[Music] hey guys I'm your host Rachel Cruz and you're watching Dave Ramsey's Greatest Hits where we're looking back at the best moments from the last 10 years of the Ramsey Show on video for this episode that includes some conversations we still think about to this day and I'm talking about heated debates massive debt in a situation that even freaked Dave out so let's get to it Violet Is With Us in Kansas City hi Violet how are you great how are you doing better than I deserve what's up hey so I am just recently engaged and my fiance he actually lives in Dominican Republic so he doesn't have a lot of money he like a thoral country um I am 42,000 in debt and I I want to get married to him but I'm just nervous because I know I'm I'm on like step number two of paying off my debt during the debt snowball and I'm just wondering if it's a good idea to get married knowing that I will have student loans to pay left to pay I don't mind folks getting married in debt at all or having babies while they're in debt at all none of that is a problem for me the only problem is is if you're not on the same page that we're going to kill the debt right and we're going to both work like maniacs to cause that to happen so has he got a job he did have a job as a mechanic and then for some reason now he doesn't have it anymore some reason that sounds kind of yeah I mean his his explanation was that their management got hired on new people so now he doesn't have the job so that was his explanation okay and how long have you all been dating we've been together for nine months and how old are you I'm 23 and he is how old he's 22 and he's from the Dominican Republic he lives there m he lives there yes where a long relationship where would you live were you married so um once we're married we'll have the process of him coming here right there's yeah okay um and he was an auto mechanic in the Dominican Republic he's a mechanic on whatever like I was I'm UNS sure of like what he specifically did so there's like a language I'm learning Spanish from intermediate to fluency and he doesn't know any English I know this sounds weird but my understanding was that he is just basically mechanic I've seen he I've seen pictures of him going to work and all that stuff I'm not sure what he specifically worked on how many times have you met him in person about four times okay I go back and forth and travel over there right okay all right um well here's some things uh I don't mind you getting married I don't mind him coming here and he's going to get a job and you guys work together and make a lot of money and pay off the debt and live happily ever after okay that's one option um I am obligated because of this show to tell people what I would do if I were in your shoes um I have a 30-year-old daughter and a 34y old daughter and a 27y old son so I've got kids older than you okay yes that are all married um and um I've been in the papa Dave chair we call it quite a bit over the years and so I'm going to change hats from Financial Guru to Papa Dave and uh tell you a couple things that I would tell you if you were my daughter okay okay uh number one it has been known to happen that folks who want to come to this country will do anything to get to come here and anything includes talking someone and conning someone into marrying them so I'm not saying that's happening but that flag went up in my head hearing this story so I want you to just be careful be wise and be very aware do not be a naive person who gets taken advantage of and you call me back later with a disaster please I don't want pain to come to your life okay yes sir okay so you watch for that number two um sometimes people from other cultures will work rings around Americans their work ethic is 10x of the typical American sometimes from people with other culture are hound dog in the sun lazy on the front porch don't work much people MH I am not hearing things I like in your description of his job and his job loss I've seen pictures of him going to work statements like that scare the crap out of me as Papa Dave for my young daughter I'm talking to okay yes like I want some as your as your surrogate Dad here for just a second I'm not but I'm just speaking like that okay but I I want some proof that this young man is a diligent hardworking young man and that he didn't lose his job because he was smoking so much reefer he couldn't crawl to work I really want to know that before he marries you because I want you to have a good life so I I want you to know that you know that you know that he's marrying you for you not for an option at citizenship I want you to know that you know that you know that this young man is a diligent hardworking young man who's going to serve and love his wife well by working his fanny off once he gets here and that he has a track record of doing that not just promises and you have a language barrier and a culture barrier to figure all this out in this is this whole process is fraught with danger it can work and it might be okay and I might be just being paranoid I do have the gift of cynicism but but I'm just this is what I heard in a short conversation and so did 16 million people listening to this conversation they're all going uhhuh uhhuh uhhuh cuz I wasn't the only one that got scared when you started talking about this so you got a language barrier a culture barrier and a couple of con situ that you make need to make sure are not cons before you go forward if this is a stellar young man and he is all that he claims to be