The Ramsey Show - App - College Advice For High School Graduates (Hour 1)

Episode Date: July 9, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. This is your show. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Sacramento starts this hour off. Luca's with us. Hi, Luca. How are you? I'm doing great. How are you doing, Mr. Ramsey? Better than I deserve, sir. How can I help? I have a curious question. So what advice would you give to an 18-year-old just graduating

high school going into a debt-filled world? Okay. In what regard? Anything in particular? I mean, I'm just curious, like, what you would do. Because, like, right now I'm going to community college because I live in California and it's basically free. Save some money living at home. I'm curious, what would you do from there to try to knock into debt

and try to get a good career from there? Okay, good. Well, I mean, certainly you want to begin with the end in mind, as Dr. Stephen Covey used to say. And it's one of the seven habits of highly effective people. And so where is it you want to go? What do you want to be doing when you're 30? And what does that career path look like? And that will tell you what you need to study then, right? Do you have any idea what you want to go, what do you want to be doing when you're 30, and what does that career path look like, and that'll tell you what you need to study then, right?

Mm-hmm. You have any idea what you want to be? Yeah, I either want to go into law or politics. Okay. All right. Cool. And so if you're going into law, obviously law school's in your future, and so you've got a lot of expense in your future some way or another that you've got to figure out a

way to cover. Mm-hmm. and so you've got a lot of expense in your future some way or another that you've got to figure out a way to cover. And I think that's, you know, we're going to require some planning for sure to get that done. You've got the first two years knocked out here for free, and then are we going to go in-state and get a degree in political science or whatever you're going to study in your undergrad, and then you can decide if law school is there, and if it is, then how you're going to pull that off and how you're going to pay for that. And, again, there's very few schools that you attend that cause success.

Knowledge causes success. An application of knowledge causes success. But I've never gone into a doctor's office in my life and said, hey, where'd you go to school? I just said, can you, you know, fix my broken body, whatever's broken about it, right? I never have asked a lawyer where they went to school. And I've heard a bunch of lawyers in my life for different things, everything from estate planning all the way around the horn to different, you know, real estate stuff, all kinds of things. And I used a lot of different attorneys, spent a bazillion dollars on legal fees in my life,

never asked a single lawyer where they went to school. So there are places that matter if you went to Harvard, if you're going to work there, or if you went to Wharton where you're going to work there, but they're less than 1% of the jobs. 99% of the jobs and 99% of the people you're going to deal with and you're going to interact with don't care where. Now, obviously, we don't want to do something so substandard that you get substandard knowledge base. But where you go to school needs to be the place that you can afford to go to school

in almost every case. And when you start making your choices that way, now you're making wise choices about education. Hey, thanks for the call, man. I appreciate you joining us. You know, that is kind of the paradox right now. We've got a $1.4 trillion now student loan crisis. And I talked to a young lady the other day here on the air from South Carolina,

and she wanted to go to Mississippi, wanted to go to Ole Miss, which involves out-of-state tuition, which triples her cost of college. And I said, so why is it you want to go to Ole Miss? It's a pretty town. See, it's scary to me how the paradox is the oxymoron is that we're fools about education. We're idiots when it comes to education. Isn't that kind of oxymoronic? It would seem like you ought to be, like, smart about education.

And in this case, it's really wise is what it amounts to. And so what's happened is that so many people have been completely overwhelmed with their student loan debt that now there's this whole movement out there that says, oh, no education is worth it. It's not worth it. Don't go to college. It's ridiculous to go to college. College is ridiculous. You shouldn't go to college.

