The Ramsey Show - App - As a College Student, How Can I Best Use My Savings? (Hour 3)

Episode Date: July 13, 2021

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Music Music Music Music Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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. Dr. John Deloney, Ramsey personality and host of the explodingly popular Dr. John Deloney podcast, is my co-host today. Open phones at 888-825-5225. You get real talk on life, relationships, mental health issues, the chaos of anxiety, depression, disconnection, and all kinds of just good old grandma common sense stuff from Dr. John all the time on his show and when he's on here too. So you can call in right now, 888-825-5225. If you can't get through today because the lines are always pretty full around here,

you can always e-mail and participate on John's show by e-mailing askjohn at ramsaysolutions.com or leave a voicemail at 844-693-3291. Ryan starts off this hour in Akron, Ohio. Hey, Ryan, how are you? I'm doing well. How are you, Dave? Better than I deserve. What's up in your world?

Awesome. Well, I've always enjoyed personal finance and learning about it. And in college, I even helped friends make budgets and just basic stuff like that. And I just got so excited about it. I know I wanted to help people with their money. And I graduated in May 2020, got a job at a bank because I thought, you know, that's a great place to help people with their money. And that's right around the time I started to listen to your show consistently and really do the baby steps for myself. Good for you. Yeah, yeah. I've seen how many lives your plan has changed dramatically. And I feel like the stories I hear on your show

are from people who would walk into the bank and I would feel pressure, you know, from my boss and from corporate to sell credit cards and sell home equity lines of credit. And I feel like I'm in this position where I'm putting people in a position to, you know, come to your show. You know what I mean? Like, I just feel like I'm pushing, you know, my job is to push debt and more debt. And I'm just wondering where, you know, in the financial world can I go where this isn't the, you know, tool of making money for companies is debt. Yeah. Well, I mean, if you work in a pizza place, you're going to be selling pizza. That's the way it works.

So, I mean, that's, and if you're a health food nut, that probably is not going to be congruent, right? Yeah. So that's kind of where you find yourself. A lot of people with your itch gravitate towards the investment advisory side of the business, like our SmartVestor Pros, where you work for a local organization that is a member of a broker-dealer, and you help people get investments going and most of those people do not peddle debt most of them peddle investments uh and they have some

of them go extend beyond that into some uh basic financial planning like they'll hook you up to help you get a will or they'll hook you up in that that world, they do. Now, our smart investor pros generally just do investing, but the ones that we endorse. But, you know, some of them get into that. Some of them get into a little bit of – but you'll have the opportunity. Let's say you had a client that had an investment portfolio that was 60 years old, but he had a 30-year-old daughter who was struggling and brought her to you, and you could help teach her about budgeting in the process.

So we did to do a lot of that kind of thing in the crossfire like that. The only place in the banking world where you're not forced with a quota, a boss breathing down your neck to sell debt like you have experienced, is small town, local banks, community banks aren't as aggressive in the debt marketing and credit unions. That's why I endorse both of those and not the large mega banks, because the mega banks are pretty well, they're just pretty well debt peddlers is what they do they just if they figure if you're breathing you need a bunch of their debt and um i don't know which one you're working at i didn't ask but the the larger ones are much more soulless in their approach and um you know i've got friends in the community banking business um obviously i

don't believe in borrowing money i'll teach people borrow money but they're much more responsible with their interaction there's a moral component for them with their interaction with their customer versus these mega banks they'll just shovel as much down somebody's throat as they can get in there and and you know you're going to lose your job if you don't sell a certain amount of credit cards car loans and home equity loans in your position. And I'll tell you the 30,000-foot view of your question is you can't work very long in a job that violates a core value of yours, whether that's treating people disrespectfully, whether that's, like Dave said, peddling food that you think is not healthy, selling debt. At some point, you will begin to fracture from the inside out. Yeah, I mean, let's just completely change the metaphor.

