The Ramsey Show - App - DAVE RANT: We're Making Stupid Education Choices (Hour 3)

Episode Date: March 15, 2019

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Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, 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. Open phones at 888-825-5225. That's 888-825-5225. John's with us in Spokane, Washington.

Hey, John, welcome to the Dave Ramsey Show. Hi, Dave. Thanks for having me on the show. I really appreciate you. Thank you, sir. How can I help? Dave, I've been debt-free, including the house, for over 10 years, and my credit score has been steadily dropping for the last few years,

and it's starting to affect my homeowner's insurance premium, like double this year. How do we deal with low credit score and home insurance? Well, I haven't had a credit score for 30 years. I know you haven't. And I buy home insurance, homeowner's insurance on my house. And I buy car insurance. Now, some of the more household names will rate you higher if you don't have a credit score on car insurance. I've not run into that on homeowners as much as I have on cars.

But basically, there was a study done by the University of Pennsylvania in conjunction with the University of Texas that shows that people with low or no credit scores have a higher rate of, they post more claims with insurance. Now, of course, the study's obviously incomplete because what they're only studying are people that are broke, and that's why they don't have a high credit score. But they didn't study people like you and me who aren't broke because I almost never file an insurance claim, hardly ever. Right. Because I just cash it.

I just have the money. I just fix the stupid thing, whatever it is. And so unless it's a huge thing, I don't file a claim. So I'm actually the best possible risk for an insurance company, and I carry very high deductibles for those reasons. So if your insurance has doubled because your credit score went away, you need a new insurance company. Okay.

You need to go shopping and get you an insurance broker that will shop among several different companies and get you the best possible deal. And in the insurance business, when they're looking for a particular type of insurance, in your case, in my case, it's homeowner's insurance at a deal if I don't have a credit score. That's a type of insurance that's a nuance. And so what that's called is they make a market, meaning they find a company that likes people like you and me. And they've got to go out there and look among a bunch of different companies to cause that to happen, where there might be a different company that would be a better deal for somebody else. So that's the beauty of having an insurance broker.

There's two kinds of insurance agents, captive and brokers. Captive means they sell for one company, like a State Farm agent. All they can sell is State Farm. And so they always tell you state farm's the cheapest, and they always tell you state farm's the best, and it's not either. Okay? And so it's never the cheapest and it's never the best. They're a pain in the butt to deal with on claims.

So same thing nationwide. You know, the nationwide is captive agent. So what you're looking for is a broker that's going to shop among a bunch of different companies and get you the best deal. Just check DaveRamsey.com, click on ELP for insurance for property and casualty, PNC, which is car and homeowners. And then find the person there. They'll shop around and there's no reason you're, I mean, it does, it is higher. You're typically going to see a higher premium. I don't doubt that. But it shouldn't be double.

Double sounds weird. There's something else going on there. Emmett is with us in Springfield, Mass. Hey, Emmett, how are you? I'm good. Thank you so much for taking my call. Sure. What's up?

So I've got a two-part question. I've been paying off my college loan. I got through college only on student loans, and most of that was my father's Parent PLUS loan. And he has expected that that is paid off by me while I'm currently on a forgiveness plan for my own loan. And I guess I'm wondering if... So as he was taking out this Parent PLUS loan all the way you going through college,

your all's handshake deal was you were going to pay it. Yeah, he was assuming that I guess I'd find the money to do so. Wait a minute, is that a yes? Yes. Your deal with your dad was you were going to pay off the Parent PLUS loan all along? Yep. Okay. All right.

How much is the Parent PLUS loan? So his is, I think, around $100,000. Holy crud! Yeah, so it's because I didn't have any assistance. So maybe one semester of assistance, but mostly it was all student loans. And how much student loans do you have? About $20,000. And what is your degree in?

English. English. You have an undergrad in English. Yep. What are you doing for a living? Right now I'm a data analyst, but it's temporary. So it ends sometime in the summer. What's that mean?

So we're for Amazon. No, I mean, what's the sometime in the summer mean? I don't understand. Oh, it's a contract. Oh, it ends. The deal ends. Okay, so what are you making as a data analyst at Amazon? About $15 an hour, so $600 a week or so.

