Don’t Let Money Drama Keep You Broke

Summary

The Ramsey Show

Episode: “Don’t Let Money Drama Keep You Broke”
Date: September 16, 2025
Host: Dave Ramsey (with Ken Coleman and other Ramsey Personalities)

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Episode Overview

In this episode, Dave Ramsey and team tackle a range of personal finance dilemmas submitted by listeners, each shaped by what Ramsey calls “money drama.” With their signature blend of no-nonsense advice and tough love, the hosts field questions about estate hassles, marital money conflict, debt, investing, and more—always emphasizing the power of financial discipline, communication, and common sense approaches to money management. The goal: to help listeners escape from the cycle of financial stress and bad systems that keep families broke.

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Key Topics, Insights & Timestamps

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1. Dealing With Debt Collection on a Parent’s Estate

[00:41–08:28]

• Caller Pat, executor of her late father’s estate, receives suspicious debt collection letters regarding her father, despite him having no debt.
• Advice: Most states have a set window for creditors to file claims during probate—if the claim wasn’t filed, you’re likely safe. However, collection agencies may persist simply by harassing executors and family members.
• Action Steps:
  • Politely demand proof of debt, providing only the last four digits of SSN if necessary.
  • If they can’t prove it but continue contacting, threaten legal action under the Federal Fair Debt Collection Practices Act.
• Memorable Moment:
  • Dave Ramsey: “They have one little thread...they’re going to pull that thread and pull that thread and eventually end up hassling your mom, probably.” [03:18]
  • “If they continue to pursue after you show them it is not his debt...I would have an attorney send them a letter under the federal Fair Debt Collection Practices Act.” [06:06]

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2. Overspending Due to Kids’ Sports & Marital Misalignment

[11:47–19:00]

• Caller James: Father of 11, $50k in debt after putting kids in intensive sports/activities; spouse not willing to scale back.
• Diagnosis: Budget breakdown due to lack of mutual agreement and discipline—not sports or lack of additional income.
• Dave’s Tough Love:
  • “The sports aren’t the problem; they’re the symptom. Her working is not the problem. It’s the symptom of you guys not being on the same page...developing a tactical process out of the strategy called a budget that actually makes the money behave.” [15:51]
• Co-host’s Insight: Strong suggestion to resolve underlying resentment and get on the same team before trying to fix the spending problem: “There’s some real resentment there...that’s got to get solved.” [18:15]

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3. Blended Family, Prenups, and Trust Funds

[23:01–29:32]

• Caller Haley: Successful single mom dating a man with a $2M trust fund and a hobby business. She’s concerned about wealth-building, combining finances, and whether to get a prenup.
• Advice:
  • Prenups typically cover what happens at divorce, not the logistics of household budgeting.
  • More importantly, hosts question long-term compatibility with a partner who isn’t growth-oriented or financially motivated.
• Dave’s Sharp Observations:
  • “A guy that doesn’t work for a profit and isn’t productive scares me. If he’s marrying my daughter, I’m afraid the trust fund has allowed him to not become who God intended him to be—a productive citizen.” [27:19]
  • “You...are a warrior princess...You make $140,000 a year, single mom, raising a human—pretty incredible.” [30:16]

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4. Smart Structuring of Inheritance for Disabled Individuals

[34:06–36:48]

• Caller Chris: Disabled, expects six-figure inheritance and asks about using an ABLE account.
• Advice: Confirm with a financial advisor or “SmartVestor Pro” to structure investments within the ABLE account to maintain government benefit eligibility.

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5. Early Retirement Planning for High-Earning Couples

[36:48–43:01]

• Caller Jay: $1.1M in investments, $475k income, wants to retire by 55.
• Dave’s Plan:
  • Pay off home.
  • Build up non-retirement, taxable “bridge” accounts to access before 59½.
  • Consider part-time, less stressful work for cash flow and a sense of purpose.
• Quote: “You have the ability to produce an incredible income and you could probably do that with 10% of the strain you have now.” [40:11]
• Co-host Note: Avoid the trap of “retiring to nothing”—maintain purposeful activity for long-term wellbeing.

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6. Rental Real Estate: When Leverage Goes Wrong

[45:03–53:02]

• Caller Ryan: $1.8M debt on a $4.4M property portfolio; low net operating income; doubts about strategy.
• Dave’s Real Talk:
  • “Your rate of return...sucks.”
  • “Shed yourself of the properties not giving you a return; create an ideal portfolio that’s 8–10% cash-on-cash for residential, 10–12% for commercial.”
• Memorable Critique:
  • “You’re still the guy that hit the slot machine once and keep putting quarters in a stupid thing...” [47:03]
• Recommendation: Consider partially (or even fully) liquidating rentals for better investments and peace of mind.

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7. Should I Use Savings to Pay Off Student Loans Before Marriage?

[55:21–64:30]

• Caller Reed: $120k salary, $15k student loan, $17k savings, wedding soon.
• Advice:
  • Set aside wedding funds first, then pay as much as possible toward debt.
  • Focus on one goal at a time to build budgeting and debt-elimination habits before marriage.
• Classic Ramsey:
  • “You can wander into debt; you can’t wander out. You’ve got to get passionate about it.” [61:30]

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8. Couples’ Investing: Debt vs. Leverage Philosophy

[98:45–107:12]

• Caller Sam: Wants to keep low-mortgage house as a rental; wife wants to sell and live debt-free. Both are financially savvy 34-year-olds.
• Dave:
  • Long breakdown of risk-adjusted return, emphasizing that leverage always increases risk (“Debt and leverage equals risk”—[104:23]).
  • Data shows almost NO millionaires were made by leveraging houses and investing the difference.
• Conclusion: Wife’s conservative, debt-averse strategy wins: “Sam, your wife’s right.” [106:15]

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9. Classic Ramsey “No” — Don’t Renovate Someone Else’s Property

[73:56–76:07]

• Caller Rebecca: Considers investing $100k to renovate her mom’s house (not as an owner)—“for the good of the family.”
• Dave:
  • “You don’t put $100,000 in somebody else’s house...don’t do this. Sorry, Mom, this isn’t going to work out.”

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10. Cashing Out Bad Insurance Products

[78:27–87:20]

• Caller Kyle: $800k cash value in whole life insurance; spouse (a doctor) wants to keep it.
• Dave’s Summary:
  • Whole life insurance: “one of the worst financial products in the world.” [80:01]
  • Unless you need to replace lost income, ditch it; invest the cash value instead.
  • “Docs are targeted by whole life guys...MDs are horrendous with their money.” [85:23]

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11. Should I Pause My Exhausting Business for a Conventional Job?

[88:36–95:54]

• Caller Jessica: Skin care entrepreneur, tired, netting too little, wonders if she should return to employment for a “reset.”
• Host Guidance:
  • Yes—pause, regroup, keep the business as a part-time side gig.
  • Take the time to learn real business skills: “There’s a vast difference between being good at your skill and running a business that accomplishes your skill.”
• Book Recommendations:
  • “Building a Business You Love” (Dave Ramsey)
  • “The E-Myth” (Michael Gerber)

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12. Parental Guilt, Helping Adult Kids & Prioritizing Savings

[119:10–124:30]

• Caller Sarah: Wondering how to help her daughter buy a car, buy house windows, and take a vacation on $55k/year and a $12k emergency fund.
• Hosts:
  • Only spend on helping others if you have the money saved and your own needs covered.
  • Don't drive your college-aged daughter with $6k in savings around—encourage her to be responsible and buy her own car.
  • “Let me help you with that. I’m gonna open the big box of ‘Nope.’ Here, let me give you a present: Nope. Happy birthday!” [124:20]

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Favorite Quotes & Moments

On Closing Down Persistent Debt Collectors:

• “If you don’t provide me proof of written proof of debt...I’m going to sue you under the federal Fair Debt Collection Practices Act...” – Dave Ramsey [04:00]

On Marital Accountability:

• “You can’t be passive and say, ‘Well, she did this.’ No, she didn’t do it. You stood there and watched it. So you did it, too.” – Dave Ramsey [15:47]

On Trust Fund ‘Husband Material’:

• “A guy that doesn’t work for a profit and isn’t productive scares me.” – Dave Ramsey [27:19]

On Whole Life Insurance:

• “Docs are targeted by whole life guys...it’s the payday lender of the insurance world.” – Dave Ramsey [85:20]

On Jumping Into Family Real Estate Traps:

• “Run. This is a trick bag. She likes to mess with people. And I can see the strings from here.” – Dave Ramsey [76:07]

On Stalled Small Businesses:

• “If you go to work every day and you make $24,000, you’re tired. You go to work every day and you make $240,000, you’re not as tired.” – Dave Ramsey [93:56]

On the Psychology of Poor/Middle/Rich Money Management:

• “Wealthy people...their planning window is: How's this going to affect me 10–20–30 years from now? Middle class: 3 years. Poor people: ‘Thank God it’s Friday.’” – Dave Ramsey [116:27]

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Overall Takeaways

• Debt is a Tool—Sometimes a Dangerous One: Don’t let leverage or “good deals” blind you to the risk that comes with debt, especially when data (and millionaires!) show the best results come from paying it off.
• Communication and Systems in Family Finances: Both spouses must engage in honest, adult conversations and align on a budget—many family money problems are due to misalignment, not math.
• Don’t Let Guilt or Drama Decide Your Financial Life: Whether it’s parents, kids, or your own spending, don’t make big financial decisions driven by guilt, obligation, or peer pressure.
• Be Wary of Financial Products You Don’t Understand: Whole life insurance, questionable debt collection, and renting out mortgaged homes—seek clarity, then act boldly to avoid (or exit) bad deals.
• Invest in Yourself (Literally and Educationally): Sometimes the best move is to pause, learn, and rebuild, especially as an entrepreneur, before jumping back in.

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Episode’s Overall Message

Don’t let money drama, family pressure, or old habits keep you broke. Break the cycle with clear systems, tough conversations, a focus on the future—and always seek proof, simplicity, and sound math in your financial life.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fair Winds Credit Union Studio, this is the Ramsey Show. Ken Coleman, number one best selling author, Ramsey personality, host of the big hit on the Ramsey Network called Front Row Seat. My co host today. The phone number here is 888-825-5225. Pat in Boise, Idaho. Hi, Pat. How are you?

[Caller]

Hi, Dave. Thanks for talking to me. I'm the executor for my dad's estate. About six months after his death, I received a letter looking for the person who could act on his behalf. I looked up the company and it's a debt collection agency primarily. Primarily focused on collecting debts related to deceased individuals.

[Dave Ramsey]

Wow.

[Caller]

They utilize technology I've never heard utilize technology like probate finder on demand to identify and contact the personal representatives of the state to recover unpaid debt. So my dad absolutely did not have any debt. He was Dave Ramsey. While Dave was running around in diapers, he didn't borrow money. I do know that there is. Just from looking at unclaimed property. I do know that there is a gentleman who lives in the same metro areas, my dad, for many years who had his exact name first, first name, middle initial and last name. So I'm thinking, I don't know, maybe they're looking for. Here, here's the deal. I don't even want to talk to them. I don't want to spend time on this. I don't know if you need to know the name of the company, but how worried do I need to be?

[Dave Ramsey]

Well, I mean, is the estate settled?

[Caller]

The pro probate is finished, but it's. It's not closed yet. I haven't closed it.

[Ken Coleman]

Okay. What.

[Dave Ramsey]

What is lacking for it to be closed?

[Caller]

Nothing. I was just doing some final insurance policies and transfer of his property to my mother. So that is done. I can close the estate at any time? As far as I know, there was nothing that came up during the probate.

[Dave Ramsey]

So your mom's still there and she's sitting with whatever assets that they had?

[Caller]

Yes.

[Ken Coleman]

Okay, good. Okay.

[Dave Ramsey]

Well, I don't know Idaho law and I'm not an attorney anyway, even if I did. But the most states have a period of time that a creditor can file a claim against the estate before, after or during the probate being open.

[Ken Coleman]

Okay.

[Dave Ramsey]

And I don't know what yours is.

[Ken Coleman]

Okay.

[Caller]

So if they. So if they didn't, I'M probably good.

[Dave Ramsey]

Probably from. From a legal, practical standpoint or from a legal standpoint? From a practical standpoint, I. These folks, they get. They have one little thread that they're hanging on, and they're going to pull that thread and pull that thread and pull that thread. They're eventually going to end up hassling your mom, probably. So from a practical standpoint, I would put them down.

[Caller]

I'm her power of attorney, so they won't get much further.

[Dave Ramsey]

I know, I know. But if they start calling her, start mailing, filling up her mailbox with stuff, I don't think there's a legal issue. I don't think they've got a claim. You don't think they've got a claim. They're probably outside the notice of meeting the creditors, period of time, all that kind of stuff. But that doesn't keep them from driving everybody in the soup crazy.

[Ken Coleman]

Okay.

[Dave Ramsey]

So I probably would invest a few minutes and just shut them down.

[Caller]

How do I shut them down?

[Dave Ramsey]

I would just call them and say, he did not have any debt with you. I'm the executor of the estate. And you can give them a Social Security number, send them a copy of the death certificate. None of that hurts you in any way. And you know our. You know, I'll give you the last four digits of Social Security numbers if it matches with what you think you're hunting. But I think you're hunting this other guy, and you need to stop. And if you don't provide me proof of written proof of debt and you don't stop, I'm going to sue you under the federal Fair Debt Collection Practices act because you're violating it. Now that I have told you that I am demanding proof of the debt.

[Caller]

Can I just demand proof of the debt without providing them anything to start with, or should I give them.

[Dave Ramsey]

I give them the last four digits. Social Security number. What I'm trying to do is in case there's two brain cells on the guy you're talking to, if they happen to rub together, you want to give him a way to go away, oh, it's not him. I got to go the other way. Okay. Right. But in case they're. In case they. If they think. But the problem is some of these companies, and what you need to be prepared for is. And I think you're kind of already there is. They will try to collect from someone that they know is not legitimately the debt just by hassling them.

[Caller]

And that's what I'm worried about.

[Dave Ramsey]

Yeah, well, I'm not worried about it because you're going to shut them down. We're not going to talk to them anymore, okay? We're gonna block them. And if they continue to pursue, I would have an attorney send them a letter under the federal Fair Debt Collection Practices act because they're in violation of federal law. If they continue to pursue after you show them that it is not his debt and you give them last four digits, Social Security number, and they don't provide proof of debt. The other thing that's gonna come up is they probably don't have proof of debt. They probably bought a line item on a spreadsheet. A lot of debt buyers don't get the actual documentation on the debt. They just get a line item, point of last contact, some details about a name, whatever the file's got. And it's just a whole list of line items. It's not like they have a file on him. So point being, I don't think they can provide proof of debt. But I'm gonna ask because I'm gonna make one or two phone calls with these people and try to in a civil way, make this go away. But if you determine that A, they're trying to collect from somebody, just anybody, and they just think they can hassle you, then just pound their face. Right. And then. And. Or B, that they cannot provide proof of debt and they won't go away. What I'm more than anything trying to do is get them to quit calling you and quit calling your mom. And it's worth two phone calls to invest in that or to never call your mom.

