« The Dave Ramsey Show

Never Buy Extended Warranties! (Hour 1)

2019-12-30 | 🔗

Debt, Home Buying

As heard on this episode:

Tools to get you started: 

Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR     

This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
From the headquarters of ranging from the dollar videos debts that Abrahams or debtors door just doing in the pay of mortgage has taken the place of the Bmw status and I am sure, your votes. This is your show. America is all about you. It's a very gall and some say the advisers worth what you pay for the phone numbers triple eight eight to five, five, two to five: that's AAA aid too far, Five: two to five Asean is whether Columbus Ohio highs
how are you I name? better than I deserve. What's up, same here. You're gonna wanna constant loop in our home, my daughter call the uncle Dave I want to know we watch that allowed and one of them shows someone said something about our package and at the time you laugh- and I was pretty funny apparently- but I just want to know since my wife and I were saving up and working to dark ranch and raise our back, and I wonder if you knew something I didn't and maybe to change course or something. I don't remember what you're talking about, but I guess comment on our package, I was trot, I think, we're talking about emu shortly I believe the evil doers broke several years ago, geysers as emu fad and a bunch of a body muse and then there was disposed to be this huge demand for the meat, and it was basically
and your car out. There was no demand for emu meat. And pretty soon the people just said Daddy Muse everywhere, but hackers, mean lama- export on I'll pack as another expert on branches, but from a business per se, given that you're entering a pretty narrow market agreed yes and you better, really know your stuff, a new, better, really do that. You can't do it just because you read and some article about our package are making people rich guys or not. I mean anymore, can't more than cows or making people rich cows, make people pretty poor all the time and some of them they make people rich it's out, as do other running a business called cattle, you know, and I'm a business and when it ceases to be a business, starts to be a fad or never become Business is all of this was a fad than there you go so what the deal. What do you want? What do you get out of our packers? What's the in product It is the fleece you can give me
You can turn into a sweater, then thought himself were the very soon or to Kashmir in the quality of the police and there you can also breed and or sell them. show them and all that. But most completely about the fleet and a big part of it is its Hidell, allergenic and stuff. So with everybody to have allergies, my my children, it will have allergies, and are you ran better than you ever been in agriculture and ranching? Before noticed, my first venture into it, and- But why would have our first venture into ranging end with a very narrow product plan? Well that. Actually, the second half of it. The stock, I'll, be starting with his go tonight.
Might I dont have all of the expertise myself. It's a good friend of mine who doesn't really working together and have made lots of money on our packaging vote not our that different thing, but the goats they did in their native country as well It sounds like you're going into something you're inexperienced in and obviously I'm gonna tell you, don't borrow money to do it. Never money you may put into this go away from a business, I give you just got a very narrow demand product, learn that the journey but does not aware of so it's not like you, you know cow aids. Leather, obviously, would be a completely different thing abroad, mortar for that and I or wool a broad market for that and so forth. But you ve, studied the market and you understand whose thing
just trust. A guy who wants raised in our packer halfway around the world and his family did that for two generations are something that that is a bad I mean you're in the United States and you think about it. To understand exactly how this turning the money and how. Like lady of because you're talking about a business here, but you get a with hypo allergenic narrow. More stuff goes. Your kids have allergies. A good way to lose all your money. Shall you need the business aspect of this. Where does this turning the money and what Omni steps does it take to turn in the money and how much money does it turned to and how likely is it to turn into money and because it scare crap out of me: you're, not really narrow market a fad like market, and it sounds like you. Ve got from another country who is come along and told you go so now. Packers worked in another market, another country and now they're gonna working I'm Ohio. I just don't know again.
