The Ramsey Show - Quit Taking Advice From Your Broke Friends and Family!

Episode Date: August 6, 2024

📱Finish today's episode for free in the Ramsey Network app. Dave Ramsey & Ken Coleman answer your questions and discuss: "Should I sell my house to pay off debt?" "Should I pursue a master's degree?" "How can I reduce what I pay in taxes?" People are telling us not to pay cash for a house..." Support Our Sponsors: Zander Insurance: Go to zander.com or call 800-356-4282 for a fast and easy quote today. Churchill Mortgage: Get started at ChurchillMortgage.com Health Trust Financial: Discover Top Health Insurance Plans, All in One Place. BetterHelp: https://www.betterhelp.com/Delony to get 10% off your first month MamaBear Legal Forms: mamabearlegalforms.com and use promo code RAMSEY to save 20% Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 💸Enter The Ramsey Cash Giveaway for a chance to win $10,000! 📚 Shop the $12 Sale to get life-changing tools to help you make real progress! ❤️ Get $100 off tickets to Money & Marriage Getaway. 📄 Will an online will work for you? 💵 Start your free budget today. Download the EveryDollar app! Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, Ken Coleman, Ramsey personality, host of the Ken Coleman Show, number one bestselling author, is my co-host today. Jack is in St. Louis. Hey, Jack, welcome to the Ramsey Show. Hey, guys, how y'all doing today? Better than we deserve, sir. How can we help? All right. Hey, my wife and I have spent most of our life pastoring small churches, and we work public works also. I did pastor full-time twice, and we've been foster parents and adoptive parents. We have nine children, and we've done all this on a nothing budget. You know, most churches want to keep their pastors poor and humble.

It doesn't sound like I'm complaining, but I guess maybe I could be. But we've had to move multiple, multiple times. And about a year or so ago, we sold our dream house to get rid of a bunch of debt. And some folks at our town wanted to raise foster kids there because of the size of the house. So we scaled down. But our bills keep coming in. My wife had two massive widowmaker heart attacks. And she doesn't look like it.

She doesn't fit the profile. They laughed and said she just had some gastric problems until she had one in front of them and about lost her. Anyway, we're loaded up with debt, and we have a house that we really enjoy and has been more affordable probably than we've had in years. And I can sell it and get rid of all of my debts every bit of it i thought you paid off all your debt when you sold the other house i misunderstood i paid i'm sorry dave i paid a bunch of my debt down i reduced my debt by about sixty thousand dollars oh i see okay yes, sir. And how much debt do you have today, not counting your house? I have $106,000, $55,000.

$55,000, not counting your house. Not counting the house. That's correct. Okay. And how much do you owe on the home? $105,000. And how old are you guys? I'm 57 and she's 55. We still have two children at home. They're adopted sons. And we've raised a lot of kids

over the years. Well, you've given your life away, brother, for others, for the kids and for the churches that you've served, and you're to be commended for that. And it sounds like, no, I don't think you would sell your house unless you just hate the house or something. Oh, we love it. We're absolutely in love with it. No, I think it's time for you to consider something you've never done in your entire life, and that's go make some money. And there's nothing ungodly about that. That would clean up your debts and help you start to build a nest egg as you head towards your retirement years. And you need to do both, don't you?

Well, I have stayed with the company. The position I've been with, this will be five years, and I've gradually worked my way up. And my wife just got her teaching certificate last week and got her first full-time contract. So what will be your household income now? We went from about $28,000 to about $60,000. With her teaching and your job?

And my full-time job, about $60,000 total. And in our area, we're in a rural area south of St. Louis, 4,000 people. There's not much here. So really, that doesn't sound like a lot of money to a lot of people, but in our area, that's a decent living. Well, just what I'm comparing the 60 to is the 55, and that doesn't matter what area you're in. Yeah.

So I need some money to throw at that 55 so that you can keep your house. Right, right. And so I think that sounds like house. Right, right. And so I think that sounds like some kind of side hustle. I don't know what that is in your area, what you're constrained to, but I mean for the next three or four years, for two years if you could bring in an extra $20,000 on a side hustle, $25,000, you could start to talk about clearing this $55,000. And, of course, if you all are used to living on $28,000 and now you're going to live on clearing this 55. And of course, if y'all are used to

living on 28 and now you're going to live on 60, maybe that'll help too. You could go that way. But no, I think you keep the house and you figure out a way to work income up. Don't you, Ken? I agree. I think the targets you gave him, and I was thinking 15 to 20,000, something realistic there. That means he's doing some odd jobs, side hustle stuff. Even in a small town like that, she's tutoring, she's teaching. And what we're talking about here is just over $1,000 a month to get to the $15,000 mark, $20,000, even in a small community like that, per year extra, plus the actual doubling of the income and a budget. They've lived below their means. He certainly learned how to do that over all the years you know obviously they've had some debt you know and with some health issues and things like that but i think they could do that and get it out of there quickly you know so

i you know jack i i mean i would tell you to get on the a detailed budget on every dollar and uh we'll give you a year of that free i'll sign sign you up for it. Okay. So you guys can jump on that app and you and your wife together can do that. But anything she can do to pick up a couple of tutoring gigs and you can pick up a little bit here or there. And you guys take the fact that your income has gone way up percentage wise, try to keep living down on nothing and throwing everything you can at this debt so that you keep the house. And then the

next step is you build your emergency fund. And the next step is you start to talk about really saving for retirement because you got about 10 years and you need, you know, you got to start working on that nest egg. So, um, it's not going to magically appear if you don't build it. And so I want you to somehow figure out a way to get after that. That's what I would do if I were in your shoes. Amen. Thanks for the call. We appreciate you. What noble people, though. They gave their life away. Oh, yeah, just true ministry, and I get that. And by the way, I'd say one of his side hustles, he ought to get involved with his denomination, whatever that is in that state, Missouri, and he could pick up some interim preaching jobs where those are actually decent money,

and he knows how to do that, and that's on Sunday. Yeah. And that's real money. Yeah, just fill in the pulpit. I can tell you, Ken Sr. is doing it for fun because he's an old man. He's 72. He doesn't need it. They've got a great smart investor that's taking care of them all these years,

and they're fine. But he's doing it, Dave, just to stay active, and he's loving it, and it's blown him away what what kind of income not massive income but it's just like really been surprising for him how much money he can make in a month just filling pulpits yeah so what jack ken's dad is a retired pastor yeah and that's what he's talking about so this is not something he just the coleman just made up here on the spot no no it's an actual thing actually occurring. Get connected with your denomination.

You'll be surprised. They have openings where churches are trying to figure it out, and they're looking for people that come in, and they fill the pulpit. Oh, well, there's a lot of holes that can be helped and so forth. There we go. Yeah, good stuff. All right, open phones here. If you want to talk about your life and your money, this is common sense for your life.

That's what we call it around here. And nowadays, common sense is so rare that having it is like having a superpower. So you jump in and we'll talk. Phone number is 888-825-5225. You can do that. And, hey, those of you that have not heard, the final 40 minutes of the show has moved over to the, on talk radio, it's still going to be right where it always was, but it's moved over to the Ramsey app. And if you haven't signed up for the Ramsey app, it's free. You can listen to the whole show there, or you can listen to the final 40 minutes there.

