The Ramsey Show - App - 5 Tax Myths Broke People Believe (Hour 2)

Episode Date: January 24, 2024

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm your host, Jade Warshaw. I am joined by George Camel today. One of my favorite co-hosts of all time. Wow. Author of the book, Breaking Free from Broke. We're taking your calls. The number is 888-825-5225. So give us a call and we would be happy to help you out with whatever the concerns you

have about your life and your money. But George, I have to say I'm really excited because we have just recently announced a new event here at Ramsey Solutions. It's a big one. Brand new, new content, new talks. Total Money Makeover Weekend. That's it. Like I was waiting for like cheers and like cannons and Total Money Makeover Weekend.

I'm really excited because it's really Total Money Makeover is the book that started really all of this hoopla, the baby steps, all of that. And so we're creating a live event weekend around that. It's May 10th and 11th. And as George said, it's all the personalities like we'll all be there. The goat himself, Dave Ramsey, will be there. And we're all going to do all new content on really the same money concepts that we've taught for 30 years around here.

So if you're new to the Ramsey way of life, this is a great event for you. If you've been hanging out with us for the last 20 years, this is a great event for you. Give me some pep in your step. Yeah, it's like a rally. You know, a reminder of what you're doing this all for. That's right. That's right. So it's here. It's here now. Early bird tickets start at just $99, but they're for a limited time. So make sure that you get your tickets now. You can do that at ramseysolutions.com slash events. But I'm looking forward. It's going to be a different format than a lot of our other events. There's Q&A sessions. Yeah, this is a two-day event, Friday and Saturday. We got Smart Money Happy Hour Live

with Rachel Cruz and I on Friday night and musical experiences. So it's a whole weekend in Nashville. Make plans to be here. That's right. Get your lodging and transportation in the budget and come hang out with us. Lodging. I like that. Lodging. Yes. Again, go to ramseysolutions.com slash events in order to get your early bird tickets. I'll see you there. All right, let's go to Spokane, Washington,

the city I was born in, to talk to Isaiah. What's going on, Isaiah? Hi, how y'all doing? Doing good. What's going on in Spokane? I am here in Spokane training to be a missionary pilot mechanic. I'm in my second year. So my question is, is I have some money in a 529 college plan from my great grandma. It's about $31,000. I've paid for school the last two years out of my personal savings, and my wife and I are making enough to where we could probably pay for school for the next three years of the program. My question is, should I keep the money in the 529 or roll it over into some other investments that way it isn't locked up and we have access to it to whether that be

reimbursed what we spent on school so far or to just make sure we have the funds to remain out of debt moving forward. I would definitely use the 529 to pay for college because if you wait and try to use it after the fact whether you have loans or things like that there's limits on you using that money to pay off student loans or anything like that, there's limits on you using that money to pay off student loans or anything like that. So if the money is earmarked for education, which it is in a 529, I would use that money and then you use your personal income and cash flow to do whatever baby step you're on. And if it happens to be investing, then you would use it there. Does that make sense?

Yes. So if I've already spent some of my personal money for the 529 plan, can that come back into reimburse what I've spent or does it have to be current and future college expenses? What you spent? Let's see. You're asking if you can use the 529 to reimburse what you've already spent. I believe you can. Well, you'll have to look into it because they're different by state. Okay. And George, it looks like George might be looking at the 529 to reimburse what you've already spent i believe you can well you'll have to look into it because they're different by state okay and george it looks like george might be looking at that right now yeah i know you can do that against like if you get a scholarship you can then take that withdrawal against the scholarship with no fees or penalties but as far as just going hey i paid

tuition last year can i take the money out now i'm not sure about that based on the plan and i know that if it was a student loan like if you're're like, hey, I have a student loan, I think you can only do like 10,000 out of a 529 to cover a student loan per year. So there's some stipulations around that, which is another reason why from here on forward, I would just use that money to pay for education. Now you're, and that just frees up your income

to do life, you know, do life on a daily and monthly basis with your wife. So you've got $31,000 in the 529. Is that going to cover everything that you need? Yes. I mean, for the last two years, it's only been about $5,000 a semester, which we've covered. And moving forward, I've gotten a lot of really good scholarships and stuff. So even if I were to take it against the scholarship, I could definitely use that money.

