The Ramsey Show - App - Dave Rants on the Lottery (Hour 2)

Episode Date: October 16, 2018

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🎵 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'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. Michael is with us in Phoenix, Arizona.

Hey, Michael, how are you? I'm doing good. I just want to say God bless you. Thank you for this show. Thank you, sir. How can we help today? Yes, so I have a quick question for you. So my wife and I, we upgraded in-house. We sold our other one. With that money, we paid off a lot of

our debt, credit card, car, and a few other debts. And the only debt that we have left is student loan debt. And so between my wife and I, we owe about $114,000 in student loan debt. So we're just trying to figure out what we can do between the upgrade of the new house and the student loans that we have left. How would we get that paid off? We're just trying to figure out how to do that. Spend less than you make and put it on the student loan? I mean, what are you thinking about?

I don't understand. Well, basically, we're just trying to figure out, like, there's three of them between us. I'm a teacher. I know there are loan forgiveness programs, but I'm just trying to figure out. Loan forgiveness programs don't work. They're 10 years long. You don't want to be in debt 10 years.

What's your household income? So take home between my wife and I, we make around $57,000 a year. Okay. And how much is your house payment? So we haven't gotten our first one. We just moved. So the house payment will be around $1,600 a month. Okay.

You're right at a fourth. That's not bad. All right. And you have no other debt except the student loans? Correct. Okay. And so if you put $20,000 a year on these, it's going to take you five years. So I think you've got to look at ways to increase your income.

Okay. You've got a lot of student loans for two teachers. Where did you get your degrees? So she has her master's. I got my master's. We both went to NAU, Northern Arizona University. Wow. Okay.

You must have put everything on there. Yeah, you list your debts, smallest to largest, the three loans, pay minimum payments on the two big ones, and attack the smallest one with a vengeance. That way you can see that tree fall over from your chopping. If you just chop a tree and it never falls over, it's no fun. So you need to feel that reward of that little one going away. When that little one goes away, then you can attack the next one down.

But you've got a five-year plan unless you add some income to this. And it's going to be a tough five years, really hard. And so I'm probably picking up some tutoring, some coaching, some something, things that teachers do on the side to earn extra money. You probably make another $20,000 tutoring and turn your five-year plan into a two-and-a-half-year plan. And that would be preferable. But you're going to pay a price one way or another. The price you're going to pay is it's going to take you a long time to get out of debt,

and that's one price, and that's a real painful price, or you're going to get really intense, focused, and give up your life for a short period of time to get rid of the debt a lot faster. And, you know, two, two and a half years, you can do that. But you guys are going to be working 24-7 to do that with the numbers you're giving me. And you can do it, though. I see teachers do it all the time. Bill is with us in Nashville.

Hi, Bill. How are you? Hey, though. I see teachers do it all the time. Bill is with us in Nashville. Hi, Bill. How are you? Hey, Dave. Hey, thank you. Dave, we've got an upside-down car. We owe $13,000 on the car. Its book value is $7,000. But unfortunately, we've got a $7,000 maintenance bill on the silly thing.

We'd have to pay to get it up to even being worth the $7,000. We're just asking, what the heck makes sense to do with this car? That doesn't make sense. What kind of $7,000 car has a $7,000 maintenance bill? It's a 2005 BMW 645. And what's wrong with it, for God's sakes? It's got an engine seal problem that costs about $7,000 to get fixed. Okay.

Well, if it's worth $7,000 and it takes $7,000 to fix it, that means it's not worth anything. That's right. There's got to be an alternative way to get this thing fixed. Are you dealing with a dealer? No, we're dealing with a mechanic that specializes in this engine. Yeah. Man, that's a ridiculous, you can't spend $7,000. I mean, you're better off to just turn it into a junkyard.

I would think the car would probably bring a couple grand, even with the shape it's in, but you owe $13,000 on it. So basically, you have a $13,000 credit card, that's what you have. That's right. That's just attached to a car. So what's your household income? Almost $100,000. Okay. Yeah, I'm just going to trade like a $13,000 credit card debt.

