Is My $1,500,000 In Real Estate Debt Worth It?
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- Äas pĆidĂĄn 20. 08. 2024
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I like that Dave didn't just jump on the guy to sell something and get out of debt. This guy obviously has a great plan in place and if his world came crashing down tomorrow, he could sell all his real estate and with other investments have $3M to retire on...he would have to downsize a bit but would be just fine.
Yeah sometimes Dave recommends selling great cashflowing properties & I'm glad that wasn't the case here.
Imagine "downsizing" to 3M
Yes mostly the other guys like John & others would be quick to tell to sell
This was a great call. I loved Dave's common sense and that he didn't just insist that they sell real estate in order to get debt free tomorrow.
If this guy called up and was only making $90k I bet he would have. This isnt a typical Dave caller so its not a typical Dave answer
I am surprised every time he has the insight on situations like this.
Jake! Good to see you here!
@@MLee-fk9ks Dave is kind of okay with hanging onto debt (if you already have it) if it's going to be paid off in a timely manner and if it's a small percentage of your overall world. The costs to selling one of the houses, stacking cash and then buying another house in cash later is probably riskier and more stressful than just having a plan to pay it off within a few years. Especially when you have that much money in retirement to stave off any craziness.
Thank you Dave for not jumping on this guys dreams before hearing your teachings. You were very encouraging and supportive. I appreciate your heart of a teacher. Your 2021 Florida conference was an Amazing and encouraging experience.
The only other consideration is "do you really want three properties?" Most people I know in this same scenerio figure out after they get into their 60's that two houses are enough and one of the three is a hassle and end up selling it. Consider which one you will sell.
I love the show and listen to consistently on the road, keeps me inspired and motivated
Love all the way from Saudi Arabia
Pay your primary house first. We did and never regretted it. The rental is secondary.
$400K/year household income, what a wonderful place to be. Not even in my dream of dreams will that become my reality.
Itâs not as hard to achieve with two working and rental income
The caller lives in Chicago, the cost living is sky high there.
I love this show....so inspirational, and informative.
This show is a blessing
In my opinion, definitely not as valid as someone like Dave Ramsey's, he is a millionaire who has just done it another way. Dave's baby steps, which I follow as I'm risk averse, allows the average person to go from broke in debt to put off debt with a comfortable living. Which is my aim. This person has just done it another way. He should be fine with his income and investments.
Love the people who call in to hear themselves talk
Lol
Ramsey was waiting for him to say $1.5 million in student loan debts. đž
Right! On a 50k or less income.
đđđđ
I can definitely believe the teachers become millionaires. They complain about the pay but we all know they're very well paid after a few years experience.
Not only that they only work 190 days a year. Instead of the 250. I know a lot of teachers with side hustles
@@gabrielgonzalez6456It's the best part-time Mon-Fri job a person could have.
You think that caller will ever be happy
Sure...he sounded pretty happy already....so don't see why not.
We all wish we were in this much trouble. Why did you even call.
Itâs really not as hard as you think to get this stuff!
Jaya Fow to get more clarity on his situation about when to make sure he has his real estate paid off.
Thank goodness! I had a similar question and he answered It⊠I am so glad I can keep my home
Remember, $500/month starting at 20 years old into an investment account returning an average of 8% will be $2.6 million by the time you are 65. You don't have to be earning tons or putting away tons to retire comfortably.
Even high income households are beginning to struggle with high debt paired with *highest inflation in decades* therefore look for a side hustle, or *three*
Caller needs to slow down and breathe đ€Ł
So what if is not his way. His way is not the only way. As long as it's working for you.
Once it gets cold I'm going to make pizza at night. Old guys can hustle too.
What Dave doesn't tell folks about risk: The higher the leverage, the higher the risk. The lower the leverage, the lower the risk.
Translation: This guy has about 50% equity in each of the three properties, which means he can quick sell and walk away with cash in his pocket. His risk is very low.
BINGO
Theyâve also told him that he was not in a bad position.
