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 Walsh, number one, best-selling author, Ramsey. Personalities, my co-host today. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Kirt starts us in New Jersey. Hey, Kirt, what's Hi. How's it going, Dave? Better than I deserve, man. How can I help?

I have a little bit of a business question. I have 57K in personal debt. I started my business less than a year ago. I've been I'm pulling out everything that I make from the business, all my profits, in order to pay off my personal debt. I have no business debt. I was just wondering, I feel like I'm not able to grow the business because I don't have retained earnings. I don't feel comfortable hiring somebody without retained earnings. I was wondering, too, if I should keep some retained earnings just to maintain overhead. What would you suggest in terms of how I should go about that?

Yeah, I would. I would. What How much have you pulled out of the business in a year? What are you making?

Year to date, I made about 80K.

Way to go.

I would say my profit margin is about 80%. Good for you. I've been pulling out everything. A little bit of a tidbit, too, is I have a a week old right now. Oh, wow.

That's fun. Congratulations. What business did you open?

Physical therapy.

I'm a physical therapist. Oh, wow. Good for you. Okay, what we teach in Entree Leadership is that you pay yourself a living wage or you pay yourself a salary, an amount that you're comfortable with, that you can make progress on the goals at home, which would include debt. You don't have any debt at the business. You could just say, I'm going to take a percentage of profit, 10%, 15%, 20%, something like that, every month and hold that as retained earnings and take everything else home. That way, your retained earnings grow as fast as your... They grow as a percentage of profits. So as your profits grow, your retained earnings grow. Okay.

Yeah, that makes me feel a lot more comfortable.

I mean, if you had 8,000 bucks laying over there because you did 10% or you had 16,000 laid over there because you did 20%, you'd be in really good shape.

Yeah, but it's definitely more than the 1,000 that I would keep in for the security.

Exactly. This is the different formula because it's business that we're dealing with. But yeah, that's what we teach on TradeLeaders. It's what we do at Ramsey, and we laughingly call it the Sharon fund because I was draining everything out of here and then griping about cash flow problems all the time. Sharon's like, Well, you're not even doing what you teach. You don't have an emergency fund. You gober, you're a hypocrite. I'm like, Oh, God, she's right again. We call it the Sharon fund when we first started doing it. We've been taking a percentage of profits from the day that I discovered that my wife was brilliant in a home.

Well, when Sam and I started our business, It was a similar thing we had. We still had about $240,000 that we were paying off. We drained all the profit to pay it off. The most painful part was you're taking this payroll and then you're turning around paying taxes on it, and then you're using it to pay off all this debt. But for us, it felt a little different because it was just the two of us at the time. We had very low overhead. There wasn't a lot of risk involved.

Make sure whatever you're taking home that you're withholding on it so you You can do your quarterly estimate. You don't want to get behind with the KGB, I mean, the IRS.

Yeah, definitely.

Okay. So as long as you're doing that, I just pick a percentage, I don't care. My recommendation would be 10 to 20, somewhere in that range of net profits. Each month when you close your books, go, I'm going to set that aside over here, take everything else home and attack the 57 and get done with it and be able to buy diapers for the four-week-old. Everything works. Very cool. Good stuff, man. Congratulations. Sound like you got it I'm proud of you. Alan's in Fortworth. Hey, Alan, how are you?

I'm doing well, sir. Thank you so much for taking my call.

Sure. How can we help?

Well, so here's a detail. My wife and I were in Baby Step 2, and we're just trying to figure out, when does it make sense to pause Baby Step 2 in order to save for a beater car?

What are you talking about? Why you don't have a car, or what's the situation?

The situation is I I have a car now. Got a big, well, not a big loan on it. It's $24,000. I guess we're trying to do the whole gazelle intense thing, and I'm just thinking, well-Oh, if you got a beater, you'd sell the $24,000? Yes, sir.

Okay. What's your household into?

All said, about 6,000 months for my primary job. I have a secondary job. I get maybe 500 a month, then VA disability, so around 7,500 a month as a take home.

Okay. All right. So you have that car, and it's worth… Is it worth around the 24, or what's it worth?

It is. I looked at Kelly Blue Book, and right now, It looks like it's selling for about 22,5.

Okay, what's the other car?

That's it. That's all. I mean, that's my car.

You have one car?

I'm sorry.

We have another car, which is my wife. What's the other car?

Honda Civic.

Okay.

What's it Well, that one's probably worth 8,000.

It's no other car. There's two rules of thumb we use when someone asks this question. Number one, don't have vehicles ever in your life that have motors and wheels, anything with a motor or a wheel, added together that equal more than about half your annual income because you have too much tied up in things going down in value. Agreed? You're not violating that one. Okay. The second one is, can we be debt-free everything with the house in around two years? We know we got 24 in debt. What other debt have you got?

About 3,000 credit card debt. That's all the debt.

You like the car?

It is a good car.

Then pay it off.

Okay.

You can be debt-free inside of two years. Easy. Probably about 18 months or less. You're making 90, we need to pay off 26 grand. You can do that.

Okay.

Yeah, I agree.

All right. You can do it inside of two years, and the total is less than a half annual income. That's the two tests that we use, the means test, if you will, to do that. Folks, let me tell you, that's not a biblical thing in terms of… It's not in the Bible because… I mean, It's just a rule of thumb. The only thing that's in the Bible is the Honda Accord because Jesus said they were all in one accord. But none of the rest of them are in the Bible. You just add it all up. The problem is that we all in America love cars. Some people love cars because they're red-neck like me and they want a muffler. Some people like a battery called a Tesla. Some people like Rachel and George, they want to catch fire to themselves. Then some people like- Spontaneously, combust. My wife likes a nice car because she thinks it's a large purse. But we like cars in America, and the stupid things go down in value. When you take $60,000 or $70,000 and you turn it into $10,000, this This is not a wealth building methodology. It's the largest thing Americans buy that goes down in value because you are what you drive in America.

It's such an identity piece. Man, I never thought about that. George is a battery. You are what you drive. I'm a loud muffler, so who knew?

That's funny.

But my neighbor said, I know when you go to work, How do you know when I go to work? He goes, I can hear it.

That's who I'm hearing driving? Driving down the road? Oh, my gosh. Good to know.

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Jade Walsh, Ramsey personality, is my co-host today. Thank you for joining us, guys. We appreciate you being with us. Hey, the best way to get a sense of power, a sense of dignity, a sense of sustainability with your money is by telling it what to do instead of wondering where it went. It's called a budget. When you write down or you use every dollar of the budgeting app and have a plan for your money every month, you will feel like you got a raise because you've been wasting so much with this organization in chaos. Me, too. I used to do that, too. I know exactly how it feels. I've done financial coaching and counseling for 35 years, and Jade has, too, not for 35 years, but We've done a bunch of it. Almost every time we sit down with someone, Jade, and they do their budget, they have this aha moment like, Wow, I've got some money. It's a big deal. Check out the Every Dollar app for your budgeting. It's the It's the world's best budgeting app for sure. It's free in the App Store or Google Play, and you can go to everydollar.

