Ram. Live from the headquarters of Ramsay Solutions. It's The Ramsay Show where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Washaw, Ramsay Personality, is my co host today open phones here at Triple 8825-5225 as we talk out you right in front of you. Wayne starts off this hour in Canada. Hi, Wayne. How are you?

I'm doing great, Dave. Thank you for taking my call. How are you doing today?

Better than I deserve. What's up?

Oh, Dave a little bit nervous here, but we're going to get it out anyways. We had purchased actually one vacant lot. Again, just a vacant lot, lakeside beautiful property. I ended up subdividing it, splitting it, putting on the market. It's going to come on two years, probably October end of this month. Sorry, not quite two years. And again, we've had a little bit of an issue with that property being on the East Coast. Of course, we've had a hurricane, then we had a fire, then we had another hurricane. Then we have interest rates and we're struggling. Nothing's moving, of course, in the market there and then where I am, too, also, as well, we do have a loan on that property. And again, we're just paying the interest only on just again, we have an appointment with our accountant, but our accountant isn't a real estate person, and then our real estate person isn't a money person like yourself, Dave. So I would just like some advice on that. I could give you kind of a rundown of what we have.

Wayne, you're in the perfect place. I'm an expert on my opinion. That's it. All right, so how many lots did you end up with? Subdivided?

One lot was 5.2 acres and the other one is 7.2 acres.

So two lots. So you bought a twelve acre track to split it?

That's right.

Okay. And what are you asking for the lots?

So the one lot, we plan on keeping the other lot, we are asking 959 for it.

Are you keeping the larger one or the smaller one?

We're keeping the larger one.

Well, I would. All right. And it's a lake lot after all, and you got enough buffer there to keep the neighbors off of you life's. Good. So what do you owe on it?

700.

Okay. And do you have $700,000 in cash and investments?

Yes.

I can give you a rundown if you'd like.

Yes, please.

So, combined, my wife and I, we have $2.2 million in investments. We have $700,000 and two other vacant properties that are in our hometown. We have a mortgage of 500K on our primary residence, which is worth 1.2. And we have no debt. We both have our emergency funds.

What's your household income?

Combined household income would be about 425.

Oh, cool. And how old are you two?

I'm 59 and a half, and my wife is turning 47.

Well, you guys are amazing. Well done. I mean, you're worth three plus million dollars. Congratulations. Approaching $4 million net worth. Well done. At 59 years old. Ding, ding. Score. You're not bankrupt. You make 425,000 a year. You can survive this. So this is a philosophical money discussion? Almost. Meaning that you have enough money that you really can't screw this up either way, you follow me?

Correct.

I mean, you can ride it out and sit on it and pay the interest, and someday it'll sell. Or you could cash out enough to pay off your house and pay off the lot, be 100% debt free, and be $1.2 million less in investments. But now you've transferred your investments into your personal residence and into some lake lots. And that way you're not a motivated seller anymore because you almost sound like you're emotionally motivated. And let me tell you, there's only one time you make money in real estate, and that's when you sell it.

Correct.

So when you sell it, you cannot be a motivated seller. And sometimes you can be motivated by finances, but other times you can be motivated by disgust. Like three hurricanes of fire and interest rates. Correct. Like crap. My plan to clear this lot by splitting this off and selling the other one was such a good plan. Crap. That's a motivated seller. You follow me?

Yes.

Am I wrong?

No.

Okay. I think way you make money in real estate is you chill. And the best way to chill is just reach over and pay that sucker off. And while I'm at it, I'm going to go and pay my house off.

Was the plan, Wayne, for you to sell those two vacant properties to grab the 700,000 so you can buy the tract of land that you want to keep?

No, when he sells off the other lot, it sells for 900.

Yeah.

And it's going to pay off the 700. He's going to clear the first lot.

But he's also got two other two tracks.

They're just an independent issue. You could sell those if you want to.

That would get him.

Are they going up in value? Why are you holding those?

One's right next door to our primary residence, and we're just going to give that to our young son later on. Or again, that was just going to.

Be just that's a buck.

Whatever.

That's a keeper. Okay. What's, the other one?

Yeah, the other one. Is it's going up in value because.

It overlooks the city.

Another big lake, too. And then part of that question was.

Would you rather have that or would you rather be or would you rather just have less liquid cash? Because I just use 1.2 of your 2.2.

I think I just wanted to hear you say what you said and just going to ride this thing, ride it out. Because so far to date, we spent 72,000 in interest.

Right.

And if we're getting 950, like I said, we're still ahead of the game.

The best time to sell something is when you don't want to or need to because you get the most for it. I mean, you got to have walk away power. I'm at a minimum, liquidating enough to pay that lot off.

The 2.2 in investments, is that retirement investments or is some of it non retirement?

He's 59 and a half.

Oh, I missed that part. Well, there you go.

Okay. Yeah. You shouldn't have any penalty. I mean it's canada. It's different. But you don't have any penalties in Canada at 59 and a half either, do you?

That's right. No, you're correct.

You've got options. You've really just got to look and see what makes the most sense for you.

You can afford to hold it. What would I do if I woke up in your shoes? I'd pay my house off in the lot off tomorrow.

Yeah.

And I'd have only a million dollars left in investments. Oh, darn. Only a million. Did you hear? Only a million dollars. But I'd have not a payment in the world. And the lot that's overlooking the city also goes up for sale. Probably if I'm you and I'm probably not going to say I'd probably rather have the liquid than have that, but I'm getting rid of all the debt, and that just chills you. And then some goober comes along and says, okay, you're asking 995, but the market's slow and hurricanes and interest rates. And so I'm going to offer you 750, which pays off your loan, which they can look up at the courthouse and tell what your loan is, which is exactly what I would do where I'm buying the lot from you in a down market. I try to buy it for what you owe and just let you out of the trap, to heck with the cheese. But instead, there's no trap. We just got rid of the trap.

That's great. I love that.

Great strategy. Then you go, no, we're not going to take 750. I'll just wait. And I did that not long ago. And as soon as you call someone's bluff, the price goes up. There you go. This is the Ramsay show. This episode is sponsored by BetterHelp hey, folks, it's Dr. John Deloney. This time of year can be hard, and seasonal affective disorder is real. When I moved to Nashville, the time change caught me off guard. It got dark at like 430, and I was ready for bed by 06:45.

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Things weren't as fun. Even the food lost its flavor. Now I know how to prepare my body. When things get dark, I go outside to enjoy nature. I stick to an exercise routine, and I intentionally connect with people. Another thing I did is therapy. Therapy can be a bright spot even when the sun goes down too soon. Something positive and interactive to make us feel grounded and give us the tools to manage the way seasonal change can affect our bodies. So if you're thinking of starting therapy, give BetterHelp a try. BetterHelp is flexible because it's totally online, so it can fit into any schedule. Just fill out a short questionnaire to get matched with a licensed therapist. You can switch therapists at any time for no charge. Find your bright spot this season with BetterHelp. Visit BetterHelp.com Deloney today to get 10% off your first month. That's BetterHelp. He lp.com deloney. Jade Washaw Ramsay personality is my co host today. Sam's in Austin, Texas. Hi, Sam. How are you?

I'm doing pretty good. How y'all doing?

Better than I deserve. How can we.

You know, I'm calling have over the years. Last couple of years, we bought a house. Things seemed to be going okay, and then we ended up getting kind of taxed on the actual build of the house. And that just kind of started a slippery slope where we started having to pay more than what our mortgage originally was, and we ended up relying on a lot of credit cards, and it got really bad. And right now, I'm especially in collections for a lot of cards, and my wife has a few. She was sued. I got a case come in as well, and I just don't really know where to turn or how to turn this around. It almost seems kind of hopeless.

Sorry. Sam, how much credit card debt is their total?

Probably around probably 15,000 to 16,000.

And how much income do you guys bring in every month?

Every month, about 6000.

How much is your house payment?

2100.

How much are your car payment?

We only have one car payment, and it's 250. And as far as the mortgage, when we were being taxed on the improvement, after about a year of having a lower payment, it was about 2700. And now we're down to I finally paid off the overage on the escrow, and now the 2100 is about normal.

Okay. All right. And what do you guys do for a living?

I'm in technical support, and she works in a dental office.

Okay. Your mortgage is high. Your car payment, all car payments are bad. This one's not super bad. The credit cards are the way you were talking, I thought you were going to tell me you had 100,000 in credit card debt. The weight that you're emotionally carrying, listening to your voice, I'm pleasantly surprised. It's only 15.

Me too.

Yeah.

I think the mortgage being a third of your take home is really what's?

And it was higher than that for a while, but even that are you guys just disorganized? And you were living in panic, and money is just flying out of there, and you had no idea where it was going?

That's a pretty good way to put it.

Yeah. Okay. Because, I mean, your numbers aren't as bad as the they don't indicate you should even be behind.

Yeah. And I agree with you there, because when I sit there and kind of add up numbers and look at it that way I look at it, I'm.

Like, okay, how many kids have you got?

We have five total.

And how old are they?

They range from teenagers down to seven.

Okay.

How many are in daycare?

None. They're all in school. Okay. Our oldest, she works, but she just graduated high school.

Yeah.

The main thing is that okay.

How many credit cards are you behind on?

Probably I would say it's pretty good number. Probably about eight to ten.

So there's a whole bunch of little ones.

Yeah.

And you're behind on almost all of them.

I've got four myself that I two.

Have gone to collections?

No, they're pretty much all in collections, but I have four that I've made a payment arrangements with. But two of them have filed lawsuits.

Yeah. You said your wife got sued on one of them, right?

Filed lawsuits, yeah. Oh, that's cute. On how much?

Hers is a little bit over 3000. The same for mine.

Oh, man.

Okay. Let me just tell you, you live in Texas, am I got that right? Is that the truth?

That's correct.

Okay. Well, their lawsuits useless. They can't garner she wages or take a lien on a house in just hanging their lawsuits hanging out there in the ether. It's just dangling out there in the nothingness. There's nothing they can do about it.

Because with hers we hired a lawyer and they're working on the case. It was the fear thing at the time.

That's the thing, Sam. Looking at the numbers that you've given us, maybe there's more debt out there that you haven't mentioned, but I think that what you're feeling is way more emotional than it is financial. It's like, oh my gosh, I've got twelve credit cards, they're suing us. It's like all these things going on. And if you just stop for a moment. If we really look at the numbers and look at the math, there's no reason that we can't list these from smallest to largest. Because like Dave said, most of them are probably lower balances because there's tons of them and they're only equaling up to 15,000 to 16,000. So my guess is that if you can just kind of pull all of this out of space, get it down on paper, like I said, list them smallest to largest, figure out what it looks like for you guys to get an extra $1,000 in every month, and you're knocking them out like dominoes, you're going to feel so much better.

