I'm Lynette Zhang Chief Market analyst here at itm trading a full service physical gold and silver dealer really specializing in custom strategies based upon your goals which need to be put first today we're going to do something a little bit different we've got a bunch of questions that uh I'm going to be asked I don't know what those questions are which is the way I like it the best so let's just rock and roll all right do you think the banking crisis is over and if not why not okay no I do not by any stretch of the imagination think that the banking crisis is over in fact I think it's I think it's a rumbling underneath the surface and the reason is because we had what 15 years of zero interest rate policies so the problem that the banks that did go under a big problem that they had was that the value of their Securities had declined dramatically as the central bank had raised rates that is throughout the entire global banking system so what's really happening right now is the popping of the largest hard for me to call them asset but I'll call them a debt bubble in history no I don't think this is this is over by any stretch of the imagination it's just being hidden from view what do you see coming next with banks and do you think it's going to be similar to 2008 when three Banks collapsed in 2000 six or seven and then another you know 10 20 100 Banks collapsed a year I do think that there are some similarities but what I also knew which is why I even started my urban farm was that in 2008 when it became apparent to the whole world the banking crisis did that the system died at that point so I think the crisis that we have uh that is not yet visible to the public but is unfolding as we are sitting here and speaking is much larger because what they did in 2008 was just bury it under a mountain of new money and their solution which has been the same solution since 1913 frankly was to devalue the currency through inflation and they haven't gotten the central banks have not got control of the inflation that they caused and the problems that they caused and raising rates aren't going to help to be honest with you what they're doing isn't working because we are at the end of this life cycle so this next system with the Advent of the FED now accounts going into effect in July and we also have the Libor so for transition which we may or may not see any of those Rumblings by June 30th but there are Rumblings the biggest experiment in history on this debt bubble that is popping um yeah I think this next Crisis is going to make 2008 look like chump change and it's going to scare the crap out of everybody and that's when they're going to try and and cram the cbdc's down everybody's throats can you explain the difference between cbdc's and fednab well yeah the cbdc is the actual digital money of the Central Bank the FED now is the account in which they can put it in so that you the public has access to it what do you see happening if and when they get the public to agree to something like that well it's not whether or not they're going to get the public to agree because we've seen in a number of their countries that have forced their population into the cbdcs by demonetizing the money and creating crisis or or just by giving people free money you know they'll spend what you give them is whether or not they will allow like their paycheck to automatically go into the cbdcs will they will they continue to make deposits into that cbdc account that's the big question mark because we do vote with our pocketbooks or our wallets that's how we vote and that's been a big problem for those countries that have already made that attempt to get their population to accept the cbdcs you know I can't I can't answer that my hope is no and the public does not seem to want these cbdc's but do I think they're going to try and cram it down our throats yes and they'll do that through crisis what could the future look like with cbdc's and do you think that would affect people's retirement or retirement 100 you know what a cbdc does and and the FED has even admitted it in the I am international monetary fund the IMF papers that they've written is see right now when they make a policy it takes roughly 12 to 18 months to flow through the system did they get what they want so we're really starting to feel the impact of the rapid rates that the FED did 12 18 months ago right so this way once they have the cbdc then they can have their finger on that policy button 24 7 which is what they've said so that if they want the consumer to go out and consume and you're not consuming what are they going to do they're going to drop us into negative rates more deeply so that you're sitting there watching your principal evaporate and when you're sitting there watching your principle evaporate what are you most likely to do but once it's in cbdc form they can dictate what you can buy with it how long it even exists which you're going to see that at first they're not going to shock you with anything because they want to lull you into a all sense of security to get you to use it and they've talked many times about this so at first it's going to seem kind of normal like people are used to credit cards they're most people are used to credit cards and debit cards and all of that so and and of course they've heard all about the cryptocurrencies and we see what's happening in that Arena and remember recently the I can't remember whether it was the biz or the IMF but they came out with a paper basically private cryptocurrencies bad Central Bank cryptocurrencies good so they're trying to get you lulled into a false sense of security and then once they have you there and let's say that a lot of the population does make that deposit into that fed now and cbdc account right um and especially you know we could go into a hyperinflation on the currency that's already out there and then have the FED controlling the value for a minute of the cbdc so people go oh well look at this is really bad but this is staying more stable and I think that's really what's very very likely to happen to get you to participate voluntarily that frankly makes having physical gold and silver outside of that system critically important because if you have everything inside of their system that they have their finger on 24 7 and can dictate everything about it they have you by the cajones right so this is why it's absolutely critical for you to be as self-sufficient and independent in in as many ways as possible Food Water Energy security barterability wealth preservation community and shelter because the more independent you are the less control they will have over you and they they are attempting this I don't think it's a foregone conclusion I mean I really have hope of a revolution Ray dalio also thinks that A revolution is coming and I I agree with him and because of these repeatable patterns just like the end of the currency's life cycle I mean these patterns when you know what they look like then you know where we are in that cycle and you can get into a position to actually not just survive it but Thrive through it and come out the other side in a better position but you better have physical gold and silver in your possession or Heaven Help Us Heaven help you moving into the future of cbdc's and fed now if people just go into that blindly what does it look like with IRAs 401ks retirement plans all of those other Fiat money assets for lack of a better term the only thing you can convert them in is to Dollars and so again if we have this split system which would make a whole lot of sense for them to do where you have the current system hyperinflating and then the cbdc system where they keep that value more stable and they might give you the option well you can convert this into this and so you know I think there would be a lot of people that would grab on to that false lifeline because they could see the value of their Investments being absolutely eroded just like what we're seeing in Zimbabwe right now where their stock market is up 600 percent as they're trying to get people to adopt the cbdc that is presumably backed by gold but it's not convertible and if it ain't convertible it ain't over I got news for you it's just another gimmick to get you to get control of you so people will fly to these things thinking that they are protecting their purchasing power and wealth but it's a big scam because at the end of the day in that hyperinflationary mode they're going to have to do overnight revaluations to get the public to go along with it and to trust it again but I could easily see a scheme where they kept the value artificially of the cbdc stable and they are going to sell it because this is what they've said they are going to sell it as look if we do cbdc's there's not going to be any more inflation so it would make complete sense in their strategy to allow the current system to hyperinflate maintain artificially the value of the cbdcs until they got you hooked and then as they say not me they say then there are no limitations to how low we can push interest rates which means attacking your principal so if you hold all of your wealth in there your your pardon me you're screwed but if you hold a chunk of your wealth as much as you possibly can in physical gold and silver even if that is our current tool of barter you're holding your purchasing power and you just convert what you need and protect the rest of your valuation your purchasing power and your wealth valuation that that's what's going to level this playing field for people that's what's going to get them through it no doubt there isn't one doubt in my mind talk about that more how you convert what you need when you need it and your I guess strategy for that where well I mean right now there are a lot of dealers that are out there but you know what I think is really important places that you can convert I mean you can convert gold and silver at pawn shops jewelry stores uh liquidation smelters but frankly the best way to do it is to establish a relationship with a reputable dealer like itm who's been around since 95 has long-term relationships with wholesalers you're going to end up better um better off you're going to end up getting more of whatever the current currency is because of the way that our our network is established and we've you know we've proven ourselves so what you would do is based upon your strategy which you can set up a call and calendly so that you understand what the strategy is based on your goals based on your part possible your current income needs right then you would simply call itm as an example and say okay this is what I need you'd send it back through it gets liquidated it gets deposited and whatever the current fiat currency is and that's how you do it easy peasy it's no big deal so you said to make a note about gold and silver IRAs right yes thank you um I mean I think everybody knows that when I'm making choices because there isn't anybody out there that can guarantee that they won't do an overt confiscation of gold I mean there's lots of historic precedence there's even current in different countries that are that are confiscating gold right now because