The Ramsey Show - App - Create a Daily Routine Even During the Coronavirus (Hour 3)

Episode Date: April 7, 2020

Chris Hogan, Debt, Home Selling, Insurance, Savings, Retirement Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

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. You jump in. We'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Joining me today on the air on the Dave Ramsey Show, Ramsey personality, number one best-selling author, two times over, Chris Hogan is with us. And Chris, we were kind of talking at the uh before before we came on the air i'm sensing in our callers a different tone than five days ago a calmer oh i am too without a doubt we were getting some very emotional very desperate calls and It's not that we're screening them one way or the other.

We're just taking what's there, any questions you've got. So if you are freaking out and you want to call, we'll talk to you. We'll help you, talk you off the ledge. But it feels like people have settled in or, I don't know, it's anecdotalotal it's certainly not a piece of research but it's just the caller tone feels like it has shifted since you were on the air a week ago i completely agree with you i can hear it in not just what they're asking dave but how they're asking it um it's almost like a resolve of of looking at the situation uh seeing it for what it is, but it's also this desire to move forward, to be able to start to gain some traction in this process. Yeah, yeah, good stuff.

All right, open phones at 888-825-5225. Rhonda is in Virginia. Rhonda, your question for Chris and me. Hi. I actually, I'm 57, and I have lost my job. I have worked for over 20 years as a recruiter on contract with different companies, so everybody's cut back, and clearly, you know, that's a factor. I was married for 28 years and now I'm divorced. And I really didn't, I've never had a lot of education given to me in terms of money, finance. And I just really, you know, paid our bills and tried to get us through retirement, counting on my husband's

income because he worked for the state, so he had a big pension. And, you know, that was where I put all my eggs in his basket. I figured we'd retire, and, you know, his mother was very wealthy, and then one day, you know, when she passed, we'd live on her retirement, and that would be our lives. Clearly that was really stupid. So we divorced two years ago, and now I am facing, you know,

imminent retirement in the next few years, and I have no money in the bank and no job. And I do, however, in my divorce, I got my house, and that I do not have a lien on it, and I have no debt. So that's one point in my favor. My question is, I have a contract on my house that's set to close next month. And once all of the realtor fees and everything comes out of that, I should have about $250,000. I have to have a place to live because I'm moving to be closer to my daughter about halfway through Virginia.

So, you know, my question is, should I rent? Is that smarter or should I buy some? I was looking in the market anyway to buy something, but I had hoped to stay under $200,000, like closer to $160,000, where I'm hoping to move, that you really can't find much below that. So, you know, should I? Okay. So if you bought something for $160, you'd have like $90 in your pocket, and I assume you're going to move back into recruiting again when you move there, right? Yes. Okay.

And you plan on moving there next month? Yes, as soon as we close. And how do you eat between now and then? Well, I have, fortunately, I have been getting help from friends, you know, just enough to tide me over. And I have had savings that I have been living on for the past, you know, eight months. And so it's not that dire, but of course, you know, this money is coming certainly at the time when the well has gone dry and depleted all resources. Why were you using savings for the last eight months? You weren't earning a living?

No, I have not been able to find work since August. Oh. I thought you meant you lost work during the coronavirus shutdown. Okay. No, it's not. Right. I've been trying to look, but that's like swimming against the current, so. I got you.

Okay. All right. Yeah, you've got to get some kind of income going, right? Yes. Period. Doing something. I don't know. You cannot go another four months without income.

Right. That's not going to work. Even if you have this money from the sale of your home in your hand, you've got to do something on the career front and get some things going, whether you move away from recruiting or whether you stay with that. Recruiting is basically sales, and so you know how to sell. I do. And that means you can sell other stuff.

I mean, you don't have to sell jobs. You can sell something else. And so, but I think we're going to see, I think you'll have some opportunities as soon as this thing turns around. By the time you get your house sold and get ready to move, you're probably going to have some serious businesses that are rehiring. And so recruiting may be a big deal because there's so many people on the street looking for work, but there's also so many businesses that will be resetting all of that employment in place, right? That's exactly right. And, Rhonda, I might suggest to you, instead of trying to go from selling a house to immediately buying one, maybe you go rent.

