Learning To Set Boundaries With Family

Kathy is over in Austin, Texas. Hi, Kathy, how are you?

Yeah. Why?

I don't know. We haven't asked them.

But when he went to the office that day, there was a padlock on the door and they'd filed Chapter 11.. He got nada. He had $11,000 on his Amex. Amex didn't care if his company had gone broke. They wanted their money.

Understandable. It's kind of a problem, isn't it?

It's almost impossible to use. So, I think, if you're willing to take that risk, I'd be very scared about it. It is standard in corporate America. Somehow, corporate America has conned its employee base into taking a loan on their behalf with the promise of repayment.

and taking the risk for that and acting like it's no big deal. But it's a real deal. I've noticed it many, many times going sideways on people. The other thing people do is they run up stuff on their credit card because they're just not watching. It's not reimbursable.

And so, they end up with a reimbursement check. that's less than a balance.

And when you use a debit card, the strangest thing happens. You pay more attention because it's like real money. So, here's the deal, Kathy. A couple of things. Number one, when you use a credit card, you are likely to spend more than when you use a debit card, period.

Tons of research showing that, because it doesn't have the same friction, marketers call it, in your brain.

And then the third thing is this. And I think the most compelling argument is this. I have never met a single millionaire that says, Dave, you know, I made it all on my airline miles.

That was my breakthrough. My financial difference, the difference maker in my financial plan was, I took a billion dollar company that studies consumer behavior in depth, and I was smarter than them. I whipped them. I didn't spend more. And I got airline miles.

And I actually used the airline miles. I actually gamed the system. And I became a millionaire because of it. Never met one, not in 30 years of doing this. Well, let me take it a step further.

I know a lot of middle class broke people who think they're gaming the system and are walking, strutting around, acting like they got something with an airline mile, but they really didn't at the end.

I like companies that offer a service that really would like to help you and they get revenue from giving you something or helping you do something or giving you a service. I can't support a company where the only way they make money is by people failing to pay, failing to pay on time. That's the top seller right there. I don't like that. The way they get them in the churn.

This is not, Kathy didn't bring this up, but we'll just keep on the subject for a minute. Um, the discover points you get, you get, you get two points back. So you get 2% back. So here's the deal. You spend a hundred dollars to get $2..

Now explain to me how that causes wealth.

That you, in order to get $2, you spend a hundred. What math class did you people go to? The school of the broke. Yeah. I'm telling you, it's that, that's the kind of stuff that's out there.

And so what I studied and the way we came up with the process that we use here is common sense that grandma had. And I studied where companies are being predatory, and I stay away from snakes. and I studied wealthy people and I find out what wealthy people do. Yep. And yes, some wealthy people, Kathy, do have a credit card and some of them do pay it off every month, but none of them claim that that was somehow a financial breakthrough.

That's right. And you're already spending more mental calories on this than it's worth. Even if you're getting full redistribution on this. So you ask why. that's why you spend more, you're more likely, on a travel expense account, to spend money.

That's not reimbursable, because I won't get my airline miles back. Oh, I'll buy, I'll buy two instead of three. I'll buy three instead of two. Cause I get my airline miles back. And so you're more likely to spend more, you're higher risk when you are loaning this corporate America characters, your money, hoping they're going to pay you back each month.

Scary stuff. And we have seen the times that they didn't, you can't just assume, assuming that you're in trouble. You know what they say about it. Yeah. I've heard.

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Jade Walsh, our Ramsey personality, is my co-host today. Thank you for joining us. America. open phones at 888-825-5225.. Nikki is in Montgomery, Alabama.

Hi, Nikki. Welcome to the Ramsey show.

Um, we're the only ones in the company that know this right now, simply because my husband's kind of the financial guy who was going to be the one to gather all that financial information to potential buyers. So we do have a heads up, which is a blessing. Um, he, the boss, has also indicated that we would be getting a severance of about 200,000.. Of course, taxes will have to come out of that. My question is after taxes, how should we manage this, knowing we're going into a season likely of no income?

Well, if you know that you're going into a season.

Okay. All right.

My obligation, I totally agree with that. I mean, your husband's obligation to him goes away if he's not willing to, A, put the severance in writing, B, put a promise to an open line and perform to an open line of continuous communication about timing and probability and whatever. We're not asking for any of the 10 million. We're not asking for any of that. That's not yours.

That's his, he owns it, but he does owe you if you're gonna, if your husband's going to stick with him, he does owe him communication and the severance in writing.

I agree with that, but he's really, really holding this close. I mean, the, the phrase that scared me, Nikki, is when you said the only reason we found out was because he needed my husband's help. Meaning that this guy really isn't discussing this with his senior leadership team,

dealing with this guy, this guy's, he's hardcore. So I'm going to be a little hardcore, back and just go, you're going to communicate with me and you're going to put the severance package in writing. And then you can keep working the interviews and line up something where you start the next day. And the $200,000 severance package actually becomes a signing bonus, then. Right.

It's extra money. Now, should we get?

After going through the stress of this, he may want to go, you guys may want to go on a really nice high-end cruise for two weeks. And you should. Oh yeah. That sounds great. Can I go too?

Yeah. That's great. I'm not talking about the Walmart on the seas. I'm talking about the good stuff. Okay.