Let's pretend that alcoholism killed your father, and you don't believe in drinking, and drinking scares you to death. You'd make a horrible bartender. Yeah. You know? And that's what John's talking about. And you don't need to quit today. We're not suggesting you run in there with your hair on fire

and make some political statement we're not trying to create an act make you into an activist okay but the uh but long term what is good for you is to find something and that's why that's what that's the itch you've got that's what you're scratching is long term you need to find something that is congruent with your belief system and your values. You're not going to prosper otherwise. You're never going to be a really great banker at that bank. That's exactly right. And you're never going to be able to sleep either. Yeah.

You know, the boss isn't going to be happy. The customers aren't going to be happy. You're not going to be happy. Nobody's happy. You're not selling enough debt. The customers are getting debt. They're not happy. You're selling debt.

You don't want to sell debt. You're not happy. Nobody's happy here. Yeah. You know, and so, you know,'re just you head on your pillow dude and and so what i would do is i'd develop a you know like an 18 month runway or a 12 month runway that says all right i've got to start doing some of king coleman's materials on hunting for a career thinking about a career i'm going to investigate for instance the financial advisory world what's it take to get into that what have

i got to do what licensing have i got to do? What licensing have I got to get? What have I got to do to get hired in that world and begin to move in that direction? But, you know, I would not ask a pizza place to not sell pizza, and I'm not going to ask a bank to not sell debt. I'm going to ask all of you to not buy it from them so that you're not harmed but i'm not going to expect an alligator to quit biting it's what alligators do and this is a common situation he says he's graduated started this job that he wanted to help people right you have a vision and this is people with money and banks got money so i'll go over there that's right man and but that

happens to graduates all over the place right and then they get in and get see behind the curtain see what we're actually doing here and then they have a crisis of value yeah right crisis of conscience yeah it's very real i appreciate you ryan you got a good you're a man of integrity and you weren't you weren't being a drama queen about it you weren't being crazy about it but you're just going this just feels weird and i don't think it's going to work and you're right it's not it's not to work. And they're not going to change. Right. So how do you treat them with dignity?

Yeah. And then how do you hold your head up high when you go find something else? You know, you're going to be, you're going to suck at selling debt. So they're going to be happy when you leave. This is the Ramsey Show. Do you know who is a prime target for identity theft? Your children. Kids have no debts or credit history. Their personal information is just as easy to get,

but the theft could go completely undetected for years. Every day all over the country, young adults are starting down their own path in life by opening a bank account or renting their first apartment only to find out that they somehow already have credit card debt, a mortgage, or even a criminal record. It's devastating, but it can be fixed when you have an ID theft protection plan from Zander Insurance. They monitor all personal info for the entire family, and they take over all the work if you become a victim. Best of all, your kids are covered for free on their family plan. Call them at 800-356-4282 or visit zander.com.

It's just the smarter, more affordable way to protect your entire family. And it's the only plan I provide to my team. zander.com or 800-356-4282. Thank you for joining us, America. Ramsey Personality, Dr. John Deloney is my co-host today. As we talk about your life and your money, open phones at 888-825-5225. Rebecca's in Orlando, Florida. Hi, Rebecca. Welcome to The Dave Ramsey Show.

Hi, Dave. Thanks so much for taking my call. I'm very grateful. Sure. How can we help? I have the Florida Prepaid Program for both of my children, and my son doesn't think he's going to go to college. It's not the 529. I have a large IRS debt I'm trying to eradicate. And I was thinking of taking the money from the Florida prepaid plan to put it towards the IRS debt. And then when my daughter is ready for college, I could just cash flow her. How much is in the prepaid plan? $23,000. And how much is the IRS debt? $55,000.

What is the IRS debt from? It's from three years. I'm embarrassed to say my daughter was sick, and I was in the middle of a divorce, and I was just trying to keep it on the table, and I hadn't filed for a fee. Okay, so it's just back taxes. Just table, and I hadn't filed for a few. Okay. So it's just back taxes? Just back taxes. You hadn't filed at all? I have since filed. So you must be 1099 or self-employed?