How many cars do you own?

We have two that we use for getting the kids around. Our oldest son has his own that he uses for school.

And you bought it for him?

He's a stepson and his dad gave it to him as a gift.

Okay. All right.

Yeah. It's just a little truck.

Okay. I'm just trying to find out what's going on here. All right. So what did this lawyer tell you he could do that the law has done for you in Texas?

Yeah, they basically said that no, they just basically said that they could either get the case dismissed or work out some type of lower settlement. Essentially that's all they offered.

Okay, well, the case is not going to get dismissed. You owe the money you lost.

Right?

You owe the money, you didn't pay it, you lose.

Ding.

Okay. Now then can we settle it for less? Well, sure, it's $3,000. They can't collect it in Texas, so of course you can settle it for less. You can do that with all of these, by the way. And next time, don't use a lawyer. What did you pay the lawyer?

750.

Okay. I sure hope he gets 750 off the balance, at least earns his keep. I don't know how he took your money in good conscience.

All right, now the main thing I worry about is because I've heard that I understand they can't charge my wages, but they could take it from my bank account.

Not unless you give them access to your bank account.

Well, they can take a lien on it in Texas. That's true. Well, don't keep if you got a bunch of money in your bank account, I guess we'd pay the bills.

Yeah, I mean, I really don't at the time, but at the current moment but working on this here and building.

Up no, I'm just saying if there's $10,000 in your bank account, you wouldn't have called me.

Yeah.

So you don't have any money in your bank account, so it's not a big fear. Yeah. Okay. So anyway, what we've got to do is A, get organized and get a very detailed plan and B, let's prioritize. First thing is houses paid are food, then house, then lights and water, then car. Are you behind on the okay, good. Stay current on the car. Go to work. And we're going to get you on an every dollar budget with Jade and put you in one of her webinars. When's your next webinar?

Oh, gosh, it's not till November. I don't know that we have all.

Right, we'll get you plugged into an every dollar webinar so you can learn how to do a budget with your wife. And we'll put you into Financial Peace University because basically what we're going to do is we're going to take care of food, shelter, clothing, transportation and utilities. First. You've got the money to do that. And then we're going to force rank these things and work them through and lump sum settlement, all of them, each smallest to largest. I'm not paying payments on them anymore. I'm going to lump some settlement you're behind. The lawsuit has got no teeth where you live. Okay, so just argue with them and say, I'm broke. I owe you $3,000. You say it's $5,000 after you added a bunch of fees. I have 2000 if you'll take that and give me that in writing. That that's a settlement in full. Remember that phrase. And no electronic access to your checking account. As Jade said, they will never know where your checking account is. But settlement in full, in writing. And then I'll send you $2,000. Oh, you won't do that. Did you know there's nine other credit cards that will?

One of them is going to take the money. I got you on the phone. Last chance. Going once, going twice I'm going to the next card. Okay, second card. Here's what we're going to do. Just hung up on the other guy because he's an idiot. Let's see if you are all right. And we're going to settle this. Going once and going twice, and you're going to work your way through this. And then you cycle back through after you finally get one to take the money. Then you pile up a little more money and you start the whole process again. Remember last time I called you when you didn't take the deal? You sure you don't want to take it? Because I'm here with another deal and I'm getting ready to go on to the second one. Going once, going twice and this is how you deal with these people. Credit card collectors are scum. You can tell they're lying if their mouth is moving. So beat the snot out of them and get this cleaned up. That's what you do. This is the Ramsey show. No matter what time of year it is, focusing on your family's financial plan is always a smart move.

I get questions all the time about where to start and what to do first. Getting term life insurance needs to be a top priority. I recommend ten to twelve times your income and lock in rates for 15 or 20 years. This gives you plenty of time to get out of debt and build wealth. I've been recommending Xander Insurance for over 25 years. They understand and live this strategy and will take the time to help you find the most affordable term life rates. Go to xander.com or call 803 564282 jade Washaw Ramsay Personality open phones at triple 8825-5225. Thank you for hanging out with us, America. Jade is my co host today. And we mentioned you're going to be doing the Every Dollar webinars with that last caller on budgeting. Your next one is not till November. You said that's a couple of weeks away. Rachel Cruz is doing them. George Camel is doing them. If you want to go to a free Every Dollar budgeting because webinar, they're going to show you how to do this. Go to everydollar.com slash budgeting. Because Jade, it sounded like with him, with those credit cards, he's got the money to pay them.

He's just disorganized and the budget is literally a way to get organized.

Yeah, that's exactly it. When you don't have a plan for your money, it just feels like it's chaos. Money is going out. It's going in all directions. You don't know where it's going. But when you have the piece of a budget, you get to see how every dollar is being spent, and it helps you identify those problem areas.

Well, 100% of the time that you put your income that you have for the month at the top and you start deducting basic necessities out, you will feel like you've got a raise.

Yeah, we see.

Because you're like, where is this money going? And I don't know where it's been going. Well, it doesn't matter where it's been going. All that matters now is that it starts going to where it should be going on purpose, intentionally. Too many people to go. Ready, aim, aim, aim, aim.

That's right.

Aim, fire. You got to pull the trigger, and you're going to hit what you aim at. And if you aim at nothing, you will hit it every time. Zig Ziglar said that, and he's exactly right. And so John Maxwell says a budget is people telling their money what to do instead of wondering where it went. And that's again, you feel like you got a raise. You have a sense of control. Even if you can't pay everything, you get a sense of peace, because you know that you can pay the things you have to pay, like food and lights and water and house payment and, oh, well, I got this one Mastercard I can't get to this month. Okay, then we got to sell something. We got to get extra job. You start to solution almost immediately.

Yeah. And you get that sense of power over you making the choices instead of it just happening to you. Right.

And the other thing that happens is when you got that much financial stress with eight credit cards or nine credit cards, and they're all behind and two of them are in lawsuits, that much financial stress in the house 100% of the time, it takes an effect on your marriage.

Oh, 100%. I can vouch for that.

Me too.

All those in favor?

It was this moment in our marriage that Sharon realized she had married Goober, not Sir Galahad. So there we go. She realized, I screwed up. I picked poorly.

Oh, man.

That's what she had decided at this point. But, yeah, I mean, it takes away your self confidence. It puts terror in the relationship. There's nothing good about being out of control.

No, nothing. You know, I could hear in that last caller in his voice, and what I heard in his voice was a sound I'd heard in Sam's voice.

Yeah. I heard it in mine. Is this like this uncertainty fear. A little fear creeping into the uncertainty.

And there's that like so I went.

And got a lawyer, and the lawyer said, oh, I'll take your know, I was really surprised he didn't say file bankruptcy, because asking a bankruptcy attorney if you're bankrupt is like asking a dog if it's know, it's like, oh yeah. So of course you're bankrupt. You came here.

Didn't know.

That's good to mention, Dave, because people get scared when credit card companies say, I'm going to sue you and we're filing a lawsuit. And your first thought is, well, I better lawyer up too. But you do owe them the money.

Like, this is a movie.

Yeah.

This is not a movie. You are not on trial. The fact that you didn't pay a credit card is on trial. And let me tell you, folks, here's what happens, okay? You've probably never done this. Have you ever gotten a speeding ticket?

I have gotten one speeding ticket.

Did you go to traffic court?

I did go to traffic and it meant nothing. I had to pay.

They still charge you anyway. But traffic court is a little bit like a joke. I mean, you go in and the judge goes, okay, you 17 people that came in here that are here, that this is your first offense, go to school. Or we'll just waive it or whatever they do, okay? And you're all geared up, like you've got your arguments in your head and it was foggy and the officer smelled alcohol on his breath. And you have all these things in your head, right, that you're going to say, and the judge is like, yawns, and goes, dismissed, dismissed, dismissed, dismissed. And it's anticlimactic.

Well, why did I have to pay mine?

Why? I don't know. That's a personal problem. Let me get on the dismissal list. I don't know. I have my theories, but I'm not going to bring it up. It could be that you were driving 200 miles an hour. But no, Dave, not me, but Sam's going to tell me the truth later. But seriously, though, when you go to small claims court or a small claim, even if it's not technically called small claims court, and you go in and the attorney is suing you for $3,000 on a credit card, here's what happens, folks. The attorney shows up with a two wheeler. He's got so many files and there's like 1000 literally cases on that judge's docket this morning. And the judge is going to go bump on all of them except the three people that show up. And the judge is going to go, you guys go out in the hall with the attorney and cut a deal.

Interesting.

It's so lame and anticlimactic because here's the deal. If you owe someone money and you have signed a contract, like a credit card agreement, to pay them money and you didn't pay them money, there's only one possible result of the lawsuit. You lose the lawsuit because you didn't pay them. Yeah. Showing up and going, I tried, your Honor is not a defense. I lost my job. Your Honor is not a defense. I got cancer. It doesn't matter. You didn't pay the bill. Pay the bill. Didn't pay the bill. That's all that matters. If you got proof you paid it, that'd be the only time and they've done the accounting wrong or something, that'd be the only time you could possibly win the lawsuit. But if you haven't paid the bill, you lose that's right now, then what happens? Nothing.

Yeah. The only consolation is you can settle.

For then you go back now, you settle the lawsuit instead of settling the credit card debt. Whoopi. We get this emotion built up because the collector's, like, we are going they Play Music In The Background bum, bum, bum.

Everything's in.

We are going to sue you. And you're going, no, please, anything. Don't sue me, please, anything. I'll do anything.

Yeah.

And that's exactly what they want.

That is true. It's all emotional. We think Perry Mason is about to come in there and Perry prosecute Mason.

You were watching reruns as a.

Would.

Have gone I would have at least gone Matlock. That's two decades later.

There you go, Matlock, that locks.

But both of them are dead. I'm just saying. But oh, my gosh. It's not a modern day law, your thing, is there? Oh, yeah. There's got to be, like, law and justice. La law. There you go. Those guys were characters themselves anyway. Yeah. So, anyway, there's nothing like that going on. This is not a courtroom drama, right. It's a factory that produces lawsuits very efficiently. Pump you're done, just like that. Just they stamped out another widget and you be it. So just chill about the lawsuit. I don't want you to get sued. You don't want to get sued. But if I can't settle it and they're going to take me to don't worry about it, just keep working it. If you pay them money, they're going to go away.

That's right.

Until you pay them money, they're not going to go away. You owe them money. That's how this works.

But they don't like to settle. Before you even get to all this, you have to call so many times to get them to take your deal.

Yeah, let me rephrase that. They love to settle. They don't like to settle easily.

There you go.

