The Ramsey Show - You Can’t Build a Future on Borrowed Money

Starting point is 00:00:00 Brought to you by the Every Dollar App. Start budgeting for free 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. Dr. John Delaney, PhD in Counseling, Ramsey personality, number one bestselling author, host of The Dr. John Delaney Show on Ramsey Networks.

Starting point is 00:00:38 He's my co-host today, open phones here at 888-825-5225. Josh is in Orlando. Hey Josh, what's up? Hi Dave, how are you today? Better than I deserve. How can I help? I have a quick question. My girlfriend and I, we've been together for a little bit under a year and a half, and we're finally starting to have that talk about moving in together. Now, I am 25, I make $100,000 salary, I'm doing well for myself. She's actually a teacher, so as you can assume,

Starting point is 00:01:10 she's making less than what we would wish she was making. So when moving in together, the conversation arose of, hey, if I move in, we'll be splitting 50-50 everything, because we aren't married or anything like that. And you'll have extra free money to spend. I'm currently on step two, so she asked me what that extra money would go towards. And I said that.

Starting point is 00:01:36 Her response was a little unnerving in the fact of she said, well, technically you're saving that money because of me. So I feel like that money that you're saving that money because of me, so I feel like that money that you're saving should go into a savings account for us and our activities, since you wouldn't be saving that money if we weren't living together. Wow, what a mash. I kind of understand where she's coming from, because she is helping me save money and that money is paying off debt. But at the same time, I feel like that's not necessarily like a healthy mindset because overall, even if I do put

Starting point is 00:02:10 that money into a savings account and... The problem, Josh, is you are trying to do a married thing without being married. Fair. And so you're trying to solve a riddle that cannot be solved. So you want a roommate that you sleep with, but you don't like their answers about money. And she's totally exposed if she moves in with you, pays off your debt, and then you break up with her. Right, that's fair. That's fair. If she's my daughter, she'd be crazy to do that.

Starting point is 00:02:46 Let me ask you something. If you're ready to move in, why don't you just get married? I've got a couple. I'd like to be debt free. I'd like to have a house before before we get married because. Why? I just just. Neither one of us were. Yeah, I wasn't. That's fair. That's fair. You just said it would help you get to those things faster.

Starting point is 00:03:02 Agreed. Now her us moving in. Yes, would would allow me to make a goal fast. Marriage would, actually. Moving in won't. Moving in actually sets you back on several fronts. The data is horrible on living together. Okay. It's, the relationship data and the financial data sucks.

Starting point is 00:03:20 And so, you know, it just doesn't, it sounds all cool, but I mean, I'm serious. If you were my son or she were my daughter, I would tell you don't move in together unless you're married. And because the data tells us that your marriage is going to be better, your relationships are going to be better, and your finances are going to be better. Now, that kind of was not what you called for. And here's the other thing. Here's the bigger red flag for me because you're doing what everyone

Starting point is 00:03:50 you're doing what feels like culturally is the next logical step even though the data says don't do that, right? Fine. The bigger issue is is your girlfriend threw a great flag which is I don't want to be a commodity on your journey towards your goals. If we are going to do something, and she said, she tried to get there, and I would challenge her on how she tried to get there, but she tried to say, hey, let's save up for us when I am not a cog in your system to get your finances under control. When they're our finances, that's a totally different question. And so my bigger concern is she threw a flag and you're trying to end around it instead of dealing with the real issue, which is you have a girlfriend

Starting point is 00:04:34 that doesn't feel safe in this relationship or she's feeling used in this relationship. At least a little bit. Let's have that conversation. And then also, so I really would you know actually my challenge to you would be as because I love you and I want you to win would be let's reset our thinking our decision-making framework here and what would it look like and what would the timeline be for us to get some pre-marriage counseling get engaged and get married and it doesn't you don't

Starting point is 00:05:02 have to do two years I mean you could do do that in a month if you want to. You know, you gotta decide what you're gonna do, the wedding and the production and all that crap. But the technicality part of it is, without the drama, is that because here's the thing. We do know, the data tells us, that people that are married in their 20s have a substantially higher net worth than people who are shacked up in their 20s when we revisit them at age 40. We do know that. And it's because of exactly the problem you're facing is that you're trying to pull together, but you're not really together legally, financially, because you're trying to pull together but you're not really together

Starting point is 00:05:45 legally, financially, because you're both exposed. If either one of you wants to walk off, let's say you bought her a car and gave it to her and she wants to walk off, well she's got a car. If you and your wife buy a car that she drives and she wants to walk off, There's a thing called divorce and then we discuss what happens to the car. Right. And so, financially, legally, and then that's the overtone, then the underbelly of that is it drives your relationship much deeper because you are aiming at the future together. You have a very clear idea of the house we're gonna build

Starting point is 00:06:25 that's gonna have the golden rockin' shares on the porch when we're 92 and the household that we're gonna build. Yeah and then that's when your debt becomes y'all's debt. Yeah. And then she's all in because y'all are building this debt-free future together. She's all in on all of her money and all of your money are going towards paying this thing off. Because it's now our money, right? But until you're married, it's not our money. So that's the problem. It's a real challenge To do shacking up. Well and the data Shows us that the divorce rate is higher for people that are first to live together The wealth building is is worse for people that live together than people that are married.

Starting point is 00:07:06 Even health issues. We're even seeing men live, what is it, seven to ten years longer? Married men? Men live eight to ten years longer, yeah. Women live four to five, which is fair. You have a theory about that. Well, no, it's not a theory. I actually dug into why do men live longer, and it said, the statistician said, because

Starting point is 00:07:22 men do fewer dumb things when they're married, especially as they age. So, I mean, there's some truth to that. Death-defying feats of stupidity. Yeah, okay. Women live longer too, but only about three years longer. Married women live longer, married men live longer. Every woman in the audience, when we talk about that, they all be like, yeah, we can

Starting point is 00:07:42 see dying earlier because we've had to deal with you. I get that. Actually, 75% of the ladies outlive their husbands. That one we do know. That's another one. So there's some interesting stuff in here, folks, that you can think about. So there's socioeconomic, the thing is, when we try to take personal finance, and I love to do it in the early days when I first started on this, and just do math, it doesn't work.

Starting point is 00:08:04 Because personal finance involves all the personal stuff. Like relationships, your spiritual walk, your how you take care of your body, your career, and how diligent and excellent you are at your work ethic. All of these things end up weaving back into your finances and so you can't take the finance piece and just set it over here on the table by itself and analyze it in a vacuum because that's not where it exists. I've seen people do everything possible to get out of debt, selling stuff, starting side

Starting point is 00:09:06 hustles, cancelling subscriptions, giving up eating at restaurants, even turning off the air conditioner in the summer and sweating through it. But most of them don't know they're overpaying for their phone plan. With Boost Mobile, you get unlimited talk, text, and data for just $25 a month. That's it! And that $25 never goes up. No contracts, no junk fees, and no tricks. So do the math.

Starting point is 00:09:34 It's not that hard. And go to BoostMobile.com slash Ramsey. Restrictions apply. See BoostMobile.com slash Ramsey for details. Thanks for hanging out with us America. Bridget is in Toledo, Ohio. Hi Bridget, welcome to the Ramsey Show. Hello. Hi, how can we help I'm calling because I have an issue that's going on with my car situation well the vehicle I purchased and it is still not cleared even after the year number seven

Starting point is 00:10:19 okay explain to me what you're talking about. Okay, so I have a 16-foot fusion that I've been paying on since 2017. This way my loan was supposed to mature back in 2023 of April, we are now in 2025 of July, and I owe more than what the car's worth. And I need to figure out what I actually owe in terms of all these late fees and expenses that were taken out.

Starting point is 00:10:47 So basically the bottom line is... Is it a Ford Motor Company loan or is it a high interest rate loan? High interest rate loan. Okay, so you're dealing with a subprime company and you had a bunch of late fees over the years? I did. Okay. And those have not been paid, so they've late fees over the years? I did. Okay. And those have not been paid, so they've been added to the balance?

Starting point is 00:11:10 They have. Okay. Is that what the balance is then, or I mean, is there something else wrong? Not from my calculations, no. The amount that they're coming up with, I don't know where they're getting these numbers from. I have a full printout of all of my payments and late fees and the repossession that was on the account and it still did not add up to 70,000. They repossessed the car?

Starting point is 00:11:31 They did for one day. Okay. How much are they telling you you still owe? $17,494.31. You still owe that? That's what they're saying. That's what I need investigated. Yeah. Have they printed you an itemized list of all the fees and how they've added up and

Starting point is 00:11:58 how they got that number? Not how they're added up, but they did print all the payments and the fees so far, but I believe there is some missing because the information that I received from the company themselves calling the numerous times to try to get information, I came up with numbers on my own with the printout that I've been asking for for over three months and I just finally got it. Yeah, but they're not giving you a printout of what you actually owe. Correct. Yeah. They mean they have to give you a printout of what you actually owe.

Starting point is 00:12:26 Correct. Yeah, they mean they have to give you an itemized bill if they've continued to jack up the... Well, you've got two options, okay? What you're wanting is to solve for the truth of what is really owed. And your guess is, based on your math, that it's not 17, but that you do still owe something because you've got a bunch of late fees stacked up and you probably got some

Starting point is 00:12:48 Repo charges stacked up in there as well that were not paid at the time of the repo. That's my guess So you're thinking you're thinking that there's somewhere south of ten thousand dollars owed, but something is oh, that's what you're thinking, right? Not that much but yes, that is true. I said south of 10,000. We don't know how much south. Sure, right. Between zero and ten, right? But it's not seventeen for sure. But in your mind, because of the math you've done.

Starting point is 00:13:15 Okay. And what was the interest rate? The interest rate that I had on the car was 18.95%. Okay. Okay. All right. You have two options. Well, you've got three options and one of them is not a good option. So you have two good options. One is continue the fight that you're doing and your frustration is real and I go along with your frustration. You're dealing with a subprime lender. They loan money to people who have

Starting point is 00:13:45 bad credit. They loan money to people who don't pay their bills. They are not usually nice to work with. You have figured this out. Okay? This is not news to you. You already knew this. And so there are three notches above a loan shark and two notches above the tote the note guy down in the bad end of town that rips people off even worse. But they're for sure it's not a clean business. And it's people who aren't as business-like as you would get in a different situation. And you've already discovered all that. So your frustration is real. You've either got to plow through that and get to the bottom of

Starting point is 00:14:28 this dealing with the morons and incompetence and the I don't cares on the other end of the phone or you got to hire a lawyer. That's your second option. Hire a lawyer and sue them. For $17,000 I'm suing them before I walk away. Okay that's another option. I would try and say I'm gonna devote one more month to this Getting to the bottom of this and if you guys can get me a number that we can agree on I'm gonna get it paid off But guys I got to get that and I'm gonna have to apparently I'm gonna have talked to somebody's boss over there to find Two people somebody has two brain cells to rub together So let's let's you know, let's just keep pushing and fighting for a month. If

Starting point is 00:15:05 you can't do that, then you say, at the end of a month, if I can't get you guys to get to the bottom of this and together we figure out what is really owed and why and come to agreement on that so I can get this paid, then I'm going to hire a lawyer and I'm going to sue you. Okay? Understood. And if that doesn't work, the third option, which is not a good option, is toss them the keys. Tell them to come get it and sue me. Good luck with that because I'm going to counter sue you. And we'll see how that reposition thing goes. You're going

Starting point is 00:15:40 to get nothing if you do that people. And so I can do that. But I don't want you to do that because two things happen. One is you further destroy your credit and two is you lose control of the amounts and you start having to negotiate on based on their weird numbers, not real numbers. And how about just the fact that I just want my car. I've been paying on it all this time and I want to keep it. That's fair. That's fair. But you don't want that car for $17,000. Absolutely not, because it's not even worth that. I got that.

