The Ramsey Show - App - Can You Still Have Fun if You Have a Budget? (Hour 1)

Episode Date: February 15, 2024

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your life. Three areas. Win with your money, win at work, and win in your relationships. That is the game and you can crush it.

888-825-5225 888-825-5225 I'm Ken Coleman joined by the fabulous, the incomparable Jade Warshaw. Now I'm turning into a boxing announcer.

Always fun. We love being together. Jade's going to help you on the money issues. I'll weigh in, and I'll dive in on the income, and she'll help out on that as well. That's what we're talking about, more income, getting rid of debt. We have a great group of people, fabulous-looking group of people out in the lobby today watching. You can come watch the show anytime that we're on. Go uh go to ramsay solutions.com look at the schedule we'd love to see you come out and say hi during the breaks and all that jazz and it's always good to have folks staring at us like we're zoo animals uh that's for yourself ken yeah well there's some lovely zoo animals i would put you

as a peacock maybe okay i'll take you okay with one? I'll take a peacock. Don't tell me what I am. I'm afraid I won't be able to handle it. Here we go. Manuel or Manuel? I never know. Manuel. I say Manuel. Let's see. St. Louis, Missouri.

What say you? It's Manuel. It's Manuel. Manuel. All right. No, no. We got to call you by your name, Manuel. So how can we help?

All right. All right. So I'm about to graduate from college with a degree in mechanical by your name, man. Manuel. So how can we help? Hi. All right. So I'm about to graduate from college with a degree in mechanical engineering in about a year. But my dream career is to be a prosthetist. And you have to go to grad school for three years. And that's going to be about $160,000. Plus, there's only like eight schools in America that have it. And the closest one to me is Chicago. So far, I've cash flowed all of college. And I want to cash flow grad school, but that's going to take, like, six years, I assume, to, like, save up all that money.

And I didn't know if it would be best to just go ahead and take out a loan and, like, pay it off later when I get my career or to go ahead, work as an engineer, save up money. But I don't know where I'll be in life in a few years. That option. So I'll be like, yeah. Let's break that down. So Jade and I, we want you to go with no loan. So let's start to map this out so it doesn't feel like you're placing your life on hold. Because can we be honest?

That's the emotion. And I get it. Yeah. Oh, six years. All right. Did you say $160,000000 160 okay now here's my question you said there were only thousand dollars each year okay and you said there were only eight schools in america that offered this particular degree grad level degree correct yeah that's

out of my research yeah is 160 the high low or medium of the eight prices? It seems about like the medium, like the regular price. What's the lowest price? I'm curious. I actually don't know that right off. I'd find out. It's cool to look through. I'd find out. Let me tell you why.

The good people that you're going to be putting prosthetics on or designing prosthetics for and the people that will hire you do not care which school you go to do you agree or disagree with that statement i'm fine with whatever agree yeah all right definitely agree so homework assignment number one jade i want manual finding out what the lowest price school is let's say it's a hundred for sake of discussion okay now all of a sudden if i'm doing the math right now i always have to have jade help me because normally i have to take my shoes off to do math 100 divided by two can but the point is is that you've got a six-year timeline for the 160 price you're you're looking at it kind of going

for me to save cash it's going to take me six years i'm trying to get you in a mental process by which you start to go wait a second i am not limited and I'm not putting myself on hold. So practically what we're doing right now, Manuel, is we're going, all right, I need to find out what the lowest price school is. Let's say for sake of discussion, it's $100,000. How does that, let's play this game out. How does that change that timeline from six years to, what do you think, off the cuff? I don't know, maybe three, maybe four.

I agree with that. By the way, we're not holding you to these numbers. We're just working the exercise that you need to do after the call. So now we've shaved off years, right? And let's not forget, we shaved off lots of dollars. And you're going to be making really good money as an engineer. Now I have one other question, and I want Jay to weigh in here. But the other question I have is,

is it possible to work your way into this role, not educate your way into this role? What I mean by that is, if you start out in engineering and you make your way into that industry and maybe there's a level or two below the designing of the prosthetics or whatever you described. Could it be possible that you work your way into that? Or is it only way in is the master's, the grad degree? From everything I've read, it's the only way in is to a master's.