[Caller]

Okay, Right. I like that. Okay.

[Dave Ramsey]

Yeah. And then. But again, write that down. It's the federal Fair Debt Collection Practices Act. Okay. And it is federal law that they're violating. If you demand proof of the debt, they don't provide it and they continue to attempt collection. Hammer them.

[Co-host (possibly George Kamel)]

I was looking for something to add. You covered it from every angle. You know, look, you got the facts, and so don't be afraid to take this on and then shut it down. I think that's what this is. I don't think this is harassment. I just think Dave's nailed it. They don't have a lot of info.

[Dave Ramsey]

It's not harassment yet. Not yet. Probably going to be there if it doesn't stop.

[Co-host (possibly George Kamel)]

That's right.

[Dave Ramsey]

So the thing is, folks, you gotta do. Debt buyers, when they buy debts are typically paying anywhere from 2 to 8 cents on the dollar. So they're paying 80 bucks for $1,000 debt, and they can't even find the people in most cases. In this case they're chasing deceased people's debt.

[Ken Coleman]

Okay.

[Dave Ramsey]

So they're always trying to chase down the.

[Co-host (possibly George Kamel)]

So this is basically prospecting.

[Dave Ramsey]

Yeah, yeah. They're dialing for dollars all day long. And you know, it's a horrible job. And here's a, here's, you want to be worse than somebody trying to collect on an old debt. Collect on an old debt that you know the person is dead.

[Co-host (possibly George Kamel)]

Right.

[Dave Ramsey]

I mean this is a bad job. Cleaning septic tanks is more fun. And so honestly, seriously, oh my gosh, what a horrible position. So they probably got high turnover. Got a boiler room, phone room going. Looks like something on Wolf of Wall street or something.

[Co-host (possibly George Kamel)]

That's right.

[Dave Ramsey]

And they're just, you know, and the average time on the job is 21 days. They're just constantly hiring new people that are dialing for dollars. You're probably not going to talk to the same person twice.

[Co-host (possibly George Kamel)]

And they're brainwashed by the way they come at you with a script.

[Dave Ramsey]

Oh yeah.

[Co-host (possibly George Kamel)]

And so that they don't get knocked off. So you better really be strong and show a lot of facts.

[Dave Ramsey]

And the other thing is, the neat thing about the technology is you can just hang the phone up, just push.

[Co-host (possibly George Kamel)]

In, it's always enjoyable.

[Dave Ramsey]

And then slide that little thing over that says block and you're done.

[Ken Coleman]

They're done. Sam.

[Dave Ramsey]

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[Co-host (possibly George Kamel)]

That's currently. Yeah. I was hoping that you and Sharon would actually listen to it. I thought it was really fun. I enjoyed it.

[Dave Ramsey]

So cousin Ken, did you know this? Cousin Ken?

[Caller]

No.

[Co-host (possibly George Kamel)]

You know, I don't think I've ever told you about it. Yeah, you talk about it. Didn't we talk about it?

[Dave Ramsey]

Yeah, absolutely.

[Co-host (possibly George Kamel)]

You've got to watch it, folks, because I'll just leave it at that.

[Dave Ramsey]

Well, Ken and Rachel are like brother and sister in a way. Very well, in really toxic ways, actually. So he makes a great interview interviewing his sister of sorts there. And it's a great. Truthfully, I was a proud dad because you brought out some of the best parts of Rachel, I think so in the interview. It's a beautiful, beautiful thing.

[Co-host (possibly George Kamel)]

She did it. It was really fun. And there's a very fun moment where you'll get to actually hear and see what Dave is talking about. Are Dave and I related? We aren't 100% sure, but there is some evidence that maybe we are seventh cousins once removed, which makes Rachel my eighth cousin once removed.

[Dave Ramsey]

And interestingly enough, so your cousin Eddie is what we're saying. Yeah, right.

[Co-host (possibly George Kamel)]

And we have fun with it on the show. But it's funny. I don't know if you ever saw.

[Dave Ramsey]

That video when I haven't seen the video, but I remember you and I talking.

[Co-host (possibly George Kamel)]

Wasn't it hilarious how she reacted?

[Dave Ramsey]

Yeah, it's hilarious.

[Co-host (possibly George Kamel)]

Her reaction is priceless.

[Dave Ramsey]

Classic.

[Co-host (possibly George Kamel)]

Because she's so fun.

[Dave Ramsey]

James is in Salt Lake City. Hey, James, what's up?

[Caller]

Hey, Dave.

You probably answered this question a thousand or a million times, but my wife and I, we have a lot of kids, which is our decision. You know, I'm not blaming anybody, but I always wanted like, I always wanted like four kids and she always wanted 12. So we're going to compromise and have 12. So that's our family situation.

[Dave Ramsey]

You really have 12 kids?

[Caller]

Well, we have 11 right now.

[Ken Coleman]

Oh, okay.

[Co-host (possibly George Kamel)]

But you seem thrilled, by the way.

[Caller]

Well, I have that type of voice.

[Co-host (possibly George Kamel)]

Okay.

[Dave Ramsey]

Okay. All right.

[Co-host (possibly George Kamel)]

That's good to know.

[Caller]

So I make more money than I ever thought I would make, honestly. And yet. And five years ago, we were pretty much debt free, but Just in the past four to five years, we as our kids have kind of reached that age. My wife has stuck him in sports and extracurricular activities and now we've amassed almost $50,000 of debt in maxed out a credit card and you know, pushed some expenses that we haven't paid, medical or whatnot. And this is something that.

[Dave Ramsey]

What do you make?

[Caller]

I know the answer. Well, net, I mean gross, I would say I'm pushing right around 200.

[Ken Coleman]

Okay.

[Caller]

And net though, after everything, after insurance and medical and whatnot, taxes, it's about 120.

[Ken Coleman]

Okay.

[Caller]

Anyway, the nearest I can figure, we're spending about 25 grand a year on the, you know, a little over two grand a month on these sports. And I, I think that's kind of the silver bullet. And yet my wife is just absolutely not willing to really give these up. She's going to look for a job and stuff, but what do we do? You know, I don't know.

[Dave Ramsey]

How in the world does a woman with 11 kids work?

[Caller]

Well, that's a good point. She doesn't have the time nor the energy. Our youngest is five and that's just a sign.

[Dave Ramsey]

That's obviously not going to happen. I mean the daycare, you'd have to float a federal grant.

[Caller]

Yeah.

[Dave Ramsey]

Oh my gosh.

[Caller]

She's hoping to pick up part time work while our youngest school from in.

[Dave Ramsey]

Between the fourth, in between the fourth and the seventh kid. Oh my gosh. No way. No, the sports are not the problem and no, her working is not the problem.

[Ken Coleman]

Okay.

[Dave Ramsey]

Her not saying out loud we have a limited amount of resources and we're going to live within them. You not saying out loud we have a limited amount of resources and we are going to live within them and write it down. And my wife stuck the kids in sports. Not anymore. My wife and I decide if we can afford anything and then it goes on the budget and then and only then do we do it. Because we both looked at the Overall picture like two grown up people and said we chose to have 11 kids and we have to manage $200,000 to feed them and not go in debt because going into debt continuously is not sustainable. Duh.

[Caller]

Well, part of our income is with, and maybe this is the tail end of my question to get your opinion. We have a couple real estate, a couple rental properties that cash flow very decently in my opinion. And she says, well, let's just sell one of those, you know, to use.

[Dave Ramsey]

The equity, that'd be fine. But what do we do when that money's gone because you continue to overspend, right?

[Caller]

Yeah, that's my position.

[Dave Ramsey]

Yeah, you can't. You can't. It's not sustainable. What you're doing is not sustainable because your system sucks. You don't have one.

[Caller]

Yeah, I like that word. I've been using that a lot the past couple years.

[Dave Ramsey]

The system doesn't work. The system, when the two of us sit down and look at our income that we have coming in and say, all right, what are we going to do with this income? And we're not going over it. And there's no excuses for going over.

[Ken Coleman]

It, by the way.

[Dave Ramsey]

None. Yeah, I agree.

[Caller]

Yeah, you've just confirmed. I think that's. That's kind of where we are.

[Dave Ramsey]

You can't be passive and say, well, she did this. No, she didn't do it. You stood there and watched it.

[Caller]

Exactly.

[Dave Ramsey]

So you did it, too. And she can't say, well, you know, you just go make the money and I'll take care of the house. No, you're not taking care of the house. You're spending more than we make, and that's not sustainable. So we are going to get on a system where we decide together where our money is going. You get a vote, I get a vote. We've got to come into alignment and it's got to be on less than we make. And so the sports aren't the problem, they're the symptom. Her working is not the problem. It's the symptom of you guys not being on the same page, of being above this strategically and then developing a tactical process out of the strategy called a budget that actually makes the money behave. I will add to this that you probably can afford to do the sports once you guys get organized and get aligned. Yeah, I think the reason. I think the reason you went in debt is she doesn't have an off button because she didn't have any system at all that was. There's no governor on this at all. And so she just going, yeah, I.

[Co-host (possibly George Kamel)]

Don'T believe that all 50,000 of the credit card debt is two years worth of sports. Is that what you're telling us? Because you actually called it the Silver Bull? Yeah, it's about five years.

[Caller]

Well, yeah, we spend about 24 grand a year on sports programs.

[Ken Coleman]

Right.

[Co-host (possibly George Kamel)]

Well, the other question I was going to ask you because you're on the phone and because I'm a man, I'm going to ask you this. Would you have worded the opening question the way you worded it? If Your wife had been on the.

[Caller]

Call.

Meaning saying that she's got the kids in sports.

[Co-host (possibly George Kamel)]

Yeah, it was all about her. Here's what it sounded like. It was. Forget your voice because you already gave us an excuse on the voice. The voice sounds like your voice beat down and like you're just throwing in the flag and you're having no real communication with your wife. That's what it sounded like. But my question is, this is a real question. Would you said it that way. I wanted four, she wanted 12, so we're doing it. And then she stuck them in sports. Would you have said it that way if she were sitting in here in the room with Dave and I and you? Of course. What was the answer?

[Caller]

We compromised. So I wouldn't have said that because she doesn't like it. But we've talked about this issue with a counselor, you know, and so I would say the same things. I think that she's sticking them in sports.

[Ken Coleman]

Right. Okay.

[Caller]

Is the problem.

[Co-host (possibly George Kamel)]

And by the way, I didn't ask you to paint you in the corner because that was not a gotcha question. But I'm glad you've answered that way because I think that you gotta be very careful. I think there's some real resentment there between you and her, and that's gotta get solved. At the same time, if not before we sit down and get this budget, we have gotta resolve the resentment. That's what I feel and hear on this call. I don't know your take.

[Dave Ramsey]

I'll go with it. I'll go with that. So, guys, the. I would say 50% of the coaching and calls that we get and the different ways contact points we have with people that are married come back to this idea that we have to both in the room, be adults. This is a limited amount of resources. This is a math problem. There's actually a number of dollars at the top of the page. And we spend the money on the page the way we want our life to look. And when it runs out, we stop. And the two of us together both have a vote on that and we figure that out together. That is the only system in 35 years of doing this that I have been able to figure out that will actually work. The idea that one spouse is off the rails or is not accountable to the mathematics and as a child and the other spouse is resentful. That idea, I've never seen that create a successful relationship or build wealth. I've been doing this show for over 30 years. And some of the saddest calls I have Taken are from situations that are completely preventable.

[Caller or Ramsey Personality (possibly Rachel Cruze)]

Yeah. And what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly and they don't have life insurance. We actually took a question of a lady, and she had three kids pregnant, and husband didn't have life insurance. And I'm like, I can't even imagine. Or even if it was opposite. Right. If a mom passed away, there's a dad with kids and trying to figure out, how am I gonna afford childcare? How do I outsource some stuff that maybe she was doing? Like. And it just takes the grief and the sadness of something like a sudden death to a whole new level. Like, when you have to think through, how am I gonna pay my bills.

[Dave Ramsey]

How am I gonna be next week.

[Co-host (possibly George Kamel)]

Yeah.

[Caller or Ramsey Personality (possibly Rachel Cruze)]

In the middle of all that grief, like, it's just. It is. It's terrible. And so life insurance is the one thing, especially as a mom with three little kids that I'm, like, so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And we keep re upping it because I'm like, I just want it there. Like, there's something about that safety of knowing that you have money if something.

[Dave Ramsey]

Suddenly happens and it doesn't cost much because Xander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud, and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza there really is.

[Caller or Ramsey Personality (possibly Rachel Cruze)]

So that is one thing to do, to say I love you to your family.

[Dave Ramsey]

So we've used Zander for all of our family's needs for insurance for many years, including, of course, term life insurance. To get a free quote, go to 800-356-4282. That's 800-356-4282. Or go to Zander. If you're tired of living paycheck to paycheck and feeling like you can't get ahead, join one of our free, free, free, free Every dollar trainings. New trainings every week this month. They're one of the Ramsey personalities, either Jade or Rachel or George. And we're going to show you how to stick to a budget. You generally Find thousands of dollars of margin in about 15 minutes. Just learning to set the thing up and you go, oh, look at that. I got a raise. And you can get out of debt? Of course. Why? So you can start building wealth. Hello. And you can ask any question during the live Q and A. It's a cool thing. It's a free every dollar training. Go to ramseysolutions.com webinar Haley's in California. Hi Haley, how are you?

[Caller]

Hi Dave and Ken. I'm good. Thank you for taking my call.

[Dave Ramsey]

Sure. What's up?

[Caller]

Okay, so I'm going to try to be brief here. I am a single mom to a five year old boy. I don't receive any child support. I have a career in finance. I gross 140k a year.

[Dave Ramsey]

Look at you. Way to go girl.

[Caller]

Thank you. I have a pretty low net worth. It's about 50k. 15k of that is an emergency fund. My boyfriend and I have been together for three years. We love each other. We are discussing marriage. His net worth is a lot bigger than mine. He has a trust fund and he lives off the dividends of his trust. The principal is about 2 million.

[Dave Ramsey]

He doesn't work.

[Caller]

He owns a business, but it is not profitable. He's owned it for 10 years.

[Dave Ramsey]

So he's a hobby.