The good stuff. Yes. Hey, thanks for calling in, Nikki. Good stuff. Ah, Hunter is in Houston, Texas.

Hey Hunter, what's up? Hey, Dave and Jade, how y'all doing?

Why would it be a bad move for the career? So the current company I work for is a high-end custom construction residential homes, totally 63,000. take home. I have no benefit except the gas card that pays me 6,000 annually. I just received a 5% raise last week after 10 months of the company, but I'm still underpaid for my industry.

Due to this, I've picked up a side hustle, giving me an extra 8,500 annually. All in, I'm about 77,500. take home. What's the new guy offering? The new guy is a Fortune 500 company offering 90 to 95,000 base plus a bonus.

That's not a good career move. Why?

My gut tells me, sir, I'm building three custom homes totaling out to $11 million, and something tells me if I'm busting my butt in front of people that can afford this kind of stuff, when it's my turn to start my own company, I might just land in the right network.

Nah. You don't think so?

Yes, sir. Nobody's hiring you to build an $8 million house. You're right. Sorry. I don't mean to be mean, but- That's okay.

I'm just being truthful. I like you. I think you're a sharp guy.

I'm thinking in five years, maybe, but in five years, you've lost $200,000 of income, not working for these other folks. Correct. You stated to me that even after a 5% raise, you're still underpaid by the industry. It's disturbing. Why would they do that?

Yes, sir. I agree. There's something bothering you about your current company because of the statement they're making by underpaying, and it feels like you know they're underpaying. Is that right?

Nope. I'm walking. This is The Ramsey Show.

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And that helps all of us. And since you are our marketing plan, we need your help. Thank you very much. Todd is with us. Todd is in Miami.

Hi,

What's up? I have a problem with parents saying no to parents.

I did your course. I did it back in 2016.. It was hard. One of the worst things that I didn't even know. I was in debt.

So I want to thank you for that. I built up a nice little cushion, some income properties, everything cooked in the crock pot, did everything I was supposed to do. And then my mother's husband passed, no life insurance, knowing that they were together for 30 years. Now she's in my hands because my other siblings can't do anything. So she wants a nice condo.

I get it. I have a real estate license also. So it was kind of easy, but it wasn't easy because you have to put 20% down.

Who has to put 20% down? You? We did. I bought it for her, but I put my name on the deed.

Yeah. How old is mom?

75 in good health. Yeah. And she has absolutely no money.

Well, she has two pensions and social security, but it's not enough to cover the expenses. They just went up on HOA fees over there. Uh, and we had to put six months in reserve. So that's like $6,000.. So, uh, and I want my kitchen done and I want the, I said,

Which book?

That to all of these things,

Yeah. So how much is it? I'm not getting any phone calls, I don't care. How much is the condo payment? It was a, uh, the condo monthly payment, uh, nine 72..

Okay. And she's supposed to be paying that. Right. And she has two pensions and social security, so she can pay a $900 payment.

Right. Okay. And the HO, but there's no, but I know the only, but.

Well, my question is keeping you from substantially. Uh, I wanted to buy some more income properties, but I don't want to retire. I work in construction and I don't want to be, you know, I'm doing things to, to, to change my whole career.

You don't have enough money. You didn't call me up with a $10 million net worth. If it was chump change and you wanted to go fix the kitchen, fine. But, but she's basically completely out of control emotionally. And I don't know where you got, or she got the idea that you're obligated to give her a condo and fix the kitchen and, and, and, and, and now, when people don't respect boundaries and Henry cloud talks about in the book boundaries, and then you set a boundary, please don't expect them to accept it graciously.

So I suspect her little spoiled self's pretty pissed off at you.

So, Oh, well, Oh, well, I know that's right. I'm sorry. I'm back on. And she wants, she said she needs a nice, you know, is almost making these demands on you. Have you said to her, mom, I, you know, I'm doing the best I can with my money.

No, you really can't. You don't have any money. You don't have enough money.

So, and you, you, you know, the reason you called her is, you know, she's weird and out of control, right? I know. Yeah. I mean, she's your mom. I'm sorry to say that, but I mean, that what she's doing is whacked.

So you just got to smile and go, nah,

done all I can do. Sorry, mom. Love you, but not do any more. My love does not, my love for you does not indicate that I have to be out of control, nor am I at an age or a net worth where I take orders from people. Are you the only kid, Todd?

It's a complete sentence.

I'm sorry, honey. It's hard when it's your mom, but she's, she's been whacked, dude.

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Hi, Stephen. How can we help?

And two months ago, our five-year-old son died.

And it's very difficult to know what to do.

Stephen, I'm so sorry. Um, so I can't even imagine,

you know, I can't breathe, and it's, and I just met you a minute ago. I can't even imagine being in your own situation. Um, what I tell folks to do, and this is from decades of doing this, is, anytime you're in a situation where there's, um, a tragedy, the loss of a loved one, primarily, try not to make any big decisions while you can't breathe. And, um, you'll, you will, uh, your memories will always be there and the pain will always be there, but your mind will clear. over the coming months.

The fog will start to lift. And right now you're just walking along and you see something, or you hear something, and it activates and a wave hits you right now. Is that right?