Starting this week, it has moved over there from podcast land and so you can download the ramsey network app at um you know google play or in the apple store whatever you need to do and it's free it doesn't cost you a thing and that way you can hear the final 40 minutes every day and you can listen the whole thing there if you want and you can even email us a question we might get it on the air you never know know. This is The Ramsey Show. 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, are people that call in and their spouse has passed away suddenly, and they don't have life insurance. When you have to think through how am I going to pay

my bills in the middle of all that grief, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm 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 it doesn't cost much because Zander 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 a stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282. That's 800-356-4282 or go to zander.com. Ken Coleman, Ramsey Personality is my co-host today. The $12 sale is here through August 31st. Whether you're looking for parenting advice, tips on how to build wealth, live a more peaceful, non-anxious life, or you're looking for purpose for your work, the sale's got something for you. $12 books to help you raise money, smart kids, to help you get out of debt and build wealth, to help you live and build a peaceful and joyful

life like Dr. John Deloney's Six Daily Choices. Yeah, that's great. And $12 resources to help you find the work that really matters. Ken Coleman's Paycheck to Purpose is on the list. Check all these out at ramsaysolutions.com. Big sale sale going on right now you don't want to miss that crystals in pennsylvania hi crystal welcome to the ramsey show hi ken and dave thank you for having me sure what's up um so i was calling on behalf of my mother um and I was just hoping to get some advice on how to get her back on track. Um, my father left her after 40 years, um, and look, kind of left her with nothing. Um, and she's 61 now. So just trying to find out where we can get started and for her future. They have nothing. Well, um, I've been trying to encourage her to i mean it's going to be two

years this december to see a lawyer but she's um kind of stuck um in the moment still um and seek counseling but he took his 401k with her and left her with a house that has two liens on it um and she makes uh so they're not divorced no they're not divorced okay well to start with she can't get on with her life until she's divorced right right i've been trying to encourage her to get a lawyer but i didn't know if there was anything she can do outside of that in the meantime no okay and he's responsible today for those liens yes he's responsible for all this and she gets half the assets and he gets half the problems he doesn't get just to say i'm going to leave you with nothing and i get to do whatever flip i want to do that's not the way the law works

and the law doesn't activate as long as he sits over there and does whatever the flip he wants to do and she does nothing about it so she can't move on with her life she can't heal and go to the next step until they put a stake in this thing right it's the only it's the only next step and there's not really anything to do until you do that so that is the answer to your question mom we're going to a diverse divorce attorney today i've made an appointment i'm taking you with me here we go okay yeah because he's getting away with murder here he is it's disgusting yeah and it's um it's wrong so and but there's no way you know he left my mom with nothing is not a true statement your mom has chosen to try to

exist in a past fantasy that is no longer there called her marriage. I'm sorry. Gosh, it hurts so much. And your dad, man, how are you talking to him? No, I haven't spoken to him in a year. In years? Oh, wow. A year, just one year.

Oh, a year. Oh, okay. Yeah. So in the middle of all this then. Okay. So he's lost everything. Yes, okay. Yeah. So in the middle of all this then. Okay. So he's lost everything. Yes, yes. So sad.

Yeah, I'm not trying to pick a fight, but it's just a matter of what is right, what is equity, what is correct. And what is correct is that she gets half of the assets and half of the problems at a minimum and he gets the same um and then she can move we can look at that and say okay what are her next steps from there obviously too uh she has to create an income so she's got to do some analysis and start talking about what she's going to do with her life uh because again the the grieving of 40 years of marriage. Man, I've been married 42 years. I told Sharon if she leaves, I'm going with her. Man. You're just tagging along?

Yeah, we're not doing that. There might be a murder, but there won't be a doing it. It's like, golly, wow. Yeah, I get that. And that's really tough stuff yeah that's and the thing is that's been going on way longer before that and he just finally checked out yeah man yeah that's terrible yeah horrible so sorry jenny's in columbus hi jenny how are you hi great thanks for taking my call so my question question is about a gift that my husband and I have received from my in-laws. They had sold some vacation property and put the proceeds into an LLC,

which is my husband is the sole proprietor or sole owner, member, whatever the word is, sorry, of that. And so the money is sitting there. And my husband and I would like to take that and use it towards debt. So I'm trying to piece together if that's the best way to do it, pay this debt in full, or if we invest this and take the proceeds. There is an asterisk to it. My in-laws basically told my husband that the money is for when they're dead and that they did not want him to spend it while they're still alive, even though it's no longer in their name. So we kind of have this moral obligation where we're feeling a little torn about that.

My husband definitely wants to spend it, and I'm kind of trying to back off. Yeah, I would just tell them we don't want the money. Okay. I don't take gifts with strings attached. Okay, because I think in their mind it's still their money, and we're just holding it. And now you're responsible for it, and you're liable for it, and anything that happens negatively is going to reflect on you and if somebody if something

happened with that llc they come after you uh the people do and all because you got money that's not yours parked in your name they should take that back and i'm not sure they didn't do i'm not sure what they haven't exposed themselves to gift tax do they have any idea what the flip they're doing um i'm not sure that they had the greatest guidance when this happened um it kind of hit us all with i don't think they had any guidance when this happened because you can't just hand somebody two hundred thousand dollars without paying gift tax on it or without going through the unified estate tax credit problem process and using a part of your federal estate tax exemption. There's a process to do this. You can't just hand people money.

And the LLC does not fix that. Yeah, it went through on our taxes, and then we were liable for $35,000 of taxes that we didn't know were coming because all the income from that proceeds went to on my husband's, you know, on our filing our own taxes because it was transferred to that. So there've been a lot of lessons. Um, so there's a lot of kind of feelings happening. Who paid that? Uh, we took it from the proceeds that were within that LLC. So what was left in the proceeds, we paid the taxes out of that.

Man, I think y'all need to get some tax planning advice and some estate tax advice, because I think y'all have screwed this up royally. You can't just randomly move stuff around without getting half. You know what the gift tax is? It's 55%. Right. If I hand you an asset that's worth 300 grand and I don't do it properly, I get a tax bill for 150,000 bucks, not 35.

We're finding out a lot of things that we didn't know were happening, and I think their intention was to make it so that nothing would happen once they do die because my husband's an only child, and they were trying. I think their intention was to have everything moved together. This is stupid on steroids. I'm telling you they have screwed this up. I'm telling you, you guys, really, this is an emergency. They're getting ready to lose $100,000 more if this comes to light and they get audited.