I guess the car sits in the driveway. You figure out other transportation. Who do you owe the money to? To the car. I guess car is USAA, so it's our bank. I'm a veteran. Okay. Well, the USAA might actually work with you

and let you sign an unsecured note for the balance of what it doesn't bring. At least that way you can get the tags and the insurance and stuff off of you and, you know, sell it for a couple of grand salvage, and then you got $11,000, you just got an unsecured note because you bought a piece of garbage, apparently. Oh, my gosh. I'm so sorry. That's aggravating. Yeah, I hate that you're saying exactly what my wife is saying, Dave.

Come on now. I'm sorry. You already knew it. It's just, oh. And usually, Beamers 7-6 series are pretty good cars. I'm really shocked you can't find something to do to get that thing patched together cheaper than that. I'm going to go back on your mechanic and maybe get a second opinion from another independent Beamer mechanic and or push back on this guy and go, listen, there's no possible way we're spending seven grand on a car that has a book value of seven grand.

So you got any other ideas, man? Because you're not getting this job. And see if he's got something else he can do. I don't know. I mean, the fuel systems are finicky. I know that. I've had a couple of them. And generally, they're great cars.

I'm a Beamer fan. Rachel and Winston bought one one i used one the other day it's really a nice car but um yeah uh um now i i'm just gonna i'm gonna push back get a second opinion push back on this guy work with usaa and then say i make a hundred grand i got eleven thousand dollar worth of worst case i got eleven thousand dollar uh credit card debt here i just gotta pay off how fast can i pay it off and you know get the title back and then sell it for salvage if if usaa won't work with you and do it on an unsecured loan basis transfer that negative equity into an

unsecured loan but hopefully you could figure out a way to put a couple grand in it and then if it's worth a couple grand salvage you spend two more on on it. That's like having four in it, and it would sell for seven then. If you could figure that out, that would be a lot better use of this situation. But no way you spend $7,000 on a car worth $7,000. That doesn't, the map doesn't work. I'm sorry, though. It's so frustrating when you get these things, man. You just want to take a gun outside and start shooting a stupid thing.

But probably not legal to do that in most areas. It makes you so mad, though. Unbelievable. I'm sorry. This is the Dave Ramsey Show. I get asked all the time about what people need to do to improve their family's money situation. Two of the most overlooked things are term life insurance and disability insurance. Both plans make sure that you have income to pay bills and take care of yourself and your family if something were to happen. For term life, you need to carry 10 to 12 times your income,

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Call 800-356-1780 or visit zander.com and compare online. That's 800-356-1780 or zander.com. Thank you for joining us, America. Levi is with us in Atlanta, Georgia. Welcome to the Dave Ramsey Show, Levi. How's it going? Better not deserve, man. What's up? Well, right now I have a job, and I'm making about $42,000 a year.

And I got another job offer for $33,000. And the only reason I'm considering it is because the benefits are a lot better. They offer 401K, more paid holidays, more vacation. They also pay 100% of my health insurance. How much does your health insurance cost now? I don't have any. I can't afford any. The company that I'm with now, it's like $500 a month or something just for me. So $500 a month is $6,000 a year. You're talking about taking a pay cut of $9,000. You're going to trade six for nine if you're doing it for health insurance.

The 401K benefit is worth very little, and the other benefits, and, you know, more time off is not what you need. You need more money. Mm-hmm. Well, I mean, the potential to grow at that company would be a lot more. Quickly? Within the next year or two. Would you double your income? Wouldn't quite double it, no.

How quick would you double it? I could be looking at, in the next two years, I could be looking at maybe another $10,000 a year. Back up to where you were? Yes, plus the health insurance. Yeah, yeah. Well, the benefits are worth very, very little in this equation. I would not do it for the benefits. Okay. I might do it if it's taking one step back and I get into a career I love so I can take six steps forward.