Uh, that's exactly right. Yeah. That'll happen less and less and less. And it's not because you're going to forget him. That's, we don't, we don't want anybody to do that.

It's just because you're managing through the grief process. And, um, but no one is thinking. no one. If Dr. John Deloney has two PhDs and one of them is in counseling, were he facing this, he would not be thinking clearly.

It would, it takes the best of minds and brains and puts a fog on them to go through what you all are going through. So we always tell folks, if you can try doing nothing with it, that is a big money expense. So, for instance, if someone calls and, had a lady call the other day, had been married 50 years and her husband passed away and she got a $600,000 life insurance check. And she said, what do we do? I said, well, it's been two weeks.

You're not doing anything. I want you to park this in a high yield savings account. And then, six months from now, when you can start to breathe a little bit better, your mind will be a little bit clearer. We can talk about it, or even a year from now. And so, if you don't need, it sounds like you don't have any debt, you said, except a little bit and on the house.

And, and I'm sure you guys are zombie mode, robot mode, whatever you call it, going back to work, trying to reach,

Yeah. My wife is a little bit different. She, she still works. Um, she was kind of established at her job. So she, she finds a little bit of solace going in when she can or she wants to.

But in the meantime, if you guys can make your bills and I guess you can off of your wife's income, I'm going to just take the 70 K and park it in a CD for six months and just cry for six months and get through the, get through the worst of this and yeah, get your new, your new reality, the new career saddle and climb into it. And you know, I, I gotta tell you, January is going to look a lot different than June.

It is, it is. And again, it's not disrespecting your son, his memory, by any stretch of the imagination. But, um, but the best thing you can do is to be healthy and to walk the path to get healthy and to part of that's being plugged back in. And so, if you're working, she's working, we're working a plan. We're looking back into the future.

Again, we're not living in a dark cloud in January, um, or, or less of a dark cloud, then you're going to be able to make much better decisions. So try not to do anything with big money or big money decisions for six months, at least I like a year, but at least six months. And, um, but, you know, I'm so sorry, man, I can't even imagine, but I am going to encourage you to lean into the grieving process and maybe even get somebody to talk to about that. It won't hurt anything at all. Uh, because, as bad as it sucks, the only thing that sucks worse is for you to still be sitting exactly the same place six months from now.

And that's not okay, uh, for you. I want, I want you, to have a better life than that. And, uh, but, boy, I, I can't imagine how sad, um, I just can't get my head around it. Hey, thanks for the call. If we can help further, Steven, you call us anytime, we're here for you.

So there's a, uh, an element, Jade, that we talk about here all the time, for the listener out there to the, us talking to Steven, they're listening in 20 million plus of them. Um,

anytime you're in a trauma situation, the brain shuts down. Dr. Deloney talks about this and like, for instance, during COVID, we had Dr. Deloney on every day telling people, okay, you're in a weird situation. A whole bunch of people are freaking out.

You remember how nasty people got during COVID? They were mean, they were scared, because your brain shuts down all the critical thinking skills when you're in trauma, it floods the chemicals over the critic. So if you're standing in the middle of the interstate and you hear, and there's a horn coming at you and you're like, God, I'm about to die with an 18 wheeler. Your brain does not have time to say, well, let's discuss what will happen if the 18 wheeler, which is ways a whole lot more continues to come at 74 miles an hour and impacts your body of 160 pounds. What will, what will the physics of that be?

Your brain does not have time to do that. So your brain naturally shuts down in a traumatic situation and says, get out of the way and your most primitive part kicks in the lizard brain, we call them. And so, uh, anytime you're in trauma, you don't make big decisions because your lizard brain is making the decisions. Your critical thinking skills are shut off. So don't make big decisions in those situations.

And we all have different things that cause that to happen to our brain. This is the Ramsey show.

Live from the headquarters of Ramsey solutions. It's the Ramsey show where we help people build wealth, do work that they love and create actual, amazing relationships. Open phones, a triple eight, eight, two, five, five, two, two, five. Jade wash, all Ramsey personality is my cohost today. Greg is in Sacramento.

Hey, Greg, welcome to the Ramsey show.

And as a result, he suffered a brain injury and, um, was in the hospital for, uh, six months. And they, but the amazing thing is, he survived and he's actually doing remarkably well, uh, even though they didn't expect him to survive. Um, he's still in recovery, but he's hoping to be able to work and live on his own again. And hopefully within a year or so, but he didn't incur a lot of medical debt, uh, given that he's not working yet. And he, he had some debt before that.

Um, fortunately the hospital itself forgave 2.5 million dollars, for which we're extremely grateful. So he had no insurance. Uh, no, that was with insurance. I mean, the insurance covered, uh, whatever they covered. And then the, the, the hospital said the total bill was 2.5 million.

Yeah. But they got,

Okay. Right. Yeah. We're.

How old are you? So he's starting over. kind of, I'm 67.. Okay. What is your wealth position?

look like? Um, we're in pretty good shape. We've got, uh, we've got some, did you ask about my positions? Yes, sir. How about what's your net?

What's your net? 200, 250 and then 401k, about 250.. Okay. And so half a million, a million dollars. Okay.

All right. Good. Something like that. And we're actually, we started following you, uh, in 2014, because my daughter introduced us to, to your show and, uh, she actually used to groom your dog. Oh, wow.

