The Ramsey Show - Don’t Let Money Drama Keep You Broke

Episode Date: September 16, 2025

🤔 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Think you’re good with money? Take our Money in America quiz!⁠⁠⁠ Dave Ramsey and Ken Coleman answer your questions and discuss: "I am getting calls regarding debt on my deceased father. How do I handle this?" "Can we get some advice on managing finances with a large family and disagreements on spending?" "How do my fiancé and I plan to combine our finances when there is a prenup in place?" "We would like to retire early. How should we adjust our investments in order to make this happen?" "How do I get out of $1.8M in debt when I'm stretched thin in spite of a high net worth?" "How do I keep my addict brother from blowing his portion of our inheritance?" "Am I wrong for not wanting to pay for repairs to my mother's home?" "My wife and I disagree on what to do with a whole life policy." "My wife and I disagree on leveraging debt to make money. Who is right?" "I am $10,000 underwater on my leased car. How should I handle this?" "I am debt-free. When can I start buying things I want?" Next Steps: ✔️⁠⁠⁠⁠⁠⁠ ⁠Help us make the show better. Please take this short survey.⁠⁠⁠⁠⁠⁠⁠ 📞 Have a question for the show? Call 888-825-5225 weekdays from 2–5 p.m. ET or⁠⁠⁠⁠⁠⁠ ⁠send us an email⁠⁠⁠⁠⁠⁠. 📱 ⁠⁠⁠⁠⁠⁠Get episodes early in the free Ramsey Network app! ⁠⁠⁠⁠⁠⁠ 📈⁠⁠⁠⁠ ⁠Are you on track with the Baby Steps? Get a free personalized plan.⁠⁠⁠⁠⁠ 🎟️ ⁠⁠⁠⁠⁠⁠⁠Two Weekends. One Life-Changing Experience. Get away with your spouse in Nashville. ⁠⁠⁠⁠⁠ 💵 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Start your free budget today. Download the EveryDollar app!⁠⁠⁠⁠⁠⁠⁠⁠⁠ 📚 Set and actually reach your goals with the NEW 2026 Ramsey Goal Planner! Hurry—they sell out every year! 👫 Check out our free Term Life Insurance Guide for helpful info and resources. Connect With Our Sponsors: Stop paying more and start shopping smarter at ⁠⁠⁠⁠⁠⁠ALDI⁠⁠⁠⁠⁠⁠. Get 10% off your first month of⁠⁠⁠⁠⁠⁠ BetterHelp⁠⁠⁠⁠⁠⁠. Go to ⁠⁠⁠⁠⁠⁠Boost Mobile⁠⁠⁠⁠⁠⁠ to switch today! Learn more about⁠⁠⁠⁠⁠⁠ Christian Healthcare Ministries⁠⁠⁠⁠⁠⁠. Get started today with⁠⁠⁠⁠⁠⁠ Churchill Mortgage⁠⁠⁠⁠⁠⁠. Get 20% off when you join ⁠⁠⁠⁠⁠⁠DeleteMe⁠⁠⁠⁠⁠⁠. Go to⁠⁠⁠⁠⁠⁠ FAIRWINDS Credit Union⁠⁠⁠⁠⁠⁠ for an exclusive account bundle! Find top health insurance plans at ⁠⁠⁠⁠⁠⁠Health Trust Financial⁠⁠⁠⁠⁠⁠. Use code RAMSEY to save 20% at ⁠⁠⁠⁠⁠⁠Mama Bear Legal Forms⁠⁠⁠⁠⁠⁠. Visit⁠⁠⁠⁠⁠⁠ NetSuite⁠⁠⁠⁠⁠⁠ today to learn more. For more information, go to ⁠⁠⁠⁠⁠⁠SimpliSafe⁠⁠⁠⁠⁠⁠. Use promo code RAMSEY for 18% off at ⁠⁠⁠⁠⁠⁠The Nokbox⁠⁠⁠⁠⁠⁠. Get started with ⁠⁠⁠⁠⁠⁠YRefy⁠⁠⁠⁠⁠⁠ or call 844-2-RAMSEY. Visit⁠⁠⁠⁠⁠⁠ Zander Insurance⁠⁠⁠⁠⁠⁠ for your free instant quote today!  Explore more from Ramsey Network: 💸 ⁠⁠⁠⁠⁠⁠The Ramsey Show Highlights⁠⁠⁠⁠⁠⁠ 🧠 ⁠⁠⁠⁠⁠⁠The Dr. John Delony Show⁠⁠⁠⁠⁠⁠ 🍸 ⁠⁠⁠⁠⁠⁠Smart Money Happy Hour⁠⁠⁠⁠⁠⁠ 💡 ⁠⁠⁠⁠⁠⁠The Rachel Cruze Show⁠⁠⁠⁠⁠⁠ 💰 ⁠⁠⁠⁠⁠⁠George Kamel⁠⁠⁠⁠⁠⁠ 🪑 ⁠⁠⁠⁠⁠⁠Front Row Seat with Ken Coleman⁠⁠⁠⁠⁠⁠ 📈 ⁠⁠⁠⁠⁠⁠EntreLeadership⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠Ramsey Solutions Privacy Policy⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

brought to you by the every dollar app start budgeting for free today normal is broke and common sense is weird so we're here to help you transform your life from the ramsie network and the fair wins credit union studio this is the ramsay show ken coleman number one bestselling author ramsie personality host of the big hit on the ramsay the network called Front Row Seat. He's my co-host today. The phone number here is AAA 825-5-225. Pat's in Boise, Idaho. Hey, Pat, how are you? Hi, Dave. Thanks for talking to me. I'm the executor for my dad's estate. About six months after his death, I received a letter looking for the person who could act on his behalf. I looked up the company, and it's a debt collection agency primarily focused on collecting debts related to deceased individuals. Wow. They utilize technology, yeah, I've never heard this either.

They utilize technology like probate finder on demand to identify and contact the personal representatives of the state to recover unpaid debts. So my dad absolutely did not have any debt. He was Dave Ramsey while Dave was running around in diapers. He didn't borrow money. I do know that there is, just from looking at unclaimed property, I do know that there's a gentleman who lived in the same metro areas. My dad, for many years, who had his exact.

name, first name, middle initial, and last name. So I'm thinking, I don't know, maybe they're looking for that guy. Here's the deal. I don't even want to talk to them. I don't want to spend time on this. I don't know if you need to know the name of the company, but how worried do I need to be? Well, I mean, is the estate settled? The probate is finished, but it's not closed yet.

I haven't closed it. Okay. What is lacking for it to be closed? Nothing. I was just doing some final insurance policies and transfer of his property to my mother. So if that is done, I can close the estate at any time as far as I know there was nothing that came up during the probate. So your mom's still there, and she's sitting with whatever assets that they had? Yes. Okay, good. Okay.

Well, I don't know Idaho law, and I'm not an attorney anyway, even if I did. but most states have a period of time that a creditor can file a claim against an estate before, after, or during the probate being open, okay? And I don't know what yours is, okay? So if they didn't, I'm probably good. Probably, from a legal, practical standpoint, or from a legal standpoint. From a practical standpoint, these folks, they have one little thread that they're hanging on, and they're going to pull that thread and pull that thread and pull that thread.

They're eventually going to end up hassling your mom probably. So from a practical standpoint, I would put them down. I'm her power of attorney, so they won't get much further than you. I know, I know, but if they start calling her, start mailing filling up her mailbox with stuff i don't think there's a legal issue i don't think they've got a claim you don't think they've got a claim they're probably outside the notice of meeting the creditors period of time all that kind of stuff but that doesn't keep them from driving everybody in the in the soup crazy okay so i probably would invest a few minutes and

just shut them down how do i shut them down i would just call them and say uh he did not have any debt with you i'm the executor of the estate and you can give me a social security number, send them a copy of the death certificate. None of that hurts you in any way. And, you know, I'll give you the last four digits of social security numbers, see if it matches with what you think you're hunting. But I think you're hunting this other guy, and you need to stop. And if you don't provide me proof of written proof of debt and you don't stop,

I'm going to sue you under the Federal Fair Debt Collection Practices Act because you're violating it now that I have told you that I am demanding proof of the debt. Can I just demand proof of the debt without providing them anything to start with? Well, I'm giving the last four digits Social Security number. What I'm trying to do is in case there's two brain cells on the guy you're talking to, if they happen to rub together, you want to give him a way to go away. Oh, it's not him. I've got to go the other way, okay, right?

But in case they're – if they think – but the problem is, some of these companies, and what you need to be prepared for, is, and I think you're kind of already there, is they will try to collect from someone that they know is not legitimately the debt just by hassling them. And that's what I'm worried about, yes. Well, I'm not worried about it because you're going to shut them down. We're not going to talk to them anymore. Okay, we're going to block them.

And if they continue to pursue, I would have an attorney send them a letter under the Federal Fair Debt Collection Practices Act, because they're in violation of federal law if they continue to pursue. after you show them that it is not his debt, and you give them last four-digit social security number, and they don't provide proof of debt. The other thing that's going to come up is they probably don't have proof of debt. They probably bought a line item on a spreadsheet. A lot of debt buyers don't get the actual documentation on the debt. They just get a line item, point of last contact, some details about a name, whatever the file's got. And it's just a whole list of line items.

It's not like they have a file on him. so they point being i don't think they can provide proof of debt but i'm going to ask because i'm going to make one or two phone calls with these people and try to in a civil way make this go away but if you determine that a they're trying to collect from somebody just anybody and they're just think they can hassle you then just pound their face right and then uh and and and or b that they cannot provide proof of debt and they won't go away what i'm more than anything trying to do is get them to quit calling you and quit calling your mom. And it's worth two phone calls to invest in that, or to never call your mom.

Okay. Right, I like that. Okay. Yeah. And then, but again, write that down. It's the Federal Fair Debt Collection Practices Act. Okay. And it is federal law that they're violating.

If you demand proof of the debt, they don't provide it, and they continue to attempt collection. Hammer them. I was looking for something to add. You covered it from every angle. You know, look, you got the facts. And so don't be afraid to take this on and then shut it down. I think that's what this is.

I don't think this is harassment. I just think Dave's nailed it. They don't have a lot of info. It's not harassment yet. No, yet. Probably is going to be there if it doesn't stop. That's right. So the thing is, folks, you got to debt buyers when they buy debts are typically paying anywhere

from $2 to $0.8.00. so they're paying 80 bucks for a thousand dollar debt and they can't they can't even find the people in most cases in this case they're chasing deceased people's debt okay so they're always trying to chase down the um so this is basically prospecting yeah yeah they're dialing for dollars all day long and you know it's a horrible job and here's a here's you want to be worse than somebody trying to collect on an old debt collect on an old debt that you know the person is dead right i mean this is a bad job. Cleaning septic tanks is more fun.

And so honestly, seriously, oh my gosh, what a horrible position. So they probably got high turnover. You got a boiler room, phone room going. It looks like something on Wolf of Wall Street or something. That's right. And they're just, you know, and the average time on the job is 21 days. And they're just constantly hiring new people that are dialing for dollars. You're probably not going to talk to the same person twice.