And that's an overreaction. It's just as dumb as go anywhere you want because it's all going to work out okay. Both of those are dumb. Hey, listen, I believe in education. I know stuff that I wouldn't have known if I didn't go to class. Hello. You know, and that makes my life move along at a better pace. I can actually look at an accounting spreadsheet and i know what it means because i had

you know eight quarters of accounting and getting my finance degree so i actually have a knowledge base that allows me to run a 200 million dollar business i couldn't do that with a high school diploma i could do it but it would be a lot more of a strain because i wouldn't know how and knowing how to do stuff is what knowledge is you know and so that's what you guys want to look for. And, Luke, I appreciate the question a lot. But moms and dads, when you've got a Luca in your life that's asking these questions, and obviously he's had some good coaching because he's already going,

I'm going to California Community College. It's free. I'm going first two years there, and then I'll get my basics out of the way. That'll all transfer. And no one asks you, even if they do ask you where you graduated from school, they didn't ask you where you went first if they do ask you where you graduated from school, they didn't ask you where you went first. They just ask you where you graduated from. And that's the three people in your life that'll ever ask you.

The only time somebody asks you where you went to school is they want to know what football team you root for. I mean, that's the only reason they care where you went to school. Where'd you go to school? Oh, you're a Vol, huh? Yeah, yeah. Go Vols, you know. So where are my little orange T around, right? And people go, you know, but they don't go like, oh you're a vol huh yeah go vols you know so where my little orange tea around right

and and people go you know but they don't go like oh wow that was academically imperiling you know it's not you were not in peril at ut uh with your academics it was but it's solid i mean solid education obviously and so folks really do take the time to think about education. There's only one time you can look at education as just generally life-enhancing, and that's if you have an unbelievably luxurious budget. And you can just go study for the sake of study. Oh, that's neat. And it just, you know, it broadened my horizons.

And that's true. But you really have to, in our world today, look at it from a utilitarian standpoint, which does bring some of you into trade school, and there's no shame in that at all. I mean, a good aircraft mechanic, a good diesel mechanic, make 100K. And a whole bunch of you with master's degree in sociology making 28 grand. Okay, so, I mean, think about what you're doing here. In trade school, there is no shame in that game whatsoever. None at all.

But think about what it is you're going to get for what you pay. And is this in your budget? Am I getting quality for what I'm paying? When you go out of state, you are not paying for an increased value. You're paying for geography, which when it comes to education would be known as stupid. Unless you have that extra money and you just want to take you a little adventure to Mississippi. You know, if you want to take a little adventure to Mississippi because the town's pretty, just make sure you have the money.

Don't make yourself the 30-year-old version of you. Hate the 20-year-old version of you. Because when you're 30 and you're still paying those student loan debts, you're going, those houses in Mississippi are not that pretty. That's what you'll be thinking then. It changes everything. Moms and dads teach you kids. Be sure you're parenting 18-year-olds. They still need parents when they're 18.

They still need somebody to love them and say, no, that's dumb. That's dumb. Don't be dumb. Really. When it comes to education, don't be dumb. It's kind of oxymoronic if you think it through. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options?

Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years, and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events.

chministries.org. Well, it's time to hear from you, the listeners of The Dave Ramsey Show. Each year, we send out a survey to find out how you listen to or watch The Dave Ramsey Show and what content means the most to you? You can get out your phone right now, and if you text the word SURVEY to 33-789, we're going to send you a link, and by completing the survey, you'll have a chance to win a $250 gift card. If you'd rather take the survey online, just go to DaveRamsey.com slash survey, and no salesman will call. So again, take the survey at DaveRamsey.com slash survey, and no salesman will call. So, again, take the survey at DaveRamsey.com slash survey.

Tell us about the Dave Ramsey Show, what we can do to make it better, what parts you like the best, all that kind of stuff. We may listen to some of it. My team really wants to know. I'm kidding. No, I want to know, too. Text the word survey to 337 SURVEY to 33789. SURVEY to 33789.

Eric is with us in Denver. Hi, Eric. Welcome to the Dave Ramsey Show. Good afternoon, Dave. How are you, sir? Better than I deserve. What's up in your world? Not a whole lot.