Okay. And that's how she met you. She met you guys and then told, told us you should follow this. And so we, it changed, it changed things for us. Okay.

So can you help him financially?

Um, well, we have been in that he's living with us and we did cover everything, everything for him and all of this, uh, like medical copays and things up until he just started getting SSDI a little bit ago and now he's paying for, for most of that. Um, um, okay. So how can we help you? Well, I'd like to know how best to deal with, uh, his debt that's gone into collections. He has, he has some money saved up from since he's been getting SSDI and he's hoping to get us on, um, about 15,000..

Okay. You can settle 45 for 15.

And here's how this goes. You call the collector that a thousand dollars is owed to, and you say, we do, he does not have, but 25% of what is owed. So we are offering you 25% of what is owed. And if you do not take that, you're going to get nothing.

So it's up to you. Do you want to do this or not? No, we're going to give you 25 cents on the dollar or you're going to get nothing. What do you want to do? No, we're going to give you, you're going to have to repeat it because these people are dumb.

Okay. Over, you're going to have to just stand there and just over and over and over and over. If they want to get nasty, say, no, we're not going to have nasty conversations. You're going to get to talk to a dial tone. I'm going to push that little end button on my phone.

If you get nasty, but we're going to do 25 cents on the dollar. And if you don't want to do that, I'll call you next month and see if you've changed your mind. And until you want to do that, you're not getting anything. Oh, and by the way, you're not having electronic two things. under no circumstances.

Do you give them money until you have the agreed amount in writing? Right. And under no circumstances, do they have electronic access to accounts? So they cannot have, give me your checking account number. We'll just draft it.

Absolutely not. They will clean him out. They lie. Yeah. You're going to have to call a couple of times to get this locked in.

Yeah. You can tell a collector is lying if their mouth is moving.

You're gone next. Hey, we have 25 cents on the dollar. You want to take that? Give it to me in writing. I will give you, uh, I will send it to you, uh, certified mail return receipt, requested cashier's check, uh, or we'll say get a prepaid debit card for that amount.

Whatever. We can find some way where they can access his account and clean out the 15 K or clean out a hundred cents on the dollar after they agreed to 25 cents on the dollar. And you got. how many of these creditors you got to deal with Greg? About 30..

Yeah. It's going to be fun. Not. I know.

You're settling this on his behalf. He's giving you, he's going to give you a sheet that says in writing that you have permission to settle this account for him, because he's meant to, he's disabled. He's got a brain injury. Right. And so you could get nothing, people, but we're trying to give you what he does have.

You're being honorable because all that you're going to give him, everything he's got, you're being honorable and settling it. So, um, you know, and just keep, just keep talking to him and talking to him, but you're dealing with people that couldn't get a job, shoveling out a septic tank. And so they're sitting on the phone being a collector instead. This, that's honorable, by the way. That's not, this is the Ramsey show.

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So here's the details. Our current mortgage is a 15 year at 2.75%. The balance is 103,000.. Our current monthly payment is 1700 a month and we're paying 2,500 a month. Very good.

Right now. we would pay it off in four years and the house is worth over 600 K. If we refinance, our monthly payment would be $760 a month. And from what I've read, the interest does not apply to the overage amount paid and is directly applied to the principal, interest-free. Is this true?

Dave, have you ever read something? and it makes so little sense that it makes you question your own level of intelligence? Everything on the internet is not.

Number one,

The interest is calculated on a mortgage just like a simple interest loan. Now, what does that mean? It means you take your annual interest rate, in this case 2.75%. You divide that by 12.. When you do that, you're going to get 0.22..

So about a quarter of a percent per month. Okay. And so whatever balance is outstanding that month, one quarter of 1% or 0.22% is going to be multiplied by that. And that is the interest that is owed that month. Now let's say that's $100,000..

Okay. And so if you paid that tiny little bit of interest and you paid $5,000 more towards your mortgage, the next month, the amount of interest would be 95,000 times 0.223.. Okay. And if you pay down $1,000 the next month, it's going to be. the interest is $94,000 times 0.223..

And so the only way a mortgage gets paid off faster due to a refinance is if you get a lower interest rate, not a higher interest rate. It's mathematically impossible for your mortgage to be paid off faster with a higher interest rate. There is no scenario in which that works. So whatever you read confused you or was just wrong. And the most of what you read these days about finance on the internet is just wrong, because it's just really basic math.

The amount outstanding that month, the balance, the principal balance that month times the monthly portion of the interest, your annual rate, divided by 12.. Okay. That tells you how much of your payment is going to interest. Everything else is going to reduce principal. So let's do some quick dirty math.

Okay. A hundred thousand bucks at two and three quarters. That's $2,750 per hundred thousand. Yes. Per year.

Okay. Okay. If you pay 2,500 a month, which is what he's doing now, that's $30,000 a year. 30,000 times three is 90.. Okay.

During that time, we've had around $3,000 in interest build up per year. So he should be debt free in three and a half years. If he just pays 20, $30,000 a year. In three years, he would have paid off 90 plus a little interest. Okay.

Some are minus a little interest. So call it 85.. Right. All right. Which will leave him about 15 more thousand.