Com and get it there as well. So check it out. We've got tens of millions of people, tens of millions of people using this every day. It's pretty cool. So thank you guys that are using it. We're glad it's helpful to you. That's what we want to be, is helpful. And just, man, pretty incredible. Andrew is with us in Lexington, Kentucky. Hi, Andrew. How are you?

Hi, Dave. How are you?

Better than I deserve. What's up?

Hey. How do I pay off my day if a good portion, over half of my income, goes to child support and taxes?

How many kids do you have?

I have three total, two are on child support.

Well, if you have kids, you do have to pay for them. That's just part of... I think that's part of normal life if you have kids in a family. Same thing with the taxes. In this case, it's really just about the math. If you want to go faster, usually the solution is you got to bring in more income and more money. What are you bringing in right now?

I average about gross, probably about over three, but I only bring in probably about maybe 12 to A month?

Yes. 1,500 a month.

Okay. Something is wrong with that because in Kentucky, two children, child supports 25%.

Well, I have from two separate moms.

Okay. So you got 20% each?

My daughter, when we went to court and stuff, they did not properly send me paperwork, and The lawyer I had at the time before I found a different lawyer was not in contact with the child support office, so I ended up missing that court date. They went for max of what they could, even with my other custody or child support that I have.

Okay. Well, there's two things we can do here to work on this. Understanding that what Jade said is proper, and I assume you agree with that, that you need to pay for your kids. There's no question about that. But how can I mathematically make this work? There is a legal amount in every state. I do not know if it's two children from two different people if it changes it, but the max in Kentucky is 25% for two kids. If you're being charged more than that, you can go back before child services, back before the judge and have it set up properly. Make sure you're getting charged the right amount and that you're doing that willingly and gladly because you're a good man and you want to take care of your kids. But if you're being overcharged because of a screw up, we'll go back and have the screw up fixed. It's not chiseled in stone. You just got to get back before the judge and go, Your Honor, here's what I've got. Here's my budget. Help me with this. Tell me what I'm supposed to do. I'm not trying to dodge here, but I also can't breathe.

I want to sit down and look at that. You've got to get back and reset this to what it should legally, and for that matter, morally be. Then the other side of the equation is what Jade said, and let's start talking about how we can increase your income. What can you do instead of making 3,000 a month, to make 6,000 a month? That may be side hustles, it may be career change, it may be something different. But one of the things we see, Andrew, often It's almost every single debt-free scream that comes in here and is on the stage had an increase in income during the time they're getting out of debt.

It's vital because the two things that you can do is you can cut expenses or and you can increase your income. There comes a point where you can only cut expenses so much. Then you say, Okay, what else can I do? Then it's, Okay, I'm increasing my income. I'm picking up a side hustle. I'm taking overtime. Anything that will pay me that is legal and moral, I'm going to do that to get Serious money.

Serious money, yeah. We had a young lady in her 20s that paid off doing a debt-free scream just the other day. Were you on with me?

Yes, I will never forget.

She was in a tended bar, $9,000 A month.

Single mom, bartending, beating alcoholism, and doing 75 hard at the same time.

Rockstar. $9,000 a month, but she's working 12-hour days at the bar. That's hard work, by the way, if you didn't know. Wow. I don't know, Andrew, but Jade's right. There's only two ends of the equation. I'd work both of them, and that's be paying the proper amount of child support by law. If you need to do an appearance before the judge in order to get that fixed, there's nothing wrong with that. Then increase your income. Lower your expenses, increase your income. That's what we're doing. Good Good question, sir. We appreciate you joining us. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. I will tell you this, something he brought up, we hear a lot, and not necessarily exactly the way that he said it, and I don't know his exact situation. But here's the thing. If you know there is a thing out there coming at you, you You have a former landlord that says you owe them money. That's a thing that's laying out there. You have a repossessed car. It's a thing that's laying out there. They're going to come at you. You've got an old credit card from five years ago.

You've not paid it, they've not called you, but you've done nothing about it. It's coming at you. You're going through a divorce, and you know when you go through a divorce and you have children, 100% of the time, there's a child support meeting. That's coming at you. When you know these things are coming at you, one of the things I've observed is that if you don't go headlong into it and face it and handle it before it comes to you, it costs you twice as much. If you wait till the former landlord sued you, if you wait till the old credit card pops up, it's going to pop up right about the you're trying to buy a house or something, or about the time you're getting engaged or some other crap, these things have a high rate of resurrection. They come back to life. These are debt zombies.

Yeah, you got to be proactive.

If you don't go find the debt zombie and handle it. So don't tell me, Well, they didn't tell me about child support. Dude, you knew about child support. You'd go down there and fix it. 100%. Instead, they jacked you up because you weren't there.

Yeah, you can't wait for somebody to tell you- Because you just didn't wander down to court and make sure it was taken care of.

You got to wander down there and take care of this stuff, boys and girls. I didn't know I had a credit. Yes, you knew you had a credit card debt. You did know that. You weren't that drunk for that long. Eventually, you sobered up and go, Yeah, I ran the balance up on that thing. You do know it happened. The stuff, it comes back to life and it's 10X worse than if you had gone and found it and taken care of it yourself. Don't let these things lay out there in the muck, because when they come back to life, they're the swamp monster, and they're three times more powerful. You've got to face these things head-on. So when you don't take care of business, business will take care of your butt. That's what I'm saying. This is The Ramsey Show. Here's the hard truth.

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Jade Walsh, Ramsey personality is my co-host today in the lobby of Ramsey Solutions. On the debt free stage, Kevin and Shaban are with us. Hey, guys, how are you? Hi, Dave. Hi, Dave.

Great.

Welcome, welcome. Where do you guys How old is she?

Cincinnati, Ohio.

Wow. Welcome to Nashville. How much debt have you two paid off?

$84,000. Nice. Wow.

How long did this take?

28 months. Good for you.

And your range of income during that time?

158 to Cool.

What do you all do for a living?

I'm in engineering operations.

I am a stay-at-home mom. Homeschool my kids, and I've done some side jobs with just our homeschooling group teaching.

Good for you. Well done. What debt was just 84K.

David was our house.

You paid off your house. Looking at weird people. We were saying that before the political people were saying it. I'm just saying, All right, hey, guys, way to go. Congratulations. Thank you. I love it. That's exciting. What's the house worth?

475. I love it.

How old are you two?

Both 43. 43.

43-year-old weirdos. Wow. A paid for house. How much in your nest egg in your retirement account and so forth?

625.

Uh-oh. Baby Steps Millionaires, too. Nice. At 43. Boom, boom. Look at you. How does that feel?

I never thought I would be here. It's amazing. Life-changing.

Congratulations. Thank you. Proud of you all. Excellent. Tell us your story. What was your I've had it moment? What turned this whole thing around? How did you get connected to us?

