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Normal is broke and common sense is weird. So we're here to help you transform your life.

From the Ramsey Network and the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm Dave Ramsey, your host, Dr.
John Deloney, Ramsey personality, host of the Dr.

John Deloney Show and number one best-selling author, Ph.D. in counseling.
He is my co-host today. So if you've got questions about dealing with your family during the holidays, he's here for you.

And if you don't, your family's calling about you.

If you don't think there's crazy in your family, that means it's you because every family's got some crazy. So there it is.
That's how that works. Anne is with us in Chicago.
Hi, Anne. How are you?

Hi, Hi, I'm doing well. How are you? Better than I deserve.
What's up?

Okay. So,

almost a month ago, I found out that my husband was gambling online, and

all of our savings has pretty much been depleted.

And we have quite a bit of debt. So

since I have noted he's used up the savings gambling,

yeah. How much? Yes.

It's a total of $120,000. Whoa!

Yeah.

And he borrowed money to continue? So, yeah. So that's the money that we owe.

How much do you owe for his gambling?

That is the total.

Oh, 120,000. I'm sorry.
120,000

is the debt that we owe

in regards to what's been spent from savings. Oh, how much did he steal from savings?

I couldn't even tell you the total, but we're basically starting from square one.

So we've we have found we've gotten a loan, he's gotten a loan to take care of the debt that he needs to pay back.

So I guess my, we're kind of focusing on going to counseling and getting ourselves back into a healthier place independently before we start to kind of focus on next steps with the marriage.

But right now, I just need to know kind of what,

how to prioritize my funds to start replenish.

like i have i have a an educator pension but i know i need to save and invest in addition to that for retirement and to also like build up that emergency and savings savings so i guess i was just looking for some guidance on like how to do that while knowing i also have a daughter going off to college next year and just life expenses so

we're gonna have to be real honest with you okay in a short amount of time is that all right? Yeah, absolutely.

Your daughter's college plans have probably changed dramatically. Yeah.
And y'all are going to have to metabolize that and have an honest, direct conversation with her.

But chances are, I'm almost guarantee you, she's not going to go to the college she thought she was going to go to because y'all don't have the money. Yeah.
Yeah. And she's,

yeah, she's aware. She knows.

Yeah.

And you're going to have to set up,

at least in the short term, for the foreseeable future,

you have to make sure you're safe because he's untrustworthy.

Yep.

And just going to counseling isn't going to solve his problem. He's got to go to rehab.

Yes. He's got to get with the Gamblers Anonymous.
He's got to be able to do that. Yeah, he's doing that.

Yeah. He's been doing that for about five or probably

longer than five weeks now. And then seeing a therapist in addition to that.

So, number one,

so your long-term

issues are

he

reaches a level of healing and then over time can rebuild trust.

It's not instantaneous, but over time he rebuilds trust, and the two of you are handling every dollar in the household together. Yes.
And

before that happens, you're going to start operating just to take care of you.

Yeah.

And I really don't care about your teacher's pension and your long-term investments right now. I just care more about you having an account where you're in control of food, shelter, clothing.
Yeah.

We kind of did that right away. I got my own checking account established

and he has

and then we have a joint one for him. to have a portion of his paycheck to go into so he can cover the debt that he's repaying, but I still have like

views of that, I guess. How do you make? What do you make?

I make about $75,000 a year. What does he make?

I think it's between $90,000 to $100,000. Okay.
And in a month,

our monthly income after taxes and deductions is about $9,000 a month.

And like

I could probably sit down with a marriage counselor and get some guidance on this, but I would not be opposed to all the money going into your account and him having visibility on it and having a discussion about it, but no access to it.

I'm in full agreement of that. Yeah.
I think his account, his check and your check should deposit into your account. And then you pay the debt bill out of that account, but he's got visibility.

I don't mind him knowing what's going on, but I just don't want him to have, I don't want him to have access to money.

He's got an addiction. Okay.

I don't even want him having access to quote unquote his money to continue his addiction. You follow me? Yep.
Yeah. Yeah.
So because his track record right now is pretty blemished.

So

you sound very

factual and logical about this. I guess you're the other side of being pissed off to where you can't even breathe.
Are you detached? Because you have to be.

It's been four weeks of, I don't know, I guess, trying to be very solution solution focused and

very much, I mean, like I said, we're, you know, we're very much focusing on

one of two things is going to occur.

Long term, one of two things is going to occur. He's going to get well and rebuild trust

and never go near these sites again, never do this stuff again.

Or you all probably aren't going to be married. Yeah.
So if he rebuilds trust and over time, 10 years from now, has not touched a

single, has not lost a single dollar gambling, not been on a site at all, and stays completely sober,

and you guys have rebuilt a marriage, you've rebuilt a relationship, then the two of you together 10 years from now will be building your retirement plans. Okay.

But if he doesn't, and you guys are not together, then yeah, then you start asking those questions later about your long-term retirement plans. But right now, I just want short-term.

I want you to think one year out right now, not 10 years.

Yeah. Okay.
And even shorter term.

Dave's talking about he has to rebuild trust.

You get to decide what the path looks like, and I want you to establish that in 30 or 60 day chunks. And what I mean by that is for the next 30 days, here's what you can do to reestablish trust.

And then he gets to decide, do I want to be a part of this marriage or not?

But for 60 days, all of this money goes into one account. Yeah.
And you can sit by me, but you don't have access to it.

I don't mind you seeing everything and even let's talk about what we're going to do with it. That's all fine.
You speak into it,

but you don't have access to any money and your name's off of everything.

Yeah, absolutely. And then he gets to choose, do I want to stay into this marriage? Yeah.
But you get to decide,

here's what reestablishing trust is going to look like for the next 60 days. And then the next 60 days after that, and the next 60 days after that.
Pick up Henry Cloud's book called Trust.

It's got some real good frameworks in it on this to have a good discussion about as well. But yeah,

let's first establish a short-term game plan that's solid and you're protected and safe. Then you worry about retirement.

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

Hi, how are you? Merry Christmas. Merry Christmas.
How can we help?

Well, thank you.

This may seem small, but it's something that,

yes, I appreciate your help with. I have a federal student loan that I thought had been discharged.

and 30 some years later it pops up again with some interest smacked on it. It's not a huge amount.
It was with that added $14,000 loan with $17,000 interest.

I find out about it. I'm like, wow, okay, what do I do? Starting with the market.
Why did you think it had been discharged?

Well,

I

had a very bad marriage and

I was told by, as part of a bankruptcy settlement by probably a second-rate lawyer that that had been taken care of.

Another loan had been discharged and I just is this a federally insured student loan or a private student loan?

A federal, yeah. And now I know that they're not bankrupt when you die.
Yeah. You can't bankrupt you can't bankrupt out a federal loan.

I understand that. Yeah.
But it did in fact disappear for all those years. I never heard a word.
I never,

and at that time in my life, I just, it, there was a lot going on and a lot of trauma and

I just, it just disappeared and I never thought about it. Well, it reappeared and so then I set about trying to manage it and settle it.
And like some people, I did this. I ignored it.

And then I signed up for this program called Fresh Start a year ago. I'm like, fine, I'm going to deal with this loan.

Well,

from

14 to 17, adding on 17, that's 31, all of a sudden it was 33, then 34.

And the program was called USAID.

And I called them and I said, can I please make a cash settlement?

While I was trying to figure out what to do, I've been saving the money. This is the only debt I have except a very small mortgage.
So I have some cash to put towards it.

And every time I call to try to settle it, the bill is higher and higher. And now

I just was digging through all my paperwork. The last time I heard from them was in September, and I think it was about $35,000 or $36,000.
And I just

think my thought is if it goes into default and revert back to the U.S. Department of Education, then I could make a cash payment rather than paying,

I think the last payment plan they offered me was about $1,800 a month for eight years or something. I mean, it was unbelievable.

I don't know anything about this program,

but I don't know that it's going to default back if the government has sold it.

Okay. If it was going to default back, it would have defaulted back a long time ago, I think, because it's been unpaid for decades.

The program, I signed up for the program almost a year ago. And interestingly enough, when I was thinking about what I wanted to do with the money, I got an email from them.

It's like my phone was listening to me. I don't think so.
But I got an email from them and it was just saying one of the things they would do would be default it back to the Department of Education.

Which my understanding is they would offer you a cash payment settlement. There could be 80 or 90%.
I have appealed. I've sent in letters.
I've sent in documentation saying I thought it had been

nothing, you know.

And I get it. There's interest, there's penalties.

Yeah,

the principal is not negotiable, but the interest and penalties are the larger portion on this thing. And that is negotiable when it goes back to the Department of Ed.

If you can get it to go back to the Department of Ed, and I'm not positive how to do that in this case.

But yeah, you're correct about that, that there is no negotiation on the principal ever on these things. No, but there is

on the

interest and on the penalties, particularly on something like this where it's a screwed-up deal.

You know, and they'll, they will, you know, if you can finally get someone over there with two brain cells to rub together in the Department of Education, then you, you know, maybe you can get something and talk it through.

I don't think this is going to be an easy path, and I don't have

a really sharp, cutting, direct thing to tell you to do

because I don't, I just don't know what to do with this thing

I think I would be calling the department I think I'd be contacting the Department of Education you know what else I'll tell you what I would do contact your congressman

the congressman's office and tell them what you've got and see if you can get some help and get them to have the department of education look at your case

and see if you can get some help that way and most of the congressional offices and the senators offices have someone, have a staffer that is assigned to student loan problems.

Okay. Well, that's brilliant.
That would be helpful.

Yeah, I'm just going to try to get, what I want to do is try to get some solid footing and something that we can count, some information we can count on.

And so far, all you've gotten is the runaround. And I'm afraid I'm giving you the same thing a little bit because I don't really have a good answer.
But I am.

100% sure that these things are not bankruptable, which you have discovered. You got shystered there all those years ago.
And

I'm 100%

sure that they will not negotiate principal.