I want to run a scenario by you. My wife and I are 27 years old. We're projecting a pre-tax income this year of $198,000. Wow. We have no debt at all right now. We have five months of expenses saved up in a money market account for emergency fund. In our house account and another money market, we have $52,000 saved up, and we're averaging about $2,700 a month of deposits going into that house account.

So my question is, is we're expecting to move from Denver to a more rural area in the next year. So my debate is, is should we continue to save up through the next year and, you know, get a conventional 15 year mortgage and just focus on paying off the house on our next move? Or should we live by renting through the next move and try to pay cash in about four years? Okay. Well, here's the thing. I have become convinced, and for 30 years have followed the principle, personally, that borrowing money short-circuits the shortest path to wealth. The shortest path to wealth is no debt. A hundred percent of the time.

I'm convinced of that. I'm convinced of that through an academic lens, a mathematical lens, an experiential lens of having coached people and worked with wealthy people for 30 years, seen how they got there. We've just completed a study of millionaires, the largest study ever done. Chris Hogan and our team have done that. And all the data, every lens at which I look through life, what the Bible says about money, 100% of the references to debt are negative. None of them say it's a sin.

None of them say you're going to hell if you borrow money. But 100% of them say you're stupid. All of them say that. And so having said all that, I decided, Eric, after I went broke because I was stupid on steroids, to never borrow money again, and that was 30 years ago, I never borrowed money again. And I've become very, very wealthy. And I became wealthy partly because of that and partly because I sold a whole lot of books. Okay?

Both, right? And then on top of that, but the wealth is just, I never lost any ground because 100% of the foreclosures occur on a property that has a mortgage. So I never lost any ground after I stopped borrowing money. All of that to say, that's my personal conviction and the basis of what I've taught people on. Having said that, you probably heard me here on the air, unless you asked the question,

I don't yell at people for getting a mortgage, a 15-year fixed-rate mortgage, and you pay it off as fast as you can. But between us, because you asked, the shortest path to wealth is debt-free. So if I were in your shoes, I would have to save up in pay cash because I don't borrow money for anything, ever, any circumstances. Real estate, ever. never for business, never for an investment, never in an emergency. I don't borrow money, you know, and because of that, I've reaped these unbelievably wonderful

financial, psychological, spiritual, relational rewards because I haven't been strapped to the wall by some banker with his gun pointed at my face i've been there before it ain't no fun and so next time you see me in a bank it's because i'm buying it you know uh there's no way i'm going back in there so i woke up in your shoes i would do that but by the tenets of what we teach on this show i wouldn't yell at you and say you're stupid if you bought a house on a 15-year fixed and went the other way. You know, so, but I have people that do stuff I wouldn't do. You know, I know one guy who lived in a travel trailer, not a trailer, a travel trailer for

four years and saved up to pay cash for a house. I'm not sure Sharon Ramsey would go along with that one. Okay? She likes where we've ended up, but she hadn't always liked how we've gotten here. You know? And so I'm not sure what we could actually pull off in the Dave Ramsey world, but if it came back to that. So all of that to say that's my pitch and that's what I believe.

So I don't borrow money so i would have to save up and pay cash in your situation it's my only option and um if you don't do that and you do conservative conservative purchase the way you were describing i'm not going to call you dumb and i'm not going to call you lacking in discipline i'm not going to call you anything because what i'm suggesting the hundred down plan, is an extreme plan. I will tell you, making $200 freaking thousand dollars a year, though, dude, if you live that way, by the time you're 40, you're probably going to have $10 million. Because you're going to have no payments of any kind.

When you're 31, you pay cash for a house, is what you just described to me. When you're 27 now, you said it'd take four years. Push a decade on top of that with that income, plus probably probable increases in that household income during that time. You're making a quarter million, $300,000 by the time you're 40. If you're not worth several million, probably excess of $10 million, you probably screwed something up. You're on a path, dude.