Export? But it's just sound weird So, I would want to know a whole lot more about it. If somebody bring something in here that feels weird, maybe usually I found out the reason it felt weird because it was weird and I'll? Show you just can't. I gotta get down into it and go okay. What's the problems with this? What am I not seeing? What are my blind spots and really study because otherwise every dollar you're putting at risk here could be gone Veronica is interacts us high Veronica. Welcome that over amnesia. Hi Dave on such a ban. Sorry, I'm nervous, adopt here, thank you for taking my car sure or a few years ago my mom needed down to work and we had just move. And with her, and so I figured I might as well. It's war helpers, though my husband got a credit card for nine thousand dollars out under his name, is a medical credit card. You can only use it first battle things and she was making payments on it and she put it down to fight
thousand the payments are like two hundred and fifty a month and lately she's been getting lower and slower with the payments she would have faltered by now, but sometimes will pay it for her and she pays it back we're trying to get on the baby said to get out on our own and every time they were kind of ahead, usually whither. He always filled hello, you Louis get on our sea or the first here for like I want to save five six years, because every time we get, on our feet, to move out my mom's really bad with money she does pine and I'm everyone takes Lonnie every time and we'll pay the payment or come up with the payment or something like we bail out and then we're stuck living here again and so this time I would like an answer, but Adria release or used to be added,
Yeah I'll show you in a move. Like you know like. Even if we don't immediately abolish, don't you both have jobs, home, I have to babies, my husband works and waters He makes about thirty thousand go, go an apartment. Ok, I'm an order. The credit card- you know, don't do that here right war is now his usual day their lives. You stay there. I can help you just stay there. I can help you, because you You are in a cycle, you know what the cycle is in your refusing to deal with the cycle. Every time you get rid of me about your mother, takes all your money and you ve been living there. Five breaking years Try to leave now
Then you end up paying this democratic Argos. You stupid enough to. Let me put it in your name and do it you get to be stupid. Tax laws do stuff. In my life and everytime. I want those checks, acknowledge stupid tat. You can read about five thousand dollars to protect Jim after you move out for your own. That's. Nobody was workin. Three drops of your work in one. This is a diver amnesia. I got a call the other day and I thought it was worth talking about again. It was from a wife looking for life insurance for her family. She asked why I only recommend term life insurance system of cash value plans like whole life. I use explain how you over pay for coverage, earn a horrible right of interest and don't get your cash value when you die, but this time I just had to go straight disaster dot com and get a rate, and then we compare that right to the whole life plan and she immediately saw the huge savings. That's why
suggests that everyone gotta zander dot com or call them at eight hundred three five, six, four to eighty two and get a free quote you were joining us. America were glad you order. Katy is in Baltimore. I Katy welcome, but I m sure Thanks for taking my car, I'm trying to figure out my husband and I are trying to figure out if we should pay off our house when baby steps, four five and six thanks to you a program and my husband just turned sixty last month, we are wondering if we should now that he can access his retirement savings,
we're wonder- and he probably has five to ten more years, God willing to work but were wondering if we should pay from his return Savings to pay the house how much is in your retirement knows about hundred and thirty five in additional one hundred and forty intention that'll be rolled over and irish one. He retired the agony yeah, that's what I meant, but not until we reach our so watch her. What your mortgage balance we are one eighty two on the house and I would take our pension way down about international trade repent, and they would take our time and down like one one. Fifty now what is it? What's your household income? we make I'm just
two hundred thousand? Yes, I would pay it off you ve got such a great income that with no house you're going to be able to max out all your retirement and invest heavily in. You have money back piled up like nobody's business, one what's the homework probably two. Seventy five good We ve currently pay a lot for his like through work. We pay a lot for his life insurance because he has diabetes and sleep up now: we have very little outside work. Another reason I kind and why, to do it now. The other thing. You know once you, each a point that with the house paid for that, there's enough of a nest egg, that if he were ass away, you would be financially ok, that's the point that yourself in
heard any, would drop that life insurance contact, your paying a lot foreigners actually went once you have enough of a upon his death with paid for house. For you be ok at that point, that's called self insured, and now it is turning sixty eight just turn. Last month we fill with those two chronic issues. Do we still their long term care insurance without the exorbitant and we pursue being self and short. I would make sure your long term care insurance instead, how much it costs will not not no matter how much it costs, but I would look at it very, strongly. I mean I don't know what the expenses gonna be based on that, but you know, problem is, if he goes into a nursing home, you ve got a hundred and seven dollars laying their and a paid for house that's my leave. You wanna get situation.
