbelievable. Yeah. These things, these things are, well, anyway, I love them. We

love them. We love our puppies. And so there you go. And yeah, you're going to, yep. You're going to do just fine. He'll be fine. You know what he needs to do is, is, uh, pay cash for a nice little van, trick it out and do the mobile grooming because that's the game changer if you can go to somebody's house and take care of the pet there yeah you sound like a customer i am it's a game changer well i say that dave that's not fair you know i have nothing to do that's all stacy but she she raves about it yeah and the fact that she's happy and the dogs are happy ken's happy megan is in jacksonville florida hi megan what's up hi how are you guys better than we deserve how

can we help great um so i have a question for you about renting out the house that we are in my husband's in the navy um we have about $96,000 is our take-home pay. And we are on baby step two right now. We've paid off almost $28,000 so far this year. I've got another $44,000 to go. And we were like gazelle intense, really should have this paid off before we're scheduled to move. The interest rate on our house is only 2.4%. And looking at the rental market, we can weigh over, like for rent in this area, we can charge between $2,300 and $2,500 a month,

and our mortgage right now is $2,000. Thank you for your service to the country. Do not keep the house when you move. Okay, thank you for your support. Yeah, do not keep the house when you move. Okay. Thank you for your support. Do not keep the house. Here's why. Okay. We've worked with the military for years, and this comes up all the time. One of two things. Number one, I can rent it, and I think I'm making money. Or number two, the market is slow, and I can't sell it, so I'm going to rent it,

and I think I'm making money. And if you're not careful in the military, you'll end up with rental properties dotted as breadcrumbs behind you for everywhere you've had a stop. This is not how you build a rental portfolio that's profitable. You're becoming an accidental landlord because if you're living in – where do you think you'll be stationed next? Do you have any idea? We know we'll be in Virginia, but it's going to be a quick, it's only two years.

Okay, if you were living in Virginia and you had a pile of money in the middle of your table and you said, would I go buy a house in Jacksonville, Florida as a rental, even if I could get a 2% mortgage, the answer would be no. You don't buy houses in Jacksonville, Florida when you live in Virginia as rental properties. It sets you up for a problem. Okay. Long-distance landlording will get you bit. Make your life clean.

Make your life simple. Just take the money and go to the next stop. And if you're not going to be in Virginia but two years, then you need to rent. Yeah, yeah. That's what we were going to do anyway. Yeah, so you don't get stuck with it in the next move. But, yeah. And, again, thanks so much.

Yeah, Virginia would be one of the big stops for the Navy, right? Yeah. Norfolk, Virginia is the largest naval base in the world. So you also have Air Force there as well. A lot of military transient in that area. Yeah. And so there's a lot of housing turnover because of that. Big time.

Yeah. So that market can get you stung on that. And Jacksonville is pretty solid. You should be able to sell that house that you're in and be in really, really good shape when you're done. But way to go, Megan. Congratulations. I'm happy on your baby step to progress.

That's very, very cool stuff. So, you know, folks, wanting to own rental real estate is like one of the biggest things in America right now. Everybody wants to own rental real estate is like one of the biggest things in America right now. Everybody wants to own some, but let me just tell you, it is not a good idea unless you pay cash for it and it's in your immediate area. And even then you really have to have the constitution, the personality to deal with these things called renters. We had a sweet lady on the phone crying a few minutes ago from New Jersey who had renters that she can't get out that won't pay. And so, yeah, there's a process here. Anybody that calls rental real estate passive income

has never done it. This is The Ramsey Show. Ken Coleman, Ramsey Personalities, my co-host today. Open phones at 888-825-5225. Thank you for joining us. We're glad you're here. Hey, if you like the show, we can use some help from you. Please help us. You can help by subscribing, hit the subscribe button, hit the follow button, click the like button, click the share button and share the show, share the link, share where

you're listening, where you're watching YouTube or podcast, radio, TV, and whatever it is. Thank you. And just let people know. We know that you are doing this because we're seeing our rankings in every one of the formats go up right now. So thank you. Thank you for sharing, and we appreciate you putting the word out there. It's a big deal to us. Thank you.

Thank you. Thank you for doing that. Christopher is in New York. Hi, Christopher. Welcome to the Ramsey Show. Hey, how you doing? Better than we deserve. What's up? So I was just kind of wondering what exactly I should do with my car loan.

I owe, the payoff would be $24,000, and it's like a 1.8 APR. I was just, you know, I'm a new listener to you and I was just kind of wondering, you know, uh, should I trade that in and get what I pretty much owe on it? And, you know, I'm not upside down on the loan at all. So I would get back what I owe and should I take out like a $10,000 loan and get something obviously, you know, know less but i could pay off much quicker um so i was just kind of wondering what to do with that you have any money um i make about 45k a year and i have i'd say roughly about 3 000,000 in my savings. Okay. Well, there's a couple things.