So what are you going to do with this English degree to make a living and pay back $120,000? I mean, my dream has always been to get into a magazine or writing in some way, travel writing or just anything. Okay, do you have any idea what that pays? I mean, various places I've seen like an entry level from like $30,000 to $40,000 I thought would be decent enough Okay, so you spent $120,000 getting a degree to make $40,000 a year? Yeah, that wasn't really the plan I went to an out-of-state school, so it was more expensive

Yeah, I got it Okay, you're going to have to make more money than this Yeah You've got to mess I don going to have to make more money than this. Yeah. You've got to mess. I don't know. There's two numbers that matter here. The debt is $120. The other number that matters is the income, which is how the debt gets paid.

And right now all I hear is income sucking. Yeah. My dad did mention that he wasn't opposed to me paying part of it. I don't care. I mean, I don't care what your dad wants. You don't have any money. Your dad's wishes are just wishes. I'd love for you to pay back this as fast as you can,

but unless I miss something in this conversation, you don't have $100,000 anywhere near you. No. Or even see it coming down the driveway okay so you know you're going to start making 50 60 70 000 and living on nothing and then you can clean this up in three or four years but you're not going to clean it up by september you do not have the ability does he think you're just going to add water to something and it's going to grow money? Yeah, I guess he has a hope

that I'll find something eventually. Well, I have a hope you're going to find something sooner than eventually. I hope you find it by next week. But you've got to get a situation going where you're working about three jobs and you're making serious money

at all of them. And then you get this mess cleaned up as fast as you can but your dad's proposal that you just instantly come up with 100 grand he's living in as big a fairy land as you have been and both of you are going to have to come down on the real world here where math works this is the dave ramsey show the Dave Ramsey Show. The last thing I want you to feel is buyer's remorse, especially when you offered thousands more on a new home to win a bidding war. If I've taught you anything, it's that blindly throwing money at a problem is a stupid plan and something you'll regret for years. The key to avoiding this rookie mistake is to call Churchill Mortgage and get certified. This easy program puts you miles ahead of your competition because you are pre-underwritten.

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761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Thank you for joining us, America. We're glad you're here. Okay, let's talk again. We have to do this about once a week. It's a rule. And this is my second time this week. So I have to get this in just to make sure we understand. We have a $1.6 trillion student loan problem in America.

Let me help you with how that happens. Okay? You cannot be the father who looks at your son and assists him in going $100,000 in debt in your name and $20,000 in his own name who gets an English degree,

hoping to have a career of making $30,000 a year. As a father, that makes you a failure. You have failed your son because you've been stupid. Now think about it. Okay? If you take someone that you supposedly love and you lead them into $120,000 in debt in a career field where they hope to make $30,000, $35,000 a year. That makes you stupid, inept, and then have the unmitigated gall to ask them to pay back the loan that you signed for. Fail your father, check box.

Part of our student loan debacle is a parenting failure, where parents don't look at 18-year-olds and go, no, darling, that's stupid. Because 18-year-olds have the capacity to do stupid things. And as loving parents, it is our job to assist them in not doing that not assist them in doing that don't assist people to do stupid things in doing things that you know are going to bring them harm. That's just dumb. Well, he's an adult.

Listen, not only is he 18, he needs you to speak into his life and say, no, darling, that is not wise. If you want to get an English degree and make $35,000 a year, work your butt off blowing leaves off of rich people's lawns rich people are afraid leaves get you a leaf blower and make twenty dollars an hour and go to community college and get an associate's degree in journalism and then go write for a magazine you do not need a four-year degree at Yale in English to work for a magazine. You don't.

Okay, I've got 40 people, 45 people on our staff that are professional content people that really know their stuff. They're world-class storytellers. They're world-class writers and editors. They produce content around here by the bushel basket every day. Yes, I do know what I'm talking about. I hire these people. They work with me. I write with them.

We create things together. They're brilliant. They know what they're doing. And none of them went $120,000 in debt to get that degree. And then you turn around and ask him to pay for it by September. Somebody ought to smack that dad. Seriously. And if you're that dad, maybe I'm smacking you right now

because you're about to be that dad. Don't sign a Parent PLUS loan, dummy. Parent PLUS stands for stupid. That's what it stands for. Parent PLUS stands for stupid. That's what it stands for. Parent PLUS loan is stupid. It's parents financing stupidity. There is no need to go into debt to go to college. Let's try that again.

There's no need to go into debt to go to college. The average in-state tuition in America today is $12,000 a year. You can make that delivering pizza four nights a week. There is no need to go into debt to

go to college. Well, I want to live in the dorm room. That's not going to college. want to live in the dorm room. That's not going to college. That's living in the dorm room. What are we after here? The college experience or the knowledge? Choose where you're going to school carefully and pay the least possible amount for it if you don't have the money or someone writing you big checks.