Starting point is 00:16:09 I don't want that. So there is a point at which I don't really want this car that the principle doesn't matter, okay? The principle of the thing doesn't matter, not the principle of the loan amount. Now, last question, our last point to be made. I wanna make real sure, because when I do something like this, and I've done stuff as

Starting point is 00:16:28 dumb or dumber than you did when you bought this car at 18 freaking percent interest rate, have you learned your lesson? Are you ever going to do this crap again? No, Dave. Absolutely not. I'm going to pay cash. That's right. Okay.

Starting point is 00:16:41 Yes, Dave. Thank you. Love you, darling. Thank you for calling. Okay. Yes, Dave, thank you. Love you, darling. Thank you for calling. Wow. Because let me tell you, if you do 18% interest, it's because you were scared. Oh yeah. And you think there's anything else in life, there was no way.

Starting point is 00:17:01 No! You feel trapped. No way! These things come out of your mouth that are not true and you start making these absolute fatalistic statements. I've been there. I was forced like I had a gun. Had to get a new car.

Starting point is 00:17:14 I had to get a car. And let me just tell you, there's two dumb things in this. Ford Fusion and 18%. These are two dumb things in one sentence right here. Unbelievable. I'm surprised the dad gum thing lasted seven years. But oh my God, what a piece of crap of a car. And at 18% interest.

Starting point is 00:17:32 And I guarantee you that it's like buying a Dodge Neon. One of those square Kia's that are like cars, man. But here's the thing, if you miss your payment, I guarantee you that rolled from 18 in the fine print somewhere It went up to 34% or whatever. Yeah, I'd be willing to bet that's where that started to stack. They may have done that They may be carrying a higher interest rate on the unpaid late charges. That's right. There's a possibility that's in the contract Yeah, or there's a $10,000 repo fee that got lumped into it. Because when you sign something that stupid you don't read it All right. I mean relief you literally drive off relief.

Starting point is 00:18:06 If you tried to read it, you know, I just want, just give me some wheels. I gotta get to work. This other one keeps breaking down. It's a piece of crap and it's costing me so much and it costs you nothing like Ford Fusion 18% money, I'm just saying. That's some serious money right there. And so, oh my God. What a mess. Bless your heart. I've been there.

Starting point is 00:18:27 Guys, when you do something stupid, here's the thing. It doesn't mean you're stupid, it means you did something stupid. I've done stupid with zeros on the end. I've got a PhD in DUMB. The trick is, my goal has always been, and it's worked real well for me, is don't do the same stupid thing again. At least learn from it, in other words. Now, I might do new stupid stuff, but I've got a whole list of things that I don't do anymore, and not doing all of those things has helped me become wealthy. Just all the stupid stuff I used to do that I don't do anymore. You know? I don't do that, and I don't do that. Why? I don't really have to explain it. I don't do that. We don't do that. Why? I don't really have to explain it. I don't do that. We don't do that

Starting point is 00:19:12 We don't do that. No, we don't do that a hundred percent of the time we tithe to our church a hundred percent of the time We don't borrow money a hundred percent of the time David Sharon are in agreement before we buy something Because when I do something without my wife's agreement, she does something without my agreement We do stupid stuff and so this is this is these are basic things that I've learned over the years and that's why we have this show to help you guys do them. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something? Well, I used to be one of those guys, I didn't even think about it, and one of my buddies said,

Starting point is 00:20:06 hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. And, oh, you're telling me, and for decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them. Me too.

Starting point is 00:20:22 And they don't know what to do next. Me too. It's terrifying. I mean, you're gonna have a crisis here. And you know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's gonna invest all this money properly and not mess this up, or she's concerned how she's gonna eat tomorrow.

Starting point is 00:20:36 That's exactly right. These are the two options. And take care of your dad gum family, man. Term life insurance can replace income, pay off debts, cover funeral expenses, so your family can actually have the opportunity to just be sad, to just miss you. That's exactly what it's supposed to be.

Starting point is 00:20:50 It's saying I love you to your family. Term life insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to zander.com or call 800-356-4282. Jeremy is with us in Los Angeles. Hi Jeremy. Welcome to The Ramsey Show. What's up?

Starting point is 00:21:37 Hi, I'm calling because I have a net worth of negative $280,000 after a vendor in my business filed for a Chapter 7 bankruptcy after we did a job that we were expecting to get paid around $2.4 million. I'm calling to see because I've always been in business, never really held a real job. And I'm trying to see if bankruptcy is a good option because I can either take on more debt because it's a low margin business to continue to do these typing jobs or I can figure out how to work off a large amount of debt. I have around $330,000 in personal debt and $50,000 across six months of living expenses, my 09 Ford F-150 and a Roth IRA. Okay, so I'm sorry, $2.3 million and you were $280,000 in debt is not low margin, that's high margin. I'm sorry, the job cost 2.1 million dollars.

Starting point is 00:22:54 I spent all the liquidity that I had and in the business to try to get this done. Oh, so you put 2.1 million on the table to make 2.2, to make $100,000? To make 2.4. the table to make $100,000? To make $2.4. Oh, to make $200,000. Plus the margin is like 17%. With no draws and no deposits. Yes, I personally lost $2.1 million completing this job. It's around 17% margin if you don't include credit card

Starting point is 00:23:26 points. With credit card points around 18.5 to 19% margins. Okay, but you did not take a single draw or get a deposit of any kind from this customer? No, they're filing chapter 7 right now. I know, but you were their bank. I mean, how many of these jobs have you done like this where you put all your chips on the table and then one hand comes up bad? This is the first time a hand came up bad or you just want this the biggest one you've done? No, it's happened before but with a much smaller, but I was aware that the company Yeah, like this company had very good. Um credit and we took

Starting point is 00:24:15 Most of the um, yeah, how old are you be paid up then because they were much. I'm 23 Yes Okay So it sounds like I should just probably I I mean I'm very, I'm very much in the faith. I was like, okay, it makes the most sense here to declare bankruptcy instead of taking on more debt and continuing to do the business or trying to work this off. So most of your other jobs were smaller jobs. How did you start with no money? I was just the person who bid the smallest amount of money on jobs and so probably the industry standards for margins is a lot

Starting point is 00:24:57 like 25 to 30 percent. Yeah and the industry standard is you don't be the bank for contractors. That's the industry standard. You get't be the bank for contractors. That's the industry standard. You get draws as the job progresses. It was a very large aeronautics company. The industry standard is you don't do that crap because you go bankrupt when they go bankrupt if you do. That's the problem.

Starting point is 00:25:17 You had bad business practices. I don't want you to extend those going forward. I've had trouble with collections and when I have trouble with collections I blame me and I change the terms I'll give you an example a long time ago before you were born There was a thing called the dot-com bubble the first time the internet took off in the Around the year 2000 okay And there was a huge bubble and all these dot-s were buying ads from us and then they were going broke

Starting point is 00:25:46 And so I figured that out. I'm like, okay, I'm not doing that anymore So if dot com is in the name of your business and you want to advertise on the Ramsey show to this day you prepay I'm not gonna be your stupid bank because you're not dependable if dot coms in the name of your company And so you figured out here that sometimes this crap happens and so you'll never do this business this way again. There's no business, no amount of business that's worth putting everything on the line for it. You did learn that lesson, didn't you?

Starting point is 00:26:19 Of course. Good, okay. I'm just making sure. So then we say, how can you go make money? What is your fastest way to go make good money again because obviously you're a high-capacity 23 year old you've done amazing things for somebody your age even though you stepped in a big old bear trap and it ripped your Leg off, but you still did amazing things and so I would have to What's the best way what's the best way for you to go make the most money the quickest? I'd have to take out more debt.

Starting point is 00:26:50 Okay. Maybe we're not listening. Probably. All right. Let's try again. Borrowing money to run the business has not been a blessing to you, sir. Correct. Okay.

Starting point is 00:27:02 So we're going to say we're going to run a business with this huge brain of yours without borrowing money. What is the fastest way for you to go make money? Your entrepreneurial genius. Even though often, okay, I understand. I have trouble because I'm new to the business. I've been in business for about one and a half to, I started two years ago by really actually like, I found my first employee. Thank God you didn't start 10 years ago, you would have been 14, okay.

Starting point is 00:27:34 So, um. How did you get $2 million? Right. We just, we always were the lowest, we didn't bid the lowest below other low bidders, but we had pretty good... You did a bunch of jobs and you made money. Yeah.

Starting point is 00:27:50 Okay. And oftentimes, you like bill pay for half the job upfront. Uh-huh. But it's still, what? Yeah. There we go. Now we're talking. Okay. But that's not enough to complete the full, like I'd have to ask for Well, if you're the low, I'll give you guys the low bid if you will not make me also be your bank. Okay.

Starting point is 00:28:12 If you will put money up front, we'll order the materials and get the people on the job. And then I need a draw as we go along so that I'm, you know, and the profit you can pay me at the end. But you got to cover my costs with cash flow as we go along one or two draws on the job and And so that's not unusual in the construction business I'm sitting in a building a couple of buildings. There's six hundred thousand square foot under roof 100% of this was cash flowed by me, not the contractor. They, every two weeks we would sit down and have a payment schedule as to the work that had been done and we paid them and then they paid the bill. They did not bank any of this. Right. I have some concern about my reputation not being large enough for people to be willing to pay a

Starting point is 00:29:07 significant portion upfront. How many jobs did you do to get two million dollars? What's that? How many jobs did you complete to get that first two million dollars in two years? I've done about 30 jobs. Okay you can't find 29 other people besides the one that just screwed you, you can't find 29 other people besides the one that just screwed you. You can't find 29 other people to say this guy's good. Of course you can. That would vouch for you? Yeah, I can. Your reputation is much better than you think. You're 21 years old, you earn two million dollars in two years. That's astounding. And so if you only earn $500,000 in the next 18 months profit, you pay off the 280 and you have a really nice

Starting point is 00:29:45 life because you do one-fourth the number of jobs on our new payment schedule that we just laid out. You can't get as many jobs. A, maybe your reputation is tarnished by this. Maybe, maybe not. But somebody believed in you, Jeremy, and I think you need to believe in you again. I think you did a lot of things smart. You did two things dumb. One is you believe debt was your way up and two is you bet the farm on one company because they were a fancy

Starting point is 00:30:13 pansy aeronautics place and you found out fancy pansy places go broke too. I also have to believe that your reputation that you think you have is non-existent. It's, a group of wiser construction folks that took advantage of you. And it felt good, they patted you on the back, but they knew they were taking advantage of you because they know the game. And it wouldn't surprise me if somebody, chapter seven, their way around paying you back because they knew they could roll over on you and not lose their future ability to hire other contractors. And so this thing that you think is your best bet, is your best attribute, I bet was used against you.

Starting point is 00:30:50 Could have been, could have been. Yeah, you can pay this back because you have high capacity. Switching banks can be a hassle and I totally get that, but when Winsun and I opened up our Fair Wins account, we were shocked by how quick and easy it was. It just took a few minutes online. We didn't have to block off an entire afternoon or track down paperwork. And the next day, we got a personal call

Starting point is 00:31:30 from a fair win specialist just checking in. I couldn't believe it when I answered my phone and I was talking to them, I was like, y'all are the nicest people. Now, if you're working hard to save money, get out of debt and build a future, you should have a bank that supports that, not fights it. That's why I recommend Fairwinds.

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Starting point is 00:32:25 federally insured by the NCUA. Diana is in Lubbock, Texas. Hi. Hey Diana, what's up? Hi. I just had a question for you. I just had one of my vehicles totaled out by the insurance for hail damage. And I still have a loan on it and they're giving me the option to maybe buy it out Because because it is totaled by

Starting point is 00:33:11 By the hail, but it's still it still works. It's just not pretty looking And I'm just waiting for also for my gap insurance to approve it to see if they would cover so I still owe for also for my gap insurance to approve it to see if they would cover, because I still owe 20,000 on the truck that I have. Okay, and so they're going to pay off the truck and take the truck between the gap insurance and the hail damage, right? Yes, if it gets approved because unfortunately, the first time I had hail damage, we didn't use all that money to fix the truck, so they're using that against, or they took it off the value, so it might interfere with the gap.

