brought to you by the every dollar app start budgeting for free today normal is broken common sense is weird so we're here to help you transform your life from the Ramsey Network and the Fairwinds Credit Union Studio this is the Ramsey show I'm Dave Ramsey your host Jade Washer all number one best selling off at Ramsey Personality is my co-host today open phones here at Cripple 8-25-5-225 most of you know I am a lifelong Tennessee in that are studios operate in Franklin Tennessee and just south of Nashville and many people drop by there several people sitting out here today watching us we do the show from 1-4 live come visit us and not lifelong Nashvilleian as well which means that as our radio career has grown and whatever else I do around here career has grown I've gotten to know and become friends with a lot of the country music folks around Nashville particularly of my generation I don't know a lot of the younger ones as well because I'm not that cool but I know a few of them but you know I one of the things I've learned over the years of working with the country music community is there's a few torps but most of them are incredible people the absolute queen of the state of Tennessee and of all the country music artists would have been Dolly Pardon and I just heard a moment ago that she just passed away and I'm heartbroken and as all of the world is I'm sure but certainly Tennesseeans and those of us who she was an absolutely amazing woman behind the scenes as well as on the stage phenomenal business mind absolute genius at business and very well accomplished in the boardroom as much as on the stage the things that she has pulled off and Dolly would among them and many many other things and the other thing that she's most known for among those of us I didn't know her but I knew half a degree of separation 46 times and incredibly generous every child in the state of Tennessee gets a free book every year from the Dolly Pardon Foundation she wanted to encourage reading she grew up in so variable Tennessee in the mountains of East Tennessee and reading was a privilege not an automatic entitlement and so she wants to make sure she wanted to make sure children regardless of their economic circumstances had that and I think the third thing that comes to mind when I think of Dolly is I mean the fourth is the performances and the absolute incredible world class talent in movie and on stage and everything else but she as much as anybody I've ever known in that business stayed completely out of any kind of politics or social issues she just said I just love you and you don't have to just accept that but we're not gonna talk about who I voted for and we're not gonna talk about your social agenda conservative or liberal because I just love you and nobody except the ones closest to her know what she actually believed on those things and because she did that was not who she was and it was she didn't care she said that's not my job and she was really really good at her job and her job was being Dolly the only one ever I mean there's very few people you can say a singular name like Dolly a single single first name and you don't even have to say the last name and as a performer you had to be really you had to have seen her and watched her many times oh absolutely I mean I'm I don't have a long list of things to say but I will say the world that I know needed certain people in it and when they leave it doesn't feel quite right and it's people like Prince it's people like Dolly Parton it's people like Michael Jackson and when somebody like Dolly Parton leaves the world you go oh it just doesn't feel right because they shaped the world that I saw leaves a hole yeah an irreplaceable hole yeah that's true and for and all cases that you mentioned force of nature yeah absolute force of nature and just incredible so Ramsey show is grieving with with our friends and our neighbors and her husband today and and honoring her as best we can from this distance but um wow you know she was scheduled to come on here several different times to do books and things that she had coming out and it just never worked out something would blow up and at the last minute get changed and everything else and I you know people ask me all the time you've met a lot of people who's the one person you had never met and I always say Dolly and I never made it I never made it so I regret that and I know so many people that are close friends and I should have forced the issue I guess but I didn't I regret that at this moment I can tell you that so but anyway I can't I the only way I can drop the name is she lives about five miles from live to about five miles from me and everybody knew where she lived I mean you know and but just see her people it's here at the grocery store she wasn't recognizable she said it takes about three hours to look like that that was her line and so pretty pretty incredible so gosh makes me want to tear up but okay open phones here at triple eight eight two five five two two five by the time some of you hear this that will be old news but such as the business that Jade and I are in and we're gonna take the moment on the microphone anyway absolutely Aaron is with us in Nashville hey Aaron what's up hi how are you guys doing better than we deserve what's up so I have been Davis for pretty much my entire adult life you know try to avoid bad bet only took out quote-unquote good death and just over the last year I finally realized that just the way my mind works I want to be 100% in on the baby step and so part of welcome to the truck thank you and so one of the mistakes I made and this both of these were relatively recent and so I bought a home would have been three years ago now on a 30% or a 30-year mortgage and I only put five percent down and so I don't have a ton of equity and two of the other mistakes I made were a year and a half ago I bought a brand new minivan and probably about six months ago I bought a year old vehicle and they are both now paid off I'm on baby step four five and six what are they worth and so combined they are worth about $56,000 what your household income $180,000 okay no I would not sell I would just start working the baby steps and pay off your house I can't I would keep the car you don't hate the cars do you know we love them and we you just you just want to be all in you just want to be all in and do that do it right now not ish and keep keeping them is not ish it goes by our guidelines you agree yeah I agree you make $180,000 a year we say that things with wheels and motors should not be more than half of your annual income and so you're under that line and so yeah all spare and love and keep in the cars this show sponsored by better help hey my friends at better help just release their annual state of stigma report it's full of all sorts of data about why so many people avoid getting the help they need for their mental and emotional health challenges 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[email protected]/RAMSI. Dean is in Houston. Hey Dean, how are you? Hey Dave, how are you all doing today? Better than I deserve. What's up? All right, so I've accumulated about $100,000 in debt and I'm wondering if Chapter 7 is going to be the best way to kind of take care of that. It's never the best way. It is a way and it's a very painful way. When you first start thinking about and looking at it, it feels like it's not painful. I've been through it and I wouldn't, we should own my worst enemy. What kind of debt do you have? What kind of is the $100,000? So about $32,000 is hospital and I have $10,000 in student loans and the biggest chunk of it is from a car accident I got into without insurance. And so $32,000 is $42,000, so that's like $65,000 or $68,000. And then there's another $12,000 in just another debt my apartment got broken into and we just didn't deal with it. So you did not have insurance on your car? Correct. Why? There's this pretty expensive at the time and I know it's just an excuse but like $60,000 expensive. Same with the renters insurance. You didn't have renters insurance. Is that what caused the $12,000 on the apartment? Well we did have renters insurance but it was the $2,500 deductible and they were trying to charge us much more than that and at the time my fiance and I, we had a baby on the way so we didn't have enough cash to fix the door and pay rent so we ended up just getting a new place. Got it. All right. So $60,000 approximately on the car debt. All right. And what do you guys make for a living? How much do you make? I bring in somewhere around 72, self-employed in your wife. My fiancee she makes around 30. Okay. What kind of self-employed work do you do? What is it? I run a handyman business. Good. Okay. Good. That means you can do a lot of that. What about your fiance? What kind of work does she do? She works in health and beauty. What's that mean? She's in an esthetician. She's a waxer. Yeah. Okay. All right. What's the wedding? Not sure. I've been kind of stacking up cash right now. I have about $20,000 in cash. Is all this in your name? Yes. Okay. It's none of it's in her name. Correct. Okay. All right. Well, I view bankruptcy like in the same bucket as divorce. You do every possible thing you can to avoid it. And then sometimes you can't, anyway. But you do every, you try everything, you leave it all on the field. And then if you file, you don't have quite the sense of regret or guilt that you would have if you just file. Okay. If you file chapter seven bankruptcy, you're self-employed making a 72,000 a year, your student loan is not bankruptable. So it's going to be there regardless. Okay. The rest of this can probably be wiped out. If you pass what's called the means test and the attorney can tell you that, they check to see if based on your income, you could pay something towards your debt. If you can pay something towards your debt based on this mathematical formula that's in the legal system, then they will not allow you to file chapter seven. They will put you into a chapter 13 where you pay minimum, you pay a certain number of dollars and say, say, you're 100,000, you're 90,000 because student loans aren't in it. Are repaid at a 40% rate for only 40,000 of its repaid or whatever. And it's over five years, okay. And it takes forever and it's a pain in the butt. And so I'm a little bit afraid you're going to bump into that with your income being pretty decent. I might be wrong, but I don't know in Texas what the guidelines are going to be on the means test. And so you're going to have to find that out if you want to investigate this further. What I will tell you is that with $20,000, you can probably clean up the medical test. You can probably clean up most of this debt. You can probably pay this debt off at somewhere around, if you could pay it off at somewhere around 20 cents on the dollar, you could be debt free by negotiating each one of these to 20 cents on the dollar. Now some of them are going to be a little more, some of them are going to be a little less. But when a debt buyer buys old credit card debt, for instance, bad debt, they typically buy it at a nickel on the dollar. And we see these deals settled all the time for pennies on the dollar. And you could take the 20,000 and work your way through it. That's one way you could go at this. So in other words, I think if you called the car wreck, I assume that's an insurance company, right? Who do you owe the money to? State Farm or who? Yeah. It was progressive and then they ended up selling it to a company. I've tried really, really hard negotiating with them, but they didn't come down any. How old is it? It's from 2022. Yeah. We'll call them again. It's been a while. You try it at the time, really, really hard. But now they've been sitting on this and they haven't gotten a dad gum dime and you call up and go, "Hey, I've got a little money, but I'm going to file chapter seven." And you're going to get nothing. So instead of doing that, let's cut a deal. And I'll offer you $6,000 for this position. And then let's start the negotiation and I'll bet you can settle it for somewhere around $10,000. Really? $10,000 or $15,000. Somewhere in there. That's, you know, it's since 2022. All you got to do, Dean, is put yourself in that company's position. They bought a bad debt from progressive, from a 24-year-old guy who wrecked his car and didn't even have insurance. They don't expect to collect anything. Well, they paid almost nothing for it. They paid almost nothing for it and they don't really expect to collect anything. So anything they get is going to be like, "Wow, we just scored." That's where they're coming from. Now they're not going to act like that when you call them, but that's where they are. They probably paid $2,000, $3,000 for this debt. Got it. Okay, so I'm going to try all of that and that will definitely work with the medical. I was going to say the same thing with the medical. The medical will definitely work. And I think you could clean up the vast majority of this for the round 20 grand and what you can't clean up, you can put on payments and work out. That's what I would do. That'd be my first choice. Also, before you do anything, I'm going to put you on hold and Christian's going to hook you up with guardian litigation, which is one of our sponsors and they negotiate with all kinds of debt. I don't know that they can help with your unusual mix, but you can ask them and we can ask them for you. They're a sponsor of ours. They typically take somebody's got $50,000 or $100,000 with a credit card debt and it's just a little bit behind and they're freaking out and they think they're bankrupt and they're not. And they can work through those deals real easy. It's what they do. But they might be able to help with this and we'll give them a shot at it. But if they say, hey, Dane, it's really not our thing, then if I'm you, I'm going to go settle most of this for this 20 grand. And by the way, you can get married for free at the Justice of the Peace this weekend, but I would not get married this weekend if you're thinking about filing bankruptcy. I would wait until bankruptcy is off the table because you're making some progress on some of these negotiations. And you need the cat. You need that 20,000 cats. Yeah. And you need it to, and by the way, I don't know what the personal exemption is in Texas. In Tennessee, it's $7,500. If you have more than $7,500, you have to throw it in the pot and lose it. And in Texas, it might be $15,000, it might be 20. Texas has homestead exemption unlimited. If you own to home in Texas, you get to keep it regardless of what it costs or how much it's worth. And Florida does are the only two states that have that in the chapter seven. But look all of that up. Look up your personal exemption in the chapter seven. You may be losing the 20 grand anyway or just portion of it. So let's work on settling it. Let's work on guardian litigation and spend five months, three months, fighting and arguing with these people. And let's get this out of your life. Oh. By insurance.