[Caller]

It's a hobby. He doesn't pay himself a salary.

[Dave Ramsey]

Businesses that don't make a profit are called a hobby.

[Caller]

Yeah, it's kind of like a passion.

[Dave Ramsey]

That's not a good indicator of his character.

[Caller]

He considers it like community service.

[Dave Ramsey]

Yeah, I consider it. He's hiding in his trust fund money.

[Co-host (possibly George Kamel)]

It's a bad idea. What's the business?

[Caller]

It's a bike shop. He has four more years of his commercial lease and then he's planning on closing the doors.

How old is he when it's over?

He's 43.

[Co-host (possibly George Kamel)]

Have you discussed.

[Caller]

I'm 37.

[Dave Ramsey]

Okay, I'm sorry. Let us stop peppering you. How can we help you, hun?

[Caller]

So I am under the assumption that you would recommend a prenup given the dramatic difference in our neck worth. I apply this program to my life and I would like to apply it to my marriage as well.

[Dave Ramsey]

But why the tears?

[Caller]

I just. If we have a prenup, how do we combine our finances?

[Ken Coleman]

Okay.

[Dave Ramsey]

The prenup does not discuss the monthly operation of the household in most cases. Most of the time the prenup just says what happens to the two million dollar trust fund if you get split up. In other words, a prenup would Be something as simple as if you did do it, if you did do a prenup, it would just be as simple as he leaves the marriage with his two million dollar trust fund and you leave the marriage with $50,000 a net worth. Or you leave the marriage with everything else and he leaves with whatever it is. I don't care. But I mean, you kind of. Most prenups kind of start with the idea. We leave with at least what we came in with and that's it. It's only if you leave the marriage does it come up. But it's not like the money coming off the $2 million that allows him to not be profitable or productive. Gross is. Becomes part of your household income even if you have a prenup. So that's how you combine your finances.

[Caller]

But we're not. So we won't combine all of our bank accounts.

[Dave Ramsey]

Yeah, you combine all your bank accounts. Absolutely.

[Ken Coleman]

Absolutely.

[Dave Ramsey]

His trust fund is not a bank account. His trust fund is an investment. Does he have any control over the trust fund at all?

[Caller]

Yeah.

[Dave Ramsey]

Okay, so anything.

[Caller]

That's my other question.

[Dave Ramsey]

Anything that's in and around the trust fund would. Would not necessarily be in your name. But even if it is in your name, the prenup would. If you switch everything to your name, the prenup would just say in the event the marriage breaks up, it goes back to his name. That's all I would say. It's not operationally inside the marriage. It's only what happens at the end of the marriage. Most of them, I've seen a few of them that interfere in the marriage, but most of them are what happens in the event the marriage dissolves. Simple. Okay, then your second question is what?

[Caller]

Well, how do I build wealth with somebody who already has wealth and isn't really motivated to build more wealth?

[Dave Ramsey]

Now there's a key issue. Now you've opened up a whole nother can of worms. I'm going to love you enough to tell you the truth. A guy that doesn't work for a profit and isn't productive scares me. If he's marrying my daughter, I'm afraid man the trust fund has allowed him to not become who God intended him to be. A productive citizen. That goes out there, leaves the cave, kills something and drag it home instead. It stunted his emotional development. And he runs a bike shop. A bike shop that's not profitable. Instead of becoming the man that God wanted him to be. That scares me. I'm looking in from the outside and I'm being a little bit Harsh. But I'm short on time and I love you and I want you to hear that. I don't want to leave this being dishonest with you.

[Caller]

Thank you.

[Dave Ramsey]

It's greatly concerning to me and I would want you to deal with that. And I'd want, if I'm you, if I'm your old ugly uncle Dave, I would want you guys in pre marriage counseling to get to the bottom of some of that stuff and some of that be solved to your satisfaction. Because, girl, you, on the other hand, are a warrior princess. 78% of the. I'm sorry, 52% of the single moms live below the poverty level. You make $140,000 a year. You're self sustaining and raising a human. You're kind of amazing.

[Co-host (possibly George Kamel)]

I, you know, I, Dave took the words out of my mouth. I was going to play the older brother card. And I went on a rant last week with a very similar situation like this on this show. And I said, ladies, don't marry doofuses. And I'm not.

[Dave Ramsey]

He may not be. Well, behold, indicators are good. I understand.

[Co-host (possibly George Kamel)]

Look at, look at you all of a sudden, Mr. Nice trying to give him a break. I'm not, because. We've heard enough. We've heard enough. I'm not saying he's a bad person, but being a doofus and being a bad person are two different things. You have a great heart and I'm just telling you, I have the exact same fear here. This is a big deal. Three years you guys have been dating. He's been on this plan for 10 years. I don't think that 2 million lasts as long as he thinks. I'm concerned about that.

[Dave Ramsey]

Two million is a lot of money.

[Co-host (possibly George Kamel)]

It's not at 43, that's why I asked that question. How old is he? So I echo Dave and I'm saying I think premarital counseling is an absolute must. And if he doesn't play ball with that, that would be the final red flag. You've got to take care of you and that five year old and you can love somebody that is not the right person for you. And again, I'm not accusing him of anything, but I have massive, massive red flags. Same ones Dave has.

[Dave Ramsey]

So let me play something back to you that I heard Haley and I think everybody heard it.

[Ken Coleman]

Okay?

[Dave Ramsey]

You came into this conversation like you are the one that is not bringing as much to the table. He's bringing everything to the table. And what we're saying is it's actually the opposite.

[Ken Coleman]

Yeah. That's right.

[Dave Ramsey]

This guy needs to step up and earn the right to be with Haley because she's a freaking warrior princess. Pretty incredible.

[Ken Coleman]

Yeah.

[Dave Ramsey]

You're making 140k a year, single mom, gotten into finance. You're out there swinging the machete through the jungle, kiddo. It's pretty awesome. And so, you know, he may have $2 million, but he won't have it long if he doesn't change. And so you just need to be careful. Again, all we're looking at is we've known the situation for about a minute and 48 seconds is all, so you know a lot more about it than we do. We could have missed something. The guy might not. But I'm not saying it's 100% off. But there are some things that are concerning enough. You've got to dig into them and get solved before you go forward with this.

[Co-host (possibly George Kamel)]

And to encourage you, you asked, how do I build wealth with him?

[Dave Ramsey]

If there's a prenup, it probably needs to include him getting a job that's profitable. Yeah.

[Co-host (possibly George Kamel)]

But until we figure out if this is the guy in order to.

[Dave Ramsey]

Get married to me.

[Co-host (possibly George Kamel)]

Right. But she. But here's the thing.

[Dave Ramsey]

To become profitable, you need to work.

[Co-host (possibly George Kamel)]

The baby steps, whether or not he's in the picture or not. And you've bought into that. Keep working it. You're doing really well. You got a good income. You can build wealth. You Y O U in caps. You can build wealth.

[Sponsor or Announcer]

This show is brought to you by BetterHelp.

[Ken Coleman]

All right.

[Sponsor or Announcer]

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[Caller]

Together.

[Sponsor or Announcer]

Find the right one with Better help. Visit betterhelp.com Ramsey to get 10% off your first month. That's BetterHelp. HP.com Ramsey.

[Dave Ramsey]

Ryan is in Green Bay. Hey, Ryan, what's up? Hey, Ryan.

[Co-host (possibly George Kamel)]

Ryan, you're on the air.

[Dave Ramsey]

Hey, Ryan. Bye. All right. Chris is in Dayton, Ohio. Hey, Chris, what's up?

[Caller]

Hi. I was on baby step two, but then life happened and I had to dip into my step one savings.

[Ken Coleman]

Okay.

[Caller]

Should I replenish that?

[Dave Ramsey]

Yes.

[Caller]

Then get back on track with my debt payments?

[Dave Ramsey]

Yes.

[Caller]

And also my second question. I'm really not looking forward to this day, but a lot of my family members are getting older, and I stand to inherit probably about six figures when that time comes for them. And I'm disabled. So the best thing I can think to do with it is stick it into an ABLE account. Would you have any other advice as far as what to do with it? I don't have any car payment or mortgage.

[Dave Ramsey]

Are you receiving some kind of government assistance that'll be affected if you got 100k?

[Caller]

No, not up to 100k. I've got SSI and Medicaid and food stamps. But with this ABLE account, it wouldn't count as a resource.

[Dave Ramsey]

Yeah, I know that. That. But I was asking why you were using the ABLE account. Because you're taking food stamps and ssi.

[Ken Coleman]

Okay. All right.

[Dave Ramsey]

And welfare, you said, too, right?

[Caller]

Medicaid.

[Dave Ramsey]

Medicaid. Medicaid, yeah.

[Ken Coleman]

Okay. All right.

[Dave Ramsey]

What's the nature of your disability, Chris?

[Caller]

I was born legally blind.

[Ken Coleman]

Okay. All right. Wow. All right.

[Dave Ramsey]

Yeah. I'm trying to think what I would do with the ABLE account. I probably would just try to get some mutual funds and set it in that. And let it create income for you from the ABLE account. And I think you can do that. I haven't dipped into those things in a while. I know what they're for and I kind of know what they are, but I'm not an expert on it. And so I would have you sit down with. Talk to one of our smartvestor pros and the people that we have that we endorse to help people with investing, and they will know how to structure your ABLE account for that. For those of you don't know if you're receiving governmental assistance, if you have money in an ABLE account up to a certain amount, if you label the account as an Able account. It has to do with protecting, keeping you from losing your government benefits if you are disabled. That's the purpose of it. That's how it's designed and what it is in general, it's a legal, proper way to have some assets and not, you know, not in her case, not lose the help that she's getting. So. Wow. Jay's in Alabama. Hi, Jay, how are you?

[Caller]

I'm better than I deserve, Dave. How are you, sir?

[Dave Ramsey]

Just the same. How can we help?

[Caller]

All right, I got a lot done pack. It's a rather happy story. My wife and I have royally kicked butt. I think we've done good, but I feel like we need to tweak it a little bit because we both, we do, we both have great jobs. We love them, but we don't think we're going to be able to do this till we retire in our late 60s or 70s. And we're trying to, trying to figure out how to expedite speeding up so we can retire maybe in our mid-50s.

[Ken Coleman]

All right.

[Caller]

So I don't, I don't know if that involves.

[Dave Ramsey]

How much have you got? How much have you got an investments?

[Caller]

1.1 million.

[Ken Coleman]

Okay, good lick.

[Dave Ramsey]

Good for you. And what's your household income today?

[Caller]

475,000 a year.

[Dave Ramsey]

Yo, and how much of that you. How much of that's her?

[Caller]

She is about 350 and I'm the rest.

[Dave Ramsey]

So you're 175, okay.

[Caller]

Yes, sir.

[Ken Coleman]

All right.

[Dave Ramsey]

And what does she do for a living?

[Caller]

We both work in medicine.

[Dave Ramsey]

I was gonna guess.

[Ken Coleman]

Okay, cool.

[Dave Ramsey]

Good for y'.

[Caller]

All. But she didn't get doctoritis.

[Dave Ramsey]

Well done. Yeah, apparently you got a good net wor and a great, great income. How much of the 1.1 is in retirement accounts?

[Caller]

About 800.

[Dave Ramsey]

Okay, what's the other 300 in?

[Caller]

I got about 120 in the brokerage account that I invest in and then the rest is home equity.

[Dave Ramsey]

Okay, and what's your ages?

[Caller]

I'm, I'm 45. She's 43.

[Ken Coleman]

Okay.

[Dave Ramsey]

So what you would do is to. Is your home paid off?

[Caller]

No, sir, we are paying extra on it to knock it down.

[Dave Ramsey]

Yeah. What do you owe on it?

[Caller]

We owe about 600 on it.

[Ken Coleman]

Okay.

[Dave Ramsey]

If you got a paid for home and you built some money in some non retirement mutual funds, that's what people in the financial world call a bridge fund. It bridges from where the, the, from the time you want to quit to 59 and a half.

[Caller]

Exactly. That's what that's what I'm looking for. Yeah, that's.

[Dave Ramsey]

Well, listen, you don't need as much if the house is paid for.

[Caller]

Yes, well, our long term, we might have a kind of a strange long term plan, but we, we both have a very well traveled and we're, we want to, once we get to that age, we're gonna, we'd like to sell the house, take the equity we get from selling the house, buy a smaller house with very, you know, place that we ain't got to grass and stuff like that. And we actually want to spend about half the year in Southeast Asia because we've, we've been there many times and love to vibe. So it's much cheaper to rent a place there.

[Dave Ramsey]

Yeah. Let me ask you this. It occurs to me that you fairly easily could sleepwalk into half of this income working part time, even if you were doing some of it in Southeast Asia.

[Caller]

My, my job currently is remote, but to be honest, I mean, I'm just being honest with you. We have no problem adjusting our lifestyle.

[Dave Ramsey]

No, no, no, that's not what I'm saying. I'm just saying you have the ability to produce an incredible income and you could probably do that with, with 10% of the strain you have now. You could probably, between the two of you, pull in a couple of hundred.

[Caller]

It's possible.

[Dave Ramsey]

Oh, I think it is. I think you have to reimagine what you do. But yeah, right.

[Caller]

We're just both getting, we see the writing on the wall and we just want to, we want to do the right thing. Pay out, pay off our house or at least knock it down a lot.

[Dave Ramsey]

I would get the house paid off and I would build some money and bridge.

[Co-host (possibly George Kamel)]

Is this 10 years that I hear?

[Dave Ramsey]

55.

[Co-host (possibly George Kamel)]

You guys want to be checked out?

[Caller]

55, 56. We're looking at, you know, say 20, 36, you know.

[Dave Ramsey]

Well, the 1.1 will be almost 3 million by then if you leave it alone.

[Ken Coleman]

Okay.

[Caller]

All right.

[Dave Ramsey]

And you would have bridge on top of that and you'd have the paid for house and you've got the potential to do something, not nothing, the rest of your life and probably generate a couple of bills doing that.

[Caller]

Right.

[Dave Ramsey]

There's a lot of different ways to roll into that 54, 55 year old point. And you're gonna be in really, really good shape. You're right. You have kicked butt. You're doing really well. The main place you've kicked butt though is your income.

[Caller]

Well, also, we laughed, but on our very first date, I asked her, I Said, I need to know how much student loans you got. And she said, no. And I said, all right, there'll be a second date.

[Co-host (possibly George Kamel)]

Now, hearing that story, we all knew you out kicked your coverage when you told us about your wife. But now this is a. This is a woman with poor judgment. Good for you, sir. You did well.

[Dave Ramsey]

You know, you're a real romantic, buddy. I'm just saying.