and he comes here and works his tail off for the good of his family and his wife you will be just fine I am not worried about your debt at all you will work your way through that I hope you didn't take that wrong cuz I did take my muddy boots and walk all through your house there but um it's just what I do just because I care about you and I want you to win and I don't want to just drive by this and act like I didn't hear those things cuz I heard them so you you be good and I hope this works out please be Wise Wise Wise and wisdom is different than intellect please get somebody else in your life to walk with you that looks in on this from the outside that loves you and that has wisdom whether it's a dad a mom a sister a brother an uncle a pastor I don't care have somebody look over your shoulder and make sure that you don't have stars love lovey doy stars in your eyes and you're blind do that for yourself as a gift to yourself that's what I would tell you if you were my own daughter I hope that helps you well the Dave Ramsey shows changed a little over the years I just used to answer questions from my friends now they're all my kids okay that's what happens when you get old and you keep doing a show for 30 years you guys all used to be my peers now with YouTube but they're all 22 oh my god oh well that's what we do here hey I'm going to answer the question question here if you don't want that kind of advice if you don't want me to tell you what I think if I were you what would I do in your shoes don't call because I'm obligated once you asked Russ is with us in Salem Massachusetts Hey Russ welcome to the day Ramsey Show hello Dave how are you better than I deserve how are you I am good Dave I posted some things on your website in regard to Insurance philosophies you put online and having been an insurance broker for about 30 5 years there are a few misstatements that are on there that I'd like to use the air as a chance to maybe either clarify with you or maybe get some clarity from you on May I do that sure okay uh number one you have said on your website that term insurance is the best and the only kind of product people should buy in all instances when they need life insurance and what I can tell you is that we do not recommend life whole life and Insurance across the boards we recommend life insurance situationally there's no two needs no two situations that are pervasively similar okay can you hear me all right yeah I'm hearing you yeah okay number two the cash value that you've talked about is did you want me to address that one first it's up to you okay if you'd like to I'll be happy to do it one at a time um well I you're you're an insurance agent obviously and um the I disagree when you say there are no two instances that are the same there are basic principles of mathematics and basic principles of personal finance that are always the same for instance I would tell you there is never a time that you would use a credit card you can't say that there you can't convince me that there's certain times you should use a credit card they suck they're a bad product they don't work and I think the same thing's true of whole life mhm all right well let's take it a little bit further number two you know there seems to be some question about the cash value of a life insurance policy as being a bad investment and I won't get into the issue of performance but I think the big thing that you need to realize is this the cash value is not there because insurance companies are creating a standard of return or investment that is deemed to be um you know is deemed to be poor or is deemed to be immovable cash value why would you do policy is there it's a function of law it involves so why would you put extra money into a policy to create cash value if the cash value is has no standard of Excellence at all on the rate of return it well you didn't let me finish a those policies historically get better as they get older okay the cash value of a life insurance policy is a function of state law it's a function of statutory reserves sure and also so from an Actuarial standpoint it's used to keep premiums level indefinitely why do you think term insurance is so cheap because term insurance does not have or maintain a legal reserve a fix to it sure it does they have to have they have to have cash reserves to to support otherwise the state won't license the term insurance company now it's a 20-year level term 20-year level term insurance is about one or about 12th the cost about 5% of the cost of the same amount of the same amount of whole life is from an act you're right but from an act point of view whole life is considered to be a product priced indefinitely that does not have yeah but it never stays in place indefinitely that depends upon the person and that depends upon the situation does the p all the all the research shows that they cash him out like crazy not not everybody yeah the vast majority do but let's just pretend you kept it for your whole life why the why the flip did you need it for your whole life how about some things called estate taxes there are people who do when they die uh see their family incur sub substantial substantial Financial loss and so in order to cover estate taxes I need to get ripped off for 60 years in a horrible Financial product that's your theory well let me just say this you know if you talk about the you talk about the difference of investment why don't you talk about the difference in for example in in attorney's fees there attorneys who