The Ramsey Show - App - America, It's Time to Sign Your Own Permission Slip (Hour 2)

Episode Date: September 18, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, 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. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. Brittany is with us in Los Angeles. Hi, Brittany. Welcome to the Dave Ramsey Show. Hey, Dave. Thank you so much. It's such a pleasure to speak with you. Thanks for taking my call. You too. How can I help? So, I'm currently 28. I live in Los Angeles. I'm working two jobs in

hospitality, one full-time, the other's part-time. I bring home about $28,000 to $31,000 after taxes a year. I'm debt-free, thanks to you. I started getting on your plan about six months ago, and I picked up the second job. I'm on a monthly budget, but my question for you is, I'm looking to go to school for the first time and I want to become a physical therapist, but I'm not sure how to go about it and still be debt-free since I feel like I'm already kind of, my budget's already really tight. What do you suggest? Okay. Where did you grow up? I grew up in Pennsylvania, actually. Okay. And what brought you to L.A.? I wanted to be a singer-songwriter, so I was out here for about eight years working on that.

But through the course, you know, through the different course, I found that I like it more as a hobby, more than a career. Gotcha. I don't like the, you know, the uncertainty of, like, not having a paycheck. than a career. Gotcha. I don't like the uncertainty of not having a paycheck. I appreciate that. I got into hospitality, which is great, but it's not something that I want to do when I'm 40, 50 years old. Gotcha. Well, that's good planning and good thought on good critical thinking skills on your part.

Very well done. Thank you. Here's what runs through my head. There's two ways, of of course to get through school debt-free um there's three variables but two ways the the one of the big variables is uh the cost and so to become a physical therapist is a wide range of costs and so where you choose to go to school matters a lot because you want to go to one that doesn't cost much. Okay.

Absolutely. Because you don't have any money. So we're going to need to just start with that one. So you don't get to just pick one because almost no one goes to a physical therapist because of where they went to school. My wife is having a checkup this afternoon, and neither nor i and ask the doctor where he went to school right it doesn't come up the only time it comes up is in a highly specialized field where you're looking for the top person in their field because you have an extreme situation that's the only time it comes up so to have a great to have a great career where you go doesn't matter what matters

is did you learn something and did you get through without a big pile of debt so number one variable is choose the cheaper school and then the second thing is from there we need to start looking for companies um that support or hire physical therapists some of the big hospital companies, like an HCA is an example, and start talking to them of do they have a program where, because some of them do, where they will pay for your tuition while you're working for them doing something else, but then you're also committed to work for them for a few years after you graduate because they're trying to do this as a recruiting tool. Okay.

Looking for scholarships, in other words. Lots and lots and lots of different places, but that's a goldmine for scholarships in the health care field is the health care companies are always desperate for new team members and will do all kinds of things to get you in. Of course, the military is an option. That's an outside option and may or may not be something you want to consider, but they'll certainly pay for it.

And again, the same thing. You're going to commit to work for them for three or four years at a minimum doing that. Now, then the last part of the equation is your income versus your outgo. The average household income in America is is fifty nine thousand dollars right now now obviously that average includes a lot of dual income households a lot of people where both people are working spouses are working and you're obviously single the way you're discussing this so um but so you're at about half at single but you also live in the second most expensive city in America. I know.

I know. That's what makes it a little challenging. So I'm wondering if you don't locate a physical therapy school that's inexpensive in a more inexpensive market, if you can't get into the hospitality field in that area and work your way through because your expenses would be so much less. I know. I mean, I have no idea, but let's just say I'll just make up a place, okay? Let's say you went to a physical therapy school in Des Moines, Iowa, okay?

You can make almost as much in the hospitality field, waiting tables and so forth, in a good restaurant there as not quite, but almost as much, and your expenses to live will be half. Yeah. And I don't know that you'd want to live necessarily. I just made up a city. Des Moines is a great town, but whatever town it is, Knoxville, Tennessee, I don't care, right?

But some town that's inexpensive to live in, you can get in an inexpensive school and you can work your butt off and get some of those scholarships and i think you can get through i think it's going to be tough because i think you're already living hand to mouth where you are you ain't got you ain't got any margin to throw at school right now that's why you called right so we got to do something to create margin you You've got your income up or your out go down, right? Right. How old are you?