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So look, if you're working the baby steps, your bank should be helping you move toward financial freedom, not just park your cash. Go to fairwinds.org/ramsey to open your smart bundle and start making progress today. That's fairwinds.org/ramsey, ensured by the NCUA. (upbeat music) - Doing a little poking around at the break 'cause I got curious if I had outlived my usefulness on my memory. (laughs) Texas allows up to $50,000 in personal assets. So he gets to keep his $20,000 if he files chapter seven. - That's pretty. - And they allow unlimited on your personal residence. So you can own a $2 million home that's paid for file bankruptcy hypothetically on $20,000 for the credit card debt. And you'd have to prove that you can't pay it. You have to pass the means test, but you keep the $2 million home in up to $50,000 worth of cash. And our personal assets, okay. Now when I filed in Tennessee in 1988, our personal exemption was $7,500, and that's what I quoted a while ago. That's what I looked up. It's been raised to $10,000 now. And you can keep up to $35,000 worth of home equity. - You think it'd be more of a sliding scale based on the amount of debt that they're trying to bankrupt? - I don't know, I, you know. The idea is you get to come out of bankruptcy with something to start fresh. It's called a fresh start contract. - Got you, okay. - And so that's where the home state exemption, the personal exemption come from in a chapter seven, which chapter seven is the atom bomb you drop on your life. - And that's that. - And it's just nothing left but ashes and whatever your little personal exemption is. And so, you know, what do you get to keep? 50,000 in your home though ain't bad, is all I'm saying. - Yeah, it's, no, it's 35,000 now in Tennessee. - Uh-huh, but in Texas. - So in Texas it's unlimited, 50,000 in personal. 50,000 in cash and unlimited on the home. The Florida's unlimited on your home as well. As long as you've owned it 1215 days for three years in other words. So that was weird. I'd never seen that before, but yeah. So if you've owned your home, it has a couple of other little guidelines on there in Florida. But all other states have something like Tennessee where you get to keep a certain amount of equity. So when we filed, I think we had about 25,000 dollars where the equity may be in our home. And we got to keep, you know, our furniture that would have brought $2,000 at a garage sale, but 'cause it's all, that's all that was left. Everything else was already gone by the time we filed. We sold everything trying to not file bankruptcy. And we were so scared we couldn't breathe. But yeah, we kept that home. But you have to re-sign for the payment. You don't get to waive the mortgage. So I got to reaffirm the debt on the house and kept the mortgage. - Wow. - And, you know, started with nothing, basically. I mean, $10,000 or $7,500 is basically nothing. And so start fresh again. That's the idea behind it. So interesting. - It's very interesting. - So when you think about bankruptcy folks, you need to understand, there's about, I think you may have seen the stuff. Sometimes it pops up on the internet. I used to see the list before there was an internet. 10 things that, if you have more than two or three of these things in a 24-month period of time, you're probably gonna be in the hospital. The 10 huge tragedies of life, you know? So divorce, loss of a child, loss of a parent, bankruptcy is on that list. And so you're entering into the list of one of the most serious things that can happen in your life. And so it's not to be taken lightly. And we don't tell people to file bankruptcy on this show. We give you five ways you can avoid it. And we say, I understand we're gonna love you, whether you file or you don't file. Sometimes if it's a ridiculous situation, we'll yell at you for your own sake. But, you know, if you feel $6,000 and you hadn't had a job in two months and you want to file bankruptcy, I'm like, dude, it cost two grand, a file bankruptcy. It's just stupid, go get a job. You know, I mean, we're just gonna get all over you, right? For your own sake. So you got the trick is the bankruptcy relieves the pressure today only. It does not fix the problem in your mirror. - And I would imagine it just sucks the confidence out of you. - Oh man. - It sucks the spirit out of you. - Man, I just was, I was not only broke, I was broken. But it was a spiritual thing with me as well. - I know, I can imagine it as well. So, took a while to rebuild after that and, but yeah. And, you know, what it does to your relationship and what it does to everything else. And, you know, you walk down the street, you see that person that didn't get paid, you know, all that kind of stuff. And that stuff happens. All right, Catherine is in Fort Worth, Texas. Hi, Catherine, how are you? - I'm good, how are you? - Better than I deserve, what's up? - Okay, in a nutshell, my question is just, how do I go about compromising with my husband in our budgeting when it comes to tithing? He doesn't really agree with it. And, I have something on it, I'm not really willing to blood right now, but it's like, I'm tired. It's a monthly argument. And I'm just like, okay, I'm over this. - Do you tithing typically comes from someone that's an evangelical Christian or Orthodox Jewish? - Yeah, are you both those things, either of those things? - No. - Okay, so I'm guessing you are and he's not. - Well, no, I'm not, I guess I wouldn't consider myself an evangelical Christian, but I mean, I do believe, you know, that God calls us to be true for givers. - Okay, he's-- - You attend a church? - Yeah. - No, you hesitated, you don't either do you? - Oh, I do, you said, do I attend a church? - Yes. - Yes. - Okay, but he doesn't. He has kinda chosen that he doesn't want to. - Okay, yeah. - This was the problem, not the ties. - I agree, so again, context, we are rebuilding after him, like wanting a divorce and all those kinds of things. And like for a long, like at the beginning of our marriage was a problem, I got out of the fighting, so I just stopped fighting. And then whenever the divorce situation came about, then we kind of were doing our own separate thing. And that's when I started tithing again, now that we're trying to come back together, it's a, like, basically I'm just like, this is what I feel called to do. And I don't really necessarily know how to compromise about it, like-- - How does that feel? - Okay, that feels like a minimum. - What if you took, let me just ask this. And I know you've been approaching it from one way. This is just hypothetical. If you had said, I'd like to give some money to this charity or to this foundation. How would he have felt about that? Just general charitable giving, not tied to something that has a religious base like tithing. Just generosity. - I can't say for certain, I don't really know. - Okay, I'd want to know that because I'd want to know that there's some piece of generosity that lives inside of this person. And if there's not, I'd want to get to the bottom of that because that speaks depths about them. So I'd be curious about that. I also want to know how long have you been married? - Now it's eight years. - Okay, let me back up then. Let's pan back a second. So evangelical Christian means Bible believing. - Okay, we'll be doing it. - And so we would take our instruction on this question from scripture, okay? And we can go into what we call the Old Testament, what our Jewish friends call the Bible, the Talmud, right? And find it all over the place. We can also find it in Jesus' own words and to tithe, to give a tenth. But in nowhere is it a salvation issue? In nowhere is it a eye-gain entrance to heaven because of my giving a tithe? God loves tithers, he loves non-tithers. It's not a sin to not tithe. But your Heavenly Father, who's crazy about you, says the best way to live your life, my daughter is to be giving steadily and a baseline to start with your generosity is a tenth to your local house of worship, which follows the Old Testament guideline for the storehouse, the Levites were provided for the pastors, the priests were provided for the rabbis and the widows and the orphans were provided for from the storehouse. And so bring a tenth to the storehouse, the Old Testament says. And so that's where the model comes from. That's the teaching. Now, then pan back and say in your situation, what matters?