So in about three and a half years, he's at free with a two and three quarter percent mortgage. That ain't bad. If you just keep doing what you're doing, dude, if you add more to it, of course, it's going to go away even faster. Right. And if you add a lump sum to it today, it'll go away.

The next month, you're not going to pay interest on anything except what is left. That's how simple interest is calculated. And that's how a mortgage is calculated with any standard mortgage that's out there. Now there are some rip-off finance company mortgages that use the rule of 78, which has a prepayment penalty built into it. And you do not get credit for the interest by prepaying principal on those.

But that's if you've got an 18 percent interest rate and you went to the storefront, like beneficial, which is not, or something like that. Right. You go on one of these rip off. It's right next to the pawn shop. Oh, you know, the gracious little personal, you know, you get a 38 percent interest rate on a personal loan of $5,000 in there, those kinds of places.

Right. Yeah. So you can go in there and get a different mortgage. But all FHA, VA, Fannie Mae, home equity loans with a traditional bank or credit union, they're all run on simple interest with no prepayment penalty. And so you do not prepay the interest.

The reason that your payment is X and most of it goes to interest. And when you have a 30 year mortgage on your first payment is because your balance is so stinking high still. And when it's multiplied by your interest rate, divided by 12, it takes up most of your monthly payment. That's right. That's why it starts out.

But if you look towards the end of paying it off, almost all of it is almost all your payment. Then, if you just pay in, your regular payment is going towards principal. Why? Because your balance is infinitely small. at that point.

You got five grand left on your balance and you're you know, you're paying a thousand dollars a month. So, of course, most of the thousand is not going to be interest, because there's not a lot of interest.

And so, Jim, thank you for coming to us. Because the problem with this kind of stuff is it causes people to do stupid butt stuff. It does. Here's the thing. Here's what's scary.

There's people in the mortgage business that don't know what I just said. I guarantee it. And they will sell you a six percent mortgage as a method of getting out of debt when you have a two and three quarter percent mortgage. Well, they're also going to get paid off of that. So.

Well, there's that. Some of them. But some of them do it out of ignorance, not, not malicious. I mean, they just don't know people. This is really basic stuff.

But, you know, let's just take it one step further. Just be real nerdy, OK? You and Sam ever get your amortization schedule? Yes. Yes.

You got the columns of the interest and the principal. It's. if you go, take your calculator and do what I just said to do. It's exactly what you're going to find. That's how that's developed.

That's the spreadsheet formula that I just gave you, that you plug in the spreadsheet formula and it creates those M tables, those amortization tables. All right. Because I showed you the portion, you know, I got a payment of a thousand, this much as principal. This tiny little bit's principal. at the first, the whole big thing's interest.

And then it goes to the bottom.

That's how it works. And that's. but it's all based on the idea of the interest that is charged only on the outstanding balance. monthly. It's not biweekly.

Right. Once a month. So you could pay four times during the month. Doesn't change a thing. Doesn't change a thing because they only, they only reset once a month.

And so at the at the beginning of the month, whatever is outstanding, I'm sure monthly interest rate is going to give you your interest charge. And so that's how this process works. That's a good question. It was in a great explanation. And I'm glad, Jim, that you sent it in here.

We're not making fun of you for not knowing, because most people don't know this. And a lot of people think that because the interest is so large on the front end that they're paying all the interest up front and you're not. You're only paying the interest that you owe each month. That's all. This is the Ramsey show.

Jade Warshall, Ramsey personality, is my co-host today. Thank you for joining us, America. The phone number is 888-825-5225.. This is common sense for your dollars and cents. Gwen's with us in Tampa.

Hi, Gwen. Welcome to the Ramsey show.

Hi, thank you so much for taking my call.

And I thought, you know, I don't know how this is supposed to go. What's fair? I do have another niece and another nephew and we have a trust as well. But bottom line is, I thought, you know, I just want to be fair. I don't know.

Slow down. How long ago did?

Well, we had it restored. So what is it worth if you were just to sell it on the?

All right. So you have a $33,000 camper and one of your family members.

I, yes, they, they expressed it probably three or four years ago and said, Hey, uh, if you're ever interested in selling it, please let us know. Okay. I'm letting you know,

Let's talk. So I thought, I don't know how to, I don't want to offend them, but I also don't want to be.

thinking on my feet. I get a little flustered. Well, you don't have to think on your feet. You don't have to think on your feet.

Well, this is the thing. I would like to use that money. We're establishing a scholarship for my husband in my husband's name at the high school. Then they're helping with that if they.

So I'm going to put it up for sale for $33,000.. If you want to sell it to them for $30,000 and just say that, that's fine. But you don't have to think on your feet. This is not a negotiation. This is you just putting a price on something and what it's worth.

There's nothing to be flustered about. Is selling this camper,

Yes. We loved it. Yeah. It's going to be, it's going to be kind of emotional the day it leaves. Yeah.

Well, I have to tell you, it's,

Okay. But you're, when you sell something for what it's worth, you have done absolutely nothing wrong. If you choose to discount it slightly, not as an act of being pressured or feeling some kind of guilt trip, but just as an act of generosity, then that's your choice. It's your item and you can do that too. So you say, you know, they, the guys at the store, tell us it's worth 33..

That's what I'm going to put it on the market for. But because my husband would love it if you guys had it and knew, and we knew that you were using it, you know, we'll sell it.

