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The Ramsey Show

Never Borrow Money for a Rental Property (Hour 2)

06 Jun 2023

Transcription

Transcript generated automatically by AI and may contain errors.

Chapter 1: What should I consider before my spouse takes a promotion?

29.056 - 60.505 Dave Ramsey

Live from the headquarters of Ramsey Solutions, broadcasting from the pods of Moving and Storage Studios, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Walshaw, Ramsey Personality, is my co-host today. Open phones here at 888-825-5225. Olivia is with us in Roanoke to start this hour. Hi, Olivia. How are you?

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60.565 - 61.927

Hey, Dave. Hey, Jade. How are you?

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62.328 - 63.349 Dave Ramsey

Great. How can we help?

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64.391 - 98.803

Good. I just want to start off by saying that I'm actually in FPU, Rachel's FPU class right now, so I'm super excited about that. I am a stay-at-home mom to two-year-old triplet boys. Whoa. Yeah, it's crazy. My husband is a car salesman in Bristol, Virginia, and so his commute is about 45 minutes to an hour. He also has very long hours, and so he leaves the house at 7 and gets home at 9.30.

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98.986 - 131.997

Therefore, I am by myself with these three crazy boys for that whole time. I just need some guidance as to, I'm not really sure. So he has been a car salesman for about a year and a half. He is up for a big promotion. The CEO has actually said that he is next in line for finance schools. And that would be a huge raise for us. He's making about $100,000 to $115,000 right now.

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And he would be making about $250,000 to $300,000.

136.423 - 136.963 Dave Ramsey

Doing what?

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Being a finance manager.

139.987 - 142.25 Dave Ramsey

A finance manager.

Chapter 2: Why is borrowing money for a rental property discouraged?

142.891 - 168.008

Yep. And at a car dealership. Okay. And the only reason why I know those numbers is because there's only two in there and they both make basically the same money. Okay. So I just need, I guess, some guidance for me mentally. It is really hard. I don't want to be, you know, have a pity party, but it's really hard on me by myself with three boys and he is never home.

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So I guess, you know, I was talking to Rachel about it and, you know, I just, I don't want him to lose this opportunity because it is a season and they will be going to school, you know, in a couple of years. And I just, it's just really hard right now.

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um doing it so i guess my my question is would the finance manager have less hours or more hours um about the same okay and that would really help us we're on baby step number two right now um and so the promotion is not a question the question is whether you just continue in this career field Correct.

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205.649 - 220.095 Jade Warshaw

Well, is the bigger problem that he's not around much or is the bigger problem that you just need help at home? And whoever it is, if it's help with a babysitter coming every once in a while, what's the bigger problem?

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It's a little bit of both. Of course, you know, we severely miss him, but I know that he's, you know, He's working for us and for our future and, you know, to be able to, you know, sit on the beach at 65.

235.154 - 255.943 Dave Ramsey

Let's just say anyone who manages three, you know, triplets two years old, you know, 12 hours a day by yourself, that's wild. You're not whining to ask a question, okay? That's crazy land. But now then, you know, the problem is you've got this –

255.923 - 280.041 Dave Ramsey

other valid thing that's a valid thing the other valid thing is 250 000 a year is a pretty dead gum good deal um and you know you're making some serious bank there uh could you move over there and you know give you an hour and a half back a day get rid of the commute so yes we actually moved here um from richmond virginia for

280.358 - 303.247

um this job opportunity and this was the first house that we just you know found because so what so sell it it's a stupid house okay okay move to bristol look getting that time back in a commute is everything rent a house next door to the dealership he can come home for lunch Yeah, no, absolutely. I agree with that as well. I have talked to him.

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There's actually a house literally like .2 miles away. Let's go. And he says, well, it's on a very big road, and the house is right up on the road.

Chapter 3: How will the end of the student loan pause affect borrowers?

313.902 - 319.589 Dave Ramsey

That's not the point. The point is move over there. Okay, because two hours a day of this is commute.

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321.031 - 323.595 Dave Ramsey

And then, like, you've got traffic jams in freaking Bristol.

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Absolutely. There's no traffic jam.

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326.461 - 327.903 Dave Ramsey

This is just a long way over there.

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It is. It is. I mean, it's horrible.