gold holds your purchasing power which is why all the central banks or most of the central banks are accumulating it so personally for my choices and also because of my Uncle Al who in 1964 had two safes full of pre-33 coins when you couldn't was illegal to hold more than five ounces except in that way right so I have some serious concerns because most people that own gold own it inside of an IRA and it's very very easy if they were to do an overt confiscation to do a big sweep of the IRAs now they're not going to want you to complain and since they know that they're destroying the Fiat money system so what if they pay you even a bonus to what the manipulated spot Market looks like just like they did in 33 and then boom it gets revalued and you're what you're left with you think you've got gold but if you don't hold it you don't own it and your perception is irrelevant in those kind of circumstances and certainly in a court of law so I want the kind of gold that you cannot hold inside of an IRA because there is clear past and current precedence for an over confiscation and let's face it desperate governments do desperate things where do you see real estate falling into the picture in the near future or and or with the changes in cbdc's and for now well you know real estate is kind of an interesting circumstance it has definitely been artificially inflated and if you go back to 2008 you can see the central bank and the Federal Reserve came out and said you know these are the areas that we have targeted for reflation right so the truth of the matter is it is severely overvalued on a global basis especially since what happened since 2020 okay now globally on average you see a major decline in the price but you've got to have a place to make your last stand I mean you're not going to camp out because real estate is overvalued so you just need to be in a position that if you had to take out debt in order to do it so you've got a mortgage that you have the ability to Boom pay that debt off in a heartbeat when they do that overnight revaluation right so there's a strategy around fixed rate debt which is exactly the same strategy that the governments use and that is to repay that debt with the currency so in in the US with dollars that have less and less value would I go out and speculate on real estate right now no we've been watching the um the the credit quality decline in purchasers we've been watching all of these special little give me's to get the most naive buyers of real estate buying real estate again Lower fees you know put down less money and therefore you're going to pay fewer fees which is insane you know so watching those kinds of manipulations shows me that they're trying to get the most naive people in the bunch to support this unsupportable really real estate market um but having said that you got to have a place to make your last stand so whether that's you know a roof over your head like you know I have my house in Phoenix which is an urban farm so I can eat off of that but also during 2020 when there were riots near my house and riots near my daughter's house and I slept in my bed that night with a gun and I woke up the next morning and said aha there is the hole right so I went out and Matt it took a while but I managed to find my bug out house did I care how much it cost not really because I believe that it's going to save our lives and we have a great place The Orchards were just I just was telling you the Orchards have been other than a few things that they're still looking for basically in so stay tuned you'll be seeing more of that um and it's completely off grid so I've and I've got a well so I it meets all of the criteria for the Mantra Food Water Energy security barter ability wealth preservation community and shelter um so you know with real estate it kind of depends because because you need it but would I buy it because I think it's going to go up in terms of Fiat dollars heck no no but would I buy it because it fit into my strategic plan that supported the goals that I'm trying to accomplish then yeah you mentioned sofa and live where earlier what's the simplest way to understand those two things and what's going on there tectonics shift right I mean I mean they are so dead silent on this transition and the problem is kind of what the problem was with the svb and the other banks that went out in that the value of their Holdings because of the increase in the interest rate the market value of all their Holdings declined right so when we transition when we conclude the transition uh the end of this month is when it's supposed to be concluded even if it's in pennies you're talking about trillions of dollars worth of contracts nobody really has any idea of how many trillions still have to shift that is a tectonic shift one that has never been attempted before and is happening into a debt bubble because all of these are dead instruments right all these derivatives and and debt contracts that are based that are shifting right so they're shifting into a bubble that is already popping whether or not they can keep that hidden for a little bit more we're going to find out just like it seems like the banking crisis is over no it is not and I don't doubt that even one second and I don't care if it's the smallest community and just recently Janet Yellen came out and said that she expects more consolidations in banks that means she expects more Banks to go down and yes because the Federal Reserve and Global central banks so it's not just here it's everywhere look at look at Credit Suisse and UBS right you know globally we had all those negative rate Bonds in in Europe Etc and we had all those bonds that basically came as at zero interest rates and now the interest rates are going up I mean I think that's going to change but the market is the Market's betting that the Federal Reserve is going to go in shortly and drop rates again so the market no longer trusts what the FED says because the FED showed them that they can't trust it and that if you remember that was last August surprised the Hades out of me when they actually gave up that level of confidence because the only level of confidence in this Con game left is the public confidence that the currency could never go away right and that I don't know do people still think the FED knows what they're doing that the treasury knows what they're doing has this debt ceiling issue ah resolved but the whole world they took it to the to the exact moment pretty much and the whole world that is based the whole marketable world that is based on U.S treasuries was looking at this and going that's our bedrock and they're playing with the Bedrock and now they're going to be issuing a whole bunch of treasuries to fill up the treasury Bank book right so they can write those checks which by the way is inflationary by the way okay is that crisis averted no we haven't seen the end of that crisis but this whole thing is based on confidence and it really did a job on a global level which was already shaky so yeah no we've got lots of issues that can erupt at any moment that we just can't see so silver and Libor are two different kinds of rates correct Libor was created in the 80s and so you have all of those mortgages car loans student loans which by the way people are going to have to start repaying now coming up in September they had three years where they didn't but now they're gonna have to mortgages uh credit cards and derivative contracts which in a derivative is just a big unsubstantiated bet against could be a stock or a bond or the weather or whether or not you do your hair up or down I mean you know um so there's just a lot of Leverage way more leverage that is built into the system today which is basically debt upon debt upon debt upon debt upon debt which makes everything look great on the way up but it also crashes the system on the way down and that bubble is popping so yes once it was discovered that shockingly uh Traders were manipulating the Libor which was just a few Banks getting together and go gee if I were gonna charge you interest overnight this is how much I would charge and if I were going to pay interest overnight this is how much I would pay once it was discovered that it was being manipulated they're a good long run uh then they had to come up with a new Benchmark and so in this country we came up with sopher and they have to shift from one to the other and then while it's supposed to be a market rate when you read the really fine print they eliminate a lot of bonds from that so is it really a market rate and the rate that that they get for so far is different than the Libor rate so that's why it's a tectonic shift that revalues trillions of dollars worth of assets that have not yet been converted and those that have been like especially for leveraged loans closer packages of Leverage loans what they're finding out is that they're taking in a lot less money as well so they're fighting it they're still fighting it that's a big problem and we can't they're not talking about it why aren't you talking about the biggest experiment in history why aren't you talking about it kind of makes me nervous so it may be a big fat nothing Burger but I don't think so it's just when are we going to notice it flyboards London so first U.S well Libor yes is the London interbank offer rate but but it was used globally okay and so far is at this point primarily being used in the U.S but that too could be used globally and I don't think it's gonna make it there there were uh like about five central banks that came up with their own interest rate new interest rate benchmark so we'll see but even even uh what they did to try and fix that difference was come up with some kind of mathematical formula but even with that formula they cannot get it to match Libor so that means that the valuation of all of these contracts that are based on Libor and shifting into so far those valuations change you can't tell me that's a nothing Burger because I don't believe it on on how many contracts who knows they were saying something like over 610 trillion but nobody really knows how I mean admittedly nobody really knows how many derivative contracts there are out there and before they change the accounting rules I personally with my own eyes at the bank for international settlements counted 1.4 quadrillion and that I think was like in 2009 and that market has exploded since then so how many quadrillions there's no way to bail it out no flipping way period period why do you think people I think so many people are confused right now and what can they be doing to protect themselves well I think that people are confused because there is definitely the normalcy bias right and what we're asking them to do is have a paradigm shift and that means that you have to admit that what you have believed to be true what you've been taught to be true your entire life is a lie and that's very hard for people to do but they knew this when they set the system up with inflation baked in it right so um and and I'll tell you an interesting story because you know I just got back from Italy right and Natalie our our guide but I've known him since 2009.