Okay. And if they have an expectation of that, that's their problem, because no promise was made ever, in any conversation to these people that they.

Nunya business.

I don't know who this family member is, but they're not in this transaction, but I just figured out what you're worried about and what you're feeling guilty about, and what all your feels are about that. Jade was smelling. It's this family member who was a member of his family, not yours. Correct?

That is fabulous. Henry Cloud will love that. The author of boundaries. Nachos. Okay.

Mic drop right there. Uh, last time I looked at the title, it says nachos. Nachos. It says mine.

That is so good. Oh, I don't know if I'm gonna get out of here or not. Get me to a commercial, Lord. Oh, that's so good. That's the ultimate boundaries joke.

right there. It is. I'm going.

Nachos. You don't get to speak into this. That is so great. Whoever it is, has been sniffing.

That works pretty good. Mind your own. Mind your own. It's a full time job. This is none.

Yeah. And it's nachos.

It's so great.

I know you work hard for your money and the key to keeping more of it in your pocket is by making a plan for your spending with a budget. And EveryDollar is the budgeting app that I use personally, because it's perfect for looking every dollar you make in its little president face and telling it exactly where you want it to go. Just like you told that guy in traffic exactly where you wanted him to go. And even better, EveryDollar walks you through the entire budgeting journey, so you always know your next right step. Download EveryDollar.

Jade Walsh, our Ramsey personality, is my co-host. Thank you for joining us, America. We're glad you're here. This is The Ramsey Show. When you graduated from high school, did anybody give you a copy of a Dr.

Seuss book as a gift?

That's my guess anyway.

Okay, but here's the thing. Let's just try something. Let's do a graduation gift that actually matters. Oh, The Places You'll Go, okay? The Get Clear Assessment is built specifically for teenagers.

They spend some time answering questions, and in just a few minutes they get customized results about their specific top talents, passions, and mission, and that is the kind of guidance that gives them confidence about the major they choose, the career field they lean towards, and avoid wasting years and tens of thousands of dollars on courses on degrees they don't need, want, or hate. People spend years of their lives trying to figure this stuff out, and you can give them the Get Clear Assessment for students for 30 bucks at ramsaysolutions.com, go to the store, or you can give them Dr. Seuss. Your choice. So now we're trashing Dr.

Seuss in our ad copy? Well, you know... Is that how un-American? is that? The point is, it's better to get the...

I love Dr. Seuss. I'd rather have the assessment, though, than the book. I would too, but why can't we pick on somebody other than Dr. Seuss?

Do both, and. I'm like Anchorman. I just read whatever's put in front of me apparently. Oh my god, this is awful. No, I'm not going to trash Dr.

Seuss anymore. Tell those mean people in marketing to rewrite their copy. They're just meanies, just big old meanies. So seriously, all joking aside, get your kids to take this assessment. Wouldn't you have loved, as a high school senior, to have a freaking clue about what you were leaning into?

Love it. Would have loved that. ramsaysolutions.com slash store. What's the name of the book? we're telling them not to buy?

Oh, The Places, You'll Go. Oh, I think you ought to get that too. Not to be confused with Green Eggs and Ham. Why don't you just throw that in with the Get Clear assessment? We don't have any of those, so we can't.

Oh, The Places, You'll Go. Rodney's in Washington, D.C. Rodney, how are you?

Well, I'm 58 years old, and I'm retired. My bring home pay is $3,800.. I have about $36,000 cash in the bank, $135,000 in one retirement account, and $230,000 in another retirement account. I owe $43,000 on my house, and I want, want, babe, to buy a new car. I'm not 100% need it right now, but I want to.

So I'm trying to figure out, should I take a little bit of money out of my retirement account and buy the car outright, or should I just pay the house off first or something else? How much are you thinking about spending?

Uh, actually, the car is going to be approximately $40,000.. Yeah. So about, close to the same amount that I owe for my mortgage. Yeah.

Okay. All right. I'm a car guy, so I can relate. I mean, I like a great car. I got my, my big Raptor with loud mufflers and my sports cars, and I love that stuff.

So I'm with you on all this. But the, the problem is, is that these toys are going to cost you parts of your future, that you don't want them to cost you. So we don't, A, number one, we don't recommend buying a car, a brand new car, unless you have a million dollar net worth, because they go down in value so fast. So we don't do that and you're not there. So we're not buying a new one anyway.

So let's talk about a used one and a used one. We don't recommend buying anything you can't pay cash for. And that the total of all of the items that you own, that has motors or wheels, does not equal more than half your annual income. And you said you make what a year? Uh, again, I'm retired by bringing.

And I would pick up, um, something fun, that I make money, really money, good money doing. And, uh, you're only 58 years old. You're just a pup. Yes, sir. I mean, you could go make, you could go make 50 grand and not even think anything about it.

And then use that money to upgrade the car after your house has paid off. I love that plan. You got, you just got this, you got all this potential right in front of you. And so, if I'm you, I want the car. I agree with you, but I'm going to do it smart.

And that way, if you ever bought something Rodney, and by the time you finished paying it off, or by the time you owned it a little while, you knew you shouldn't have bought it. And you hated the stupid thing that you thought you were going to love. Yeah. That's what this, that's what this is going to be. If you do this wrong, cause you're already too smart to do this.