You do a six-month lease and rent and begin to take your time and look because you're going through some life changes and those are all big, big deals. But you've got to be very, very intentional with this money from the proceeds of the sale of your home. This is a very important time in your life to reset and for you to start to save and invest. For you, you're 57.'ve got time you can you can move on from here it's going to be very important but again i want you to be extremely intentional

and slow down do not overbuy okay do not do not try to rationalize that in your mind i think that's a good idea now the caveat is you know rent for six months and get the job right and uh but you cannot touch this money this house money you have got to earn some money to eat with to where you do not touch this money because in the last eight months you've drained your savings and if you come back eight months later and you've drained this house money that is not going to be a pretty picture for you so you have got to create an income uh and you there's things out there to do and you just need to change directions. So hold on, I'll send you a copy of and also get you the digital for Ken Coleman's Proximity Principle book. And Zach will also instruct you on how to get the 14 day free

trial on Financial Peace University because you said that you're counting on your husband back in the day. I mean, it sounds like the divorce was a while back. But that you need to probably fine-tune your money skills, and we'll definitely help you do that with Financial Peace University. It's in a 14-day free trial. We'll get you signed up for that. Give you a copy of Ken's book on careers, The Proximity Principle, because you've got to adjust something you're doing in your hunt.

Your job hunt's not working because you've got to create an income, kiddo. This is The Dave Ramsey Show. For most of us, health care costs seem to increase every year, and saving money on health insurance feels more and more out of reach. For example, take the Olcheski family from LaGrange, Texas. Jeff and Cherise had just celebrated the birth of a new baby boy. Shortly after, they had a health scare involving one of their kids that was completely unexpected. With today's health care climate, this could have bankrupted them.

But thanks to Christian Health Care Ministries, the Olcheskis were spared from a ton of medical bills. As members of Christian Health Care Ministries, they're part of a group of believers who financially and spiritually support each other. CHM is the original health cost sharing ministry and is a Better Business Bureau accredited charity. It's biblical, affordable, and it's shared nearly $97,000 to help the Olcheskis. To be a part of Christian Healthcare Ministries, visit chministries.org.

That's chministries.org. CHM is a proud sponsor of Dave Ramsey Live Events. chministries.org. Devin is with us. Devin's in Ohio. Hi, Devin. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for having me.

I appreciate everything you've done for my fiance and I. Well, thank you. I have two different questions for you. I've kind of heard you talk about the Paycheck Protection Program and how you definitely don't like that. I can see why. I'm a real estate agent and was just wondering about the Economic Injury Disaster Grant, and if that's the same thing or if there's a difference with that. Is that the $10,000 one?

Correct. Okay. with that the 10 is that the ten thousand dollar one correct okay um i have not seen how they're issuing that yet um and i'm not sure if it is a grant or a loan if it is a grant meaning there is no you don't have to do anything to qualify for forgiveness because it's a grant. They're not going to give it to you if you don't qualify, and once they give it to you, you're done. You don't have to pay it back under any circumstances. It's a grant. The SBA loan, on the other hand, is a loan that has loan terms, and if you don't meet the exact, and there's a whole bunch of nuanced things you have to meet,

and it's dangerous. It is very dangerous for small business. It's super dangerous for churches to get into that. But aside from that, and you've already heard me talk about that, the $10,000 one, I have not seen the structure on it. I don't know if it's – what they're doing with it, what I did read about it is it's coming out super fast, right? Correct. And I don't know if it's – what they're doing with it, what I did read about it is it's coming out super fast, right? Correct.

And I don't – Yeah, from what I'm seeing. Yeah, if you go to get it and it's – read the documentation. Is it a loan that requires forgiveness, or is it truly a grant that you just walk away with $10,000 free? If you do that, I'm not mad. Take it. That's fine um and the payroll uh taxes being put off uh you're not to pay the employer side of payroll taxes in a small business

this year you can take all of those and push them out to the next two years uh we'll be doing that here uh at ramsey uh for sure well they i don't qualify we have more than 500 employees so we don't qualify for the uh either of the grants or the SBA loans, but we wouldn't take the SBA loan out in 1,000 years. There's not a chance we would borrow money. But here's the thing. You've got to be careful because people are mixing up the terminology out there and calling that SBA loan a grant.

