Quit Spending Like You’re in Congress!

build wealth, do work that they love, and create actual amazing relationships.

I'm Dave Ramsey, your host, Jay Barshaw, number one best-selling author. Ramsey Personality is

my co-host today, as we answer your questions. The phone number is 888-825-5225. Ryan's in

Seattle. Hey, Ryan, what's up? Hi, long-time listener. I just got an offer from my parents.

They'd help me buy a house. I'd enter into a contract with them, where basically they would

be the bank. They would fund the entirety of the purchase price, and I'd pay them back,

including interest. They gave me a little bit better of a deal with the interest at about

6.5%, instead of... It's around 7, 7.5%, around where I'm at. I was just curious on if it was

going to be something I should do. I know you've talked about not buying a home with somebody

you're not married to, but it is family kind of thing. The difference in interest, what does that

amount to? I'm going somewhere with this, because that's the break you're getting, right? That's

home. I'd pay off 75% of the home, and then when I sell it, they get their...

So the purchase price is 400 grand. Yeah.

They would be given back their 100,000, and then 25% of any profit that was made.

So this gets very complex. Yes.

Have you already done this?

It's in the process of getting done right now.

Can you, and are you willing to stop it?

I think it's a great idea. It's not a great idea. It sucks beyond belief. It's a horrible idea.

It's going to end in ashes. Please don't do it. Please don't do this.

How old are you? 27. Okay.

Just 10. When you're 30, and you're married, and you want to refinance the house,

and you have to buy out the 25%, your wife is going to be so pissed at your parents.

Don't do this. Is that because the value would be going up?

Don't do this. You can't afford to buy a house, sounds like.

Mm-hmm. If you can't afford to buy a house, go buy you a house, son.

Do not do this. You guys are putting this all together like there's only one thing that can

happen, and it's everything works out perfect. And 100% of the time, everything does not work

out perfect. Everything that comes at this, if you want to refinance, you want to sell,

they don't want to sell, you are now in partnership with people for no apparent

reason except a half a percent. No, no, no, no, no, no, no, no, no, no.

And to go back to the first thing, it sounded like at first your parents were just trying to

offer you, and it wasn't a good method, but it sounded like they were trying to offer you a

break in interest. And my thought would have been like, well, calculate how much it is and just ask

for it as a gift, and then you go buy the house. But they're really trying to make a profit.

And so it's two things going on. It's you trying to get a house before you can afford it,

and them trying to invest in real estate, and they don't really have the money to do that either.

So it's two things that are gone awry. This is really bad, Ryan. I really wish I could

talk you into not doing it. I don't think I can, though. I think you're too far into it.

Yeah, you're done. Okay. Good luck, son. Please don't do it. I'm going to tell you one more time,

there's 47 ways this can go wrong, and only one way it can go right, and you're going to

experience one of the 47. You called and asked our opinion. I've got 30 years on this microphone,

40 years of doing one-on-one coaching. I have never seen a deal like this work out.

They always go sideways. You're asking to have a strain in a relationship with your parents

over a stupid house, and you guys have these rainbows and unicorns and skittles in your head

that this is all going to work out a certain way, and honey, it's not. So you're going to do it

anyway, and you're going to learn the lesson the hard way, but you can remember the time you called

and we told you not to do it. When you're sitting neck deep in the poop, you just remember that Dave

and Jade told you not to do it. Yeah, because he's going to be neck deep in the poop.

Katie's in Pensacola. Hi, Katie. What's up? Hi, Dave and Jade. Thank you for taking my call.

Sure. So I just want to ask, what type of savings account should we keep the $110,000 that we have

for a down payment on a home in the future? My husband is eligible to retire from the Air Force

in three years, but we'll probably wait another two years, so five years total, to maybe buy a home.

Yeah. Wow, nice. Well, if you're going to play close to a five-year window, you can talk about

putting some or all of it towards something like a standard and poor, an S&P 500 mutual fund,

and you'll make some really good money on it. That's what I do, okay? But it could go down in

value. You know, you could put $110,000 in and it might be worth $100,000, but that would be a highly

unusual five-year. 97% of the five-year periods in the stock market's history have made money.