Self-employed, yes. Yeah. Okay. So what do you make? Well, this year with the pandemic, I'll probably make about 55, maybe 60. So you've got the IRS on a payment plan? No, I actually applied for an offering compromise, but I haven't heard from them yet. You're going to be denied.

Okay. You have to be able to show pauper status, absolutely no income and no assets to get an OIC through. That's one of the great mythologies. How much did you pay for this OIC application? I put it down $6,000. Oh, man. Yeah. Okay, don't give me any more money.

Okay. Yeah, that's a – there's just very – I've been doing this 30 years i've seen two of those go through two and and in both cases we were working with a tax attorney and you prove that they have no assets at all and no income and really no potential of income and so they really believe that you're virtually financially dead and you're not you make 55 000 a year so they're going to put you on a 900 year payment plan all right um i don't cash out kids uh college funds for debts but the kgb around your neck the irs after you is not going away so yeah i'm, I'm doing this. Okay.

All right. But be forewarned that what goes with it, the tears that you had a minute ago with the shame of not having filed because of all the stress and the horrible things you were going through, you're probably going to have more of that feeling because you just used your kid's college fund to clean up the mess or part of the mess. And so that's why I almost never tell someone to use a college fund, even though it might make mathematical sense, is because you feel like a dog using your kid's money that you

set aside for them. And I just want to warn you ahead of time you're going to have that feeling but it is still the logical thing to do it's the right thing to do here uh it is the best thing for your kids for their mom to get straightened up and get this get this debt out of her life because the irs has tremendously expensive penalties interest and they have almost unlimited power to screw up your life. You want to get them out of your life. Believe me. It's the only kind of debt that terrifies me for our clients.

It terrifies me because I've seen what the KGB does to people when they decide they want to get rough. And so I just don't want you on that thing. And I want you to get with one of our tax ELPs and get an installment plan working as soon as you hear that the OIC went sideways. And certainly don't, see, you listed on the OIC that this college money exists, right? No, because there's technically no cash value. And I didn't even think about it until after I submitted it. Oh, there's technically no cash value and i didn't even think about it until after i submitted it oh there's technically cash value when you cash it out you're getting cash

yeah i guess i didn't yeah i you know if they saw that on the application they would have grabbed it they would have said no you're not you're going to give us that money. So if I'm wrong, I'll be happy for you. And the OIC comes through, and they say, you know, we'll settle this $55,000 debt for $23,000. Cash it out and do it. But then you've got to really get in gear, and you've got to start working with your son and your daughter on how they're going to get their education paid for. They're going to get really good at taking the ACT test. They're going to get really good at working their butts off while they're in school. You know, pick an affordable school,

not an expensive famous school, in-state, maybe a two-year program to get some of the basics out of the way really cheap. All of those kinds of things. Yeah, that's exactly right. And I'm going to recommend you be real vulnerable. Sit down at a kitchen table and walk your kids through what's happened, what we're going to do about it. Without blaming dad. We're not going to blame anybody. You're going to take ownership for this. This is a level of vulnerability.

They're going to feel this tension on you. And what kids do, Dave, is they absorb that tension and blame themselves, especially young kids and especially teenagers. So this is a great moment for an adult to model, hey, guys, here's what I did to put food on the table. It wasn't right. Here's what I'm doing to clean it up. Here's what we're all going to do together.

We're all going to start budgeting. We're all going to lean into this stuff. And is it going to be uncomfortable? Oh, my gosh. There's going to be some value to your kids seeing the tears and seeing the plan and watching you live out of this thing. And there is a way to make meaning on the back end of this thing. Those tears will have value.