You're making bank. You're being wise. You're on a path, dude. You're making bank. You're being wise. You're asking questions. I'm so proud of you, so proud of where you're going. So I'm not going to answer your question except to say I don't borrow money. I would call you unusual, weird, and wise if you saved up and paid cash for that house, but I wouldn't call you dumb if you did it the other way because I don't call anybody else dumb on there for that one type of debt. That's the only type of debt I don't call you dumb for.

Everything else I'll just straight up call you dumb. You get a car payment, you're just dumb. You got a MasterCard, you're just dumb. That's just dumb. Okay, but 15-year fixed, I'm going to lighten up a little bit. But I can't really back it up with any of my data, except I'm trying to get people to buy into this and get the house paid off as soon as they can.

And some people can't see it that far. You can see it. Really cool question. Thanks for letting me get on my soapbox. Evans in Grand Rapids, Michigan. Hi, Evan. How are you? Hi, Dave. I'm great. It's really an honor to speak with you. You too, man. What's up? Well, I have a question. I'm 18. I just graduated high school, and I'm planning on attending a community college for two years starting next year and then transferring to a public university. I've been really fortunate. I've saved about $8,000 on top

of a $1,000 emergency fund for myself. How'd you do that? What's that? How'd you do that? Well, I'm a hockey referee, actually, and I've been able to save a lot of money and not borrow any, not have any debts my whole life. Wow, you've been getting yelled at by a lot of parents but got some money out of it. Good for you. Thanks. I've worked really hard for it. I bet.

Yeah, I've also been very fortunate, and my parents and grandparents have contributed to some college funds for me since I was born, which is worth about $30,000. So my question was, how should I split that money up? Should I do it over four years or should I cash flow my first two years at community college and just use that money lump sum on my last two? Or what do you think about that? I would lay out a projection that takes you through all four years between your work, your $8,000 and that $30,000 and where you attend and say if I go two years here at community and then I go two years over there at whatever college, whatever university to finish, these are my costs for my four years. How does that compare to $38,000 plus the money I can make from working while I'm in

college? And I think you project it all the way out, and you have a game plan that does it. I don't care where you put which money. I just want you to finish your education, because education is valuable, like we talked about in the first segment. I'm proud of you, man. You're a go-getter. You're going to do well.

Hang on. We're going to send you a copy of Anthony O'Neill, Rachel Cruz's best-selling book, Five Mistakes You Can't Afford to Make in College. I don't think you're going to make them, but maybe you can coach somebody else. I hate to see people waste money, and that's exactly what happens when you spend hundreds of dollars a year on ID theft protection plans like Trusted ID, LifeLock, ID Watchdog, and any of them. Well, let's face it. Identity theft is a nightmare, and it's not going away. But there's no need to freak out and buy the most expensive plans out there

because you think you're getting the best protection. Wrong. I've been telling you for years, you need to protect yourself, and Zander's ID Theft Plan provides the maximum benefits and is literally half the price. They monitor your personal info, send alerts when you're at risk, as well as take over all the work if you become a victim. They also cover your bank accounts if they get hacked and protect your children at no

extra cost. The right protection at the lowest cost. It really is the smartest way to protect yourself and your family. Go to Zander.com or call 800-356-4282. In the lobby of Ramsey Solutions, Nathan and Rebecca are with us. Hey, guys. How are you? Good. Hey, Dave.

We're truly doing better than we deserve today. Fun. Where do you guys live? Ellensburg, Washington. And where is that near? So it's actually, if you just look at Seattle and you go two hours east, it's right in the center of the state. Gotcha. Cool.

Very fun. Pretty area of the country. It is. Yeah. Yeah, fun. And you guys, looking at your T-shirts, you are a member of the Mutual Admiration Society. We are. We are.

I love my awesome wife. I love my awesome husband. Very good. He didn't wear his blue one today, but. He wore his purple one. We are. We are. I love my awesome wife. I love my awesome husband. Very good. He didn't wear his blue one today, but... He wore his purple one. That's even better. Even better. That's even better, yeah. I think that's what you call that, yeah. Welcome, guys. So how much debt have you two paid off?