So I'm very comfortable with the risk, if you put it in and leave it alone five years. If you're

going to leave it alone three years, probably not. You're probably going to go high yield.

If you want to do a blend, I'd do some, like half of it in a mutual fund, an S&P 500 fund,

and half of it in a high yield. But at least get some of this money working for you, because we're

talking about the difference of about $10,000 a year in what you would earn on the money.

So we're talking about $50,000 high yield versus a mutual fund over a five-year period of time.

I also like the idea of investing it or doing the blend, because once you put it, you know,

you put it in an index fund or you put it where you put it, you're less likely to touch it. You're

less likely to have something pop up like your friend's, you know, wedding in the Caribbean

that you think would be a good idea to spend some of that money on, right? Whereas if it's in a high

yield, it's easy to grab some of it, you invest it, it's kind of locked away. High yields are a little too

accessible. Yeah. Yeah, I like trying to keep it out of my own reach. I like to trick myself

into becoming wealthy, you know, and trick myself into actually accomplishing my goals. And yeah,

that's a good point. It's a very good point. It's always a wedding in the Caribbean.

I don't know. What is it with you and the wedding in the Caribbean? That comes up a lot.

Is this a scar in your life? It might be. It might be a friend out there somewhere that's...

But you know how it is. Now suddenly you need a new car.

Oh yeah. Well, you know, for a redneck, it's we need a bass boat.

Oh.

Need a bass boat. I need a side-by-side to go deer hunting in.

Oh gosh.

You know, and they're only, they're only 20 grand. I mean...

You got that sitting in the high yield.

You know, it's all... I got that money sitting over there. Why would, why would we, why would

we pay a bank interest for the side-by-side? Your brain starts fogging up and it stops working. You

can't see through the windshield anymore. Yeah, you're exactly right. That's a very good point.

So I, I personally, I'm comfortable knowledge-wise with the history of the stock market.

So I'm plunking all of it, if it's me, into an S&P 500, if you got a four or five-year window.

If you're a little less comfortable, do some there and some otherwise.

If you're completely, that freaks you out, just put it in a high yield,

but you've got the downside of it's too accessible.

You know, it becomes a bass boat fund or I need to redecorate the kitchen fund or...

Yeah.

Whatever the crap comes up. This is the Ramsey Show.

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We're going cruising boys and girls. We'd love to have you go with us. We're doing the Ramsey

Live Like No One Else cruise. For those of you that are Baby Steps 4 and beyond, it's your

opportunity to celebrate the milestone of getting into wealth building mode. All the Ramsey

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slash cruise. Paul's in Buffalo, New York. Hey Paul what's up? Hey how's it going man? Better than I

deserve. How can we help? So kind of a crazy life event happened lately. I have kind of a

strange uncle. I know him but probably haven't talked to him in 15-20 years and he passed away

and my mother his sister is this executive of the estate and she calls me and says he left you about

a half a million dollars. Whoa. You're the guy. I've always heard about a guy with a rich uncle.

It was you. It happens. It happens. I always I never I didn't know where you were. I've always heard about

you though. Paul in Buffalo. The guy is he's Paul in Buffalo. He's the guy with the rich uncle.

Wow that's so cool. That's so cool. I hate it when I get a half a million dollars out of the blue.

So little it's a good problem to have but I just don't really know what to do. I've been

married for 21 years well not married but with my wife for 21 years. I'm 37. We have a house

and we have two beautiful kids and I've listened to your show for a while and I know it's very

centered around getting rid of debt but I just want to be smart. I've never had this type of like

influx of cash flow before and I just don't want to make any mistakes and

you know set my kids up and obviously take care of us in the immediate. So yeah that's very wise

because this kind of a hit really could change your family tree if you're careful with it. So

that's very wise and so how long before you actually receive the money do you think?

I mean they said it's well that's another question too. So a lot of it is an investment

and just from things I was reading online I've seen people where like the attorney will liquidate

all the investments and then they get taxed really heavily on it and I don't know other

things I was reading would like move it to a Roth and then inherit the Roth or something. I don't know.