charge $300 an hour versus $700 an hour you don't tell somebody to invest the difference in legal fees to see if they come out ofe do you of course I would if the actual uh if if the actual legal advice was exactly the same well that's if you die you get paid with term insurance your your beneficiary gets paid pretty simple formula if you die with whole life life insurance your beneficiary gets paid only the face amount after you've paid 20 times more for the policy that I can refute that very easily you if it is a if it if a policy is arranged properly a person can receive not just the face amount of the policy but but in addition they can receive the value of the cash account no they can't not unless it's a b not unless it's an AB Universal in which case you paid more for it to start with no you do not that is not true that are you talking about paid up additions pardon me are you talking about paid up additions no I'm not talking about paid up additions there is a did you have something called the fifth dividend option sure absolutely what is it well absolutely the bottom line is at the end of the day the people don't get the cash value you pay 20 times more and the cash value is not added on now I mean you can look at every major whole life company that's out there and you tell me they get their cash values they don't get them it's a piece of crap you talking about the beneficiary listen here's the situation dude I can talk to you and for the rest of my life and I'm not going to tell you I'm not going to talk you into not selling whole life I'm not even talking about whole life of term I sell a lot of term bundles of it but you still sell the other crap too and you're offended because I said it's crap now let me ask you another question Yeah by by the way for your for your information just I'm not arguing with you but the cash value the amount of the value on top of the face of the policy can be paid to the beneficiary if the policy is written appropriately I and none of them are written that way well I've written them that way for 35 years now it just doesn't happen dude you and I know that that you and I know that that is not how the industry is set up well believe me it is the other thing is you said that you know you talk about whole life as being such a horrible product and again maybe in your mind is but can I ask you this question why is that particular product that particular product that you think is so deplorable bought by many publicly held companies and privately held companies to fund buyouts uh of corporate stock and there's a lot of Buell agreements at your whole life and you know why because people like you sell that crap to them no exactly why they do it do you know how much a simple partnership byell agreement can be funded with term life insurance for 12th of the cost well let me ask you this do you know how many publicly held Fortune 500 companies use whole life and the millions of dollars the boards of directors authorized for that it's really sad that they're all getting screwed at that level well it really is because it's garbage R Us very prestigious Business Schools I think they know a little bit more than uh than a lot than the lay person well they may or they may not but the bottom line is is that at the end of the day dude this is it is the payday lender of the middle class it's it's a horrid product when you pay 20 times more for the same amount of coverage to build up a cash value that you never receive because when you die they pay the face amount James is in Lexington Kentucky hi James how are you I'm pretty good today Dave how about yourself better than I deserve how can I help well I'm in got myself in quite of a MTH right now and I'm not really sure where to start to get out okay um to start with I have um currently about 400 $30,000 in student loans good Lord um yes I was u in medical school um I had failed um two sets of boards after three years and then was recently dismissed and so about 80 of that 80,000 is from undergrad and then um other courses later on to take to get into medical school and the remainder is from medical school right now I have the debt but no degree to you know that I was planning to used actually be able to pay that back so at this point I don't really know what my options are to try to dig out of this you're right that's a mess I'm so sorry that's scary um it is yeah how did you get that far into it and then not be able to pass the boards I actually did fairly well during the first two years but it was just I think being able to I guess it was one thing to take an exam every few weeks every month but being able to retain that and then to recall it to the level the detail that I needed for the exams I just couldn't put it all together at the end is there any way you can re-engage and still have a shot at finishing not without having to reapply and then go through the process all the again then have and also have to take out more loans so what are your when did when did you um flunk the last one that was this past spring and so let go this summer okay so what are you what since then what has been your plan well basically just been getting by I was able to find a job um first of all as a substitute teacher and I was hired as a high school biology teacher but my loans are on deferment right now and I have some for Barett to go but at this point I'm not sure any of the other career options I thought about you know you know physician assistant other programs like that but it requires going into more