I had this year I had about 18,000 scholarships I got. So if what you mentioned, you can use a scholarship to take the money out in place of that. So, yeah, we could definitely use the funds. And then whatever's left, you know, if it can roll over to different family members. So if your wife has further education, if you guys end up having children, depending on the state, you should be able to roll it towards different family members as well. And the good news is over time, I believe a 529, by the time you're in your 60s, it becomes just part of your retirement, if I'm not mistaken. But there's some flexibility there. The point is when money is earmarked for a certain purpose,

especially when it's invested money, you definitely want to use it for the purpose that it's earmarked for because it's better off. Was there any other part of that that you had questions or concerns about? No. The only question is if I were to roll it out or take it out for school, that would free up some of our savings money. Absolutely. Should I just keep getting, just grow the savings or should we start investing?

As a missionary pilot, I'm only going to be able to fly for missionary aviation until I'm about 63 in that field because they kind of cut you off before you get too old. Flying isn't the easiest. So I was wondering if I should start investing sooner, knowing that I won't have to save as much for college because we'll be using that plan. Yeah, I mean, if you've got no debt, emergency fund, you're able to cash flow all of your program uh 100 then you can begin investing now but just make sure do the

math on all this and make sure you're not going to get to year three and go oh gosh more expensive than we thought so figure out all of the expenses needed whether that's housing and textbooks and who knows what else are is here. Is your wife working? Yes, she works full-time as a nanny, so that is one nice. Okay, and you don't have any debt? No debt. Perfect. Will you be making money while in school?

I work a little bit. My school is 40 hours a week and then homework on top of that, so it's not the most friendly to work as well, but I try to pick up stuff here and there. Okay, that's the part to think about, is you may have a reduction in income, and so I don't want you guys to use up all that emergency fund because you're in school. Yeah, and I'd be working now with whatever money you have left over

to build a separate emergency fund. Like, you've got this 529 money. What other money do you have left over to build a separate emergency fund. Like you've got this 529 money. What other money do you have? We have about five, 6,000 in savings. And then our monthly expenses, we don't pay rent or utilities or cars or phone bills or anything. Our parents have blessed us with all of that.

So our monthly expense is about $1,500 a month. So that's around that four month. Listen, if I'm you, if I'm you, I'm going to stock up that emergency fund in six months. I'm going to make sure I'm on an every dollar budget. So I know what the plan is and I know what we're working towards. And for you,

it's getting six months saved and eventually you'll be investing 15% of your income every month into investments in retirement. This is The Ramsey Show. You're listening to The Ramsey Show. I'm Jade Warshaw. This is George Camel, host of the YouTube show, The George Camel Show. George, how's that show going, by the way? It's honestly bonkers, Jade. I don't know. You know, January is always a big month for all of our shows, but ours in particular has gone zoom zoom, as our friend Dave would say. And so right now, I don't know what's going on, but we had a really strong episode with Dave.

It was millionaires and cars getting coffee with Dave and I in a Tesla. And we went to his barn. It was there's behind the scenes. He made me a cup of coffee from a fancy coffee machine. And we had a great conversation. Was the coffee good though? It was good. Yeah. I got no complaints. That felt like it wasn't that good. Well,

I don't want to dog Dave. You know, I got very bougie with my coffee, but it was a great cup. So we enjoyed it. You can go check it out on YouTube at, just search George Camel with a K on YouTube and you'll see all the stuff we're up to. Love it.

All right, let's take your call. By the way, you can give us a call. The number is 888-825-5225, and we'll answer your questions. So let's go to James in Cleveland, Ohio. What's going on, James? Hey, how's it going? Thanks for taking my call. You're welcome.