It is not. And the number of students that sign up for a student loan thinking it was some kind of a scholarship and find out later that it was a loan which is pretty naive really but it does happen every day because they half butt look at what's going on and they're desperate to grab the money and if you're if you half butt watch what's going on with this thing and you're desperate to grab the money you're going to end up with a $10,000 loan and you don't want that. So look at it, investigate the rest of the way through and determine what it is. And then based on that, make your decision. You're right, Dave.

Do your due diligence. But you're absolutely right. Read the fine print. The last thing you want to do is to take someone's word for this. You need to see it, understand it. An article in the newspaper doesn't count. No, it doesn't count. And listen, there's too

much on the line here whether you're talking about five hundred dollars or five thousand or more there's too much risk so we need to read uh and really understand all the fine print the details and actually even reach out to a contract attorney if you need someone to translate it's that important yeah it's um i'm trying to find some of the notes i've got stacks of stuff oh it's dave some of the detail i mean it's absolutely unbelievable and again i'm seeing interest rates people when i see interest rates that tells me loan well that's the sba but the other thing he's talking about is a ten thousand dollar fast advance uh and it's an eivd i believe it was called um and i'll have to look it up.

I'll have to read more about it. I just scanned over it because I was looking at the details on the SBA loans and on the payroll tax push, and so I could – that's the two big ones. Well, here's the deal, Dave. It's EIDL, the Economic Injury Disaster Loan. There it is. Includes an emergency grant of up to $10,000. Okay, well, is it a loan or a grant?

Dave, I don't know. Seriously. I mean, they've got loan in the title, but then the description says grant. Listen, Reagan used to say this. He said, if you hear these words, you ought to run. I'm from the government, and I'm here to help. Just run. Just take off.

Just run. Justin is in Tennessee. Hi, Justin. Welcome to the Dave Ramsey Show. Hi, Dave. Me and my wife was working before COVID-19 happened. I was on SSI as well. I had lost my job, but I'm still on SSI,

and I was wondering if I could use the stimulus money to finish off baby step number two and then work into baby step number three, or should I save it for an emergency? Well, is your income stable? You're on SSI due to disability, correct? Yes, sir. Okay. What's the nature of your disability? I am legally blind, but I'm hoping to not be on it long.

The plan was to get off of SSI and work full-time at my job, but you can see what happened. Okay, so the COVID shutdown affected your job. Yes, sir. Or the job that you were going to use to get off of SSI. Is your wife working outside the home? Yes, sir. What does she make? She makes about $1,200 a month.

And she got a temporary raise because she decided to stay and work instead of taking a temporary leave because of COVID-19. I would put this money in savings right now until you get this income stuff squared around. You've got a very low income, and I don't want you to end up with a food or a rent or a lights and water problem. Yes, sir. So I would just set it aside in an emergency. I mean, you've got $1,200 income plus your SSI payment coming from the disability payment coming in for now, and so you guys have got a real tight budget anyway.

So let, let's get past this, this shutdown, this economic uncertainty as a result of Corona. And then, you know, when you, when you do get that employment,

you may want to shift back into gear. So what we're saying is you're not skipping a baby step. We're saying you're pushing pause on the baby steps and dumping money into an emergency fund to get past an emergency situation. That's right. And, Dave, you even mentioned, and this was weeks ago, that putting the extra money over into savings, we come out of this thing, and now you get back to your baby steps, and your income gets stabilized. The money you had put over in savings, take it and move it and put it toward the debt. Just take off again. Yeah, you just keep on rolling.

Here's my concern, Dave. In the midst of this, we've got people that are at home and we got one click stupid available now with being able to buy online and click a button and stuff shows up. And I'm worried that people are medicating their fear by shopping and that's just it's worse than that it's they're medicating their boredom yeah well you're right i'm bored yeah and so i'm i'm surfing amazon and clicking and you suddenly end up with gold-plated nail clippers i mean it's just crap starts showing up in your front door, you know, and people just because it's boredom. Yeah.

And so it can be it can be medicated. You're medicating stress, but it's you need a routine. John Deloney talked about this in his message of hope that was so strong. And he's actually doing a 30 day thing on his website on his Instagram now. John, follow him at John Deloney, because he's going through, you know, how to put together a daily routine because your routine's messed up. And when your routine's messed up, two things happen. One is stupid invades, and two is stress goes up.