Believe me that nursing home to be covered today. I now they look up. You look up five ten years from now, and you got a million dollars which you should have and investments where the paid for house and your network urging a million and a half. If you want to self ensure that point through pressing home, stay and drop that that would be fine and somewhere along the way you would have dropped your life insurance to and which would also help pay for that, then that would be fine, but the point if you think, about the events occurring, whether its death or a nursing home stay. Where does leave you and today In neither case does it leave you great. It leaves you good, but not great, so only time we dropped. The insurances were when we're in great mode. So today I pay off the house, may be- I'm only doing that if I'm firmly committed to building this next vague,
really really rapidly using this fabulous income that you have and see. You keep the life insurance play in place for today, and they put long term care insurance in place today and on then we drop the life. Parents are senators enough mighty cover upon his death and then later on. If you ve got enough piled up in you, wanna do the and self ensure, through the long term, insurance later through the nursing homes day later, you could do that, but that's probably out their debt or so away. You're, probably buying that for about. Ten years before you can with the numbers are given me doing really really good very well done when they a copy Chris Organs, but it will guide you through this process. It's called retire inspired, number one by selling but shall hold I'll. Send you copy a member is with us in Oklahoma City Hall. How are you I'm married and even better than I deserve. What's up in your world
ok felt my husband and I are twenty five years old. And the only non mortgage tat we have is a student, long payment or a student, of about forty thousand dollars good. We have ye, I merely side we have twenty. Seven thousand in our savings, now it all my life, but you will tell you they paid out completely tonight today, now is the natural easy. Then you thirteen thousand dollars and you have no death, Twenty five years old and your household incomes. While about forty awesome now, what would you say? Ok, we still have. We had still have a mortgage. How that would you say, put the rest of it as the house knows, were killed in an emergency babies to want to save a thousand dollars. You ve done that babies have to use everything above a thousand dollars and become dead free, accept your mortgage. That's what I just did baby steps
Three is a fully funded emergency fund. Raising your one thousand on our count up to three to six of expenses. I think that's! Thirteen thousand there! That's your eventually find your touch, that for anything in they do not buy stuff with that money back therefore a day if you want to Bosnia stuff you gonna, save up beyond that. If Europe by car you're back out, you want to go on Christmas vacation you go save about, of that thirteen thousand in a separate account that money, you don't touch. Ok, and then we move on to babies have for which, as we start investing now to become wealthy investing and before the houses yeah sure all the rest of it at least what we baby steps forward. Fifteen percent goes into retirement, and above that, any money you can scrape body your budget, you put towards the house and pay off the house,
and your work your way by the house as it were, we call baby steps takes hold on. I want to give you a copy. The book outlining all of this is called the total money make over, but you need to be debt free by the end of business to day hold on. I have Kelly pick up. Morgan. Give you a copy of that open phones, a triple eight eight. Five five two to five Rashid, is on twitter. Following me Dave Ramsay, eighty seven thousand of you do. Thank you for hang out with me. I would of your old, how should I get a homeowners warranty? No. Now you never buy extended and on cars, electronics, warehouses, here's why eighty seven percent
of what goes out the door on a warranty, goes to cover overhead and profit and commissions only twelve to thirteen percent of what you pay actually goes to cover the statistical probability of the breakdown. That's the averages. These things are almost all profit and commission to the person selling them extended, warranties at best buy rip off extended warranties at the other electronic stores, rip off extent, warranties at a used car lot rip off extended war. These on a home rip off, they dont worry the math does not it is not a good bye! You are better off to take that twelve percent risk on that item and shellfish through that by having a good emergency fund as result of having paid out. All your
Thinking money to extended warranted you can. And extend warranty freaking pencil addressed by they put an excellent warranty on anything. They'll. Put, you walk through the line. It's unbelievable, no good place. The bottle I think I got prices but no extends warranties Nokia and warnings on your homes. Your cars you're like tracks, bad math, bad, laugh about one clear. This is that every measure
The lobby Abram easy solutions. Virginia is whether Virginia our young big day dear, was an honour to have you. Where do you live? I live in Marietta, California and Woe Santiago area. Yes, why? What's a bit of a trip over to merge by all? Yes, but well, where I dared do your dead, free, screamin, personal? Yes, I love it more honour to have you. How much did you buy all the ink on sixty three thousand three hundred and fourteen dollars and fifty cent excellent? How long did it take it? Did me twenty months an arrangement Gump. I started off with my main job and second job.