We were talking about his personal experience when they shifted from the Lira the Italian currency into the Euro right and he said and I I knew this he he didn't recognize the first part of it where they devalued the currency by 17 to get they supposedly on par with everybody so they could make this transition and then when they made the transition if say a loaf of bread cost you two Lira it cost you two Euros except that it took four Lira to buy those two Euros so immediately you lost what 50 100 of its value right and he was telling me but he couldn't charge twice as much for his Services because that was too much right so I made a comment about um how that Union was set up and there have been lots of studies on it where it was sold as it's going to level the playing field for all of these countries but in reality it was set up for Germany that is a nation of Savers to benefit the most by loaning money to all of these other countries so that those countries and those individuals in those countries could buy goods from Germany and take on that debt and so where it was supposed to level the playing field don't hold me to this because obviously I'm not looking at this but if I recall something like 96 of the populations in the other countries their standard of living had declined dramatically and when I told him that and even based on his personal experience he said to me well Lynette I'm surprised that you would say that because we've been taught talking about community and meeting Community all this trip and here you are saying that this community is not a good one and I said to him so so number one there's your normalcy bias he admitted how that transition had a negative impact on his personal standard of living right and he knew it absolutely knew it and yet when it came down to the bottom line it was definitely supportive of the Union and even the currency Union so for me that was a normalcy bias because when they set up the system they knew they knew many things but they knew two key things number one people marry the legal money of the state and number two not one man in a million understands inflation and that's how they've been able to take advantage of us so understanding that that's where they are and the only thing we are at the end of this currency's life cycle period end of discussion the only thing that can protect you from it is to be secure in the whole mantra but you gotta have this that's why you see on a global basis central banks buying gold hand over fist at the highest levels ever because they absolutely know that they're destroying the last little bit of whatever happens to be in their Fiat money and trying to transition us into a new system whether or not that's going to work I don't know I hope it doesn't I hope we have that Revolution so that we can have a more fair system because the system that they have in mind for us is a full surveillance system where they control if you are completely dependent on that system they can control every single aspect of your life and look at where they've taken us to so far they've done such a great job for themselves but not for you and me so what you can do is execute the strategy and make sure that you are secure in food water energy security barterability wealth preservation community and shelter so that you don't have they can't dictate to you if you're not they're going to be able to dictate to you and I'm pretty sure even though you will own nothing you will not be happy and you prioritized your wealth preservation first oh absolutely you can fund all of your sustainability projects absolutely a hundred percent and and you know you might have seen that in May turkey sold a bunch of gold and so you could say oh well why did turkey sell the gold because this is your savings right this ensures your wealth preservation and your purchasing power it has for thousands of years and so what you would all have also noticed if you looked at the report is that China and India and a number of other countries added to and when turkey had to sell off it was to be able to buy things it was their savings that were able to buy things that they needed so yes 100 you you know it's it's just like if you're in an airplane and you're going down and the oxygen mask comes down what do you do you're supposed to put that on first and then you can help the child next to you even though you would give up your life for that child right so yes that's why you you get your wealth preserved and your ability to purchase you know short barter you get that done first then that's your that's your oxygen mask then you can do everything else and don't wait because we are running out of time I can't tell you exactly the moment I'm not going to know it before you or anybody else but I'm hoping and I'm thinking that I am going to know when this gig is up completely and then we get to our bug out house thanks Lynette appreciate the time my pleasure but just remember wealth Shields are made of physical gold physical silver in your possessionRead More
[Music] foreign brought to you by the every dollar app start budgeting for free today today's question comes from Andrew in Minnesota what are your thoughts on balance transfer credit cards I have three credit card debts I'm paying off in baby step two and the interest rates are really high would it be wise to transfer it to a zero percent interest rate card while I am paying them off the life hack of the balance transfer to the zero percent card how many have built their wealth Dave no I'm not a fan of these balance transfer cards and one of many reasons is that it doesn't solve the root problem you going into debt another reason is the three to five percent they charge you just to do this which means if you transfer 10 grand you're paying an extra 500 bucks for the pleasure of continuing to be in debt with the zero percent offer that will soon run out while you're still in debt and then we're back to square one so while I'm paying off debt can mean a lot of things while I'm paying off debt over 10 or 15 years which means you're not really paying off debt or while I'm paying off debt for one year because I'm gazelle intense and sold everything but the kids and they're worried you know I mean that's that's two different things of while I'm paying off debt so um while I'm paying off debt over 10 years which means I'm not really doing it then I'm moving with George don't bother because you're just kidding yourself that you actually did something interest rates aren't your problem the guy in your mirror is your problem you need to quit spending like you're freaking in Congress if you're instead doing the other way and you're like gazelle intense you're paying it off in one year then what you're saving is 18 of your balance or 26 percent of your balance minus whatever transfer fees there are and so you would save some money but let's just kind of talk this through for a second let's say let's say net of fees transfer that you saved I'll make up a number let's say it was a 20 and a five percent fee so net of 15.
You save 15 okay if you save 15 off for one year on twenty thousand dollars while you're paying it off well you're not really saving it on twenty thousand because during that year you will have reduced it within six months down to ten thousand so your average is not twenty thousand your average is about ten thousand that you're saving the interest on does that make sense okay this done math nerd here okay so 15 of ten thousand dollar savings is fifteen hundred dollars on a twenty thousand dollar balance so is it worth it to save fifteen hundred dollars on a twenty thousand dollar balance in one year yes but to George's Point does it solve your problem no you have a twenty thousand dollar problem you don't hit it with a fifteen hundred dollar tool you hit it with a twenty thousand dollar tool which is you you be working you butt off that's the tool yeah okay and you be living on beans and rice rice and beans and don't talk to me about you deserve to go out to eat you'll be a broke person in credit card debt you don't get to go out to eat broke people don't do that crap that's the other piece is you have to actually change your habits you can't just go up I switched to the zero percent we're good now I can keep living my life how I was living and the problem is what I'm trying to point out is the problem is when you make this massive intellectual calorie burning move right to make this transfer and I'm beating the muscle genius ah I've got the billion dollar credit card industry on its back punching it in the nose no you don't okay they are punching you in the nose this is why we're having this discussion so you're not gonna whip their butt you they're the 800 pound gorilla you might take a little chunk out a 1500 chunk out but don't think that that solves the problem it's okay to do it as long as you know that 95 of the problem still stands there and 95 of the solution still stands there and that be you to your point yeah so do the transfer if you want but don't act like don't strut around act like you did something and don't get comfortable because now with zero percent you're going well it's fine it's not gonna don't act and don't act like you can do this odd infinitum because that's what they're praying for that they can keep haggling you hassling you and punching you in the face and it's time for you to uh just say you know what I don't like the rules of this game I refuse to play anymore I'm taking my toys and going home you know I'm going I'm getting away from you people you I'm gonna put up a boundary you're talking this is a toxic relationship absolutely so what reminds me Dave I just uh we uploaded this YouTube video on my channel and reacting to this woman who said hey velocity banking hack I paid off my mortgage years early by maxing out my credit cards and writing a check to myself and then switching to the zero percent cards one after another and all of you should do this hack to pay off your mortgage early it's genius and so I broke it down on why velocity banking is a scam but it reminded me of this conversation about these balance transfers so they renamed stupidity velocity you have to give it a cool name to keep it hip because then you know infinite banking you've talked about that I thought velocity means statement speed that's the anointment stupidity yes but stupidity banking No One's Gonna no they wouldn't sign up for that no oh so we had to give it a different name infinite banking Velocity Bank oh it's it's stupid fast do stupid fast quickly fast do do stupid quickly uh you know how to sell things Dave you know how that works it's just exhausting so here's what they'll jump through interest rates in almost a thing to remember the reason debt consolidation doesn't work in general is that 88 of the people that take out a debt consolidation loan end up going deeper in debt because they don't change the person in their mirror the problem with this whole thing is it's a pain in the butt because changing you changing me me changing me is a pain in the butt I don't like changing me I like the old me I don't I don't want to have to go through the pain of growth I don't like it I don't like the discomfort of transformation and yet that's what makes a better version of me and so changing me is the hook not changing the um technique or the hack so change the you know if you want to shift your balances that's fine but you still have 95 percent of the problem you've only addressed five percent of the problem so don't strut around the yard throwing your shoulders back acting like you be bad because you're not you haven't done anything yet you just moved it around the shell still has a p under it it's just a matter of which one the con game on the street and you're just playing the game you got you're getting suckered again so it's there somewhere you can count on it until you get rid of the toxic relationship completely by paying the stinking thing completely off it's a big deal it's a big deal so that's the difference in see I grew up in the financial world as a as a in the academic side of things getting all the licenses and selling all this crap and we are always taught that the problem is a math problem and it's just not when it comes to your personal finance it's 80 Behavior twenty percent had knowledge it's in the psych Department yeah wrong Department it's not a math issue it's a behavior if it's a behavior problem then the solution is a behavior modification solution yeah people think well the problem Dave is the 24 interest if I could solve that no the problem is the guy who got your who got themselves into 24 interest debt and if we can solve for that we've solved for a whole lot more than just this one little dinky debt oh and let me tell you when you fall for stuff like velocity stupidity banking um when you're desperate or when you're greedy if you want to con someone you need to find people if you read I read a great book by a con man one time he said if you want to con someone find people that are afraid or that are greedy and if you so if you think that you're the exception to the rule and you've got the hack and you no one knows about it but you after all this time God selected you to give him this what you've got to be kidding me that's so greedy and stupid and nice prod comes right before the fall you just describe most of the cryptocurrency community and now the nft community they're really quiet now yeah not making much noise pipe down where are all you people that said George and I were frauds well they made their Millions now they're on the beaches Dave they're not tweeting anymore that sounds like velocity banking to me now they're probably back at work working their normal job that's a velocity uh Philosoraptor banking oh there you go that's a whole new banking I'm signing up for that one Chomp Chomp I know what happened to the dinosaurs I'm not I'm not touching that one with a 10 footballRead More
