Welcome to another hour of The Jalen Ramsey Show where we’re here to talk about your life and your money. Open lines at 818-338-0011. We’re enjoying the NFL offseason but it’s still ON SEASON for personal finance. Starting off today down the street in Costa Mesa we have John. Welcome to The Jalen Ramsey Show, John.

Hello Jalen and thank you taking my call. How are you doing today?

Better than the Jaguars under Tom Coughlin. How can I help?

I’m calling today about housing here in California. Well, let me start off by saying I’m not your typical caller. An undrafted free agent some years ago, I got in a few seasons with the league before entering the coaching ranks so, in my NFL career, I only earned about $1.3 million total. 

Not a bad haul for being, what, I can’t imagine you’re 30 yet?

28. And I think I have a knack for this coaching thing. My college coach let me return to U-Dub where I cut my coaching teeth and, for 2021, I’ve been named the Alex G. Spanos Coaching Fellow here in town with the Chargers.

Can’t imagine that pays….anything.

Well and this is why I am calling. I’m from the LBC. Played my high school ball at Jordan High in Long Beach. I had my college paid for and played meaningful snaps in the NFL. Sure my career was short but I made a million bucks and haven’t really lived an unreasonable lifestyle or thrown away my earnings. Still the professional, I pivoted to coaching and now I’m back from the NCAA to the NFL to coach and, frankly, I don’t know how I am going to afford to live in my own hometown. 

California real estate is expensive but I’m here. I don’t see why you can’t drop half your savings and straight own your home for $500,000 and still have a few hundred thousand left over to establish your finances and investments as you enter your thirties and start hitting your stride as a professional coach.

Jalen, a 3/2 at 1,040 square feet is gonna cost me five hundred plus three thousand a year in property taxes. 

It’s expensive. I get it. But say you wanted to buy at $800K and you were going to put down just 20%. That payment becomes a $2,600 monthly payment for thirty years. Now, how much does it free up your monthly budget to not have that monthly payment?

It’s just bullshit man. I played for a hot minute in the AAFL with Salt Lake and, man, any $800K home here is like half that there.

It ain’t the same home. It’s further from ocean. The weather sucks. Your neighbors have as little integrity as Mike Lee. But you make a fair point — Californians have to work in a local economy but compete for housing in a global market.

And it’s pricing us out of here! I can’t tell you how many friends I had in school who can’t afford to move back home. And this isn’t some beachfront mansion standard — these are people who are happy to take an older home in the area of their old stomping grounds and put in the elbow grease to upkeep the place because they want to be a part of the community that they take such pride in. But the investors are already on these properties with cash offers over asking the day they hit the market. What’s one to do?

I told you. You have enough money. You can buy a place cash, eliminate any potentional mortgage obligation, and focus on building your life in LA. And, given that there is a good chance you’re going to have to bounce around a bit as you move up the ranks, you’ll always have a home base in a beautiful climate. I mean, I get your point about people being priced out of their community but what does it say about that community when sellers aren’t offering consideration to longstanding members of the community, like your classmates? It says that your vision of community is idealistic and artificial.

That’s such a cynical view to take. The people of Los Angeles are good, hardworking, caring people. And they —

And they can move about wherever they want. You think people from Mississippi can move wherever they want? They gonna take their $39,368 average annual income and save up to move to San Diego? Some waiter in Tucson going to save up his pennies and build a nest egg to buy his way into a condo in Seattle overlooking the Lake Washington with a view of Husky Stadium off Union Bay?

But I’m not talking about moving here. I’m talking about being forced out of here.

Listen, I’m a Tennessee boy. I live in LA and it’s nice but, once work no longer calls me here, I’m out. You know, I’d planned on playing college ball at USC before transferring to FSU because this place just didn’t feel right. And, you know what, I’m reminded every day that this was the right move for me. California is beautiful and you cannot beat the weather but this place isn’t for everyone. So, while many people are selling their real estate and moving out, it may not always be the curse of being forced out — it may be the opportunity to leave for a home that will be a better fit. An opportunity that Californian real estate owners find much more palatable than, say, someone who wants to escape Alabama but who don’t own as desirable an asset as California real estate. That’s the way the free market works.