And they're brainwashed, by the way. They come at you with a script. Oh, yeah. And so that they don't get knocked off. So you've got to really be strong and show a lot of facts. And the other thing is the neat thing about the technology is you can just hang the phone up. Just push in. That's always enjoyable.

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If you've not listened to Ken's show, it has exploded as a brand new big hit. It's called Front Row Seat. It's long-form interviews with people who are changing the world in all kinds of different ways, inspiring people. And Ken, I actually loaded and listened to about half of your episode with Rachel that pop. That's the one that's currently up, right? It's currently. Yeah, I was hoping that you and Sharon would actually listen to it. I thought it was really fun.

I enjoyed it. So Cousin Ken. Did you know this? Cousin Ken. I know, you know, I don't think I've ever told you about it. Yeah, you're talking about it. Yeah, absolutely. You've got to watch it, folks, because I'll just leave it at that. Well, Ken and Rachel are like a brother and sister in a way, and really a toxic ways, actually. So he makes a great interview interviewing his sister of sorts there. And it's a great, truthfully, I was a proud dad because you brought out some of the best parts of Rachel.

I think so. In the interview. It's a beautiful, beautiful thing. She did it. It was really fun. And there's a very fun moment where you'll get to actually hear and see what Dave is talking about. Are Dave and I related? We aren't 100% sure, but there is some evidence that maybe we are seventh cousins once removed, which makes Rachel my eighth cousin once removed. And interestingly enough, so your cousin Eddie's what we're saying. Yeah, right. And we have fun with it on the show, but it's really funny. I don't know if you ever saw that video when we revealed it to it. I remember you and I talking about it. One of that hilarious, how she reacted. Yeah, it's hilarious. Her reaction is priceless.

Classic. Because she's so fun. James is in Salt Lake City. Hey, James, what's up? Hey, Dave. You've probably answered this question a thousand or a million times, but my wife and I, we have a lot of kids, which is our decision. You know, I'm not blaming anybody, but I always wanted, like, I always wanted, like, four kids, and she always wanted 12, so we're going to compromise and have 12. So that's our family situation.

You really have 12 kids? well we have 11 right now oh okay but i make you seem thrilled by the way well i have that type of voice okay all right that's good to know so i make more money than i ever thought i would make honestly and yet and and five years ago we were pretty much debt-free but just in the past four to five years we as our kids have kind of reached that age my wife has stuck him in sports and extracurricular activities and now we've amassed almost $50,000 of debt and maxed out a credit card and, you know, push some expenses that we haven't paid medical or whatnot. And this is something that I think I know the answer.

Well, net, I mean, gross, I would say I'm pushing right around 200. Okay. And net, though, after everything, after insurance and medical and whatnot, taxes, it's about 120. Okay. Anyway, the nearest I can figure, we're spending about 25 grand a year on the, you know, a little over two grand a month on these sports. And I think that's kind of the silver bullet. And yet my wife is just absolutely not willing to really give these up.

She's going to look for a job and stuff, but what do we do? You know, I don't know. How in the world does a woman with 11 kids work? Well, that's a good point. She doesn't have the time nor the energy. Our youngest is five and is in school all day. That's an eye. That's obviously not going to happen.

I mean, the daycare, you'd have to flow to federal grant. Yeah. Oh, my gosh. Well, she's hoping to pick up part-time work while our youngest is at school from eight to three. In between the fourth and the seventh kid? Oh, my gosh. No, the sports are not the problem and no, her working is not the problem. Okay.

Her not saying out loud, we have a limited amount of resources and we're going to live within them. You, not saying out loud, we have a limited amount of resources and we are going to live within them. And write it down and my wife stuck the kids in sports, not anymore. My wife and I decide if we can afford anything. And then it goes on the budget. and then and only then do we do it because we both looked at the overall picture like two grown-up people and said we chose to have 11 kids and we have to manage $200,000 to feed them and not go in debt because going into debt continuously is not sustainable, duh.

Well, part of our income is with, and maybe this is the tail end of my question to get your opinion, we have a couple of real estate, a couple rental properties that cash flow very decently. in my opinion. And she says, well, let's just sell one of those, you know, to use the equity to pay off like that. But what do we do when that money's gone because you continue to overspend? Right. Yeah, that's my position.

Yeah, you can't, you can't, it's not sustainable. What you're doing is not sustainable because your system sucks. You don't have one. Yeah, I like that word. I've been using that a lot the past couple years. The system doesn't work. The system, when the two of us sit down and look at our income that we have coming in and say, all right, what are we going to do with this income and we're not going over it?

And there's no excuses for going over it, by the way. None. Yeah, I agree. Yeah, you've just confirmed. I think that's kind of where we are. You can't be passive and say, well, she did this. No, she didn't do it. You stood there and watched it. Exactly. So you did it too. And she can't say, well, you know, you just go make the money and I'll take care of the house. No, you're not taking care of the house. You're spending more than we make. And that's not sustainable. So we are going to get on a system where we decide together where our money is going. You get a vote.

I get a vote. We've got to come into alignment. And it's got to be on less than we make. And so the sports aren't the problem. They're the symptom. Her working is not the problem. It's the symptom of you guys not being on the same page of being above this strategically and then developing a tactical process out of the strategy called a budget that actually makes the money behave.

I will add to this that you probably can afford to do the sports once you guys get organized and get aligned. Yeah. I think the reason – I think the reason you went in debt is she doesn't have an off button because she didn't have any system at all. There's no governor on this at all. And so she's just going. Yeah, I don't believe that all 50,000 of the credit card debt is two years worth of sports. Is that what you're telling us? Because you actually called it the silver bullet.

Yeah. It's about five years? Well, yeah, we spend about 24 grand a year on sports programs. Right. Well, the other question I was going to ask you, because you're on the phone and because I'm a man, I'm going to ask you this, would you have worded the opening question the way you worded it if your wife had been on the call? Meaning saying that she's got the kids in sports? Yeah, it was all about her. it was it's here's what it sounded like it was forget your voice because you already gave us an excuse on the voice the voice sounds like you're beat down and like you've just thrown in the flag and you're having no real communication with your wife that's what it sounded like but my question is this a real question would you said it that way i wanted four she wanted 12 so we're doing it and then she stuck him in sports would you have said it that way if she were sitting in here in the room with david i and you of course what was the answer we we compromised

So I wouldn't have said that because she doesn't like it, but we've talked about this issue with a counselor, you know, and so I would say the same things. I think that she's sticking them in sports. Right. Okay. And then by the way, I didn't ask you to paint you in the corner because that was not a gotcha question, but I'm glad you've answered that way because I think that you've got to be very careful. I think there's some real resentment there between you and her, and that's got to get solved at the same time, if not before we sit down and get this budget. We have got to resolve the resentment. That's what I feel and hear on this call. I don't know. Your take. I'll go with that. I'll go with that. So, guys, I would say 50% of the coaching and calls that we get and the different contact points we have with people that are married come back to this idea that we have to both in the room be adults.

This is a limited amount of resources. This is a math problem. actually a number of dollars at the top of the page, and we spend the money on the page the way we want our life to look, and when it runs out, we stop. And the two of us together both have a vote on that, and we figure that out together. That is the only system in 35 years of doing this that I have been able to figure out that will actually work. The idea that one spouse is off the rails or is not accountable to the mathematics and as a child and the other spouse is resentful, that idea I've never seen that create a successful relationship or build wealth.

I've been doing this show for over 30 years and some of the saddest calls I've taken are from situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. or people that call in and their spouse has passed away suddenly and they don't have life insurance. We actually took a question of a lady and she had three kids pregnant and husband didn't have life insurance. And I'm like, I can't even imagine. Or even if it was opposite, right? If a mom passed away, there's a dad with kids and trying to figure out how am I going to afford child care. How do I, how do I outsource some stuff that maybe she was doing? And it just takes the grief and the sadness of something like a sudden death to a whole new level. Like when you have to

think through how am I going to pay my bills? How am I going to eat next week? Yeah, in the middle of all that grief. Like, it's just, it is. It's terrible. And so life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And we keep re-upping it because I'm like, I just want it there.

Like, there's something about that safety of knowing that you have money if something suddenly happens. And it doesn't cost much because Xander shops among a gazillion different companies. it doesn't cost much. You just have to admit that someday you're not going to be here. You've got to say it out loud, and you've got to say, I'm going to say, I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. There really is. So that is one thing to do to say, I love you to your family. So we've used Xander for all of our family's needs for insurance for many years, including, of course, term life insurance. To get a free quote, go to 800, 356, 4282. That's 800, 356, 4282.

go to zander.com. If you're tired of living paycheck to paycheck to paycheck and feeling like you can't get ahead, join one of our free, free, free, free, every dollar trainings new trainings every week this month. They're all hosted by one of the Ramsey personalities, either Jade or Rachel or George. And we're going to show you how to stick to a budget. You generally find thousands of dollars of margin in about 15 minutes

just learning to set the thing up. And you go, oh, look at that. I got a raise. And you can get out of debt, of course. Why? So you can start building wealth. Hello. And you can ask any question during the live Q&A.

It's a cool thing. It's a free every dollar training. Go to Ramsey Solutions.com slash webinar. Haley's in California. Hi, Haley. How are you? Hi, Dave and Ken. I'm good. Thank you for taking my call. Sure. What's up? Okay, so I'm going to try to be brief here. I am a single mom to a five-year-old boy. I don't receive any child support. I have a career in finance. I gross 140K a year. Look at you. Where to go, girl. Thank you. I have a pretty low net worth.

It's about 50K, 15K of that is an emergency fund. My boyfriend and I have been together for three years, we love each other, we are discussing marriage. His network is a lot bigger than mine. He has a trust fund, and he lives off the dividends of his trust. The principal is about $2 million. He doesn't work. He owns a business, but it is not profitable. He's owned it for 10 years.

So he's a hobby? It's a hobby. He doesn't pay himself a salary. Businesses that don't make a profit are called a hobby. Yeah. It's kind of like a passion project for him. That's not a good indicator of his character. He considers it like community service.

Yeah. I consider it he's hiding in his trust fund money. It's a bad idea. What's the business? It's a bike shop. He has for more years of his commercial lease, and then he's planning on closing the doors. How old is he? When it's over.

He's 43. Have you discussed the long-term range? I'm 37. Okay. I'm sorry. Let us stop peppering you. How can we help you, hon? So I'm under the assumption that you would recommend a pre-nut.

given the dramatic difference in our net worth, I apply this program to my life, and I would like to apply it to my marriage as well. But I don't know. I just, if we have a pre-nupt, how do we combine our finances? Okay. The pre-nup does not discuss the monthly operation of the household in most cases. Most of the time the pre-nup just says what happens to the $2 million trust fund if you would get split up. In other words, the pre-nup would be something as simple as, if you did do it, if you did do a pre-nup,

just be as simple as he leaves the marriage with his $2 million trust fund and you leave the marriage with $50,000 a net worth. Or you leave the marriage with everything else and he leaves with whatever it is. I don't care. But, I mean, most pre-nups kind of start with the idea we leave with at least what we came in with. And that's it. It's only if you leave the marriage, it does it come up. But it's not like the money coming off the $2 million that allows him to not be profitable or productive, gross, is becomes part of your household income, even if you have a pre-nup. So that's how you combine your finances.