Because what I want to – how old are you? 23. So the question is, when you're 43, 20 years from today, does this take you where you want to go 20 years from today if it's not taking you in that direction then you're doing this for health insurance benefits and that's a dumb idea okay um i mean maybe maybe not this job uh it might i don't i don't know exactly how i mean i don't know that much about the company quite yet, but it does open kind of the door for the – it could help transition me into the career I want to be. What do you want to be? I want to be a master diesel tech.

Okay. And what do you do now? I'm a welder. Okay. And what do you need to do to become a master diesel tech? I need to get all my diesel certifications. Okay. What's the shortest, quickest way to do that?

A good diesel tech makes a lot more than 42, right? Oh, yeah. Yeah, I could be looking at like 100 grand a year. That's what I was thinking. Okay. Yeah. So what's the shortest path there again? We've got to get the certs.

How do you get the certs? Technical school, I guess. That's the only way i know okay what's the other place you're talking i can get into a company that would put me through the school there you go what's the other place you're talking about working what's the other place you're talking about working what do they do um they actually they work on uh big or uh 18 wheelers and trailers and stuff like that. What kind of work? Do they do diesel tech? Yeah.

They have them there and stuff. I would be coming in in a different position. I'd be coming in as a welder. Okay, if they'll take you in as a welder and they'll pay for you to get your certs, and in three years you're doing certified work and you go from 33 to 100, then nobody gives a crap about health insurance. We just tripled your income, dude, and you're doing certified work and you go from 33 to 100, then nobody gives a crap about health insurance. We just tripled your income, dude, and you're doing what you want to do. Yeah.

Now, that's a plan. In other words, in the interview, you say gently and kindly with a smile, if you want me, health insurance is not the carrot to dangle. Quickly getting me the certs is the carrot to dangle, and this rabbit will be going. Okay. But I need a plan. I need to know.

You can start the certs with, you know, you work here a year before we'll pay for your certs? Okay, I'm in. I'll take a pay cut for a year to get where I want to go by the time I'm 43. Okay. But I'm not just taking a pay cut because you gave me a little bit of lame-o health insurance. Okay. Wrong motivator. Are you following me?

Yeah, I get you. You make 100% sense. So I called. So Jack, in a nice way, loving way, negotiate with them, jack them up, and go, dudes, you got you a new welder. If you'll pay for my certs, when can I start? Well, we wouldn't start you for a year. Okay, you got you a new welder.

Will you put it in writing? You'll pay for my cert starting in a year? And then figure out how long it's going to take you to get through those certs, and then you know when you're going from 33 to 80 to 100. And now we got a plan. Go get them, man. Go get them. Open phones at 888-825-5225. You know, let me tell you how I answered his question, and it'll help you guys.

I learned this a long time ago. Because you ever hear people say, thank God's friday oh god it's monday live their whole life thank god it's friday oh god's money hump day those are people that are surviving they're a rat in a wheel they're just trudging along got no plan living for the weekend that's what you know that that that's those people right now let me tell you what the statistics tell us the research tells us about those people they do not progress in their life or in their wealth building and let me just tell you anything anything that's not growing, it's dying. People who have wealth starting from nothing, which is the majority of people who have wealth,

they started from nothing, when interviewed and they asked them their decision-making paradigm, they said, I make decisions like career decisions or purchase decisions or investment decisions, not based on what will make me feel good Friday, but what will make me win 10 and 20 years from today. If your decision-making paradigm by which you analyze and apply critical thought to your decisions makes you ask yourself, how does this decision affect me 10, 20, 30 years, or for that matter, in eternity? It will cause you, because you're aiming at the moon, it will cause you to jump higher,