Well, it may be the market but I don’t like it.

Then California needs to interject themselves in the market. There’s nothing stopping the state from enacting a luxury tax on investment properties or out of state buyers or foreign buyers or vacation homes and then using those same funds to subsidize housing costs for Californians working and living in the local economy. But by not taking such a step, California has made the decision to allow the real estate market here to become the expensive — and highly profitable to established asset-holders — market that it is.

So I need to think about calling Pelosi’s office and letting her know what you said we need to do about the California housing crisis…

No. You need to find a place you can pay for cash and focus on your coaching career. Quit worrying about everyone else and focus on yourself.

But if I buy a place cash today and California enacts this law that reduces the demand for this real estate, might I be setting myself up for a loss because prices may drop?

Could happen. Could also not happen. But you’re much more likely to be shopping for a house in a California market that will never see such a drop in demand before you need to worry about California passing legislation to reduce home values. Hell, you’re the A G Spanos Coaching Fellow — see if the Spanos’ multifamily construction empire isn’t ready to throw millions at defeating even the whiff of concern for people who want to apply to buy any of their properties or rentals.

I think I may. And, to be honest, I think I’ll be surprised to see what a kind heart Mr Spanos and his family share in their business.

Yeah you do that and we’ll do this. Picking up line two we hop across the state line to Nathan in Las Vegas, Nevada. Sin City Nathan, we’re short on time but what can we do for you today?

Hi Jalen. Calling…uhhhhh…. calling today because I love your advice but I’m having uhh…

Dude. Come on.

Calling today because I’m trying to get away from Bank of America after hearing your take on ethics. I’m in a smaller market and, you know, I have substantial wealth. I know you have mentioned credit unions in the past but, like…uhhh….

Spit it out!

Jalen, the freaking bank president is in their cruddy little commercials here wearing a polo shirt broadcasting about little things I don’t need, like their great service on vehicle loans, and I’m supposed to be entrusting my wealth with these people? I mean, I get the principles but I don’t know if I’m comfortable with people who haven’t really built an institution to handle my level of monetary solvency.

What the hell are you talking about? You don’t invest with a credit union. It’s where you stick your walking about cash. What kind of funds are you talking about moving?

Well, I’ve got $350K in CDs with BofA and then —

Alright stop. You aren’t an eleven year old learning about interest. You need to put that cash into a real investment that’s gonna beat the, like 0.6% the bank is earning you. Then you tell those dicks at BofA that they wronged you by allowing you to make that move and severe all ties with that place.

So what goes in the bank?

Whatever cash you need at your disposal. How long does it take you to burn through a hundred grand? Stick that in there with whatever credit union or whatever. I’m not saying you gotta use the guy from the tv but I am telling you that you really shouldn’t ask much from a bank because it’s nothing more than a place to stick your cash.

Oh. So that’s why service is so important?

Oh! Yeah, Nate. You’re not getting a loan from them or even earning any more than absolutely nominal interest on any bank account. Just make sure the website works and they are competent and you like dealing with their employees for deposits or whatever because you’re never going to worry about any of their lending services.

What about a local bank instead? I’ve been talking to a neighbor of mine who —

That’s fine. Point is that you avoid empowering the most heinous businesses in our country who are actively hurting every community in which they have influence. Hell, put the $100K in a coffee can in the backyard if that’s convenient for you. Just do not — DO NOT — play the game with these big banks. They’re horrible people running a horrible institution and they only get away with it because they’re so good at it.

So that’ll put another hour in the book and here’s a reminder for those who can to get their vaccine and, for the rest of you, sit tight, mask up, and we’ll see you next time, right here, on The Jalen Ramsey Show.