It is not a conversation that you portray the end of the world. It's a conversation that goes, I screwed up, and here's what I'm doing. Yeah, and there's a redemption. We're going to make meaning of this, and things are going to change around here. And we're all going to do this at the table together. Yeah, the good news is things are going to change. The bad news is things are going to change around here and we're all going to do this at the table together yeah the good news is things are going to change the bad news is things are that's right and so the vulnerability is going to be hard the tears are going to be real and the the walking out of this is going to be tough you still got to come up with 25 000 other dollars

right to pay this thing off and you know pandemic or otherwise you got to get your income up and you got to get this thing knocked out fast yep as. As fast as you possibly can. Hang on. I'm going to send you a copy of Anthony O'Neill's book, Debt-Free Degree, and that will help the kiddos start to think that way and you start to think that way because you're going to be cash-flowing this, A. B, they are, too. You're going to be playing along. That's right.

And C, we've got $25,000 more to clean up with the IRS if I'm wrong. And I wish I was, but I'm not. Hang on. Zach will pick up and take care of you. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Christina says, since student loans are interest-free right now,

should I stop paying the minimum on all nine of my loans and focus all my money at my lowest loan in an effort to snowball? Well, Christina, student loans are student loans, and whether they're interest-free or not, we're going to treat them the same. We're going to list debts smallest to largest. We're going to pay minimum payments on everything but the smallest debt regardless of what it is, and we're going to attack it with a vengeance. And when it's gone, we're going to get the next one down. When it's gone, we're going to get the next one down.

That is the fastest way to get out of debt. And we can add to that, I would not wait on Washington to fix your problems. There's a lot of promises in the air that Biden is going to forgive all your student loans. He might. He has control of both Congresses. It's logistically, legally possible for him to get that through, but it'll be a while. And while you wait around on one foot and then on the other

for the blessings to flow from D.C., you will learn the lesson that blessings don't come from D.C. They come from grit and hard work and ownership. If you think $1,400 changed your life, you didn't have a life. Man. And you never will if you think that that's going to do it. Please don't sit around and wait on these guys to make your life. This is The Ramsey Show. We'll be right back. If there's one thing 2020 has taught us about investing, it's you cannot invest alone. You need someone in your life who knows the market better than you do

and teaches you so that you make smart decisions and they talk you off the ledge. Look, I love do-it-yourselfers, but DIY investors do not have the same rates of return that those of us who have pros in our corner. I don't pull my own teeth, and I don't do my own investing. I get advice just like I tell you to do. You invest in the wrong things. You get caught up in trends. You make rookie mistakes.

You build a portfolio based on what you read on Reddit. Oh, my God, what were you reading Reddit for? That's a lost day. You'll never get that time back. Not realizing all it takes is one freaking pandemic to knock you completely off track. Trust me, you do not need to add any unnecessary stress to your life. Stop winging it. A good investment pro like a SmartVestor Pro will help you follow the right plan for your money

so you understand what's going on and you invest in the right things and you never have to worry if you're making the right decision if this is your never again moment for your retirement and you're investing don't be at the mercy of some global crisis ever again text invest to 33 789 text invest to 33 789 and you can create a rock-solid investment plan starting today. Bethany is with us in Scranton, Pennsylvania. Hi, Bethany. Welcome to the show. How can we help?

Hi. Thank you so much for taking my call. Sure. I have a question. So my husband and I have three very small kids and our middle child has down syndrome so we are just wondering what you would advise for the future um we recognize that college may be a possibility but it may not be um so we're just wondering what you would do different um to say for her future and then would you save the same monetary amount per kid

um no equal is not fair and fair is not equal right okay and so if this child needs more money set aside than the other two then uh to take care of them then that's there's nothing wrong with that at all matter of fact that would be called being a good parent and so you're not you don't have some moral obligation to dole out everything equally um the uh uh so you know what we're going to do is you're just going to save the money in your name okay and you're going to have life insurance on you and your husband. Okay. And in both cases, the life insurance beneficiary is going to be named to the family trust that is formed upon your death.

