Changing Your Future Starts with Changing Your Mentality

[Music] welcome to the dave ramsey show [Music] you can be intentional about your character you can have money and a career you are the hero in your story live from the headquarters of ramsey solutions broadcasting from the dollar car rental studios it's the dave ramsey show where debt is dumb cash is king and the paid off home mortgage has taken the place of the bmw as the status symbol of choice i'm dave ramsey your host chris hogan ramsey personality number one best-selling author a couple times over is my co-host today the voice of the everyday millionaire in america open phones as we talk about your life and your money at triple eight eight two five five two two five that's triple eight eight two five five two two five mark is in asheville north carolina to start off this hour hey mark welcome to the dave ramsey show hey fellas thanks for taking my call sure man um so uh so my wife and i are new to the baby steps we're in uh currently in baby step two we've been paying off uh some debt the last two months or so um we got about 6 000 in debt it's on a personal loan um of mine it's our last last little bit um we owe about 150 on our house 150 000 on our house um and we have uh 350 000 roughly in a uh a brokerage account invested in single socks and i'm just curious what your thoughts are on on whether we leave that there and try and do this on our own or or kind of what we do wow where'd you get that well uh yeah yeah um my my wife's father passed away when she was a teenager and this is this has kind of been in this account for for since then basically you know 15 15 or so years my goodness wow chris well i'm just curious whether we whether we just don't even touch it and and kind of work work everything on our own or yeah i'm going to tell you something your thoughts are what sets us up i'm going to tell you right now you all have been blessed obviously because an inheritance is something that someone intentionally leaves to you and if if i'm in you all shoes i'm going to use this inheritance and this blessing to be just that i would begin to to sit down with the smart vista pro to walk through and talk through where you are but also beginning to really look at liquidating this to begin to move you forward to attack the debt and pay off the house the rest of that money that's sitting in there i would move over into gross stock mutual funds and look at this as a long-term play for you all's investments you've got an opportunity to fast forward uh through these baby steps and put yourself in an incredible position how old are you all uh we're both 32. goodness gracious what's your household income uh about 75. what's the house worth about 400 400 000 roughly right now you know kind of went it kind of went sky high this year very um so let's play pretend for a second let's close our eyes and say we've got 25 000 sitting in an emergency fund in a money market account okay okay you don't have a debt in the world no house payment nothing okay and you got 175 000 invested in mutual funds with a smart vester pro which will double roughly every seven years if you don't add anything to it oh but you're going to be adding to it because you don't have any freaking payments anymore yeah so now your ability to invest as a baby step 7 person is going to be amazing how much you can invest if you just invested a house payment the old house payment on 150 000. what's your house payment 1700 bucks uh it's about uh 1300 right now we put down a big chunk okay so if you just put if you just put 2 000 a month away from age 32 to age 62 that's tens of millions of dollars just not having a house payment it'll probably be about 12 million dollars at your age just paying yourself a house payment yeah yeah that's crazy yeah i'm not doing it would be capital gains that's just part of it there is no capital gains capital gains is not based on your debt capital gains would be in the you want oh capital gains on this account oh you might have has the account grown since she inherited it uh yes how much has it grown how much was it when she got it uh well it's it's uh right around what it is now really um it hasn't grown you know she paid for grad school we should pay for graduation capital gains is based on the growth of the stocks if the stocks have grown while she has owned them you will pay 15 on that and so that would come out of this but it doesn't change my advice dude yeah i would be on a written budget a detailed plan every dollar has an assignment the two of you working together and i would promise myself with the smart investor pro i'm going to start investing in my 401k max my roth ira max where i get to 2 000 a month invested in good growth stock mutual funds growing tax-free if at all possible and um that alone will make you worth tens of millions of dollars and that's the legacy her dad left her if you play with this right now if you go buy a bunch of stupid stuff with it and you got a 70 000 bass boat in your driveway somebody ought to smack you okay but if you'll go do the right thing with this you're gonna have all the money you ever wanted to do anything you ever wanted including be a blessing to others yeah it really will and and just puts them in a whole another stratosphere financially dave uh what a blessing you know and it again thinking it through having a game plan and i tell people you've got to have a plan for your money because everyone else does look at the commercials they're coming out with cars now that can park themselves did you know that dave no okay i never get that tired that i can't put it in park okay i can do that but i mean there's always something out there the latest greatest thing and so we got to have our own value system of what matters to us and what we're chasing down um and so mark i hope you'll go sit down with your wife talk this through replay this for her and you guys really get connected get over into ramsay plus and work as a team and i'm telling you your kids kids kids will reap the benefits of her father's blessing to you all if you play your cards right so i lied to him oh okay uh-oh he's not going to have 10 or 12 million he's only going to have 7 million well he can't make it on that so he's not going to be 2 000 a month invested in good mutual funds at average rates of return from age 32 to age 62 would be 7 million um let's take it to 30 let's take a 72 just for the fun of it just to see what would happen no i think that's going to get us closer well yeah i know but i did the math wrong in my head apparently so i have to admit that and on it so let's see here we need to get the calculator going oh that has to be wrong it's 23 million so it couldn't be that couldn't be right but uh actually it is but um yeah so seven million because but you keep doing it for ten more years that compound interest on seven million that's a holy gramoly either way i think you're going to make it my brother all right robert is next no no he's not he's gonna be up after the break so there you go power of compound interest edison called it the eighth wonder of the world yeah and it is not a lie i mean that you know the mindset when people get that light bulb going and understanding when you invest not only is the money you put in growing but the interest is growing interest and so compound growth becomes this thing that's just a it's a big financial hug think about that coming from the guy who just loves hugs well you know he's [Music] can you see a dirty look over the radio you made me nervous right well you should be mr huggable this is the dave ramsey show [Music] one of the things that makes the dave ramsey show unique from other shows is that we genuinely care about our listeners that's why we are very intentional about choosing our advertisers blinds.com offers high quality window treatments at unbelievable prices and then their customer service is truly unbeatable they make it simple to shop for blinds shades and interior shutters from home with easy online ordering and free shipping right to your door and blinds.com will help you every step of the way just like they've helped thousands of my listeners with free design help by phone and online plus they guarantee the perfect fit go today and take advantage of this week's special offer [Music] chris hogan ramsey personality is my co-host today open phones at triple eight eight two five five two two five our question today comes from blinds.com they are the number one online retailer of custom window coverings you get free samples free shipping and with the new promos they run every month you'll save even more use the promo code ramsey to get the best possible deal all right here we go today's question comes from eric in ohio he says i understand funding of the 401k match then roth concept all things being equal where do the hsa contributions fit into this concept if hsa is being used as a retirement healthcare expense giving long-term care statistics what amount of money do you think is a reasonable retirement hsa that the hsa should have in it well couple things here eric you're bringing up two different things with the hsa i mean you've got a great opportunity as an individual to contribute up to thirty five hundred fifty dollars per year and as a family seventy one hundred dollars but long-term care visas almost think of them like a tag team partner long-term care insurance is something you want to have in place by age 60 to make sure that if you do go into a nursing home or need assistant care you've got money or an insurance policy the long-term care to take care of it yeah long-term care insurance is an essential part of financial planning at 60 years old and beyond if you have a net worth of uh under 10 million dollars uh otherwise you probably self insure through it if you got 10 million or more you probably just hire somebody to come to your house right i mean you wouldn't go into a nursing home and so um at least that's the way people that i know are handling it so but but otherwise you you know you can use the hsa for long-term care expenses and so funding it could help you become self-insured and not need a long-term care policy oh uh is i think maybe what he's hinting at okay and that's okay too but we're fully funding the hsa as account the savings portion of the account as an investment would really be a baby step seven tactic you've maxed out all your retirements and you still don't and you still want to hide some money from the government legally i fully fund my hsa every year it's invested in mutual funds and i've never used it for medical expenses i was just cash flow my medical medical expenses consequently i've been knowing this is george w and that's when hsas were invented as in his uh admin in his administration and i've got like 250 000 in that account so you're looking at that like a health emergency fund yeah that could be my long-term care policy oh in a sense okay if i wanted to just pay for long-term care that's the first place i would pay for it out of okay and i'm just letting it grow as an investment it grows tax-free or tax deferred just like a 401k or a regular traditional ira and so it becomes an investment if you're not using it for health care anytime soon okay and so little stuff like a deductible i mean if one of us had a tiny surgery or something we had a thousand dollar two thousand dollar thing we just pay that just pay it and we leave the hsa alone but that's in a high net worth situation and baby step seven situation that's right prior to that you wouldn't use it except just to cover chronic stuff stuff that's going where the money is going and going out every year but um but the hsa we're huge fans of that around here and this first time i've ever seen the question come up as a long-term care issue but you do need long-term care insurance yeah hey what dollar amount is it that you think that someone is self-insured what would you say you know what i've got a cheat sheet laying around here somewhere on the long-term care insurance and i think it's important while i dig that out just to touch on this whole subject a minute because it's such a good subject we're such a proponent for long-term care insurance without a doubt and the the reason is is that 75 of you ladies will outlive your husbands and so the typical thing that happens is the uh i can't find it the typical thing that happens is the um you know you you lady the papa goes into the nursing home burns through fifty to a hundred thousand dollars a year for a couple three years and burns up the nest eggs cracks cracks and scrambles in this deck and so the typical long-term care stay that's what i was looking for the cheat sheet on is it under my oh maybe it is uh nope nope it's got it's got its own thing over there somewhere james but that's okay i'll find it later bottom line is is the typical stay is not that long so it's a three to five hundred thousand dollar event is them typically the max it's very unusual to hear somebody going over 500 000 in nursing home care but the problem is for most people that's everything they got that's right and but if you're sitting on a you know everyday millionaire situation they got five ten million dollars and they got a half million dollars sitting in that hsa or three hundred thousand sitting in that hsa they can pay for their nursing home or in-home care themselves and self-insure it uh and it's all tax free because the hsa going in is tax deductible