Editor's Note: This transcript was automatically transcribed, so mistakes are inevitable. You can contribute by proofreading the transcript or highlighting the mistakes. Sign up to be amongst the first contributors.
Live from the headquarters of Ramsey Solutions, broadcasting from the dollars car rental studios at the Dave Ramsey Show, where debt is dumb, cash is king and a paid off home mortgage has taken the place of the BMW. Now's the status symbol of choice. My co-host today on the air, the one and only Dr. John Boloney, Ramsey personality from Dr. John here to answer your questions about life and me about money and life. And we're just going to talk about you right in front of you.
I love that. And it's a free call. And some say the advice is worth what you pay for.
I still think it's double that. But take them at their word. Easy, double, easy, double easy, double back. When I went to work for that guy for free one time, I told him if I wasn't any good, he could cut my pay in half.
That's the same thing. So exactly. Open phones, a triple eight eight two five five two two five. That's triple eight eight two five five two two five.
We're going to start this hour off with Janelle in Dayton, Ohio. Hi, Janelle. How are you?
Good. How are you? Better than I deserve. How can Dr. John not help? So I am currently starting my master's program, but I have a lot of student debt from my undergrad, a portion of it is in my parent's name. It was a parent plus loan, but it's kind of mutual understanding that I will still be paying those back as well as the ones in my name. The parent plus loan will have much higher interest rates and I'm trying to start paying some of these loans off while still in school, even though I don't have necessarily a super steady income.
And so I'm trying to decide if it's best to start paying on the ones with the higher interest rates or pay on the ones that are actually in my name to help my score.
OK? Probably neither.
How are you paying for your master's? Still on. I'm still using student loans. OK, well, before we would pay down one student loan with the left hand and go borrow another one with the right hand, we would just use whatever money you have to pay down student loans to take less student loans or no student loans for your masters. OK. It's kind of scary, it's kind of silly to pay down a student loan and then turn around, take one out, it's like fill in the bathtub and drill in a hole in the back of it at the same time.
What do you get your master's degree in? Public health. When will you complete it? I have two more years yet. Are you already in it? Have you started yet? Yeah, I started my. Hmmm, why is it not a two year masters? It is I have only just started I'm only a semester in. Oh, OK, on. All right, and how much do you make? Currently, I'm only working part time at twelve dollars an hour, but I'm applying for a full time position since my master classes will only be in the evenings.
You need a full, full time big girl job and then pay cash for your first goal is to pay cash for your masters. Let's go one and just don't pay anything on these other student loans. They're not due right now while you're in your masters. Just let them sit there. Yeah, I was just trying to get some payments on them for the interest rate was zero percent, I understand, but it doesn't matter.
It is kind of ridiculous to be borrowing student loans while you're paying down another one. So get the big girl job, pay cash for your mashers. That's job one. If you're doing all of that and you've got the money to pay for your living expenses in your masters and you're taking out no more debt, I'm going to call that a win.
But if you go past that and you have extra money, then list the other debts, smallest to largest, and attack them in that order. That's what I would do. All right.
Julie is going to be next in Chicago. Hi, Julie. Welcome to The Dave Ramsey Show.
Hi. Thank you so much for taking my call. It's an honor to speak with you both. You too. How can we help? Well, my boyfriend and I were friends for about 20 years and became a couple about 17 years ago. We were both divorced at the time. He has three kids. I have two kids. They all five of them are beautiful, amazing kids, all wonderful adults. Now, the thing is, is that I'm we've always raised our kids in separate households.
So we've never lived together. We've not combined anything together. And I'm going to be 55 this year. He's going to be 53. So I'm wondering at this point now that the kids are adults, should we get married at this point? Because, you know, I've been told that there's a marriage penalty. His income is higher than mine, significantly higher than mine. Mine sold because of covid, unfortunately. But if we combine households and I'll lose her head of household and then I'll be Avidan and then be at a higher tax rate.