listen if you hate it if you hate being debt free you can always get back in goor that's what you choose and that's the life you want you can always do it but there's something about living in this mentality when you don't owe someone anything nothing it's just a few of those decisions painful hard decisions sometimes when you're in the midst of it but it's just saying hey this this and this for a period of time and that's the problem John I think is that people they're comfortable where they are and it kind of is working I mean you know what I mean like this is a great example I'm like yeah $28,000 car loan $28,000 St I we could kind of just truck along pay you know an extra thousand a month you know and you're in it for for three four years and it's oh man I need new tires well you can just Finance those just kind of like go along and then you look up it's been five years and you're like we've made I've made no progress like and I dug my whole deeper right yeah that's right that's right so the habits you guys if you're not happy with the situation you're in financially that means the way you're handling money the way you're viewing it it has to changeRead More
I interviewed an ex-employee at Capital One okay and she told me they run thousands and thousands of experiments on humans to figure out what's going to get them to spend more right and so what they found is hey instead of it being cashed back we should make it points cuz then you go I have 100,000 points I'm winning oh that's $100 whoops and oh I can only use it on these certain dates and these certain flights and I can only go to Boise in July and so there's all kinds of stipulations with points shout out to Boise love you guys big fans but there's always going to be a trap and if you think you're winning that's what they want you to think yeah they want you to think man I'm really sticking it to them I'm making so much money off of American Express and Discover card and what I found is you are the best cash back program that existsRead More
[Music] brought to you by the every dooll app start budgeting for free today Paul is with us in Minneapolis hey Paul welcome to the Ramsey Show hey Dave thanks for taking the call I have another should we pay off the house early out of our retirement question for you okay why is this one different um well we're my wife and I are both retired uhhuh I'm I'm 61 she's 58 we retired with the mortgage mhm and I've got a number of differing opinions from our financial guy I've Got Friends that work in the finance industry I worked for a banking 30 years and um I guess just looking for another opinion maybe one with a little bit more Credence than some of the others I guess okay so how much do you ow in your home uh so it's a $450,000 house we owe 170 and how much do you have in your nest what's that how much what's your net worth what do you have in your nest EG um net worth is about a million and a quarter we've got just over a million of that is uh investment and retirement if your house was paid off if your house was paid off why would you go borrow on it uh we would not then what's the difference I I gu it's just okay let me rephrase the question maybe a a better question is if we decide to do this is it a process over multiple years to ease a tax burden do we just bite the bullet and take the hit and do it once or how how would I do it I've been doing this 30 years I've never had anybody call me back and say they were pissed off because they paid off their house fair enough so one shot or would you uh I'd write a check today I'd be debt free I'd have been debt free yesterday if I were you and quit listening to all these idiots there's a lot of idiots out there running around with an opinion about your money and you're a millionaire what's your mortgage payment right I'll I'll go ahead what's your mortgage payment right now mortgage payment is what 1,200 okay you'd freay up most of that which then now you can invest so yes you'll lose some out of that investment account but you're going to still invest for the next 20 years dude you're just going to sleep so much better tomorrow I mean we're both retired so invest is rolling not necessarily additional you have almost zero risk in this situation because you could write a check at any minute and pay it off if you got in a pinch you don't really need the money in one way or the other it's all about you know what is your end goal when you're 85 do you want to have a mortgage you know why would you keep it there's no reason to keep it you wouldn't go borrow on a paid for house in order to have more money to invest and so write a check and sleep better tomorrow tonight tonight pay it off tonight hit the submit button and then when you go and you get the mortgage release in the mail make a copy of it take your shoes off walk into the backyard have a mortgage burning party and tell me that didn't feel good I mean there's just no there's just no downside to this um you know you're a millionaire you're going to you're going to be okay either way if you don't follow our advice if you follow those idiots advice but if I've got a financial person that's telling me to stay in debt I'm getting a new Financial person period because George we studied 10,167 millionaires the number of them that told us that they became wealthy because they borrowed on their home in order to invest was precisely zero none of them leveraged their personal residents to build their wealth none of them and so the idea that I continue to leverage my personal residence in the name of Building Wealth is asinine based on the millionaire data well we're seeing so much more of this because people have their record low mortgage rates they don't want to let go of Dave like why would I pay off my mortgage you know but I got your mortgage rate beat you know what my mortgage rate is zero I don't have one hello heck of a rate zero I got the best rate come on man so when go up and down you don't have to worry about them cuz you don't need debt anymore it's a great feeling instead of worrying about what the Market's doing so yes it hurts to write that check and lose that much money lose quote unquote but you never really had it if you owed it to the lender in the first place Paul pay it off son pay it off you you're there's a bunch of intangibles that you're not even considering in this decision you're still acting like it's primitive math um or at least the idiots advising you are so you you're going to sleep different your wife's going to look at you like a hero never never once have we had a wife said you know my husband borrowed deeply on our mortgage and he's my hero never came up I love the Kermit Vibes she had too there was greatRead More
[Music] foreign brought to you by the every dollar app start budgeting for free today when you find yourself making when here's some things that will tell you if you're making a wrong decision okay because making a wrong decision around money particularly like a car purchase or house purchase or something of the some other a big investment deciding to go into crypto deciding to do something stupid along you know getting out of where you're getting ready to set yourself back a decade by screwing up by making a bad decision see we always talk about wealth building and the things to do to build wealth I don't think we spend enough time probably on how to uh stupid proof ourselves so we don't do something stupid and offset all the good work we did right so one of the things I discovered about me and turns out it's true of everyone is that right before I right after I get desperate I get stupid and right after I get stupid I get broke you know what I'm saying there's a close connection when you feel desperation trapped I and you start your language will tell you that you're that way I was forced to we had no choice buy a car never in the history of human races have been true you were not forced they did not have a gun they don't do car reverse carjackings it doesn't happen right so it doesn't happen so you weren't forced you or in a desperate situation on transportation and so you Justified a dumb butt decision to go to The Tote The Note lot and pay double for the car at a 28 interest rate because you and then say but I was forced you weren't forced you were just stupid I've been stupid too right I just explained it right after I felt desperate and trapped okay and so when listen to your language and if your language is indicating a sense of being trapped a sense that there is no other options and in your language to yourself in this decision making or to your spouse who you're trying to talk into this is bizarre then that tells you that you're getting ready to screw up okay I'll give you another example we run into George every property for rent in x-town is four thousand dollars a month make up a number fill it in you can't find them they don't exist see these absolute hyperbole statements are indications that you feel desperate and stuck and so once you've decided inaccurately that every property for rent is four thousand dollars minimum in this town then you can justify buying something you shouldn't be buying at a point in your finances that you aren't ready to buy you see what I'm saying yeah so when you start making these fatalistic absolute statements that are that are overstated then and when you say if it sounds bizarre to you then that tells you you're there and that was my that was my question with my I I couldn't get it out of my mouth fast enough in that last call because we've been looking for a property in Texas for nine years okay that's just weird no you haven't or if you have you've got other issues other than property looking takes you a decade that it takes a decade in Texas to find something to live in that's just not true that's just that's that smacks of weirdness and uh desperation and you're getting ready to make a mistake but what that leads to then is I'm going to do a deal here that I know I shouldn't be doing because for nine years this is the only property see the see the you know how that comes out and I do that in my own head that's how I recognize the drama queen it lives in all of our heads and it's like you know I'm so stuck rental prices are so high I am forced to buy a house I can't afford while I have six hundred thousand dollars in student loan debt well that's just dumber and crap you know no it's just not true okay not true and and so oh the other one I love is um our house has mold our children will die if we stay here and the only property we can find to live in is sixty percent of our take-home pay these are our two options death of our children or bankruptcy these are two options because we forced ourselves in desperation into this false Narrative of fatalism that I'm stuck and the only way out is to go from one stupid horrible thing to another stupid horrible thing and I'm trying to justify it by saying it's the only option you see what I'm doing oh yeah and every time I do that in my head I have lost so much money I just every time that fear-based desperation leads you into that and and I get the these are the actual calls I get here you've heard them I'm getting triggered Dave my PTSD is coming back from the caller saying well there's no used cars under 25 000 so we had to finance one for 35 because what else are you gonna do yeah you're just stuck I mean because it's not not a used car anywhere all the used cars in America that's right now 25 000.