That's even they want to milk as much out of the deal as they can milk, because they finally found a cow, because usually they can't even find the cow. It's just loose. It's running around in the country somewhere. They can't find the cow. But if you show up and they go, oh, I got a cow, I'm going to milk this as far as I can. That's what they're doing. Yeah. They love to settle because they bought these debts, usually pennies on the dollar, if they're a debt buyer on old, bad debts, and they probably got a nickel on the dollar in it, so on $3,000, they probably got $150 in it. That's what they paid for the debt. So will they settle that? Do they like to settle? Oh, yeah. It's their whole. Thing because you think about all the cows that got loose. We just got one, we're going to milk it. Maybe we can get a grand out of this, three grand, and it'll pay for ten of the other cards that I can't even find the cow. It just disappeared because I got one that showed up here. So they'll work with you folks, you just got to get up in their facing, but you've got to get organized.

You've got to get on a budget. You have to buy your food for your children first, your lights and water and your shelter. Second and third, before you do anything else, don't talk to me about I settled a credit card and now we don't have any food.

Right.

No, mastercard not that important. They not the master. They just the card. That's it. No, you work it. You work it. You work it. It's a system, it's a process. For them, it's all business. For you, it's all emotions. Get the emotion out of it. When you lay it out on a plan, use the EveryDollar app and get your crap together and get this mess cleaned up. When your business gets to a certain size, the cracks can start to show. If this is you, learn these numbers. 36,000 businesses have upgraded to NetSuite by Oracle, the top cloud financial system. For 25 years, NetSuite has been helping businesses do more with less and drive costs down. And one, because your business is one of a kind. And right now, download NetSuite's KPI checklist absolutely free@netsuite.com. Ramsay jade Washaw ramsay personalities, my co host today open phones at triple 8825-5225 ryan's in green bay, wisconsin. Hey, Ryan. How are you?

Great, and yourself?

Better than I deserve. What's up?

Hi. So me and my wife are on baby step six right now, and my dad's uncle recently approached us about buying a 40 acres up on our family land up north. And we're debating if it's worth going back to baby step two or not.

So you're saying that you would go back into debt to get this land as opposed to pay off your current home?

Correct. For a short period of time.

How much is the land?

$40,000, $1,000 an acre.

And where is it? How far away from you?

An hour north of here.

And you want it for what?

We use it for hunting. I mean our whole family, it's been in our family our whole life. So we got 300 acres up there that we family share.

And this 40 acres is part of the 300?

Correct.

So what happens if you don't buy it?

That's a good question. I don't know.

Does your uncle want to keep it? He wants to sell it. Somebody else in the family or he's going to hold it. Right.

Well, thing is, he's tight for money, so he wants the money. It's worth about $250 to $275,000.

Is there anyone else in the family?

Wait a minute. The 40 acres that is hunting land is worth $250,000.

Correct.

This is not hunting land anymore. Not at that price. I mean, deer meat is not that big a deal. Dude, this is expensive deer meat. I mean, you're paying, like, $80,000 an ounce here. Seriously. Hunting property is cheap property. $250,000. This must have some proximity to this is not out in the country somewhere. This is close to town.

Well, that's what it's worth. Like I said, we would be buying it for only 40.

Yeah, something's wrong with this equation. Okay? Either this is not hunting property that it is close to a metro area, or it's not worth that because hunting land, you don't pay $250,000 for 40 acres to hunt on up here it is.

Well, you don't have the money to buy it right now. Let's go back to that. I would not go back to baby step two, and I would not pull out another pull out debt on this.

Let's just pretend I could buy something that's worth 250 for 40, and I don't have the 40. I can't buy it. Let's just pretend that all of that is accurate, okay? I can't buy something I don't have the money for now. He wants the money now because he's hard up for money. So I guess another relative is going to do this deal. If you have something you can cash in or sell sell your truck.

Yeah, you could do that.

Get you a hoopdy, get rid of your $30,000 truck and then go a big garage sale, work six jobs and close on it by end of the year and pay them cash. Okay, if you want to do that, that's fine, but I'm calling BS. Okay? There's something wrong with this. I bought real estate my whole life. I own several hundred million dollars worth of real estate. I've got a 250 acre farm in that mix, okay? And, dude, no way. You don't buy stuff to hunt deer on for 250 grand. Not even in Michigan, not even in Wisconsin, wherever you are. Oh, my God. No. Unless you pay cash. I wouldn't do it. You do whatever you want to do, Ryan. But that's what we tell people. It's a toy. And extra properties and second homes are toys.

Yeah.

Pay cash and you pay cash for them. And even if it's a good deal, it's not a good deal if you can't afford it. Yeah, the shirt is half off, but I got no money. It's not a bargain. Shirt is not half off.

Right.

Didn't get the shirt. It's same deal. I mean, it's not a bargain when you can't afford it. And I just hear rationalization and yeah, no, don't believe it. Joe's in Youngstown, Ohio. Hey, Joe, what's up?

Hey, Dave. Thanks for taking my call.

Sure.

I am about $130,000 in debt.

On what?

And a lot of it is well, the majority is my truck and my wife's car.

Which is how much each?

The truck is 40,000, and the wife's car is at 15,000.

Okay. So you're the problem. Okay.

What else?

Well, that is a lot of the fine.

Sorry, I went straight to it, but go ahead.

Is only 30,000 a year right now.

You said 30,000.

What?

Yes.

Your income is 30K?

Yes.

And whose income is that? Is that just one or the other, or is that both of you combined?

That's just me. My wife is a stay home mom right now.

How many kids?

Three.

Okay. What's the rest of the $130,000?

Okay. So I own a home in PA that I don't live at. I have it on land contract, which was a mistake.

You sold it on land contract or you bought it on land contract?

I sold it on land contract.

Okay.

So that one is still 15,000 on the mortgage and 28,000 on the line of credit. That was with that.

Is the payment coming in enough to cover those two?

Yes.

Okay, so that's the purpose of a land contract. All right. So right now that's a break even. It's not your issue. Okay, right. That's 45 of the 130.

Right.

90. So there's another 40. What's the other 40?

A lot of it is I was self employed for quite a few years, and so I made some mistakes with some job estimations that I did. And so I owe quite a few metal companies a lot of money for metal.

And how long has it been since you paid them?

It's been months.

Okay.

Is it companies or company?

So you got 40K in vendor debt.

Yes. There is actually 31,800 precisely in building materials.

There's another 8000 floating somewhere. What is it?

It is personal loans from small lenders.

And stuff for just what happened to your income because you used to make more?

I quit my business because I was going through a struggle for a short period of time, and I decided that I'm just going to quit, go for a job. And it didn't work out, so I started a new company later, two years ago, actually, and right now, I am self employed. I do commercial roofing, and I have been struggling more than I have ever struggled with a business.

So here's my thing. Until your business is making you enough money to float your lifestyle, it's really just a hobby or a side hustle, and I commend you for starting that business, but it's not making enough money to manage your household bills, obviously. So you've got to treat it like a side hustle. That's got to be something you're doing on the side and building while you have a full time job.

How long you been doing that, the current business?

Two years.

Yeah. Okay. Jade's right. I mean, that thing should have been pushed to the side as a side hustle about 18 months ago.

I also work with another commercial roofing company that I work for like two to three, sometimes four days a week.

I mean, that's great, but are you going to argue that 30,000 is fitting the bill right now? Because it's not.

No, absolutely not.

Is the 30 from your business or the 30 is total of the two?

That's total of the two, yeah.

You're not making enough. You used to make close to six figures, didn't you?

I have never made six figures. I mean, I think the most I ever made was 50,000.

But there's two glaring things in your math that are going on. And part of what we do here is we have the advantage of not being in the forest so we can clearly see the trees. Okay. The glaring things are you have two cars that you could never afford at any time in your life. They should never have been purchased. Both of them belong in the crazy column. Nuts. Sell them both, get two 1000 $2,000 cars. And then the second glaring area is your income. You've got to do some things to get your income up short term and long term.

And I'd even be looking at the wife staying at home. I want to know how young those kids are, because it might be that she can go out and get some work as well.

Because you worked your tail end off yes. When you guys were getting out like crazy. So yeah, income is one side of the equation and two cars in the cray cray column is the other side of the equation. If you get those two things fixed, your life's going to shift very quickly to the good side.

That's right.

This is the Ramsey Show, live from the headquarters of Ramsey Solutions. It's The Ramsey Show where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Washaw Ramsay personality is my co host today. The phone number, if you want to talk, is triple 8825-5225. Nikki is starting this hour in Miami. Hi, Nikki. Welcome to the Ramsay show.

Thank you. Hello.

Hi. How can we help?

So I was calling to see if I, in your opinion, can afford or should I buy a $1.5 million house?

Cool.

I know it sounds like a lot. It's not a lot in my area. It's actually, I would even say a fixer upper for 1.5, but it's in a great desired neighborhood for schools.

Okay, cool.

I wanted your opinion, if that's a move we should make at this point in our lives.

Absolutely. If you can afford it.

Exactly. And that's my question. Can I afford such a big purchase?

So what's your household income?

Complicated. Yes. So that's the complicated part. So my husband and I, we make $290,000. However, we do have rental properties. As soon as we turn 25, instead of having a big old wedding, we took our money and we bought our first investment property. We paid it off, moved on to the next one paid that one off, and we've been building slowly.

So two rental properties, free and clear.

Free and clear. Yeah. We have four in total. We have one left to pay off.

Out of the four, can you tell me the first three? Can you tell me what they're worth?

Of course. So the first one, we bought it for 200,000, and now it is worth $800,000.

Wow, good.

What about the second one and my cash? My net cash every month is close to $2,000. After all expenses. My second property is paid off as well. Bought it for 250,000, now it's worth $800,000.

Sweet. Way to go. What about the third one?

Yes. Then the third one also paid off, and right now it's currently worth $350,000.

And what do you owe on the one that's not paid off?

330,000. And that one is worth around $700,000.

Okay. And is there any other debt that you have?

Just our cars. We owe, between both of us, $46,000 in cars. They're fairly new. We ended up buying them just a few months ago.

Anything else?

No student loan? No credit card?

Do you have any cash?

We do. We have about $150. And then aside from our income of 290, we also have our rental income, which nets to about 95,000 a year.

So that's separate from the 290.

That's correct.

That's in addition to okay, and do you have any other investments?

No, just of retirement. 401k.

How much?

Close to 160.

How old are you guys?

I am 37 and my husband is 40.

Oh, you've done extremely well. Congratulations.

Thank you.

And you're fairly new to this Ramsey stuff, I think, aren't you?

I did. I started watching the show and your videos just a couple of weeks ago.

As much money as you've got and as well as you've done, why do you care what we think?

Both of my husband and I were accountants, so we've done so far. And we sacrifice so much in our twenty s and thirty s to get where we are. I don't want to make the wrong move over a dream that is expensive.