Starting point is 00:33:53 So I'm just waiting for them to give me an answer on that. Okay, so you're not sure if you're even going to get enough to pay it off? Yes, yes sir. Okay, the problem is once they declare it total it goes to salvage title and so reselling it is very difficult at any stage and you're dealing with a $20,000 or $15,000 truck, you're not dealing with a $3,000 truck. If you're dealing with a $3,000 truck, yeah, maybe drive it until it finishes dying. But $15,000, you got a lot of life left in that thing. A lot of time to drive ugly around town. And no, I think this is your get out of jail free card.

Starting point is 00:34:41 If I'm you, I'm going to pay it off and let them have it and move on with my life if you can get completely clear and then scrape together a few dollars and buy you a hoop tee until you can save up some money and get a decent car and get out of the vehicle debt business forever. This is your chance to be free of a $20,000 loan. Yes, I hear you. We do have another car that's paid off, but I'm a stay-at-home mom. And so my husband works two jobs, so he's using the car. I don't ever have time to go out or do groceries or do anything. Yeah, but I'm not saying live on one car. I'm saying get you a cheap car to sit in the driveway to do grocery shopping with. And then save up and pay you because the

Starting point is 00:35:28 stinking truck payment was what 500 bucks? Yeah about 600. Yeah. 600 bucks a month. So in 10 months that's six thousand dollars. Okay. That's not a bad truck. No No And so go buy you a thousand dollar garage sale car to drive around Somewhere and then save six hundred bucks a month and go buy you a decent a good a decent truck for six grand And then go do it again and then go do it again for the rest of your life You pay yourself car payments and buy a car with cash. That's called saving money Yeah, okay, so just buy it with with cash because like's called saving money. Yeah. Okay, so just buy it with cash because my credit is not that great because... No more

Starting point is 00:36:10 borrowing money. We're getting out of the car payment business. Okay, okay, I hear you. You called Ramsey. We're not gonna tell you go get a car payment. Yeah, yes. This is your chance to get out of car payments. You're stuck in a $20,000 truck that you didn't fix the last time it got hit with hail. Yeah. And now you might be free. You pay $600 a month to go get $400 worth of groceries, don't you?

Starting point is 00:36:36 Yeah. Yeah, that's madness. Don't do that. Yeah, it's time to get out of that world. It's time to stop. And no, there's no deal to be made here. What you want to do is fly and be free, if I'm you. There you go. Tim is with us in Philadelphia. Hey, Tim, what's up?

Starting point is 00:36:56 Hey, guys, how are you doing? Better than I deserve. How can we help? You guys have been a huge blessing to my family and our church hosts, FPU classes. So we're very thankful for your work, your ministry. Just made a big difference in our life. I got a question for you. I'd love to hear your perspective on it. So I'm one of two pastors at my church and I came here about eight years ago. And at the time they offered me two packages.

Starting point is 00:37:22 I could take a higher salary and find my own housing or I could take a higher salary and find my own housing, or I could take a lower salary and live in the parsonage where all of my housing expenses covered. So at the time I chose the higher salary, we bought our own house and the idea was I wanted to build some equity. So here we are about eight years later, we've pretty much remodeled the whole house. It was a short sale when we bought it for $115, which you can't even get a shed for that these days. And I could probably sell it for about $220, I would guess. The question I'm wrestling with is the percentage is still available and I'm trying to decide if it would be a better move long term to stay put and pay down our mortgage or to sell the house and tap into that equity to invest or boost our

Starting point is 00:38:11 retirement savings. And I'm not quite sure which way to go. I would stay in the house. To stay put and pay it down? Unless they're going to make the number so unequal that the parsonage is... but it doesn't sound like that. It sounds like the parsonage is a break even with the other, and then you have no equity, no property going up in value. So pastors that live in parsonages throughout their whole lives have to save money to buy a house at the end of the story anyway because you become homeless at the end of the story

Starting point is 00:38:48 and of course we're talking 20 years from now or whatever and house prices have gone zoom zoom and you have to save money you have to have a mutual fund labeled house payment or house purchase for the end of for your when you retire and don't live in the parsonage anymore and they give it to the next guy and so you've got to offset that with investments and so if you're gonna do that you might as well live there because the housing allowance is you've got a great deduction on that anyway while you're there let that thing grow grow grow grow grow grow in value and be part of your investment portfolio the fact that you own a great home that's what I would

Starting point is 00:39:24 stay right where you are my man okay so the the fact that you own a great home. I would stay right where you are, my man. Okay, so the idea that we were wrestling with is basically, you know, having that lump sum available and how fast we could get ahead with that versus the... You don't get ahead any faster with that than you do on in the house. You just borrow it from future you. Yeah, mutual funds are going to go up in value, houses are going to go up in value. borrowing from future you. Yeah, mutual funds are gonna go up in value, houses are gonna go up in value.

Starting point is 00:39:46 Hey, that's pretty simple. So it's a long-term play, stay put. Well, we're entering into baby steps four, five, and six. Perfect. We're gonna invest our 15%, be happy with that. Yes, yes. And the grass is not greener on the other side. Yes, yes.

Starting point is 00:39:59 Well, we talked to too many people who are 70 or 65 or 58 and just got fired or let go or their church closes, and they've been living in a parsonage and now they have nowhere to go. And then they got paid $22,000 a year plus quote unquote free housing, and now they've got nothing. So that, and well that, but that lump sum that you took out, it would have grown to enough to your point to buy a house at that point, but it's not going to do anything else for you. It doesn't create more wealth than just owning the house does.

Starting point is 00:40:29 And owning the house gives you a lot of other flexibility, you know, in terms of, you know, when you're in a parsonage, the church holds two things over, the deacon board, the elder board holds two things over your head, your job and your home. If they just hold your job over your head, then it's a different discussion in some of those meetings. But if they've got your home too, it changes the flavor. And so it changes, you know, the flavor of that discussion changes from denomination to denomination too. There are some denominations that do a lot more parsonages, but most stand-alone evangelical churches have gone away from that model. They're not doing parsonages. That's

Starting point is 00:41:13 more of an old-line denomination of some kind, typically Methodist, Presbyterian, something like that, where you're going to find a parsonage. There's exceptions to that, but I'm talking about in the...we deal with about 50,000 churches in America right now, and so that's been our experience. So I just like keeping everything real clean, and you guys own your house, and it's going to go up in value. And like you said, be patient with the 15% baby step forward. You're going to turn out beautiful. And Tim, thanks for your service to the community and for your walk with God. We appreciate that.

Starting point is 00:41:48 We need men like you in the pastorate. And so, honored to help you, sir, any way we can. This is The Ramsey Show. Thank you. Let's get real, folks. Healthy eating sounds good until your day gets really busy and suddenly you're gulping down your third frozen pizza of the week. That's why I love Field of Greens. It's a superfood powder. It gets me real fruits and veggies selected by doctors to help my heart, lungs, metabolism, and so much more. I mix

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Starting point is 00:43:50 today. Sid is in Phoenix. Hi Sid, welcome to the Ramsey show. Hello Dave and John, how are you guys today? Great man, how can we help? So I'm 33 years old, married with two kids. So recently the solar salesman came knocking on the door, said like, oh, the solar credits are going away after the big beautiful bill. I'm kind of in a situation where I should go solar before the tax rate goes away. Just pass on the opportunity and then just let it go. Okay. Yeah, you're right. The credits on solar panels on residential go away at

Starting point is 00:44:31 the end of the year and the tax credit for them. Solar panels are excellent in some areas of the country and it depends on two things. Obviously sunshine and high cost of electricity. If you live in an area like Phoenix that has a lot of sun and you have a high cost of electricity, you can break even on a solar panel purchase fairly quickly. And if you do, then solar makes sense. It never makes sense to buy solar on debt. Do you have the cash to do this?

Starting point is 00:45:03 Yes, sir. I don't have any of the debt except my mortgage. Okay, and you have the extra cash to buy the solar panels? Yes, I do have extra cash. I have cash sitting around. I was planning on putting that towards my mortgage. Yeah, that's fine. What was the bid on the solar panels? How much? Before tax credit it was $31,000. What was the bid on the solar panels? How much? Before tax credit it was $31,000.

Starting point is 00:45:31 And what's your home worth? My home is worth $610,000 and I have $400,000 left on it. Okay. All right. So you have an extra $31,000 laying around to do this? Yeah, I have $35,000 sitting around. Not counting your emergency fund? No, I have separate emergency fund. Okay. All right. I'm just making sure because sometimes I ask these questions and get different answers.

Starting point is 00:45:58 Okay. Did they run a break-even analysis after the tax credit? Because after the tax credit is your real cost because you get a full tax credit. Yeah, that would be $22,000. Yeah, and then how long does it take to get $22,000 back in energy savings? I did a quick map. It's taking around eight to nine years. Don't do it.

Starting point is 00:46:23 I guess our buyback rate is, don't do it. Yeah. Yeah. Solar needs to have a break even of six years or less. Okay. Here's why. Here's why. Let me explain why. Here's why. Solar is technology. Eight years ago, solar technology was substantially different than it is right now. Eight years from now, it will be substantially different than it is right now. Eight years from now, it will be substantially different than it is right now. It's like a computer. I mean, unless you're operating on an eight-year-old

Starting point is 00:46:54 computer, which most people aren't, if they use their computer, okay? Because what's a computer that you've unpacked from the box already obsolete, right? And so, I mean, people don't use eight-year-old technology for hardly anything. A few things in our cars we do, a few things here or there we do.

Starting point is 00:47:13 But by and large, this thing, eight or nine years is just too long on a technology-based application, and solar is technology. I believe in solar. That's why I was asking all these questions. And there are places that do that. But you need to break even. You need to get your money back faster on something

Starting point is 00:47:29 that the technology is becoming obsolete at breakneck speed. Because I promise you, I mean, look at 16 years ago, what solar looked like. The number of panels that it would have taken to do what your number of panels it takes to do now, drastically different. You'd have to fill up your whole yard in your neighbor's yard.

Starting point is 00:47:47 And it'd be eight feet thick. Yeah. And think about your television. The one on your wall. Somebody said the other day, I saw a good meme this weekend, said in 1964 no one looted and carried off color televisions because you had to have a box truck to do it. It was huge. And so it was a piece of furniture.

Starting point is 00:48:11 But the other day I went in to grab one. They're like 239 bucks. Yeah. $200. Remember plasma came out and they were $7,000? $8,000, yeah. And they weighed two tons. Yeah, man.

Starting point is 00:48:24 It just goes quick. Yeah, I got one of those back in. Yeah, and they weighed two tons. Yeah, man. Yeah, it just goes quick. Yeah I got one of those back in the day those nice plasmas. It's in the on the wall three houses ago Probably still on the same way moving that thing Yeah, and that's that's the same thing. Okay, so don't you know, you wouldn't buy a television, you know, and eight years later You don't have to replace your television if television and eight years later. You don't have to replace your television if it's eight years old. I'm not saying that. That must mean you're doing something wrong.

Starting point is 00:48:49 But technology just has a high rate of change and solar is in that camp. So you do want a quick break even regardless of the, and here's the problem for the solar world. It's gonna get 30% harder as of January 1. Yeah. It's actually gonna have to make sense not counting tax. I'm wondering how the margins are

Starting point is 00:49:07 going to be on those solar companies. They're going to be tough. It'll be tough, tough, tough. There's going to be a bunch of them go bye-bye probably. And I wouldn't want to be sad for that business. And for those of you out there in business, I was in a business one time in the 80s that was based on the tax benefits.

