The Ramsey Show - App - Can I Upgrade My Expensive House? (Hour 2)

Episode Date: February 4, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thanks for joining us. Open phones at 888-825-5225. That's 888-825-5225. Ashley is going to start off this hour in California. Hi, Ashley. How are you? Hi, Dave. I'm so glad to be talking to you. You too. What's up? I've been married for six years and I'm currently nine months pregnant

waiting for my third child. I'm taking care of my kids at home and I'm feeling financially insecure, especially if something happens to my marriage in the future. So, two things that I did, uh, so far recently, I learned that my husband can contribute to an IRA for me. So I had, I had one open for myself and I had him, you know, combine our, the second thing was I had him combine all of our accounts into one joint account. And I just want to know what can I do now to start doing financially secure, or what can he do to help me feel secure, financially secure? Okay, so you have this latent fear he's going to leave and take all the money? I don't know.

I just want to feel like being at home, that he and I are on the same page, that I'm doing. I don't know what to say to him. I think he's doing everything. Oh, you're not discussing money? You're not on the same page? You're not making decisions together? I mean, we are, but I did talk to him about he did combine all of our accounts. Yeah, but I mean, if you're making your decisions together,

then why don't you feel like you have a voice? Because I feel like I want him to combine his IRA and his investments with mine. He can't. You can't. You can't. There's no such thing as a his and her IRA. You have an IRA, he has an IRA. Oh, by the way, California law says if you get divorced

and he has a million dollars and a 401K, you get half of it, even if your name is not on it. What else can I do? Because I don't have any idea, like, what else can I do? Because I don't have any idea, like, what else can I do? I can't bring in an income because I'm staying home with these young kids. I feel like my hands are kind of tied. So he's kind of bringing in an income. Okay, I'm having trouble.

If you're at home with the babies and that's your choice and that's what you want to do, which is a wonderful thing, I do not know that you're vulnerable. This is an irrational fear. Yeah, it is. Okay. I mean, if it was a rational fear, there would be some things we could do tactically to, quote, unquote,

protect you, okay? Now, from a relational standpoint, the two of you need to agree we do not make major financial decisions without us being in agreement. Sharon and I have that contract. I don't go buy a car and go, look what I did. We make that decision together. I don't go buy a piece of property and go, look what I did. We don't make a major contribution to charity and say, look what I did. We don't make a major contribution to charity and say, look what I did. Now, I mean, she might give somebody 500 bucks or something, but I mean,

she didn't give people $5,000. I don't go buy an expensive, you know, $8,000 gun that she doesn't know I'm doing. And she doesn't go buy an $8,000 purse that I don't know she's doing. Right. So we have an agreement that we don't spend or make big decisions without the other one. Secondly, we have an agreement that says that all of our monthly budget, we both have a vote on, and we both agree. All the money comes in. She has not made a dime, well, virtually, a dime of income in 33 years. But yet our income is described as our income because we are married. It is ours. By the way, the law says it's ours. But more importantly, the spirit says it's ours. And we together are managing our money. She has as much say in what happens with the money as I do, because that's how she and I choose to run our relationship.

And by the way, it's the healthiest methodology for your marriage and has the highest probability of being successful financially when you learn to work together like that in unity, trusting each other, having experience. So a budget where every dollar has a name, we both have a vote, those dollars are all assigned, that you have equal say in the money even though you technically did not bring it into the household. Number two, number one is you make a pinky swear and spit shake. We don't make major decisions without each other. Number three, understand that the law gives you access to any assets that have his name on them in the event of a divorce or a death. Number three, understand that the law gives you access to any assets that have

his name on them in the event of a divorce or a death. Number three, put together a will that takes care of you guys if something happens to him. Number four, put together life insurance that takes care of you guys if something happens to him. Lots of it. Lots of life insurance. It's not that expensive. And so those kinds of things can tactically make you secure. But if somehow you've been delivered a message by your parents or society or some stupid college professor that says you don't add value to your family because you're at home with the kids, then that's something that's screwed up in your head that you have to fix.

Is that right? I agree with you. Okay. Listen. Thank you for that. Billy Graham had a mama. Right? Yes.

He changed the world. That's an important job you have. Maybe the most important job on the planet. Now, if you want to do a career while you're doing that, I'm not mad at you for that. But don't listen to voices that devalue your position. Okay? Okay. Thank you. Thank you for that list. that devalue your position. Okay?

