The Ramsey Show - App - Caller vs Dave: Are You Smarter Than Warren Buffet? (Hour 1)

Episode Date: October 7, 2021

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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. I'm Dave Ramsey, your host, Ken Coleman, number one bestselling author, Ramsey personality, host of the Ken Coleman Show, talking about your career, your job, and how you make money is my co-host today.

So we'll be taking your calls about career, job, and how you make money, as well as your life and your money and how you spend it. We're here to help. Open phones at 888-825-5225 so ken and i and dr john deloney were among the team that was with a group of radio executives uh in cape cod this last week and on our way up there i stopped and spoke at liberty university ken's alma mater and i got to speak at their convocation which is about 12 000 students in an arena it's a bit of a trip and a lot of fun. And my friend Jonathan Falwell invited us up, and that's the second time I've gotten to speak there.

It was a pretty incredible thing. So I've been off the microphone for about a week, and it feels good to be back in this seat. So, Kent, had you ever been to Cape Cod before? I had only gone one time when I was in my 20-something. I was working for the governor of Virginia, and I was in charge of getting publicity for the renovation of the governor's mansion. And I came up with a bright idea at 23 to get Bob Vila to come down. Oh. And so they got a hold of him, the governor's PR department, and they said, all right, you've got to fly up with the governor's pilot and get him. So it was a quick visit. It was in bob you landed you touched you touched the base and kept

running so technically yes oh that doesn't officially no so it was a wonderful story but it doesn't count i thought you'd appreciate it so yes uh had only been there for moments if you will and it was wonderful it was uh what a wonderful place you know it's when you get around this great country and in the world you you know, it's amazing how beauty is everywhere and the uniqueness of the culture. It's just such a lovely place. Two of the ships. Yeah.

In the Boston Tea Party were Nantucket whaling ships. Yeah. And so we're, we're on Nantucket for a couple of days before we went over to Cape Cod with all these radio people and got to see all that whole whaling background. I mean, you know, I still, I think of Massachusetts more in modern terms, but it really is, in a sense, the heart of, obviously, the Puritans on Plymouth Rock, that wild turkey are still running around on Cape Cod, thinking, boy, you guys should stand and figure this out still, have you?

This is Thanksgiving dinner. And so, but it was was and the people are just wonderful we love you massachusetts we're we're we got to meet a lot of people up there that were um listeners and viewers of the show and uh a lot a lot of fun i just really it's always does uh does me good to go to a place that's not like home and find there's good people there too you know there's people that you love there too there's people that you're instant friends with and you have an instant bond with there and um everything from the boat captain that took us out to look at the houses and we froze our butts off it was raining and cold all the way to uh he was a listener you know that kind of thing all the way

around to the um uh you know a lot of times it's not the pretty people it's the people that do all the real work that we run into that are listening. It's true. And I guess you're pretty people, too. Don't misunderstand. I was going to say, yeah. It's not like the rich and famous run up to us. It's the people.

It's the lady waiting at our table that runs up to us. How about the owner? We love that. Yeah, the owner of a little shop called Sunset. Sundance. Thank you. Sundance. Don't mess that up.

I messed it up already. It's too late. Sundance, thank you. Sundance. I messed it up already. It's too late. Sundance right there in downtown Chatham. And come to find out, she's going to be with us at Entree Leadership Master Series, our training camp event for leaders.

She's going to be with us in November at Amelia Island. I mean, so cool to run into her. It was so wonderful. Yeah, my wife wandered into that wonderful store and you would have thought Elvis came in the building.

It was... That's right. They're so sweet. Just nice people. Lovely, lovely folks. We loved it. It was a lot of fun. Good to see you, Cape Cod.

It's a place I've never been. Good for a hillbilly to get out and see places. I've got to mention, Dave, that the chowder or the chowder and the lobster. The lobster and the chowder. I've got to tell you, we had a couple of meals that blew my mind with the fresh lobster and the chowder. It was unbelievable. So shout out to the amazing food. A couple of hundred dozen of oysters might have been.

Oh, my gosh. Just a lot of fun, you guys. Thank you. We enjoy being with you guys and enjoy being with you guys right now. Charlotte, North Carolina. Veronica is with us. Hey, Veronica. How are you?