But we're not, so we won't combine all of our bank accounts, though? Yeah, you combine all your bank accounts, absolutely. Absolutely. His trust fund is not a bank account. His trust fund's an investment. Mm-hmm. Does he have any control over the trust fund at all? Yeah. Okay. So anything that's... My other question...

Anything that's in and around the trust fund would not necessarily be in your name. But even if it is in your name, the pre-nup would, if you switch everything to your name, the pre-nup would just say, in the event the marriage breaks up, it goes back to his name. That's all I would say. It's not operationally inside the marriage. It's only what happens at the end of the marriage. Most of them, I've seen a few of them that interfere in the marriage, but most of them are what happens in the event the marriage dissolves.

Simple. Okay. And your second question is what? Well, how do I build wealth with somebody who already has wealth and isn't really motivated to build more wealth? Now there's a key issue. Now you've opened up a whole other can of worms. I'm going to love you enough to tell you the truth.

A guy that doesn't work for a profit and isn't productive scares me. If he's marrying my daughter, I'm afraid. And the trust fund has allowed him to not become who God intended him to be a productive citizen that goes out there, leaves the cave, kills something, and drag it home. Instead, it's stunted his emotional development, and he runs a bad. bike shop, a bike shop that's not profitable, instead of becoming the man that God wanted him to be. That scares me. I'm looking in from the outside and I'm being a little bit harsh, but I'm short on time

and I love you and I want you to hear that. I don't want to leave this being dishonest with you. Thank you. It's greatly concerning to me. And I would want you to deal with that. And I'd want, if I'm you, if I'm your old ugly Uncle Dave, I would want you guys in pre-marriage counseling to get to the bottom of some of that stuff and some of that be solved to your satisfaction because girl you on the other hand are a warrior princess

78% of the 50 I'm sorry 52% of the single moms live below the poverty level you make 140,000 dollars a year yourself sustaining and raising a human you're kind of amazing I you know Dave took the words out of my mouth I was going to play the older brother card and I went on a rant last week with a very similar situation like this on this show. And I said, ladies, don't marry doofuses. And I'm not taking- He may not be. Well, but hold on. But the indicators are good. I understand. Look at you all of a sudden, Mr. Nice guy. I'm trying to give him a break. I'm not because we've heard enough. We've heard enough. I'm not saying he's a bad person. But being a dufus and being a bad person are two different things.

You have a great heart. And I'm just telling you, I have the exact same fear here. This is a big deal. three years you guys have been dating he's been on this plan for 10 years uh i don't think that two million lasts as long as he thinks i'm concerned about that and like two millions a lot of money it's not at 43 that's why i asked that question how old is he so i echo dave and i'm saying i think premarital counseling is an absolute must and if he doesn't play ball with that that would be the final red flag you've got to take care of you and that five-year-old and you can love somebody that is not the right person for you. And again, I'm not accusing him of anything,

but I have massive, massive red flags. Same ones Dave has. So let me play something back to you that I heard, Haley, and I think everybody heard it. Okay, you came into this conversation like, you are the one that is not bringing as much to the table. He's bringing everything to the table. And what we're saying is it's actually the opposite.

Yeah, that's right. This guy needs to step up and earn the right to be with Haley because she's a freaking warrior princess. Pretty incredible. Yeah. I mean, make it $140K a year, a single mom, gotten into finance, you're out there swinging the machete through the jungle, kiddo. It's pretty awesome. And, yeah, so, you know, he may have $2 million, but he won't have a lot if he doesn't change. And so you just need to be careful.

Again, all we're looking at is we've known the situation for about a minute and 48 seconds is all. So you know a lot more about it than we do. We could have missed something. The guy might not. But I'm not saying it's 100% off, but there are some things that are concerning enough. You've got to dig into them and get solved before you go forward with this. And to encourage you, you asked, how do I build wealth with him? If there's a pre-nup, it probably needs to include him getting a job that's profitable.

Yeah. but until we figure out if this guy's the guy in order to get married to me right right but here's the thing but here's the thing you need to work the baby steps whether or not he's in the picture or not and you've bought into that keep working it you're doing really well you got a good income you can build wealth you why oh you in caps you can build wealth yeah This show is brought to you by better help. All right. As a society, we tend to overshare sometimes.

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Ryan, you're on the air. Hey, Ryan. Bye. All right. Chris is in Dayton, Ohio. Hey, Chris, what's up? Hi. I was on baby step two, but then life happened,

and I had to dip into my step one. Okay. Should I replenish that? Yes. Then get back on track with my debt payments? Yes. And also my second question, I'm really not looking forward to this day, but a lot of my family members are getting older and I stand to inherit probably about six figures when that time comes for them. and I'm disabled, so the best thing I can think to do with it is stick it into an ABLE account.

Would you have any other advice as far as what to do with it? I don't have any car payment or mortgage. Are you receiving some kind of government assistance that would be affected if you got 100K? No, not up to 100K. I've got SSI and Medicaid and food stamps, but with this ABLE account, it wouldn't count. It wouldn't count as a resource. Yeah, I know that. But I was asking why you were using the ABLE account

because you were taking food stamps and SSI. Okay. All right. And welfare, you said, too, right? Medicaid. Medicaid, yeah. Okay. All right.

What's the nature of your disability, Chris? I was born legally blind. Okay. All right. Wow. All right. Yeah, I'm trying to think what I would do, with the ABLE account, I probably would just try to get some mutual funds and set it in that

and let it create income for you from the ABLE account. And I think you can do that. I haven't dipped into those things in a while. I know what they're for and I kind of know what they are, but I'm not an expert on it. And so I would have you sit down with talk to one of our SmartVestor pros and the people that we have, that we endorse to help people with investing, and they will know how to structure your ABLE account for that. For those of you don't know, if you're receiving governmental assistance,

if you have money in an ABLE account up to a certain amount, if you label the account as an ABLE account, it has to do with protecting, keeping you from losing your government benefits if you are disabled. That's the purpose of it. That's how it's designed of what it is in general. It's a legal, proper way to have some assets and not, you know, in her case, not lose the help that she's getting. So, wow.

Jay's in Alabama. Hi, Jay. How are you? I'm better than I deserve, Dave. How are you, sir? Just the same. How can we help? All right.

I got a lot to unpack. It's a rather happy story. My wife and I have royally kicked butt. I think we've done good, but I feel like we need to tweak it a little bit because we both, we both have great jobs. We love them, but we don't think we're going to be able to do this until we retire in our late 60s or 70s, and we're trying to figure out how to expedite speeding up so we can retire maybe in our mid-50s. All right. So I don't know if that involves.

How much have you got an investment? $1.1 million. Okay, good lick, good for you. And what's your household income today? $475,000 a year. Yo. And how much of that's you? How much of that's her?

She is about $350, and I'm the rest. So you're 175, okay? Yes, sir. All right. And what does she do for a living? We both work in medicine. I was going to guess. Okay, cool.

Good for you all. But she didn't get Dr.itis. Well done. Yeah, apparently. You got a good net worth and a great, great income. How much of the 1.1 is in retirement accounts? About 800. Okay.

What's the other 300 in? I got about $120 in a brokerage account that I invest in, and then the rest is home equity. okay and and what's your um ages uh i'm i'm 45 she's 43 okay all right so what you would do is to is your home paid off no sir we are paying extra on it to knock it down yeah what do you owe on it uh we owe about 600 on it okay if you got a paid for home and you built some money in some non retirement mutual funds that's what people in the financial world call a bridge fund it bridges from where the from the time you want to quit to 59 and a half exactly that's what that's what I'm looking for that's well listen you don't need as much if the house is paid for yes well our long term we might have a kind of

a strange long term plan but we we both have very well traveled and we're we want to once we get to that age, we're going to, we'd like to sell the house, take the equity we get from selling the house by a smaller house with very, you know, place that we ain't got to cut the grass and stuff like that. And we actually want to spend about half a year in Southeast Asia because we've been there many times in the love divide. So it's much cheaper to rent a place there. Yeah, let me ask you this. It occurs to me that you fairly easily could sleepwalk into half of this income working part-time, even if you were doing some of it in Southeast Asia? My job currently is remote, but to be honest, I mean, I'm just being honest with you.

We have no problem with us in our lifestyle. No, no, that's not what I'm saying. I'm just saying you have the ability to produce an incredible income, and you could probably do that with 10% of the strain you have now. You could probably, between the two of you, pull in a couple of hundred. It's possible Oh, I think it is I think you don't have to reimagine what you do

But yeah Right, we're just both getting We see the writing on the wall And we just want to do the right thing Pay off our house Or at least knock it down the lot I would get the house paid off And I would build some money in bridge

Is this 10 years? Did I hear 55 You guys want to be checked out? Prop 55, 56 We're looking at, you know say 2036 you know it's it well the one point one will be almost three million by then if you leave it alone okay all right and you would have bridge on top of that and you'd have the paid for house and you've got the potential to do something not nothing the rest of your life and probably generate a couple of bills doing that right so there's a lot of different ways to to roll into that

54-55-year-old point and you're going to be in really really good shape you're right you have kicked butt you're doing really well the main place you've kicked butt though is your income well also we laughed but on our very first date i asked her i said i need to know how much student loans you got and she said no and i said all right there'll be a second date now hearing that story we all knew you out kicked your coverage when you told us about your wife but now this is a woman with poor judgment. Good for you, sir. You did well. You're a real romantic, buddy. I'm just saying. Yeah, you're a real sweat. He'll have to sweep a girl off her feet. Sweep her right off her feet. You got any student loans, baby? And then he declares there will be a second date.

Okay, we'll go out again. You get the pleasure of my company one more time. I love the advice you gave there, Dave, and I think there's a bigger lesson for our audience. We know from all kinds of data. You can go research this yourself, that When a person completely stops work altogether, there's got to be some purpose beyond just retiring from a job. And in this case, I love what you recommend here, which they can travel the globe, do whatever they want. Stay involved a little bit, just enough to maybe cash full all this and not eat into that retirement. And I just think that's something to think about. This idea of I'm going to stop cold turkey and just do nothing but hang out.

That's not what he was saying. The data is really scary about how many are dead in six months. It is. And so finding some purposeful work, even if it's volunteering or some type of minister. Yeah. I mean, you could go, you know, let's go. Medical doctors in Southeast Asia would be at a premium. That's exactly right. Great, great point. I mean, that's what I was thinking. You could, a lot of stuff you can do there. Yeah. Yeah, this idea that I'm going fishing for the next 45 years is probably not a plane. Hold on folks. Don't panic.