[Co-host (possibly George Kamel)]

Yeah, you're a sweat. I'm gonna sweep a girl sweeper right off her face.

[Dave Ramsey]

Feet. You got any student loans, baby?

[Co-host (possibly George Kamel)]

And then he declares there will be a second date.

[Dave Ramsey]

Okay, we'll go out again. You get the pleasure of my company one more time.

[Co-host (possibly George Kamel)]

I. I love the advice you gave there, Dave. And I think there's a bigger lesson for our audience. We know from all kinds of data, you can go research this yourself, that when a person completely stops work altogether, there's got to be some purpose beyond just retiring from a job. And in this case, I love what you recommend here, which they can travel the globe, do whatever they want, stay involved a little bit. Just enough to maybe cash flow all this and not eat into that retirement. And I just think that's something to think about. This idea of I'm gonna stop cold turkey and just do nothing but hang out. That's not what he was saying.

[Dave Ramsey]

But the data is really scary about how many are dead in six months.

[Co-host (possibly George Kamel)]

It is. And so finding some purposeful work, even if it's volunteering or doctors without orders.

[Dave Ramsey]

Yeah, Yeah. I mean, you could go, you know, let's go. Medical doctors in Southeast Asia would be at a premium.

[Co-host (possibly George Kamel)]

Hell, that's exactly right.

[Dave Ramsey]

So great.

[Co-host (possibly George Kamel)]

Great point.

[Dave Ramsey]

I mean, that's what I was thinking. You can. A lot of stuff you can do there. Yeah, yeah. This idea that I'm going fishing for the next 45 years is probably not a plan. Hold on, folks. Don't panic. Buying a home in today's market doesn't have to be complicated. But it does take more than hope and a quick Internet search to get the right home. One that will be a blessing and not a burden. You need a trusted mortgage partner who will listen and serve you, not push more debt. You need the professionals at Churchill Mortgage. I've personally recommended Churchill for over 30 years, and they're the only mortgage company. That's Ramsey trusted. Churchill stands out because they operate the Ramsey way with transparency, integrity, and a commitment to doing what's right for the customer, not what's profitable for themselves. Churchill aligns with Ramsey's values by focusing on education, responsible mortgage Lending and helping people make smart long term decisions that enable them to build lasting wealth. Go to ChurchillMortgage.com today to begin a better mortgage experience. ChurchillMortgage.com this is a paid advertisement in MLS ID 1591 in mlsconsumeraccess.org equal housing lender. Welcome back to the Ramsey show in the Fairwinds Credit union studio. Ken Coleman, Ramsey personality number one best selling author and host of the new Show Front Row 6 which is a massive hit on Ramsey network. He's my co host. Today Ryan is with us in Green Bay, Wisconsin. Hey Ryan, what's up?

[Caller]

Hey, how's it going?

[Dave Ramsey]

Better than I deserve. How can we help?

[Caller]

So, yeah, kind of similar story maybe to how you started out. Right Now I got 1.8 million in debt. That rental portfolio is worth 4.4. That's a conservative estimate off of what realtors would tell me they would list.

For.

Currently that that portfolio puts out approximately at a low end, $5,000 a month. At a high end, $19,000 a month. Because we're heavily invested in commercial. So right now with, you know, post Covid, we're, we're a little behind on the commercial leases.

[Ken Coleman]

Okay.

[Caller]

Just trying to think of like what. But so I had a home run early on. I sold a building that I bought for 426. I sold that building for 1.6 and then I did a 1031 exchange on two of the buildings.

[Ken Coleman]

Okay.

[Caller]

That I currently hold.

[Dave Ramsey]

Okay, how can we help?

[Caller]

Well, I don't know.

[Dave Ramsey]

What are you asking?

[Caller]

Well, I'm not sure. You know.

I'm not sure.

I guess I have 1.8 million in debt. I have poor portfolio of 4.4.

[Dave Ramsey]

And your rate of return on that portfolio sucks.

[Caller]

Yeah, it's not great.

[Dave Ramsey]

No, it's horrible.

[Co-host (possibly George Kamel)]

Do you want to get out of debt, Ryan? Do you want to get out of debt?

[Caller]

I do. I do.

[Ken Coleman]

Okay.

[Dave Ramsey]

Now you're still, you're still the guy that hit the slot machine once. And so you keep putting quarters in a stupid thing. You had that one hit and did that 1031 made bank. And ever since then you've been putting quarters back in the machine, trying to do it again. And none of the rest of them did that?

[Caller]

Well, no, I. Yes, yes, more or less, yes, I will agree with you. But I have, I, I have hit more than one.

[Dave Ramsey]

How old are you?

[Caller]

I'm 38 years old.

[Dave Ramsey]

Where do you want to be when you're 58? You want 10x this or you want. What do you want?

[Caller]

Yeah, I want to. I want to 10x this, man. I want to. I want to pay off my home that is worth a million dollars. But I have a $360 note.

[Dave Ramsey]

But I'm just telling you, I don't want a 10x your portfolio, your rate of return is awful, sir, when you tell me you're getting an NOI of 60,000 to $19,000 on an asset base this high, your rate of return, your ROI, straight up mathematics. It's horrible.

[Caller]

3.8.

3.8, I know, but you're.

[Dave Ramsey]

When you make $60,000 as a return on 3.8, I mean, that's horrendously bad. You should be making a half million dollars on that.

[Caller]

Correct?

[Dave Ramsey]

Yeah, absolutely, I'm correct. Yeah, yeah, no, I know. So you've got to figure out why these rate, these properties are not giving ROI and shed yourself of the properties that are not giving you a return and build a model portfolio where you're getting in real estate, you need a cash on cash in residential of 8 to 10, net NOI, net operating income, 8 to 10% cash on cash annually.

[Ken Coleman]

Okay?

[Dave Ramsey]

And in addition to that, the thing needs to be going up in value. And in addition to that, you need to be taking the tax depreciations that the depreciation schedules with. The IRS allows. All of those things together give you north of 15 to 20% on a commercial, you ought to be making 10 to 12 cash on cash. Ours does that. And it's not rocket surgery to do it, but you've just been buying crap, man, and you didn't think anything about the debt aspect. And so the debt on some of these is eating your lunch because the rents are not commensurate with the values and with the debt service you're carrying. And that's what's destroying your roi. So you need to get down inside of that and figure out which of these things you want to and create an ideal portfolio that's going to be 8 to 10 on residential and 10 to 12 on commercial cash on cash. And in properties that are going up in value, those are the ones you want to expand owning and the others you want to get rid of. And so there's the playbook right there, and you adjust it, and that's what's going on. But you've fallen backward into this thinking that all real estate's good, all real estate's not good. Some of it sucks, and you've got some that sucks, and some of it's leveraged too high. Some of it you got too much debt on and it's pulling you down. And so yeah, if I'm you, that's what I'm looking for. And in the process of doing that over the next five years, I'm going to sell off enough of it and use enough of my income to become 100% debt free. That's where I would be going. But I don't think you're going to do that because I think you like borrowing money. So I'm not sure where you're going to end up. Exactly. I hope you make it. Hope you do for your sake in this case.

[Co-host (possibly George Kamel)]

Would you? I mean, because he's got enough. If we take him face value, 4.4 million, he said Conservative in all that property, 1.8 million debt. Would you get out of the rental game altogether and have him invest that? He's a young guy, he's like 37.

[Dave Ramsey]

Yeah. I mean he'd be better off.

[Co-host (possibly George Kamel)]

That's what I think.

[Dave Ramsey]

If you just, if you did a hundred percent slate clean and dropped it all mutual funds, you'd make more money than you're making now.

[Co-host (possibly George Kamel)]

That's where my head was going.

[Dave Ramsey]

Yeah, because you got $2 million in mutual funds in and you're making $200,000 a year.

[Ken Coleman]

Right.

[Dave Ramsey]

You know, and that. And you're not doing anything to do that. You don't have to collect rent, you don't have to replace water heater, the roof doesn't leak, you know, all that.

[Co-host (possibly George Kamel)]

It's a really healthy reset for a guy his age with kids.

[Dave Ramsey]

Not sure I would go that far. Instead I'd probably cherry pick it and take about three years and clean up most of it. Clean it all up in about a three year period of time. But clean it up by getting rid of the properties that aren't cash flowing but have equities and then get out of the debt business. Because that's what's part of what's bringing you down here. The other part is you're still trying to replicate that one, dude.

[Co-host (possibly George Kamel)]

So hit those numbers again for people because too many people watching TikToks and reels. So what is the ROI you're looking for on commercial versus residential, the stuff that you own or else you say it's not worth having.

[Dave Ramsey]

I pay cash, right. And so I want to make, if I put a half million dollars in a house. We don't buy houses anymore. But when we were buying, I got a bunch of them still. I got rid of all of them. But on the houses that we own, the residential single families that we own, we look at what we paid for it, what it's worth in the market. And we want an 8 to 10% cash on cash after all expenses are paid. Rent minus expenses is net operating income. We want to see a cash on cash of 8 to 10%. If you get that and you have appreciation in value and you take the depreciation, those three things together are called the internal rate of return, the IRR, and those will be north of 15, 17% on your residential, which is a lot better return than a mutual fund. But it's a lot more hassle then on our commercial stuff. We're making anywhere from 10 to 14% cash on cash. And so we're seeing most of our IRRs, our internal rates return up in the 20s on those. So we're making serious money on those commercials because commercial property does that, but it's a lot bigger property and again it's a lot more cash tied up in them. So those are the processes you've got to go through to get those there. You got to just decide what you're doing. Cuz if I can, if I can't make 8 to 10 when I can make 12 on a mutual fund, right. Why am I going through all this hassle?

[Co-host (possibly George Kamel)]

Exactly.

[Dave Ramsey]

We've told you for years, debt is dumb, cash is king and the borrower is slave to the lender. So when we find a bank that actually gets that, we shout it from the rooftops. That's why we've partnered with Fair Winds Credit Union. These guys aren't pushing credit cards or auto loans like your current bank is. Fairwinds is on your side. And now they've taken it to the next level. They worked with us to create a high yield savings account that gives you a great rate without the junk. No bait and switch rates, no credit score games. Just a simple powerful way to help you build your emergency fund fast. It's part of what Fairwinds calls the smart bundle, made for Ramsey fans. You get high yield savings, a no fee checking account and zero gimmicks. Just common sense banking that works with the baby steps, not against them. And coming soon, they're launching a brand new Ramsey debit card. It says debt is normal, be weird right on the front of it. That's not just a card, that's a daily reminder that you, you do money differently. So check them [e-mail] Ramsey Fairwinds is federally insured by the NCUA. Reed is with us in New Jersey. Hi Reed, how are You?

[Caller]

I'm good. Thank you for taking my call.

[Dave Ramsey]

Sure. What's up?

[Caller]

So I'm getting married in April, and I have about $15,000 worth of student loan debt, and I've saved up about 17,000. And that's not including my 401k and my investments. And I'm wondering if I should.

[Dave Ramsey]

How much is in your non 401k investment?

[Caller]

I have 17,000 in a high yield savings account, not including the 401k.

[Ken Coleman]

Okay.

[Dave Ramsey]

And not including the other 17,000.

[Caller]

No, there's just one 17,000, you said.

[Dave Ramsey]

Okay, I'm sorry. So you have savings of 17. You have 15 in a student loan, and then you said I have investments and a 401K.

[Caller]

Yes.

[Ken Coleman]

Okay.

[Dave Ramsey]

The 401K. I understand. What are the investments that are not in the 401k?

[Caller]

I have about $5,000 in an IRA.

[Ken Coleman]

Okay. All right.

[Dave Ramsey]

Do you have any investments that are not in a retirement account other than the 17 and the high yield savings?

[Caller]

No.

[Ken Coleman]

Okay. All right.

[Dave Ramsey]

Trying to make sure I had the clear picture.

[Ken Coleman]

Okay.

[Dave Ramsey]

Because if I heard 20,000 laying in a mutual fund over there, that wasn't retirement. That changes the picture. You follow on me, right? That's what I was looking for.

[Ken Coleman]

Okay.

[Dave Ramsey]

Yeah, yeah, yeah, yeah, yeah, yeah, yeah. All right. What do you make?

[Caller]

120 before taxes.

[Dave Ramsey]

Good for you.

[Caller]

Thank you.

[Dave Ramsey]

What have you been spending it all on?

[Caller]

I Living expenses in New Jersey, and I travel back and forth a lot between New Jersey and Atlanta to help take care of my mom. She has ms, so it's a little bit difficult to save, but I'm putting away at least $500 a month, which.

[Dave Ramsey]

Is 6,000 a year out of 120,000. That's not much.

[Caller]

No, it's not.

[Dave Ramsey]

Okay, so you've not been very intentional and careful and controlling with this great income that you have until now when you start focusing on it recently.

[Caller]

Correct.

[Ken Coleman]

Okay.

[Dave Ramsey]

Not trying to blame you. I'm just trying to make sure I get the picture of what the story arc of your behavior is, because that affects my answer. So the good news is you kind of just started all this stuff and you probably can do a lot better than 500 bucks a month. So if you took the 15 of the 17 paid off student loan and really bear down on the budget, you probably could put the 15 back pretty quick.

[Caller]

Yes, we are planning a wedding.

[Dave Ramsey]

Okay. Are you paying for part of that?

[Caller]

Yes, for about half of it.

[Dave Ramsey]

How much?

[Caller]

10,000 total is our budget for that.

[Dave Ramsey]

Okay, so you need five.

[Caller]

No, I'm sorry. In my budget. So that's 50% of the wedding.

[Ken Coleman]

Oh, okay.

[Dave Ramsey]

10.

[Ken Coleman]

Okay.

[Dave Ramsey]

All right, so that changes the discussion again.

[Ken Coleman]

Okay.

[Dave Ramsey]

And does he have debt? What's his financial condition?

[Caller]

My fiance has no debt other than the condo that we live in.

[Ken Coleman]

Okay, cool.

[Dave Ramsey]

All right, well, so number one, as long as you do it between now and April or as soon as you get back from the honeymoon, I don't care. You're still going to get to where you need to go. More than anything, what I'm wanting to do is create a behavior pattern that's realistic that you can lean into and take all the way into your marriage. That's a positive behavior pattern.

[Ken Coleman]

Okay.

[Dave Ramsey]

Because you make good money and you don't have much to show for it. So that's why you're asking these wonderful questions, because you want to do something better. You want to have something to show for it. Am I reading you correctly?

[Caller]

Yes. It just. It becomes pretty challenging with the amount I have to fly and helping my parents out.

[Dave Ramsey]

Yeah, well, it. And that also is not the only reason.

[Caller]

Yeah, for sure.