This doesn't matter at all. - No. - I wouldn't die on this hill. - And the more, honestly, the more you argue about it, the more he's probably gonna dig his heels in. And this is never gonna happen based off of an argument. He's never gonna become generous. - The tithes should be the result of your faith. It should be the result of your faith, your result of where you place your trust. And that's what's missing here. And so the two of you working on your relationship and coming into agreement about what heaven looks like and what the truth of the scriptures are, is a thousand times more important than whether or not you give a tithe for this four month period of time while we're discussing this. I don't predict good things for your marriage until you get aligned on religion. So number one, one of the number one, one of the top four things that breaks families up. (upbeat music) (upbeat music) - Hey, what's up guys, it's Jade. Back to school season is here. 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Give yourself one less thing to worry about this school year and go to cbac.com/ramz to schedule your service and get 10% off your visit. That's cbac.com/ramz. - 10% off, up to a $250 value. See store for details. (upbeat music) (upbeat music) - One of the biggest mistakes people make is thinking that they can skip having a will just 'cause they're too young or too healthy or they don't own anything. A will protects your family and gives clear instructions. Keeps your loved ones from having to guess what you wanted while they're going through a difficult time. Doing a will is an act of love. If you're ready to create one, go to mommabarelegal.com. If you're not sure where to start, text quiz to 33-789. We'll help you figure it out. Caleb is in Raleigh, North Carolina. Hi, Caleb, how are you? - Hey Dave, I'm doing well. How have you been? - Better than I deserve. What's up? - Good, my question for you, so I'm weighing the benefits of either working towards paying our mortgage off early or putting the additional amount towards investing and the reason I'm calling you is my financial advisor has told me it makes more sense to invest, but being a listener of your show, I've heard contradicting statements from you, so I wanna talk through it. - Well, your financial advisor is wrong, and that's what the data says, okay? The theory that he's using or she's using is that if you have money invested at 12%, or whatever the good mutual fund is bringing you, and you use that to pay off a 6% mortgage that you cost yourself money. That's the theory that they're operating under. What they're not taking into consideration is the socioeconomic impacts of paying off your home. What we find is people are healthier, their marriages are stronger, they do better in their careers, and in addition, and all of that amounts to way more than the spread of a mortgage over a mutual fund. Way more mathematically. And where we see that turn up is when we studied doing the largest study of actual millionaires, not broke financial planners with an opinion, where we talked to actual millionaires, people that were millionaires, and we said, ask them a whole series of questions, we talked to over 10,167 of them, and the number of them that didn't pay off their home, and instead borrowed on their home effectively, was what you're doing, to invest in a mutual fund, and say, that's what caused me to build wealth, the number of them that said that out of 10,000 was precisely zero. Okay. Instead, what we found was that the typical millionaire in America, the first one to five million, typically is about half, a third to a half of your net worth is a paid off mortgage, and the other two-thirds to a half is your 401(k) and your good retirement investing. But the idea of keeping a mortgage around to the typical millionaire, they laugh at that ridiculous advice, and so do I, and so does Jade. (laughing) There it is, there's the laugh. Oh, okay. Okay, and I am 24 years old, so that's been the big question I'm weighing, is it my age, does that compound interest over time? Nope. Pay off more than what paying my mortgage out might be. Nope, because the risk, debt equals risk, and you haven't mathematically adjusted for risk, taxes you haven't adjusted for, and no, we're in this equation. Have you figured out what it's costing a relationship, or costing you physically, or whatever else? See, we can trendline heart disease, anxiety increases in our culture over the last 50 years, and the trendline follows exactly over the top of increasing debt. As credit card debt, student loan debt, and mortgage debt have increased steadily, so have those diseases interesting. Well, no kidding. Of course you have more anxiety if you don't have a mortgage than if you don't. Hello, right? Mm-hmm. And of course that affects your heart. You wanna know what I think, and this is just something I think it's not a fact. It's not data. I think that people just like the way it feels to invest their money, and I think they just like to see that balance go up, up, up, up, up. It feels better. It feels like money that they can see and feel and touch more than the equity in their home. I think it, honestly, I think it just boils down to-- And it might be even a subconscious thing that if you have a million dollars in a mutual fund, but you've got a half million dollars in a house mortgage. Okay, you can access-- You can get it. You can get it. You can't get it out of the house. Exactly, and I think it's a-- You want to go by fast, but you have to refinance. That's right. If it's in the house. I think that's, I mean-- Which is another reason to do it, because it keeps you from doing stupid crap for your money, right? So, keep your hands up. What we call a forest savings plan. So Caleb, I would beg you to become debt-free and stay debt-free, and use your most powerful wealth building tool, which is your income to build your wealth, and get a different financial advisor, one who's right. He's 24, he's got a long time to build wealth. Yeah, you got plenty of time. You're going to be very, very wealthy, but no. And age really doesn't enter into it, because the math is still the same. I'm not sure. Age makes it more pronounced. So we had on the area yesterday, we had a debt free-screen ratio, and I did. 23 and 22 from Northern Michigan. The houses worth about 300,000. Wow! They paid off 140,000 in 22 months. They have zero debt. They make $170,000 a year. So let's juxtapose that Lyon couple with this young man. Okay. And because he said, "cause I'm young," right? Can you possibly imagine what a couple making above $150,000 a year in their early 20s is going to be worth if they have zero debt payments. I'm going like 33, 34 million. Yeah, we didn't even put it in the calculator. We just put the house payment only in the calculator, and it was 20 million. I'm done. Well. Just the house payment. Wow. From 22 to 67, you know? And it's just like, holy. That is unbelievable. So, you know, but what we're not doing there is paying, you know, worrying about what commission my financial planner gets. That's right. Which they don't get commission on paid off mortgages. It's a good point. Things that make you go. That's a very good point. Now honestly, most of them don't give the advice because they're greedy jerks and they want to get commission. That's really not what happens truthfully, I'll defend them. Most of them just give this advice because they're trained by an industry that's wrong. I mean, the financial planning business is a bunch of lemmings. Do you know what that is? Little rats that run and hurts, and they will all run off the cliff together. That makes sense. They follow each other like, like a herd, like the hogs when Jesus removed the spirit from them and the whole herd ran over the cliff, that's the financial planning business. Whatever one of them does, they all do. And then they declare it to be absolute by God truth. And it's most of the time not. Some of them are CFPs and some of them are certified financial Pharisees. And so, you know, so there's some really good people in that business and there's some people who haven't had their own thought in years. They just were told what to think and that's all they think. And then they decided that was truth.
it came out of the Bible or something, which in by the way, none of this discussion comes out of the Bible except the part where the borrowers slaved to the lender. That part comes out of the Bible, but the rest of it doesn't. So, you know, I'm not defending paying off the home mortgage based on that, other than you wouldn't be a slave anymore. That's nice, but I didn't make that point to Caleb. I made a math point to him, but there you go. So, gosh, can you imagine these 20 somethings get in here and they do these dead free screams and they're stinking house and the house was cute. I'm sure it was. Well, I mean, you thought, you know, but in northern Michigan, you can buy a lot of house. Yeah, you can. They're on the middle of nothing and so, but I mean, you get a good deal. I mean, but it was, it was a little, it looked like a little Norman Rockwell painting and the little Norman Rockwell couple. I mean, they were just a power couple. It was unbelievable. Good for them. Yeah. You're thinking, man, I think we're going to be okay if we like it. It's still possible. We got a few of those around. We're going to be all right. So this stuff works and to Caleb's point, it works even better when you start young. Absolutely. I mean, it sounds like they probably didn't have a ton of consumer debt to pay off. They just went hog on their, yeah, on their mortgage. He was raised in a, he was a financial peace bank. I wondered. Yep. He was raised in that and then he was dating a girl who was smarter in him. And so that's what he said. But it's still a ton of debt, you know, if it's 140,000 towards the mortgage, that same, I mean, 140,000 is 140,000 if it's consumer debt, if it's what it doesn't matter, the fact that you can get intense and really pay something off in a short period of time is. Yeah. But knowing what I know, the amount of data that is in my soul on this stuff from sitting in this chair for 35 years, I hear that couple and my mind, the math just explodes in my mind. What's going to happen to that couple and their family tree. And I can't, I don't have any data to back up. The hard data to back up, the health effects and the relational effects. What percentage of people never get divorced that don't have debt versus the people that have been? Wow. That's interesting. Because divorce is grand. I mean marriage is grand, but divorce is 50 grand. So I mean, if you split your assets ever so often and start over, it's hard to build wealth. Let me tell you what I get asked all the time. When should I get term life insurance? How much do I need? Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is term life isn't a baby step. So if anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance. Now, and most people are surprised by how affordable term life really is. Even if you're not in perfect health. Look, I understand the hesitation since most insurance companies make it more of a hassle than it needs to be, not as standard insurance. They're not an insurance company. They're a broker that works for you. That means they'll shop and compare the top term life companies to find the most competitive options on the coverage for your family. For almost 30 years, I've recommended Xander for straight answers, competitive rates and coverage that actually protects your family. So 800-356-4282, or go to zander.com for a quick and easy quote, that's zander.com. Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Jayde Washall is my co-host today. I'm Dave Ramsey. Sal is in New York City. Hi, Sal. How are you? Hi, Dave. Hi, Jayde. How are you guys? Better than we deserve. What's up? Good. Well, I'd like to start off by thanking you because I am the light at the end of the tunnel finishing up. Baby Step 2. I'm almost completely out of debt. I plan on being there probably by the end of the year. Cool. Good for you. Yeah. But part of really the reason why I'm calling is because as much as I'm invested into the Ramsey clan and being in control of my finances, my ex-wife is not. And her behaviors towards money concern me when it comes to our daughter. Then what way? Is your daughter going to be fine? Well, no, but a lot of frivolous spending, the idea of it costs, what it costs, things like that, you know, racking up debt, a lot of debt, take borrowing, just 401Ks, clearing out 401Ks. How old is your daughter? She's 13. Okay. Good. All right. Well, here's the thing. You cannot, I mean, you could ask the same question and say, how do I teach my child to do their homework and get good grades if my ex-wife won't, how do I teach my child to have good manners and a pleasant kind of person if my ex-wife won't. I'm sorry. I said, those are also things that kind of have to do with the territory. So what the answer to the question is, is you can't control what happens over there. That's why we call them the X. Right. So we don't get to control that anymore. The only thing you can control is what you can control. And it's as for me and my house, this is what we do. So here's what I do, honey. You're 13. And when I had 13 year olds, the thing I always heard is, I just want to be traded like an adult. You ever heard that? Yes. Yeah. To which my answer always was, when you're acting like an adult, I will treat you. Like an adult. When you're acting like you're four, I will treat you like you're four and within every 13 year olds body is a four year old and a 34 year old. Right. And so I have to ask this, multiple personality human, which one I'm speaking to at the time. Okay. If I'm speaking to the adult version of you, I'm going to talk to you like I would my best friend and say, honey, here's what I'm doing and why that makes sense. I'm going to always be generous. I'm going to always live on a plan. I'm going to always be living on less than I make. I'm going to always be investing. I'm going to avoid debt and I'm going to enjoy some of my money that I pay cash for things only I do not take on debt. You will not find chaos and anxiety at our house over here because that's the way I live and that's how I would love for you to live because I think it's going to cause you to be the best person ever. If you're four, I'm just going to tell you, no. Right. And I don't have to explain it because you're freaking four. And just too, there's part of this that's going to, it's going to have a delayed effect because at 13, she's not going to necessarily see how things end up, but there's going to be a day where she's 23 and she's going to think back and go, oh gosh, my dad, you know, these are the things he taught. And I can see the results of that and how he's living today and what his demeanor is, how our relationship is. And then she's also going to see the results of what your ex is doing, which is she probably is going to end up with more debt. There's going to be more stress and more strain on the relationship. So let it take its course, let the learning and what she's learning take its course. You're not going to see the result of it today or even next year or, you know, so honestly, if I can, I'll ask them, am I speaking to the adult version of you? If I am, then let's talk this through and I will use persuasion and my tone of voice and use logic and explanation and data and spiritual guidance and those kinds of things like I would with an adult. But if I'm talking with a four year old, it's having a hissy fit on the cereal aisle, then the answer is just no. And I'm not negotiating with a rational human being at this point. I just have to pick them up and leave the store. Right. Yeah. I recognize with this, it, you know, Jade, like you said, it's, it's the long game. Yeah, it is. It is the long game. And the persuasion, when you say it to a 13 year old about anything, you know, pre-marital sex, studying, brushing your teeth, how to talk to pep boys, where to put your, what position to put yourself in, all these, the 13 year old is going to listen some and some they're not going to listen and then you're going to get some hard lessons that will come with that. And so, um, but you, the only thing you can control, I wouldn't, I wouldn't put an ounce of my brain calories on what happens over at the X's. And if she brings that up, you just go, you know, your mom's a great lady and she can do whatever she wants to do over there and what we do over here is this. I don't know, I usually, I'm sorry, Dave, go ahead. You're fine. No, I was just going to say, you know, I, I, I try to, um, you know, keep, you know, emotionally or any kind of thought or feeling towards whatever's going on over there, you know, not my monkeys, not my circus, kind of, and that's typically what I do, um, with that stuff. It's just where certain instances come up, something like, you know, that happened today where it's like, it hits in my brain where it's, you know, what, what is my daughter really learning, you know, from, from that insulin, and I don't want, it's what she's learning. Bad things, right? You know, things that are not going to be helpful to her. That's what she's doing.