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with Ramsey's values by focusing on education, responsible mortgage lending, and helping people make smart, long-term decisions that enable them to build lasting wealth. Go to Churchillmortgage.com today to begin a better mortgage experience. Churchillmortgage.com. This is a paid advertisement, an MLSID 1591, NMLS Consumer Access.org, Equal Housing Lender. Welcome back to the Ramsey Show. in the Fair Wins Credit Union Studio, Ken Coleman, Ramsey Personality, number one bestselling author and host to the new show, Front Row Seat,

which is a massive hit on Ramsey Network. He's my co-host today. Ryan is with us in Green Bay, Wisconsin. Hey, Ryan, what's up? Hey, how is it going? Better than I deserve. How can we help? So, kind of similar story maybe to how you started out.

Right now, I got $1.8 million in debt. that rental portfolio is worth 4.4 that's a conservative estimate off of what realtors would tell me they would list for currently that that portfolio puts out approximately at a low end $5,000 a month at a high end $19,000 a month because we're heavily invested in commercial. So right now with, you know, post-COVID, we're a little behind on the commercial leases. Okay. Just trying to think like what, but so I had a home run early on. I sold a building that I bought for 426.

I sold that building for 1.6, and then I did a 1031 exchange on two of the buildings that I currently hold. Okay. How can we help? Well, I don't know. What are you asking? Well, I'm not sure. You know, I'm not sure. I'm not sure, I guess. I have $1.8 million in debt. I have a portfolio of 4.4. And your rate of return on that portfolio sucks.

Yeah, it's not great. No, it's horrible. Do you want to get out of debt, Ryan? Do you want to get out of debt? I do. I do. Okay. No, you're still the guy that hit the slot machine once,

and so you keep putting quarters in a stupid thing. You had that one hit, that 1031 made bank and ever since then you've been putting quarters back in the machine trying to do it again and none of the rest of them did that well no i i i yes yes more or less yes i will agree with you but i have i i have hit more than one how old are you i i'm 38 years old where do you want to be when you're 58 i uh you want 10x this or you want what do you want yeah i want I want a 10x this, man. I want to pay off my home that is worth a million dollars, but I have a $360 note.

I got two kids. I'm just telling you, I don't want a 10x your portfolio. Your rate of return is awful, sir. When you tell me you're getting an NOI of $60,000 to $19,000 on an asset base this high, your rate of return, your ROI straight up mathematics is. It's horrible. 3.8. It's 3.8. I know, but when you make $60,000 as a return on 3.8, I mean, that's horrendously bad.

You should be making a half million dollars on that. Cracked. Yeah. Absolutely, I'm correct. Yeah, no, I know. So you've got to figure out why these properties are not giving ROI and shed yourself of the properties that are not giving you a return. and build a model portfolio where you're getting, in real estate, you need a cash on cash and residential of 8 to 10 net, NOI, net operating income, 8 to 10% cash on cash annually.

Okay. And in addition to that, the thing needs to be going up in value. And in addition to that, you need to be taking the tax depreciations that the depreciation schedules with the IRS allows. all of those things together give you north of 15 to 20 percent on a commercial you ought to be making 10 to 12 cash on cash our hours does that and it's not rocket surgery to do it but you've just been buying crap man and you didn't think anything about the debt aspect and so the debt on some of these is eating your lunch because the rents are not commensurate with the values and with

the debt service you're carrying and that's what's destroying your ROI so you need to get down inside of that and figure out which of these things you want to and create an ideal portfolio that's going to be 8 to 10 on residential and 10 to 12 on commercial cash on cash and in properties that are going up in value those are the ones you want to expand owning and the others you want to get rid of and so there's the playbook right there and you adjust it and that's what's going on but you've fallen backward into this thinking that all real estate's good all real estate's not good some of it sucks and you've got some that sucks and some of it's leveraged too high.

Some of it you've got too much debt on and it's pulling you down. And so, yeah, if I'm you, that's what I'm looking for. And in the process of doing that over the next five years, I'm going to sell off enough of it and use enough of my income to become 100% debt-free. That's where I would be going. But I don't think you're going to do that because I think you like borrowing money. So I'm not sure where you're going to end up exactly. I hope you make it.

Hope you do. For your sake. In this case, would you, I mean, Because he's got enough, if we take him face value, $4.4 million, he said, conservative and all that property, 1.8 million debt. Would you get out of the rental game altogether and have him invest that? He's a young guy. He's like 37. Yeah. I mean, he'd be better off.

That's what I think. If you did 100% slate clean and dropped it on mutual funds, you'd make more money and you're making now. That's where my head was going. Yeah, because you got $2 million of mutual funds in and you're making $200,000 a year. Right. You know, and you're not doing anything to do that. You don't have to collect rent. You don't have to replace water heaters.

The roof doesn't leak, you know, all that. It's a really healthy reset for a guy his age with kids. I'm not sure I would go that far. Instead, I'd probably cherry pick it and take about three years and clean up most of it. Clean it all up in about a three-year period of time, but clean it up by getting rid of the properties that aren't cash flowing but have equities. And then get out of the debt business because that's part of what's bringing you down here. The other part is you're still trying to replicate that one deal. So hit those numbers again for people because too many people watching TikToks and reels.

So what is the ROI you're looking for on commercial versus residential, the stuff that you own or else you say it's not worth having? I pay cash, right. And so I want to make, if I put a half million dollars in a house, we don't buy houses anymore. But I got a bunch of them, not still, I didn't get rid all of them. But on the houses that we own, the residential single families that we own, we look at what we paid for it, what it's worth in the market. and we want an 8 to 10% cash on cash. After all expenses are paid, rent minus expenses is net operating income. We want to see a cash on cash of 8 to 10%.

If you get that and you have appreciation and value and you take the depreciation, those three things together are called the internal rate of return, the IRR, and those will be north of 15, 17% on your residential's, which is a lot better return than a mutual fund. But it's a lot more hassle. Right. Then on our commercial stuff, we're making... anywhere from 10 to 14% cash on cash. And so we're seeing most of our IRRs, our internal rates return up in the 20s on those.

So we're making serious money on those commercials because commercial property does that. But it's a lot bigger property. And again, it's a lot more cash tied up in them. So those are the processes you've got to go through to get there. You've got to just decide what you're doing. Because if I can't make 8 to 10 when I can make 12 on a mutual fund, right. Why am I going through all this hassle?

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That's not just a card. That's a daily reminder that you do money differently. So check them out at fairwins.org slash Ramsey. Fairwins is federally insured by the NCUA. Reed is with us in New Jersey. Hi, Reed. How are you? I'm good. Thank you for taking my call. Sure. What's up?

So I'm getting married in April, and I have about $15,000. worth of student loan debt, and I've saved up about 17,000, and that's not including my 401K and my investments. And I'm wondering if I should just go ahead. How much is in your non-401K investments? I have 17,000 in a high-yield savings account, not including a 401K. Okay, and not including the other 17,000? No, there's just one 17,000. Okay, you said, okay, I'm sorry. So you have savings of 17, you have 15 in a student, loan and then you said I have investments and a 401k yes okay the 401k I understand what are the investments that are not in the 401k I have about $5,000 in an IRA okay

all right do you have any investments that are not in a retirement account other than the 17 in the high yield savings no okay all right trying to make sure I had the clear picture. Okay. Because if I heard $20,000 laying in a mutual fund over there that wasn't retirement, that changes the picture. You follow me? Right.

That's what I was looking for. Okay. All right. Yeah, yeah, yeah, yeah. All right. What do you make? 120 before taxes. Good for you.

Thank you. What do you've been spending in all on? I'm living expenses in New Jersey, and I travel back and forth a lot between New Jersey and Atlanta to help take care of my mom. She has MS. So it's a little bit difficult to save, but I'm putting away at least $500 a month. Which is $6,000 a year out of $120,000. That's not much. No, it's not. Okay. So you've not been very intentional and careful and controlling with this great income that you have.

Until now, when you started focusing on it recently? Correct. Okay. Not trying to blame you. I'm just trying to make sure I get the picture of what your what the story arc of your behavior is because that's going to that affects my answer so here so the good news is you kind of just started all this stuff and you probably can do a lot better than 500 bucks a month so if you took the 15 of the 17 paid off student loan and really bear down on the budget you probably could put the 15 back pretty quick yes we are planning a wedding okay are you paying for part of that yes for about half of it how much

Um, 10,000 total is our budget for that. Okay, so you need five. No, I'm sorry. It's my budget, so that's 50% of the wedding. Oh, okay, 10, okay, all right. So that changes the discussion again. Okay. And does he have debt?

What's his financial condition? My fiancé has no debt other than the condo that we live in. Okay. All right, cool. All right, well, so number one, as long as you do it, between now and April or as soon as you get back from the honeymoon, I don't care. You're still going to get to where you need to go. More than anything, what I'm wanting to do is create a behavior pattern that's realistic that you can lean into and take all the way into your marriage.

That's a positive behavior pattern, okay? Because you make good money and you don't have much to show for it. So that's why you're asking these wonderful questions because you want to do something better. You want to, you want to have something to show for it. Am I reading you correctly? Yes. It just, it becomes pretty challenging with the amount I have to fly and helping my parents out. Yeah. And that also is not the only reason. Yeah, for sure.

Okay. All right. The, all right. All right. Yeah, yeah, yeah, yeah, yeah. When is the wedding? April. Okay. To the extent. that you can be confident that you can build the 10,000 and then rebuild the other 15. I need $25,000 by April. Okay? To the extent you can be confident of that, can't be confident of that because you're just starting. All right. So I was going to give you an answer that I'm not liking now.

Yeah, I saw you crunching those numbers. So, no, I'm going to take 10,000 of your 17 and move it to a separate savings account, and the wedding is now funded. Pressure's off. Okay. Okay. And then I'm going to take 5,000 and throw it at the debt, leaving you $2,000, or $6,000, and throw it at the debt, leaving you $1,000 in the account. And then I'm going to get on a tight beans and rice, rice and beans budget. and you have no debt at that point, correct?

Correct. No, no, you still have the student loan debt because we only put six towards the 15. You got nine loans. So we got nine thousand. We've got to tear into that nine, and then we've got to rebuild the emergency fund by the wedding. But the wedding pressures off.

We've got the $10,000 sitting there to do that. We're throwing $6,000. I need $9,000, and I need to rebuild my emergency fund by April. You can do that making $120 if you get on the every dollar budget and you really start pounding it and you say I'm not going out to eat I'm not spending money we're not going over this wedding budget that's it that's a whole budget not a dime more we're picking out a dress that fits within that a videographer and a reception that fits within the 20 budget and buddy you're putting up the 10 he can put up the 10 he's going to be able to do that sounds like it sounds like you guys got

a good match here um so that yeah that's what I'm doing now let me let me recap what I'm trying to do is I'm trying to get not too many things coming at you to put pressure on you the only pressure is getting out of the debt now because we got the wedding financed you see what i did right yes but then you've got to create the people uh read that change their lives doing this stuff are the ones that create this internal uh positive anger it's like i've had it i'm sick of making this much money and i got nothing yeah i got this expenses running back fourth atlanta but i got nothing and i'm sick of this, and I'm going to do whatever it takes that's moral and legal to change that in the person in my mirror, and I'm freaking changing.

