Stop Avoiding The Hard Truth About Your Finances

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“So we're here to help you transform your life.”

From the Ramsey Network and the Fair Wins Credit Union Studio, this is the Ramsey Show. I'm Dave Ramsey, Jade Washaw, Ramsey Personality, and the best selling author is my co-host today. Open phones, a triple 8255 and 225.

It's the fun. It is with us in Denver. Hey, Stefan, what's up? Hey, Dave, how are you? Better than I deserve, man.

How can I help?

So I'm in kind of a typical here.

About a few months ago, I was looking to move and I needed to move quick. Because the living situation I was in, was not good for my kids. The neighborhood drastically turned and became extremely dangerous.

And so I took out a bridge loan to kind of try to get me into a new home. And I was hoping that I was going to come in at a competitive price. My price is already like $30,000 less than what my home was worth. And it's almost six months now. And my home, my old home still hasn't sold.

And I owe 169/5 by the end of the month. And there are two options for me. I'm not the greatest, so I don't know which one to do. They will either purchase a home. But I still have to bring 7,000 to the closing.

Plus 2,000 carrying costs every month. It's not sold. Or I refinance again with them at 143,000. And pay 33,000 at closing. And then sell it for, keep it on the market for whoever knows how long.

I've tried reaching out to investors. And who did you get this loan with? With up equity. And so this is not a standard bridge loan. This is an, I'm going to screw you a bridge loan.

And in a very short time. Yeah. And I didn't realize that. And like I said, my situation. I mean, there was ramp.

Their crime was raising. And I needed to get my boys out of there. It's quickly possible. You can't use that excuse anymore. Because now you've stepped neck deep into stupid.

“What you should have done is going and rented a property.”

If you need to get your boys safe. That's the difference that I got into this. Instead of stepping up on some loan shark. Yeah. So they instead, you went and bought a house.

That was not required for you to get out of the neighborhood. You could have got out of the neighborhood and gone and rented something. So anyway, we're here now. What do we do now? And you're not bankable.

What's the house on the market for? Um, right now I just dropped the place again. It's at 170. And it's, is it free and clear? Uh, no, I had--

I mean, it was before the bridge loan. Like, what do you mean like, free and clear? Did you have a mortgage on it prior to taking the bridge loan? Yes, I did. Of how much?

Uh, 128. The bridge loan pay off the 128? Yes, it did. Oh, okay. Okay.

So you're only dead against this is the 169,000 dollar bridge loan. You dropped the price to 170 to try to get rid of it. Correct. Okay. All right.

Ouch. And the investors, like, so far the offers that I've gotten are 115, 120.

And so I'm looking at 60, you know, 50 to $60,000 of basically, um,

um, this is a, this is a, this decision paid. Do you have any money? Yes. I have about 26 in savings and checking. What about cars?

Um, I, I own my car outright, but yeah, I have a car. What's it worth? Um, I don't know what it'd be worth now. Maybe 1715. What do you make?

Um, I make just, um, about 92 a year. Okay. Have you talked to your credit union about a, you know, like a $100,000, $150,000 a loan and you put 26 with it and get rid of the loan sharks. And just put a credit union loan on it and take the panic out of this discussion.

Um, no, I haven't really considered that yet.

“That would have been where you should have gone first before you did the loan shark deal.”

But, um, wow.

I mean, refinancing it without, with, and getting these people out of the picture on a,

“five year balloon node or something makes a lot more sense.”

And then you've got some room to take the beating that apparently you're going to take on price. And some room to cover the difference. But right now, I mean, if you write a check for $7,000, you're still on the hook for $2,000 a month for another $24,000 a year. Is that what you told me?

Basically, uh, with the with the loan shark guy.

So you write a check for $7,000, you're not out. No, I'm not. Okay. So that's not really an option. That's like going from bad to worse.

So I would rather you write a check for $26,000 and take out $140,000 loan with a credit union on a $170,000 house. Um, or something along those lines. Or for that matter, I would rather you let, let's just establish you are in debt 170,000 with a rip off. Okay. That's where we are today, right?

So now, if we restructure that debt, I don't care how we restructure it. As long as we get rid of these guys. So if you bought a borrowed 100,000 from the credit union, put 26,000 in it and put 30,000 on a credit card. Fine. That's a better deal than you got now.

And just because credit card, you just got a series of payments. They're not going to come take the house. They're not, you know, but these guys that you signed up with, woo, Guido, man. Wow. Yeah.

I really, I really wish I hadn't done that. And I thought it was doing what was best for my toast and for the kids. You were leaving was best for your kids. I'm not making that argument. But how you left, oh, man.

Yeah. I would have just put the house on the market, left, and gone and rented it. That's behind us now for those of you out there that are listening. So yeah, that's, um, restructure this somehow and get these goobs out of your life. Mm-hmm.

Get Guido out of your life. The lesson for the listener is when you're fearful and you do things out of fear.

“You have to really think every way about the decision you're making and when you do things in urgency.”

So those are the two things I need to make you stop and go away to mental. Let me make sure I'm making the right choice. And I'm not. Does that make sense? Yeah, I can look back on the worst deals I've done in my life and they usually followed me being desperate.

Yeah, there you go.

Desperate for me always equals stupid.

As soon as I get desperate right after that, my brain quits working and I do something stupid. Right. Because I want to be happy. The logic behind wanting to move is exactly right. But that's just a good word to the lies.

And when you do something stupid and it calls you money, when I do that, I have to write a check for my stupidness. I write in the fore column on the check, stupid text. Yes. You have to pay a tax when you're stupid. And I have paid so much stupid text in my life, which qualifies me to host the show.

Exactly. Because I have a PhD in DUMB. So I know from when you come. And so if I say you've done something stupid, it's because I love you. And you're just like me. Your people are my people.

Your my people. Hey guys, George Campbell here. Listen, we need to talk about your phone plan. Because for a lot of you, it's like a bad roommate. You know the one unpredictable moods.

Always asking for money. You know the one unpredictable moods. Always asking for money. You know the one unpredictable moods. Always asking for money.

You know the one unpredictable moods. You know the one unpredictable moods. You know the one unpredictable moods. Always asking for money. Hard to get rid of.

And they never do the dishes.

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Andrews in Atlanta, Andrew, what's up?

Hey, how's it going, David? It's really nice to talk to you. You too. How can we help? Well, being my wife or trying to decide

if we should sell our rental property to pay off our debt. So it's 2024, my income is around 105,000. And hers is staying consistent. But my income dropped down to about 85,000 last year. And we had this house built when we were,

when I was making a little bit more money. And we have our rental property. And we're just looking to see if it's a good decision to sell it and pay the debt. Or if we should just go with the snowball effect,

like the snowball program. How much debt? What, yeah, how much debt? We've got about $90,000. It's actually about 87,000 if you include everything.

And how much of that is cars? About 65,000. How long? 65? Yeah, so I have a truck in her car.

Yeah, and what does she make? She makes $48,000 a year. OK, and show you $135,000 income. Right? Did I get that right?

Yeah, I did. Yes, not maybe. Maybe maybe 140, OK. How much of the 65 is the truck? 40 of it is the truck.

Yeah. What's the rental property worth? It is a praise last year at 265,000. And we owe about 160 on it. OK, she got 100 in it, equity, roughly,

not counting fees and miscellaneous. And what's your home worth? The only winner right now, a praise at 410. And what do you owe on it? About 328.

OK, all right, cool. OK. If you did not have $100,000 in debt,

“would you be looking to sell the rental property anyway?”

No, no. I'll look at real estate as to count a long-term investment. Something that-- I mean, how long have you had the rental property? So we've had it for six years.

How are you doing as landlord? Are you good at it? I think pretty well. Yeah, I mean, we've had only had two tenants this last ten. It's been there for three years.

It's actually been relatively pleasant. We kind of live out a little bit away from the city. So it's been relatively nice. When your income went down, did it affect the amount of your mortgage on your take-home pay? Is that where this is stemming from?

Well, I think-- so I think cash flow just kind of died when my income went down. Right. It exposes to pit of these car purchases. So no, I wouldn't sell the rental property.

That's all both cars. Mm-hmm.

“Yeah, because what's the payment on those combined?”

I'd get two five or ten thousand-dollar cars that are cash, and then I'd plow my way through with 140,000-dollar income, plow my way through, the little bit of debt that's left, and keep the rental property. Because it's going up in value, and that's stupid but truck-it.

No, no. I do use the truck in my line of work. When-- Right, but being excuse-- The cars are three quarters of the debt.

How great would that feel for those to be gone? It would feel good. Well, what would I do in a situation that they're outside down? I mean, what's the best route-- How much up top down are that?

Well, the truck's not outside down.

That's the first one to know that.

Yeah. The cars-- You're not going to do it. You're not going to do it. I don't think you're uncomfortable enough.

I think that you had some discomfort.

You had a $100,000 pile in the middle of the table,

and instead of buying a rental property, you went and bought cars.

“If you keep the cars, that's what happened.”

If you don't keep the cars, you say, "I bought a rental property with my 100 grand." But you're deciding right now between the two, based on this, and you've already-- you've already dipped your toe in there twice,

since we've been talking to you about keeping this truck. Trying to figure out a reason to keep the truck. Trying to figure out-- If I'm you-- Listen, I got a great truck.

I got a wrap to her. It's my favorite car. I'm a truck guy. Loud, bread, neck, muffler. I love it, man.

It's incredible. And I'm with you on owning a truck. I'm not with you. I'm trading a truck for a rental property. No, no, no, no, no, no, no.

Rental properties go up in Val. You're in the Atlanta market for God's sake. You also got to play Best on Worst Case scenario. Have you ever had to make a decision, and you're scared of it?

Worst Case scenario. He sells this truck. He hates having the eight or nine hundred dollars a month back in this pocket. And he-- so, you know what? I don't like that.

I'm going to go get the truck. I'm going to go back in summer.

“I'm going to sell the rental property, and then go back to her.”

Yeah, that's the-- I mean, true. Yeah, you can actually-- Great, and truck, if you did that. If you-- if you decide owning this truck is a better idea than owning the rental property,

which I'm not in agreement with. We were telling you upfront. But she's right. Sell it. And test our theory.