We paid off $46,000. Mm-hmm. And it took just under 30 months. It was 29 months. Wow. Yeah. And your range of income during that time? So I think we started at right about... $70,000? Yeah, $68,000 I think was right when we were starting.

And did it about $95,000. Yeah, yeah. Cool. What do you guys do for a living? I taught social studies for four years in public school, and now I'm actually the associate pastor at our church in Owensburg. Very neat. Yeah.

And I'm in vocational rehabilitation counseling. Okay, cool. Yeah. So what accounts for the $25,000 raise in 30 months in your household? Well, I started off, I was working in a wood shop for about four years, and the wage was a little low, but it was really enjoyable work. But that shop closed, which forced a change of career. And that's kind of where the bump came in.

Good, okay, got it. Yeah. Good deal. We were able to, when I left teaching and moved back into ministry full-time, we had a couple months of double paychecks. Oh, yeah. So that really sped up our debt snowball as well.

Very good. What kind of debt was the our debt snowball as well. Very good. What kind of debt was the $46,000? Mainly student loans. When we started Financial Peace, we had a few medical bills from having our daughter, but the bulk of it was my student loans. I had about $33,000 in student loans when we got married. How long have you been married? Six years.

This month? Okay. So what got you started on this equation 30 months ago, this journey? Well, my parents actually got us an FPU home kit when we got married in 2012. And it moved with us, I think, to three different households. At least you didn't throw it out. No, we didn't throw it out. No, we didn't throw it out. Right.

And through some circumstances that got us a little bit tighter, we decided to pull it out and finally start on this. And actually, I wrote down all of our debt and everything, and we just kind of crossed one off as we went down the line. And yeah, it's been a pretty cool experience. Once we started, it was definitely a kick of like, why didn't we do this three years ago? That was definitely a humbling moment. So you had cheerleaders and mom and dad for sure. Yes.

They were going, yes, they finally opened the box. Yeah, exactly. Finally used our gift. Finally used the DVDs. I love it. Very good. Good. Did you have people saying you were crazy while you were doing this?

Yeah. Yep. We had a lot of people, even just when we'd go out to dinner with coworkers or with other people of like, well, we're not going to have another baby until we're out of debt, or we're not going to do this until we're out of debt. And they're like, oh, that'll never happen. And we just would nod and smile and be like, okay, that's up to you. So it was definitely had some pushback on that.

Very cool. Good. What do you tell people the key to getting out of debt is? Goodness, have a plan, really. Yeah. And follow the plan. I mean, you can have a plan, but if you don't do it, D in, D out. I think we've seen, we've led the class three times now at our church as well.

And so, especially when you're in a partnership, in a marriage, like it has to be both of you. We've seen people, we're going through it, that it's just, if you're not both on board, like it's just, it's not going to work. It causes big fights, really. It does. We didn't actually have very many, but it can for sure. If you're not on the same page. Right, exactly. But if both of you are on, it's game on, then that's fine

because you're just trying to figure out how to win the Super Bowl now. Pull in the same direction. Yeah, we chose to live with roommates and live really frugally. And we live in a really tiny duplex right now that we kept the cost of living really low. And the biggest thing that I think was the hardest was that I stepped out of doing ministry for a significant amount of time to pay off loans. I was working as a missionary with a campus ministry called Chi Alpha.

And so I chose not to go on staff somewhere and chose to leave ministry in order to pay off loans. So we weren't raising a missionary budget to pay off debt. And so being able to go back into ministry now, even before that snowball was over, was huge. And that's a staff position. Yeah. Yeah. It's at a regular church, whatever that means. There's no such thing.

No such thing, I know. That's the only way I can describe it. Good for you. Well done. Well done. I'm proud of you guys. Well, we've got a copy of Chris Hogan's retire inspired book for you. Sweet.