I mean, you've got to get this thing going, right? And when you get that going, then you're going to be okay. But you can wander into debt. You can't wander out. You've got to get passionate about it. And that causes you to sacrifice deeply to hit the goals. So 10,000 in an account, 6,000, leaving 1,000 in your savings account. No more money going into your 401 case.

Stop it temporarily. Stop everything temporarily. Your life is now on hold until you get the other 9,000 student loans paid off, and your life is not on hold until you finish that emergency fund, rebuilding it to $10,000 or $15,000. So when you come home from the honeymoon, you have $15,000 cash, no debt on the wedding and no debt, and you make $120. That feels good.

That's worth pushing for. Yeah. And that's a burn the ship's mentality, which is what you need at this point. It's now I have no margin, but instead of stressing out over the wedding, we're just, hey, I don't like the fact that I don't have an emergency fund. That's a very different vibe. And that motivates you very clearly. I love that.

All conviction at this point. Yeah, I create systems that push me to do what I want me to do. Yes. Right. I put myself in those positions. Right. It's one of the reasons I love stuff like automatic draft on your chair. checking account going into your investments or the four one of the reasons the 401k has caused

more people to build wealth than just about anything else because it's automatic anything i can do to put a system around me that automates my discipline well tell everybody why you i know what you did but what's the psychology behind saying all right we're going to fund the wedding why'd you tell her to do that because that's i know what you did it's brilliant but explain the psychology behind having her do that. Can't focus on two things at once. Yeah. And one of them is going to suffer.

Yeah. The wedding is so important to her. It's such a huge deal that if Dave didn't have her do that, what happens is she starts to go, well, the wedding is super important, super important. I can't do both. And it kills any momentum on getting rid of the debt. This way, you give her a full runway. Instead, I've got a light at the end of the tunnel that's not an oncoming train.

Brilliant. Even if it's a pin light. That's right. There's a light there. That's right. And it's a singular. a singular focus point. And when you're trying to modify behaviors,

you look for a singular focus point and lean in on that with visceral, passionate craziness. And then you can create this permanent change in your brain. And you rock on then. You reset who you are is what you're doing. Folks, when we get you out of debt, the getting out of debt is not the important thing that happened. It's what you became while you were getting out of debt.

That's the important thing that happened. Hey, you guys. More than a hundred million Americans carry medical debts, and that is so scary. And it shows that traditional coverage often leaves people to face big bills alone. Families need more than just coverage. they need community. So what if your health care costs less and you are actually supported by other believers in the process? That's why I love Christian health care ministries. CHM is a budget-friendly, faith-based alternative to health insurance that's been serving believers since 1981. And they've

paid over $12 billion in medical bills. Y'all, that is faith in action. So let me say it again. CHM is not insurance. It's a nationwide health cost sharing ministry. It's Christians helping other Christians with their medical bills. With CHM, you get to choose your providers. There are no networks, no surprise bills, and no insurance headaches. Whether you're just starting out as a family or you're looking for something that fits your budget better. CHM is where your faith and finances agree. Programs start at just $98 a month. month. So go to chministries.org slash budget to learn more and take the leap of faith today. That's chministries.org slash budget. Our question of the day is brought to you by Y-R-R-F-I. You've tried budgeting. You've tried making minimum payments, but those defaulted private loans are still weighing you down. Y-R-R-R-R-R-E-F-Y.M-Y might be able to help. Learn more at Y-R-R-E-F-Y. That's the letter Y-R-E-F-Y.com slash Ramsey. Not available in all states. Today's question comes from David in Massachusetts. My father suddenly passed. passed away recently and did not make the will he always planned to create. He owned five

properties and only two have mortgages. He also owned a business with a partner which brings in close to one million in residuals annually. My mother is not in the picture and I have an older brother who has a substance abuse problem. My father did not inherit any money from his parents and built all this from the ground up, so I want to honor him by making sure none of this goes to waste. My brother will waste away his half of the inheritance on drugs if he gets access to it. My name will be the only one on the death certificate and our attorney will file for me to be the head of his estate. Is there anything I can legally do to prevent my brother from getting a lump sum?

You need to seek legal counsel that really knows what they're doing. No, I doubt it. I think he's going to get his lump sum unless he's declared incompetent by the court. unable to take care of his own affairs and just being stupid or doing drugs is not going to cause that to happen stupid immature drug person is not going to that's not incompetent by legal terms um my mother's not in the picture uh she is now if you're if they were married uh or if they are if they were married at the time of his death she's very much in the picture whether you want her to be or not. So, again, we're not attorneys in Massachusetts, so you need legal advice in Massachusetts where you are. And my suspicion is Massachusetts has some wicked crazy

probate laws because there's some other stuff on the books there that's wild. And so wouldn't surprise me a bit. But you need to find out what you're dealing with. Okay. So in most states, if your mother is alive and they're still married, she's going to get at least half of these assets, whether you wanted her to or anybody else wanted it to. And if not, if she's dead or they're divorced and gone or whatever, and she's really not in the picture legally, then you and your brother are going to get half each, and I'm not aware of anything you can do to legally prevent your brother from getting his half. now what i would do if that's the case when you sit down with your attorney is i would sit down

with your brother and say look i love you dad loved you i don't want you to use this to OD i don't want you to use this and have nothing to show for it later if you would allow me to manage your half for you until you get through you through this part of your life, I will do that as a favor to you because I'm very afraid that you're going to end up with nothing. What do you think? And see what he says? Yeah.

And again, what percentage of guys in this situation are going to go, oh, yeah, why don't you take care of? None. But it's worth asking. But that's probably, persuasion is probably your only technique. Yeah, tough situation. So sorry for your loss. Yeah.

What does this situation? illustrate, illustrates everyone needs a will. Period. And here's why what you, what this guy did when he died suddenly is he has put a curse on his two sons. He left them with a mess because he didn't do a will. And so now you've got one son trying to navigate, the older brother trying to navigate the protocol and try to do what dad wanted and try to think through and not there's no direction and there's no legal binding anything if your dad had simply left half of this in a trust for your brother it would have taken in an hour and a half to do that will maximum and if he'd left half of it in a trust for your brother to manage it and upon such time as your brother exemplified

positive behaviors you released the trust to his control which would be a fairly normal thing where you've got an immature kid or a kid doing drugs or whatever, you're going to hold it for them, but not let them have it. So it would take it just, you know, it's just so those of you that are out there, do your freaking will if you love the people that you're going to leave behind because you just, you screw up everything for the people you leave behind by not doing it. It is an act of love to do your estate planning because now this poor, guy David has got this whole thing is sitting on his shoulders. He's the only adult in the

story. Yeah. It just aggravates a pee out of me. So this is millions of dollars we're dealing with here. Yeah. And by the way, there's a partner in a business he was running with him that doesn't know what to do too. And I'm sure there's no freaking plan there either. So you guys, I don't care if you got two nickels and a kid. You need a will because the kid is going to be controlled by the state. If you don't have a will that dictates who's going to take care of your kid. You're going to leave that up to the DMV people? The people that run the DMV. That's the level of competence you have when you're doing with the state.

No, I'm not leaving that up to them. No, I'm not leaving anything up to the government to decide anything because I was too trifling to get my dad-gum work done. And getting your will done is being an adult and getting your work done. Oh, man. Poor David. I'm so sorry, David. But I tell you what, if you want to, if you have a bunch of people, people, a bunch of kids that you don't like, and you want to, you want to, you want to really mess up the next 10 years of their life, leave about $2 million with no instructions and a bunch of scraps of paper laying around of what they thought you wanted. And watch them fight through it. And all the lawyers get the $2 million over the next 10 years and nobody in the family talks to each other the rest of their lives. It's almost a guaranteed formula. That's right. Yeah. It's like dropping a bomb off in the middle of a family. Yeah.

It's exactly what it does. So just aggravating. David, I'm sorry you're facing that. But I wouldn't burn a ton of calories on your brother. It's not his fault. It's not his problem. He's his problem. He's what's known as an adult.

And I wouldn't burn a ton of calories on anything except just getting this thing settled and moving your part over to the side and you go live your life like a responsible human being. And, oh, by the way, get a will. Did I mention that? Rebecca's in San Diego. Hi, Rebecca. What's up? Hello, how are you?

Better than I deserve. How can I help? So my mother inherited my great-grandmother's property that has two houses. Unfortunately, both of them need significant amount of work that my mother cannot afford to do. If we were to move there, it would be five generations on this land. So we are trying to do what we can to not have to. sell it off. My husband and I do have a down payment saved to buy a house, but we were thinking instead that we could move into the bigger house. We've got two kids and another one on the way.

You know, down payment to fix up that house and live in it and have no debt, you know, no house payment. And my mom would take on the smaller house that needs less work and better suitable for just her by herself single. She recently decided she wanted to only be the sole landowner. or we wouldn't be put on the deed or anything legally. That settles it. I'm not going. She wants us to pay $800 on top of about $100,000 we would be putting into repairs of the house and the property. I'm not going.

That's what I said. You don't put $100,000 in somebody else's house. Let's pretend, Rebecca, that you were my renter and you were my tenant. And I said, hey, why don't you renovate my house? You would look at me like, you're an idiot. I'm not putting $100,000 in your house, Dave. Why would a renter do that? Yes.

Don't do this. Sorry, Mom. This isn't going to work out. We're going to have to just go buy a house somewhere else, and I hope this all works out for you. Yeah, family said that because one day I would possibly inherit it with my siblings, that children should take care of. I'll deal with it when I inherit it. Right now, I'm not doing a thing. Yeah.

You already don't like this, and you're still trying to figure this time. Your mom has set up a trick bag here. You need to run. This is a bad vibe. Bad juju, kiddo. Really bad. You need to run. This is a trick bag.

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If you died tomorrow, how much would your family need to keep the lights on? How would they pay the mortgage? How would they buy groceries? If anyone in your life depends on your income, you need life insurance. And how do you choose from all the options out there? Well, life insurance is term life is the only kind that does everything you want, which is replace your income for the lowest possible cost. and we've recommended only term life insurance for the last 35 years here on the air.

You need a policy worth about 10 to 12 times your annual income, and the perfect term length we think is a 15 to a 20-year level term policy, meaning the premium stays the same. For more info and resources, use our free term life insurance guide. You can go to Ramsey Solutions.com slash term life guide. it's free or click the link in the show notes. Speaking of life insurance, Kyle is with us with a life insurance question.

Look at that. Hey, Kyle and Tampa, what's up? Good. How about you? Better than I deserve. How can I help? Yeah, so I think we're doing good on our savings to retirement. But we have like a large life and whole wife that we got kind of sold on.

and my wife she doesn't agree we're giving it up but I do and now it's kind of like I catch 22 where I think we have enough but

I just want to give it up kind of just for potential growth okay so it's like $800,000 in cash value potential it could be maybe I looked into the end like you currently have

cash value of 800K Yes. Are you sure? Yes. How much did you put into this? We put a lot of money into this. I don't know. We just kind of got caught up into it. I think it was like 10 years ago. So what is the face value?