We have had them, when we, one of our coaches would go in and do the do battle on behalf of the consumer, we have had them

work on it

as well.

And I'll tell you what, we've got a litigation firm that I don't know if they're handling anything on student loan stuff that just became an advertiser that is representing people where debt has been mishandled

and the debt collection process has been mishandled. We can put you in touch with them too, and let's see if,

or we'll get in touch with them on your behalf and see if they can help you or can give you some solid direction because they're solid people and they know what they're doing. So, yeah.

So, I'll put you on hold, and Christian will pick up, and we'll get you signed up for those guys. And I'm trying to remember.

Guardian Litigation. I was trying to remember the name of it.
I cut the ads the other day. They just came on with us, but they're helping people that have

collectors that are misbehaving, violating federal law on Federal Fair Debt Collection Practices Act.

They're representing the borrowers against those collectors and having some really good luck in those situations. That's not what this is, but they may have good information on this that can help you.

So we'll try them and we'll try the congressman's office and let's see if we can get something moving for you, Kiddo.

And the only way, Dave, just mechanistically, that this could refer back to normally

a debtor, like a car, you take out a bad car debt and you don't pay it. They sell that loan to a collection agency for a discount.

And then the collection agency, whatever they can get from you, that's how they make the spread.

The only way this would work and revert back is if the federal government is not selling the loan, but they're hiring basically a henchman to go get the money.

Well, no, no. Sometimes the, see, it's a federally insured student loan.
So sometimes

the lender or the owner of the debt gives up and looks at the federal government and says, pay me. You have a guarantee on this.
Ah, okay.

And so then the Department of Education buys the loan at full value. Okay.
And so they get their money because they have a guarantee on it.

The lender gets their money, and now the loan actually becomes the property of the federal government because they're buying it out. Same thing happens with like an FHA home that gets foreclosed on.

Okay, that the federal housing administration has guaranteed the loan. So Citibank forecloses on an FHA loan.
HUD, Department of Housing and Urban Development, writes Citibank a check for 100%

of that loan, regardless of what the house is worth. And then they take the house and sell it for whatever they can get.

And so you've got a HUD foreclosure up for sale that the government owns the house because they had to make good on their guarantee with Citibank. And this works exactly the same way as that.

So when we think of at the macro level, you know, the debt, the U.S. debt, none of that's included.
None of that's included? No. Like the liabilities that the government has guaranteed?

None of that's wound in the money. That's not in that number.
Okay. Yeah, that number is simply money that treasury bills, treasury bonds that are issued, which is borrowed money.
Okay.

And people buy that and they use that money to fund the amount that they're in the hole called the deficit. Okay.

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Sienna is with us in Birmingham. Hi, Sienna.
How are you?

I'm doing well. How about you? Better than I deserve.
What's up?

So, first, I want to thank you because I've been listening to your show and I have paid down quite a bit of debt.

The only thing I have now is student loans. However, I am signing on a home next week.
I did put down a down payment.

Well, actually, I borrowed that some money and put down that down payment. And now I am

getting ready to close on it. And my question is:

I don't want to make dumb decisions on putting furniture in the home, putting appliances in the home. I'm pregnant and I'm getting ready to go on maternity leave.

So I just really don't know what's the best way to do it without going back in debt. To do what?

To furnish the home. Furniture?

What Where's your furniture now? What furniture have you got now?

It's used furniture that I got from my mom. Okay.
Just put that in there.

Okay, so what about like appliances? The house doesn't have appliances?

It has a stove. Okay.
What appliances do you need?

A washer, a dryer,

a refrigerator.

Okay.

Are you single or are you married?

I am now newly single, yes.

Just divorced?

No, we were getting married, and then a big cool-off happened, and now I'm single,

and I found out a month later that I was pregnant as well.

Okay. Tell me about this down payment.
It's an earnest money check, right? Not a down payment.

Yes, because how much did you put up in earnest money? I had the house built.

Altogether, I put up

like $36,000.

You put a $36,000. Oh, you had the house built.

So you put a $36,000 earnest money up?

Wow. Did you borrow that money? Yeah, she said she did.
I borrowed $29 of it. From who?

My account.

What account? Like I borrowed against my own am my own savings.

You mean your 401k?

No, I just had it in savings and I just borrowed against it. Oh, I see.
Okay.

Well, that's fairly easy to pay off. Just take your savings and apply it to the debt and be done with it then, right?

So how much do you have in savings?

Well, I have like $20,000 in one account, $45,000 in another account.

And then I did just find this. I had this Acorn account that I had started like years back, and it has like $5,000 in that, and I was just going to take it out of that.

Okay, so when you close on the house next week, the $36,000 will apply against all of this, right?

Yes. So the $45,000 account, for instance, is a $36,000 lien on it, right?

Okay.

Do you have more down payment coming at the closing next week?

I do have closing costs, and that's just about it. Okay.

How much do you have to bring to the table next week?

Only like

$2,400.

Okay. All right.
And so you have $70,000

in those three accounts minus $29,000 loan, right?

Right. So you pay off the $29,000 loan.
We we use the savings to do that and $70 minus $29

still leaves you a ton of money kiddo I mean like $41,000

so I if you have $41,000 minus $2,400 why can't you buy appliances

well the thing is that I won't so I had I was saving up for a year my my mortgage will be three times the amount that I used to pay in rent

and I was saving up afford to have a year because I won't be working.

Oh, so maternity leave is unpaid for you?

Yes.

I'm a travel nurse, so I don't have benefits. Okay.

And what are you going to do after the baby comes and maternity leave is over?

So that's the hard part I'm facing now because

in my mind, before I was pregnant, I was like, oh, I'm just going to keep doing travel assignments, and I'll have it paid off in no time

and so now

yeah so now now you're probably a local nurse so that you can take care of your child right

yes which is gonna be a big pay cut

right okay can you afford this new house now I think you're selling this new house aren't you

oh am I gonna be able to afford it owner no on a local nurse yeah no probably not no

no

yeah

Okay.

And

does baby daddy know he gets to pay child support on this yet?

He's learned that, yes. Okay.
Good.

All right.

Oh, my goodness gracious. Can we just say we're going to about to tell you what to do next, but

this is going to sound silly to say this out loud, but I want you to spend at least a minute being sad

that

this guy blew up your life. you're not going to be able to have this dream dream home that you had built from the ground up

and your future plans with this little baby are going to look different yeah yeah

i i would close on the house next week and after the first of the year i would contact ramsey solutions go to ramseysolutions.com and contact a ramsey trusted real estate agent and i would turn around and put the house back on the market and let's get it sold

before it gets you in trouble because you and i know

you already knew before you called me this house is going to be trouble because now you you are going to be staying in Birmingham as a nurse no longer traveling and that's going to be a 30% pay cut and you simply can't pay the payments on this house anymore and all you're going to do is burn through your savings and then you're going to have the same problem so let's just go ahead and not have the problem

get rid of the stupid thing it's just a stupid house and it's you know you can live anywhere and go buy you a used washer and dryer on craigslist and uh try to find a bargain on some kind of little refrigerator to stick in that hole while you get the house sold.

But you don't go buy a big fancy washer and dryer that flies to the moon and back. And you don't go buy

a refrigerator that has way too many features.

Okay, just the bare minimum thing that'll get it done, a used washer and dryer, maybe a used refrigerator, but go pick up something just an inexpensive, something on sale after the first of the year with cash.

You've got the cash, and then you hoard cash. You save the cash.
You watch the cash to do what you were talking about.

But let's turn around and get the house right back on the market and get rid of it. Because you've got to reset your life in a way you had no idea it was going to be.

Because you thought I was getting married and there was no baby.

And now I've got a baby and I'm not getting married.

And so I'm staying home, take care of this baby. I'm not going to be able to be a travel nurse.
And it's going to change your ⁇

John's right. It's very sad.
It's tragic what you've got

with the way this has unfolded for you.

You also don't have,

again, this is all due respect. I don't think you can afford maternity leave.

That's what I'm afraid of. You can't.
I've been trying to double up, but I'm also very tired and hurting at the same time. I know.
I know.

Have you got family in the area? No.

I do.

So I also have two other girls, and my mom helps with them. But, I mean, I can't help, you know, how were you traveling with the other two girls?

my mom helps with them so you'd be out of town for like a week and your mom kept them

no i would travel an hour and a half every day or i would um

travel there and work like four days and then travel back and then work pr in where i'm at okay so well if you can continue to do that

if you can continue to do that after the baby comes for a period of time if your mom can handle the newborn that's going to be a wise thing just from a math standpoint.

I know it's hard, but this whole situation's hard. But get rid of this house, okay?

Okay, thank you. Thank you.
I'm sorry, kiddo. I hate this for you.
Wow. What a horrible mess.
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Scott's in Canada. Hey, Scott, how are you?

Hey, I'm doing well. Thank you, Dave and John, for your ministry.
My wife and I really appreciate it.

I just have a question

about a vehicle that my wife and I were recently given. It's a 2023 Jeep Wrangler.
It's worth about $50,000, just over $50,000.

And we

make about $35,000 a year. I'm a plumbing apprentice, and my wife is at home, our five-month-old son.
And we are currently, we're debt-free completely.

We're renting a house, and we have a great renting situation. We're just saving up for a down payment on a home.
And we were just wanted to get some wisdom on

this vehicle that we've been given, if we should keep it and have a safe and reliable vehicle for the next many years, or if we should maybe consider selling it and put that towards a down payment on a home.

But it was a gift, and so there's kind of a little moral dilemma there. And yeah, we just wanted some wisdom on what to do with this vehicle.

Not counting the moral dilemma, I would sell it and buy a $20,000 car and put $30,000 in the bank.

But now, what's the moral dilemma? Does somebody give it to you, give you a gift and expect you to keep it?

Yeah, so

the way we came about this is a family friend passed away, and he gave all of his estate to another family friend who's 96 years old. And this 96-year-old, he gave us this Jeep

from the estate. And

yeah, I'm pretty confident that he probably wouldn't have given it to us if he knew that or thought that we would just sell it right away.