And if you hate having that cash, back in your life, then get it back. Go back and get it. Go back and get it. Most sell the rental property and go buy your car for cash.

And then you can-- There you go. You can undo this at any time. That's true. So we get--

Yeah, I would get rid of the cars, both of them, and see how my life feels. And after 90 days, if you think, "Oh, Ramsey's full of it." It's like-- I think I joined a cult.

You know, then sell your rental property, and take the money from that and go buy some cars. Because it's the same thing, dude. It's the same thing. But all you--

At least you could test the theory. Mm-hmm. That's a good point. It's a test the theory. Try this stuff for 90 days.

“And if at the end of 90 days, you hate it.”

You'll never-- you'll never go back.

You've been on the air for 30 years. Never had anybody go back. No one's ever called back and said, "Dave." I hate-- I hate you. Because you made me bet--

Because you told me to sell my car, and I don't have an $800 car payment, so I hate you. That's-- that call I've not gotten. Now I've got a lot of people to hate me for a lot of-- That's saying something.

But I mean, there's a long list of reasons to be pissed to Dave. And they're out there on the internet. If you know, just type in Dave Ramsey sucks. It goes for that.

Sorry. But that's-- but that's not-- but that's not one of 'em. That's-- listen, we let costs-- I sold my car, and I am dead free, and I hate Dave Ramsey.

Is it something we've never heard once? I've never even seen-- I might go on the break and look on social media and see if there's any sort of hashtag about that. I guarantee, isn't it?

No, there's not. There's not. And our social media team would have already told me. Yeah. I don't look at it, but I'm afraid they do.

And so-- Yeah, testing-- testing is good. Yeah. And here's the same thing with Penn off the house. Those are-- I have $150,000 in my CD, and I owe 100 on my house

to pay off my house. I mean, times we take in that call. Oh, yeah. Five million times. And I'm like, pay off your house.

And if you hate it, you can go get a mortgage. And the same thing you did. Just test it. Test it. And you know what?

Never.

I'm never going to anybody write me hate mail.

They would pay off my house, I hate you. I've never had that one time. Now, there's a lot of people have all these theories about this. Dave Ramsey tells people pay off their house.

And they're not going to be rich because of it. But then there's all these tens of thousands of millionaires that are millionaires because they paid off their house and took the mortgage payment and became millionaires. And there's one sitting in front of us right now from here.

Yes. Yes. Let me tell you, yeah. Hello. I had a guy.

He had a pile of stocks and a bunch of debt. And you know, we would say if you have stocks. So the stocks used to pay off the debt. He didn't want to do that because he'd had the stock for quite a while. He had it since he was 18 years old.

And I said, listen, I said, try it. I said, take a portion of the stock. Just take a portion of it and pay off a portion of the debt and see how you feel. And he said, I never considered doing that.

It was in his mind. It was an all or nothing deal. And because it was all or nothing in his brain, he chose the nothing. And so if you're on the fence, just try it.

And you want to know what? He got a hold of me later and let me know. It felt so good. I sold the stock and I ended up paying off the rest of the debt. Just let me know.

Lots of pastors that have said, try tithing for six months. If after six months, you think that tithing is to your local church is wrong. I'll give you a money back guarantee on it. None of them ever had anybody ask for their money back.

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Better than we deserve, what's up? So I am a college student and I do have a little bit of credit card debt, but I also have a pretty big tuition payment come up in June because I'm looking at transfer schools.

“And I don't know the best way to go about this.”

Saving up for the tuition? Yes, so much as a tuition. And June will be 15,000. Oh boy. Okay.

Yeah. Yeah, I have 11,000 saved up because I do look two jobs and a full-time student. And my credit card debt is about 2400. And so I don't know if we better just throw two grand

out of the credit card debt than take a little loan out in student loans,

or save up the 15 to rest the way and then pay that. And then pay a little more than the credit card debt when I can. I cannot make the payment. Yeah, I would pay for the tuition in cash and not add and not use debt ever again. Yeah, because I've been paying for cash the last year for school.

I paid out 18 hundred a month. So why are you 15,000 up some master? So we say it's an online degree and so I'll start in June and make the payment. And I'll be done by next year because I already have my associate degree. And then this will be online course to get my bachelor's and biomedical sciences.

Okay. So you're making this payment and then wins the next payment due before you finish. I, or that's it. It's not online. It would just be just this one payment that's done.

I'll see if I just told me as well as just the one payment. I don't know if the payment plans are not. Okay. But you're pre-paying for the entire year. Yes, sir.

Okay. And you said you have 11,000 saves. So you're just solving for the 4,000, right? Okay. And you can have the 4,000 by June.

Yeah. So pay cash for the tuition. No. So here's the thing.

The trick to getting out of debt is to vow never to borrow again.

You already have debt. So let's just let that sit there. Pay minimums on that and save up and pay cash for this tuition. And then work on the debt, a beyond that.

“Now if you're doing online, are you going to be working full time at that point?”

Yes, sir. So I work full time as a third time medical assistant and also bartender on the weekends. Okay. So that's where all this money is coming from. So you're going to have the money to live during this year.

Or you finish this up and go ahead and knock out the credit card debt. Yes, sir. Look at you. Look at you. Well done.

Yeah. Yeah. I wouldn't fool around. I'd pay cash for the tuition. Not have anything lingering from that decision.

And then the old decision. You're sitting there coming back on a tack ahead as quickly as you can. Once you've got 15,000 in the bank. Do you know why Christian were telling you not to go into debt? Further.

I did not know. No. Okay. Let's talk about that. So because you've considered obviously you've considered that you used it for credit cards.

You considered it as a solution for your problem right now. The reason Dave and I are telling you, hey, draw on in the sand no more debt going forward because debt eats at your ability to build wealth over time. It steals your, it steals your heart earned income and causes you not to be able to do things like invest. Not to be able to do things like pay cash for emergencies.

And that is a vicious cycle. That is why we're on the areas because it creates a vicious cycle in people's lives. And they can't get ahead. Yeah. Exactly.

Well done, sir. You are working your way through this. I like you. Well done. It's good to find people that work hard.

And get, and achieve their goals as a result. Quinn is in Philadelphia. High Quinn. How are you? Hi.

I'm so excited to talk to you, and Jade. So my question is about my employer who's telling you that I owe them about $17,000.

Oh, boy. You figured it out. Yeah. And they want you to repay them. That's correct.

And what? Yeah. What did they say? When do they want the money by? So they want the money by the end of this fiscal year, which is July, but then it's actually October because that's when we get our bonuses.

So the air, I came back from a charity live in September, 2024. I wanted to start work at 9 a.m. instead of 8 a.m. physician. And getting there at 8 a.m. was just too hard. We have 4 kids. And so it was really just a couple of days a week.

It went from a 1.0 employee to 0.95 or like 95 percent effort, basically.

I didn't notice the change on my paycheck. But then I really wasn't paying attention to anything. I was a typical doctor out of school with Doc I just came out of fellowship thought I could, you know. So what is your total income now doc? So my husband and I together make about 420.

I'm at like 4.

“Oh, it was 440 prior to, that's how I 240 prior to the change.”

Yeah, I didn't notice on my, my paycheck until recently last July. We came back from our like 4 to vacation. And I couldn't pay off my credit card at the end of month. When I found you read the total manning makeover. I'm convinced my husband, although I feel like I'm still convincing him some days.

But we're actually two weeks away from paying off all of our debt except for house. Wow. And going from 2 to 3, yeah, about $80,000. So the 17,000 accrued over the course of how many years? About a year and a half, about a year and a half.

About a year and a half. That's fantastic. Yeah, so it's not. I mean, I'm probably going to get a bonus about that much. I'm just like, I'm still upset about it because it is so much money.

And like, right at that time, I'm going to be going from step. We're going to get out of step 3 in the summer. And that balance would really help us like kickstart steps 4, 5 and 6. So I'm having a meeting with them next week. And I'm just hoping you can give me some advice going on the meeting.

I'm wondering if I should talk to a little bit ahead of time or just wait till afterward. Or if I have any, like, legs stand on the I am, like, highly productive. They measure doctors, like, flexibility based on how many patients you see. And I've looked back and there were many months that I was over 100% productive.

Basically seeing more patients that I had slots for.

Yeah. So here's the thing. You can ask an attorney. I don't think you. I don't think you have a legal case.

So I don't think that's the lens through which I would open it.

“If you want to gather the information, it won't hurt anything.”

But ask so ask an attorney to learn that because I'm not one. I'm trying, okay, so if I had a highly compensated and I do. I do have highly compensated folks on our team. And we made a clerical error that was amounts to 5% of their income or 10% of their income. Okay.

Here we would say, oops, we screwed up. Right. Yeah. And I wouldn't ask for back. Okay.

Because I'll be embarrassed that we screwed up. You didn't steal the money. You didn't deceive anyone. Quite the opposite. You're the one brought it to their attention.

Right. And so I would just say, hey, you know, I think it would be. If I'm in the meeting, I might say something like, guys, if you look at my productivity, it's well beyond 100% which is very unusual on your staff. I brought this error to your attention.

You probably would have never found it if it wasn't for me.

You made the mistake. You should be embarrassed.

“And you should consider just waving this for all of those reasons.”

And now you probably don't want to be quite that loser. I'm going to say. But I mean, but that's the message. You know, okay. Let's, let's, let's, you know, I'm being sitting with my boss.

I'm saying, okay, boss. I'm one of your top guys. I brought you the error. And I wondered if you would consider being embarrassed about making the error and just wave it.

Listen, I think they should.

“But only I think it's a morale and employment or a high-productive, highly-productive.”

Because finding another doctor to replace you when you leave over $17,000. The thing is though. And they don't know that's not going to happen. That's, it's going to cost a lot more than that to fix the mess they made here. If they hold you to this because you're going to remember this forever.

And the first time some other bloke or some other group comes knocking, you're going to be thinking about $17,000 instead of $817,000, which is what the deal. I mean, they're, they don't be stepping over dollars picking up nickels. Yeah.

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“Bridgets in Savannah, Georgia, high Bridget, how are you?”

How are you doing?