Okay. Thank you. Thank you for that list. Yeah. Tactically, you've got to do those things. But listen, if you emotionally decide to be insecure, none of those things are going to fix you. I agree.

Okay. Absolutely. Hey, thanks for the call, kiddo. Anytime you want to talk, I'll preach at you. Just call anytime. Love you, kiddo. Open phones at 888-825-5225. Well, I got to tell you, man, my wife get her hillbilly up.

Somebody devalues a full-time mom because she's been a full-time mom for 33 years now now she's full-time mimi run around you know bothering six grandkids on a regular basis so and uh by the way i have three absolutely incredible stellar adult children that are absolutely incredible stellar husbands and wives and absolutely incredible stellar mommies and daddies themselves with incredible walks with jesus and incredible careers and uh you can blame it on one thing if you want sharon ramsey so i don't know how you can create more value in society than that obviously you got me started didn didn't you? Oh, well, this is The Dave Ramsey Show. Business leaders, I'm not going to lie. Finding the right people to make an impact at your company for years to come is hard work. But I can tell you from personal experience, you can find them when you use LinkedIn Jobs. LinkedIn Jobs reaches candidates you just can't find anywhere else.

And not only are they able to reach these candidates, they're able to get the right people for the right jobs. It's no wonder a hire is made every eight seconds on LinkedIn. And when you consider that over 600 million members visit LinkedIn to make connections, learn and grow as professionals, and discover new job opportunities, it's easy to understand why my team loves LinkedIn Jobs. They make it incredibly easy. Get started with linkedin jobs and get 50 off your first job post visit linkedin.com slash ramsey that's linkedin.com slash ramsey terms and conditions apply couples that have happy marriages are twice as likely to talk about money dreams together invest in each other this valentine's day with gifts that will help you build a bright and debt-free future.

You can save up to 66% during our Valentine's Day sale on books, bundles, and tools that will help strengthen your marriage. Check out our new wedding gift pack as well. If you just got engaged or you're looking for the perfect wedding gift for the happy couple, the wedding gift pack is a must-have for any marriage to take it to the next level. Getting on the same page when it comes to money is one of the keys to having a successful marriage. 66% off during Valentine's Day. Check it out at DaveRamsey.com. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee that means even if you mismeasure, you pick the wrong color, they'll remake the window blinds for free.

They have free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code RAMSY to get the best possible deal. Rules and restrictions apply. Question is from Lance in Florida. Dave, I'm 24 years old. I'm a Financial Peace University graduate. I'm done with step one. I'm on step two, getting out of debt.

I'm working two side jobs as well as my primary to get my debts paid down. The primary full-time benefits job has to make office cuts because giving is down. They cut two employees recently, and I'm worried I might be next. Do I save three to six months of income now and then resume baby step two? Sounds like you need to look for a job. Quick. Now, here's the rule. If you think that there is a problem coming at you, then you don't need to,

and you need to stop your total money makeover baby steps. Push pause. If the problem has a 50% or greater likelihood in your mind, in other words, half a chance that you walk in today, you keep your job, half a chance they're going to lay you off, then it's time to stop your baby steps and build up a big emergency fund and get ready until the storm passes. Now, when you start feeling more secure in your job or you find a different job, therefore you're more secure in a

job, and I think you need to look for a job in your case, then you would push play again on your baby steps. And that means you would clean out any savings you have down to the $1,000 level again, baby step one. And you would throw any of the extra money you had saved to cover the storm back at your baby step two debt snowball. And you get going again. But you can't kind of play it both ways and just generally fret you need to make an honest logical assessment is there a 50 chance or greater that something's getting ready to turn our lives sideways here and so if you think that you know if you're just generally worrying that's different but if you really think you've got a 50% chance of losing your job based on these other layoffs in the next six months,

then you need to push pause, build up cash, and find another job. Because if your job's so unstable, it's not a good job. Tim is with us. Tim's in Hawaii. Hi, Tim. Welcome to the Dave Ramsey Show. Hey, good afternoon, Dave. Thanks for taking my call.

Sure. I'm 42 years old. My wife and I are looking at purchasing a new home, but we're in one of the most expensive real estate areas in the country, and the numbers just become huge. The purchase price of the home we're looking at is $1.9 million. The home needs a little bit of work. It is a waterfront lot with direct ocean access.