Yeah.

Okay.

It was a car he owned or a car that was in the estate or something. He didn't buy it to give to you, right?

No, he didn't buy it to give it to us. He received it through the estate of another family friend, and then he gave it to us from there.
How are you connected to this guy?

Is he friends with your parents or is he just a neighborhood? Yeah,

he's friends with my dad. Have you talked to your dad about it?

Yeah, and he is leaning more towards keeping keeping it and driving it for the next 15 years.

That's awfully optimistic with a Jeep, but that's another conversation.

Yeah.

Well, I mean,

it's found money, and I'm not going to sever a relationship over it. If you have to drive it, you have to drive it.

But I probably am having a cup of coffee in person with a 96-year-old and saying, hey, I got little babies, a wife. We need a house more than we need a car.
This gift is incredible.

I want to honor you and thank you for that.

But it's way more car than we could have.

And we could do with a lot less car and a good down payment on a house better.

And I would think that, you know, that you probably would tell me that buying a house is more important than buying a car.

And so I'm asking your permission to help me buy a house with this money and by selling the car moving down. And I'm asking for your blessing on that.
I don't want to hurt your feelings.

I don't want to seem ungrateful or dishonoring to you or to the gift and see what the reaction is.

What do you think the reaction will be? You know the guy.

I don't know him super well, actually, but

he's a very nice man, so I think he would probably

wouldn't be too hurt by that.

One of the greatest questions an older man can be asked is, can I get your wisdom on something?

Yeah, I want to get your wisdom on something. Here's what I'm thinking.

I mean, I've got a little, I've got babies and a young wife, and we need a house more than we need a fancy car. And I'm really,

I want to be, you know, careful to honor you and honor how generous you've been. Thank you.
And I never would do something without talking to you, and I'm asking your wisdom on this.

It feels like to me that I'd be better off driving a $20,000 car with a $30,000 down payment on a house than driving a $50,000 car, which is going down in value like a rock.

And I promise you, a cheap Wrangler is going down in value like a rock.

That 50 is going to be worth 20 in 30 seconds.

If somebody came to me and asked me that, I would

gladly. 99% of the time.
If I'd given somebody like an heirloom rifle that my great-granddad owned, I would say, I don't want this sold, right? I gave it to you to entrust it to you.

But if it was a car that somebody else gave me because they passed away and then I've got it, and I've got about 30 minutes left on this life, I would say, bro, get yourself a house, take care of your babies.

Yeah, and I think most people would, except apparently your dad, but yeah, but your dad's like wrong. But, you know, other than that, yeah.

So I think you sit down in person, have a cup of coffee with the guy. Maybe even take your wife.
And the two of you sit down and just say,

number one, we want to say thank you. We want to be grateful.
We don't want to be entitled. We don't want to seem bratty.
We want to honor you and honor the gift. And we need your wisdom on that.

Yeah, you've changed our life. So thank you.
Yeah, thank you. This is incredible.
It's mind-blowing. And we need your wisdom on something.
Here's what we think makes sense. What do you think?

And

I think you'll get a positive response, and then I'd sell the car. And if you don't get a positive response, you get an answer, and then you can move on with your life.

Yeah, you just drive a stupid car. Yeah.

I mean, mean,

I would have to honor it if he holds you to it, but I just, it's a very unusual human being that's going to do that. He's got some control issues in himself or something else going on.

By the way, folks, a gift with this many strings attached is not really a gift. Okay, so

yeah.

Jimmy's in Cleveland, Ohio. Hey, Jimmy, what's up?

Hey, I'm wondering if I should get a 529 plan for my children. when you're at baby step five, yes.

Okay, well, I don't make a ton of money, and I guess I'm wondering:

is it better? I have a, I'm a teacher, so I have state teachers' retirement, which is about 15% of my income that goes into that.

And I'm wondering if it's

better to put additional money into a 457

or into a you're better off to put it into a 529

okay 529 grows tax free 457 grows tax deferred

okay and i well i do have a roth 457

i still wouldn't do it i still would do it i still would have a 529 that's growing tax free for your kids college when you're able to do that and ready to do that at baby step five

but don't okay yeah don't use don't use the wrong tool for the job.

Okay. Yeah, I'm definitely there at baby step five.

And Jimmy, let me tell you this. I was a high school teacher in a public high school.
I was an elementary school teacher at a private school. I was a university administrator.
You know what?

All of those had some sort of education plan for my kids. And so I didn't open up one.
I had no idea that this thing called a podcast was going to come my way down the road.

Okay. You know what I mean? And so you can have the best laid plans right now.
You just don't know what the world's going to look like five or ten years from now.

When I started teaching, there was no such thing as a podcast. It didn't exist.

YouTube was just enough, it wasn't a thing. It didn't exist.
And so, man, plan for the future that you want, not the one you think you're going to have.

Yeah, three cats chasing a laser. That's yes.
Pew, pew.

Classic YouTube line, yeah.

Yeah, I think use the right tool for the right job. You know, don't save up for a house using your Roth IRA, people.
That's not what it's for. Okay.

Don't save up for your kids' college using something other than a college fund or just a mutual fund that you have earmarked for college if you want to go that way. But no,

I

wouldn't do that. I remember, Dave, I was working on a wood project for years.
I would just tool around in the garage and I would never buy chisels.

I always thought, I'll just do this with a screwdriver and a hammer. And I finally broke down and bought chisels.
It was amazing. It was amazing how much better that tool worked.

The right tool for the right job.

When you squit using a flathead to do your first screw, it's just. Yeah.
Oh, my gosh. Yeah, no kidding.
Yeah, that, that, you know, don't try to trick stuff. Just keep it real simple, real clean.

Be the tortoise. Don't be the hare.
Don't look for a way to hack. Don't look for a hack.
The hack is live on less than you make, give some and save some. Ta-da! There's your hack.

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Welcome back to the Ramsey Show in the Fair Winds Credit Union Studios. Dr.
John Deloney, Ramsey personality, is my co-host today. Tom is in Syracuse, New York.
Hey, Tom, Merry Christmas.

Hi, Dave. Thanks for taking my call.
Sure. What's up?

I just needed some advice on, I guess, how to deal with a parent who has developed a gambling addiction.

She's elderly. I lost my dad about five years ago, and she was not left in great shape financially.

So, when he was alive, and in the last, say, four or five years, we would pick up some of her bills here and there. And we found out about the gambling addiction.

She lives on just Social Security and loses about 25% of that to a casino. How old is she?

She's 80

and loses, lives on like $2,300 and lost, you know, over about $7,000 last year.

So

I guess I just have a lot of guilt as to not helping her really with her bills any longer because of the gambling addiction. I've talked to her about it.

And, for example, we know in about a year she's going to need a car.

And I'm not willing to give her the money for the car since I know a large portion of her money goes towards gambling but I've developed a lot of guilt because of this because I guess we're fairly fortunate financially

so I don't know the next question I don't understand your question what's your question

well the other shoe is going to drop soon and

should I be funding her even though she has this this addiction should I be taking care of her bills?

She'll never go without food or shelter. Sure.
Well, so at the end of the day,

one of the hardest things in the world to do is when somebody you love, and in this case, your mom, so that's like

the epicenter of love, right? It's your mom. When your mom says, when a loved one says, I don't want your help,

and you know, you see the train coming down the tracks, you know they're going to need it.

But the boundary right now is,

for right now,

I'm not going to bail you out anymore.

And then when the day comes that she's moving into your house, which you know is going to come sooner rather than later,

then you will be able to make choices for how you help and support and love her.

Yeah, the thing is, you have to define help.

And when you assist someone in a self-destructive behavior, that is not help.

No. When you buy a drunk or drink, it's not help.
And so

that's what you're facing. And so, yeah, it's just heartbreaking.

But it's very hard to love some. It requires much more courage to love someone well than to just wuss out and throw money at them.

Right.

And so,

you know,

the other extreme is this. Mom, I'm more than happy to take care of you and make sure you're okay.
But in order for me to do that, I will have to take over all your money and manage it for you.

And you will never be in a casino again.

Which we've discussed, and she will not

do that. No, she's not going to do that.
So she's choosing to stand in front of a train. And she's an incompetent, quote-unquote.

You know, a doctor has not declared her early onset or something like that. She's

legally competent adult.

And so the law says she gets to do stupid stuff

because stupid is not illegal yet. Our prisons would be vastly overcrowded.
But yeah. So are you married?

I am, yes.

So I think the more productive use of this guilt and these feelings and this energy that you felt is to sit down with your wife and say, when the day comes, what are we going to be willing to do when it comes to, are we going to move her in?

Do we have a room here? Do we have a space here? Are we going to fund her apartment? Like, what's that going to look like?

And go ahead and get that on paper. You all agree to that? Yeah, I will.

If you're financially set and you want to use some of your money to help your mom, provided you take over all of her bills and all of her income and you stop this behavior, you know,

as a part of the deal. But mom's not willing to do that right now, but there'll be a day where she's going to run this thing into the wall and she's going to be stuck.

And you go, well, you know, my terms are still the same, mom.

When I take over, there'll be no more of that.

Right. And you're going to be taken care of.
You will never want for food or shelter or transportation or clothing. You'll not have any problems.
You'll be taken care of.

But taken care of does not include casinos. Nope.

Nope. Okay.
You know, and you're just, it's just hard. Yeah.
It's just hard.

The sandwich generation, taking care of a kid, taking care of your parents at the same time, you get squeezed between. Let me say it this way, Tom.
There's no bad feelings here.

You're allowed to feel guilty. You're allowed to feel mad.
You're allowed to feel frustrated. You're allowed to feel mad at your dad for not setting her up.

Like whatever feelings you have are all good and right. Mad at the casino for taking advantage of an 80-year-old widow.
Hello, I could be mad about that. So there's no bad feelings.

It's just what are you going to do next?

And that's the question. Yeah.