debt for me because I'm not in a position where I could work and then pay as I go plus pay off the current you know the loans I've got now too yeah so what would it take to be a PA from where you are I would have to it take about another year of classes I would have to take some other interest classes and two and a half years for the the program itself wow then it would be that's probably at least another 70 60 to $70,000 in tuition and living expenses what about nursing it's my my undergraduate degree was in biology and then the end did Premed and so none of the none of the med school work you've done applies to anything else no none of it it's I you know I have the debt but none of the courses none that actually I can transfer to [Music] anything wow well I mean the only thing I know to tell you is to try to assess some kind of a career and that's what I'm poking at here I don't know enough about that world to try to help you but um we obviously need to get to the point that we're making some good money to begin to pay this through right and so I want to I want to lead you towards something that six figures uh to try to try to plow through this with um and or get on maybe with some kind of a uh Hospital type of a company that would uh do some student loan pay for you uh as part of your signing bonus that kind of a thing obviously you're not going to be doing that as an MD but um right uh the PA idea is a good idea something around the biology or medical field but I I I want to move you well beyond high school biology teacher to pay off $430,000 in debt right right exactly and the other issue I mean right now you know I'm 34 years old and so I have all this debt and no say no I mean have an emergency fund but no retirement savings nothing at all so I don't know well I'm not worried about that until we address your income we got to address your career track which gets you to your income which solves the debt problem and then solves the retirement problem I'm not in a panic about that today um I mean if you were six 6 I might be but um but you're not you got time to work through that you've just got a reset here Natalie is with us in New York hi Natalie how are you Hi how are you Dave thank you so much for taking my call sure what's up in your world so I am recently married um just a few months and we are um talking a lot about our finances um I paid off my student debt a little while ago and now now we have his to work on um and it's it's 300,000 oh my God is he a doctor or a lawyer he's a doctor okay so what is what is your household income now well um it's about 230 good good so you're gonna live on nothing and pay that off real fast right um well yes but um he's he's finishing residency so um you know my income is 150 and his is about like 70 as a resident so we're looking at job opportunities in two different areas and they they offer um one pays about 500,000 more one job is $500,000 more yes okay but it's in a an an unideal location which we would not stay in long term so we're just wondering if it's worth it to take you know a job that pays that much more just to get out of debt quicker and kind of postpone um okay so job number one pays what and job number two pays what about 850 versus 350 okay and you make 150 would you make 150 at either one of those locations maybe a little less um you know maybe 100 I would say okay so that's kind of either place you'd make about a 100 so you'd leave you'd leave New York City yes in either case and so what is the less than ideal location that's 500 Grand more that's it's kind of in the tundra it's up North near Canada in Canada no near Canada it's but it's in the United States yeah so he's a surgeon so once he completes training you know they they offer some of these these jobs in you know underserved areas yeah for a lot more money yeah I never heard of half a million more but uh uh that I mean I knew underserved would overpay I knew that but uh are they asking for a length of time commitment yeah they they ask for three years okay and you would be willing to do the three years I'm not sure why we're kind I want to know your you already live New York City it's not like you live in the south I mean you're used to cold weather yeah but it's it's just kind of a whole lot of nness okay all right so there just not a yeah so you're moving uh to a very rural a very rural location versus New York City that's a big culture shock I got you exactly okay all right well I mean I I don't know you got to ask yourself that question you're going to be making $450,000 in a worst case scenario right exactly and so my God I mean if you can't pay off 300,000 in the first year somebody ought to smack both of you you know if you can't live on have a lot of stuff if you can't live on 150,000 somebody ought to smack you really don't you think yes we haven't bought a house yet we haven't no you don't need to buy a house you have $300,000 in student loan debt you need to clean up so I mean if you go make 450,000 I think you're going to work this out you could be debt free in one year and the next year you buy a house and the next year you know you do some other stuff I mean just have a little bit of patience with that kind of shovel you ought to be able to move anything you want to around um so uh the other way you come out a million and a half ahead a half million dollars times three for three years uh but you're you know you're in the tundra uh you know you could buy a whole lot of airline tickets out of the tundra and come visit you know