This is how this works, boys and girls. The reason we have a crisis is people, when it comes to the subject of education, have no education. We're making stupid, the paradox is we're making stupid choices when it comes to education. We're getting degrees in things that have absolutely no application in the marketplace, no ability to give you a return on investment. You get a degree, a PhD in German polka history, and then wonder why you can't get a job.

It's dumber than a rock. And we just said, well, everybody just needs an education. No, everybody needs an education that's applicable, that has a marketplace value. Otherwise, you have paid for something that was an intellectual luxury, and you have to have the extra money to do that. You don't go $220,000 in debt for an intellectual luxury. It's stupidity on steroids. Stop it.

We have a parenting crisis in America. Moms and dads, you need to love your children enough to not participate in their crazy and guide them away from crazy. No, darling, you're not going across the state line. We don't have the money. You just tripled your tuition just to go to a school that looks exactly like this one with different football team. It's blue instead of orange or red instead of purple. That's all it is. It's the same stinking place virtually.

I mean, my gosh. It's just crazy, y'all. It's crazy, crazy, crazy, crazy, crazy. Stop it. All right. Jersey City, crazy, crazy, crazy. Stop it. All right. Jersey City, New Jersey. Leslie is up. Welcome to the Dave Ramsey Show.

Leslie, how are you? Good, good, good. Thank you so much for taking my call. It's an honor to speak with you, Dave. You too. How can I help? Okay, so I have a question on behalf of my fiance and I. So he currently is part of a family business, and he's co-owner in that business.

And the problem is that, again, because it's a family business, his dad, his brothers, all of whom he works with, they're all very bad with money and finances, and that in turn affects how the business is able to cash flow and getting business payments in on time and bills and operating expenses and et cetera., getting business payments in on time and, you know, bills and operating expenses and et cetera. How many people work in this organization? So it's four. What do they do?

What do they do? So they own a trucking slash logistics company. So they ship freight and they do, like, deliveries throughout the whole eastern east coast. Okay. All right. So they drive trucks back and forth and they don't do a throughout the whole eastern um east coast okay all right so they don't they drive they drive trucks back and forth and they don't do a good job of handling the money i mean basically no that's it that's it it's four people it's not a very sophisticated operation it's four people and they're all family yes okay and um so let me ask you this let me ask you this. Let me ask you this. Yes. Is this going to get better?

No. I didn't think so. That's the central problem. I agree. So he needs to go get a job. Okay. Because what he was thinking about doing is potentially leaving this business and starting his own. That'd be fine. Oh, so you would agree that that's the best way?

Sure. As long as he can learn how to handle the money. Yeah, yeah. That's what we're completely on board with at this point. Yeah. But I guess then my next question would be, like, in terms of business and financials, would there be any liability? Because the current business is structured as a limited partnership.

So would there be any liability on his part if the business potentially folds, if his leadership is gone? He needs to give up all of his ownership, takes his name off of all documents. Has he signed any guarantees on loans? I think, yes. He's not getting rid of that until those loans are gone or until they refinance them. He's got that guarantee. He's stuck on that. That's called a contingent liability.

If they don't pay the bill, he's going to end up getting repoed. But he needs to get out of there. This is not going to get better. This is the Dave Ramsey Show. You know, I still get lots of questions about ID theft, and now is a good time to delve into this a little deeper. ID theft has become a huge problem, and most people think it's all about financial fraud. But there are so many other areas where people are being victimized. Tax refund fraud, for example, is out of control.

Last year, the IRS paid out over $3 billion in fraudulent refunds. Thieves are filing false returns and stealing your refund. Credit monitoring and prevention plans don't detect this type of ID theft and don't help resolve the problem. That's why the only plan I have for my family and all my team members is through Zander Insurance. They cover all types of ID theft, including tax refund fraud and work with the IRS to get your refund resolved. Go to ZanderInsurance.com or call 800-356-4282. This is the smartest, most affordable way to protect yourself and your family. That's ZanderInsurance.com. Thanks for joining us, America.