But Dave,

it's hard in a culture that you've been told either A, your feelings are everything. Just do what you feel, which is always...

awful advice, but also the idea of feelings don't count, they never matter, forget them, never feel them. That's bad, too.
You have to feel them, and then you got to go do the next right thing.

And that's where people get hung up, and it's hard. It's hard.
Yeah, I mean, just say it out loud. This sucks.
Yeah, it is.

So the right thing is,

you know, and maybe getting your mom a car. Maybe she wouldn't go sell the car to gamble the money away.
Like, you have to go through all the cars.

If you give her a car, just keep it in your name. Yeah.
It's mine. Can't sell it.
You can borrow it. You can use this car.
Yeah. And that way it doesn't turn into gambling money.

But of course, the reason she can't pay for her own car is because she's gambled a money way That was also his point So yeah, yeah, it's just there's something always going on and at what point does an 80 year old quit driving?

I mean, there's all that too So

I don't know what her health condition is. I don't know what's going on with her.

So the thing beneath the thing is might be you have a really lonely 80-year-old woman and you go into a casino and there's people there and people will talk to you and they'll smile to you and they'll bring you a Diet Coke.

And like it may be when you move into my house, we're going to have to figure out some ways for you to get some connection in the last years of your life or whatever that looks like.

But none of this is easy.

And all of it stinks, I think. Yeah, that's.
But Dave, we keep getting these calls on gambling, man. It's just...
Gambling is

this was casino here, but online and particularly sports betting is just raping America. It's okay,

it's just cleaning out. I mean, if you guys don't think that FanDuel and DraftKings and whatever other stupid butt commercials on every break, on every game you watch,

You know what they're paying for those commercials? That's some of the most expensive commercials you could buy on a live sporting event. And

they're making billions off of you people. And y'all are just standing back going, well, isn't this fun? I lost everything.

You're going to lose your wife. You're going to lose your kids.
You're going to lose your job.

But I'm really good at betting on football, you moron. Unbelievable.
Man, it's just a house. The house always wins.
Man. The house wins.
Just, you know, follow the money.

You know, Vegas hotels were not built on the backs of losers. They're winners.
They're built on the backs of losers. And that's what you are when you walk in there immediately.
House wins.

You're a loser in so many ways.

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One of the things we've railed on for years around here is the fact that timeshares are legalized fraud.

85% of all timeshare buyers regret their purchase yet cannot cancel it due to a short rescission window.

95% of timeshare buyers go back to their resort sales team for more information within one to three days. On TrustPilot, Marriott Vacation now has a 1.3 stars out of five.

According to ARDA, the maintenance fees go up 17.5% a year and

$50 million

in losses last year alone to the elderly, the AARP says, for timeshares. The timeshare business is absolutely a billion-dollar fraud.

The whole thing has been screwing primarily the elderly, but also those of you that are silly enough to walk in there for a, quote, free vacation, and then they lock you in a hot box for five hours until you agree to sign.

And we tell you over and over and over again, stay away from these people. They're slimy.
They're crooks. It's a horrible business.
I hope I've not been unclear.

So I was really happy to get a call the other day from U.S. Senator John Curtis, Utah's senator, and he has a bill coming up before the Senate to regulate the freaking timeshare business finally.

So we've become instant friends because of that. And I ask him to come on and talk about his bill.
Senator Curtis, thanks for joining us. Dave, I can't tell you how much I enjoyed your intro.

I love your passion.

Thank you for being so passionate about this. I am honored to be a co-conspirator with you and reining in this terrible, terrible problem.
So what got you on the timeshare thing?

Why did you decide to do this? You know,

over time, I've heard from so many people, and it kind of came to a head when a good friend reached out to me and said, look, you're in the Senate. Why don't you do something about this?

And so, you know what? He's right. I sat down with my team, and we started thinking about what we could do to put some guardrails on this.

So the bill has now officially been introduced. That's correct.

When you and I talked a few months ago, you just had it drafted, and we were able to talk about it on the phone, and you were showing me what it was going to cover.

And I particularly like several of the things that the bill does. Talk about the items in the bill to limit the timeshare world.

Yeah, it's pretty simple. First of all, you should know what you're buying.
There should be transparency. Second of all, you should know if there's going to be radical changes to what you've bought.

And third of all, you should be able to change your mind within an agreed-upon period of time.

And then, let's face it, if 85% of the people regret getting into it, there needs to be some way for them to get out of it. And that's a simplification of what the bill does.
Yeah.

One of the things I saw in there was it grants the buyers a 14-day penalty-free cancellation period, which I've been trashing the timeshare business, and they've been coming back at me, have sued me and done everything else all over for decades now.

It's a horrid business. And from my understanding, talking with those guys, a 14-day penalty-free cancellation period will cut their sales by 70%.

You'll probably put them out of business. Well, listen, if any business is dependent on getting people to do something they don't want to do, then they perhaps should go out of business.

Now, my goal is not to put them out of business, right? My goal is just to make it so people can trust what they're getting into.

You well know that a lot of these people are on vacation. They're away from their children, their financial

advisors, their lawyers, and then they do these deals. And by the time they get around those people who generally give them advice, it's too late.
Yeah, there's no backing out.

And there's no way to sell the stupid thing because nobody wants to buy them. There's hundreds and hundreds and hundreds of them for sale on eBay for a dollar.

Yeah, and the reason is, is they now come with this liability of these monthly or annually fees that are so exorbitant, far greater than any amount of money that you could spend and have a really great vacation.

And that's why they're worthless. Yeah, I mean, $13,000 will buy you a lot of freaking Hilton.
Hello? I mean, come on, people. And then you mortgage it too.
You mortgage air.

Because you're not even getting real estate. There's no title here.
You have a two-week stay, maybe,

probably not, at the place they told you it would be. And then you want to, oh, you can go to Hawaii.
Nah, never happening. That's the biggest line of crap.
It never occurs.

Okay, so the bill has been introduced. What are the next stages and what can our listeners do to help you protect the public from this industry? This is where I need their help.

I know the size of your audience. If even a fraction of those call their senator and say, please hop on the Times Serge Transparency Act, that's what I need.
I need more senators to join me.

You know this battle is pretty lonely. And right now, you and I are feeling pretty alone on this.

We need senators engaged and we need people to call their senators and say, look, I've had one of these bad experiences. Please support this bill.

That's simple. Just so if you're listening to this and you know somebody's been screwed by a timeshare or you have and you think a 14-day waiting period is at least fair,

I would be, yeah, that's a minimum. But the impact of this would be

a mandate disclosure of all fees and notice requirements and all the changes. And dad gums, 17% increase on average every year in the maintenance fees.
See, that stuff needs to be disclosed up front.

And that's all we're asking, is transparency. If people still want to make that decision and they know all of these things and have a reasonable amount of time to get out of it, fine.

But as you well know, most of the people wouldn't sign up for that if they were given the time and the space to make a good decision. Right.
And

AARP has actually come out in support of the bill. They've endorsed it, right? I actually spoke with them just a few minutes ago.
They enthusiastically supported. And sadly, you mentioned this.

Many of the people that get into these are our seniors. And like I say, they're away from their normal support structure when they get into these very, very high pressure sales techniques.

They maybe make a bad decision and then they don't have a window to change that decision. That's just wrong.
Yeah, and you're not actually buying anything, so you can't sell it.

And yet you have debt on it.

I swear, one attorney that does the exits on this calls it legalized fraud, and I don't disagree with him. I completely agree with that.

So the Timeshare Transparency Act is live and well in the Senate. Senator John Curtis from Utah has introduced it, and he needs some cover from you people in the audience.
So reach out.

ping your senator, send them an email, give them a call, whether you know him or not, and just say, hey, you need to back Senator John Curtis's Timeshare Transparency Act.

Because I got to tell you, this business is full of money.

And they will be throwing a serious battle up to not be forced to give transparency. This is when icky, icky, icky politics starts working right here.
Icky, sticky mess.

And so Senator Curtis is right. They're going to come at him.
They've been coming at me for years. I'm used to it.
And just bring it, buddy. Bring it.
I hate you people. I'll take it.
I'll come on.

That's fine. But

I think you you suck. But anyway, he's being a lot more diplomatic because he's a U.S.
senator and I'm just a podcaster.

So, but you guys, you know, reach out to him, reach out to your senator, reach out to your congressman because it'll have to go through Congress as well.

And just let's get some political cover on this from the consumer base to protect the consumer. That's simple.
And in the meantime, stay out of those places. Just stay away from them.
Snakes bite.

Don't pick up snakes. Why is this hard? These guys are unbelievable.
So, Senator Curtis, thank you so much for taking your time to join us, brother. Thanks.
Thanks, Dave. Thanks for your support.

And thanks for what you're doing to get this bill on the floor. The Timeshare Transparency Act.

Yeah.

In other words, if you could see what these people were doing, no one would do it.

That's how this works. I mean, come on, this is really not hard.
So check it out, guys. We've been saying around here forever.
Timeshares suck. Hector wrote in.
He said, I'm 26 years old.

I currently have about $13,000 in debt for Hilton Honors.

Timeshare. The timeshare has been a major burden.
I'm paying $218 a month plus over $1,200 in maintenance fees every January. Honey, you could have stayed in a nice hotel for less.

A lot.

I realized it was a mistake and I'm looking for a way out. I have no way out.
You're right. You're stuck.
You're screwed.

Dave, the thing I'm struggling with here is I don't really know where you stand on timeshares.

Man, yeah, Hilton bought,

was it Diamond? I got into it, the guy running Diamond on the air.

I was doing a Twitter fight with him a while back, Mikey, and he got fired finally, and he was the president of the company, and I was just taking him down because he's such a slime ball.

And so Hilton buys that company for like a billion dollars. And so now Bilton has a

Hilton has absorbed Diamond. And so what all these Diamond timeshares, which are really particularly scummy, they now are under the brand name of Hilton.
Hilton's damaged their own brand with this.

It was a legitimate brand, and now they delegitimize themselves.