going out for medical there's no taxes right and so it's a very very good program that health equity company that we endorse is who we've got our hsas invested in and they've got good mutual fund options in there and um we'll do that so yeah it's important and again if you're out there and you're a millennial and you've got parents or or whatever that are in their mid-50s please bring this up because you want to make sure that that policy is in place by age 60. and don't overdo it because your chance of using long-term care insurance in a nursing home setting or in-home care setting prior to 60 is one-tenth of one percent so you just but as soon as you turn 60 it's like all hell breaks loose and the statistics get you know really very dramatic and increase that you're going to need some kind of care in your last couple of decades of two or three decades of life and by the time you get in early 60s the price goes up astronomically so you want to be proactive love your parents enough to bring it up just tell them hey you saw two bald guys uh talking about this stuff and mom dad i love you and do you have this in place and and if so you're just asking and that's doing it out of love not out of greed there you go robert is in orlando hey robert welcome to the dave ramsey show hey how are you guys doing today better than i deserve man how can we help so i will be starting law school next fall i'm 23 years old and my only debt is a 17 000 car loan that i might sell depending on where i move to uh currently i make 32 000 a year and have about 15 000 in safe stock hopefully that'll be able to grow to about 20 before i start i do have an emergency fund as well as a roth that i contribute to every month my question is should i use that 15 to 20 000 to pay for rent and living expenses while i'm in law school or just take out enough student loans to be able to pay for those living expenses and just focus on school robert did you really just call the dave ramsey show to ask dave if you should take out a student loan are you new are you new to this robert are you brand new as a matter of fact i am okay all right well let me keep him calm then you just be nice to me no chris i'm going to scare them i'm the nice one robert here's the thing buddy i love the fact that you've got a career track i even love that you know the direction you want to go uh but here's what i want you to avoid we have a 1.7 trillion dollar epidemic going on uh excuse me billion dollar epidemic drone uh it's going to get to that pretty soon loans it's a situation and so what i don't want you to do i want you to chase your dreams but i don't want you to grab student loans i really and truly don't uh you've got an opportunity to look at this and start to think you can go tonight i've got friends that have done this my friend where you're enrolling and going to law school at night while you're working and it might take a little bit longer but for you to come out of that without student loans would be a game changer yeah the um the stories that we've heard robert over the last 20 years 25 years of doing coaching with people financially that took out a law school loan they're 200 000 in debt and all on the premise that this was all going to work the way it was supposed to work and life never works exactly the way it's supposed to work and so they end up not passing the bar and let me tell you what your law degree is worth then economically speaking not so much um or so they end up deciding they want to be more of a public servant and they want to work for the government as a lawyer which means you get paid squat but you got big old student loans that you've got based on the fact you were going to be a rich lawyer someday and so it doesn't turn out the way people think it's going to turn out always there's all kinds of different things that happen it takes longer to get the law career started and get the income to go with it all those kinds of things so it you put yourself in a dramatic disadvantage when you take on these student loans so that's why we're always trying to talk people out of it open phones at triple eight eight two five five two two five you jump in we'll talk about your life and your money it's a free call chris hogan ramsey personality author of the number one bestseller everyday millionaires is my co-host today here on the air this is the dave ramsey show [Music] if you're financially conscious you know that healthcare expenses can take a big bite out of your budget christian healthcare ministries or chm is here to help trim those expenses and make sure your family is cared for chm is not health insurance but it is christians helping other christians by sharing each other's medical bills most people have the means to pay for basic doctor services but when it comes to something on a much larger scale say several thousand dollars for surgery or hospitalization folks are worried they'll be left to try and find a way to pay for that themselves not too long ago i was diagnosed with ovarian cancer and they really came through so far we've had over 180 thousand dollars worth of bills and got close to 75 discounts chm shared the rest of the expenses to see if chm is right for you and your budget check out chministries.org backslash budget [Music] [Music] hmm [Music] [Applause] chris hogan ramsey personality joins me today is my co-host i am dave ramsey your host open phones at triple eight eight two five five two two five on the debt free stage in the lobby of ramsey solutions kirk and emily are with us hey guys how are you great we're good welcome where do you guys live springfield illinois all right welcome man how much debt have you paid off 77 000 in five years good for you and your range of income during that time uh start around 25 000 it's up to about 55 000. cool what do you guys do for a living um i was a stay-at-home mom during this time and i worked in insurance and then talked guitar lessons on the side okay very good what kind of debt was your 77 000 it was our house paid off your house i'm looking at weird people you have no debt in the world nope pretty great yeah how old are you guys we're i'm 30 and 32. and you're paid for house you are straight up weird i love it i'm so proud of y'all well done what's this house worth around 80 90. okay and you own it by god yep all right what caused this who started this journey well definitely our kids we found out three years ago we were expecting and that's what really spurred us on um in like the month after that we found out we were pregnant with our first our air conditioner and furnace had to be replaced too sure and we were already on the path of paying off the house early by that time but um in in like the three months after that we saved about twenty thousand dollars wow yeah i worked like seven days a week about 12 13 hour days every day yeah so you had to get some money so you went and got some money yeah yeah that's where you get it work i've heard that's fantastic so all right which one of you is the saver and which one's the spender he's probably the saver okay i'm probably a little bit more of a spender just a little yeah just a little bit so it sounds like you guys have been very on task yep yeah yep it definitely um i feel like we were we've always been like when i met kirk he he never had debt and we went to open our checking account after we got married and he didn't have a credit score and so they were like well we don't know how to he had to have all this extra identification and stuff for opening the checking account and i was like well that's kind of weird and yeah he's off the grid pretty much you know uh when i was pretty young i read steve martin's autobiography yeah and when he talked about never having a credit card and never wanting one it just really struck me because i just i hate the idea of the burden of owing anybody and when we got approved for our mortgage i was like well that's great but i don't want this um and we just worked as hard as we could to get it paid off i love it you definitely made some serious sacrifices working as much as you did i mean that's a big deal it really is uh what'd you what did you learn about this process of paying off the house you got to do something that you like yeah and um you know sometimes you just have to get past the feeling of wanting to buy like whatever you want for me it's guitars i love guitars but i have enough of those and uh you know every every spare penny that we had if you would find change on the ground it's like never spend found money we would just take that and put it away we also started a business on the side i play violin and so basically all week he would work and then teach guitar lessons in the evenings and then pretty much every weekend we would play a wedding oh so we started playing weddings and we just worked so hard and learned to be patient too it was something that took a lot longer than i don't know i'm normally not a very patient person so learning long-term setting long-term goals was really good but but she's really the budget budget whiz uh emily's actually studying to be a cpa right now all right so you know the biggest lesson that we've learned is listen to your spouse whoever it is just listen to each other there you go very good very good so who were your biggest cheerleaders outside the two of you who who was cheering you on you got a paid for house at 30 and 32 right yep family for sure parents and my my brother helped me fix like every single thing on our cars and he taught me from a really young age how to fix my own car and that that helped out a lot oh yeah having a car for a long time did your friends think you all were weird yeah we didn't tell a lot of people um and then yeah i think now that we're mentioning it to people more they're like well that's kind of strange well i wouldn't want to live like that so that's fine i had some friends think i was weird when we asked for a vcr instead of getting disney plus yeah that might be weird very cool guys i'm so proud of y'all well done heroes how does it feel to not have a payment in the world pretty great wonderful especially in the middle of weird times like we're in that's actually how we finished this was we got our stimulus payment and put it towards the house yeah so we we had um savings set aside for emergency fund and then the extra expenses after on we just decided that at that point it would even out if we paid off the mortgage at that time we could still save that much more and get it back to where it was so we took care of it fabulous well done you guys we got a copy of chris's book for you every day millionaires and that's definitely the next chapter in your story so we'll get the kiddos in the picture for the debt free scream what are their names and ages sammy is two and a half and henry is nine months all right go henry here we go buddy i love it very cool all right kirk and emily sammy and henry 77 000 paid off in five years they have a paid for house and everything at 30 and 32 years old ding did that making 25 to 55 000 a year they are heroes well done guys count it down let's hear a debt free scream one two [Applause] oh man oh man oh man way to go that's about that's about killing it right there yeah it's a big deal 30 and 32 years old if you're out there and you're sitting and you're going well man oh man how'd they do it well they decided and then they made sacrifices and then they worked a plan that actually worked uh you have an opportunity to do that as well just make the decision today and then decide and truly get plugged in this plan works and it's helped millions of people and we're helping the young young people own homes outright which is awesome yeah i mean it's you're so right chris that you know the only difference in their story and some of you listening if you've been listening a while if you're listening first time today you're just trying to figure all this stuff out but the only difference is is they decided yeah they just decided really and some of you know you've done that about other things where you just decide you you know the old joke yogi berry you say when you come to a fork in the road take it right but you know that's a decision yeah you got to go somewhere and so remember that time you decided to ask her to marry you remember that time you decided to go get that degree you remember that time you decided to move to that other city and it changed everything yeah it changed the whole trajectory of your life and so decisions are so powerful and the interesting thing is they're not necessarily permanent you don't have to decide something and and then never change it again right but if you decide something positive you could never change it that's right that would work you know find something there's some things i never ever again do again in my life yes you know there's some things i always do in my life those are decisions i always tithe as a christian i always give a tenth of my income i always say for emergencies i always invest i'm always an incredible tipper i always i mean you got some you gotta have some decisions that you make and you know i never ever will do business with american express again under any circumstances there's some decisions you need to make right absolutely there's some decisions you make and you say i'm not gonna i'm not gonna be treated like that that's right and you know the beautiful thing is we live in the greatest country on this planet and i'm biased