So when you start making these over the top crazy but statements what that states is not the actual fact what it indicates is your mindset is in desperation and stuck fatally there's a whiny toddler inside all of us we just want the new car just admit it you want the shinier newer car well yeah but admitting it would be dealing with me and I don't want to deal with me instead I would rather create this false Narrative of the marketplace is forcing me into doing things it's the economy High interest rates it's just ridiculous I mean it's forced me the only way I could go to school was to go four hundred thousand dollars of student loan debt it's the only way it's the only possible other than joining the military but only possible other than to say only other than other than other oh my God but the only part so now here I sit and Biden won't forgive them and so I'm screwed you know and now Sunday you have to start paying payments again not someday Sunday this coming Sunday so but yeah but but every time you say something with a bizarre set of overstatement that is indicating you're getting ready to make a mistake because I've done this I've done I'm not making fun of y'all if you've done it I'm not even making fun of our last caller I mean it was a little bit hard to keep up but I mean I but even even aside from that I she just was stuck and I want this and so I and I don't think I should be doing it it feels wrong but I've got to justify it with everything else out here all the three-story buildings and above are not safe uh they don't have licensed contractors you know all these other wild and crazy stories out here in there to justify the move and again that's not picking on her she's sweet lady she's trying to figure it out I appreciate her calling if you call I'll pick on you too but I'm picking on me and the same thing because I'll tell you man some of the dumbest butt stuff I've ever done is when I was in facing uh bankruptcy I got stuck in that and I thought there's no way out there's nothing I don't know what to do and I lost so stinking much money uh I made Decades of income evaporate in in single Strokes of the pen because I was desperate stuck and fixated and the one that goes with that also the sister to it is greed and when you get when you get all fired up and you're like oh I'm gonna but if okay if the system is broken yeah and the millennial can't get ahead then the millennial has to do something that's completely different crazy shortcut exactly I need a Tick-Tock life hack which is nothing down real estate velocity banking is what we all need velocity we need we need high speed stupidity High stupidity on high speed stupidity on caffeinated stupidity that's what it takes in today's world Dave yeah but it's so true most of the calls on the show is someone saying hey I've got option A and option b and they're both terrible what do I do and we say have you ever thought about option C or D no there's a lot of that and it involves you instead of a shortcut it involves that's how you know let me help you no is a possible answer no it looks like the only car you can find that suits your needs is 25 000 and you're broke uh answers no and it's a complete sentence no it's an interesting sound two letters the silence that follows it is definitely no this is the Ramsey ShowRead More
what's the best way for me to to get wealthy like like I don't want to say rich but like wealthy is like the best way be very intentional with your money most people just kind of wander along and then wonder what happened and if you'll just be very intentional then that will lead you to doing a budget that will lead you to living on less than you make that will lead you to generosity that will lead you to avoiding debt uh that will lead you to investing and those are the keys to Building Wealth but no one does that accidentally no one wins the Super Bowl on accident it's an intentional act and so just by asking the question you've started that process of being intentionalRead More
[Music] brought to you by the every dooll app start budgeting for free today Joe Is With Us in Springfield Hey Joe welcome to the Ramsey Show Dave thank you for taking my call sure what's up I've been listening to you often on last couple years it hasn't a lot of things haven't soaked in but the other day you said that nobody should own a new truck unless they have a net worth of a million and they're debt free well I bought a new one earlier this year and so my question number one is should I sell that truck and downgrade get something a little bit more economical so that I can pay it off how much do you owe uh 43 no 42 and some change so 43 what's your household income 220 210 and you don't have any money no I have uh I have about 40 in the bank right now how long youve been making that kind of money oh years you're making good money why do you not have any well my wife kind of lives YOLO I kind of live like hey we might live to be 500 and it's just it's been 15 years of just kind of we've sat down and we've put budgets together and it just it it doesn't stick on one end and it does on one and uh I've just kind of learned to compromise to keep the marriage happy and uh but the marriage isn't happy man I can hear it on you it's frustrating I mean I love her to death wouldn't trade her for nothing but it's frustrating well you know when you have a divided house um you know like I hate Christmas I hate it um you know we spend $4,000 every year in Christmas and it's to people and friends and and every year we argue about it and it just gets me where I just hate Christmas you know because I know we're just going to blow a bunch of money and we shouldn't and we don't have to yeah you know you you move on you know you can either dwell on it or you can just move on and and then and then you borrowed 40,000 on a truck yeah yes well I I'm a sales guy so I have to have a truck that's less than three years old and so many miles I get paid 850 a month for my truck allowance whether you have a car payment or not that's right and that's where I would rather tuck to 850 and throw it on the house we're in a great situation on the house house is worth about six six and a quarter we're down to about 270 on it okay um Joe Joe the the truck the truck needs to be paid off or it needs to be sold but it's 10% of your problem okay the problem that's screaming at me in this conversation is you make way too much money to be this broke I agree and you guys have really got to sit down and address that you're just you're you're just a quarter no you haven't you because just not fixed what do you but what do you do I think you need if you can't if you and your wife can't sit down and dream about a future that you're willing to control yourselves for cuz you're not controlling yourselves you're you have no self-control in your household and if you the two of you can't find a house a dream in in high definition that the two of you can agree to that is worth working towards together and worth not spending everything we make to cause it to happen then you do need to sit down with a marriage counselor if that's the case often High performing High earning folks sit down and have this conversation as a math problem honey we make this much money we got to make a budget know I have one I have an Excel sheet I can show you I know you do here's what I'm telling you there's a different conversation when you sit down with your wife and you hold her hands and you say honey I can't breathe I'm so scared we make way too much money I'm working so hard and I feel like you and I are fulling pulling further and further and further apart and I love you too much to be frustrated at you all the time CU I know that's hard to live with and I love you too much for us to pretend that we're all joyful and happy once a year at Christmas and we try to throw money at our friends and family instead of being a warm safe place for them to come land would you build something different with me that's a different conversation then honey look at my spreadsheet look at this if you just would do this then we could get out of this crap one of those she's going to go to her defense and that defense is probably way older than you and that's probably been there since she was a little kid and then you go to your defense cuz she starts bombing you back and it's different when you take ownership and say I want my wife and I want a family that um I want a unific a unified front here I want a unified vision of what we're going to do and I'm scared to death I'm going to lose you the irony is is that you think by acquiescing you're creating peace and you're not that's the irony the fire is burning in the basement and it is hot it's coals yeah and because this it's eating you up and she can feel that on you and then she goes about solving that feeling with the way that her body's been solving those feelings for her whole life spending spending and trying to make people feel good about themselves and showing people how great she's doing and that's different than y'all two building a life together yeah yeah and if you guys can't sit down work that through and start to say we need to develop a new vision for our future a different plan other than just spinning our Wheels feeling like a rat in a wheel I'm scared I can't do this this is killing me I cannot live in a situation where I make a quar million dollars a year and we have nothing that is just absurd to me my brain can't do it anymore my mind can't do it my psyche my spirit can't do it anymore so we've got to develop a plan for the future that we're both willing to work towards and I want to do that with you let's start fresh FR a reset not we've got to get on a budget some but will lead you by the way to a budget and it's not a spreadsheet budget it's an every dollar budget but it'll lead you to the two of you working together to implement the plan that you have agreed to together that both of you had a vote in I love starting those conversations with I'm sorry I'm sorry I've tried to control you the way I know to control a problem I've tried to solve you I've tried to fix you I'm sorry let me tell you the truth I'm scared to death and there's a different there's a different approach there someone can enter into your space that way instead of uh having to swing back at you it's tough hope that works for you brother and then pay that truck off in the next 20 minutes um or couple months and or sell it one of the two that's um because it's you know you went and bought a truck while she went and bought Christmas I think you yeah you showed her man I think you spent more so um there you go and the 850 is coming in whether you have a truck payment or not so that doesn't justify itRead More