All right, I'm going to challenge you. Let me challenge you. There's a lot of things I've read and I think I'm right. And then I meet somebody who's actually experienced it and actually knows. So that's homework assignment number two, right? I want to know by talking to somebody in the field who hires people in the field,

who's working in the field, is it the only way that I get that job by getting the grad degree? I think you get that answer and the answer to the first homework assignment, which is what's the lowest cost school of the eight. And, Jade, why is it so important that he be patient and wait three years, four years to save up? Why do we have that stance? Well, I'm looking at a couple of things here. So I'm really interested in where the lower price range schools are. I wish I knew that number.

Because that dictates a lot for us. But I think that, to Ken's point, while you are where you're at, what will you be earning as a mechanical engineer out of the gate? I'm currently at an internship, and I rolled over to a career. And so I'm not sure what the price is. I think I've heard a lot of's like around $40,000 as like the first year income. First year income as a mechanical engineer?

I don't know. Right after graduation. I heard it could fluctuate depending on where you are but that's because I'm at a startup now. Okay. I just think that you need to do a lot more research. I feel like, and I'm not faulting you on

this because you've been focused on your education but i want to turn a lot more of those i don't knows or i thinks or i'm not sure i want those to become way more definite because where you work in the amount of income that you're able to earn and knowing where you're going to go next is a huge informative piece of this puzzle right like if you if you if you find out hey there's mechanical engineer jobs in denver that pay twice as much as the ones that are over here in new mexico you're right you know i'm saying and then you find out oh and by the way that least expensive program is also in colorado just a couple minutes outside of town like you might find some things that really inform the choices that you make next so you're really in research mode that's where you're at right now is research mode and then

the mindset simply has to be like ken said no matter what i do debt is not an option so maybe you're calling those places up and you're saying hey i've got this degree i've been working in this field for the last year and a half is there i'm so interested in working my way into prosthetics. What can that look like? Is there a program? Is there a fellowship? Is there an internship? How can I do this to where you guys are going to fund part of this or all of this?

Ask questions. And, man, y'all, just leave it with this. I want you to go watch our documentary, Bar of Future, because there's a dentist that's featured in that powerful documentary, and you just need to get his story, because if he could get a hold of you, he'd go, it is not worth all the debt on the back end. Even though you're doing the thing and you're making good money,

you do not want to be stuck with all that debt and resent the very thing that you feel you're supposed to do with your life. You're going to do good stuff. Thank you so much for the call. Excited about your future. Man, don't take the debt. It's never worth it. This is The Ramsey Show.

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That's chministries.org slash budget. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me this hour, and we are here for you, America. 888-825-5225. Dallas, Texas is where we go next. Our Janice is on the line.

Our Janice, how can we help? Hey, how are you guys? First of all, I'm really excited to be on the show for my first time, and I have a bit of a different kind of question for you guys. A different kind of question? Here we go. I'm ready. So my question is, how can I budget to have fun? The reason why I'm asking is because a lot of my family is dispersed in different parts of the world.

Okay. So I always have to find a way to budget to travel and go visit and kind of connect back with my family. So to me, it's very important to make memories. Luckily, I never opened up any credit cards. I don't have any debt. I have a house paid off that I'm renting at the moment. I'm actually working on renting out another RV that I have.

So how can I also just budget so that I can go out and kind of just spend my money and some fun? That's cool. Hey, it sounds like you've done a great job with your financial situation. You don't have any debt. Did you say you have a paid off house, but you're renting it out? Yes. Awesome. And then you've got an RV that you're renting out.

Where are you living? I'm actually renting a house. A second house? Yes. Okay. Interesting. Okay. So tell me a little bit about how much income you're bringing in every month.

So I'm bringing, just for my job, it's about $4,000 a month. And then with the rental, it's another $1,200. And once I get the RV rented out, I'm planning on renting it out for another $750 a month. Okay. And how long will you be able to rent that RV out at $750 because it's going down in value and is the RV completely paid off? Yes, the RV is completely paid off. So, I mean, I just would rent it as long as I possibly can or eventually sell it. But for now, I'm looking to just get some money out of it and just kind of rent it out. And what do you pay in rent for yourself? I pay $1,000 in rent. $1,000.