Yeah. Hey, you're not done.

I didn't even thought of that. Oh my God. I've got the money. That's different. But yeah,

You're working, man. I used to sit around. It's like, you're sitting, looking around your house, just looking for things to replace. Yeah. It's what happened during COVID, man.

Let's start chunking down on that house. Let's get that house paid off and then let's save up beyond that. And the best, the fastest way to do that is just make some more money. You could double your income without a lot of effort. Yep.

Yep. You're only making about 45,000 a year with your current retirement income. And you could easily go make another 35 or 40, just screwing around. I mean, really it doesn't, you don't have to work that hard, but just go, do something all with the idea that when I get my car and I got the emergency fund and I got the house paid off, I'm going to quit that. And I may sit around and do nothing again, except you'll be trying to spend again.

But yeah, but yeah, that, that, that's how I would do it. If you'll do this after you have figured out a way that's fun and reasonably easy to make some more money, and you have paid off your house and you have your emergency fund, and then you pay cash for the upgrade on the car. If you do it then, and buy a one or a two year old one, you're going to feel really good about Rodney.

doesn't have to be eight hours a day, you know, all this time, but it doesn't have to be a grind. Yeah. It doesn't have to be a grind. It can just be something you enjoy doing.

And you, and you got it dialed in and you hit the sweet spot every time you hit the ball, you know, and then 60, you start slow down and calm down. But most people make the most of their money in their fifties. So you got a real opportunity, Rodney still got two of those years left. This is the Ramsey show.

live from the headquarters of Ramsey solutions. It's the Ramsey show where we help people build wealth, do work that they love and create actual, amazing relationships. Jade Warshall, Ramsey personality, is my co-host today. Open phones at 888-825-5225.. Starting off this hour is Jill in Dallas.

Hi, Jill. Welcome to the Ramsey show. Good afternoon, sir. I am so grateful that I.

I value your opinion very much. We have a question about paying off a reverse mortgage for my father-in-law. My husband and I make between 180 and 200,000 a year. We have no debt. We have about 1.2 in our retirement accounts.

We own our house and we also own two other houses. Wow. Very good. So your net worth is north of 4 million?

Probably between two and three. One of the houses is pretty small. That's a story in itself. Anyway, my husband's father has a reverse mortgage and we would like to pay it off. The interest rate seems to be quite exorbitant.

Yes. And in another six or seven years, the interest will have eaten up the complete value of the home.

I just want to know from your perspective, we were considering taking out the money. There's 160 out on the house. We were considering withdrawing it. My husband is 59 and a half. We were considering withdrawing it and making it like an investment, since real estate does appreciate.

I realized that his father is 89 and so this could be tied up for 10 plus years, but long-term investments usually are just that long-term. So I, just, from your perspective, would really value your opinion in. what do you think of this? What pitfalls do you see?

And none of the other siblings are in a position to help?

Yes, sir. We're going to deed the house to you guys. Yes, sir. And y'all just pay it off and it's your house. And then you pay for the insurance and you pay for the taxes, you pay for the maintenance, and dad gets to live there for life.

Yes, sir. Or as long as he can stay in the house, that is. If he has to be cared for in some other way, then that'd be different. But yeah, we'll get you out, dad, but go ahead and just deed it to us now. And that's our return.

And we're also going to have to invest more, because we're going to have to cover the maintenance and we're going to have to cover the taxes and insurance for you to live there for free, as long as you're able to live in the house. Yes, sir. And that's a fair deal financially. It's also a very kind thing for you all to do, and you're in a position to do it and you'll be okay financially. You're not stupid, but I'm not doing this and keep it a secret.

Secrets are ugly and.

Okay. Well,

But if you don't have a better plan, you don't have the money, we're standing here with the money, we can do this. But I don't want some character in the family to be yelling later, oh, Jill took advantage of grandpa. Yeah. And the house has.

You're able to take care of dad, but I'm not going to have anybody objecting to this, and we're going to control the variables, because he obviously has,

we know that he doesn't always make good decisions because he made the decision to put a reverse mortgage on there. And so I can't leave the house in his name hoping he's going to make good decisions. No, we're going to take care of this so that we can.

I don't want to.

And unless you've got a better plan to take care of him, he's otherwise going to end up losing his house. So what do you people want to do here? Yeah. These reverse mortgages are from the pit of hell. They're horrible.

Absolutely horrible. High interest rates, high fees. And what's weird is, of course, the reverse is they pay for you. Those of you don't know how it works. They're paying the old man payments until it gets to 65% loan to value.

When it gets to 65% loan to value, they stop the payments and now they just add interest to the 65 until it eats up the entire value and then they foreclose. That's so sad. Or if he doesn't keep up the taxes and insurance even after they stop the payments, that throws it into fault and they foreclose. So regular home mortgages have about a two to a 3% foreclosure rate. Reverse mortgages have a 15% foreclosure rate.

So I'm not kidding when I say this is a ripoff. And they're sold on television on ads by washed up actors between the walk-in bathtubs and the study commercial. I saw Joe Namath, Montel Jordan.

My greatest fear in life is I live long enough to do one of those ads.

This is the Ramsey Show.