Better than I deserve, how can I help?

Yeah, I was calling because my husband and I recently paid an off about $24,000 worth of credit card debt. Good. And yeah, we're very excited about it. But that frees up about $600 to $700 a month for us. And we still have some medical debt that we were of course considering, you know, just quickly paying that a loss.

But my sister actually lives overseas. And we haven't seen her in two years and I've since then had a whole pregnancy and a baby. So I would really like to be able to go over there and see her and introduce, you know, her needs to her. She can't come over here due to visa reasons. But I didn't know if that would be a bad idea and we should just continue with, you know, going with the medical debt.

How much medical debt have you got? About 6,000.

How quickly could you have the 6,000 paid off?

You've already paid off 24,000. Yeah. It's not like you're not going to see your sister for seven years. We're talking a handful of months. Yeah.

The thing that's paying off the credit card debt on large majority of it once due to a good tax return. No, no, no, there's no such thing as a good tax return. A tax return is when you overpay your taxes and they give you the money back when no interest. That's not good. How big was the tax return?

About 10,000 on the lower tax return. What's your household income? My 8,000 roughly 4,800. And then I do a few contractor jobs in roughly bringing in between 1200 to 2000. How old were you end up with a $10,000 tax return on the $50,000 income?

I'm not even. I'm not even. I'm not even. I'm not even. I'm not even.

I just checked this. She had the tax business and was able to figure it out. But I do know, we had a very high risk pregnancy and our son was admitted to the children possible for a few days. I'm that same year. So I'm not sure if that had anything to do with her.

I don't know. Okay, stop.

“Number one, you need to get your crap together and you do need to know.”

Someone else taking care of your taxes is how you end up not paying the proper amount of taxes. And you have no idea what's going on. I don't mind having someone prepare my taxes. Someone does my taxes. But I'm going to understand how my tax bill works and why.

And you need to understand this. Because if you have $10,000 to much coming out of your check every year,

And that will help you kind up to $6,000.

“No honey, you should not go to your up until you pay your $6,000.”

You should roll up your sleeves and finish the job. It's not like we're saying, don't see your sister for four years. It's four months. Bridget, this is what I'm concerned about. I'm concerned about when you told us you were very excited that you cleared out the existing credit card debt at $600 a month.

But then you very quickly let us know that that wasn't anomaly. And that let me know that you are not really ready to go on this journey.

And I want to talk about this for a second because when you decide you're going to work the baby steps,

you have a moment in time where it's like, I have to, I'm setting the bar for what gets past. Right? I'm setting the bar for what my lifestyle must be for this to happen. And there's going to be a lot of things that are going to try to compete with the priority of paying off debt. But you have to set a clean bar.

We don't do anything. We're cutting our lifestyle. We're not taking trips right now. And you're so early in the process. And you had an anomaly of a win, but you're already thinking about taking trips.

And you've got $6,000 to go. I would really encourage you to lock in because if you take a trip to Europe, then something else is going to pop up and you're going to go, ah, let's do that. And then something else is going to pop up. And before you know it, you've been kicking the can down the road two years.

So that's why this is so important.

“And if you emotionally rationalize and justify decisions that you know when you're brain or wrong.”

Well, I haven't seen that when you start doing that with your voice. That's when you know you're getting ready to do some stupid.

Because I do it. I cannot. Because you're the drama queen that lives inside of our brains.

All of us have one. Well, well, it will just, you know, sounds like a big old chase in a rabbit. You know, it's like, I've heard that. Yeah, it's just like your voice. Octave goes up and you're, and you're like, well, I haven't seen that maybe.

And you, all of a sudden you sound whiny. I do it, I do it to myself. I hear it at my own voice. Sometimes I'm like, you are a whiner. Go back and look at any purchase you had buyers remorse over and replay what went over in your brain. Exactly.

The little whiner came in. Yes. And like, I deserve it. I work so hard. And I tell myself, are you work so hard?

You've, so many years you paid the price. I deserve it. I deserve it. So, as soon as you do that, and you're, I'll guarantee you.

My, your octave always goes up one.

Everybody does it. We all do. And a budget you're doing it. So, don't do that. Drop your, drop your octave back down and be like a grown-up and go, you know.

I still got to clean up this stinking mess I made and then I'm going to go see my sister. Yeah. Flip the script. Let it motivate you to get their faster. Yeah.

But you do whatever you want to do, Bridget. But you called Nastas and we're always going to love you enough to tell you the truth. And we're not telling you anything we haven't told ourselves. And we're not telling you anything we haven't told 5,000 other people before you called. It's fairly predictable.

What's going to happen when you call the show. We're going to love you. So much that we're going to be very truthful or even brutal with you. When you call here. And that's, that's because we want you to win.

And in, you know, you'll have about a whole ramsy brand. It is about trust because you trust us because we love you enough to tell you the truth. That's right. Yeah.

“You know, that's what this whole thing is about.”

And, you know, and then you get to hear the other side of it sometimes. And, you know, young guy that called last week, I don't know if you were on. I think Rachel was on the air with me. And he said, I called you when I was 22 years old and you said, if you will do these four things exactly and don't argue with me.

Do them exactly. You'll be a millionaire by the time you're 30. He said, I'm 28. Six years later, and I'm a millionaire. And I called to tell you that.

I love that. And it's like, he said, I did exactly what you said to do. I didn't argue with you. Yeah. And he goes, and I got there two years earlier and you said I would.

And I want to ask you about this other thing. And it wasn't a winding thing. He was asking about it. It was a little agenda in my question. But that was the preface to his question that he was calling in about though.

That's cool. Yeah. Because that's very cool. If you do this stuff because we want you to be that story. Absolutely.

Absolutely. And that, you know, live like no one else so that later you can go to your point. You want. And it's true. He said it and she'll have a better trip for waiting and doing it the right way.

But when you start to do the things we teach the way that we teach them. No holds barred. You do. You go faster than you thought you were going to go because momentum is on your side. And it's like the moving sidewalk at the airport.

And that's my favorite part of it. Yeah. You're walking along and you're walking under your own power. And God looks down and says, oh, you're faithful with a little face. If you're faithful with a little things, I'm going to give you more to manage.

And so you're walking along. And then all of a sudden you're moving like you're moving on the sidewalk faster. Then you're actually walking singer walks. Yes. But it's also moving under you.

And you end up arriving at the point faster.

of manage.

And please don't expect for him to give you more to manage when you're unfaithful with a little

thing. Just organize chaotic, immature, impulsive. When you're all of those things. And now we're not fussing at bread yet. We've moved on from just in case bread yet.

You know, we're not, we're not preaching at you. But preaching all of us. But do you think Dave, that's the secret sauce behind this. Because I can say, when Sam and I were paying off $460,000 of debt.

“Looking at the Ramsay planning going, you know what?”

This is biblically based. That means I can ask God, hey, help me do this. Yep. And then I can get a yes. Yep.

This is based on what he wants me to be doing anyway. Yeah. God, your word says, the borrower is slave to the lender. And then Jesus said, it's tough to serve two masters. Mm-hmm.

So help me, Lord. Help me get out of this. And give me some work to do.

Here's what they, I was going to do.

Give me a raise at work. I was going to be checking the mail. It's going to be worse. Yeah. It's not a random.

Yeah. The duck is not going to fly in the window already cooked. But he will take you duck hunting and let you get a bit. Yes. So then you get to pluck it and you get to cook it and eat it.

So expect the blessing to come in the form of more work, more opportunities, more work. More the diligent prosper. You know what diligence is? That's excellence in the ordinary. Excellence every day.

That's diligence. And those are who prosper. That's who gets a raise. That's who gets the promotion.

That's who the competitor comes along in steals.

If you work in a toxic environment where they don't reward, diligence, someone will look over there and go, well, you look at that. And they will hire you away and you'll make more money than you ever made in your life because you work diligent. So we got a lot of calls on this show where life happens.

One day someone's healthy. They're working, providing for their family. And then a curve ball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

Yeah.

“And that's why you've always said that having term life insurance from Zander is essential.”

Because it protects your family if the worst happens. Yeah. That's right. You need 10 to 12 times your income. In coverage, no gimmicks, no whole life junk.

Just straightforward term life protection. But there's another piece that people often overlook. And that's long term disability insurance. Yeah. It's important to understand the difference between them.

Life insurance steps in when you die. Disability insurance steps in while you're alive, but can't work. So it replaces a large part of your income. So the bill still get paid while you get back on your feet. Now if your employer gives you free disability insurance, great.

Take it if it's discounted there at a better price. Take it. But if not, Zander can help you find the right plan. Whether you're single or married, it's not optional. If you're going to be out of work for a while,

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Protect your income. Protect your family. Welcome back to the Ramsey Show. And the Fair Wins Credit Union Studio. Jay Washaw Ramsey Personality is my co-host today.

Roman is in Atlanta. Hi, Roman. How are you? Hey, I'm doing okay. How are you doing? Better than I deserve. What's up? So I am here at $100,000.

And I'm likely going to get $60,000 more when the house sells. I paid off my $30,000 student loans already. Good. I just earned 23. I graduated in May. Wow.

And I'm trying to remember. Please, I'm doing so. And I focus on my documentary. Good for you. So, but that's kind of like kind of letting me down this path to where.

Like, I've been looking at government a lot. Like, involve in government. I'm trying to get myself in a place where I can attend law school in 2021. And I plan to work and save and tell them. And I'm just like, I have family who's advising me to put like my money

in like 50k in a CD and like tearing her off. And like 5% liquid investment. They're five on liquid investment. And my bank is trying to get me to invest it with their financial advisors. But I'm just not sure to do with that money knowing that I'm going to have that day.

Excellent to law school coming up. How much is law school going to cost?

which would only be.

It's, you J is only $60,000 in total.

It's like $1,000 per year. It's like $1,000 in total. I mean, this is only like, you're away.

“What if you just let it sit in the high yield savings account until you need it?”

And I'm, if I do have something to do with that. So I just don't know. I just don't know. I can tell you why I would do that. I would do that because knowing that this is really short term.

I wouldn't want to mess around with any risk of investing it. And I want to keep it pretty liquid because you're going to need it. I mean, you said this is 2027. I'm guessing. Yeah, if I applied now, it'd be 2027.