Starting point is 00:49:24 And then the tax benefits went away. And it bankrupt the business. It's called real estate. We used to write off double declining balance, for those of you in accounting, in the early 80s. And so you could buy a piece of property, put it on a 15 year straight line and do double declining balance,

Starting point is 00:49:42 which means you wrote it off in seven years. And then they did a whole bunch of loans in this thing straight line and do double declining balance, which means you wrote it off in seven years. And they did a whole bunch of loans in this thing that they used to have these bank type things called savings and loans. They were everywhere. They were like credit unions. They were all over America, savings and loans. And they all went broke because they had loaned money on investment real estate with double

Starting point is 00:50:03 declining and the government with the stroke of the pen did away with the double declining and the value of those properties went away Simultaneously because we based our business on tax law rather than on economics good economics So now the solar people have based their business on tax law now They're going to base it on economics meaning that the solar panels are actually going to have to pay back, not counting the government subsidizing it. So either the cost of solar panels are going to have to go down drastically go down or the business goes away. Yep. Or the technology improves. Has to get better, right?

Starting point is 00:50:35 Dramatically. Yeah. Okay, Dave. 30% better by January 1. Let me ask you a cultural question then. So back when savings and loans went away with a stroke of the pen, we didn't have social media back then, but I can imagine there was mass hysteria that there is going to be this particular business is going to go away, lending is going to crash, everything's going to go

Starting point is 00:50:56 – what was it like seeing things pop up like local banks or credit unions, things that emerged out of that ash? Because we're watching real businesses being upended by technology in wild ways or in stroke of a pen government orders. And it's easy to say, oh, this is the end of everything without thinking out of that soil grows new things. Yeah. Well, all the stuff that those SNLs, they didn't have the FDIC, they had the FSLIC,

Starting point is 00:51:24 insurance plan. So there was life before FDIC, which means there'll be life after FDIC, they had the FSLIC, insurance plan. So there was life before FDIC, which means there'll be life after FDIC, whatever that looks like, who knows. And it became something else, and the government basically took all the assets and dispersed them, and we went on with our lives. It was just, but everybody in those businesses were gone. They had to start doing something else.

Starting point is 00:51:40 Do something else. And that was part of what contributed to my crash as well, but although I really wasn't doing as many tax-based deals, but I had a lot of friends that were doing tax-based deals and they lost everything at the same time, exactly. That was Ronald Reagan, by the way, who signed that. He did away. He's the one who screwed that up.

Starting point is 00:51:58 Yeah. One of my favorite presidents, but he screwed that up royally. This is the Ramsey Show. This show is sponsored by BetterHelp. Life can be chaotic. Work can be stressful. And when your life outside of work and your work life collides, your mind and your body feels it. Listen, there's a ton of research about workplace stress impacting your mental and emotional

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Starting point is 00:53:58 If you're tired of living paycheck to paycheck and feeling like you can't get ahead, join one of our free every dollar trainings we will uh... train you we do these every week this month and they're all hosted by one of the ramsey personality showing you how to use the every dollar budgeting and finance app to get your money under control and start making the moves to win with this we're gonna show you how to stick to a budget and even

Starting point is 00:54:25 find $9,000 worth of margin on average. That's pretty cool. That's like a head start. Remember when you're a kid in the backyard and you're doing a race and the little kid gets a head start? Yeah, $9,000 head start. I remember that. Yeah. And you can ask questions during the live Q&A, which kind of turns it into like this show except you can actually get on. So sign up for free at everydollar.com slash webinar. Jeremy's in Houston. Hey Jeremy, what's up? Hello, afternoon. How are you doing today? Better than I deserve. How can I help? Well Dave, I'm sorry you said that you're in Houston. I'm actually in San Antonio, but just a small correction. Oh, I'm sorry. Not your fault, it's alright. I

Starting point is 00:55:04 wanted to pick your brain, not only as a financial guru, but just a small correction that I'm sorry Not your fault. It's alright. I wanted to pick your brain not only as a financial guru But someone I for knowledge you own a lot of residential real estate and I wanted to get your opinion on something Back on February 20th. I sadly lost my mom at the age of 71 she had been retired about six years and It was a hard time because I think my daughters took it the hardest because I was their only living grandparent and they were her only grandchildren. So it was not a good spring break that year. But February 20th, after she died, the next week, she had just signed a new lease at her apartment that she was in. And I told her the property manager

Starting point is 00:55:41 about what happened. I said, you know, we'll get her stuff out as soon as we can. She said, of course, you know, take your time. I understand. And it was about two weeks later after she died on March 7th. Me and my wife got everything out of the house, cleaned it up, turned in the keys, and she wished us the best. I'd gotten a, I kept the phone on for a while to keep,

Starting point is 00:55:56 you know, just to make sure all loose ends were tied up. And she, I'm getting a rent request from Venmo because that's one of the ways she was able to pay was through Venmo. And she said, no, don't just ignore it. It's okay. Like, okay, I turned on the keys, assumed everything was fine. April 1st, there's a Venmo request for rent.

Starting point is 00:56:13 Again, I call the property manager. He says, again, I will talk to the landlord. Don't worry about it. And May, I'm getting now letters because I have listed as a contact reference for her on the lease. And it says that she's delinquent Seriously delinquent and so I finally get ahold of landlord and tell him look I don't know why you're sending this she passed away. I've turned the keys the apartments cleaned out. You're good to go He he's insisting that he's entitled to the full remaining value of the lease because at least she signed

Starting point is 00:56:41 She's not a new one and it took effect this past January So he is he is insisting that he's in value to entitle the full value of the lease because at least she signed she's not a new one and it took effect this past January so he is he is insisting that he's in value to entitle the full value of the lease I try to tell him what are you talking about she's dead well he has your family he is from her estate does she own anything she all she had was a savings because when she took... How much was in savings? Over 200,000. Okay. Then she, that 200,000 has to be used to pay the lease, yeah.

Starting point is 00:57:13 Really? That's a lease violation if you die? No, it's not a lease violation. Her estate, when you die, what you own stands good for what you owe. Assets versus liabilities. Okay? And what you what she owed was a lease. Wow okay. Okay so she had if she had ten thousand dollars in credit card debt that doesn't just go away because she died. Well sure. Well it's the same thing. Same thing. It's still a liability. It's a contractual liability that she owed.

Starting point is 00:57:46 Now you don't owe anything, but her estate does owe for this lease. And yeah, he's technically right about that. He's being weird about it for sure. Well, he's being disrespectful, really. He went on for a tirade on me the last time we talked about how it's post-COVID. I'm a landlord and I have no rights anymore. It's cost me money. I feel like the whole time he talks to me he was- My tenants are all dying on me. What a jerk.

Starting point is 00:58:13 I feel like he's taking a leak of my mom's grave and with me there's just some boundaries you don't cross and that's one of them. You're going to lose probably. Do you not have this estate being probated? No, I was her only son. She was never married and there was no one else on lease. I think I'm going to spend the 500 bucks to go get an estate attorney and have it probated because in most states, and I don't know Texas law, but in most states, and Texas has some

Starting point is 00:58:42 weird laws because it's a republic, it's not a real state. I'm kidding. But not really. I'm kidding, but not really. Sitting next to my resident Texan here. But anyway, yeah, but they do have some interesting real estate laws that are different than a lot of states. So check this out, but in most states, if you go through probate, what you do is, and I don't know since he's notified

Starting point is 00:59:07 you if you can get by with this or not, but they post in a widely publicized thing like a legal newspaper a notice to creditors. And if none of the creditors apply or submit that they have a claim against this estate, then they lose their right to claim against the estate after 90 days or whatever in the notice accreditor's period of time is, okay? So you get all of that by going through probate and going with an attorney if that is Texas law and I don't know if it is. I'm just saying, but a lot of you listening out there, that's what you would face. So I think it's going to be worth your time to

Starting point is 00:59:40 step out of this and let the probate attorney deal with the jerk. Yeah, I don't want to talk to that guy ever again. The other thing, again, it could have all changed, but when I was in Texas, they could only hold you for the gap until they filled that apartment back. That's true. That's what I'm thinking, because I feel like that's double-dipping. That's true in most states. You're not held to the law, at least in most states if they've re-rented it as he re-rented it I even the property manager is I spoke to unfortunately is no longer there And I have been by that apartment because it's on the other side of town. I bet

Starting point is 01:00:13 So maybe the only oh two months of rent or three months I knew March because our belongings were still in there. We didn't clear up that Marvin's on March 7th. Honey. It's a liability Okay, it's a contract just a stream of payments and technically in most states you're going to be held liable, not you the estate is going to be held liable. You're not liable for anything. You understand that? I think that's where this guy's screwed up because the other thing I haven't told you yet was I got a summons this past Friday and he is suing me for the value for $27,120 which is the remaining 16 months. Well you're not on the lease and so I'm going to counter Friday and he is suing me for the value for $27,120. Oh good. For the remaining 16 months.

Starting point is 01:00:46 Well, you're not on the lease and so I'm going to counter sue him for $100,000. Yeah, because I know on the summons, he's not suing me as the executor of her estate. Yeah. I had power of attorney over her estate in her last year. She had been on dialysis and she wanted to make sure that... He can sue you as the power of attorney or as the executor, but he can't sue you. You're not on his lease. So what this guy is is a cowboy out of control and we're going to have to get an attorney

Starting point is 01:01:12 smack him back off the saddle, okay? We'll do. Yeah, you're going to have to get him straightened up. Not only is he overstepped his bounds legally there, but he's also just being a jerk because normal people would say, hey, your mom passed away away you're technically liable for this whole thing let's work something out I'm so sorry you lost your mom that would be the phone call you got from Ramsey okay how would you deal with a tenant who passed away I mean yeah now if they but you know if they got ten million dollars in their bank and they don't want to pay, I'd go get

Starting point is 01:01:45 it. But I wouldn't have been a jerk about it, and I'm not going to give you a lesson on COVID landlord rights. That's just – no, that's relevant. All that's relevant is a simple thing. Your mom's estate is liable for her lease, probably in Texas like it is everywhere else. Again, check your – you need to go get a lawyer. You need to spend $500 on a lawyer. your you need to go get a lawyer you spend 500 bucks on lawyer

Starting point is 01:02:06 You recommend probate or I would start with probate and that's the probate lawyer if he can handle this eviction or this other lawsuit and smack cowboy down Cuz cowboys out of control here. He's lost his dad gun mine He's pissed off pissed off redneck landlord, and he thinks he can sue everybody, and he can't. I mean, I had enough dealing with my daughters about my mom passing, I don't need this. I mean, it's just, you know, it's $200,000 in the bank

Starting point is 01:02:34 versus cleaning this mess up. That's the way you gotta look at it. Instead of, I mean, this guy didn't know your mother, he, you know, it's just sad that people don't have any sense. Don't have any relational sense anymore. And so you can handle stuff like this and be firm and still be nice. You don't have to be a jerk about it, but the guy being a jerk is going to get him. And then he went and got all crazy and sued the wrong person.

Starting point is 01:02:57 Well, he's got somebody on retainer that just prints these letters for him every other week and it just doesn't mean anything to anybody. Yeah, but even that guy, if somebody's on retainer, they ought to look down at the lease and go, this guy's not on the lease. You think. That's kind of like fourth grade level. This is not, this is not graduate level business law. They're just flexing on people. Basic stuff. Yeah. Seeing who we can piss off here. Oh gosh. Sad. Yeah. Get a lawyer. That's what you're going to have to do. I'm sorry. Hate to pay those people, but somebody needs to. I'm sorry. I hate to pay those people, but somebody needs to. I'm sorry.

Starting point is 01:03:27 I hate to pay those people, but somebody needs to. I'm sorry. I hate to pay those people, but somebody needs to. I'm sorry. I hate to pay those people, but somebody needs to. I'm sorry. I hate to pay those people, but somebody needs to. I'm sorry.

Starting point is 01:03:35 I hate to pay those people, but somebody needs to. I'm sorry. I hate to pay those people, but somebody needs to. I'm sorry. I hate to pay those people, but somebody needs to. I'm sorry. I hate to pay those people, but somebody needs to. I'm sorry.