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Or if you're watching on YouTube or podcasts, click the link in the description, baby. Christy's with us in Lexington, Kentucky.
Hi, Christy. How are you?

Hey, I'm blessed. How are you? Better than I deserve.
Merry Christmas. How can we help?

Yes. We are about to lose 80% of our income.
And so

I was wondering, well, my husband got in a really bad coal mining accident in August of 2024.

And he it almost chopped his hand off. It was so bad.
He's still under doctor's care, workman's comp, but he's getting ready to lose the workman's comp.

And he's got a couple checks left coming that we do know of before they cut him off. But I don't know if I need to use that money to pay off what I can.

Okay, so he's unable to be a coal miner because of the injury.

Yes.

And how is it that they're getting away with not paying him for the rest of his life for that?

Well,

that is something that we are going to push for. But in the time being, I mean,

he won't get anything until we fight it, if that makes sense. Yeah, well, I mean, it's been

a year and some change. Why are we not yet fighting it?

Because

our

legal advisor told us that we needed to wait until he was completely done with with all doctors' care. That way he can continue to get the care that he needs for his hand.

And then after it's over, then

there's no union contract that covers any of these injuries?

No.

This is unionized, though, isn't it?

I'm not sure. He's not in a union?

No.

No. That's.

Interesting. Okay.

All right. So, oh, yeah.
Well, I mean, your attorney is,

you have faith in your attorney that this is good advice, and you're going to be ready to go. Because I suspect this is something that, I mean, he was hurt on the job permanently.

I think they're probably going to have to support him. But,

you know, but you're right in the meantime. Okay.
So what's the status of his injury now? How's he doing in general?

Okay.

He's unable to use his hand.

They had to amputate his thumb. It de-gloved him from his palm all the way up his forearm.
Oh, God. Tendon ligament repair.
They had to take muscle out of his hand. It has been a terrible

answer to him. Yeah,

obviously. Oh, my gosh.
I'm so sorry.

The Lord has helped us, though. I'm telling you, if it was not for the Lord,

there's no way that we could have

been where we are today.

What I'm thinking about, how old is he?

He's 35. Okay.

This is an absolute tragedy and it's absolutely horrible. I'm so sorry.
And

if I'm him, I got the rest of my life. I got to figure out what I'm going to do.

Yes. And nothing is not an option.

Right.

So

lots of people have

sadly gone through losing a limb or losing the use of something and have managed to find productive work of some kind,

maybe using your mind instead of your body, or maybe using prosthetics to get a different kind of a job done.

But I really want him to be thinking about, other than sitting around waiting on the lawyer to call him,

I want him to think about what his next career is.

Yeah,

he has been doing that. So what's the plan?

Well, he

really likes to detail vehicles. He's always liked to do that.

And that is something that he was. What did he used to make as a miner?

Close to

100 grand a year almost. Okay.

And so let's start talking about detailing, a detailing business, car detailing business that makes $100,000.

Not.

It could be done. That's doable.

It might be

has five crews doing

car detailing, and he owns a business, not just as doing it himself. I mean, I don't know.

But but let's start looking for a path where we don't start with the assumption of we lost 80% of our income for the rest of our lives. No, no.

How about we lost none of our income and we get the benefit of this lawsuit?

Yeah.

So,

I mean, as soon as he is physically

able with somebody to hire somebody to help him,

and then the two of them can do a car detailing, detailing. He needs to get started detailing cars now.

Yeah. Yeah.
Merry Christmas. You've got a pressure washer for Christmas.

He already has tons of that stuff. All right.
Well, let's get our button gear.

Let's get our button gear. And then we don't have to sit and try to solve for an 80% cut in pay.

We're going to have some cut in pay, and you've been through this horrible tragedy, and all of that's real. But let's minimize the damage that it does by getting back to work sooner than later.

Is that okay?

Yes,

as soon as, I guess as soon as he's able to, I mean.

Yeah, and I don't know the medical condition, and I can't even imagine that because basically if I have a hangnail, I end up in intensive care, I'm a complete wuss.

So I can't even imagine what he has gone through, and I would not ever dare to

even begin to understand the pain. or the loss or the emotional scars that go with this whole tragedy.
But I can't even get get there because I'm a complete wuss. I mean, really, it's ridiculous how

big a wuss I am. And so, but

so anyway, I still, though, if I'm him, I'm going to go back to work.

Yes, and he, I mean, he wants to do that, but as of now, I mean, he can't even lift over 15 pounds. I have to help him do everything.
I mean,

no, it's the end. You can't lift anything with that hand, but the other hand he can lift on more than 15 pounds.

Yes, yes.

But I help him do a lot

because of the hand injury.

He does as much as he can. I mean, and he's a go-getter.
He's always worked 60-plus hours a week. Yeah, I'm assuming.
I'm not accusing the guy of being lazy. Please, not even close.

But the other thing is. Oh, yeah, I'm not.
And I'm assuming you're doing a lot of physical therapy as well, right?

Yes, he has done it over and over. Yeah, I bet.

I'm so sorry.

Even if he has to go work a register somewhere just for the time being, like, there's the physical ailment here, but he lost his identity.

Coal miners have a, like an ethos. Yeah, they've got a spirit about them.
They're tougher than the rest of the people. They do work that nobody will do.

There's a spirit, and that's been taken from him.

And so even just grinding out a shift at a gas station, sitting on a stool, like checking people out with their waters and

their snuff cans, he'll at least start to slowly get back a little bit of that I'm providing. You get what I'm saying?

Right. And right now he's okay.
Kimna okay with it because he is drone workers come, but he's still constantly like, I need to do something. I need to go.

He's right. He's right.

But hear him say, that's a spiritual thing. I'm serious.
Hire a college student that's home for the holidays to go out and help him and get his, let's get this detail business started.

Good idea. You know, and somebody go be with him and the two of them together get it done and he can manage the customers and manage the money and do some of the work.

Some of the stuff is doable, I suppose. I don't know.
I mean, I'm just reading into this. But all of this to say.

Let's not start with the premise we're going to lose 80% of our income. Let's start with the premise that we're going to lose 80% of our income for a month.

But to go back to your original question, we're not going to take all the remaining cash we have and try to pay off anything. We're going to pay minimums and stack cash, right? No, you stack cash.

You're in the middle of a hurricane. So you just stack up cash.
How big a big, you're in the middle of what's called an emergency. Right.
So you don't use anything.

You pile money up, you pay minimum payments, and then let's get this thing stable, get this situation stabilized with his income coming back up with some kind of a business or some kind of a thing he can do.

And by this time next year, he should be back up. He's cooking.

And then you can start talking about using that money to pay down debt and push play again on the total money make over baby steps.

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Preston's with us in Austin, Texas. Hey, Preston, what's up?

Hey, Merry Christmas. Thank you for paying my call.
Sure. How can we help?

I was wondering if it would be

unwise to pull out of the 401k to pay off the car

before our baby is due. 100%.
Yes. Absolutely.
Terrible idea. Don't do this.

Okay.

Have we been clear?

Here's why. When you pull it out early, you get a 10% penalty plus your tax rate.

So if you're in a 20% tax bracket with a 10% penalty, that's 30%.

That's like saying, Dave, I want to borrow money at 30% interest to pay off my car. No.

Yeah, no, you're right.

That's silly. It's a depreciating asset.
I'm starting to panic. Yeah, what do you owe on the car? Our

about $8,000. Okay, and what do you make, sir?

$58,500 salary. Okay, and you have a baby due when?

In March. How old are you?

I'm 29 years old. Good for you.
So what's the panic?

Well, so my wife, she makes about the same amount of money.

And we're planning on for her to,

you know, move to a part-time or even less position after we have our child um i and our our rent is too high um how much is your rent apart

it's 1700 a month

okay

um and so that along with all the other i mean um so i married her and i have never had debt um and and when we got married i i i kind of panicked when I saw like um all the monthly bills that come out for like student loans and that kind of stuff.

How much other debt other than the car do you all have?

It's about $23,000 total. Okay.

All right, cool.

So here we did. You are a guy who likes to have no debt and plenty of room in the budget, and you have neither of those.
And so the word panic comes up a lot in a conversation with you.

Yes. Okay, that's fair.
That's fair. So what we need to do is to develop a game plan to A, get rid of the debt, and B, make sure we have the margin for her to go to part-time.

I don't know if you do or not.

You may not have that option.

But you need to decide that not with your heart, but with your math.

Because you're grown-ups.

Yes.

And it may be that she's got to work six months after this baby's born, so y'all clear everything out, you get some margin, and then she can take all the time off she wants. Yeah.

okay. But

listen to me and Dave. We're two emotional guys.

I won't speak for Dave. I've felt the panic you're feeling right now.
I've felt it. I have too.
And what I'll tell you is, panic makes us make bad decisions.

It's your body screaming at you. You're an emergency.
Just start running. I don't care where.
And that's where there's a loan company telling you, consolidate with us.

Or that's when you're going to make out a 401k. 401k.
borrow money on your 41k, or take cash out your 401k.

You only have $8,000 in debt, you only have 23 total, eight on the car, and you make 58, and she makes 58. That's 116.

This is very doable. We've just got to decide how she ramps down and when she ramps down so that we clear these debts.

And the way to do that is get yourself on a detailed budget, and the two of you together are looking at the numbers like two grown-ups because we have a little person we get to watch over now.

Okay. And that will remove a lot of the anxiety because one of the things that causes panic or anxiety in these cases is the unknown.
When you actually know in detail what the villain looks like,

he's not nearly as scary. That's right.

So I want you to get the detail of your budget down, the two of you, where every stinking dollar is going.

And maybe we're not eating out. Maybe we're not going on vacation.
Maybe we're not buying X, Y, or Z. I don't know.
Probably all of that.

And we're going to clear up these stinking debts, and we don't have any debt payments. All we've got's the rent and baby formula.
We can make it fine. And then that's when she could back down.

