Chapter 1: What financial struggles does the caller face with her husband?
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Nicole is in Boston. Hi, Nicole. How are you?
Hello, I'm well. Thank you for taking my call.
Sure. What's up?
I'm in the situation where I very much want to trust my husband's judgment on finances in our future. But we've hit a rocky patch here where he just keeps digging us into more and more debt in the hopes that we'll get out of it one day with some risky real estate world stuff. And I don't know how to dig ourselves out of that and maintain respectful marital boundaries.
as risky I don't want to take risks well it's not the risk it's the get rich quick right the get rich quick I'm not a fan of that strategy so here's the deal you're not called to respect your husband if every time he gets in a car he drives it into a ditch you go you suck at driving That's not disrespectful of your husband as a husband.
It's disrespectful of his driving ability because he sucks at driving. So don't get this confused that somehow respect is I'm supposed to turn a blind eye to idiocy. That's not respect. That's just enabling. Then when you give respect and you give a compliment for something that he actually does right, we don't know if it's real because you also endorse stupid stuff and call it respect.
No, no, he can't drive a car. He keeps running in the ditch. Honey, you need driving lessons, and I'm not riding with your butt until you learn how to drive. You suck at driving. That's not really, I mean, some version of that, nicer than that, is not disrespectful. That's not disrespecting the position of that you love your man, you love your husband, you think he's a good guy.
That's just telling the truth. It's just he sucks at driving.
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Chapter 2: How does Dave define respect in the context of financial decisions?
Are you sure you're not personally liable for it?
I'm 90% sure.
I'm not.
Okay. Again, this is why I needed you guys. I don't know what I don't know.
They make non-recourse loans but sell them as small as $6 million. If it's a non-recourse loan and you can walk away from it, yeah, I'd just walk away from it because it's not worth what you owe on it. If it's a non-recourse loan, put the keys in a shoebox and tell them to come get them. But I don't think it is. I want you to be sure you're not personally liable.
Just because it's in an LLC doesn't mean he didn't sign it personally.
Yeah, I think it's a non-recourse loan, but I can be sure before I did that.
But if your numbers are correct... If it's an $8 million property and it's going to take a little while to sell it, then let's sell it for $7 million or $6.5 million and get a little bit out of it and sell it.
But if your numbers are correct that it's worth what you owe on it and your only option to keep the thing running is to go deeper in debt again, and this time personally, in order to fix up this property.
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Chapter 3: What advice does Dave give about handling financial disagreements in a marriage?
I don't know. We're hillbillies, so arguing is an art form. So I don't know. I mean, I do not think my wife is a bad Christian wife because sometimes she looks at me and goes, no, I don't like that.
Absolutely.
That means like she's a full grown woman with an opinion is all that means.
That's right.
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Brett is in Flint, Michigan. Hey, Brett, how are you? I'm all right. Good. How can I help?
So between my wife and I, we've got approximately $250,000 or under $250,000 in debt. Most of it resides in our mortgage and her student loans. Is it? I had a weird childhood, so I'm kind of really terrified of being homeless again. Is it stupid to pay off the mortgage before the student loans? I know you can't bankruptcy the student loans and you can sell the house and that kind of stuff, but...
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Chapter 4: What are the key steps to take when facing overwhelming debt?
The tax fairy is not going to come visit you and fix this. You're going to have to be like a grown-up and go attack this situation with a vengeance. Otherwise, it's going to take you down because you don't want to screw around with the IRS for the next decade.
And they're wrong. You're in the position of power. You're right. You have the information. I just feel like your countenance is very low, as though everybody else knows more than you.
As if you have no options. Yeah. You're the one with all the options. But listen, you hire an attorney who gets excited about this, not one who's like, I don't know what we're going to do. If that's the attorney, fire them before you hire them. You want an attorney who gets mad like I am right now.
Well, I appreciate that, Dave, more than you know. Your book changed my life and made me a believer. I want you to know that. Well, I appreciate that.
Hey, hit this thing right in the nose and see if it'll bleed, okay? I will. Yeah, knock it down. Knock it down. This has owned you every waking moment for the last year, hasn't it? The last three years. You need to be free from this, and the only one that's going to set you free is you with action. OK, so get on Ramsey Solutions. Talk to one of our tax pros in the area.
Tell him what your situation is and you tell him I'm fired up about it. Dave's fired up about this. OK, and get me an attorney that's fired up. You want an attorney that even you don't really like. That's the kind of attorney you want. OK, you want one that pisses off everybody because that's his job as an attack dog. Sick him. All right. Her job, whatever. Get it. And that that's man.
That's crazy. He's letting these the IRS could care less. Number one, these people could care.
No one is incompetent bureaucrats. I don't care. Yeah, no one's thinking about this. Including the former employer. How embarrassing. Horrible. If we accidentally did that to one of our people here, I would be so embarrassed that I would have fixed it in 20 seconds.
Yeah, and somebody would have got fired.
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Chapter 5: What advice is given for using inheritance to pay off debt?
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Chapter 6: How should I approach financial decisions with my spouse?
Download it in the App Store or Google Play. Brad's in Greenville, South Carolina. Hey, Brad, what's up? Hey, how's it going? Better than I deserve. How can we help? So I inherited about $450,000. Wow.
It's in... It's in an IRA, inherited IRA, so I have to pay taxes on it. But I think I'll have enough to pay off the house afterwards. I don't know if it's better to invest that or if it's better to pay the house off.
How much do you owe on your home?
So $373,000.
Yeah, you would have, yeah.
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Chapter 7: What are the benefits of being debt-free?
Okay. No, no, you won't either. You're not going to get that much out of 450. It's all taxable at ordinary income when you pull it out.
Yeah.
It's going to put you in the top tax bracket, so it's 30%.
So I'm pulling it out a little bit at a time. So I'm going to do it over like a four or five year period. to where I can stay in that 22% tax bracket.
I don't think you're going to be in a 22% tax bracket if you do that. That's $100,000 a year. I don't think that's a 22% tax bracket.
So it would be better to look at investing it?
No, that wasn't what I was saying. I'm just questioning your tax numbers is all.
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Chapter 8: How can I teach my children about money management?
So have you talked to a tax person to help you run this out?
I did, and that's where I got the 22%. Okay.
Then maybe I'm wrong. Okay. What do you make? What's your household income?
So we're about $120,000, $130,000. He told us about since it's married, filing, joint, it'd be about $228,000, give or take, is what the 22% would be for us with the standard deduction.
Okay.
Okay.
Hmm. All right. All right. Um, I will shut up then. Okay. So you can pull a hundred a year out for four years. Yeah, roughly. And keep it at 22. Okay. Yeah. All right. Um, now back to your question then, um, We surveyed and did research, the largest research project on millionaires ever done in North America, 10,167 of them.
The number of them that said I borrowed on my house to invest in the stock market and that's how I became wealthy was precisely zero. None of them did that. Instead, they worked systematically to get out of debt and systematically to invest while being debt free. That's what they almost every one of them like 89 percentile.
So that's the data tells me that the smartest thing to do, what millionaires typically do is to pay off the house. And so I would pay off my house if I were in your shoes. And then I would use that increased cash flow to build wealth with because you don't have a house payment anymore because your house payments got what? Four thousand, three thousand bucks. We're at $23,000. Okay.
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