learning. And the only chance you've got to offset that is by pouring good, clean water into the glass so that it displaces the other stuff out of the glass. And that vessel being one precious 13-year-old. And Rachel says what Jade said is more is caught than taught. I'll send you a copy of the book Rachel and I did together. It was her first number one. It's called Smart Money, Smart Kids, How to Teach Kids, How to Handle Money. It's a parenting manual on that. And it'll help you. It's your love reading it. And it'll help you. We want to teach them to work. You want to teach them to save. You want to teach them to give. You want to teach them to spend wisely. And you want to teach them to give save spend and work. That's it. Yeah. Give save spend work. And that's what adults should learn by the way. Most people can't do all five of those things either. Work. Give spend. Work. Give. Spend. Save. Save. I mean, that's it. That's it. That's it. That's over and over, right? Yeah. That's right. Get stuck in that. That's it. Yeah. I mean, the other good. Right question. By the way. It's a good question. And then, you know, I don't have kids 13, but I've been 13. And so I feel like that's my perspective on this. And at the end of the day, when you become an adult, you learn just as much from what your parents taught so much of what to do and from the mistakes that they made. You learn from both of them. Yep. So it's not a, oh my gosh, everything I taught my kid wasn't exactly right. They're going to learn either way. They're going to learn from the mistakes that I learned from. We were talking about that. You and I the other day on giving at church. Yes. In the old days, you would put a check into the giving in the offering flight and the child would see the parent doing that week after week after week on their day of worship and every single and you don't have to say a thing. No, it's just drilled in. Yep. And you know, but yeah, the more it's caught, then taught. Hey guys, it's Rachel Cruz. If you're working the baby steps, every major expense deserves a second look. And healthcare is one of the biggest expenses in most family's budgets. And that is why I recommend that you check out Christian healthcare ministries. CHM isn't insurance. It's a health cost sharing ministry. That means members help pay one another's medical bills and they've been serving Christian since 1981. CHM programs start at just $115 a month. And here's why that matters. If you are paying more than you need to for healthcare, that money could be going toward paying off debt, building your emergency fund or reaching your next financial goal. And your monthly cost isn't based on your medical history or where you live. Y'all a lot of families find CHM gives them more room in the budget. That's why so many members say they're better with CHM. And right now, new members can receive a 50% credit towards their first month of membership. Go to CHministries.org/budget and use promo code Ramsey. That's CHministries.org/budget and promo code Ramsey. Our question of the day is brought to you by why RIFI missed private student loan payments can leave you feeling like your financial goals are stuck on hold because they are. Why RIFI helps borrowers explore low, fixed rate refinancing options that fit your budget so you can move forward and I'd be stuck. Visit YRIFI.com/ramsey. It might not be in all states. Alrighty. Today's question comes from Sam in Wyoming. He says, "My girlfriend believes I'm making the worst decision of our life." A family friend asked us if we wanted to buy their home without putting it on the market. It's a great deal. And an attorney will handle the contract. But, we're not married and I believe we have too much debt at this time. I have about 50,000 of debt and earn 85,000 a year. My girlfriend has around $100,000 in debt and makes 65,000 a year. We are currently renting and living with my brother. Am I making the right decision not to purchase this house? Yes. Now is not the time. You highlighted A reason not to buy this house, but there are several reasons not to, for the love of God, to not buy this house. Your girlfriend is very emotional. She has something in her mind. She's created this picture, this playing house picture with you of you moving into this house that you can't afford and living this lifestyle with your friends that you can't afford. And you have just woken her up from what she thought was a dream, but you know as a nightmare. And so here's the thing. Number one, you're not married. Never buy a house with someone you're not married to under any circumstances period. Period. This ends up in what's known as a car wreck. Terrible. Number two, and you highlighted this, the debt, $150,000 of debt between the two of you. No money saved because you didn't mention it. And I feel like you would have mentioned it if you had it and you're living with the brother so you don't even have a place of your own. There is no foundation. There is no financial security in this relationship at this point. And for those reasons, I'm out. So what I would do if I were in your shoes and this would be the order of importance that I would do this today, since you're the one who wrote in and you're familiar with our principles, if I were you, I would start tackling your debt. I would start working our plan, the seven baby steps. And I would start sharing that information with your girlfriend so that she can do the same. And then when the time comes and you guys, if you do decide to get married, I don't know if that's in the cards, if you decide to get married, and you still have a little bit of debt, now you can work together and combine your money as mirrored people and actually pay off your debt, save up some money and then save up a down payment. And then when the time comes, you can purchase a home the right way. But that day is not today. And it's quite far in the future. The problem with real estate is everyone says to buy real estate. It's great. Almost no one says don't buy real estate. Yard of my house, buy house, buy house, buy house. Any young couple buy house, buy house, buy house, buy house. Get out of my house and go buy house, buy house, buy house. That's right. That's what the brothers say. And it's a family friend. I'm going to give you a deal. Buy house. What's wrong with you? You crazy? You got to buy a house. It's almost as if if you're a renter, you're going to hell. You're not. Real estate has no middle ground. It is either purchased properly when you are in a proper situation to buy it. And it becomes a blessing. Right. Or you're going to screw yourself over and it's going to take you a decade to get out from one of this bad idea called real estate purchase. Well, you left a part out because the number one thing is everybody's saying buy a house. But the number two part is when you see a house, you think that's the only one. Yeah. You think it's the only deal you'll ever get. The only one with that floor plan, the only one with that. And as a person who's been in the real estate business, often on most of my life, I laugh at that. There's a stinking house on every corner. Oh, but it's a great deal. There's a deal on every other corner. But look at the yard. Yeah. Well, it's got grass. You're killing me here. I'm sorry. It's a stupid house. Don't ruin your life. Real estate is a horrible purchase when you're not ready. And you're not ready because you're not married and you don't have any money and you're not married because you're broken and dead. Now, if you want to buy a house as a single person without your girlfriend, that's okay. But do not buy a house with your girlfriend or boyfriend stupid. All kinds of really bad things are going to happen when you do this. So Sam, you are right. Please stand your ground. And if it means that this young lady runs away, well, that might not be a big loss. It may not be. And I just, I mean, I can't stress enough to have $100,000 of debt or whatever consumer debt and to rush into buying a house, putting as minimal down as possible, having a payment that's way too much. Yes. You don't get hammered. Please don't do this. You're right, Sam. We're on your team. Timothy is in Los Angeles. Hi, Timothy. What's up? Hey, David. Hey, Jay, how are you guys doing today? How can we help? So just to be succinct, I'm calling you because my parents probably wouldn't. I am 19 years old and my parents make well over six years every year, but we kind of find ourselves living more or less paycheck to paycheck. And I'm going off to college in a month. And that brings one big payment at the end of September with it. And so I'm kind of calling just to ask like, how do I get my parents on board with a total money makeover and get their like hearts into it? You don't. Just for the number of parents that listen to a 19 year old is almost zero. Now, are you concerned that when it's time to pay tuition in September, there's not going to be any money there or how are are we paying for your tuition? Yeah, so basically.
Maybe my bad philosophy on it, just because the income is pretty high has always been that we didn't need to put anything into any accounts, because we would just pay for it when we got there. But as the date gets closer and more logistics gets figured out, it's kind of becoming clear that they're becoming stressed about it, and I'm kind of becoming stressed about it. And so I know that it will be fine, but it's also just kind of like a thing where I've been listening for a long time, and I think those are all money makeover book recently, and it's like all of this truth and like good stuff is here in front of me, and I kind of want to, you know, bring helping them the piece that I see and all these stories and all of that. Well, I'm glad that you picked up the book, and that, I mean, that's going to serve you very well in your life. But I agree with Dave, you're not going to be able to change them because you told them that you listened to something on the radio or, hey, look at this book, but I am concerned with you for the tuition, how much, what, you said they were just thinking that they're going to cash flow it, how much is due in September, just about $14,000. $14,000. So the conversation I'd be having, and I think this is fair, this is not you overstepping, I think it's fair to say, hey, mom, dad, tuition's due, coming up here and, you know, less than a month, I just want to make sure the plan is still what we talked about, that I'm still going to be able to sign up, because if I'm not, I want you to tell me so I can start thinking about what my options are. And so I can start thinking about if I have to push to next September, if I have to start thinking about maybe picking up a job to help pay for this. I just want to know, I want to open up the lines of communication. That's good. That's good. Yeah. But Timothy, overall, your heart is good to want your mom and dad to learn something that you have learned and you're excited about. But truthfully, it's what we call the powdered butt syndrome. Someone has powdered your butt, they don't want your advice on money or sex, and so you're never going to be able to advise them on either one of those things, even if you're a 40-year-old financial planner and your father is broke. Maybe then, maybe then he will ask you a question, but he's certainly not going to ask a college freshman who's just out of high school because he read one book and he's not going to listen to you. And I don't mean that disparagingly towards you, it's just the way things are. And so, it's the most difficult thing you can do. Now, what you can do is you can just say, "Mom and dad, I read this book and I love that. I think you might like it and just leave it on the coffee table." And then see if they pick it up. Maybe I can get to them. Right. Now, I do want to say this to you. I know you're probably moved offline, but what is an absolute no-no is if they start talking about student loans that you can both sign for, the answer is no. Correct. No student loan for you. We're not doing any student loans. You're not signing your name with. I'm not signing up for any debt. Yes. We're going to find another way to go to college if you can't do it, Mom and Dad. You're right. Good catch. [Music] Hey, George Campbell here. Listen, if you're behind on debt payments and drowning in debt, I already know what you're thinking. I can't afford a lawyer to help. And honestly, that's exactly what creditors are counting on. But here's what most people don't know. Guardian litigation group doesn't work like a traditional law firm. There's no massive retainer. There's no hourly billing that costs more than the debt itself. Guardian is a law firm built specifically for people in default behind on payments or staring down bankruptcy. And their model is designed so people in that situation can actually access real legal protection. From day one, you're assigned an attorney. If a creditor sues you, you have someone who can actually represent you, not a call center that isn't built to defend you in things escalate. The best path out of debt is still doing it the right way, budgeting, working the plan, changing the behavior. But if you've already hit a wall and you need real help, guardian delivers. There are attorneys have settled over $600 million in debt for more than 55,000 people. So go check it out for yourself, guardianlit.com/ramsy. That's guardianlit.com/ramsy. Attorney advertising results may vary in no specific outcomes guaranteed. Michelle is in Sacramento. Hi, Michelle. How are you? Hi, Dave. Thanks so much for taking my call. Sure. What's up? So my husband and I are just getting started here and we're kind of at a crossroads and we just started a family. So there's nothing like a baby that gets you thinking a little more critically about the future. Hey, man. And what a wonderful path. Yeah. Yeah. It's amazing. It's the best. So basically, we have $100,000 between student loans and auto loans. We have about a million in stock. He makes $145,000, I make $175,000, and I would love to be a stay-at-home mom one day. So I can have more a bigger family and I just don't know how that looks like and how- Where'd you get a million in stocks? Lucky, I guess. No mutual funds in the mix? No. Lucky. I mean, wow. It's just dropping