You can't move dead people's stuff into a Roth. It doesn't work. So that's internet

garbage. So the investments should not have any investments don't have any taxes honey.

So the deal is this now the attorney does if the attorney liquidates them or you liquidate

them it doesn't matter. You now become the owner even if he liquidates them okay. You can ask him

not to liquidate them and you can do it but here's the here's the tax law on that part and then we'll

move on to the rest of it okay. So let's say that part of the 500,000 is I'll just make up something

Home Depot stock okay and uncle paid 50 grand for the Home Depot stock but the Home Depot stock's

worth 150 now. Your basis as the inheritance in an inheritance is current market value and so

your tax is based on how much above current market value it is. It's called a stepped up basis

okay. You do not get taxed on what he paid for it you get taxed only on what it's worth at the time

of his death and if you sell it within six months of his death it is presumed to have been at market

value by the by the IRS okay. So you got no taxes because so you take all this stuff if you want to

if you want to liquidate all of it and have a half million dollar pile of cash in the middle of the

table zero tax there's no income tax there's no inheritance tax. That's cool. Now okay so that

answers that question so we don't have to we can move on past that. Now then the reason I ask how

long before you get it is I want you to start pretending like you were hired suddenly to manage

someone's half a million dollars and you've never done that before which is exactly what's happened

right. God just gave you a half a million of his money and God says how you gonna manage it son

and you're going this scares me a little bit I want to be careful and that's wise.

So what you would do if you were hired by someone and you didn't know what you were doing

you would get some other people on your team that knew what they were doing and so I want you to

begin to gather up your own little personal committee your own little personal board of

directors so to speak. So we're going to get a mutual fund broker a SmartVestor Pro off our

website in your corner. We're going to get a an estate planning attorney in your corner. We're

going to get some tax advice from an ELP and backup and make sure that Dave Ramsey actually

gave you the right advice a while ago and check that with a pro okay and you can get an ELP a

tax ELP off our site. We don't have estate planning attorneys on our site but we've got

people we recommend for tax in Buffalo and for if you're going to do any real estate deals you can

go get a real estate person in your corner. If you need insurance you need a good insurance broker

in your corner. Every one of these people do not qualify to be in your on your committee unless

they have the heart of a teacher meaning your job is to manage their money their job is to teach you

enough about their specialty to help you manage the money. Got it. You don't turn it over to them

and go well I just gave it to this guy to manage and he lost it all. No your job is to manage it.

You're taking advice from these other people and therefore their job is to teach you they have to

have the heart of a teacher. Does that make sense? It does. And that will keep you out of trouble.

Do not do anything with this money that you do not understand because it is your responsibility.

Yeah because sometimes these people start talking it sounds like Charlie Brown's teacher.

You remember that and so yep long time ago on that cartoon but yeah the anyway so

uh all that to say then we're gonna have you work the baby steps right Jade? Yeah Paul what's your

current financial situation tell us about your financial life before this money. Yeah well that's

another like interesting thing I just had a business of 13 years and I sold it in January so

I have about a hundred thousand dollars in assets that I still need to kind of get rid of

okay and I have about twenty thousand dollars in cryptocurrency. As far as debt goes I have

none and my wife has none. We don't have anything. Mortgage? Yeah. We own our house

I think we owe about 130,000 and it's worth about 300. Okay so first thing I'd probably do after you

have those people in place is I definitely want to pay off my mortgage and just be scot-free

and then from there on I think they've set you up to have the right folks in your corner to decide

what you're going to do about this money how you're going to invest it if it's going to be in

the stock market if it's going to be in real estate. And my recommendation is take six hundred

and twenty thousand dollars from bitcoin and sale of business and inheritance and put at the top of

the page and spend it. We just spent 130 of it paying off the mortgage. What are we going to do

with the rest of it? Okay I'll give you and then I'll tell you one last thing on that. A lump sum

invested in a good mutual fund or series of mutual funds if it averages 10 percent or more

will double every seven years. You're 37 you said? Yep. So let's pretend we put 400 in investments

and when you're 44 you'll have 700. When you're 51 you'll have 1.4. When you're 58 you'll have 2.8.