[Ken Coleman]

Okay. All right.

[Dave Ramsey]

The.

[Ken Coleman]

All right.

[Co-host (possibly George Kamel)]

When is the wedding?

[Dave Ramsey]

April. Okay, to the extent that you can be confident that you can build the 10,000 and then rebuild the other 15. I need $25,000 by April.

[Ken Coleman]

Okay.

[Dave Ramsey]

To the extent you can be confident of that, can't be confident of that because you're just starting. All right, so I was gonna. I was gonna give you an answer that I'm not liking now.

[Caller]

Yeah.

[Co-host (possibly George Kamel)]

I'm crunching those numbers.

[Dave Ramsey]

So, no, I'm gonna take 10,000 of your 17 and move it to a separate savings account, and the wedding is now funded. Pressure's off.

[Caller]

Okay.

[Ken Coleman]

Yep. Okay.

[Dave Ramsey]

And then I'm going to take 5000 and throw it at the death, leaving you 2000 or 6000 and throw it at the debt, leaving you $1000 in the account. And then I'm going to get on a tight beans and rice. Rice and beans budget. And you have no debt at that point, correct?

[Caller]

Correct.

[Dave Ramsey]

No, no. You still have the student loan debt because we only put six towards the 50,000.

[Co-host (possibly George Kamel)]

You got nine left.

[Dave Ramsey]

So we got 9,000. We got to tear into that nine, and then we got to rebuild the emergency fund by the wedding. But the wedding pressure's off. We've got the 10,000 sitting there. To do that, we're throwing 6,000. I need $9,000 and I need to rebuild my emergency fund by April. You can do that making 120 if you get on the. Every Dollar budget. And you really start pounding it and you say, I'm not going out to eat, I'm not spending money. We're not going over this wedding budget. That's it. That's a whole budget, not a dime more. We're picking out a dress that fits within that, a videographer and a reception that fits within the 20 budget. And buddy, you putting up the 10. He can put up the 10. He's going to be able to do that. Sounds like. Sound like you guys got a good match here.

[Ken Coleman]

So.

[Dave Ramsey]

Yeah, that's what I'm doing. Let me recap. What I'm trying to do is I'm trying to get. Not too many things coming at you to put pressure on you. The only pressure is getting out of the debt now because we got the wedding financed. You see what I did, right?

[Caller]

Yes.

[Dave Ramsey]

But then you've got to create the people, Reid, that change their lives doing this stuff are the ones that create this internal positive anger. It's like, I've had it. I'm sick of making this much money and I got nothing. Yeah, I got this expenses running back forth to Atlanta, but I got nothing. And I'm sick of this. And I'm gonna do whatever it takes that's moral and legal to change that. And the person in my mirror and I'm freaking changing. I mean, you gotta get this thing going, right? And when you get that going, then you're gonna be okay. But you can wander into debt, you can't wander out. You got to get passionate about it. And that causes you to sacrifice deeply to hit the goals. So 10,000 in an account, 6,000, leaving 1,000 in your savings account. No more money going into your 401k. Stop it. Temporarily. Stop everything temporarily. Your life is now on hold until you get the other 9,000 student loans paid off. And your life is not on hold until you finish that emergency fund rebuilding it to 10 or $15,000. So when you come home from the honeymoon, you have $15,000 cash.

[Ken Coleman]

Cash.

[Dave Ramsey]

No debt on the wedding and no debt. And you make 120. That feels good. That's worth pushing for.

[Ken Coleman]

Yeah.

[Co-host (possibly George Kamel)]

And that's a burn the ships mentality, which is what you need at this point. It's now I have no margin, but instead of stressing out over the wedding, we're just, hey, I don't like the fact that I don't have an emergency fund. That's a very different vibe. That motivates you very clearly. I love that. All conviction at this point.

[Dave Ramsey]

Yeah, I just I create systems that push me to do what I want me to do.

[Ken Coleman]

Yes. Right.

[Dave Ramsey]

I put myself in those positions.

[Ken Coleman]

Right.

[Dave Ramsey]

It's one of the reasons I love stuff like automatic draft on your checking account going into your investments. Are the four. One of the reasons the 401k has caused more people to build wealth than just about anything else. Because it's automatic. Anything I can do to put a system around me that automates my discipline.

[Ken Coleman]

1.

[Co-host (possibly George Kamel)]

Well, tell everybody why you. I know what you did, but what's the psychology behind saying, all right, we're gonna fund the wedding. Why'd you tell her to do that? Because that's. I know what you did. It's brilliant. But explain the psychology behind having her do that.

[Dave Ramsey]

Can't focus on two things at once.

[Ken Coleman]

Yeah.

[Dave Ramsey]

And one of them is gonna suffer.

[Ken Coleman]

Yeah.

[Co-host (possibly George Kamel)]

The wedding is so important to her. It's such a huge deal that if Dave didn't have her do that, what happens is she starts to go, well, the wedding is super important. Super important. I can't do both. And it kills any moment momentum on getting rid of the debt. This way, you give her a fully.

[Dave Ramsey]

Light at the end of the tunnel. That's not an oncoming train.

[Co-host (possibly George Kamel)]

Brilliant.

[Dave Ramsey]

Even if it's a pin light, there's a light there.

[Co-host (possibly George Kamel)]

That's right.

[Dave Ramsey]

And it's a singular focus point. And when you're trying to modify behaviors, you look for a singular focus point and lean in on that with visceral, passionate craziness. And then you can create this permanent change in your brain and you rock on. Then you reset. Who you are, are, is what you're doing.

[Ken Coleman]

Yeah.

[Dave Ramsey]

Folks, when we get you out of debt, the. Getting out of debt is not the important thing that happened. It's what you became.

[Ken Coleman]

Yeah.

[Dave Ramsey]

While you were getting out of debt, that's the important thing that happened.

[Ken Coleman]

Foreign.

[Caller or Ramsey Personality (possibly Rachel Cruze)]

Hey, you guys. More than a hundred million Americans carry medical debt. And that is so scary. And it shows that traditional coverage often leaves people to face big bills alone. Families need more than just coverage.

[Dave Ramsey]

They need community.

[Caller or Ramsey Personality (possibly Rachel Cruze)]

So what if your healthcare costs less and you are actually supported by other believers in the process?

[Dave Ramsey]

Process.

[Caller or Ramsey Personality (possibly Rachel Cruze)]

That's why I love Christian healthcare ministries. CHM is a budget friendly, faith based alternative to health insurance that's been serving believers since 1981 and they've paid over $12 billion in medical bills, y'.

[Dave Ramsey]

All.

[Caller or Ramsey Personality (possibly Rachel Cruze)]

That is faith in action. So let me say it again. CHM is not insurance. It's a nationwide health cost sharing ministry country. It's Christians helping other Christians with their medical bills. With chm, you get to choose your providers. There are no networks, no surprise bills, and no insurance headaches. Whether you're just starting out as a family or you're looking for something that fits your budget better, CHM is where your faith and finances agree. Programs start at just $98 a month, so go to chministries.org budget to learn more and take the leap of faith. Today, that's chministries.org budget.

[Ken Coleman]

Foreign.

[Dave Ramsey]

Is brought to you by why Refi? You've tried budgeting, you've tried making minimum payments, but those defaulted private loans are still weighing you down. Why Refi might be able to help. Learn [e-mail] Ramsey that's the letter y r e f y.com Ramsey not available in all states.

[Co-host (possibly George Kamel)]

Today's question comes from David in Massachusetts. My father suddenly passed away recently and did not make will he always plan to create. He owned five properties and only two have mortgages. He also owned a business with a partner which brings in close to 1 million in residuals annually. My mother is not in the picture and I have an older brother who has a substance abuse problem. My father did not inherit any money from his parents and built all this from the ground up, so I want to honor him by making sure none of this goes to waste. My brother will waste away his half of the inheritance on drugs if he gets access to to it. My name will be the only one on the death certificate and our attorney will file for me to be the head of his estate. Is there anything I can legally do to prevent my brother from getting a lump sum?

[Dave Ramsey]

You need to seek legal counsel that really knows what they're doing. No, I doubt it. I think he's going to get his lump sum unless he's declared incompetent by the court, unable to take care of his own affairs, and just being stupid or doing drugs is not going to cause that to happen. Stupid, immature drug person is not gonna that's not incompetent by legal terms. My mother's not in the picture. She is now if you're if they were married or if they are if they were married at the time of his death. She's very much in the picture whether you want her to be or not. So again, we're not attorneys in Massachusetts, so you need legal advice in Massachusetts where you are. And my suspicion is Massachusetts has some wicked crazy probate laws because there's some other stuff on the books there that's wild. And so I wouldn't wouldn't surprise me a bit, but you need to find out what you're dealing with.

[Ken Coleman]

Okay?

[Dave Ramsey]

So in most states, if your mother is alive and they're still married, she's going to get at least half of these assets whether you wanted her to or anybody else wanted it to. And your brother, if not, if she's dead or they're divorced and gone or whatever and she's really not in the picture, legally, then you and your brother are going to get half each. And I'm not aware of anything you can do to legally prevent your brother from getting his half. Now, what I would do if that's the case when you sit down with your attorney, is I would sit down with your brother and say, look, I love you, dad loved you. I don't want you to use this to od. I don't want you to use this and have nothing to show for it later. If you would allow me to manage your half for you until you get through these. This part of your life, I will do that as a favor to you because I'm very afraid that you're going to end up with nothing. What do you think? And see what he says. And again, what percentage of guys in this situation are going to go, oh, yeah, why don't you take care? None. But it's worth asking. But that's probably. Persuasion is probably your only technique.

[Ken Coleman]

Yeah.

[Co-host (possibly George Kamel)]

Tough situation. So sorry for your loss.

[Ken Coleman]

Yeah.

[Dave Ramsey]

What does this illustrate? Illustrates everyone needs a will, period. And here's why. What you. What this guy did when he died suddenly is he has put a curse on his two sons. He left them with a mess because he didn't do a will. And so now you've got one son trying to navigate the older brother trying to navigate the prodigal, and try to do what dad wanted and try to think through and not. There's no direction and there's no legal binding anything. If your dad had simply left half of this in a trust for your brother, it would have taken an hour and a half to do that will max. And if he'd left half of it in trust for your brother, with you as the trustee to manage it, and upon such time as your brother exemplified positive behaviors, you release the trust to his control, which would be a fairly normal thing where you've got an immature kid or a kid doing drugs or whatever, you're going to hold it for him but not let him have. Would take it. Just, you know, it's just so those of you that are out there, do your freaking Will, if you love the people that you're gonna leave behind because you just. You screw up everything for the people you leave behind by not doing is an act of love to do your estate planning. Because now this poor guy, David, has got this whole thing is sitting on his shoulders. He's the only adult in the story.

[Ken Coleman]

Yeah.

[Dave Ramsey]

Just aggravates a pee out of me. So this is millions of dollars we're dealing with here.

[Ken Coleman]

Yeah.

[Dave Ramsey]

And by the way, there's a partner in a business he was running with him that doesn't know what to do, too. And I'm sure there's no freaking plan there either. So, you guys, I don't care if you got two nickels and a kid, you need a will, because the kid is going to be controlled by the state. If you don't have a will that dictates who's going to take care of your kid, you're going to leave that up to the DMV people, the people that run the dmv. That's the level of competence you have when you're dealing with the state. Nothing. No, I'm not leaving that up to them. No, I'm not leaving anything up to the government to decide anything because I was too trifling to get my dadgum work done. And getting your will done is being an adult and getting your work done. Oh, man. Poor David. I'm so sorry, David. But I'll tell you what. If you want to. If you have a bunch of people, a bunch of kids that you don't like, and you want to really mess up the next 10 years of their life, leave about $2 million with. With no instructions and a bunch of scraps of paper laying around of what they thought you wanted and watch them fight through it and all the lawyers get the $2 million over the next 10 years, and nobody in the family talks to each other the rest of their lives, it's almost a guaranteed formula. That's right.

[Ken Coleman]

Yep.

[Co-host (possibly George Kamel)]

It's like dropping a bomb off in.

[Dave Ramsey]

The middle of a family. Yeah, that's exactly what it does. So just aggravate. David, I'm sorry you're facing that, but I wouldn't burn a ton of calories on your brother. It's not his fault. It's not his problem. He's his problem. He's what's known as an adult. And I wouldn't burn a ton of calories on anything except just getting this thing settled and moving your part over to the side. And you go live your life like a responsible Human being. And oh, by the way, get a will. Did I mention that Rebecca's in San Diego? Hi, Rebecca. What? What's up?

[Caller]

Hello. How are you?

[Dave Ramsey]

Better than I deserve. How can I help?

[Caller]

So my mother inherited my great grandmother's property that has two houses. Unfortunately, both of them need significant amount of work that my mother cannot afford to do. If we were to move there, it'd be five generations on this land. So we are trying to do what we can to not have to sell it off. My husband and I do have a down payment saved to buy a house, but we were thinking instead we could move into the bigger house. We've got two kids and another one on the way. Use our down payment to fix up that house and live in it and have no debt, you know, no house payment. And my mom would take on the smaller house that needs less work and better suitable for just her by herself. Single. She recently decided she wanted to only be the sole landowner. We wouldn't be put on the deed or anything. Legally.

[Dave Ramsey]

That settles it. I'm not going to going.

[Caller]

She wants us to pay $800 on top of about a hundred thousand dollars we would be putting into. I'm not going House in the property.

[Dave Ramsey]

I'm not going.

[Caller]

That's what I said.

[Dave Ramsey]

You don't put a hundred thousand dollars in somebody else's house. Let's pretend, Rebecca, that you were my renter and you were my tenant. And I said, hey, why don't you renovate my house? You would look at me like you're an idiot. I'm not putting $100,000 in your house. Down. Why would a renter do that?

[Caller]

Yes.

[Dave Ramsey]

Don't do this. Sorry, mom, this isn't gonna work out. We're gonna have to just go buy a house somewhere else. And I hope this all works out for you.

[Caller]

Yeah. Family said that because one day I would possibly inherit my siblings that children should take care of.

[Dave Ramsey]

I'll deal with it when I inherit it. Right now, I'm not doing a thing.

[Co-host (possibly George Kamel)]

Yeah, you already don't like this and you're still trying to figure this out.

[Dave Ramsey]

Your mom has set up a trick bag here. You need to run. This is a bad vibe. Bad juju, kiddo. Really bad. You need to run. This is a trick bag. She likes to mess with people. And I can see the strings from here. You need to run.

[Caller]

Run, run, run, run, run, run, run.

[Caller or Ramsey Personality (possibly Rachel Cruze)]

Y'.

[Dave Ramsey]

All.