When things don't go like we planned, that's called anxiety. Yes. And so now that you've got a new, albeit temporary, and I don't know how long it is in different cities and different situations. It'll be different lengths, apparently. But, you know, you've got a new routine. And so you need to say, this is what I do first in the day. This is what I do second in the day. This is what I do third in the day. Because otherwise you end up with gold-plated nail clippers.

It's going to happen. Yeah, don't do that. And guess what? Put your kids on a routine too. Absolutely. Give them a schedule. That's the only way that they get to live. Sleep, eat, read.

Some teachers after this are going to be moms and dads that didn't want to be homeschoolers that now are yes some teachers are going to be highly appreciated after this teachers may get some cash awards yeah for real combat pay this is the dave ramsey show In times of uncertainty, there is one thing you can control, you. So it's time for you to say no to fear and yes to a plan. And that plan is Financial Peace University. Through FPU, nearly 7 million people just like you have learned to pay off debt forever save for the future build wealth and become outrageously generous and for the first time ever you can start a free 14-day trial of a financial peace membership this free trial includes all nine video lessons financial tools and

downloads a vibrant online community and every dollar plus our premium world-class budgeting app. It's everything you need to start getting your money on the right track. This proven plan doesn't change with the economy or what's happening around the globe. Start your free trial of Financial Peace University today at DaveRamsey.com slash FPU. So yesterday we launched the first of a group of quick reads that we're going to do from Ramsey Publishing. A quick read is how we're defining basically a couple of chapters in book form. So, like the one we did yesterday, 64 pages long. Okay?

It's by Anthony O'Neill. And Anthony has the debt-free degree number one best-selling book on how to go to college without debt. But, of course, when he's out there running around, lot of people are going yeah well too late i already got student loan debt how do i get out and so of course he was teaching them the things that he and you and i and rachel all teach in financial peace university and so forth on getting out of debt and so but he did want to put it out in his voice, the destroy your student loan debt. So the book, the two chapters, I call it, destroy your student loan debt. If you're buying this thinking it is a 200-page book, it's not.

It's a 64-page booklet that we're calling Quick Reads. But it does go in. It's a deep dive basically into baby step two it's ten dollars and it's every little nuance every little thing about what you need to do to get rid of student loans all about the forgiveness issues about consolidation issues all the questions that come up to anthony and to the rest of us for that matter on destroying your student loan debt so if you're if this is this is for someone who's not deeply immersed into the ramsey tribe okay if you're already have read two or three of our books or whatever you don't need this book you already know what we're going to say it's not

going to say anything new except maybe some of the detail and the nuances but but basically this is for a great graduation gift for a college student that doesn't know beans about what we teach, and they're coming out of school with a bunch of debt right now. This is a great graduation. It's only $10. You buy a box of them and give them away. And it could just be somebody's got student loan debt, but you can't get them to listen or read a full book. This is a 64-page quick read.

So you can get it at Amazon. You can get it at DaveRamsey.com. You can get it at AnthonyO'Neill.com. And we have another one of these quick reads coming out in a few weeks. And really what it is, it's the white paper that we did, and we put a new cover on it. But it's all the details of the research behind The Everyday Millionaire, the number one bestseller. And it's a quick read. It is.

It's probably about 60 pages, too, isn't it? Yeah, it's about 60, 70 tops. But, you know know this from anthony o'neill is a great opportunity when you have a friend that says hey i've got a boatload of student loan debt and i need to know what to do or i can't make traction this is a great thing to be able to hand to them or point them to so they can begin to have some traction have some understanding and this could lead to them getting into Financial Peace University and a whole lot of other things.

But I like this, Dave. I like this opportunity to give people a ramp, you know, that especially that are new to us or may not know. Phil is with us. Phil is in Colorado. Hi, Phil. Welcome to the Dave Ramsey Show. Oh, yeah.

Hey, Dave. Thanks for my call. Hey, Chris. My question is this. Well, my situation, and then the question is, we paid off our home. The last step of getting out of debt back in December, based on your counsel. So we're not in any debt. Thankfully, with our foresight, in light of this crisis, we're already good.