I partially disagree. Depending on the amount cash at hand is the amount of risk. He also has enough in his retirement and brokerage accounts to pay it all off⊠you can 100% leverage on all properties but if you have 40% of the debt amount sitting in cash itâs a lower risk
I love dave's soft spot for real estate
I hope everything works out well for them so they can enjoy retirement and help people
I hate that Dave makes the jump from their "study" from correlation to causation so quickly and easily.
Brag call...
He answered the question âhow old are you?â with âweâre 50 and our household income is $400kâ. đ đ
âïžđ .
Maybe Dave should have told him to deliver pizzas to pay off the $1.5 million. đ
Itâs not a brag call at all! He was looking for advice and what there doin, anyone can do!
@@reese85 đ
This is the best call ive heard maybe ever
These numbers đ€Ż I feel like an ant
The rich people calls, I'm not as into em. Wah đ
wow! 400k/yr income, 1.5mil paid off of ~3mil across three properties, 1.8 in retirement savings, and another 1mil possibly paid off by renters in the vacation homes. Best of luck gary, gonna be a sweet retirement IF it all goes to plan.
He should train me for sales lol
Beans and rice rice and beans and donât go to restaurants unless you work there
Iâd really love more content like this!
Regarding the comments at the end about millionaires and their professions. Teachers actually make a lot of money, their employment is very stable, they still get pensions, they get benefits. It has been in fashion for a long time to complain about how much teachers make but many of them do really well. Plus their education is not especially expensive. Actually if you think about it the three top professions can get their professional credentials without spending especially a lot of money. Lawyers and doctors get reamed in their professional schools, plus they have to spend additional time and money to get their licenses. I bet you could draw a diagram of growing wealth and it would show the pace of accumulation measured against the cost of education for the professions and the sweet spot measured against the number of years the average person can work is probably for engineers, accountants and teachers. If people had useful working lives that lasted another couple of decades doctors would likely outpace everyone else. All this is aside from the usefulness of each profession's skills in accumulating wealth, and in that respect I would expect that engineers' math background certainly helps but that the best profession is most likely accounting. I would say that doctors are thrown off course by the expense of their education, and lawyers have much less stable professional lives than any of the other top 5 categories. The lawyers who become millionaires likely have (relative to other lawyers) very stable professional lives, and obviously there is a lot of potential for high earnings as a lawyer, depending on what you do.
Just an opinion of a broke lawyer.
Sell the least profitable rental house. Pay off the main residence with the proceeds. Then payoff the second home and keep renting it.
Dumb. Up to this point his renters have been buying his house for him. That, the extra cash flow, and the appreciation in value, it's a no brainer to keep both.
Can't wait to do doordash when i make that much money lol
Gary is killing it
2:41 so commonality = causality. đ€Can someone who took statistics 101 confirm this, please? Thanks.
Live off of $100K and put $300K a year at the houses. One at a time.
First time ever, today, that Dave Ramsey acknowledges a mortgage as a "risk" or just like any other agreement therefore, a deal no one should consider as any different or lighter than a "debt" only the object of the agreement is a house in this case - You have come a long way D.R...!
I'm so worried about this guy. Darnit, I hope that he can get it together.
đ€Ł
đ€Łđ€Łđ
I know seriously hes only a few missed paydays away from shaking a tin cup downtown!
I been stressed out all week..just being worried about him
@@jayc4715 đđđ
I get calling Dave because Dave has a ton of experience with real estate investing and he probably values Daveâs opinion. Dave didnât immediately let him have it either for having mortgages on rentals which surprised me a bit.
The guy who called in makes a great living each year too though, so I'm thinking that's why there was no real hurry to pay off his real estate holdings, but can do that over a longer period of time.
@@Sheryl777 I was thinking that too. Also in his 50s without knowing his liquidity position we donât know how much he would drain to pay them all off. 400k incomes can run dry quickly in an over leveraged position. It was good to hear he had 50+ percent equity in the properties.
@@genxretiree Yes I agree. Glad to hear he has as much equity in them as he does too. đ
I'd still sell one of the rental houses... In my opinion, 1.5 mil is way too much risk even making 400k a year.
@@TheFlyingZulu I'd personally never have rent houses to begin with, cause I don't ever want to be a landlord (if I can help it) lol, but I guess some people don't mind the hassle that comes with that sort of thing.