Hi, Dave. Sorry. Thanks for taking my call. How are you? Great. How can we help? Yeah, so I'm newly married. My husband and I, we have debt because I went to college, didn't know any better, and got myself into debt. However, I've been paying off my debt snowball now for at least, I guess, a year and a half, two years now. My husband and I, yeah, my husband and I, we recently got married. When I met him, he was on route to become a chiropractor. So it takes about 10 years to become a chiropractor. He's pretty much in the middle of that. Um, so he's paid it off so far cash. Um, but now we're married. He has debt, you know, because he married me and then we have a fully funded emergency fund. And so we're kind of in a bind wondering what we should do with the money that we would put into debt. Should we

continue putting that into the debt or should we save it? Should we put it in an investment vehicle for his schooling? We're kind of not sure what to do right now. The first step of getting out of debt is avoiding new debt. So you have to manage your cash to go to school without any debt. That's your first goal. Yes. Whatever's left over after you manage your cash to go to school, whatever's left over you can pay on the debt. Okay.

But it'd be crazy for you to pay off your student loan debt and him turn around and borrow to be a chiropractor. You're just swapping hands. Yeah, 100%. Yeah, so no need to do that. We're just going to slow the debt reduction on yours enough to cash flow his chiropractic school. Am I answering this? Is this what you're asking?

Yeah, yeah. Another thing we were thinking about, and I don't know if it would be too late considering that he's already in school, but we've considered maybe like ESAs or 529 plans or something like that. I don't know. I don't know too much about it. I don't think that's necessary because those work best when you have a long time horizon because they grow tax-free.

But if you're going to leave it in there a year, tax-free growth is not relevant. Yeah. Okay. Veronica, you mentioned savings. You mentioned emergency fund. Are you talking about our Baby Step 1 $1,000, or is there more in there? Oh, no, it's the Baby Step 1 emergency fund. Okay, so you don't have any additional cash that you guys have saved up right now?

No, we have put it all into debt or into school. Yeah, well, it all goes into school first, and then if there's anything left, it goes on your debt. And make sure, if you do need to pull some back through the summer to get ready for the fall, that's allowed. Because that's just cash management to go to school. But we're not going to pile up like $100,000 in a savings account just so we can make sure he goes to school. That's not what we're suggesting here. But you guys got to just look out into the future, look at your income versus your outgo and go, okay, here's how we're going to cash flow this. And any spillover, then you throw it at the next thing at the debt is what we're going

to do. So good question. Ken Coleman, Ramsey Personality, my co-host today. This is the Ramsey Show. It continues to amaze me how identity thieves keep finding ways to use our own identities against us. Not only did they commit crimes related to financial fraud, medical ID theft, and insurance benefit fraud, but now we have to deal with home title fraud. Thieves are using your own personal info to take ownership of your home so they can take out loans,

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Open phones at 888-825-5225. No parent ever wants their child to experience the panic of being unprepared for an emergency. But teaching your kids how to be smart with money, this can be a big job in this crazy world we live in. With our digital self-study courses, we got your back. You can rest assured that your teen will know the right way to handle money. And then in five or ten years, when they get married, they'll come on here and do their debt-free scream and tell people they're an everyday millionaire, a Baby Steps millionaire.

No instructors needed. If your teen has a tablet or a computer, they're all set. Text SELFSTUDY to 33789 Text SELFSTUDY to 33789. SELFSTUDY to 33789. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. That means even if you mismeasure or you pick the wrong color, they'll remake your window blinds for free.

Free samples, free shipping. And with the new promos they run every month, you'll save even more. Use the promo code RAMSEY. You'll get the best deal at a great American company, blinds.com. Today's question comes from Robert in Alabama. I'm a couple of years into a middle management position in a tech field at a Fortune 100 company. I dislike the politics and endless meanings of management and miss being able to work on solving technical issues. My salary didn't change much when I moved into this new role. and endless meanings of management and miss being able to work on solving technical issues.

My salary didn't change much when I moved into this new role. How do I talk to my bosses about stepping back into my non-management position, and is this even a good idea? Happens a lot with tech. All the time. And first of all, it is a good idea that you realize, hey, I don't want to be in a leadership role. I want to solve technical problems. That's really key. So then it's just a function of being clear, sitting down with your leaders and going, hey, I'm grateful for this opportunity to be promoted. Here's the deal.