Number one, we're always at, you know, like you said, you're new to this Ramsey stuff. So we're always moving people out of debt because your most powerful wealth-building tool is your income. So keeping a car payment around your whole life is a good way to ensure that you never have any money and the second thing is with cars or anything for that matter those motors wheels they all go down in value and so having too much invested in things going down in value obviously is going to keep you from being wealthy too so the rule of thumb that i started using years ago and we use around Ramsey is don't have any, all the things with wheels and motors added together in your life should not equal more than half your annual income. And yours does. Right.

So on that basis alone, I would sell the car. The second thing I decide on selling a car, I decide is can I pay it off in two years or less if it is less than half my annual income? Now, yours is sold. We've got to sell it because it's too much based on your annual income. You've got too much invested in things going down in value. But if you could pay it off in two years, would we keep it? And I think you'd struggle to pay this off in two years, don't you? Yeah.

Yeah, I would. The payoff date is July of 2027. Yeah, but that's if you just pay the but even if you paid extra and leaned in and say i'm going to pay double payments you still won't get there in two years so no you this thing is it's become too big a part of your life as a ratio does that make sense yes sir yeah and so getting if you had no car payment right now think about how much you could save how much you you could invest. And so, you know, and then when you took overtime or you took an extra job, you know, it all be going in your pocket and you could use it for generosity. You could

use it for helping others. You could use it for building, you know, building up a good 401k plan, start to really become wealthy. And that that's what I'd look like, you know, so, or what I'd look towards. So yeah, in your your case, I think you already had come to the right conclusion, Christopher. Sometimes we're just here to confirm. I think it's a lot of times. I think people know what they should do, and they just need someone to nudge them, and we're happy to do that. And I would say, just generally speaking, we have a lot of new people.

Christopher illustrates this. Dave, this is just something I lived in my own life. The car thing is so overblown in America. The car has become a status symbol. And I got to tell you, the status wears off pretty quick and is replaced by stress. And if it were me, I'd always try to move the car if it could help me get ahead and I could drive something that's a whole lot cheaper. It gets me from A to B. Then it motivates me to do everything I want to do to have a nicer car. And that's what Stacey and I did for years. And I got to tell you, it worked out for me.

And we're seeing it today. I mean, we had a conversation with our son the other night. And he's telling me about this kid in his class that got a BMW. And I made a comment. He mean, I went, A, he didn't get it. His parents didn't. I guarantee it's got a giant payment. So he came home, had a smile on his face, and he went, hey, Dad, I found out. You were right. I said, oh, yeah?

About what? I didn't know. Because I don't hear that very often in my house. It's something you ought to hear, yeah. And he said, what, pray tell, was I right about? What was I right about? Let me write this down. Let me make a note here in my journal.

But he looked at me. He said, I asked my buddy how much the payment was. 900 bucks for a 16-year-old to drive a brand new 2023 BMW. $900 a month. And this is the mindset of most Americans. And it is tragic because here you got a kid starting out. He didn't earn that. He didn't have any money. Kid's broke. His parents probably can't hardly afford it. out he didn't earn that he didn't have any money kids broke his

parents probably can't hardly afford it parents didn't earn it either nine hundred dollar a month payment on a brand new bmw that's losing value rapidly he may run it and you taught a kid that the way things look the status is more important than the actual facts behind the scenes. That's correct. Behind the scenes, we've got broke people buying a 16-year-old. These people are brain damaged. I mean, that's just dumber than a rock. Yeah.

Man, when I was 16, every kid I've had when they were 16 tears a car up. A hundred percent. Some of them tear it up royally. Some of them just tear it up a little bit destruction just a little bit yeah but the the number of number of teenage cars that made it with completely unblemished i mean come on and so what we're going to do is we're going to teach this kid that status is more important than the fact that we are stupid and borrow that kind of money. Number two, we're going to teach this kid that, you know, he gets – oh, God. By the way, the parents are doing it for their status. I know.

Because they get to say, look, I bought my kid this car. And you didn't buy it. You loaned the car. Oh, God. That's what I want people to understand. And they're going to tear it up. Oh, a new BMW. Oh, such a nice car. Brand new. 16-year-old kid. Oh, God. That's what I want people to understand. And they're going to tear it up. Oh, a new BMW. Oh, brand new.

Such a nice car. 16-year-old kid. Oh, God. It's just, I am a car guy, and tearing up a really nice car is just a dumb butt thing to do. I mean, why don't you just give it to an orangutan and give him the keys? It's the same thing. Oh, my gosh. I mean, God.