Number one bestseller. We want that to be the next chapter in your story. Yeah. Rageously generous millionaires. Yeah. Yes. And you're on your way to doing that. So very, very well done.

And congratulations. You said you had a baby along the way? We did. We had her before we started the journey. So she is three and a half and she's home. Split some time between the grandmas. Oh, rough life. Yeah, she was so abused last week.

She's great. Good stuff. Well, thanks for coming by, you guys. I'm proud of you. Well done. Thank you. Nathan and Rebecca, state of Washington. I don't remember the name of the town now. $46,000 paid off in 30 months, making $70,000 to $95,000. Count it down. Let's hear a debt-free scream.

Ready? Yeah. One. Oh, are we going down? We're going down. Three, two, one. We're debt-free! Very good, you guys.

Very well done. Stephanie is in Chicago. Hi, Stephanie. How are you? I am doing well. How are you? Better than I deserve. What's up?

First of all, I think that your program, everything has been amazing. I am a registered nurse here out here in Chicago. I do have a good amount of substantial use at. Okay, I'm having trouble hearing you. Your phone's breaking up. Can you make sure to speak directly into it, please? Can you hear me better now? Yes, ma'am.

Okay, I apologize. I am a registered nurse out here in Chicago, Illinois. Can you hear me better now? Yes, ma'am. Okay, I apologize. I am a registered nurse out here in Chicago, Illinois. I have about $90,000 worth of student debt. I have decided I've been very fortunate enough. I've decided I'm going to stay home for the next two years, so I have no rent. This is my only student, my only debt, really. I have not even a car payment. I drive a 12-year-old car.

My goal is to also in the next year to double my salary because nursing is very fortunate enough of a career where you could expand. You have so many options with it. I was just calling to see if there's anything else you think I can do to get out of this step faster. I already saved up my emergency fund of the step number one. I'm sending additionally over my payment an additional $900 to my loan, starting with the smallest going on my way up. Okay, you owe $90,000. Yes. Okay, and you're owe $90,000. Yes.

Okay, and you're paying $10,000 a year off right now, extra. That's what $900 a month is. And you make how much a year? About $63,000 to $65,000. And you can double that by going crazy worth your work hours. So the nice thing is, a couple years experience, I could do travel nursing. So it's contracts that I could travel out in the country. The hard part is, of course, you're living in a suitcase. But with those salaries, you're well making about six figures. You have children?

No, I do not. Thank God. So you're single? Yes. Okay. So you can kind of go on an adventure and knock this out very quickly. If you did two years of that, you'd be debt free, right? Yes.

So my question also for you is I actually am in the position now where I'm getting possibly a new job soon. I just interviewed and I heard back that it went well and the paperwork's not in yet, but there will be a paid increase. I was wondering to also ask if you think I should contribute a little bit at all into a return? No, nothing into the retirement plan. You have a $90,000 mess you've got to clean up. Completely focus on that and go crazy. It's going to be about $4,000 a month to get it knocked out in two years. That's about what the numbers come out.

You can do this. Keep listening. For years, I refused to endorse any company that claimed to get people out of timeshares. I told my listeners it's a horrible product and that, unfortunately, they didn't have a lot of options. Then a few years ago, I sat down with Brandon Reed, the owner of Timeshare Exit Team. Brandon walked me through the timeshare industry, and I learned that you can't sell them, and you can't even give them away and then we talked about timeshare exit teams process every ownership situation is different which is why they have more solutions than any other company and that's when they earned my respect don't call any of the imposters out there and there's a lot the only

timeshare exit company i stand behind is Timeshare Exit Team. They have exited thousands from their timeshare burden this year alone. Yes, you will write them a check, but they stand behind their guarantee. They will get you out or they'll give you a full refund. Call 844-999-EXIT online at timeshareexitteam.com. Austin, Texas. Gila is with us. Hi, Gila.