You've not been accepted yet. No, I, I thought to think that else.

And I've been sitting for that.

Okay. So here's the same fall. You have two pretty big hurdles to go to UGA. You're going to have to score well on the else set. Because UGA's tough to get in turn.

And I have to accept you. All right.

“So two big blockers yet before this actually happens.”

So we don't know if it's going to happen or not until we cross those two mountains. So and you've probably got some backup schools there. Yeah, that you've considered in the prices of those. There's a lot of, yeah, there's a lot of, like, good schools. And Atlanta too, like John Marshall and whatnot.

But that you can afford to pay cash for with this money. So you have 130,000 cash laying around between these. All of these events is at that. I understand that right after you paid off your debts. Well, the 60's going to house.

That hasn't been sold yet. Yeah, but it'll sell. It'll be selling sometime. I mean, it's up for sale, right? Oh, yeah.

Okay. Okay. Okay. Well, the other people are trying to be, your family's trying to be helpful. Your bankers trying to be a banker.

So asking a banker what to do with money is like asking a dog if it's hungry. So no, there are 100% of the time they have an opinion and it's put it with me. So no, we don't need a banker's advice on anything. No, thank you. Mom and dad mean well.

And yeah, a Roth IRA with 7,000 of this is not going to keep you from having the money to do to go to law school. If you're filing a tax return and making at least 7,000, that's not a bad thing to do, it's not going to make or break your life. The best investment Roman that you can make is to attend law school and pass and then pass the bar. That's a better investment.

That's a better return on the 60,000 than if you invested in mutual funds or real estate. Okay. So the 60,000 you're investing in the best investment I know of which is you. Great. And so I want you to just like Jade said just protect this money.

“And does it kind of, does it kind of feel calm to do nothing?”

I think doing nothing is a really cool idea. Just park it in high yield savings, super boring. I don't have to worry about being sophisticated. I simply got the money sitting there making a few points while I get ready to go to law school. Just go have a good night's sleep.

Yeah. That does sound nice. Yeah. And then just tell everybody else, thank you for, thank you for loving me. And I'm just decided what I'm going to do is concentrate on law school.

And when I get out of law school, I'll be a lawyer and I'll make money. And I got plenty of time to build wealth with that. Because $60 or $80,000 is not going to make you wealthy anyway, Roman. Right.

I mean, they didn't leave you six million, they left you 60.

So it's nice. Some glad you got some. Right. But everybody's acting like you hit the lottery. This isn't going to be weird.

You did, but it was like a small ticket. So yeah, just calm, calm, calm. One of the things having too many choices in front of us, it gets confusing and anxiety goes up. Is that right?

Yeah. And so when I narrow my choices down and go, decision has been made. I'm going to do nothing on purpose. That's my decision. I'm going to park it in high yield savings.

Super boring. I'm not going to lose it. It's going to be sitting there when I pass the LSAT. Get a good score and get into UGA. And then I'm going to head to Athens in the edge of the mountains of beautiful north Georgia.

And I'm going to be a lawyer. Yeah, that's right. Yeah, doing nothing doesn't mean you're not being 100% intentional. You're still being very intentional. You can intentionally do nothing.

But the power of making a decision when there's too many decisions in front of you is the stress and anxiety drops immediately.

Too many choices is very stressful.

And so I just go, no. No.

“You know, I think that's what happens when people look at their money.”

And they think, should I be paying off my debt? Should I be investing? Should I be saving for kids college? Should I be paying off a credit card? And then when we just say, don't do this.

One thing is-- And then do this. And then do this. Their stress level goes down and they go execute. Yeah, it's a plan.

Yeah, it's a plan. Work the plan. Work the proven plan. And so the proven plan here, Roman, is the best investment Roman can make is in Roman. And that is in training your brain so that it is more eligible for more income.

Yes. And that is not dropping 100 grand in an independent film that you decide to go make. And that's not what I said. Okay. Got a degree in film.

No. But it's not what I said. Yeah. It's a invest in a track record.

“I mean, you know, if you want to be a lawyer and you want to be a good lawyer, you”

can make a good income as a lawyer. That's a good thing. And Lord knows we need some good lawyers because there's plenty of dumb ones out there. So, all right. Don't get started.

I feel like you, you almost went on a tangent. That's okay. I just, I just self edited it right here on here. That was a good job too. Good.

Yeah. You're, so guys, anytime you're a college student or you have a college student. And they say, I have the money for tuition. Should they invest that instead of a mutual fund.

Always tuition, assuming they're studying something that is marketable.

Don't get a degree in left-handed puppetry or German poker history. You'll be a barista. Okay. This is not what I'm saying.

“What I am saying is get a degree that's usable in the marketplace.”

And the knowledge that you put in your tool belt will make you valuable in the marketplace. That is the best return. The increased income over the remainder of your life when you properly do education. And on something that's relative in the marketplace is the best return of investment there is. You've worked too hard to get control of your money just to let strangers control your data.

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So go to JoinDeleteMe.com/Ramsy to get 20% off through annual plans and take back control. That's JoinDeleteMe.com/Ramsy. Matt's in Philadelphia, hi Matt, how are you? Good, thanks, David and Jake, take my call. Sure, I got a quick question.

I'm wondering one, I should hire for my business. I know small mechanic work on like ATVs and motorcycles just like stuff like that. And I've been in business for about 15 years. Kind of, I feel like I've hit my max. I can't seem to get out of the groove of making the same each year.

So I don't know if I should hire or if I should be doing something else. Are you turning the way work? No, I'm taking as much work as I can, and in the past two years I've actually opened my business up to repair for customers. You know, bring them machines and I can repair for them. I used to just buy machines to come up and resell them.

And that was such a, you know, so it's such an overhead and if they didn't sell for months, you know, just a lot of sitting around. So I opened it up the past two years to work on other people's machines, charging 75 an hour.

And, you know, it trickles in and out, you know, I always have three or four machines I'm working on for customers, but.

So if you hired someone, what would they do?

Tell me what needs to be done on it and then we can order parts or if they need to order parts, just the stuff that you don't want. Which would allow you to do more machines, but you don't have more work. Right, right, and so I just, I don't. It's easy to the past two years. Can you get more work?

“That's what I guess I'm trying to figure out how to, how to get.”

Yeah, I, I opened the Facebook page and you know, started advertising that way and just getting my name out there. But, you know, it's just so slow. Have you, uh, and you're raising your prices at a, at the correct rate over the past 15 years? Um, yes, I, like I said, I've only really started working on customers machines over the past two years. And I started at 55 an hour and up to 75 an hour.

Okay. Yeah, so it's up there and you're most, most big shops are like one 10 an hour. So I'm under, I guess I'm under what big shops are charging, but it's just me. Okay, the big shops are dealers. Right, right. Okay, is there any independent non dealer shop competing with you?

Um, there's one that's like 10 minutes from me and his shop weight is 95, but he turns away a lot of work. Interesting. I wonder if he would send it to you? I could, that, that could be a question I could look into. Yeah, I just stop buying a cup of coffee with him.

Go, I understand you're turning away work. I'll take it. Right. Try offer and something like that. Sure.

I buy you a steak dinner ever so.

And in the meantime, I'd also be sending you two million dollars worth of work.

I'll send you on a cruise. Yeah, but I mean, you know, I don't know what he's, I don't know what this amounts to, but yeah, but, but you don't need to hire someone. And then both of you end up bored. Right, and you're losing money because you're paying him, but you're not making any more yourself.

“Yeah, you need to be making more money as a result of having hired the person.”

What? And that person is either because that you're making money on the work that that person's doing. Or you're making money on the work that you're doing that you weren't able to do because they're doing work you used to do. Either one. So, you know, like our guy that our CFO or chief financial officer does not create revenue here.

But he keeps me from having to do all that. So I can create revenue. And that's what you're talking about. So you need to create, but there needs to be revenue on the other side of the equation to justify hiring. And yes, right?

I would work on getting growing the business so that you do need to help so you can get some scale to it. Because today, when you're a solo prnu or like this mat, you're incredible. But for 15 years, you've just owned your job. That's a different than owning a business. You know you're own your job when if you don't show up, they income stops.

That's you own your job. But if you own a business, if you don't show up, and then income keeps coming in. People keep working. So like when I'm not here, Rachel and Jade do the show, right? And so the revenue keeps coming in and I'm not here.

So I own a business then. But if it's just me on the radio or on the podcast and then I don't show up. There's no podcast. There's no revenue. Then I just owned my job.

And so that's different.

But the first step of business and I'll send you a copy of my latest best seller.

It's called Building a Business You Love. And it's the five stages of business. You're in the first stage of business. You just been there a long time, 15 freaking years. So but the first stage is the treadmill stage where we feel like we're stuck on treadmill.

We got no one to delegate to and you just run, run, run, run, run, run, run, Collapse on the couch every night. What'd you do today? I don't know, but I did a lot of it. And really tired.

And so that's treadmill stage. And but and it's fun stage. It's an exciting stage. You do have control of your destiny. Yeah.

It's a nice. It's a fun part of that. And but then when you start hiring people to do work when you're not working. So now life starts to get good assuming you get the right people.

“And you want the first time you have to fire them and get new people.”

And but you'll finally find people to actually work and there's there out there.

There's not many of them, but they actually work. And then you'll start to grow the business. So hang on. I have Christian give you a copy of the book. Building a business.

You love Jason's and Toledo. I Jason, how are you? Hey, good. Great to talk to you. James Dave.

He's so I'm trying to help guide my parents on their finances and helping clean up some things. Did they ask you the question is? Hello. Did they ask you?

Yes, they did. How old are they? They are both 79. Okay. How old are you?

I am 54. Okay. Good. Okay. Then it's possible though.

Listen. That's why I was asking. Okay. Good. Appreciate it.

Yeah. When you ask your questions, people didn't ask. Then sometimes, you know, don't help. Anyway. Okay.

It's okay.

Are we 79 years old? Yep.

“And the question is, should they pay off their home equity loan that they have?”

Or continue to pay that payment? So if they have the cash that they have in retirement, they only have about 100 grand. Just so that they can have that on hand for medical emergencies.