That's got to feel really good right now. It felt good. You know. We had to dip into some investments. It hurt, but I feel good about it. Now, our question is, we live in another state other than where the home is

because of some others. It's family property that we got years ago, and so we're living out there. It's in a rural area. But the house is in another state that it's paid off. And my question is, you know, this homeowners are paying on it is pretty hefty. And it's kind of a hanging on us. And we're thinking about maybe the risk reward or the wisdom of maybe eliminating

our homeowners policy. You know, we don't need it necessarily, but, you know, it's wise for liability or for theft or for disaster. Now, I'm not worried about liability because we're about 5% of the time, you know. But, I mean, somebody can come in there and hurt themselves when you're not there. Yeah, I guess. I mean, you know, it's in a subdivision. It's in a gated community.

Yeah, they could. I mean, somebody could walk across. A kid could walk across the backyard, trip, and his dad sue you for breaking his leg. That's a liability. You know, I'm not sure they would win, but you've got a liability. So what's this house worth? It's about $300,000. And so if it's sitting empty and it burns, don't you want $300,000?

Your homeowner's insurance isn't that much. No, no, I know. It's about $1,500 a year for the homeowners. Versus $300,000. There's no way I would go without insurance. No, it just doesn't. Yeah, the risk return. I mean, you would have to go 100 years and have no event.

I mean, it's not quite, but it'd be like 25 or 30 years and have zero events and no liability and nothing. No. No, you need homeowners insurance on that. Right. I mean, we just had tornadoes in the Nashville area. We've just had roofs blown off and houses completely leveled. And, you know, house fires are a real thing, especially when the house is empty. It's more prone to burn.

Yeah. I mean, this is just basic risk management, Phil. And in exchange for coverage, you make a payment. And this is not something to skimp on. And I can understand trying to cut costs, but not here. It's just too much risk for you, your family, as well as this asset that you worked hard to pay off. So don't skimp here. Stay focused. Stay really, really clear and look for other areas to cut back in your budget. It does sound like you're probably going to start talking about selling this house. Family property and there's some emotional ties you've got to work through in your mind

and maybe even some relationships you've got to work through. But you're there 5% of the time. It's just empty. That's a pretty big keepsake to remember somebody by. Yeah, it is. And, Dave, I don't think you want to do the long-distance landlord thing. No. I mean, I don't.

You know, you can't keep an eye on it. You're going to have to use a property management company. I mean, it's just a lot of expense. Absolutely not. Lydia is in Virginia. Hi, Lydia. Welcome to the Dave Ramsey Show. Hi, Dave.

I have a question. So I have a student loan of around $25,000. I'm thinking about paying it as fast as I can. So I have two ways. I can either save up like $10,000 per year and pay it off within two or three years, or I can refinance it. The fastest refinancing term would be five years. So which would you recommend? What is the purpose of refinancing it? Lower the interest because right now the interest – Okay, why could you not do both?

If you lowered the interest and still pay $10,000 a year for three years and be out of debt? Oh, because the refinancing, I think the shortest term is five years. I know, but you can pay it early. There's no prepayment penalty. Oh, so you can do refinance and also pay, like, more? Yeah, make sure if you do a refinance that there is no prepayment penalty and make sure the interest rate is lower and make sure it's fixed rate.

But there should be, I mean, check Splash Financial that we recommend for student loan refinances. And, again, make sure you get a lower rate, no closing costs. Splash doesn't have any closing costs. And that you get a fixed rate, a lower rate, and that there is no prepayment penalty. And all of that would be true with Splash, except we don't know what your rate is. But, yeah, there's no reason you can't do both. No, not at all. And just for the people out there listening, prepayment penalties are something that can

be prevalent on personal loans, mortgages, and even student loans. And that's where you have to pay a fee if you pay it off before the term of the loan. And so this is just something to ask just to make sure, and you want to pay attention to the details. Most of the time, those are with substandard loans. Loans with real estate. If you've got a high interest, if you've got a prepayment penalty on your car loan, it's because you have a high interest rate because you had bad credit. And so you got an 18% loan, a 38% loan, you probably have a prepayment penalty in there because they want to make sure that they kick your butt. They don't just kick it.