A little over ninety four Kay indeed, just last year, with both jobs at around six little overs. When sixteen, while excellent show, what do you do, I'm a compliance, animal for a California, electric utility great and your shot, gig my side, gig two. I worked at Amazon and I worked a retail job in my life to say what we tell gyros. I worked at. He game acts Loca inertia which provide better. My main John we're not mean other Tucson vessels, which will be the second job to get back, ok yeah earlier, and I just want to say too. I also made an additional one, thousand five hundred thirty two hours and eighty five cents on the selling app offer up just from stuff hanging around the house, all good mocha. So what kind of it was a sixty three thousand? Well, I had a closed cable bill. I hadn't about six thousand on credit card.
The I owed the Irish fifty four hundred I had two for a wine k loans a little over twenty thousand. Yes, a car loan at twelve thousand, a personal line of credit at about fifteen thousand and personal loan. From my sister about ten thousand. So, if you're out, I'm sorry fifteen hundred you're like normal, yeah? I was really normal shallow, but a debt everywhere and it's gonna be bobbin along and what happened twenty ago, flipped your lives map, and yet it did a dead. I was turning fifty Dave tomorrow as a milestone birthday. I wanted to have like a party reception starve and invite my family and friends. I started looking into the cost of that and found it was just gonna cost too much. So I wear a chose: a cheaper alternative, an all inclusive vacation, Cancan, Mexico. Ok, yes before us. To leave. I sat down to pay my bills for the month and I was looking at my check in and it was really love. It was self
that I had to put one of my utility bills. Water bill. I believe on a credit card, and I was sitting there thinking I'm about to turn. Fifty years old I've been working since I sixteen years old and I'm putting a utility built on a credit card and I'm going to and good and kind can Coon. Yes, yes, so I decided. I guess I'm sorry nerve that's ok, you're doing good, so I can confirm right. Where you are, I can feel it. This is you fifty years old you're getting over. This is your haven't. I've. Had it moment, I'm here and yes, yes, I was really. I was discussed it and I was embarrassed alone, no one, anyone really new, except for my sister of what you know the circumstance I was- and I was really embarrassed of myself- and I said you know I know
dig out into this whole cause, I'm not afraid to work at all where I can dig myself. I this whole and I well when I get back from can code, but what am I gonna do not end up here again because I ve done it. I did it time time again and so on, so I went on. I had to borrow money for my sister for the trip to kind of stay afloat for the rest of the month. And to have a little bit, but spending the encounter to at least tip and go on a couple of excursion. So she lent it to me. But you know how you say: you need someone to tell you the truth, someone, that's not afraid to her. Failing. That was my sister. I love that is growing as she knows how much I make, and she says this doesn't make any sense. She goes where's your money going. We have to do something about this, an getting mad and I was like we don't To do anything I have to do it. Gonna blame you, the money she and she did she. Let me the money and
so we went to hat Cancun. Had the best time of my life, my birthday was fantastic, but if you look at the picture in conclusion, I looked great had lost lot away us feeling healthy, but I was broke. I was broke it thank goodness. The trip was all inclusive we got back, I knew was about to be holiday season and I apply to Amazon because they were hiring. Of course you know like gangbusters, so I got a job there. First, I had posted on my facebook page. I said: I made a financial mess of things. It is my responsibility to clean it up in a dear friend, Tracy, I'm sure, commented in my person. She said hey. I have the materials to financial peace University, but they Ramsay. Do you wanna? Take the courts with me and it's a day Ramsay. I know him, I know you through beach body. I have your book entre leadership and I said, but I didn't
the total money make over the Financial Peace University Dave I'm so sorry immediately when, on your website, I was about to leave where that second job, that night I went on your website, researched everything saw the class as and I saw that you had a pot castle on the way to work that night, I download the podcast and there there was, a single mom, who was a nurse doing her debt free screen and she went through hosts her story at a really resonate with me or family was helping her. She was working like gangbusters and I think the first time I had hope. I said this is the answer to my question and so I I went on to work day night, but but also I heard when you were interviewing her walking walk into the star. You were talking about the baby steps listener maybe that one thousand dollars to small large. I could do that you said this is when it clicked. You stay
you're getting out of. Debt is eighty percent behaviour and twenty percent head knowledge and clicked fireworks, or off my brain because I relate I had up to that point. I had lost about seventy pounds and I didn't think to apply those principles to my money. This is the answer to tat. What I indeed it might to change my financial life so you're emerging, I went on the work in the rest. The rest is, history has called hope. Yes, farm, yeah, yeah, so watch. The key tell people how to get out of that. One of the key I mean honestly for me, taking Your nine we course financial Peace University was that it was everything. Was a game changer being among other people, because I'm single it was so that our ability and encourage were yes absolutely, and if you see me, I mean I was. I was running a little late to the and if you see me, I, if Kelly showing the picture of I'm, I have that kit grit and I might