They'll probably never pay off the home equity loan before they pass.

But then those, you know, that would come out of the proceeds of their house. What's the home work? Probably about 250. And how much is the he loan? So there's about 50 left on it.

Okay. And that's the only debt or is there a mortgage as well? That is the only debt. Okay. And they're only money as they have 100k.

That's correct. And how much do what's their income? They're fixed on Social Security about 44,000 per year. And we did a very detailed budget with them.

It came to about 40 per year in expenses.

So that's close. But they think that they can maintain that long term with Social Security. But that's all they got. Wow. Tight.

Very tight. Yes. Yeah, I agree. I would not use the 100. And only have 50 at 80 years old to pay off a 50,000 dollar loan.

But I really am scared. That loan is very destabilizing for the situation. So I do want to come up with some thoughts on how to get rid of it anyway. But no, I would not use 50% of the little bit that they have to clear this a little bit alone.

“Do they have any other assets that they could sell?”

Not really.

Are there any significant snow?

There's not a lake lot. No. Honestly not. Okay. Are you the sole layer?

No. I've got a couple of siblings. Okay. What's the financial condition of you and your siblings? We're decent.

I don't know that any of us are in a position to, you know, find together and pay that off for them. I would love for each of you to throw in seven in K and it to go away. Yeah, I don't think that that's probably going to be happening unfortunately. Okay. How's their health?

It's okay.

“They're not like in dire health, but it's not great either.”

Yeah. My thought behind what Dave said is you probably stand in here at the house. So it's money that you would get back. Yeah. That's the reason I did it.

But if they can't come up with the cash, it doesn't matter. Yeah. Yeah. It's not like the money's going away. It's going away for a short period of time until they pass and you sell the house.

Yeah. I was sent right where you are. But if you can figure out a way to pay it off, also I would get rid of it. Because it's more de-stabilizing than your words make me think you think it is. If you run a business, you already know this.

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Taxes.

Just saying the word kind of pisses me off.

But you know, I just don't like it at all. But we're going to talk about it because you guys ask a lot of questions about it, especially this time of year. So, Jade, when our taxes do someone asks, and what if I'm late? Well, they're doing April 15. That's the date.

But you shouldn't be late because if you think you're going to be late, just file an extension. That's what I would say. But even if you file an extension, the taxes are still there. It's still got to pay them. If you don't pay my own April 15, the penalties and interest begin.

Oh, yeah. So, the extension is not on payment. The extension new file is paperwork. The paperwork on the actual filing of your taxes.

“So, you can file an extension to file your taxes, but you should pay them anyway.”

Pay what you think they're going to be. Yes. They're going to start getting late. They start getting late for you that day with your file an extension or not, tax deduction versus a tax credit. I like this.

So, a deduction that's going to lower your taxable income, whereas a credit would lower the overall amount that's due. I like to think of a credit like a coupon. $30 off. Yeah. 50% off.

Yeah. And not many things are tax credits. Most things are tax deductions. That's right. So, a tax deduction is $10,000 deduction means you reduce the income that is taxable.

That's taxable by $10,000. And so, if you're in a 25% tax bracket, that then would save you $2,500 on your taxes. Because you don't pay taxes on $10,000 worth of income at 25%. So, that's a tax deduction.

“And that's 99% of the time what we're talking about around here.”

Occasionally, there's something that gives you an actual tax credit, which is dollar for dollar. $10,000 tax credit reduces your tax bill. That's great. $10,000. That is 75% better than a deduction.

But yeah, not many of them out there, but there's a few things that you get tax credits for. Okay, this one blows people away. The number of people that don't understand this is like everybody. How do the tax brackets work? Yeah, so the tax brackets, there are progressive system.

So, there is a range of income that is taxed at a certain amount. Your entire income is not taxed at the same amount.

A higher bracket never means that you're going to pay that tax percentage on your entire income.

So, if you've never done it, go through and you can Google the tax brackets for the tax year. And you can see how it's broken down. Everyone pays the same amount of taxes on the first 25,000. As you go through the bracket, when you jump a bracket, it does not jump your entire income by that percentage amount. Only the amount above that last bracket.

And so it might be that you have $5,000 above a bracket. And so it's hardly anything. So, that's so good because a lot of people are like, "I don't want to make more. I don't want to be in that bracket." That's crazy talk.

You know? Well, there's not 100% bracket yet. Right. So, of course, you want to make more because you get to keep it. There's not even, there's not, I mean, I think the max is about 30% percent.

You still get to keep 70 cents on every dollar no matter what you make. So, go make more. Shut up. Yeah. So, how much to set aside if you're self-employed?

All right.

You always want to take 25 to 30% set that aside for income taxes.

And just know that you'll likely need to make pay quarterly taxes. I like to do a quarterly estimate set that aside. That way, Uncle Sam has his cut. Yeah. The quarterly estimate is a one-page document.

How much were the revenues for my business? How much minus the expenses for my business? Equals the profit for my business? Times tax bracket.

“And you have to pay that once a quarter if yourself employed.”

Yep. If you don't, you're going to get penalties and interest on that after the first year. First year they give you a pass. Which also leads people into doing stupid stuff like not paying their taxes. But you need to do your quarterly estimate set.

And it's really not rocket surgery to figure this out, it's not that hard. So you just sit down and go, okay. The business made $100,000. And we spent $90,000. So our taxable income is $10,000 on the profit.

And we're in a 25% bracket. So I'm going to set aside $2500. And I'm going to send that in to the, you know, in with my quarterly estimates. And then that's has the same effect at the end of the year. As those of you that have a W2 job where you're withholding automatically out of your check.

And what difference is you actually have to send the money in, which pisses you off more. And so you actually know that you're paying taxes.

You don't think about it. So about a fourth, about a fourth of your profits. So if you're running a business year on a separate checking account, whatever's left in that account, if you pay only business expenses out of that account,

“which is what you should do, and you only put business income in that account,”

which is what you should do. What's left in there is profit. And so if you pull $5,000 out, you should set aside $1250 bucks. And you know, only pull $3750 into your checking account, and set aside $1250 so that when you're ready to do your quarterly estimates,

you're ready to do your quarterly estimates. Standard deduction versus itemizing. All right, so that's usually people's question, which should I do?

And the answer is whatever is going to lower your taxable income more.

For most of us, the standard deduction is where we're going to sit. If you're just normal W2, not much going on, but the rent. I mean, if you're married filing joint, that's $31,500 that they're deducting. And so that's where most people sit. Now, if you own your own business, and there's a lot going on,

and maybe you're working with the tax professional, they might say that itemizing is the way, but most people are going to fall in that standard deduction. Because it's easier, often higher. Only itemize if your expenses exceed that standard deduction amount. Yeah, exactly.

If you need, you know, that $31,500 that married filing jointly. If you don't have that much in right-offs, then it was a reason. Then you do better off. And here's how silly it is now. With a huge amount of standard deduction now, the $31,500.

Okay, that's big. Way high.

It's now 91% of Americans do standard deduction.

Now, if you do standard deduction, you are not writing off. Charitable giving. You are not writing off interest on your home mortgage. That's right. Because you're taking a standard deduction and you're not itemizing.

You only write those things off if you're itemizing. And so you say, "I'm keeping my home mortgage because I get a tax to write." There you go, Dave. You lied to yourself. You didn't get a tax break because 91% of you did the standard deduction.

Life changes that affect taxes. Yeah, so like I was saying before, most of us can maybe file our own taxes. If we're doing normal W2, but if you've got a major change, maybe you got married. You had kids. You got a new job.

You bought home.

Maybe you entered retirement.

All of those things definitely can affect your taxes. And after major life changes, just go ahead and review a gesture with holding. Decide if it's now good to work with the tax professional versus filing them yourself. Yeah, and that ends up, you know, why your refund changes is those things. It's stuff like having a kid, buying a house, starting a business, stuff like that.

Those are pretty big old divorces, deaths, all those things like that. Anything that's going to cause your refund to change.

“Now, if you're constantly getting a refund, you need to remember,”

Santa Claus does not live in Washington, DC. That is not free money. That's not the Disney fund. That's not the Disney fund. Walt Disney doesn't live there either.

No one charitable lives in Washington, DC. Everyone in Washington, DC wants your money. They're parasites. They're a tick on the butt of America. Their parasites are sucking the blood out of you.

And so do not think you are getting a blessing from Washington, DC. If you got a refund, honey, it's cause you've had too much of your money taken out of your check. And then they send you your money back at the end of the year with no interest on your money. That's what a blessing DC is.

That's what a blessing the IRS is. So you get $3,000 back. All that is is $3,000 of your freaking money because you had $250 a month too much taken out of your check. Change your W4.

Stop having refunds. No more refunds. And it's so easy to calculate your withholding. Well, I used the IRS tables.

“Wait a minute, you just assumed the IRS was competent?”

Well, that was a dumb thing to do. It's like saying the DMV is competent. No. No, you run your taxes out. You figure out what your withholding should be and get the proper amount withheld.

A way to do that is look at your lacks. Your last tax refund. Divide it by 12. Go on your W4. There's literally a line on there that you can decide what you're withholding is.

Change it. [Music] Well, we wish we could get to every call around here, but we can't. If you got a money question and you wanted to answer the way we would answer it, go to our website at ramsysolutions.com and use the Ask Ramsey tool.

So here's the way AI works. AI is pretty simple. It's going to regurgitate spit out only the data that you put into it. Whatever data set you put into it is how it's going to make the answer. So if you're so stupid that you're Google and you put reddit in the data set,

then you're going to get stupid but answers like Google's giving you out of reddit. But if you only put Ramsey like three years of this show, all the transcripts into the AI tool, all of financial peace and diversity, all the books that we've written, all the articles that are on our website,

“that we, the way we believe, the way we teach you into the tool, then guess what?”

That's the only data set it's got to work from so it will answer the question exactly. Better than we would answer it here on the air because it's the culmination of all that data. And it's free and it's blowing up y'all. People are hitting it like Bingbing Bingbing Bingbing, having argument with your brother-in-law. Bingbing Bingbing Ask Ramsey.