go visit New York City every weekend every weekend and come out ahead yeah because we're a little older so we worried about you know not having any retirement savings not having anything yet you'll be okay you're going to be making a half million dollars a year as long as you don't go spending and play do stupid doctor tricks with the money and you know go another 400,000 in debt to do something else but if you guys will just stay debt free you're going to have tons of money to invest you're going to fine you start banking 200 Grand a year you know how quick you have a million dollars it's like four years you know you're okay you're going to be all right you know as long as you don't keep you know Jack your lifestyle way up so the only thing I I would take I would take the $450,000 cheaper job if you're committed to getting out of debt in one year if you're not you need to go do the other one I think we could do it in in one year I think you can do it in one I really do I mean not plus or minus taxes taxes might push you into to but I don't want you to jack your lifestyle up or start doing a bunch of other stuff till you get this debt cleaned up no job one's get the debt gone before you do anything else don't talk to me about buying a house buying a car don't buy anything you're broke and in debt hundreds of thousands of dollars clean that mess up and then you're free to live the rest of your life and do whatever you want now the only thing that if Sharon and I were looking at this my wife and I were looking at this situation we would consider the tundra opportunity uh but we would put in there a couple $1,000 or $100,000 out of that 500 in travel and we would just bug out of there virtually every weekend yeah well as a surgeon that's not as easy I guess he's going to have a lot of call but he's not he's not on seven days a week no okay so I mean just jump on the plane and go I mean even if you Charter a plane out of there you can go you you know you can have a life is my point and you don't have to Define your life as like you're living on the moon and you can't come home yeah you know you can jump on a plane and be anywhere in some period of hours you know and and and just you know enjoy some downtime head down to the Caribbean head down to Cabo for the weekend I don't care you know you can do a lot of that kind of stuff on a half million bucks and still come out ahead if you wanted to play that that's how we would play it because I'm like you put away a lot of money yeah I mean I'm pretty relaxed nowadays but if I were your age and I was concerned about you know New York type of uh activities you know then that's a way to do it is to budget it and still say okay we're going to spend 50 Grand on travel a year or 75 grand on travel a year and that's our way of dealing with the fact that we're in the tundra and we're making all this extra money for at least 3 years and if you want to do that that's a way to make it palatable um I'm not sure I would I think if you're making 450 you ought to be able you ought to be okay and you'll probably make not 450 for all three years probably make 450 the first year your income will probably go up his income will probably go up the second year so you probably back up over a half million easy between the two of you then so but kiddo whatever you do get rid of this debt before you do anything else do not go buy a house till this Deb's gone do not go buy a car until this Deb's gone you hear me loud and clear on that I'm going to call you stupid if you do straight to your face this is the Dave Ramsey Show well on every one of my social media feeds for the last 5 days or 4 days since this article hit people have been exploding their brains are frying out of their heads over this article in the Wall Street Journal Mike Maru has $1 million in in student loans how did this happen Mike Maru a 37-year-old orthodontist made a big investment in his education and as of Thursday he owed 1,6,2,5 189 a month not enough to even cover the interest so his debt uh s years from 7 years at the University of Southern California grows at by $130 a day in two decades his loan balance will be $2 million he and his wife Melissa have become numb to the burden focused instead on raising their two daughters if you thought about it every single day Miss Maru said you'd have a mental breakdown due to escalating tuition and easy credit the US now has 101 people who owe at least a million dollars in federal student loan debt five years ago it was 14 people while the typical student borrower owes 177,000 that's not true it's 37 the number of those who owe at least 100,000 has risen to 2 A5 million the government essentially allows graduate students to borrow any amount to cover tuition and living costs with few guard rails on how the final sum will be repaid these are choices we are not coercing says the dean of USC's Herman Ostro School of Denistry where Mr moroe went to school which is one of the most expensive dental schools in the US you know exact L what you're getting into says the dean dental school is the costliest of higher education programs in the US an average of $71,200 a year the USC program now costs $91,000 a year and $137,000 when living expenses are included halfway through dental school he said he started to worry about the soaring costs of his education why did it take halfway you're in the most expensive dental school in the US I'm sitting here saying holy crap should I really be doing this Mr Maru called should I drop out Miss Maru 