332.37 - 335.855 Dave Ramsey

Yeah, sell the house and move. Sell the house and move and hire a nanny.

336.295 - 356.88 Jade Warshaw

That's what you need. Look, Olivia, when my family moved here to Tennessee, and before this, I was basically... Worked from home. I was with my kids as much as I need to. So this was a big change. And we knew going in the commute needed to be very short. I can meet my husband for lunch. The kids can come by for lunch. I'm home in 20 minutes like that. That is everything.

356.96 - 358.403 Jade Warshaw

So I think that starting there.

Chapter 4: What advice is there for managing finances after losing a spouse?

382.68 - 388.328 Dave Ramsey

When you're with kids like that all day. If you're going to make an extra $150,000 a year,

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388.308 - 410.4 Dave Ramsey

we can offset you know we got some money to spend that's right yes so spend 20 spend 20 on a nanny yeah you're not a spoiled little brat you're not you deserve that's okay to do that's the cost of him doing this that's right yeah now are you guys working through a lot of debt right now too is that what's giving you pause

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411.41 - 426.735

No, we have two car payments and a mortgage. But I guess it's just the fact that we're, you know, of course, eating rice and beans, being the rice and just really trying to gung ho on everything. Look, the price for sanity.

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426.715 - 448.124 Dave Ramsey

is a small price to pay no no i mean you're netting out okay because your other option is your other option is untenable it's not your situation is not sustainable okay right at 250 at 150 at 350 it's not sustainable because you're telling yourself that you've got that message loud and clear in your head and you're that is not whining And so what are we going to do?

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448.204 - 460.475 Dave Ramsey

Well, we're going to take the promotion. We're going to move over there. We're going to take some of that $250,000, that extra $150,000, and we're going to hire a nanny. And that's not whining. It's how we're able to pull this off.

461.937 - 484.571 Dave Ramsey

How does Rachel and Jade with small children pull off New York City media appearances and book launches and doing this show three hours a day when they're down here to do it and doing media hits at 6 o'clock and 5 o'clock in the morning on Fox? How do they pull that off? Right. And so there's an offset that has to be there to be able to actually cause that to occur. That's right.

487.82 - 509.218 Dave Ramsey

So that's how you do it. And I don't think you're... If I thought you were whining, you know I'd tell you because I love you. But I don't think you're whining. No, this is a real deal. I need to get a reasonable situation where you need some help. But you guys need to go, okay, this is not working. What do we got to change? And that's what we started doing. We started prescribing changes to you.

509.839 - 513.938 Dave Ramsey

Now, so I'd get down there right close to the office. Very little commute.

Chapter 5: How can I handle a spouse's long work hours and family responsibilities?

514.62 - 544.903 Dave Ramsey

See him more, and I'd hire a nanny, and I'd take the promotion. And then, hey, a year from now, two years from now, if it's still wired up, maybe you do something different. But let's give it a shot. This is the Ramsey Show. Jade Warshaw, Ramsey personality, is my co-host today. Open phones at 888-825-5225. Stacey is with us in Canada. Hi, Stacey. Welcome to The Ramsey Show.

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Hi. Thank you so much for this amazing opportunity to get your advice.

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550.375 - 551.998 Dave Ramsey

Well, thank you. How can we help?

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My husband and my family, we live on a farm and we pay really cheap rent where we are because we help out on the ranch. So that's a good situation there. So we ended up buying a waterfront lake home to leave for a legacy for our kids when they grow up. So we do have that paid off now. So I guess technically we're done baby step seven.

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So now we're looking at buying a house instead of staying on this ranch forever. So I guess the question is, what order should we do this? Should we buy a house? It would be about $900,000 we'd have to save for. Or should we just go ahead and save a quick down payment on a smaller house in town that we could rent out and it would pay the mortgage while we save for our bigger purchase house?

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What would you do?

602.551 - 608.817 Dave Ramsey

What happened to living on the ranch for reduced rent?

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Oh, we're going to do this as long as possible. So we would consider buying a country expensive home and renting that out. It would never cover the mortgage, but we just don't know how long.

618.929 - 621.693 Dave Ramsey

Why would you need to do that? I mean, why do you need to buy something?