So I was just wondering what you thought about that. Yeah, you won't be significantly higher tax rate. There may be a little bit of a bump married filing jointly, but very little. And here's the thing to me, that is a minor issue. If you're 55 years old, you love this guy and you spend the rest of your life with him, get married, you get married.
Like you said back at the time, you'll be together 17 years. Yeah, Pintor got the latter.
So I just you know, we both want to we were just, like I said, kind of concerned. We've heard so many naysayers about, you know, combining income. Well, there's a lot of people out there.
There's a lot of people out there that have a little small lives. You're not one of them. Have a big life. Get married. Wonderful, you're halfway Julie, you're you're halfway done, you're halfway down the aisle, well, you're all the way you know, you all are done down the aisle. You're 17 years together. But I'm saying you're halfway done with your life. You're going to live to be at least 110. Julie, I can tell by the joy in your voice on on the phone talk about test drive the car.
You have test drive in this car for the better part of two decades.
I think you get free. Yeah, get married. And listen, you're here's the other thing. There's there is some actual statistical data in the tax law that may or may not cause you to pay slightly higher taxes. There's a lot of other data that says that people who are married have a higher tendency to prosper than singles in their careers, in their wealth. Building the combined household is much more powerful mathematically.
And so anything that you lose in a little bit of taxes, you're going to gain back probably 10x by the quality of your life going up. And as a result, a lot of your health issues go down. You're married. People live longer. They do make more money. On average, there's tons of data that shows they call it the marriage lift in the financial world that married married people just have a higher tendency to prosper. It's not so you can't do it single.
But there's, you know, whatever you whatever downside there is in the tax law, you know, it's going to be a lot of upside on the other. And combining households and combining your finances is an exciting adventure. It's called Living Life Together.
That's right. She's got the back. Half the kids are gone. She just gets to create this. I mean, you walk in in this universe, you're walking in is emptiness. You want you got the best part to go. Yeah, this is great. Yeah. Get married tomorrow. I love it. Go catch up. Go catch your pastern. Say I need to go to coffee and bring your little book because we're getting married. I love it.
This is the Dave Ramsey Show. At Takeover's, we believe a great pair of cowboy boots won't just make you look taller, they'll give you the confidence boost that'll make you feel taller to attack us. We make traditional cowboy boots for men and women that look great and feel great so you can walk into a big meeting or out on the town with comfort and confidence. And because we sell directly to you with no middleman to mark things up, you're going to get great quality at a great value.
Find your PEMRA takeover's dotcom, slash Ramsey and walk taller. Dr. John Boloney Cramps Personality is my co-host today here on the air. Joey is up next. Joey is with us in Louisville, Kentucky. Hi, Joey. How are you?
Hey, Dave and Dr. Dave, thanks for taking my call. Our pleasure. How can we help? All right. So I'm on baby step three B, get married in November and have a car. It's paid off. I'll pay cash for it. But it's a it's a German car. It's an Audi, and I just put new tires on it. That cost me a grand last month. And then I have something going on with my brakes that I just got quoted.
Nineteen hundred dollars to fix who we are.
Brake. I think I'm getting a second opinion. Yeah, that sounds like a dealer to me. No, that's that's that's tha that's like a mechanic, so they're telling me to go to the dealer because the parts are so expensive. Hmm.
Wow. Hmm. The car has the car has 40000 miles on it. And what's the car worth? I could get rid of it for 75, hmm, OK. All right, so what's your question? My question is, should I fix these breaks and sell it and then I'll only pay twenty one for the car and I could get 75, so do I. Do I fix this and sell it? Because down the road I don't want to drop two grand every time something goes wrong with this car.
Well I mean, it is a more expensive car to work on than a domestic car or your or a more standard Honda Toyota thing. I mean, an Audi, a Mercedes, a Beamer costs more to work on.
In any case, a nineteen hundred dollar brake job blows my mind.