The reason you built wealth, accountant, is to live the dream, not count the coin.

Correct.

Okay. So you're going to give up some of your rental income in order to live the dream. If I'm you anyway, I've got a bunch of rental property. I love rental property. I love real estate. All of mine's paid for. I never borrow money for anything. My house is paid for. Everything's paid for. Everything's paid for. Everything's paid for. So I'm going to have you in a paid for dream house by selling off some of your rentals. If I'm doing your deal now, that makes you a question whether you really want to do this or not. Because now the accountant is fighting with the little girl who wanted a dream house. Now who's going to win?

It is.

Well, look, it is.

We have discussed that option, but we don't want to let go. It's cash flow.

Yeah, it is.

But would you rather strangers live in the paid for house or you? That's the way I look at it. I'd much be willing to clear I'd probably clear rental number four since there's debt on it anyway. I'd sell that one and get 300,000.

Cash, then drop one of the 800.

I'd drop one of the 800 and.

Pay cash for this puppy.

And you're the one living in the.

Paid for house, not one of your renters?

No. Makes sense. Yeah, right.

It's funny.

I'm renting the houses out and I.

Live in what do you live now? What do you live in now?

I rented all of my houses and I'm the one living in an apartment.

Wow, okay. And you're a 37 year old multimillionaire with an income approaching a half million.

Dollars a year, and I'm still questioning what I should do.

Yes.

Well, listen, let me help you with this. Okay. There's three things you can do with money, and you need to do all three all the time. Be generous with it, invest it and enjoy it. You're only good at one investing and you are a world class investor, but you suck at enjoying it.

That is true.

Yes.

My husband says the same thing. We had this conversation last night. I said, Taylor Swift tickets are too expensive.

Oh, God. This has nothing to do with Taylor Swift.

But they better go see it. Y'all better go see that show.

How did Taylor Swift get in this conversation?

Because she put Kelsey on the map. Dave.

Oh, Jesus. Help me, Lord. Help me, Lord.

It's so expensive. I can't pay for those happen. And he asked me, what happens if you thought it will ask for it. He made me think at that point, I said, I got to think about it.

I got to justify the what would I believe? I teach people to get out of debt. I teach people to save. People that spend all the time, people that spend all of their money on fun and have no life consequently, except of stress and problems. So most of the people we talk to, Jade and I are on the other end. We're telling them, Grow up and quit being a child and quit having awesome fun. Instead, have some generosity and some investing in your life. So I want you to insert some generosity in your life. You didn't talk about that. I'm not saying you don't have that. But I want to make sure it's there. And I want you to enjoy some of this money. Here's the deal. With the money that you make, if you sacrifice one and a half rentals, the one that's paid for and the one that's not, and you get a nice home and you take a normal amount and start investing it, from this point forward, you're going to be worth $25 to $30 million at retirement.

Wow.

That's where you're headed mathematically. And you're an accountant. You can do compound interest. And you know what? It looks like you have this fabulous income. And better than that, you have this thing called self control and discipline. You're weird. It's awesome. Yeah. But you need to go get you a good house, girl. You earned it.

Sure did. Very good.

This is so fun. Way to go. Way to go, Nikki. This is the Ramsey show. What we teach at Ramsey boils down to taking control of your life. It's all about personal responsibility, and if you own a gun, that's even more important. So I recommend becoming a member of the US. Concealed carry association. You'll have immediate access to liability insurance, education, and training to protect your loved ones and defend your rights in the most responsible way. Go to uscca.com slash ramsey and join today. That's uscca.com slash Ramsey. Jade Washaw Ramsey personality is my co host today. Today's question of the day is brought to you by neighborly, your hub for home services. When something in your home breaks, remember the neighborly done right promise. Which is it's not done right until it's done right. That's cool. I like that. Download the neighborly app today, schedule your appointment, and you know you'll get great service when you're working with Neighborly's network of home service providers.

That's right.

Great company.

Yeah.

Today's question comes from rachel in missouri. She says, I've been listening to you for over 20 years, and I'm so grateful for your financial principles. My family is close to paying off our mortgage, and then we are completely debt free. Will you please give perspective on our world events, talking about the Israel at war, et cetera? What's the best advice to prepare financially for our own home and how to invest with so much turmoil? This is an interesting question, Dave. I'll give my $0.02 on this. I'd love to hear your side of this, Rachel. Things like this, whenever there's calamity, whenever there's uncertainty in the world, I think about COVID and all those things. I really go quickly to controlling what I can control. And in this case, like you said, you're close to paying off your mortgage. You're close to being completely debt free. Do those things that you know to do and continue walking down that path. And then for me, I just also have to accept it's. Like, in one hand, I control the things that I can control, and then on the other hand, I have to accept the things that I can't control.

And one thing that I have found that helps me accept the things I can't control is I tend to want to lean into generosity a little bit, and then there's kind of just like, okay, I can't go overseas, and I may not be the one that can save people, but I can be generous in my community. There's things that I can still do. So that's the way that I would approach that. And those are the two things that have given me peace in times like these. What about you, Dave?

No, that makes a lot of sense. Control, the controllables. I mean, when we were in the you know, we didn't know what was going to know. We'd never been in a fauci pandemic before. You didn't know what to and so, you know, you just kind of got to get in there and wind your way through. That one actually showed up in Missouri. I don't think Hamas is going to show up in Missouri. I could be wrong, but I'm pretty sure of that one might be wrong. I mean, sure, as I say that it'll be tomorrow, but I don't think so. I think you're probably okay, but then the question is, what do global events do to your investments? Well, if you invest in the stock market, for instance, in your 401K, sometimes global events temporarily affect that. A scare in the Ukraine, a scare in Israel, a war in Israel, a war in the Ukraine can affect stock market, usually fairly temporarily. Certainly an event in the homeland, an event in the United States proper, would affect the stock market. But even 911, when the towers were attacked by those cowards and they fell and they fell, if you don't know, literally within blocks of Wall Street, the actual New York stock exchange is right there, okay?

You couldn't get to it for a day or two because of the so. But also we traditionally shut down the stock market exchange, the New York Stock Exchange, and for that matter, the Nasdaq, which is in Chicago, will shut down trading during horrible events like an attack on American soil. We shut it down. Well, so it shut down. 911 was on a Tuesday. Stock market didn't reopen until Monday. And as soon as it reopened, you know what it did? It dove 500 points in a matter of moments. You know what it did? And then it went down, like, for a week. It just kept going down, and everybody's like, oh, they've crashed the towers and they crashed the American economy. No, not even close. I kept telling people, look, buy. It's time to buy. It's going down. Buy, it's on sale. Buy. I don't want to take advantage of a calamity. That's not the point. But the market's gone down. This is not the time to sell. It's the time to buy. Because 54 days later, it returned to.

Where it was, which nobody talked about.

And never made a single news headline. But the news headline, big, bold across the front page of the local liberal pamphlet we have that's called a newspaper. And big, bold letter, stock market crashes following terrorist Attack. You know how much coverage they gave it when 54 days later, it completely returned? Zero. Not one mention not one anywhere. Even CNBC, which is supposed to report on business didn't report it. Even Fox Business didn't report it because Fox Business was not in existence then. But there you go. That's how this world event things work. So what you do is you keep buying. So Dave, all the time, you just keep buying. The rest of your life you keep buying until it's time for you to sell. You do not buy or sell based on world events because they always have a temporary impact.

So we always say here that when you're investing, you're spreading it over four types, right? Growth, growth and income. Aggressive growth, international. And I feel like I've heard you say international is kind of like the wild child, right?

No, it's the weak spot.

That's the weak spot. And that is because those economies have.

Not done as well.

Right.

And we know that overall, in the United States, foreign stocks as a category have not kept up with US stocks as a category. But there's a reason for the last.

40 years, there's a reason that it's still a quarter of the strategy.

Exactly. Because there are times that things like a BMW or a Mercedes were they still owned by Germans, they're not now. But where they think of a foreign company then there's a bunch of them that you ingest and do business with every day and don't think anything about it, but their stock then is considered a foreign stock and so there's times that they're going to prosper, sometimes on the back of the US economy.

That's true.

But that profit is from a foreign goes to a foreign company then. So it's not a patriotic issue, it's a math thing. And so you just keep investing. You just keep investing, rachel and I got to tell you, if you're worried about a paid for house in Missouri because of the war in Israel, you need to turn television off. You're watching it too much because your reality is getting distorted as to what the real effect is going to be on your life. No one is happy about Israel being attacked. Well, some people are happy, but I mean, none of the people around me people like me happy about it. We're all horrified with what's gone on. It's absolute evil. But from a financial or economic perspective, year from now, it'll be a distant memory. From a political perspective, ten years from now, it'll be a history note and a book. That's all it'll be just a note.

That's true.

Like the 1960, 719, 72, same dates. It is real, right? Same thing. Just a note in the history book. But while you're living in it's a real thing. But you can't get caught up in things that are happening somewhere else. Control the controllables.

Yeah. It's tough. I think the way the world is, there's social media there's 24 hours a day, network news, right. And it's constantly feeding us the worst possible things happening in society. And if we don't put boundaries around that. We will destroy our brains. Like we will be in fear. 24/7.

It's a 24/7 news cycle. 24/7 fear cycle. It's fear porn. And not to say that the Israel thing is not real. Of course, it is obviously real. It's obviously a horrid. It's a tragedy. It's a disaster. It's all of those things. But is it going to affect Rachel in Missouri? No. Other than pray for I was going to say pray for peace in Jerusalem.

Yeah. Other than in the way that we can pray for passion.

That's all you can do. Hey, thank you. Thank you for your question. Rachel. Open phones at triple 8825-5225, by the way. There's lots of information on the stock market history that is very intriguing when you dig into it. One piece of information I saw in one of the brochures one time is if you had invested at the worst possible day in the stock market in the last five years and you did that every five years, you would have so much money.

The worst possible day. Yeah.

Because you were buying at the bottom yeah. Cheap. And you say, okay, this is the horrible thing that happened right after 911. If you had invested right, if you had invested after Black Monday in 1987, which the market just dove, like, 20% in one day, it was crazy. It's a weird day. If you'd invested on the worst possible days, if you'd invested at the highest possible days, how much money you'd have, and it's still a lot of money.

Something.

So the point of the chart or the illustration is keep investing, keep investing, keep investing. The only people that get hurt on a roller coaster are those that jump off in the middle of the ride. This is the Ramsey show. Jade Washaw Ramsey personality, is my co host today. Derek is in Salt Lake City. Hi, Derek. Welcome to the Ramsay show.

Hi, Dave. Hi, Jade.

Hey, what's up?

Hey. I'm getting married in less than two months.