It's not for me. I'm not cut out for it. It's not you guys. It's me. It's not my jam. What I do love more than anything, and I now realize it, is just being in the trenches, getting my hands dirty, solving technical problems. But I know that I took this. Is there a way that we can smoothly move me back into that role? I'd be grateful. I think that's your approach. It's about posture, and it's about just owning the fact that, hey, you took a promotion,

which is the normal human thing to do, but it's not the best fit for you. Yeah, and the weird thing is you might actually make more money as a maker. That's exactly right. People that are makers are creatives, they're tech, coders, writers, architects, salespeople. It's not unusual at all in business for us in leadership to do the exact wrong thing, and that is because they're good at their discipline, we think that means they should be a leader. And leadership is a separate discipline. Yes.

It's a different kind of thing. And not everyone has to aspire to be in leadership to make a great income, to have a very fulfilling career, to win. So the first time I ever saw this, my parents owned a real estate company when I was growing up, and residential real estate's the world's worst at it. As soon as somebody starts selling a bunch, they make them sales manager. It's a completely different set of skills to be sales manager than to be a salesman. You know, selling houses is different than managing people who sell houses.

It really is. Now, you need to know some of the technical things to be able to lead well, and that's in your given space. But there are a lot of residential real estate agents that sell houses that make a lot more than their manager makes. Yeah, and so if we just look at what we love to do. So we teach this here at Ramsey Solutions. Talent is what you do best. Passion is work you love.

Here's the reality. Leadership is work. It is a form. It is a function. It is a function. It is a skill, as Dave said as well. And so if you don't love leading people and serving people, there's no shame in that. But Dave, as you know, getting promoted, which is stage five of the seven stages to doing work you love, is getting promoted. And many times as you win, people go, oh, well, we're going to put you in management. Make sure that you talk to other people who lead.

Do a little homework and go, hey, what do you love most about leading? What do you like least about it? And really soak in it and make sure that it is something that you will really want to do because you know it is one of the most difficult things in the world to do because it is involving humans, and we humans can be great, and we humans can be awful. Business is great until people get involved. All right. Up next is going to be Chris in Los Angeles. Hi,. Business is great until people get involved. All right. Up next is going to be Chris in Los Angeles.

Hi, Chris. Welcome to the Ramsey Show. Hey, Dave. How are you doing? Great, man. What's up? There's a couple things. One, you've done some great work, and in some ways I love you.

In other ways, you're stupid and arrogant. Okay. How can I help you in other ways you're stupid and arrogant okay how can I help you all right by the way that's a great way to start any conversation right there yeah well my first question would be are you smarter than Warren Buffett how old are you because you push I'm 35 okay cool so what I'm sorry let's stop in a second what's the point of your call how can i how can i help you the the point of my call is you push people into actively managed funds when over time if you push people into an index fund they would have about 50 percent more money when they retire. Okay. Not sure where you went to school for your math class, but you failed.

Actually, compounding costs add up dramatically. I got socks older than you. I've been teaching this a while, okay? So this is how this works. Now, here's the thing. You're basically doing doing what bogel said and bogel invented a wonderful thing with the index fund and the s&p 500 funds are wonderful index funds are wonderful uh they are not a cure-all and there is no possible scenario unless you're an absolute idiot in picking your actively managed funds, that you would have 50% more in an index fund.

Now, the actual facts are more than 50% of the funds underperform the indexes. That is a true fact, to your point. That's a different fact. The fact is 2%, 2% above, if you have a 70% return versus a 9% return, which you have the compounding cost bringing your return down by 2%, over 50 years, you'll have half the money. Do the math on that. Google it. That would be true, too, but none of those numbers you're using are accurate in terms of what the S&P has produced or what actively managed funds have produced. The actively managed funds that I personally have picked have outperformed the indexes by more than 2% as a portfolio

because it's fairly easy to study mutual funds and pick them that outperform. But if you're not going to study them and you're not going to have a good advisor in your corner, then using the index funds is a great idea. Here's what we actually found in the real world versus someone's hypothetical vacuum discussion of theory, okay? As we studied the largest study of millionaires, 90% of them, the largest study of millionaires ever done, over 10,000 of them, 90% of themaires ever done over 10 000 of them 90 percent of them became wealthy without becoming without inheritance inheritance did not cause their wealth and almost