I've been connected to you for about a decade. I think our story starts back in 2007. We were just married. We were living up in Detroit area, and I was working in the automotive industry. If you remember 2007, 2008, it was a real great time up in Detroit. The company that I worked for was actually sold to a leverage buyout company. Mallon had just been born in May third, and that was the same day we decided we need to get out of here. We actually put our house on the market.

The day she was born.

The day she was born. Oh, yeah.

That's not...

We are out of here.

Yes.

The real estate market was awful. It took us five months to sell the house. I still remember this day, we had to write a $20,000 check and bring it to closing just to get rid of the house. It wiped out our life savings. We looked at each other, and it wasn't anything we had done wrong, but we just said, We never want to feel like this again. It was at that point, I was able to get a job in Ohio, and my parents lived down there. We actually moved in with my and lived with our daughter Madelyne for the first year just to climb back out because everything we'd saved for was gone. Everything we'd saved for was gone.

Then you end up buying a house? Yes. And said, But we're going to get it paid off fast? Yes. Okay, cool. You were connected to us way back in Detroit?

I think I may have started listening to it just a little bit, but then really got connected once we moved down to it. I probably listened to you for over a decade, for a long time.

Well, it worked. Your baby steps We're going to get it.

Thank you.

From being broke and living in your daddy's basement. Yeah. Oh, my God.

It was actually upstairs. It wasn't in the basement. You put him in the basement.

Okay. All right. Either way, I got you. The attic. Okay. Wow. Congratulations, John. Thank you.

Tell us, what does it look like? A lot of people don't believe that you could pay off your mortgage one day, right? That's not something people talk about every day unless you're here on the Ramsey Network, right? Tell people, what does that look like? What do you do in order to be able to pay off your mortgage?

It was about a couple of years ago, Madelyne is 17 now. She'll be starting college next year. I think I was just looking at the principal, the amount. I just started doing the numbers on my math. I was like, If we really focus on this, we can get this thing paid off. You had this clarity of thought, If we really focus on this, we can get it done. Then you start making the payments and the bonuses and just put it down. It's like, Holy cow. It's just an unbelievable detraction that you can achieve when you really focus.

You average three or four a month for 28 months, and you were done. Yes.

But there's still that intentionality of taking the numbers out of the air and putting them on paper, putting them in your every dollar budget. Yes. Wow.

I got a feeling I know who the nerd is in the family. You came out of your cave with your spreadsheet, and what did your wife say?

I think, fortunately, I listened to you long enough that we dreamed together. We had the why. We have had the why conversation for a long time. We talked about what we want our lives to be when we're older. We had that discussion, the why discussion. We dreamed in high definition, as you said. Early on, we talked about traveling and helping our kids pay for school. The biggest thing for Siobhán was we had a really challenging time with Madelyne. When she was little, she had some health issues She said, I want to be able to be able to go when my grandchildren and just stay with them, whether it's a week or it's a month or whatever it is that they need. I want to have that freedom to be able to go help with my grandchildren. That was one of her dreams.

That's called financial independence, so to speak. You're not independent, you're actually interdependent. But yeah, wow, way to go, guys. Thank you. Very cool. You guys are heroes. You go from broke to millionaire in 10 years. I mean, that's pretty incredible.

It's just one day. I would say it's also one day at a time, too, and just staying focused on that. The small things add up, too, and being content and realizing that stuff doesn't make you happy.

The other gift that's hidden inside this story is you've got these beautiful kids over here that are living in your home, being homeschooled, and they're breathing this air of contentment. They're breathing this air of living on less than we make. They're breathing air that's not in other homes. They can't help but be formed by that. If they're ever in their own home and the air doesn't feel like that, then they know something's wrong. You've set a pattern for them. More is caught than taught, Rachel says, and she's right. That's a pretty cool thing. It's a pretty cool parenting. They're going to do what you do. They're not going to do what you say. Pretty impressive How do you celebrate?

What happens next?

Yeah, what's the big celebration?

Big celebration is actually Madelyne is graduating from high school, so we're actually taking a nine-day Caribbean Cruise next May.

Yeah, baby. Love that.

I like it. Yes, we should do that. Absolutely. Yeah, the year she's born, we sell our house at a loss, move into the attic, and the year she graduates, by God, we're going on a cruise. I like it. That's right. This is a bookending right here, man. It's perfect. It's the way it should be. Well done, you guys. Very well done. All right, bring up the kiddos. Let's meet them all in their names and ages, please.

Mallon here is 17. Right. Nicholas is 12, and Samuel is 14.

All right, very good. Good job, you guys. I'm proud of you all. I assume they've been practicing their debt-free scream because their mom and dad are heroes. Yes. They live with weirdos in a debt-free house. Debt-free millionaires at 42 freaking years old. Amazing. Shut up. This is great. I'm so proud of you all. You're just amazing. Just amazing. All right, Kevin and Shaban, Madlyn, Samuel, and Nicholas, Cincinnati, Ohio, 84,000 paid off. That's their house and everything making them Baby Steps Millionaires. In 28 months, they paid off the house, making 158 to 200. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free.

I love it.

This 10-15 year time span. It was 2007, so I quoted that wrong. It wasn't 10 years, so it would be 15 years or so, 16 years. They took them to turn. When you say, I'm going to become a millionaire, most people think it takes 50 years.

Your whole life.

It's going to take forever, and I'm not going to have a life.

I'll be 80 by the time I- I'm going to live in a cave and collect lent until I'm 92, and old paper clips and whatever else.

It's just Oh, God. No, it's not how it works. They're 42. They're going on a nine-day cruise to celebrate this. If you're 27 and you're whining about a little bit of sacrifice, shut up and do the work. I know. Wow. Step up, seriously.

Because 40 is the new 30.

I thought 60 was.

We could do that, too.

Apparently, green is a new fashion trend.

That's right. You're on trend, Dave.

Good job. I had no idea. You and I were both dressed to join the army today, but we did. And glasses, too. Hey, we're a real team around here. We're more in sync than we realized. Way to go, you guys. We're very proud of you. I got to give you some of my hair. No. Man, I'm proud of those people. What a neat family. This is the Ramsey Show. Are you working the baby steps? One of the smartest Most and most impactful changes you can make is to ditch your cash value life insurance plan, if you have one, and replace it with a term life policy. Listen, the only thing a cash value policy is good for is overcharging you for the life insurance and then paying you a crappy rate of return on your overpayment. Stop wasting your money and really focus on getting out of debt and growing your savings. For over 25 years, I've trusted and used Xander Insurance to find the best rates on term life insurance from the top-rated companies. They keep the whole thing simple. You can apply online or over the phone, and they even have low-cost plans that don't require an exam.

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Hi, Dave. Thanks for having me on the show.

Sure. What's up?

Well, my mother passed away about 18 months ago. She left me and my brother, a paid-off home, currently valued at $450,000. I'm an executor on the house, and I'm trying to make a decision as to whether to sell the house and have to throw my brother out on the street or let him continue living there.

Okay. Well, I assume he doesn't have the money to buy your half?

He does not. Okay.

I think it's a little dramatic to say, throw him out on the street. He's going to have $200,000 in his pocket when he lands on the street?