because it's only one i've lived in we don't need anybody's permission we get a chance to decide and try you don't need a permission when you used to go out in the hallway in your kids to school field trips yeah mama hogan had to sign them yeah not anymore you're like a grown-up i'm a grown-up you don't need a permission slip anymore you can just give yourself permission boom to pay off your house way to go kirk and emily touchdown baby they're weird this is the dave ramsey show [Music] [Applause] [Music] [Music] [Applause] [Music] [Music] this year's been hard for everyone i'm betting you know someone who had a really hard year maybe they got slammed maybe it was medical bills or maybe they lost a job well they shouldn't have to struggle like that ever again and they don't have to this christmas you can give them some peace of mind help them feel hope with ramsay plus it's our step-by-step money plan that helps people get out of debt and get their life back on track quickly so they can finally save money for their future because once you're not sending all your money to the bank you can breathe easier when the next emergency hits because you've got an emergency fund you can give someone ramsey plus by going to davramsey.com that's daveramsey.com store ed is with us in tampa hi ed welcome to the dave ramsey show hey dave hey chris how are you guys great man how can we help well my question is um i have not been able to work since uh the covey came along um and my wife has not missed a day she got a promotion to uh kind of like um in charge of the whole department and she's gonna get a twenty thousand dollar a year raise starting in january um we finished baby step three wonderful and in jack thank you and in january we're going to talk to a smart dresser pro now beth is going to have to um do like a lot of traveling and she's going to be working long hours um and she she says she would like me to just stay home um you know take care of the dogs when she's out of town you know take care of the yard the house um just take care because you know she's going to come home and she's not going to want to make dinner and do all these kinds of things pardon me stay home to take care of the dogs no no there's no kids no kids oh no grown okay yeah what is she making well she went from 48 to 68 and i have not been able to work i've got um uh i'm one of those high risk people with recorded and my doctor told me that i really need to take this stay-at-home thing seriously you're you're irrita you've got what kind of a problem medically uh upper respiratory upper respiratory okay yeah so and but even when our plan was i am 60. okay all right um i was planning on going back to work once the vaccines were available but we've still been able to save you know about a thousand dollars a month um putting it in the bank um and she's going to get this big bumped into a raise with her microwave she gets whether there's somebody at home to watch the dogs or not so a bad decision well i don't understand it is what i'm saying that's why i'm being sarcastic it it there's um i mean if you are it now what now there's a couple of caveats i do understand you're not working if you have a health concern with upper respiratory and covet i sure no trouble but that may be let's just call that um let's just reach out there and say a year from now for whatever reason vaccine or whatever other reason that that's no longer a concern you are a 61 year old man and your job is to sit at home and watch the house yeah i know i know that's just making you sense plus i feel really guilty you know i'm not trying i'm not trying to kill you it's just strange i've always worked you know i've never been unemployed in my life right well ed here's the thing buddy i i think you know you being conscious of your health situation i think is one thing uh but you have opportunities to be able to work from home you've got opportunities to be able to do things where you're not encountering other people so i don't think you just throw in the towel because your wife got a 20 000 raise and if that's what her thought is i want to suggest you sit down and and really kind of speak yours uh your thoughts your feelings to make sure you guys are getting on the same page all of this is the other side of a health concern okay if there's a health concern right we're sitting down you're on the bench okay i got no issue with that at all but the other side of a health concern there's just great dignity and work there's not much dignity in watching the dogs there's just not i mean they go out twice a day and you feed them i mean there's just not a lot to do here so um you know it's uh no i think i think if i it's gonna be good for your mental health regardless of your bank account for you to be doing something as soon as you're medically able to do so with wisdom right and um so no most the time i hear honestly when something like this comes up there's kids at home and she's making six hundred and eighty thousand right not sixty eight thousand yeah that was a zero in a comma and and then she wants to you know then she wants you to stay home and take care of business because she's out there killing it right okay we can talk about that but dude 68 000 bucks well here's the other side of this coin too dave he said she's going to be traveling a lot so that means he's not going to see her and so he needs to have something to yeah to pour into so ed listen sit down have a conversation yeah you guys talk and if you can't get agreement you might need to reach out and get with a marriage counselor to help you guys kind of navigate this and and make a long-term decision yeah there you go yeah open phones at triple eight eight two five five two two five jennifer is with us in atlantic city hi jennifer welcome to the dave ramsey show hi dave and chris thank you so much for taking my call i really appreciate it sure okay i live in new jersey and um this summer we i was notified by ezpass in new jersey that um our payment wasn't being processed um so i called easy pass to correct the issue with my credit card but of course this summer no one was working in ez pass i couldn't get a hold of anyone because of covid everybody's working from home i tried my husband tried anyway we ended up changing the information online with the credit card straightening it out what we thought was for ourselves and i just went to my mailbox and i just found out we were reported to collections because the situation that we thought was rectified was indeed not so it is truly no fault of our own um we're just having a hard time in the state of new jersey trying to get any kind of public employee to respond so i'm just curious um what do i do now it's 175 dollars i'm going to say the total charge was maybe 75. um well um you know this is not the first time i've heard easy pass sucks um you've heard that before too haven't you jennifer absolutely yeah i mean this they kind of have a reputation like comcast you know it's just like yeah it's like oh when you hear it you just go oh it's hard to find intelligent life over there it's like the dmv or something um so and then worse than that they all decide not to work so um you know work from home entails work but not for everyone so um ouch so what are you saying you you your bit you did not pay your bill on time because the account was screwed up you went online thought you fixed it and it was still screwed up yes but it kept on saying you have to speak to someone um you have to talk to someone from ezpass to correct this problem and you never tried yeah and we could this summer we couldn't and we just assumed okay well we updated the information ourselves i guess we're okay but then today i go and i find out now it's up to 175 and we've been reported to collections i've never been reported to collection well there's no it's not like it's not like they're going to come to your house or something don't worry about it they're not working that hard um so uh and collection is just aggravating i mean it may have dinged your credit or something but whoop-de-dub-duty it's not the end of the world uh i i i don't know what to tell you i mean you're asking me how to motivate a government employee i don't know how to tell you how to do that um okay you know i'm sorry i'm being smart out like but it's also the truth i mean how do you how do you get somebody who can't lose their job for incompetence to work yes um i'm i'm being feeling very frustrated yeah i'm angry yeah i get you i'm so uh or you know i mean it'd be okay if they said look uh we're not gonna charge you anything because we're not getting our work done over here that's different but instead they're like trying to ding you like triple for for this thing so um i don't know what i would do in this situation is i would just continue to be a bother to them until i got it fixed and i don't know i mean you know just like every morning i gotta get up i gotta make my easy pass call and then we'll go on with the rest of our day until we get somebody with a brain plug two brain cells to rub together to try to get our way work through this problem and get this charge removed down to the original charge and then get it paid i don't know what else to tell you i don't have a good answer for you but i do share your frustration you can tell this is the dave ramsey show [Music] [Music] [Music] welcome to the dave ramsey show you can be intentional about your character you can have money and a career you are the hero in your story [Applause] [Music] live from the headquarters of ramsey solutions broadcasting from the dollar car rental studios it's the dave ramsey show where debt is dumb cash is king and the paid off home mortgage has taken the place of the bmw as the status symbol of choice i am dave ramsey your host thank you for joining us america open phones a triple eight eight two five five two two five chris hogan is my co-host today ramsey personality and author of the number one best-selling book every day millionaires again the number here triple eight eight two five five two two five ashley's in knoxville hey ashley welcome to the dave ramsey show hey dave and chris thanks for taking my call sure what's up um i was just trying to get a little bit of guidance um long story short i am the only child my parents were divorced my dad never remarried he is looking to retire in may and he doesn't he's a very simple man very old school um he doesn't have any debt he has money put back in his bank account so whenever he draws social security he thinks that he's going to be fine with that and he wants me he wants to leave me his 401k um i am on your plan i'm on baby step 2 and i've paid off like 7 800 since july and i'm trying to be very smart as far as if he needs it in the future maybe try to find some way to make it grow to take care of him possibly or you know maybe make it useful for him in a different way if he needs it okay so he's retiring and how much is in his 401k um around 140 000. okay and how much does he have in the bank um about 20 000. okay okay and so in his mind he doesn't want to touch the 401k he just wants to leave that all to you that's yeah and you you try to talk to him about it but like i said he's very simple um he doesn't take trips he doesn't buy a lot of stuff what he does buy he pays cash for but it's not often right okay well i mean i would just roll it to a 401k in some good mutual funds if i were him and he can name you as the beneficiary and if he doesn't use it it can go to you but it's there until his death if he needs it yeah it can do both things actually yeah i was just kind of curious as far because like my he doesn't i'm a nurse and whenever he gets to the point where he needs care he wants me to do that and i understand and so i want to be able to have the money there to use that if he needs it especially yeah well it'll be it'll be in an ira and a mutual fund and you could just pull out whatever you needed he can name you the beneficiary he also should do a will and he could name you he could name you special power of attorney where if he was incapacitated and you were nursing him and taking care of him let's say he had a dementia diagnosis or something like that then you could take over his business affairs and manage the money for his care which is your concern and uh yeah and then you know and if it all works out the way he thinks and there's still a hundred thousand or two hundred thousand laying there when he dies it can go to you there's nothing wrong with that but your point is is that he he really can't give it to you prior to death there's not a vehicle that allows him to do that right he can just name a beneficiary on it also upon death but then you've just got he makes decisions with his life up until then that either use that money or don't use that money right exactly yeah yep that's fairly easy i mean the thing is it can be sitting there for him and if he doesn't use it like he says it can go to you that's right no that's such a big deal and having that we talked about that in our staff meeting today dave uh with uh the beneficiaries please please please make sure you all are updating these uh people go through life changes and stages just make sure because that that designation of beneficiary can outweigh a will uh so please make sure yeah and so you want to make sure on your life insurance on your 401ks your iras that that's updated and is the way it needs to be uh it's just a good thing year in