Congratulations.

Thank you very much. She has about $23,000 of consumer debt. I do not have any debt outside of my mortgage. So my question to you is, should I stop baby steps four, five, and six and save up to be able to pay off her debts after the wedding, or should I continue four, five, and six till after the wedding?

So you don't have 23,000 cash now?

I do, yes.

Okay. Why would you need to save up then?

I'm currently finishing my basement, and so I'm doing that debt free, and so I'm only going to have about 15,000 left.

And is she contributing any to this 23,000?

She's working to pay it off right now, but when we get married, the lion share will still be there.

Okay.

So you've got 15,000 that you can put towards it?

Yeah, I would. Yes. To answer your question, I would stop my go ahead and get ready for the. Post honeymoon debt freedom, and then make sure you have a fully funded emergency fund and never dip into your emergency fund for anything. And that includes fixing a basement, which is by definition, not an emergency. And then after we have an emergency fund in place, we'll restart and put 15% of our new household income into retirement plans of some kind.

Okay, that makes sense.

Yeah. That's just adjusting both of your lives to fit the post marriage baby steps. Agreed.

Definitely.

Yeah. You were on track. You knew what we were going to say already, but you just want to make sure that the nuance was there.

Yeah, I had a couple more questions for him. I wanted to know if he was spending his emergency fund to do his basement.

Well, he had 23,000. He's going to be down to 15.

Yeah.

So I don't know how far that's what I said. You got to make sure the emergency fund is in place and a basement is not. Yeah. We went from this real noble, I'm going to pay off my fiance's debt after we're married to I'm finishing my basement.

Yeah, your face was priceless.

What? Finishing my basement. All right.

There's.

That okay. How are these in the same sentence? That's good. That's okay.

Maybe she wants the basement finished.

It's okay. Nothing's wrong with what he's doing. It just caught me off guard like a hard left turn. It was morgan is in Sacramento. Hey, Morgan, what's up?

Hi, how's it going?

Better than I deserve. How can I help yay?

I am calling because I have been a homeschooling, stay at home mom for the past 18 years, and my kids have just gotten old enough now to where I am working part time and we're trying to figure out what to do with my added income. Some of it is going to help make ends meet with inflation and all that fun going on, but we still have an abundance beyond that. And so we're trying to figure out how to if we in comparison with elevating our lifestyle with paying off the mortgage.

So you're on baby step six?

I think so.

Awesome. So that would mean for anybody listening, you have no other debt other than the mortgage. You've got three to six months set aside for expenses in an emergency fund.

Yes.

And you're investing 15% of your income before taxes. And then are you putting aside anything into five twenty nine s or anything like that for the kids college?

No, that stuff is all taken care of.

Okay.

How's it taken care of?

Oh, I'm sorry. I said wow. I said, yeah. My oldest was given a 529 already and has sent scholarships and is working her way through. So this is her first year. And we also have relatives that are helping along the way and are able to help, but we just really feel strongly, too about our kids work ethic and being able to put themselves through. We live in an area, too, that has a state school and a community college. And here in California, community colleges paid for by taxpayers. So there's just a lot of support.

So they're able to go without debt. So that's yeah, but you're contributing nothing debt free.

Yeah, correct.

Okay, so taken care of means that you think they have a plan.

Yes, that's true.

Okay. I just wanted to know what you meant. Okay.

Yeah.

All right, so I get it. That's been the plan. They're home school, and that's been the plan all along, and they know that. They're not surprised by it, and you're actually coaching them and showing them how to do this debt free, I hope, without mom and Dad's support and with the support of some relative money coming from some relatives. Okay, cool. Well, I mean, there's two things to do with the overage. Then it'd be baby step six, as you said. Put it on your house or enjoy it. How much overage have you got?

Probably about 1000 a month.

Okay, so what do you want to do?

Little things. Like, my daughter this year asked if she could have new soccer shoes instead of used soccer shoes, things like that. Like I really would like to do. And what we actually did do for my birthday, we bought a table at a banquet for a charity event for people. And that was so much fun to be able to do that. My husband likes to buy dinner if we ever go out with friends, so nothing huge, I guess. But then that's what we're thinking. Like, oh, maybe we could save up and go to next year's money and marriage event, things like that, that are super exciting.

What I would say, this is what Sam and I do, and we came up with this because we have variable income. And every month the question is, what do we do with this extra income? And finally we got to the point where it's just a percentage. And we know this percentage is going towards a mortgage, whatever it is, this percentage goes towards something fun we want to do, and this percentage goes towards giving. And that kind of takes all of the guesswork out of it. It kind of takes the tendency to maybe leave something that's important out so that you can do something else. And that way it's like, okay, we're covering every base every time there's extra money. And that's one strategy you could utilize with this. Because I do want you to be intentional about paying off your mortgage because it is part of the process, and it's very important for you to do that in order to build wealth. But like Dave said, it's extra. Right. And you don't have to be so intense about it. I just want you to be intentional. So you do have the opportunity to give some or save some as well.

Yeah, I agree with that. I think that's a great formula. And so it might sound like we're going to put 50% of all overage towards the mortgage. We're going to splurge with 40% of the overage, and we're going to give an additional ten for generosity out of it or whatever. You can switch those numbers around or you can have different numbers, but obviously out of $1,000, then I'd put 500 towards a mortgage, or 500, whatever that percentage tells you. And that's exactly how Sharon and I do it as well. We increase our lifestyle by a very small percentage on all overage. We increase our generosity and our investing by a large percentage on all overage. But we're blessed in that our income is so freaking ridiculous that a small percentage is a great for life. Our lifestyle. Increasing a small percentage is not a small dollar.

Right.

We just don't need to spend that much. It's just nuts. And we still have a crazy good life.

I think people do fear, like, lifestyle creep, though.

Yeah, but if you don't, you should fear it. Yeah, because if you don't learn to control how much you spend on your consumption, you will consume all of it the rest of your life, no matter what you make. And people will make $15 million, buy $15 million worth of stupid stuff, then.

That'S called mo money, mo problems.

That's it. And that's mo immaturity. So it just keeps growing. Right. But the formula gives you permission to enjoy the portion that you set for enjoyment and permission to do the generosity without looking over your shoulder. Was I irresponsible?

That's right.

And permission to do the investing without feeling like I'm Scrooge McDuck counting my coins, right?

That's right.

And so I love that where we allocate a percentage. I use it. We teach it to high income people all the time, but it works for anybody in four, five and six on any amount of overage. It could be 1000, it could be 10,000 overage, whatever it is. Good suggestion, Jade. Well done. This is the Ramsay show, folks. Changing your family tree takes more than rice and beans and side hustles. It's also about transferring the big financial risks off your family by having the right kinds of coverage in place. That's why my team created the coverage checkup quiz. It only takes about five minutes to find out what types of insurance you need and don't need to protect your finances. Make this quiz one of your regular checkups, starting right now@ramsaysolutions.com. Checkup. That's Ramsaysolutions.com checkup. Jade Washaw Ramsay Personality is my co host today open phones at Triple 8825-5225. James is in Santa Cruz, California. Hi, James. How are you?

Very good, thank you. I am a new listener. My radio station just picked you guys up and a couple of questions on credit scores. We have bankruptcy years and years ago and we've just been working real hard on bringing our credit up. And now we're in the 800. And I heard you the other day saying that isn't that important. So I'm just trying to find out about credit ratings.

Yeah. So, James well, number one, thanks for listening and thanks for even being open to what we're talking about here. The thing with the credit score is it's all about your interaction with debt. And since you have started listening, we are of the camp that debt is there's no such thing as good debt. Right? We want you to pay off your debt, and when you do pay off your debt, your credit score goes to zero after time, usually it's about a year that passes, and it will go down to zero if you have no debt on the record. And for a lot of people, yourself included, I think that is completely new information. It's like, wow, I didn't know that that was possible. And it makes people a little bit nervous because our whole lives, the culture is telling us you need to have credit score, you need to have good credit score, and you need a credit score to get all the things that you want in life. But when you really do look at that score, it's about how much debt you have, how long you've interacted with that debt, what types of debt do you have, right.

The history of your debt, what percentage of your debt that you're using. That's all they care about.

And it's only good for one thing, and that's to help you get more debt.

Right.

It's not an indication that you have a high net worth, a high income. It's not an indication you're winning with money. It's an indication you're winning with debt. And so it's a false measure of winning is our point. And do we want to purposefully destroy it if you've got an 800? No. But the only way you've got an 800 is since you filed bankruptcy years ago, is after the bankruptcy, you've had a lot of positive interaction with debt, meaning you borrowed, paid it back. Borrowed, paid it back on time or early. And you didn't get into crazy amounts of debt, I hope. Usually you don't get an 800 if you're way over leveraged. Right. And usually you don't get an 800 if you've got a bunch of wrong kinds of debt. By wrong kinds, I mean the super dumb stuff, right? But it's not all credit card debt, or it's not all whatever, but, I mean, you've been living a fairly normal consumer life and have paid everything earlier on time, am I right?

Yeah. And we have four vehicles. Everything's paid off. We have credit cards, but, I mean, we pay them off every month.

Right, but you didn't always or you wouldn't have an 800.

No. Correct.

The cars weren't always paid off, and the credit cards weren't always paid off every month or you would not have an 800.

Right. The only thing we have is our mortgage, and I just looked it up yesterday and it's worth like, 1.2, and we owe 513. So it's like $687,000 in equity.

Yeah. Way to go. Way to go.

We have two kids. Our girl is the last two years at Cal Poly, so we're paying their tuition.

What's your household income?

The wife is around 125 and I'm self employed, and I actually retired this last December, which doesn't feel like it because I'm still working.

What do you make?

On paper? I'm about 20 to 30.

Okay, so here's the premise. You're a brand new listener. The thing that we've discovered and I've lived and we have taught now for 30 years on this show is the shortest, fastest way to an extremely stable, wealthy enjoyment of money is to become and stay debt free, because that frees up your income. It takes away the risk of problems. And you're living in a fairly risk free environment right now. You have nothing left but a very small mortgage, and relative to the value, and your wife has a good income. You've been very careful, calm, wise. You've not done anything super stupid here. You've done a good job, a very good job. And so in your mind right now, this idea of living without debt completely, it's not that radical because you're almost there, basically. Right? And then the point being, do you want to go back into debt? If you want to go back into debt, I would argue with you. If you want to go back into debt, you should protect that credit score because it's the easiest way to go into debt. But if you're not going to borrow anymore and you're just going to build wealth and the next time you get ready to buy a car or put a kid in school, you're going to figure out a way to write a check to do that and you're not going to borrow money, then your need for an 800 credit score is very low now.