Okay, interesting. So, okay. You asked one question, but I can't help but pull a thread of another one. It is interesting to me that you are operating a rental and you're renting for a $200 spread. Yes. So, um, eventually, well, my plan was that I was going to live in it, but, um, the rent has been increasing more and more in Texas. I originally am from New Jersey. I moved from New Jersey to kind of get away from all the expenses and stuff. And I came here. So everything started to increase here. So I was like, well, if I just live in it,

I mean, I won't really pay anything, but I was like, maybe I can get some money out of it. And I'll be honest with you, I don't have any kids. I don't have like, I guess, major huge responsibilities in my life right now. But the rental is not where you live. How far away is it from where you live how far away is it from where you live the rental is 20 minutes from where oh okay okay okay okay let me let me

keep myself on track if let me just give you a piece of advice that you didn't ask for if i were you i would not be renting i'd live in the house that you own because it's not worth when you said it you're right rent is going up so you're charging, but you're also paying more. That's why you're never making a spread on it. So if I were you, I would live in the house that I own. And if you want to do rental property, I would save up because like you said, you don't have any debt. And then I would save up until you can buy another piece of real estate in cash and do it that way. And I think you're going to get where you want to go a lot quicker that way. Okay. Now let's talk about... Go ahead.

I'm sorry. The reason why I originally got a rental was because it was a whole mix of between a family thing going on with the property at first. So I kind of rented to get out of that situation. But you own the house. Yes, right. But it was a whole sentimental thing, you know,

having family come over and can I live in it and things like that. Oh, so you have family renting the house? Yes. Yes. Right now, still? I'm sorry? Still? No, no, not anymore. That's what I thought.

We appreciate the reason, but the advice is still correct. It doesn't change what I think that you should do and i get that i'm just a radio person that you called into so um let's get to the crux of what you want to do which is you want to travel more and you're you're on the right track you have to put in the budget so this is just a matter of you getting very detailed on what that looks like where are you traveling to how often are you trying to travel and really being detailed on what that looks like. Where are you traveling to? How often are you trying to travel? And really being detailed on what it's actually going to be costing and letting those items be reflected in your line items.

So if you're saying, all right, where's one place that you have family? So I can give you an example. Last about two years, I think it's been two years already, I met up with my uncle. We actually went to the World Cup in Qatar together. Last about two years, I think it's been two years already, I met up with my uncle. We actually went to the World Cup in Qatar together.

So that's one place that we traveled to. He happens to live in Romania. And then his brother, which is my uncle, lives in Spain. And then I have a family in Mexico. So it's kind of between like Europe, Mexico, and those areas. But it's- So when you went to Qatar, when you went to Qatar, what was the problem?

Or was there a problem? I'm guessing that you budgeted to go because you said you don't have any debt. So tell me where the problem lies. So to be honest, so the problem is, I also have this thing where it hurts me when I have to start taking money out of my account. For some

reason, it bothers me. I got to a point in my life where even though I know I have a good emergency fund and my checking account is still good, it starts to bother me when it goes down. It might feel a little excessive. Here's what you have to decide the tension between. You said that it's important for you to see your family but we also know that your family it sounds like is spread across continents and countries so it can when you're making four thousand dollars a month i'm just going to be honest with you it can feel excessive if you're going to spain and mexico and romania and europe and qatar like there is a part of that that even if you're making work, there's probably a part of you that's like, hey, can this money be better spent elsewhere?

And that's where you are going to have to go. Okay, the opportunity cost of this is what? If I'm going to Qatar, if I'm going to Romania, if I'm going to Mexico, is that keeping me from investing? Because are you currently investing 15% of your income? So I'm not really. I do my stuff,

but it's not really a thing that is working out for me. Okay. So I think that's what you're feeling. I think you're feeling the tension of, okay, there's things that I want to do, but I'm doing them at the expense of other things that I really need to be doing. Right? So the way we teach is you're already in a great spot. You have no debt um do you have any money saved not retirement but just like a saved emergency fund yes i do have i do have some money

how much i have about 12 grand right now okay great so you might bump that up a little bit since you're a single guy try to get it to six months of expenses but then i think what's happening is you're not investing and we would suggest that at this point you're investing 15 of your income every single month every time you get a check and I think once you start doing those things you're going to go okay when I have extra it truly is extra like I'm taking care of the things I'm supposed to take care of and then it's reasonable for you to think okay I'm taking care of the things I'm supposed to take care of. And then it's reasonable for you to think, okay, I'm a single guy. I don't have a lot of attachment. Are there two trips that I can plan a year?