This call was cringy. Example: How old are you? Answer: I'm 50 and our annual income is 400K.
I mean, Iâm sure that was goin to be Daveâs next question tho!
I didn't see anything cringy about it myself. Of course Dave wants to know the statistics of his callers, so he knows how long the guy has till retirement (asking about his age there so he knows where the man and his wife are in regards to how much longer it will be before they retire), and also how much he makes per year, (which would indicate the guy's capability of handling the situation should anything go sideways with the real estate for any reason). Both of those are important issues in being able to tell a caller which path would be best for them to take.
Why is it cringy? Rich people need financial advice too.
@@reese85 do you preemptively answer questions that haven't been asked yet?
@@allaboutroofing2 itâs a financial call, obviously you give your financial info immediately. Whatâs wrong with that?
If you knew the answer, whyâd you call?
Brainstorming
500k+ is too much for for any rental. Way too much hassle getting them filled
Likely STR with rents like $800/night or higher
He has too much risk going into the recession.
500k is a shack in most places nowadays.
Why does this guy call in? To brag and confirmation bias
Moral of the story, make more money so you can afford to make "mistakes"
I wish I had this guy's problems.
I have his problems, and trust me you donât want them. I canât even turn around in my house without knocking over piles of money, itâs annoying.
Getting what heâs got, is easier than you think!
Man, people really call for justification of their actions when they're already killing it on their own. Ramsey is not the end all, be all
Is he killing it though? He wants to have that all paid off by the time they retire.
Exactly lol
He has $1.5 million in debt. That's not "killing it" by any metric and will forever carry unnecessary risk. With such a high income, there's no reason at least one of these properties isn't already paid off so that tells me there were other financial issues going on prior to this point. Probably a ton of consumer debt which is typical. The more we make, the more we spend. I wouldn't be shocked if they had a negative net worth 5-10 years ago so this call was absolutely legitimate.
What an odd statement. Most people donât think anyone is the âend all be allâ.
@@MyUsernameIsNotClever you didn't listen to the call at all did you?
Gary gunna learn today.
Yeah, but what are those vacation properties going to be worth/cash flowing in 3-5 years?
Really inspiring đđŸđđŸđđŸđđŸđđŸ
Has anyone ever verified Dave's "study of millionaires"? đ€đ€đ€
Reading the millionaire next door right now.
@@adrianmechelle3784 that's not a study..that's a book HE wrote man my years ago.
@@jayc4715 a book can be a study
I thought he published his study
There is a free summary page of the study, or you can pay to access a PDF with the study findings
For someone with as much experience as Dave, it baffles me that he doesnât seem to understand you canât have reward without risk. Risk isnât bad, as long as itâs the right type, with a good potential for returns and most importantly one that you can afford to take.
He never said don't take risks. But you don't take risks when you're broke which many people seem to want to do..
@Obsidian your comment shows just how little you know about finance
Itâs absolutely possible to have reward without risk. Dave has done it himself, so not a great point.
Buying stocks with your own money vs buying real estate with someone elseâs is very different
@@MyUsernameIsNotClever you definitely do take risk while being broke! Being broke is the reason for taking the risk
Focus on paying off one property first.
This guy clearly called in to brag. There is no way he is that successful and not smart enough to realize he is in a position that most people would love to be in. Worse case scenario he sells his rentals and walks away with close to a million before taxes. OMG how will he ever survive being a multimillionaire with a 400k income! đđ
Heâs just brainstorming. Thatâs what smart people do
@@PInk77W1 No way I'm buying that. This dude has absolutely killed it. He has reached a level of financial success that most of us can only dream of. He is a legitimate multimillionaire with unlimited potential. He is one of the few people that Dave Ramsey didn't tell to sell their rental properties immediately. There is now way I'm buying he needed help with something that simple.
@@jimdango123456 Iâve ridden my bicycle across the USA 5x. The first time I quit at California AZ border. I thought I was doing horrible. I got home and crunched the numbers. I was ave. 127miles a day. The mind plays tricks on u in many ways.
Iâm not that rich so I donât know, but he seemed ligit to me.