And that may end up on you all if they die. So you guys need to fix this. You all need to get this cleaned up and get some advice and do this right. No, I don't want anything to do with this money. This is a freaking hot potato. It's not free money. There's nothing to do with it. You don't have a choice to invest it. You don't have a choice to use it on debt because it's not free money there's nothing to do with it you don't have a choice to invest it you don't have a choice to use it on debt uh because not even really your money except

it is in your name and you've taken on all the liability for it no heck no man what a horrible thing to do some of you parents the things you do to your kids and And listen, folks, here's the deal. An individual can only, what's the, let me find it this year. What is it this year? 18,000. An individual can give another individual 18,000. An entity can give another entity 18,000. Anything in excess of that is subject to gift tax. If you don't use some estate tax planning tools like the Unified Estate Tax Credit Program, which you can do, but you have to actually know it's there. You can't just hand stuff $200,000 to your kids and not have, you're going to get screwed to no end here by the government. This is the Ramsey Show. Buying your first home is a big deal and

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Ken Coleman, Ramsey personality, is my co-host today. Cole is in Memphis. Hi, Cole. Welcome to the Ramsey Show. Hey, guys. How are y'all? Better than we deserve. What's up? So, I got a couple questions for you, or I just got one, I guess, and I'll kind of give you a little background here. So, I'm 24. I graduated in December with a degree in finance, and that was in December. So, when I graduated, I started a co-op at a company

here in Memphis and, uh, that ended in June and it was an accounting, it was in the tax department and I was doing accounting work. Well, I actually ended up really liking it actually. And I decided I wanted to do my master's program or start my master's program in accounting. So there were some roadblocks along the way, and I've actually learned that my time schedule to get my accounting degree would be pretty, it's going to be longer than I thought it was going to be. So I guess my first question is, it is going to be expensive. Should I try to take out a loan for it or should I try to bankroll it or pay for it myself? I guess is a better way

to say that. Or should I just go ahead and go into the workforce and then come back to it later? That would be my first question. Are you in accounting now? I'm trying to follow what you just laid out for us. What are you doing right this second? So currently I am waiting for school to start. So I went ahead and got accepted to the master's program, so my degree is in finance, and then I did this co-op in accounting. I know. So right now you're doing nothing right this second,

and you're getting ready to go back to school full-time, and you don't have the money to do it. Well, I do currently. So I've got $24,000 in savings and $5,000 invested. What's the program going to cost, and how long is it going to take? It's going to cost up to $29,000. Well, it was going to be $29,000. It's probably going to be more of $34,000 now.

And what's the driving reason to get the master's in accounting, assuming that's what you're getting it in? Yes. And the driving reason is I really wanted to be, well, honestly, I really fell in love with accounting, but really, I would like to be a dual threat in that space, in the finance accounting space. Meaning what? What does that mean?

I know what dual threat means, but specifically, does that mean what? CPA plus? Maybe, or more of kind of just have more experience in everything and kind of be able to understand more. So real quick, just let's run through this. Is a master's degree the only way to get where you want to be? If you're going to be a CPA, yeah. He's going to have to finish.

No, I know, but I want to hear him. Is that the only way to get where you want to go, or can you get there and then come back to it later? That's the question. Do you need it now to get where you want to go, can you get there and then come back to it later that's the question do you need it now to get where you want to go or can you start the path what are your thoughts well i i guess no that i'm not necessarily right now and and i guess that could bring up something else i'm kind of scared at this point in time to take out the loan. You should. Here's an option. Here's why I asked the question. I'm cutting you off because one of the things I think you have to explore is you tested the accounting field in the co-op. You

know you like it. That's half the battle. That's huge. I would be getting back into the field. I'd be getting a full-time job with a good firm and be looking at firms and in the interview process, find out how many of these firms are willing to help you with your master's degree or maybe pay for the entire thing through either reimbursement or they're just going to fund it. This is very, very possible. And I'd be kicking the tires on this coal before I ever even sniffed at the idea of taking out a loan. Plus you've got the cash. So you don't need a loan anyway. You've got the cash. You can make the additional $5,000 between now and whenever you decide to start. There's no absolute reason at all for you to get a loan.

You don't have to have it all up front. So if I were you, I'd get back in the business and see if one of these firms, let's get in there and bust it for six months and then say, hey, I'm kicking the tires on a master's. Here's why. You don't have to do an accounting master's. You do not have to be a full-time student. There's plenty of adult programs that people do while they work a full-time job

and finish up their master's. They do it. People do it every day. And they're not that expensive. What you're talking about paying is a little high for a master's degree. And so you ought to be able to do that for around $20,000, really. And there's such a demand out there, Dave. I think you go get a job where they have a benefit that pays for your education.

I agree. And you get it free, and you're working and making money, which means you're going to be – that's like a $20,000 signing bonus, a $40,000 signing bonus if you go do what Ken is suggesting. So the delta between what you're talking about doing, making no money, not working, going to school, burning through your cash. So what would you have made during that two years? And what would you have spent that maybe someone else would have paid you during that two years and paid for your school.

I mean, now we're talking, we're bumping up to $100,000 here, difference in that plan and the plan you're on currently. So, no, I think you go get a job, man, and just make sure that the people you get a job with, you're doing accounting with a finance degree. That wouldn't be that unusual at all. And you've got the chops to do that with an undergrad. Nothing wrong with that at all.

You just don't have the master's in accounting, and you're not on a CPA track until you get that. But take a job with somebody that pays well, has reasonable hours, and is going to pay for your master's. And that's exactly what I would do if I were in your shoes. Your idea is not bad. The process of how you're getting at it sucks. And that's what I would do if I were in your shoes. Your idea is not bad. The process of how you're getting at it sucks. And that's what I would change.

I just think these graduate degrees, folks, they're always going to be there. So don't feel this pressure to jump right into it if it doesn't make any sense. Those programs are always going to be there. And increasingly in today's world, we're seeing companies that are paying for these programs because they want to retain quality people. You know, there are a lot of post-grad work that you can do, graduate degrees that you can get that are economically useless. That's right. They don't do anything.

The MBA is actually useful. You actually can further your career, not because you have an MBA, but because of what you learn while you're getting the MBA. And it is a box that has to be checked if you're going to go to cpa that's correct so um you know you don't have a choice on that one but the um but but you know there's a lot of stuff but people are going i'm going to go get my for what you're just collecting you know just collecting certificates and very expensive little certificates gold lined yeah uh certificates uh steven is in new jersey hey steven what's up hi dave hi ken thank you for taking my call sure how can we help so my wife and i got married in

november congratulations thank you She's expecting. Congratulations. Yes. And so we both listen to the show. We've been through FPU. We've got the EveryDollar app, which is the premium version. Very, very helpful. And so right now we're renting a one, one bedroom apartment. Our lease is up in April.

We're, uh, she's going to take three months off from the baby. That kind of lines up to the end of our lease. And we're speculating moving in with my dad for a concrete period of time to save money. What is the concrete period of time? Six months. Which way are you all leaning? Because you called to get our take, so you guys are leaning one way or the other. Which way?

So, I think all parties agree that it would be not the idealist of situation. My dad still works. My twin brother lives at the house. The other big factor that leans me towards it is right now we spend about $1,750 a month on rent. And another factor is my neighbor, who used to watch us as kids, would be more than happy to babysit um and that what's your household income we make about 130 together okay um you guys do whatever you want to do i

wouldn't do it yeah i agree with that i don't think your twin brother your father has any idea what they're signing up for the a brand new baby in the house. Nobody going to sleep. And your wife's probably telling you she doesn't want to do this. She may have not said it overtly. She may be trying to be kind. But I think she's sending you signals she doesn't want to do this. Mine would.

