A caller named Ashley from Columbus, Ohio recently joined “The Ramsey Show” with Dave Ramsey and Jade Warshaw to share a financial dilemma that, on the surface, shouldn't exist.
Ashley and her husband have an estimated net worth of $40 million. Of that, $30 million is tied up in her husband's stake in a private company valued close to $1 billion. Despite this, their financial advisor suggested taking out a home equity loan on their fully paid-off vacation house.
Locked Wealth, Limited Control
Ashley explained that while the couple appears wealthy on paper, their money isn't liquid. Her husband's ownership stake doesn't allow them to redeem shares freely. “He's one of the owners in the business,” she said, “but he is not on the board of directors, so he doesn't get to make the decision on when redemptions can be made.”
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That $30 million may look impressive, but it's effectively locked away. And as Ashley discovered, the board has no plans to make shareholder liquidity a priority. "It was told to me, crystal clear, no questions asked, we will never prioritize shareholder redemptions over the growth of the company," she said.
Ramsey was straightforward. “There’s no possible way that borrowing on your lake house is a good idea when you have $40 million,” he told her. “This is just asinine.”
The remaining $10 million in their portfolio includes about $4 million in retirement accounts. Her husband also brings in about $400,000 annually on commission. Still, the family had grown used to spending far beyond that—at one point withdrawing $1 to $1.5 million per year from the business.
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Ashley said that lifestyle included two homes, paid staff, private flights, yacht charters, a horse farm, and support for an ex-wife. "We spent money assuming that we were going to be redeeming shares," she admitted. "You know, chartering yachts and flying private—that’ll happen real fast.”
“Now I’m getting there,” Ramsey responded dryly.
Ashley said she only recently took control of their finances after realizing how unsustainable things had become. Ramsey made it clear the couple’s main issue wasn’t a lack of money—it was control and discipline. "You have $30 million tied up in something you have absolutely no control over. That is not okay," he said.
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When Ashley mentioned they might have to divest entirely, Ramsey didn't hesitate: “Absolutely. Because you are going to lose your butt.”
He encouraged her to sell shares, even if it means paying taxes, in order to regain financial freedom. “I’m going to pay some taxes and get free of these jerkwads. No chance I’m putting up with that crap,” he said.
As for the financial advisor who suggested a loan on their lake house? Ramsey didn't hold back: "You may need a new financial advisor, too. This one's an idiot."
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