@@PInk77W1 You rode a bike more in one day then I've probably ridden one in my whole life combined. So I'd say you did pretty well. It just sounded like one of those look how great I am calls to me. I've been listening to Dave Ramsey for 10+ years, and every once in a while people who are doing great call in with something dumb to get praised. For instance, there was a guy who was making 300k a month, and wanted to know if he could afford his car payment đ.That's what it seemed like to me.
@@jimdango123456
They mite b bragging. I mite b a bad read of people. But I donât think rich people call talk shows to brag. I think they have other ways to brag. Me ?
61yr old high school drop out.
Retired tree climber. I make $52k.
I have no debt at all. House paid for
Money in the bank. Never done drugs
Travel the world by bike. LoL.
I feel rich.
Rents two $1M properties? What happens when they don't rent?
This collapse is going to make 2008 look like a Sunday school picnic.
And if you keep saying it you will eventually be right
Exactly, someone who gets it.
Weak
Great I will go debt 10 million dollar this year. Per Dave it okay
Beats renting đ€·
I wonder what Dave will say here
Ayo this Graham? đ
Lol Dave didn't nitpick the highest-rate-first method! Smarts and discipline get a free pass, huh?
He didn't need to nitpick, cause the guy who called in has plenty of income coming in each year, so he didn't need to worry much about which method he used to pay the real estate off. The guy would be just fine either way he chose to do that.
Each house has about the same amount of remaining debt. If one were two hundred thousand and the other five hundred thousand, I'm sure Dave would have called him out to pay off the smaller first.
@@Winnie-Kay Yes I think you are probably right about that.
Yes the smart and disciplined do get a pass good on Dave
If teachers are so likely to become millionaires, why arenât they teaching their students to do the same?
Students don't want to learn
They want to be youtubers
Be on social media
And make easy money
That is NOT what the owners want, the want obedient workers!
Teachers have to follow curricula. And it's not just about knowlege. It's mostly about behavior.
Because they're not allowed to. Teachers don't set the curriculum. Duh!
Because if they teach whatever they want then they wonât have a job for very long.
Did meeting Graham Stephan lighten Daveâs opinion a bit? I canât believe how different he was in this call about the guy not following his plan to the letter.
The guy has good numbers
Unfortunately Dave does not know what causal means,...
Weird flex
Different net worth gets different answers. I'll bet if his net worth was under 500k, he would say to sell them.
And then go into these strawman arguments of why he should sell them.
And yet, here you are bloviating about something you have ZERO knowledge in.
The guy can stoke a check and be free and clear, something you have ZERO concept of
And thatâs exactly what he should do.
@@alinatamashevich3354 Troll can stand when other people have a different opinion then Dave.
@@jimmymcgill6778 Troll struggles to string a sentence together.
SRB
what going on / yeah I'm out there / .. / / it doesn't matter / yes we can got to "legal mediation"/ and this is about my nephews'/ o.k. I'll think up some terms / special for "sept11th / and we can disuc it / but remember , that /you were the one "who want gonna let me do this case"
Imagine being 80 and having to make decisions on multiple properties and potentially have things go haywire. His retirement sounds like a disaster.
Yes. A completely stressed retirement.
Point if the call, so it wonât be a disaster
They semi-ridiculed a dude making that much money a year
This is the result in this very costly, high inflational territory, that many Western countries and it's taxpayer citizens now find themselves in...
Voluntary debt will do that.
Reason why I avoid it.
đâïž
The largest study of millionaires are based on Dave Ramsey listeners.
another fake call from the back room. and of course he make "400 THOUSAND DOLLARS A YEAR" BeeeeSssssss
What a stupid comment. When you have 20 million listeners on the radio from a country where most people are as dumb as a brick, there is no need to fake calls.
Lol either that or someone calling just to brag and get a chance to talk to Dave.
There household income, more than likely including rental income, is 400k! Itâs really not as hard to get
Couple making $200K a year. Itâs not that hard
Nope. If itâs debt then itâs not worth it. Proverbs 22:7
Thereâs good debt and real estate if itâs making money is one
I would gladly take over that debt
Pumpdup true, that's why he called in trying to figure out a plan to get the real estate paid off (and when to). Because he said after listening to Dave, he agrees with Dave that debt isn't good.