But so I mean, if you're tired of that stuff and you want to move into a quote, more reliable, less expensive to maintain vehicle, that's fine. But don't use this as an excuse to move up in car. We're going to, you know, buy 17500 car when you sell a seventeen thousand five hundred seventeen thousand five rental car.
That makes sense. Yeah, exactly. I guess so. With me getting married and we're we're saving for a house, it's like a two thousand dollar expense every other month.
And I don't think that's going to happen. But, you know, but it has exposed the fact that you have an expensive car to work on.
So when it does break, but I mean, you don't we don't none of us sitting here thinking you're going to spend two thousand dollars a month for a year, you're going to spend 24000 hours to keep his car running. That's not the case. You're out. He's not a piece of crap there. Good car. But, you know, but obviously there's some expensive parts on that puppy or something. I am really going to get a second, third and fourth opinion on this.
I'm just not going to when something seems weird, it's usually because it's weird. Right.
And that both John and I had a physical reaction when you said nineteen hundred dollars. And, you know, we're not mechanics, we don't work on cars, but we both have enough redneck in us that we've turned a wrench here or there. And so you just you just kind of go, huh?
I just know my first two or three cars didn't cost 1500 dollars for the whole machine, much less the brake job on it.
Well, that's true. There's that, too. That gives you had to.
But yeah, if you're going to move, just move to something that, you know, look for what you're looking for is reliable and or low maintenance cost or both.
And that's there's no problem to do that.
And you can move down a little bit in a car, but let's not move up in car because that is working against your in terms of cost. It's working against your your goals, your preset goals. All right.
And Catherine is in Los Angeles. Hi, Catherine. How are you?
Hi, Dave. I'm doing great. How are you? Better than I deserve.
What's up? So I'm twenty seven, I'm a nontraditional college student, I just finished off my two years at a local community college and now I'm trying to figure out where I want to transfer from a little bit nervous and and making that choice. I've had about thirty thousand dollars in savings, but I'm currently unemployed. So the two schools that I'm deciding between one is in California and I've got a full ride to go there. It seems like the obvious choice.
The other one is out of state. It would deplete my savings, but it's where I want to live and it's where I want to build like my life. So I think I'm feeling a little bit behind and stagnant in life and trying to maybe skip a few steps. But I really want to go to that school out of state to build my life there.
What are state? Oregon. OK. And have you told them that you have a free ride and they need to give you one in order to get you to come?
Oh, yeah, I've tried to negotiate it. I've gotten a little bit of money out of them, but I haven't been able to get quite enough. Hmm.
OK, I would be hesitant to do to borrow any sort of money to deplete any sort of savings in the current higher ed environment.
I would even if it's for another semester, I would go with where the money is free. I would go, you've got two years, another semester. Nobody knows what this is going to look like. Everyone I know across the country working in colleges is trying to figure out what the next day is going to look like. I would take the free money right now. Settle down for a second.
You don't know. None of us know what the world's gonna look like in 24 months.
So I would take the free money and hold onto my savings.
Yeah, you're. I agree, and I it does not preclude you from continuing to work on this. Not at all. So where in Oregon are we talking about? I'm looking at the University of Arkansas. OK, and what field of the field of study are you in? Marketing. OK, good. OK, so that could land a lot of places, so the University of Oregon is not as much of the issue and that's located, what, Portland?
It's energy companies have got a really great pipeline into my Adidas in my background as an entertainment marketing, so it seems like a really great parallel to me to dive into. It doesn't matter.
Worried about marketing, marketing, marketing is marketing. That's not I really I don't think so.
And I mean, your goal in life is to end up in Eugene, Oregon. Yeah, I really love it there. I'm done in California. OK, all right. All right. Are there any other schools in Eugene? There's a couple I haven't met with them a whole lot. I was more drawn into the relationship that you had with my mom.
You have had with your what you've had, I think Nike. Oh, crap.
I absolutely do not want to land.