How can we help? So I make about $80,000 a year. I have about $85,000 in consumer debt spread out between a car payment, a personal loan, and some credit cards. Okay. Can you tell us how it spreads out, just so we know? Yeah, so I have $43,000 on a 2021 truck, $24,000 on a personal loan, and then the rest is credit card. Okay, thank you. And I started working with this company that is supposed to negotiate with these credit card companies and the personal loan company to help bring the balance back. Like these debt settlement relief companies? Yes, yes, exactly. And so just recently finding you guys, I'm coming to the horrible realization that this was a bad idea. And to the point where most of these accounts are defaulted or, you know, not going to work with me personally. So I don't really know where to go from there in the baby steps. I have a thousand dollars

fund saved, but as far as like tackling the debt, the truck itself is the only thing that's active if you will is it upside down no so we're selling truck first off that's what i'm doing because a guy who's making 80 000 probably shouldn't have a car that's more than half of his annual income that's kind of just a rule of thumb that we go by around here. And I mean, yours is just a little above, but considering your debt, if I woke up in your shoes, the first thing I would do is sell that car. And I love, so many people call in, James, that are upside down in their vehicles and it kind of puts a wrench in the plan. I mean, they're still able to do it, but because you're not upside down, if you sold that car today, what would you get? It would be real close regardless. But my question with that would be, is I travel for work and my vehicle is like my lifeline.

Every six weeks to three months, I'm going to a different part of the country. I build retail stores for a living. So, I mean, having a vehicle with a warranty was kind of why I went with a new vehicle when I purchased it in the first place. So, you're hauling things in the truck because it's a work truck? Yes. So, you're saying that there's no way that you could have half the truck, have a $23,000 truck do the same thing? No, I guess that's not the case. Yeah, because I'm not, listen, I'm not telling you that you have to get a $2,000 truck do the same thing? No, I guess that's not the case. Yeah, because I'm not,

listen, I'm not telling you that you have to get a $2,000 truck. I'm just saying, I think there's a significant downgrade that you can do in this situation. And I'm saying that that's what we're working up to. Thing one here is we're paying off your debt. That's what we've got. That's the house that's on fire. That's what we've got to be focused on. And part of that, the reason that your house is on fire is because you've got a $43,000 truck. So if we can knock that down for the time being,

$55 a month or something. If we can knock that down for the time being to far less expensive, that is going to get you where you want to go. And then the time's going to come where you can upgrade slowly to get back to a $40,000 truck. Sure.

So would I attack the truck, get rid of the truck, and then start working on this debt that's now going to collections and stop working with this consolidation company? Yes. Stop giving them money. So what these companies do, James, and now you know this, is they'll intentionally tell you, hey, stop paying all payments on this. Let it tank, and then we'll try to negotiate the payment to make it lower, which in turn just implodes your financial life and really doesn't solve the problem. And by the way, you could have done that yourself.

Yeah. And so these companies are a borderline scam, and I hate them with a burning passion. But yeah, we need to get rid of this truck and downgrade for now which is going to free up a payment you said how much is the payment on this truck um it is 835 oh lordy listen james 835 dollars do you know that's so much money that is so so much money you're going to be able to make such great headway um before you sell the truck obviously you're going to need to set aside some cash that you can get a car in cash and again remember this is just short term like i understand everything you said about your your truck being your livelihood in many ways but this is just such a short-term sacrifice because with 835 dollars saved up or you know saved in your budget every, you're going to be able to pay off $10,000,