Mine would be going, nope. Nope. Less than ideal. Davis code for it could get messy. Nope. This is bad. No, I don code for it could get messy. Nope. This is bad. No, I don't think I'm going there. I'm going to, you know, I'm going to be okay. You've worked, saved, sacrificed, and been gazelle intense with your financial game plan.

But do you have the right defense in place, like the right health insurance? Look, you can't walk past a doctor's office these days without getting a massive bill. And if you don't have health insurance, a major medical situation can undo all of your hard work. That's where my friends at Health Trust Financial can help. They work for you, not the insurance company. So they find you the right health insurance and they save you money. Ramsey has recommended Health Trust Financial for two decades because they're the experts. And whether you're 19 years old or 90, you can trust them to do two very important things. Listen to

you, then find you health insurance coverage with everything you need and nothing you don't. Health Trust Financial is your one-stop shop for unbiased advice about affordable health insurance options. They could save you hundreds of dollars a month, so make sure you're not overpaying. Go to healthtrustfinancial.com today. healthtrustfinancial.com. Hey guys, if you want to help us out, we could use the help. Click the share button on your podcast or your YouTube and share this show with people. Also subscribe and follow and do that. All those things help us considerably because it causes the algorithms to push the show forward

and tells people about it that might not even know they were looking for it so it's very nice and so thank you for all the help you've given us because um and continue to do it please because it changes everything our numbers on youtube and on podcast are way up and it's all you people's fault thank you we appreciate it garrett is in bowling green kentucky hi garrett welcome to the ramsey show hey thank you so much for your time i appreciate it. Garrett is in Bowling Green, Kentucky. Hi, Garrett. Welcome to the Ramsey Show. Hey, thank you so much for your time. I appreciate it. I'll jump right into this, and I'll be honest. I really have no approach.

I know nothing about what to do, how to handle this situation that700,000 in the bank, no debt, a 10-acre farm, and a house. I am the only biological child to my father. My brother and sister are stepchildren to him. Upon conversation with my dad, there is no plan in place of how the money will be dispensed or the farm, the house, other than my father says, well, when I leave this world, the assets, the money, everything, it'll go to your mom. She can do whatever she wants with it, and then when she leaves the world, it goes to you, Garrett. The home and the farm are deeded to me. They have a, I think, you know, they can live there while they're alive, but then when they pass, it's mine.

When did they do that? It's been about four years ago. Yeah, so this whole situation makes me very uneasy. It's a lot of money, and I just don't a a sibling rival yeah i agree i don't know what to do were your uh stepbrother and sister raised by your father yes sir they were but it was not a good situation what's that mean well my father's an alcoholic, and it is a very abusive home for them and myself. And my father, unfortunately, is more inclined to give me more than them. I don't like that, but I know that that's where his heart's at because he's told me.

Well, if he leaves it all to your mother, he no longer has a choice in it. She can do what she wants. Yeah. Because she would have a will that dictated what happened to her assets. We're pretty sure he's going to die first, it sounds like. Yeah, he's older and not in good health at all. Yeah, with the drinking and all that. Yeah.

Yeah. Okay. All right. Because I know that my dad doesn't have a wheel i know that my mother doesn't have a wheel uh which to me is kind of alarming if yeah it is alarming um and it puts you in a bad position but it doesn't sound like your dad is the type that cares if he leaves you in a bad position. He doesn't see that. He doesn't see that it put me in a bad spot.

Yeah. So if you went down and sat down with him in person, had a cup of coffee and said, Dad, look, this is not good. I'm not good with this. I need you to do a will. I need Mom to do a will because you're going to leave me being the bad guy in this, and I don't want to be the bad guy. Yeah.

These people are going to end up mad at me, and I don't want that to happen. And once you get the will done, you need to tell everybody what the will says. Okay. So if they want to be mad at him or they want to be hurt by him or your mom or whatever else, that's fine. Yeah. by him or your mom or whatever else that's fine um yeah now so the truth is that if he just does a will and leaves it to your mom and your mom does a will and puts it three ways anything you can do about it yeah okay um you know if that's what she wants to do uh but who the Lord knows what these people are going to do. Right. So the proper way to do this is for both of them to have a will.

And the will says that 100 percent goes to my spouse. If I die, 100 spent goes to the other spouse if I die. So and then if we both die or upon the death of both of us, here's how it's going to be divided up. It's called a mirror image will. Their wills are identical. We just switch the names out. OK, it all going to be divided up it's called a mirror image will their wills are identical we just switch the names out okay it all goes to my spouse all goes to my spouse if we both die or when we both die it all goes this way and they can lay that out it's not super expensive uh you can go to mama bear legal forms.com you can help them do it

it you know it's like but it's just gonna the problem is it's going to make him face your mother, and he doesn't want to do that. Yeah. Yeah. So I don't know if you're going to be able to pull this off relationally or not, but the answer to your question is the proper way to do this would be to lay it all out and then meet with the other two and tell them, here's what the will says, and have a reading of the will while everybody's alive.

Okay. And then you don't have all the people mad and trying to contest a will, and they're angry at you like you did something, because you're not allowed. If you're left as the executor of the estate, you're not allowed to do anything except what the will says, regardless of if you like it or not. Yeah.

Executor's estate. Okay. will says regardless of if you like it or not yeah executors okay yeah so the executor is the one who can who conducts the business of the will after a person passes away you follow me so if your dad said sell the farm well the farm's already gone it's in your name yes sir okay uh which may be a huge tax problem, but that's a side issue. Oh, boy. Because you now have a basis in the farm of what they paid for it, which is little to nothing. So when you sell it, you're going to have 100% gain just about. Gotcha. Putting it in your name early was really dumb on their part.

Gotcha. They did not do you any favors. So they probably cost you whatever the farm is worth times 15 percent um whenever you do said do sell it someday anyway so um yeah laying it all out and everyone being in agreement ahead of time is the proper thing to do but that requires a level of family for the family to be somewhat functional not dysfunctional and i don't know that your dad's going to do all this, but it's the right thing to do. Yeah. And it's, what is he, what are his other options on that deeded property? Cause he said the farm in the house, I believe.

So what does he do in that situation? Does he just pretty much stuck with it or can that be unwrapped? I don't know. Yeah. Four years old. You got to see an attorney and get it done. I'm not positive. But folks, let me walk this through because some of you have heard it before if you've listened to the show for a while, but it's worth covering for the rest of you. This is two of these calls we've gotten this hour. That's correct. People just freaking move stuff around and don't act like there's any consequences. Okay.