28. Yeah. I think you're going to do this. I think you're going to figure it out. Yeah, I'm ready for it. If you'll treat the problem like, okay, I'm going to go do something crazy for three or four years to get to live this dream. I'm going to go live someplace I wouldn't normally live. I'm going to pay a price. I'm going to live like no one else so that I can get to get to live this dream i'm going to go live someplace i wouldn't normally live i'm going to pay a price i'm going to live like no one else so that i can get this degree to live this dream i think you can do this yeah because you're that girl i mean

that's who you are aren't you yep yep i can do this i I think you can. I think you can. So you've got some analysis to do. Locating a school, locating a city, and some stuff like that. Or you've got to figure out a way to make a ton more while you're there, or find somebody that just pays for school, and you live there hand-to-mouth while you go through school and keep the exact same location, same jobs. There's nothing wrong with L.A. It's a wonderful place. It's. There's nothing wrong with L.A. It's a wonderful place.

It's just expensive. Nothing wrong with it. It's just everything you touch is, you know, glitter there. And that's why you went there in the first place, was to try to get some of that glitter on you. But that's okay. That's cool. Next chapter.

Turn the page. Next chapter. And you got the stuff. You got the moxie. I can hear it in talking to you. Thanks for calling in. Open phones at 888-825-5225. Matt is on Twitter.

Dave, do you recommend a separate emergency fund for rental properties? And if so, how much? Yeah, rental properties, I treat them like a separate business. And business should have its own retained earnings to cover its own issues. And so, yeah, your rental property, I would hold money in the rental property account to cover expenses that are going to occur there. Vacancies, heat and air that needs to be replaced, hot water heater goes out, roof leaks. You know, you've got to put some money back there. And I usually hold about three months' worth of rent in each of my rental accounts,

and that gives me plenty of pad there, and then I don't ever have any panic by coming up short on cash. This is The Dave Ramsey Show. It's time to take another look at your budget. That means scouring every expense and making sure you're not leaving any money on the table. One of the biggest expenses is your mortgage payment. I recommend a quick Churchill checkup. In just five minutes, our friends at Churchill Mortgage can tell you if you could save some cash each month. They've helped thousands upon thousands of my listeners keep more cash in their pockets through a smarter mortgage.

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NMLS consumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Coming up at the bottom of the hour, Ramsey personality and millionaire expert Chris Hogan will be joining us. So if you have questions about how to be a millionaire, he has just finished, along with our team and an outside research firm that we used, the largest study of millionaires ever done. We've interviewed over 10,000 millionaires. So if you want to know what millionaires do, because you want to be one, and you want to do what they do so you can be one, you can call Chris.

The phone number here, if you want to be on the line, we'll clean off a couple lines for Chris. It's 888-825-5225. Kelly will clean off some couple lines for chris is triple eight eight two five five two two five kelly will clean off some lines and let you through triple eight eight two five five two two five calls for chris hogan darren is in nashville hi darren welcome to the dave ramsey show hey dave how are you better than i deserve sir how can i help uh yes sir i have a question about my son's taking a personal finance class and there's a junior high school and right now they're on the book of dave and he he mows yards uh throughout

the summer and he has about three thousand dollars saved up and they come to me and wants to invest about fifteen hundred dollars of it and i don't know where to tell them to start not just looking for your advice on that okay we can do a couple things. The simple answer is just click at DaveRamsey.com, click SmartVestor, and put in your information. It'll drop down a list of the SmartVestor pros in your area. They'll be happy to sit down with him and you and explain how a mutual fund works, what it is, help him to choose one,

but he needs to learn about it as a part of the process. The only reason to do that is for him to learn. Okay. What's happened, though, is he's seen some of the compound interest examples of how when you invest early, how it turns into a lot of money. And you've probably seen those. I've certainly seen them. And they're really motivating.

It makes you want to do it. And he wants to be that guy someday. And so he wants to get started now uh and that's why he wants to do this so if he wants to put a little money in that's fine but let's also discuss something else okay what's what's more important than him actually doing the investment is what he learns from it, that he learns to be an investor, and he learns how to do it and all that kind of stuff, and is no longer intimidated by it because it feels like first day in class in school or something when you go meet with one of these guys the first time. So that part of it is something really cool that is good.