Yep. See how this changes your family tree? Exactly that's the thing like I said it's such

yeah it's a good problem but it's kind of it's intimidating it's kind of scary all at once you're

like. And the other two things you can do with money is have fun with it and be generous with

it and you should do some of that with some of this money too. Notice I didn't invest at all.

You're debt-free, you're generous, you have some fun and you invest and you keep your

stinking hands off of it and let it double. This is the Ramsey Show.

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Thanks for joining us America. Jade Walshall, Ramsey Personality is my co-host. John's in

St. Louis. Hey John how are you? Not too bad myself. Better than I deserve. What's up?

I just called to try to get a little bit of advice from you Dave on

ways that my wife and I can tackle our monster debt that we have. Currently without our house

we are at $240,500. Good lord. Yes. What is a monster? What is the monster?

Unfortunately it's a lot of credit cards, student loans, it's a HELOC and a 401k loan

as well as two car payments. You never met a debt you didn't like.

No and unfortunately not. What's the income?

Our salary-wise is $151,600. I broke it down to what our yearly is should be roughly $99,840.

Okay so it sounds like you guys, I'm just trying to get my head around how this happened.

It sounded like you felt like you were making a good income and it was time to just go crazy.

Is that right? The credit cards is the biggest issue. How much is that? Unfortunately

of the credit cards $46,962 as of last month. Okay. How much on the cars?

The cars itself, my car is $28,700. My wife's is $21,000 and mine's due to be paid off in four

years. Hers is due to be paid off in three years. Well one of them's probably got to go.

The $28,000 one, what's it worth? I'm not entirely sure. It's a 21 Kia Sorento.

It's more of the family car. She has the more gas-efficient car.

What does she have? A Nissan Altima.

Well whatever one of these is the least upside down and of the most value, I'd probably try to

get into a cash car. John, I don't really care if it's the family car. You people are broke.

You're starving to death making $150,000 a year. You don't get to say it's the family car.

You get to say everything's on the table. We're selling so much stuff the kids think they're next.

We're not doing anything until we get this mess cleaned up because you guys have been spending

like you're in Congress for what, 10 years? How long have you been married? 10 years?

Four years. You guys did this in four years or did you get started early?

I mean the student loans is all my stuff. How much is that?

Unfortunately $80,000. Well that is the biggest portion,

not the credit card. And then the HELOC.

HELOC is $46,000 and that was just this past year.

What'd you do with that? Which unfortunately helped us pay off a bunch of credit cards.

No you didn't. You moved them.

It helped us consolidate them I should say. Yeah you moved them onto your house.

And it didn't help you consolidate them. It put your home at risk. So it's not a help.

And you didn't stop spending. You're still spending more than you make, right?

I would say yes. Have you cut up the credit cards?

No unfortunately not. I own myself. I use mine primarily for work related, which I know Dave,

I've heard you talk about before. I've expressed in my work they should get us all credit cards so

we don't have to use ours. Hopefully we can get that approved so I can stop using mine when I travel.

Apparently that's not working for you. You have $46,000 in credit card debt and a HELOC

that's $46,000. So it's basically $90,000 in credit card debt.

So something's broken with that system. Would you agree?

Yes. You don't end up $90,000 in credit card debt when something's working.

So no use of plastic is going to be okay in your house. You guys have to go cold turkey.

You don't walk around with a flask in your back pocket if you're trying to quit drinking.

Just curious, for the work part, because I want to know how much of that is an excuse,

how much are you putting on your credit card every month for work?

I mean, it's not that much. The card that's got the biggest amount, I take the full blame for it.

Miscellaneous stuff. That had nothing to do with work, yeah.

My point is, if you're spending a little bit here or there for work

and they're reimbursing you, you don't need a credit card for that. You shouldn't be doing that.

Let's reset here for a second. Does this scare you?

Yes, because it's continual. As a family-wise, we would be better off financially.

The credit cards I look at, it's one of the scariest things.