all and almost all of them did it with their 401k with actively managed funds now some of the funds actually underperformed the s&p and some of them overperformed the S&P, and some of them used an S&P because a good 500 fund was in their portfolio as well. Now, let's go back to Warren Buffett for just a second. Are you aware that Warren Buffett does not have all of his investments in index funds? Of course. He has it in the holding company. I'm not sure. Other than the fact that he has

stated that the average guy because he's a bogleite the average guy should buy index funds instead of actively managed funds other than that he doesn't actually do what he says he's going to do with that he actually has an actively managed portfolio called berkshire hathaway are you aware of that yes i am and he's's doing it with the money he's leaving to his wife when he dies. Well, that's fine. I mean, where the money's going is not relevant to the mathematical discussion. The mathematical

discussion, Chris, is simply this. Warren Buffett made comments frequently about the average guy should buy index funds. And I really don't have a problem with that. You can get rich with index funds. Not 50% richer. That's complete BS. That is true. But you can get rich with index funds. I don't have any problem with that at all. If that makes me arrogant, fine. But I think we're confused as to who's arrogant

on this call, brother. I think that's the issue. I've got a book suggestion for Chris. It's called How to Win Friends and Influence People. It's a classic. You should read it. I mean, it's good luck with it. I hope it works out for you, but here's the thing. I've been doing what I've been doing for 30 years, Chris, and it's made me a multi, multi, multi, multi-millionaire.

And I invest in actively managed growth stock mutual funds that outperform the indexes across the four types we teach. I actually invest in what I tell people to do. I don't tell people to do something while I'm investing in something else. Different than my friend Warren. This is The Ramsey Solutions, on the debt-free stage, Brandon and Jenna are with us. Hey, guys, how are you?

Hey, Dave, good. Good to have you all. Where do you all live? We're from Virginia. Okay, cool. What part? Northern Virginia area. Ah, Alexandria, like in that area.

Okay, cool. Welcome. How much debt have you paid off? $207,000. Woo! How long did that take? 49 months. Look at you.

And what was your range of income during that four years? Yeah, Dave, we started at $91,000. We went up to about $120,000 and then back down to $93,000. Works for me. What do you all do for a living? I'm a physical therapist. I stay at home with the kids. Works for me. What do you all do for a living? I'm a physical therapist. I stay at home with the kids.

Awesome. Awesome. Very cool. So that's the reason you were working and you went back home with the kids? Yes. All right. That's the up and down part of the game. Good.

Good. What kind of debt was the $207,000? Yeah. So most of it was student loans and we had a car payment, but we also cash flowed two interstate moves and having two babies. Wow. Wow. Yeah, lots of moving, lots of stuff happening. Wow. Good for you guys.

That's amazing. Thanks. So what happened 48 months ago that caused you to get on this Ramsey journey? Well, we got married. That'll do it. And yeah, I was just, I was putting all of our debt together in a spreadsheet, and I felt overwhelmed and just kind of scared. Yeah.

It is terrifying. She had your book, The Total Money Makeover, and one night I didn't want to go to sleep, and I just found that book and started reading it and i finished it in one night wow and um and she hadn't finished it and so we we read it together and then we were both on board wow so okay so that's intense yeah you kind of stay up most of the night read the book and then okay hey babe you got to finish it what did you start doing i mean how how intense was it? I'm just curious. Did you dive in all in right away? Did you have to ease into it? What did that look like?

I think we were both pretty excited about it. We were reading all the stories and seeing what people could do. And we felt like it was something that we really needed at least to try and see what would happen. The hardest part was putting all of our savings into the debt snowball. And that was the hard part of, you know, going. How much was that? Probably like $10,000, I think. Okay.