I'm sorry I didn't hear, and I got in where and when I sat down and heard everyone else's story. It was just I had even more hope, and then I found out too I'm not the only Financial hot mess in I'm not by myself, removes the condemnation that yeah yeah whenever you here for you well down, I'm proud of you. Thank you. Thank you. I sure your biggest your letter was your sister. Yet absolutely unshaven came with your way. We're gonna. Do that average. She did. She know her name is. Could trees were I to go contrition? love it. You not only a truth: teller you're supporter gas, very good gallery coup yeah congratulation eighty day very well known. We combat Chris Organs book for you, retired, not returned Barton too. Many years is downright every day
millionaires because you're gonna be want. Thank you day, you're on your way thing. I just want to say too I at some point I did audio listen to Chris S book and that really opened up what I was doing and even more for me, because I have a very good job denying job and the power of the income, as you too hung about. I just saw even more clear and am I was hoping to be done. What baby step three by now, but my check, that posted, yet it I'll get her love it well done. A journey from Serbia, egg, sixty three thousand boundaries prayed Auburn. Twenty bonds make a ninety four to one, sixteen great store.
He carried down, but Sarah Dat Bridge Greame baby. That's right. There is sick and tired of the sick and tired people. You level come around. You lived you up and help you win were one of the people. They love you. We want you to win this is that a ram shout,
the initial stage, where those or again welcome other rooms and shows God cried they take you. Michael sure, what's up I'm trying to decide whether or not I should stay in college payment or whether you any other changes to my financial plan. Little I'm asking his cousin Hannah getting in weight start to college. Thirty nine and my
it's an iron baby step to right. Now, I'm not I'm not using debt to pay for college. In fact, I get my private scholarships and they get tired of Czech about every six months for a twenty five hundred to three thousand. So how much was caught college costing you out of pocket? It's not top costing me anything out of pocket the man. Why would you quit so because so I kid I could move towards baby step three faster. I focus on working exe jobs and things like that, how I gotcha what are you studying, Eyeteeth when will you graduate in two and a half years and your howled, I'm thirty? Nine and your household income is what
Last year we made about seventy five combined animals. I also started driving goober isn't here, and so I'm I'm bringing an extra five hundred fifteen hundred a month good, but I'm not sure if I can continue level with Gilbert and also continue to focus on my stuff, Yes, as much as I need you, and what you need to focus on them enough to graduate. But I'm not that worried about your GPA. I got a whole lot. Artie working here of never not hired someone because of their GPA over the question is: can they job. That's all! I know right right, that's what I'm after as a high risk employer and Yeah, I already working. I t since I've been in for four years and fast track my career with the plenary, and so your GPA does matter. Then again, I'm trying, destroy your grades, but if you make it
a b or a sea instead of an ay, because your earnings from it income driving Ober. Oh well, that's my point, but I'll be Leave you flunked out. We can't do that. So, are you gotta find that What you ve got to gauge on your own thy. Not thank you stay in school. I think this too, Yours is a really tough time of your life. While you clean up debt your household and you guys are making You're doing a lot of things. At the same time, you're getting out there you're trying to finish school, you do and all the stuff you you know your dress, the candle at both ends, but you can survive that for a short period of time in two and a half years is not twenty years and two and a half and you're not be or not deployed Afghanistan, you're just going to school and driving over right yeah. This is above all, you can do this and I think you make it. May I think, the turn and you keep workin out at an you. Gotta keep budgeting and you keep keep trying to find everywhere. You Kanda, cutting, pencils and increase income. While you finish this degree and is there any way we can fast tracked the degree? That's the other
can you get out any faster and then what I'll bet mean to your income? It should mean something to your income. I suspect it will Jonathan as whether some Lynchburg Virginia high Jonathan welcomes the diver amnesia. Things are happening, they sure what's up oh yeah! I was No, no just like how to get started on paying off my student loans. Ok, do you have any other debt. How much longer do you have twenty thousand dollar: twenty: three: twenty four: you just get out of school university, roughly a year and a half ago, going on two years and
a year and a half program at community college that so you're finished you and your degrees in one. I got a loving certificate. Mocha and so are you a welder said what he might roughly twenty nine thousand net, and you just started right that six months and the opportunities for overtime region, gigs right now, I'm at a new job. I was at the old job for five months and upgraded and have been at this one. Monk so perfect, not a whole lot of room for not yet, but you are They soon away to increase your income by looking around about what I can do with my welding certificate. That makes me more money right. Yes, I keep asking that question over
We need to add as much income I take it you're single! Yet do you live at home with your parents? Enough item I lived with one remain: ok and you should the only debt you have assisted lunch. Yes, ok. What I'm gonna prescribe to you is a tough gig. I may argue work and forty. Forty cool, ok! If it's not welding, then on the side. I want you to pick up another side. Gig of some increase, your income and I want you, go written budget go to every dollar I'd com download they every dollar budget, it's the best budgeting app in the world to its free, download it for your phone and or your computer and use it. Free and you give every dollar. Of your income assignment before the month begins in that I and that's why you don't you. You lay the plan out you plan and then you work the plan and you stick exactly two.