Okay. You need to get a lawyer and get a will built or go to Mama Bear Legal Forms and get a will built. It depends on how complicated your estate is, but yours is getting ready to get pretty complicated complicated so what you normally do for a special needs child there's a special needs trust which lasts their entire life and the trustee is in charge of investing the money and handling the money to take care of the child okay and they do it according to your directions and so if this were my child I would have a special needs trust that's formed upon my death and my wife's death, and it's funded with the money from the life insurance policy. The beneficiary on the life insurance policy says X number of dollars out of this policy goes in the special needs trust. Okay?

Okay. And I'm going to put it across four types of mutual funds, growth, growth and income, aggressive growth and international, and the income produced off of this fund is to take care of this child, and that is the trustee's job. You would also name a guardian to the extent that the child as an adult is not able or is able to take care of themselves. Okay. It might be a sibling. Okay. Okay, something like that.

Now, with children that are not special needs and they're minors, we always build a family trust. And the same exact thing. The life insurance proceeds go into the trust upon your death if both of you die. Okay. And or your mutual funds and investments that you already have go into that trust in the event that both of you die. And it works exactly the same way. The only difference is that when the child reaches a certain age, that the money's just released to them because they're adults and they're on their own,

and you don't need a trust, you know, a family, a childhood trust surviving until that kid's 65. With special needs, you may. Right. That's the only difference is the length of time the thing survives they work exactly the same way so if you put five hundred thousand dollars in there and the thing makes ten percent that gives fifty thousand dollars a year to take care of that kid right that's simple okay and you can put the five hundred thousand in there with investments over time but until you have that five hundred thousand you would have five have 500 000 worth of your life insurance

allocated to that and i just made that number up but just i would just say take 10 and use that as your number it's probably not right but it's close enough okay and and say you know all right i want them to have three thousand dollars a month well that's thirty six thousand dollars a year so that's 360 000 so let's just call that a $400,000 policy. Okay. And I'm going to get a million dollars on your husband and you. And if something happens to you, $400,000 is going in a special needs kids' trust, and the other $600,000 is going over here for the other two, $300,000 each.

And they've got very similar wording and so forth. Okay. Make sense? It does. I think so, yeah. So how severe is the Downs? Well, I mean, we don't know. She's two.

Oh, you don't have indication. We have a long time to go, so she's only two. How old are your other kids? My oldest is four, and I have a two-year-old and a one-year-old. Wow. Oh, you are in it, aren't you? Yeah. Yes.

And you're calling me about a will. Yeah. Oh, my goodness, yeah. Well, yeah, I mean, even just to set aside for college yeah like it feels i don't know what to do for her i would not set aside for college i would just keep it in your name okay because you can control it that way and you can do with it what you want if you put it into their name you might lose control of it when they turn 21 the courts might take it and take it over to manage it for the kid and it's not their money. It's your money. Yeah, okay.

And you're not going to do anything that's not for the benefit of the kid. No, no. We know for us everything's a little bit slow financially. We're not. Yeah, so I just want to make the best decision. Yeah, you're going to get there because you're thinking about it and you're being intentional. All right, Brian's in Birmingham.

Hey, Brian, welcome to the Dave Ramsey Show. Hi, Dave and John. Thanks for taking my call. Sure. Oh, Birmingham, UK. I thought it was Alabama. Okay. How can I help?

No, a bit further away. Just a wee bit, yeah. I live in the UK, obviously. Just a little bit. The thing's a little bit different here to the US. And a lot of the things that I look bit different here to the US and a lot of the things that I've I look at YouTube videos blogs that sort of thing a lot of things say that kind of the baby steps in your plan don't apply to the UK but I tend to disagree for the last sort

of year I've gone down a rabbit hole of looking at your videos and followed your steps thus far and it's certainly pretty well I've got out of of debt, and where my wife and I are at the moment, that's where my biggest steps are, four, five, and six. The concern that I have, I'm 31. My wife, she's 28. Prior to looking at your videos, I didn't really know anything about finance at all. I just lived paycheck to paycheck. My concern now is

whether I'm going to have enough in retirement. We're saving 15% of our total gross income. Why wouldn't you have enough? I don't know because I keep punching numbers into the compound. What are you investing it in?