To start with, when dad deeds the farm to his son, dad is subject to gift tax of 55% of the value of the farm. You can't just deed stuff to people. Well, it's my son. I don't care. You have voted people into office who have promised to tax you into oblivion, and they're good at it. And so there's tax law in place that's going to take your freaking head off if you start just handing people assets you cannot do this without

getting good professional help a good tax attorney or whatever so let's pretend that dad and mom bought or dad bought this farm in 1960 or something, whatever the flip. I don't know. And he paid almost nothing for it. When you transfer an asset prior to death, whether it's a share of stock, a piece of real estate, you transfer it prior to death. You move what you paid for it as the basis over to the person who got it. So now our friend Garrett, when he gets ready to sell the farm it

says if he paid thirteen thousand dollars for it he's going to sell it for a million bucks and he's going to pay taxes on a million bucks capital gains tax because it was transferred prior to death if instead dad had left the farm in a will to be given to Garrett upon his death Garrett's basis for tax gain would be the value of the farm at the time of death we're using a million dollars as an example let's say this how this farm is worth a million bucks today now Garrett's basis is a million dollars if dad dies this year and if he sells it he only pays taxes if he sells it within six months he pays zero tax wow because it's presumed to have been sold at market value if he sells it after six months three or four years from now he only pays taxes on the amount

over a million that he gets for it so discussion, if this farm's worth a million dollars, and if he bought it many, many, many years ago, is probably a $150,000, $200,000 mistake that dad has made here. That Garrett's going to end up giving the government when he sells his farm someday, $150,000 to $200,000, too much that he didn't have to do because his father was too big a goober to get a good lawyer to set this stuff up. Do you ever feel like you're finally making progress towards your goals only to get quickly distracted by something else in your feed? Well, that's why we created the Ramsey Network app, your single source for content that keeps you motivated. The Ramsey Network app is designed to keep you laser focused on reaching your goals. Loaded with over 7,000 hours of Ramsey shows, this free app

is the best place for uninterrupted content and no distractions. Plus, you can search specific questions to get more personalized content in seconds. So for the days you need some extra motivation, you'll have proven advice at your fingertips. It's time to get serious about your goals and shut out the distractions for good. Simply search Ramsey Network in the App Store or Google Play. If you're listening on a podcast, just click the link in the show notes to download our free Ramsey Network app today. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. The phone number here is 888-825-5225.

That's 888-825-5225. Ken Coleman is my co-host today. He's the number one best-selling author and, of course, the host of The Ken Coleman Show and talks to people about how to make more money in their lives. And that's one side of the equation, right? And I'm the other side. Don't spend so much. There we go. So phone number here is 888-825-5225. You jump in. Rebecca is in New York City. Hi, Rebecca. Welcome to the Ramsey Show. Hi, Dave. Hi, Ken. Thanks for having me on. Sure. What's up? So I have a question, a couple of questions.

First, I called a couple years ago and paid off my house, so thank you. Way to go. That was your advice. So very exciting. How does that feel? Really good. Really good. What's the house worth? So we bought our house for $3 house for 322 and now it's worth

over 700 yeah wow love it so yeah super exciting um so yeah so a couple years out and now i'm you know doing pretty well thinking about my future um i'm i've got two children. I'm married. And I pay a tremendous amount of money on taxes. And just wanted to know, are there any strategies that I can use to mitigate that or make my money work for me and my family in our future? Move out of New York is one. I know. It may not be a viable option. I understand. You were going to say that. That's the smart aleck answer. I know. It's a southerner joke.

I apologize. It's insensitive is actually what it is because you live there. No, I agree with that. I wish I could. There you go. Okay, so a mistake that people make when we get mad about taxes, and I'm as mad as anybody about taxes. I hate them.

But the mistake that we can make is we start doing things that don't make good business sense or economic sense all in the name of saving taxes. Okay? You don't want to do that. Okay? So don't get so motivated by this that you get yourself in trouble so um i mean you get yourself into some bad my fair share not 52 no that's not the point that's i'm not it's not about your fair share no anybody anybody that pays federal income tax pays more than their fair share because 48 of the people in the united

states of america pay zero federal income tax that is not fair okay that's not fair that's not that's not reasonable so uh that the idea that you you've done something wrong and should be punished is asinine but anyway not by you but in general. Okay, so all that to say, the only thing I would tell you to do is it's probably going to be worth some money to spend on good tax preparation. Getting a really stellar, super smart tax person in your corner it might cost you a few thousand dollars more but you guys are making enough and have enough that um that that it's worth it to look at every little thing um the amount of money i spend on preparing our taxes and managing our taxes every year is ridiculous but it makes me but it saves me more in taxes than it costs me so i do it and uh because i'm not you know i want to know what every rule is

what every law is that i can utilize morally and legally to keep those bozos from my money and um and so i'm gonna i'm gonna spend the money to find somebody that knows every one of those things. And they're not illegal things. They're not loopholes. They're not tricks. They're not something that's done wrong. All that kind of stuff.

It's none of that. It's just things in the law that there's no way, you know, the tax law is so, there's so much volume to it that to have somebody that really knows what they're doing is worth the money. So I would just tell you, look for a tax ELP, go to endorse local provider at Ramsey solutions.com for your area and interview a couple of them. There'll be two or three of them will pop up in your area and just find, you know, you're looking for somebody super smart and really knows her stuff and works with high income people and knows every little nook and cranny but don't spend money don't go spend ten thousand dollars to save on to create a ten thousand dollar tax deduction because that only saves you four thousand dollars in taxes and you gave up ten to save four that's not a good trade that's the kind of crap people

do when we get mad enough about taxes if you want to do that just increase your giving to your church and it happens you know at least the money's going to something good give you give if you want to turn 10 000 into 4 000 tax savings just increase charitable giving you can do that without it's not fancy at all, but it's not a mathematical trade you want to do very often. I mean, you want to do good generosity, but I'm talking about, you don't do this for tax reasons. You do it for giving reasons because the economics of it, you're turning 10 into four. And that don't work. And real quick, it's really important that for a broader audience that you really have a tax pro in your life, no matter how much money

you make. Because I'm just looking at this and I know that the New York state taxes are very, very different, much more complex than Tennessee, for instance. And so the federal plus the state taxes, having that tax pro, Dave, is huge because of the minutia, loopholes and all those things. It really is important. Well, I've got friends that, um, that, that are people of serious net worth and serious income. And when they sit down with a pro and they look at what California has recently done with an extra 15% on people that make serious money, um, they said, you know, I really like, I really love California, but I'm not going to live here anymore. Absolutely.

And they left. And, you know, I can name three or four people off the top of my head right now that have left there in the last three years because of their tax law and paid cash for a house in the Nashville area with the savings from one year. Yeah, that's exactly right. Not paying California. So that's what the, that's what this gun, but, but at least you, you know, you may want to choose to stay.

I'm not saying that Rebecca needs to leave. We were joking with her about that, but that, but my buddy could choose to stay in California if he wanted to stay there. That's right. But he needs to know what it's costing him. That's correct. To be there. Yeah.

And so they left. Yeah. And, um, one of us building a house over by you. I know. Trust me. Don't get him. He shall remain nameless. But if you get him started talking about California taxes.

And he lived there his whole life. So he's particularly pissed. And also palpably excited about what his income is going to look like after officially moving to Tennessee. With zero income tax. Bouncing up and down. We don't have a state income tax. Yes. And we're one of quite a few states that doesn't, and the economies are booming in every one of those states.

Go figure. There's your art laugher analysis of this, right? But that's true. I mean, it's a math thing. That's right. And so when you look at the math and you go, this is what it's doing to me here. This is what's doing to me here. You're punishing me.