This is the Dave Ramsey Show. Open phones at 888-825-5225. Adonis is with us in Anchorage, Alaska. Hi, Adonis. How are you? Amazing. How about yourself? Better than I deserve. What's up? Awesome. Well, Mr. Ramsey, I just started listening to you and

following you, and I very much appreciate you. I just got my snowball or my debt all consolidated, and I found out that I have a loan for the mother of my children's truck. It is about $4,800, and I found out that she's not paying anything on it for about the past eight or nine months. Okay, stop a second. I'm a little bit confused here. The mother of your children. Is this your ex-wife, your ex-girlfriend?

Girlfriend. Okay. your children is this your ex-wife your ex-girlfriend girlfriend okay so you're shacked up and she had you had some babies and you put a truck in her name and you put your name on the loan yes sir and now y'all are split up yes sir okay you have a truck loan all right yes sir okay that goes in your debt snowball Okay. You have a truck loan. All right. Yes, sir. Okay. That goes in your debt snowball. Yes, sir. And how far behind is she on this truck loan?

About nine months. Whoa! Why have they not repoed it? They don't know how to find her. And so another little twist here is that, so in our custody agreement, because we have court papers and stuff, I can't repo the truck or do anything to hinder her from the transportation as she is responsible for the truck. So even though you weren't married, you have a court agreement?

Yes, sir. So I have 50% custody of my children. Okay. And you're paying child support? No, sir. No. Okay. All right.

With the 50% says you can't hinder her. Okay. So what do you make a year? Right now, I'm currently unemployed. I just lost my job. Wow. You need to write a country song. Good Lord.

So what did you used to make? About $20,000 a year, sir. Okay. Doing what? As sales representative at a garden shop. Gotcha. Okay. All right.

So what are your job prospects? What do you think you're going to be making? What are you job prospects? What do you think you're going to be making? What are you looking for? I'm hoping to make around about at least $30,000. Okay. All right. What I would love to be able to do, and I'm guessing you have no money, right? Well, so I've done a little bit of things backwards i had a roth ra um set up so i had some money set aside uh around about it was around about like 5500 or so gotcha in that um

uh that that and no i don't have any. And how much debt do you have, not counting the $4,800 on the truck? Not counting the $4,800 would be $11,000, about $12,000. Okay. So $15,000 changes your life. Yes, sir. That's wonderful. That's wonderful. Okay. And so, you know, income, income, income, income, income from 14 different sources working six jobs is what we need, right?

Yes, sir. You need to work like an absolute maniac. How old are you, 23? I'm actually 30, sir. 30. Okay. All right. Cool.

All right. So I need to get, you know, income solves a lot of your problems because the bad news is you got a mess. The good news is it's not that big a mess. Only $15,000 changes your whole life. And so what we've got to do is just, you know, what if you got a job making 30 and you got another job making 20 and you got another job making 10, you know, and you were just working all the time. But, buddy, you'd be done with all of this shortly. Because here's what you can do with this car company. They can't find her.

And if you called them up and said, yeah, I'm on this loan, but I'm unemployed. You're owed $4,800. You're nine months in the hole on this truck. The truck's probably not even worth $4,800, right? Correct months in the hole on this truck. The truck's probably not even worth $4,800, right? Correct. Yeah. What's the truck worth? That, I have no idea.

Oh, guess, guess. I'd say it's about $5,000, if that. Oh, so you think it's worth about what's owed on it? Probably, yes, sir. Okay, all right. So here's what I'd do. I'd call them up and offer them two thousand dollars to settle it so i've done that uh really really fast that's how i got it down to the 4781

because it was 7 000 uh okay about 7 000 and some change so i'll say say about $7,500. And they said the lowest that they could get it was this $4,781. Tell him you talked to your financial counselor and he said that didn't work for him because I'm your financial counselor and it didn't work for me. Awesome. Listen, they're screwed. They can't find her to repo the truck. The truck's not even worth the $4,800 that they're offering you. So I would offer them $2,500, and I'd cash out your Roth IRA and pay them if you can get that.

But get it in writing. Get it in writing. And they give you the title. They give you the title, and then you hand it to your ex. Okay, because that's what I initially had told them that I was really going to try to take care of it. But I do have about $2,000 coming in, so I was going to see if I could try to... Where's that coming from? ...see exactly what you said.

Where's that coming from? I had a check. So I did. I pretty much am doing exactly what you're saying. I did cash out one of my IRAs. Okay. And so I had the check coming in, and it just got here. But so when I had talked to the people to get the truck out of repossession,

because she has to transport my kid. Yeah, I know. I got that. I got that. But they can't find her. But they can't find her. But they can't find her. They can't find her. This is Alaska.