35 said her husband and her decided it was too late to turn back if he quit or transferred to a cheaper school he still owed for the loans he already had yeah so the cheaper school would keep you from doing what the USC education helped Mr Maru earn 225,000 last year no being a dentist helped him earn $225,000 last year working for a corporate practice in Draper Utah outside saltt Lake City that comp comp with 158,000 median income for dentist some dental school Educators fear that the eye popping let me help you all for a second that's a Miss that's a misnomer let me stop just for a second um the median income for dentists is 158,000 but not for orthodontists and he's an orthodontist so let's learn the difference here it's 225 he's not making extra money because he went to USC where he went to school did not increase his income he went to the most expensive school and he makes an average income note to those of you who want to go to an expensive school because you say it's going to cause you to make more money it doesn't anyway moving on some dental school Educators fear that the eye popping cost to enter the profession could disway good prospects from even trying yeah think Dental school's financial aid director estimated that the basic four-year program would require $4 to $500,000 in student loan debt Mr Maru and his wife concluded dental school is a good investment we're like well we can make this work yeah made sense to me they took it out on a lower interest rate long story short the interest rate went up they got themselves in trouble a law passed in Congress in 2001 severed the link that tethered student loan interest rates to treasury rates and the rates went up causing him to get into a bigger mess the one luxury I'm skipping along was buying a used Mercedes Benz which carries a payment of $390 the couple then bought a home using a $400,000 mortgage Miss Maru took out in her name she used an inheritance from her grandfather for the down payment and her mother co-signed for the loan cuz she's married to a broke dentist Mr Maru then entered into a government sponsored repayment program on the loan where after 10 years his loan will be forgiven um but when you add up everything he's paid in he will have paid back a million dollars even by then and then you and I will eat the other million roughly since refinancing his debt with the federal government in 2015 M Mr maru's balance has grown by $150,000 it will keep growing through the 25 year uh it's 25 year life of the repayment plan until it reaches 2 million the sum will be forgiven and at current tax rates will cost him another $700,000 in income tax for forgiveness of debt the government repayment plan affords the Maru family a comfortable life their home is on a mountain with panoramic views of the snowcapped Peaks surrounding Salt Lake City they take vacations including a recent trip to Havana and they drive a used Tesla yeah it does make your head explode extreme things like this always do make the news and obviously this is an extreme thing but what it does point out is a whole bunch of things one thing it points out is is that you and I are stupid America we're stupid because we elected a Congress that allows a student loan program like that to be in place because you and I are getting ready to pay this guy's Bill these are federally insured student loans the taxpayer insures the student loans no one else gives unlimited lines of credit to 18-year-olds on un secured debt except you and me no Banker in his right mind would give this and bankers loan money like hot potatoes they'll loan money to a dog that's dead and they won't loan money to you but no you and me we're so bright we think the students you know college education is so important and the whole economy would collapse and America would be a bunch of illiterates if if we don't step up and pay these if we don't step up and Ure these student loans so I'm telling you you need to call your Congressman based on this article right here which wakes you up and say the federally insured student loan thing needs to stop you want to stop colleges from overcharging it's real simple when nobody goes there because they're too freaking expensive their rates will drop but when they have an unlimited supply of money from the government insured by stupid people like you and me and signed up for stupid people like this guy who didn't even add up what his costs were going to be until he was halfway through this is a whole group of stupid people in a pile stupid colleges overcharging stupid taxpayers that are willing to sign up willing to sign on for this guy because you and I are going to pay this your tax money is paying this guy's bill because we're stupid because only stupid people loan people like this money so we're stupid we guaranteed this loan it's a federally insured student loan the Student Loan program is a freaking disaster Mike maru's life is a disaster so Mike you're in Salt Lake City my man you're in a hurt you're in a world of hurt you become the laughing stock of America after this article I'm so sorry people are probably writing him hate mail like crazy I'm not going to write you hate mail I'm not going to pile on I've done dumb things too okay you guys if you had fun with the episode there is more where that came from because up next on Dave Ramsey's Greatest Hits we've got even more Dave rants so make sure to check it out and share this video with a friend who you think would enjoy it thanks for watching and I'll see you next [Music] time