Does Land Count Toward Our Net Worth If We’ll Never Sell It?

Summary

Ramsey Everyday Millionaires: Does Land Count Toward Our Net Worth If We’ll Never Sell It?

Date: November 5, 2025
Hosts: Dave Ramsey, Caleb (co-host)
Guest Caller: Kayla from Mississippi

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Episode Overview

This episode addresses a classic money debate: Should your house and land be counted in your net worth, even if you never plan to sell them? Kayla calls in to settle an ongoing argument with her husband concerning whether their home and property should factor into their net worth calculation—especially since Kayla is adamant she’ll “never, ever, ever” part with them. Dave Ramsey and co-host Caleb guide her (and the audience) through the true nature of net worth, the role of liquidity, and the importance of income-producing assets in retirement planning.

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Key Discussion Points & Insights

1. Does Land (That You'll Never Sell) Count in Net Worth?

• Kayla’s Dilemma:

  • Kayla doesn’t want her home and land to count in their net worth because she “would never, ever, ever sell” them.
  • Her husband thinks otherwise, leading to an ongoing disagreement.

• Dave’s Straightforward Take:

  • Net worth is simply a matter of accounting: “Net worth is simply what something is worth. The definition of net worth is an accounting function. It's a math thing, not a feeling.” (00:56 Dave Ramsey)
  • It doesn’t matter if you intend to sell; what matters is what you own minus what you owe.
  • Liquidity is a separate concept—the portion of your net worth you could easily convert to cash.

• Memorable Quote:

  • "You would get rid of your husband before you got rid of the land. You made that clear." (01:32 Dave Ramsey, in jest to Kayla’s insistence)

2. Net Worth vs. Income-Producing Assets in Retirement

• Kayla’s Concern:

  • Husband thinks high net worth means he can retire, but Kayla is doubtful because their main income is his $200,000 salary.

• Dave’s Clarification:

  • The key to retirement isn’t just high net worth, but ensuring enough net worth is in income-producing assets.
  • "What we need to retire is we need net worth that is creating an income…you can't eat [land] at retirement." (02:03 Dave Ramsey)
  • If assets like land aren’t generating rental or business income, you can’t rely on them alone to fund retirement.

3. Kayla and Her Husband’s Actual Numbers

• Their Finances:

  • $2.7 million in 401(k)s and Roth IRAs.
  • Home and land valued together at around $800,000.

• Dave’s Encouragement:

  • With $2.7 million invested, earning 10% annually could generate $270,000 per year—enough to replace their current income without touching the principal.
  • "2.7 makes 10, that's 270 without touching the 2.7 every year, right?" (04:22 Dave Ramsey)
  • Despite Kayla's disbelief, Dave assures her they've done incredibly well. He jokes that Kayla is the driving force, keeping her husband disciplined.

4. Lessons for All Listeners

• Asset Allocation and Retirement:

  • Don’t retire with all your wealth tied up in non-income producing assets—spread wealth across investments that generate ongoing returns.
  • Dave references stories of families with massive land holdings but little actual financial security due to lack of income-generating diversification.

• Business Owners Take Note:

  • If your only retirement plan is to pass a family business to your kids, you risk putting them in debt to buy you out. Make sure you have assets outside your business that can sustain your retirement.

• Quote on Family Wealth Dissipation:

  • Dave tells a story:
    “Every generation they had to sell off blocks [of land] to pay the estate taxes… nobody ever bothered to create an income. You gotta create an income.” (07:22 Dave Ramsey)
  • Lesson: Generational wealth can quickly erode without a smart income strategy.

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Notable Quotes & Memorable Moments

• On Emotional Attachment to Land:
  “In your case, you would get rid of your husband before you got rid of the land. You made that clear.” (01:32 Dave Ramsey)

• On Net Worth Definitions:
  “Net worth is not about whether you sell it or not... It's a math thing, not a feeling.” (00:56 Dave Ramsey)

• Summing Up the Retirement Formula:
  “If 2.7 [million] makes 10, that’s 270 [thousand] without touching the 2.7 every year…” (04:22 Dave Ramsey)

• Kayla’s Lighthearted Stubbornness:
  “No matter whatever happens, I’m never leaving here.” (03:33 Kayla)

• Dave's Commendation:
  “Way to go, Mississippi. I love it. I’m proud of you. You did great.” (05:02 Dave Ramsey)

• On Income vs. Wealth:
  “You have to have enough of your net worth tied up in income-producing assets… Those of you that are small business people, you need to have assets outside of and in addition to your small business…” (05:51 Dave Ramsey)