The comps are about $2.2 to $2.3 with a little bit of work. It is a waterfront lot with direct ocean access. The comps are about 2.2 to 2.3 with a little bit of work. It's in a state sale. Just a little bit of background, I'm 42 years old. I have an annual income or our household income is just right around $500,000 and a net worth of about 1.6 if I don't include my company. It's probably in the threes if I include the company. We're looking to put around $600,000 down, but the number's just a little bit scary because these are huge numbers, Dave. And to the point, if this is the right financial thing to do

or want to get your opinion on it, we are debt-free except for our current home. Well, the only way I get any relief from fear in numbers is ratios. All the numbers you gave me are very large numbers, and they're very emotionally large, including your freaking income. You're a fabulous income. And so that kind of calms everything. You know, so let's just kind of walk it through for a second. All right.

Take everything you just told me and shave a zero off of it. Okay. You make $50,000, you're looking at a $220,000 house, and your net worth is $180,000. And you've got a company that's worth about another $300,000. That's taking a zero off everything you just told me, right? It is. Doesn't sound that unreasonable to do the deal you're doing no it doesn't scare me what that tells me is the ratios are fine just the sheer

size of it is emotional it is i think that's exactly what it is it's just a gorgeous purchase all i've ever made yeah and it is emotional i experience that all the time around here i look up and we're spending you know we're $200,000 inside this company on some piece of technology, and I'm going, crap. But then I go, yeah, and then I look up and the company made $250 million, you know, top line. And I'm whining about 1%. But it's emotional because I'm from Antioch, Tennessee, man.

$200,000 is a lot of money. Yeah, I'm really from central Florida. That's a lot of money to me too, Dave. You know, and that's what's happening to you is the math is fine. It's just normal that when you make the kind of money you're making and your life is growing financially as fast as your life is growing, it's hard emotionally to keep your arms around it. And the only way I've ever been able to do that or coach someone to do it is to uh to use ratios and uh and you say okay that

makes sense then okay i'll give you another example all right here's a weird one okay but it's the same kind of crap because you ever your neighborhood i grew up in people would say stuff like well the little man can't get ahead you know and that kind of crap right and no one should ever spend that on a car they're starving children in vietnam you know i mean this kind of stuff right and people in africa are dying nobody should ever spend that on a car people said stuff like that so i got a buddy who made 15 million dollars last year income he gave away to ministries three million bucks good for him yeah it's pretty incredible he still got 12 million before taxes after that right so he's still okay you know i mean but it's he's he's exactly having the same conversation that you're having but yet one more

zero on the end of the thing and he goes and he buys a $200,000 car. You know? Wow. I like him. I like him, too. But let's run the ratios, okay? So $15 million, let's chop off a couple zeros, right? He makes $150,000.

$200,000, let's drop off a couple zeros. It's like a guy making a hundred and fifty thousand dollars a year buying a two thousand dollar car you know and that just that tells me to look at him and go dude buy the car you know makes sense you gave you gave you gave over 10x that away in ministries you're investing you're being wise. You're thinking. You didn't make $15 million and spend $22 million.

You're not spending like you're in Congress. And so it's just weird when the numbers get that big, and your numbers are big. I just have to say out loud, it's awkward. Those of us that have achieved certain levels of zeros in our numbers, it's just weird to talk about it, and that's okay. So I think the deal you outlined for me is fine. I don't have a problem with it. Your payment on your house is going to be a 15-year fixed, and it's going to be less than a fourth of your take-home pay,

and it fits the guidelines we're talking about. And it's a fixer-upper, a $2 million fixer-upper. You've got to love that. It was on the beach in Hawaii, too. How great is that? Way to go. Touchdown, baby. Touchdown.

Hey, congratulations, sir. We're very proud for you, proud of your success. Obviously, you're very good at something. People don't give doofuses $500,000 a year. So you're obviously very good at something. People don't give doofuses $500,000 a year. So you're obviously very good at something. Congratulations. This is The Dave Ramsey Show. All right. Yeah. We'll be right back. There's some things you should not do for yourself.

If you have a $200 car, you can work on the car. If you have a $20,000 car, you probably ought to have somebody work on your car. You should not pull your own teeth. Some things you should just not do yourself. Taxes are kind of that way. If you got a really, really simple tax return, not much to it, and you just want to file electronically, that's not a bad idea. If you have a complicated tax return, usually what you pay a tax professional is worth every penny.