What's the payout on death? At this moment, 1.2 for me, 2.3 for her. Okay. And what do you make, sir? And we're 40 checks. I don't make them together. together we make about 325s what do you make about 55 and what does she make about 275 okay all right all right she a doc yes yeah that's who they go after okay um yes and that's

kind she's a target she's a target they worked all her and they worked all her buddies um yeah you got screwed and you're getting screwed every day that you keep it So, do you have, you said, I think we've got enough. I mean, what, do you have a large net worth or something? I mean, yeah. What is your net worth? I mean, it's probably like $3 million. Okay, invested in what?

And that's not included in that policy. It's probably like 1.5 for houses, and then about $1.4 for just 401K things. Okay. And then I have $800,000 of this. and I'm just kind of like I got you all right well let me kind of give you can play this back

you can play this back for her okay docks are targeted by whole life guys they're the they're the sweet spot for those guys that sell this crap it is one of the worst financial products

in the world it's absolutely horrendous no one in the entire financial world believes in whole life life insurance as a good product except the people that sell it. All the rest of us, all the financial planning community, all the investment community, all the estate planning community, unless they're involved in the whole life business, they do not believe in it and they tell people not to do it. All of us have abandoned this product because it's not just bad.

It's one of the worst. It's the payday lender of the insurance world. It's how bad it is. This is not a medium product. This is a product that absolutely is horrendous. Okay? Now, let me walk you through why. And then you guys can go home and you can talk about this after you play this back because it'll be on the podcast, okay?

So life insurance has one possible need in a scenario like you're in. And that is to replace lost income if one of you dies and the rest of you are dependent. on that person. You do not have a large enough estate to have an estate tax problem. And so there is no, you have zero need for life insurance for that purpose. You got to get to $25 million before you have to worry about an estate tax problem. And you're a long way from $25 million. All right. So you don't have an estate tax problem at all, not even close. Nor are you going to have one anytime soon. Now, so, but what you do need life insurance for, is if you wanted to replace the income.

Now, we replace her income. You would need about 10 times that. So you would take about $2.5 to $3 million, probably $3 million policy on her. And we'd take about $10 times on you. So we'd take $750,000 on you just to round up. Okay? You could do that at your age for nothing, the cost of a pizza. If you don't smoke and you're not obese.

If you're not fat and you don't smoke, life insurance costs, almost nothing. It's ridiculously inexpensive. Like the cost of a pizza. Well, in your case, this many millions, probably three pizzas. But it's really no money compared to the 800 grand we're talking about, all right? Now, here's the problem. You put so much money into this thing. If she dies, you know what they're going to pay? 2.3 million. You know what happened to the 800,000? They're going to keep it. Cash value dies with you. This is a dangerous situation because you guys have gotten screwed so bad so if i were you i would cash this out really fast and let me and let me say like hers is 500 and mine's 300 so we we have

two different balls that's okay i'd cash you out real fast to just get rid of i got both of i'll be done by the end of the day because if one of you dies without life insurance in the next 60 days and you've got three million dollars left to live on i think you're going to be okay Yeah, that's what I told her. All right. So you're self-insured. If you want to go buy some term insurance, price it out with Xander insurance. It doesn't cost nothing if you want some extra insurance.

But right now, you've got $3 million. Oh, wait a minute. No, you've got almost $4 million, count this $800,000, right? Yes. Yeah. And I think you guys, if one of you dies, the other one can make it on $4 million. Yeah. So you're self-insured.

Just taking this $800. hundred thousand and putting into like a mutual you should have put it in a good investment yeah absolutely one that goes up in value cash value has an average rate of return nationally of 1.26% one percent you're making nothing this is costing you a hundred grand a year in lost opportunity what it should be growing yeah awful absolutely awful so no you she needs to tell his life insurance got to jump off a cliff and he screwed you guys bad really bad and i can name the company probably

why are doctors uh ground zero for this uh because they make a lot of money and they feel all fancy because they're new doctors and they have no knowledge of finances at all they're the worst with money with the possible exception of actors and country music stars MDs are horrendous with their money There's a handful of country music stars Do a really good job There's a handful of doctors do a really good job There's a handful of NFL players do a really good job

And the rest of them are financial morons And so these guys weigh in on these guys Who are all puffed up Because I just got my MD and these gals And they're feeling all good about themselves Because they just got to be a doc And they swoop in just about that time About the time you're making a little money

And they go oh, well, you need whole life, life insurance. So, yeah, horrible, horrible product. Yeah, you're my, and I don't care. I'll sell either one. You know whatever you want to do. But if I woke up in your shoes, by the end of the week, I'd have my 800K in my hand, and I'd be sitting down with a smart vestor pro and opening up a good mutual fund

and making 10, 12% on this money instead of 1%. And when I die, they don't keep it. There's an idea. And if you want some life insurance in addition, your $4 million net worth at that point, just call Zander insurance and get you some insurance. You can get, like, again, 46 years old, if you're not obese and you don't smoke, you can get some insurance. It's really not that much. But long ago, I quit buying insurance because Sharon's okay if I died. Matter of fact, she's really okay if I die. I kind of need to sleep with one eye open.

Hey, what's up, Dr. John Deloney here. The new dates have dropped for the money and marriage getaway over Valentine's Day weekend in 2026. This is your chance to hit pause on everything in your life and reconnect with your spouse over a long weekend and Nashville, Tennessee. Me and my friend Rachel Cruz will be digging into topics like sex, money, communication, and more. This weekend is happening on February 12 through the 14th and early bird prices start at $749 per couple, but the prices will be going up soon. Get your tickets today at ramsysolutions.com slash events. Welcome back to the Ramsey Show in the Fair Wins Credit Union Studios.

I'm Dave Ramsey, Ken Coleman, Ramsey personality, number one bestselling author, and the host of the new Ramsey runaway hit called Front Row Seat, Long Form Interviewing with people who really know how to do life well. You'll learn a lot if you join him on front row seat. Our phone number here is AAA-8-25-2-2-25. Jessica's in Birmingham. Hey, Jessica, what's up in your world? Hey, guys. I feel so blessed to talk to you today. Thank you for taking my call.

Well, thank you. How can we help? Okay, so I run a solo aesthetic skincare business that grosses around $85,000 a year, but after expenses, I only bring home about $24,000. My husband and I are on Baby Step 2. I do really love my business. I love my clients, but I do have a lot. on in my life right now, and I just do not have the drive to keep pushing and building my

business the way that I have in the past. I'm just tired. But my question is, should I take a full-time job for a year to pay off all of our debt, and while I do that, keep the business open for like one to four days a month? Yes. And then go, okay. Okay. I'm tired. I don't make any money as a formula right what would you make if you did the exact same thing you're doing the aesthetic skin care for your clients if you're doing that for somebody else and you were just getting paid for your time what would you make easily double or triple yeah that's the answer yeah as long as they allow you to keep your clients yeah that's the problem is If I worked for another company or conflict of interest.

Yeah, exactly. So what I was thinking was doing something similar in the industry, like working in sales for a brand or something like that that wouldn't be directly a conflict of interest. Would you make as much as if you did your actual craft? Yeah, I'm sure I could probably, if I got into sales and worked for like a skincare, brand i could probably bring anywhere from 70 to 100 in a year didn't do it okay yeah it's a no-brainer and

meanwhile consider can begin to read and study business yes sir because you're a classic accidental entrepreneur um here here's what we find when we're working with our entrepreneurial clients and Entree leadership, and we coach about 10,000 small businesses. There's a vast difference between being good at your skill and running a business that accomplishes your skill. You are good at your craft of helping people with their skin. You suck at running a business. That's okay.

You can do it. You can learn how, though. It's a learned skill, business acumen because you're not making any profit. We know this because you're not making any profit. We know this because you should, you're just talking to you for a few minutes. You're obviously bright. You're articulate. I think you're right.

I think you go make 100K selling just after talking to you. I actually believe you. All right. Now, if you're all of those things and you're not making at least that doing this craft that you're good at, it's a business problem. Yeah. And so learn the business part. Let me recommend a couple books to you. I'm going to send you a copy of building a business you love, my latest number one bestseller.

I'll give you a copy of it. Another book I'm going to recommend is by a friend of my name Michael Gerber. It's called the e-myth, the entrepreneurial myth. And it is learning to work on your business, not just in your business. Okay. So what we run into all the time, Jessica, and I tell them exactly the same thing I just told you. A guy who knows how to work on heating and air, and he's doing a really good job fixing people's heating and air, replacing their broken heating and air, all that kind of stuff, an HVAC guy. And he decides I'm going to open my own thing, and he gets a truck.

and he leaves his job, and he goes into business fixing heating and air. Now, he's really good heating and air technician, but he knows nothing about running a business. And he ends up exactly where you are, instead of making $80,000 working for somebody else fixing heating and air, he ends up making $20,000 with his own truck, and he's miserable. And so, but the only difference there is pricing and marketing and accounting and growing the business, understanding the parts of a business and growing a business, and you can reset, relaunch four years from now with some knowledge that you don't have now

on how to run a business, hire three people that do skin care, and you do some skin care, and you could make 150. But you've got to have those pieces, you've got to have those other tools in your belt. You don't have right now, and right now you just need some money and you're tired.

Yes, sir. Do you want to run a business long term? after Dave gave you that pep dog. It's a great one, by the way, and he's right. Do you want to run a business on the other side of this debt elimination and how tired you are? No, I really do. I absolutely love entrepreneurship. We just have a lot going on in our family right now, so that's the reason I'm tired.

But I love. No, I mean to tell you, if you go to work every day and you make $24,000, you're tired. Yeah, that's right. You go to work every day and you make $20,000, you're not as tired. That's true. That's true. just it's hard. I mean, you're just in a slog. Yeah. And we call it the treadmill stage of business. You feel like you're on a treadmill. And when you're on a treadmill, it's more tiring

than running down the road because you're not getting anywhere. It's just tiring. And it's emotionally exhausting because the scenery does not change. And that's part of the thing. And I've been there myself running hours over the years, in years past. So I think you're amazing. And I think you, this is not a permanent solution. It's a solution for three, to five years. Go make you some money, get not tired. That's right. And you're going to come back on the other side of this and you're still an entrepreneur,

so don't let the doubting voices, you know, kind of win the day here as you take a break. Because a lot of entrepreneurs refuse to do what you're actually doing, which is A, you raise your hand and said, Dave, Ken, I need some help, number one. Number two, you've taken it and said, okay, it doesn't mean I'm a big giant failure because you're not. And you're going to pause and you're going to learn during the pause. and I think you come back and you're way more successful. I'm very excited for you.

This is not the end of the story. It's just another chapter. Yeah, absolutely. Kelly, I don't know if we've got E-Myth in stock. If we do send her one, if we don't, you'll have to get it yourself, Jessica. But, I mean, there's this thing called Amazon. They'll put one on your front porch where I can get it there anyway. But E-Myth by Michael Gerber.