$11,000 in credit cards, lickety split. You're going to be able to pay off that $24,000 loan, lickety split, because I know that's not the only money that you'll be able to free up to put towards this debt. Yeah, sure. Absolutely. And James, the other issue with using this truck for work, a new expensive truck, is that you were destroying the value by taking this thing on the road like that. And so you need to get out of this thing while you can and you're not underwater. He's lucky he's not already with the miles. You'd put another 10, 20, 30, 40,000 miles on this thing and that value is just going to drop like a rock. So that's your homework

coming out of here. Your homework is, A, we tell everybody to get on a budget. So make sure you pull up an every dollar budget. That's just going to help you. That's your roadmap going forward. And then number two, you're going to start saving up a little bit of cash so that as soon as possible, you can sell this car and have some cash to get just in the meantime. Because once you sell that car, it's going to take you a year to get out of this debt or less. I'm going to say eight to 12 months to pay this off if you get after it. Fair enough. Yeah, and I'm not entirely alone here. I do have a fiance and two children at home. I have a seven-year-old and a one-year-old. So it makes it a little difficult for my fiance to, you know, help in the income endeavor. As of now, we don't really have strong support system around. But as well, I don't think she should help you yet because you're not married yet. So until you get married, I do, even though

you might be living together financially, keep it separate. And this is your debt until you guys do get married because her credit card debt is in total with that 85 okay okay so thank you for the clarification for right now when do you guys get married 12 years so oh you've been together 12 years but when do you get married yeah good question listen james james you just flipped the entire script on us right here and ticked off the wrong jade. No, I'm not mad. I'm not mad. I just wish I had this information sooner.

Listen, number one, get married and stop playing. If you've been together 12 years, you got two kids together. This is the woman. And if it's not. It's a real wedding and it's just not in the table financially. Okay, I get that. But literally just get the piece of paper because this is for legal protection for both of you. And if you guys want to do the party later that's fine but get the piece of paper so that you can

combine your money and it's safe for both of you like just talk and be like listen girl we've been together all this time come down to the courthouse with me let's get this paper signed you don't even have to tell anyone all right that can be your little secret until it's this is just to keep you safe under the law of combining your things together because if something happens you want to show that you were legally married financial legal protections with marriage that's right so that's you got some work to do james james thanks for telling us you just he just entered the fire by telling us last minute. 12 years. Listen, get a Costco pizza and a Costco cake and we'll celebrate later.

Listen, they don't even have to tell anybody. Just go get the dat gum certificate. Don't tell anyone. And then when you can pretend like, oh, we set a date and we're getting married. Like nobody knows. At this point, they forgot. I mean, they're like 12. It's been 12 years.

Everybody around them thinks that they're married. Yeah, that's crazy. Listen, if you're listening, I don't care if you've been dating for eight years or 24 years. If you don't have that piece of paper and something goes wrong, you are not protected. Get married. Get the piece of paper so that if something goes awry, the law is on your side to make sure you get your cut. Come on, ladies. This is The Ramsey Show. You're listening to The Ramsey Show.

I'm your host, Jade Warshaw. Your other host is George Camel with a K. Don't get it twisted. And we're taking your calls all afternoon long. The number is 888-825-5225. And we're coming, George, around the pipe to my favorite time of year. Not true. Tax season.

It's a whole season, Jade. Like, we got birthday month, but it's tax season. Season. Yes. I don't historically love tax season, George. I'm not going to lie about that. It feels stressful. It it feels like all right like i gotta start you know people are sending me papers in the mail they're emailing me papers i gotta download the pdf and send it to my you know well at least you're

tech savvy and young you know my mom i gotta show her how to get the pdfs downloaded and printed it's a whole situation the pfd they'll pfd no i get it i mean when i schedule my tax appointment it might as well be scheduling a colonoscopy man that's how it feels like i'm just preparing my heart it feels that i don't i don't feel like we have to feel that way i feel like that's kind of just the stigma of taxes but i feel like it can actually be simpler. Oh, well, I like my tax. I got a tax pro and I've enjoyed working with them. So I'm like, I get to see them again this year. This will be fun and get to catch up. But you know, they're all with the stigma, Jay, there's a lot of myths out there. And I released a video on my YouTube channel called five tax myths broke people believe and not just broke