The $1,500 is not going to change his life. It'll turn into some money over time, and that's just fine. But what will change his life is learning about and getting comfortable with and being sold on being an investor. Now, were he to call me, I would first ask him how he was going to pay for his car before he did this and how he was going to pay for his car before he did this and how he was going to pay for college before he did this. He has a paid-off car.

Okay. His mother and I, we started your program about eight years ago, and we're saving money for his college. Okay. So those things are taken care of, so he doesn't need to participate in either one of those two then? No. Okay.

Good. Good. Sounds like a hardworking young guy who's got a good head on his shoulders. He's thinking, and I think it's an opportunity. The investing you're already doing, you may already have a person that's helping you, a smart investor pro or someone else that's helping you with your investments. Just sit down with them, and they need to have that heart of a teacher, and they're not making any money on a $1,500 investment.

I mean, the commission they make on that won't pay the postage to mail the thing in. But what they will do is if they're one of ours, they'll take the opportunity because they enjoy teaching young people. They enjoy teaching anyone, for that matter, and want to cause them to go ahead and be ahead and win. And so that's a good opportunity, and I think it's something you ought to do. Gail is in Raleigh, North Carolina. Hi, Gail. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks so much for taking my call. Sure. What's up? So my ex-husband recently passed away and left a life insurance policy to my daughter,

but she is 13, so she cannot accept it. So I have guardianship, which means I have to prove to the court every year that that money is still there and that none of it is gone. So I know you don't typically recommend annuities, but I wondered if that might be the best option for me. No, it wouldn't be. I would invest it in good mutual funds for her good. You don't have an annuity? No.

I mean, if you want to use a variable annuity, you can. How much money is involved? $250,000. Okay. If you want to use a variable annuity, she's 13? Yes. Okay. Because she's going to need that money for college, I assume, right?

Right. But I have five years, and I have to prove every year on an annual basis that all of that money is still there. Yeah. Well, I mean, that's not a problem. I mean, if you invested in good mutual funds that have a good long track record and you've got a good diversification, you know, it'll go up and it might go back down. It'll go back up. But as long as the 250 is still there that originally started,

you're not going to have any issue. So you can meet with one of the SmartVestor pros, like I was just telling the gentleman before. Sit down with them. You can look at a variable annuity. The only difference is it gives a guarantee, and you can show the court that you have a guarantee on the principal, but you're paying extra fees for that. And you can get to the same mutual funds or a lot of the same mutual funds inside of a variable annuity, so the returns would be good, but you've got that guarantee to waive at the judge if you need to, if the market happened to slip down. And so, you know, you can, that's a, but I would not do a fixed annuity under any circumstances.

Ever. Horrible, horrible product. The downside of even the variable annuity is if you use any of the money for anything for her good, and you have the right to do that even if the money is, I mean, if there's something comes up and you use the money reasonably for her and you can document that, that is a time you can reduce the principal in this. And then just show the judge where the money went. But you can't show that you took her on a world cruise with you. That won't work.

But I'm talking about if she had a medical condition or something like that, then you took care of her with that money. That's what it's for. But you probably 99% chance that's not going to happen. If you use the variable annuity, it has a seven-year, most of them have a seven-year surrender charge. And if you touch it inside of seven years, you're going to get hammered with all kinds of fees. The surrender charges are horrendous.

And so that's another reason I'm not a big fan of those they're okay but you're leaving this alone till college now when she gets out you know when she's uh what uh we're talking about she's 13 so seven years puts her at 20 i'm not putting it all in a variable annuity if you're going to use some of it for college she's going to be in college before you can get it out right or you've got to get into a variable annuity that does not have the long surrender charges like that. Not all of them do. You can probably find one. So answer the question.

The easy answer, the proper answer is sit down with SmartVestor Pro, talk through your options. One of those two things is there. But not a fixed annuity, maybe a variable annuity, and maybe a variable annuity for a portion of it. But certainly a good mix of good mutual funds with a long track record over that many years is going to be fine. You're going to be safe. I wouldn't sweat it. And you're not going to Vegas and rolling dice here. If you took $250,000 and bought a house, how many times would that house go down in the next seven years?