It's a short book. You'll like it. And it's a classic in the business literature realm. And we'll send you a copy of mine as a gift, building a business you'll love and read it and begin to learn. But start becoming, I'm going to read 12 business books on small business, running a small business this year, while you're doing the other stuff. Yep. And turn off Netflix. And I'd add, and learn how to run a business. I'm going to add one more homework assignment. There's got to be somebody in your neck of the woods who's winning in

this area. Yeah, go learn from them. And just go buy their lunch and just ask them, like a book report. Keep it simple. I think you're doing a sixth grade book report on their business. You'd be surprised what you'll learn. Yep. Yep. You could, you know, I would imagine there's about four levers if we had time to get into it into an in-depth coaching session that you could pull and go from 24 to 50 quick. Yeah, that's right. You're probably double the nets on this because there's probably just some stupid. I mean, it's just, it's, when I look back on some of the stuff I've done, I go, God, man, that one little thing, it was so stupid. And it changed them, it changed a million dollars. It's just nuts. Yeah, you can do this. And you're very capable. I don't, I don't hear someone that's lacking in capability. I think you got it. Thank you. We've all done dumb things with money. I've done them with zeros on the end. One of the biggest mistakes I see people make with money is not having a plan for it. You've got to have a plan. You've got to be

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The design, the interior design elements are amazing. So ramsysolutions.com slash store. The Ramsey Gold Planner for 2026 is here. And you can click the link in the description if you want to go that way too. We'll help you out. Sam's with us in Connecticut. Hey, Sam, how are you? I'm good.

How are you doing? Better than I deserve. How can I help? So I wanted to get your advice. My wife and I have a very different risk tolerance when it comes to investing in debt, specifically when it pertains to a single family home that we currently live in that I would like to rent and get a different home for us to live in. And my wife would like to sell it. She has the mentality of being completely debt-free.

and we're conflicted because of some of the variables underneath. I wanted to kind of walk it through and see what you thought. Okay. What are your underneath variables? Yeah, so for me, I have more in cash on hand than I owe on the mortgage. We have about $330, 330, I'm sorry, 330k in equity on the house and the only debt that we currently have are my wife's student loans which she has 30k in student loans 20k of that being at about 5 to 6% interest 10k at 3.5% or lower so my fault

process was between the two of us we have about 190k in cash and what's your mortgage what's your mortgage balance? The mortgage balance, we have 97K left on the mortgage. It's a fixed 15 years at 2.4%. Okay. And what's your household income? Household income between the two of us

before taxes is 285. Okay. All right. Cool. Good for you. Well, well, well done. And how old are you two? 34. Okay. All right. And so that's the variables you're talking about, the

underneath, right? In other words, that's your that's your story, your financial story, your math story. Yes. For me, I'm just thinking we have a very low mortgage. So her vote is to pay cash for the next house and sell this one and pay off the student loans today out of the cash that you have. Your vote is keep the rental house and keep the student loans because they're low interest rate and stay leveraged. Yeah, so what I said was let's pay off the 5% or high. higher, the 20K. The 3.5% is about the same as what we can get in a high-yield savings.

It's low. Okay. Leave them. If the rates change, then let's pay them off. But I would like to stay leveraged and make money on the spread because my mortgage is about one point. One more time. Tell me how old you guys are again?

34. Okay. I'm sorry. And what do you do for a living, Sam? I work in corporate finance. Ah, okay. Sounded like it. Okay, good.

All right. Do you have a finance degree? Yeah. You have an MBA? No. Okay. All right, cool. All right.

So I've got a finance degree, too, by the way. And with a specialization in real estate, that's the world I grew up in, which is the king of leverage, right, real estate. So obviously you two are smart people and you make really good money and you're going to be okay if you watch what you're doing. You're not in bankruptcy zone or anything like that. Do you remember looking at the case studies back in college when we used to do case studies on companies? And when the bond, when a publicly traded company, when the bond, when they were putting out too many bonds, they were issuing so many bonds and they were carrying a load of bank debt that we looked at that as risk and we would there, we would run a formula and lower the value of. the stock because they were carrying too much debt, that debt equaled risk. Do you remember those case studies?

At a high level, yeah. Yeah, okay. And then when I got out of school, I got my securities license and I was selling investments in the investment world. And there's a thing when you're comparing an aggressive growth stock mutual fund, which has high volatility, and the measure statistically of the high volatility is called a beta. It's a math number that the money.

more volatility, the higher the beta, okay? And a low volatility smooth curve versus a high mountain and valley curve is a low beta. And what we were taught to do in that world on a sophisticated level was to say, all right, we're going to adjust for risk by adjusting with the beta. We're going to use the beta as the mathematical way to adjust for risk because you can't really compare a 20% rate of return high volatility mutual fund with a 11% rate of return low volatility mutual fund and compare them apples to apples you have to adjust for risk and mathematically the way you do that is to use a beta in an inverse math formula does any of that sound familiar yeah a little bit okay that's that's how it's done point all of all of that

gobbledy goop academic talk was because you approached this from an academic intellectual viewpoint. And so that's the way I'm approaching your question. The point being that mathematically, we are 100% sure in business, and it's proven in every area, more debt equals more risk, period. Lots of debt equals, lots of risk, no debt equals almost no risk. So risk is associated with levels of debt. Would you agree with that? Yeah. So to compare your zero risk of being debt free by paying off the three, 3% loan and say, no, I don't want to pay that off because I'm going to invest that money at 3% to say that you're actually, or 4%, to say that you're actually making money on that

transaction, you're not after you mathematically adjust for risk. Do you follow that? I do, yeah. So your initial formula is a formula most people use, but it's a naive, unsophisticated formula because you're not mathematically including risk in the discussion. That's all I'm bringing up. So all of that to say debt and leverage equals risk. Now, does that prove out in the data over long periods of time?

Well, it does, because when we interviewed 10,167 millionaires, and I'll send you a copy of the book, Baby Steps Millionaires, which has the white paper of the research in the back of it, and you can go through it, when we interviewed 10,000 millionaires, the number of them that said, I became a millionaire by borrowing money. at my house on my house are not paying off a student loan at a low interest rate and investing the difference. The number of people that said that caused me to become a millionaire, Sam, it was precisely zero. None of them did it. They all said, what your wife said, they all said, I'm getting out of debt. And with the lowered risk and the increased cash flow, because I don't have debt payments, I'm going to use the increased cash flow to bill wealth. And the sustainability of this is very high because I've lowered my risk quotients, and this is a real fancy long diatribe to say, Sam, your wife's right.

That's true. Yeah. She's right. Sorry, bud. You'll lose. And again. If I woke up in your shoes, I'd sell your house and I'd pay off your student loans today. And I'd buy me another house with cash.

And I'd kiss my wife on the lips and say, thank you, Jesus. I married a good woman. That's so true. True. Yeah, because the 190K cash. Oh, you're in such a good position. You've done so many things right. And this is almost a esoteric philosophical argument. It's really not really a big, but you've got to work this through because the problem is you're going to extrapolate. You're going to magnify whatever your value system is here. So if your value system is Sam's and you're going to continue to borrow money into it, all of that crap I just laid out there that's all true is going to take you down eventually. That's right. Because you'll keep doing it. And if you go her way, which is grandma's way, it doesn't feel as sophisticated to a finance major, but it's actually technically more sophisticated. Hmm, isn't that interesting?

Yeah. Yeah. Then you end up with a high sustainability, high cash flow, low risk environment. And it's not about risk tolerance. It's about what works in the end. Hey, guys, I'm so excited to tell you that our new 2026 Ramsey goal planner is available right now. This isn't just your average planner. It's your personal guide to setting clear goals and building habits that stick.

So get ready for all new monthly content from your favorite Ramsey personalities, tactical goal-setting track, and upgrades that make this our most durable planner yet. Last year we sold out, so don't miss out. Order your 2026 Ramsey Goal Planner for 4997 today at ramsysolutions.com slash store. Elijah is in Oklahoma. Hi, Elijah. How are you? I'm good. How are you guys? Better than we deserve. What's up, sir? Hey, so me and my wife, not too long ago, decided to go ahead and start doing the baby steps.

We're still on baby step one. It hasn't been that long since we decided. But the reason I was calling today is because we did lease a car about a year ago. I've been listening to you for a little while, and I know. that's a no-no, but we did do it. And we're upside down on it about $10,000. And so we're kind of in a pickle, and I was just calling you guys to see if I should just ride the lease out and, you know, figure it out when it ends

or if there's something I can do in the meantime to kind of get us in a better position. Okay, what kind of car is it? It's a 2025 Chevy Equinox. Okay. how long is the lease I believe it's three years so coming up October will be one year so we'll still have a couple years on it

and how much is your monthly payment uh 645 okay so it takes 14,000 to ride the lease out 50 15 yeah so yeah give or take yeah and um

Okay, I'm not sure, I want you to double-check your numbers on the $10,000 upside down. That sounds wrong after one year. Okay, well, we had, I had another vehicle that I had leased before, and again, I know it shouldn't have done it. You rolled the negative into this one. Yes, yes. Okay, so when you call, did you call, you called to get a payoff, did they give you the early buyout number on the least? or the total number on the lease? I believe it was a total number.

I didn't ask. You need the early buyout. If I wrote you a check today to pay the car off and own it, what is the number today? Because I think that's going to be less than $10,000 with the numbers you're giving me. Okay. Might not be, but it could be. Okay. That's the first thing I want to do.

all right so here's the thing we know if you write a check for 15,000 you can drive the car for two years that's your numbers today we know that number okay 645 times 24 okay and so we know that's where that's going to take us now and so that's our worst case scenario and then you turn it in at the end of the lease like you said ride the lease out okay that's our worst case now if we sell the car and in order to sell the car, we have to write a $10,000 check, then we could have driven the car for two more years for only $5,000 difference. Okay.

I'd probably ride the lease out if that's the case. So if your 10 number is correct, I'm going to ride the lease out because you're not making enough headway on this versus you get the full use of the car if you pay the 15. Yeah. If I only, if I write a check for 10, I don't have the car for two years. And so, really, I get the use of the car for the difference, which is five in that scenario. Now, I think you're going to find it to be less. Let's call it seven.

And if you could get out of it for seven, would I get out of it? Yeah, I probably would. That's like 10 months payments. And then I'm free from the other months payments. So, yeah, if you could get out of it for seven or anything less, I'm probably going to write a check and get out of it or borrow the money, the $7,000 at the credit union, get out of it. but I don't know how much negative equity you rolled and I don't know which numbers you're getting and of course you've got to compare this to the actual value of the car how did you value the car well I had I called some dealerships and gave them all the information and they

told you what they would pay for it oh yeah yeah exactly see that's that's the wholesale number you can sell the equinox to an individual yes yeah and if you did that is it seven or is it difference. Yeah, probably because that's a wholesale number you got. So the second, so first thing you got to do to figure out your real numbers is you got to call the finance department. That's your 1-800 number on your payment book, okay, on your website for payments. And talk to him and say, I need the early buyout. If I write a check today, what's the payoff today? I need that number. I think it's less than 10, okay? Then the second number, you go to Kelly Blue, book kbbb.com or edmund's car guide either one and look up the uh private sale value of your car

not the trade in value because when a dealer buys a car from you elijah they buy it to resell at a profit okay and so if they buy that car for 20 that means they plan to sell it for 25 okay which means you could have sold it to an individual for 23 if that's the case and that's a That's a, you know, that's probably your difference, something like that with that equinox, somewhere in there. Yeah, I'm sitting here listening to this and, you know, it's just a reminder to not get sucked into whatever the decision was. There was an emotion there because here's a young guy who's going, man, we messed up. And now you've got to try to wade through this. Stuck.