I mean, this is what David, David, but tell you right here. Ask your question today, ramsysolutions.com, click the Ask Ramsey tool. You're going to love it. It's completely free. Paul's in Tampa, type Paul, what's up? All right, sir. Thank you, Jay, and Dave, you're a blessing to our nation.

Really appreciate so much. Thank you. I have, you, thank you. I have a question. I see to a couple principles that you've talked about our in opposition to my life.

On nearing the time, I have the money to buy a boat in cash. We live near the water. It is going to be more than half of our annual income in boats, motors, wheels, etc. What you say not to do. On the other hand, we have the money in cash. And it will shoot the burn in the middle of our winning room.

It wouldn't be the end of our world. What's your net worth? About four million. And what's your net worth?

“So, are you counting the income at that four million would be creating?”

Or just your little, you're just counting your phone and real estate and the boat money is separate? No, that's not what I meant. He's saying to make the rule. Yeah. Number one, you're right.

When you're at a no income, low income portion of retirement and a huge net worth, that rule does not apply.

So, if you're worth $10 million and all of your investment income is rolled back into your investments.

And you don't count that income in the equation. And so, you're living on a $70,000 pension or something, but you're worth $10 million. Then we don't apply that formula. But if you take all of your net worth and use the income off of your net worth, you probably would, the formula would probably work. But we don't have to do that.

How much is the boat? About $400,000. Okay. And you have $4 million. So, it's 10% of your net worth.

Correct. And what is your income? How many of the 50? 50. And you're retired.

60. 60. Okay. And what is your income? Right now it's about $250.

Okay. Yes, I would buy that boat. Okay. But that's based on the ratio into your net worth.

And based on the fact that you're, and again, if your net worth was $40 million and you made $250, you know, you still could not buy the boat.

If we only use the 50% of your income. But most people were not dealing with a net worth. It's substantial when we apply that formula. So, yeah, I would buy this boat for sure. It's a sweet boat.

What is it? It is a taller, a 40 foot taller. Triple engines are quadruple. Double engines. Double.

What horsepower? Yeah. So slow at the taller. It doesn't go very fast. Okay.

All right. And what brand? It's a great harbor. Oh, yeah. Okay.

Yeah. And you're wet on the air coastal waterway. That we have access. Yes. Okay.

All right. Wow. Good for you. Yeah. I mean, your proposition to do the cause after all this hard work.

Yeah. Yeah.

The bottom line is the reason that the decision makes sense is the other rule that you use.

“If I burn that much money in the middle of the floor, would my life change in the answer?”

No. And that's because your net worth so high, not because your income ratios are correct on this. And so that's, if we were doing it off your income, you know, we'd be going, okay, $100,000 if you burn

But if I'm in your shoes, I'm buying that.

I will buy the boat. Yeah. That's what I would do. If you want a boat. I mean, that's a lot of money in a boat.

But it's a small percentage of your net worth is tied up. And and trawlers go down in value, too. Just like cars, just like, I mean, 100% of boats go down in value. What's maintenance on a boat like that a year? You know?

No, I don't. But it's it's the docking fees and the insurance and the gas and or the fuel. Probably maybe diesel. But I don't know. It's something to cancer.

He's considered that probably pretty substantial. But it's not hundreds of thousands on that. Because you don't need a crew and all that on that thing. So he's the crew 38 feet long. I mean, it's not.

So yeah. But that's yeah, when you get into a thing where like Zuckerberg shot pulled up the other day.

“Yeah, Rachel was putting that up on her Instagram, right?”

You know, that sucker's got like 59 people or something on it. Uh-huh. Yeah, just the the daily rate to keep that thing running is a small city. So yeah. But that's a different world.

But again, as a percentage of his net worth. Yeah. It's nothing. Nothing. One of the wealthiest guys in the world.

You know. So it's a 300 foot yacht. It's probably worth. I don't know a billion or half a billion. Something like that maybe.

And yeah. And yeah. But it's again, it's he's got hundreds of billions. Yeah. And this is a half of one of them.

You know, I mean, it's hard to get your head around when you're like regular people. But it's if you it helps you if you just go. It's a ratio. Look at the ratios. But ratio is this.

What percentage of this?

“And it keeps you from saying stupid stuff.”

And here's what stupid people say they're invious.

And I actually have said it. But I haven't said it in 35 years. Yeah. About 35 years ago I quit being that stupid. No one should ever dot dot dot dot dot dot dot dot.

That's redneck in V. Okay. That's trashy. No one should ever have a car that nice. There's starving children somewhere like your car cost children to star would you shut up.

Unbelievable. Of course you should get that car. Yeah. You live like no one else later. You can live and give to the starving children.

Like no one else. But this. Oh, these over saved people that think their Jesus. They're going to tell you that the only car you can drive and still be holy is a 93 canry and that's the car of the evangelical anything beyond that.

Any car beyond that is not holy and you're you're over spending and you're not a good steward. Oh, bull crap. Yeah. It's actually not a canry.

It's an accord because Jesus said it. They're all in one accord. Dad joke. Okay. Anyway.

All right. I'm going to let that slide. You just keep that one going. Keep on moving past that. But yeah, but the seriously, I mean, the judgment of other people's decisions.

Yeah. It's it's just please manage your life. It's like a full time job to manage you. It's like, you know, the person in your mirror is a problem child. Work on that one.

Instead of working on fixing everybody else's spirituality. She's some of you people. So yeah, that's that's the problem with stuff like this. Yeah. It's just very small.

Look out there and I see Zuckerberg shot. I go. Not a big Facebook guy, but man, he killed it. Good for him. Well, I mean, how mad can you really get because you're how mad can you really get?

You're probably on medicine where you're probably on Amazon. I paid for a few days of that thing to operate. Yes. That's what I'm saying. With the Facebook ads that Ramsey buys.

So it's probably my fault. Yeah. But money will spend mark. You know, it's like you live in life large. Yeah.

But yeah, I mean, there's nothing wrong with. Yeah.

I honestly, I've never had, you know, 300 billion.

So my mind can't get my emotions. Can't get my head around that. But it is throw away money for him.

“And that's what we're keeping talking about here.”

Yeah. You know, work hard. So when you're old, you don't have to work in McDonald's. You're not a Walmart greeter. [ Music ]

[ Music ] Welcome back to the Ramsey Show. The Fair Wends Credit Union Studio. Jade Washall, Ramsey Personality is my co-host today. Kelsey is in Seattle, Washington.

I'm good. How are you doing? Better than I deserve. What's up?

“So I have a question for you, of course.”

And I guess I'll just flat out say it. I feel like I either was or am being financially abused. And I can't really tell. I'm very confused. We have a very complex financial situation.

So where would you like me to begin? How old are you? I'm 37. How long have you been married? Seven years.

Okay. And what's your household income? I'm not really sure. What is complex about your financial situation? So we have a lot of debt.

But I guess we do have a lot of equity. We have numerous businesses. And we just have money coming in and out.

“And I'm just living on one credit card that is constantly maxed out.”

And I never have access to cash.

Why don't you have access to cash? I'm not sure. I have asked to be put on the account. My name isn't on anything. And I have been asking.

And he seemed willing that we were waiting. Because I never got my name changed because I got married during COVID. So I did get my name changed finally my last name. And then so he was telling me that he was waiting for that. But now that it's changed, you know, my name is still not on anything.

None of the properties. None of the accounts. So he just he tells me that the financial situation is so complex. But I just wouldn't understand it. Which frustrates me because I'm very organized.

And I have always paid bills on time.

Do you have children together? Yes. We have a blended family of five. We have two 18-year-olds, a 16-year-old. And then together we have a four-year-old and a five-year-old.

Do you work outside the home? No. And I have been before we got married and I have been. It depends. I used to make.

I would just say on average I used to make like five or six thousand. But then there was a time where I switched jobs. So I was making significantly less. What did you do for a living? So I was a nursing assistant.

And then I saw others.

“How does it feel when someone says you're too dumb to understand this?”

It's really frustrating because I know. Because I have been homeschooling our kids as well since we got married. So I mean, I'm really organized. You have to stay organized. Have this many kids in homeschool.

Frustrated is a word that describes when you're trying to do a task. Can you get traction on the task? Yeah. I don't know that that's the right word to describe what Dave asked. Yeah.

When someone says you're too dumb to understand, that's demeaning. Yeah. So I can't think in 43 years of her or told my wife she was dumb. I don't think that would make me dumb. I think that would make me dumb.

I think he's at that it was very complex. No, it's too complex for you to understand darling. But I and I got it because I'm the smart one. He's an arrogant butthole.

So we have about 4.3 million in equity.

How do you know? Oh, so last year I really started pressing. I wanted to have transparency and clarity on our financial situation. And I slowly have been asking questions and putting stuff together. So let go back there.

When you say slowly is the purpose of the slowly for your own understanding. I'm just building this mentally piece by piece. So I'm understanding it or is the purpose or is the purpose of the slowly. I can only ask him so many things that once before he shuts me down. So I'm just going to do it a little bit here.

Then wait five months and do a little bit here. Tell me the purpose of that. Or is it a little bit of both? Um, I think it's a little bit of both. If I just sit down and ask a little questions, I'm sure he would tell me.

Okay, did you get a break?

No, I didn't. Okay. You got to decide how much of this you're willing to put up with.

“You've already put up with way more of it than you should have, I think.”

So if it was at my house, this would be over today. We're going to sit down and go. Bubba, you got 24 hours to put everything out on the table. And I'm going to understand every bit of it. And it's your job to make me understand it.

And I'm going to have access to all the accounts in the next 24 hours. Or I'm going to go see a divorce lawyer.

And I'm going to have a two million dollar net worth.

Because I'm taking half of this. But we have $2.9 million in debt and loan. I thought you said you had equities of $4 million. Even still. Do you know what equity is?

I guess I didn't. I just figured that I would subtract the loan amounts and the debt amount. Well, the amount of the value minus the loans is the equity. But honestly, that's a little bit beside the point. The point, the biggest point is...

I'm taking half of it. Yeah. Because you're not being-- Because you're not getting the divorce. Because I'm tired of you screwing me over and treating me to this.