You don't have to worry about it. It's not doing anything wrong. It's just sitting there and there's no sense in like I said, we don't need to shoot it or something. We don't want to destroy it. But I'm not going to sit and fret like most of Americans do about oh, God, it dropped ten points. Who gives a crap? I mean, it doesn't matter. You're not using it. It has only one use, and that's to borrow more money. And if you decide, like I decided 30 years ago, and you've been moving this way before you even met us, James, you've been moving towards being debt free and hopefully staying that way. If you decide I'm going to stay that way, then you have no use for a credit score. Right?

Yeah. And the further you walk down the path, the easier it gets. Right. When you first start out, you've got a bunch of debt and there's more risk in your life you're thinking, well, a lot of people erroneously think, I need a credit card. What if something happens? It's my safety net. And then they start to realize and get their confidence of, wait a minute. I can use my own money. I don't need this credit score. And the further you get down that line to where maybe the only thing you have left is your mortgage, then it's like, yeah, what do I need a credit score for? I've got everything. And now I have all this extra cash because I don't have payments. So if I do need something, I can easily stack up the cash to pay cash. I don't need debt.

That's it. Once you know that, then you don't need a score. Yeah, that's what james, thanks for being a brand new listener. Caleb is in Charleston, West Virginia. Hi, Caleb. How are you?

I'm great, Dave. How are you doing?

Better than I deserve. What's up?

So I do reside in Charleston, West Virginia. I own a roofing company. We're coming up on just over two and a half years in business and fairly healthy. We will be projected about 2.2 million.

Right. Good job. Well done.

Thank you. And we've accumulated a decent amount of money. I've got actually just checked it this morning around 303,000 and change in the bank. But it is just sitting in the bank. So I can give you a little bit more details of kind of our family. We've got two young girls, and when you work pretty hard for that type of money, you seem to keep it closer to your chest. And I don't know if I'm doing disservice to myself as well as the family if we don't pick up a little bit and be more aggressive in.

Well, you need an emergency fund at home. You need retained earnings at the office. You need some cash at the office for operations, for growth, for buying things so you don't use a line of credit to the office, that kind of stuff. So I keep a retained earnings fund here at Ramsay. All right. And then at home, I've got an emergency fund. So some of that 300 will be allocated to those two things. The rest of it should be either used to pay off debt or to invest or both, depending on where you are in the baby steps.

Okay.

Are you familiar with the baby steps?

I am familiar.

Okay. Where are you? Are you out of debt?

No. And you're probably with the type of money and again, it's one of those things where it's sometimes hard to give up some of the money that I've worked you already gave it up when.

You bought the item with debt. You just hadn't admitted it yet.

Yeah, that's what I want to know. You did 2.2 million in revenue, but did you guys take out debt on the business?

No, the business has zero debt at all.

What's the debt that you're ashamed of that you don't want to talk about.

130,000 in my mortgage.

Oh, is that all? Is that all?

I have 130,000 mortgage?

That's it. That's no biggie.

Pay it off, man. Oh, God. Pay that off today. Good Lord.

I thought he was going to drop a bomb on us.

I thought you were going to tell me you had $80,000 truck. I really did, yeah. Oh, my God. No. Pay off that mortgage, man. Today.

Great. Exciting stuff.

Yeah. And then you still got 150,000 and $80,000. Yeah. Oh my gosh. This is the Ramsay Show, live from the headquarters of Ramsay Solutions. It's The Ramsay Show where we help people build wealth, do work that they love and create actual amazing relationships. Jade Washaw, Ramsay personality, is my co host today. Thank you for joining us. The phone number is triple 825-5225. Brian is in Minneapolis, Minnesota. Hi, Brian. Welcome to the Ramsay show.

Hi, Dave. How are you?

Better than I deserve. What's up?

Yeah, so my wife and I, we are both 25 years old. We got roughly $35,000 in debt and that is pretty well just consumed in vehicles. I got a truck and she's got an SUV. We got our first child on the way and we are just looking for some advice as far as getting out of debt and stopping living paycheck to paycheck.

So you've got 35,000 in two separate cars. Can you just break that down for me right quick?

Yes. So the truck, we have about twelve, five that we owe and whatever the remaining balance is from that is what my wife owes on the vehicle.

Okay, got it. And so what's your income?

So our combined income, it varies a little bit because I am full commission sales. However, combined we gross roughly 120 a year.

Okay, 120 a year, good for you. That is good. When I look at 35,000 in cars, I don't think with your income, I'm not like, oh my gosh, you guys are out of control. But I am wondering, where is your income going? And my first question to you is if you're on a budget or not.

So we are not. And we actually just started the baby steps. We got our emergency fund, we paid off our smallest debt just last week. We need to get a budget together because it's kind of a deal where every paycheck, it's like, where the heck is our money going?

Yeah. So I think you've got a lot going on in your life. You got this debt, you want to get it cleared up, you've got baby coming up, you want to get that cleared up. What I want to tell you is I know you want to get out of debt and that's good. But during this time, what I really want you focused on is just piling up as much money as you possibly.

Can until baby comes.

Yes. Because when the baby gets here, everything's going to be fine, wife's going to be fine. That's the goal, right. That's the hope, wish and want. And so when the baby gets here, everybody's healthy. Then you can take that big chunk of money and attack these cars and order smallest to largest. So we're hit the truck first.

You should have more than enough to pay off her car the day baby comes home from the hospital.

Yes.

Okay. Not her car. Well, either car. You might have the 22,000, but you definitely have the 12,000. Agreed, right? Yeah. So pile it up as big as you can pile it, start your debt snowball hard and fast with that big pile of cash is what Jade's saying, when the baby comes home. In the meantime, I like just having a big pile of cash when a baby's on the way.

Yes. And that's kind of what I was wondering. Know, I don't want the baby to show up and then we have no money.

Well, I'm not worried about you being able to feed the baby. You can do that on 120, right, in case there's a little medical hiccup or something. You want to concentrate on baby and on mommy, not on debt.

That's right.

Having no money with a baby on the way is scary. So let's just pile it up. Get on that written, detailed budget, use that Every Dollar app, you and your wife sit down, lay out where Every Dollar is going to go every month before the month begins. Every dollar has an assignment. Every dollar has a name. Every dollar has a mission. You both agree to it. You pinky swear and spit shake and you freaking stick to it.

Yeah. Because at the very least, you know you're going to hit that deductible and you're going to have to pay that out of pocket, which depending on your insurance, could be pretty high if you've got a high deductible plan. So you know you're at least going to hit that with the baby.

Yeah, you're going to have that. And we want to pay a car or two off. Yeah. So it would be very cool. And how much money can you save in nine months? 9000, $10,000?

Hey, let me ask you something about that. So somebody mentioned if, you know, you're having a baby going into the hospital up front, that there's an advantage to going in and paying up front for the delivery cost if you don't have insurance. Only if you don't have insurance.

Yeah, if you have insurance, it's all set.

It doesn't matter.

It doesn't change anything because the insurance company has already cut the deal. They have a baby cost X deal. Okay. The insurance company does. But if you've got, I don't know, let's just say labor and delivery is $12,000 as an example. I don't know what it is. I haven't paid in a long, long time. But let's just say that's probably about what it is. Give or take right now. And if you did not have insurance, which would be highly unusual.

It would be. That's why I was trying to get around that.

If you do not have insurance, it's a very interesting thing with hospitals. It's the only time you go to the hospital that you're glad.

That's true.

So babies are good PR for hospitals? Well, people come there and everybody that comes about, the baby's happy and the.

Baby'S happy, well, Mama's not glad until.

Well, I don't mean that, but I mean, it is a celebratory event. That's right. It's not having your appendix out. Okay. It's not having your knee replacement surgery done. It's not your mother died of gallbladder disease there. People go to hospitals to die. It's not that right. It's the only time that it's a happy story.

That's right.

And so hospitals want people to have babies there. Yeah, because it's a good thing for them from a PR perspective. It puts good vibes into the community. Right. So with all that in mind, you can go in ahead of time and negotiate and prepay. And they'll cut as much as half off that's pretty in labor and delivery. They probably will do it on other procedures, but they're known for doing it industry wide on labor and delivery, which tells us that we're paying too much through insurance, but our insurance is paying it, but we're paying the insurance. And there we go.

But anyway, the way mine was, the doctor's office set up whatever your deductible was, and they're like, you pay half now, you pay this much, and then by the time the baby was done, you had already done it.

And it really wasn't optional. It's a program. But again, this would have been a while. Pre. Obamacare as an example, there were more people walking around that insurance.

That's right.

Now they just pay twice as much for it. But there were more people walking around than out insurance in those days, so you could go in and negotiate. We had great success with that back in the day. I don't know how that much that would apply today, because I don't know how often somebody actually goes into a hospital for labor and delivery without insurance.

It'd be fairly true.

Austin is in Jackson, miss. Hi, Austin. Welcome to the Ramsay show. Hey, Austin, you're going to hang on to the next break? I just looked up and saw the time. Sorry about that. I'm not going to try to answer your question in 15 or 20 seconds here. Yeah, that doesn't work at all. So I suspect if you had elective surgeries that were not insurance covered, that you probably could also go in ahead of time and say, if I prepay, what kind of deal will you give me? And I'm shopping other locations to do this elective surgery.

That's true. Yeah.

I like that. Again, something that would not be insurance covered that has not been dictated, but yeah, I suspect you could do that there as well because you've got choices then. A you don't have to do it. B you certainly don't have to do it there.

That's right.

And so again, your walk away power from a negotiation standpoint is intact. This is the Ramsey show. Here's the thing about investing advice. You can find it just about anywhere. But that doesn't mean it'll always help you with your personal goals. Here's another option. Check in with a SmartVestor pro. These financial advisors can review your plan or help create one that's personalized to you. To find a SmartVestor pro in your area, go to ramsaysolutions.com SmartVestor. Go to ramsaysolutions.com SmartVestor. Ramsay Solutions is a paid nonclient promoter of participating pros. Learn more@ramsaysolutions.com SmartVestor jade Washaw Ramsay Personality, is my co host today open phones at Triple 8825-5225. Austin is in Jackson, Mississippi. Hey, Austin. How are you? Austin, are you with me?

Yes. Can you hear me?

Yes, sir. How can we help?

I hope you both are doing well today. So I recently, probably within the last few weeks, stumbled upon your content. And I'm just trying to wrap my head around I have a 6% salary match. Four hundred and one K and I'm trying to wrap my head around foregoing that and putting in straight into debt. And I was looking for an explanation.

That's a great question. That means you're being very thoughtful about all of this. Very well done. So what do you do for a living?

So I am actually a purchasing manager for a mine.

Okay. And so you have a degree in business? Possibly?

Yes.