It will save you more in taxes. You think I do my own taxes? Not a chance. Now, I know a good bit about taxes. I wouldn't call myself a tax expert. I sometimes even give bad tax advice here on the air, and people correct me later, but I don't do my own taxes. You shouldn't either if you've got a complicated return. If you don't know, here's what I want you to do. to davramsey.com slash tax quiz take a quick assessment davramsey.com slash tax quiz in about three and a half minutes we'll help you figure out if you should file yourself or whether you ought to use a pro and we'll tell you the truth not everyone needs to use a pro but the ones that do really do and this is the time of year don't screw around and wait until april 14th to figure this out okay you need to get on top of this and stay on top of it robert is with us robert is in texas hi robert welcome to the dave ramsey show hi dave my wife

and i are very thankful for your ministry there We were in your old building five years ago during our Baby Step 2 stream. Love it. We're really zooming. We're now on four, five, and six. Good. And we're expecting an old girl here next month. Yay! Awesome, man. Thank you. Thank you. So as part of that, we were actually saving for the IVF fertilization work. And so we have some savings that we thought we were going to have to use, and God told us that we didn't.

And now, as we start thinking about 529s and adding Baby Step 5 into our routine, we're looking at about $20,000 that is there. And I've seriously been considering front-loading a 529 so that we can continue. We've really been making a lot of progress on Baby Step 6. We're $2,500 a month chunking at that house. And so we're fitting right in your averages. If we can continue to do that would be about 10 years yeah total that's awesome man so i guess my question is so this is your first baby our first baby yes yeah i would front load a 529 in a heartbeat i love it in your situation you've got the money laying there the only question is do we throw it at the house or do we throw it in and front-load the 529?

I like that. I did that. It wasn't 529s. They didn't exist when our kids were little. But I front-loaded funds for them to where I could just check the box and went, okay, I have enough in there that it will grow to enough by the time they're 18 to send them to school. Checkbox, done with college. And so you think that the 20 grand would be substantially

i think that's probably going to get you there you could sit down with your smart investor pro and run some calculations pull some actual data from the school you think might be you know your in-state school like if you're in texas university of texas texas tech whatever it is wherever you're thinking about sending them and you go okay in-state tuition is X now, and the average tuition inflation rate for that school has been Y. And 18 years from now, that says that tuition would be around Z, and we need Z, so we need to put A, B, or C into this 529. But I think $20,000, $10,000 this year, $10,000 next year,

into good mutual funds that have a good solid track record of outperforming the S&P will take you there. Perfect. But sit down and do the calculations and be done with it. So this was money left over from in vitro or whatever other fertilization process that you didn't end up needing. Correct. We thought we were going to have to do ibf we had a pretty long yeah

pretty long journey and we thought we were going to have to do ibf so we were saving pretty aggressively for that yeah and we were able to i love the irony that that sends the kid to college that is pretty funny god's got a sense of humor yeah i think that's pretty neat and so what are you gonna do for the next baby same thing that's uh that'd be great just do it again i like it baby by the time the next baby's here at the house is gone that gets a lot easier yeah for sure and it'll be gone before either one of them get there what'll probably end up happening is is that you know you're gonna have all kinds of money flying around by the time they actually get to school because you're going to have been debt free college is going to have been done you're going to be loading up retirement and other things so you guys are just killing it man congratulations so proud of you guys that's wonderful news mary is on the line

in arkansas hey mary how are you hi there dave thank you for taking my call and it's actually alaska i looked at it wrong kelly put it on there wrong i said it wrong can't blame kelly Hey, Mary, how are you? Hi there, Dave. Thank you for taking my call, and it's actually Anchorage, Alaska. Alaska. I looked at it wrong. Kelly put it on there wrong. I said it wrong. Can't blame Kelly this time. I blame her most of the time, but this time it's my fault.

So what's up? Well, I'd like to retire in a few years. I'm 61. My husband's retired at 63, and we both have union retirements. We did buy a business a couple years ago, and it's just strictly open storage for boats and snow machines, and it's up in a lake. It does about 30 a year we can bring in.

And heating, of course, is about what we pay out, and it's a fixer-upper. Anyhow. I'm sorry. Are you making money on the business after you pay the heat bill we are okay well i was trying to keep this short um our bill they come our payments for that place um is it roughly um it'll be paid off in 2022 okay the payment we have on it got Gotcha. What's your question for today then? Well, I want to retire in a couple years, but I don't know what to do about it.