Oh. Yeah. oh it's the same thing oh my gosh i mean god oh yeah i by the time i the car my first car by the time i got rid of it it had been hit on every side or i had hit it on every side i guess i should say oh yeah and it the thing had so much bondo in it it was double the weight oh the car my dad gave me when i was 16 was a turd with wheels. It was even that color. I named it the Brown Hornet because of my love of the Fat Albert cartoon series, but it was a way of making a joke at how ugly this was. The paint was bronze at one point, but it had probably 275,000 miles on it. It was a stick shift. I want my child to be safe.

Then we should save them from you yeah oh my gosh well oh man oh that's painful but the object lesson was there he got it you know and honestly when my kids were your kids age and they're all grown adults right with their own kids but it was the same neighborhood and the same stupid stuff going on yeah i mean you know we i was in one of the videos i used to say you know we live in a neighborhood where these stupid people buy a 16 year old a new brand new bmw and then you just actually did experience that that's just mind-blowing oh god because i had to explain to my son uh these kids that are driving this their parents aren't paying cash well because their parents are stupid right so he had to he had to find out i said i'll tell you what find out i forgot that i told him go ask him and sure enough

he had the guts to do it and the kid told him because the kid's clueless yeah kid doesn't have any appreciation for 900 bucks a month that's a lot of money wow so the point is america don't get hung up on the status of your car that kid that that's the way to live his life. It'll take him two decades to recover from this negative lesson. You know? It's just that regardless of the dollar amount, prestige is all that matters. Oh, you're killing me. This is The Ramsey Show.

Ken Coleman, Ramsey Personality, is my co-host. Open phones at 888-825-5225. Angela is in Midland, Texas. Hi, Angela. Welcome to The Ramsey Show. Hi, Al. How are you? Better than I deserve. How can we help? My husband and I are new to Baby Step 7, and we called our financial advisor to see what to do with the extra money,

and he suggested a life insurance retirement plan, and it kind of raised a red flag because it has life insurance in it. It would raise a red flag. It would shoot off fireworks. Fireworks that would cause me to change financial planners i don't think you get a financial planner they give an insurance agent and that's what i thought yeah um no uh i mean who uh does this guy have a company that he works for yes it's one of the national places. One of the national insurance places? No, it's a financial advisor national place.

Okay. Wow. I don't know if I can say it on there. You can say whatever you want to, but I'm just trying to figure out who I want to trash. So here's the thing. Very few people recommend that in the financial world, unless they're in the insurance business. Very few. And, uh, so he, he's, if he's working for a traditional, uh, brokerage house type thing

and he recommending this, he's, he's an unusual bird. Um, uh, how old is this guy? Oh, he seems to be about late 30s, early 40s. Okay. That's unusual, too, then. It's an Edward Jones. Okay. All right.

It's unusual for Edward Jones. We don't work with Edward Jones, but it's unusual for them because they're typically a typical brokerage house, and they're not usually peddling this crap. So I don't know where this kid's doing this thing. But, yeah, that scares me, and, no, I'm not doing that. Absolutely not. Do you have a recommendation? What to do with extra money at Baby Step 7?

Yes, sir. Yes. I personally have been doing that for 30 years or so, and I buy mutual funds that have a low turnover ratio, or I buy real estate that I pay cash for. Okay. And so what I have ended up doing, honestly, is I've ended up throwing money into an S&P 500 no-load fund until it gets enough in there to buy a piece of real estate. And then I pull it out and do that so here here's the why you do let me explain what that means low turnover ratio means

okay inside of a mutual fund the percentage of the stocks inside the mutual fund there's 90 to 200 stocks in the typical mutual fund the percentage of them that are sold every year is called the turnover ratio the profits on those sales are all taxable so if a mutual fund say had a hundred percent turnover one hundred percent of the profits from that mutual fund that year will be taxable follow me right if you don't sell a stock and it goes up in value you do not pay taxes on the capital gain until you sell it. You understand that, right? Okay, yes, sir. So if a stock goes from $50 to $70 and you don't sell it, until you sell it, you don't pay taxes on that $20 gain per share.

Mutual funds are the same way. So if you get a low turnover ratio, like an S&P 500, it'll usually have a 3% to a 5% turnover ratio, meaning 95% of the profits are not taxable until you sell the mutual fund. And when you do sell the mutual fund out, you're going to pay taxes at a capital gains rate if you've held it for more than one year, and that rate would be 15%, a lot less than your ordinary income rate. So it's a great way to save money. So capital gains growth of any kind is not taxable until you sell it. So if you buy a house for $100,000, it goes to $150,000 as a rental. You do not pay taxes on that capital gains growth until you sell the house. If you buy a low turnover mutual funds, you do not pay taxes on that capital gains growth until you sell the house.