Okay, good. I thought so because you're good at seeing the math thing right in front of you and going, well, that seems dumb. So here's a couple of things that we discovered. And honestly, doing this for 30 years, 25 years ago, I was backing into some of these ideas because I come from the same academic background but back when the dinosaurs roamed the earth that you came from. Okay. And so my first tendency is to nerd out and fix everything with math. But I figured out in personal finance that the data of best practices among millionaires doesn't necessarily follow math all the time. In other words, personal finance is more personal than it is finance. It's more behavior than it is math. And so what we've discovered over the decades of doing this is that, in other words, here's an example. The power of exclusively focusing all of your money energy, your arithmetic energy on one goal for a short period of time. Supersedes the employer match.

Yeah.

The power focus. Although that's a little bit nebulous and hard to put a math figure to, we've proven that over a decade, getting clear of consumer debt very, very quickly increases the probability that you actually do it, number one. But number two, it gets you out of debt and frees up then your most powerful wealth. Building tool, which is your income when you bifurcate your focuses, meaning you spread them out. When you spread out light, it merely lights a room. When you focus it, you can do surgery or manufacture things with it called a laser. And what we're doing here is for a short period of time, not an extended period of time. The theory doesn't stand up and the hypothesis doesn't stand up over a long period of time, but for three years or less if you forego a match and forgo all investing. And in lieu of that, they have this tremendous emotion and psychological focus on singular goal of becoming debt free. And then you stay out of debt for the rest of your life. You not only get the match, you get to max out all of these retirements and it ends up being, 15 years later, the shortest path to becoming a millionaire.

Although the short term math of missing out on that match for someone like you, Austin, or me that was trained in nerdville, it feels blasphemous, doesn't it?

I understand what you're saying. I feel like I'm stepping over dimes to pick up pennies almost.

When you take the match, you are.

Yeah, I get what you're saying. It's better to direct my approach towards one thing as opposed to try and spread my avenues out, which hasn't worked for the past however many years I've been going at this.

Yeah, let me give you another example because it's a great discussion for everyone to listen in on this conversation because this comes up a lot, because it's a real valid question and a valid discussion. But here's the other thing. If you don't get out of debt and you don't change your mindset about debt, and you languish in consumer debt for ten years because simultaneously you're trying to invest, then what you've done is you've completely disabled the wealth building mechanism. And so by simply increasing the probability of becoming and staying debt free by shortening the term, you've increased the probability of wealth dramatically. In other words, you can't half but do the get out of debt and half but do the investing thing at the same time. And ever get this right, you never get clear of it. That's what ends up happening. But, man, I get tripped up on the math thing. Here's another the debt snowball versus I was on a podcast the other day with a young lady in our space, Erica, very smart lady, and she used the debt avalanche to pay off she's a lawyer pay off her law school debt.

And she was talking to me about that. And I said, yeah, but you're a highly disciplined, valedictorian law student, okay? You're an unusual human being. Most of us are normal human beings. We have to see the feedback loop of getting the little one paid off and sensing some success and traction, which keeps me plugged in. The psychological feedback loop supersedes the math change. And here's the thing. The probability of completing the Debt Avalanche is one 10th the probability of completing the debt snowball.

Yes.

In other words, nine out of ten people that start the debt snowball complete it one out of ten on the Avalanche completed or whatever the number is. But the completion probability is not figured into the stupid math equation. When someone says, oh, you should pay off the highest interest rate first, I use the Debt Avalanche, which means you've been on TikTok, not in reality. That's what that means. And so, again, behavior trumps math when you do it on the short term, because our behaviors are what caused the debt in the first place.

Yeah, I agree. I mean, when I look at it, I think about it. If you look at it as like a football field, right? And let's say debt's in the end zone, if you run straight, you're getting there faster. But if you zigzag a yard here and then zigzag a yard there, and then I'm going to put five over here on this one, it takes you forever. Forever to get to the end zone.

That's exactly right.

Running is run it straight up the.

Middle all the way and take the yardage. You can get take it and then play the next play.

That's right.

Play the next play. Just straight down the middle. Run it up the gut. Run it up the gut. That's exactly what we're talking about. But the other thing that we don't even us math nerds, because I've been teaching it based on behavior for 25, almost 30 years. So I understand it, I believe it, and I've got 10 million people that have done it. I've got the proof text that I'm right, but it still messes with my brain.

That's funny. I'll be honest with you. That was the one thing that didn't mess with my brain.

You came out of the music background, the artist background. You just went, this is how to do it.

Do it. Yeah, that is true.

There's one way to play that song.

Yeah. And this is the way. Yeah.

I mean, it's not that song. If you play it two ways, it's a different song. That is true. Yeah. But the math thing is you cannot. And it's the mistake that the financial world has made. All of the financial planning world and all of the investing world and all of the insurance world, they try to do everything based exclusively on math. In a behavior based world. Yeah.

They forget about mindset. They forget about behavior.

If we were only doing math, no one would have credit card debt facts, because it's mathematically absurd. If we were only doing math, no one would borrow $250,000 to get a degree in left handed puppetry.

Come on, Dave.

We were only doing math. But this is not about math. No one would go into debt to go to a college campus because they have a good football team.

Isn't that funny, Dave, how the math.

Matters until it doesn't matter?

Right? When we don't want it to matter because we get something, it doesn't matter. But then when it's like, wait, if.

It'S we were doing math, we wouldn't buy a car that has a toxic plastic smell in it called new car smell. And watch the depreciation happen when we drive it off the lot.

That's it. Right?

When you hear that sound, when you go off the lot, bloom. Bloom. When you break the curb, that was the sound of $10,000 leaving your net worth. But if we were doing math, we would never do that. No, but we smell the toxic smell and go, oh, my God. This is wonderful. Smell the leather. No, it's not leather. It's carcinogens. You're getting cancer right now. Oh, my God. Unbelievable. But, yeah, I mean, if we were doing math, we wouldn't do almost anything that we stupid human beings do out there. Austin, that is a great question. You're awesome. Thank you for asking that question. But the answer is, don't solve a behavior based problem with a math based solution. Ding, ding. This is the Ramsey show. All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're someone you can trust to have your back. From the first call to closing day, find a Ramsey trusted agent near you@ramseysolutions.com. Slash agent Ramsaysolutions.com. Slash agent.

Thank you for joining us, America. Jade Washaw Ramsey personality is my co host today. I'm Dave Ramsey, your host. This is a show where we talk about your life, your life right in front of you. And we unpack all of it. And we're generally really nice about it. I tell you, even if we're tough, it's just because we love you.

That's right.

And we want you to win. Ben is with us. Ben is in Meridian, Mississippi. Hi, Ben. Welcome to the Ramsey Show.

Hello. Thanks for taking my call.

Sure. What's up?

So, as of this time next week, we will be baby six or baby step six complete.

Look at you. Baby step seven is what that means, right?

Et cetera.

Wait a minute. Wait a minute. Let me stop.

We're trying to just breeze past that.

You finished baby step six next week. You mean baby step seven. You got your house paid off?

We will pay it off next Tuesday or Wednesday when Mr. Schwab gives us our money.

Come on, Mr. Schwab. Here we go. Baby. Love it. Congratulations. Ben, how much is the house worth?

Hopefully about 450.

Cool. How much in your retirement accounts?

About 100. And then pulling some of these investments in a big savings account to pay it off.

All right, good for you. All right. How's that feel?

Palms are sweaty just thinking about it.

You're going to love it. If you hate it, you can go get you another mortgage, but you'll be all right. No, I love it, man. All right, how can we help you today?

We also have other money set aside for sinking fund. Our house is 15 years old. We expect things like HVAC, water heaters, things like that to come. Is that simple savings account type money or is that investment money?

I would not put that as investment money. I think the idea when you know you have things coming up and you want to do sinking funds that's separate even from your emergency fund that's separate, yeah.

You can use the EveryDollar app to create a breakdown of the sinking funds. For instance, let's say you had an emergency fund and then you had a high yield savings account that you dump all the sinking funds into, and you say the Every Dollar app will keep up with okay, there's $10,000 in there, 4000 is for air conditioner future, 1000 is for Christmas, and so on to where the $10,000? None of it is vague. It all has a name in that one high yield savings account. You can break it down. The every dollar app. Right. That's how you do it.

Yep. You do it as funds. The only time I would think about something that's investable is if it was years and years down the line. Like maybe you have this dream of renovating a room in your house and you know it's five or six or seven years down the line. Something like that.

Yeah. Or Ben, I'll tell you when I did it. In addition to that okay, I'm going to talk sinking. This is not a sinking fund. This was just extra investing. And what I was doing was I was saving to buy my first rental with cash after we went broke and had a house that was paid off. So I just started throwing that in an S and P 500 index fund and it would just sit there and churn until there was enough to buy a rental. And then I would throw all the rental income, net of expenses and any other money I could find into an index fund until I had enough money to buy another rental. And then every time I did that, I had more rental income going into there. So pretty quick those houses started buying other houses and rental properties started buying other rental properties. But that's the only time I did it. Other than that, just a high yield savings for stuff like air conditioner, roof replacement, Christmas next car, that kind of stuff. I would just use a high yield savings separate from your emergency fund, but you can keep it named inside of every dollar broken down.

Yeah, that's a really good differential. And I think, Dave, you and I were on the show a couple of days back, and we talked about that. Your emergency fund. Like, if you want to have some savings know, sinking fund type stuff that is totally separate from your emergency fund, your emergency fund is only for actual emergencies. And I would not I keep them physically. Yeah. I would not put those in the same savings account.

No. Because otherwise a bass boat will turn into an emergency.

Oh, yeah.

And who says it's not? But it is. But it's like, of course it is. I need a larger motor. Those bass keep out running me. That's it. They're fast little critters. That's the thing. But you look down and you go, hey, the boat I was thinking about I had $10,000 saved for are $25,000. I really want to buy $5,000 more and reach over and pull it out of the emergency fund without even half thinking. But because it's not in the same account, it makes it hard to do that. It'll keep your butt from doing it.

That's right. It sure will.

Because my wife will amputate my hand if I reach towards that account.

I call that uncle boo. Boo.

Uncle Boo Boo.

Yeah. We all have an uncle who convinces us to make the worst possible financial decisions.

The dumb little guy sitting on your shoulder.

Oh, yeah.

Like the little devil on your shoulder. Uncle Boo Boo. Yeah.

He'll look at that money together and say, oh, that looks like you have enough money to go to my wedding in the Caribbean.

Next thing you know, this sounds like this happened. Jay did that really?

I know.

Look, that sound like that really happened just then I sensed that you went to a Caribbean wedding at some point that you wished you hadn't.

I will convince you.

I saw boo. Boo. Uncle Boo Boo is a persuasive sales guy. I didn't know him before, but I think I know him.