No, don't do that. Oh, don't do that. Not at all.
No, that's going to you have narrowed your focus all the way down to a laser, not a singular possible outcome. And that is a bad plan. Marketing to is a great plan.
Nike might be the case. I doubt it. You probably are going to do something much bigger and better.
OK. And when you have college for free, I can't I can't express this enough is something you're going to experience for yourself and feel it.
You will walk through the world lighter as you head into internships, as you write papers, as you work full time jobs while you're going to school and you start getting into the marketing world. If you have no debt, you've got no, she's not talking about that.
She's you've got no cost.
That's right. Yeah. You're not burning through savings. You're going to be able to focus psychologically and just physically on this job in a way that I'm telling you, if you were worrying about finances, trying to figure out watching your your savings just dwindle down, I get being done with California.
My understanding is you have to get in line to leave the state right now.
But I'm going to recommend take the free college, take your free college and go for them on the 405.
I hate my buddies in Texas. They're calling it the Great Eastern Migration Man. That is a gold rush in reverse.
Yes, but yeah. All right.
Let me let me let me kind of let me put a bow on this because I don't want to run on time. So, John, if you didn't, I'll give you a little background. Came out of higher ed.
He's got a Ph.D. in higher education. So that's what you stumbled into, was a guy who actually knows what he's talking about. That's the other guy, not me. And so his advice matters on this. And from my perspective, I've got a 27 year old. If you remind my daughter this is what I would tell you, stay there and work it for free until higher ed shakes out a little bit. No one. No, to use that time, you could finish up your last year at Uvo because you spend this year while you're in school.
They're free talking them into giving you the last year free because they may they may need to draw some students that direction. You know, it's higher. It's just going to look different. They've been they've been strutting around, acting like they had everything you wanted. And so now they don't. They need you and now they need you. So the world has changed to your favor and it's going to continue to for at least the next six months to a year.
And so use that year to your advantage and go ahead and go free. It doesn't mean you have to stay there free forever. But and don't chase the Nike dream chase a bigger dream. This is the Dave Ramsey Show.
People all over the country are discovering a faith based and budget friendly way of meeting health care costs through Christian healthcare ministries, Christian health care ministries, or S.A.M., is a nonprofit organization that helps members carry one another's burdens with health care expenses. And they have successfully shared each other's medical bills for nearly 40 years. CFC is right for you by visiting S.H. Ministries. Dog C h m is a proud sponsor of Dave Ramsey live events. Dr. John Boloney, my co-host today here on The Dave Ramsey Show.
On the debt free stage right here in the lobby at Ramsey Solutions, which could only mean one thing, they're debt free. Kyle and Kelsey are with us. Hey, guys, how are you?
Good, good. Thanks for having us. Absolutely. Where do you guys live? Oh, we're in small town Iowa around Des Moines. Oh, fine.
Very cool. Welcome to Nashville. So how much debt have you paid off? Oh, we paid off around 60000 dollars in around 14 months. Good for you and your range of income during that time. We're about 140 to 160, 140 to 160.
Cool what we all do for a living. I'm a police officer. I'm an H.R. generalist. OK, great. Well, welcome.
It's good to have you guys. Thank you. So what kind of debt was the 60000 the most? Most of it was student loans. A little bit of credit cards in there. But yeah, I'm also a student loans.
And what inspired you to do this in 14 months, 14 months ago?
Well, at the time, Kelsey had stopped working to stay at home with kids and decided to go back to school. Mm hmm. And funny enough, we started taking out loans because at the time we thought that was the only way we'd be able to handle school. And at some point we look up and we've got all this debt. And I came across you on YouTube. I was familiar with you before, but I was getting into YouTube, podcasts, things like that.
And I came across your YouTube channel and I started talking to Kelsey about that. And she was like, I've actually got his book in my my bed, which I didn't even know until that time. So, yeah, it was kind of funny. I went in there. Sure enough, it was right by her bed and never saw it in the before. And I think I read almost the whole thing that night.