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Timestamps for Key Segments

| Time | Topic | |----------|------------------------------------------------------| | 00:20 | Kayla’s question: Net worth & emotional attachment | | 00:51 | Dave’s definition of net worth | | 02:03 | Difference between net worth and retirement income | | 02:41 | Kayla’s household finances (2.7M investments) | | 03:24 | Value of home and land ($800,000) | | 04:22 | Investments as income replacement in retirement | | 05:51 | General financial advice for retirees/businesses | | 07:22 | Story: generational land, estate taxes, and income |

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Tone & Style

Dave and Caleb keep the conversation lively and humorous. They make friendly jokes about Kayla’s refusal to leave her home, but provide clear, practical advice rooted in financial fundamentals. The episode is educational and approachable, aiming to demystify financial concepts like net worth, liquidity, and retirement income for everyday listeners.

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Key Takeaways for Listeners

• Your net worth includes all assets, even if you never plan to sell them.
• Liquidity (how easily you can access cash) is separate from net worth.
• Retirement security comes from having income-generating assets, not just high net worth.
• Don't over-concentrate net worth in non-income-producing property unless you have enough elsewhere to live on.
• Multi-generational wealth requires intentional income planning, not just asset accumulation.

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End of Content Summary

Transcript

[Dave Ramsey]

This episode is brought to you by Smartvestor. Connect with an investing pro near you at ramseysolutions.com Smartvestor Kayla is in Mississippi.

Hi, Kayla. How are you?

[Kayla]

Hey. I'm great.

[Dave Ramsey]

Good. How can I help?

[Kayla]

Okay, well, it's kind of a dispute that my husband and I have had for a really long time. And he thinks that our house and our land should be including our net worth. But I don't because I will never, ever, ever sell my house on my land. I mean, no matter what happened, I would not do it. And so he thinks it should be included in that. And so for that reason, he has a high net worth for us. Really high. And I don't think it's a high because I would never sell it.

[Dave Ramsey]

Okay. It does it. Kayla, I'm sorry. You're wrong.

[Kayla]

Who knows?

[Dave Ramsey]

Yeah. So I'm sorry, you lose the argument, but here's why, okay? Net worth is not about whether you sell it or not. Net worth is simply what something is worth. The definition of net worth is an accounting function. It's a math thing, not a feeling. Okay. And so. And it's not a wish or an intent. It's not what you plan to do with it. None of that really matters. They don't ask that question in accounting. All they want to know is what you own minus what you owe assets, minus liabilities equals net worth, period. That's your net worth. Now you can say, what's my liquidity? Which is your argument. Your liquidity is the money that you would cash in or use if something came up. And in your case, you would get rid of your husband before you got rid of the land. You made that clear.

[Kayla]

Not quite that extreme.

[Dave Ramsey]

Almost. Almost. I mean, we're not sure at this moment, especially since you lost the argument now, but, yeah, that's it. But.

[Caleb]

What'S so special about this land?

[Dave Ramsey]

That's it must be family.

[Kayla]

He wants to retire. He's like, we have this huge net worth and I want to retire. And I'm like, we have.

[Dave Ramsey]

Okay. Now, that net worth does not necessarily mean you can retire. That's true. Okay. Because what we need to retire is we need net worth. That is creating an income. So if you're farming the land, then you would be creating an income with it, but it's just sitting there, growing, going up in value. You can't eat that. You're right.

[Kayla]

Right.

[Dave Ramsey]

You're right about that. That part of the argument you win. Okay? So your net worth, if your net worth is too off center on one Thing like dirt in your case, then you can't eat at retirement. That won't work. So what is the rest of your net worth? Not counting the land?

[Kayla]

It's in 401ks and Roth IRA, and it's 2.7 million or thereabouts.

[Dave Ramsey]

Well, darling, he can retire.

[Kayla]

I don't see how because he makes like 200,000 a year.

[Dave Ramsey]

Well, what do you think 2.7 million will create? Well, 2.7 million and 10%. 270,000.

[Kayla]

That's where I have the disconnect. We've only ever saved, save, save, saved, and we've never taken anything out. And so I'm like, really?

[Dave Ramsey]

I need to. We need to check his back for the lash marks.

[Caleb]

I'm telling you, you. But you're sweet. I think. I think he's smiling. You're smiling the whole time?

[Dave Ramsey]

Yeah. You're smiling the whole time. You kick him out. And they were mourning to go to work. Get your butt up.

[Caleb]

How much is the land worth?

[Dave Ramsey]

That's hilarious. It's. What?

[Kayla]

I'm sorry, What?