It's scary. The math is not scary. What's scary is the pattern

of being out of control and staying out of control. That's what scares me. It's not sustainable. You

know this is heading towards the wall and you're going to T-bone the wall and just blow the whole

thing up, right? You know that's what's coming. Because you guys just continue the same pattern.

We're in it. You can't get out of a hole by digging out the bottom, right?

Now, how's your wife feeling? We're both just as stressed with it.

Okay. Are y'all fighting about this stuff? We try to talk about it and she gets stressed

and doesn't want to talk about it. Y'all are fighting about this?

Yeah. It would be weird if you're not having a bunch of fights,

because this stuff is the number one cause of divorce in North America. It's the number one

cause of disagreement in marriages is money problems and money fights. You got them all up

and around your ears. Here's what we're going to do. We're going to help you. I want to give you

an overarching plan. I've been where you are, except worse. I remember being terrified. I

remember my wife being terrified. I remember us trying to kill each other. I don't want that for

you, okay? The plan I'm going to give you does not have a middle ground. It is not an easy process.

The result is a hundred percent. You're going to win and you're going to become a millionaire,

but the path to get there is painful because you guys have a series of behaviors, habits,

and even language that you use in your own heads and at each other that has got to completely change

because your behaviors, your habits, and the language you use around this stuff.

As soon as I start talking about the car, you start talking. It's a family car

as if it's a non-starter. It's not a non-starter. It's a stupid car and your family's almost

bankrupt. It's the enemy. It's not the family car, okay? So you change your vernacular around this.

You go, anything that is between me and freedom is the enemy. We are going to freaking war

with our lifestyle and our former patterns of doing things. We are not going to do this anymore.

If you're ready to enter into that, I can show you how to do it. If you want to play around and

think there's a math trick to hack you out of this, you got the wrong guy. I can't help you,

but I can show you. I've shown millions of people how to get out of debt. We'll put you

into Financial Peace University. I'll pay for it free and we'll pay for you to be on every dollar

of the premium side of the app and get you in the every dollar app and you and your wife sit down

together. Crap, I'm not even going to put a coach in your corner. We got one of our Ramsey coaches

in your area. I'm going to pay for a personal coach to coach you, but only if you're willing

to say, I'll do whatever I have to do to win. Okay. All right. We can get rid of this fear,

man. And here's the weird thing. Before the debt belief, the fear will be gone. You'll still have

the debt, but you won't have the fear anymore because you'll see your way out. You'll see a

light at the end of the tunnel that's not an oncoming train. The only thing you know right

now is you're stuck and you're not stuck. What's stuck is the stupid crap that brought you to here.

It's the same stupid crap that made me go broke. And they got Jade to what? 460. 460,000 in debt.

The lady to my right and paid it off, her and her husband. So you can do this when they weren't

making anywhere near a hundred and a half. So you hang on. This place is about hope,

but it's not about false hope. You're going to live like no one else, man. Your friends

are going to think you joined a cult. You're going to be going cray cray, man, completely

different than anything you've ever done in your life, but you'll be free in 36 months.

Hang on. I'll pay for it. Christian will pick up and get you taken care of, brother.

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Jade Walshall, Ramsey Personality is my co-host. Open phones at 888-825-5225. We appreciate all

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doing it because our numbers are way up. Tim Zinrono. Hi, Tim. How are you? Hi, Dave. Thanks

for taking my call. Sure. What's up? So my wife and I are about halfway through baby step three.

And so we're looking toward investing something that's outside of my work TSP and her work 401k.

Good. And we've reached out to a financial planner and I don't want to make another mistake with

money because I've done a lot of them. So I'm just wondering, how much should I be paying this guy

as a financial planning fee? And then... Did you go to a smart investor pro? We did. Okay.

We did. The smart investor pro, that particular one has a financial planning fee?