One time out of 100. You know, it's just not going to. So unless you just bought a ridiculous house, you know, the worst deal in the real estate history, right? But most of the time, houses go up in value over the next seven years. So you'd be the same kind of thing as that. That's what I'm looking at. And you have the obligation to make this money make more than 1%. So do a better job than that by meeting with a smart investor pro.

Coming up at the bottom of the hour, as I said, Chris Hogan, Ramsey personality, millionaire expert is going to be here. If you have questions about how to be a millionaire, what our study found, Chris can answer them for you. He is the millionaire expert, and it's some fun stuff that we found in this study. So you may want to stay tuned, and we'll talk some about that, and we'll take your calls as well here on the Dave Ramsey Show. The phone number, if you want to get in, is 888-825-5225. That's 888-825-5225. Chris Hogan is going to be with me the next two segments, so jump in if you want to talk to Chris.

This is your time. This is The Dave Ramsey Show. I get asked all the time about what people need to do to improve their family's money situation. Two of the most overlooked things are term life insurance and disability insurance. Both plans make sure that you have income to pay bills and take care of yourself and your family if something were to happen. For term life, you need to carry 10 to 12 times your income, and I recommend 15 or 20-year plans for most families. Stay away from cash value or return of premium plans. They're just a ripoff. Disability insurance is just as critical. How are you going to pay your bills if you're unable to work? Disability is the leading cause of bankruptcies and foreclosures, and that's why I send you to

Zander Insurance. They've been helping my listeners find the right plans at the lowest cost for almost 20 years. Call 800-356-1780 or visit zander.com and compare online. That's 800-356-1780 or Zander.com. Joining me this half hour answering your questions as well as Ramsey personality millionaire expert Chris Hogan, number one bestselling author of the book Retire Inspired, and the future bestseller is called Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and How You Can Too. And Chris and our team and even an outside research firm put together an airtight research process and did detailed interviews with over 10,000 millionaires. Some of those were millionaires that were familiar with us.

Some of them were not familiar with us. And oddly enough, the data between the two of them matched up. But the findings from that are in this new book. It is on sale now. It comes out technically in January. So we'll ship it to you in January if you buy it now. And Chris, the sales are going very brisk. Dave, it really is.

I mean, it is moving at a very, very good pace. And I'm excited for people to read these stories. It baffles me. Every time people ask me, they say, how many people did you survey? I say over 10,000. And it's hard for people to wrap their head around that because you don't hear about studies that have that many people. But that's our effort to be comprehensive and to know exactly what's going on.

What are the state of millionaires nowadays? And we've got this information here in the book. Yeah, 10,000 millionaires. That's a lot. I mean, 1,000 is statistically significant. That's right. When Tom Stanley did the book Millionaire Next Door years ago, he had 750, and that was fine. From a statistical standpoint, that makes the findings reasonable and accurate.

I mean, if you've ever had a statistics class, you know how to do that stuff, and certainly Chris and I have. But that wasn't the point. The point was we wanted it to be, because we knew that some of you are, and some of your friends are victims and think you're stuck, and you would not like the message that it is up to you to become a millionaire. And so we wanted to get enough data to where it's no longer a discussion about what the facts are.

It's just your feelings are wrong. And that's a big deal. Oh, it really is. I mean, because now you've got to look in the mirror. You've got to make a decision, you know, and seeing the stories of the people that have walked through stuff, Dave, the consistency over time. That's one of the things you talk about, is being focused, being consistent, and having those actions that you just do, do, do. That's the things that we hear time and time again in these stories. It's not an accident.

It was a decision. And people can make that decision right now here today to begin to put themselves on that track. And you've got to make it over and over and over and over again. That's right. You can't just make it one time. It's every morning you get up and make the decision, I'm going to engage in the habits that millionaires engage in. I'm not going to engage in broke people habits.