people. A lot of people believe these. And so I want to cover them real quick the spark notes version okay and then people can go watch the full version with all the funny memes and clips that we put in there and jokes but this one's uh less jokes okay ready for it i'm ready myth number one a tax refund is reason to celebrate you've seen people bragging and the commercials are all like i'm going to dis Disney with my tax refund. Yikes. Here's what this really is. It's an interest-free loan you gave to Uncle Sam. Ooh. Yikes. Because that means you overpaid your taxes all year long

and they're just giving you your money back. So wait a minute. You're telling me that I loaned the government money and they didn't even pay me interest on it? 0% is what you got. And then I have to file something in order to get my money back just to figure that out that's a problem so think about it what could you do with that money instead if you had it all year long if you had 2400 refund that's 200 every month that you could have been using to budget george listen i know folks out here who are

getting like eight thousand dollar refunds that hurts my brain they are giving the government way too much we already do that enough with taxes can we do a poll on that i want to know like what folks are getting like put put in the comments put in the chats what you what is an average or like a normal tax return amount for you i just want people to see the amounts that they're letting the government borrow that'll be fun to see so the goal here is to get to as close to zero as possible yes that's you don't want to That's, you don't want to give too much. You don't want to owe too much. And you can just go on your W-4 and like change, like they've made it easier to change your withholding. Yeah. So work with your HR team and you can adjust that form. And myth number two, it's bad to be in a higher tax bracket. Mo' money, mo' problems. People are always scared of making

more money, Jade, because they're like, well, I might push me into the 22% tax bracket. I'm like, you don't, that's not how- It doesn't even work like that. It doesn't. And I walk through this visually in this YouTube video. We're not going to do it here, but tax rates are marginal. It's not your whole amount that's taxed at, yes. Thank you, George. This first portion of your income is taxed at 10%. That's right. This next portion is taxed at 12% and it stair steps up. And so if you make an extra $2,000, you're not going to be just jumping into wildly more taxes. You got to think about the effective tax rate instead of marginal. I walked through it in the video. Myth number three, you've heard this one. Keeping debt around is good for the write-off. Yeah, bro. I keep my house payment

for the tax write-off. You've heard people tell, don't pay off your house, you'll lose the mortgage interest deduction. The numbers on how many people actually itemize, which by the way is the only way you can get the interest deduction, is so abysmally low. Yeah, most people take the standard deduction. Exactly. And you don't think about

what you've been paying all year in interest for the benefit and joy and blessing of getting a little bit back. And then there's just the peace, right? Can we just... The peace of not having debt. So don't spend a dollar to save a quarter. That's bad math.

That's stupidity. And don't spend money to make money. You've seen the people are like, I'm going to buy a G-Wagon for $240,000 and write it off like a life hack. No, no one thinks you're cool. Myth number four, you have to pay by tax day. And if you can't, don't even bother paying at all. You missed it.

You missed the boat, Jade. That's a lie. That's a lie. Do you know what musical that's from? I don't want to embarrass myself. Dreamgirls, but keep going. I was going to say Dreamgirls, which would have been embarrassing. So that's why I didn't do it.

So yeah, you have options here. Don't ignore taxes just because you can't pay by tax day. You got to file anyways. Right. It's just you filing the paperwork, right? Yes. And you can file an extension for the payment. But this is, you got to pay as much as you can and get on a payment plan.

And if you do owe the IRS money, put it to the very top of your debt snowball. Ooh, good one, George. That goes to the front of the list because they can screw up your life and garnish wages and take you to court it's not you don't want to do that pay your pay your taxes please don't mess around with these irs folks okay keep going last myth you're not smart enough to do your own taxes hey hey i have felt that in times past i have felt that george well they got all these forums and all they ask you a billion questions And so here's the deal. It's become a lot easier. And this one depends. Some people, it's wise to do it yourself if you feel comfortable. And some people, it's worth working with a pro. So online tax software can be great if you've got one to two sources of income.