Starting point is 01:03:43 I hate to pay those people, but somebody needs to. I'm sorry. I hate to pay those people, but somebody needs to. I'm sorry. I hate to pay those people, but somebody needs to. I'm sorry. If If you like this show, we would appreciate some help. Subscribe, follow, share, leave five star reviews, all those kinds of nice things. Tell people about us, in other words, and it helps us a bunch. We appreciate you. Thanks for hanging out. Our question of the day is brought to you by WeRefi. If you're struggling with defaulted private student loans, WeRefi offers a great solution

Starting point is 01:04:38 to get you back on track. For a low fixed rate and more flexibility, go to werefi.com slash ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states. Today's question comes from Justin in New Mexico. Justin writes, I'm 35 years old and I have a net worth of about 2.5 million bucks. My fam- oh great. My family has decided to pool money and invest together for a larger return. We currently have five million dollars in the fund. Now that we have this nest egg saved, where should we invest it for the best return? I don't think I would do this with my family.

Starting point is 01:05:14 Is that bad, Dave? I'm a hundred percent sure I wouldn't. Um, there is no advantage with five million dollars pool to invest over $2.5 million pool to invest. None whatsoever. There's no deal you can do with $5 million that you can't do a similar deal with $2.5. The only way you would get that kind of leverage is if you got, you know, okay, we put money together and instead of $2 million there's $100 million. And now we start talking about hedge funds or something else. They're ultra high plays

Starting point is 01:05:48 that are completely different than anything you guys should be doing with this money. So, no, I would not pool my money together at 35 years old with my family. So, I think it sounds like the cow's already out of the barn though. It feels like So I think it sounds like the cow's already out of the barn though. It feels like it and it feels like he is funding half of this bankroll. Yeah. He's 50% of this. And they don't even know where they're gonna put it in. Right. This is really dangerous. Yeah. Justin, I would not do this. I would say you know what I've had second thoughts family I'm out and the math works the same. So it works the same. I mean you can buy a two and a half million dollar piece of real estate pay cash for it

Starting point is 01:06:27 Get the rate return get a similar rate of return what you get for a five million dollar piece of real estate. I've got both So I mean I've got properties that I paid two for I've got properties. I paid ten for Got proper they know and they all you know It's it's all about buying the property right not about that set amount of money and so you can get the same rates of return in real estate on two and a half that you can get on five so there's no no advantage to pooling the same thing's true certainly with stuff like mutual fund investing and that kind of thing and then there's no you know there's no real break the breakpoints are all done in a million. So in terms of commissions and that kind of stuff with your financial planner going into

Starting point is 01:07:08 mutual funds. So once you got a million in, you're not paying commissions anyway. So it's, I don't see any advantage of pooling it and I see a ton of disadvantages. So if you can not do it in a gentle kind way without it being a reflection on you hate them or something, yeah, I would not do it in a gentle kind way without without it being a reflection on you hate them or something Yeah, I would not do it. I can't imagine a way this ends. Well, I'm trying if you stay in it if you stay in it Yeah, yeah Somebody somewhere is gonna go cuckoo. Yes Or it's not fair that you're taking half the returns and you would say well

Starting point is 01:07:44 I put half the money in this fund and they're Like yeah, but it was for all of us and we should all this just ends badly. Yeah family socialism. Yeah Alex is in Reno. Hi Alex. Welcome to the Ramsey show Hi team, thanks for taking my call. I appreciate it. Sure. How can we help? So I'm in step two attacking my debt. I'm $15,000 in debt including my car payment. I'm working two jobs right now But I'm still living paycheck to paycheck and I've had a indexed universal life insurance policy for Myself and for my daughter. It sounded really good at the time

Starting point is 01:08:21 I'm not so sure it's the plan for me anymore, and I'm looking to pinch pennies where I can Ultimately one is a face value of two hundred fifty thousand my daughter's is a face value of a hundred and fifty thousand How old is your daughter and? My daughter's nine and she's had it for five years. No correction nine seven years, okay Yeah, I mean I can save you a lot of money. I would not own that stuff. It's crappy investment and it's crappy insurance bundled together. So it's a bundle of crap. And so, you know, I would just go to Zander Insurance that we've recommended for 30 years here on the air, get a good term insurance policy on you, and a nine-year-old doesn't need life insurance.

Starting point is 01:09:07 They're not producing an income. She needs coverage and your family needs coverage if you pass away to replace the income that dies with you, because they're counting on your income. And so you need life insurance, a lot of it, 10 to 12 times your income. But your nine-year-old doesn't need life insurance. You didn't buy it for life insurance anyway.

Starting point is 01:09:27 You bought it for an investment on her. And so you're much better off to do your investments and other things and following the baby steps, getting out of debt and then loading up in real investments, not insurance crap, with cash that is freed up because you got out of debt. That's how you build wealth. So yeah, make sure though you get the term insurance policy in your hand before you cancel because I don't want you dying between policies.

Starting point is 01:09:53 So definitely just there's no surrender value on either of these. So just take the bite on it and move on essentially. Oh, so everything you put into it they're going to keep? Yes. Well you got screwed. How long have you had this? Since 2019 2018. Good Lord. Six years and they still have not given you any cash values? Yes sir that's correct. I was essentially making the minimal payments of it and that I assume that's probably why when they wanted more But the more I look at it, I'm like this just doesn't feel right. Okay

Starting point is 01:10:29 Well, you may not have put enough in to make it make it past your commission base then because they click all the commissions up front That's one of the reasons the crappy product Is oh god, man, you got hammered You could have paid a tenth of this for the same amount of insurance all this time. For six years, you're being screwed. So, yeah, regardless, you need to get, yeah, definitely. Get the term insurance in place as fast as you can. Go to zanderinsurance.com or you can call them

Starting point is 01:10:56 at 800-356-4282. You hear them ads on here every day. We've been advertising for them forever. They're great people. And just get your good term insurance policy in place as fast as you can, 10 to 12 times your income. So I've been investing for six years and my investment equals zero. That's quality investment. So, golly, man. How do you sell that stuff with a straight face? I don't know how people sleep atlly, dude. How do you sell that stuff with a straight face?

Starting point is 01:11:25 I don't know a friend that you went to college with. I don't know how people sleep at night, man. God, what a horrible product. I've been investing for six years. What's your investment worth? Zero. Where'd all the money go that you put into it? I don't know.

Starting point is 01:11:40 They get it, I guess. My old roommate has a cool new truck, man. Gee. Wow. Steve is in Charlotte. Hey, Steve, what's up? Hey, Dave. How you doing, man? Better not deserve. How can I help? Hey, got a question. And I want to know what would you do in this situation? I'm getting ready to turn 65. I'm retired. I have 300,000 in my retirement account and from retirement I get $7,400 a month and it cost me about 1400 to run, pay all my bills. My house is paid off. I have a thousand dollars. Thank you. Thank you. Thank you. That's, That's what my mom said. I have a thousand dollars in my emergency fund and I have one car payment that will

Starting point is 01:12:32 be paid off in about three months. But my question is, how much do I, when I bill my emergency fund up to the full amount, how much does that need to be since I'm already retired and I love traveling. Ten thousand dollars. How much? Ten thousand dollars. Okay, in terms of my emergency. Yes sir. And out of that five thousand and out of that five thousand that I get every month, how much can I put toward traveling? Because I love traveling. I got a son in LA and one in New Hampshire And I just love traveling going to different schools Obviously you can't spend more than that because you can't go into debt to travel and if you spend less than that You've got some money to give and you've got some money to invest so I spend less than that

Starting point is 01:13:18 But how much less than that's up to you? Music Not just another summer sale, the summer Black Friday sale gives you tools to help you win with money, relationships, career, beat back, anxiety, all of this without blowing your budget. All week long, you got a chance to score sale prices on products, so be sure and check back every day because we're going to drop new deals all week. The products include select audiobooks, e-books, questions for humans decks, the GetClear assessment merch and more go to Ramsey solutions.com slash store if you're watching on YouTube or podcast click

Starting point is 01:14:29 the link in the description sale ends Friday July 18 at 1159 so get your deals while you can Brianna is with us in Phoenix hey Brianna what's up or not anyway where am I going there there we we go. Okay. There we go. All right, and how about that Briana? Are you there? Hi, can you hear me? Yeah, how can we help? All right Well to give you a little background I am a newly single mom and I'm living with my parents right now while I get back on my feet I have a one-year-old daughter $10,000 in savings,

Starting point is 01:15:06 and I owe about the same on my car until it's paid off. I just returned to work as a server, and I just want to make smart choices and work towards buying my first home. And I'm just wondering what your advice would be for me if you were in my situation. How old are you? I am 25. Do you have child support coming in? No, sir. Why?

Starting point is 01:15:32 How come? I'm just trying to keep the peace right now. Tell me more about that. We didn't really end on very good terms. He was cheating on me. So right now, he doesn't really care to see our daughter, so I'm not going to push for it and don't really care to get child support from him right now. I think that you're making a very short-sighted gamble. If he was abusive or you were scared for your life, I would tell you to call the police.

Starting point is 01:16:08 If the fact that you're mad at him and you don't wanna risk him seeing his daughter so that you don't have to deal with him, for her, for you, financially, emotionally, otherwise, I think that's a very short-sighted move. He needs to pay to take care of his child Take care of his kid, even if you don't want to see her That's a the law B

Starting point is 01:16:29 It's the right thing to do and unless he's horrifically abuse and let not anyone say horrifically unless he's abusive or whatever She needs to know that her dad is out there because she's gonna ask those questions whether you like him or not Yeah, I know. So that would be step one. Yeah, then step two is you said you're 25? Yeah. Okay, so regardless of how we got here, what do you plan to do with your life? Well, I was a stay-at-home mom for the last year, right after I had her. I just returned to work as a server, where I make pretty decent money. I don't know if that's what I'll do for the rest of my life. Well, I hope not. Right.

Starting point is 01:17:22 But right now, it's just getting back on my feet so I don't have to live with my parents and my daughter. And hopefully... Yeah, first step is get some income coming in and get a job. I don't blame you for that. But you don't want to be a 55-year-old server. No. Okay.

Starting point is 01:17:37 That's not your career goal. You're just trying to recover emotionally from what you've been through and find some safe space and everything else. But I want you to dream again what is it you're gonna be that makes a hundred thousand dollars a year two hundred thousand dollars a year three hundred thousand dollars a year what are you gonna do with your life you're not defined as a waitress that had a baby that's not your definition thank you so what's your answer what Thank you. So what's your answer? What do you want to do? I don't know. I thought of going back to school. For what? Why? Well,

Starting point is 01:18:17 originally my first career choice was a teacher, but my father kind of straightened me away from that because they don't make the best money. They make way more than a waitress does. Yeah. And they have, not a great one, but they have a retirement plan and health insurance. Yeah, so I guess my next step would be going back to school. Okay, well, if that's what you want to be. I don't care. You don't need to go back to school. Okay, well if that's what you want to be.

Starting point is 01:18:46 I don't care if you don't need to go back to school to escape. Going back to school is not a magic pill unless it takes you somewhere. You're going back to school to study these three things because I have to know these three things to go be what I want to be or whatever the thing is, okay? So I want you to figure out what you're aiming at and then figure out how to get there. If school's the way to get there, fine. But just I'm going back to school, just generally, I'm 25, I had a baby, I live with my parents,

Starting point is 01:19:11 I'm gonna go back to school. Why? Because that's what everybody does. No, no, no, no, no, no, no, no, no. That sounds like a good way to get a bunch of student loan debt to me. Exactly. No, you need to go back to school only

Starting point is 01:19:22 if it's with a purpose to get the skills to go be the thing that's going to cause you to be a really smiley 60-year-old grandmother someday. Do you have an undergraduate degree already? No, I don't. Do you have any classes at all? Yeah, I went for the first two years before COVID happened and that kind of... Okay, before you go to school, if you want to be a teacher, I want you to call one of

Starting point is 01:19:48 the region centers in Phoenix or in Arizona because they're so short on teachers right now. They're paying premiums and they're paying signing bonuses and they're putting people through fast track programs in certain states. Or if you want to go to nursing school or if you want to go to med school, like whatever it is you want to do, like Dave said, decide who you want to be and then reverse engineer that. Write a letter to your 35 year old self and say, thank goodness that when I was 25 I took

Starting point is 01:20:15 these steps so that we, you and your daughter, can have this life when you're 35. Yeah. But I can hear it, you're frantic to get out of your parents' house, and this is a recipe for coming up with some schemey mortgage that you can't afford in a house you can't afford because you quote unquote have to have a house and you're trying to get this life that you thought you were having. You're going to try to duct tape it together. Please don't do that.