I feel the same way.

Yeah. On what planet does he think he gets to live there for free indefinitely?

Well, he's been living there for free. He's been in prison for about 15 years now. He has an anxiety disorder which led him to be dependent on Xanax. He does not work. His girlfriend pays all his bills. She's been living there for about nine years. She's a disabled vet who works part-time as a nurse. My mother couldn't have the heart to put him out on the street. Then as a Christian, I'm struggling, too. What's the right decision?

I'm not sure that supporting or enabling people's inability or unwillingness to deal with their stuff is non-Christian. As a matter of fact, it's non-Christian to enable them to sit in the sewage that we call their life right now. Loving them well would require them to deal with their stuff and build a sustainable life and dignity. That would be an act of love. Does that sound right?

Yes, I agree.

A The definition of Christian is not wimp. It's not doormat. It's kind, but it's also strong, and it's acting in others' best interest. What is best for your brother is for him to heal, to seek counsel and deal with the anxiety and get off the drugs. Because the way you stated this, you don't believe that you believe he's escaping reality rather than dealing with and getting better. That's what I heard you saying. Did I miss something?

No, I think you're saying it correctly. Yeah.

That's your viewpoint on it. If this is my friend or my brother, loving them well would be helping them do better in their life, not giving them a cocoon to continue to retreat down into a hole. See, that's what enabling... Your mom was an enabler. And sweet. All enablers are nice people. They're the nicest people on the planet because they don't want to do anything that causes conflict or raises an eyebrow. Gosh, I guess you've got two options. One is you do have to deal with this lovingly and help him get better and sit down with him and the parasite that moved in with him because he attracted that with his life. That's what his life attracted. Help them deal with it and help them see a path of what they could do with the money from the house or just deed it to him and walk away.

Right.

Which is honestly cowardish.

Yeah. Do you need the money? It's a lot of money.

I definitely need the money. Yes, I do. Yes.

Yeah. I mean, there's a practical nature to this as well, which is just because he lived in the house for 15 years, it wasn't his. It's not his house. It wasn't his house. Now, you have ownership of it, and there's nothing wrong with you saying, Hey, can you please… This is $200,000 that you're holding hostage, and I really need access to that. There's nothing wrong with saying that. To Dave's point, you're not putting him on the street. He's coming away with a couple of $100,000, which is a nice chunk of change. Where is the house?

Where's the house? Niles, just outside of Chicago.

Oh, in Chicago area. Okay. Yeah, Chicago area. Are you in that area as well, right? Yes. Okay. Well, are you married?

No, I am divorced.

Okay. I'm just looking for what the dynamics are. Is there anyone in you and your brother's life that could sit with the two of you while you work on this that could help navigate through all the emotion?

I haven't talked to my brother in probably five months. This makes it even more difficult. He's basically just cut everybody off in his life.

I would call him and I would go over there, and it's half your house, and say, We need to have a cup of coffee, and I love you, and I want to be kind to you, and we've got to talk about what we're going to do here. Because I can tell you this, one of the options is not, this is you talking to your brother, if it's me. You got to love him well enough to be strong and kind. Honey, one of the options is not you stay here free the rest of your life. That's not an option. I am the executor of the estate, and legally, that gives me the power to evict you. You and I can do this together, nicely, and we can figure out a way to get the house sold. Or if you've got money that I don't know about, you can buy me out. I don't care. But I'm not going to sit here and do nothing and you aren't either, because I'm going to force you to do these other things. I really want to do this in a way that you and I work together and we can be friends the rest of our life.

But that's going to be up to you. Okay. That That's what I'm telling him. It's up to him how he reacts to this situation because his set of assumptions are completely immoral, unethical, and unreasonable. Correct. He can choose to react and act like you're doing something wrong, but you're not.

You have to go in knowing that.

Let me just tell you. You go over there, the whole thing blows up. He has a fit, acts like a four-year-old, says, Get out of here, I'm going to shoot Then you say, All right, here's what we're going to do. You're going to be getting a letter from the attorney, and the attorney is going to be telling you that you have 30 days to move. After that, we're going to evict you. After that, I'm going to sell the house, and I will still send you your half of the house once it's sold, but you are leaving, and you chose poorly on how to react to this. It's still going down, honey. Then just walk off and go get a lawyer. Okay. Because that's probably what's going to happen, am I right?

I'm really taking this to heart. The other thing in the intern, my father has gone ahead and he's taken $1,400 a month from his future inheritance, and he's given that to me as rent. He says, Well, as long as your brother's in there. He said, You're going to keep getting $1,400 a month, and that'll go over to your inheritance. But you know, Dave, as well as I know, we don't have the crystal ball. That money could easily disappear down the road. We don't know.

I don't like that.

So your father also is an enabler. He's covering for him, too. Am I understanding that right?

I think he was just feeling bad for me and just- Oh, you?

Feeling bad for you? Okay.

Well, it's both because he's saying, I'm essentially paying your brother's rent, and if you let me pay rent to you, then you can let him stay in the house. It's very twisted, all of it. I mean, I don't have to tell you that it's unhealthy dynamic.

I would rather him give your brother 1,400 to help him get counseling and go to a rehab center and go inpatient treatment and get some help with the anxiety disorder so he can become sustainable and healed. I'd rather him use the money for that, and and let the lady who lives there's family take care of her and your dad to help take care of your brother. If you want to use some of the money from the house to take care of him, if he's moving in positive steps, I'd be willing to do that if I were you. But I am not willing willing to sit here and cause this dysfunction to happen to me. It is not good for anyone in the story. No one in the story is winning. Correct. No one in the story is going to have a better life because of this. It just requires proactivity on your part, and I'm sorry, but it's going to be... You got a year of emotional hell ahead of you. You're going to get called everything in the book before this is over. I'm sorry. Pick up Dr. Henry Cloud's book, Boundaries. You'll read it and you'll go, Oh, there's my family.

This is The Ramsey Show. Before we get to the next caller, I got some good news for you. Even when this portion of today's show runs out of time, there's still plenty more for you to tune into. Just head on over to the Ramsey Network app to finish today's show for free right there on the home screen. And if you don't have the app, just search Ramsey Network in the App Store, Google Play Store, or click the link in the show notes for an easy download. You never know what call is coming up next. So finish today's episode in the Ramsey Network app 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, Jade Barchaud, Ramsey personality. Number one best-selling author is my co-host today. Thank you for joining us, America. Open phones here at 888-825-5225. The call is free, and some say the advice is worth exactly what you pay for it. Scott is in Baltimore. Hi, Scott. Welcome to The Ramsey Show.

Good afternoon, Dave and Jade. How are you doing today?

Better than we deserve. What's up?

I'm a 58-year-old single guy. Getting tired of working. I'm trying to get to retirement, but I don't have really anything saved. I need to know what I should do to get there.

Okay. What do you make?

Seventy-five.

What do you do?

I'm a trim car vendor. I trim high-end houses and build some custom cabinets as well. Okay.

Do you have any debt?