Yeah. They have a... They call it a retirement planning fee. It's an annual fee. And then

there's... Then as I was reading in there, depending on what investment vehicle you're

using, if it's like above 50,000, then it's a percentage. And then below that, it's the brokerage

fees was the way I was reading it. But I don't understand that. And we're meeting with the guy

tomorrow and I just... Most of the smart investor pros run on just managed accounts. And managed

accounts is simple. There's no commissions and they charge 1% of the balance. Now, some of them

do have a minimum, 50,000 in balance or whatever, till they get there. And you don't need to pay an

annual fee. I don't know what that's for, just for planning. Because you're not going to be doing

that much planning annually. Now, you may want to pay an upfront fee to help you get your will

started if you don't have one, help you do some other financial planning things. How much was that

fee? 600. Okay. That's not unreasonable now. Okay. Okay. All right. Because I mean, a lot of people

in the financial planning world, there are people that do not sell anything. They do not sell

insurance. They don't sell mutual funds. They don't sell wills. They don't sell anything. And

they just charge for their hours. That's called fee-based planning. Okay. I don't generally

recommend those because then you're also going to pay commissions on top of that. And you can get

the same advice basically for 600 instead of 4,000. Or for, you know, if you move a couple

hundred thousand bucks over there, you're not going to pay anything but 1%. And they're just

going to take care of your plan, your annual planning and your other stuff too. There's not

that much to this. And so different Smart Investor Pros run different things. But as to my knowledge,

we don't have any fee only. All of them are managing mutual funds for your Roth IRA, your

college or rollover from your old job or whatever. And they're helping you do that. And 1% on the

managed accounts is what almost all of them are doing. I mean, my only question would be at this

point in your investing, you haven't even begun yet. How much financial planning do you need each

year? That would be my question. Right. Not a ton, but 600 bucks is not, you know, it's not 6,000.

That's true. The other thing you can do is this, meet with that guy and just get a sense of the

spirit. And as you're driving away, ask your wife, do not ask her what she thinks. Ask her how she

feels about that meeting. The reason I'm calling is based on how she feels. Okay. What's her

feeling? Well, they sent us their disclosure agreement and the contract. She started reading

the contract and she's like, well, wait a minute. Now we're getting tied into a contract and there's

all these different fees and whatnot and getting nickel and dime to death. And I don't want to get

involved in that. Okay. Go meet with them and see if that spirit changes. We have, we've met with

them twice already. Oh, okay. Okay. Then don't do it. Okay. You're interviewing them. Yeah. Click

on Smart Investor Pro and go talk to another one. Okay. There's more than one in your area.

And you know, there's probably one just doing a 1% management fee. Um, and so that, that really

wouldn't be that unusual. So yeah, listen, dude, a hundred percent of the time, my wife does not

feel good about a business relationship I'm entering into. We don't do it period, period.

And I will ask her, I'll challenge her. Are you sure that's God's spirit? Not last night's pizza,

right? I'm going to double check, but she will say, nah, it just doesn't feel right. And every

time that one wins, Proverbs 31, who can find a virtuous wife, the heart of her husband safely

trusts her and he will have no lack of gain. Huh? Look at that. So yeah, don't, don't do it. I don't

care if it's our, the guy might not be a bad guy, but he's not your guy. And that's it. That's

because somebody else might call the guy, work with him and be like, this guy's great. How many,

there's been many times where somebody has recommended somebody to me, they love them.

And then I go and I'm like, that's not my guy. Yeah. So it happens.

Hey Christian, I do want to learn a little bit more about this guy. I don't think he's doing

anything wrong, but I want to learn a little bit about him. So find out who it was. Okay. I'm

gonna put them on hold. All right. Open phones at 888-825-5225. Tom is with us in San Diego. Hey,

Tom, how are you? Hey Dave, I'm good. How are you guys? Better than we deserve. What's up?

Wonderful. Glad to hear it. Um, I am out here and I'm trying to figure out what the right move is

to do with my house. So I went through FPU, uh, at the beginning of the year and I'm upside down

on the car payments. Like I make good money, but I'm, I'm at a very high in debt to income

threshold on my, on my house payment. How much is your house payment?

$4,500. And what do you bring home?

Uh, gross is about $140, $145. What are you bringing home a month? Every month.

Just over $11,000. Yeah, that's pretty high. Okay. Yeah. And how much is your car payment?

$860,000. Holy. Well, there is a bigger problem. Yep. And that's, so this is the problem I faced.