[Music] what's up guys welcome back to another episode of real estate the Ramsey Way the housing market has uh seen some pretty weird times lately and while things aren't as crazy as they were just a couple of years ago it's still not a Walkin the park out there interest rates are up prices while steady are also high and there just aren't enough homes for sale bottom line is you really need to be informed on what's happening in the market and how it affects you so stick around and listen to my conversations with folks struggling with things like affordability and refinancing in this unusual Market Caitlyn joins us up next she's in Arizona Caitlyn welcome to the show hello how are you good how can we help today yeah I just had a quick question in regards to overcoming a negative mindset so I'm 29 I live out in Arizona I'm a single mom and as you know our housing market has been gelle intense to say at least um and I'm paying about 60% of my take-home paying rent I yeah I can't buy in this market I don't make enough I pulled down to about 40 last year um and I just feel like I'm spinning my wheels and that Treading Water feeling is really starting to get to me so I was hoping you could provide some insight on that if possible yeah I mean I I'll be honest Kaitlin I'm like I I would feel that too if if more than half the paycheck is going to housing that's a that's a big chunk so tell me uh a little bit more about kind of the situation because you are obviously in an a more expensive I don't know if it's an area or apartment or what it is is there other options for you to to change locations just to at least catch your breath and bring it down to at least you know we recommend 25 30% but even if it went down to 35% that would change your world right yeah um I live in a two-bedroom apartment right now um and I pay about 2,000 a month I had looked at going down to a one-bedroom the only trouble with that it was it would only Save Me Maybe 300 bucks a month but I actually work from home um so I need and I have my son here with me too so I don't know how we would make that work yeah no to B yeah yeah yeah I oh sorry I was going to just say have you have you driven you know 20 miles either direction of where you currently are just to see other prices uh right now I'm already kind of on the edge of um what I would consider to be a safe area um so I can look maybe a little bit deeper into Phoenix but I just want to make sure we're still safe and everything's good like that so um I I could I mean I I work remotely so I could probably Buy in other states and other markets but my son's father's here and I really just don't want to leave um my home state so for sure for sure understandable and how much do you make a year I pulled down about 40 uh last year okay what are you doing for work uh I work at a call center for an insurance company okay so there's there's only two ways we can go about this and we can we can spend less and we can make more so do you have any payments in your life that we can get rid of do you have any debt I don't have any debt um I do have that going for me I don't have any debt and I do um anticipate my income going up um actually I had a conversation yesterday with my supervisor that made me feel like maybe something close is on the horizon um for getting my my pay up um I think it's just this waiting period between uh making more money and trying to find something cheaper to to rent it's just it's mentally been draining me I think but um well especially as a single mom I mean you're you got your how old your how old's your son he just turned six his name is Mason I think he might be listening that's awesome hi that's awesome oh well you're doing an incredible job Caitlyn I mean you know the the hard thing is it's nothing that you're doing wrong it's just that the numbers are kind of stacked against you and so like George said you know an option of bringing in more I mean right now the job market is just insane and so I would push and look to see if you can even I mean 40 Grand you know you're you're you're doing fine but man people are paying just insane amounts of money right now for jobs and and since your is not like very specifically specialized you know what I mean like I feel like you could um do all sorts of things uh even with the experience that you've had in this insurance role um so you know I don't know if it's looking for something else or a different apartment but one of those two things really probably it needs to shift for your own sanity Caitlin you know what I mean like temporarily yeah to have the numbers work for you um is going to be a big deal do you have an emergency fund Caitlyn I do yeah okay three to six months in there uh I still have my baby one I have a a $11,000 emergency fund and then I have about 4,000 000 in my my actual uh emergency fund so I still need to build that up okay I think building that up may help with a little bit of that Financial Peace and anxiety about what if something happens if one check doesn't come in what are we going to do and if you get that in place then I'm going to start saving up for a house slowly and I know it's hard because there's not a lot of margin right now but that feels like it's the long-term goal and I'm hoping that all this craziness is not forever and so a year from now hopefully we're looking at a very different picture and you are work from home and so that does open you up but I know you've got to will stay close to home because of the uh situation with your son and so there's not a ton of options here other than let's look at the budget let's do a budget audit where can we save every single insurance premium every single expense I'm going through that with a fine Toth comb going how can I shave off 10 bucks 20 bucks 30 bucks yeah absolutely and then the income I mean the yeah income and apartment um situations would change too you know yeah but you're doing a great job kayin you really are you're doing a great job for for where you're at um incredible no debt you have savings I mean all of it you really are but that 60% it oh that that hurts me it's a tough situation and this inflation stuff I mean it's hitting people all over their pocketbooks from rent to gas to food and so there's just batting down the hatches and let's get to work let's get the second job if we have to Let's trim the subscriptions that we're not using right now and all the little luxuries that we once enjoyed might need to go away temporarily yeah for a season because they're saying you know I I read a report and they think in the next 18 months with just even the um the supply chain all of that but I'm like I mean the hard thing is after two years I've just learned who knows like who knows that's right I remember April of 2020 doing Instagram lives I did one like every other day just to answer questions and I I said I guys I think by August all this this will all be over it's all going to be over here we are so I'm not predicting anything but uh I think you just have to prepare with where we're at the reality of what's going on and what and what sucks is that that means cutting back some because the numbers everything is going up yeah and if you're single you don't have kids there's more options because we can go all right let's get you a roommate now it's more difficult when you have a family when you've got kids involved it's not that simple right but if you work from home that can open you up to a lot of options too you may not want to live on the outskirts of town but temporarily for a year if we have to sign that lease to go all right we can now breathe and still hit our other financial goals I'm okay with that and it's amazing what peace of mind even does right like we can talk about the numbers and the percentages and all of that all day long but there is just something to be said about when you do have margin it gives you a level of Peace like a level of like you can take a breath and sometimes it's worth s the things you never thought you would do I never would live this far from wherever right people make these claims and then when Life Starts hitting you and you think okay is it now I would rather live far farther away yeah and actually have peace of mind and margin and enjoy life a little bit more than everything just getting sucked out of the paycheck so much out of our control too and so I always like to go what is in my control so in Caitlyn's situation if I'm anyone listening right now I'm going all right let me make a list of ways I can make more and ways I can spend less I'm going to make a list of five things and I'm GNA go okay which one can I go do this week this month and just start trying things what can I sell on Facebook Marketplace that's been sitting in the closet for a while what is that second job I can take for a few months to just supplement my income temporarily yeah and so if you start doing all that and that's why I love the budget audit it's kind of a real nerdy thing but you go man I'm way overpaying for auto insurance let me connect with Xander and oh my gosh I just saved 100 bucks right there and you start doing that in all areas we've talked about this on your show Rachel with cable and internet and yeah how can we start shaving all this down our phone bills to where now we have 200 bucks a month yes in margin we can breathe a little bit and it's not easy I'm not trying to make it sound like it's just but it's the stuff that's the kind of the auto the