And that's what's outlined. And no, they didn't all inherit their money. If you're new to this program or you're new to this discussion, in excess of 90% of them are not millionaires because of an inheritance and we can get real detailed and get down into the study exactly how many got zero inheritance or you know they might have got 10 000 or they might have been worth two million dollars and then they inherited 250 so you can't say they got no inheritance but they were already millionaires before they got it

or the amount they got was so ludicrously small that it didn't impact the math well and dave i'm gonna tell you there's all kinds in here but i'm gonna tell you another one that jumped out at me it's not about how much you make you see this is another you know that surprised me i thought we were going to see higher incomes at least spectrum spectrum. Right. I didn't know what the average income throughout their working life would be, but I thought the spectrum would be up over $200,000. Me too. And it wasn't. No.

A lot of them didn't even make six figures. That's exactly right. And people will shake their heads. I'm telling you, you need to read the book because it's in there, because it just snatches away. And you said a word, Dave, that that jumped out at me. And it's the victim. Like, we've got to get over this mindset that that everything's against us and we don't have an opportunity.

That's not the case, because some of the people in here really walk through some tough life situations. But there came out of a really tough, really tough. But they decided. And as you said, kept it consistently going. So, America, the American dream is alive and well. You just have to make a decision. Yeah, that's true. That's a declarative statement that's very accurate.

So the book is Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and How You Can Too. It's a great message because the dream that you can financially be somebody is still alive uh is that the answer to all your problems no no no if you're if you're a jerk and you get money you're just a rich jerk i mean it's not the answer to your problems but this idea that you're economically stuck is just not accurate the book is is $20. It comes out in January. We'll ship it to you then. If you want to preorder it, we're going to bribe you to do that. We're going to give you about $50 worth of free bonus items, including in January, we will ship you the Everyday Millionaire's audio book,

read by Chris Hogan himself with that voice, the trusted voice in America, and Everyday Millionaire's e-book and a video lesson from Chris called How to Retire Inspired will send you immediately. And a video lesson from me called It's Okay to Be Wealthy. Sometimes you need permission to win in a culture. It's a weird thing. We're taught to, parts of us are taught, fewer and fewer these days. It's disturbing.

But when I was growing up, you were taught to work hard, be honest, help people, serve, and you would be successful, and you could build wealth, and you could grow a life. Then when you do all of those things and you're wealthy, then you have people throwing stones at you and say, oh, you've done something wrong. You must be a crook. You must be a snake oil salesman. You must be this or that. And so it's this paradox of you're supposed to be wealthy, but you're not really supposed to be wealthy.

That's right. And so that's why we do this lesson. It is okay. It is okay. And the other thing we found with most of these millionaires is they're not crooks. No. They weren't shysters. They didn't run some Bernie Madoff scam.

You know, they didn't run some thing that got them put in jail or, you know, that's not who. I mean, those are such, those stories, they make the news because they're so rare. Most of these people were just engineers. They were just accountants. The one occupation that threw us off, teacher. Teachers. In the top five. Yes.

The top five most found in the study, occupations in the top five was teacher. I love that. Oh, it blew me away. We all know they're underpaid for the job that they do. But despite what they're paid, again, it doesn't matter about your income. It's your plan for your money. That teachers landed in the top five blew me away. But then again.

Medical doctors did not. Did not make the top five. But then again, Dave, it goes back to the plan. You, for 30 years now, have been telling people to be intentional with your money. Get yourself out of debt. Stop giving it to other people and making them rich. Build your own wealth. And the thing is, is as you have those habits in your life, the byproduct is you will get to build wealth.

You will get to be able to be a blessing, to help single moms, wounded veterans. Because broke people can't do that. They don't have the means. Yeah. I wanted to help people when I was broke, but I didn't have the money. Right. I was trying to feed my kid.

You know, I got hungry kids at the Ramsey house. You know, that's where we were then. Yeah. You had three boys. You definitely got hungry kids. Did you have permission slips back in your day when you all in school, when you had to have your parents sign them? Yeah, me too.

And what I found in doing this, this book is that you Americans, we have to sign our own permission slip to give ourselves the ability to be able to build wealth. We have to believe it's OK and then start to do it ourselves. Rabbi Lappin talks about that in Thou Shalt Prosper. One of the ten reasons he found that Jewish people prosper and a rabbi studying why Jewish people prosper was that you can, it's very difficult to engage enthusiastically in something you believe to be morally wrong. If you believe wealth is morally wrong or building wealth is morally wrong, it's very difficult for you to engage in that. It's psychologically perpendicular. It doesn't work for you.