climb faster, and go bigger, because you have a higher, bigger goal. A BHAG, my friend Jim Collins calls it. A big, hairy, audacious goal. But if all you're doing is saying, God, if I could just get to Friday, let me just tell you, all you're going to do is just get to Friday. The people on the lower socioeconomic rungs of the ladder who stay there have short-term, very short-term decision-making paradigms. And so they do rent to own. Because you would never pay payments, rental payments, on a couch if you were thinking

long term. You would never pay rental payments on a washer and dryer if you were thinking long term. If you were thinking long term, you would pay cash for a used one at a garage sale, because then there's no payments. No one invests for retirement unless they're thinking long-term. No one saves for their

kid's college unless they're thinking long-term. These are all activities of wealthy people. But you always see short-term thinking, the lotto tickets.-term thinking lotto winner you know the lotto tickets almost all your lotto tickets are sold in the poor zip codes in town oh but it goes to education that's great let's have poor i got a government plan for you

let's put it out there this this possible way let's tax the poor so we can send middle class kids to college for free and say we won ding ding well that's what my state does we're so proud we just took money from poor people and sent middle-class people's kids to college for free it's a great program well some some lower class kids go to college but you know who really goes when you analyze zip codes the people that take advantage of the lottery winning are not the lottery winnings. The lottery scholarships are all middle class. There's a few lower class, but it's almost all lower class zip codes that pay for lower

socioeconomic zip codes that pay for the lottery. So why? Because you're thinking short term. And they say stupid stuff like, oh, I just play for fun. You know what? I've lived a long time. Losing money has never been fun to me. That was fun.

I just lost some money. That was a blast. See, that's short-term thinking. If you put the same amount into a mutual fund and a Roth IRA that you put in your stupid lotto, you could retire a millionaire. That was fun. It's not fun. It's stupid.

It's a tax on people that can't do math. That's what the lottery is. It's short-term thinking. And this is where all the short-term thinking is in that end of town. If you want to get out of that end of town. Start thinking long term. Open phones this hour. This is the Dave Ramsey Show. We're glad you are with us. Marion is with us in the lobby.

I'm sorry. Let me try again. I don't know what I'm doing here. I'm picking up stuff. Marion is in the lobby. I'm losing my mind. How are you? Absolutely.

Oh, wonderful. Thank you, Dave. Welcome. So I can tell that you're not from the South. No. I've come all the way from England just to come and do my debt-free scream. Wow. What part of England do you live in?

Well, it's Brentwood in Essex. Oh, there you go. She came from Brentwood to Brentwood, Tennessee. Yeah. Well, that'll work. Very fun. And to say a massive thank you to you. I just wanted to come and say thank you to you.

Well, we are so honored you did that trip. That's amazing. And welcome to Nashville. Thank you. So, congratulations. How much debt have you paid off? I've paid off $17,820. Awesome. And how long did that take you? 23 months. Good for you. And your range of income during that time? $39,470 to $40,788. Fine. What do you do for a living?

I'm a medical PA in a children's hospital in London. Very fun. Good for you. Wow. So how in the world did hillbilly Dave Ramsey get connected to a sophisticated English lady like yourself? I'm not sophisticated. Tell me this story. What happened 23 months ago? Well, first of all, I just thank God I found you. Well, this is my daughter, Laura, here from Costa Rica, and my friends, Julie and Ian from Toronto. They've also come in to support me. Wow.

And I've been a single parent since my daughter was one year old. And obviously her father's amazing and he's supported us, but financially it's been a big struggle. So we took in foreign students to try and help me with my income, which was really fun and it really helped me. But I spent many evenings just working out my income and my outgoings and it was all very stressful. There just wasn't enough money. What happened 23 months ago? Well, 23 months ago, I'd got into um a lot of debt um and that was really my downfall was

when my bank gave me an overdraft of four thousand pounds whoa yeah and at the time i thought that i'd won the lottery because i didn't have an emergency fund. I had a lot of debt that I'd moved to a 0% credit card. And like you say, I felt like I'd done something, but I hadn't actually done anything. I just moved my debt from one place to another. And I was starting to struggle, and the bank was charging me interest and interest on the interest. Some months I was being charged about £35, £50 a month just on interest, and I just thought, I just need to get out of this. I was just struggling and panicking. Yeah, and how need to get out of this. I was just, yeah, struggling and panicking.