You don't have a bunch of non-retirement investing going on. You're taking the standard deduction. You don't have any major life changes like moves or marriage or whatever. Babies. Online tax software is great. And we actually have one called Ramsey Smart Tax. There it is. That is wonderfully easy to use. It guides you through the whole process.

There's no gimmicks. There's one price you pay, one flat fee. And there's not this surprise at the end of, oh, you have one extra form? We're going to get you at this one like the other guys do. Yeah. So they make it super simple upfront pricing. I love that. If I, like literally me, if I'm looking, I'm going to go, listen, I can't do my taxes. I got a small business. We just had a baby. His income is like that. Then you're looking for a pro.

And we've got a whole network of Ramsey trusted tax pros all over the country who are ready to help you with that. That you can trust. They're not, they want, they have the heart of a teacher. They want to actually educate you. And so those two are great options. So you can go check that out. Ramseysolutions.com slash tax.

Our team created just an entire hub. Number one, there's a few questions you can select. It's going to show you the best option for you. Should you file online? Which version? Should you work with a pro? And it'll give you the next steps. There's also a great guide to taxes and some great checklists.

Like prep checklist. I print this out every year from this website. So that you make sure you're having all the paperwork for your tax. All my ducks in a row. Because there's always one I forget. I'm like, oh yeah, I need the 1099-I for the interest income from the high yield. All of that is right there in the checklist. So you know you're ready to go when you meet with the pro or you're filing online. I suddenly have less stress, George. That's the goal. That is the goal. So ramsaysolutions.com slash tax. You know too

much now to fall for these myths, y'all. And happy tax filing. I like to get mine done as soon as possible, truthfully. I'm already there. Listen listen last night as we were getting ready for bed i was because sam's mom is an accountant she's done our taxes forever bless her and so i was like did you send your mom the tax stuff and he was like yeah i'm like did you send her our giving statement the giving statement you know you at church you give your tithe that that checklist i now too am going to go download that checklist just to make sure because there's always one or two things that slip your mind. And so it's nice to have that checklist to remember all those, like you said, 1099I, all those little things. So go to ramsaysolutions.com slash tax. You'll see my face. You'll see Dave's face. We're smiling. We're happy. And it says you shouldn't

have to doubt your tax service. So we've got all kinds of options. We'll walk you through. Should you work with a pro? Should you file? And at the bottom, you'll see the free tax guide. You'll see the personal checklist, even a self-employed checklist. Yeah. That can be stressful for those that are self-employed. Listen, I want to roll back though, George, to that myth number one about the refund being a reason to celebrate. I feel like people, y'all don't give yourself enough credit because a lot of people just view it as, hey, George, this is how I save for vacation every year. Listen, it's easy. My tax refund comes and that's our trip to Disney.

I really want to bust that myth up because you could literally keep that money in your account and have a better rate. You could put it in HYSA for 12 months and have a better rate of return than letting the government hold it for a year because you don't think you can save money for a vacation yourself. Well, too many people are complaining they don't have margin in their money right now with inflation. And I'm like, well, you have margin. You just are giving it to the government all year and then you're getting it at the end of the year. So change your withholding. It's January. This is a good

time to be looking at that. Reset. Whatever you've been getting over the past, you know, look back on years past, whatever you've been getting over the past, you know, look back on years past. Whatever you've been getting, take that number and divide it by 12. Like George said, that's the amount of money you could be having back in your budget every single month. Think about that, man. With inflation, that's groceries. That's gas money. You just gave yourself a raise.

Okay. I love it. Significant. There it is. We ate our vegetables, Jade. We taught the people about taxes. You did a great job. Are you happy, James? I hope so. James is never happy. Thisificant. There it is. We ate our vegetables, Jade. We taught the people about taxes. You did a great job.