Index funds, so 100% index funds. And what's the rate of return in the last 30 years on those index funds? Well, the index fund I'm on at the moment is only being announced since 2011, and it's 9% every year so far. If you save 15% of your income from 32% to 62 nine percent you're gonna have plenty of money and just so in case people don't know math works the same in any country don't owe people money it works wherever you live it's a cool thing about math it's international the baby steps work exactly the same in the uk as they do in the u.s with the exception of what you put your money into in Baby Step 4, because obviously you have a different retirement system.

But he's got access to a 9% rate of return fund. You're going to be just fine saving 15% of your income in 30 years. This is The Ramsey Show. MC show. Our Scripture of the Day, Proverbs 18, 15. The heart of the discerning acquires knowledge, for the ears of the wise seek it out. Brian Herbert said, The capacity to learn is a gift. The ability to learn is a skill. The willingness to learn is a choice.

That's a strong quote. I like that one. Maria is with us. Maria is in California. Hi, Maria. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you for taking my call.

My honor. What's up? Hi. So I am 20 years old. I have about $30,000 in savings, and I just wanted to get your opinion on what I should do with that money, whether that is putting it in a Roth IRA or saving it for a down payment in the future for a house. Okay. Are you working? Are you in college?

What are you doing? Yeah, I'm in college. In my third year, I'll be graduating next May. Good. And I'm working part-time. With a degree in what? In earth science. Cool.

And hopefully I'm able to change that to a degree in geology. Very cool. Okay. So what are you going to do for a living when you get your degree? Well, I'm thinking about going into hydrogeology, doing work in that, which is why I want to target the geology degree. Right now I'm doing an internship with the water district here in Orange County. So I'm getting the experience that I'll need in the future with this internship.

So yeah, that's kind of what my goal is right now. Okay, so when you finish all of this and you get the dream job, what does it pay? I don't know what a hydrogeologist gets paid you'll have to tell me yeah they get paid um i think starting it's about 80 uh 80k a year yeah and then it goes up to 120 and how long is it going to be before you complete this field of study um well if i if i go the earth science um way i think i maxed out at like 90 which is why i want to do an extra year so if i do the extra year and go into geology i would be graduating may of 2023 and then i can um i would have kind of a bigger pay range um in the future, which would, I think from what I've seen, it's about $120,000 to $180,000 with the hydrogeology. And that will take you an extra year?

Yes. Kind of like doing grad work in a sense, but it's not really. Okay. No, yeah. Okay. So the $20,000, the best investment that Maria can make mathematically is in this investment called Maria. Completing that field of study, completing that degree with what you just told me you're going to make as a result, is worth the investment of the dollars a lot more than a mutual fund or Roth IRA will ever pay you.

So I want every dollar you've got committed to you graduating and you graduating debt-free as soon as possible and pursuing that line of income that you're telling me you can make. Yes. Every dollar. Maria is the best investment Maria has possible because you've chosen a field of study that's not left-handed puppetry. You actually can do something with it, and you've figured out what that is, and you know.

You didn't hesitate when I asked you what the career field looked like and what you would be paid. You already know. This is not a pipe dream. You've got this studied. You've thought this through. You're working in it right now. You've planned it.

You're working the intern. You're doing everything right, kiddo. Thank you. Yeah, I also forgot to mention for my expenses for school, I get financial aid, so basically everything's covered, which is why I didn't know if I should put that money. I don't care. I don't care if you save up $100,000 and you don't even need it.