Yeah, and how did you get a hold of us? Well, I was sitting out in the garden one night, just on YouTube, trying to find out how to get out of debt. And I come across your gazelle video. Mm-hmm. Wow. And I saw it, because we've got nothing like you in england in the best possible way of course

and i saw the gazelle video and i was just like oh my god this is this it. And actually I sat in the garden and I was crying because it was the first time that I actually felt hope that I could get out of debt. Wow. So the next day I got my whiteboard and I added up all my debt, which was a bit of a shock. And I put it at the top.

And I started to get my emergency fund together. I mean, I'm 57, and I've never had an emergency fund. And one of the things I wanted to do was to thank you for telling everybody that an emergency will happen because in January this year, my mum was diagnosed with cancer and my daughter wanted to come over and see her and straight away I could just pay for the flight. Yeah, yeah. And I would never have been able to do that before.

So you paid off the last of the debt when? 31st of July this year. Congratulations. How does it feel? It's just amazing. I feel completely, oh, sorry, I'm getting emotional. Okay, it's good. What's the key to getting out of debt?

The key to getting out of debt is deciding um oh sorry just deciding that you're going to do it and then following through um regardless of what everyone says or tries to make you feel um there's so much pressure out there to um you know make you spend money and um you just got to decide i'm not i'm i'm just getting rid of this debt and i'm not something happened in the garden when you're watching that silly video that hillbilly guy running up down the stage screaming that you can get out of debt, you believed that you could do it. And that was the first time that happened, and you never dropped that belief.

Nobody was going to stop you once you believed. Yeah, and that was you. You did that. No, you did that. You believed. I can't make you believe. I can just show you how to do it. You did it.

You were ready. You were so ready. And once you believed, there wasn't any holding you back. You did it. You were ready. You were so ready. And once you believed, there wasn't any holding you back. You're amazing. It's so fun to talk to you. Very fun. Very good.

Very good. Congratulations. I'm so proud of you. Thank you. Did you have some cheerleaders, people telling you you could do it? Oh, I've had some amazing cheerleaders. I've had all my friends, my daughter, work, Trevlyn, Zainab, Melita, Lauren, my mum. You know, when you talk about it's how your grandmother. Yeah.

My mum just says, well, that's what we've always done. And I've said, that's what he said. It's common sense. It's common sense. It's just not common anymore. I've always used cash. And I've been called weird, which is the biggest compliment I've ever had. Yeah, lots of people have called me weird.

And it's like, thanks. That's good, yeah. Yeah, because you were normal and stressed. It wasn't fun. Normal wasn't fun for you. No. Way to go. We've got a copy of Chris Hogan's book, Retire Inspired, for you.

That's the next chapter in your story. We want to hear from you when you become a millionaire, and I think you're on your way. Yeah, thank you. And outrageously generous along the way. Thank you, Dave. Well, thank you. Congratulations. You're inspiring.

Now, once someone believes that they can do something at a deep core level, you can't stop them. And Marian is definitely a rock star example of that. So cool to talk to you. Thank you. And thanks to all your friends and relatives and daughter and everybody for coming to cheer you on. Very good stuff. All right. I think this is the first in-person English debt-free scream we've ever had.

I think you're the first one. Yeah. So Marion from Brentwood, England to Brentwood, Tennessee. $18,000 paid off in 23 months, making $39,000 to $40,000. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free!

I love it! Woo-hoo! Boom! Man. That's why I get up and come down here every day right there. Wow! How fun. What a neat lady.