Are you happy, James? I hope so. James is never happy. This is The Ramsey Show. You're listening to The Ramsey Show. I'm your host, Jade Warshaw. This is your other host, George Camel with a K. Your producer, James Childs. He just told us we did a

good job and that rarely happens you know how rare that is i mean he said you guys are gaslighting me so bad right now it's like the dad who's never said he's proud of you and then finally 20 years in he shakes your hand and says he gives you a handshake and he says take care buddy yeah not a hug a handshake okay i'm kidding he pulls a quarter from behind his ear and says go buy yourself something nice don't spend it all in one place kid i love it he's the best the guys in the booth are the best guys ever and the gal and gal yes ibu listen they're really the ones that make this show happen let's be clear about that um i can't imagine being on the front lines of screening the phones for this show they whisper all the answers into our ear pieces.

That would be amazing. Give us a call. The number is 888-825-5225. We're just having a good time. And let's go straight to the phone lines where we've got Mark from New York City, New York. What's going on, Mark? Hi, Jade and George. Thank you so much for taking my call.

You guys are my heroes. Wow. That's awesome. You kind of set your sights higher, but I really appreciate that. I appreciate your time. So I'm in a unique, my wife and I are in a unique situation. We have about 1.6 in a brokerage account, 43. We have about a quarter million in retirement.

I also have, I'm about 17 years in the public retirement system, pension system in my job. Okay. We owe about 260 on our primary and around $113,000 on our rental property. Okay. And really what it comes down to is, after listening to you guys, I wonder if I should use the brokerage account to pay off the two properties and become truly debt-free. We have no debt. Cars are paid off. No credit card debt. It's just such a big decision. I'd like to get some advice. You just need somebody to

kind of push you. It's like jumping out of an airplane. You just need the guy on your back to just jump and then you go. You know what we're going to say. Yeah, you know. The question is, what's holding you back? Like, $373 million out of your $1.6 million, you're still going to have $1.2 million sitting in that brokerage account. And that's what my advisor is saying. However, I got this money initially from my grandmother when she passed away as an inheritance. I feel like I'm the steward of this money. Absolutely.

And I just don't want to do anything wrong with it. Pretty much, we've basically quintupled the money. And I know this is a great problem to have. I just, I'm so afraid of making the wrong decision. Listen, the good news for you is we teach grandma's way of handling money. That's our whole thing here. I never met a grandma that liked debt. Me neither.

I think your grandma, if you talk to her now and you said, listen, grandma, I took that money. I paid off all my debt. My family is living debt free. We're millionaires. We've got paid for real estate. Our own home is paid for. I think she'd probably, I don't, I don't know the woman, but my guess is she would be so very proud of you.

I guess the only, well, thank you. But, um, I guess the other thing would be opportunity costs with that money, um, still invested. Would it outstrip the, would it make more than it's as an investment rather than, or is this more of just a emotional decision rather than a purely numbers decision? Also the tax liability on selling those investments, I'm wondering if that would be an issue as well. Well, are these going to be long-term capital gains? Yes. Okay. And you're not selling all of it. And so do the math on what you would owe in taxes,

and we're going to set that aside as well. But again, you're still going to have over a million dollars sitting here. That money is going to continue to grow. Do you need to touch that money for any other reason? No, no. We've used it in the past, like to, you know, the down payment on this, this, our current home and things of that nature. But like I said before, I really try to keep hands off of it as much as possible. Okay. Well, play it out.

Think about this too. You have two mortgage payments right now. Take those mortgage payments and plug them into investment calculator. You're 43. Let's say for the next 20 years, you start to invest that much more into that same account. That's going to change the numbers for you. That's, I'm guessing, a few thousand dollars you're now investing that you weren't before, correct? Yes, absolutely. I mean, it would definitely free up cash flow that, you know, in a way that we've never seen before. That's for sure. And every, if you get, let's say,

a 10% average annual return in this account, if it's invested well, that money is going to double every seven years. So 1.2 turns into 2.4, turns into 3.6, and you're still going to be, you know, what, in your 60s at that point? Correct. And that's if you do nothing else. That's if you just leave it alone and you don't put another dime in there. So you're going to be okay. So I'm less worried about opportunity costs in the future, and I'm more concerned about Mark right now. And he's at 43 years old, and the freedom and options he gets to have with his family with no payments in the future, and I'm more concerned about Mark right now. He's at 43 years old and the freedom and options he gets to have with his family with no payments in the world. It does sound very enticing.