Well, also, I think the biggest dynamic is. I had come to realize that he's not paying for my knees. But so he has a daughter from a previous marriage that he adopted. Actually, it wasn't a marriage. It was an engagement.

It's not anything to do with it. And you know what it is. No, it's not.

“Because you need to know everything that's going on in the next 48 hours.”

That he's been giving-- That's fine. That's fine. Her larger amounts of money on the side that I would disagree with. That's fine.

That's a lot of-- He's been doing a lot of crap. And you're going to put up with it. And you're not going to put up with any more. Starting today.

But I did confront him about it. Oh, you're enthusiastic. No wonder you have this problem. You can't stay on task. I'm trying to give you a simple thing.

The simple thing is the overall way you're being treated needs to stop immediately. And then you go down these different rabbit holes. Fourteen times. I can't even have a conversation with you.

No wonder.

The first question you asked is, I don't know if I'm being financially abused.

The answer is yes. The answer is yes. The answer is yes. The answer is yes.

“And yes, you should do something about it.”

And not one off every little stupid thing you're talking about here. It's the overall thing. A hundred percent of everything that's going on. I'm going to know it. And I'm going to have a vote.

And it's starting today. Or I'm going to see a divorce attorney. Yeah. And here is Kelsey. We're on your side.

We're trying to be on your side because we agree that the behavior you're talking about. But you're like a dog chasing its tail girl. Yeah, you're worth it. It's circular with this. You can't even have a discussion about it.

I think you've been living in this toxic mess so long. That you're, you know, you're clouded on everything's just circular circular. No. It needs to be very clean and crisp. And either we get this healed or we end this.

You decide. That's what I would do if I were in your shoes. You work your butt off for your money.

But your money's never going to return the favor.

If all you do is hope for the best. If you're ready to learn how to make your money work for you. Check out the smart vester program. Smart vester can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies and more.

Whatever your goals your pro will take the time to explain your options. So you never have to invest in anything you don't understand. Head to RamseySolutions.com/smartvester. The get connected. Ramsey Solutions is a paid non-client promoter of participating pros.

Learn more at RamseySolutions.com/smartvester. [Music] We use a couple of terms around here. That sometimes are confusing, so let me clarify. We use the term financial infidelity,

which is when someone lies to their spouse and hides financial things like debt. And so it's a breach of trust like sexual infidelity is. But the fact that we call it financial infidelity does not really put it in the same category as sexual infidelity. Sexual infidelity is much more traumatic. Both are a breach of trust.

One is a less traumatic breach of trust. But we use the term to describe the fact that it's a breach of trust.

Probably not accurate a lot.

Abuse is like domestic violence when someone's beaten the crap out of their spouse. That's real abuse. So financial abuse, where you don't have access to the numbers, is not as traumatic as actual abuse. And so when we use the term financial abuse, it's not real abuse. It's a descriptive term to say, you know, you're in a situation where you're not being treated right.

That's different than abuse. But in our culture today, overall, we have taken some of these words and we've used them so flippantly that we forgot what they actually mean. And so anytime I disagree with someone I call them a narcissist.

“Well, you need to actually understand what a narcissist is before you say that.”

Because just because someone hurts your feelings doesn't mean they're a narcissist.

And just because we use the word abuse doesn't mean that it's descriptive of what is going on at the trauma level.

Okay, yes, it's a toxic and horrible marriage, a bad relationship. That's way different than real abuse. So we're guilty of participating in overstating, over-dramatizing some of these things like financial infidelity or financial abuse. As if it was as bad as infidelity or real abuse, it's not. Okay, so when you call us up and say, am I being financially abused? It's way different than if you call us up and say, my husband's hitting me.

Totally different reaction here because different parts of the way you deal with trauma in those situations is completely different. From a psychological viewpoint from Dr. Delonnie's insight and input on this way different. So if you call me up and say, I'm in an abusive physically abusive relationship. I am not going to shame you. I'm going to walk you out of that and get you some help immediately.

Because shame is one of the tools that's used by physical abusers.

“But if you call me up and say, am I being financially abused?”

And then you give me 16 different stories. I'm going to call you out on your inconsistency and that's not me abusing someone that's being abused. Because they're not actually being abused. They just don't have insight into the money and don't know what's going on with the money. So it's not actual freaking abuse. But it is a toxic horrible marriage.

And yes, she does need to stand up and put an end to the bulk crap. But that's just basic relational advice, not someone that is actually being abused. Now, she's actually being abused. She's going to get a different reaction from us on this show. And so, if you don't like how I handled the last caller, kiss my butt and go listen to a different show. Okay? Because that's the way we do it here.

We love people, we love people well, and we tell them the truth. So that's how that goes down.

“All right, Duke is in San Francisco, hi Duke, what's up?”

Hi Dave, hi Dave. Thanks for taking my call. Sure, how can we help? Yeah, so about three weeks ago, I got caught up in all the tech layoffs and I lost my job. And I have enough cash to pay off my mortgage, which I was planning to do in November anyway. But now I'm wondering if I should just hold on to that cash.

Yes, for now. How much were you making, huh? Um, the last year was a 600,000. Wow. What are you doing in the tech world?

Um, I'm a web engineer, mostly focused on digital accessibility, which is making sure software works for people with disabilities. Yeah, a big deal. That's a big field, okay? So what do you have? Well, what's the outlook for the new position?

Well, it's kind of a rough job, market for what I do right now. So I don't know how long it would take, but I'm also concentrating on stepping out of faith in starting wild business. Doing what? Um, same work, consulting. I wouldn't step out on faith, that step out on facts.

Um, okay. But I mean, you know how to do what you're doing. Do you think there's a market for it that you could build up enough consulting gigs to make what anywhere near what you used to make? Uh, it probably kicked me a lot of get up to that amount, but um, yeah, there's more than enough work I think. Okay.

And do you plan to live in San Francisco? Um, uh, I don't think I'll be able to stay here too much longer. Okay. Then why would you pay off the houses? Put the house up for sale.

If you're leaving, you don't need to keep it.

Yeah. And then that changes the whole formula, right? Because you may be buying a property that's twice the size and half the price and a different market, more affordable market. You're in one of the most expensive real estate markets in the world. You know that, right?

Yep. Yeah. And so if you're going to, I don't know where it's best for you to operate this consulting firm from.

“I was going to say, what's your timeline for making that choice on whether or not you're going to step out and do your own thing versus continue to search the job market?”

But I give my stuff probably about two months. Okay. I need to start looking again. You need to start looking now. Are you going to sit on your butt until then? What do you mean?

I need to take a break. Okay. So how much money are you going to do? Well, you got a break. They just gave you one. But while you're on break, look for a job, honey. I mean, for real.

Anyway, that's what I would do. Yeah, set yourself a timeline. And what I would do is nothing with the money to answer your question.

And and say, okay, I've heard the next two months.

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“My goal is simplicity and convenience. When in reality, I use a debit card for my recurring.”

I use debit card for purchases. That is more convenient and more simple. I don't have to pay a bill within the month. If you think debt equals simplicity, they got you. Even if you're paying it off in the month and not in debt.

If you're paying it off in full, you're still not the simplest way. The simplest way is a debit card. The study show that if you use a credit card, you will over time spend 10% to 30% and some cases depending on what it is that you're purchasing up to 100% more. Using a credit card, things like fast food, things like entertainment.

You are up in that high percentage of how much more you'll spend. I don't think this guy is going to be in that super high percentage. He's very careful. If you're just doing your normal purchases, you're going to spend a little more. But the big thing is, you're paying it off in the month anyway.

So what's the difference in a debit card? Oh, one extra step. It's not as simple. That's why I said it's a mindset in his mind. They got you.

They talked you into believing this was smart somehow. And then you defend it with all of your numbers. I don't think I'm going to talk you out. I don't think I'll be able to talk you out of it because I think they got you. Yeah, I think they got you.

Yeah, your argument is invalid. It is not simpler or more convenient. Not using a debit card. Nothing is easier than I get my paycheck. And I take my paycheck to pay for my things.

Yeah, well, I use my debit card. I mean, a lot of my utilities on stuff on odds and ends. Like personal stuff. Like utilities automatically hit the debit card. Or some of the odds and ends.

And I don't have to do anything. Yeah, it's just credit card. And he has to pay the bill off at the end of the month. Yeah. I don't have to have that extra step.

Mm-hmm. So it's not simpler or more convenient. And I want to say this because I think that this is a very subtle thing that's worth saying.

“This guy, do I think this guy is going to end up in debt?”

No. Is he going to end up on the side of the road? No. I'm not being a fatalist in any way. He's going to go about his life.

He's going to be fine. He's going to retire. No, no problem. My problem is the mentality of it. The borrowers slave to the lender.

So at the end of the day, I want to be able to have as much freedom and autonomy in my life to know, hey, I actually went out in the world. I made a living. I didn't have to depend on a system of debt to keep me afloat or make me feel like I was something. That's all it is. But that's a big thing.

Agreed. Margie's in Dallas. Hey, Margie, what's up? Hi. Thank you for taking my call.

Sure. I've had a lifetime of bad decisions. And have sucked myself into a hole in debt. And I'm debating whether to file bankruptcy to try to settle some things out of pocket myself when my house sells. I'm going through it.

And I know I'm getting 50% equity. Yeah.

“And I just don't want to continue making bad choices.”

So I just kind of need some guidance as to what rat I should take and where I should prioritize. How long are you married? 30 years. Oh, baby. That's tough.

Wow.

I'm sorry. A lot going on with you. A lot of pain.

How much debt do you have, Margie?

Um, total for myself.

“Not include my husband and I have always kept our finances separate.”

Mm-hmm. So just my debt including the mortgage because my name is on the mortgage. No, you're debt not counting the mortgage. What do you have? Okay. Well, 609 total minus 343 for the mortgage.

So whatever that we've got 108 in unsecured credit cards. I have 137,000 in due loan. And I know bankruptcy won't erase the student loan. So I'm stuck with that. And I'm good with that.

I got my, I got that. I'm going to pay that. So I'm sorry. That is heavy. Yeah, that's a lot.

And what do you make? Um, 87,000. Mm-hmm. Okay.

And how much equity will you get from the sale of the home?