Yeah, and this is pretty simple. You need to reset your expectations. You just don't have a lot of margin. I think you said your rent was $1,000. You make $4,000. That's too high. We've already told you what to do there. Run the baby steps out.

And after you do everything that Jay told you, it's back to the line item in the budget. I've got, I'm making this up, $150 a month that I could put towards the, we used to have an envelope called the blow envelope when Dave first started teaching. It was like blow money, fund money. And that's how you started the call. So here's the deal. I'm going to save up 150 bucks a month because that's what I can do after I take care of business. And here's the other thing. I would sell the RV and get what money you can for that now. It doesn't make a lot of sense. So let's say it's worth 15. I'd go ahead and get the 15 cash and I'd start applying that to the baby steps. And I also want to challenge you to make more money in four grand a month. You know, more income. If I got to take on a side hustle and all of a sudden that side hustle is my travel fund. Fantastic. But I think it's very

simple. Real expectations based on your income and then some discipline. And I think you're sudden that side hustle is my travel fund fantastic but i think it's very simple real expectations based on your income and then some discipline and i think you're a disciplined guy but i think there's some strategies that you can take to bring in more income and not be putting money into things like renting when you own a home yeah and an rv it's a depreciating asset depreciating asset i'd sell it now but he's trying to do the most he's trying to do everything yeah i'd rather travel back if it were me i'd rather travel yeah scale it back so uh there you go thanks for the call our genus appreciate you this is the ramsey show quick break we're coming right back don't move welcome back to the ram. Thrilled to have you with us. 888-825-5225 is the phone number.

That's 888-825-5225. If you're new to us, and boy, we hear about this all the time, new people coming in all the time, YouTube, podcast, first of all, welcome. We're thrilled you're here. This is a safe place, and I'm telling you, when you talk about money, when you talk about your work, your income, you talk about your relationships, it's very vulnerable. And I just want you to know that we're here to help you as a caller.

You aren't a prop. You are the reason we do the show. And you represent millions of people who can connect to you. So I just wanted to say that if you're new, welcome but feel safe. That phone number is for you, and we want to help you win. Jade Warshaw is alongside of me. I'm Ken Coleman. We're your friends, I promise. 888-825-5225. All right, up north we go, New Haven, Connecticut.

That's where Chris is waiting. Chris, how can we help? Hey, thanks for taking my call. How are you doing? We're having a blast. What's going help? Hey, thanks for taking my call. How are you doing? We're having a blast. What's going on? So, work question for you. Hoping you can help me out. Okay. Love my job. Absolutely love it. Been there for about two years. Work for a very big company. So, you can kind of see where I'm going here. And I've heard stories about this all the time,

but I was hoping it would never happen to me, is that everyone loves my work. Everyone loves what I do. I have no problems with the people I work with at all, but I was promised a promotion at my most recent review. It's not like I was begging for one. It was discussed heavily. And well, it's been quite a few months and it still hasn't happened yet. So I absolutely love what I do, but how do I be a little more aggressive in pushing for that without burning bridges?

Sure. All right, let's go back. So you said you weren't begging for it. Did you bring it up or did your leader bring it up in the review? My leader did initially. Interesting. Did they give you a timeline? No. And did they discuss any comp? They discussed a potential increase. Nothing specific. I got to tell you, I love Jay's question. If you combine it with no details at all on timeline, what it looks like, I feel like maybe this was a carrot. I think you're doing a really good job. And I think this leader is probably an inexperienced leader. I'm not going to project anything more negative than that. But I think that's an immature move. And it feels like, whether it was intentional or not, it feels manipulative in the form of they're dangling a carrot. And for people that are really young and never heard that analogy, that's the idea of,

you know, the old cartoons, you know, they would tease Bugs Bunny or whatever with a carrot and a stick and just hold it out just far enough that he couldn't get it to keep him moving and that's the idea and Chris you resonated with that when I said it correct yeah okay now let's go back for a second you said that you're begging for it so had you had this annual review and the boss says hey we love you love what you're doing great job keep it up and and we feel like, hey, we love you, love what you're doing, great job, keep it up, and we feel like if you keep it up, you've got some real growth here. Had they left it at that, how would you walk away from that meeting as opposed to kind of expecting a promotion soon? How would that be different? Pretty good. You'd have been fine. Yeah. Yeah.