Maybe it is. I mean, I called up because I wanted an answer from people that I respect and trust, and to be honest, I probably have gotten the answer that I expected. So what are you going to do, Mark? The question is, what are you going to do? I'm going to do it. I'm going to make the call and pay it all off. We always joke, if you regret it, Mark, you can always go get more debt.

You can take out against that all those equity in your homes and get HELOCs up to your eyeballs. That's right. I don't think you will. I was going to mention that we have a low interest rate, but I know how that goes over on your show. Oh, yeah. I keep that to myself.

My favorite interest rate is zero, and that's what I have on my house, and that's what you're about to have. Rich people earn interest. They don't pay it. Exactly, and you are a rich person. And your grandma left a beautiful legacy. And I think she would want you to solve for freedom. And this is what freedom looks like, man. The world is your oyster with no mortgage payment. You guys have done so well. 43 years old, net worth. I'm guessing we hadn't even hear the

full picture. Man. With what the properties are worth, plus the millions in these accounts. Excellent. Excellent. The way he's going to be able to give save and spend for the next 40 years yeah is mind-boggling that's exciting it's so hard you know the he's a math guy like he's all into numbers they're the hardest to remind about peace well when it comes to emotion i can get people to look at the math but when people are mathematical it's hard to get them to look at emotion it's so hard to go what would that feel like and they go well i don't know because on paper it's a low interest rate i can make a spread if i invested it yeah and they're losing brain calories and sleep over this and i'm going i got peace and no payments man try it out see how you like it i hear that let's ask dennis let's help him out he's in white plains i think we can help

him right quick what's going on dennis well I think we can help him right quick. What's going on, Dennis? Well, it's not White Plains. It's West Plains. West Plains. West Plains. Sorry about that. I got my glasses on. She was in a New York state of mind for a second. I was.

I was. How can we help? Well, I see all this stuff and hear everything about the high-yield interest rates for the high-yield savings accounts. And I've been looking and trying to figure them out. There are so many names I haven't seen anywhere before. I am looking for some guidelines on what to look for in them in order to know I'm picking something that's going to work for me. That's a good question.

I love that. So is this where you're parking your three to six months of expenses or are you using it for another reason? Well, it's four to three to six months and for taxes at the end of the year. Okay. So, a kind of short-term savings cost. Well, I'll tell you, there are a million out there, and we don't have one that we've partnered with. I can tell you one I personally use, and Jade can do the same, and Rachel Cruz can do the same. But what you want to look for here is one that has low fees to no fees. So, no monthly maintenance fees, no ongoing expenses, and one that you have easy

access to. And so a high yield savings account is not like a CD. You can access that. It's liquid at any time. You can transfer it to your checking account. So those are the important things you want to look at. And of course, the interest rate. That's right. So what do you use, Jade, right now? Listen, I love an online account. I love Ally. There's not a lot of fees associated. Like you said, the money is totally liquid. I don't attach it to any debit card or credit cards or any checks or anything like that because I don't want easy access to it. But at the same time, it's there if I need to pull it out. Exactly. I use one called Marcus. Again, we don't have any affiliation with these, but

I try to find one that's also not tied to credit card companies and gross debt products. And, you know, that's hard to do in the banking world. But Ally and Marcus are ones that I've heard people have great experiences with. So just open one, Dennis, and set it and forget it. Set it and forget it. Ron Papil, baby. I love it. This is The Ramsey Show. We'll see you next time.