your mailbox. What do you mean? Bolt stock or what? It was awarded through work. It's all one stock? Yes. Oh. OK. Yeah. Very, very scary. Yeah. Very, very dangerous. Are these restricted shares? Are you able to sell them? I'm able to share them. Good. Good. OK. Well, first order of business, if I woke up in your shoes, I would be terrified. Amen. OK. I'm a little stressed out. I don't know what the best-- I'll be terrified that all my money was on one horse, and he might fall and break his leg. Yeah. OK. So the first thing I'm going to do is learn a word called diversification, which means to spread around. So I'm going to cash out this stock, and I'm going to pay you set up the money for taxes that are created. See a tax professional? See how much it is? And then I'm going to pay off all of my debt, and then I'm going to invest the stock in good growth stock mutual funds. Now, what did your husband-- is always given to him his compensation? Yes. So he didn't pay anything for any of this? There's some ISO that we're paid for before, yeah, but not much. Not much, though. Yeah. It's just a word, yeah. So you're going to have a lot of taxes if you do what I'm talking about, but I'm going to do it anyway, because I'm afraid you guys are going to get baked if this company slips just a little, and it stubs its toe. It's going to cost you 200 grand that you don't have. So I'm going to get out of this business of owning one stock. Your husband's not going to like this conversation. I don't care. He's wrong, okay? Because he thinks he knows what just business is going to do, and he doesn't. He's not in control unless he's the owner of the business. And even then, he's not in complete control, because sometimes the marketplace will still kick you in the teeth. And so anyway, all that to say I'm getting out of this, and let's pretend that we spend 250,000 on taxes, and we pay off $100,000, $140,000 in debt. So we're 100% at free. We also have $550, sorry, we also have a home loan that's $550,000. Oh, sorry, you shouldn't have brought that up. That's okay. All right. Okay, I don't think I'm going to win this discussion. But I'm going to tell you, you called NASS, so I'm going to tell you what I would do. I would cash out the stock, I would pay my taxes, and I'd pay off all my debt. I don't think you're going to have anything left. Yeah, exactly. So that's what I'm scared about, it's how to, and if you don't have a house payment and you don't have any debt, and you never borrow money again because you live on a budget, you probably can make it on his $145, plus I bet he's continuing to get stock, is he not? Yeah. Just a normal, does he have the ability to invest through a 401k into mutual funds or into funds? Yes. Okay. Okay. I would set my 401k up, but how much stock does he get a year in value? How much money and stock does he get once a year? About $50,000. Okay, so he actually makes $195. Okay. I would cash that stock out, and I would invest in the 401k heavily every year and live off of $195 in Sacramento with zero mortgage and zero debt of any kind, you can do that. Okay. And then, okay, that sounds good. But this is not an easy sale. It seems like a lot. It's a very tough sale. Yeah, it seems like a lot of money, and I just want to set up our features so that we can get more to church, give to our parents as possible, set up our kids. Well, if you're making $200,000 a year, and you know, you're, what, 28 years old, how old are you? 28. Huh, look at that. Almost like I've done this. Okay. Thank you. Okay.
Yeah, you're 28 years old and you make $10000 a year and you don't even have a mortgage I think you can invest and you can be generous, and I think you can build a wonderful life and become multi-millionaires And that's the way I'm looking at this. I think you own way too much of one company. It's very very very dangerous Yeah, does he at least share your fear in that? Nope Actually, we're both probably overly confident in that company because that company's always done well But that's what we call the myth of continuity To it can there's one thing is for sure Things are gonna change they're gonna get worse so they're gonna get better this idea that things are gonna remain the same is mythology Okay, and so I don't know I do know I the first time I ever ran into this was about 35 years ago I was used to do one-on-one personal counseling in those days and I sat down with a lady who had a million to with a name Brand company that if I named it every one of you would know the name of the company and she had a million to and company stock and she was 78 years old Whoa, at least she had a million to before she came and saw me because In the six months before she came and saw me she lost 30% of it because that company had a bump And so she didn't she really had about seven hundred and eighty thousand by the time she got to me and She sat in my office and cried. I bet she did and I'm 78 years old. What am I gonna do? And I'm like well, we're not gonna stay in this position. We're gonna get out and you may not got to pay all those taxes Yes, what about my company that I've trusted all these years and I'm like you trusted not only for them for your income You trusted them for your retirement. You can't trust them for both. That's bad You should have retirement on your own and trust them only for your income So no, I would not be keeping any of this company stock. I don't own any single stocks from a show by the way. Not one. No one. No one Hope that helps that's tough Wow, Walter Mike's in Houston, Texas. Hey, Mike. What's up? Hey, Dave and Jade a long time this my first time call I love you guys you too. How can we help? Yeah, so my wife and I've been debt free since 2020. We're in baby step four five six For the long. My question is we said boundaries with my mother-in-law about child care and cost So we've paid her Since my daughter she was Born like 2014 To take care of her and then during the summers and we found her and then my son was born in 2020 and she's kind of done the same thing for all these years So we end up paying her now about $800 a month, which I know is a Bargain, but I feel like that's taken away from a lot of our saving power now, and what you do is she wasn't caring for I know We would do all the things on our own. So now the kids are in school. Okay, so you don't need a child care now You're doing it as a favorite of her. No. Yeah, so so this kind of this she hasn't worked for so long And doesn't really have a plan to go back and so now we just need help with like, well, you know how old are your old conversations? She used 12 So Well, this is one of those things that because you didn't deal with it when you should have it's going to be harder to deal with it now Yeah, you made a bigger problem by not dealing with it when it was a little problem So now I I don't know how this is gonna go, but Mom I'm gonna sit down with her and no kid around you and your wife sit down to kitchen table and just say mom We're thinking about changing the direction of the child care. We don't really need child care How can we help you make a transition? What's a reasonable plan? Yeah, I think that's fair I don't think that's you being the villain at all the kids were going to grow up and outgrow the need of that I mean, what are you going to do in six years anyway when it's a real 18? Right? Absolutely, so you know, so we need a plan and It's been wonderful It's been a great season and it's been a blessing to you the money has and you've been a blessing to us and to the kids So we want to make sure we grab to a gradual transition that you doesn't harm you But we need to work on a transition. What do you want to do and how can we help you? That's okay? As your business grows everything becomes more complex There was a time when Ramsey solutions had too many disconnected systems and not enough visibility across the business We wasted too much time chasing information instead of making decisions That's why we got Netsuite Netsuite brings your financials inventory CRM and more together in one place more than 44,000 businesses run on Netsuite including Ramsey and now they're taking the next step With Netsuite next Making it easier to put AI to work across your entire business Netsuite next helps you make the most of your time Automating routine work like forecasting demand and following up on overdue accounts with Netsuite next AI is built into everything you do so you can ask it questions just like when you're talking to a member of your team And right now you can try Netsuite next for free if your revenue is at least seven figures go to Netsuite.ai/ramsey That's Netsuite.ai/ramsey If you're working the baby steps the best and fastest way to do it is by using every dollar It's more than just our budgeting app now the whole Ramsey plan is built right in You track your progress you get personalized recommendations and coaching for your situation That'll sound just like you were here on the air with us It'll help you free up more money work the plan faster get out of debt become wealthy It's like having one of us walking with you every single day start every dollar for free by downloading it in the app store or Google play Crystal is with us in St. Louis. Hi crystal. How are you? Hi, Dave and Jade. Thank you guys for taking my call. I appreciate it. Sure. What's up Um, so I have a little bit of a dilemma. I think I know what you're going to say, but I want to hear it I guess so we're building a house right now and I'm afraid that we're going to be house poor So a little bit of backstory is we're debt free. I'm 29. My husband is 33 the only thing we owe on now is our house that we're building And it's just kind of snowballed. We didn't put enough money in things like we forgot about some stuff like the septic expensive things So um, we have 40 acres. It's paid for Um, and then we built a big shop. We're living in the shop now while we finish a house So all in when we're finished, we'll have about 700,000 in this place We have quite a bit of equity doing it equity in it. We could probably sell for like 1.2 in our area And how the market is right now, which is exciting that we have that much equity But my husband is the only one working right now. We have two kids and um, there's just no child care. We're under two So we have a 10 month old and fun stay in home with him Um, I do plan on going back to work and I'll make about 35,000 a year. He makes about 120 right now So our house payment is a big chunk of our income right now Which we're still making it fine. My husband does side jobs Excavation work and flipping vehicles on marketplace But I just hate having to rely on that to come up with the payment. What is he bringing in every month? What is your monthly income, including all of his side hustles? Um, if he does the side jobs, it's probably about 8,000 a month. If he doesn't do the side jobs, probably six And how much money or how much payment is what? Whenever it's done, it'll be about 4,000 So it's half of when he's going or 75 or 70% of his not doing side hustles Yeah, correct. Yeah. And so I know that 25% is what we need to shoot for in a 15 year mortgage um When my question is should we finish building we're probably about two months done two months and we'll be done building Should we finish building and just turn around and sell talk it like 600,000 and find somewhere and take cash which sounds great Or stay in the school district we want and just I go back to work in a year and he just picked up even More side jobs and just really work on you know, hounding down this debt to be able to stay where we want in the area that we want The hard part for me with that strategy that with with option number two is even if you went back to work You were bringing around 2000 bucks a month in so that gets you back to the 8,000 which now you're at 50% But that means in perpetuity he would have to be doing all of these side hustles forever and ever a month until your incomes come up Yeah, you're you're going to I'm sorry, Christ. Oh, this is a horrible thing because it's this house. You love this house. It's
It's got your heart and soul in it. I can hear it in the way you're describing it. It's got a piece of ground. There's a piece of dirt there that goes with it. Oh my gosh, this is just wonderful. Everything is good, except your finances. You're going to be broke. - And you'll end up disliking the house and disliking the property because of what it's costing you, not just in dollars and cents. - You're not going to be able to do anything. And everything that happens when things happen are going to end up looking like new debt. You don't have the margin to save up for the next car. You don't have the margin to save up for the kids college. You don't have the margin to save for your investing for your future. You're just broke people living in a big house. - Well, yeah. I should say that we have about 60,000 also in the bank. I've got about 30,000 in my retirement. And the older kid has about 7,000 in-- - Yeah, that's before you took out a mortgage that was 70% of your take-home. - Right, and I mean, I love that you told us that, but what does that mean to you? That doesn't change the situation that this is 50, in some cases, 75% of your take-home pay. - Yeah, I guess it doesn't change at your rate. It just makes me feel like a little more comfortable having that little bit. If I'm short of $1,000, I can take it out of that. - Right, but Dave, what are you going to do? If you're going backward the whole time. - What Dave highlighted is the thing I want you to be thinking about, which is, it's going to cost money to do the things that are going to be required out of your life. Say for kids college, help your kids, you know, buy their first car, take a family vacation. Those things require margin to save up sinking funds for or to invest for. You don't have any margin. And you need to keep the emergency fund. You don't want to, you know, drain that down and do what all that down to before you know. - Yeah, this is not an emergency. This is a, you were refusing to face reality. So if I'm in your shoes, what I'm going to do is sit down and have a serious discussion about our incomes. And not in two years when I go back to work. I've got to go back to work in hell. - Man. - And