We really don't have any savings, and I know it's really not a wise idea to recover. I know I need to have a plan. Okay. Well, you're only 60, right? 61, 62? Yes. So, I mean, what's your household income? It's roughly 83.

Okay. Why aren't you saving any money? We're putting it in the business right now fixing up the house okay which is losing money the business losing money it it's not no it's not it's it's all income um okay so why is it if it's making money why are you needing to feed it well because we're fixing up the house we had to clean up the property it was a mess and um so we've cleared it all up and, you know, put gravel in, things like that. So the business is in your residence next to you, attached to your residence? Well, my husband's up there, and I'm living in Anchorage because I'm working.

I'm still working. And so when we retire, I want to keep the house here, and I want to go back and forth. You have to be able to afford to do all that yes okay so right now the business is not making money you're reinvesting everything the business is making back into growing that business and fixing up that property and so on correct yes so why aren't you saving money out of the eighty thousand dollar household income you're putting your money more than the business is making back into the business no definitely not at all we just took everything we had and put it into the business and then now

it's uh we we haven't drained our account we're we're trying to get it to build but i'm okay let me stop we're not we're not let's pretend that the business is self-sufficient and whatever improvements that the business is going to do, it's going to fund itself. Okay. In addition to that, you have an $80,000 household income, don't you? Yes. You need to be saving a bunch out of that.

That's my point. I know. Okay? Like, all of it. Right fast. And if you do that for five years, that'll be a substantial amount of money. That's a little nest egg there. I mean, you have $300,000 or $400,000 if you do that for five years, that'll be a substantial amount of money. That's a little nest egg there. I mean, you have three or four hundred thousand bucks

if you watch what you're doing. Five or six years. So, yeah, you'll be working a little while. But you're trying to maintain two residents. You're trying to start and run a business. And you're not operating with a budget. And you've not made savings a priority. Something's going to give here.

If you want this to work. This is the Dave Ramsey Show. Elaine is with us in Louisiana. Hi, Elaine. Welcome to The Dave Ramsey Show. Hi. Thank you for taking my call. I need your help in what I need to do. I'm going through a divorce, and my husband has filed Chapter 13 bankruptcy.

And I'm in the home. I have some equity in the home, but not nearly enough to pay the bankruptcy. And I don't know what to do in a community property state. I believe his creditors will eventually come after me, and I can't afford it. If he completes the Chapter 13, they will not come after you. The Chapter 13 is a payment plan that lasts five years, and at the end of the payment plan, the bankruptcy is concluded, and they have received all that they're going to receive.

If he fails and does not complete the 13, which happens, sadly, a large percentage of the time, then you could be left holding the bag because he would convert to a Chapter 7, wiping out all of his obligation, leaving you on the hook for all of it. Are you signed up with a bunch of these creditors? No, none of them. Okay. And when will the divorce be final? In a few months.

Why so long? Just a minor trial, and you have to wait a year. Oh, okay. All right. And when will he file? he already filed he already did he's already filed and he has a uh enormous note that he pays every month right that i don't if he can keep making that note until if he can keep making that note until the divorce is final you're no longer on the hook.

What do you mean? Well, when you're not married to him, community property does not apply. You're not on the hook for his debts anymore. Now, any debts that have your name on them, that you put your name on, you're on the hook for those. Right. Have you got your name on all this debt that he's got? No, I do not how much debt has your name on it none of it you don't have any debt in your name anywhere only the home okay and but his attorney told him that because he had a business and my name was on that business. It's not anymore, though, because you're divorced.

We'll be divorced. Yes. They're saying that because of what happened in the past during the time the debt was made, we were a community. I don't think that's right. I'm not an attorney you need to talk to your attorney to be sure because louisiana does have some unusual laws in this regard but um i did talk to my attorney and they she just said that they could possibly possibly come after me i don't think i don't think i don't think they can i don't think they will i disagree i really i think your attorney's acting your divorce attorney's acting like a

bankruptcy attorney here i you know again it doesn't have your name on it and you're not married to the guy and right now it's in bankruptcy as long as he's in chapter 13 you're completely protected you don't have to worry about it it's the only time we worry about this is if the chapter 13 fails right which i don't i don't see it you don't think he's going to make it because his notes too high in the 13 way way way too high okay all right i mean i just i want him to hang on to the divorce's final, and then you've got real grounds to say, I'm not paying anything that's his. I mean, you're no more liable for his debts than you would be mine at that point. Right.