to just begin to look at and always update it yeah i mean we were i couldn't believe that how few people had uh current beneficiary status in our company right i'm about to chew on somebody i mean it was like half of them man it was crazy because the other day were you on the air with me with that lady called or was it hey yo no a.o was on ao man she called she they've been married seven years she her husband had two hundred thousand dollars in his 401k he's 32 years old had two little babies and he got killed in a car wreck and the beneficiary on the 401k for her husband his dad because he never forgot he never changed that for seven years of marriage he never went back and changed it after he got married please tell me the dad did the right thing he did okay but guess what dad got 200 grand in an inherited ira in order to give it to somebody he's got to work through gift tax issues and tax issues as well yes and so net of taxes she would have had taxes on it anyway probably depending on how it was set up but oh my gosh the whole thing's just a tangle mess because you didn't go do your beneficiaries you've got to do your dadgum paperwork people because it ends up costing everybody that's left behind money and hassle and a pain yeah and you're right dad thank god would stand up i mean what if it's one of these toxic situations yeah he's like no i never liked you to start with and he just keeps at 200 grand you know because because he there's in squats you can do about it it's straight up i mean it's a designated beneficiary there's no will that intercepts that so sierra is with us sierra is in columbus ohio hi sierra how are you hi good how are you david chris better than we deserve how can we help hey i wanted to ask questions i often hear you say sell the car i'm looking at about 200 000 in debt not including the house our income is just over a hundred thousand um most half of that debt is student loan debt um but we do have about fifty thousand wrapped up in um car debt do we sell both cars and get two cheap ones do we sell one car what are we looking at to attack this set what do you owe on the two cars there's 50 total break it down uh so we owe 25 on one 25. okay so yeah yes but the one is upside down yeah well yeah so the deal is this one-fourth of your debt is cars it will speed up to move way down in car i mean you get your two five thousand dollar cars and pay them off it'll speed this process up considerable and uh how old are you guys yes um i'm i'm in my 30s uh my husband is significantly older though so he's an assistant the advantage of doing this is twofold one is it cleans up the mathematics and allows you to move forward getting out of debt much faster the other advantage is is you are screaming at the person in your mirror that when you bought these cars it was stupid by selling them absolutely you are permanently changing the groove in your brain i mean you can say this was dumb and pay them off but when you sell them you're saying this was dumb that's right and it changes as you go you remember that time that we had two hundred thousand dollars in debt and we got rid of fifty thousand cars we're not going back there never ever again you know but if you if you you can work your way out of it you got you know how fast how long does it take to pay off a hundred grand or 200 grand making 100 if you do it in 50 000 it's four years if you do it in 75 000 it's three years yep you get a bird scooter and a skateboard and start moving stuff changes today sierra seriously get your life back get your life back bird scooter you got to be ashamed of yourself we need to get some dave let's ride no no no no me and you on bird skaters that's not a good idea this is the dave ramsey show [Music] folks it's an honor to tell you about the army national guard not only are they big supporters of our high school curriculum but they also give you the opportunity to impact your local communities whether your goals are to get an education serve your country or have a better life the army national guard can help get you there plus they offer unbelievable financial benefits secure your future today visit nationalguard.com to find out more [Music] only two days left to enter the ramsey christmas cash giveaway could be your chance to win our grand prize of five thousand dollars you can enter daily to increase your chances of winning at daveramsey.com giveaway it gets even better you can now pick up our life-changing books and kids products for about ninety percent off on a lot of them this is the week-long green monday sale you can get deals on books like chris hogan's number one best seller every day millionaires or my total money makeover all of our main best-selling books are 10 each 2020 was the dumpster fire year but next year doesn't have to be you can use this as your reset right that's right you can go i get a fresh start i'm going going new gonna i'm gonna be the third pig the one in the brick house so when the big bad wolf comes i don't get blown over right and i got to get prepared i got to get my emergency fund i got to get out of debt i got to get on a budget we can show you how enter to win some cash and save some money green monday sale which runs all week we have these one-day sales that run all week i have not figured the logistics out on that exactly but apparently it's a marketing thing so check it out daveramsey.com giveaway daveramsey.com giveaway david is in miami hi david welcome to the dave ramsey show oh hey i'm i'm doing good how are you guys doing today better than i deserve man how can we help you so uh i've i'm kind of holding my back i i was proposed an offer on a startup uh startup tech company and lately this year has been pretty you know blessed i uh made some good money and i was starting you know been following all your shows on youtube and i was about to attack you know all my debt that i have on my credit cards and my loans and now this proposal came up and i don't know if i should jump on that first or pay my debt i'm like i'm like i'm a little scared what to do well how much debt do you have david um so i have in credit card debts just around 25k okay uh and then i mean i have my personal auto loan that i have how much around around 50. yo 50 000 on your car correct and then my wife has a lease what's your household income um i want to say around 250. and how much money do you have in the bank or you said you've got some money laying around how much you got laying around yeah i've got like around 240 sitting in the bank how much is this investment it's around 100k okay did i miss something because you said 50 on the car 25 on the credit card that's 75 and 100k is 175 but you got 250 in the bank correct but the thing is like with what i do i kind of work on a commission base so that money can't always it always fluctuates depending on the market too right so that's why if i'm in your shoes david i'm going to go with the known not the unknown your income fluctuates so the known thing that happens you know that there's credit card statements coming in every single month you know that there's car payments that are due every single month and you've got a lease payment due every single month so i'm gonna do the thing to give me a raise okay and and trust me dave and i have worked with nfl players pro athletes entertainers everybody comes to us and tells us about these ideas and concepts rarely do they ever talk about the ones that went south and so i would take care i would clean up your personal situation and then give yourself that peace of mind before i drop a hundred a grand in a startup i'm gonna have two million dollars in mutual funds my house is gonna be paid off and everything else is gonna be paid off because that basically is money you're dropping on the roulette table hoping you hit a number right now that makes sense it's an uber high risk play you understand that i'm not 100 that's why i'm very like uh worried what to do yeah but 100 of the time you pay off that car you no longer have a car payment that's exactly right that statement's not coming in and now you can redirect that money and again it's just a smarter play and again i i understand the that sentiment i can go back to my pd days now listen you already knew you just wanted somebody tell you it was bothering you you were stressed this didn't feel right to you you already knew before you called us this was a bad play yep so don't do it and proud of you for reaching out every time the bell rings answer the bell when you get a feeling that's called god's spirit whispering to you don't do it fool every time i go against a don't do it for a whisper i find out i'm a fool i mean we've all had that no we are i knew i shouldn't i knew i just had a feeling how many times have we said that to ourselves all of us do it man it ain't just you david we all have had that experience and but but it looks glittery it looks shiny yep and then three years later you go oh god i'm an idiot well you know though i've decided that dave we should go back and count the things i know we shouldn't i don't want to count the things i have done no that we didn't do it's a long list that we protected ourselves from oh the things we didn't do yes see it might be a longer list well that's true but we staying on the plan uh david i'm going to tell you buddy i don't care what offer comes your way you're going to do the thing that's known and the stable for yourself and your future proverbs says the wise see danger and hide themselves the simple see danger proceed on and are punished for it and that's what we're talking about and i have been the simple and sometimes i've been the wise and so you know what we're saying is you that that feeling that sense you had is very very accurate so well done sir well done man you're making some great money congratulations mike is with us mike is in pittsburgh hey mike welcome to the dave ramsey show hello thank you for taking uh my call sure just i'm looking for some guidance our family to start off has been blessed financially so it's a good call but um i have four kids my oldest has just graduated college yay um and she's gonna come back home and work at a job for a couple years um it's what she wants to do and then she's going to move on okay um so here's my question now i have saved all my kids have college education so she she's graduating debt-free so she'll be 21 debt free but i do have some investments that i started when when she was younger with u.s savings bonds and then i have an utma uh account uh for her so all together i have about fifty thousand dollars for her um well i'm not sure exactly i know when she's 21 she's supposed to you know i don't she does not know about it yet but uh i i hate to just give her this money um is there something you know that i saved for her uh any kind of and then she wants to get a car but i refuse to let her get a car loan i didn't know he used that money to get her car and then the last thing of all that is now she's living i want her to get used to paying bills and stuff so i didn't know if i just make do i charge her rent collect it and then give it to her when whenever she moves in two years but what what can i do with that money now all my kids are i'm gonna have that same thing with all four kids hopefully yeah um so i just wanna get your guidance on that okay uh well there's several subjects going on here and i have every one of those subjects with my kids and my kids are now in their 30s okay one's 29 and the rest of them are 30s and they're all married and grandbabies and all kinds of good stuff happen now so uh all uh two of mine never came back home they didn't want to they were mad at us they just had other plans right one of them just got married right out of school or just before getting out of school so rachel winston got married right before graduation so they obviously weren't going to live with us or not obviously but they chose they were able to my oldest when she did move back in with us after college but we didn't want her to stay a long time just long enough to get situated she stayed about three months and the reason we didn't want her to stay longer than about three months assuming that there wasn't some kind of a problem in her life and there wasn't she was a very healthy and everything was fine and making good money and just like yours is something happens when they have to turn off the lights in their own place and buy their own groceries for their own refrigerator and pay the bill or it gets cut off kind of thing and just even with a responsible kid something happens developmentally they like to finish the last step into adulthood i wouldn't let her stay there two years i don't think it's wise from a developmental standpoint i think she needs to move on with her life now a few months is fine that's okay and yes i would talk to her about this money and talk to her about how to wisely use this money that you've got as a blessing and buy a car out of it help her go show her how to buy a car go with her teach her how to buy a car dad it's one good thing dads can do right and so uh just walk along with that that's exactly how we did it but you're trying to help them launch not trying to run an economic model there's a difference this is the dave ramsey show one of the things that makes the dave ramsey show unique from other shows is that we genuinely care about our listeners that's why we are very intentional about choosing our advertisers blinds.com