[Dave Ramsey]

What's the land worth?

[Kayla]

The house and the land together will probably be around 800,000.

[Dave Ramsey]

Oh, well, that's not even the larger part of your net worth then. Huh. Interesting.

[Kayla]

No.

[Dave Ramsey]

So how old is your husband?

[Kayla]

No matter whatever happens, I'm never leaving here.

[Dave Ramsey]

We got that. Okay. We got that early.

[Caleb]

Don't question.

[Dave Ramsey]

So did he, by the way. But. So the question is this. When. How old is he?

[Kayla]

62.

[Dave Ramsey]

62.

[Kayla]

62, that's right.

[Dave Ramsey]

Okay, so sit down with your financial advisor and ask them if it's him.

[Kayla]

Yes.

[Dave Ramsey]

Well, maybe you need to get one that'll help. You guys both look at this and say, because if I were your financial advisor, I could show you how you could invest that money in some decent growth stock mutual funds, which I got a feeling he's already done. And it would create 10 to 12% rate of return. And so you would make. 200,000. $200,000. Without even touching the nest egg. Without even touching the 2.7. See, if 2.7 makes 10, that's 270 without touching the 2.7 every year, right? Yes. Okay, See, that's without touching the nest egg. And he's 62. And you know, if anything really goes wrong, you could sell a farm. No, I'm kidding. I couldn't resist.

[Caleb]

Yeah, yeah. It's too easy.

[Dave Ramsey]

It's an underhand pitch, this.

[Caleb]

Never, ever, ever, ever, ever, ever, no matter what ever nuclear apocalypse guarantee you Kayla's on.

[Dave Ramsey]

You guys have done a wonderful job together because you're fun and you focused and you don't spend money, you save money. And he's done a wonderful job. If he's been the one managing this, growing it at 62 to have 2.7 plus an 800,000. So your net worth 3.5. Way to go, Mississippi. I love it. I'm proud of you. You did great. Now if he wants to retire, he can afford to retire for sure.

[Caleb]

I don't think he had much choice. I think Caleb made that poor guy save and invest, which is good, which is good.

[Dave Ramsey]

Good for him. But. Well, that way they don't have to sell the land.

[Caleb]

I thought it was going to be some like massive track of land worth millions of dollars.

[Dave Ramsey]

I thought they had 2.7. The land's worth 20 million or something. Yeah, I thought it's 800 grand. It's not even the biggest part.

[Caleb]

Might be a price you would consider.

[Dave Ramsey]

But she does make. I'll tell you, the conversation is a good point for everybody listening though. Okay. When you, you have to have enough of your net worth tied up in income producing assets to be able to live off of that income. In their case, it's a very simple formula. 2.7, 10%, 270. Right. But let's say you had 2.7 and it was in real estate that was generating rents. Are the net rents net of all the expenses enough to live on and are you okay with that? And those of you that are small business people, you need to have assets outside of and in addition to your small business when you retire? No, that's my retirement. No, that's not your retirement. That retirement has to be done. Then you're going to put your kids in debt when they try to take it over from you because they got to buy the old man out because the old man hadn't saved any stinking money. So you need some stinking money. You need to have invested and created income producing assets that you can live off of at retirement. So one of the guys I was, ran through my head. One of the guys we found was worth $12 million in the, when we did the millionaire study. Yeah, for the millionaire next. Not millionaire next to it. That's Tom Stanley's book. My book, Baby Steps Millionaires. Right. And so that study, one of the guys, he was one, he was an unusual millionaire and that's why I remember him. He bought a tract of farmland, he was a farmer in Kansas for cash. And then the next year he bought another tract and then the Next year he bought another track. And then the next year he bought another track. He had $12 million in dirt. Oof, dirt. And if he's not farming it, it doesn't create an income. It goes up in value, probably because it's apparently good dirt. Right. And he's been doing that. But if you've got it all tied up in dirt, you know, we had a family one time, we were coaching in entree leadership. They were third generation and they started with like 500,000 acres in New Mexico and it was part of a land grant thing three generations ago. And every generation they had to sell off blocks of it to pay the estate taxes. And now we're down to the third or the fourth generation and they're all trying to live off of this land, only it doesn't create an income, but they have this massive net worth. To Kayla's point, she makes a good point, but no income. And they sat and argued is what they did about what to do next. Because basically the thing between someone trying to eat and the federal government taking estate taxes every generation, the half a million acres had been disbanded and was gradually eroding. So sad for those things because nobody ever bothered to create an income. You got to create an income and you gotta do that. So she makes a great point on that and she's a lot of fun. That's great.

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