we both got to get our income up. And if we can't do that, then what we're saying is is we're not willing to trade those hours of work and those changes in work for this house. Because this house is not a blessing right now. It's a curse. I know it feels like a blessing when you walk out in the yard and you're looking at it and you smile. But then when you turn back in and you go to the kitchen table and the checkbook's laying there, that's when you know it's a curse. - Yeah. - And so it's, when you're strapped to something like this, it does not bring joy. And so I want peace for you guys. I want joy for you. I want prosperity for you. And the numbers you're giving me make me ache for you instead. So if I were in your shoes, I'm going to work on this for a little while. But after the first of the year, when the grass starts getting green early in the spring, I'm putting this thing on the market if we haven't changed our career track substantially by then. - I wonder if there's any way. 40 acres is a decent amount. I wonder if there's any way if they sold off some of those in pieces and took that cast. - Might parcel it off and sell off a couple of five acre tracks or ten acre tracks and dump that onto the mortgage, get the balance down. Take some of your 60,000, you got too much sitting there through a 30 of that in there and see if you can't get this balance down to where you can swing it. That's not a bad idea at all, Jade. Kind of destroys part of the dream. - It does. - But the dream's turned into a nightmare from where I'm sitting. - Yeah. - And that's whoo, this is rough. So it was an old book out years ago that Dr. Stephen Covey put out and it was made famous because it was kind of like the total money makeover. It stayed on the bestseller list for like a decade. There are several books that have done that. Men are from Mars, women are from Venus. Do you remember that book? - I've heard of it. - It was on there for about eight years. Same thing, strings little book. But yeah, there's books that hung out on the bestseller list for years and years. Atomic Habits, in most recent, is a great book for end of ours, right? And, but the book was the seven habits of highly effective people. And one of those habits was to begin with the end in mind. Crystal and her husband violated that rule. They just started building. Well, be. And then they discovered they needed a subject tank. And then they discovered they needed like waterline. And then when you need shingles for the roof, didn't think of that. And horrible, horrible planning. - It's kind of biblical, though, too. That scripture that says. - Begin with the end in mind. Oh yeah, yeah, yeah. - About starting a tower and not counting the cost. And then they look at him and say, look at this guy, he started building a tower and he can't finish it. - Right, Jesus said, don't build a tower without first counting the cost unless you get halfway up and you're unable to finish. And all you see you begin to mock you and say this man began to build and was unable to finish. Begin with the end in mind. And so this is a mistake that a lot of people make. Crystal's not a bad person or husband's not a bad person. They just violated a basic concept of strategic thought. And it will burn your butt. And it'll put you in a place where you have pain in the long term or at least in the short term. Selling this house on the short term is gonna be painful. Selling off some of that acreage is gonna be painful. Keeping it's gonna be very painful. (upbeat music) - If you or someone you love is dealing with a complex health issue, navigating the healthcare system can feel like a full-time job that you never signed up for. Several months ago, my family experienced multiple emergency healthcare situations and little did we realize what kind of nightmare we were in for beyond the medical issues. Dealing with different schedules and signatures from different providers, scheduling appointments, decoding all of the medical jargon, figuring out medical billing and the mountains of paperwork. All of this on top of being sick or scared and dealing with the challenges and disruptions to our home. Like me, most people go through this alone, but not anymore. The next time a medical challenge arises in my home, one of my first calls will be to solace health. Solace health is extraordinary. They pair patients with a personal advocate, someone with an average of 16 years of healthcare experience, whose entire job is to fight for you so you get the care and honest answers you need. And solace is covered by insurance. They handle the paperwork, battle claims denials from the insurance companies and make sure you're not getting lost in a system that was intentionally designed to be confusing. So you and your loved ones can focus on getting well. With solace, you have someone who knows how to fight for you and who will. Go to solacehealth.com/ramsie or click the link in the description to see if you qualify. It takes about two minutes. That's S-O-L-A-C-E, solacehealth.com/ramsie. Must be 18 or older. Advocates do not provide medical or legal advice. (upbeat music) (upbeat music) Welcome back to the Ramsey show in the Fairwinds Credit Union studio. Scott is with us in Phoenix. Hey, Scott, how are you? - I'm doing good. How are you doing, Dave? What's up? - Me too, I love that thing. Well, we're kind of in a predicament. Where we've got a data center that's gonna be built. We've got about 400 yards of our house in the neighborhood. And we're just wondering, what would Dave do? We've got our primary home is paid for, which is worth about probably around 600. We've got a house that we just inherited that is just closing, which is we're gonna net property about four, 16 out of that. And then we've got a mountain house up in the woods. That's worth about, about, right around 600 as well. And so what you're trying to do is-- - So your primary residence was 400 yards from a commercial zoning. - That's what they said, it was commercial. And now they're putting an industrial million square foot data center on it. - Yeah, but I mean, the point is they could have put a warehouse there anyway. - Absolutely. So you're 400 yards from, and you're 400 yards, and then to have always been 400 yards from an industrial/commercial area. - That's been zoned commercial commerce. - Yeah. Okay. So-- - We're both retired. - What I'm trying to navigate is the actual facts of the impact of this versus the obvious emotions of it. - Yeah, I wanna know, Scott, what do you perceive the impact to be? - Well, from some of the studies, it sounds like, you know, the noise, the total footprint of the environment is gonna be a negative. And in some of that, the real estate people are saying the negative impact is gonna be about 25%. - Okay.
reduced in, you know, housing around there, which is, you know, nothing who knows what it's going to be. Yeah, you don't know because you got to sell it first. And so I do not know what is going to happen with that because I've never, we're experiencing this all over the country right now in different neighborhoods, so to speak, are different areas of town. And so we don't know how much of this is, so when you're facing something like this, there's always a percentage of it that's drama, and there's a percentage of it that's actual facts. And the truth is, the real estate agents are somewhat working on the drama side. They don't know. I mean, we know what you've been told. You've been told it's going to be noisy. There's a detrimental effect on the entire environment in the area and all that kind of thing. And then maybe it's worse, or maybe it's better when they actually build it. So the unknown is more scary than the actual known. So it might be a mistake. When's the thing coming out of the ground? But they're building it right now. They're putting the skill up now. Okay, good. That's good news. So in a year, we're going to know a lot more than we know right now. Right? Yeah, that's true. I mean, it could be quieter. It could let's pretend that the drama is and all the anger and everything is, which is, I'm not saying it's not valid. It's just there. But let's pretend that that's 50% and 50%'s reality. So it's not quite as noisy. As everybody says, it's not quite the negative impact as everybody says. And then we settle in and your house actually brings about what it's brought right before all this was announced. The problem is, if you sell your house now, someone buying it is going to discount it based on the drama, not based on the reality. And we don't know. The reality could be worse. The reality could be better than the discussion. Does that make sense? Yeah, it does. In my experience, these things are not usually as bad as whatever these things are. But I mean, a negative impact to a piece of property is not nearly as bad as everybody thought it was going to be. So I had an experience. We owned a piece of property and the HOA was all up in arms. They were putting a Walmart down the street, about four or five pieces of property away. It was a commercial piece of property. It was zone for retail. Walmart didn't do anything wrong. They just put a Walmart where Walmart's go. And everybody's like, oh god, the neighborhood's kind of failed. It's going to lose 50%. A year and a half later, the neighborhood was up. In other words, it had no effect. Wow, except all the drama and the yelling and the screaming and the picketing and all the stuff around it. And if you sold it to one, when the picketers are out there, that's, you know, you'd have given your stinkin' house away for no reason because 18 months later, after all the, everybody's pulse rate went down. There was net, net, net, no effect. Now I'm not saying that's the truth about a data center. I don't know. I'd be curious to know, especially if he's lives in an area where there's other residences near him. If anybody else is selling, if like if you can kind of survey and see what's going on, that also could, could, I mean, I'm pretty sure you're going to sell your house too cheap if you sell it right now. If it's me, and I own a bunch of real state, I'm going to ride this out a little bit and let the waves calm down and see what the actual flood is. See what the actual, you know, cause of hurricanes coming, you know, and like, yeah. And I think you can do some, I would think you could do some fair research on area similar to yours, similar size data centers. I feel like you could look out there and see what's going on. I'm going to know if there's a data center that's been up 18 months, what eight and within 400 yards, somewhere in a metro area, what did it do to property value? That's a good piece of research. I don't know that. There's enough of them going up that you might find that. But yeah, my life experience tells me that the drama is always worse than the reality. Generally. And it's not always. But I mean, often enough that I'm going to probably sit there and ride this out unless I did research that told me otherwise. Yeah. And I got to believe it's still somewhat new, but I feel like there's something out there. There's got to be some numbers out there that'll give you at least a sense. But I'm pretty sure you're going to sell your house too cheap if you sell it right now. Yeah. I could be wrong. I mean, I'm really I'm just discussing this with you out loud. I don't, I don't really have any data or anything to back this up other than years of real estate and stuff like the Walmart example. Those are real things. That that really happened. I mean, and but the number of times, I mean, but it's it's kind of like for me, it's, you know, the, you know, the hurricane is coming. And then it rains. And the wind blew for four hours. And, but we all acted like that the house was going to be completely blown over and it was basically a rainstorm. Yeah, I mean, not a thing because it wasn't what everybody, but you know, you kind of got to prepare for it emotionally, but didn't happen, you know, and so I don't know. I can't think of, I mean, anything else you could figure out where there was an environmental impact to a property close to a residential. What did it actually do? Guys, Dave Ramsey here every day on the show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show, whether you're making a decision or just want something explained, ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try ask Ramsey today. That's RamseySolutions.com. Jane is in Charlotte. Hi, Jane. How are you? I'm doing fine, Dave. How are you? What's up? My husband makes $210,000 here. I make $75,000. He contributes 17% of his salary to our household account just because that's what he thinks that he wants to give. And I've always given 100% of mine, but just recently, I say, you know what, I'm going to give 17% as well, but it ends up to where I have to give more to pay our bills, but my question is, should I be giving 17% or should I be giving eight and a half because my salary is so much less than his? How old are you guys? 58. And how long have you been married? Oh, 40 years. Oh, boy. Okay. I want to say this as gently as I can. This is tremendously dysfunctional. What kind of human being is married to a woman for 40 years and gives 17% towards the household? And what kind of human being accepts this arrangement? I understand that, but I'm at a loss because he puts his foot down and that's what he says is going to go and I don't know another way to make it be different. Well, you're 40 years too late to raise as much hell as you should have raised, but I guess better late than never. Well, it's only been this way for 23 years. Okay, changed. How about no more? We're not doing it this way anymore. My Bible says to leave and cleave. My Bible says that and the two are one and we are now one flesh. And if you want to continue to live in this house with me, buddy, it's now 100%. Yeah, I'm hearing otherwise I'm going to knock a noggin on your head. Yeah, nut. You're just nutty. Yeah, you've got, you've really got two choices here. Jane, you can participate in the dysfunction by saying, oh, I'm only going to do, you know, 17%. Actually, I'm only going to do 8% and you can participate in it or you can do it. Dave said and draw a line and say, here's the way it needs to be in order for me to Continue.