So now here's what you got to do. You've got an immature leadership move. Now you have to be mature. So I'm talking mindset first. I'm going to tell you practically what I would do in a second, but I want to make sure you now have to hold serve and go, that was an immature move. I got to be mature. Does that make sense?

Absolutely. And that's why I'm going back to reframe it. You would have been fine. You'd have just been, man, I'm really enjoying this. Now, everybody wants to progress. Every human wants to know, where do I stand now? And do I have an opportunity to progress? So now this has been dangled. It hasn't happened. What I would do is I would set up a meeting and I would go back in and say, hey, at my annual, this is what was said. And I got my brain going. Now I want to give some ownership to the boss, but I'm going to be humble with this. It got my brain going and we haven't talked about

it since. And so I started going, you know what, what would a growth plan look like? Like where do, and so I want to come back to you and go, Hey, in the annual, we didn't really talk about maybe some areas where you think that I can grow some skills, maybe some tools I can add to my tool belt, Make this about humble and hungry here and go, what do you want? What do you think? I'd love to some more feedback on that. And then, hey, is there a timeline? And how is that timeline affected by my performance? Because you kind of got me excited. And so we're going to put it back in their plate with some humility. And here's why we're doing that. We're going to find out really quick whether that was

truly a carrot. And we're going to give that leader actually a little bit of what I'm going to call positive pressure to come up with a plan. But you're going to put it in their lap. They get to develop the plan and we want to measure it. And so when I create a personal growth plan that they help map out and it's tied to performance, and the performance is tied to income and promotion, now we've got ourselves a plan, and that's the best way to ask for a raise. Never ask for a raise. But in this situation, it's not as simple as the raise. That's how I would go about it.

I'd love to know what Jade thinks. How would you go about it? What would you do? I think you're right, Ken. What was formulating in my mind, and it might be the question that chris has or maybe somebody listening is if you're you are in a position and you have outperformed your position to the point where you can be talking about a raise what's what's a fair time frame for you to see that play out in the form of an actual income increase as a because you? Because Chris might go and follow your instruction

and the guy be like, okay, yeah. And they create a roadmap or a rally plan around this. But what's a fair timeline to watch that shake out? Yeah, it's a good question. I'll answer it. But Chris, question, did you get any kind of annual bump? And we know in corporate America, your typical bump on an annual raise, and usually it's tied to your annual, is a three to 4% bump. Did you get any kind of annual bump? I did. What did you get?

3%. Okay, so that falls within the averages. So this was not about the raise in this case. It was kind of like you're in line for a promotion, and then there's just been crickets. So to answer your question for Chris, you always, your baseline for a raise discussion is usually at your annual. And then outside of that, that's where I want to be developing a plan to where I'm not just relying on the annual 3%. And I call it like a growth plan. I always want to sit with my leader and go, and I do it here. But I mean, even with that, like what's the, what's the timeframe on that? I don't think there is.

That's too formulaic. I think it is based on, if I'm talking to my leader and we're talking healthy here and the leader's going, I see you're a performance guy. Let's lay out a path for growth. And if I hit these numbers,

then I get this. That becomes its own timeline, if that makes sense. I see. Yeah. But Chris, let's let you step in here. I mean, we told you what we thought. Any more questions? Does that help? You have more questions?