offers high quality window treatments at unbelievable prices and then their customer service is truly unbeatable they make it simple to shop for blinds shades and interior shutters from home with easy online ordering and free shipping right to your door and blinds.com will help you every step of the way just like they've helped thousands of my listeners with free design help by phone and online plus they guarantee the perfect fit go today and take advantage of this week's special offer [Music] in the lobby of ramsey solutions on the debt free states richard's with us hey richard how are you man i'm all right in yourself better than i deserve where do you live los angeles oh welcome to nashville a bit of a haul over here to do a debt-free scream huh yep how much did you pay off uh just about forty thousand dollars cool and how long did this take uh 20 months good for you and your range of income during that time uh between 55 and probably about 90 this year okay good what do you do for a living i am in um supply chain aerospace oh excellent yeah good that's a great career yeah zoom zoom you can go up man fast yeah yeah and you are you've gone up a bunch in 20 months yeah i mean there's a lot of um a lot of that has to do with the side hustles but i guess we'll talk about that okay what are the side hustles um i did uh you know like food deliveries and things like that um i'll spare you guys the names they don't they don't pay me to give them free uh advertising they don't they don't they don't pay the richard endorsement fee all right how many side hustles did you have though um probably throughout this whole thing probably about five wow okay okay so you got serious yes okay so what was the debt you just deleted out of your life uh part of it was uh consumer debt it was five thousand dollars in consumer debt okay um just a little over 34 000 in student loans wow wow what happened 20 months ago set you on fire man uh well it actually all began in um at the end of 2017 i was at work one day and one of my co-workers uh he just i walked in and he was watching one of your your uh shows and he said hey you know rich i think you should uh you should check this guy out he seems like this is something you'd be interested in so that next morning while i was cooking breakfast i just decided to put you up on on youtube and you you were describing how to um invest 100 a month and become a millionaire over time at the time i was also in a finance class in my undergrad and i was learning about the i had a financial calculator i was learning about the present value and all of that and yeah so i was punching in the numbers as as you were describing it and uh sure sure enough it it came out to a little over a million dollars um so from then i knew like okay this guy knows what he's talking about and so i was i was all in um from then 2018 came around i had a goal of i had two goals um beginning to pay off some some debt and the other goal was to save up money on some trips that i had planned for the end of 2018 and through 2019. um so beginning of 2018 came i started started with the program just to get rid of the consumer debt the five thousand dollars um six months it it it worked i was like okay this works but i still wasn't 100 convinced so i said okay if it worked for the 5000 let's see if it works for for me to be able to save up to go on the trips that i had planned so i used the same principles to um to basically save up for the trips that i had planned um six months later december 2018 it worked i had enough money to be able to if i had like five trips i was going on um beginning in mexico going to japan at uh the end of 2018. so once once i saw that it worked i said okay 2019 is game over yeah i'm i'm all in knock it out knock it out so um so i like i said i was headed to japan at the end of 2018 i made my first uh payment on my student loans i had about 34 000 left on that before i got on the plane i said i'm making this first payment that way as soon as i touch down back in los angeles i'm going to be going from there um then most of 2019 was all just payments every single month back to back i got used to it um paid off probably about 15 grand in 2019. wow um just you know just steadily a little over a thousand dollars a month every every month yeah then 2020 came and um due to the pandemic um those side hustles that i mentioned um just went through the roof yeah um so between january and july of this year um i was able to pay off 19 grand wow wow yeah just just by just submitting to the to the process um and so i've you know it's it's been it's been amazing the whole journey a little bit circular but when you applied it it worked it applies yeah i mean for me i mean once i'm all in i'm all in but i have to test the waters and yeah that's with everything that i do i hear you um very so analytical yeah yes and one and once i i saw that i was able to do it and something that i enjoyed doing because i definitely didn't enjoy paying off debt sure you know um so once i applied it to traveling oh being able to to use this it's the same concept but to do something that i really enjoy doing so what's your advice to someone wanting to get out of debt it's it's definitely it has nothing to do with the numbers um because when i looked at you know 39 000 dollars um two years ago um a little over two years ago i was like i don't know when it's gone you know when i'm gonna be able to do it but i'll do it eventually um it's all about the mentality it's all about um believing you can so you take steps right right and one of the things that i've heard you mention on the podcast a lot is um is you went you know you went at what you focus on yep you know so um but i learned that it's not that's not just like a philosophy it's not just something that sounds good like you literally when when you're focusing on it other opportunities come up you start i mean i i had um since i started focusing on it i had two promotions at work and two uh two raises um so my and and the reason why i got the first promotion was because i told myself okay if i want to do this i have to make some more money so i actually started you know digging into the job openings and stuff like that and um and got a job that i probably wouldn't have applied for if i wasn't out there looking for it and same with the side hustles that's amazing you became hyper intentional oh you became very intentional absolutely and uh not only did you get your money back uh you gave yourself a a promotion in life yes you know on another path man i'm proud of you well done uh seriously bro you have to be proud i really do we're proud of you very much absolutely got a copy of chris's book for you everyday millionaires that'll definitely need be the next uh thing to be intentional about yes right next chapter in your story that's the goal i'm trying i'm racking my brain trying to find that quote that when when a man or woman is focused and has a goal uh heaven and earth will move to cause them to make it happen you know it's just like everything starts to collude collide in your benefit when you're aiming at something when you're aiming at nothing it all just seems to wander away from you all these opportunities go to somebody else yes but they seem to collide on you when there's something uh in the spiritual realm that when you just focus on something it causes things to happen and and the thing is a lot of things um there were i had plans for things to work out in a certain way it didn't work out in any way that i've done but it actually it worked out better better you know so it's almost like there's a conspiracy behind the scenes to work to cause you to win right yeah because i definitely didn't plan on a pandemic i definitely didn't know that you know but no nor prospering from it exactly you know you know so well done sir very well done thanks for coming all the way from la man oh i had to very neat the way to do it for me after after all of that all right richard from los angeles 40 000 dollars paid off in 20 months making 55 to 90. count it down let's hear a debt free scream all right i didn't give it any practice but we'll give it my best shot right here three two one i'm dead free well done sir well done yep young man it is amazing how there is a conspiracy in your favor when you set a goal and you commit to it it's not a dream it's not a wish it's a goal because the goal is just vision with work clothes on right that's right and it's amazing how the the the conspiracy of heaven and earth comes together like everything is like angels are saying we need to get him that job you know and we got to get this relationship straightened out now we gotta get this thing and things just start to happen to your benefit because you create this wake yeah of becoming a force of nature yeah it's very very interesting how that really does work and it really i've observed it a bunch in 30 years oh this is the dave ramsey show [Music] [Laughter] [Music] [Music] you [Music] thank you for joining us america open phones at ramsay 825-5225 is my co-host today here on the air reed is with us in richland washington hey reid welcome to the dave ramsey show gentlemen thanks for taking my call today sure man what's up so i'm 35 my wife's 33 have three kids eight three and one um basically to try to sum it up bought our first home about 10 years ago it was a duplex rental property type of property lived in one side rent rented the other out i'm kind of a fixer-upper sweat equity entrepreneurial type person saw an opportunity at another cheap property after we were in the duplex for about five or six years bobbed this other house picked it up and recently with the high market we was able to sell it for a pretty substantial profit and move back into our duplex um after selling another property if that makes sense yeah how many kids you got how many kids you got three kids and when you said when you uh started all this stuff you did did you have kids when you started all this stuff no he did not he did not so moving back in the duplex wasn't as fun as you thought it might have been it's cozier it's cozier um that's not that i heard your wife shoes but i have a yeah i have an awesome wife though and she she does above and beyond um during that time me and my wife also have completed her bachelor's degrees online while i worked full time and she's taking care of kids so great it's been a process yeah so we still have a remaining mortgage balance on the duplex of around a hundred thousand is what we owe left on it if uh okay hundred thousand let's round it up um we sold the other property netted a profit after realtor fees after everything of about 147 000 and so we already have some money set aside that's been our i guess you'd call it emergency fund it's about three to five months worth of savings um we did say things a little bit backwards we only incurred a little bit of school debt while me working full-time and taking care of children of about twenty thousand yeah what's your question both degrees well my question is with 147 000 um we're looking at possibly you know obviously finding another primary residence in the future we could take 100 of that 147 000 pay off the rest of the duplex that is going to maintain a rental property for us for a long time is how i see it um and have some money left over to put down as a down payment on the next property i guess my question is is is it worthwhile to just pay off the rental property or because it's going to be a rental property would it behoove me to um buy something else with as much contrary to what you've been doing for your entire life what we have found is that the people who build wealth are the ones that get out of debt and stay out of debt that is the shortest path to wealth building it's not keeping around debt and or figuring out that some debt is good and some debt is bad and all that bull crap okay so bottom line is is if if i'm you my goal is to take every dollar i can get my hands on and have a paid for house and i paid for everything as soon as possible now if that means keeping the duplex so it takes a few years to pay off the house or a few years to pay off the duplex because you put 147 000 on the house that's fine or if it means i'm selling the duplex taking the equity out of it putting it with the 147 yep paying cash for a house then i'm going to start saving to pay cash for my next rental and avoiding debt from this point forward either one of those plans will work for me that's exactly right and reid you are hearing from a man that i know of that owns the most real estate possible i i know dave i know it's hard for real estate i know his passion for it but i also know his philosophy and that means with cash and so in this and i read i hear it in you you you got the propensity for some stupid uh that going on meaning and as far as jumping out and grabbing more property and more and this and that you said you like getting your hands on things and working on it what i want you to do is get your hands on your future and like dave said one or two ways either hold on to the duplex and that's going to be the slowest route i'm going to microwave this bad boy i'm going to sell the duplex and take that money along with the money you have saved get in a home cash and pay cash for this thing and now moving forward i'm not doing anything debt related i don't care who it's from how good of an idea or how great of a property is if i don't have cash there's