- Yeah. - Is eight percent fair? - No, nothing in this discussion is fair. A hundred percent of both of you is fair and correct, and the right way to operate a household. Anything less and you're participating in the madness. But you're not gonna do that, are you? You're not gonna cause this big a stink. 'Cause what I'm talking about is turning his little world upside down. What needs to happen, darlin'? - I understand, and I've said those things before, but it doesn't work. - Okay, I think you need to see a therapist and a marriage counselor, so what I think. And have them help you decide what you're willing to do. If you wanna live in the middle of a crazy town, just build your tent, Keto, and just live there. You've been doing it for 40 years, so, or at least 23, or whatever it was, he decided this absurd butt idea that he's a think she's a roommate instead of a husband. Jane, for 40 years, Sharon Ramsey has not earned an income since our oldest daughter was born. So what if I told her I was gonna put in 17 percent? Do you think that hillbilly woman would have put up with that? I'm just telling you, she wouldn't. There've been frying pans involved, and she's from East Tennessee, that's an Olympic event there. - Wow. - Yeah. - This is tough. - Yeah, honey, I'm sorry. This is-- - And go over her. - I do not have a fix other than to try to embold you and give you verbiage to sit down and talk to someone and get the help that you guys needed 23 years ago, and you still need today. 'Cause what he is proposing and what he has put you under is what we call financial abuse, and you guys need help. This is weird. It's not right, it's not normal. It's unethical. So I don't think, how many ways do I need to say it? And so I would not want my friend, Jane, to tolerate it, and I would not want my friend, her husband, to continue to be a bad husband. - Oh boy, yeah, that's tough. You're gonna have to, it's gonna require a lot. - Yeah. - A lot. - Yeah, and these patterns are deeply ingrained at this point, so-- - Yeah, 'cause she's asking us to give advice on how to be more dysfunction. - Yeah, I can't gauge the level of crazy that I wanna participate in. I just don't do crazy, so there we go. And this is crazy, Jane. - It's crazy, crazy, crazy, crazy, crazy, crazy. - Wow, I'm sorry, kiddo. I hope you guys can get some help for your marriage. You desperately, desperately need it. All right, Hunter is in Phoenix. Hey Hunter, what's up in your world? - Hey guys, how are we doing today? - Better than I deserve, how can I help? - Hey, I just want some information or some help on how to tackle some debt. I'm a recent college graduate. - Cool, what's your degree in? - I moved back. Construction management. - Good, you get a new job? - Yes, sir, I started in June. - Awesome, what are you making? - I make $78,000 a year salary. - Good for you. - Plus bonuses and stuff, huh? - Yeah, we get a 401k bonus set into the year. - Awesomeness. All right, good for you. That's a great job coming out of school. Congratulations. - Very nice. - And how much debt have you got, Hunter? - So I got out of school with only about $11,000 worth of student debt. - Good. - And then I got about, this is what's gonna hit is $33,000 in a truck loan. - Okay. - Okay. - And so you celebrated your graduation and your new job by going and doing a stupid thing? - Exactly, you were 100% correct. (laughing) - You wouldn't be the first. - No, this is like a standard. So number one mistake new college graduates make. They go by a new car. Number one mistake. So yeah, you did it and you did it good. You went big. - Yeah, you did. - Okay, so you got 34 home run. - So you got 44, over the fence. $44,000 in debt. If you keep the truck and you live on beans and rice and you have no life, you could be debt free any year. If you don't wanna trade the truck for beans and rice, you could get rid of the truck now and be debt free really quick and have a decent life. But you're not going out to eat. You're not going on a date other than to throw a frisbee. - Mm-hmm. And you're not going on vacation. You're not doing nothing except cleaning up this dad gum mess you made right after you graduate. You did it really good till then. - Did I hear you say, we may cut you off. Did you say you moved back in with your parents? - Yeah, I chose to move back in after college. So I didn't have to pay rent and tried stacking up cash. - Yeah, how much cash do you have? - Right now I got about 4,000 in a Roth IRA and about 3,000 high yield savings. Okay, no more Roth, no more investing. Clean up the stand alone and get the truck paid off and move out. Go get your life. Town, you make $78,000 a year. You need to get a life. Go get your one bedroom apartment. I personally would sell the truck, but if you wanna keep it and scratch and claw and be done with it in about a year, you can do it. But you need an extra job if you're gonna do that. Let's just work all the time. Any chance you can get extra work or with the construction folks or is that it? Not with the company I work for currently 'cause we're a full-time salary. I probably do some weekend piece work with other companies. - Good. - Yeah, I mean, that's the name of the game. If you wanna keep all of your truck-- - Go do all you can do if you wanna keep the truck. So I'd go get a one bedroom apartment and I would decide whether I'm keeping the truck and I'd work all the time until I'm 100% dead free and that has to be an under a year. And I'd get the one bedroom apartment in the next 30 days. - Yeah, I would, yes, you do not get to say, I want this truck there for I get to stay in my parents house to pay for that. - No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no. I live with my mommy because of my truck. No, that's just something oxy moronic about that. - It doesn't feel right. It doesn't sit right with me, Dave. (upbeat music) Hey guys, George Campbell here. Our big investing essentials event is just one week. Hey guys, George Campbell here. A week away. It only happens once a year and trust me, you don't want to miss this. If you're tired of sorting through all the conflicting investing opinions online, then join Dave Ramsey and me for this two-night virtual event to learn Dave's playbook for investing and wealth planning. We're gonna break down 401K's, mutual funds, passing on wealth and more. So join us next week, September 1st and 2nd. Take it start at $199. Do not wait, get yours today at RamseySolutions.com/events or click the link in the show notes. (upbeat music) Buying or selling a home is a huge decision and with so much conflicting market news out there about housing, it can be hard to know what's really going on. We're here to help you understand what the market's actually doing, not what all the drama is, so you can buy or sell with confidence. We recommend a 15 year fixed rate mortgage. Those rates are covering, hovering just below 6% about five and a half right now and don't wait on a rate that you can't predict. You date the rate, you marry the house. You always refinance later if the rates come down. Remember, no matter what the market's doing, only buy when you're ready, you're out of debt, you have your emergency fund. Media and home prices dip below $429,000 last month, which is a 2.4% decrease from the previous year. Not exactly a bursting bubble, but certainly a stabilized market. Good news if you're ready to buy. One in five listings had a price cut last month and there's 1.1 million homes on the market as we speak. So real estate's good, everything's fine, breathe, breathe. You can check all of this out at RamseySolutions.com/market or click the link in the show notes. Josh is in Birmingham, hey, Josh, what's up? - Hey, hey, how you doing? - Yes or so, 30 years old, I have an immunity, immature is in about two months and I've spoken to a financial advisor and trying to figure out if I should use him or if I should just do what I have planned on my own. So I'm just thinking about trying to send it to another immunity and then systematically trying to withdraw some of that money out over the next five years or so to get it out of the way. - Why don't you just cash it out? - Because I thought you said it was up. - Pack it up. - You're not going to.