What's going on in your head? I think it's all good. I'm willing to work with them. Let's just say that. But I don't want to again, like you said, be waiting too long. Well, you know what's going on? This dangling of the carrot has created

a potential for resentment. Yeah, it went as a whistle and now he's like, let's go. You get it. I would do it the way that, because here's what we're going to do. If you do what I told you to do, we're going to find out real quick if they meant it. Right now, I think you and I and Jade are going,

there's a possibility they meant it and they're busy they've got distracted maybe or maybe circumstances changed and they just haven't been good at communicating i think you need to get to the bottom of it so that you now have uh proper expectations that keeps us from being resentful does that make sense absolutely all right my man hang in there but go after it listen uh let me tell you this i i i wrote this in my first book the proximity principle was about connecting and turning connections and opportunities but it's it's true in this situation jade and this is a good reminder for people you know you're not the only person your boss leads right and there's a there's a

guy used to work for who used to tell me this i I don't know where he got it, but he said, nothing's moved unless it's shoved. And sometimes you've got to shove your leader a little bit because you're not the only person they're thinking about. They didn't wake up this morning, and while they're getting ready for work, they didn't go, huh, I've got to think about Chris's plan and how I'm going to promote him today. They're just not. And so you've got to stay in front of them a little bit, and there's an art to that. What say you about that? I think that's exactly right.

I think sometimes – You know what I'm talking about. I think sometimes it's a little bit of a test to see, like, how bad do you want it, and are you going to go get it and make it happen? Push forward. There's a respectful push. Oh, 100%. And it's basically get in front of your leader and be like –

Hey, remember when you said that thing? Yeah. Hey, I want to play. Yeah. Listen, there were times where I got in the game only because I said, hey, coach, I'm ready to get back in. Put me in, coach. And he was like, oh, yeah, Coleman. All right, get back in.

That's right. That guy's coaching the game. I got to tell him, I want to go in, coach. This is the Ramsey Show. Welcome back to the Ramsey Show. So thrilled to have you with us. I'm Ken Coleman, and Jade Warshaw is with me as well. And we're here for you, America.

888-825-5225. Now, the board says on line four that Jim from Scranton, Pennsylvania is on the line. And you know what I'm thinking. Come on, Michael Scott. It's all I can think about is Dunder Mifflin. I'm hearing the theme song in my head right now. All right, let's see what this is all about. Jim, you're on the Ramsey Show.

How can we help? Hi, Ken. Hi, Jade. I had a question about a vehicle loan. What's up? I have my emergency fund saved. I have six months emergency fund saved. I have six months expenses saved. The only debt that I have is my mortgage and this vehicle loan.

Okay. My question is, I'm fortunate enough that my job provides a pension. So I have a pension for retirement. Okay. And I also am involved in a deferred compensation program with that. Okay, that's great. Separately, I have a Roth IRA that I no longer contribute to. Okay.

So my question is, that Roth, should I cash that and pay off my vehicle, my truck? No, I would not do that. But I do wonder why you have a Roth IRA that you no longer contribute to, because if you have a pension, we would still say that you're investing a certain percentage into separate retirement funds. And a Roth IRA would be a perfect place to start. Sure, sure. So I do have a separate one.

It's the Roth that I was talking about, I was actually in charge of and I was managing. I changed that to what we call a deferred compensation. So I do have money coming out into a separate retirement account. It's just that this particular lot is no longer receiving any contributions. Okay. And the deferred compensation, it's going, what type of, where is it going? What's it going into? I believe it's a pre-tax account and it's managed by a third party. It's obviously not managed by me. Okay. And are you choosing the investments? No. Okay. So back to what I said, and I'll get to the rest of the question, but this is really important for you and anybody else listening. When you have something like a pension or deferred

compensation, that's great, but because you're not in control of it, the pension, obviously, there's a huge portion of that that you're not in control of. And the pension, obviously, there's a huge portion of that, that you're not in control of. And if you die, that money dies with you. So that's thing one. Thing two with the deferred compensation, it's great that you're having money put aside. But again, you're not in control of the investments. Therefore, you're not in control or you have even less control of the rate of return that takes place. So the way we teach here is that if you've got that going on, there's nothing wrong with that, but you should not count that

as 15% of your monthly salary going to your 401k. And here's why. And those are the two reasons I just laid out because you don't have control of it. So let's say if you had an estimate overall, how much, what percentage of your income is going into the pension and what percentage of your income is going into the

pension and what percentage of your income is going into the deferred plan uh so the deferred i have is 10 okay um but the pension is is basically a set amount um depending upon um your yearly salary and are they taking it from your salary or it's just them putting that money aside for you? That I'm not sure. Okay, let's find out about that. Because if it's just them putting money aside for you, then I would count that as 0% when it comes to your 15% that's being invested. And as far as this deferred thing, I'd probably count that for about half because you don't have, you're not in control of it at all. So let's say that you, that 10% count that as 5%. And now we still need to do another 10% of investing into plans that you have control over. You're choosing the investments. And that's why that Roth IRA is still a good place to keep putting money into.