John may be right. She may be back to work for a little while.
But you guys need to make that decision with a calculator,

not a feeling. And Preston, let me tell you this.
If every time she sits down to do a budget with you, you go into panic mode. She doesn't want to do it.

She doesn't want to sit down and have a budget with you. So if that's been you, here's a great way to sit down and have this conversation.
I'm sorry.

I have made these budget meetings chaotic and stressful for you, and I get panicked. I'm sorry.
We got a baby coming. I'm going to be calm, and we're going to come up with a game plan together.

And maybe I'll decide she is going to stay at home, go to part-time, and you're going to start driving Uber at night until Waymo takes that away.

Or I'm going to get a second job for six months and get these things knocked out, and then I'm going to be at home and be present. You all have a math problem in front of you.
That's it. That's all.

That's it. There's nothing to panic about though.
No. Nothing here.
You have a very doable situation. You're not going to be without food.
The baby's fine. Everybody's okay.
You're going to be fine.

It's just a matter of how quickly you get some of the financial stressors off of you and instead turn towards wealth building. And we'll help you with that.

We'll put you into every dollar as our gift. Let's make it a baby shower gift, okay? So Christian will pick up and we'll get you signed up for every dollar.

John, I have noticed, and I'm sure from

your PhD in counseling, you probably could speak to why this is, but I've noticed when I sat down with couples doing one-on-one coaching over the years that

the unknown is way more stressful than the known. So they come in with like a box, like a shoebox full of bills.

And we get them all out and we just start writing, making lists and throwing them in the trash, making lists, throwing them in the trash, because there's usually 17 multiples, you know, duplicates, like another notice and another notice, another notice, all on the same bill.

So it's really just one number, but there's seven pieces of paper. So let's just get it down to one piece of paper, throw it away.

And you just clean the thing up and organize it, and then you make the list, and then you draw a line and total it, and they go,

oh, it's not as bad as I thought it was. Right.
Or

when somebody says I'm exhausted, I'm frustrated, that lets me know they're working a hard plan. And I go, yeah,

two more years, one more year. Like, there's not a way around that.
When someone says I'm panicking, I'm anxious, they don't know the plan. Almost always means I don't have a plan.
Yeah.

And when I write it out on a budget and you see that I can eat and I see that I can keep the lights and the water on and I see that the rent can be paid and we can buy a baby formula and I see that we can do this.

We just can't go on vacation this year.

But we can do, we can live. Then every time I see I can do one more thing, the anxiety, the stress drops.
Yes.

Okay, I can eat. So it goes down.
Oh, we got lights and water. Oh, I'm okay.
Oh, we're getting to pay the rent. Oh, we're going to be okay.
Oh, and I can pay the carpet. Oh, and we pay the payment.

Yeah, but we just can't get extra on it. Oh, it's when your body feels like it's being acted upon, it goes into panic.
When it knows that you're taking action,

it might be, it might still be scary, it might still be frustrating, but it won't send you into panic because it knows you're driving.

Bad news or tough news that's clear is way less stress-inducing than not knowing. Than not knowing.
That's right.

Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio.

Dr. John Deloney, Ramsey Personality, is my co-host.
Susan is in Jacksonville, Florida. Merry Christmas, Susan.
Merry Christmas, and God bless. Bless you.
How can we help?

So I wrote you an email. I am 57 years old.

You're what? You're 5'7?

I'm 5'7. I'm 57.
57.

57 years old. Okay.
I thought you said 6'7. That was going to be bad for all of us.

So

I never thought about retirement. It was just something not in my in my vocabulary.

I spent my 20s and 30s having a good time.

Very unusual. But now that I'm 57, I'm starting to think about things I should have thought of a long time ago.
So I have a little bit in savings. I have a little bit in an IRA.

And my question is, is it too late for me to think about retirement? Yeah,

it's over. You're just so old.
You're so old. Sorry, Susan.
You're so old. You can't do anything.
You need to go to the bar and find you somebody because it's over for you.

Of course not.

Of course not. Now, obviously, it would have been better if you started when you were 27, but that's in the rearview mirror.
So let's just deal with what we got. What do you make a year?

I make $50,000 a year. Okay, so if you save 15% of that, that's $7,500, fully funded Roth IRA, tax-free growth in a good growth stock mutual fund.

And if you do that for the next 10, 15 years, you're going to have a pretty sizable chunk of money. Okay.

Probably a million dollars.

Seriously? Yeah.

Okay, so $7,500 a year into a Roth IRA

in good growth stock mutual funds. Okay.
Jump online at ramseysolutions.com and click on Smart Vestor.

And those are investment advisors that we

endorse. They don't work for us, but we vetted them, and they have the heart of a teacher.
And I want you to become a student of this. It's not rocket science.
You can do it. I can do it.

Everybody can do it. And just sit down and learn how that mutual fund works and learn how that Roth IRA works and have it automatically drafted out of your checking account.

And if you get any raises in the future, and you probably will, increase the amount that you're saving, clear your debts, get the house paid off. And if you come into 70 years old, 13 years from now,

with a pile of money in your Roth IRA and a paid-for house, you're going to be in really good shape. Okay, sounds good.

But you're going to have to concentrate on it, like you said, for the first time. Well, one of the things, too, is that I don't own a home anymore.
I sold my house.

So I rent.

I will be renting right now.

Why?

I don't know, to be honest.

It was just getting too crazy.

What was crazy? Well,

my business suffered dramatically during the pandemic. I had a catering business.

And so when the pandemic hit, I lost $4,000 a month in income in a blink of an eye.

And I had a very difficult time bouncing back.

Are you bounced?

I'm still trying to get back on track. Why? Five years later?

It's when you're in the hospitality industry.

No, honey,

we pay thousands and tens of thousands of dollars to caterers every year.

I don't know one that hadn't bounced back. Yeah, I don't know why.

I don't, that's one of the mysteries. I don't know why.

I think I've been making some poor decisions. Yeah, like you're still living in the trauma and the pain.
Got PTSD from the pandemic. Me too, by the way.
But,

I mean, every time I hear the word Fauci, I still want to flip. So,

you know, it's just somebody, if I see somebody in a mask, I just go crazy. So, I mean, I understand.

anyway. All right, Susan, I did the math for you, okay? How much is in your IRA right now?

$50, $57,000. Oh, $57,000.
That's even better. All right, check this out.
You ready? Uh-huh.

$57,000. I'm going to put in here $75,000.
I'm on the Ramsey Investment Calculator. $7,500 a year? Yeah, $7,500 a year at 77 years old.
Okay.

If you put $625 a month, that's $7,500 a year,

you're going to have $1,050,000.

Okay, and that's going to be enough for me in retirement. It'll be more than you have now.
Okay.

Okay.

And you're going to have more than that because you're going to get the catering business moving again. You're going to get over the PTSD, start smiling and cooking again.
I appreciate that.

Yeah, you get this. Go get those customers back.
Don't let some other caterer have them. Okay.

I want to give you a wild homework assignment. You ready? Yes.
Do you live by yourself right now? I do. I want you to write a letter to your 77-year-old self

and tell her about what you decided to do at age 57 so that she could have a million dollars in retirement.

Okay.

I can do that. Called these weird guys on a podcast.
I went to their website. I got a Smart Vestor Pro.
I got my business kicked in the butt and moving again. And I started putting $7,500 a year away.

And I even put more than that away because later on I started making so stinking much money I wanted to have a million faster than $77.

I wanted to get it at $67. So, you know, yeah.

Yeah. That's going to get you there.
Wow.

Pretty cool. That's a good idea.
Write yourself a letter.

There's something powerful about getting out of your body and putting it on the, on, imagining yourself at 77, sitting in that same crummy recliner you got, and thinking, I can go to sleep tonight because I got a million dollars in retirement right now.

Yeah. And let's talk about owning a home during that time again.
Yeah. When it is appropriate for you.
Yeah. So, yeah.
It's

it's very real, though, to emotionally

still have scars from the economic damage that was done to your life during the Fauci pandemic.

Well, it's you can't, you can have everything in line and then all of a sudden you wake up on a Monday and you can't go to work anymore. Yeah.
Or all of your business goes away. Right.

And that could be the same. I know people are panicking all over the country about AI.
Like, I'm just going to wake up tomorrow and my job will be gone. And

that could be paralyzing. And that goes back to the thing we were talking about in an earlier segment.
Feel that. That fear is real, fine.

And then get on about the next right thing, which is get after it. I tell you what, man, we spend so much time with millennials and Gen Zs

that

every article, I've read probably five different things this week that were credible.

I think I'm really starting to believe there are going to be more millionaires created by AI than any other technology disruption to come along. There's a very real possibility.

I think some people are going to use AI like people, you know, people use the internet and digital to access and to start a business that they never would have dreamed prior to that and became millionaires.

This is

exponentially larger. That time's a billion, yeah.
It's exponentially larger. Yeah.
And so I think the opportunity of AI is so huge that it offsets what little bit of pain is going to come from that.

That's the plan. Wow.

Yeah, I'll go get you some.

That's a plan.

It's one of the best times of the year, but it's also the time of year when people let their money get totally out of control. Everywhere you look, it's just buy, buy, buy.

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Oh, I love this question, Dave. This one's for you.
Today's question comes from Sam in Michigan.

Sam writes, My 16-year-old son, who's an avid listener of the Ramsey Show, has been buying and fixing up cars since he was 14. Good for him, man.
He recently refurbished a Trans Am

and is conflicted about what to do with it. Oh, me too.
He wants to turn on White Snake and have somebody dance on the hood. So part of him wants to stop.
Smokey and the bandit.

What are you talking about? And move on to the next project. But the other part of him wants to take it to the racetrack and enjoy the fruits of his labor.
Car's about one-third of his net worth.

Should he take the chance of blowing it up at the racetrack or should he sell it and move on to the next project?

I kind of want to let the kid drive the car. That's just my thought.

So, yeah, I mean, the Trans Am had a 455 in it.

It's freaking.