no chance of me taking that risk so period i did that myself when i was 28 years old i went broke first thing we did was we rented for two years and then we saved up and we paid cash for a house um then i saved up paid cash for my first rental that go round now i had four million dollars with real estate before i went broke but it was all leveraged and i lost it all right but my first rental was about 32 years old and when you have a paid for rental and you do not have a house payment and you start making just a little bit of money and you get to keep it all except the dadgum government's part right but the rest of it is yours you're not sending a bunch of it to a bank it does not take long to buy the next rental and by the way both of those rentals for cash then cash flow like crazy and that cash starts piling up you get a snowball going here in your favor rental snowball rent rates i mean i got so much rent coming in nowadays that i can buy another piece of property once a month right from the rent that's coming in but how many properties did you had before you would it all fell in at the height of your real estate back in the day well i've owned over 2 000 in my life but i'm trying to think that the uh i probably owned uh probably only about a hundred a hundred yeah so you went from lost to zero i lost them all yeah yeah or sold them all to keep from losing one of the two but i mean they all went in that deal when i got turned up on my face out of my own stupidity because i had the propensity which you said the propensity for stupidity and i i did it with zeros on the end man i don't i don't do anything half butt and when i do stupid i even go wide open you know so um that's what i did so it took the the second go around was not the hair the second go around was the tortoise that's right yeah and and that's what we're talking about reed is what we're describing to you is making your hair curl because you're just like oh god that sounds so slow it is yup it's also the wisest route it's also the shortest route the best way to get rich quick is get rich slow yes sir tyler's with us tyler is in michigan hey tyler what's up in your world good how about you dave and chris nice to talk to you guys you too man how can we help yeah um i'm 29 years old and i have tried to get real good grades on um my retirement i currently have about 140 000 in my retirement account through my work in my 401k and i am looking to max it out um starting this year um at 19.5 a year i can put in yeah and i didn't know is it best to put all of it in one lump sum at the beginning of the year or pay the max out per month into my 401k this year this year that we're just coming out of is a really good example to test you on this all right mathematically if you're gonna leave it alone in a retirement account and you should be leaving it alone if you're gonna leave it alone five or ten years it's always better to go in all in as fast as you can because the money starts working sooner but emotionally sometimes that'll give you a throat punch imagine a world called january of 2020 and you put all in and what did it do in march 20th the stock market dove remember yeah right little pandemic crash we had going there remember that like the world is coming to an end oh my god remember that okay yeah oh yeah and if you go pull up the dow jones industrial average for this year or s p 500 chart for the year 2020 you'll see january coming along and about the time you would have maxed your 401k it fell off a cliff and if you can't emotionally stomach that you would not be where you would be today which is by the way after it fell off that cliff it climbed steadily back up the mountain and about 65 days or whatever it was later it was back but nobody reported on that in the news and today you'd be sitting with a nice rate of return having invested it all in january but the road that you would have taken would have been thrilling [Laughter] mathematically mathematically is the right thing to do emotionally you got to be able to ride it you got to be able to do the ride this is the dave ramsey show [Music] [Music] [Music] [Music] welcome to the dave ramsey show you can be intentional about your character you can have money and a career you are the hero in your story [Applause] [Music] live from the headquarters of ramsey solutions broadcasting from the dollar car rental studios it's the dave ramsey show where debt is dumb cash is king and the paid off home mortgage has taken the place of the bmw as the status symbol of choice chris hogan ramsey personality is my co-host today we're taking your calls about your life and your money open phones at triple eight eight two five five two two five that's triple eight eight two five five two two five now next week uh in preparation for christmas we will be doing our annual giving show it is one of the more popular shows we do and we devote an entire day of shows to giving stories stories where you call in and tell about the time that you were able to help someone able to give able to be outrageously generous or sometime that you received something that means someone else was giving it's still a giving story we want to promote and encourage outlandish outrageous generosity and so if you have a great giving story or receiving story to help someone be inspired about generosity then you just go you just email kelly at dave on air at ramseysolutions.com dave on air at ramseysolutions.com just put giving story in the subject line tell a little bit about the story keller will get back to you we don't tell you what to say or anything like that but we just line the calls up so that we can get you lined up on the air and chris we've had some great giving stories over the years we had two of them in house this year one each of our team members a thousand team members we gave them 250 bucks each yes with the requirement that they find find someone in their life it could be a family member it could be a friend it could be even an acquaintance yeah uh that was affected by the pandemic this year and was struggling and hurting and uh in some way just be outrageously generous with that 250 dollars uh and we had some wonderful stories come back on that people are able to find all kinds of situations where 250 dollars just completely changes rock the world and i'm going to tell you i haven't heard a few of the stories it's one of those i get goosebumps just because uh we've had single moms be impacted you've had people that uh with health issues that have been impacted that truly uh are gonna have a different type of holiday season uh because of that and i can't wait for us to see the whole compiled list uh just the ripple effect of that dave uh because once you have that mindset in that heart what happens is you begin to to make a difference and you can talk about it or be about it and uh through through ramsey solutions we were able to be about being a blessing to people yeah yeah and the second thing we were able to do was we took some of our christmas party budget this year and we used it to buy old bad debt and we bought 10 million dollars worth of medical debt and uh old car repossession debt and credit card debt eight thousand accounts and uh like i said there's roughly 970 of us something like that it right about about a thousand of us and so we gave everybody eight people to contact and tell them that their debt was forgiven and the stories that have come out of that were absolutely amazing it's jesus birthday god sent his son so that we're forgiven we're christians and so we like celebrating that and uh we do it loudly and boldly and so we're gonna forgive your debt 10 million dollars worth and some of the stories back on that the amount of tears oh are incredible listen i don't know why this hasn't been picked up by a major news network you all oh yeah yeah well i know it's ridiculous but but to hear people you got to hear this now so this is old debt it could have been hanging around for five years or more right where people haven't been able to make progress on it and to get a phone call not a collection call but to get a phone call from somebody to tell you that that that's been forgiven in jesus's name you can't imagine the responses we got you can't imagine the relief that people felt to have this thing that's been around their neck or this thing that's been in the back of their mind or their spirit for it to be removed was amazing yeah absolutely amazing 10 million off the books gone like erased uh and we had dollar amounts anywhere from 500 up to 15 to 20 000. but it didn't matter it was the you could hear the joy in the people's voices uh and i tell you that's a job i would take all day long yeah to make those kind of phone calls i said call people told them their dad's forgiven yeah that'd be a great job all day but uh it's amazing it was amazing it's interesting too calling because i had like 10 people to call and uh everybody else had eight but i got 10 because it's kind of like my company so um i really and i never got a person all i got i got three i think i got four voicemails and left the voicemail and then i got um a bunch of disconnected numbers i did two yeah and so the uh because obviously if you're in collections you don't pick up a strange phone no i don't pick up a strange phone number anyway yes if you're not my caller id i just figure you're stupid i don't need anybody calling me so boom you're gone uh you can get touch with me some other way because i just don't take phone calls that much anyway but anyway i and i'm if you're in collections i suppose it's that way now yeah you know the phone up because you know some duper trying to hassle you right so then they open up their voicemail and it's me on there going one of them was 36 thousand dollars wow hard that forgiven that was pretty cool but i have no idea i didn't talk to the guy but um i just left him voicemail but some of them are calling back into the ramsey concierge team and they're hearing the stories yeah too so maybe maybe some of mine got through but you kind of got a feeling what it's like to be a collector uh-huh you know you got a bunch of beady this number has been disconnected you know right and that's what you do all day yeah dave you know i used to do that back in the day you did back in the day i would give out money at the first of the month and then i got so much what does that mean [Laughter] i used to make phone calls there are people still in counseling they even knock on doors oh no back in the day yeah yeah oh i know better now yeah i'm on the right side of the process i'm preventive of medicine yeah well you're yeah you're not yes um yes you're not on the dark side of the light yeah i did i really did but the cool thing was is not only do we call them and leave them that voicemail they're going to receive the letters from us confirming it and you all it was just a blessing and i just i want to encourage you out there especially this time of year you have people that are struggling and they look like everything's okay uh on the outside the face is okay and they're not stuff like how's everything going just fine they'll even tell you i'm okay or everything's all right i truly you know those people and i want you to make an impact in asking and praying for them but also giving in small and big ways uh and if some of you are going anywhere where there are valets or servers or any anybody in the hospitality world they all are operating on about 20 of their normal income because it's just their lives have been screwed this year by the shutdown and so you know you really somebody delivering a pizza to your house you really need to throw a big tip on yeah can i tell you a cool story take a tip triple tip quadruple tip everywhere you go during the holidays especially real quick there's an fpu class uh uh one of our team members sent this to me they were meeting and doing the social distance but they were still doing their class well they called and ordered pizza and this guy brings pizza to the door they give him a copy of dave's book total mini makeover and retire inspired but there's an envelope inside of it they had collected a tip for this guy and gave him four hundred dollars okay the delivery guy and he's sitting there holding the book in the cash and he goes are you serious and they were like absolutely this is what this class is about we want you to read these books but be blessed yeah and that was really cool they got it on video it's awesome we're gonna do giving stories like that next week send us yours send us yours at dave on air at ramseysolutions.com and we'll get you lined up to be one of the callers next week on the giving show we were drawn to christian healthcare ministries because we both had young families and we wanted to have more children and we had also just started a real estate company and needed to find health care coverage that would meet our needs chm is not health insurance but it is christians helping other christians by sharing each other's medical bills the medical bill sharing from chm was exactly the way the website described it there were no surprises no bait and switch no hidden agenda chm did everything they said they would by sharing all of our eligible needs we like that it's a non-profit ministry and that we were being better stewards of our money all while helping other families established in 1981 and accredited by the better business bureau chm is here to meet the needs of your growing