I don't want to be punished for something I didn't do. I don't want to be punished for my success. And that's what it gets down to. Wow. We did all that and it's not even April. I usually get so pissed around April that I have to do a tax rent. Well, it's always, you know what, when you're coming up on Election Day, it's always good for a Dave tax rant, just to remind people.

One of the issues they should be thinking about. Yeah. See? See? Yeah, there it is. There it is. Now we've got to go to a break. This is The Ramsey Show.

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Open phones at 888-825-5225. Today's question of the day is brought to you by Y Refi. If private student loan debt is taking away your peace of mind, you don't see any way out? Well need why refi i love this company i love what they do why refi refinances defaulted private student loans that other places won't touch and they give you a low fixed rate loan built customized for you go to yrefi.com slash Ramsey today. That's the letter Y, R-E-F-Y dot com slash Ramsey. Might not be available in all states. Today's question comes from Craig in Iowa. I'm 42 years old and I work as a security guard earning close to $25,000 a year. I'm

currently trying to find a second job to increase my income. Using one of the online recruiter websites is like playing the lottery and hoping to win. I have a teaching degree in high school math, but quickly realized I don't have what it takes to be a teacher. I've worked in fast food for 10 years until my body gave out, and that's when I started working as a security guard. I have $35,000 in debt made up of credit cards and a car loan. Rent is $800 per month. I don't have any retirement investments. I've been stuck for a long time and I need help with how to get unstuck. Ken, be honest with me. Is there any way I can turn my career around since I have been a turkey for so long? It's funny, but it's not true. Let's start

with that. You're beating yourself up here because you've not gotten through and you've not had any breaks. And it's really because you admitted you've been playing the job lottery after realizing that high school teaching wasn't for you. I would be going back to the teaching degree because you actually have a degree that's going to help you. Two, I would be looking at what you enjoy about instructing. There was a reason why you chose being a high school math teacher. I think the thing I can pull from a question like this without

being able to talk to you is obviously you're good in math, probably enjoy math to some degree, that kind of thinking. And the idea of instructing people, pouring into people, that was interesting to you. So you get into high school teaching, and for a variety of reasons, it's not for you. What I wouldn't do is discount all of those signs that led you to high school teaching. And I think if you could think about that degree and how you could parlay that and your relationships into some type of role where you're instructing people. This could be very simple where you walk into a company and you become a training manager or a trainer. That's just one example. It's the art, the skill

of instruction, and you're pointing to people, and yet you're dealing with adults who hopefully are there because they want to be there, not a high school math situation with all of those extenuating circumstances. So what I'm looking at here is, what do I enjoy doing? What am I good at doing? I have some clues from the past. Security guard isn't it. Your soul's slowly seeping out of your body as you stand there and check on things. So believing, back to the very first point, that you have something to offer is huge. Figuring out what you can offer, and you have some clues to that, and now it's where. Where in my community are they looking for somebody who has more skills than just instruction? The ability to plan, the ability to communicate. You have several things that you have at your

disposal. And I think if you see it as, I've got this tool belt with a lot of very good tools, then we can do something with that. And I wish I was with you on the phone. I'd give you the Get Clear assessment. I'd get the book, Find the Work You're Wired to Do, which has the Get Clear assessment in it. And it's going to give you a great self-awareness test. And Dave, the reason that I'm preaching this self-awareness here is because a person who is clear is confident. And this email is reeking in a lack of confidence for a variety of reasons. Yeah, and I would pick up the proximity principle and get off the lottery. Yeah, that's right, too. You don't have to do the lottery thing with the things. Now, Ken, I'm reading here, okay okay i'm just looking at his word choices yeah in this but quickly realized i don't have what it takes to be a teacher now we don't know what that means we

don't yeah um let me give you a guess i have a guess too i don't want to deal with unruly misbehaving children where there's no discipline in the classroom or in the school because the helicopter parents are creating snowflakes you just took both that that is the environment and i don't want to work in that environment yep and i'm going to just guess okay that's my guess this is one of the reasons teachers are leaving in mass is they're being asked to teach things on a value system basis that they hate in an environment that's completely chaotic and out of control and the inmates are running the asylums and so the teachers are running out the door with their hair on fire we're losing the best and brightest people to teach our young people because we won't freaking

make the system behave where there is no law and order there cannot be prosperity yeah okay now end of rant but that's the reality. It is the reality. If that's why you left the classroom, then you are a real candidate to be a fabulous one-on-one tutor. I agree. And as a tutor, a math tutor to high school students, you can make $30 to $50 an hour. Let me throw another scenario. That ain't $25,000.

That's right. Let me throw another scenario out. That's $50,000, $60,000 a year. Yeah, and just take a Chick-fil-A manager, okay? Because Chick-fil-A is a wonderful organization. They value their people. Somebody like this could walk into a Chick-fil-A that needs a manager, and he's going to make more money than that, double, triple that money with a path to actual growth, and they're going to treat you like a million dollars.

That's an example. Again, he's got so much that he can do because half of what – I've got a good friend who's a Chick-fil-A operator. And you'd be leading quality young people. You'd be leading young people who want to be there. That you can fire. That's right. So that's just one example. And tutoring, we could go down the list of all the things

that a teacher brings to the table from a skill and experience standpoint. Yeah. Teachers actually have a lot of magical powers. They really do. I agree with that. It's the ability to sell an idea and pull someone through a frustrating experience because 100% of learning has a frustration level to it.

When you're learning something new, you have that moment where you kind of grit your teeth and get pissed off. You know what the most magical power a teacher has? What's that? They transfer belief. I think we can all look back in our lives at a teacher who believed in us and it changed our trajectory. It may have been in the second grade and it may have been in a small way but i think teachers that magical power i'm glad you said that i think they transfer

belief and when someone believes in you that's powerful stuff i gotta tell you i'm i could i could tell you i've written about i've written blogs about some of the teachers that we've had and some of the stories and um you know uh we've talked about it a lot of times but yeah it's exactly right and the number of times you know what's running through my head too and i don't know i don't know how to monetize this or what the business model is but the number of times someone says to us in the money world i'm not good with money because i hate math math intimidates me i'm not good with math so i'll never be able to have money yeah and so there is this with math people don't say that about english it's true they just

destroy the english language like like i do and they don't think anything about it right and uh but they but about they don't go well english intimidates me they don't say that okay it's true but they say math intimidates me. Like math has a spiritual power to it or something. Which I'm a math nerd. Math comes easy to me, so I never understood that idea. But I wonder if there's not something a guy like this could do to help the adult population that's intimidated by math. Well, again, financial coaching.

You know? You know, going to work in finance. Finance. Excuse me. You know, there's so many ways that he can go. Accounting. Again, let me tell you what I know about tax pros. If you can do math, it opens up a lot of doors.

You want to have a massive opportunity for somebody who's good with numbers is jumping in the tax field. There is a – our team will tell you this. In fact, the personalities we're sitting down with, our tax team recently, and talking about the industry, and I'm telling you, you good with numbers, you want to make good money and be secure in your job, go into tax preparation. They're looking for people who can handle the unbelievable crush of business. That's just one example. Well, and there's new crap you have to learn every year because they change it all. That's right. Just to make sure they steal more from you.