Starting point is 01:20:40 Please develop a game plan and step by step by step gradually walk into what you need to. If that's first into an apartment that's fine, but you don't need to leave your parents house into a new home purchase as a waitress. No, thank you. We'll send you a copy of Ken Coleman's Find the Work You're Wired to Do and you can take the career assessment in there and see if that'll give you some guidelines. But man, I'd be real careful about if you want to go do something and people are already throwing grenades at you, well that's not going to make any money. You're not going to like that.

Starting point is 01:21:12 Maybe but also maybe not. And maybe you've taken advice from some folks you shouldn't have been taking advice from for a long time. Yeah, something to think about for sure. Alright, Precious is in Chicago. Hi Precious, how are. Hi, Precious. How are you? I'm well.

Starting point is 01:21:27 How are you? Better than I deserve. What's up? All right. So my question is, how do I find work while on Workman's Comp? Well, I think if you're out on Workman's comp, it's because you're not able to work physically. Yes, to an extent. I'm sorry?

Starting point is 01:21:50 Yes, to an extent. Okay. So when will you be able to go back to work? That's the key. Because if you go get a second job while you're taking worker's comp, they're going to deny your worker's comp. Right, right. So I will go back around September or September is what they're saying. It might be October, but September is the earliest.

Starting point is 01:22:13 Why is that the earliest? Just from what the doctors and the physical therapists are saying. Okay, so they are saying you're not ready to work. Yes. So, but you say you're ready to work. I'm ready to work only for the financial benefit because when I'm getting on workers' comp is not enough and I'm depleting my savings quickly by trying to stay afloat. Yeah. Okay. I'm gonna work with your employer and your doctors to get

Starting point is 01:22:51 released and get back to work. What do you do? So I was a truck driver for a nonprofit but since the injury from the job I'm not able to do that quite yet. Is that what you'll be doing again in October? Um, no. I'll probably be doing some type of light duty work. Then let's see if we can get that going now. Because here's the thing, if you go take a side job and they discover that, they're going to make you repay your workers' comp.

Starting point is 01:23:26 Workers' comp is based on you being disabled and unable to work. That's what it's based on. And so it's workers' compensation. Compensation for workers who can't work. And then you go work, they're not going to go along with that. So you know, I'm going to start to work back into the job is what I'm going to do. As fast as I can. As fast as you're able without hurting yourself

Starting point is 01:23:54 Hey everybody our summer Black Friday sale is here. Here's how it works each day this week has a new deal This isn't just random stuff It's the books, merch, and products that help keep you fired up for your goals. They give you the encouragement and hope you need. So if you're sick and tired of being sick and tired, now's the time to get tools that really work. Check back daily so you don't miss the deals. Go to ramsysolutions.com slash store today. ramsysolutions.com slash store. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people

Starting point is 01:24:47 build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, Dr. John Delaney. Ramsey personality is my co-host today. It's a free call at 888-85-225. Kelly is in San Diego. Hi Kelly, how are you? Good, hope you all having a great day. We are. So my question is kind of twofold. So my parents are in their late 70s and God willing I don't get their inheritance in for the next 20 years. But I just want to be prepared because my fiance and I are getting married in March

Starting point is 01:25:31 and I know you always say prenups are more to protect from the crazy brothers, cousins, uncles, and he's got those. We've made really good rules in our lives where we aren't giving away money to family members but my fear is if one of his brothers or either of them have a child that's going to be a soft spot for him because in his mind the children are innocent it's not their fault that their parents are irresponsible with money and don't make really enough to sustain life. So I'm trying to protect the inheritance that I will receive from my parents. I'm an only child. My fiance and I are entering the marriage with almost equal assets, so cleanup

Starting point is 01:26:18 wouldn't be for those items. It would just be for the inheritance. How much do you stand to inherit? About two million. There's a million in stock and a million in real estate. just before they inherit it. So I don't know if that's clear enough. How much do you stand to inherit? About two million. There's a million in stock and a million in real estate. Okay. And so I don't know if it's a thing that my parents would have to do to word it or protect it in a specific way

Starting point is 01:26:38 so it only comes to me and would never be his. They could easily leave it into a trust and then it's completely protected. Okay, and so even though we would be married, like, she would still not have access to it. Yeah, if you're the only beneficiary of a trustee, you have no marital access to it. As a matter of fact, you can stay in the trust that they have to, someone has to be in the bloodline to receive the benefits, but that's not your real problem. Your real problem is you and your fiance have not come to terms yet on how you're going to live your lives. You just told me you can't trust him with two million dollars because he has a soft Yeah, that's a little scary. But that means you're coming into this marriage with your one foot out of the canoe already. You're already hedging against a perceived or a real deficiency that he has.

Starting point is 01:27:37 That's a scary place to enter into a marriage. Yeah, you guys need to be in agreement on that regardless of if there's $2 million on the line. Because it's not the $2 million of your parents, it's the two million dollars you all will earn in the next ten years. And you're not pre-nupting that. And you're not in agreement on that. So when he wants to take 500 bucks out of your checking account that the two of you have together, that both of you put money in while you're both working, we're gonna have a

Starting point is 01:28:03 problem. And the prenup is not, this question is not solving for that problem. So I'm going to tell you to go back to the pre-marriage counselor and the two of you need to sit down. You all need to work through this because you've got to have enough belief in your husband having your best interest and be in agreement with you over and beyond anyone else outside of our walls. Okay. The old, you remember the old language,

Starting point is 01:28:33 you may not be old enough, but the old language in the Marriage of Alasdair, a man leaves his mother and father and a wife leaves her mother and father and cleaves, leave and cleave, it's old English language. You ever heard that? Yes. It means that you set up an independent household

Starting point is 01:28:51 and it's the two of you together against the world. And against the world including nephews and nieces and mother-in-laws and whatever. And y'all don't have that right now. and whatever and y'all don't have that right now because you feel like that the future nieces or nephews have a secret passageway through the wall into your lives and that's not a pre-nut problem that's a husband problem it can be solved though I mean I'm not I'm hopeful. I'm not saying this is a dire situation. But I think your fear is revealing more than just what happens to the two million

Starting point is 01:29:33 dollars from your parents. It's revealing things that you guys are going to face as you go along. Does that sound right to you? Yeah, a little bit. I mean his brothers have said they're not going to have children, but... No, no, no, no, no, no, no, no, no. That's not a for sure. That's not what I'm talking about. That's not the point.

Starting point is 01:29:49 That's a proxy. The point is that you think your husband's soft heart towards crazy is going to cause him to do something irresponsible with money without you going along with it. Is that making sense? I think, yes, I think the way I'm seeing it and that he would say it as well is that, you know, you say that we could give like no one else, he'll see it as charity. Okay. I know.

Starting point is 01:30:24 My point is, you've got to solve for that. Y'all have to see this as charity and y'all are gonna have a thousand of these kinds of issues pop up. No matter how well you think you know each other, you're gonna have a thousand of these. And Dave and I both have soft spots in our hearts for different things.

Starting point is 01:30:39 And our wives do too. That's not the issue here. The issue is you have a value and he says, when it comes to this, I don't care what your value is, I don't care what our values are, I'm gonna do what I want to do. And until you address that issue, you're going into your marriage and it's gonna have a hole in the boat. That's what I'm saying. Yeah, exactly. Got it. Like the kid part of this, the charity part of this, like I

Starting point is 01:31:06 have a soft spot for over tipping. I worked at Burger King for four years and I know how people are treated like garbage and I have, it's a pathology. And my wife has said, I love this about you and you are making it to where we can't go out to eat much anymore because you over-tip so much. And she was right. And I was using the waiter to make me feel...so there's all this to it. It has nothing to do with the issue of tipping. It had to do with a shared set of goals and values that we had, and I was overriding it. Yeah, and you can't let the waiter violate the walls that were formed by leaving and cleaving.

Starting point is 01:31:45 That's right. You're putting a wall around you. It's a walled city, like a medieval city. It's a walled city, and the only two people that live in the city have to be in agreement before anything goes outside those walls. That's right. And if he can't be dependent, if you can't depend on him to not send stuff over the wall without you two agreeing to it, then you've got issues

Starting point is 01:32:05 that you guys need to get to the bottom of. And otherwise it's going to pop up at the weirdest time and you're going to be left being the bad guy. Exactly. It'll be, oh, you don't care about so and so. Yeah. What are you, a test pilot for broom factories if you don't like children? You hate children or so and so has special needs.

Starting point is 01:32:20 Why do you hate them? Or you will turn at him and say, why are you so generous? Right? So it's that deeper issue that we're talking about here. Yep. Yep. Yep. I know that's hard. I know that's hard. It's so much easier to solve for these proxy wars. You can't solve for it by just being... But if you want to fix the parent thing, it's pretty easy. Call them and tell them to put the money into a trust to you, and blood only can touch it. So you and your kids be the only ones that can touch that money then.

Starting point is 01:32:51 And or your designee but he can't just throw that money over the wall but that that this is pointing out a broken part that you guys need to solve for now because it's going to come up again in a different setting having nothing to do with inheritance. And I promise it's going to come up. Nobody else, nobody has just one soft spot where they violate the values. That shows up everywhere in a relationship. Yeah, my soft spot's probably gun purchases. I was gonna say a couple others, but I'll go with that one. I don't violate though,

Starting point is 01:33:17 because it costs me a purse every time. Hey guys, George Campbell here. Do you ever feel like insurance companies only care about your money and not what you actually need? Well, there's a better way. When you go to Ramsey's Insurance Resource Hub, you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life insurance, health insurance, identity theft protection, and more.

Starting point is 01:33:44 And when you're ready to get the coverage you need, you can connect with a Ramsey Trusted Insurance Pro who will only get you what you need at the best price. Go to ramsysolutions.com slash insurance, ramsysolutions.com slash insurance. Buying or selling your home is a really big deal with all the clickbait headlines and conflicting data out there. It's hard to know what's really happening and we're here to make the latest trends easy to understand Median home prices stayed steady last month at about four hundred and forty one thousand Nationally a number of homes for sale hit a million for the second month in a row This is the highest inventory since 2019 and yet prices are continuing to go up

Starting point is 01:34:38 The average 15 year fixed rate also held steady just under six percent To learn more about housing market trends and get free tools to help you buy or sell with confidence, go to ramsysolutions.com slash market or click the link in the show notes and we'll help you out. Hey Dave, can I ask you a quick real estate question real quick? You can.

Starting point is 01:34:57 All right, so this might be bad math in my head. So let's say we're in Nashville, Tennessee, where the real estate has gone way up in value over the last five, 10 years, right? So let's say the house I bought back in 2020 is quote unquote, worth double. And I put on the market for double what I paid for it in 2020.

Starting point is 01:35:16 And let's say because of the influx in inventory, I have to drop the price a bit. And somebody comes in and bids $10,000 left. So it's just a little under double. I feel like on social media and whatever, the report is house prices are falling. But the way I look at it is I'm still on house money because it's worth almost double what I paid for it.

