[ Music ] >> Brought to you by the EveryDollar app. Start budgeting for free today. >> So I'm seeking some advice. My husband and I don't agree on whether or not to pay off our car loans. I'd like to pay them off, but he does not agree with that. >> He likes being in debt on a car? >> He tells me, and I quote, paying off our car loans is like giving away free money based off of our low interest rates. >> So he actually believes that people build wealth by borrowing on their cars? >> I don't understand it to be completely honest. It's something that we argue about pretty frequently, actually. >> Okay. Okay, so how can we help, do you think? >> Well, so I'm looking for ways that I can explain to him like why it would be worth it to pay the debt off. >> What's the interest rate on these two loans? >> So in total, we have 27,000. So 20,000 on one, and it's 3.49% interest, 7,000 on the other, and it's 2.94% interest. >> Okay. Well, let's address the theory that he's operating on first. >> Okay. And then let me just tell you, I don't think we can convince this guy. I don't think he has any desire to be convinced. I think he's already made his mind up, but I will answer your question anyway, okay? In other words, I don't think this is going to work, but I'll tell you. So what his premise is, is that if you can borrow money at what'd you say the interest rate was 2.7%, right? Is that right? >> No, one of them is 2.94, the other one is 3.49. >> Okay, so let's just call it 3%. All right, if you can borrow money at 3%, and you could invest it in a good mutual fund, and it made 10 or 12%, you're making the spread, okay? However, he's not doing that. He didn't invest the difference. There's no $27,000 investment out there as a result of having borrowed on these cars. So his premise is 100% theoretical. In other words, it's bull crap, okay? Now, the problem with his premise, it sounds like if you invest money at 10%, and you borrow at 3, aren't you making a 7% spread? Maybe, but if you made a 7% spread, you have to pay taxes on it, and you've increased your risk load, your stress load, and you've strained your relationships in your household. And by the time you've done all of that, you really didn't make any money. So it's a bloody joke, okay? 'Cause 7% on $10,000 is 700 bucks. 7% on $30,000 is $2,100, okay? No one ever got rich on $2,100 a year. Ever, mathematically. So again, his premise is absolute bull crap, because the numbers break down when you tear into it. Another reason we know that is, is that we have done, and we have worked with millionaires for decades, and a couple of years back, we did the largest study of millionaires ever done in North America. We studied 10,167 of them. I wrote about it in the book Baby Steps Millionaires, and I'll send you a copy of it as my gift, okay? That might give us a chance at helping this guy. But I don't think this guy wants to be helped, so I usually can't help people that don't want to be helped. But anyway, as we studied 10,167 millionaires, we found that 89% of them were not millionaires because of inherited money. In other words, they invested money, they handled money wisely, they lived on less than they made, they got their house paid off, they stayed out of debt, and they built wealth. And that's how an 89%, 9 out of 10 of America's 24 million millionaires right now, that's how they became millionaires, okay? As we studied, Tabitha, 10,000 people who are rich, not broke people with a car payment and an opinion, but people who actually are rich, the number of them that we found that became wealthy due to borrowing on their car at 3%, and investing the amount instead at 10%. The number of people that did that to become millionaires out of 10,000 of them was precisely zero. None of them used your husband's plan to become wealthy, none of them. So what that statistically tells us is your husband is wrong, like you thought, okay? He loses the argument. Now, that still doesn't answer your question, how do we convince him? I've told you three times already, I don't know if we can, but I'm trying to tell you, you're not crazy, you're accurate, you know, he's kind of looking down like some kind of juvenile that can't do math, and he has high math figured out when it's quite the opposite, your women's intuition was way wiser than his screwed up half-butt attempt at mathematics. Yeah, and I would go so far as to say this is a cop-out, this is a quick little line that he's kind of manufactured from social media or some social message out there, or some car dealer who's sold in these cars, and this is his quick Heisman Trophy stance to you, like I don't want to talk about it, because I don't think he actually wants- She don't know what that means, you put your stiff arm out, okay? She might know what it means. Yeah, I know what it means. Thank you, thank you, thank you. Well, I had to think about it, so I'm sorry. Here's my point, I think it's a cop-out because he doesn't want to do the hard work that you're asking him to do to budget, to sacrifice, to pay these things off. That's my take, and I think I'd push in a little bit further as his wife and say, "I don't feel safe financially carrying this debt." I think you've got to have a real conversation- I think it's a marriage conversation because he's not allowing for a financial conversation. Yeah, and there's a lack of respect towards you that's just not okay, that's getting me riled up and giving you this answer, and because I kind of hear him sneering a little bit in this, like, "You're just a little lady." I think so, I had the same feel, like that little line he had, like in his holster, and he just kind of pulls it out, flings it out, or go away. It does feel dismissive. I got this, yeah, it does. And the hilarious thing is, he's a hundred percent- He's totally wrong. It's a hundred percent wrong. And Tabitha wins, ding, ding, ding, ding, ding, ding. Now, how to get him to do it, Tabitha? I don't know him. Probably not all the snark that Ken and I are employing, it probably won't work, right? So you're going to have to be more loving in that. But I think if he needs to hear that how important this is to you, and he needs to hear that he has to respect you. Now, my wife and I can have a good argument about most anything, but I'm going to respect her opinion. And at the end of the argument, we may do one, we may do the other. There's no set rule that one of us has to, quote, win or not. But we're going to do it in a respectful way, meaning that I'm not going to be dismissive, and she's not going to be dismissive. You're just a man, you don't understand. And I mean, she tries that sometimes. She tried that when we're putting furniture in the new house, like I'm an idiot, because I don't know anything about decorating, because I can't even match my clothes. And so there's the problem is she's- Is that an actual quote? No, I mean, but that's basically the tone, right? Because it's also accurate. I have to think about my clothes a lot just to make sure something doesn't fleshed. And so yeah, and like, you don't know anything. You're just a knuckle-dragger. You don't know anything about decorating, right? I don't, but I do know what I like, and it's my freaking house. So I get a say. There's that. You don't get to dismiss me. I agree. She doesn't get to dismiss, and I don't get to dismiss her. She has her opinion too. She lives in that house too. It's her money too. So we have to work through this. This is called marriage. And sometimes it's a challenge. Yeah. Tabitha, roll it back on YouTube and let it get mad at us. Yeah, that'd be okay. That's why we do this. I'd be okay. Pretty good at pissing off or look at spouses. It's like a gift. 'Cause they're wrong! Create your free every dollar budget today. The simplest way to budget for your life.