Um, so the house would probably sell for 440 to 480. We owe 343. And so my half, I'm thinking after closing. Probably be about 50K. Mm-hmm.

Okay. Well, bankruptcy's not going to work for you. Because when you go to file, there's two types of consumer bankruptcy. There's chapter 7 and chapter 13. Chapter 7 is the clean slate where the student loans are not bankruptable,

but the credit cards get zero. Um, and in order to file a chapter 7,

“you have to pass what they call a means test.”

Meaning they look at your income and any assets that you have.

And when they see that you have 50,000 dollars and make 87,000 dollars a year, you're not going to pass the means test. So you're going to be forced into a payment plan in chapter 13, which is five years, 60 months of paying payments on the credit cards. You put the student loans in there too, but they get paid in full.

The credit cards can be paid all or portion of in chapter 13. In your case, they're going to get most of it anyway. So are you delinquent on the 108 on credit cards? Yeah, I stopped payments in January. Okay.

That was part of, you know, being able to afford an attorney. Yeah. For the divorce. And so honestly, my thought process where I wanted to do is wait for the sell of the house, and then just start calling creditors and settle.

“I think you can probably settle the credit cards for the 50 or something like that.”

Okay. If you, if they went seriously delinquent, they're not seriously delinquent yet. But, and it'll be a long, it'll be, you know, year and a half while your heart is broken over a 30 year marriage ending and your fresh trying to get a fresh start. You're going to have a lot of work to do here.

I've got another idea. The Guardian litigation people that we work with. This is what they do, they negotiate with them when you're, when you're into fault. And they're very, very good at it. I just had lunch with the CEO the other day and was listening to their whole process.

And I think they can take care of you. And we'll help them do that because you are in a pinch. All right. And so we're going to hook you up. Christian is going to get in touch with them and hand hold your hand and walk you right into them.

And I think they can walk you through this because you're not going to qualify for a chapter seven. It's going to put you into a 13 and so some kind of a payment plan or settlement process is going to be better for you outside of bankruptcy. It's going to be more efficient. And it doesn't require all of your emotions to deal with the anger and the crap that the collectors

are going to throw at you if you do it yourself. And if I'm in your shoes, I don't need that right now because your heart's already breaking. So hang on and we'll help you with this time. Dave Ramsey here, most people stay stuck with their money because they're not paying attention to it. Most people are living paycheck to paycheck.

Stress out and broke. Don't be most people. You work way too hard to be broke and feel broke and you deserve to have something to show for it. That's why we built the every dollar budget app.

to beat debt and build lasting wealth.

“Plus you get real coaches guiding you through your plan step by step.”

Look, most people hearing this will just keep hoping something changes but not you. You're ready to make change happen starting now. Go download every dollar in the App Store or Google Play and start for free today. [Music] Our scripture that A. Proverbs 21, 21, whoever pursues righteousness and kindness finds life prosperity and honor.

Warren Buffett, you only have to do a very few things right in your life. So long as you don't do too many things wrong. Guys, Ramsey is taking over an entire cruise ship. That's right. One of the top lines, Holland, America, fancy, fancy cruise line, not the cheap ones.

This is 20, this is a 2500 people coming together for the ultimate debt-free celebration. If you're on baby step four and beyond, you're out of debt except the house and you're working on getting, you're working on getting, you're, you're emerging. I mean, you're past your emergency fund, working on getting your retirement building, getting the house paid off, all that, or even beyond anywhere, this is for you. We're not asking you to spend money while you're on baby step two and go on vacation with us, but let me tell you.

We'd love to have you on this. All the Ramsey personalities are going to be on there for seven days including me. My wife's sharing will be with us the entire time. We're going to have new wealth-building teachings. We're going to join the world's largest debt-free scream.

We're going to watch live episodes of your favorite Ramsey shows. Be taped right there and so much more. So you get all kinds of opportunities to deal with every one of us and we're going to be all over the place. We did this last year. It's going to be one year from right now.

Be in March of 2027. It is well, it's not sold out, but it's getting closed already.

“So if you want to go click the link in the show notes or go to RamseySolutions.com/events to book your cabin.”

Larry is with us in Salt Lake City. Hey, Larry, what's up? Now, much game. I'm so excited. Thanks for taking my call.

Sure. How can we help? Here's my question. I think we went to stupid university and made him take and I'm wondering what you would do in our case. What about our home about a year ago and when we bought it, we understood it was seller finance.

But the day we went to sign the paper, like we didn't hire a lawyer in advance. That was probably our biggest mistake. When we got there, it turns out it was more of like a seller take back. Like they didn't give it to us with their money. They are using the loan.

They previously have. I did not realize that was like weird.

“So would you be concerned if you were me?”

Would you go refine it? I don't understand what you mean. They're using the loan they previously had. What do you mean? They didn't pay off the home with the money that we gave them to, okay.

So we paid like a $1 million home. We paid 750, but still owed that extra like 300-ish. And they just kept the loan they previously had. So they're not financing it out of their money. What is the balance on that loan?

So the balance on their loan is 320 and we owe them $380. So we borrowed $60,000 from them. And then like overall balance is 320 on the house. Is the house been put into your name? Yeah, we have the title.

So that's right. I thought we were all above board. But then I looked at it today online and it said it was a seller take that loan.

I was like I've never even heard of that before.

I don't know that. That's something I made up on TikTok. I've been doing real estate 40 years. I've never heard that phrase. So seller take back what this is is an illegal loan though.

Because when the mortgage company finds out and they will, when they discover for instance that the homeowners insurance that has to be reported to the mortgage company is not in the seller's name. It's in your name.

And it's in their name, still. How can that be? Did you put the house in your name or not? Yeah, the house is in our name. Then they cannot have insurance on your house.

I can't buy insurance on your house. It's not possible. Great. So would you refinance like now? Yes.

Okay, okay.

Because here's what's going to happen.

If that is a standard mortgage this laying on the house. In paragraph 17 on that mortgage it has what's called a do-on-sale clause. Do-on-sale means if that seller sells the house, that mortgage becomes due in full.

And when they discover it, they're going to call that loan.

“And they're going to man that seller give them”

$320,000 in 30 days. And if they don't, they're going to foreclose on the house that you thought was yours. Great. But it's not good.

But you have recorded a warranty deed into your name. Is that right? At the courthouse. Yes. And where I thought we were legal.

Because you are legal. You are legal. You're just vulnerable. Because the seller is either a shyster or a moron or both. Okay.

Okay. Because they don't understand that you cannot keep a loan in place with a do-on-sale clause in it. And all current modern mortgages have a do-on-sale clause in them. If you've got an FHA loan from 1972, it does not have a do-on-sale clause on it. But they don't exist anymore because they've all been paid off.

That was 50 years ago.

So back in the day when I first started in real estate in the late 70s and early 80s,

we had all kinds of FHAs laying around that you could assume without a do-on-sale. But those have been gone for 50 freaking years. Okay. So anyway. You pulled up their mortgage deed. Okay.

The trust deed in most states it would be. If it's a fanny may, a standard conventional loan. You just flip it over to see paragraph 17. It will say do-on-sale. If the title is transferred, it becomes a balloon note.

And they call the, it's into fault. They call the whole loan. And the seller does not have the ability to pay that loan off. And so they're going to get foreclosed on. And because the lean is still on your property.

You're going to end up losing the property. So you need to get this refinancing. Get these shifters or morons or whatever they are out of your life as fast as you can.

“And you need to standard $380,000 mortgage.”

And pay them off as far $400,000 mortgage or whatever you got to go get to get them paid off as fast as you possibly can. How long have you had the property in your name? A year. Good. Because it's going to take 12 months before they'll look at appraisal versus acquisition.

Okay. And so now they can look at appraisal. And I assume the house is worth more than when you bought it. Probably. Yeah.

So you guys have any money. You obviously put down everything you had, right? We did. But like over this last year, we saved up 100 grams. So I was just thinking we could put some of that chart.

Yeah. And if you can get, if you could just get like your credit, you need to give you $380,000 mortgage. Oh. Okay. You know, just easy.

Just something quick. Right. Our culture chill mortgage. And they can help you walk through it. But I would get this out of these people's names as fast as you possibly can.

And for God's sake, get the homeowners insurance in your name. You have $700,000 of equity. If this thing burns down, that's going to go to them. Wow. That would be awful.

Yeah. Yeah. Because the homeowners insurance is not in your name. And by the way, you can't have insurance. Yeah.

Insurance law is basic. You have to have an insurable interest. I do not have an interest in Jade's house legally. Right. So I can't go be buying insurance on somebody else's house.

That's the insurance on your house. This house is in your name. They, they, they're insurance policies not valid. Yeah. You're not going to get the money.

You're going to end up with nothing. Nobody's going to get nothing. Because the insurance company is going to go, you didn't know in the house. Yeah. Is that illegal?

Like if that, if something like that happened. It's not illegal. It just invalidates the policy. So the, the insurance company is going to go, no.

I'm not, we're not writing a check for a million dollars on a property that, to the, to the,

to the people that are not our client. And our client doesn't own the property. Right. So it's not worth the papers written on. Oh, that's a mess.

It's useful. It's so much wrong with trying to do what is effectively a, a, called a wrap around the mortgage. Where they wrapped around the old mortgage. And they carried back 60. And they wrapped around the 320 for a total of 380.

You can't do a wrap around mortgage. Where there's a do on sale clause. And I promise you, there's a do on sale clause on that. I promise you there is.

“So yeah, that's, that's what you get into out.”

Scary, scary, scary, scary, scary. Yes, get refinance as soon as possible. And get, go, and go by, insurance on your property today. Go by homeowners insurance today. Forget that they've got it.

And no, we're not paying them for it. Because it's terrible paying their policy is ridiculous. But that's why they didn't want to change the policy. Because when you change the policy names out, it tells the mortgage company that we've sold the house.

That does sound a little shifty.

Well, yeah, it's just dumb.

“It's somebody doing real estate on TikTok.”

That puts us out of the Ramsey Show in the books.

We'll be back with you before you know it.

“And the meantime, remember, there's ultimately only one way to financial piece.”

And that's to walk daily with the Prince of Peace.

Right, Jesus.