“… You choose”
Touching the search button on my car radio the other day I came upon “The Dave Ramsey Show”. There was someone that had called in, and what follows, is the story that they had to tell:
“I own two different houses in Florida; one of them is worth $250,000, and the other one is worth $350,000. Both of these houses are paid for.”
“I own a transmission shop worth $400,000 and owe $70,000 on it.
“I also own our current home, it is worth $350,000 but I still owe $120,000 on it.”
“My wife works and brings home $90,000 after taxes and I work at my shop but have not been able to bring home any salary due to the economic downturn for the past 6 months.”
“Due to the economic downturn, I have been trying to float expenses at the shop, and I have incurred $90,000″
“My wife does not want to sell our homes in Florida because by the time we paid listing and seller fees we would have lost over 45%.”
“What can we do?”
Dave begins by ranting and raving about this guys wife, that she is being totally unrealistic in this crisis position, Then Dave advised the poor man to sell one of the houses he owns in Florida and get out of debt! This is tragic advice for multiple reasons. The following are a few.
It assumes that money is of a greater value than to him than his wife, because he mocks her advice and concern
In a very depressed market it still assumes he can sell his property(s).
It also assumes that if he pays of his debt he will not incur any further debt in his business.
The next assumption is that the financial crisis is over.
It goes against common sense by assuming that getting out of debt produces financial freedom.
But let us only examine the facts:
If this gentleman can sell his house for 55% of what he has into it then he will receive max, $190,000 on the $350,000 home and less on the $250,000 home ($137,000.) This will pay off his current debt and leave him with $47,500. At the rate he has been spending money in his business this will last him roughly 3 months. Then he finds himself right back to where he started from. Only this time he has no equity to liquidate and “save himself” from being in debt. Strike one Dave!
Secondly, it is only an allusion to be debt free in the society of today. The only debt free people that I have seen are the people that are holding signs in parking lots and on the street corners. We really should just face the fact that nobody can be debt free unless they own absolutely nothing. If you own anything, than you face taxes, service fees, utilities etc. Guess What? This means that you have to live in debt. Strike two Dave. No one wants to be a homeless hobo.
Now in the third place Dave, you have completely ignored the fact that this man that called in has had some sort of financial plan. When you look at his entrepreneurial endeavors this becomes obvious. Your hack attack at his wife was self degrading and certainly unacceptable. The attorney trick was employed by you. If you cannot find fault with the deed attack the person behind the deed. This makes strike three Dave, you are out!
If you will consider this fellows situation it will become apparent that he has made some very sound financial decisions, otherwise where would the asset accumulation come from? And I would seriously doubt that his wife was just an onlooker in this financial expansion. For Dave to insult her, and mock her was totally wrong. But what can you expect if you call a group entertainer for financial council?
So what other way could help this caller besides prolonging bankruptcy by selling his property?
Well, let us start with a true but little known fact. Real estate equity has no rate of return associated with it! The wealthy have realized this for centuries and acted accordingly. And that is why the Infinite Banking Concept can become increasingly beneficial to you. By Becoming Your Own Banker you can keep your money in a very liquid and secure place, still use the asset(s) which your money purchased (or purchases) but not be penalized for using your money which made the purchase in the first place. Fact is if you use the money for financing current needs and capital ventures…you will end up with even more money and assets with only one little caveat…you will not have to work any harder or longer to make that extra money because your money will be working instead.
Even thought Ramsey rants and raves against it, participating whole life insurance is a very powerful tool available for anybody who is spending money today. Do not get fooled by the entertaining gurus who tell you differently. Who pays all of those entertainers? Bingo! It is the ones who are making money off you, by using your money, instead of you using your own money to work for you.
Tomas McFie is a professional financial coach and is nationaly known for helping people recover the money they currentley spend. Don’t Make another payment until you have watched his Infinite Banking Video Then Contact him he can help you