They make sure they get to keep kicking it. They want to get every dime they can from you. And so that's where you see that. And typically, there is no prepayment on Sally Mae at all on a student loan, but there can be on some of the private ones, and those are usually ripoff loans around some of the Vo-Tech schools, some of those kinds of things. You've got to be real careful on these subprime, substandard lenders. They're right up there with those payday lenders,

which you need to stay away from right now. This is The Dave Ramsey Show. dental insurance is great if somebody else is paying for it But if you're footing the bill, OneDental.com is a much better way for my listeners. OneDental.com is a discount membership that gets you unlimited lower rates at the dentist, not just for cleanings, but even dentures, implants, root canals, braces, and more. Whether you're getting a plan for yourself, your family, or your business, OneDental.com is the way to go. Visit OneDental.com. Our scripture of the day, James 1.5.

If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given to him. Helen Keller said, a bend in the road is not the end of the road unless you fail to make the turn. That's where some of you are right now, for sure. And understand, we're there with you going bridge out, bridge out. So turn, turn, detour, detour. There's a new way to go. So I got a good tweet at the break, Chris, from a listener helping us out, bridge out. So turn, turn, detour, detour. There's a new way to go. So I got a good tweet at the break, Chris, from a listener helping us out, and he makes a really good point.

Phil, the guy that has the empty home, needs to make sure he does not have a traditional homeowner's policy because a homeowner's policy is invalid if you are not occupying the home. And so if you have a vacant home, you can get a vacant home policy. If it is a rental, it's called a fire and EC, fire and extended coverage. But when I used to do rehabs, we would buy vacant home policies and they're fairly inexpensive. It'll cost him a lot less than this. The traditional. Than the traditional homeowners does. Besides that, the traditional homeowners does besides that the traditional

homeowners if you're not living in the home if it's not owner occupied is invalid oh wow and and five percent of the time there is not it's not enough so this uh thank you to sean who sent that in that is a great or shahan or however i pronounce that but thanks for a text or for tweeting that i knew that but i didn't didn't but for some reason it didn't come out of my brain at the right time. So thank you for reminding me and really, really good input. Thank you. Appreciate it. Gosh, let's just stop for a second and have a moment.

What did you do? Twitter just did something positive. It really did. That's so freaking unusual. We need to take a snapshot of that. Yeah, we just need to have a moment right here. Twitter did something good. It's just because 98% of what's on Twitter is just trolling.

So it's just crap. So why do I even look at it? Because occasionally there's a nugget of a good human being in there. That's a great nugget. So thank you. All right. Matthew is in Tennessee. Hey, Matthew, welcome to the Dave Ramsey Show.

Hey, Dave. Chris, thanks for Ramsey Show. Hey, Dave. Chris, thanks for taking my call. Quick question for you guys. I'm 28 years old, and my wife and I are debt-free besides our home. We have a 10-month-old daughter, and I would like to start college savings. And there's so many different vehicles, it appears, to do that, ESA 529. Just really wanted to hear you guys' recommendation on the best route. I've also thought about doing a Roth IRA and using that vehicle in case,

for some reason, she does get scholarships or doesn't need the funds, that that can be used towards our retirement. So just wanted to hear you guys' thoughts on that and recommendations. Gotcha. So, Matthew, tell me this. What baby step are you on right now? So we're completely debt-free. So all we owe is our home. Okay, fantastic. So you're out of debt.

You've got an emergency fund and everything. Correct. Yes, sir. We have about $50,000 saved up. Okay, that is fantastic. So we've got to figure out what to do with that money, obviously. Yeah. Okay.

So what's your household income right now? We're at about 170. 170. Okay. And how old are your kids? 10 months. She is 10 months old. 10 months.

Okay. Yes, sir. All right. And so you're looking to put away money. Have you looked into the ESA? I've briefly read online. I know there is some income restrictions that we would probably phase out in the next year or so.

So when do you expect your income to go from $170,000 to how much? I mean, yeah, we'd probably increase our income 25 to 30K a year between my wife and I. Okay. I would say we'll probably phase out ESA in the next year or two. Yeah. Yeah, you will, without a doubt. Well, in that case, what we recommend is the 529. There are several types of 529s, so beware.