I mean, tax you more. Pay your fair share. It's a never-ending learning curve. But yeah, those are some great examples. Yeah. He's got tons of options. There's a lot of things he can do. Security guard is not his destiny.

No. That's his I quit position. I quit on life position. So, yeah, I agree, Ken. I'd pick up proximity principle and the work you're wired to do and take the get clear assessment and then go do something. Get active again. You're not a turkey. You're just parked in the wrong place.

You need a new parking spot. Hey, guys, George Campbell here. As a new dad, I see a lot of things in a new parking spot. Hey guys, George Camel here. As a new dad, I see a lot of things in a new light. The cost of diapers, the value of sleep, and how crucial it is to have a will. Because if something happens to me, I don't want my family stressing about the details. And that's why I recommend making a will with Mama Bear Legal Forms. A will gives you peace of mind knowing things will be taken care of the way you want, instead of a random probate judge deciding who gets your fine china or precious moments collection.

Looking at you, Aunt Shirley. If you think you're too busy, you don't have enough time, no excuses here. I completed my will in just 20 minutes with their easy online process. Plus, if something comes up, you can make changes to your will for free for up to six months until you're completely satisfied. And listen, there's a lot of online will companies out there, but what's great about Mama Bear is that there's no membership, no subscription, no upselling. The price is the price. And if you love a good deal like me, go to mamabearlegalforms.com right now and save 20% with promo code Ramsey. That's mamabearlegalforms.com, today, download EveryDollar for free on the App Store or Google Play today. Ken Coleman, Ramsey Personality, is my co-host today. Thank you for joining us, America. If you're going to buy or sell a house in the middle of

this weird real estate market, well, if you do do that you would need a pro right now you need a pro anytime but a pro is a real estate agent who does 30 to 300 transactions a year and actually knows what the flip they're doing they didn't get their license last week you don't want to list your $500,000 asset with somebody who just learned to drive a car. I mean, come on. That's what you're saying. I got my license last week. I'm your Aunt Sally. I don't care, Aunt Sally.

Good luck with your new business. I'm not listing my $500,000 asset with you. No. You need a pro. Ramsey Trusted is Ramsey Trusted real estate agents are people that we have vetted that we regularly coach and talk to, and they know the Ramsey systems, and they'll help you do real estate the right way. And now is a great time to buy and a great time to sell a lot better time than it's going

to be like a year from now what if you what if you had bought last year instead of this year yeah yeah you would have avoided all those price increases hello so if you're in a good position with your money and you're ready to buy and you need a ramsey trusted real estate agent you can find one for free at ramsey solutions.com slash agent josh is in tampa hey josh how are you hey i'm doing well dave how are you better than i deserve what's up hey so kind of a weird situation need to get some advice from you guys um so here's the gist of it uh my wife and i are currently in the process of looking to buy our first home um we are debt free and and have always been a big fan, big believer of just doing things debt-free.

And we are actually in the position to pay the house entirely with cash without being house poor. Yeah. So we are super nervous, excited. As most people can know, it's a huge purchase. But we're getting some pushback from friends and family, mainly because one of the main arguments is that that can be put into investment more in the market instead of just buying a house the normal way and doing a mortgage so so what they're saying is if you had a paid for house what these people are saying is if you had a paid for house you

should go borrow on it and put the money in mutual funds yeah okay well let me help you with this we did the largest study of millionaires ever done in North America, detailed, airtight research. The conclusions we came to in that study have been so thoroughly vetted and the research methodology was so tight that if you don't agree with the conclusions of that study, you're what's known as wrong because this is data. It's facts. Okay? We studied 10, 167 millionaires the vast majority of the people that had a one

to a five million dollar net worth were like 85 88 percent of them were composed of a healthily funded 401k plan that ends up with you know seven eight hundred thousand bucks in it and a paid off home of seven or eight hundred thousand bucks so that's a million five million six net worth the number of millionaires that we interviewed out of the 10 167 that used your broke family and friends idea they're broke people by the way i know this because their theory they're using is makes them broke okay the number of millionaires that we interviewed that said we became a millionaire by taking our paid for house and borrowing on it and putting the money in mutual funds the number of millionaires that said that out of 10 000 was precisely zero none of them became millionaires doing what you're

i'll be nice ill-informed ignorant friends and family are saying that was nice that was like a hallmark card yeah that was not so sweet because i wanted to call them all kinds of names but i'll just call their ideas stupid and inaccurate and they're trying to influence you so these people don't get a vote whoever they are just go ahead and write their name down in the column of don't get a vote on money because they don't know what they're doing. They don't. There's no one. We couldn't find a one out of 10,000, Josh, that did what your people are telling you to do.

That's how dumb the idea is. It wasn't like it was only 70% of them and did your friend's plan no no none of them not one that's how dumb the idea is it's like the number of them that became millionaires with their airline miles was precisely zero the number of them that thought that leasing a car was a great idea there was actually a couple of those there was there was more of those than your idea which is also a stupid idea by the way but there was you know there's probably 15 or 20 out of 10 000 that thought leasing a car was a good idea but most of this is the kind of stuff we discovered. So the,

the, what the suggestion is so asinine that it's preposterous. Does that help you at all? Yeah, no, it does. We're just, we've,

we've literally looked at or heard your show for a while. And it's one of those things of, we always have gotten excited when people say hey we've gotten out of debt we've never been there we've paid off our mortgage we've never been there so as we're walking through this we just want to make sure that we're making wise decisions in that okay here's the thing go pay cash for your house and if you hate it then you can get a mortgage sounds good try that Try that one. I mean, you know, but I've never had anybody go, you know, I really hate being debt-free.

People get pissed at me about a lot of stuff, but none of them are pissed at me about paying off their house. None of them. I mean, it's just, you know. I like that you gave him the option to get the mortgage after he paid the house off. That's great. That's kind of a, hey, give it a shot.

Scratch and sniff. If you lose 30 pounds and you hate it, you can get fat again. It's not hard. It is true. Getting fat's easier than losing the weight. Isn't that true? It's so true. I mean, it's not.

A lot more fun, too. If you hate it you know if you cut up all your credit cards and you get out of debt and you hate it just wait about 10 seconds and there'll be 14 credit cards in your mailbox yeah you don't have to worry they'll send them right back to you they it's not like you broke up with them and they're mad they just they'll come back for more and they'll up your everything. Oh, God. Yeah, I mean, try it. Try something different, folks.

And listen, if broke people are making fun of your financial plan, it's always a good sign. If fat people are making fun of your health and fitness plan, that's a good sign. It's a good sign. You know, it's just um you know if people that are have been married six times don't like the way that you treat your husband or your wife because you're nice to them and you know yeah it's a good sign yeah if their kids are hoodlums and they're making fun of how strict you are yeah it's a good sign doing something right it's a good

sign it's a good sign you mean you don't something right. It's a good sign. It's a good sign. You mean you don't allow your children? That's right, I don't. Nor my grandchildren, nor my dog. So, Dave, for the new people who are slightly cynical, where does the theory come from, from the people that you just dismantled it? But I think it'd be fun for you to explain. Well, if you borrow the money at prevailing interest rates, 6%, okay? And you put it in a good mutual fund at 11%.