How are you? Good afternoon, Mr. Ramsey. It's a pleasure to talk to you. Thank you. Certainly. How can I help? Okay. I have a simple question.

Our net worth is above $4 million, and we're wondering when we can retire, my husband and I. Our age is a little bit lower than retirement age. I'm 53 and he's 59. And so I'm just wondering, based on, you know, obviously we don't hit Social Security and also health care concerns, and who knows what happens with markets and so on and so forth. We're just wondering about that. Is the $4 million invested? What's it in?

Half of it's in real estate, and that would be rental properties plus our own homestead. And the other half, 401Ks and retirement accounts. Okay. And 401Ks and retirement accounts are all invested in good mutual funds? Yes. Okay. And so you've got $2 million in that and about $2 million in real estate? Correct.

Okay. Our own homestead is probably $4 something, less than half a million, and the rest are rental property. Okay. All right. And so you should be making $100,000 to $200,000 a year off your real estate, right? Well, we have $300,000 that we've borrowed, so that's our only debt for the property. They do cash flow when they're all considered together.

Okay. So what are you making on your real estate a year? I don't have the books in front of me, but I would say not too much, maybe about $7,000 a month. Okay. So that's pretty substantial. So let's say $100,000 a month. Mm-hmm. Okay. So that's, you know, pretty substantial. So let's say $100,000 a year, okay, probably. Mm-hmm. Can you live on $100,000 a year?

We could, but, yeah, certainly we could. Okay. Well, if you can live on $100,000 a year, you can retire now, right? You just live off your rental property only and the other stuff you could start collecting on after 59 and a half it's all tied up in retirement you said um so you know you're going to be penalized if you start pulling that before 59 and a half right and uh you burn as far as uh i'm sorry you know the amount of you wouldn't see any kind of concern as far as the amount of money, the net worth we have at this age and retirement at this age. I think your net worth is fabulous.

If you had it all in raw ground and it was producing zero income, it would be hard to retire, wouldn't it? So how the net worth is structured, what it's invested in, is it invested in assets that are creating an income that you can live the way you want to live, tells you if you can quit working. And I assume by retirement you mean quit working. Quitting, yes. And we're not concerned about that really. We just want it to know when or say even.

Well, the thing is, do the assets that you own, the things you own, do they create enough income to give you the lifestyle you want? When the answer is yes, you're ready to retire. That's what it comes down to. But you could hypothetically have $4 million invested in such a way that it created no income on a monthly basis. And you'd have trouble eating with a four million dollar net worth does that make sense let's say you bought just all raw ground bought a mountain with it you just went and bought a mountain and it was just sitting there

looking at you you know but it's a four million dollar mountain it's a piece of ground but it produces zero income you follow me then you hypothetically could have a four million dollar in net worth and not enough income to retire on. So the point is to have it invested in such a way, which you guys have done. You've done a wonderful job. Congratulations. You're millionaires, multimillionaires. Well done.

And, you know, you're probably going to be worth, by the time you hit 70, you're probably going to be worth $10, $15 million is what it sounds like to me. Because you're not going to spend all this money. You're just not. It's not who you are. So to spend all this money you're just not it's not who you are so how much of this did you inherit uh about uh 300k 300k long time ago or recently no that would be um maybe five years ago so you were already multi-millionaires correct so you're you're a millionaire but it wasn't because of inheritance. How did you end up with all this money?

Did you invest, or how did you end up with the money? Yeah, we spend beneath our means. We like appreciating assets. We try to avoid at all costs buying depreciating assets. We do travel a lot, but that would be probably what we spend on other than that. What do you all do for a living? I'm a real estate broker, and my husband is an anesthetist. Oh, okay.