And you did this right after getting married? About two months, yeah. Okay. So you've been married about four years. Okay. Yeah. All right. A little over four years. Yeah to go very cool so you say okay uh this is overwhelming this is scary i've stayed up all night we're gonna go all in we're gonna attack we're gonna

take the money out of savings oh god i hope my breath i don't know if i can do this or not here we go and wide open How long before you started feeling confident? Yeah, I think... When we started paying off the smaller loans, and we could see that zero balance, that's what really gave us the confidence to keep going. Just keep crossing one more off the list. Yeah, and he had his spreadsheets, and he would reprint them every time we paid something off so we could see the zero balance. I like it.

I like it. That's true. There's something about the human brain that even if it's a little one, you take it off, you go, this might work. This might work. It's called hope, right? Yes. And that hope starts to grow the more successes you have. Congratulations.

Thank you so much. I'm so proud of y'all. Well done. What do you tell people the secret to getting out of debt is? Communication. I think that it really helped that we were both on the same page from the get-go. And, you know, it really helped bring us closer together as a couple yeah for sure very fun and the debt snowball what do you say to other couples

there's other couples listening right now maybe there's uh one half of a couple listening right now and they're going i'm on board but my spouse isn't or i don't even know we can't get through a conversation about the kids school without an argument what would you say to them to encourage them um pray um I think you know I know Dave you preach this um everything through through Christ Jesus and um you know religion is huge for us um we believe we believe in God. We believe in Christ. And we know that through him we were able to do this for sure. Very good.

That's powerful. Yeah. Good answer. Good answer. Yeah. Excellent. Well done, you guys. What was the hardest part for you guys?

Sticking with it, Dave, it was a long time. Yeah, four years. It was a long time yeah four years long time but people can't keep their eyes on the ball for four minutes in this culture yeah that was tough we had we had back and forth though like sometimes it was hard for me sometimes it was hard for him and so you know just kind of supporting each other and reminding each other this is our goal this is what we're we're shooting for. And, you know, we were just talking about this, you know, last night, um, I think it was like two years ago, I just kind of mentioned, you know, Oh, in two years, you know, we have our debt paid off. We

can go do our debt-free scream. And that was, that's what, what, what my motivation was, um, listening to other people do their debt-free scream and hearing their stories gave me motivation to keep going. Yeah. Yeah, that's powerful. Well, I'm so proud of y'all. Well done. Who was your biggest cheerleaders outside the two of you? I think our parents on both sides.

Yeah. They were pretty supportive. They encouraged us. So most of the two was student loans, most of the $200,000, and a whole big chunk of that was PT, had to be. Yeah. Physical therapy school, yeah. Yes.

That's real. Good. And you did it! How old are you? 32. And you're debt-free! You're weird! It's official!

I love it! Well done, you guys. Very, very proud of you. We got a copy of the Legacy Journey for you, because that's the next chapter in your story, to change the legacy of this family you've started. I'm so proud of you. Very, very well done. Sharp couple.

Very sharp. Very sharp. Also going to give you a copy of Total Money Makeover, so you can give it to somebody and keep them up all night. Perfect. I'm not sure that's positive when your book keeps people from sleeping, but okay, I'll go with it. I'll take it as a positive.

I'm going with it. I'm sticking with it. It's worked 10 million times. It's worked, so I'm going sure that's positive when your book keeps people from sleeping. But okay, I'll go with it. I'll take it as a positive. I'm going with this. I'm sticking with it. It's worked 10 million times. It's worked. So I'm going with it. Well done, you guys. Brandon and Jenna, Alexandria, Virginia, $207,000 paid off in 49 months, making $91,000 to $120,000 to $93,000. Two babies and two moves cash flowed in the mix.

Well done. count it down let's hear a debt-free scream three two one we're debt-free i love it they're heroes yeah absolute heroes People who take control of their own lives in a culture that tells them over and over that it's not their fault, that they are victims. They're the heroes. They're taking control of it. And a big old honking student loan debt. You know, there's some heroes in the new documentary. Borrowed Future documentary comes out next week.

It's on Apple TV, on Google Play. It's on Amazon Prime. You can rent it or buy it anywhere great documentaries are viewed. And you can go to BorrowedFuture.com. But in there, we are following some heroes that are fighting through astronomical amounts of student loan debt. And I was telling these radio guys we were with this week, the biggest problem with building this documentary was to build a story arc because there were too many villains.