Starting point is 01:35:41 And just because I take, is that a bad way for me to look at the real estate investment? Okay? Do you get what I'm saying? No, it is house money, but it's different than that. The reason social media is wrong is for a different reason. Market value of a property, by definition, when I went to real estate, when I got my four-year degree in real estate, I have a degree in real estate and finance, if you go to appraisal class and you go to even even take your real estate test they teach you this. The definition of market value of a piece of real estate is what a willing buyer is able to give a

Starting point is 01:36:15 willing seller and willing when neither are under duress. Okay? So in other words, if you're getting foreclosed on, that's not a valid sale. You can't use that sale when you're doing an appraisal. Right. Because it does not establish market value because one of the parties is under duress. Okay? If you've had a house on the market,

Starting point is 01:36:40 if you bought another house and you're having to sell your house out of desperation because you shouldn't have bought the other house and now you've got two house payments, one of the parties is under duress. Okay? So they might sell it quote unquote below market value. Yes. Just to get rid of it.

Starting point is 01:36:56 Yes, but it does not establish market value. So when someone says house prices are going down, they mean market values are going down. Market values have not gone down. But there are some parties, because the market has been sluggish, that are under duress. Got you. And are selling. Because they may have leveraged a bunch of property easier. They're what you call a motivated seller for one reason or another.

Starting point is 01:37:17 And house has been sitting on the market, and they lower the price below what the appraisal would be, what a willing buyer, but they're no longer without duress. They have duress. I mean, they're in a stress situation. And so that doesn't establish market value. That doesn't establish what home prices are doing. But if you're in a seller's market, then the buyers are under the risk. Because that's when you get 83 offers on the house.

Starting point is 01:37:48 If you're in a buyer's market, which we haven't seen in a long time because inventories have never kept up with demand, but if you're in a buyer's market, that means there's houses everywhere and the buyers could come in and cherry pick what they want and they can demand stuff from sellers because the sellers are under more stress. And that drives prices down. But we haven't seen that in two decades. But even if market value went down 20%, I'm still up in my investment.

Starting point is 01:38:20 But house prices would have gone down if that was the case. Correct. There you go. So social media would be correct. But social if that was the case. Correct. There you go. So social media would be correct. But social media is a drama queen. Correct. It's not functioning on anything except some 20-something year old living in his mother's basement having a little snowflake attack.

Starting point is 01:38:35 Correct. And that's your social media. That's not got anything to do with the actual reality of what's happening in the market. That's just somebody pissed off because they feel like they got boxed out of the market because they're a barista after getting a PhD. Or they're pissed off because they did like they got boxed out of the market because they're a barista after getting a PhD. Or they're pissed off because they did some napkin math and looked at the wrong internet website and said, my house is worth $1.2 million. They get an offer for $700,000 and in their soul they feel like they lost $500,000.

Starting point is 01:38:59 If it was not worth $1.2 million. That's exactly right. Yeah. It was never worth that. And so is there actual market value? So if you're going to do an appraisal on a piece of residential real estate, you find three comparable sales within the last 90 days, comparable in area, comparable in attributes, and comparable in square footage, and you adjust for square footage. If one's

Starting point is 01:39:22 a five-bedroom, one's a four-bedroom. One's got six baths, one's got four baths, one's got a five car garage, one's got a three car garage. You adjust for the differences and you do that and then you take the average of those three after adjustments and you have a residential appraisal. But the qualification is all three of those comparable sales cannot have had a buyer or a seller under duress. So you can't use two foreclosures in the neighborhood as your comp, as your comparable sale. Otherwise you have an invalid appraisal. What did they do in 2008 when whole neighborhoods were getting wiped out? Well then you've got a new market.

Starting point is 01:39:58 The market established that this neighborhood is foreclosed neighborhood. So it drove it down because everything in there was. So if you had like those townhouses and stuff where they, you know, where these bogus investment deals, that's what happened in 2008 and the mortgage bank securities, all that crap crashed and so they started punting on these loans left and right and so they end up with whole neighborhoods back. Now you got a complete reset on that neighborhood. But that's not a statement of real estate, that's a statement of that neighborhood.

Starting point is 01:40:27 That neighborhood was full of investment real estate, 100% renters, and 100% of the investors in air quotes were walked away. And so now you got a reset. And now we've got, okay, what will people pay in that neighborhood where neither are under duress? And that takes about a generation to get through that. Not a generation of people, but a generation of sales. Because the bank, when they take it back,

Starting point is 01:40:52 they're under duress. Ah, okay. So when the bank resells it, you can't count that. That's a real estate owned, an REO. You can't count that as your appraisal. And so that's what we're getting into. So no, that's what this thing I just said, go to our website. We track this stuff. There's 1 million 36,101 homes on the market right now.

Starting point is 01:41:11 We know exactly how many are on the market. We know exactly when we're tracking all this stuff in detail and you can go there and find the actual data and you're month over month over month, every month this year, median house price, which is the middle, not the average, it's the middle of house prices, is what a median is in statistics, has gone up every single month. It's not gone up much, it's gone up like a thousand bucks. Or two thousand bucks. But it's not crashing like every month.

Starting point is 01:41:38 It's not going down, is the point. It's going up. And there's good inventory, and there's's good demand and everybody's sitting around waiting to see if the Fed Chairman's really going to get fired and if we're really going to see some interest rates adjusted. And once they get past that waiting game, probably about September, you may see this market take off like a dead gum hair on fire thing. September could be wild in terms of house prices going up again, but we're not we've been telling you guys this out there

Starting point is 01:42:08 And it's proven to be true. I've been telling you this for five years House prices are not going down. This is not a bubble a Bubble is when there is an is when the prices have gone up faster than the demand is when the prices have gone up faster than the demand. Demand has outpaced inventory. Demand is higher than supply. Every time you see that in economics, you see prices go up. It's a simple thing. It's seventh grade economics, if anybody taught economics in seventh grade anymore. But that's it. I mean, when there's a shortage of goods or services, the price goes up on those. When there's an overabundance of goods or services, the price goes down on those.

Starting point is 01:42:49 It's very simple. And you really can't hardly figure out at any time in economics, with an open market anyway, that that gets violated. It just shows up that way every single time, given a half a minute. But I mean, you get weird anomalies like COVID and that kind of stuff that hit a marketplace. It takes a little while to get the wrinkle out of the sheet on that. Like the supply chain stuff, same thing. But the problem is everybody's just so frustrated that wants a house and can't get one right now. So they're throwing all these darts out there

Starting point is 01:43:23 that they call truth to try to make themselves feel better about it. And it's just not, it doesn't change anything. You still have to do the math. Hey everybody, our summer Black Friday sale is here. Here's how it works. Each day this week has a new deal. This isn't just random stuff, it's the books, merch, and products that help keep you fired up for your goals.

Starting point is 01:44:14 They give you the encouragement and hope you need. So if you're sick and tired of being sick and tired, now's the time to get tools that really work. Check back daily so you don't miss the deals. Go to ramsysolutions.com slash store today. ramsysolutions.com slash store. Music In the lobby of Ramsey Solutions on the debt free stage. Emily is with us. Hi Emily, how are you? Hello, I'm good.

Starting point is 01:45:04 Thank you Mr. Ramsey. Good to have you. Good to have you. Where do you live? Decatur, Alabama. Very cool. And how much debt have you paid off, Emily? $110,000. Alright. And how long did this take you? 15 years. 15 years? Yes, sir. Alright. And your range of income during that time? Let's see. In my notes I have it was $39,861. Okay, up to what? And now I am at 68,052, but in Alabama we get a 3% raise in our district this year.

Starting point is 01:45:36 I love it, I love it. What do you do? I teach French and ESL. Very cool. And who's the good-looking gentleman to your right? Well, this is my dad, Jeff West. Alright, Jeff. Welcome. Good to have you, sir. Thank you, Dave. Thanks for being here to support your daughter, Emily. Very cool. Emily, 15 years. Yes, sir. There's a story here. I think so. Tell me about this. How did you get started on this Ramsey stuff,

Starting point is 01:45:58 and what does a 15-year journey look like? Well, thanks to my dad and my mom. They raised us on you guys, of course, and your principals. Anyways, before I went off to college, my dad had paid off the house and he called me downstairs to the basement and said, hey, I'm going to call into the Dave Ramsey show and I want you to listen. And so just seeing him do that was pretty inspiring for me. So he called you did your debt-free scream from the basement Yes, I made your college-aged daughter watch it about 24 25 years ago. Oh Man, it was in 2000 2000 or 2000 now I'm looking at a baby steps millionaire for sure. Yes, sir. Yeah. Well cool. Very cool

Starting point is 01:46:42 I like that. Thank you. It's good stuff! Yes, sir. Alright? And so, anyways, we were able to pay for my college and stuff. I didn't have to have student loans because they were able to pay off their debt from the house and stuff. So, where was I? So you started this journey then. Yes, sir. What was the 110,000 in debt? What kind of debt was that? That was to pay off my house.

Starting point is 01:47:05 You bought a house after college, okay. Well, actually I went to North Carolina and taught there for two years and then I moved closer to home, to Decatur, Alabama of course. Anyways, two years after being there, I bought my house. Oh, okay. All right, and then 15 years you've been paying off the house.

Starting point is 01:47:23 Yes sir, it was just a good investment at that time. All right, so single lady teaching French in Alabama. You teach high school I guess? Yes sir. All right, and you fight your way all the way through and have a paid-for house? Yes sir. What's the house worth? Let's see, I think it was a hundred eighteen thousand at that time. Now what's it worth now? Oh now? Three hundred thousand. Say three hundred thousand. Yeah, okay. Very cool. Wow. And you've been investing in your retirement all that time?

Starting point is 01:47:47 Yes, sir, I have. Good. What's that look like? What's the balance on that? Well, let's ask this man right here because he stays on that one for me too. Okay. Well, her schooling,

Starting point is 01:47:57 or her school actually takes out about $500 a month. So she's putting in roughly 10%. Yeah, okay. All right. And then she's got another little bit of nest egg. Yeah, that goes in also. How's that feel? How old are you? I'm 42. And you're a paid-for house. Yes, sir. And you do anything you want to do. How's your feeling having no payments? It feels fantastic. Wow. Yes, sir. And I don't do credit cards either. Good for you. Well done. Yeah, that's amazing.

Starting point is 01:48:28 Thank you. And especially, in fact, I just went through with my show producer, Kelly, the number of families that call in that either kids aren't talking to their parents or parents aren't talking to their kids anymore over political issues or drama or whatever. And so it's pretty cool to see a

Starting point is 01:48:45 father and a daughter still united and working together on things this far down the road. That's pretty cool. Yes, sir. Dave, I got one story right quick. Whenever Emily, and I've got a younger daughter that's two years younger, there was a rainbow vacuum cleaner salesman. Oh yeah. You remember those? Oh yeah I do. Well he uh. It's kind of like buying a Cadillac. Exactly.

Starting point is 01:49:10 So he'd come and he knocked and I let him give his spiel and I think Emily and Jessica, my younger daughter, was there and they was just shaking their head. And then all of a sudden whenever the salesman started telling about the, uh, uh, to buy it on, uh, payment plans, they just started shaking their head and said, uncle Dave's not going to go with this. So he kind of got, he got, uh, headed on out the door. That was the day I knew my daughters were going to make it. So you've been gone.

Starting point is 01:49:46 Your name's been Uncle Dave. Okay. I'll take it. I'll take it. I've been, I've been, I'm going to do a lot of worse things. I can tell you that's good. Emily, what's next for you? Oh, let's see.

Starting point is 01:49:56 I'm a few years out from retiring from education and I think I'm going to go into real estate, maybe. Okay. Fine. Something I'm looking at. Good for you. And I travel overseas every summer and stuff and as I had wrote in to my email I use my tax refund check as my spending money over there so I don't have to use

Starting point is 01:50:15 any of my money here. Well it's still your money but. It's still my money but you know it's like that extra that I didn't. You just likeed it to the government a little bit a year. Yes, sir. All right. All right. So 39,000 she starts out, now making 68,000. French teacher has a paid for $300,000 house and she's 42 and has substantial money in retirement. So it's interesting that when we did the study of millionaires that the most likely career to be a millionaire was an engineer,

Starting point is 01:50:46 the second was accountant, and the third is teacher. And people always write in and go, well, that can't be, you can't do that when you're a teacher. Well, ladies and gentlemen, meet Emily, okay? And I got news for you, you can do this. But you know, that's amazing what you've done. This is incredible. I'm so proud of you. Thank you. I have two amazing what you've done. This is incredible. Thank you.