I'm all about the dumps of Tahoe plan, but because I'm too upside down on it, there's no way.

What do you owe? I got hit really hard. 30, number 30, 39. Okay. And what do you think it's worth?

Well, according to the like KBB estimates, it books at like 24. Private sale?

Private. And so trade would be like 20. Yeah. What'd you do? Tear it up? No. Roll negative

equity from the other deal in it? Negative. No, I didn't. Um, it was a, it's a high interest.

Oh, wait a minute. Wait a minute. Wait a minute. Wait a minute. What's your interest rate?

12. Okay. The 40 or the 39 is probably not your payoff. That's probably when you do a subprime

loan. They generally put it on the books on TOP total of all payments. That's different than an

early payoff number. You're asking for you. Did you ask what your account balance is and you got

39? No, I asked them what their pay of the 10 day payoff. And they gave me a 20 day payoff,

which I've never heard of, but. Okay. So that's an actual payoff number. That was an actual payoff

number. What car is this? It was a Jeep. Man, you got so screwed. Okay. So the, I'm, I'm really

close to a breakthrough on being able to refinance this house and it would cut my payment down

significantly. But the trouble is because I have this, like I'm trying to go back and forth between

baby steps one and two. And so I had my step one, I'm crushing step two. And then I got hit with

like $20,000 of home repairs in June. And so I just got nothing. So it's starting all over.

And so I just keep getting overwhelmed with it and trying to figure out how I should do it. Cause

if I give up everything, I'll do it. Yeah. I mean, something's got to go and you need to decide what

it is because nothing you're describing is fun. We got to get rid of the Jeep and maybe the car,

maybe the house you decide, but you can get more of both. So I wouldn't hang on to them for dear

life. I just say, okay, God, which get me out of this. Hey folks, Dave here. And I know some of

you listen to the show, waiting for a call that answers your specific question. Maybe you need

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in the app store today. 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. I'm Dave Ramsey, your host. Number one bestselling author, Jade Warshall,

Ramsey personality is my co-host today. Open phones at 888-825-5225. Craig is with us in

Minneapolis. Hi, Craig. How are you? Great. How are you? Better than I deserve. What's up?

So to start off with, we have no debt outside of what we owe on the home. But my question is,

is investing money into solar panels to save money on utilities better or worse than investing in

the market? So after the tax credit that you'd get the 30% that just comes right off, I'd get

it back on next year's taxes. That equates to about a 7.8% return on what I would save. So

obviously, I don't have to pay tax on money that I saved. But if I invested it, I end up having to

pay tax eventually on money that's invested. Man, you really want some solar panels, don't you?

You got the bug. You got the salesman's pitch down, man. So what you're saying is actually not

true. Because if you put it into a Roth, there's no taxes on it. And a tax rebate is just a cost

savings. It's not a return on investment. Right. I'm not factoring in the tax

rebate on anything as far as... You said a 7% rate of return was the tax credit.

Oh, no, no, no, no, no. So the system is like 57. I'd get the 17 or whatever back on the tax

credit. So I'm looking at it... That tax credit is just a cost savings. That's all it is.

It's not a return on investment. And I'm not factoring that into any of my figures.

What was your 7.6%? Me eventually putting in $40,000 and saving about $3,400 a year.

Oh, okay. All right. That's your 7%. Okay. That is an actual return. Okay. All right. Correct.

So if you invest $40,000, you have a 10-year breakeven.

About, yeah. Yeah. That's because you're not in the solar panel zone in Minneapolis. You ought

to have about a five-year breakeven on solar panels for them to make sense. And the reason

is the technology is moving so quickly. The solar panels today are excellent compared to five years

ago. And the solar panels five years from now will be excellent compared to that junk you're

getting ready to buy. So you need to break even on it really quick. It's like buying a computer.