I've got about 25,000 $1,000 worth of a mortgage and $20,000 auto loan. Okay. Good. Okay.

All right. Why have you saved no money?

I was married to a spender, and at the age of 50, got divorced, and I walked away with $0.

That was eight years ago. Why have you saved no money in the last eight years?

While getting back on my feet, I ended up buying a house. That's where the mortgage comes in. I got $25,000 left on that.

Is that where your extra money was going, paying down that mortgage? What did it start as?

Paying down? Yeah, Paying down the mortgage. It was a bank-owned property. I got it for a song in a great neighborhood. I put a fair amount of money into it. That's where most of my money went.

All right. You bought a truck?

No. I have a truck that's paid for.

What's the $20,000 vehicle?

I know you're into cars, Dave. It's not a car. It's a motorcycle. It's a Harley Davidson.

Okay. We got to get rid of that.

I knew that was the first thing you were going to tell me to get rid of.

Yeah, it's It's gone. If you want to save money, we can't keep doing what we've been doing. You have a $20,000. You almost owe as much on your motorcycle as you do on your house. That's weird. I mean, really. You did so good on the house and so poorly on the motorcycle. That was a weak moment. I'm sure it's a great bike. I'm sure it's a great bike, but it's gone. It's gone. It's somebody else's great bike now. Because we need you to... Then Now, what I would say is let's get on an every dollar budget and build an emergency fund first of 3-6 months of expenses, and then pick up every extra job you can get. Let's pretend that you saved $10,000. Let's pretend you It's $24,000, $2,000 a month, $24,000 per year for 10 years. That'd be $240,000 plus growth. It'd be a half a million dollars.

Okay.

You're 67, and you'd have a half million dollars in a paid-for house.

Okay. I do have about $23,000 in cash.

Okay. Well, then you got your emergency fund in place. I do have that.

That's great. I do have the emergency fund, right? I also, I've got a term life insurance policy. It's $100 a month for a half million dollars. Should I keep that or is there a way to convert that to something else?

I didn't convert. It's just like I have homeowners insurance and I don't have a home anymore. Do I need it? No, you don't. Because there's no one counting on you, it sounds like, for your income.

No.

Okay. The house is worth more than you owe on it. Do you have children? I've got three. Okay, so if you die, they sell the house and pay the funeral, right?

Correct.

Okay.

Let it lapse.

Yeah. I would close that out because you need that extra $100 a month toward our $2,000 a month goal. Okay. What I'm going to do is sit down and do a budget, and I'm going to come up with $2,000 a month. I'm going to sit down with a SmartVestor Pro, and I'm going to fill up Roth IRAs and simple IRAs and whatever else you can do as a self-employed person. The great news is, as a trim Carpenter in high-end properties, you are in great demand. You've always had more work than you could take on. Right. If you want to jack it up and make some extra money for a little while, you can do that. I'm always less tired when I don't feel like a hamster in a wheel, when I'm actually getting traction. Part of what's making you tired is you feel stuck.

I don't know if I necessarily feel stuck. I know it stuck feels like because once I got out of my divorce and got rid of the spender and started actually saving or being able to have money and didn't have to live paycheck to paycheck and play the beat the bank game, I sat down one day and thought, Wow, this feels really good.

I'm tired of working is what you told me. If my work is going toward a goal that I'm excited about, I'm not as tired. That's all I'm saying.

Okay, yeah. Well, my goal is to get as much money, save as much money as I can for retirement. Retirement, for me, is probably working three and four days a week instead of five, six, and seven days.

That's true, but there always comes a time where you won't be working anymore. Making you get to the point that you're okay when that phase of life hits is also very important.

See, if you had a half a million dollars in the bank in a mutual fund at 67 in a paid-for house, that 500,000 will throw you 50,000 a year.

Right.

Without forever. You couldn't travel. You could do whatever you want to do with 50,000 a year. You work one day a week, you can do whatever. What I do know, having grown up and been in the building business, real estate business my whole life is trim carpenters are artists. They're the artist on the site. They're very precise, very detailed. They make furniture. You've got an artist's eye. I need you to use your business side, the science, not the art side of this discussion that we're having. You can't art your way out of this one. You got to science your way out of this one. It's a math thing. Then it will build you a situation where you have enough of a nest egg that it caused you to have a good life. That's what I'm wanting to move you towards. You got 10 years, $2,000 a month, and you can get there. It's very doable. You might fool yourself. You might get there sooner because the more you pile it up, the faster, the more you're willing to work, all that stuff. You can back down at whatever point. But I would sit down with Smart Vesta Pro, go to ramseysolutions.

Com, pick somebody with the heart of a teacher and say, This is my situation. I've got to do this. Dave told me to get on an every dollar budget. He told me, Jack my income up, get rid of my motorcycle. Jade told me, get rid of my motorcycle. But Dave agreed.

That's just slightly Put that in there.

Just through that, through the… You see the bus tracks? I see the bus tracks right across her. Yeah, there we go. Yeah, get you a game plan, man, and then execute the game plan. Just like you were doing a job on a house, you lay You lay out the game plan, you lay out what is needed, you get the supplies on hand, and you execute. Same thing here. Same exact deal. This is The Ramsey Show. Don't rely on politicians or the healthcare system to do what you can do for yourself. We teach personal responsibility on The Ramsey Show, and that's why I'm excited to tell you how you can take your family's health into your own hands. A medical emergency kit from The Wellness Company. I got mine, and I can tell you this is not some rinky-dink first aid kit with bandaids. It comes with real prescriptions prepared by leading doctors to treat over 30 common illnesses. This kit can treat infections like strep throat, pneumonia, UTIs, and bronchitis because you have the prescriptions on hand like a Z-Pack, amoxacillin, or ivermectin. If you start your meds faster, you get well faster. The kit gives you peace of mind.

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Today's question comes from Patty in Illinois. My husband and I purchased a very modest home for his parents due to the rising cost of rent in our area. My father My mother-in-law is disabled. My mother-in-law works full-time at a very modest job, and they pay us a small amount of rent each month. It's been five years now, and the home has required a lot of repairs, such as water, intrusion of mold. We've been able to cash flow the problems, but it has cost over $15,000, not to mention our sanity. It has also changed our relationship because they frequently contact us for issues or requests in spite of many conversations about what is, quote, nice to have versus what is, quote, needed. We're trying to honor our word, but it has been very taxing, emotionally and financially. We're in baby step six, and we need to plan for our own retirement. I keep telling myself to suck it up, but we are losing tons of money with no end in sight. I've listened to the show long enough to know we probably shouldn't have done this, but at the time it felt like the right thing to do.

What would you do if you were in our shoes? Well, first off, I wish I had more information, Dave. I want to know how old these parents are. I want to know I want to know more. I want to know the value of the house because I'm thinking, if you bought a house in 2019, the value has probably gone up a good deal. They might not be losing money in the way that she thinks. Now, the actual idea of doing this, I think was a really bad idea. I think there was just a lack of foresight here, and I don't know what the promise was. Did they say, Hey, we're doing this house. You're going to live here until you die, and we're covering it? I don't know what the promise was, but I think that they may have promised more than what they could deliver on. I think that's probably what she's feeling some type of way about.