People think you're making a 5% spread. Well, you're not. You're not. You're not. Because you've got to pay taxes on your gains. And so if you make 11% on your money, you've got to pay taxes on that 11%. And so your spread is reduced by the taxes on 11%, which in a 30% tax bracket would be about three points. So your five is now two.

Okay? And so you're doing all this crap for 2% spread net of taxes. It's very tax inefficient to start with. And if you did all that and you netted out of taxes, then you have not adjusted for risk because 100% of the foreclosures occur on a home with a mortgage. And you've not mathematically adjusted for risk because 100% of the foreclosures occur on a home with a mortgage. And you've not mathematically adjusted for risk. When you adjust for taxes and risk, you don't even make money in this theory. But the naive formula is, oh, I'm making 11 or 12 and I've only paid six.

I'm making the spread. No, you're not. You're just naive. You just don't know how this crap works. That's all it is. This is the Ramsey Show. Hey, folks, Dave here. If you haven't booked your cabin on the Live Like No One Else cruise, now's the time because it's 90 something percent sold out. You do not want to miss joining me, the Ramsey personalities, and amazing guest

entertainers for the ultimate debt-free celebration. We'll be sailing the Caribbean March 22nd through the 29th, 2025, stopping at the incredible Turks and Caicos, Puerto Rico, St. Thomas, and the Bahamas. Hurry to secure your spot with a $600 deposit today at RamseySolutions.com slash cruise. This is the Ramsey Show. Open phones at 888-825-5225. Ken Coleman, Ramsey personality, is my co-host today. This is pretty interesting. One of our marketing guys pulled this up.

Did a little statistical analysis, Ken. If in 1973, interest rates for homes were 8.04%. Okay. 1973. If you said in 1973, I'm going to wait for interest rates to come down before I buy, it would have been 20 years that you waited until 1993. Wow. When they dropped to 7.3.

That's a word to the wise for those of you that are saying, I'm not going to buy a house right now because of interest rates. You marry the house, you date the rate. Buy the house, and when the rates go down, if your little theory that rates are going to go down is right, which I don't think it is probably, but if they did go down, then refinance. But, you know, about the only thing we can't be sure of is interest rates. We can be pretty sure of is interest rates we can be pretty based on historic history anyway okay the thing we can be sure of is that house prices are going to go up that's history

that'll help you wow so let me hit you with this dave real time uh this is three hour old article 30 year average mortgage this is 30 year 6.28 let me see if they got 15 year 5.32 right now okay so that's pretty good i'd move on that i wouldn't you well the thing is even if it goes down right we're just refinance that's exactly right it's refinance but if you if you're saying i'm going to wait for rates to go down to buy a house, you might be saying, based on that example, I'm going to wait 20 years. And guess what the house prices are going to do during that 20 years? Hello.

Caleb is in Greenville, South Carolina. Hi, Caleb. How are you? I'm doing well, Mr. Ramsey. How are you doing today? Better than I deserve. What's up? So I'll make it short and simple for you, but I have a wedding coming up in a couple months.

Congratulations. The love of my life. I greatly appreciate it, sir. I got very lucky. But with the wedding coming up and the cost of the wedding along with living expenses, we are set for about six to eight months of emergency funds, and that is including the wedding pay for. Now, I am in real estate in Greenville right now, and the market's doing very, very well. And I'm currently on a team where I'm giving about 50% of my income a little over a time away, and I'm wanting to branch off

and create my own team. Now, my question is, is it financially and emotionally a good time for me to start doing that it's a bad time emotionally um and when i say emotionally i mean with uh it's a bad time it's a bad time in terms of your you know i'm gonna go take a big risk right at the moment i'm getting married, which, you know, you've already got brand new everything getting ready to happen in your life, and let's just go ahead and go over at work and do brand new everything too. We're just increasing our stress level. So I would, you know, I'd wait until six months after anyway, just because I want you to concentrate on your bride, not your team.

Okay. You're not going to lose. The money you're going to lose on your bride, not your team. Okay. The money you're going to lose during that time is not much. Now, what did you make? What was your personal income last year in real estate? My personal income last year was a little over $30,000. This year I'm looking at a little over $60,000. Okay. So you're not moving much property.

Well, yes, I am in a way. This year I'm going to close around 35 to 40 properties, but all in all it's about 50 to 70% that I'm giving away to the team owner. You told me a minute ago it was 50. It depends on the lead that we get. I'm sorry? It depends on the lead. Okay. uh it depends on the lead that we get um it depends on the lead okay

and the price point you're working is low um anywhere from fifty thousand dollar land to three million dollar lake properties not many three million dollars in the equation you just gave me of 30 people or 30 transactions and you're only getting home at 50% with $60,000. That's not. Correct. Yeah. Let's see. $30,000 is 3% of million.

You only did $2 million in transactions. You didn't do a $3 million transaction. Last year. So last year, honestly, one of my deals, this is only my second year in real estate, and last year I had a million and a half on one deal, and then the rest of them came to about 2.5, I would say, around total, 2.55 2.6 okay one percent of two and a half okay all right one and a half yeah okay all right all right yeah you just gotta you need more volume than that to go out on your own you're not doing enough volume to uh total dollar volume you're not to you're going to take on a lot of

overhead and other things that you're not anticipating here to, you're going to take on a lot of overhead and other things that you're not anticipating here. Your income is going to go down if you do this before your volume gets up. So I would spend this year on your spouse and on getting your volume up. And, uh, let's get another year of, of experience under your belt for you to jump out from under this. Um, the numbers I'm hearing are not, you know, if you told me you're doing $10, $15 million in volume, then yeah, we can talk about it, but you're really not doing much volume. Is that typical, that high of a share or split, for lack of a better word? 50% would not be unusual for a new agent. He's a new agent.

Right. For a starting point. They usually work on a gradient depending on who, I mean, everybody's got some different deal. There's no set deal. But the, um, but that's not that unusual. No. Um, so I mean, if you, so if you close a half of the, if you're the listing agent, the selling agent, you got 3% and you got, so you end up with a one and a half percent on, um, yeah,

that'd be on 100. That's 1,500 bucks per 100,000, right? So, yeah, to get to 60, you got to do about 3 million. And that's just not a lot of real estate. No. So, yeah. And the thing is, you're thinking you're going to double your income, and'm thinking you're not just by I agree getting rid of this because you're you've got to go now generate your own leads and you haven't proven that you can that you can do the level of volume that you're going to need to do to support

this so no definitely not in your marriage year I'd spend some time learning the business the rest of the way jacking up run your volume way up and then you might be able to renegotiate too uh with your with your team uh or maybe it is time to start a team i don't care nothing wrong with either one good question hey folks here's the deal the next 40 minutes of this show are now as of this week only available the last 40 minutes of the show only available on the Ramsey network app. If you're not listening on talk radio, if you're listening on podcast or YouTube, if you want the last 40 minutes of the show, you can listen to the whole show on the Ramsey network app, or you can get the last 40 minutes of the show starting right now, ready, set, go. So go to the app store or to Google play

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