If y'all are listening to this, click over to YouTube and watch it because Dave's smiling it away. Huge engine in that thing.
That's the Smokey and the Bandit car.

Burt Reynolds, Reynolds, Sally Fields, the whole thing. That's the car.

And the thing would, it's, if he put it back together the way it was originally, it's incredible.

Yeah.

Okay. So what Dave can do.
So what is the wise thing to do here? Okay.

The important part of this whole story is not the car. Correct.
It is the kid.

This kid has already figured out that he is the secret sauce, not the vehicle.

He's just, he can, so he'll be able to land on his feet no matter where he lands, no matter where he goes, no matter what he does. So, this car,

one-third of his net worth, when he's freaking 16 years old, I don't like that word net worth. He has a net worth at 16 years old.
Nobody, so let's not worry about this, right? So,

I think he continues to learn lessons that teach him that he is the variable, not the car. Yes.

And so I think you enjoy the car, not just because I'm a car freak and I think this is a very cool car, but all that aside, I'm not saying it because I'm thinking what I want this 16-year-old to come away with is not build up something and then

protect it and guard it.

Build up something, enjoy it, and know that the reason I got this is not because of dumb luck. It's because of my effort.
I worked hard. And can I I say this?

If he goes out and blows it up at 16, that might be the greatest thing that ever happened to him. And he learns the lesson.
What a great lesson he'll learn. You go, well, next time I'm not going to.

I don't know that he's going to blow it up. I mean, just because he puts it on racetrack, he could wreck it, I guess.

Or he may devalue it or whatever, but

he can fix it back up. But I mean, he has learned that I can,

you know, I had a guy speak one time. He said that everything that's created is created twice.
It's first created in your mind,

and then you physically

create the thing.

And what he has figured out is that he can create something in his mind and then cause that future to occur.

The cause and effect of hard work, the cause and effect of thinking out into the future, and not just being distracted by all the stuff that other people are distracted with, which is stupidity everywhere, right?

And instead, this guy actually says, okay, I can buy this, fix it, and turn it into something.

And what I learned from that is

that I have the ability to affect my own future. A locus of control.
Both financially and for joy. For fun.
For joy, for fun, for dignity, for

the

pure satisfaction and honor of a job completed and well done.

And when he can get all of that crap going already at 16, this guy's going somewhere. And here's the thing that...
He applied this to building a skyscraper. Yeah.
It's the same exact thing. But

here's what the lost cost here is.

Sam can flip, or Sam, your son can flip this thing and sell it and get on to the next thing.

But what you might be also missing out on is, yes, he's going to go have fun and drive fast around a racetrack. He kid loves cars, obviously, but he's going to get around other drivers.

And he might get around other drivers that are like, hey, can you work on my car?

Hey, could you, I know a guy who could help with, and and so by being around other car guys, that's going to elevate his entire game and maybe get him out of your garage and into his own shop.

I mean, there's so many other things.

If this is his destiny, right? That's right. If he never works on another car again, but all he gets out of this whole thing is that he understands he controls things.
Yeah. He controls his destiny.

He creates it in his mind and then he causes his future to come to pass. That is money.
That's money in the bank right there. That's right.

And so, yeah, I'd go the racetrack.

He might bump into Shelby. Yeah.
That's what I mean. And he might bump into Ferrari of the future.
And, Sam, can I tell you something that would really honor the 16-year-old?

Ask him if you can sit in the passenger side on the first ride.

That would be cool.

Man, I don't know if I could do that. That'd be cool.
Hang on tight, but that would be cool.

I could drive it, but I don't think I could sit there.

Yeah. That makes my stomach hurt.

16-year-old in a Transam. But a 16-year-old looking over and seeing his dad smiling real big.

Give me a slow lap, and then I'll get out, and then you can go.

Let's cook it. Let's cook it.
Oh, man, that's great.

I got to tell you, Sam, you ought to be proud of him, and it has nothing to do with the car, and it has nothing to do with the racetrack.

You've done a good job with him, and he's obviously a great young man. And I predict huge things for this guy.
I think he's a stud.

All right. Katie's with us in Phoenix.
Hey, Katie, what's up?

Hey, Dave. My question is about how to decide between paying off our house versus using the proceeds from a rental sale to reinvest in real estate.

So a few weeks ago, you mentioned using cash on cash return to decide whether to keep or sell a rental.

My husband and I have a rental in another state, which gives us a 4% return, which is far from the 8% to 10% return you recommend.

But we're planning on listing it for $750K in January. Cool.

It's paid for, but if we sell it and use the proceeds to pay off our primary house where we still owe $440K, we'd owe about $71K in taxes because we've already taken 90K in depreciation.

And like you, we hate giving the government any more taxes than we need to. Our other option is to use 550K of the proceeds to buy two rental properties here in Arizona.

We already have one rental condo here that performs well. That would drop our taxes to about 16K and save us roughly 55K in taxes.

We'd still be able to put $139K towards the mortgage and stay on track to pay the house off by late 2027.

But if we follow babysit step six strictly, we'd pay off the the mortgage first and then we'd only have about 193K left, which isn't enough to pay for property in cash and we'd have to pay taxes.

And we love real estate and want to grow our portfolio. So what would you recommend we do?

So 250 buys one unit because you had 500 buying two units, right?

Yeah, so there's one for like 250 and one for 300.

And you could do a 1031 on just one of them and offset the taxes.

true yeah but we'd still have to pay some

yeah some but you'd offset a bunch of it 250 000 worth and or the taxes on 250 000 not 250 000 in taxes but the yeah you can shelter that much of it and if i did my math right

um

well you've got it dialed in you've done a really good job so i had i was doing this in my head while you got it in front of you but the it sounds like you could do a 250 unit and just about pay off the house, can't you?

Um, probably pretty close. Yeah.

And what other savings have you got this non-retirement?

Um, we have probably

900K in the stock market that we don't really want to liquidate. Oh, geez.

So this is a false dichotomy.

Oh, my God. Roll it all into a dad gum 1031, pay no taxes, and

get you an ROI and take enough out of the stupid stock market to pay off your house. But then you got to pay capital gains on the stocks.

Yeah, but nowhere near like you're talking about on this other.

You haven't got 100% gains in those things and you've not got an adjusted basis where you've depreciated down your basis either. Those stocks.
It's the other way around.

So I think you probably got some

last in stocks, the last ones in that have got the least gain, that are nowhere near the tax implications of this.

You've got to crunch the math on it, but definitely I'm doing at least one rental unit on a 1031 and taking the balance out of the stocks. I might do all of it and take the balance out of the stocks.

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Hey, where'd all your money go in 2025?

You don't know?

Well, I would make you normal.

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Billy's in Fort Worth. Hi, Billy.
Merry Christmas.

Hey, Dave. Merry Christmas to you as well, sir.
What's up?

Well, I came into a little bit of money, and I want to see if I should pay off my debt, my house, and a couple of notes and whatever, and then I'm not sure what to do with the leftover.

I'm not

too big on wanting to do stocks and stuff like that, but that's what I wanted to talk to you about. What's a little bit of money?

Well, I have $52,000 in a savings account, and then I got $420,000 in an insurance settlement. Lumps on?

Yes.

That's a lot of money, Billy.

Well, yeah, it is to me and my wife. We've never had that before.
That's why I'm

nothing to do with that. Yeah.
It was

a personal injury fell and broke some disc in my neck and lower back. How are you doing?

I'm doing much better now. I did one surgery on the neck and have another upcoming one on the back soon, but other than that, I'm doing okay, really.
Wow. What do you do for a living?

I'm medically retired. I had cancer.

So I'm 60, my wife is 69. So I took a kind of early retirement because of some complications that I've run into as well.

I may work again, but I'm really limited in what kind of work I can do.

I was in water treatment.

working for the city for her whole career. And so I have

$4,000 a month in pension income, and my wife is $3,500 a month in her job.

So we've combined like $7,500 a month in income. So you can easily live on that.

Yes. And how much debt do you have?

$150,000 on the house,

$60,000 on a piece of land that we bought next to the house, and $3,300 on a car. That's all the debt that we have.
So we're like $244,000 in debt.

Okay. And I think if we paid everything off, that would leave us with what, 225 or so.
Yes, sir.

That's what we're, that's what we're not sure what to do with, or should we not pay that off and do something else?

No, I would pay, I'd pay everything off under the condition that the two of you promise each other starting today that you're going to live on a written budget on the Every Dollar app the rest of your life.

Okay.

No buying anything on debt ever

again.

No. Because now you've you got seventy five hundred and zero bills

right well i guess our if we paid everything off i think our monthly living expenses would be around two thousand a month that's worth yeah you got seventy five hundred coming in

yeah you got seventy five hundred coming in a month four thousand and thirty five hundred right yes correct sir okay and so you budget that and you continue to invest and grow in your retirement you grow some wealth and uh you use the fact that you don't have any debt to grow

substantial wealth in the next 10 years. And we're going to use that 225 to

start with that. There are three things you can do with money.
And anytime I have excess money, I try to do some of all three.

I can be generous with it. Generosity ought to always be part of your financial plan.
Giving.

to others money.

Secondly, I can have fun with it, and it sounds like you're overdue for some fun.

And thirdly,

I can invest it.

What are you two driving?

We have a 2024 Toyota RAV, and then I've got a 22-year-old pickup that I drive around. Okay.
Do you need to upgrade the pickup?

No,

it's perfect for

me and running around town what I do.

Okay.

Well, if you need to spend $10,000 and upgrade the pickup, this might be the time.

And $10,000 is not exactly a new F-150, okay? I'm just saying move up out of the beater that you're driving. But you can do whatever you want to do.

But you could use some of the money for something like that. You could take a trip that you've always talked about taking,

and you could give some money to the homeless shelter or to the orphanage or whatever. I don't care.
Some ministry that you want to support.

And then the rest of it, I'm going to sit down with a Smart Vestor Pro. Go to ramseysolutions.com, get someone in your corner, and begin to learn about investing.