That is, I think, we've had folks from Australia, maybe Ireland, certainly from Canada. I think it's our first, I know it's the first from Brentwood, England. Very fun. This is the Dave Ramsey Show. Thank you. Thanks for joining us, Amanda. We are glad you're here. You can follow me on Twitter, at Dave Ramsey. Follow me on Facebook.com, slash Dave Ramsey. And we answer, actually, some of the questions.

On Twitter, Chloe says, What do you think about living in a mobile home for a year to save up for a down payment on a house? Wouldn't be a problem if you're renting it. I wouldn't buy a mobile home. Mobile homes go down in value. It's the only thing you own that you live in that goes down in value. Even if you buy dirt under it that goes up in value more than it goes down in value, so it appears you didn't lose money, you lost money.

You buy a $50,000 mobile home, in a few years it's a $10,000 mobile home. You buy a $50,000 house, in a few years it's a ten thousand dollar mobile home you buy a fifty thousand dollar house in a few years it's a hundred thousand dollar house this home you just don't want i mean cars go down in value mobile homes go down in value it's a car you sleep in i mean that's what you're dealing with so if you want to rent one that's fine i've had a few people over the years that have called me that went and bought a $5,000 mobile home, put it on a piece of ground, pay cash for it, knowing that the $5,000 mobile home is going to be worth $3,000, but they're going to lose a couple grand. And that's their form of rent while they save up money and pay cash to build a house on that land. People have done stuff like that. That's fine. But this idea you're going to buy a $75,000, $80,000, $100,000, $50,000 mobile home and

call that a good long-term plan, no, it's not a good long-term plan. It goes down in value. It's simple. I had a buddy of mine who owns a huge mobile home operation, and he's always giving me a hard time. Would you quit saying that, Dave? And I said, well, when it quits being true, I'll quit saying it. We've got some that go up in value and i went well when when i see that as an across the

board thing yeah now i will tell you this manufactured housing is what they always call it you know one way or the other there's all kinds of manufactured housing sometimes that means mobile home sometimes that means the wall systems were built in a factory they stood them up and it basically looks like a stick built house and so it's treated by the purchasing public like a traditional home. Whatever you're buying, I don't care what words you use to describe it, the question you ask yourself is, when I walk up in front of it, do I say mobile home? Or do I say house? And if you walk up in front of it and you say house, ugly house, pretty house, but it's a house, right?

Then that's going to go up in value. And a mobile home with the wheels off sitting on a concrete foundation that looks all permanent still looks and feels like a mobile home when you walk into it. And as long as people think it was, that it's not a house, it's not going to go up in value because that's how the market perceives it. And that's what you've got to look at. So whatever you're putting into that, you're throwing that money away. So back to you, Chloe, what do you think about living in a mobile home for a year to save for a down payment? If you're doing that $5,000 mobile home thing and want to pay cash for it

and live there for a year while I save up some money, that's fine because you're just giving up some of the $5,000, not owing $50,000 on something that's now worth $30,000 where you get upside down in the thing. Or if you're talking about renting something that's what you want to do sure whatever wherever you want to rent i don't care rent cheap rent as cheap as you can rent because that means you can save more for your down payment james is in lexington hi james how are you hey i'm good thanks for taking my call sure what's up uh my wife and i are in baby step two uh we have about two thousand dollars left and we just

found out that she's expecting a baby in late may and we were curious if we should pause our emergency fund or uh pay off our our last debt you only owe two thousand dollars yeah and actually i got a bonus i would cover we were in our last month anyways. Yeah, and what's your household income? Around $60,000. Okay. Yeah, I would go ahead and pay it off out of that bonus and then use this time to build your emergency fund aggressively between now and then.

Okay. You're only going to be $2,000 off. Yeah, I'm going to finish you up because you're so close to the finish line. The point of pushing pause when a baby is on the way is because I don't want you going into a labor and delivery situation with $1,000. You know, that's the point of pushing pause. But you have from now until May to save some money, and you don't have any debt. So, yeah, you ought to be able to have a really juicy emergency fund, right? Yeah.