Yeah, it's true. The villains are everywhere. It's like the zombie apocalypse or something. There's so many villains in it. But the heroes, the people like Jenna and Brandon, who just paid off $7 000 most of which was student loan debt took them four years to slog through it they're 32 years old and they're free and they have babies and they're living their life and they're doing well these are heroes

uh there are a lot of people that are that the student loan their student loan situation regardless of how they got into it regardless regardless of who you blame for it, are completely overwhelmed and paralyzed. Yeah. And the process works. This is another example. In 49 months, that's a long time, $200,000 plus in debt. But you see the emotion on these folks when they share the story, and you feel it on them as well, because there's no stopping them now.

They pushed through, sacrificed for something that is so significantly greater than the challenge that they face. They're so strong. There's no stopping them. And you can do it too. Yeah. And like I said, they've learned to communicate about one of life's most difficult subjects. So now you can fight anything. They can do anything.

I love it. Well done, heroes. I love it. This is The Ramsey Show. Thank you for joining us, America. Ken Coleman, Ramsey Personality, is my co-host today. Becky is with us in Prescott, Arizona. Hi, Becky. Welcome to the Ramsey Show. Hi, Dave. Hi, Ken. Good to talk to you, too.

You, too. I'm kind of needing your help. I have a daughter who's married and has a little two-year-old, and they both are teachers. She's a stay-at-home online teacher. He teaches for a small public school. They would like to buy a home, and they really don't have the income to do it, and I would like to help. But I'd like your advice of what are some possibilities for helping them get a home I know you said don't outright buy it and then have them rent and be

tenants because that makes Thanksgiving dinner very strange but what what ideas do you have for helping our kids get into a home if they don't have the funds to get that started. Okay. Well, the first thing is that if you help someone get into a situation that harms them, that by definition is not helping them. And I think that is the core of what you're asking, is to how to do this wisely so that they're not harmed. But when you say they can't afford it three times in your question,

that scares me a little, that they just don't make enough to pay the payments we're about to sign them up for. We don't want to do that, right? Right. And I know you say 25% of your take-home should be what is going towards that house. Yeah. So maybe the way you help them is you coach them a little on their careers. Maybe the way you help them is we coach them on their budgeting

and get them out of debt. They need to be out of debt and have an emergency fund before they talk about buying a house. But if they're managing money really well on their modest income and they're out of debt and they have their emergency fund and they just don't have enough down payment and you want to give them $100,000 of your $5 million for them to be able to buy a house as a bigger down payment as a gift, I don't have any issue with that at all.

I don't want you to give someone, anyone money who's misbehaving with it because you are not blessing them. No, they're doing actually well. I put them through FPU. They have been on a budget. They are not in debt. They have their emergency fund. But that leap, especially with real estate, and tell me this, do you think this is the time to buy and one should wait on buying a home? What's your opinion on the timing right now? Well, the market's really hot obviously it's

white hot and um the uh uh it's not the it's not a buyer's market it's a seller's market so but does that mean you can't buy right now no but i mean you just have to be wise don't get in a you've seen these movie scenes like with an old jerry lewis movie where somebody gets super excited at an auction and loses their mind and bids like seven times what something's worth. That's what some people are doing with houses right now. And so you don't want to do that. You don't want to lose your mind. And there are people that have lost their minds in this market.

And so if you can be calm and wise and walk away from enough deals to find one that is a reasonable purchase in their situation then again it's not you can't say no don't buy in this market but it's a difficult market to get a a reasonable to good buy-in because it is a seller's market without a doubt so here's the thing um i had a friend who uh gave his children the money to pay cash for their first home. After they were behaving with money wisely and were saving, and they were getting ready to just go get a normal mortgage, and he just gave them the money. He's worth hundreds of millions of dollars.

He had the money. It wasn't a big deal. And so they bought like an $800,000 house or whatever, and he just bought it and handed it to them. No strings attached. The only thing he did ask them to do, because he's like you and me, Becky, he's a Financial Peace University person, right? And he said, I just want you to sign a letter swearing you'll never borrow money again. That's all I want you to do. So that my grandkids never go in debt if I do if i give a gift that this is this lavish

that we truly have broken the chain mathematically on this family tree and uh and he and then he stepped back and was not controlling and didn't interfere in their life didn't question their vacations or anything else he just wanted to keep their word what they said they would do and uh that way that's the last person in his family tree to borrow money and you know those kids those kids were millionaires almost instantaneously And that way, that's the last person in his family tree to borrow money. And, you know, those kids were millionaires almost instantaneously as a result because of their net worth. Yeah, I think that's absolutely the right advice. And, Becky, you know, they're a young couple. It seems like they're doing all the right things.