He sells whole life insurance. He only buys new cars because he thinks they're good investors.

A payday lender.

That's right.

What a jerk. James is in Chesapeake, Virginia. Hi, James. How are you?

I'm doing good.

How about you? Better than I deserve. What's up? Yeah.

So let me give you a little rundown. I'm 19 years old. I'm an electrician, and I make just over $40,000 a year.

Cool.

And, of course, drive a company vehicle with that as well.

Very good.

I've had some, I guess a couple of people, but one in particular mention about credit cards. I don't have a credit card. Don't intend on getting one. And I guess I should say won't get one, but with the credit cards, I've had somebody say that when they use them, they're like a fraud protection. Not because you need the cash back or for the actual because you don't have money and you've got to pay it in advance or you don't have the money now, but you could pay it at the end of the month. What is the fraud protection? Or why is it, I guess, okay to use a credit card? Because of the fraud protection.

There's a lot of lies out there that have been spread about this by people who love credit cards. James so you can look it up for yourself. It's not hard. If you pull up Visa and Mastercard's fraud protection on their website, both of them use this language. Okay? You have a zero liability in the event of fraud for credit card use as fraud. Visa and Mastercard no Mastercard product, no Visa product of any kind, credit card or debit card allows someone to misuse your number, and the bank charge you for it. So if there's online fraud, if someone steals your number, if someone steals your card and uses it, you are not liable. You have a zero liability with a debit card or a credit card with Visa, and you can look it up on their website. It has big old capital letters, zero liability policy on their agreement, their cardholder agreement. So the idea that a credit card has more fraud protection than a debit card is simply not true. It's someone that doesn't know what they're talking about.

Okay?

You can look it up. It's really just pull up zero fraud protection on debit card debit. It's right there. It pops up anywhere. Google will put it right in your face. So it's not even hard to research this and find it out. But people hear some Doober talking about, I get airline miles and I get fraud protection. And no one should ever recommend a debit card because it doesn't have fraud protection. And they heard some moron on TikTok say that, and so they believe the moron on TikTok, instead of actually looking up the credit card agreement or the debit card agreement, it's universal. In order for it to have the little Mastercard or Visa symbol on the front of it, whether it be a credit card or a debit card, the issuing bank has to abide by the agreement with Visa and Mastercard and provide a zero liability in the event of fraud.

There you have it.

Ding, ding, done. Yeah, it's over.

I've never had a problem using a debit card if somebody did, for I've never ever had a problem with them giving my money back.

I've never even it gets shut down with the stupid fraud algorithms. But so the credit cards yeah. Did you make this charge? Yes. I was in Mexico. Okay. But oh, my, my. We have to call and notify our bank if we're leaving the country, because they immediately assume someone stole our yeah, so but that's the world we live in because there's fraudsters everywhere. But either way, you're protected in the event someone actually did use it. We actually did have somebody hit my card, come to think of it, and the bank just put the money back instantly.

That's right.

But they can wait two or three days, but they generally don't.

Yeah.

This is the Ramsay show. Our scripture of the day. Proverbs 1311 dishonest money dwindles away. But whoever gathers money little by little makes it grow, like investing and stuff. There you go. Bob Hope said, a bank is a place that will lend you money if you can prove that you don't need it. I miss people like Bob Hope. I'm so old. I love it. I love it. Wow. All right. Cody is in Montgomery, Alabama. Hi, Cody. Welcome to the Ramsay show.

Hello, Dave. How are you?

Better than I deserve. What's up?

So I'm a 21 year old college kid, and I'll be graduating this May with zero debt.

Way to go.

I've had the honor. Well, I have to pay credit to my parents. They've really helped me out with this, and they've seen the damage that student loans can do.

Wow. Wonderful.

Me and my girlfriend have been together for six years now, and we're both in nursing, and we're projected to graduate together in May, and we're expecting to make 120 to 140 our first year combined.

You're not combined. You're a girlfriend.

Well, yeah. That's to come, though. I plan on getting married before all this is over.

Okay.

Like before graduation? Is that what you're saying?

Shortly after.

Okay.

Good for you. Okay. Fun. What a great life.

Thank you. My parents are going to allow me to live at home and save all this money so I can adjust to this new job before I jump out and start making a bunch of crazy decisions. And my girlfriend, she doesn't really want to do that. She wants to maybe stay at home for six months. I'd like to stay home for a year and save all my money so I can have an accurate down payment on a house. And I wanted to ask you, should I put down larger than the 20% that you recommend and put the excess in investments?

I'm a little bit confused. Are you getting married and the two of you moving in with your parents?

No. So shortly after graduate, we're going to live at home separately. I mean, she lives basically right down the street from me the first year. That's my plan.

So you're not getting married right after graduation?

No. It'll be within that year, though. But it'll be within that year.

If the point of waiting to get married is so that you can do this house and down payment, that wouldn't be a reason for me. You know what I mean? I feel like what you're trying to do is create, like, this perfect six freaking years.

You're going to go live in your mother's basement to save money to be one more year before you actually marry the girl? No, not a chance, dude. You all go get married, get you an apartment this summer, get married in May, start life in an apartment start piling up money. If it takes you a year or two, buy a house. You're going to be making both nurses. Oh my gosh. It's a wonderful career field. You can work, like, as much as you want to work, save up money. Don't worry about a house. You can buy a house after a year. Buy a house after two years. I don't care. You're still going to be 25 years old, be a homeowner and be debt free. Everything but the house.

I know that's right.

You're going to be very smart and very married.

I appreciate it. And I have one more question. We love the idea of being a travel nurse, and we'd like to do that after about three years of experience. So three years after graduation, we're going to try to go all over the country and do that for about two to three years. Should I be renting or should I buy a house before I leave and try to rent it out?

If I knew that I was wanting to be a travel nurse and travel all around the world, even more reason to just get an apartment and hang out there until you're ready to settle.

Yeah. I wouldn't buy while you're traveling. If you're going to travel for three years, why don't you do that early? Why do you have to wait? You have to have experience to do that.

Yeah. The field usually requires one to two years. Some of the rules have changed with COVID but that's still what yeah, with.

The nursing shortage after the fauci pandemic. That's a thing. Yeah, that's real. I mean, the nurses, man, we had some nurses coming in here. We had one lady, you remember that lady? I don't remember if you were on the air with me or who was. We did a debt free scream, the travel nurse. And she made, like, COVID year.

Oh, yeah.

Chick made, like, 550 grand in one year. She worked all the OT, and they were paying, like, triple time because, wow, you were the hot commodity then, and you are still because there's now a shortage because so many people left over vaccine requirements, mask requirements, other things. They left the industry, they got out of it. And so then now there's a shortage, and now the hospitals have this weird thing. They forgot that they ran all their talent off. Now they're going, oh, God, we were stupid. Who knew? But we were requiring everyone to be vaccinated and people didn't want to do it, and so we fired them. Oh, yeah, that's us. Wow. Okay. Yeah. So if you can go on the road, the sooner you can go on the road and make bank, I would call that your early adventure.

Yeah.

Two of you get married, may pass your bars and go on the road and go make three or 400 between the two of you. Not 120 between the two of you.

That beats Mama's basement. All day.

Ding, ding. Got to tell you, beating mama's basement is a low bar, though.

Hey, it comes with free meals.

It's still a low bar. Love mama. Love you, mama. Love you. Mama not coming. All right. Mama and them, that's a southern thing, right? Tracy is with us in Portland, Oregon. Hi, Tracy. Welcome to the Ramsey Show.

Hey, Dave and Jade. It's so good to talk to you both.

You too.

What's up? Thank you. I need some Warshell Ramsay math magic, please.

Let's go.

Give it a shot.

Okay, so here's my background. In April of 2022, I purchased a home in New Mexico. However, due to medical reasons, I had to return to Oregon and I'll be staying here. So as of now, the home is with a property management business and it's currently rented short term. So here's the numbers I have for you. I purchased it for 380,000 with 120 down at 4.9% in April of last year. It's currently valued just looking online at Zillow for 60,000 less than what I paid for it already.

Zillow is not dependable.

I know.

What city are you in?

I get it. Alamogordo, which it's out in the middle of nowhere, but there is a military base nearby. I put 50K in upgrades and my question is, should I sell it or leave it as a rental in hopes that it continues to be occupied or sell it at a really big loss? And it rents for 2500 a month. My mortgage is 1700 a month. So with the property management fee, that gives me about 550. I'm not looking to make money, I just want to break even. But it doesn't look like I don't know what to do.

Yeah. Number one, I want to get better facts. So what I would do is go to Ramsaysolutions.com and click on the Ramsey trusted real estate agents, the endorsed local providers, have one of them go do a comparative market analysis, a CMA on it, which is basically a realtor appraisal. And let's find out what the house is really worth and find out if the bloodbath you think you have is really real, because that changes everything. I mean, you think you're going to lose 50,000, turns out you're going to lose 5000, it changes the discussion. Right, right. And so, yeah, 5000, I'm out of here. Make 5000, I'm out of here. Okay. But generally speaking, nationwide houses have not dropped that much.

Yeah. If this is true, what do we think would have caused that other than.

You in she got in the fever and overpaid got in the mean.

Maybe I did. Maybe I did because I sold my house here in Portland to move down there and made a mean. People were doing the same thing on that end. They were getting what they could for the houses and there wasn't much of a market, so I had to buy a house at the time. So I didn't buy it. It was valued. It appraised. It that I had to go through the VA. So it appraised. It just the market has fallen there.

It's possible that a unique micro market, the macro market nationwide has not dropped, but some of the individual markets have. And some of the individual markets have increased still substantially because there's still shortage of housing. So it's possible. But I would want to do something more than Zillow to make the decision. I'd want solid info. Get a good Ramsey real estate agent, a good Ramsey trusted real estate agent to go out there and walk you through this. And they'll tell you, I think if you'll hold on six months, this market will rebound based on things that are happening in that local economy. I don't know.

No, I definitely wouldn't listen to.

Mean not as my sole arbitrator. It might be accurate. Sometimes it is, but they use algorithms. They're not using actual CMAs, and so it's not slamming Zillow. It's just a matter of it's a mass produced thing. So, anyway, look at that and then decide if you can stomach the loss or not. And if you want to, there's not a wrong answer unless it's putting you in a pinch today. This is the Ramsey show. We'll be back with you before you know it. In the meantime, remember there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace. Christ. Jesus.

Hey, what's up, guys? It's Jade. Look, if you like what you heard in this episode and want to know more about getting started on the Ramsey baby steps, go to ramseysolutions.com and click the Get Started button. We'll help you figure out the best next step for you based on your specific situation. That's Ramsaysolutions.com. And click. Get started.