Think about a five-year-old computer. It's a joke. It's a doorstop. And so nothing as clunky

as old solar panels. But I'm a believer in solar, but solar, the numbers we've run on it, you need

to try to break even on it. Net cost, not the 57, but the 40. I'll go with your tax credit being a

cost savings. So we're running the numbers on 40. But if you're only making 3,400 on 40, you've got

a 10-year breakeven, 11, 12-year breakeven. That's not good enough. You need to make your money back

faster than that on that kind of thing. So I endorse solar companies in some of the markets

that we're in, some of the talk radio stations and so forth, but they're running five, maybe

seven-year breakevens, but not 10, 12. And by the way, 7% rate of return on technology that's

deteriorating daily is not a great rate of return. So 7% rate of return on a high-yield

savings account would be great, but it's not great on technology. So that's going down. So

these guys, and you've obviously run into a world-class salesman because you're regurgitating

his stuff really well. No, I personally would not do that. I just want to make sure. Because

your breakeven is too long. I just want to make sure he wasn't thinking about this as an alternative

to... He was, and that's the other problem. It's not even on the same spectrum of investing. Just

do your investing and then say, am I going to buy something else that gives me a breakeven? Am I

going to buy a car that saves me on gas mileage? Yeah, they're two separate discussions. Okay,

if I've got a gas guzzler and I'm going to save X number of dollars on my car by buying it, but

it's a little bit more expensive. What's the breakeven on your gas mileage savings? But that

has nothing to do with whether or not you're going to invest. That's not an alternative to investing.

Yeah, that's right. You don't get to not do a Roth because you bought a car that doesn't

need gas. That's right. Or you put solar panels up that don't need electricity. But what that tells

us is he can't afford to do this because he's considering doing one over the other.

That's what I'm getting to. I got my magnifying glass out. Good, good,

good job there, investigative. I like it. Cody's in Orlando. Hey, Cody, what's up?

Hey, Dave. So I am over my head in a situation with a car that I financed.

I took the car over and now I'm in a position where my mechanic told me that the motors are

in recall. It's destined to blow up at any point. Of course it is. And I owe $14,000 on this car.

And there is about a two-year waiting list for a new motor due to the recall on all of them.

What vehicle is it? What is it? It's a 2018 Hyundai Sonata.

And Sonata's all the engines are blowing? It's burning oil, causing the engines to blow up.

It's internally burning oil. And it's a recall. This is not just you. It is,

but it is not covered. I'm not under warranty due to the mileage on the car.

And so the car is at almost 160,000 miles. I took it over in a bad situation going through a divorce,

didn't want the credit to get ruined, took over the car. Okay, so what are you

on it? I owe $14,000. And what can you sell this piece of crap for?

A trade-in, probably $2,000. And I don't have anything in savings, but I have another car.

My mom just passed away and I inherited her car. No payment, paid off. What's it worth?

About $3,000 trade-in. It's a little older. It's a 2012 with about 80,000 miles on it.

About $54,000 a year.

All right. So if you trade-in or whatever, you got $3,000, you need $11,000, right?

Yes. Where are you going to get $11,000? You need $11,000, where are you going to get it?

Yeah, I don't have it. I know. Where are you going to get it?

I would have to work and save it. That's right.

Like a lot of work, more than you're doing now. Yeah.

Like extra job. Yeah. Okay.

Like you can make, you know, $1,500, $2,000 a month delivering pizza

five nights a week. Okay.

And you're doing that in your mom's old car, or you could run the Sonata all the way into

the ground until it blows. I don't care because it's not going to be any more. You might as well

get something out of it and just run the crap out of it and, you know, DoorDash and pizza and

anything else. What do you do for a living? Right now I'm a cook at Longhorn.

Okay. All right. So anything you could do to get more and more hours at the best possible pay

doing anything, I want you working like a maniac and, you know, like have a, like a, I don't know,

five, six month plan to be done with it. Five months would be $2,000 a month, right?

Yes, sir.

Find $2,000 a month for five months and then get rid of this piece of crap.

And then you go, okay, that one's in my rear view mirror. No pun intended.

I think he thought there was a...

Oh, there's not a hack.

Yeah, there is a hack.

No, there's not a hack.

Gotta work your way out, unfortunately.

It is. It's called work. Lots of work. It's a hack.

Magic trick.

Work all the time. It's a hack. Oh, this is a Ramsey show.

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