family or small business get started today and check us out at chministries.org backslash budget that's chministries.org backslash budget we absolutely believe in it [Music] so we were talking about the 10 million dollars in debt we paid off anytime someone becomes debt free everything but the house or everything including the house something happens inside of you sometimes it's a real dramatic you can just hear it click you know yeah and sometimes it's a little more subtle and it's just kind of smooth but either way it's the sound of chains dropping because the borrower is slave to the lender when i hear a debt-free scream i always ask who the cheerleaders were because getting to be a freed former slave requires some cheerleading and a lot of motivation and a lot of scratching and clawing and a lot of scrappy so if you're ready to make some progress on your debt you need some motivation join ramsey plus and you'll go through our step-by-step money plan with people just like you who are trying to get out of debt it's good to have some comrades and arms some a band of brothers to fight beside as you're doing this stuff our most popular class financial peace university is of course part of ramsey plus you connect directly with people who can hold you accountable and encourage you to stick with the plan and stay away from the as chris says stay away from stupid it'll sneak up on you as a ramsey plus member you get the tools the practical tips you need to pay off your debt fast the fastest possible way so that the future you're working toward will be there for you you can get out of debt and you don't have to do it alone join a financial peace university class after you become a ramsey plus member to start your free trial of ramsey plus and join a class you text the word join to 33789 join 233 7 8 9. taylor is in houston texas hey taylor welcome to the dave ramsey show hi thanks for taking my call today sure what's up uh yes so my husband and i are in baby step two so we started in september of this year we've paid off about six grand or so first or so so yeah and so the next question is um we still have a lot of debt to go but we know we need to get rid of one of our vehicles that we are upside down on uh my question is how to best go about that so we're probably about 40 4500 4 000 upside down due to a private or to a private sale so do i put that money towards just principal payments or do i say that into savings until it's time to sell and then apply it to the loan or does it not really matter doesn't matter either one's fine and i would count that if you if that's a car you're selling i would take 4 500 upside down amount put that number in your debt snowball okay so just put that in the nutshell so i can pay so okay so putting this again snowball so we have that smaller than that at this point so should we just uh you have all one payment um on snowball we have um a few credit cards that are below that amount yeah you'll knock them out before you do this car deal probably okay and then i would knock out the card then i would knock out the car save up the five grand to get out of the car right or pay it down five grand either one get rid of the car and of course you got to get your little beater car to get around in too right yeah well we're just going to go in one car because he gets a work truck so i work from home like yeah he can just take my car to get there if he needs to okay that makes me feel better because putting that money in savings kind of scares me because art doesn't really scare me i'm like ooh i could apply this here because we've gone super crazy we're doing uber east and we're doing all of that fun stuff so we're really excited but it's really scary just to put that money aside and then apply it all at the end yeah you're doing so good yeah you guys are doing a great job yeah keep working your debt snowball like keep that money as it comes in keep it moving directly toward the debt everything but a thousand dollars and what that's going to do is help you stay on the path so taylor proud of you all this is the time of year don't let your guard down stupid is lurking around every corner so be intentional yeah um i've also noticed you can't let your guard down on food this time of year um food and money why you had to get all churches yeah i'm on salads right now which is frustrating because salad isn't the food salad is a promissory note like more food is coming and so i'm having to adjust my mindset especially if you're from the south where your salads are certain you put gravy on salad in the south [Laughter] see i think we found your problem yeah jocelyn is in sacramento hey jocelyn what's up hi dave hi um chris how are you guys great how can we help i'm i'm calling actually because i'm a little bit in a financial situation and i was really really hoping you guys can help me out so me and my husband um purchased our first home um last year in november and now i've lost my job and we literally cannot make ends meet and i just kind of wanted to see what was your input um we did get the house evaluated and actually at a lesser value now um and then the forbearance that we're currently on adds on to it actually so um that's kind of the situation i mean i kind of want to know you owe more on the house than it's worth yes why because you haven't been paying payments through the since november uh no not since november since uh april okay both of you lost your job right now what was that both of you lost your jobs just my husband i mean just myself my husband's the only one providing right now and well uh he makes 55 000 a year and how much is your house payment 600. good lord what did you make i bought the same thing that he did you had a high house payment before i know it's like ultra high okay yeah so it's it's it's a little scary um we do have a little bit of money put like for savings what does the what does the forbearance sound like you're not you're just not paying payments right yeah i'm not making any payments on it yeah exactly because at the end of the day you're still responsible for that money yeah so you have you talked to the lender have you tried to sell the house on a short sale yes yes so we we um we were actually in the causes of a short sale however the agent that was supposed to be helping us he wasn't very honest he actually uh falsified some paperwork and i no longer felt comfortable with him so i actually terminated that um that process because yeah you need to start the process over with a good real estate agent get rid of this house because this is not going to end well you can't just sit and not pay payments indefinitely eventually this is going to get the wall yeah and you've got to work through the lender to get approved for a short sale um so i was going to say jocelyn not only do you have to work through that process you also need to gain agreement on what's going to happen on the dollar amount that is short like they need to give it in full writing you need a real estate agent that has experience in dealing in short sales what you want to do a loan without i mean a short sale without recourse that's right you're not in the on the hook for the balance what's what kind of one is this fha va or conventional it's an fha okay all right uh so here here's what you've got to do uh you need to get online at daveramsey.com click on elp for real estate find an endorsed local provider in your area that we recommend they've got the heart of a teacher interview two or three of them over the phone and ask who's got some short sale experience short sales are not as hot right now because the market's so hot even in sacramento the market's so hot i'm really surprised you're upside down on this house it's very unusual in that market and so um either way i'm going to get this house on the market and get it sold short sale and you got to put a lot of effort and a lot of time and a lot of energy with the agent into causing that to happen because this is going to not sneak up on you it's going to creep up on you and knock you in the back of the head this is not going to be pretty you have got to deal with this and so get this stinking house sold if you do not get it sold your worst case scenario is if you don't pay payments they're eventually just going to take it it is california and it takes forever to execute a foreclosure there so you may be three or four years behind before they get around to it particularly in a pandemic so but that doesn't mean it's not gonna come and all of a sudden so to speak you're going to have a problem and it's not really all of a sudden so let's get this thing sold and let's get you re-employed and then don't get into a house payment the stinking 50 of your take-home pay again that was just nuts even before you lost your job this is the dave ramsey show [Music] folks it's an honor to tell you about the army national guard not only are they big supporters of our high school curriculum but they also give you the opportunity to impact your local communities whether your goals are to get an education serve your country or have a better life the army national guard can help get you there plus they offer unbelievable financial benefits secure your future today visit nationalguard.com to find out more so in the lobby of ramsey solutions on the debt free stage justin and heather are with us hey guys how are you good welcome where do you guys live attica michigan awesome good to have you welcome to nashville and how much debt have you paid off seventy two thousand two hundred and sixty dollars all right love it and how long did that take you eight and a half months good for you wow and your range of income during that time um well we're self-employed so in 2019 we had eighty thousand 000 and this year we're projected to make between 115 and 120. wow very good excellent what do you guys do for a living um i'm a carpenter home remodeling and stuff like that okay very cool so tell us what did you pay off well we had two thousand dollars worth of couches fifty five hundred dollars for a classic car sixty six hundred dollars for a dirt bike ninety eight hundred dollars for another classic car ten thousand five hundred dollars for a dump trailer and 37 thousand eight hundred dollars for a student loan wow sounds like somebody had some toys well yeah well i'll take um full responsibility for that one hers was only the student loan i wasn't thinking about her yeah right [Laughter] that's so great somebody has to say so you might you must have had some money in savings or you sold something um we sold about 24 000 worth of stuff what did you sell we sold the 54 hudson hornet i and justin sold the brand new dirt bike that he got he didn't even get to ride it oh my gosh um since we're in michigan we bought it in november and it was gone by the end of march so no time to uh ride in the winter yeah yeah and then we also sold uh some tools that he had laying around and a boat oh wow okay wow so you sacrificed some real stuff here justin what happened what caused you all to get this serious well you know stuff is just stuff you know i look at the kids every day and i don't want to you know i want to give them a means you know show them teach them you know so they can provide for themselves and better themselves and i think um you know with owning our business uh by the time the end of 2019 came we had all those loans and joss was working for a contractor that when he paid it paid really well by getting him to pay was a job in itself and so trying to float paying our subcontractors keeping the business going with buying materials and the expenses for it and then also paying ourselves the weight of that got really heavy and we were working basically for nothing and i and i think that the other thing too is we realized we had our priorities wrong and that we needed to put god first and once we put god first in our life then all that stuff just became stuff it didn't become the source of contentment that we were looking for and so once we did that it was like the floodgates opened and it's like you say you know when god realizes you can manage a small then he gives you more and as the year went along we couldn't believe like the profits that we were getting from these jobs and we're like did we always get this much money and just blow it or like we know the answer to that question yeah and we had a few bumps up along the road um in july i got into a car accident and i so we were pretty thick into it we're really close to being done and justin had an 85 chevy suburban laying around i that had no air conditioning the radio didn't work and i it was it was not my first choice of car but um i've actually named her bertha there you go and drove her with pride because we were not going to get another loan and actually we ended up getting the car back and seeing the progress that we had with so little left on the student loan i was like i don't care about getting it fixed up like let's take the money that we're going to use to fix up the car and i don't have to see the outside of it it's fine on the inside and we tacked it on because we just saw how fast it would progress like getting out of debt sooner so when originally started we thought it was going to be two years and i convinced him it would only take 18 months and then it turned into a year and then as we just kept going and just kept piling and looking at everything that we could sell uh it just turned into eight and a half months and we