[Caller or Ramsey Personality (possibly Rachel Cruze)]

Do you want to know a game changer for your grocery budget? Start your weekly shopping at Aldi. Seriously, by making Aldi your first stop. You can easily check off your family favorites from fresh organic produce to grass fed ground beef, marinated, ready to cook chicken breasts and high quality dairy products. You'll be able to make incredible meals while keeping your budget on track. So no overpriced gimmicks or membership fees here. Now real families like yours are saving up to $4,000 a year just by making Aldi their go to grocery store every week. Find a store near you@aldi US that's a L D I.us savings based on.

[Co-host (possibly George Kamel)]

Regional analysis of Aldi versus select competitors.

[Dave Ramsey]

Prices may vary by location, product availability and the market. If you died tomorrow, how much would your family need to keep the lights on? How would they pay the mortgage? How would they buy groceries? If anyone? Your life depends on your income. You need life insurance. And how do you choose from all the options out there? Well, life insurance is term life is the only kind that does everything you want, which is replace your income for the lowest possible cost. And we've recommended only term life insurance for the last 35 years here on the air. You need a policy worth about 10 to 12 times your annual income. And the perfect term length we think is a 15 to a 20 year level level term policy, meaning the premium stays the same. For more info and resources, use our free term life insurance guide. You can go to ramseysolutions.com term lifeguide. It's free. Or click the link in the show notes. Speaking of life insurance, Kyle is with us with a life insurance question. Look at that. Hey, Kyle in Tampa. What's up?

[Caller]

Good, how about you?

[Dave Ramsey]

Better than I deserve. How can I help you?

[Caller]

Yeah, so I think we're doing good on our savings for retirement, but we have like a large life and whole life that we got kind of sold on. And my wife, she doesn't agree with giving it up, but I do. And now it's kind of like a catch 22 where I think we have enough, but I just want to give it up kind of just for potential growth. Okay, so it's like $800,000 in cash value potential. It could be. Maybe I looked into the end.

[Dave Ramsey]

Like you currently have cash value of 800k?

[Caller]

Yes.

[Dave Ramsey]

Are you sure?

[Caller]

Yes.

[Dave Ramsey]

How much did you put into this?

[Caller]

We put a lot of money into this. I don't know, we just kind of got caught up into it. I think it was like 10 years ago.

[Dave Ramsey]

So what is the face value? What's the payout on death at this moment?

[Caller]

1.2 for me, 2.3 for her.

[Ken Coleman]

Okay. All right.

[Dave Ramsey]

And what do you make?

[Caller]

46. I don't make them. Together we make about 325.

[Dave Ramsey]

What do you make?

[Caller]

I make about 55.

[Dave Ramsey]

And what does she make?

[Caller]

About 275.

[Ken Coleman]

Okay. All right.

[Dave Ramsey]

She a doc.

[Caller]

Yes.

[Dave Ramsey]

Yeah. That's who they go after.

[Ken Coleman]

Okay.

[Dave Ramsey]

Yes.

[Caller]

And that's Kanye.

[Dave Ramsey]

She's a target. She's a target. They worked all her and they worked all her buddies.

[Caller]

Yeah.

[Dave Ramsey]

You got screwed, and you're getting screwed every day that you keep it. So do you. You said, I think we've got enough. I mean, what, you have a large net worth or something?

[Caller]

I mean. Yeah.

[Dave Ramsey]

What is your net worth?

[Caller]

I mean, it's probably like 3 million.

[Ken Coleman]

Okay.

[Dave Ramsey]

Invested in what?

[Caller]

That's not including that policy is probably like 1.5 for houses and then about 1.4 for just 401k things.

[Ken Coleman]

Okay.

[Caller]

And then I have 800,000 of this, and I'm just kind of like, I got you.

[Dave Ramsey]

All right, well, let me kind of give you. You can play this back. You can play this back for her.

[Ken Coleman]

Okay.

[Dave Ramsey]

Docs are targeted by whole life guys. They're the sweet spot for those guys that sell this crap. It is one of the worst financial products in the world. It's absolutely horrendous. No one in the entire financial world believes in whole life insurance as a good product except the people that sell it. All the rest of us, all the financial planning community, all the investment community, all the estate planning community, unless they're involved in the whole life business, they do not believe in it, and they tell people not to do it. All of us have abandoned this product because it's not just bad, it's one of the worst. It's the payday lender of the insurance world. That's how bad it is. This is not a medium product. This is a product that absolutely is horrendous. Okay, now let me walk you through why, and then we can. Then you guys can go home and you can talk about this after you play this back, because it'll be on the podcast. Okay, so.

[Ken Coleman]

Okay.

[Dave Ramsey]

Life insurance has one possible need in a scenario like you're in, and that is to replace lost income if one of you dies and the rest of you are dependent on that person. You do not have a large enough estate to have an estate tax problem, and so there is no. You have zero need for life insurance for that purpose. You got to get to $25 million before you have to worry about an estate tax problem. And you're a long way from $25 million. All right, so you don't have an estate tax problem at all. Not even close. Nor are you going to have one anytime soon. Soon, now. So. But what you do need life insurance for is if you wanted to replace the income. Now we replace her income, you would need about 10 times that. So you would take about two and a half to $3 million, probably $3 million policy on her. And we take about 10 times on you. So we take a 750,000 on you just to round up.

[Ken Coleman]

Okay.

[Dave Ramsey]

You could do that at your age for nothing. The cost of a pizza. If you don't smoke and you're not obese, if you're not fat and you don't smoke, life insurance costs almost nothing. It's ridiculously inexpensive. Like the cost of a pizza. Well, in your case, this many millions, probably three pizzas. But it's really no money compared to the 800 grand we're talking about. All right, now here's the problem. You put so much money into this thing. If she does, you know what they're going to pay? 2.3 million. You know what happened? The 800,000, they're going to keep it. Cash value dies with you. This is a dangerous situation because you guys have gotten screwed so bad. So if I were you, I would cash this out really fast.

[Caller]

And let me. And let me say, like hers is 500 and mine's 300. So we, we have two different policies.

[Ken Coleman]

That's okay.

[Dave Ramsey]

I'd cash it out real fast to.

[Caller]

Just get rid of.

[Dave Ramsey]

I got both of them. I'll be done by the end of the day because if one of you dies without life insurance in the next 60 days and you've got $3 million left to live on, I think you're gonna be okay.

[Caller]

Yeah, that's what I told her.

[Dave Ramsey]

All right, so you're self insured. If you want to go buy some term insurance, price it out with Xander insurance, it doesn't cost nothing. Nothing. If you want some extra insurance. But right now you've got 3 million. Oh, wait a minute. No, you've got almost 4 million countless. 800,000, right? Yes.

[Ken Coleman]

Yeah.

[Dave Ramsey]

And I think you guys, if one of you dies, the other one can make it on $4 million.

[Ken Coleman]

Yeah.

[Dave Ramsey]

So you're self insured.

[Caller]

Just taking this 800,000 and putting into like a mutual fund.

[Dave Ramsey]

You should have put it in a good investment. Yeah, absolutely. One that goes up in value, cash value, has an average rate of return nationally of 1.26%. 1%. You're making nothing. This is costing you 100 grand a year in lost opportunity. What? It should be growing.

[Ken Coleman]

Awful.

[Dave Ramsey]

Absolutely awful. So no, you. She needs to tell his life insurance guy to jump off a cliff and he screwed you guys bad. Really bad. And I can name the company probably, uh, oh.

[Co-host (possibly George Kamel)]

Why are doctors ground zero for this?

[Dave Ramsey]

Because they make a lot of money and they feel all fancy because they're new doctors and they have no knowledge of finances at all. They're the worst with money. With the possible exception of actors and country music stars, MDs are horrendous with their money. There's a handful of country music stars do a really good job. There's a handful of doctors do a really good job job. There's a handful of NFL players do a really good job. And the rest of them are financial morons. And so these guys weigh in on these guys who are all puffed up because I just got my md and these gals and they're feeling all good about themselves because they just got to be a doc. And they swoop in just about that time, about the time you're making a little money and they go, oh, well, you need whole life life insurance. So horrible, horrible, horrible problem product. Yeah, you're. And I don't care. I'll sell either one. You do whatever you want to do. But if I woke up in your shoes by the end of the week, I'd have my 800k in my hand and I'd be sitting down with a Smartvestor pro and opening up a good mutual fund and making 10, 12% on this money instead of 1%. And when I die, they don't keep it. There's an idea. And if you want some life insurance in addition to your $4 million net worth at that point, just call Zander Insurance and get you some insurance. Insurance you can get like, again, 46 years old, if you're not obese and you don't smoke, you can get some insurance. It's really not that much, but long ago I quit buying insurance because Sharon's okay if I die. Matter of fact, she's really okay if I die. I kind of need to sleep with one eye open.

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[Dave Ramsey]

Welcome back to the Ramsey show in the Fair Winds Credit Union studios. I'm Dave Ramsey. Ken Coleman Ramsey, personality number one best selling author and the host of the new Ramsey runaway hit called front row seat. Long form interviewing with people who really know how to do life well. You'll learn a lot if you join him on front row seat. Our phone number here is triple 882-55-5225. Jessica's in Birmingham. Hey, Jessica, what's up in your world?

[Caller]

Hey, guys. I feel so blessed to talk to you today. Thank you for taking my call.

[Dave Ramsey]

Well, thank you. How can we help?

[Caller]

Okay, so I run a solo aesthetic skincare business that grosses around 85,000 a year. But after expenses, I only bring home about 24,000. My husband and I are on baby step two. I do my business, I love my clients, but I do have a lot going on in my life right now and I just do not have the drive to keep pushing and building my business the way that I have in the past. I'm just, I'm just tired. But my question is, should I take a full time job for a year to pay off all of our debt and while I do that, keep, keep the business open for like one to four days a month.

[Dave Ramsey]

Yes.

[Caller]

And then go. Okay, okay.

[Dave Ramsey]

I'm tired. I don't make any money.

[Caller]

Yeah.

[Dave Ramsey]

There's a formula, right?

[Co-host (possibly George Kamel)]

What would you make if you did the exact same thing you're doing the aesthetic skin care for your clients. If you're doing that for somebody else and you were just getting paid for your time, what would you make?

[Caller]

Easily double or triple.

[Co-host (possibly George Kamel)]

Yeah, that's the answer.

[Dave Ramsey]

Yeah. As long as they allow you to keep your clients.

[Caller]

Yeah, that's, that's the problem is if I worked for another, you'd have to give up.

[Dave Ramsey]

Conflict of interest.

[Caller]

Yeah, exactly. So what I was thinking was doing something similar in the industry, like working in sales for a brand or something like that. That wouldn't be directly a conflict of interest.

[Dave Ramsey]

Would you make this much as, would you make as much as if you, you did your actual craft?

[Caller]

Yeah, I'm sure I could probably, if I got into sales and worked for like a skincare brand, I could probably bring anywhere from 70 to 100 in a year.

[Dave Ramsey]

Then do it.

[Caller]

Okay.

[Ken Coleman]

Yeah.

[Dave Ramsey]

It's a no brainer Meanwhile. Meanwhile, consider can begin to read and study business.

[Caller]

Yes sir.

[Dave Ramsey]

Because you're a classic accidental entrepreneur. Here's what we find when we're working with our entrepreneurial clients in entree leadership and we coach about 10,000 small businesses. There's a vast difference between being good at your skill and running a business that accomplishes your skill.

[Caller]

Yeah.

[Dave Ramsey]

You are good at your craft of helping people with their skin. You suck at running a business.

[Ken Coleman]

That's okay.

[Dave Ramsey]

You can do it. You can learn how though. It's a learned skill. Business acumen because you're not making any profit. We know this because you should just talking to you for a few minutes. You're obviously bright, you're articulate. I think you're right. I think you could go make 100k selling just after talking to you. I actually believe you now. If you're all of those things and you're not making at least that doing this craft that you're good at, it's a business problem. And so learn the business part. Let me recommend a couple books to you. I'm going to send you a copy of Building a business you love, my latest number one best seller. I'll give you a copy of it. Another book I'm going to recommend is by a friend of mine named Michael Gerber. It's called the E myth, the entrepreneurial myth. And it is learning to work. Work on your business, not just in your business. Okay, so what we run into all the time, Jessica and I tell them exactly the same thing I just told you. A guy who knows how to work on heating and air. And he's doing a really good job fixing people's heating and air, replacing their broken heating and air, all that kind of stuff. An H VAC guy. And he decides I'm going to open my own thing. And he gets a truck and he leaves his job and he goes into business fixing heating and air. Now he's really good heating and air technician, but he knows nothing about running a business business. And he ends up exactly where you are. Instead of making 80,000 working for somebody else fixing heating and air, he ends up making 20,000 with his own truck. And he's miserable. And so. But the only difference there is pricing and marketing and accounting and growing the business. Understanding the parts of a business and growing a business. And you can reset, relaunch four years from now with some knowledge that you don't have. Now on how to run a business business. Hire three people that do skin care and you do some skin care and you could make 150. But you've got to have those pieces. You got to have those other tools in your belt you don't have right now. And right now you just need some money and you're tired.

[Caller]

Yes, sir.

[Co-host (possibly George Kamel)]

Do you want to run a business long term? After Dave gave you that pep talk? It's a great one, by the way, and he's right. Do you want to run a business on the other side of this debt elimination and how tired you.

[Ken Coleman]

You are?

[Caller]

No, I really do. I absolutely love entrepreneurship, that we just have a lot going on in our family right now, so that's the reason I'm tired. But I. I love.

[Dave Ramsey]

Let me just tell you, if you go to work every day and you make 24,000, you're tired.

[Co-host (possibly George Kamel)]

Yeah, that's right.

[Dave Ramsey]

You got to work every day and you make 240,000, you're not as tired.

[Co-host (possibly George Kamel)]

That's true.

[Caller]

That's true.

[Dave Ramsey]

It's just. It's hard. I mean, you're just in a slog.

[Ken Coleman]

Yeah.

[Dave Ramsey]

And we call it the treadmill stage of business. You feel like you're on a tree treadmill. And when you're on a treadmill, it's more tiring than running down the road because you're not getting anywhere. It's just tiring, and it's emotionally exhausting because the scenery does not change. And that's part of the thing. And I've been there myself, running hours over the years in years past. So I think you're amazing, and I think you. This is not a permanent solution. It's a solution for three to five years. Go make you some money, get not tired. That's right.