If you buy a low turnover mutual funds, you don't pay taxes on it. So it's basically tax deferred growth. Does that make sense? Yes, sir. So a low turnover mutual fund and click online and go to SmartVestor at RamseySolutions.com and find the broker and or brokers that we're recommending in your area. They will not give you this type of advice. They will teach you the stuff that I'm teaching you right now.

And they can help you find some low turnover mutual funds. And you'll get an investment advisor that you can trust. But it's nothing against Everett Jones, but that kid's giving bad advice there. And honestly, it's unusual against Everett Jones, but that kid's giving bad advice there. And honestly, it's unusual for Everett Jones. I'm shocked. But usually they would be more traditional than that. I half expected her to give me a life insurance company's name. I thought the national one was coming.

And I wonder if this young man's getting a commission, a little kickback on this. Oh, definitely. The commissions on these things are 10x what it is on a mutual fund. Yeah. So it's a big commission item. But even then, the brokerage houses have abandoned it. These people, you know, like a Raymond James or a, you know, an A.G. Edwards or, you know, whoever, I mean, Merrill Lynch, they've abandoned selling this stuff long ago because everyone outside the life insurance business has figured out that, you know, these whole life and universal life products are absolute trash.

They're horrible, chunked full of fees, overpriced insurance. They get upside down and run backwards before you know it. I mean, it's a disastrous industry. It's an antiquated industry and so the only people that say whole life life insurance is good are people that sell it that's the only one i mean so but this kid's only bringing it up because yeah some somebody brought it into some sales meeting pitch this guy and he's young and he just bit because he could say he got dollar signs in his eyes off the commissions oh sure that's exactly what happened yeah that's right because again i i would wager to say again we don't do any business no smart no edward jones

or smart mr press okay so i'm but i'm not mad at them but they're they're a traditional good company there's nothing wrong with the company in general and so i do think this is unusual yeah uh if you told me you're doing uh something like northwestern mutual well then i would have said run you know right well that's their way mutual well then i would have said run you know right well that's their way different right instead i'm just saying you should reconsider who's giving you advice yeah yeah it's a little different yeah you know oh my gosh but yeah that that's what you're facing so uh wow yeah um whole life life insurance and leasing a car are two signs that you are 100 percent intent on remaining in the middle class. Right.

These are these are the payday lenders of the middle class. And, you know, the lower class generally they get ripped off by like I mean lower socioeconomic ladder. I don't mean class, but I'm talking about class in terms of financial inputs um you know they get ripped off by tote the note lot rent to own uh pawn shops uh that's who's in their end of town uh payday lenders are the worst of the worst scummies to the scum so the whole life life insurance agent the car leasing is the payday lender of the middle class that That's what it amounts to. And, you know, that's who rips them off. So you don't see these things in the rich end of town.

No, you don't. That's the other thing I wanted to ask you. Why? Because rich people don't do that stuff. That's how they got rich. What's the ratio of people in Baby Step 7 really needing insurance? You know, you become self-insured. She was just looking for a retirement.

She was looking for an investment. Oh, I know. you know you become self-insured the more she was just looking for a retirement she was looking for an investment oh i know but i just wanted to bring this up for new listeners because this idea of insurance in general my life insurance you i don't know i mean it's based on you know net worth if you die is there enough money to take care of everybody that's left right that's the formula right and if you know if you're sitting on 10 million dollars and you you know the kids are grown and gone and you die you you don't need life insurance. I don't have life insurance. Right.

But my kids are grown and gone. They're independent. Right. And there's hundreds of millions of dollars of assets left to mis-share and she'll be fine. So I think she can struggle through. What do you think? So I don't think she needs freaking life insurance. So, yeah, you become self-insured by getting the kids grown and gone, getting rid of the debts, and building a balance in your retirement

and your investments, right? That's right. So you got a couple million dollars in your retirement. I paid for a house. Kids are grown and gone. Your need for life insurance is gone. That's right. And so then the only time they would bring it up to somebody like Angela,

in her case, is trying to sell it as an investment program, which is a bunch of crap. Yeah. Keep those in two separate buckets. One of those little emojis, turds with eyes on it. That's what this thing is. That's exactly what it is. We need that little pile of turd emoji, James. We need that. We'll pop that up at will here. With a sound effect, maybe. I don't know. We'll see. Just put it right there on the old whole life, life insurance right there. Boom, right there. Boom, boom, right. I don't know. We'll see. Just put it right there on the old whole life, life insurance. Right there. Boom.

Right there. Boom. Boom. Right there. Yeah. Boom. This is The Ramsey Show. Hey, it's Ken.

If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Go to ramsesolutions.com today to sign up for our newsletter. Again, that's ramsesolutions.com to sign up for our weekly newsletter.