Wow. And we both jumped on board and yeah. The rest is history.
OK, so the book was being used as a coaster, pretty much not really the rings off the coffee table. I was trying to muster up the courage to talk to him about it because we both like our hobbies and we both like to spend money.
Oh, so you thought you'd mess up everything if you told him about it? Well, I just had to be articulate about how I presented this, you know, because sometimes it's easier to present it like it's their idea and then to buy it.
Now, this is a knowledgeable wife, every wife ever, right? Yeah. Yeah, that's good.
Not sometimes. All the time. Yeah. That's a great way of presenting things.
One thing worth mentioning about our our dead is during the time we're paying off our debt, we're both I was finishing my master's degree. He's finishing his bachelor's and we started cash following the remainder of our degrees at that time. So it could have been a lot worse than it was had we not started when we did. Yeah. So you finished the cash flowing and you paid off the debt. So it's like a double dip. Well done. Yeah, yeah, yeah.
Very cool. So I had a big impact. Oh.
So what was it that obviously you had this knee, this thing, the scratching at you.
Right. And so but what was it when you read this stuff that you said we're doing this or.
The funny thing about is when you read the book, I can like, hear your voice like when you're talking so I can hear that. And it just it's common sense stuff. I mean, this stuff makes sense. I'm going to say Kelsey was a lot more naturally. I think we were both naturally what quote unquote good with money. But she was a lot more natural to be debt free. I don't think she had any debt, any consumer debt.
When we got in a relationship, I was a little bit more free spirited.
I'm not willing to say no. And I think that was one of the biggest things I learned from this, is be willing to say no to stuff. And when we did this as a couple, as a group, it just made things so much easier. There was really never any. Once we came on board, we were both 100 percent. Yeah. And bought into it.
So once the book came off the night stand where we go and the YouTube is activated.
Well done. Proud of you guys. So what's the secret to getting out of debt?
I would say surrender to yourself while you're there. Nobody put that credit card in your hand. Nobody made you go back to school and start accruing all the student loan debt.
And once you figure that out, you can define are you interested or committed?
And we went in both feet. We were committed.
Hey, hold on, Kelsey. I think I misheard you. It sounded like you said you have to take personal responsibility for the way you're choosing to live.
What you said. Absolutely. Wow. Don't be the victim. You are blowing minds across the country today.
People are going, wow, so what? I can't blame someone else.
Yeah. And the quicker you realize that, I mean, it was easy for us. You set that budget, you stick to it, you plan, you succeed. And that's what we did. We did it in a short amount of time. I graduate with my master's in May. He is halfway through his master's right now. Wow. And we're debt free.
So what are in your masters was an H.R.. Yes. And yours is in criminal justice and public administration. Public administration.
OK, very good. Good for you guys. What great careers you got ahead of you. Great education under your belt and you learn to work together and you hit and you hit some serious milestones and one of the toughest subjects on the planet. Yeah.
And I'd say that the communication for me was. Important. It was funny that we wouldn't have went out and made, like really big purchases without talking to each other before, but it would have been nothing for me to spend two or three hundred dollars on something and not talk to her. And when we started on this, I mean, I wouldn't have bought a soda without talking to her about I mean, we just got that intentional about stuff and know.
And I think the other one of the things you talk about is having Grace, you know, and I think that helps a lot is that we probably could have done this a little quicker than what we did in our original goal. I think we said a little bit more aggressively. But throughout the process, just being being willing to do a couple of things as long as it was budgeted. I think that kind of helped us just having a little grace and and just made the process easy.
But like I said, it really wasn't hard for us. And we saw the progress like almost immediately, like in that first month, it was like, holy cow, this really works.
Wow. Well, congratulations. Who were your biggest cheerleaders outside the two of you?