She's got a lot of drama in her words. She does. It's her in-laws. The piece of information I would like is I'd like to talk to her husband and see if he feels the same way.

If it was everybody's idea.

If it's bothering him to the same degree, or if this is in-law drama that you are now laying over on this house.

Yes. I think it's a little bit of both. She does use the word we a lot, which makes me think that there is some unity.

No, I don't think it was a hidden thing, but I think he went into it and went, I bought mom and dad a house, and dad's disabled, mom got not much of a job, and they pay us what they can pay us, and we fix the stuff that breaks. She's going, Oh, God, I'm dying. It's like, 15 $1,000 is not we are losing tons of money over five years. For five years?

No, it's nothing.

If you own a house, you're going to spend more than $15,000 over five years on a house.

They're getting some rent, which is good.

It's going up in value. It's gone up in value. Mom and dad are going to pass someday, and you're going to have a nice asset that's gone up in value that you can sell.

Probably pay off your house and more if you haven't already.

I think the first thing I would wonder is get to the bottom and say, Where is all this resentment really coming from? Is it really coming from the house? I don't think it is.

I don't think so. Now, there is part of it where they may have bitten off more than they realized they were going to be chewing. Do you know what I'm saying? In theory, it sounded good. Then when you start walking it out, you're like, Oh, my goodness. But to your point, if she's writing into our show, there's something that they're not talking about.

If your mother-in-law is calling you and asking you to fix something at a house that you gave her at a deal, and you already had mother-in-law idus, then that would just make it worse, right? I mean, it's like, Well, the difference in what is needed and what's nice to have. But it's a modest home. They're modest people. She makes a modest income. There wasn't anything in there lavish.

There's also, though, Dave- I didn't hear a Jacuzzi being installed. I think, to quote myself, I think there's also a vocab rehab that needs It's not going to happen. Amen. Because here she's saying, My husband and I purchased a very modest home for his parents. They don't own the home. They're renters. You guys bought a house for yourself. It's your asset. It's your home. I think if you start viewing it as an asset that we have, it's going to change your thoughts.

I have a rental house, and it had a water leak, and I had to fix them all. That's right.

As opposed to it's- Guess what?

I've had to do that a bunch of times.

Right.

That'll help. I had zero drama about it.

That's right. I just fixed it. It was It's going up in value.

Tree fell on the back porch. I just fixed it. It's just you own a house and crap happens, right? Yeah, that's right. The other question that I'm with you, I don't think we have enough information because it's a very interesting question. It is. I'm impuning a lot on you, Patty. I apologize for that. But I'm trying to figure out what's really happening here, and therefore to what to do with this.

Because also their age might play into it.

If she's- If they're 87, suck it up. If they're 57, seven.

Kick them out.

Sell it and give them the money that it brings, whatever it brings. Give them the money from it because you didn't buy it for money. You bought it to help them. If you want to give them whatever needs are because you're going to have made some money to your point from 2019. Yeah, that's part of it. I think then I would want to just really ask…

I don't Well, walk that out. Let's say she's listening. She goes, Yeah, you know what? They are in their 50s. They need to get out of this house. They've been paying us a smaller amount of rent. What would you suggest in that situation to fairly- I don't care if you give them the money.

I mean, you All the house and whatever. I don't know if there's a mortgage here or not, but pay off all the expenses, and then whatever money you've made on the house, give it to them. I don't care. I'll tell you the other piece I don't know right here is I don't know Patty's income. Yeah, that's Patty makes $300,000 a year, stop whining and deal with it. That's another good point. If Patty makes $55,000 a year, then you did something you couldn't afford to do here. That's true. That's where some of this drama is coming from is the pinch. Because it's like, it's been very taxing emotionally and financially. Yeah. Okay, I don't understand. It's 15 grand. It's not taxing emotion. I mean, it's All right. But so that's… Yeah.

It's a lot of details. Maybe call in sometime, Patty.

Yeah, we'd do that. You can contact them back off the email if you want to, James. We'd take the call. Because I don't know what to do. But I think we could give a couple of scenarios If then, flow charted. If they're super old and you make a lot of money, then this drama is in your head, calm down and suck it up. If they're super young and you don't make a lot of money, maybe you need to move them out and sell the house. I think those are the two variables that could be there. I don't hear a lot of mother-in-law drama, but I just think it was curious to me how much drama she had, and I wondered if her husband would feel exactly the same way. I bet he doesn't.

Now, if they're only paying The mortgage is 2,000, and she said they're paying a small amount of rent, so they're paying 1,000, the proceeds, I'd split.

Okay, I don't care. The thing is, you're not selling it because you need money. That's true. She did not bring that up. You're right. She did not bring it up. Selling it to get rid of an emotionally and financially draining situation, to quote her.

That's true, but she did say, We're in baby step 6 and need to plan for in their own retirement. So that made me think they might want some money.

Could be, and it could just be that- The drama. I'm tired of giving them anything, and I'd rather put it in my account.

In lost situations, they get salty really quick.

Not going there. Not going to do that. You're right. You started the whole thing right when you said you shouldn't have done it.

Foresight. You have to play these things out in your mind years and years to see where it will land and all of the different variations of the plan.

When you're trying to help your parents, you're trying to help your own kids, you do not enter into a process that does not bring them to sustainability on their own. You get them up where they're standing on their own feet and you let them go. Whatever you're doing, create a that gets them up on their own feet instead of a continuous drain. So you people pay in your 28-year-old's private schools for their kids. That's not sustainable. You shouldn't have entered into that. This is the Ramsey Show. With so many health insurance options and so much fine print, you need to work with someone you can really trust. Health Trust Financial has partnered with Ramsey for 20 years, saving our fans money and hassels with the right coverage and great service. Health Trust Financial works for you, not the insurance company. They're the only health insurance company Ramsey recommends. Go to healthtrustfinancial. Com. That's healthtrustfinancial. Com.

What is up? John Deloney here, and I've got a big update.

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The $12 sale is here through August 31st. We've got $12 books to help you raise Money Smart Kids. The book Smart Money Smart Kids, number one best seller by Rachel Cruz and me. Twelve dollar books to help you get out of debt and build wealth, including our number one best seller Baby Steps Millionaires, including Jade's book. Twelve dollar books to help you build a peaceful and joyful life. Dr. John Deloney walks you through the six daily choices in Building a Non-Anxious Life. Ken Coleman's From Paycheck to Purpose will help you do work that really matters. All $12. Check them out, ramseysolutions. Com/sale. Barbara is in Santa Barbara. Hi, Barbara. How are you?

Oh, good. Thank you so much Thank you for taking my call. It's a pleasure to talk to you both. You, too. I've been listening to you for quite a while. I know how you love a whole life insurance policy. Yeah, my husband took one out literally in college in the '60s because a friend of his got their first job and sold everybody in the fraternity house, a whole life policy. It is now 2024. We still have this policy, but I've never heard you address this issue. If we terminate this policy, because I feel we can self-insure at this point, I have a loan on this policy for $63,000. The agent is telling me if I surrender the policy, that will be taxed at my income or income level. Is that true?