And so that's what you're talking about. We need permission. It's okay. You should do this. You should do this. You can order the book at ChrisHogan360.com or at DaveRamsey.com. We're going to come back with your questions for Chris Hogan and for me right here on The Dave Ramsey Show. Thank you. Ramsey Personality, millionaire expert Chris Hogan joins me this hour answering your questions. Emily is with us in Cincinnati.

Hi, Emily, your question for Chris and me. Hi, Mr. Ramsey and Mr. Hogan. I've been listening to your show for the last couple of weeks. And so my question is, we are moving off of a farm. We're switching from what was essentially an internship with 1099 back to W2s at a different job. And we want to start our own business and we need to know how to track and make a budget in every dollar or another system and also how to know what debt we should get into in order to start that business. Okay, every dollar is not designed for a business budget. Are you saying a business budget?

Yeah, we're currently using it for just our personal. Yeah, it's great for that. It's the world's best for that. And if you've been listening to me for 10 minutes, you know we're not going to tell you to go into debt for anything, ever, ever, under any circumstances. It's a surefire way to make sure your business fails. Now, you might try.

What about your ground? Like we're a farm. Rent. Lease it. Okay. Lease it until you go make some money. Farming is tough. And the last thing you need is, you know, hundreds of thousands of dollars in debt,

millions of dollars in debt on the ground while you're trying to get a crop in. That's a good way to go broke. Take your time. You said you took jobs and moved off an internship, right? We are moving off next week. Okay. So you've got jobs, and so the business is a side gig then. It is for now.

The internship we were doing, we were intending to buy this farm, and things have not worked out. So it's basically become an internship. So now we're leaving. But it is a very profitable business that's done right um and it can be started from very small good started small make a bunch of profit and use that to grow it right well you still need some equipment that's what i'm trying to figure out is you know and a house to live in and things like that so i don't know kind of where you go with

that rent rent rent rent rent until you make some money. And get your equipment old and used until you make some money. It's what we did here. I've got, you know, you can do what you want to do, kiddo. That's the third time you've laughed at me. You get one more, okay? You can do what you want to do. But I've grown this business from a card table in my living room.

And I'm sitting in a studio that costs two million dollars so uh and you can't you can't be in radio and you can't run a business with all the things we have around here with the cameras and all the different things without going into debt and yet we've done it but we started used we bought used we we used old stuff and we moved along like that and that's how you do it emily i'm going to tell you something dave is telling you and giving you wisdom. They don't teach us in grad school. They don't teach you this in business school because you hear these phrases, leverage and OPM. And all those things are called risk.

They steal your peace of mind. They steal the ability for you to be able to run your business and enjoy it because you have this thing hanging over your head demanding a payment month in and month out and so i'm telling you he gave you a phd in wisdom right there avoid the debt i'd rather you take longer to get it started but it be yours and not the banks not the credit unions and not the credit cards you can rent equipment you can rent land you guys can pull a trailer up on that on that farmland and sleep and be there there are ways to do it without giving up your joy and your peace of mind yeah and just just grow it and if it's so dadgum profitable use the profits that's what

i've done we haven't eaten all the profits here no i've turned them all back in dave when you were doing this because obviously you did have people laughing in your face and telling you what you could and couldn't do. What were you reminding yourself of during that period of time as you were bootstrapping and going slow? What were you telling yourself? Well, a couple of things. One was we had promised that we weren't going to borrow money anymore because we weren't broke doing it the first time. And the number one cause of small business failure is cash flow problems the cash flow problems are caused by two things people don't do their taxes and keep up with their taxes in a small business and it takes them down and they go in debt and the payments take them down it adds

risk exponentially it adds the probability of failure exponentially and a vast number of businesses start and operate without debt but everybody talks about uh oh you can't do you can't be in the farming business you can't be in this business you can't be in that business without debt and you can't you just have to start really really low and and really, really slow and go, nobody's taking this one. Nobody's coming and taking this one. I own this. And you can't go broke making a profit. You know, when you don't have any debt, if you just keep making a profit, you can't go broke making a profit.