[Co-host (possibly George Kamel)]

And you're going to come back on the other side of this, and you're still an entrepreneur. Let the doubting voices kind of win the day here as you take a break, because a lot of entrepreneurs refuse to do what you're actually doing, which is a. You raised your hand and said, dave, Ken, I need some help, number one. Number two, you've taken it and said, okay, it doesn't mean I'm a big giant failure, because you're not. And you're going to pause, and you're going to learn during the pause. And I think you come back and you're way more successful. I'm very excited for you.

[Dave Ramsey]

This is not the end of the story. It's just another chapter. Yeah, absolutely. Kelly, I don't know if we've got email in stock. If we do send her one. If we don't, you'll have to get it yourself, Jessica. But I mean there's this thing called Amazon. They'll put one on your front porch before I can get it there anyway. But E. Myth by Michael Gerber. It's a short book. You'll like it and it's a classic in the business literature realm. And we'll send you a copy of mine as a gift. Building a business you love and read it and begin to learn. But start becoming. I'm going to read 12 business books on small business. Running a small business this year while you're doing the other stuff and turn off Netflix. And I'd add and learn how to run a business.

[Co-host (possibly George Kamel)]

I'm going to add one more homework assignment. There's got to be somebody in your neck of the woods who's winning in this area.

[Dave Ramsey]

Yeah, go learn from them and just.

[Co-host (possibly George Kamel)]

Go buy their lunch and just ask them like a book report. Keep it simple. I think you're doing a sixth grade book report on their business. You'd be surprised what you'll learn.

[Dave Ramsey]

Yep, yep. You could, you know, I, I, I would imagine there's about four levers if we had time to get into it and do an in depth coaching session that you could pull and go from 24 quick. You're probably double the nets on this because it's probably just some stupid, I mean it's just, it's when I look back on some of the stuff I've done, I go, God, man, that one little thing, it was so stupid. And it changed them. It changed a million dollars. It's just nuts. Yeah, you can do this and you're very capable. I don't, I don't hear someone that's lacking in capability. I think you, we've all done dumb things with money. I've done them with zeros on the end. One of the biggest mistakes I see people make with money is not having a plan for it. You got to have a plan. You got to be intentional. And you need to get a budget. You have to tell your money where to go so you're not wondering where it went. Our budgeting app, EveryDollar, helps you do just that. It's the easiest and fastest way to make a monthly plan. For every dollar you've got coming in and going out, now's the best time to get started before the ridiculous holiday spending season gets here and sucks you in because you didn't have a plan. Don't let that happen. You're done making that mistake. Go download every dollar for free. Free in the App Store. Or Google Play today. Well, don't just set goals for 2026, learn how to reach them. The 2026 Ramsey goal planner is, is here. It's packed with monthly content from Jade, Rachel and Deloney to help you stay on track with your money, faith and relationships and follow through on your goals. We sell them out every year early, so don't wait around. You'll end up without one. Get yours at $49.97. That's a lot. But it's one of the most expensive products that we produce for us. But it is fabulous. We completely turned the creatives loose, said go play in your sandbox and boy did they. It is a good looking product. The design, the interior design elements are amazing. So ramseysolutions.com store the Ramsey Gold Planner for 2026 is here. And you can click the link in the description if you want to go that way too. We'll help you out. Sam's with us in Connecticut. Hey, Sam, how are you?

[Caller]

I'm good. How you doing?

[Dave Ramsey]

Better than I deserve. How can I help?

[Caller]

So I wanted to get your advice. My wife and I have a very different risk tolerance when it comes to investing in debt. Specifically when it pertains to a single family home that we currently live in that I would like to rent and get a different home for us to live in. And my wife would like to sell it. She has the mentality of being completely debt free and we're conflicted because of some of the, the variables underneath. I wanted to kind of walk it through and see what you thought.

[Dave Ramsey]

Okay, what are your underneath variables?

[Caller]

Yeah. So for me, I have more in cash on hand than I owe on the mortgage. We have about $330. 300. 330. I'm sorry, 330k in equity, the house. And the only debt that we currently have are my wife's student loans, which she has 30k in student loans, 20k of that being at about 5 to 6% interest, 10k at 3.5% or lower. So my thought process was between the two of us, we have about 190k in cash.

[Dave Ramsey]

And what's your mortgage? What's your mortgage balance?

[Ken Coleman]

Balance?

[Caller]

The mortgage balance, we have 97k left on the mortgage. It's a fixed 15 years at 2.4%.

[Dave Ramsey]

Okay, and what's your household income?

[Caller]

Household income between the two of us before taxes is 285.

[Ken Coleman]

Okay. All right, cool.

[Dave Ramsey]

Good for you. Well, well done. And how old are you two?

[Caller]

34.

[Ken Coleman]

Okay. All right.

[Dave Ramsey]

And so you're that, that's the variables you were talking about the underneath. Right. That. In other words, that's your, that's your story, your financial story, your math of sort story.

[Caller]

Yes. For me I'm thinking we have a very low mortgage.

[Dave Ramsey]

So her, her, her vote, her vote is to pay cash for the next house and sell this one and pay off the student loans today out of the cash that you have. Your vote is keep the rental house and keep the student loans because they're low interest rate and stay leveraged.

[Caller]

Yeah. So what I said was let's off the 5% or higher, the 20K. The 3.5% is about the same as what we can get in a high yield savings. It's low. Okay, leave them. If the rates change, then let's pay them off. But I would like to stay leveraged and make money on the bread because my mortgage is.

[Dave Ramsey]

One more time, tell me, tell me what you. How old you guys are again?

[Caller]

34.

[Ken Coleman]

Okay.

[Dave Ramsey]

I'm sorry. And what do you do for a living, Sam?

[Caller]

I work in corporate finance.

[Ken Coleman]

Ah, okay.

[Dave Ramsey]

Sounded like it.

[Ken Coleman]

Okay, good. All right.

[Dave Ramsey]

Do you have a finance degree?

[Caller]

Yeah.

[Dave Ramsey]

You have an mba?

[Caller]

No.

[Ken Coleman]

Okay. All right, cool. All right.

[Dave Ramsey]

So I've got a finance degree too by the way. And with a specialization in real estate. That's the world I grew up in. Which is the king of leverage. Right, Real estate. So obviously you two are smart people and you make really good money and you're going to be okay if you watch what you're doing. You're not in bankruptcy zone or anything like that. Do you remember looking at the case studies back in college when we used to do case studies on companies and when the bond, when a publicly traded company, when the bond, when they were putting out too many bonds, they were issuing so many bonds and they were carrying a load of banks debt that we looked at that as risk and we would run a formula and lower the value of the stock because they were carrying too much debt, that debt equaled risk. Do you remember those case studies at a high level?

[Caller]

Yeah.

[Dave Ramsey]

Yeah.

[Ken Coleman]

Okay.

[Dave Ramsey]

And then when I got out of school, I got my securities license and I was selling investments in the investment world. And there's a thing when you're comparing an aggressive growth stock mutual fund which has high volatility and the measure statistically of the high volatility is called a beta. It's a math number that the more volatility the higher the beta.

[Ken Coleman]

Okay.

[Dave Ramsey]

And a low volatility smooth curve versus a high mountain and valley curve is a Low beta. And what we were taught to do in that world on a sophisticated level was to say, all right, we're going to adjust for risk by adjusting with the beta. We're going to use the beta as the mathematical way to adjust for risk. Because you can't really compare a 20% rate of return high volatility mutual fund with a 11% rate of return low volatility mutual fund and compare them apples to apples. You have to adjust for risk. And mathematically, the way you do that is to use a beta in an inverse math formula. Does any of that sound familiar?

[Caller]

Yeah, a little bit.

[Ken Coleman]

Okay.

[Dave Ramsey]

That's how it's done. Point of all of that gobbledygook academic talk was because you approach this from an academic, intellectual viewpoint. So that's the way I'm approaching your question. The point being that mathematically, we are 100% sure in business, and it's proven in every area, more debt equals more risk. Period. Lots of debt equals lots of risk. No debt equals almost no risk.

[Ken Coleman]

Risk.

[Dave Ramsey]

So risk is associated with levels of debt. Would you agree with that?

[Caller]

Yes.

[Dave Ramsey]

So to compare your zero risk of being debt free by paying off the 3% loan and saying, no, I don't want to pay that off because I'm going to invest that money at 3% to say that you're actually. Or 4% to say that you're actually making money on that transaction. You're not after you mathematically adjust for risk. Follow that.

[Caller]

I do. Yeah.

[Dave Ramsey]

So your initial formula is a formula most people use, but it's a naive, unsophisticated formula because you're not mathematically including risk in the discussion. That's all I'm bringing up. So all of that to say debt and leverage equals risk. Now, does that prove out in the data over long periods of time? Well, it does. Because when we interview 10,167 millionaires and I'll send you a copy of the book Baby Steps, Millionaires, which has the white paper of the research in the back of it, and you can go through it. When we interviewed 10,000 millionaires, the number of them that said, I became a millionaire by borrowing money at my house, on my house, or not paying off a student loan at a low interest rate and investing, the difference, the number of people that said that caused me to become a millionaire, Sam, it was precisely zero. None of them did, did it? They all said what your wife said. They all said, I'm getting out of debt. And with the lowered risk and the increased cash flow because I don't have debt payments. I'm going to use the increased cash flow to build wealth. And the sustainability of this is very high because I've lowered my risk quotients. And this is a real fancy long diatribe to say. Sam, your wife's right.

[Co-host (possibly George Kamel)]

That's true.

[Ken Coleman]

True.

[Co-host (possibly George Kamel)]

Yeah, she's right.

[Dave Ramsey]

Sorry, bud, you lose. And if I woke up in your shoes, I'd sell your house and I'd pay off your student loans today. And I buy me another house with cash and I kiss my wife on the lips and say, thank you, Jesus, I married a good woman.

[Co-host (possibly George Kamel)]

Yeah, that's so true. Because the 190k cash.

[Dave Ramsey]

Oh, you're in such a good position. You've done so many things right and this is almost a. A esoteric philosophical argument. It's really not really a big but. But you've got to work this through because the problem is you're going to extrapolate, you're going to magnify whatever your value system is here. So if your value system is Sam's and you're going to continue to borrow money into it, all of that crap I just laid out there. That's all true. Is going to take you down eventually.

[Co-host (possibly George Kamel)]

That's right.

[Dave Ramsey]

Because you'll keep doing it if you go her way, which is grandma's way. It doesn't feel as sophisticated to a finance major, but is actually technically more sophisticated. Isn't that interesting?

[Ken Coleman]

Yeah.

[Dave Ramsey]

Yeah. Then you end up with a high sustainability, high cash flow, low risk environment. And it's not about risk tolerance. It's about what works in the end.

[Caller or Ramsey Personality (possibly Rachel Cruze)]

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[Dave Ramsey]

Elijah is in Oklahoma. Hi, Elijah. How are you?

[Caller]

I'm good. How are you guys?

[Dave Ramsey]

Better than we deserve. What's up, sir?

[Caller]

Hey. So me and my wife, not too long ago decided to go ahead and start doing the baby steps. We're still in baby step one. It hasn't been that long since we decided. But the reason I was calling today is because we did lease a car about A year ago. Been listened to for a little while, and I know that's a no no, but we did do it, and we're upside down on it, about $10,000. And so we're kind of in a pickle. And I was just calling you guys to see if I should just ride the lease out and, and you know, see how, you know, figure it out when it ends or if, if there's something I can do in the meantime to kind of get us in a better position.

[Ken Coleman]

Okay.

[Dave Ramsey]

What kind of car is it?

[Caller]

It's a 2025 Chevy Equinox.

[Ken Coleman]

Okay.

[Dave Ramsey]

How long is the lease?

[Caller]

I believe it's three years. So coming up, October will be one year, so we'll still have a couple years on it.

[Dave Ramsey]

And how much is your monthly payment?

[Caller]

645.

[Dave Ramsey]

Okay, so it's good to take 14,000 to ride the lease out.

[Ken Coleman]

50.

[Dave Ramsey]

15.

[Caller]

Yeah, yeah, give or take.

[Dave Ramsey]

And. Okay, I'm not sure. I want you to double check your numbers on the $10,000 upside down. That sounds wrong after one year.

[Caller]

Okay, well, we had. I had another vehicle that I had leased previously, and again, I know it shouldn't have done.

[Dave Ramsey]

You rolled, you rolled the negative into this.

[Caller]

Yes.

[Dave Ramsey]

Okay, so when you call, did you call, you called to get a payoff. Did they give you the early buyout number on the lease or the total number on the lease?

[Caller]

I believe it was a total number. I didn't ask.

[Dave Ramsey]

You need the, you need the early buyout. If I wrote you a check today to pay the car off and own it, what is the number today? Because I think that's going to be less than 10,000 with the numbers you're giving me.

[Ken Coleman]

Okay.

[Dave Ramsey]

Might not be, but it could be.

[Ken Coleman]

Okay.

[Dave Ramsey]

That's the first thing I want to do. All right, so here's the thing. We know if you write a check for 15,000, you can drive the car for two years. That's your numbers today. We know that that number.

[Ken Coleman]

Okay.

[Dave Ramsey]

645 times 24.

[Ken Coleman]

Okay.

[Dave Ramsey]

And so we know that's where that's going to take us now. And so that's our worst case scenario. And then you turn it in at the end of the lease, like you said, ride the lease out. Okay, that's our worst case. Now if we sell the car, and in order to sell the car, we have to write a $10,000 check, then we could have driven the car for two more years for only $5,000 difference.

[Ken Coleman]

Okay.

[Dave Ramsey]

I'd probably ride the lease out if that's the Case. So if your 10 number is correct, I'm gonna ride the lease out. Cause you're not making enough headway on this versus you get the full use of the car if you pay the 15. Yeah, if I. Only if I write a check for 10, I don't have the car for two years. And so really I get the use of the car for the difference, which is five in that scenario. Now, I think you're gonna find it to be less, but call it 7. If you could get out of it for 7. Would I get out of it? Yeah, I probably would. That's like 10 months payments and then I'm free from the other month's payments. So yeah, if you could get out of it for seven or anything less, I'm probably going to write a check and get out of it or borrow the money, the 7,000 at the credit union and get out of it. But I don't know how much negative equity you rolled and I don't know which numbers you're getting. And of course, you've got to compare this to the actual value of the car. How did you value the car?

[Caller]

Well, I had, I called some dealerships and gave them all the information.

[Dave Ramsey]

And they told you what they would pay for it?

[Caller]

Oh, yeah, yeah, exactly.

[Dave Ramsey]

See, that's. That's the wholesale number. You can sell the Equinox to an individual.

[Caller]

Yes, yes.

[Dave Ramsey]

And if you did that, is it 7 or is it 5 difference? Yeah, probably. Because that's a wholesale number you got. So the second. So first thing you got to do to figure out your real numbers is you got to call the finance department. That's your 1-800-number on your payment book.