autodraft the auto pay where you're just like oh and then you look up two years you're like wow I've never pushed on that or seen that you know what I mean and and doing that it does it gives you gives you some more margin yeah you got to advocate for yourself and get yourself in a better financial position and that's why our plan works in good times and bad I mean imagine if she had all these debt payments looming in her life y great work Caitlyn you done a great job good job Tanner's with us in Washington DC hi Tanner how are you I'm good how are you better than I deserve what's up so my question is I'm curious about the flexib of spending more than 30% of your takh home pay on rent found that pretty difficult to do especially in like an urban area like DC I live in downtown um I make around 990,000 a year post grad 23y old um I got about 20,000 in cash and 7,000 uh in an investment account and M myly debt is around seven 7 and a half th000 in student loans and I spend about $2,000 a month in rent which is my biggest expense expense by far but I still find myself able to save um and spend less on other things I'm just curious your take on on that approach okay well we tell folks to put 25% of their take home pay aside for housing and uh no math Works in every city and in every state you don't get a pass on math because you're in Washington DC even though Congress thinks you do I was getting ready to say a lot of people think they do yeah a lot of people in DC think you do but you don't and the the purpose behind it is not that 25% is Magic Tanner uh the purpose behind it is don't be house poor if you find yourself able to save and uh able to invest because you keep all other parts of your lifestyle so low then then you're okay but if you're you but what happens to most people is when they've got a high cost of housing in their budget it squeezes their budget and there's not room to uh save up to buy the next car so the next car becomes debt and there's not room to save up for for Christmas and Christmas becomes debt and there's not room to save up for a couch and the couch becomes debt and because it's all going out in house payment and so in effect what you did is you uh you you you didn't you know by by squeezing yourself you did that now you're telling me you've made room in your budget and you're doing okay then you know if whatever you want to do brother but here's the thing whatever you spend on rent is gone mhm I mean you're just setting fire to $100 bills in the middle of the floor and so the more $100 bills you burn in the middle of the floor the fewer M less money you got man I mean it's a pretty simple equation yeah yeah definitely definitely reduces the ability to buy down the road for sure yeah yeah I mean because you're giving it to them in rent and so I don't know how you fix that exactly necessarily in your situation maybe you're commute is longer maybe there's a roommate involved or uh or maybe you just say I'm going to it's going to cost cost me this and it's my choice and I'm an adult well yeah you're allowed to do all that but our reason to give you giving you the 25% guideline it's not a rule it's a guideline is so that you don't become house poor because if you're for instance going to get a mortgage folks in America um the stupid mortgage company will approve you for almost double that I mean they'll approve you close to 50% of your take home pay 36% of your uh ratio you know and so and that's not based on take home pay the 36 that you can get a house payment up close to half of your dadgum take home pay and there's just no way that budget Works people and well I'm in California well California they got to do math too even though your Governor doesn't think so you got to do math you know it's not it's not an option math is math and it's not it's not a a a moral construct it's a it's a math thing well to win Tanner in professional World Financial World you've got to sacrifice everybody who wins has to sacrifice something and what we've done here with this 25% you are now having to choose do you want to sacrifice money as Dave said by by burning those extra100 between the 5% that we're talking about or do you want to sacrifice a little bit of your time now you're live in downtown DC that's premium and I get it you may work on the hill who knows what you do but you're there for a reason but if you move out into the suburbs of Northern Virginia I know it well yes it's a it's a headache uh but we'd rather you sacrifice the right thing and that's why we put this I want people to understand what we're teaching here it's not to be hard and fast on a rule it's to help you learn what you need to sacrifice and in my situation if I were in your situation Tanner I would be sacrificing my time not my money yeah 23 years old yeah yeah you know I will tell you this Ken I did it worse than he's doing it sure worse yeah he's in good [ __ ] my wife and I get out of college and here's how stupid we were we go and rent a we we have two dogs we're just out of College we got two little jobs we go and rent a three-bedroom townhouse sure luxury right thing sure that's like five times what we needed MH because we thought it was cool do you remember what were in the extra rooms uh nothing sure cuz by the time we finished paying the freaking rent we had no money yeah yeah so what we ended up doing was moving into a little one-bedroom uh apartment and a questionable uh I don't know what those ladies down the hall were doing in a questionable situation and um you were hoping you weren't on a Vice episode man I'm telling you and uh we lived there for a year but it was one3 the rent that we were paying before onethird and so that'd be like you you had an $1,800 rent and we moved down to a $600 rent right you know kind of thing today in today's dollars it was a lot less than that and back when the dinosaurs roam the Earth but yeah but oh my gosh wow I did the exact same crap no I get it but I wanted something nice and I had a job and I'd gotten out of college and I'm I deserved it a lot of 23 year olds that are in a very similar situation to Tanner now just think about this if he gets a roommate and now he's saving let's just call it $1,000 a month okay splitting the rent he's paying off that student loan debt of $77,000 really really fast and now he's just stacking money that's cash stacking cash man so much the housing market isn't known for being easy to predict that's why it pays to have a pro in your corner who's earned the ramsy trusted Shield Ramsey trusted real estate agents are the top experts in their areas plus they have experiened navigating a changing market so don't step into the ring alone find a real estate agent you can trust at ramseys solutions.com SL agent or click in the show notes Debbie is with us in Detroit hi Debbie welcome to the ramsy show hi thanks for taking my call sure what's up um my husband and I made a huge mistake we moved into a house about uh two months ago and with the housing market being so crazy and lots of competition for homes we made a mistake of buying a house for more than we wanted to spend um we paid over list and appraisal and we're now in a house that um we just feel like we can't afford the mortgage payment um it also has a pool that is much more of an expense than we thought it would be the house um needs a lot of repairs and some things have come up in the last couple of months that we didn't realize were going to need to be repaired right away um so my question is should we plan on selling it or stay for at least two years um and then not have to worry about capital gains but if we sell it now um we would probably walk away with you know losing about 40 Grand there is no capital gain when you lose money right but on the odd chance if we if you broke even if you break even there's no capital gain capital gain would only occur if you made a profit right so it doesn't sound like that's a problem yeah but if if we sold it for what we bought it if we just broke even we'd probably lose about 40 Grand with closing costs and everything so what's your house payment um well that's the other thing too it's more than what we thought it would be with um the property taxes are going to be more than we had planned for so with property taxes and insurance it's about $2,300 a month and what's your monthly take-home pay in your household about 9,000 okay all right well you're slightly above what we would tell you but not a huge amount um it doesn't sound like this your your house payment's not 40% of your take-home pay um this sounds more emotional than mathematical okay just we feel like we've been bleeding money ever since we moved into the house because of the pool and the repairs that have been needed and what have you spent on repairs I'm sorry what have you spent on repairs um well with the pool it's been uh over $1,000 um with the repair we just had a garage door repaired that was over 700 we need what' you pay for the house um we paid 410 for it and you had $1,500 worth of repairs and you're panicking yeah well you make 100 you make $140,000 a year yeah well yeah yeah this is emotional it doesn't sound like you're bleeding out it feels like you got a little scrape on the knee but it's just a lot it sounds like it's more stress of just we're having to I think you were super impulsive and you did something that you wish you hadn't done and that's what's killing you the Math's not killing you okay I mean we should it's not ideal uh but um I I probably would just breathe a little bit here um okay you know I I okay here here's the thing the house payments not out of control the repairs are not $28,000 in one month they were 1,400 in one month and you make 140 there's nothing here that's causing red Sirens to go off and fireworks and panic in the numbers okay now I understand you have a deep sense of regret because you feel like you impulsed and overpaid uh but so I don't want to trade $1,400 repair and a house payment that's slightly over the margins we teach which are conservative for a $440,000 loss right well the other thing that I'm worried about too