Oh, definitely our family. You know, we I talked about this a lot, pretty much anybody that listen, I've said your name to them. So it's just again, it was so it meant so much to us and we see the progress in it. So we talked to a lot of people and everybody was cheerleaders. I would say there was some people that were like, yeah, you know, they'd make the excuses. They can't do it for this reason or that hope you can.
But I don't I don't think that's for me. Yeah, so you see some of that.
But our family has been great the whole time. And, you know, when we weren't eating out, parents would take us out to eat and, you know, let us enjoy some of that stuff that we were going to do at the time. So. So, yeah, it's been great.
That's cool. And you brought the kiddos with you. What are their names and ages? Let's get them in the shot. Faith's six and able is eight.
All right. Very cool. So are they are they plugged in to this whole process or were they spectators?
They have. You know, we but we kind of got into the whole system. So we've done smart money, smart kids. We've read that book. We've won a lot of the stuff and we've started the letting them work for the money and give, save and spend. And so they've got their own envelopes that they save up their money. I think they're naturally more savers than we are. So it's harder to get them to spend the money, you know, than it is to get them to save it.
They've they've been a big part of the process, so they've been practicing their debt free scream.
That's the other thing we need to know. Well, yes.
And we said it's not a scream. It's a yell. That's really your people have no do. So I got a four year old granddaughter like a shattered glass. Yes. Yes.
The DB's are tradoc pterodactyl level. I love it. Why do you go? You guys were so proud of yourself. Why do you go? He rose.
You look at that family right there. Everything changed because mom and dad stood up. So well done. It's incredible. So incredible. Very well done.
We got a copy of Chris Hogan's book for you Every Millionaires, because for sure that's the next chapter in your story. Well done, you guys. Very, very proud of you. All right. Kyle and Kelsey, Abel and Faith from Des Moines, Iowa.
Sixty thousand dollars paid off in fourteen months, making 140, 160. Count it down. Let's hear a debt free. Yeah.
All right. Here we go.
Three, three, two, one word free.
I love it. Well done, you guys, very, very well done and they Cash-Flow their degrees while they're doing it. That's impressive. They tried to buy that one.
Know, the amount they paid off is deceptive because they paid off. Also on top of that, they paid off their their school as they went to, which is that's incredible.
Yeah. There's there's a lot of stuff going on in that story mathematically.
And can I can I mention this? They're both in high stress jobs. She works in H.R., she deals with systems and with people who are struggling and trying to figure out their next steps. He's a police officer who's getting into public administration. Both of them are bring calm and peace to messy situations and messy people situations. And the fact that they've taken this off the debt off their shoulders, it's going to give them they're going to sleep a little bit deeper.
Their stress is can be a little bit lower. And they're going to able to present themselves fully at home and at work. This thing is going to pay off systematically throughout their communities and organizations. You know, there are layers to the slavery being debt free, changes everything, borrower slave to the lender. And there's a layers to what that means. You're exactly right. This is the Dave Ramsey Show. Thanks for joining us, America, this is The Dave Ramsey Show, Dr.
John Deloney Ramsey personality is my co-host today here on the air. Well, nearly every great success has a never again moment in your past where you reach the point where you're sick and tired of being sick and tired and you say, I've had it never again.
When I filed for bankruptcy in 1988, I said, never again, never again. I'm not going to be in debt. Never again. As American Express going to call my house, never again is my family going to be on the edge of homelessness never ends. My electricity going to be cut off.
Never again. covid could have been your never again moment.
The pandemic may have knocked the socks off of you financially.
There's a global economic crisis. Along with this pandemic. It's a one two punch, so start taking control of your money. Let's get on a budget. Let's get out of debt. Let's have savings and get our life changing books and tools for up to 70. Up to 73 percent of what?
OK, books away. Yeah. What so weekly deals right now.
Dave Ramsey Dotcom. And whether you want to get rid of dad or whether you want get your kids started on the right path like the couple that we just did the debt free scream with.
There's all kinds of back to budget deals out there. And so you just Dave Ramsey Dotcom, we will walk with you while you have your never again moment.