This is your first child, right? Yes, it is. Congratulations. Thank you. Well done. Well, I'm going to send you a copy of the book, Smart Money, Smart Kids, which is for parents to learn how to teach their kids how to handle money. And that's pretty cool stuff.

You need to do that. Matter of fact, I'm going to send you another book, too. I'm going to send you two. I'm going to send you one called Hero by Dr. Meg Meeker. And it's my favorite parenting book right now. It's all about how dads should be heroes. And dads that are heroes, they're always heroes be a good hero you know and don't be on the dark side i'm sure you're not going to be but uh it's a great book about the importance of

fatherhood and you'll really really enjoy it lakisha is with us in houston texas hi lakisha how are you i'm doing well, Dave. How are you? Better than I deserve. What's up in your world? I have about $63,000 in student loan debt, and I have a home loan that I owe $43,000, and I am trying to determine which I pay off first.

Student loan. I have been through the FPU. Student loan. Previously. Okay off first. Student loan. I have been through the FPU. Student loan. Previously. Okay. Yeah. Student loan. House is baby step six.

Student loan is baby step two. Okay. Next question is, I'm 42 and just got a job or income that's pretty fair, very fair, actually. Good. What are you making? Insurance. What are you making? Oh, about $33,000 a year. Okay.

No, a month, I'm sorry, a month, $33,000 a month, I'm sorry. And so needing to know, 42 years old, I don't have much retirement, so I'm trying to determine what's the, I guess, best way to set up my retirement at this stage. Okay. So you're making $400,000. Yes. Good for you.

That's amazing. That is awesomeness. Way to go. I. Good for you. That's amazing. That is awesomeness. Way to go. I'm trying to wipe my debt out completely. Well, so let's go back to your original question. You make $400,000. $100,000 pays off your student loan in your house, and you're asking me which one to pay off first.

It doesn't matter. You're going to do it so fast. I mean, your six months are both gone, right? Yes. So it doesn't matter which one you your six months are both gone, right? Yes. So it doesn't matter which one you pay off first. But pay off student loan first. But, yeah, you're going to be debt-free house and everything. Just boom, just like this.

I mean, you're done. Way to go. You're killing it. Thank you. And then how do you save and invest? Well, we've got the house paid for, and we're going to max out. You're at baby step seven at that point. And so we're going to max out all retirement that's available for you.

I assume you have a 401k available. That's $18,000, right? I have a 401k, but I just recently went back to work, so I don't have much. In savings, though, I have about $40,000. No, no, no, no. I'm saying you're allowed to put $18,000 in a 401k a year max. Well, this employer, it's, I'm 1099 income, so

I don't have a 401k. Yeah. Okay, I thought you had a 401k. I'm sorry, I misunderstood. You do not have a 401k, it's your current employer. Okay. Correct. Good. You're 1099, so you do you have employees? No. Okay.

So you can do a SEP then, a Simplified Employee Pension Plan, and you can put up to 13.8% of your income, but it'll max out at, I don't remember what the SEP limits are this year. I'll have to go back and look. But you're going to be able to put something like 20-something thousand probably into that a year. Okay. And you can do backdoor Roth IRAs, which is another $5,500. So sit down with your SmartVestor Pro.

Click on SmartVestor. Okay. And put in your information. It'll drop down a SmartVestor Pro in your area, mutual fund people that we recommend. And they'll help you max out a SEP and max out a backdoor Roth. And that'll get you $25,000, $30,000 going in. That's not enough, but that's a good start. And then above that, I would buy mutual funds and I would save and pay cash for rentals if you want to be in the real estate business.

If you don't, that's fine. But that's all I invest in. I buy mutual funds, lots of them, max out all my retirement, and dump money in mutual funds. And I dump money in real estate that I pay cash for. Those are the two things I do. Way to go, kiddo. 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 carrying on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show.