No.

No. It's not true. Because I thought my understanding was the way you talk about it, when you borrow against the policy, you're actually borrowing your own money and paying interest to borrow it. Exactly.

So I thought, why am I paying- So your cash value amount is how much?

$3,030.

Above the 63? Yes. Okay, so you get a check for three grand. Okay. Okay, and you have a net income as a result of that of $66,000, which includes the loan, okay? Yes. That amount is compared to the total amount you paid into the policy since the beginning, which is way more than $63,000. Okay. Your basis in a cash value policy for tax purposes is the total of your premiums paid in. Right. As long as your cash value does not exceed that number, you have zero taxes.

Okay. I would think that since it's been paid on since really the '60s, '70s- How much have you paid on it? Do you No, I have no idea. The death benefit's $24,000.

But if you add it up, you're going to add up and see the total premiums that you have put in is going to be more than the cash value that you get out.

Okay, how am I going to find… Where do you find that? Can they tell me that?

They can tell you that. The company could tell you that, or you could just say, how much is the monthly or the annual amount? And multiply it out since you got it.

Oh, okay. I I would think that we've paid in enough over all these years, that it's more than 63,000.

Exactly. I mean, it's been 60 years.

Sixty years?

Oh, my gosh. If it's $1,000 a year, if you only paid $1,000 a year, you're still okay.

Yeah, I wish I'd found you a long time ago. I would have never bought this policy, but I just never knew about this loan thing because I know you'd say, Surrender them if you can self Sure, but I've never heard you address it if you have a loan on it. They keep telling me I'm paying income tax on it.

Well, that's what they like to tell you because they scare you to keep the thing in. But the problem is most of the people in the whole life business don't even know what they're doing. Their level of expertise is so low because 80% of them are gone in a year. People that sell whole life life insurance, 80% that start selling a whole life life insurance are gone in a year. So the number of seasoned, experienced experts Pert agents that have been doing it for 30 years, it's close to zero because they look up and realize how bad they're ripping people off and they get out of the business.

The numbers on this are bananas. She's been paying into it since the '60s. It only had $63,000 of cash value and only a $24,000 death benefit. I'm shooketh.

Yes. I mean, what if there was $63,000 and she hadn't borrowed on it? I know. And she died, or he died. They'd lose it. They get $24,000. The $63,000 be gone. The only way you ensure you get it is to keep a loan on it. Then when you try to get out of this complete screw job, they lie to you or they're ignorant, one of the two, about how the tax calculation actually works.

That is crazy.

Yeah, this is how bad it is. It's a payday lender of the middle class.

Remember on Sanford and Sun when Red Fox, I'm coming to join you.

What do you have then? What What's his wife's name? Lily?

Yeah, I think so. I can't remember. I'm coming. I'm coming. Oh, gosh.

That makes my heart. Grab his chest and fall back.

Oh, Lord.

Sheesh. That's it. That's how it works. Spencer is in Austin, Texas. Hi, Spencer. How are you?

Dave, Jay. Thanks so much for taking my call. Sure. Great. What's up? Yeah. My situation right now, I live in a house that my parents own, and they want to sell it to me, and I want to buy I get it from them, and I have the cash to pay it off. Good. But they want to... Yeah, which I do. You're definitely follow in your plan on that for sure. Paying off cash. I don't like that either. But anyway, I guess the reason I'm calling, though, is because... So they've owned this house for just under a decade. And so they bought it back in 2016 for just under $100,000. And now, as you know, the housing market is crazy. So I think this house has worked somewhere between 200 to 225. So they want to sell it to... We have a negotiated yet, but they want to sell it to me somewhat close to what they paid for it. I guess my question is, I know it's a good deal for sure, but I guess my question is, I guess I'm calling on their behalf, too, because we're wondering about, are there going to be capital gains taxes?

How does it work with me buying it at much less than what it's worth? How does all that work? And what's some ways around, if there are any capital gains and things like that?

Okay. Well, capital gains tax is calculated on the gain over basis. Let me walk you through that. That's a technical thing, all right? What you pay for a house is your basis, okay? Let's say they paid 100 for it, and let's be simple for a second and say they sold it to you for 150, then they would pay capital gains tax on the 50 gain. See what I'm saying? Yes. Okay. That's a 15%, and so that would only be, what, 7,500 bucks will be their taxes. Okay. That's a simplified look at the thing. Now, we'll add a couple of complications in there. If they have been renting the property and have been filling out a tax return on that and depreciating the property against their taxes, taking depreciation, then they have an adjusted basis. So the 100,000 they paid for it minus any depreciation that they have taken becomes their basis. So let's say they had taken $20,000 worth of depreciation on their taxes over the years, then their basis is no longer 100. Now it's 80. You're following me? Yes, sir. It's called an adjusted basis. Then your taxes are going to be on the difference between the 150 and the 80.

They're going to pay taxes on 70 grand in that case. That's how you calculate it out. If they sell it to you, weirdly below market, let's say this thing is worth 300 and they sell it to you for 100, you probably ought to get some tax advice as to whether or not that's going to qualify as just a good deal or whether the IRS would look at that as giving you a gift and try to tax them on a gift tax. I wouldn't want them to get hit with that. There's a gray area on the difference in a gift and a good deal.

Okay. That was my other question, too, because they're going to sell to me for less than what it's currently valued at. I guess they were worried about that as well.

How absurd. If they sell it to you for a dollar and it's worth a million, then they're going to get hit with a gift tax, okay? Because Because that's a gift. That's not just a good deal. That's go over the top. It's going to shake everybody up that looks at it. But if you sell you a $300,000 house for 200, that's probably just a good deal. You need to talk to a tax advisor on that part of it to make sure that you're not violating anything on gift tax. At what point does the IRS look at something being a good deal or being a gift? And then they also can help you with calculation on the basis. So good deal. And pay cash for it, and it's a free, clear transaction. It sounds like a wonderful deal. This is The Ramsey Show. Hey, guys. George Campbell here with some big news.

The Ramsey $10,000 Cash Giveaway is here.

Enter all month long to increase your chances of winning. No gimmicks, just $10,000 dollars cash. Head to ramseysolutions. Com/giveaway to enter every single day. Plus, we've lined up some unbeatable deals for as low as $12. These best sellers will teach you the most effective way to build wealth, make Raising Smart Money kids easy, or help you live a more joyful a less anxious life. You don't want to miss it. Go to ramseysolutions. Com/store. Jade Walsh, Ramsey personality is my co-host today. Thank you for joining us, America. We're glad you're here. Val is in Minneapolis Hey, Val, welcome to The Ramsey Show.

Oh, family, family. I listened to you years, five years, and I said it's time to stop listening and start doing.

Okay, good. How can we help today?