Listen, tickets for the Live Like No One Else cruise are selling fast. This is the ultimate debt-free vacation and I can't wait to celebrate with all the folks who've worked their butts off and changed their family trees. We will be sailing through the blue waters of the Caribbean with the Ramsey personalities and other special guests. A bunch of cabin options are already sold out. So hurry and reserve yours with a $600 deposit today at RamseySolutions.com slash events.

Jade Warshall, Ramsey personality, is my co-host today. Thank you for joining us, America. The phone number here is 888-825-5225.. A whole bunch of you are brand new. We appreciate that.

We're glad you're here. You can help us out if you would, whether you're old-timer or whether you're brand new. We need the help. You can do three things to help us move this show out and help America and serve America by telling them the truth, because we love them. And that's simply this.

Share the show. Tell people about it. Click the share link. if you're on a podcast or YouTube or something like that. Click the share link.

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And now we're, I think we're number 11 podcast on Apple's ranking. It comes and goes in the entire world of podcasts, which is some two or three million podcasts that are out there. That's not a nuanced category. That's of all of them. And so thank you guys.

We appreciate that. We have not spent $300 million on marketing this year. Instead, you guys are just telling us you like it by telling each other about it. So thank you. Thank you.

Thank you. Katrina is in Chicago. Hi Katrina. Welcome to the Ramsey show. Thanks.

How are you guys? Better than we deserve.

And so now we want to live in the same city to figure out if we're going to marriage. So you're going to move from Chicago to Nashville?

Well, I'm not planning to. So I'm trying to work it out with my job so that I could be fully remote. But in the meantime, I had to come in. I'm supposed to be around 60%. So I'm.

I'm still doing that by going to Nashville, but it's a little painful.

And I really don't want to get any, because you know how this works. Yeah, I do know how it works. Well, my question is,

Because the rent is so expensive. But even if this wasn't, even if there was no boyfriend or anything like that, we would never say to just walk in and up and buy a house. You would just want to get a feel of the area, figure out what life is. I have been getting a feel of the area.

that's about a hundred. How long you been dating boyfriend?

Since pandemic love.

Pandemic love. That's the only good thing that came out.

But here's the thing, I'm.

That's just another reason we think you're awesome.

When the relationship goes from boyfriend to husband, and when the job allows you to move, now we have permanent. Then we buy. As a matter of fact, then we buy, you and him, because you're married. Until then, you're doing this gypsy thing back and forth, corporate gypsy thing, and remote, semi, and long distance love affair, and all this. All of that.

You get engaged. You decide to get married. You can sell the Chicago house, and you can probably end up buying whatever house you get here in Tennessee in cash, as opposed to trying to... Do. you see what I'm saying?

This just screams rent for six months. Yeah, long term, it's better to do.

Hopefully, he's worth something. We didn't even ask about that.

I don't mean that, but compared to... There's a lot of earning potential between 32 and 46.. Okay, okay. All right. I see you, Katrina.

I.

when this all settles. You're going to end up saying, we want to set up our lives, and it's not in this house, or not in this condo. And so it just bothers you because you're cheap to rent, because you feel like you're wasting money. But rent, when it's in a proper scenario, and this is a proper scenario,

Good stuff. Stacy's in Bakersfield, California. Hi, Stacy. Welcome to the Ramsey Show. Oh, thank you for having me.

Sure. What's up?

What do you make? I make, well, I gross about $107,000.. This year, I'm going to get a 5%, though, but $113,000 a year. Mm-hmm. All right.

I pay into a pension. I have a pension. No kids, right? Right. All right.

So that's what I would do. And I'm excited that you're on this journey. I think that it's exciting that you're finally getting in control of your money. And that starts with you budgeting. It starts with you getting out of debt.

And make sure, before you do all of this, that you put aside $1,000 for emergencies, because you need that. first things first. For your starter, beginner emergency fund.

It's just our gift to you to help you start fresh.

Hey folks, there's a lot of half-baked investing advice out there, but here's what you can do to get more confident about this stuff. Check out the SmartVestor program. SmartVestor connects you with local financial advisors who have the heart of a teacher. They'll help you level up your knowledge and build a retirement plan based on your goals, not theirs. Go to ramsysolutions.com slash SmartVestor to get connected and get more confident about your plan.

That's ramsysolutions.com slash SmartVestor. Ramsey Solutions is a paid.

Hi, Dave and Jade, how are?

So. last year we sold his car to get out of that debt and save money, since he's able to walk to both his jobs. It's worked for us for almost a year. My husband has a full-time job for $22 an hour and part-time with $17 an hour, and I get $16 an hour for my part-time job. We take home about $4,530 a month.

So my husband is looking for a better job that would pay him about $25 to $28 an hour. If he gets this job, we would have to come up with at least $7,000 quick to get a new car or a used car. Where did the $7,000 come from? So we've been working with a car broker, auto broker, and that's like around the number that we have been looking for.

But yeah, if he gets that, then we can get down to one job and I won't be going crazy with the kids at home all day alone. So my question is, is it worth it for him to go for that job that cost a little, I mean pays him a little bit more, or should we just continue what we're doing?

Yeah, and then we would

You should just want to do it. What's best for your family. You don't have $7,000, right? No. You can't buy a $7,000 car then.