We'll show you how that book, that light on the nightstand that she was talking about. So deal, right now, it's a special. So check it all out. Up to 73 percent off a tons of our different products and best selling books to help you get started. So you're never in a never susceptible to this again, be the little pig that builds the brick house. So when the big bad wolf huffs and puffs, the house doesn't come down, you said that important, not if, but when that wolf comes.
Yeah, the wolf will come, yeah. And because they do, they do.
It's the nature of wolves, right? That's what wolves. Nature of of life. Yeah.
It's it's you know, it's not you know. You're not thinking positive. No, I'm positive it's going to rain.
You're going to have a rainy day. I'm absolutely positive. More than one. So more than one. It's going to happen.
Rain comes and that's how we know what sunshine looks like. So Alex is with us in San Diego.
Hi, Alex. Welcome to The Dave Ramsey Show.
Hey there. How are you guys doing today? Thanks for having me. Sure, man. What's up? So I want to thank you guys, because I've been listening for the past six months or so and I've had a pretty good savings built up, but have baby steps one and three and kind of backtracked after listening and building up the courage. And this week we paid off twenty five thousand dollars worth of debt and that was it.
So out of Alec's way to go, man. Good job. So you're debt free and do you have your emergency fund now? We have an emergency fund, we have about one hundred and thirty thousand dollars in savings and about thirty thousand dollars invested. Good. So I'm still getting used to transferring it out of out of a bank account. It kind of makes me feel good to open up the app and see that those figures, to be honest, I'm just that kind of person.
But I'm, you know, building up because that was. Well, good. I guess my question is, is there just, you know, in my heart, I don't want to buy a home right now. We're not really settled down where we're at. We have family in different places, but financially, we're saving a good chunk of money every month. And our family tells us, buy a house, buy a house. And I know it's not a bad investment and a lot of ways, but from a lifestyle perspective, I don't see it.
So I know baby step kind of six is to just to pay off their home early. But I don't even have a house. And I feel like, what do I go from here from a financial perspective. Your family doesn't get a vote, Alex. Yeah, I interrupted you. Oh, no, I won't say anything. You are you have entered into the territory of the weird. You've entered into the ecosystem of people who make different types of life decisions and choices.
And so part of that is comes with people speaking all kinds of their various wacky two truths to you. And usually they're speaking to you out of love. They care about you.
But if you're not ready to buy a house or really buy a house, if you don't think are going to settle down and one of the most expensive real estate markets this side of Mars, then hang on to your cash. Right.
Marshall's real estate market. That's the rumor. They're working on it. Right. So here's the thing.
Short term, that's fine. It is not a good 15 year, 25 or 30 year plan, and the reason is very simple. Rents go up continually until you own and once you own and you fix the largest cost item in your in your line item budget is your rent, your cost of housing.
You fix the cost of housing when you buy. And of course, you fix it low when you actually pay it off. The second thing is and rents are not going anywhere but up.
I mean, I'm old, I've watched friends go way up my first apartment, two hundred thirty five dollars a month. And you can't even get a steak sandwich for that, you know, so it's unbelievable.
So, yeah, you're going to see that and it's going to rob your wealth over time if you don't buy. So that's where the idea of home ownership comes from, because it works for you on stabilizing your today and causing wealth building in your long term tomorrow. Out of the 10000 millionaires that we studied, we found two primary areas that caused them to become worth a million dollars or more primary. And no one was they continually invested in their retirement plans or Roth IRAs or 401K in good growth stock mutual funds.
Primary area number two was they had a paid for home. Now, does that mean you have to do this in the next four months or four years?
No, it does not.
But just say if what your meaning is a as a short term lifestyle decision, I'm not sure I'll stay here. I kind of want to play this. I'm going to enjoying the pile of cash right now. That's cool, because probably I'm going to stay in San Diego. I may end up in wherever that's all. OK, no troubles with that.