Do not put money in something you don't understand and don't do it because I said do it. You do it because you learn about it.
You understand it. It's really not that hard to understand.

You can do it. And understand what a mutual fund is and how it works and how to pick one.
Smart Vestor Pro is...

In order to get our Ramsey trusted endorsement, they have to have the heart of a teacher. We will not send you to somebody who just says, do it because I said so.

They want you to understand it or they don't want you to do it.

And so I want you to take a little time with that. There's no rush.

You can just park it in a high-yield savings account until you figure out the investing you want to do and what I'm going to spend and what I'm going to give.

But I would pay off the debts immediately and I'd get on a budget immediately.

I don't think you're going to be an overspender, Mr. 22-year-old truck guy.
I don't think that's that's going to be a problem for you, okay? No, no.

I don't think you're going to go like hog wild and crazy or something. So I think you're going to be okay, but I want you to have a plan to replace the truck and replace the car someday.

I want you to have a plan for Christmas. I want you to have a plan for some vacations.
You deserve them. I want you to have a plan for some generosity.

And I want you to have a plan for some investing out of that $7,500 a month that you got to work with. And so that's your budget.

But you're going to have substantial money in the next 10 years if you do this basic things right here. It's a really, really good position.
I'm sorry you got hurt so badly.

Man, that's a big settlement. And

that indicates a lot of pain.

Yeah, and Billy, are you going to be responsible for all these other surgeries and whatnot?

One more. Yeah, that's what the settlement was for, yes, sir.
Okay, so do you need to keep some of that liquid for these future surgeries and challenges?

It's just

like a 20% copay for my insurance. So,

you know, I'm estimating maybe $10,000 or so I would be having to pay out of pocket. I don't really know that.
That sounds right. Well, make sure you've got that allocated too.
Yeah.

And again, it goes back to what Dave was saying. Just be intentional and have a plan.
Have a plan, have a plan, have a plan. And the foundation, that plan is going to sit on a concrete and

iron foundation of we don't borrow money.

Right, right.

That's exactly right. I agree with that.
So you would put the bulk of it into mutual funds if you meet with the Smart Investor Pro? I would.

After everything's paid off, after you have some fun and do some generosity, yes.

Are those low risk?

It's not like regular stocks in the stock market or anything? It is the stock market, but it's as low a risk as buying a home.

Okay, gotcha. Okay.
Okay, well,

I will check for a Smart Investor Pro on the website and get started from there. Billy, if it makes you feel better, I use a Smart Vestor Pro.
And so do I. And that's where I put my money.
So do I.

So, yeah. So here's the thing.

Like, you take a look, folks, at some of the growth and income funds or even some of the growth funds and say, okay, in the last 50 years, how many down years did they have? And what's the total up?

And you will find it's as safe as your house. There's no guarantees.
You don't have a guarantee. You don't have a guarantee when you bought a house.

They can go up, they can go down, and sometimes they go down. If the neighborhood goes away and people start misbehaving around you and that kind of stuff, the values can go down.

You can have all kinds of problems, right?

And

yeah, somewhere in there is what I'm looking for. Wow.

Billy, I'm sorry you went through that.

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Our scripture of the day, Philippians 2, 3 and 4, do nothing out of selfish ambition or vain conceit, rather in humility, value others above yourselves, not looking to your own interests, but each of you to the interest of others.

Jordan Peterson says, perhaps you are overvaluing what you don't have and undervaluing what you do have. Lex is with us in Denver.
Hey, Lex, how are you?

Hello, Dave. I'm doing well.
How about yourself? Just the same, sir. How can I help? Merry Christmas.
Merry Christmas to you as well.

So I find myself in an interesting situation to where I'm discovering your channel at a time in my life

with an interesting economic situation kind of hanging over our heads.

I've been fortunate enough to acquire some

decent wealth over the last seven years when I got out of credit card debt and I'm looking this year to probably be right at about a million dollars in net worth with about $1.3 million. Thank you.

With about $1.3 million

in debt.

Vast majority of it is within the real estate.

But the more I'm listening to your show, the more I'm starting to realize that I might have bought some stressors in my life with

the ability to get to where I was. Now I've got to figure out how to maybe

tighten up the debts. And I was hoping you might be able to give me a few pointers on which direction to head to.

Okay, sure.

Well, I love real estate, and I made a fortune like you in my 20s in the real estate business, and I lost it all because I had too much debt.

At that point, at the high point of that, I had a $4 million

portfolio with about $3 million worth of debt. So I had a 75% equity or 75% loan-to-value situation, and I was 26 years old.
So how old are you?

I'm 33. I'm about to be 34.
Okay. All right.

And I was doing a lot of flips, and so I had short-term notes, and the banks called our notes, and it caused us to lose everything in the next two and a half years.

So, and then, you know, we started this whole thing, living on less than we make, being debt-free and all that stuff, 30-plus years ago. That was 1988 when I went bankrupt.
That's how long ago it was.

And so I've watched my friends in the real estate business. My family was in the real estate business.
That's how I got into it. I love real estate.

And I own several hundred million dollars worth of real estate today, all debt-free. So I've reversed that course many times over, but it's still an interesting journey I've been on.

And I'm honored to get to talk to someone that has done as well as you have at this age. And congratulations.
Very well done.

So I'm always going to go towards less debt to no debt because I have less to no stress that way.

And my sustainability is greater because a lot of times in the real estate business, we don't perceive the risk that debt creates.

A lot of real estate people always laugh and say their risk meter got broken. It doesn't even work anymore.
They don't even measure risk anymore. They just go, oh, more, more, more, more.

And that's what I was doing. Yours is 50%, so you're not as bad off as I was.
You're in much better shape than I was at that time.

Tell me about the real estate that you own. What is it?

Yes. So

I was kind of following your journey. That's kind of where I find myself, too, is that my next plan was to buy more and more

third and fourth property to try to leverage the debt to get enough passive income to kind of buy my freedom, if you will.

But yeah, I'm glad I found your show. I have two properties.
One of them is a single-family house that I essentially converted into up-down duplex.

And I have a fourplex that are both currently cash flowing. However, I'm noticing that in Denver in particular, rents are starting to take a big downturn

due to some of the economic stressors. Yeah, just last week we had a brand new

apartment complex that got foreclosed on by a bank and the investors lost $125 million because

probably probably bad management, but also bad investing and over-leveraging.

And so I'm seeing rents around town, especially for like luxury places, go off 20%, 13% off, where last year they would have been rented for upwards of $3,000. Now they have $2,500,000, $2,300

a month.

Okay, so you own two properties that are worth $2 million?

Just about, yeah, just under $2 million. Okay.
And you have a mortgage on each of them? Yes. Okay, what's the mortgage on the duplex?

On a duplex, I got it back right around COVID, so I have 2.3% rates, uh, just right around 500

value.

As a duplex, what the cash flow is, it's probably right around 750.

Okay, and so the other one's worth 1.3?

Uh, slightly less, uh, probably closer to like 1.1 or so with about 700 on on it.

And then I have about 300 in investments between my IRA and stock and shares.

Okay. And stock market.
Okay.

And what do you make?

What's your career? I'm a mechanical engineer. And so you're making $200?

$125 or so. Oh, okay.
All right, cool. All right.
And you're married?

No. Okay, good for you.
Okay, cool. All right.
So there's a couple of ways you can go at this. The biggest thing I want you to do is I want you to to perceive that those debts equal risk.

More debt equals more risk. Less debt equals less risk.
So point being that on the fourplex, you owe $700. If you owed 1.1 on it and it's worth 1.1, you'd have more risk.
Agreed?

Because the cash flow would dry up due to the debt service. And it's not as sustainable.
And you can't get out of the stupid thing because you're leveraged up to your eyeballs.

In your case, you got about a 30% equity in that particular position.

position the other one's about the same as a matter of fact so can't figure out where the million dollar net worth is you must have a pile of cash somewhere

uh yes so roughly

there's about 400 of equity on that 1.15 property 250 on the 750 property yeah that's what i got

350 in stocks and retirement okay equally okay 300 and 350 in stocks

or how much in retirement How much in stocks? About an equal split. So about $150 in stocks and like one,

a little closer to $200 in IRA. Okay.
And you continue to like both of these properties as they've got a good future?

I

yes, yes. The Foreplex got a really, really good cash flow and a good upside for the future, too.
And the single family has got a really low rate, so it overperforms the average inflation. Good, good.

Okay.

I like all that. That's good analysis.
All right, so there's a couple of ways you can go. One is you can just say, all right, I'm going to systematically start clearing the debt on these two.

So I'm going to reach over and pay that duplex off. I'm going to throw $175 at it today,

and I'm going to reach over and get it paid off in the next couple of years.

And then I'm going to take all that cash flow, and I'm going to reach over and start working on the fourplex and get it paid off.

When it's paid off, I'm going to take this incredible cash flow because I got zero debt, and I'm going to buy my next property with cash.

That's going to slow down the number of properties, but it's also going to lower the amount of hassle you have per dollar.

Right. Because if you got 25 renters instead of five renters,

you've got a different hassle level in your life, agreed.

Yeah, yeah. The idea is at some point I'm probably going to retire off my engineering or go down to working minimum, just the jobs I like, and then concentrate a little bit on the wealthy and that's.

That's okay. Right now you're 33 and you're a mechanical engineer.

That's what I would do. If you want to get even more radical, you would sell one of the properties and pay off the other one

and then start from there and go cash on. And I have an allergy to risk, so that's what I would do.

Yeah, but

I'm okay with you starting with a plan to say, I'm going to work my way out of this debt.

And every time I lower the debt balance, I've I've lowered my stress life and I've lowered my probability of problems and everything else. And

if you dislike one of the properties, I'd cash it in and throw it at the other one. But you seem to like both of them.
And so that doesn't, you know, you could go that way. Either way is fine with me.

But no, I'm not going to go buy six more like this.

That's a recipe for problems. A series of problems.

That puts this hour of the Ramsey Show in the books. We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.