were done it kind of it kind of turned into a game i mean once you turn loose of things yeah emotionally then it's like okay how can we what's the it's like tetris working where can we set this money to make it get to make this debt snowball roll yep and i was listening to your show and you had um someone on and he said something that really struck a chord it was that god's not a transactional god he's a relational god and that you know he's not just going to give you the 70 thousand dollars but when you commit to it he finds so he gives you a way to do it so justin had lots of opportunities for work we had all this stuff that became such a burden became a blessing in a way because it became a means to get out of debt and get out of uh the mess that we had made very cool and justin you talk about your kids being your motivation how many kids do you all have we have three how old are they um five and a half okay almost four and almost two huh so and and the stuff is just stuff you don't you know okay i don't have a brand new dirt bike i have a 20 year old dirt bike i have a 25 year old car it gets me to work the same way that's right so what's it really matter that's right you got your priorities straight yep well done how does it feel to be free it's amazing when we sit and look at you know like all we have is just our house payment you know it's just such a weight lifted off and you know being able to show that for the kids too you know we're starting to teach the five-year-olds all right about giving and saving and spending and she's got her chores around the house and she just went and bought her first toy from earning her eight dollars of dishwasher yeah i love it you guys are incredible well done heroes very proud of you what do you tell people the key to getting out of debt is well being on the same page yes yes because we've actually known about you for 10 years and we were ramsey-ish for 10 of those years we actually met you seven years ago at your other building and we get on board but then you know doing this is it's a commitment and you know like i it was something that we didn't think we'd be able to do and we thought we were better than the average person because we did have a thousand dollars in our emergency fund we did have a loose budget and you know we would get a loan we pay it off early but then we go and get another one and then we go and get another one and okay well after this one we're going to get into it and we never really did and then finally when all that kind of just weighed down you're like okay we got it we gotta do it gotta knock it out now gotta do the recipe the way that it's made yeah they kind of get discussed that after some point yeah and it's just like game on you're working until all hours of the night yeah nothing to show i feel like a rat in a wheel just run run run run get nowhere yep well well done you guys very very proud of you we got a copy of chris hogan's book for you everyday millionaires that needs to be the chapter in your next chapter in your story and the kiddos join you for the debt free scream what are their names and ages this is addie and she's five this is emerson and she's almost two and this is hudson and he is almost four wow you got a house full this is awesomeness right here well you've changed your family tree guys i'm very proud of you very well done very well done all right justin heather addie hudson and emmy 72 000 paid off in eight and a half months making 80 to 115. they sold everything that wasn't nailed down count it down let's hear a great debt free scream three two one we're debt-free well done you guys oh wow very very well done absolutely these young people these young kids are going to have a whole different future now mom and dad have taken back control and have a path and have clarity and that's fantastic you guys just started a legacy and it's amazing it is amazing you're looking at a family tree that got changed those of you watching on youtube and i got to tell you that's a real thing it really happens you know rachel cruz was born the year that we went broke and we started understanding these things and of course our older sister denise was a toddler our marriage is hanging on by a thread that's a year our life was changed we said never again never again and um now rachel's got kids success so and that you know the family tree changes yeah you are you are changing it but you have to make a decision and you have to draw a line in the sand and go that's it we're done let's run we're done and you don't have to drive a 20 year old something the rest of your life but you do until you don't you got to make those sacrifices it's a requirement you got to do it until you don't got to do it well that's it you pay cash for it as you go that's the way it works very well done you guys proud of you this is the dave ramsey show [Applause] [Music] [Applause] [Music] so [Music] [Music] so [Music] our scripture of the day second timothy 3 16-17 all scripture is breathed out by god and profitable for teaching for reproof for correction and for training in righteousness that the man of god may be complete equipped for every good work zig ziglar says what you get by achieving your goals is not as important as what you've become by achieving your goals open phones at 825 5225 chris hogan ramsey personality is my co-host today here on the air you jump in we'll talk triple eight eight two five five two two five fort knox kentucky david is on the line hi david welcome to the dave ramsey show hi dave and chris thanks so much for taking my call sure man what's up hey so i am if everything goes right starting law school this upcoming fall uh now unfortunately i don't have the money to cash flow it but i am in the national guard and they do offer a student loan repayment program if i re-enlist now i have money for this upcoming year to max out my roth ira and i guess my question is should i still invest and rely on that student loan repayment plan for the guard or should i stop investing and start saving to pay off law school well law school is an investment also a better investment than a mutual fund so i would stop all investing in cash flow everything and you'll get the money anyway from the national guard and then that'll just cash flow the next semester or the next year okay well so the the student loan repayment program i won't really see the full fruition of it until about five years after law school so i guess that eight year time frame is just worrisome but that makes sense why will you not see it until five years after so uh in order for it to actually be applied to my law school loans i'd have to re-enlist after law school's done oh start paying on it for another year so it'd be at least four years before any money okay okay i got you yeah i'm gonna do everything i can to cash flow law school then and then when that money comes it'll just be a repayment at that point right yeah absolutely because i mean they're going to do that program they're going to follow through on that without a doubt yeah that might be that that might that might change your plan a little bit but either way that's that's what i'm going to do and congratulations well done and thank you for your willingness to serve open phones at triple eight eight two five five two two five zak is in redmond washington hi zach welcome to the dave ramsey show hey dave how's it going better than i deserve man what's up sounds good hey uh so my wife and i in the last year recently bought our first property um we graduated two years ago and and our mortgage broker reached out to us and said that she could save us like 400 by i guess interest rates being low and all that um she said something in her explanation about rolling over all of the money we paid into the mortgage into this new one and how that made her not have to uh i guess get the house reassessed um i didn't quite understand everything and so i don't unders i don't know if the four hundred dollars is all we're looking at or if there's other i guess side effects fha loan yes it is okay what she's proposing is what's called a streamline loan and the interest rate is a little higher than marketplace interest rates are and then um with the interest rate being a little higher they offset that and they don't charge closing costs that make sense not sure not totally so i'll tell you our original loan was like 585 at uh 3.8 something percent um and she's proposing like 2.99 would be the new thing um i guess in my head it it made sense that with such a lower interest rate on such a high amount of money it would end up costing us less but i obviously i don't know what i'm saying is the interest rate you have today is what uh 3.875 i believe and they're quoting you what on the new one uh two point eight seven five or two point nine okay so one percent credit and you have any closing costs on the quote you got um she said that they were going to cover any upfront costs and but i did take a look at the she said it would cost about 3 000 on the tail end of the loan like i just paid over time oh they just rolled the closing costs in okay so it's not a streamline okay streamlines they don't charge closing costs on and the interest rate is higher but 2875 is not a not an above market rate so that's about a market rate and so that puts you in pretty good stead there um so you're saving one percent on five hundred thousand dollars which is five thousand dollars a year in interest okay so and if it costs you three thousand dollars on the back it was worth it okay so this is absolutely something we should do that's what i'm hearing well the scenario just the the scenario dave just laid out for you is the scenario you should do i don't know what your person was talking about uh sounds like they're talking around you instead of to you so i'm going to reach out if i'm you i'm going to reach out talk to churchill talk with them about what you're looking to do and understand the difference yeah call churchill mortgage and get a different quote and see what they can quote you and see how that compares and also try to get a little bit better explanation as to what you're getting into the typical thing you'll have is you will have some closing costs and if you have the equity you can roll the closing costs in meaning you borrow them they come off the back end of the loan is what amounts to they are they're added to the loans is all it is and that's okay to do if you're in baby step two it's not a problem at all but but you're because you're saving your has nothing out of pocket or virtually nothing out of pocket and you're saving five thousand dollars a year in interest uh and you can go ahead and you should go ahead and make it a 15 year fixed which means you're probably not going to save 400 a month anymore right but but you are saving 400 a month in interest it'll just be going towards the principal that's right and you're getting rid of 16 years and also with fha we got to keep our eyes open you all because now uh that pmi private mortgage insurance can be on those loans for life okay so you got to go into it you got to get the right people on your side so you know what product you're dealing with and what makes sense for you yeah that makes that that's exactly right chris is in milwaukee wisconsin hi chris welcome to the dave ramsey show hey guys how are you better than i deserve sir how can i help okay so i have a bridge account slash investing question for you guys um thanks to both of you my wife and i paid off about 400 000 in student loans here wow um together we make about 400k and so my question is you know right now i maxed out my 401k ross of 19k and we have all this extra money uh coming in um and trying to figure out where to put it i have a combination of 300 000 in rollover and roth roth iras and so my first question is a tax question i i have former employee 401ks that are now in rollovers can my wife execute the backdoor roth and avoid the pro rata rule and then my second question is is it even worth doing any of that for the for the backdoor off on her end or both can do a back door roth and their pro rata really didn't get anything to do with it when you do a back door wear off yeah sharon and i sharon and i do a backdoor roth every year got it so the rollover iras don't impact that no they do not impact that at all no okay got it and chris what baby step are you on we're getting close on time what baby step are you guys on right now uh so we just want to figure out how to invest the 15 and then we're gonna go start paying off the house all right well and the beauty of it is is doing the 15 this is what i was getting at do the 15 then you need to turn your attention to the house once the house is paid off now you can begin but getting to fifteen percent of four hundred is that a lot of generations get there yeah yeah but reach out get with the smart investor pro and sit down i'm proud of you guys wow uh getting rid of 400 000 student loan debt's a big deal absolutely slated man very very well done all right chris good show today thank you sir it's fun james childs our producer well done kelly daniel our associate producer and phone screener great show i am dave ramsey your host we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace christ jesus [Music] [Music] you

Channel: The Ramsey Show - Full Episodes

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Id: xJNtvAGIvPU

Length: 125min 0sec (7500 seconds)

Published: Mon Dec 14 2020