But the 10 year from you now version of you need to own a house. Tzadok. Yeah, that makes sense, would you recommend me if we still are kind of, you know, I'm twenty five years old, my wife is twenty one right now, so, you know, perspective in life could change and all of that. And of course, we had a family. We would really be thinking of buying a house where we're at it or picking the location.
But when we get our quota down more, you're still in play right now. Yeah, exactly, yeah, if we get to that point, though, and we're still kind of a little bit mobile, would you recommend getting something, you know, just as an investment at that point, five or 10 years down the line, as a backup? As long as you're going to stay in it two years or more, you're probably going to make money in most most areas.
OK, so, yeah, I know you're not it doesn't it's not like you can't sell a house unless you buy Weird House, Donmar Warehouse, but I mean, you know what I'm saying?
Buy something that I think about the resale appeal of the product that you're looking at when you're buying it, you know, and so if you buy a house, it's ugly when you get resell at its ugly house. So, you know, don't do that. Buy something that's got some appeal. Right. And then you can jump in and out of it fairly easily.
But, you know, and in the meantime, go ahead and pile up your cash fund.
You might even pay cash for your first house.
You're 25 years old with 130 grand in the bank and no debt. That's that's a good that's a good way out of the pretty studly out of the garage right there already.
Studly man. You're the kind of guy that could end up paying cash for a little starter house somewhere, especially if you jumped out of San Diego. San Diego starter house is a different world. But I mean, if you jumped, you know, into a more traditional real estate market than a California real estate market, you might see the ability that you could pay cash for 200000. Our house, pretty nice, pretty nice starter house. And that makes it real easy to get into a fairly generic product that has a lot of market.
When you get ready to resell it, it'll go up in value. And again, you've stabilized your largest expense and it's not going up. The rents not going up. And somebody didn't come in and go, you know, we're going to sell the house out from under you. And so you got to move.
You get control of, you know, this big section of your life, which is where you live.
And there is an emotional value to that. There's a financial value to that. There's a relational value to that.
And I underestimated that for a long time. I was always looking at it through this hour. Why are we or why? What's the money? What's the money? And I had a great friend, Todd, who told me, man, your wife needs a home, you need a home, your kid needs a home.
And so I love to hear you mentioned both of that davits. It's something about roots and security as well as a place to park and grow your wealth. And that's that's a matter of a life philosophy, though. That doesn't say you have to run out today into it. Absolutely not. But you just go at some point.
There is value to this. That's intrinsic as well as financial. That's right. Yeah. Very good.
Good stuff, man. You're doing great. Proud of you, Alex. I mean, you've done amazing. That's pretty stinking cool. But you're in that place.
You've done a great job with your money, so just keep being intentional with it, pile up some cash and then when you feel good about it, not your family, then it'll be time for you to buy based on this discussion that puts us out of that Abrahamsson show in the books.
Thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I'm Dave Ramsey, your host. And we'll be back.
This is James Childs, producer of the Dave Ramsey Show.
On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey network skill. From there, you can listen to all our shows. Ask Dave money questions like how do I invest my money or what is the debt snowball? Find out more it. Dave Ramsey, Dotcom's smart speaker.
I feel like you're in a rut and living life, just going through the motions, build confidence in yourself and learn to trust the God who created you. Check out the Christy Wright Show, where Christy inspires you to break through your limitations and create the life you're proud to live. Hey, all, I'm Christy, right? You know, it's so easy to feel stuck. You live life just going through the motions, doing dishes, doing laundry, carpool lines and a whole list of commitments that bring you no joy.
Why do we live like that? That's why I want you to check out the Christy Right show. Each episode will help you build confidence in yourself and the God that created. You hear more from the Ramsey network, including the Christy Wright Show wherever you listen to podcasts.
Hey, it's James, producer of The Dave Ramsey Show. This episode is over, but check the episode notes for links to products and services you've heard about during this episode. Thanks for listening.