Yeah, and as you were laying this out, I just, I feel legit compassion. And there is such an emotional pull. It seems like such a good idea, the lease idea. And then when you actually get stuck with it, and the pit in your stomach or your chest of that $600 and, what, I think I wrote $645 a month payment. Yeah, that's a lot. That's a heavy weight. And now he doesn't have a ton of options because I don't, I mean, I'd love for him to try to sell it on the open market to somebody. But not a lot of people in today's economy are looking for a 2025 Chevy Equinox.

You try it, but you may have to just bite the bullet on this. There's a guy named Elijah. They bought one. Yeah, that's right. somebody buying them. He leased it, right? You know, I think you bring up a good point, too, that when you're excited about buying something or you're in what feels like a desperate situation and you're buying something, you need to push pause.

Yeah. In both cases and wait overnight. And here's the lens, I think, Ken, you're bringing up this very smart. Here's the lens to look at it. Say, all right, is this a good decision? 10 years from now yeah if i'm 26 years old will the 36 year old version of me be pissed that's a great way of looking at it if that if that 36 year old version of me is going to look back and go i'm going to choke you you little you know and um because you're just being impulsive

and excited and you like that new car leather smell yeah all that stuff and um you know you got stuck in it or you're feeling scared and you're scared about nothing you're acting like this is a big deal not a big deal. And that's what perspective gives you when you pan back. That's right. And you say out there 10 years, 15 years, 30 years. One of the things we found, I found this study like, man, when I first started on this show, like 30 something years ago, that wealthy people, when you talk to them and interview them, their planning window, when they're asking, when they're getting ready to do something, they ask themselves, how's this going to affect me 10 or 20 or 30 years from now? middle class people say how's this going to affect me three years from now yeah poor people say

thank god it's friday that's right that's right oh god it's monday yeah it's right and so and zig ziggler used to say poor people have big TVs rich people have big libraries you know so it's a long-term thinking thing and you know so you know don't think like poor people yeah and if you want to be rich people start thinking like rich people and you'll become rich people in America. That's right. By the way, here's a notion. In the 24-hour pause that Dave recommended, actually go home and run the numbers on what a $645 a month payment is going to do to your expenses. A lot of people don't do that. They're on the car lot, right? And there's a negative emotion or an excited emotion that drove them to the car lot. They got a salesperson. All the things, endorphins are exploding when they sit in the car,

when they drive it and they wonder what it's going to feel like, what am I going to look like? and nobody sits there and goes, what's $645 a month going to feel like? Yeah. Well, the number of times somebody gets a $500 a month raise and celebrates it with a new $750 a month payment. Yeah, that's just, yeah, that's a great point. It's the same exact thing. What are we doing here, folks? It's the same exact thing.

Yeah, it falls into all of that. And point being, Elijah, you're not the only one. Most of us have done this dumb thing you did. Yeah. We love you. We're proud of you for turning it around. Get those two numbers, the actual private sale value, and the early buyout, compare those to the $15,000 number to keep the car

and then ask yourself, is it worth it to be set free? If you're only going to save $1,000 or $2,000, drive the thing through the lease. If you're going to save $15,000 or $10,000, then get rid of it today. Our Scripture of the day, Proverbs 418 and 19, but the path of the day, Proverbs 418 and 19, but the path of the just, is like the shining sun that shines ever brighter into the perfect day. The way of the wicked is like darkness. They do not know what makes them stumble. Theodore Roosevelt said,

Knowing what's right doesn't mean much unless you do what's right. Sarah is with us in Grand Rapids. Hey, Sarah, what's up? Hi, Dave. I want to thank you for walking with me every day. I listen to on my walks and I pray. So thank you. I knew I was getting some exercise. I got free, but I make about $55,000.

And I'm just wondering at what point can I, should I help my daughter buy a car or purchase windows for my house or go on a vacation. When you have the money? Yeah. Yeah. So that's what I was trying to figure out. I think according to you, I probably need to save more. Well, I don't know. I mean, I don't know why what I told you on your walk, but, um.

Yeah, give us a picture real quick. I mean, you're debt-free. You have an emergency fund of three to six months of expenses, right? Um, I have about 12,000, yeah. Is that three to six months of expenses? Yeah, probably the lower end of that, yeah. All right. Then we have an emergency fund in place.

And then do you have any more money saved than that? No. No, not much. When you have money saved, you buy windows or when you have money saved, we buy daughter a car. By the way, it won't hurt for daughter to be working. And, you know, maybe she pays for half of this car. Maybe you put in a little help or you put in $1,000, $2,000. She puts in a $1,000 and $2,000 car gets her a little teenage hoopedie, right?

Right. Well, yeah, yeah, that's a whole issue, but yes. Why is that an issue? Well, I gave, when I went through one of my divorces, my ex-husband promised both my daughters a car. Well, that's his problem. So I gave one of my daughters a car, but I made her pay half, but I gave that money to the other daughter. So I think then if that daughter was, and she hasn't bought a car.

So, and I'm driving her back and forth to school in Ann Arbor. So it's a lot of driving, and I have a 45-minute commute as well. You gave her cash for a car, and she didn't use it for a car. Well, she still has the cash, but she just is saving it. How much money does she have? She has, she's about $6,000. I'll tell her just go buy a dead gum car. But I only gave her $2,000.

Okay, that's fine. She can go buy a car. What's the problem? Your ex-husband hadn't got anything to do with this. That's why we call him out. Yeah, but I gave the other daughter half of it. I mean, her pay half the value of that car. Well, so what?

You don't have any money. Okay. $6,000 daughter? Get a $6,000 car. Other daughter? That's the way it went down in the divorce. If your ex-husband wants to put some money in, that's fine, but you don't have any money. And your no need to be commuting for a kid.

It's got $6,000 in the bank, and you're driving around half of Egypt up there. Ann Arbor is a long way from Grand Rapids. That's insanity. I know. Get that kid's butt in a car. Tell her to be up and get up and drive herself down there. Sarah, I think you've got to get to a point where you realize you are going to disappoint your daughter at some point. And when we have real reasons for the disappointment, like Dave's saying, you're just going to have to own that.

I feel like you're in this crazy cycle right now trying to please, trying to make everybody happy, and you don't have enough money to get windows in your house. right so start taking some initiative i'm going to help you a whole bunch in this one call this is even better than our walk okay so here the one call you ready you tell your daughter to go buy a car because you're not driving her anymore and you i'll help you go pick out a car okay that now that one's done and let me tell you what you just got back two hours a day you just got back and all the gas and all the gas and that's going to help you save up a lot of money for us. This is just miracle right here. It's a miracle. I'm so glad you called. And we also found you

some overtime opportunities or a second job opportunity now that you're not driving all over Michigan. Now that you're not Uber and a kid that has the money to buy her own car. Yeah. Wow. I love to disappoint my kids when I'm right. When I'm right or it makes common sense, it's like, yeah, I'm disappointed you right now. I used to tell them all the time, look, you got to have something to tell your therapist when you're 30 so we're just going to go ahead and cover that now right come on everybody needs a struggle everybody needs a struggle everybody needs some dad issues so i'm going to give you some dad issues right now oh that's good answer's no nope nope let me give me help you with that i'm going to open out the big box of nope so true though yeah i mean it's tough

and poor little rachel survived didn't she and poor little daniel's done they survived it's just amazing they're resilient little creatures they are it's amazing what they can come through yeah poor little thing mommy ain't driving it all the way to dadgum an arbor from grand rapids good lord a lot of guilt and shame i'm gonna open up a big old box of nope here let me give you a present nope nope happy birthday right yeah carrie is in charlotte north carolina hey carrie what's up hi i just had a quick question for you um i recently got married, and we each had a house before we got married, and we're just trying to figure out what to do to maximize, essentially, the growth on my house, avoiding capital gains maybe.

You're not going to have any capital gains. You've lived in it. Well, if we rent it out, which is what we're considering. I'd sell it. No details needed, just sell it. Well, the details are I'm making the assumption that you have mortgages on both of these. Correct. Okay. No, I don't need another mortgage payment.

and I got a husband, so that's enough. So now we're going to, now we're going to, let's combine our households, move in one of them, take the money from the other one, pay down the one you're going to live in, pay off your debts, the one you're going to live in, walk your baby steps with the one you're going to live in from the equity of the old one. If you tell me, I'm wrong, and they're both paid for, and you've got a million dollars in your 401k, I might change my answer. Not that much, but we're in a good spot.

Are they both paid for? Are they both paid for? No. Do you have the money to pay both of them off today? No. Okay. Then don't keep it. Okay.

Because essentially you've defaulted into I borrowed money to buy a rental property. That's the default that you backed into, and I'm going to avoid that mistake. And so that's, I'm not trying to just rush the answer and say there's an answer that your, your situation is not different. Your situation has got its nuances without a doubt, but I'm not going to lead you into. borrowing money to buy a rental property. And if you keep a property that has debt on it, you backed into it and had the exact same effect. And I want to point out that when we talk to so many people like this and they think, oh, this is a great investment, you start running through the actual numbers of what you make, there's not much there for the headache. Now all of a

sudden you're a landlord in a new marriage and it's just never worth the squeeze. I shouldn't say never it's very rare in the situation you gave then it would be worth it with cash you own it cash well that's one thing but man there's some actual cash flow that's exactly right but the margin are so small on a lot of these stories very small that's a that's a that's a interesting thing and we don't have the exact numbers in this situation but let's pretend you had a 500 dollar house payment a low low house payment okay and you rented it for a thousand dollars right you're barely breaking even barely Okay. Now, I own $700 million in real estate right now. That's where I get that formula from, a barely breaking even. I would know what I'm talking about is what I'm saying. Yes. We own a bunch of houses. We own a bunch of commercial property. We own this campus that we're sitting in and so on. Okay. And so the deal is that in the real estate world, you have your gross rent potential, the maximum of if it stays rented the whole time, minus vacancy, right, minus credit loss, which is people who don't pay and you have to remove them

and then you never get your money, minus repairs, the heating and air that goes out, the roof that leaks, the floor that has a creed, you know, the mold, scare, whatever the nine million things are that's going to go wrong with that house in a year, minus taxes, minus insurance, minus your payment. You didn't really make any money. You did a lot of work for a hundred bucks. And you took a lot of risk for a hundred bucks. And that's where most of these things shake out to Ken's point.

We'll be back with you before you know it. In the meantime, remember there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.