Go ahead and save it up and make sure that you graduate. The day you graduate, you get this job, we'll start investing, and you can use that $100,000 to buy your first house. Okay. But right now... I will do that. Right now, that money is laying there to make sure Maria graduates, and Maria graduates debt-free.

John's got a Ph.D. in higher education, Maria. So, I mean, you don't see this kind of thing very often. No, this is a laser focus. But when Dave says all your expenses are taken care of, here's what that means. Like most college students will say tuition, room, and board. Dave also means your engine's going to fall out of your car. He means someone's going to throw a rock through your back windshield or you're going to need some more clothes, whatever the thing is.

So get to the finish line owing nobody anything. Does that make sense? Okay. Yeah, it does. It does make sense. That's job one. Job two is get to the finish line with $50,000 in the bank. Okay.

And some great connections and no investments made yet. But you're 23 years old at that point making six figures, and you're going to be very wealthy because you are a laser-focused chick. I mean, you're amazing. Thank you. I'm so proud of you. Very well done. If we could train America to do that, we'd be okay.

My 19-year-old self was like, I don't know, man. Let's think about it, bro. I mean, the number of people getting a degree in beer pong is scary. All right. Helen is with us in Fayetteville. Hey, Helen, what's up? Hi, Dave. Thank you for taking my call.

Sure. How can we help? So my husband and I are on baby steps four, five, and six, and we would really like to get our house paid off in the next 18 to 24 months. Cool. But I'm wondering, does it make sense for us to back off our retirement investing a little bit to free up some money to throw at the mortgage and just to give you a fuller picture of where we are. What's the balance on your mortgage? $250,000. So how much are you going to back off and how quick, what's it going to change the numbers? Well, so we currently have about $425,000 in retirement. He is 50.

I'm 49. That wasn't what I asked. I asked how much you're going to back off and how fast it's going to pay off the mortgage because it's probably not going to do what you think it's going to do. Well, so we're currently only setting aside about 10%. We're maxing out the Roth 401K and roth i'm self-employed roth ira and then we're we've got some cash set aside beyond our six-month emergency fund and we're kind of we're in that position of all right can we start throwing this at the mortgage yeah do we

need to do outside investment outside i'm sorry more time. What did you tell me your household income is? About $400,000. Oh, you didn't tell me. Okay. All right. So if you make $400,000 and you don't want to put in 15%, you only want to put in 10%, how much cash have you got set aside? Let's see, above our six months, about $50,000.

Okay. So let's see, 5% is $50,000. Okay, so let's see. 5% is $80,000. Yeah, so if you do that, that's going to pay off. It's $80,000 a year. Did I do that right? I did do that right. Yeah, that's $80,000 a year. It's 5%.

So if you do that, if you keep only putting 10% in and you take that $50,000 and throw it at the $200,000 mortgage, you should be debt-free in 18 months, like you said, right? Right. And then the rest of your life, you just invest like crazy people. Okay, okay. Yeah, I'm in for that. Okay, all right. Well, I know that 15% is really where you like people to be.

You understand, you're in the top one-half of one percent of income earners. So, you know, you also don't need to spend ten percent of your budget on food because you get really large. True. Because, you know, things start to change with this kind of scale. Right, right. You know, the good news, the great news about this is you guys are actually thinking about it. You're questioning whether you should break a rule in the system, the Dave system, you know, all that. And so you're really, you know, and obviously you're not dumb.

Dumb people don't make 400 grand. So not any I know of. Well, maybe one exception. I know a couple of them. But I just went there in my head. But anyway, I'm just not going to say it. No, you're fine. You're fine.

You're going to do great. You're being intentional. You're being thoughtful. You're being wise. You're going to pay off your house in 18 months, and you're not going to skip a beat. You're going to have millions of dollars in your accounts, and you're going to be great. So proud of you. Very well done.

Very well done. John, good show. Thanks, man. Good job, James and Kelly in the booth. I'm 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 The Ramsey Show.

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