Well, you've got a great household income then, and that's part of it. But you've done an excellent job. Congratulations. Very, very well done. So the answer to the question, am I ready to retire, is do the assets that you own throw off enough income to feed you the way you want to be fed? And if the way you want to be fed is go on a cruise every other month, that's a different level of being fed than, you know, living in a cave, collecting lint, and only coming out on

triple coupon Thursday. There's different levels of lifestyle, right? And so how do you want to be fed? What does retirement look like for you? And do you have enough income coming in to live that dream? And then you're ready to retire. But the other thing is this. You're in your 50s. I don't know. If you just quit, what are you going to do for the next 40 years?

Fish? Play golf? I mean, there's only so much of that you can do and you can slow down you could change the structure of your career you could do all kinds of things but truthfully i'm 57 i have no intent of quitting ever well i take that back i have told the people in the booth when i quit making sense and i'm making a fool of all of them they can tell me i have to quit so someday i'll have to quit but no that's not tomorrow kelly okay but um you cannot use that on me now it's only when dementia sets in okay but you look a little too eager in there but uh but you know the point is is i i you know i get joy out of what i do most people in the real estate business get

joy out of being in the real estate business and if you don't you probably ought to do something else anyway but uh find something you get joy out of i've got an aunt that's been teaching in the classroom in the high school classroom for 40 years and um why didn't she retire 10 years ago when she could have because she likes it and. And what else is she going to do? Sit on the couch and watch Oprah reruns? I mean, you know, what are you going to do? So I would challenge you to say, you know, financially retiring means you don't have to work,

but that doesn't mean you have to quit. Mmm. You could restructure your work, your career. You could have what's called an encore career, your last bow you take after the curtain. And some people make more with their encore career than they ever did in their other careers. But you've done very, very well.

I mean, a $4 million net worth at 52 years old, you're just a rock star. Well done. Very, very well done. Martin is on Twitter. You can follow me there, at Dave Ramsey. Dave, I'm on baby step two, getting out of debt. Should I have term life insurance in place?

Yes. For how many years? Typically, we recommend 15 to 20-year level term insurance. And the reason we recommend that is it takes about 15 to 20 years to become self-insured by the kids growing up and leaving. You're getting your house paid off, and you build up some net worth in your emergency fund. So if you're 30 and you have little kids at home, 20 years from now, you're 50, they should be grown and gone, both grown and gone. And that got rid of some of the cost, right?

Then 20 years from now, if you're listening to me and you you're 30 you took out no more than a 15-year mortgage so your debt-free house and everything 20 years from now the kids are grown and gone oh 20 years from now you've been investing steadily into your 401k roth iras in good growth stock mutual funds and you'll have seven eight hundred thousand dollars in your mutual funds so you're 50 years old and you die your spouse is left with seven hundred fifty thousand dollars in a 401k or in mutual funds a paid for house and no kids at home i think they can struggle through you become self-insured your need for life insurance goes down as the kids grow up and leave, as the debt disappears, and as you increase wealth, you become self-insured. So that's why I recommend 15 to 20-year level term.

If you're 60, you probably don't need 15 to 20-year level term. You may not need life insurance at all. So that's what you've got to look at. What is your need, the length of your need, before you're ready for the person you're going to leave behind that counts on your income to die for them to survive if you die? This is The Dave Ramsey Show. Hey, guys, this is James Childs, producer of The Dave Ramsey Show.

I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show. Okay, I need you to listen to this. Because one normal routine that everyone does can cause total chaos in your life. I'm talking about the simple act of using Wi-Fi. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and every search you're doing online. It doesn't matter if you're on your cell or your laptop. They can see you visiting websites, streaming or downloading,

uploading photos, files, and more. I'm not telling you this to scare you, but I want you to be aware and take action. You need to download an app called Hotspot Shield. Hotspot Shield helps keep your connection on your own Wi-Fi and any public Wi-Fi secure. 600 million people worldwide have downloaded Anchor Free's Hotspot Shield. Download it right now.

Just search Hotspot Shield on iTunes or Google Play or go to hotspotshield.com. You can be secure in seconds. Download Hotspot Shield by Anchor Free today.