is um we moved with our jobs because now we can do our jobs from anywhere after coid and there is a chance that my salary could be decreased based on where we're living now well if that happens and you can't afford the house we can talk about selling it then but we don't sell a house on what might happen the house might get hit by a tornado too yeah but we're not going to sell it because it might right Debbie do you guys have any other debt other than this mortgage uh we do have a car payment um we owe about 12 Grand on a car we only have one car and then we um just from the move we've got about 6,000 on credit cards so it sounds like there's some other pieces to this puzzle that are causing this stress do you have an emergency fund um we have about 25,000 in savings okay right now I would write a check and pay off the credit card and cut it up and pay off the car a day right okay and you guys need to get on a budget you are not in control with your spending today's question comes from Jimmy in Kentucky my wife and I are on baby step three and would love to buy a home but we're nowhere near able to put down money on a house we are concerned that the market will continue to increase before we can get a down payment saved up can we use my VA loan to take advantage of the 0% payment down payment to get into a house sooner and refinance in three to five years Jimmy I'm going to say no I mean VA loans they're just it's just not it's not a great option I mean there's so much with the fees everything that that that is in that uh it makes it a difficult it's a difficult mortgage and between FHA VA and conventional it's the most expensive unless you are disabled if you're a fully disabled veteran then they wave a lot of the fees and stuff but it is not it's not a good deal for you and basically what you're doing is you're trying to find a way to game the system you know you want to scam the system and the system isn't broke and it means delayed pleasure and yes house prices are going to continue to go up they're not going to continue to go up like they have been the market has slowed down substantially that is not going to price you out of the market Jimmy what will price you out of the market is doing it dumb and moving into something when you're broke and you have no down payment and you're not ready to buy you're going to get in a problem you're you know that the the you know you're going to create friction here in your life it's not going to be fun and you're going to turn we want you to have a house we don't want the house to have you yeah and that's what ends up happening so much we talked about it on the show yesterday with George that you know your home it's such an emotional thing right it's like where your family is it's where you sleep at night it's where you do your meals I mean like it is it's such an emotional part of your life and so many people rush into that so it's it's an emotional part of your life and it's the most expensive part of your life it's usually the largest purchase you ever make and so because of that it's like you people make not wise decisions when it comes to their money with their houses because they just let their emotions get ahead of them whether it's fear whether it's long for something plus there's all these stupid people that are around you telling you all the time to buy something you got to buy house you got to buy house you got to buy house you got to buy house you can't be a renter you got to buy house every oh God oh God oh God you're going to get priced out okay okay and you know what is your Beautician and Economist the lady doing your NE Nails is not an economist oh my God you know so stop listening to these broke people with their craziness uh because I've heard that for 30 years yeah for 30 years I've heard I'm going to get priced out of the market and I can tell you real estate's considerably more expensive than when I started the show 30 years ago but but you know and it'll be more expensive 30 years from now when you're still doing the show so but the uh uh God willing the Greek don't rush but the you oh my gosh the uh uh that's but there's a lot of outside pressure family members and everybody else oh you had bought a house yet you've been married 26 seconds and you had bought a house oh my God and there's all this craziness out there well that and then on top of all the emotion of just the recent yeah real EST I mean all of it right so it's it's it's I don't know there's a lot going on 2020 was one of the highest increases in house prices in history yeah of all time I mean in in modern history and 29% it went up oh my that's unbelievable unprecedented as they say in the coid language but yeah oh my gosh yeah that's just crazy and so uh it scares a cred out of you but it's not it's not that's not going to be what happens going forward it's also not going to crash for those of you waiting on the prices to go down well let me but let's talk about this because I've been there's there's been so much I feel like even in the recent probably like week or two about the real estate market because there's I read an article this morning the Seven Cities where it continues to increase substantially right so there was so I read that and then There Are Places though that they're seeing you're seeing prices go down go down and so the important thing there is to remember that that still buyers or I'm sorry sellers some of them are still in the mindset of oh I can make yeah so much they're still looking for a sucker coming from another city so when you're seeing those prices I just want to know your thoughts on it is it going back to just true home value of what the what the house is really worth versus the inflated prices yeah and so when when do you know what your house is valued at like a true value after all the craziness of it going up so fast is it that you can you still run comps like do you know what I mean because going up so fast is a reality okay so the definition of market value for Real Estate when I was in appraisal class y a thousand years ago is still in college is still the definition and every real estate test you ever take to get your real estate license is when a willing buyer meets a willing seller and neither are under duress okay Webster I'm going to call youster well I mean so here's the deal so you have a buyer and a seller and neither one of them are freaking out okay the seller is not motivated by a divorce or a bankruptcy or something else okay okay the buyer is not over motivated because the last three houses they put offers in they didn't get and so the marketplace is so white hot that the buyer is under duress and so some of these buyers were paying above market value but their purchase does not enter into an appraisal that that property is not an actual indicator of value okay because the one of the parties was under duress yes you can't use a okay a foreclosure on your street does not affect the value of your house because one of the parties was under duress okay so that's not a value that's a price how are you so how people out there that are wanting to buy or like how do you run comps now because I'm like usually you just run comps if you run you run comps and if one of them sticks up and shows they all are going to stick up right maybe maybe I mean if you if everybody was a white hot buyer in the whole area then the value probably has gone up yeah because the marketplace was iness in that sense but if you got some one-offs like you know we we talked about during the thing I live in a neighborhood where uh like like almost all the houses that sold in it's a nice neighborhood uh sold recently were California people moving in with California equity and the Tennessee people are sitting there going I got I got a sucker on the hook here yeah they're going to way overpay because they can't get a house there's a shortage and so they're going to they're over paying substantially overvalue and and so enough of that happens then other people get greedy and they're like I didn't really want to sell my house but if I could sell it for that I'd sell it what the heck and and one of the guys I was playing golf with we talked about that during the streaming thing that we doing he goes I put mine on the market I put an extra 200,000 bucks on it looking for one of those California sucker fish I'm GNA hook me one you know and it didn't sell yeah and he said I haven't been able to hook one so the market has calmed down the market has calmed down and the migration from California or New York or wherever into these other uh markets you know Southeastern markets primarily is slowed down y but we've had a million plus people displaced from just California and New York yeah just those two states moved out into other markets and that it adversely affect what is a real value but real value should be based on a calm reasonable wise transaction by both parties yes and even that goes up 3 to 5% a year remember folks you never want to let the housing market control your housing decisions only your personal situation and finances should do that if you're prepared to buy or sell a home then it's a good time to do it even if the market is changing if you're not prepared then it's not a good time even if the market looks favorable and if that's the case it'll be worth the wait to get in a better financial position to do things the right way Trust me thanks for listening make sure to share this with the people in your life that are getting hung up on what's happening in the market and tune in to the next episode where we really get tactical about the steps it takes to purchase your next homeRead More
you can get qualified for a loan that's 50% of your take-home pay and you can't even breathe you can get qualified for a loan that's 35% of your take-home pay easily easily and then you have trouble funding your car replacement fund your 401k your kids college fund because you become increasingly house poor over the scope of the next decade it's going to be very hard for you to avoid debt and prosper if your house payment eating up all of your income.Read More