It's the wild, wild west. Right. Yeah. They're never going to find her. They don't even know where to look. And you're not going to turn her in either. No. Because she's taking care of your kids.

So you're going to settle this for $2,000, $2,500, something like that, cash. And you're going to get an in writing from them before you give them any money, and then you get the title when you take them the money. It's that simple. And then this is over, and you hand her the title, and this part of your crisis is over with, and then you continue with your income crisis and your career crisis, and you turn those things around, and you're going to be okay.

You're going to be all right. You've got a game plan here. I do not tell people to cash out retirement accounts except to avoid bankruptcy and foreclosure, and you're on the edge of bankruptcy with this repossession breathing down your neck. So to stop a repossession, I'll cash this out in this setting. It's not something I normally tell people to do, by the way. But your back is against the wall here,

and this is a way to get a deal on this and get rid of it, get rid of this problem all in one fell swoop. But you're going to have to negotiate harder. $4,800 is not a deal. It's not a good deal. Tell them you talked to your financial coach, and he said there's no way that's a good deal. All you got is $2,500, and it's all you can do. If they want to take that, they can take that, and this will be off their books.

They haven't gotten a payment in nine months, and they can't find the collateral. They're so screwed. You totally hold all the cards at this poker table here you hold all the cards they got nothing in their hand and so that in there and yet they're posturing all over the place and bluffing so yeah just settle it settle it that's what you need to do good question man and if i can help you further adonis you call me again i'll walk with you through this but you need to do. Good question, man. And if I can help you further, Adonis, you call me again. I'll walk with you through this. But you've got to get your income going, man.

A bunch, a bunch, a bunch, a bunch of income. And new life choices. Lots of better life choices going forward. Wow. Life on the radio. It's called the Dave Ramsey Show. We'll be right back. Thank you. Our scripture of the day, Romans 15, 13, May the God of hope fill you with all joy and peace as you trust in him, so that you may overflow with hope by the power of the Holy Spirit.

George Bernard Shaw said, The joy in life is to be used for a purpose. I want to be used up when I die. Very nice. Well, if you've ever felt stupid because you couldn't do your taxes, you'd be like a normal human being because our tax code is unbelievably complicated.

I don't do my own taxes. Amy, one of our friends, had a different experience after working with one of the tax pros that we vet as part of our endorsed local providers program. She said, I have never had someone try to help me actually understand how taxes work until I met with my endorsed local provider. There's an expression, if you can't explain it to a fifth grader, you don't understand it well enough. And she helped me to fully understand it.

We found our new CPA. Thanks for pointing us to her. Good to have pros in your corner that make you competent and are competent. Find an endorsed local provider to help you get your taxes done right. Go to DaveRamsey.com and click ELP for taxes or DaveRamsey.com slash ELP. Alyssa is in New York. Hi, Alyssa. Welcome to the Dave Ramsey Show.

Hi, Dave. Thank you for taking my call. Sure. What's up? So my husband and I gave some advice to my in-laws recently, and I wanted to run it by you to make sure that it's consistent with your teachings. My in-laws are in their 70s. They are debt-free, including their home.

They're on a fixed income, mostly Social Security, of around $3,500 a month, and they seem to live within that income. They have a very small nest egg of about $120,000, which is currently invested about 60% bonds and about 40% equities. And then they have around $20,000 to $30,000 in cash. So my question to you is, would you have the investment in the four categories you recommend or sort of based on their age and the potential for needing to use the money more quickly for nursing home or what have you, would you make any adjustments to that

allocation or would you leave it as is? Yeah, generally the four categories we recommend as you apparently know as growth growth and income aggressive growth and international i would not use an aggressive growth with them i'll probably flip that over and pick up a balanced and i might pare down the international i wouldn't be in bonds especially right now and the reason is this and as interest rate bonds have an inverse relationship with interest rates as interest rates increase bond values decrease and we are and interest rates that we're referring to are long-term interest rates like mortgage interest rates as an example so mortgage interest rates are really a reflection of the bond market the bond market

is a reflection of mortgage interest rates so as mortgage interest rates go up and they've come up a full point and a half in the past two years as they come up the bond market has tanked and so you could take you could you take some serious losses in the bond market if these mortgage interest rates continue to creep up gently and gradually the way they have in the past two years. So I just wouldn't be in bonds. I don't like bonds to start with for any use, but I really, really don't like them in this environment because you're probably going to see some pretty serious loss in value. That probably represents a whole lot more risk than you guys thought it did and maybe even than your planner thought it did. Yeah, I mean, I'm kind of disappointed that they got the bulk of the investments