And for that reason, I would not withdraw money from that. And even if that wasn't the case, by the way, I still wouldn't pull money out of a retirement vehicle to pay off a car loan. Is that fair enough? Yeah, yeah. That 10%, and maybe that was a little confusing, that 10% is managed by a financial advisor and they are invested. Right. But it sounds like you don't have any say in the matter. It's just, hey, this guy, we give him this money and he does X, Y, Z with it, right? Correct. So you get to pick either aggressive, conservative, and you can either set a set amount or you can do a set percentile of your pay. Yeah. I mean, I get what it is and my

ideals on that remain the same. Okay. So I know I answered part of your question. What was the other part? Because you mentioned a car. Correct. So that Roth that I was no longer contributing to, I could pay off my vehicle with that rot that I was not contributing to. Well, what do you owe him a car? 18. Okay. And what do you earn every month? Trying to break it down monthly. Roughly around $10,000. Okay, so...

Is that your primary car? I have three vehicles. Okay. I mean, my family has three vehicles, I should say. My wife has one, and then my daughter has a vehicle. But my truck is the only thing that I have a loan on. What's the payment on it? I think it's $500. I do like $550 a month just to try to pay it off ahead of time. I would just keep working that pay to pay it off. There's no reason for you to borrow from the Roth for all the reasons and hit yourself. Just get it

done. It feels like you're trying to fast-forward something that you regret, which I get. But in this case, that's not a good strategy. The only strategy right now is to either sell it and you get something cheaper if you've got equity in it, or just go ahead and pay it off. You've got good income. Yeah, yeah. I mean, I can afford the truck, and I don't want to sell it.

What's your hesitation? Well, I thought I would just, which I'm not going to do now, but I thought I would just drain the Roth. I have that deferred comp, and I have my pension, and then obviously I would start working on my mortgage. I love that you're mad at it, but there's a couple strategies on how to be mad, right? Yeah.

And the way you propose is like throwing a tantrum it doesn't help anybody versus getting focused and knock this out so that's the point let's put in let's put it in perspective because i always have a handy dandy investment calculator here so i want to know how much is in that roth right now um it's 18 000 it's exactly 18,000. Yeah, depending upon the market, depending on that day, yeah. Okay, so that's probably one reason it's tempting. So if you don't mind me asking, how old are you, Jim? I'm 38. Okay, you're 38.

Let's just pretend that you decide to retire when you're 68, okay? So what would happen if we left that money alone that 18,000 alone? And we invest it for the next 30 years and it compounds annually At about 8% that's fair right 8% I would say, you know, you want accounts that do 10% but for the haters Let's say 8% and let's say you don't add anything else to it you just leave it alone at the end of that term that's going to be 181 000 dollars yeah so let it go and let it go yeah let it go you got to let it go and let it grow and i don't think that in the moment it feels worth it to you to say, let me just take

that money and pay off this payment. But when you really think of what it could be, if you just sit it there and let it grow, you're going to have almost $200,000 and you didn't touch it as opposed to just you, as opposed to pulling it out now, just use your own income, pay off this car. And I can't, I can't emphasize enough what I said earlier about your investments especially now that you revealed that you've got a daughter and a wife that pension is a great it's great that they're offering that but that dies with you so you've got to be investing in other places and you've got to be investing 15 of your income very very important yeah I mean I do have a life insurance policy.

So I've kind of, I don't know if you want to call a hedge that, but if something were to happen to me, I do have a term life insurance policy. Okay, good. It's term. All right, great. Yeah, term is absolutely smart. But you got the plan. Yeah, of course. It is, yeah, okay. Listen, I'm trying to help folks out.

I want to make sure he's okay, because your retirement is not just for what happens after you die. It's for your family. It's for you to live. It's for you to thrive. A good man leaves an inheritance to his children's children. And that's what we want to get to. Good hour, Jade Warshaw.

Thank you, James Childs and the crew. Thank you, America. This is the Ramsey Show.