You're not going to have much taxes on it. How much is in it? $200,000. So it's about $950,000. I would have taxed on about $200,000. I'm sorry. How much is the balance of the annuity? What's it worth? $950,000. Okay. And what was it when you took it out? So when it, it would mature in a couple of months, and then I would take it out. The balance would roughly be about $950,000. I know. What was it originally when it started? Originally, it was about 1.1 million. So there's a lot of fees and a lot of details on that, but. Okay. So you've lost money on the annuity? I've lost $200,000. So the post-heifer was about $760,000. And so, yeah, over time, I probably, yeah, I guess I've kind of. Okay. What I'm trying to determine is. How much money did you put in it when you started it? 1.1? The work accident. And I used it to live on for about seven years or so. Okay. So that's what reduced the balance. Yeah, yeah. I see. Okay. So it's 1.1 million from an accident. And then you lived off of some of it. How much did you withdraw to live on? I also looked drawing probably around $50,000 a year. For how many years? Probably about seven years now. Okay. $350,000 from 1.1 puts us at what, $6,700,000, right? It's our $650,000. No. Yeah. $750,000. Okay. All right. So $750,000 is. And then it's worth $900. So you would have taxes on $150,000, correct? Yeah. Roughly. It depends on what the market does, the time that it matures on that day. Yeah. Yeah. I understand. Roughly. We're getting our own numbers here. Okay. Yes, sir. Yeah. So I would get out of this. And I would get into some good mutual funds with a good Smart Vester Pro. So go to ramsysolutions.com and click on Smart Vester Pro to find somebody in your area there at Birmingham that we recommend with a heart of a teacher. Let them sit down with you and crunch the numbers. I'm not going to do that here on the air. Are you back able to work or are you still have to draw a fit? Oh, and I've been working for about five years now. All right. So from this point forward, you could just let it grow and leave it alone and just become wealthy, correct? Yeah, that's the idea. Yes, okay. So here's the problem with the annuity. Like you said, it's got a lot of fees. All right. That aren't necessary for your situation. You instead could buy mutual funds that don't have as many fees, half the fees, probably or so. And then you can pick good growth stock mutual funds that are growing. If you the market has average close to 12, if you only and we're about 12 year to date this year and it's only August. Okay, so, but if you only make 10, your 750 would grow to in seven years, it'll be 1.5 in seven more years, 14 years from today. How old are you? 30. 30. So when you're 44, you would have $3 million. Okay. And when you withdraw the money out of it, you will only have capital gains tax, not ordinary income, which is double capital gains. And when you're in an annuity, the growth is at ordinary income. Yes, sir. As you're about to find out on that $150,000 worth of gain you've had, approximately. I'm trying to figure out what your basis is. You need to get someone to actually crunch the numbers and go, "This is actually what's going to occur." But the problem is when your 750 turns into 3 million, you're going to pay either a 35 or a 40% tax on that or a 15% tax on that. That's a huge difference. And that's if it's in the exact same mutual funds inside the annuity is outside the annuity. Yes, sir. I'm going to pay some taxes today. But when it's up in a month or so, right? Yes, sir. So, you know, fidelity doesn't have a new option that has. Honey, what did I just tell you for the last five minutes? No more annuities. That was the takeaway. No, trust me. I get it. Yeah, I get it. Okay, then why did you just ask me about an annuity? No, you don't need to do an annuity. Don't do it. I would not do that. You do whatever you want to do, honey, but I wouldn't do it. So, check out RamseySolutions.com. Click on a Smart Vestor Pro. Sit down with them. I personally use a Smart Vestor Pro to help me with issues like this to try to make sure my brain's working. Jade and Sam do the same thing as Dave and Sharon as Rachel and Winston as George and Whitney. Everybody here on the show, John and Sheila, we all use professional help like that. And we do this for a living. Why does he think he wants an annuity? What are they saying out in the market that is making people go? Yep, I'm going to do that because I hear all I can look at it and say, this is a terrible idea. But how is it being marketed that people aren't realizing that it's a terrible idea? What are they saying? Well, I don't know what he's hearing, but how's it being marketed? An annuity at a variable annuity has a couple of functions that if you're a first-time investor and you're scared, they give you some comfort. If you put money in a variable annuity, it's mutual funds inside of an annuity. Right. And you can pick the mutual funds inside the annuity. So you can pick good ones and he has done pretty good probably. All right. And the problem is it grows at ordinary income, tax rates, not capital gains tax rate. But they will give you a guarantee of two things. One is that if you put 750 in, if you leave it alone seven years, will guarantee you 750,000 principles. You're not lose, so there it is. And we'll also guarantee you a 5% rate of return. Which is poo poo. Exactly. Because you can probably make almost three times that, two times that anyway. So I'd rather take the low interest rate and know that I'm not going to have a loss. No, it's a guarantee of a low interest rate. The bottom line is these guarantees are both worthless because the market, if you pick mutual, decent mutual funds, is going to far outperform either one of those guarantees. So they're not going to activate. Right, and that person doesn't know that. And so they've just got this in the back of their mind that I can do this and I can, I can, I've got a guarantee. At least I got a guarantee. Yeah. And I'm not going to lose my principle because everybody knows you lose all your mind in the stock market. Right. And all this bull crap, right? But, you know, in 2023 it went up 26% and 2024 it went up 25% and 25% it went up 18% and so far in 26 it's up almost 13%. So they're selling you a sense of security you never needed. It has to really suck going forward for you to be back down to your original principle and only getting five. Yep, yep. Hey, what's up guys? It's Jade Warsha. Listen, summer spending adds up so fast between vacations and road trips and camp fees and events and all the extra gas and grocery runs. Money can get tight before you know it to really get your money under control and keep it that way. You're going to need a plan and that's what you'll get with the every dollar budget app. It helps you track your spending free up cash to put toward debt and savings and it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go. Download every dollar in the App Store or Google Play and start for free today. Now our scripture of the day Isaiah 30 and 21 whether you turn to the right of the left your ears will hear a voice behind you saying this is the way walk in it. Dolly Parton said if you don't like the road you're walking start paving another one. We today depending on when you're hearing this I don't know but today we learned that we the dollies in the arms of Jesus at 80 years old. She was an absolute treasure and that we talked about her in the first segment as we came on the air today. But yeah all of Nashville and Tennessee for sure is grieving. I'll tell you something else about her I didn't mention in that first segment. Almost regardless of who you talk about in the music business the acting business the business you and I are in podcasting or whatever else almost everyone that has gotten some notoriety has a lot of fans. But there's almost always someone that's got something to say well I was at the restaurant one time. That's weird I mean she was golden yeah never heard anybody say anything negative I mean it didn't take about 30 seconds found somebody say something negative about me.
They're everywhere, you know? But I've never heard anybody say anything they could ever about her. And if they did, they discredited themselves instantaneously. But never in my presence, I've never, I've heard people say something. I've got a lot of good friends in that music business, all that. They'll say, man, man, man, man, man. So-and-so-and-so-and-so. Well, yeah, but he does this and this and this, yeah. Well, okay, but you didn't, so. But not Dolly, not Miss Dolly. Wow. Absolutely incredible human being. All right, Alex is in Las Vegas, Nevada. Hi, Alex, how are you? Hi, I'm well, how are you? What's up? My question was, should I file bankruptcy? What's going on, kiddo? Sorry, I didn't want to get emotional. That's okay, it's scary. So I'm 31. I have five kids for the past, for the past three years. I've been in like a custody battle with one of my, with one of the, one of the fathers of my children. So I've had to take out loans and recently I did, I, I had to take out a title loan on my car to give my attorney like the final payment, and I also had to take out a payday loan as well. If you win. And so I don't know yet, so the judge is going to do a written decision, but my attorney is pretty confident that the, you know, the other person had no case and basically said, we have nothing to worry about. Just wait for the judge to do the written decision, however, like getting up to this point has cost me like thousands and thousands and thousands of dollars. What I was trying to figure out is the bleeding was over and it sounds like it's over, okay. So but the patient, but the patient is wounded today. So okay. Yeah. So I, so how much is the payday lender rip off? So the, the payday loan that I took out was for like $600. So every time, okay, I got, I know, I know they're awful and so, and the title loan on the car was how much 3,500, okay. And what other debt do you have? So I have about like total, I have $68,000 in debt. I have a reposition from like 2023. What's the balance on that? So that's 11,000. Okay. And what's the rest? I have school loans, 25,000 and I'm still in college. And then I owe my old attorney $14,000. Mm-hmm. Okay. And then I owe the IRS close to like $7,000. Okay. Alright. And what do you make? And then a credit card that I have about $900. $50,000. What? Doing what? I'm a medical billing and coding specialist. How old are the five kids? So 15, almost 16 and then 13, 10, 7, and 2. Okay. Okay. Alright. Are you plugged into a good church there in Las Vegas? Yes, I am. Okay. Have you talked to your pastor and the counseling team about your situation? No. No, you've not. No. You need two today. Okay. Because it's their obligation to help you, it's what they live for. They're going to want to help you. You have five kids and you're on a shoestring budget, okay? And they can. So let's kind of go back to your original question and then I'll walk you forward out of that. So first thing we're going to do is get some people around you. The second they want to do is get them to help you a little bit with some of this. I don't expect them to pay it all off or anything and you don't either, okay. Even loans and IRS are not bankruptable. Repo is not collecting today. And the, what was the 14,000 again? That's an old attorney. Oh, that's an old attorney. He's not collecting today either. He's waiting because he knows your broke, probably be surprised when you pay. Credit cards, you've probably not been paying on them because you've been dumping everything into this child case. So the really the two, the two that are the most pressing are the 600 and the 3500 agreed? Yeah. Yeah. Because you're really not doing much with the rest of it. Yeah. So what I would recommend is not paying anyone and clearing the title loan as soon as possible. And if the church can help you with that sum, I think that would be awesome. And get your car back because you're going to need that. And then we'll argue about what we're going to do, settling with the payday lender that rescrewed you, but you walked in there and asked for it. And I understand why, but you still did. And so we've got to clear that little 600 up before it becomes 1,820 minutes. Right, right, right. And then we'll begin to work through the rest of this. Here's the neat thing. The student loans just sit there on hardship deferral, just call them and put it on hardship deferral. I'm not paying anything right now. Besides that, you're in school. What are you doing in school? I'm getting my bachelor's in Associates of Science and Human Resources. Okay. When? Will it be done? In two years. Are you continuing to go into debt for this? Yes. Okay. We've got to stop that. Yeah. We have to clean up this mess. All of those things in your rearview mirror, all those monsters are chasing you down the road. And they're destabilizing you emotionally. They're destabilizing your whole household and everything else. Okay. So for right now, we've got to put school on hold until we can pay for it unless they want to extend you some kind of help as a single mom with five kids. And they might, if you went into the counseling office there, if they'll give you a free semester or something, then you can stay in, but otherwise you've got to put it on hold. Otherwise you're going to have $50,000 or $60,000 a student loan debt when you're done. You've got to stop this. And you can't just keep piling this up and then get out. And bankruptcy doesn't fix this because most of it's not bankrupt. Yes, you've got IRS. You've got student loans. That's the major pieces of this. Yeah. I mean, you can settle this repo for like two or three grand. It'll go away when you can scrape up some money later. So order of attack is this. Here's your order. Here's what I want you to do. This call is when you get off of here, I want you to call your pastor, I want you to go sit down and show them your budget, show them your situation, tell them you talked to us on the air and that I said, I think you that they will give you some help. And they probably will. If it's a decent size church, okay? And if they could clear up, help you, clear up that car, that'd be great or part of it, that'd be great. And even better would be the car and the payday lender. And then let's just start trying to get current. Let's get the IRS gone. Let's get the attorney gone. You know, let's just start a develop an order of attack down through these things and stop borrowing money on school until you get this mess cleaned up and then you pay cash for school as you go and don't go further and further and further into that. And you know, this is not going to be a quick fix, but the problem is you've been getting killed here, death by a thousand cuts. And so we got a heel, one cut at a time and it's going to take a minute. Now, take a little bit, a little bit of work and a little bit of help. We'll help you on our end. We'll put you into a situation with one of our coaches. I'm going to give you one of our coaches for free, Christian. I'll take care of that, to coach you in person. And we won't charge you a dime, and we're going to put you into entree leadership and make sure you're okay and that you're entree leadership, put you into every dollar and make sure you're okay. 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. Get the Prince of Peace, Christ Jesus.
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