You're looking only for one kind, and the one kind you want is the kind where you select the mutual funds and they do not move unless you move them. Some of these are life phase or they're age-based programs, so as the kid gets older they automatically move the funds to more conservative types of funds. No, you control the funds. Also, technically speaking, the state programs where

you have prepaid tuition are technically a 529 plan, and you certainly don't want those. They're horrible. So no, what you want is a mutual fund or a series of mutual funds that are outperforming the S&P 500, like we always purchase, that have a long track record inside of a 529. And you can find that by getting in touch with one of our SmartVestor pros, and they can lay all of that out. Most of these 529s, not all of them, but generally speaking, you'll find them to have about a $10,000 a year limit on what you can put in. And so if you drop 10 in this year 10 in next year and 10 in the

next year for a baby you're probably done because that 30 you'll probably grow to 150 by 18 and um and that would probably be plenty uh unless you're really trying to super beef it up now if they get scholarships uh you're allowed to remove the amount of the value of the scholarship out of the 529 with no taxes. So you don't get trapped by scholarships. And no, I would not have you do your Roth for your kid's college. And I would, for that matter, not do the kid a Roth. They have to have an earned income. But I would not do a Roth for them for their college anyway.

That's moving way past there. So in your case, I'd just drop $10,000 into a 529 this year and $10,000 next year and then stop and look at where you are. And let's see from there. That way you don't have to worry about the $200,000 limitation on AGI on the ESAs. And just get in touch with the SmartVestor Pro. Click SmartVestor at DaveRamsey.com and sit down with one of them. They can explain all that and help you out.

Make sure you get in the right type of 529. There's one other kind of 529 that locks in. Once you buy it, you can't change anything. And you obviously don't want that. That's ridiculous, too. So there's some real trash under the heading of 529, so there's only one good one, and that's the type I'm talking about. And a better financial advisor would only advise you to go that way,

but some of them get all twisted up and some of this crap that's out there. So that won't happen with a SmartVestor Pro. You'll get advice there consistent along with what we say. That's kind of what our typical guideline is, isn't it, Chris? It is, and the income requirements out there for people, you know, you've got certain levels and thresholds where you're not eligible for the ESA. So looking at the 529 is definitely a way to go. But like you said, Dave, a smart

investor pro will guide you down all this path and give you the information you need. Absolutely. Lori is in Oregon. Hi, Lori. Welcome to the Dave Ramsey show. Hey, Dave. Hey, Chris. So excited to talk to you guys. You too. How can we help? So I work for a biotechnology company. We're actually doing pretty okay with this whole coronavirus issue that's going on. And I'm paid, part of my compensation is performance units or stock units. And I just received some, and typically I would sell them right away because I know we're not supposed to have a bunch of single stocks.

But during this time, I just feel like I don't know if I should exercise them right now or if I should just wait a little while until things calm down. It depends on what you think that's happening with the price. I mean, the Dow's off over 20%. How far is the stock price off? You know, the stock price is doing still pretty okay, considering what's going on based on how it was earlier in the year. Does that mean it's off 18% or it's off 1%?

What's that mean? Oh, well, it's only down $2 today. On what kind of price? $2.08. But it's down $2 today? Today, yeah. Okay, what was it in January? In January, it was $2.40.

Okay, so it's lost 20%. It's down by what the Dow is. I would just sit on it and ride it. How much of it have you got? I have about 65 shares. Okay, yeah, I would just ride it. How much of it have you got? I have about 65 shares. Okay. Yeah, I would just ride that. Just ride it.

And let's let this market rebound a little bit before you cash it out because you may be trapping your losses down. It's dropped $40 on $200. Yeah. And I'm trying to do – is that 10% or 20%? I can't make my brain work for me without my – Yeah. So, yeah, it's doing about what the Dow's%? I can't make my brain work without my thing.

So, yeah, it's doing about what the Dow's done, I think. So I would just write it back up. It's not enough money to kill you one way or the other. No. You're not going to stay in it for 20 years. That's right. Chris, thanks for hanging out today. Thank you for having me, Dave.

It's been fun. Chris Hogan with us here on the Dave Ramsey Show. James Childs is our producer. Zach Bennett is our associate producer and phone screener. I'm Dave Ramsey, your host. We'll be back before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

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