about maybe eight years ago, and if they had invested in all equities since then, they would be sitting in a much better position now than they are. So that's disappointing. The second question I had was long-term care insurance. They did have that, but I think that the previously, that's the disappointing um the second question i had was um long-term care insurance um they did have that but i think that the um previously but the premiums were kind of pricey i'm not sure exactly how much they were but they were a few thousand dollars and they were had to be paid out of this investment portfolio and so they dropped that because the monthly budget doesn't really

allow for it would you you know would you take that out of the investment would you just yes i would buy long-term care insurance if they're healthy and can get it reasonably priced how old you said they're 70 so it may be i mean you just got to base it against this here's the problem okay nursing home is going to be 30 to 60 000 a year depending on what they go into 75 of the ladies outlive their husbands right so typically papa goes into the nursing home and burns up $100,000 to $200,000 to $300,000. Mm-hmm. Mama's left broke.

Right. That doesn't sound like a good plan. What would be sort of reasonable? I mean, $2,000, $3,000 a year? Yeah. Yeah, it's probably going to be $3,000 to $4,000, actually. Okay. At their age.

Okay. But, you know, you're offsetting her being broke because he went to nursing home that's what we're offsetting and because they not got a lot of margin to work with here and uh and it's not going to cover that much it's not going to cover you know ad infinitum the coverages are pretty limited that you get these days but um but you know i'm trying to thumb through here because I've got some of the statistics written down. The average time spent in a nursing home right now is 2.4 years. Okay?

24% of the people that go into a nursing home are all that spend longer than three years. So 75% don't stay three years or longer. That's what we're saying. All right? And, you know, the numbers I gave you there on the costs are about right um and you want to get something that's got in-home care okay as a part of the policy coverage but 70 of the people over 65 will go in for some kind of long-term care assistance in home or in a nursing home and that that's so there's a very high probability that one or the other of them is going to actually use this um and you know these things just the claims very

few of these policies cover more than five years anymore but really statistically the chance of you using it longer than five years is not it's not that that i'm worried about it's the five years that i'm worried about right the five years that I'm worried about. Right. The three years that I'm worried about. And because it can eat up what little nest egg they got. And I just, I would, I would insure against that. So I love long-term care insurance.

If you're over 60 folks, I'm a big fan of it. I wouldn't buy it before you're 60. You have almost zero chance of using it percentage wise. But once you're 60, you have almost zero chance of using it percentage-wise. But once you turn 60, long-term care insurance is a good idea. And never, folks, never combine long-term care insurance with other types of insurance, like savings programs or health insurance or life insurance or anything else. Keep it a standalone. When they start bundling stuff like that in the insurance world together,

it almost never works in your favor. About the only time bundling works in your favor is when you put your car and homeowners together in one company. But the rest of the stuff where they start putting life insurance and there's a lot of these whole life policies is basically what they are with long-term care out there floating around right now. And they are total crap. And they're super expensive.

So just stay away from that garbage. Just buy and don't buy return of premium even. Just save your money on all that stuff. Don't buy all these gimmicks. Just get the nursing home coverage. That's really all you want. It's really all you need. Nick's on Twitter.

Dave, where should my wife and I park our three- to six-month emergency fund if not a standard savings account? I mean, you can make a little bit more on it, a money market account. You can probably make a point and a half right now. You might make 1.8, something like an allied bank online or something like that. You can make a little bit of money, but you need to remember with your emergency fund that it is not an investment. Not an investment.

Not an investment. Not an investment. Your emergency fund is insurance. Insurance costs you money to protect the assets that are making you money. And in a sense, when you're only making 1% on $10,000 or $15,000, then that is costing you money in a sense. Opportunity cost on your money. It could have been working harder, but it doesn't need to work harder that portion of your assets that portion of your portfolio that is your

rainy day fund it is more important for it to be accessible with no penalties and no downturns in the market than it is for that money to actually make money it's there to protect the other things that are actually making money not not an investment, is insurance. Insurance costs you money to protect investments that make you money. And that's what your emergency fund is. It's insurance. So you're not going to make any money on it. It doesn't matter what you make on it.

Make 1%, 2%, it all sucks. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you 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. This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com.