In some years, we didn't make a lot of profit. We made just enough to eat and plow most of it back in. But just about every year, we've put more back into this business than we've taken out for 25, almost 30 years now. And nowadays, that's a lot. But, you know, you don't need but so much going home. And so, you know, I got things I want to do around here. I want to launch this book of yours. I want to do these other things. So we're going to plow back into the business and do different things and push it that way.

But I didn't want anybody to take it again. I've been there. It wasn't any fun. And if you go do it the way everybody else does it, you're going to get the results everybody else gets. And they fail. 80% of small businesses fail in the first five years. And that is why. Because you do it like they do it.

Be not conformed to this world. Don't be normal. Be transformed. How? By the renewing of your mind. New information. Different information. It changes everything.

Steven is in Lexington, Kentucky. Hey, Steven, how are you? I'm great. How are you? Better than I deserve. What's up? So I had a question for you and Chris today. It's a first-off honor to speak with you both. I'm on. How are you? Better than I deserve. What's up? So I had a question for you and Chris today. First off, honored to speak with you both.

I'm on Baby Step 4, and I recently began to transfer. I have a traditional and a Roth IRA to one of your smart investors I got in touch with. My question is, I have a small amount under $5,000 in a traditional IRA. The smart investor is perhaps suggesting I transfer that to a Roth now and pay for the taxes now versus later in my career when I want to retire and stuff. I want to hear your thoughts on that. Yeah, well, Stephen, again, thank you so much for calling in, and I love. How old are you, my friend?

I'm 34. 34 years old, I tell you. They tell me young people aren't paying attention, and that's a lie. I like where you are. I like the position you're in. And remember, whenever you hear Roth, we're talking about tax-free. We're talking about money that's going to grow. The government can't mess with it or touch it anymore.

So, yes, it is a great opportunity for you to convert that if you have the cash to pay the taxes on it to be able to convert it and let it sit there and let it grow. Right. Yeah, I don't have any debt. Like I said, we're trying to plow through here and get 15% invested and then pay off our house early. I'm proud of you, my friend. Again, thinking different and having your mind on the goal, looking at it, knowing where you're going.

You're about to change the game in your family. And so keep your eye on the prize. Keep working together with your spouse if you're married. And again, don't stop. Find ways to go forward. Don't go backward. Going backward is against the rules. But you're doing exactly the right thing.

And Chris said exactly right. Yeah, I would use, especially since it's a small account like that, if it was $100,000 and you had to come up with $25,000, I might say throw that at the house. And when you get the house paid off, then convert your traditional to a Roth. But this is a small account, so I think, Chris, I completely agree with the advice he gave you. And that is just use cash.

Now, if you take the money out of the account, out of the Roth account, out of the traditional, to pay the taxes, then you have a smaller amount left in your Roth, then you broke even. You get no advantage to this. But by paying the taxes and converting it to a Roth, it's as if you have invested that extra money. It has the same mathematical effect because now you're going to grow completely tax-free. So it's a beautiful thing, this Roth stuff, man. Man, these tax-free accounts, we're seeing that stuff show up in this millionaire data all the time. Oh, yeah, Dave.

I get tingly whenever I say Roth. I do. I mean, the government can't mess with it anymore. It's going to sit and it's going to grow. And the two best friends of your money are time and compound interest. It's a beautiful thing. Yeah, and you're going to end up with some serious money doing that. So that's the kind of stuff these millionaires do.

Yes. But, you know, here's the thing. What do normal people do? They're broke. And what do they, do they ever have a conversation that sounds like this? Nope. No. They don't even think

about something like this. So that guy's 34. He's not only doing it, he's thinking about it. He's going to win. He's going to win. Chris Hogan, ladies and gentlemen,

thanks for stopping by. Thanks for having me, Dave. This is the Dave Ramsey Show. Hey, it's Blake, Chief Production Officer for the show, and here's a little tip for 2018. Go download our revamped Dave Ramsey Show app from the App Store. We're always listening to your feedback and adding new features to make it even better. Check it out.