[Ken Coleman]

Okay.

[Dave Ramsey]

Or on your website for payments and talk to them and say, I need the early buyout. If I write a check today, what's the payoff today? I need that number. I think it's less than 10.

[Ken Coleman]

Okay.

[Dave Ramsey]

Then the second number you need, go to KellyBlueBookKBB.com or Edmund's car Guide, either one. And look up the private sale value of your car, not the trade in value. Because when a dealer buys a car from you, Elijah, they buy it to resell at a profit.

[Ken Coleman]

Okay.

[Dave Ramsey]

And so if they buy that car for 20, that means they plan to sell it for 25.

[Ken Coleman]

Okay.

[Dave Ramsey]

Which means you could have sold it to an individual for 23 if that's the case. And that's a, that's a. You know, that's probably your difference, something like that, with that Equinox somewhere in there.

[Co-host (possibly George Kamel)]

Yeah, I I'm sitting here listening to this and. And you know, it's just a, a reminder to not get sucked into whatever the decision was. There was an emotion there because here's a young guy who's going, man, we messed up. And now you gotta try to wade through this. Yeah. And as you were laying this out, I just, I feel legit compassion. And there is such an emotional pull. It seems like such a good idea, the lease idea. And then when you actually get stuck with it and the pit in your stomach or your chest of that 600 and what I think I wrote, 645amonth payment.

[Ken Coleman]

Yeah.

[Dave Ramsey]

That's a lot.

[Co-host (possibly George Kamel)]

That's. That's a heavy weight. And now he doesn't have a ton of options because I don't. I mean, I'd love for him to try to sell it on, on the open market to somebody, but not a lot of people in today's economy are looking for a 20, 25 Chevy Equinox. You try it. But you may have to just bite the bullet on this.

[Dave Ramsey]

There's a guy named Elijah. They bought one. That's right, the somebody bought them. But yeah, he leased it. You know, I think you bring up a good point too, that when you're excited about buying something or you're in what feels like a desperate situation and you're buying something, you need to push pause in both cases and wait overnight. And here's the lens I think, Ken, you're bringing up. That's very smart. Here's the lens. To look at it, say, all right, is this a good decision vision 10 years from now?

[Ken Coleman]

Yeah.

[Dave Ramsey]

If I'm 26 years old, will the 36 year old version of me be pissed at the 26 year old version?

[Co-host (possibly George Kamel)]

That's a great way of looking at it.

[Dave Ramsey]

If that, if that 36 year old version of me is going to look back and go, I'm going to choke you, you little. You know, and because you're just being impulsive and excited and you like that new car, leather smell, all that stuff and you know, you got stuck in it or you're feeling scared and you're scared about nothing.

[Ken Coleman]

Mm.

[Dave Ramsey]

You're acting like this is a big deal. It's not a big deal. And that's what perspective gives you when you pan back and you say out there, 10 years, 15 years, 30 years. One of the things we found, I found this study, like, man, when I first started on this show, like 30 something years ago, that wealthy people, when you talk to them and interview them, their Planning window. When they're asking, when they're getting ready to do something, they ask themselves, how's this going to affect, affect me 10 or 20 or 30 years from now? Middle class people say, how's this going to affect me three years from now? Poor people say, thank God it's Friday.

[Co-host (possibly George Kamel)]

That's right. That's right.

[Dave Ramsey]

Oh God, it's Monday.

[Co-host (possibly George Kamel)]

Yeah, that's right.

[Dave Ramsey]

And so Zig Ziglar used to say, poor people have big TVs, rich people have big libraries. You know, so it's a long term thinking thing. And, and, you know, so, you know, don't think like poor people. And if you want to be rich people, start thinking like rich people and you'll become rich people in America.

[Co-host (possibly George Kamel)]

That's right. By the way, here's a notion in the 24 hour pause that Dave recommended. Actually go home and run the numbers on what a $645 a month payment is going to do to your expenses. A lot of people don't do that. They're on the car lot, right? And there's a negative emotion or an excited emotion that drove them to the car lot. They got a salesperson. All the things. Endorphins are exploding when they sit in the car when they drive it and they wonder what it's going to feel like, what am I going to look like? And nobody sits there and goes, what's $645 a month gonna feel like?

[Dave Ramsey]

Yeah, well, the number of times somebody gets a $500 a month raise and celebrates it with a new $750 a month payment.

[Co-host (possibly George Kamel)]

Yeah, that's just. Yeah, that's a great point.

[Dave Ramsey]

It's the same exact.

[Co-host (possibly George Kamel)]

What are we doing here?

[Dave Ramsey]

Same exact thing. Yeah, it falls into all of that. And point being, Elijah, you're not the only one. Most of us have done this dumb thing you did. We love you. We're proud of you for turning it around. Get those two numbers. The actual private sale value and the early buyout. Compare those to the $15,000 number to keep the car. And then ask yourself, is it worth it to be set free if you're only going to save $1,000 or $2,000, drive the thing through the lease. If you're going to save $15,000 or $10,000 dollars, then get rid of it today. Our scripture of the day, Proverbs 4:18 and 19. But the path of the just is like the shining sun that shines ever brighter into the perfect day. The way of the wicked is like darkness. They do not know what makes them stumble? Theodore Roosevelt said, knowing what's right doesn't mean much unless you do what's right. Sarah is with us in Grand Rapids. Hey Sarah, what's up?

[Caller]

Hi, Dave. I want to thank you for walking with me every day. I listen to you on my walks and I pray. So thank you.

[Dave Ramsey]

I knew I was getting some exercise.

[Caller]

I am debt free, but I make about 55,000 and I'm just wondering at what point can I. Should I help my daughter buy a car or purchase windows for my house or go on a vacation?

[Dave Ramsey]

When you have the money?

[Caller]

Yeah, yeah. So that's what I have the money figure out. I think according to you, I probably need to save more, so.

[Dave Ramsey]

Well, I don't know. I mean, I don't know why, what I told you on your walk, but.

[Co-host (possibly George Kamel)]

Yeah, yeah, give us a picture.

[Dave Ramsey]

But I mean you're debt free. You have an emergency fund of three to six months of expenses, right?

[Caller]

I have about 12,000. Yeah.

[Dave Ramsey]

Is that three to six months of expenses?

[Caller]

Yeah, probably the lower end of that, yeah.

[Dave Ramsey]

All right, then we have an emergency fund in my place. And then do you have any more money saved than that? No, no, not much. When you have money saved, you buy windows. Or when you have money saved, we buy daughter a car. By the way, it won't hurt for daughter to be working and you know, maybe she pays for half of this car. Maybe you put in a little helper, you put in a thousand, $2,000. She puts in a thousand. $2,000 car get. Gets her a little teenage hooptie.

[Caller]

Right, right. Well, yeah, yeah, that's a whole issue, but yes.

[Dave Ramsey]

Why is that an issue?

[Caller]

Well, I gave. When I went through one of my divorces, my ex husband promised both my daughters a car.

[Dave Ramsey]

Well, that's his problem.

[Caller]

So I gave one of my daughters a car, but I made her pay half. But I gave that money to the other daughter. So I think then if that daughter worth. And she hasn't bought a car, so. And I'm driving her back and forth to school in Ann Arbor. So it's a lot of driving and, and I have a 45 minute commute as well.

[Co-host (possibly George Kamel)]

Gave her cash for a car and she didn't use it for a car.

[Caller]

Well, she still has the cash, but she just is saving it.

[Dave Ramsey]

So how much money does she have?

[Caller]

She has. She's about $6,000, but I only gave her 2,000.

[Dave Ramsey]

Okay, that's fine. She can go back. Car. What's the problem? Your ex husband hadn't got anything to do with this. That's why we call him X. Yeah.

[Caller]

But I, but I gave the other daughter half the. I mean her pay half the value of that car.

[Dave Ramsey]

Well, so what? You don't have any money. Okay, $6,000 daughter get a $6,000 car, other daughter. That's the way it went down in the divorce. If your ex husband wants to put some money in, that's fine. But you don't have any money and you're not need to be commuting for a Kid. It's got $6,000 in the bank and you're driving around half of Egypt up there. Ann Arbor is a long way from Grand Rapids.

[Co-host (possibly George Kamel)]

That's insanity.

[Dave Ramsey]

Get that kid's butt in a car. Tell her to be up. Get, get, get up and drive herself down there.

[Co-host (possibly George Kamel)]

Sarah, I think you got to get to a point where you realize you are going to disappoint your daughter at some point. And when we have real reasons for the disappointment like Dave's saying, you're just gonna have to own that. You're. I feels like you, you're in this crazy cycle right now trying to please, trying to make everybody happy. And you don't have enough money to get windows in your house.

[Caller]

Right?

[Co-host (possibly George Kamel)]

So start taking some initiative.

[Dave Ramsey]

I'm going to help you a whole bunch in this one call. This is even better than our walk.

[Ken Coleman]

Okay?

[Dave Ramsey]

So here, here the one call. You ready? Tell your daughter to go buy a car cuz you're not driving her anymore. And you, I'll help you go pick up out a car. Okay, that. Now that one's done. And let me tell you what. What? You just got back two hours a day. You just got back. And all the gas money, and all the gas. And that's going to help you save up a lot of money for your windows. This is just miracle right here. Miracle. I'm so glad you called.

[Co-host (possibly George Kamel)]

And we also found you some overtime opportunities or second job opportunity now that you're not driving all over Michigan.

[Dave Ramsey]

Now that you're not ubering a kid that has the money to buy her own car. Yeah. Wow.

[Co-host (possibly George Kamel)]

I love to disappoint my kids when I'm right. You know, I like, you know when I'm right. Or it makes common sense like, yeah, I'm disappointing you right now.

[Dave Ramsey]

I used to tell them all the time like, look, you gotta have something to tell your therapist when you're 30. So we're just gonna go ahead and cover that now, right?

[Co-host (possibly George Kamel)]

Come on. Everybody needs a struggle.

[Dave Ramsey]

Everybody needs a struggle. Everybody needs some, some dad issues. So I'm gonna give you some dad issues right now. Oh, that's answer is no.

[Ken Coleman]

No.

[Dave Ramsey]

Nope. Let me get. Let me help you with that. I'm gonna open out the big box. I know. So true though.

[Co-host (possibly George Kamel)]

Yeah. I mean, it's tough.

[Dave Ramsey]

And poor little Rachel survived, didn't she? And poor little Daniel and still Denise. They survived. It's just amazing. They're resilient little creatures.

[Co-host (possibly George Kamel)]

They are.

[Dave Ramsey]

It's amazing what they can come through. Yeah. Poor little thing. Mommy ain't driving it all the way to dad Gump. Ann Arbor from Grand Rapids. Good Lord.

[Co-host (possibly George Kamel)]

A lot of guilt and shame.

[Dave Ramsey]

I open up a big old box of. Nope. Here, let me give you a present. Nope. Nope. Happy birthday.

[Ken Coleman]

Right? Yeah.

[Dave Ramsey]

Carrie is in Charlotte, North Carolina. Hey, Kerry, what's up?

[Caller]

Hi. I just had a quick question for you. I recently got married and we each had a house before we got married. And we're just trying to figure out what to do to maximize essentially the growth on my house. Avoiding capital gains, maybe.

[Dave Ramsey]

You're not going to have any capital gains. You're bleeding lived in it.

[Caller]

Well, if we rent it out.

[Dave Ramsey]

Oh, no, I just sell it. Considering I'd sell it.

[Caller]

No details needed to sell it.

[Dave Ramsey]

The details. The details are I'm making the assumption that you have mortgages on both of these.

[Caller]

Correct.

[Ken Coleman]

Okay.

[Dave Ramsey]

Yeah. I don't need another mortgage payment. I got a husband, so that's enough. So now we're gonna. Now we're gonna. Let's combine our households, move in one of them, take the money from the other one, pay down the one you're gonna live in, pay off your neighborhood debts, the one you're gonna live in, walk your baby steps with the one you're gonna live in from the equity of the old one. If you. If you tell me I'm wrong and they're both paid for and you got a million dollars in your 401k, I might change my answer.

[Caller]

Not that much, but we're. We're in a good spot.

[Dave Ramsey]

Are they both paid for?

[Caller]

Using it as an investment?

[Dave Ramsey]

Are they both paid for?

[Caller]

No.

[Dave Ramsey]

Do you have the money to pay both of them off today?

[Caller]

No.

[Dave Ramsey]

Okay, then. And don't keep it because essentially you've defaulted into. I borrowed money to buy a rental property. That's what, that's the default that you backed into. And I'm going to avoid that mistake. And so that, that's. I'm not trying to just rush the answer and say there's an answer. That your, your situation is not Different. Your situation's got its nuances, without a doubt, but I'm not going to lead you into borrowing money to buy a rental property. And if you keep a property, property that has debt on it, you're backed into it and had the exact same effect.

[Co-host (possibly George Kamel)]

And I want to point out that when we talk to so many people like this and they think, oh, this is a great investment, and you start running through the actual numbers of what you make, there's not much there for the headache. Now all of a sudden you're a landlord in a new marriage and it's just never worth the squeeze. I shouldn't say never. It's very rare in the situation you gave. Then it would be worth it. If it cash, you own it. Cash, well, that's one thing, but man.

[Dave Ramsey]

Well, then there's some actual cash flow.

[Co-host (possibly George Kamel)]

That's exactly right. But the margin are so small on a lot of these stories.

[Dave Ramsey]

Very. That's a, that's a interesting thing. And we don't have the exact numbers in this situation, but let's pretend you had a $500 house payment, a low, low house payment.

[Ken Coleman]

Okay?

[Dave Ramsey]

And you rented it for $1,000, right. You're barely breaking even.

[Ken Coleman]

Barely. Okay.

[Dave Ramsey]

Now I own $700 million in real estate right now. That's where I get that formula from. A barely breaking even. I would know what I'm talking about is what I'm saying. Yes, we own a bunch of houses, we own a bunch of commercial property, we own this campus that we're sitting in and so on, okay? And so the deal is that in the real estate world, you have your gross rent potential, the maximum if it stays rented the whole time, minus vacancy.

[Ken Coleman]

Right.

[Dave Ramsey]

Minus credit loss, which is people who don't pay and you have to remove them, and then you never get your money. Minus repairs, the heating and air that goes out, the roof that leaks, the floor that has a creep, you know, the mold scare, whatever the 9 million things are that's going to go wrong with that house in a year, minus taxes, minus insurance, minus your payment. Ta da. You didn't really make any money. You did a lot of work for 100 bucks and you took a lot of risk for 100 bucks. And that's where most of these things shake out to Ken's point. 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.