And I think it's a real stretch to say your name was on the business, he ran up all the debt, and he went into a Chapter 13, and after a divorce, that they're going to come back based on the fact that you had your name on a few of the documents at the business you don't have your name on anything at the business now right no well the bank account was only thing my name was on yeah i don't think i don't think there's a chance they can get you on this again i'm practicing law here which is dangerous okay i'm not a lawyer but i really i if i were in your shoes i would hire an attorney that had big long fangs and uh would scratch somebody's eyes out if they came after you i just don't think it's going to happen i really really it's not logical it doesn't flow with standard legal practice and uh plus you don't

have anything it's not like you're sitting there on a million dollars so it's not like you got a target so if you're a big target i guess we'd worry about it even more so let's get the let's make sure bubba stays alive until the divorce is final that's a big thing he doesn't he did that bankruptcy stays upright until then that that's a big deal right there make sure your name's not currently on anything having to do with that business so that it's all finalized at the divorce, and then you worry about the house, and you worry about your bills, and let's get you moving on all of that. Glenn is with us. Glenn is in Ohio. Hi, Glenn. How are you?

Good, Dave. Thanks for taking my call. Sure. What's up? Well, I just got a quick question. I'm a state employee with Ohio, and we have our own retirement. Yep. That's the P-E-R-S. I'm really wanting to start investing, and I think I might already know the question I answered, but I'm just kind of seeking counsel here before I jump in blindly.

But the state offers a deferred comp right um i mean the thing that don't sit well with me on the deferred comp is is you can you can you can place it in three categories low risk medium risk and high risk yep but they can't advise you on where to put your money at and to what company. And I'm like, you know, on this list, it's like there's hundreds of companies that you can put your money into. I'm like, I don't know the first thing about the stock market. Well, you're not buying individual stocks inside those companies, and the high-risk category is going to be mutual funds that are growth stock mutual funds. And in reality, it's not really that high a risk.

And so that's the category you're going to want to play in, and you need to get in there and learn about what it is. Now, they don't have a 401K at all, right? No, no, no. It's a big PURF. I know. I know you got the 457. You do not want to invest any money into the state retirement at all

except what's mandatory and you don't have a choice on. The only money you want to invest is in Roth IRAs on your own. If you're married, you and your wife do a Roth IRA in good mutual funds across four categories, growth, growth and income, aggressive growth, and international. When you sit down with your smart investor pro click smart investor at Dave Ramsey dot com find someone we recommend we love in your area that's got the heart of a teacher that you like sit down with them you

pick the four mutual funds and get your IRA started go ahead and take your 457 options in and let them look at them with you and they'll help you root through all of that and show you what to do and don't do it because they said do it do it because they teach you and you understand what to do don't do it because i said do it do it because i taught you and you understand what to do so take your time learn learn learn learn learn and then start investing the good news is this is not these concepts are not rocket science. They're not that hard to get your head around. So sit down with somebody like a smart investor pro to help you get your IRAs going. And in the process of doing that, that person can coach you up, teach you up,

grow you up on the mutual funds that are inside your 457, and you can decide how much of that you want to do. But the 457 is the bottom of the list for me. It's not a bad thing. It's just not as good as a lot of the other options that are out there. So it's deferred comp, meaning you're just not taking your compensation now. You are putting off your compensation. That's all it means. And since you put it off, you don't get taxed on it until you take it. So it's deferring, putting off, delaying your paycheck. And if you don't take your paycheck, you don't get taxed on it.

That's all it is. That's how it works. But the government allows you under the 457 program, which that's Section 457 in the IRS Code regarding payroll withholding for investment purposes, right? That's where 457 gets its name, 401K. Section 401, subsection K is where that item, that regulation in the IRS code comes from. 403, subsection B, that's where you get it for nurses and doctors and hospital and teachers and nonprofits that want to do it that way. So, you know, that's where this comes from. And it's not really, it's not that much to it.

It just sounds awfully fancy. So dig in there and learn about it and then get your investments going. You'll be in great shape. That puts us out of the Dave Ramsey Show and the books. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I'm Dave Ramsey, your host, and we will be back. Hey, it's Blake Thompson, senior executive producer for the show.

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