And you have no life- all you do is work and pay Dat, if you do that, you can be that for two years but you're gonna, no life I mean about party and on Friday night. Your friendship, I think, you're crazy, and you're gonna be get not because you can't be workin you gotta get out of that, but fifteen thousand a year. You probably can make them as your side, job and eyes delivering pizzas you can make that threatens to refer nights a week. And on the end you work here. Off and throw it all at the debt and make all the money that comes in behave, no wasted. Motion everything's right everything's mathematical efficiency and that's what the budget and the more you do that the faster you'll get out you. Actually. I would get out of that about eighteen months, but do not, but what I am about because I'm the only got twenty thousand, that fifteen thousand a year for two years, get you out of debt, but you can do more than that cause. You don't need you
twenty nine live on right. I do also want to add on that my dad, also has an student the early helping him. There was was that your agreement. When he took them out unremittingly. The agreement was that you would pay them that's how much a spoken agreement when it happened, but he always helped me and once I started working, we ve just gonna help each other. How much is that that I think it there I think our less pay off your twenty nine first, if you want have him some money as you go along that slows down how fast you get out of the twenty nine, but I wouldn't pay on that other alone. Until you get your too, non cleared up
as I found your alone. That's his loan and we ve got this weird sworder handshake, maybe agreement that you're responsible for some of it and I think he probably need to clarify what your moral responsibility is, another alone with him at some point. You have to do that today, but what is our agreement here dad? What is your expectation me on this one, because I don't feel like I'm on the hook for all of it, and I don't really want to if I got if I came under some money, must most project by operating thousand in what am I supposed to do here? and I you some clarity on that- it's all a moral agreement with your dad you're, legally, not responsible, all apparent. How long you named not on it but his name, but I, but if you feel like you I promised him than you would want to keep your promise us the moral aspect of it, but I think there's out of a foggy not around what your actual obligation, there is some point. In the coming months as you're, getting close to paint
you're, twenty nine, then you kind of economy to quantify exactly when you are begun, by knowing exactly what that loan you are responsible for this? I would look at this very good question. Man you got that you can do it for shit. You calling in this- Is that ever amnesia hey it's Kelly associated certain funds. For that everybody should this episode is over, but if you heard about a product or service it didn't have a chance to write it down. Don't worry. We list everything that is mentioned during this episode in the pot. Tat show that section thanks, felicity.
If you're looking for fun and practical ways to save money in your everyday life, you need to check out the Rachel crucial podcast from money, expert, Maidan, Rachel crews, guys its rights of creators, and I'm so excited to tell you about an ipod. Has a lot of you, darling paychecks pay check their end ass. You don't even know where to begin that they have this need this want to get in control of their money, and if that's you, you have come to the right starts, so needs episode, jeering at a time of inspiration and practical advice, not subscribe to the rates of crucial podcast makes region today nor more from the Ramsay network, including the Rachel crucial. Wherever you listened Abad, Gash, hey, it's just producer of the Dave Ramsay show this
Transcript generated on 2020-02-21.