Chapter 6: What are the benefits of hiring help when managing a household?

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I guess so our money grows. We feel like that's the way we should do it as opposed to just saving it in a savings account.

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631.928 - 637.757 Dave Ramsey

Okay. No, I would not buy a rental property with debt.

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639.037 - 640.218

We don't have any debt.

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640.278 - 644.884 Dave Ramsey

No, you'd be buying a rental property with debt, and I would not do that.

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644.904 - 646.646

Oh, yeah, because we don't want it.

647.627 - 665.188 Dave Ramsey

I would not do that. If you want to invest in good mutual funds, you can do that. And then when you're ready to purchase a home someday, you'll have a big pile of money in your mutual funds. That might be okay. Okay. And that's not a savings account. No, I would not park it in a savings account. I don't want a million dollars in a savings account, but you don't have a million dollars.

665.268 - 666.85 Dave Ramsey

But what's the lake house worth?

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460, or I think 518 this year.

671.038 - 672.985 Dave Ramsey

Okay, and you don't rent it out, do you?

Chapter 7: Why is it crucial to have an emergency fund for unexpected events?

706.064 - 733.894 Dave Ramsey

whether it was large or small or 900 or whatever it was it didn't matter it's all involved no i would not go into that no absolutely not i would invest in good mutual funds if you want to buy some investment property uh save up and pay cash for it okay okay but don't buy a piece don't buy an investment property that you think you're going to live in 20 years from now because you won't the chances of you moving in that house 20 years from now is precisely zero

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That's actually a good point that we hadn't really thought of. We're picking something out we would like, but yeah, that's a really good point.

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741.462 - 749.618 Dave Ramsey

Yeah, your life is going to change. Your dreams are going to change. The dishwasher is going to change. Technology is going to change. You're not going to move in that house in 20 years.

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749.939 - 751.562 Jade Warshaw

I was wondering where that $900 is.

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751.677 - 754.002 Dave Ramsey

No, that was the home she wanted to live in someday.

754.483 - 755.546 Jade Warshaw

Got you, got you.

755.566 - 769.838 Dave Ramsey

That was the future, the 20 year from, or whatever, however number of years we stay on the ranch, I don't know. But yeah, yeah, yeah. It took me a minute to kind of unwind all that. You've done a really good job. Everything you pay cash for, you've got the, you know, basically the, the, the,

769.818 - 792.99 Dave Ramsey

parsonage on the ranch so to speak where you're living there virtually free and um and you've been piling up money you've done really really really good and then you got the real estate edge i guess you got on tick tock or something and got the real estate so no don't don't don't go into that stuff i mean i love real estate but i love paid for real estate and that's what i would tell you to do so

792.97 - 805.19 Dave Ramsey

All right. Open phones here at 888-825-5225. Student loan payments will restart soon, and many borrowers aren't ready. Interesting article from CNBC here.

Chapter 8: How can I make informed financial decisions after a loss?

826.145 - 828.269 Dave Ramsey

Did we tell you that? Oh, yeah. We told you that.

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828.289 - 829.912 Jade Warshaw

We've been telling folks this, Dave.

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830.192 - 833.539 Dave Ramsey

We told you that they weren't going to be forgiven that you're going to pay them. We told you that, didn't we?

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834.14 - 839.189 Jade Warshaw

And now it's time to pay the piper. The piper calleth, and it's time to start paying.

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839.57 - 841.834 Dave Ramsey

This is the King James version of Jade.

841.854 - 842.135 Jade Warshaw

Yeah.

842.475 - 842.856 Dave Ramsey

Piper calleth.

842.836 - 872.573 Jade Warshaw

calleth dave i just i wanted to highlight some of these numbers because i don't think people really understood what's taking place these i mean obviously you know your payments have been on pause no interest no payment due in quotes but this was such a great opportunity to take advantage most people during this pause dave had have saved about fifteen thousand dollars in payments that's what they've saved during this time by not having to pay and what did they do with them pray tell no

873.076 - 899.758 Jade Warshaw

wait they say $15,000 they don't have $15,000 no Dave they got they bought hamburgers and and and they bought expensive lattes and they bought car payments for $717 that's what they bought and here's here's here's where my soul was crushed when I read only less than one percent

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