And the reality is help them be patient. And you yourself need to be patient in this time, you know. And so, look, it's going to cool off at some point. Even if it doesn't, you have the discipline, like Dave said, to be able to walk away from those deals. And I think you're a great lady with a great heart. But, you know, every young couple wants to get in a house. And the reality is, is that it's never worth getting in a house but not being able to do what you need to do to take care of it, be able to you know fix it up and i think that's a temptation right now and sometimes people are making too big of a rather too quick of a leap into this and i'll tell you you have to be real careful of the

tendency for control in these situations um i'll just share with you that becky i think the hardest stage of parenting is when your children are grown because you can no longer tell them what to do. And you just have, you know, not if you want to. Well, you can tell them what to do, but it doesn't work. But, I mean, you know, you just have to. My kids, thank God, have not done a bunch of stupid stuff. But I'm of the age that my friends have grown kids that are 35 or 40 years old or 25 years old,

and the kid is off the ranch and, you know, doing stupid stuff. And stupid is not illegal. And it is very difficult to have good relational boundaries with your grown children for all of us, me included. I do, but my kids have also been taught well enough about boundaries. When I don't, they step in and remind me. But if you're going to get in a financial transaction like this where you're giving them some money, then you've really got to fight that urge to control, that urge that does not give you additional rights to speak into their life. You got to cut bait emotionally, walk away,

act like for the rest of your life you didn't give them a dime. That's good. And something else. On that line, Dave, I think that you're right about this. You know, a lot of parents, they're still the most influential voice in their adult kid's life. And this young couple's in a good place right now. They don't have debt.

They're on a budget. They are listening to Becky, and that's why. Which is great. But don't put pressure on them that already exists from culture, which says, you've got to buy a house, you've got to buy a house. And I think sometimes parents unwittingly will steer kids in the wrong direction just because you feel that cultural pressure as well. They're in good shape, and they've got time.

They're a young couple. You know, prior to 1970, for a young married couple to buy a home in their first five years of marriage was highly unusual yeah i think that's a good thing it was it was highly unusual only in the last couple generations have we deemed it mandatory yeah you know you've been married five minutes what's wrong with you yeah you know and i'm not saying becky's doing no there's a thing out there that's that that is that thing yeah it's very real and so just be careful with all of it but it sounds like she's being very wise i didn't hear anything in there except she's really worried about them being able to afford the payments

they're all about to sign up for yeah and you gotta be careful with that one for sure james is with us in boise idaho hi james what's up hey Dave. Thanks for taking my call. Sure. I'll give you a little bit of context here for a minute. I'll tell you what, go straight to your question so I don't run out of time. Okay, sure thing. So I'm in city government. I'm required to contribute 9% to a public pension plan. On top of that, I do a 457 account. My wife contributes to a 403B. We have a pretty good amount in those two accounts. However, none of them are Roth, obviously. How old are you? So I'm 31. Okay. And your question's what? Is it advantageous to start a Roth now, even though the accounts in those pre-taxes are

pretty good amounts in the compounding interest, obviously. Doesn't matter. I don't want to flip those to a Roth today. I want you to use money that you would have paid on taxes by doing that to pay off your house. But all your future investing should be in a Roth. Roth always beats traditional. Gotcha.

It always beats from this point forward, from today forward, everything that you can do in a Roth, do it. But I would not roll the existing accounts to Roth because that's going to trigger a big tax bill that I don't want you to have to pay a big tax bill while you should be doing other stuff with money other than giving it to the government right now. So let's chunk everything we can into the Roth, get that tax-free growth, put yourself in that position. Good question, sir. Thank you for letting me push you to the point because I knew the top of the hour was coming down on me. Ken Coleman, good hour. Thank you, sir. Very well done, James Childs. Kelly Daniels in the booth. I'm Dave Ramsey, your host. Have a friend or family member that needs a daily dose of Ramsey advice in their life?

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