Starting point is 01:51:05 I'm so proud of you. Thank you. I have two paid off vehicles as well. Two? Well, you need two for. For weekend, Emily. For me to work on. So she's got something to go muddin' in on the weekend.

Starting point is 01:51:18 I like it. She's got some all-around in there. I know you're proud of her. Obviously you're here to support. Thank you. And so, way to go, man. This is absolutely incredible. Very well done, young lady.

Starting point is 01:51:28 Very, very well done. Thank you so much, I appreciate it. What do you tell people the key to getting out of debt is, Emily? No credit cards, and you just, if you don't have that money, you don't get it. You pay for what you have, and you put back. And then you just work with the system,

Starting point is 01:51:42 which is what you've done. That's exactly right. You've been very, I can tell you're a very precise person. Yes, sir you just work with the system. And you work it. Which is what you've done. That's exactly right. You've been very, I can tell you're very precise person. Yes sir. It's all about system. Yes sir. Yeah, good for you.

Starting point is 01:51:51 Thank you so much. Very, very well done. Proud of you kiddo. Thank you. Good work. I guess I get to do my scream now cause I didn't do it at the beginning of. That's right, we're gonna do it now. Okay, good.

Starting point is 01:52:00 All right, Emily and Jeff's gonna help from Decatur, Alabama. 110,000 paid off in 15 years, making 39 to 68 French teacher in high school. Count it down. Let's hear a debt-free scream. Count it down. Let's do it. Okay.

Starting point is 01:52:17 Five, four, three, two, one, here we go. All right. Debt-free, yeah! Yeah! All right! That'll work. I'll take it. Good stuff. Yeah! Yeah! Alright! That'll work. I'll take it.

Starting point is 01:52:27 Good stuff. Well, the interesting thing is the folks who can do it. That's the point. Why did we start doing these debt-free screams? Because somebody just started screaming one day on the phone, and then some guy called back the next week and said, hey, can I do that? And we said, sure. And so it started with that. He must have been from Alabama too.

Starting point is 01:52:48 Yeah. Well, he definitely was country. I remember he's country fried like that. That sounded like I did, you know. And so I knew where he came from. But anyways, yeah, let's celebrate. Let's celebrate. This is hard work. It's sacrifice. You sell so much stuff the kids think they're next. You live on beans and rice. You don't go out to eat, you don't go on vacation, you get the debt cleaned up so you get your life back and the companies don't own you anymore. Your stress level goes down, your relationships are better, and you get on this process of building wealth. And it's called hope.

Starting point is 01:53:19 Yeah. And it just goes counter to everything we're taught today, which is maximize everything, leverage everything, get all the shiny new stuff all the time, get new stuff and get new stuff and get new stuff that you can't afford. I love how simple what she said, what Emily said was, what was the key here? Live on less than you make. Don't buy it if you don't have the money. Don't buy it if you don't have the money.

Starting point is 01:53:43 Sounds like her great grandmother would have said. Money, if you don't have the money, don't buy it if you don't have the money. Don't buy it if you don't have the money. Sounds like her great grandmother would have said, yeah, honey, if you don't have the money, don't buy it. And 20 years ago, $118,000 house. I guarantee you there were people pressuring her to get a bigger, nicer place than that. And to have the discipline even back then to get a house that was 118,000. This is what it looks like. She's paying it off in her early 40s and now she's free. It's awesome.

Starting point is 01:54:02 100% debt free on a teacher's salary at 40 years old. 42 years old. Shut up. Don't tell me this stuff doesn't work. Our scripture of the day, Luke 12, 15, and he went on to say to them all, watch out and guard yourselves from every kind of greed because your true life is not made up of the things you own no matter how rich you may be. Dr. Joyce Brothers said, credit buying is much like being drunk. The buzz happens immediately and it gives you a lift. The hangover comes the next day.

Starting point is 01:55:10 Amen. Katie is with us in Houston, Texas. Hi, Katie, how are you? Hi, I'm good. How are you doing, Dave? Better than I deserve. What's up in your world? So between 2022 and 2024 was probably the roughest part of my life.

Starting point is 01:55:30 I am very young. I'm only 27, but I was married, experienced domestic violence. We separated, dealt with a miscarriage, then I got divorced. Didn't feel like being on earth. But I come to find, to really, really, really know Jesus Christ more than I thought I knew Him. So that's the plus of it all. But I made a lot of foolish, no matter what I went through, I can't victimize all the foolish financial mistakes I made. I used to like be a restaurant manager. I've made over 60k, over 65k before annually. Last year I experienced a bit of homelessness and I was able to come back home with my parents.

Starting point is 01:56:17 And October, I didn't have a job for about six months. I never imagined being there and I finally got a job, but the income, this was probably one of the lowest jobs I've ever had, which is not, um, anyway, it's 37, I think 35 or 37,000. So for me, just never knowing how to budget, like I've seen a budget sheet and thought, Oh, that's cute. Let me try to play with the number. Never really like understanding. I know what to do. Like I'm like, help me.

Starting point is 01:56:48 I think I got about like $30,000 worth of debt. Not too much. You have a car payment? And I've been watching the show for the last couple weeks. You have a car debt? Yes, and I would be negative if I tried to sell it. No, no, I wasn't what I was asking. I'm asking how much you owe on your car.

Starting point is 01:57:05 That's all I ask. Twenty, twenty-four thousand. Okay. And is that in the thirty, so there's six more or there's thirty more? No, no, there's six more. Okay. And so six is on credit cards? Yes.

Starting point is 01:57:19 Okay. All right. Good news. All right. So here's the situation as I hear it and then Dr. John can chime in as well. I hear a person who is a trauma survivor. Okay? When you go through a miscarriage, that's trauma. When you go through a divorce, that's trauma. When you go through domestic violence, that's extreme trauma. Okay? All of these things gut-punch you. All of these things mess with your confidence.

Starting point is 01:57:57 And therefore you end up on the street and we're bouncing back in mom and dad's house and getting a fresh start. That's how I heard, what I heard. Tell me about this, tell me about the six months of not being able to work. Were you unable to find a job or were you struggling with your mental and emotional health? Tell me about that time. So I have experienced with like sickness due to type 1 diabetes. So when I came back initially in October, I had strep throat, but it just hit me way worse maybe than it should have. I'm not sure. I was out for like maybe two to three weeks with that.

Starting point is 01:58:36 And then I started back on the job hunt around, I think a couple of weeks before Thanksgiving. I was filling out applications at first I was doing it, you know on indeed but I'm like, okay Well, let me put in some more effort Applications I have found that on a YouTube I watch let me pull out the pool application But I could not get those users. They're very successful. Are you staying with your parents now still? Yes. Hey, do you have a your parents now still? Yes, yeah. Do you have a good relationship with them? Is that an okay place to be?

Starting point is 01:59:09 Yes. Okay. I would love... Let me ask you one more question. How old are you? 27. Oh, 27. 27.

Starting point is 01:59:17 I would love for you to get a whole bunch of little wins in a row before it. What I hear is somebody that like broke a kneecap, broke the other ankle, tore their Achilles tendon, and you're just now walking and you're calling us asking how you can get, what marathon training program. If you had nowhere to live in a very unsafe situation, then we would be having another conversation because you would be in a mess. The fact that you have a safe place to land for a minute, I would love to see you go 60 or 90 days and just do this job. Clock in, clock out, feel good, start to trust yourself again, work really hard at this job. Even if you think like, man, it's just a $37,000. Be the best person in that whole arena.

Starting point is 02:00:08 And if it's selling cell phones, sell cell phones like no one has ever sold a cell phone before, come home and be a present, like present with your family. Hey, let's get our feet underneath us for a second. While you were racking up this debt and all this trauma was going on, did you also gain weight? I recently, the last year, through homeless, I never noticed, but when I came back, all of my family was telling me how much weight I gained.

Starting point is 02:00:36 And I forgot to tell y'all, actually, between 2021 and 2023, I actually couldn't walk. I was dealing with peripheral neuropathy, but thanks to God, I could walk again. So it was just, yeah. That wasn't a slam. There's a normal correlation with that, okay? Because when all things fall apart, it's not unusual for people to eat their way out of it. I even tried that during COVID. It didn't work. I ate every donut in a 50-mile radius. It was great. But it didn't work, but I tried it. So what I would add to John's thing on your quick wins is it sounds like you've got a

Starting point is 02:01:15 recently found great, wonderful faith in Jesus. And so I would set up a morning routine that And so I would set up a morning routine that involves your spiritual health and some beginner exercise program. Going for a walk for 30 days. Let's get some beginner exercise programs going. That releases a bunch of wonderful chemicals in your body that helps you feel better, and you'll have the benefit also of losing weight and feeling better about yourself from the disciplines. So lots of little wins. You know, let's see how many days in a row you can walk

Starting point is 02:01:48 at least a mile, getting up at 5 a.m. Let's see how many days in a row you can read at least two chapters in the Bible and spend 15 minutes in prayer. Let's see how many days in a row. Let's get some streaks going, some good streaks. And then that gives you the foundation for, I'm winning. And I can start talking about, okay, when I'm 37, I want to be a X, Y, Z. And that means I need to start making some career moves that way. But right now, I'm with John, I think a good 60 or 90 days of just going on a walk every day, doing a Bible study every day, going to work every day and being an excellent version of you, that's going to be really, that's going to be a breath fresh air for you, kiddo.

Starting point is 02:02:32 And that's going to build the confidence back up because all this crap that's happened to you, when I went through bankruptcy, one of the things it is, is stole my confidence. I was a cocky little twerp and all of a sudden I was completely humiliated. He's got that back. Don't make any mistakes. Don't worry about it. It'll come back. It'll come back.

Starting point is 02:02:50 But I mean, no, now I'm just confident. It's different. But what happens is your confidence grows back with these experiences. Your experiences with the Lord every morning, your experiences with the rain and the sunshine out there doing that one mile walk or whatever it is every day, get some light weights and start moving them around to get some tone back, you're gonna start to feel better about you and that version of you has a lot better chance of landing better and better and better jobs. I'm also gonna hook you up with my friends, I'm gonna give you three

Starting point is 02:03:21 months for free with our friends at BetterHelp. Free therapy, you can do it at home on your computer online with a licensed therapist okay? Yeah and you gotta use it though is that fair? Yeah that's a deal. Awesome. And we'll also put you into every dollar and a financial peace university. We want to walk with you while you get better on this but I think you're gonna walk before you run again to John's point. And that's so okay. It's the way you gotta do it. Okay.

Starting point is 02:03:48 Is that cool? Yeah. Yeah, yeah, it was just so unfamiliar just being just broken and it was like, okay, God, where are you? But it's like, okay, like I'm ready. He's right there. That's where you find him is right there. Taking a whole bunch of little steps in a row. That's where you find the best parts of him is right there. We're super proud of you. Yeah, good job. Awesome.

Starting point is 02:04:11 Good job. Hang on. We're just gonna pick up and get you taken care of. That puts us out of the Ramsey Show in the books. 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. What if you could watch the Ramsey show before anyone else? Well good news, now you can. For the first time ever you can stream the show a day early in the Ramsey Network app. That's tomorrow's episode, today. Real calls, real answers, real fast.

Starting point is 02:05:00 It's free, it's easy and the content might just change your life. So search Ramsey Network in Google Play or the App Store or click the link in the show notes. You never know what calls coming up next.

The Ramsey Show - You Can’t Build a Future on Borrowed Money

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