Right now, I've finally started with the first and second step. But now I'm at the point where I have three kids that I know I shouldn't have, and I did it prior. I cosign for a car loan because if you You do one, you got to do the other one. I'm stuck with these three car loans. One of them is about to be paid off in two months. The other one, she's paying half on it because she said she's going to have all of it to pay the whole car loan, not paying the other one. The third one is just saying they don't have the money right now. My question was, I was thinking about just letting the other two cars just go because I can't afford to pay for neither one of them. Would it be a good idea if I just let them reach for it and just let it go on my credit?

Well, you're going to have reposition on your credit. You cosign. Then when they sell the car and it doesn't bring what's owed, they're going to come after you for the difference.

I know. That's what I hit them at the point was.

Yeah, you're going to get sued and you're going to have your credit screwed up. Let's talk about the… One car The one that's almost paid off, so it's not a problem, right? Right. Okay, so the second car, the one you pay part of the payment, what is owed on that second car?

One car is owe… One is 16,000 on one. The other one is 14,000.

Okay, and what are they worth?

The one for 16,000 is only worth 8,000. That was a shock.

The one that's worth 14, what's it worth? The one that you owe 14, what's it Four, 10,000.

I think it's it. I'll almost sold that one for 10,000. I'm thinking this guy is going to buy it for 10,000, but he never did come through. I guess it only works like 9,000 or something.

Well, just because one guy didn't buy it, that doesn't establish value. If you can sell the $10,000 car for $10,000 and get the loan, you have to get a loan somewhere for $4,000 to cover the difference. Who are these loans with?

They're with my credit union.

Good. Go down to your credit union and tell me you want to sign a note for the difference before these cars get repowed, and you're going to have $12,000 in debt. You sell an $8,000 car that you owe 16 on, you sell a $10,000 car that If you're going to have 14 on. You're going to have a debt with that credit union. Because otherwise, they take these cars and they're not going to sell them for 10 and for eight. They're going to sell them for five and for four at the repo lot.

So I can sell this car back to the bank?

No.

Oh, I thought you said I can sell it back to the bank.

No, I said you go down to the bank and tell them you want to sign a note for the difference of what the car won't bring. They have a $16,000 loan on a car that's worth eight. You're going to end up with an $8,000 loan at the credit union instead of a $16,000 loan. You sell a car that's worth 10 that you owe 14 on, you're going to end up with a $4,000 loan instead of a $14,000 loan. Your kids are going to get about the business of getting their own cars.

Right.

But you get to pay the eight and the four difference, which is going to be 12, because they're not going to come through on that. You and I know that.

Yeah.

This is what you pay. It's called a cosigning fee.

Is that what you're calling it?

I thought there was an actual thing.

No. No, it's a stupid tax is what it is. When I do something stupid and it costs me money, I call it stupid tax, and the cosigning is stupid.

Yeah, I learned that.

You learned it three times over. You thought you were doing something nice and you did the right thing the wrong way. You were being kind and sweet and unwise. You knew you were unwise when you were doing it, but you were too kind and sweet to stop doing it. So next time, be more wise and less sweet.

I know, that's right. Wow.

Well, the truth is she didn't do the kids any favors either because they've been strapped to this.

That's right.

You think you're doing somebody a favor and you strap them to something they can't afford. And that's why the bank wouldn't loan them money in the first place.

Everybody feels the strain.

Yeah, Thanksgiving dinner tastes different. Co-signing is so universally stupid. The banks are the most aggressive lenders on the planet. They love to loan money. If they won't loan somebody money, it really means.

It really means something.

That they can't pay it. Instead, we step in and we go, Oh, it's a little junior. We'll help junior. We step up and we cosign. Proverbs 17:18 says, One lacking in sense cosigns for another. The contemporary English version, the CEV of the Bible in 17:18 Proverbs says, If you cosign for someone else, it's stupid. It's stupid. That's what that version of the Bible says. The Bible called it stupid. So I didn't get mad at God. I cosign for a guy one time, and I ended up having to pay it. A guy cosign for me one time, and he ended up having to pay it because I went bankrupt that time. I had to go back and pay him back later. It's an awful, awful mess. Don't get into those things. It's a horrible, horrible situation. So poor Val. I feel so sorry for her. It's awful. Hey, guys, things are changing around the Ramsey show here. This week, Back on Monday, we made a move. We have a network app called the Ramsey Network app that you can download for free. You can listen to the whole show on the Ramsey Network app or watch the whole show on the Ramsey Network app, whichever you prefer to do.

The last 40 minutes coming up is only on the Ramsey Network app or on talk radio as of this week. If you're used to the entire show on podcast, you can still get the entire show. It's still completely free, but you can only get the last 40 minutes on the network app. You can watch the whole thing, but you can get the last 40 minutes only on the network app. You YouTube folks, podcast folks out there, you're expecting another 40 minutes. It's there, but it's only over on the Ramsey Network app. You can get it for free. We're not charging for this. It's all free, and it's searchable. You can search it by subject, and you can even send an email, ask We might answer some Ramsey app questions at some point. The Ramsey Network app in the App Store or Google Play, completely free, not going to cost you a thing. Jay, this is exciting. The things that we're putting in this app to help you guys and help you access the information that you're listening for. You could listen for three days and not get the answer to your question.

Yeah, but if you want to know about car repossessions, you can just Google it in and you'll- And you'll hear Vowels call.

Yeah. Exactly. That's what's going to happen because they do come after you for the deficit, like we were telling her in that case. Two ways to get the free app. You can click the link in the show notes, or you can search Ramsey Network in the App Store or Google play. Again, we're going to be adding lots and lots of tools to this thing in the future. Right now, we have the searchable feature. We have some audiobooks and some other things dropping in there. We've got all kinds of processes because we're building stuff out where we can deliver to you on this It's very inexpensive for us to do, so it's going to be free or inexpensive for you to do. The last 40 minutes of the show, as of this week, again, on the Ramsey Network app only, or if your talk radio station carries On talk radio, it comes out as over three hours. That's what we do. We do a three-hour talk radio show. But in podcast world, it's going to look like something different. That's the thing. You can get the full episodes to the Ramsey show Only the Ramsey Network app.

It's very convenient, very easy, and very free. Don't miss it. Again, Jade, the features we're putting in this thing we're excited about.

I'm really excited. I heard a little birdie talking about a show that one of us is doing that might land in there. That's really cool. That's all I'm going to say. I don't know which little birdie this was, so I have to find out about this birdie.

Okay, cool. But that might be fun. We could do a show just on that. Like a specialty show. Yeah, that you can only watch on the network app. That'd be cool. On a certain subject or something. That would be neat.

Be special. Okay. Exclusive, if you will.

Yeah, and completely free. You can't argue with the free part. We have no plans to make it a subscription. It's just a free deal. So go to Ramsey Network and get the app in the App Store or Google Play, and that way you don't miss a thing. And did I mention that it's free? This is The Ramsey Show.

Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right?

All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free.

Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom.

All right, I'm getting out of here.

Enjoy. We'll see you on the app.